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LAW - MISREPRESENTATION > Statutory implied terms > Flashcards

Statutory implied terms Flashcards

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1
Q

The 3 general categories of implied terms

A
  1. Terms implied by statute
  2. Terms implied by custom and usage
  3. Terms implied by the courts
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2
Q

Terms implied by statute

A

In contracts for the SALE OF GOODS and SUPPLY OF SERVICES certain basic provisions are implied by statue in order to provide protection to purchasers.

They are placed by Parliament

  • Everything you buy is subject to statutory legislation
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3
Q

Why are some terms implied by statute?

A

This is generally done for core issues where it is seen as reasonable that such matters are automatically written into a contract.

Basically T&C’s

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4
Q

Some terms implied by statute

B2B

A

Sales of Goods Act 1979

Supply of Goods and Services Act 1982

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5
Q

Sales of goods Contracts

Key Provisions:

A

S.12 SOGA implies that the seller has a right to sell the goods.

S.13 SOGA implies a term that the goods will correspond to their description.

S.14 SOGA implies a term that the goods will be of satisfactory quality and fit for the purpose.

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6
Q

Sales of goods contracts - S13 and S14

A

Ss.13 and 14 (description and quality) are the ones that cause the most disputes.

Both are treated as conditions, thus a breach can lead to repudiation of the contract, not just damages.

  • Refund/reject
  • Reduction in price
  • Repair
  • Replace
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7
Q

S13 - SOGA

A

Implies a term that the goods MUST correspond to their description

  • There has to be some kind of description
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8
Q

S13 - Case Study

Grant v Australian Knitting Mills (1936)

A

C - Dr Grant purchased woolen underwear from a retailer
- Nothing was said about washing prior
Suffered skin irritation
- Grant sued the manufacturer alleging they had been negligent

I - Description of goods

R - Parts weren’t satisfactory quality
Not normal to wash before wearing

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9
Q

SOGA - ‘Ignorance’ -

Case study - Harlingdon & Lenister v Christopher Hull Fine Art (1990)

A

C - Claimant purchased a painting, described in catalogue as being by a German artist.
- The sellers weren’t experts in German painters, purchasers sent their experts to inspect, after the sale discovered it was fake

I - Description of goods when seen by purchasers

R - The buyers had NOT RELIED on the description, as sent experts to inspect.

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10
Q

Sales of goods contracts

A

Implies a term that the goods MUST correspond EXACTLY to their description, even if they are still fit for purpose

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11
Q

Case Study - Sale by description

Moore v Landauer (1921)

A

C - A contract for sale of 3,100 tins of peaches described the tins in a case of 30.
- Price went down
Arrived in cases of 24
- Landauer refused to pay

I - Description of goods

R - The buyer was entitled to reject due to the packaging being part of the contract.

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12
Q

Sale of goods contracts S14

A

Implies a term that the goods will be of satisfactory quality and fit for the purpose

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13
Q

S14 - Subsections

A

s14(2) SOGA

  • Deals with SATISFACTORY quality.
  • Used to be MERCHANTABLE quality

s14(3) SOGA
- Deals with fitness for purpose.

S14 only deals with sales in the course of a business – NOT private sales.

S13 deals with ALL sales

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14
Q

Common issues between ss14 (2&3)

A
  • All goods sold under the contract (including packaging) are covered by law
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15
Q

Common issues - Quality & fitness for Purpose

Case Study - Wormell v RHM agriculture (1986/7)

A

C - Instructions about weed-killer had to be followed to the letter, or wouldn’t work properly
- The instruction said the the poison to be used at certain stages of growth - confused buyer

I- All goods sold under the contract are covered by law

R - The goods meant not just the goods themselves but everything with it. If instructions were wrong then it did breach, however the court found the instructs weren’t misleading.

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16
Q

Common issues between ss14 (2&3) Cont

Strict Liability

A

The liability of the supplier is strict. (no defence to say that reasonable care had been exercised)

17
Q

Strict Liability Case Study

Frost v Aylesbury Dairy Co. LTD (1905)

A

C - Aylesbury Supplied milk to frost

  • Contained germs and Frost’s wife contracted typhoid and died
  • Frost sued that there should be no germs.

I - Quality & fitness for Purpose - Strict liability

R - The CoA ruled that the clear wording of the Act left no room for such an argument.

18
Q

S14 - Satisfactory Quality

A

The Standard that a reasonable person would find satisfactory

  • any description applied to the goods
  • Defects that should have been discovered after the examination
  • Price
  • Freedom from minor defects
  • Durability
19
Q

S14 - Satisfactory Quality (2A)

A

Any description applied to the goods:

Differing descriptions lead to differing expectations.

Where defects have been brought to the attention of the buyer, a buyer is deemed to have accepted the goods accordingly.

‘Shop soiled’ not enough.

20
Q

Satisfactory quality - case study

Bartlett v Sydney Marcus Ltd (1965)

A

C - Bartlett bought a car from SM ltd, SM ltd told Bartlett there was issues about a clutch and oil gauge

  • Contract mentioned this offered to be sold cheaper or repaired.
  • Bartlett agreed to sold cheaper, a couple of weeks later issue with clutch

I - Quality

Ruling - Car was reasonably fit for use on road, car was bought subject to defects.

21
Q

Satisfactory Quality - S.14 (2C) b

A

Defects that should have been discovered after examination.

  • Can be Patent – discoverable by reasonable inspection.

