Terms

Question 1

Is something a term or a representation? Four things to consider:

Answer 1

(1) Importance attached to the statement by party
(2) Special knowledge or skill of person making statement
(3) Time lag between making statement and making contract
(4) Whether there is a written contract

Question 2

Case showing that if great importance is attached to a pre-contractual statement, it’s more likely to be a term than a representation

Answer 2

Couchman v Hill (1947)

Seller said a cow was not pregnant, when it was. The cow was bought but died giving birth. The statement was clearly important to the buyer, so was a term, not a representation

Question 3

Case showing that if someone WITHOUT special knowledge or skill makes a statement, it’s more likely a representation than a term

Answer 3

Oscar Chess v Williams (1957)

An individual man sells a car privately. He said he thought it was a 1948 model, but was wrong. This was not held to be a term as he did not have any special knowledge or skill

Question 4

Case showing that if someone with special knowledge or skill makes a statement before a contract, it’ll likely be a term rather than a representation

Answer 4

Dick Bentley v Harold Smith Motors (1965)

Car dealer says car has done 20,000 miles when it had done 100,000 miles. This was a term, because it was a car dealer saying it

Question 5

Case that holds that many terms are innominate, as they can’t be said to be conditions or warranties, without knowing the consequences of the breach

Answer 5

Hong Kong Fir Shipping Co. Ltd v Kawasaki (1962)

Question 6

Case showing that if there is a written contract, and something discussed isn’t included in it, it’s presumed not to be a term

Answer 6

Routledge v Mackay (1954)

Buyer and seller discussed manufacture date of vehicle the week before, but never put that into the written contract. Therefore, it was presumed to not be important enough to be a term, but was a representation

Question 7

What are the three types of term in a contract?

Answer 7

(1) Condition
(2) Warranty
(3) Innominate term

Question 8

What is a “condition” of a contract?

Answer 8

A term which is so important that a failure to perform it would destroy the main purpose of the contract

Question 9

Case showing an example of a breach of a condition

Answer 9

Poussard v Speirs (1876)

An actress agrees to play the lead role in a performance, but fails to turn up for the first few performances. The producers are entitled to treat this as breach of a condition and refuse to allow her back in for next performances

Question 10

Case showing an example of a clause being only a warranty

Answer 10

Bettini v Gye (1876)

Performer is contracted for six days of rehearsal plus some concerts. They miss some rehearsals. Attending the rehearsals is held not to be a condition, as it does not go to the root of the contract: it is only a warranty

Question 11

In what four ways can a term be implied into a contract?

Answer 11

(1) Common law (term obviously needed to make contract work)
(2) Statute (e.g. CRA 2015)
(2) Prior dealing of parties
(3) Custom

Question 12

When is a term implied into a contract at common law?

Answer 12

When:
(1) It’s needed to make the contract work, and
(2) The parties would obviously have agreed to it, if they’d thought about it beforehand

Question 13

What is the name of the test for whether a term should be implied into a contract at common law, on the basis that parties would obviously have agreed to it?

Answer 13

The “officious bystander” test

That is - if an officious bystander had asked if this clause was in the contract, BOTH parties would have answered “Oh, of course!” - Shirlaw v Southern Foundries Ltd

Question 14

Case showing a term being implied through it being obviously needed to get the contract to work

Answer 14

The Moorcock (1889)

Defendants own a wharf where claimants dock their ship. At low tide, the ship breaks up on rock. Held: It’s an implied term that the wharf would not endanger the ship at low tide, as any reasonable person would think this was obvious

Question 15

What terms are implied by CRA 2015 into a contract for goods?

Answer 15

s9: Satisfactory quality
s10: Fitness for purpose
s11: Match description

Question 16

Which section of the CRA 2015 says it is an implied term that goods are of satisfactory quality?

Answer 16

s9 CRA 2015

Question 17

Which section of the CRA 2015 says it is an implied term that goods are fit for the purpose for which they are purchased?

Answer 17

s10 CRA 2015

Question 18

Which section of the CRA 2015 says it is an implied term that goods will match their description?

Answer 18

s11 CRA 2015

Question 19

When does the Consumer Rights Act 2015 apply?

Answer 19

When one party is acting for the purposes of their trade, and the other party is an individual who is not mainly acting for the purposes of their trade

Question 20

How is “satsfactory quality” assessed under CRA 2015?

Answer 20

By what the reasonable person would consider satisfactory, taking into account:
- The goods’ description
- the price
- Other relevant issues

Question 21

When might a trader have a defence to goods not being of “satisfactory quality”?

Answer 21

When:
- The consumer had an opportunity to inspect the goods, or
- The trader has brought the consumer’s attention to any defects in advance

Question 22

What are the remedies for breach of an implied term about goods, under CRA 2015 (and from what sections of the Act)?

Answer 22

s20: Short-term right to reject
s23: Right to repair or replacement
s24: Right to price reduction or final right to reject

Question 23

The short-term right to reject goods under s20 CRA 2015 must be exercised within how long?

Answer 23

30 days

Question 24

If the consumer exercises their short-term right to reject under s20 CRA 2015, what obligations is the trader under?

Answer 24

They must issue a refund without undue delay, and must pay the costs of the return of the goods
(Other than the costs of taking them back to, say, a shop)

Question 25

When can a consumer NOT use their right to get the trader to repair or replace the item under s23 CRA 2015?

Answer 25

When the costs of repairing or replacing would be disproportionately high - instead, they should issue a refund

Question 26

If a consumer uses their right under s23 to repair or replacement, what oblgiations is the trader under?

Answer 26

They must repair or replace the item within a reasonable time

Question 27

In consumer contracts for goods, what happens if there is a fault but six months have passed since purchase?

Answer 27

After six months, the burden is on the consumer to prove the defect was present at purchase
(If it’s within the first six months, the burden is on the trader to show the fault was NOT present at purchase)

Question 28

What terms are implied by statute into a contract to supply services (and from what sections of the CRA 2015)?

Answer 28

s49: Reasonable care and skill
s52: Performance within a reasonable time

Question 29

What remedies are available under the CRA 2015 for breach of a contract to supply services (and from what sections of the Act)?

Answer 29

s55: Right to get the trader to repeat the service
s56: Right to a price reduction (only if repeating the service is impossible or the trader hasn’t done it in a reasonable time)