Implied Terms

Question 1

What are the steps for implied terms?

Answer 1

Common law or statute
Business efficacy
Officious bystander
Implied by custom or prior dealings
Consumer Rights Act 2015
Sale of Goods Act 1979
Supply of Goods and Services Act 1982

Question 2

How are terms implied by common law?

Answer 2

Either by:
Business efficacy & officious bystander
Custom or prior dealings

Question 3

How are terms implied by business efficacy and the officious bystander test?

Answer 3

If it makes the contract work on business-like basis (is the term necessary to make the contract effective + if the parties had thought about it they would’ve suggested it be in the contract)

Question 4

What is the business efficacy test?

Answer 4

If the contract makes business sense without the term the courts will not imply a term

Question 5

Which case shows the business efficacy test?

Answer 5

The Moorcock case
Schawel v Reade

Question 6

What is the officious bystander test?

Answer 6

If a third party had asked the parties at the time of the contract being made if the term should be implied, they would’ve said yes

Question 7

Which case shows the officious bystander test?

Answer 7

Shirlaw v Southern Foundries
Hillier v Rambler Motors
Shell UK v Lostock Garage Limited

Question 8

What are genuinely implied terms? (Officious bystander)

Answer 8

Terms that a reasonable person would have understood to be the intention of both parties in the context of the contract

Question 9

Which case shows a genuinely implied term?

Answer 9

Egan v Static Control

Question 10

How do the tests ensure the terms are reasonable and equitable?

Answer 10

If it satisfies the other requirements, it is hard to think it would not be reasonable and equitable

Question 11

Which case shows a term implied by custom?

Answer 11

Hutton v Warren

Question 12

How are terms implied by custom?

Answer 12

If in that trade/area/culture the term is expected

Question 13

How can terms be implied by prior dealings?

Answer 13

Previous conduct of parties may indicate terms to be implied - but it must be shown many times, consistently

Question 14

Which case shows a term implied by prior dealings?

Answer 14

Hill as and Co v Arcos

Question 15

Which type of contracts does the Sale of Goods Act 1979 deal with?

Answer 15

Business-to-business
Consumer-to-consumer

Question 16

Which type of contracts does the Consumer Rights Act 2015 deal with?

Answer 16

Business-to-consumer

Question 17

Which type of contracts does the Supply of Goods and Services Act 1982 deal with?

Answer 17

Where the contract is for a service and the goods are supplied when services are being provided

Question 18

What controls does the Sale of Goods Act 1979 impose?

Answer 18

s13(1): in a contract for the sale of goods, the goods should correspond with the description (this includes how they are packaged e.g. in cases of 24 vs 30)
s14(2): goods should be of satisfactory quality (excluded if buyer made aware of defect or it’s obvious)
s14(3): goods should be fit for purpose

Question 19

Which case shows goods not being as described? (s13 of Sale of Goods Act 1979)

Answer 19

Re Moore & Landauer
Beale v Taylor

Question 20

Which case shows goods must be fit for whatever purpose stated? (Sale of Goods Act 1979)

Answer 20

Baldry v Marshall

Question 21

If goods are being bought for their normal use, is there a need to state a purpose? (Sale of Goods Act 1979)

Answer 21

No

Question 22

What controls does the Supply of Goods and Services Act 1982 impose?

Answer 22

s13: services should be carried out with reasonable care and skill
s14: service should be carried out within a reasonable time

Question 23

Which case shows services must be carried out with reasonable care and skill? (Supply of Goods and Services Act 1982)

Answer 23

Thake v Maurice
Wilson v Best Travel