Or

Latent – cannot be discoverable, e.g. building foundations not discoverable for years afterwards.

22
Q

S.14 (2A) Defects that should have been discovered after examination

Case Study - Wren v Holt (1903)

A

C - Wren bought beer from a pub which was contaminated with arsenic
- Pub owner argued it came for a supplier and he had done all fit to ensure it was fit to drink.

I - Quality

R - Judge ruled pub was liable, As Wren fell ill showed wasn’t the required quality.

23
Q

Satisfactory Quality - S.14 (2C) b Price

A

The more you pay, the better quality you get.

24
Q

Case Study - Price

Rogers v Parish (Scarborough)Ltd (1987)

A

C - Rogers bought a new Range Rover for 14k

  • After a few weeks developed faults and returned to be replaced
  • Replacement car was also faulty
  • Several attempts at a car Rogers returned the car

I - Quality Price

R - CofA said right to return card, expectations were higher when buying a Range Rover

25
Q

Satisfactory Quality - S.14(2B) (b-c) - Freedom from minor defects

Case Study - Jackson v Rotax Motor & Cycle Co Ltd (1910)

A

C - Goods were purchased for £450 and the cost of putting them right was £35

I - Quality - Freedom from Minor Defects

R - The buyer was entitled to reject the goods, even though the defects.

26
Q

Satisfactory Quality - S14(2B) D

Hidden Defects (Safety)

A

Safety defects put goods in breach of the condition as to satisfactory quality.

27
Q

Hidden Defects (Safety)

Case Study - Godley v Perry (1960)

A

C - Godley a 6 year old, bought a plastic catapult from stationer Perry. Godley used the Catapult properly but it broke and injured his eye

I - Hidden Defects (Safety)

R - Held. The use of catapult was implied, and catapult was not fit for purpose. Godley could recover damages.

28
Q

Satisfactory Quality -
S.14 (2B) e

Durability

A

How long do the goods last?

A warranty which results in damages only (repairs).

It will not cause a breach of condition (you will be entitled to reject the goods)

Shop guarantees individual to the store

29
Q

Durability Case study

Mash & Murrell v Emmanuel (1961)

A

C - Mash bought potatoes from Emmauel, shipped from Cyrpus to Liverpool. Arrived not fit for purpose

I - Durability - How long should things last?

R - Goods had to remain durable by the time they arrived and not when shipped.

30
Q

Satisfactory Quality - S.14 (3)

Fitness for Purpose

A

If the buyer makes it known the purpose for buying the good, then the seller must supply it accordingly.

31
Q

Fitness for Purpose - S.14 (3)
Case Study

Manchester Liners v Rea (1922)

A

C - The seller supplied coal to be used in a ship. coal delivered by the seller was unsuitable for the steamer.
- Rea sued saying that the coal wasn’t fit for purpose

I - Fitness for purpose

R - Held- Coal merchants knew the differences, there was a breach of the implied condition.

32
Q

Fitness for Purpose S.14 (3)

A

If goods are to be used for their normal purpose, it is assumed the buyer need not say anything

33
Q

Fitness for Purpose
Case Study

Priest v Last (1903)

A

C - Buyer bought a hot-water bottle, wife used it 5 times, both burst and wife was scalded

  • Evidence showed the bottle was not fit for purpose
  • Seller stated that, the buyer had not made the purpose aware

I - Fitness for purpose

C - Seller entitled to recover the expenses in treatment of buyer’s wife injuries, because the buyer relied on the seller’s judgement.

34
Q

Fitness for Purpose (3)

A

When the buyer indicates a range of (or specific) uses of the product the seller must meet the expectations.

The more vague the buyer is, the lower the requirement of compliance

35
Q

Fitness for purpose - Uses
Case study

M/S Aswan Engineering Establishment v Lupdine Ltd (1987)

A

C - A proprietary liquid waterproofing compound called Lupguard was stacked in plastic buckets in Kuwait

  • buckets melted and collapsed losing the Lupguard
  • known the goods were being shipped to Middle East

I - Fitness for purpose

R - lupine knew that the buckets couldn’t stand the heat,
- when they tried to sue court said they should of known.

36
Q

Fitness for Purpose - S.14 (3)

Skill and Judgement

A

The buyer must reasonably rely on the skill and judgement of the seller.

In consumer transactions, the seller is under a higher standard.

37
Q

Fitness for Purpose Case Study - Skill and Judgement

Slater & Slater v Finning (1996)

A

C - the claimants bought a specific camshaft for their speedboat, camshaft worse out as not suitable

I - Fitness for Purpose

R - As the claimants had specifically asked for that particular camshaft, the seller assumed the knew whether it as suitable.

38
Q

Terms Implied by the Courts

A

The Courts use:

1) The ‘officious bystander’ test to ascertain if a term is so obvious, that is should be imputed into a contract

Or

2) The ‘business efficacy’ test to introduce terms which are deemed important to make a contract meaningful.

39
Q

Terms implied by the Courts - Case Study - Business efficacy test

The Moorcock (1889)

A

C - Claimant Moore this ship at the defendant’s wharf, ship became damaged due to rocks on river bed, claimant sought to claim damages.
Defendant argued that there was no provision about condition of river bed.

I - Fitness for Purpose

R - Court stated that the implied term moorings would be reasonably safe for the ship.
- Court intruded business efficacy test, if the contract makes sense without the term, courts will not imply the term

LAW - MISREPRESENTATION (2 decks)

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