Terms of a Contract

Question 1

How do courts decide whether an innominate term is a warranty or condition?

Answer 1

Courts look at the effect of the breach to determine the appropriate remedy?

If the whole benefit of the contract is lost, likely to be a condition.

Question 2

When does the Sale of Goods Act 1979 apply?

Answer 2

Whenever goods are sold

Question 3

What conditions does the SGA 1979 imply?

Answer 3

• Seller has a **right to sell **
• The goods match the description given by the seller
• The goods are of satisfactory quality (fit for the purpose they are generally used)
• Goods are fit for any special purpose that the buyer tells the seller the goods will be used for

Note: the condition of title cannot be excluded. Other conditions can only be excluded if the exclusion was reasonable

Question 4

When does the Supply of Goods and Services Act 1982 apply?

Answer 4

The SGSA 1982 applies to contracts for services supplied by a business and to goods supplied in relation to a service (business to business)

Question 5

What terms does the SGSA 1982 imply?

Answer 5

Same as the sale of goods act (ie satisfactory quality, good title, fit for purpose, match the description). These are all conditons.

AND an Innominate term, for service contracts that the supplier (if its a business) will carry out the service in a reasonable time and with reasonable care and skill

Contracts can exclude these implied terms only if it is reasonable

Question 6

When does the Consumer Rights Act 2015 apply?

Answer 6

Sale contracts between a business and a consumer (somoene who isn’t buying for business purposes).

Question 7

What terms are implied by the Consumer Rights Act 2015?

Answer 7

Same as Supply of Goods Act ie seller has title, goods comply with description, satisfactory quality, fit for purpose.

For service contracts, services should be:
- carried out with reasonable care and skill
- Completed in accordance with any information the consumer relies on
- Completed for a reasonable price
- Completed within a reasonable time

Question 7

Can terms in the CRA 2015 be excluded?

Answer 7

NO. Terms implied by the CRA 2015, cannot be excluded or limited. Any exclusions are prohibited terms under the CRA and will be void

Question 8

In what situations may a term be implied by the courts in a contract?

Answer 8

1. To give the contract business efficacy - ie it is necessary to make the contract work the way the parties intended
2. There is an industry/market standard covered by the contract, terms can be implied based on the custom and usage in that field
3. Where there are regular and consistent dealings between parties

Question 9

What happens if no price is agreed in a contract?

Answer 9

The SGA, SGSA and CRA provide that the buyer will pay a reasonable price if no price has been agreed.