Terms

Question 1

What are the implied terms under the Supply of Goods and Services Act 1982?

Answer 1

The implied terms under the Supply of Goods and Services Act 1982 include the goods being of satisfactory quality, suitable for any purpose made known to the seller, and complying with any sample. These terms are explored in this Act.

Question 2

What are the implications of the Sale of Goods Act 1979 on sellers and suppliers?

Answer 2

The Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982 impose important obligations on sellers in contracts for the sale of goods and suppliers in contracts for the supply of goods and services.

Question 3

What are the three groups into which statements made during contract negotiations can be divided?

Answer 3

Statements made during negotiations leading up to a contract can be divided into three groups: (a) Mere puffs or statements of no legal significance, (b) Statements of fact or law which the parties do not intend to be binding, and (c) Statements of fact which the parties intend to be binding.

Question 4

What are the statutory rights of a consumer under a services contract?

Answer 4

Under a services contract, a consumer has the right that the service is performed with reasonable care and skill, the right to a reasonable price (where a price has not been agreed), and the right to receive the service in a reasonable time.

Question 5

What contracts does the Supply of Goods and Services Act 1982 apply to?

Answer 5

The Supply of Goods and Services Act 1982 applies to certain contracts for the transfer of property in goods, contracts for the hire of goods, and contracts for the supply of services.

Question 6

Why does the distinction between representations and terms matter in contract law?

Answer 6

The distinction between representations and terms becomes important when the statement turns out to be untrue or the promise is not fulfilled. The court then has to decide which statements are contractual terms and which are non-contractual representations, inducing the contract but forming no part of it.

Question 7

What additional remedies are provided under the Consumer Rights Act 2015?

Answer 7

The Consumer Rights Act 2015 provides additional remedies for consumers when the implied terms are breached. These remedies sit alongside the remedies available under general law.

Question 8

What factors were considered in the Schawel v Reade case to determine if a statement became a term of the contract?

Answer 8

In the Schawel v Reade case, the court considered the importance of the statement, the timing of the statement, the reduction of the contract into writing, the special knowledge or skill of the person making the statement, and the assumption of responsibility by the person making the statement.

Question 9

What is the definition of a ‘contract for the transfer of goods’ under the SGSA 1982?

Answer 9

A ‘contract for the transfer of goods’ under the SGSA 1982 refers to a contract where one person transfers or agrees to transfer the property in goods to another. It excludes specific types of contracts such as a contract of sale of goods, a hire purchase agreement, and more.

Question 10

What are the remedial options available to a consumer when goods fail to meet the requirements under the Consumer Rights Act 2015?

Answer 10

When goods fail to meet the requirements under the Consumer Rights Act 2015, a consumer has three remedial options: the short-term right to reject, the right to repair or replacement, and the right to a price reduction or final right to reject.

Question 11

What are the different ways in which terms can be implied in fact?

Answer 11

*Terms implied by custom
*Terms implied in fact
*Terms implied in law
*Terms implied by statute

Question 12

What are the potential consequences if a term of a contract is not fulfilled?

Answer 12

If a statement is a term of the contract and this term is not fulfilled, it will amount to a breach of contract, for which the innocent party may claim damages among other remedies. However, if the untrue statement is not a term of the contract but a representation, this may amount to a misrepresentation, for which the innocent party may still be able to obtain a remedy in the law of misrepresentation.

Question 13

What is the difference between terms implied in fact and terms implied in law?

Answer 13

Terms implied in fact are based on the presumed but unexpressed intentions of the parties, while terms implied in law are imposed by the courts or statute regardless of the intention of the parties. Terms implied in fact give effect to the unexpressed intention of the parties, while terms implied in law arise out of certain common types of contractual relationships.

Question 14

What are the implied terms in a contract for the hire of goods under the SGSA 1982?

Answer 14

In a contract for the hire of goods, implied terms include the right to transfer possession, terms where hire is by description, terms about quality or fitness, and terms where hire is by sample. These terms correspond to those implied in contracts for the sale of goods.

Question 15

What are the different ways in which terms can be implied in law?

Answer 15

Common law and statute

Question 16

What are the conditions for exercising the short-term right to reject for non-conforming goods?

