Implied and Express terms Flashcards
terms are obligations of each party
e.g if i buy a cappuccino for 3pound, the express terms are cappuccino and 3pound which also represents the consideration for the contract . A term that may be implied in this contract is the fact that the coffee will be hot.
what are expressed terms?
can be made either in writing or orally.
if it is oral we have to be sure that the statement made verbally is actually a term not just a representation.
if it is a term then you can sue for breach of contract and the remedy will depend on what type of term it was i.e warranty, condition innominate.
if the statement is not found to be a term of the contract, the remedy will be misrepresentation as it will be seen as a representation that has been made.
what is meant by implied through common law?
terms can be implied through statute or common law. in common law, term can be implied in two ways :
1 business efficacy and the officious bystander
2 the courts will consider
3 is the term necessary to make the contract effective?
4 if the parties to the contract had though about it, would they have agreed that the suggested term was obviously going to be in the contract?
5 was it so obvious that the term would go without saying
6 business efficacy- the power to produce the intended result i.e. if it was obviously intended to have the term, the courts will imply it .
2 by custom or prior dealings between the parties
The Moorcock
Defendants owned a wharf with a jetty on the river Thames. They agreed to dock a ship and unload cargoes at the wharf. Both parties were aware at the time of contracting that this could involve the vessel being there at low tide and that then the ship would rest on the bottom . when the ship grounded, it broke up on a ridge of rock. The defendants stated there was no term covering this. the court implied a term that the ship would be at a safe mooring and that the ship would not be damaged when it settled at low tide.
The officious Bystander test
reasonable person test
obvious
this is a way courts determine if unwritten terms should be implied into the contract or not
in simple terms shirlaw v southern foundries 1939
explained it as ‘ if someone the officious bystander’ was standing nearby when the contract was being made and they suggested including a particular term, both parties would have said of course, that goes without saying ‘
terms will not be implied never would have agreed to if the bystander suggested it or if they had thought about it.
Shell uk v Lostock Garage 1977
Shell supplied petrol and oil to Lostock who in return bought those products only from shell. Shell then supplied petrol to other garages at lower prices which forced Lostock to sell at a loss. Lostock argued that there was a term in the contract that shell wouldn’t abnormally discriminate against it. The argument failed as shell would never have agreed to such a term.
objective case
Marks and spencer v Bnp 2015
In this case, the supreme court clarified that implied terms and their reasonableness should be judged objectively- not looking at the actual parties and what they thought but with that of a reasonable person in their position.
They also outlined that either the officious bystander test or business efficacy can be used.
what is meant by prior dealings/ customs?
if the parties have had prior dealing, then that prior conduct may indicate terms to be implied hillas v arcos.
if there are customs that have been established, then this can be an implied term Hutton v Warren 1836
Terms implied by statute - consumer rights act 2015
consumer rights act is concearned with anything between a consumer and a business.
consumer- an individual acting for purposes mainly outside of that persons trade/ profession . a company cannot be a consumer.
trader- a person acting for purposes related to their trade.
can be a sole trader , company or business partnership.
consumer rights act relates to contract where goods or services are being transferred
section 9 consumer rights act 2015
s9- the right of satisfactory quality
this is an implied term into any contract where a business is selling goods to a consumer. The quality of the goods must be satisfactory.
objective test- what the reasonable person would consider satisfactory taking into account:
any description of the goods
the price or other consideration for the goods
also takes into account their state and condition
what are sections 9 exceptions?
- the act will not apply:
when defects have been drawn to the consumers attention before the contract is made.
the consumer examines the goods before the contract is made if the examination would have revealed these defects. - the goods have been sold after inspection of a sample and the defect would’ve been apparent on a reasonable examination of the sample.
- whether the goods are satisfactory quality is an objective test and based on the reasonable person, not the individual in the contract.
section 10 the right of fitness for particular purpose
the consumer tells the trader expressly or impliedly the purpose for the goods.
if they state the purpose for the goods, the trader must ensure that the goods are fit for that purpose or state if they are not.
the consumer may be relying on the skill judgement of the seller and has expressed a particular purpose for which the goods are required.
