Implied Terms Flashcards
What are implied terms?
Terms that are not specifically identified by the parties but are put into contracts anyway.
What are the ways implied terms can be put into contracts?
- By custom or trade usage (B2B or C2C)
- By the common law (B2B or C2C)
- By statute (B2C)
Discuss terms being implied by custom or trade usage.
Terms can be implied when they are customary/normally in certain types of contract. In British Crane Hire v IPM the usual term about crane return was implied in the contract even though it wasn’t specifically stated.
Discuss terms implied by common law.
Terms can be implied by fact where the reasonable person thinks the term would be intended by the parties in the circumstances, as in M&S v Paribas.
This can be proven though two tests:
1. The business efficacy test is where it is necessary for the term to be implied otherwise the contract would not make sense, as in Moorcock.
2. The officious bystander test, from Shirlaw v Southern Foundries, is: If the term was suggested by an officious bystander, the parties would reply with ‘oh, of course’.
Discuss the Consumer Rights Act 2015
The CRA 2015 applies to B2C situations.
S2 defines a consumer as someone acting for a purpose wholly or mainly outside their business and a trader as someone acting for purposes relating to their business.
Discuss main terms for goods
S9 shows that goods must be of satisfactory quality, meaning the quality a reasonable man would expect. This considers factors such as price, durability and being fit for purpose.
S10 shows that when the seller says the goods a for a particular purpose, there is an implied term that the goods will be fit for this purpose, unlike in Baldry v Marshall.
S11 shows that if goods are sold by description, the goods must match the description.
Discuss remedies for goods.
For breaching an implied term, the party could:
- Reject the goods within 30 days and get a full refund (S20)
- Ask for a replacement or repair within or after 30 days (S23)
- If the goods are not/cannot be fixed, they could ask for a reduction in price or refund up to (and beyond) 6 months (S24).
Discuss main terms for services
S49 shows services must be conducted with reasonable care and skill, as in Thake v Maurice.
S52 ensures the service is done within reasonable time.
Discuss remedies for services
S55 shows the consumer can ask for repeat performance, with the service provider incurring the extra costs.
S56 also shows they can demand a reduction in price.
What is the structure for an incorporation essay?
- Identify
- Define
- Say when the CRA 2015 applies and what type of contract their is (B2B or B2C)
- Explain the rules for this type of contract
- Apply