Answer 16

The short-term right to reject for non-conforming goods is available to the consumer for 30 days from the time ownership has passed, the goods have been delivered, and the trader has notified the consumer that the required steps have been taken. This right is not available if repair or replacement is either impossible or disproportionate.

Question 17

How can a statement be both a term and a representation in a contract?

Answer 17

A statement can be both a term and a representation, giving rise to an action for both breach of contract and misrepresentation. This means that if the statement is considered a term of the contract and is not fulfilled, it will be a breach of contract. If the statement is also false and can be classified as a misrepresentation, the innocent party may have a claim under the law of misrepresentation as well.

Question 18

What are the important implied terms under the Sale of Goods Act 1979?

Answer 18

The Sale of Goods Act 1979 implies important terms related to title, correspondence with description, satisfactory quality, fitness for a particular purpose, and sale by sample.

Question 19

What are the remedial options available to a consumer when digital content is non-conforming?

Answer 19

When digital content is non-conforming, a consumer has the right to repair or replacement and the right to a price reduction. The right to repair or replacement must be provided within a reasonable time and without significant inconvenience to the consumer.

Question 20

What is the significance of Section 12 of the Sale of Goods Act 1979?

Answer 20

Section 12 of the Sale of Goods Act 1979 implies that the seller has the right to sell the goods.

Question 21

What is the significance of the Consumer Rights Act 2015?

Answer 21

The Consumer Rights Act 2015 provides important implied terms and remedies in consumer contracts for goods, digital content, and services

Question 22

What is the legal position if non-compliant digital content causes damage to a device or other content?

Answer 22

If non-compliant digital content causes damage to a device or other content, the consumer is entitled to repair or a compensatory payment from the trader.

Question 23

What does Section 13 of the Sale of Goods Act 1979 imply?

Answer 23

Section 13 of the Sale of Goods Act 1979 implies that where there is a contract for the sale of goods by description, there is an implied term that the goods will correspond with the description.

Question 24

How does the court determine whether a statement made during contract negotiations is a term or a representation?

Answer 24

In seeking to discover whether the parties intended to be bound by a statement made by one of them, the court will apply an objective test based on the question, ‘what would a reasonable person understand to be the intention of the parties, having regard to all the circumstances?’ If the statement was made during negotiations to induce the other party to enter into the contract, there is prima facie ground for inferring that the statement was intended to be a binding term of the contract. However, this inference can be rebutted if the party making the statement can show that it would not be reasonable to hold them bound by it. The court will take into account any factors that appear to be relevant.

Question 25

What are the remedial options available to a consumer when services are non-conforming?

Answer 25

When services are non-conforming, a consumer has the right to require repeat performance and the right to a price reduction. Repeat performance must be provided within a reasonable time and without significant inconvenience to the consumer.

Question 26

What are the cornerstone rights implied in a consumer sale of goods under the Consumer Rights Act 2015?

Answer 26

The cornerstone rights implied in a consumer sale of goods under the Consumer Rights Act 2015 are that the goods should be of satisfactory quality, reasonably fit for any purpose made known to the trader, and should match the given description.

Question 27

What does Section 14(2) of the Sale of Goods Act 1979 state?

Answer 27

Section 14(2) of the Sale of Goods Act 1979 states that where the seller sells goods in the course of a business, there is an implied term that the goods supplied under the contract are of satisfactory quality.

Question 28

What are the implied terms for contracts for digital content under the Consumer Rights Act 2015?

Answer 28

For contracts for digital content, the implied terms under the Consumer Rights Act 2015 include the digital content being of satisfactory quality, reasonably fit for purpose, and matching any description given by the trader to the consumer.

Question 29

What is the significance of the reduction of a contract into writing in relation to implied terms?

Answer 29

The reduction of a contract into writing is one of the factors considered by the court when determining if a term should be implied. While there is a general presumption that the parties have expressed every material term, terms may still be implied to give effect to the presumed intentions of the parties or fulfill legal duties.

Question 30

What are the conditions for exercising the right to require repeat performance for non-conforming services?

