Terms and implied Terms

Question 1

s12 Sale of Goods Act

Answer 1

Implied term as to title
- seller has the right to sell the goods
- condition

Question 2

s13 SGA

Answer 2

Correspondence with description
- This term is classified as condition
- Breach entitles innocent party to repudiate the contract
- The implied term is a condition, but 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 3

What do breaches of the implied terms under Sale of Goods Act entitle the innocent party to?

Answer 3

Repudiate the contract and claim damages
- unless breach is so slight it would be unreasonable to treat it as a breach of condition

Question 4

A design company ordered a roll of fabric in the colour “fluorescent pink” from a specialist fabric company. However, on arrival, the fabric turned out to be “wavey pink”, which is darker.

What can the design company do?

Answer 4

Repudiate the contract as a breach of condition and claim damages

• This breach is not so slight as to be treated as a warranty. It is fundamental that the design company has the correct colour
• Therefore, breach is treated as a breach of condition

Question 5

Under s14(2), implied term that goods are fit for particular purpose, when will there not be a breach?

Answer 5

A good will not be deemed to breach s14(2) where an issue has been brought directly to the buyer’s attention

• There is not a breach if the buyer is told about the issue

Question 6

s14 - fitness for a particular purpose

Answer 6

Where the seller sells goods and the buyer expressly makes known to the seller the particular purpose for which the goods are being brought - there is an implied term that they are fit for the particular purpose

• breach is classified as a condition

Question 7

What is a condition precedent?

Answer 7

A condition which must be satisfied before any rights come into existence
- where the coming into existence of a contract is subject to the occurrence of a specific event
- it can be inserted into a contract under which a condition must be fulfilled before the contract becomes effective and both parties are bound

Question 8

What is the situation if a condition precedent is not met?

Answer 8

Contractual obligations are not enforceable, as contractual obligations have not arisen (as the condition precedent was not met)

• condition precedent requires fulfilment before contractual obligations come into effect

Question 9

What is a condition

Answer 9

A condition is a term that goes to the root of the contract. A breach of condition entitles the innocent party to a right of election: to terminate or affirm the contract and claim damages

Question 10

What is the seller’s rights if the buyer does not accept (s50 SoGA)?

Answer 10

The seller has the right to claim damages for non-acceptance

If a buyer and seller enter into a valid contract, the seller delivers goods in accordance with the terms of the contract and the buyer refuses to accept delivery, under s50, the seller is entitled to damages for non-acceptance

Question 11

Can implied terms be excluded under a contract?

Answer 11

Yes, for example, a party can exclude the implied term of satisfactory quality under a contract

• this would be subject to the requirement of reasonableness (which is a issue of fact)

Question 12

What implied term under the Sale of Goods Act 1979 cannot be restricted?

Answer 12

• seller’s liability can be excluded and or restricted by agreement of the parties. But this is subject to UCTA

UCTA limits ability to exclude/restrict these implied terms:
- the implied term as to title cannot be excluded or restricted

Cannot exclude liability for breach of statutory implied term that the seller has title to the goods at the time of sale