Baldry v Marshall 1925
consumer had asked the seller to supply him with a fast flexible easily managed car that would be comfortable and suitable for ordinary touring purposes. He was given a Bugatti and then claimed that this was not fit for purpose. the court agreed.
don’t need to state the purpose of the goods if they are being brought for their normal use e.g. grant v knitting mills/
section 11 the right relating to description
- every contract to supply goods by description, has an implied term that the goods will match their description.
can be an implied description e.g if the goods are on display.
if the goods are by reference to a model seen/examined by the consumer, then the goods supplied must match the model. includes they way goods are packaged too.
result can be harsh for the trader
Re Moore and co:
contract was for tinned peaches packaged in carton of 30 tin. many carton actually contained 24 tins, even though the total number of tins was correct this was still a breach.
can be used for performance needs to be exact.
Remedies under the CRa for terms implied in a contract to supply goods:
these rights under the cra are in addition to the usual remedies for breach of contract such as damages.
- short term right to reject under s20
the right to repair or replacement under s23
the right to a price reduction or the final right to reject under s24
go through these in order
remedy s20 the short term right to reject
have to start s20
this must be exercised within 30 days of the delivery of the goods shorter if the goods are perishable
must be made clear to the trader by the consumer that they are rejecting the goods and terminating the contract.
consumer is then entitled to full refund
trader must bear the reasonable costs of returning the goods too.
refund must be given
without undue delay 14 days beginning with the day on which the trader agrees that the consumer is entitled to full refund
remedy s23 the right to repair or replacement
-if the consumer doesnt excerise their section 20 right they will have the right to a repair or a replacement.
-replacement is sometimes impossible where the goods are unique
-if it would impose an unreasonable cost on the trader to replace/ repair than alternative must be used.
- if it is possible for the trader to do, they must do so within a reasonable time frame and bear costs in completing the task.
- the fault complained of by the consumer must have been present at the time of the original delievery.
Remedy s24- the right to a price reduction or the final right to reject
if s23 isnt satisfactory for the consumer, the have the right to a price reduction or to reject the product and claim a refund.
- this means the consumer has attempted to repair replace but the consumer still isnt satisfied
any refund is subject to a deduction for use
the rights/ remedies are tiered
start with s20 if this is no excercised within 30 days , then the consumer has the right to repair/ replacement. if this is unsatisfactory then the consumer has the right to a price reduction or final right to reject and claim a refund.
what are the remedy exceptions?
presumption: if a fault arises within the first 6 months, the fault was present at time of delivery.
- the trader can rebut this presumption by providing evidence to show otherwise
- this presumption does not apply to the short- term right to reject
if the fault develops after the first 6 months, burden is on the consumer to prove it was faulty at time of delivery.
Implied terms : services
The statutory implied terms differ depending on whether the contract is for goods or services. The remedies are also slightly different.
s49- Reasonable care and skill
The CRA includes an implied term that if there is a contract for services then the trader must perform the service with reasonable care and skill.
- some contracts include a delivery of goods and services. If this is the case , the services element needs to be completed with reasonable care and skill.
- the standard of care is equivalent to the standard of care expected in a claim in the tort of negligence. it is on a case by case basis.
Thake v Maurice 1986
Mr and Mrs Thake had five children. The husband decided to have a vasectomy. After the operation, Mrs Thake became pregnant again and sued for breach of contract. There was an implied term that the surgeon would perform the operation to the standard of care and skill of a competent surgeon. Evidence showed that he did reach that level and so the claim failed.
legal authority
key case
objectiveness
reasonable standard
Wilson v Best travel 1993
on holiday in Greece, claimant fell through a glass door and was injured. Glass conformed to Greek but not British safety requirements. Court stated that as the tour company had checked the premises to ensure the local safety regulations had been complied with, they hadn’t breached the implied term.
s52 Performance within a reasonable time
If a contract doesn’t expressly state a time for the service to be performed and doesnt state how it is to be fixed, then it must be completed within a reasonable time.
- the term also applies where the service has not been completed or has taken longer than expected.
what is reasonable is subjective and will depend on the circumstances.
Remedy s55 the right to require repeat performance
start here s55
- This remedy requires the trader to perform the service again.
if this right is exercised, and the performance is not now impossible, it must be completed within a reasonable time and without significant inconvenience to the consumer.
trader has to bear the costs incurred in doing this ie labour materials
Remedy s56 the right to a price reduction
- This right reduces the price to the consumer by an appropriate amount for the traders failure to perform the contract
may result in trader giving a refund, up to the full contract price.
when is s56 remedy available?
1 where completion by repeat performance is impossible or
2 if the consumer has asked for repeat performance but the trader is in breach of the requirement to do it within a reasonable time and without significant interference to the consumer.