Answer 30

The right to require repeat performance for non-conforming services is available unless completion in conformity with the contract is impossible. Repeat performance must be provided within a reasonable time and without significant inconvenience to the consumer.

Question 31

What factors determine whether goods are of satisfactory quality according to Section 14(2) of the Sale of Goods Act 1979?

Answer 31

Goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking into account any description of the goods, the price, and all other relevant circumstances. The checklist of factors includes fitness for all purposes, appearance and finish, freedom from minor defects, safety, and durability.

Question 32

What is the definition of a ‘consumer’ under the Consumer Rights Act 2015?

Answer 32

A ‘consumer’ under the Consumer Rights Act 2015 is defined as an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft, or profession.

Question 33

What are the conditions for exercising the right to a price reduction for non-conforming services?

Answer 33

The right to a price reduction for non-conforming services is available if repeat performance is impossible or if the trader has failed to provide repeat performance within a reasonable time and without significant inconvenience to the consumer.

Question 34

What are the circumstances where terms can be inferred by the courts?

Answer 34

Terms can be inferred by the courts when they are necessary to give effect to the presumed but unexpressed intentions of the parties or to fulfill legal duties that arise out of certain common types of contractual relationships. The courts may infer terms based on trade customs, a course of dealing between the parties, or to give business efficacy to a contract.

Question 35

What is the consumer’s right to a refund of money paid for digital content?

Answer 35

The consumer has the right to receive a refund of all money paid for digital content. The refund must be given within 14 days and using the same payment method used by the consumer, without imposing any fee

Question 36

What is the definition of a ‘trader’ under the Consumer Rights Act 2015?

Answer 36

A ‘trader’ under the Consumer Rights Act 2015 is defined as a person acting for purposes relating to that person’s trade, business, craft, or profession, whether acting personally or through another person acting in the trader’s name or on the trader’s behalf.

Question 37

What are the exceptions to the implied term of satisfactory quality under Section 14(2) of the Sale of Goods Act 1979?

Answer 37

The exceptions to the implied term of satisfactory quality are when defects were specifically drawn to the buyer’s attention before the contract was made or if the buyer examined the goods before the contract was made and the defects should have been revealed. The term also does not apply if the seller is not selling in the course of a business.

Question 38

What is the role of trade or professional customs in implying terms into contracts?

Answer 38

Trade or professional customs can serve as a basis for implying terms into contracts. When a term is implied based on a custom, it is assumed that the parties intended to be bound by well-known customs of a particular trade. This can be seen in cases such as British Crane Hire v Ipswich Plant.

Question 39

What is the significance of the Unfair Contract Terms Act 1977 in relation to the SGSA and the Consumer Rights Act 2015?

Answer 39

The Unfair Contract Terms Act 1977 limits the ability to negative or vary the implied terms set out in the Supply of Goods and Services Act 1982 and the Consumer Rights Act 2015. It provides provisions for contracting out of these terms

Question 40

What does Section 14(3) of the Sale of Goods Act 1979 imply?

Answer 40

Section 14(3) of the Sale of Goods Act 1979 implies that where the seller sells goods in the course of a business and the buyer makes known a particular purpose for which the goods are being bought, there is an implied term that the goods supplied under the contract are reasonably fit for that purpose.

Question 41

Can a consumer treat a contract as at an end as a result of a breach of implied terms under the Consumer Rights Act 2015?

Answer 41

In general, a consumer cannot treat a contract as at an end as a result of a breach of implied terms under the Consumer Rights Act 2015, except to the extent set out in the Act.

Question 42

What are the implied terms in a contract for the transfer of goods under the SGSA 1982?

Answer 42

In a contract for the transfer of goods, implied terms include terms regarding title, terms where transfer is by description, terms about quality or fitness, and terms where transfer is by sample. These terms correspond to those implied in contracts for the sale of goods.

Question 43

What does Section 15 of the Sale of Goods Act 1979 state about sale by sample?

Answer 43

Section 15 of the Sale of Goods Act 1979 states that where a sale is by sample, two conditions are implied into the contract: (a) that the bulk will correspond with the sample in quality, and (b) that the goods will be free from any defect, making their quality unsatisfactory, which would not be apparent on reasonable examination of the sample.

