Week 9: Implied Terms (Statute and Fact) Flashcards
What are the two categories of implied terms?
- Implied by Law
- Implied by fact
What are the two primary statutes which regulate implied terms?
- Sale of Goods Act 1979 (Business to business)
- Consumer Rights Act 2015 (Business to consumer)
What is meant by ‘Terms implied through fact’?
- Context of the express terms of the contract.
- Commercial common sense
- Prior cummings (what the parties knew at the time of contracting)
What are the 4 common restrictions within both the Consumer Rights Act 2015 and the Sale of Goods Act 1979?
- The seller will pass on a good title
- Goods sold by description will meet that description
- Goods sold in the course of business will be of satisfactory quality
- Were goods are sold by sample, bulk will be of similar quality
Provide two examples of implied terms under the common law.
- Professionals duty of care to clients
- Duty of trust and confidence between an employer and an employee.
What case is referenced concerning implied terms through custom?
Morton v Muir
Facts:
* Two businesses in the same trade; making lace
* Both based in Ayrshire
* Morton gave Muir instructions on how to make lace
o This included the use of design cards
* Muir had the card but the design of the card belonged to Morton
o Who gets the protection when Muir goes bankrupt, and someone uses the designs
o Use of Morton’s card
* Was there an implied term that the design should only apply between them
Judgement:
Every reasonable man on the one part would desire for his own protection to stipulate for the condition and that no reasonable man on the other would refuse to accede it , then it is not unnatural that the condition should be taken for granted in all contracts of this class without the necessity of giving it formal expression.
* There was an implied term
* Even though if one had a design card, the design belonged to Morton and would require express permission to use
What are the two features of the test used to evaluate whether a term was implied or not?
- Business Efficiency/necessity - Whirter v Longmuir
- Reasonabless/’goes without saying rule’ - ‘oh of course’
Which case highlights the two pronged test desigined to determine whether a term was implied or not?
Aberdeen City Council v Stewart Milne Group Ltd
What are the three features of the test designed to determine whether a contract can be deemed unfair or not, as outlined in s. 62 (5) of the Consumer Rights Act 2015?
- Contrary to the requirement of good faith
- Causes a significant imbalance in the parties rights/ obligations
- To the detriment of the customer
What 4 consumer contract terms can be regarded as unfair as outlined in schedule 2 of the Consumer Rights Act 2015?
- Terms restricting the liability of the trader
- Terms which allow the trader to make unilateral decisions about the main subject of the contract or the price
- Terms where the traders rights following a breach are disproportionately better than those of the consumer
- Terms restricting or adversely affecting the consumers right to litigate in the event of a breach
What two terms may NOT be regarded as unfair, as outlined in s. 64 of the Consumer Rights Act 2015?
- A term about the main subject matter of the contract
- A term about the price by comparison with goods, digital content or services supplied under it
Should a term be considered unclear or ambiguous how does s. 69 (1) suggest that term be interpeted?
Contra Proferendum.
What will happen should a contract be declared unfair?
- Not binding to the customer
- The rest of the contract will continue, as is possible
How does the Consumer Rights Act 2015 regulate exclusion clauses?
A trader cannot by a term of a consumer contract or by a consumer notice exclude or restrict liability for death or personal injury resulting from negligence.
How does the Unfair Contract Terms Act 1977 regulate exclusion clauses?
s. 16 (1) (a): It is not possible to exclude liability for death or personal injury.
