Week Nine Flashcards
What are the key focuses when discussing implied terms in contracts?
What is an implied term?
When will the law imply terms into a contract?
Why does the law imply terms into a contract?
What are the categories of implied terms?
Implied by Law (by statute, by common law, by custom/usage, affecting similar contract types)
Implied in Fact (affecting individual contracts)
What are some examples of implied terms by statute?
Working Time Regulations 1998
Commercial Agents (Council Directive) Regulations 1993
Sale of Goods Act 1979 / Consumer Rights Act 2015
Can implied terms in the Sale of Goods Act 1979 be restricted?
Implied terms for business-to-business contracts for the sale of goods.
Unfair Contract Terms Act 1977 restricts contracting out of these implied terms.
Can implied terms in the Consumer Rights Act 2015 be restricted?
Part 1 implies terms for business-to-consumer contracts for the supply of goods, digital content, or services.
Restricts the ability to contract out of these implied terms.
What are the key sections of implied terms in the Sale of Goods Act 1979 and Consumer Rights Act 2015?
Good title (s12 1979 Act / s17 2015 Act)
Conforming to description (s13 1979 Act / s11 2015 Act)
Satisfactory quality (s14 1979 Act / ss9-10 2015 Act)
Quality of goods sold by sample (s15 1979 Act / ss13-14 2015 Act)
What are the rules for contracting out of implied terms in the Sale of Goods Act 1979?
Unfair Contract Terms Act 1977 s20
s12 - No contracting out
ss13-15 - Only if fair and reasonable
What are the rules for contracting out of implied terms in the Consumer Rights Act 2015?
s31 - No contracting out
What are some examples of implied terms under common law
Duties in specific professions such as solicitors or accountants (duty of care).
Employment contracts contain duty of mutual trust/confidence.
What is a case reference for implied terms by custom?
William Morton & Co v Muir 1907.
When should terms be implied by custom?
If both parties would reasonably expect them.
What is the purpose of terms implied in fact?
To make contracts workable.
What is the business efficacy/necessity test for implied terms?
Ensuring the contract works as intended by the parties.
What is a case reference for the business efficacy/necessity test?
The Moorcock (1889).
What does Marks and Spencer v BNP Paribas (2016) emphasize about implied terms?
Non-reliance on actual party intention.
What is the reasonableness/officious bystander test for implied terms
Terms so obvious that they go without saying.
What is a case reference for the reasonableness/officious bystander test?
Southern Foundries v Shirlaw (1939)
What was the issue in Crawford v Bruce?
Rent review clause and issues of enforceability due to non-specification.
What was the issue in J&H Ritchie v Lloyd Ltd?
Machinery defect and implied terms of quality and rejection rights.
What was the issue in Aberdeen City Council v Stewart Milne Group Ltd?
Business efficacy and off-market sale with implications for implied terms.
What is the test for implied terms?
Necessary for business efficacy or so obvious it goes without saying.
What are some case references for the test for implied terms?
Acotec v McLaughlin (2016)
Marks and Spencer v BNP Paribas (2016)
What is the focus of statutory control of contract terms?
How statutes ensure fairness in contract terms, covering both business to consumer and business to business contracts.
What does the Consumer Rights Act 2015 replace?
The Unfair Contract Terms Act 1977 and Unfair Terms in Consumer Contracts Regulations (1994, 1999).
To which contracts does the Consumer Rights Act 2015 apply?
Contracts between traders and consumers (s61).
How are “trader” and “consumer” defined under the Consumer Rights Act 2015?
Trader: Person acting for trade, business, craft, or profession.
Consumer: Individual acting outside their trade, business, craft, or profession.
What must courts consider under s71 of the Consumer Rights Act 2015?
The fairness of consumer contracts even if not raised in proceedings.
Are unfair terms and notices binding on consumers?
No, they are not binding on consumers (s61).
What is the fairness test under s62 of the Consumer Rights Act 2015
Good faith requirement.
Significant imbalance in rights/obligations.
Detriment to the consumer.
How is fairness determined under s62?
By the contract nature and circumstances at the time of agreement.
What are some key cases related to unfair terms and notices?
ParkingEye Ltd v Beavis [2015].
Director General of Fair Trading v First National Bank plc [2001].
What is required for fair and open dealing in consumer contracts?
Terms should be clear without hidden traps.
What types of terms may be regarded as unfair?
Trader’s liability restrictions.
Unilateral decisions by the trader.
Disproportionate breach rights.
Restrictions on consumer’s litigation rights.
When are terms not regarded as unfair under s64?
If they are transparent and prominent, including main subject matter terms and price comparison terms.
How are ambiguous terms interpreted under s69?
They are not binding, but the rest of the contract continues.
Can exclusion clauses exclude liability for death/personal injury from negligence under s65?
No, they cannot.
To which contracts does the Unfair Contract Terms Act 1977 apply?
Businesses and certain contract types (e.g., sale, service).
What does the Unfair Contract Terms Act 1977 affect?
Exclusions and restrictions on liability for breach of duty.
Can liability for death/personal injury be excluded under ss. 2(1), 16(1)(a)?
No, it cannot be excluded.
What happens to other liability exclusions under ss. 2(2), 16(1)(b)?
They have no effect if not fair/reasonable.
What does volenti non fit injuria mean under ss. 2(3), 16(3)?
No injury consented to.
What is the key point in George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1983]?
The onus on proving fairness and reasonableness is on the enforcing party.
What considerations are highlighted in Smith v Eric S Bush (A Firm) [1990]?
Equal bargaining power, external advice, task difficulty, loss bearing.
What is the effect of standard form contracts under s17?
No effect if they exclude or restrict liability for breach or alter performance than agreed.