Question 44

What are the implied terms for contracts for goods under the Consumer Rights Act 2015?

Answer 44

Under the Consumer Rights Act 2015, contracts for goods imply that the goods will be of satisfactory quality, fit for any particular purpose made known to the trader, and will comply with their description.

Question 45

What is the significance of Section 15A of the Sale of Goods Act 1979?

Answer 45

Section 15A of the Sale of Goods Act 1979 provides that if a breach of implied terms is so slight that it would be unreasonable for the buyer to reject the goods and repudiate the contract, the breach should be treated as a breach of warranty, entitling the buyer to claim damages.

Question 46

What is the significance of business efficacy in implying terms into contracts?

Answer 46

A term may be implied to give business efficacy to a contract, meaning to make the contract produce its intended objective. However, a term will not be implied solely for the purpose of transforming the agreement into a business-like arrangement. The court will only imply a term if, without it, the arrangement would be unworkable.

Question 47

What role does special knowledge or skill play in determining whether a statement is a term or a representation in a contract?

Answer 47

Where the party making the statement had exclusive access to information or special knowledge compared to the other party, this is likely to be taken into account. The concept of skill and knowledge can be seen in contrasting cases such as Oscar Chess Ltd v Williams and Dick Bentley v Harold Smith.

Question 48

Can the implied terms under the Sale of Goods Act 1979 be excluded or restricted?

Answer 48

Under Section 55 of the Sale of Goods Act 1979, a seller’s liability under the implied terms can be excluded or restricted by agreement of the parties, subject to the Unfair Contract Terms Act 1977. However, the implied undertaking as to title cannot be excluded or restricted.

Question 49

What are the different types of terms in a contract?

Answer 49

The terms of a contract can be classified as conditions, warranties, or innominate terms.

Question 50

What is the significance of distinguishing between conditions and warranties in a contract?

Answer 50

The distinction between conditions and warranties becomes significant in the event of a breach of contract. If a party breaches a condition, the innocent party has the right to treat the contract as repudiated and can terminate the contract. If a party breaches a warranty, the only remedy available to the innocent party is to sue for damages.

Question 51

How are implied terms in a contract classified as conditions or warranties?

Answer 51

When terms are implied by statute, the statute will normally specify whether they are conditions or warranties. In some cases, the statute will also state or modify the remedy available upon breach of such a term.

Question 52

How can conditions and warranties be distinguished?

Answer 52

According to the traditional approach, a condition is an important term ‘going to the root of the contract,’ while a warranty is a less important term. The crucial question is whether the parties intended, at the time of contracting, that any breach of the relevant term could result in the innocent party terminating the contract.

Question 53

What are innominate terms in a contract?

Answer 53

Innominate terms are terms that are neither conditions nor warranties. They are of an intermediate nature. The consequences of breach determine whether the term will be treated as a condition or a warranty. If the breach deprives the innocent party of substantially the whole benefit intended from the contract, it will be treated as a condition and the innocent party can terminate the contract and claim damages. If not, the innocent party can claim damages only.

Question 54

How can terms in a contract be classified if they are not clearly conditions or warranties?

Answer 54

If the classification of a term as a condition or a warranty is not clear, the court will consider whether the parties intended for any breach of the term to entitle the innocent party to terminate the contract. If the parties’ intention cannot be determined, or if not every breach would lead to the right to terminate, the term will be considered innominate. The consequences of breach will then determine the available remedies.

Question 55

What is the effect of breach of statutory implied terms in a contract?

Answer 55

Breach of statutory implied terms is not automatically treated as a breach of condition. The court has discretion to treat it as a breach of warranty if the breach is so slight that it is unreasonable for the innocent party to repudiate the contract. In such cases, the innocent party is entitled to claim damages only.

Question 56

What is the significance of time performance or completion in a contract?

Answer 56

Time performance or completion is of greater or lesser importance depending on the nature and circumstances of the contract. If time is of the essence, lateness can amount to a repudiatory breach, entitling the innocent party to terminate the contract. The intention of the parties and the express terms of the contract determine whether time is of the essence.

Question 57

What is the difference between a repudiatory breach and a breach of condition?

