WK 9 - Case law Flashcards
Sale of Goods Act 1979
Implied terms for business to business contracts for the sale of goods
Unfair Contract Terms Act 1977
Restricts the ability to contract out of these implied terms
Consumer Rights Act 2015, Part 1
- Implies terms for business to consumer contracts for the supply of goods, digital content or services
- Restrict the ability to contract out of these implied terms
William Morton & Co v Muir 1907
Lace instructions
- Two businesses in same trade.
- M instructed W on making lace.
- M had card, W designs.
- Who gets protection when M goes bankrupt and person managing company uses M’s designs in competition with W?
- Ruled there was an implied term.
- Express consent necessary to be used outside of their contractual arrangement.
Acotec v McLaughlin 2016
Necessity of contract.
- Ring fence off sea to build a pier. Must abide by EU Regulations from 2007 to do so safely.
- Must the party completing work supply a design certificate to do so?
- Court ruled yes; therefore there was an implied term.
- Necessary for business efficacy.
[Cross referenced to Marks and Spencer v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2016] AC 742, at paras 14-31.]
The Moorcock (1889)
- In all cases a law is raising an implication from the presumed intention of the parties with the object of giving to the transaction such efficacy as both parties must have intended that in all events it should have
- Hull damaged whilst situated at dock
- Owners should take reasonable steps to allow safe stoppage. (Implied)
Marks and Spencer v BNP Paribas Securities Trust Co (Jersey) Ltd 2016
“implication of a term […] “not critically dependent on proof of an actual intention of the parties” […] one is not strictly concerned with the hypothetical answer of the actual parties, but with that of notional reasonable people in the position of the parties at the time at which they were contracting” per Lord Neuberger at para 21
McWhirter v Longmuir 1948
- Deliver milk to particular zones during war.
- Give zone to other when called to war.
- Express agreement as to when he could get zone back, but unsure if safe return from war.
- Express term not incorporated in contract
- Not express, nor implied
Southern Foundries (1962) Ltd v Shirlaw 1939
- Reasonableness/’the officious bystander’/goes without saying
- “Prima facie that which in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying; so that, if while the parties were making the bargain, an officious bystander were to express some provision for it in the agreement, they would testily suppress him with a common “Oh of course!”’ per Mackinnon LJ
Crawford v Bruce 1992
- Terms implied in fact
- Shop premises leased for a period of 10 years
- Rent review every 3 years
- Landlord to increase rent from £3250 to £6500
- Clause in lease (doesn’t specify how much agreed to pay)
- Tenant argues unenforceable clause due to uncertainty
- ‘No reasonable man in the tenant’s position would have refused to accede to it.’
J&H Ritchie v Lloyd Ltd 2007
- Machinery developed a problem 2 days after purchase
- Seller investigates and then informs purchaser that he machinery has been repaired
- Purchaser rejects goods
- Seller claims goods are satisfactory quality (unable to reject)
- Therefore goes without saying the term is implied
Repairs completed but purchaser unaware of nature of repairs. Entitled to reject as not sufficient information. [Repair, replacement, repayment]
Aberdeen City Council v Stewart Milne Group Ltd 2011
- Applied both business efficacy/’officious bystander’
- Inter-group transfer of the land by SMG
- Price paid was far below market value. Sold land to another part of SMG for under £500k but worth £5.5m (business efficacy).
- Reasonableness: Council would seek profit back if sold at market price
- Bound to sell at open-market rate
‘If the officious bystander has been asked whether such a term should be implied, he or she would have said ‘of course’. Put another way, such a term is necessary to make the contract work or to give it business efficacy.’ per Lord Clarke
Director General of Fair Trading v First National Bank plc [2001]
“The requirement of good faith in this context is one of fair and open dealing. Openness requires that terms should be expressed fully, clearly and legibly, containing no concealed pitfalls or traps. Appropriate prominence should be given to terms which might operate disadvantageously to the customer”
George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1983] 2 AC 803
- Extent of reliability if reasonable person proceeds with knowledge of risk. (e.g., railway line)
- Violenti non fit injuria s16(3)
Smith v Eric S Bush (A Firm) [1990] 1 AC 831
- The onus of proving that a term is fair and reasonable lies on the party seeking to rely upon it - s24(4)
- Equal bargaining power? Advice from another source? Difficulty of task/exclude liability? Who bears loss/insurance?
