UNIT 5

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Author:
kitttaz
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142137
Filename:
UNIT 5
Updated:
2012-03-18 17:42:54
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Description:
EXPRESS AND IMPLIED TERMS
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  1. HUTTON V. WARREN (1836) 1 M&W466
    Courts may imply a term because of local custom or trade usage.

    The court cannot imply such a term if the contract has any provisions that contracdict it.
  2. SPURLING V BRADSHAW [1956] 1 WLR 461 CA
    Terms may be implied by a previous course of dealings between the parties.
  3. ATT-GEN FOR BELIZE V BELIZE TELECOM LTD [2009] 2 ALL ER 1127
    In this case, the court implied terms in order to reflect the presumed intentions of the parties.

    Lord Hoffman emphasised that the court had no power to improve on the contract or to introduce terms to make the contract more fair or reasonable.
  4. LIVERPOOL CITY COUNCIL V IRWIN AND ANOTHER [1977] AC 239
    • A case where terms were implied by the courts because of the type of contract.
    • The case was about a landlord/tennant contract.
  5. SALE OF GOODS ACT 1979

    SECTION 8
    • If there is no price stated in the contract, and it is not distinguishable from the wording, the buyer must pay a reasonable price,
    • What is reasonable is a question of fact depending on the situations.
  6. SALE OF GOODS ACT 1979

    SECTION 13
    • Where there is a contract for sale by description, there is an implied term that the goods will correspond to that description.
    • This implied term is a condition.
    • This is a strict liability - there is no need to prove any fault, just that the goods dont match the description.
  7. SALE OF GOODS ACT 1979

    SECTION 14 (2)
    (2) Where a seller sells goods in the course of a business there is an implied term that the goods supplied under the contract are of satisfactory quality.

    (2A) Goods will be of a satisfactory quality if a reasonable person would regard them as such taking into account any description, the price, and any other relevant circumstances.
  8. SALE OF GOODS ACT 1979

    SECTION 14 (3)
    If a buyer has made known to the seller or any credit broker, any particular purpose for which the goods are being purchased, there is an implied term that the goods will be reasonably fit for that purpose, except where it is shown that the buyer does not rely, or that it is unreasonable to rely on the skill or judgement of the seller (or credit broker).
  9. SALE OF GOODS ACT 1979

    SECTION 14 (2A) TO (2C)
    These sections explain what is meant by satisfactory quality. they cover appearance, safety and durability but do not cover any matter specifically drawn to the buyers attention before the contract is made.
  10. HARLINGDON & LEINSTER ENTERPRISES LTD V. CHRISTOPHER HULL FINE ART LTD [1990] 3 WLR 13
    There can be a sale by description (section 13 of the 1979 Act) even where the buyer has examined the goods provided that the buyer has reasonably relied on the description.
  11. SALE OF GOODS ACT 1979 (AS AMENDED BY THE SALE AND SUPPLY OF GOODS TO CONSUMER REGULATIONS 2002)

    SECTION 48 (A)
    There is a rebuttable presumption of nonconformity where goods do not conform to the contract within 6 months of the date they were delivered.
  12. On what grounds can courts imply terms into contracts?
    • 1. By custom or trade usage - Hutton v. Warren
    • 2. By a previous course of dealings - Spurling v. Bradshaw
    • 3. To reflect the presumed intentions of the parties - Att.Gen for Belize v. Belize Telecom Ltd
    • 4. Where it is necessary because of the type of contract - Liverpool City Council v. Irwin and another.
  13. S.48 A-D
    SALE OF GOODS ACT 1979

    WHERE GOODS DO NOT CONFORM TO THE CONTRACT, WHAT TWO ADDITIONAL REMEDIES ARE AVAILABLE FIRSTLY TO THE CONSUMER?
    • In these circumstances a consumer may require the seller to repair or replace the goods free of charge.
    • Theseremedies are not available if they are either impossible or otherwise disproportionate in comparison to other remedies such as a price reduction.
  14. SUPPLY OF GOODS AND SERVICES ACT 1982
    If a contract is just for the supply of a service, which sections of the 1982 Act will apply?
    sections 13, 14 and 15
  15. Explain s.3 of the 1982 Act
    There is an implied condition that in a transfer by description, the goods will correspond with the description.
  16. Explain section 4 of the 1982 Act
    There is no implied condition about the quality or fitness for any particular purpose of goods supplied under a contract for the transfer of goods.

    If the goods are transferred in the course of a business, there is an implied condition that the goods supplied under the contract are of a satisfactory quality.
  17. Section 13 of the 1982 Act
    There is an implied term that in a contract for the supply of a service, the person carrying out that service will act with reasonable care and skill.
  18. Section 14 of the 1982 Act
    In a contract for the supply of a service where no time limit for conducting the service is determinable, there is an implied term that the supplier will carry out the service within a reasonable time (what constitutes a reasonable time is a question of fact).
  19. Section 15 of the Supply of Goods and |Services Act 1982.
    In aconduct for the supply of a service where the consideration for the service is not determined, there is an implied term that the party contracting with the supplier will pay a reasonable charge.
  20. What is the difference between a condition and a warranty
    A condition is a major term - a term that goes to the root of the contract.

    A warranty is a minor less important term
  21. How do the courts decide whether a term in a contract is a condition or a warranty?
    • The court applies an objective test: Would a reasonable person think that the parties to the contract intended the term to be a condition or a warranty?
    • The court puts emphasis on deciding the importance of the term which has been brokenat the time the contract was made, rather than focussing on the effects of the breach, the loss or damage which results from the breach.
  22. What is the effect of a breach of a:

    1.Condition

    2. Warranty
    1. If the court decides that the term is a condition and the contract hsa not been performed, the innocent party can terminate the contract and obtain damages for any additional loss, even if the loss is minor.

    2. If the term is a warranty, the future performance of the contract cannot be terminated. The innocent party can onkly sue for damages ar loss suffered.
  23. Sculer v. Wickman Machine Tool Sales Ltd [1974] AC 235 HL
    The use of the word Condition ina contract raises a rebuttable presumption that the word is used in the legal sense.
  24. Hong Kong Fir Shipping Co. Ltd v. Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26
    Innominate terms. Diplock LJ suggested suggested that the test to be applied was to ask whether the breach deprived the innocent party of substantially the whole benefit of the contract.
  25. What are the two approaches to the classification of contractual terms?
    1. Traditional approach-Terms are either conditions or warranties. This gives certainty as both parties know from the start what will happen if ther is a breach, but also means that if a breach of a condition results in a minor loss, the contract can be terminated, whereas a breach of a warranty that results in a major loss does not allow for termination.

    2. Innominate
    Approach - (Hong Kong FIR Shipping) This means looking at the effects of the breach and avoiding the possible unfairness of the traditional approach. The downside is that you loose certainty.

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