Answer 57

A repudiatory breach refers to a breach of a condition, which gives the innocent party the right to treat the contract as repudiated and terminate it. A breach of condition is an important term ‘going to the root of the contract.’

Question 58

How does the law treat contractual terms regarding time performance or completion?

Answer 58

The law treats contractual terms regarding time performance or completion differently depending on whether time is of the essence. If time is of the essence, lateness can be a repudiatory breach. If time is not of the essence, the innocent party can make time of the essence by serving a notice on the defaulting party stating so.

Question 59

What is the effect of breach of terms implied by statute in relation to conditions and warranties?

Answer 59

Breach of terms implied by statute may be treated as a breach of warranty rather than a breach of condition if the breach is slight and it is unreasonable for the innocent party to repudiate the contract. In such cases, the innocent party is entitled to claim damages only.

Question 60

What is the significance of classifying terms implied by statute in a contract?

Answer 60

The classification of terms implied by statute determines the available remedies in the event of a breach. Conditions give rise to the right to reject and claim a refund, while innominate terms and warranties allow for a claim for damages. However, the remedy for breach of implied terms may be altered by specific provisions.

Question 61

What is a term of a contract?

Answer 61

Statements of fact made by the parties which they intend to be binding

Question 62

Which factor is not generally relevant when deciding whether the parties to a contract intended a statement to be binding?

A. The importance of the statement

A. The timing of the statement

A. Special knowledge or skill of the person making the statement

A. The age of the person making the statement

Answer 62

The age of the person making the statement

Correct. The age of the person making the statement is not relevant when deciding whether the parties intended the statement to be binding. The factors that are relevant include the timing and importance of the statement and whether the person making the statement had special knowledge or skills

Question 63

Why was the clause not enforceable against the claimant in Thornton v Shoe Lane Parking?

The parties previous dealings had not been regular and consistent

The claimant was not given reasonable notice of the clause either before or at the time of contracting

The defendants were prevented from relying on the clause because their employee orally misrepresented the meaning of the clause to the claimant

The clause was contained in a document that did not have contractual effect

Answer 63

The claimant was not given reasonable notice of the clause either before or at the time of contracting

Question 64

How can parties to a written contract reduce the possibility of a claim that there are binding oral terms alongside the written terms?

The parties can include an exemption clause in their written contract

The parties can say that there are no binding oral terms alongside the written terms

The parties can include an ‘entire agreement’ clause in their written contract

The parties can include a ‘complete agreement’ clause in their written contract

Answer 64

The parties can include an ‘entire agreement’ clause in their written contract

Correct. An entire agreement clause provides that a particular contract or set of contracts constitutes the entire agreement between the parties

Question 65

Which of the following is not a means by which we can ascertain the terms which the parties to a contract intend to be bound by?

Incorporation by course of dealing

Incorporation by agreement

Incorporation by notice

A signed written contract

Answer 65

Incorporation by agreement

Correct. This is not a means of ascertaining the terms of a contract. The terms can be ascertained where there is a signed written contract, where there is incorporation by notice, or where there is incorporation by course of dealing

Question 66

Which of the following is not a basis for implying terms in fact into a contract?

Under the common law

Where the parties have dealt with each other consistently and regularly in the past

On the grounds of trade or professional customs

To give business efficacy to a contract

Answer 66

Under the common law

This is the correct answer.
Terms implied at common law are not implied in fact. The grounds for implying terms in fact are to give business efficacy to a contract, where the parties have dealt with each other consistently and regularly in the past and on the grounds of trade and professional customs.

Question 67

Which of the following is correct about the Sale of Goods Act 1979?

The terms implied by ss 13, 14 and 15 of the Sale of Goods Act 1979 cannot be excluded or restricted by agreement of the contracting parties

The Sale of Goods Act 1979 implies terms to an agreement between a trader and a consumer

The Sale of Goods Act 1979 implies a term that the seller of goods has a right to sell the goods

The Sale of Goods Act 1979 implies a term that the goods will be of satisfactory quality if they meet the standard that the buyer of the goods regards as satisfactory

Answer 67

The Sale of Goods Act 1979 implies a term that the seller of goods has a right to sell the goods

This is the correct answer. The Act implies a term that the seller of goods has a right to sell the goods. This implied term is found in s.12(1) of that Act.
The SGA applies to business-to-business contracts only, and not to consumer contracts ie between a trader and a consumer. Satisfactory quality under the Act is judged on an objective basis (s14(2)), and contracting parties can agree to exclude or restrict ss13,14 and 15 of the SGA 1979, subject to the Unfair Contract Terms Act 1977.

