T4 implied terms SoGA and CRA

Question 1

The Moorcock 1889

Answer 1

The owner of a wharf agreed to provide mooring facilities for ‘The Moorcock’. The ship was damaged when it hit a ridge of rock at low tide. Although the defendants had no legal control over the river-bed, they could ascertain its state but they had not done so.

Held: The honesty of business required an implied undertaking on the part of the wharf owner that it was a reasonably safe place to moor a ship. The wharf owner had broken his implied undertaking and was, therefore, liable in damages to the ship owner.

Question 2

sales of goods act 1979 (SoGA)

Answer 2

S.2 Contract of sale.
(1) A contract of sale of goods is a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price.

Question 3

statutory implied terms

Answer 3

sales of goods act 1979 (SoGA)
> implies terms into all contracts for the sales of goods between businesses

consumer rights act 2015 (CRA)
> implies terms into all consumer contracts for the sale of goods

Question 4

S.12- title

Answer 4

> implied condition that seller has the right to sell
implied warranty that the goods are sold free from encumbrances (a mortgage or other claim on property or assets)

Question 5

s.13 description

Answer 5

implied term that where goods are sold by description, they will match that description.

case example:
Harlingdon & Leinster Enterprises Ltd
v Christopher Hull Fine Art Ltd (1991)

The claimants were unsuccessful with their
claim as by sending their own experts to inspect
the painting they could not show they had relied
on the description, thus the sale was not by
description

Question 6

s.14(2)- satisfactory

Answer 6

Implied term that where goods are sold in the course of business they shall be of satisfactory quality.

case example: Ward v MGM Marine Ltd (2012)

Expert witnesses were unable to find any
other cause for the engine exploding a short
time into the luxury yachts maiden voyage
thus it was not of satisfactory quality.

Question 7

a “Reasonable person” objective test is applied

Answer 7

(a) fitness for all the purposes for which goods of the kind in question are commonly supplied,

(b) appearance and finish,

(c) freedom from minor defects,

(d) safety,

(e) durability.

Question 8

S.14(3) fitness for purpose

Answer 8

Implied term that where goods are sold in the course of business they shall be fit for their usual or ordinary purpose plus any specific purpose made known to the seller at the time of sale.

Frost v Aylesbury Dairy Co [1905]

Despite quality checks conducted on random batches of milk supplied the claimant contracted typhoid and died from drinking milk purchased from the defendant. The milk was not fit for its usual purpose of drinking.

Question 9

s.15 sale by sample

Answer 9

Implied term that where goods are sold by sample, the sample will correspond with the remainder of the bulk.

Any defect in the remainder will be visible upon a
reasonable inspection of the sample.

Godley v Perry [1960]
The catapult purchased which was not as robust as the sample inspected broke causing injury to a
young boy.

Question 10

terms can either be expressed or implied- what do these terms mean?

Answer 10

> specifically stated/agreed
not stated or agreed but inserted by either statute courts (fact) or custom
e.g. The Moorcock

Question 11

Q:why has consumer legislation been induced?

Answer 11

To protect Parties (particularly consumers) in a contract from unscrupulous conduct. To provide remedies when things go wrong

Question 12

Q: what does the sale of goods act 1979 do?o

Answer 12

implied terms into all contracts for the sale of goods-> business v business

Question 13

Q: What does the Consumer Rights Act 2015 do in respect of contracts for the sale of goods?

Answer 13

Implies terms for Business v Customer contracts

Question 14

Q: How does SoGA 1979 define a contract for the sale of goods?

Answer 14

Property in goods exchanged for money consideration called the price

Question 15

Q: What two things does s12 Sale of Goods Act 1979 imply into a contract?

Answer 15

> A condition
that seller has title (the right to sell)
Warranty
Title free from encumbrances

Question 16

Q:What happened in the case of Rowland v Divall (1923)?

Answer 16

The claimant, a car dealer, bought a car from the defendant for £334. He painted the car and put it in his showroom and sold it to a customer for £400. Two months later the car was impounded by the police as it had been stolen. It was then returned to the original owner. Both the claimant and defendant were unaware that the car had been stolen. The claimant returned the £400 to the customer and brought a claim against the defendant under the Sale of Goods Act.

Held:

The defendant did not have the right to sell the goods as he did not obtain good title from the thief. Ownership remained with the original owner. The defendant had 2 months use of the car which he did not have to pay for and the claimant was not entitled to any compensation for the work carried out on the car.

Question 17

Q: What does s 13 Sale of Goods Act 1979 imply into a contract?

Answer 17

> Goods sold by description
Must correspond with description

Question 18

Q: Are these terms a warranty or a condition?

Answer 18

Consumer Contracts – Condition
Business Contracts – Warranty

Question 19

What happened in the case of Beale v Taylor (1967)

Answer 19

FACTS:

Taylor published an advertisement to sell a car describing it as “white, 1961, herald convertible….” Relying on that description Beale came to see the car. Since he did not have a licence, he did not actually take a test drive, but just sat on the passenger side. After the test run he also saw a metallic disc on the rear of the car with the figure 1200 on it. He bought the car believing it to be the 1961 model. When he got the license he found the car unsatisfactory. On examination, the mechanic told him that the car was made up of two cars welded together, the front portion was one 948 model while the rear portion was the 1200 model. Further the car was found to be in unroadworthy and unsafe. Beale filed a suit claiming damages.

ISSUE: Whether the transaction was sale by description?

Defendant
It was not a sale by description but sale of a particular car as seen, tried and approved. The buyer had ample opportunity to inspect and test the car.

HELD

Trial Court: The sale was not a sale by description as B had seen, tried and approved the said car.

Question 20

Q: What does s14(2) Sale of Goods Act 1979 imply into a contract?

Answer 20

> In course of business
Satisfactory Quality
According to reasonable person

Question 21

Q: What sorts of things will the court look at when deciding whether or not this term has been breached?

Answer 21

Courts examine the impact of the breaches in the context of the transaction as a whole in order to decide whether breaches are repudiatory.

Question 22

Q: What does s 14(3) Sale of Goods Act 1979 imply into a contract?

Answer 22

> In course of business
Fit for ordinary purpose
Specific purpose made known at time of sale

Question 23

What two things are implied into a contract by s 15 Sale of Goods Act 1979?

Answer 23

> Sample will correspond with remainder of bulk
Any defect in remainder of bulk apparent on reasonable examination of sample