Question 68

The Supply of Goods and Services Act 1982 does not imply terms in which type of contracts?

Contracts for the supply of services.

Certain contracts for the transfer of property in goods

Contracts for the hire of goods.

Contracts of sale of goods

Answer 68

Contracts of sale of goods

Question 69

A service that is carried out in the course of a business needs to meet what standard under the Supply of Goods and Services Act 1982?

Performed with reasonable care and skill

A satisfactory standard

An absolute standard - liability is strict

The relevant industry standard

Answer 69

Performed with reasonable care and skill

Question 70

The Consumer Rights Act 2015 regulates contracts entered into by what people?

Answer 70

A trader and a consumer

Question 71

What remedy is available to a consumer under the Consumer Rights Act 2015 where a trader breaches the implied term that the trader must perform the services contract with reasonable care and skill?

The consumer has a right to reject the service

The consumer has a right to receive a refund from the trader of all money paid by the consumer for the service

The consumer has a right to treat the contract as at an end because of the breach

The consumer has a right to require the trader to perform the service again to the extent necessary to complete its performance in conformity with the contract

Answer 71

The consumer has a right to require the trader to perform the service again to the extent necessary to complete its performance in conformity with the contract

This is the correct answer. The right to repeat performance is governed by s.55 of the Consumer Rights Act 2015. Where a trader breaches the implied term that he must perform the services contract with reasonable care and skill, the consumer has only two remedies available to him under the 2015 Act. The first is the right to repeat performance already stated, and the second remedy is the right to a price reduction.

Question 72

Which option is not available to an innocent party following breach of a condition by the other party to the contract?

The innocent party has the right to treat the contract as repudiated and sue for damages

The innocent party can waive the right to repudiate, affirm the contract and sue for damages

The innocent party can terminate the contract and sue for damages

The innocent party can accept the repudiatory breach, affirm the contract and sue for damages

Answer 72

The innocent party can accept the repudiatory breach, affirm the contract and sue for damages

This is the correct answer. The right to accept the repudiatory breach is mutually exclusive to the right to affirm the contract – the innocent party either accept the repudiatory breach or they can affirm the contract. They cannot do both. Please note that whichever option the innocent party takes, they will also have the right to sue for damages for the breach.
The other options given in the answers are all open to the innocent party.

Question 73

Under the Sale of Goods Act 1979, what is the classification of the implied term that goods will correspond with their description?

Answer 73

The term is classified as a condition, but it may be treated as a warranty if the breach is so slight that it would be unreasonable for the buyer to reject the goods

Question 74

What is the remedy for breach of an innominate term?

The innocent party has a statutory right to terminate the contract and sue for damages in all situations

The innocent party can rescind the contract and sue for damages where the consequences of the breach are serious

The innocent party can treat the contract as repudiated and sue for damages where the consequences of the breach are minor

The innocent party is limited to suing for damages where the consequence of the breach is minor

Answer 74

The innocent party is limited to suing for damages where the consequence of the breach is minor

This is the correct answer. The remedy for breach of an innominate term can be identified by applying the test in the case of Hong Kong Fir Shipping Co v Kawasaki Kisen Kaisha Ltd.
The test focuses on the consequences of the breach and asks the question whether the breach has deprived the innocent party of substantially the whole benefit of the contract. Where the question is answered in the affirmative, ie the consequences of the breach are serious, the term will be treated as a condition. Where the question is answered in the negative, ie the consequences of the breach are minor, the term will be treated as a warranty.
Regarding the other options, note that the remedy of rescission is not available for breach of contract.

Question 75

The owner of a construction company (‘company owner’) purchases a forklift truck from an online retailer. After the forklift truck is delivered, he notices a dent at the front. The company owner decides to use the forklift truck anyway. One month later, the company owner decides that he wants to get a different forklift truck from a different shop. He telephones the online retailer and says that he wants to return the forklift truck and get a refund but the online retailer refuses. Which one of the following statements best explains the legal position?

The online retailer has not breached any terms implied by the Sale of Goods Act 1979 as the forklift truck was still usable for its intended purpose. Consequently, the company owner cannot return the forklift truck and get a refund.

The online retailer has breached an implied term under the Sale of Goods Act 1979 to provide goods of satisfactory quality. The company owner may have been entitled to return the forklift truck; however, he affirmed the contract by using the forklift truck for a month. Consequently, he cannot return the forklift truck and get a refund.

Since the company owner affirmed the contract by accepting delivery of the forklift truck, the online retailer has not breached any implied terms. Consequently, the company owner cannot return the forklift truck and get a refund.

The online retailer has breached an implied term under the Sale of Goods Act 1979 to provide goods of satisfactory quality. As the purchase was made online the company owner can still return the forklift truck and get a refund.

The online retailer has breached the term implied term under the Sale of Goods Act 1979 to provide goods of satisfactory quality. The implied term is a condition which means that Company owner can still return the forklift truck and get a refund.

Answer 75

The online retailer has breached an implied term under the Sale of Goods Act 1979 to provide goods of satisfactory quality. The company owner may have been entitled to return the forklift truck; however, he affirmed the contract by using the forklift truck for a month. Consequently, he cannot return the forklift truck and get a refund.

Correct. This answer correctly identifies the breach, the available remedy and the effect of affirmation.

Question 76

A mother wants to buy a pony for her daughter. She visits the owner of a stable yard who is selling a pony. The mother says, ‘I only want the pony if she is happy to be petted.’ As she says this, she goes over to try and stroke the pony. The stable yard owner stands in her way and says ‘she’s happy to be petted. No need to check! You can have her for £500.’ The mother agrees to buy the pony the same day. When the pony arrives at her new home it is obvious that she is not happy to be petted. Which one of the following statements best explains the legal position?

Despite The stable yard owner’s protestations, the mother should have checked whether the pony was happy to be petted. The failure to check will result in the stable yard owner’s statement being a representation.

The stable yard owner’s statement that the pony is happy to be petted is likely to be a representation. It was unreasonable for the mother to rely on the expertise of the stable yard owner as she is best placed to know what pony would be suitable for daughter.

The stable yard owner’s statement that the pony is happy to be petted is likely to be a term of the contract. This is because it was important to the mother, the stable yard owner had specialist knowledge, she prevented the mother from checking, and the statement was made on the same day the contract was entered into.

Since the stable yard owner’s statement that the pony is happy to be petted was not written down, it will be a representation.

Since there was some delay between the statement that the pony is happy to be petted being made and the mother agreeing to buy the horse, it will be a representation. In order to be a term, a statement must be made immediately prior to contracting.

Answer 76

The stable yard owner’s statement that the pony is happy to be petted is likely to be a term of the contract. This is because it was important to the mother, the stable yard owner had specialist knowledge, she prevented the mother from checking, and the statement was made on the same day the contract was entered into.

Correct. This answer correctly applies the legal principles on distinguishing a representation from a term.

Question 77

A homeowner enters into a contract with a tree surgery company (‘the company’), for it to cut down two trees in her garden. The contract is in writing, and records the work to be carried out, when it will be carried out, and a price. No other terms are agreed. The company fails to take any steps to control the way in which the trees fall when cut, and one tree crashes through the homeowner’s conservatory, causing significant loss and damage. Which of the following is the clearest legal argument for the homeowner to advance?

The company has breached the implied term under the Supply of Goods and Services Act 1982 that a service must be performed with reasonable care and skill.

The company has breached the implied term under the Consumer Rights Act 2015 that a service must be performed with reasonable care and skill.

The company has breached the implied term under the Consumer Rights Act 2015 that a service must be performed within a reasonable time.

The company has breached the implied term under the Consumer Rights Act 2015 that in a contract to supply goods, goods must be of satisfactory quality.

The company has breached the implied term under the Sale of Goods Act 1979 that in a contract to supply goods, goods must be of satisfactory quality.

Answer 77

The company has breached the implied term under the Consumer Rights Act 2015 that a service must be performed with reasonable care and skill.

Correct. This answer recognises the distinction between business-to-consumer contracts, and business-to-business contracts and applies the correct statute.

Question 78

A customer buys a rechargeable lawnmower online from a retailer which operates a website selling gardening equipment to consumers throughout the UK for £170. The website describes the lawnmower as capable of operating for 90 minutes without needing to be recharged. In fact, it only operates for 35 minutes before needing to be charged. The customer wishes to bring a claim on the basis that the contract has failed to comply with the implied term that the goods would comply with their description. Which ONE of the following statements best describes the situation in relation to remedies available / not available to John?

The customer will not have any remedy for this breach.

This breach entitles the customer to damages, but not to terminate the contract.

The remedies available to the customer as a result of this breach depend on the consequences of the breach in accordance with the case of Hong Kong Fir v Kawasaki.

This breach entitles the customer to terminate the contact.

The remedies available to the customer as a result of this breach are as set out in the Consumer Rights Act 2015.

Answer 78

The remedies available to the customer as a result of this breach are as set out in the Consumer Rights Act 2015.

Correct. The other answers seem plausible, but they are not correct as they fail to identify which legislation this implied term comes from.

Question 79

A road maintenance company hires a van from vehicle hire company, at a cost of £270. The van is wholly unreliable and causes the maintenance significant losses. Under the contract between the two parties, the maintenance company has to return the van in the same condition as at the start of the hire period. On returning the van to the hire company’s yard, the hire company inspects the van, and presents the maintenance company with a sheet of A4 paper, marked “Record of vehicle condition at end of hire period”. The paper has a diagrammatic representation of a car split into various areas. Next to each area is written “no damage”. The hire company signs this sheet, and asks the maintenance company’s representative to sign it, which he does. At the foot of the page are various terms and conditions, in small print, which the maintenance company’s representative does not read. One of these terms (the ‘Term’) provides that the hire company’s liability for losses during the hire period is limited to £300. The maintenance company seeks to recover its losses caused by the van being unreliable, which exceed this sum, and the hire company seeks to rely on the Term to limit any liability. Which ONE of the following statements is most likely to be correct?

The Term was incorporated into the parties’ contract because the maintenance company signed the document.

The Term was incorporated into the parties’ contract because this is a reasonable term to include in the contract.

The Term was not incorporated into the parties’ contract because the maintenance company did not read it.

Whether or not the Term was incorporated into the parties’ contract depends on the extent of the maintenance company’s losses.

The Term was not incorporated into the parties’ contract because an objective party would not consider the document to have contractual effect.

Answer 79

The Term was not incorporated into the parties’ contract because an objective party would not consider the document to have contractual effect.

Question 80

Factors to consider for incorporation by reasonable notice?

Answer 80

Factors the courts take into account in deciding whether, or not, reasonable notice has been
given are:
*Nature of the document. Is the document one on which a reasonable person would
expect there to be contract terms? For example, a term on the back of a ticket that
someone had been given after paying for the hire of a deckchair was held not to be a
term of the contract. A reasonable person would simply have assumed that the ticket was
proof of payment.
*Timing. The notice must come before or at the time of the contract (eg on a quotation)
and not afterwards (eg on an invoice).
*Onerous terms (eg a term imposing a substantial fine if a particular condition is not
met). The more onerous the term the more a party must do to bring it to the other party’s
attention.
*The exemption clause must be legible.
*If the term is set out on the back of a document are there words on the front drawing the
other party’s attention to them, such as ‘See terms overleaf’?

Question 81

How can terms be incorporated?

Answer 81

Incorporation of terms
Terms may be incorporated into a contract in the following ways:
*Signature
*Reasonable notice before or at the time of the contract
*A previous consistent course of dealing

Question 82

Terms implied by fact?

Answer 82

a term may be implied into a contract where the parties have not expressly agreed
something, but the contract would be unworkable without the relevant term. It is taken that the
parties have implicitly agreed what is necessary to make commercial sense of their contract.