Contracts for the Transfer and Hire of Goods: Implied Warranties and Exclusions, Lecture notes of Business

Download Contracts for the Transfer and Hire of Goods: Implied Warranties and Exclusions and more Lecture notes Business in PDF only on Docsity!     Supply of Goods and Services Act 1982 Chapter 29 Part I Supply of Goods Contracts for the transfer of property in goods 1 The contracts concerned (1) In this Act a “contract for the transfer of goods” means a contract under which one person transfers or agrees to transfer to another the property in goods, other than an excepted contract. (2) For the purposes of this section an excepted contract means any of the following— (a) a contract of sale of goods; (b) a hire-purchase agreement; (d) a transfer or agreement to transfer which is made by deed and for which there is no consideration other than the presumed consideration imported by the deed; (e) a contract intended to operate by way of mortgage, pledge, charge or other security. (3) For the purposes of this Act a contract is a contract for the transfer of goods whether or not services are also provided or to be provided under the contract, and (subject to subsection (2) above) whatever is the nature of the consideration for the transfer or agreement to transfer. 2 Implied terms about title, etc (1) In a contract for the transfer of goods, other than one to which subsection (3) below applies, there is an implied condition on the part of the transferor that in the case of a transfer of the property in the goods he has a right to transfer the property and in the case of an agreement to transfer the property in the goods he will have such a right at the time when the property is to be transferred. (2) In a contract for the transfer of goods, other than one to which subsection (3) below applies, there is also an implied warranty that— (a) the goods are free, and will remain free until the time when the property is to be transferred, from any charge or encumbrance not disclosed or known to the transferee before the contract is made; and (b) the transferee will enjoy quiet possession of the goods except so far as it     may be disturbed by the owner or other person entitled to the benefit of any charge or encumbrance so disclosed or known. (3) This subsection applies to a contract for the transfer of goods in the case of which there appears from the contract or is to be inferred from its circumstances an intention that the transferor should transfer only such title as he or a third person may have. (4) In a contract to which subsection (3) above applies there is an implied warranty that all charges or encumbrances known to the transferor and not known to the transferee have been disclosed to the transferee before the contract is made. (5) In a contract to which subsection (3) above applies there is also an implied warranty that none of the following will disturb the transferee’s quiet possession of the goods, namely— (a) the transferor; (b) in a case where the parties to the contract intend that the transferor should transfer only such title as a third person may have, that person; (c) anyone claiming through or under the transferor or that third person otherwise than under a charge or encumbrance disclosed or known to the transferee before the contract is made. 3 Implied terms where transfer is by description (1) This section applies where, under a contract for the transfer of goods, the transferor transfers or agrees to transfer the property in the goods by description. (2) In such a case there is an implied condition that the goods will correspond with the description. (3) If the transferor transfers or agrees to transfer the property in the goods by sample as well as by description it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description. (4) A contract is not prevented from falling within subsection (1) above by reason only that, being exposed for supply, the goods are selected by the transferee. 4 Implied terms about quality or fitness (1) Except as provided by this section and section 5 below and subject to the provisions of any other enactment, there is no implied condition or warranty about the quality or fitness for any particular purpose of goods supplied under a contract for the transfer of goods. (2) Where, under such a contract, the transferor transfers the property in goods in the course of a business, there is an implied condition that the goods supplied under the contract are of satisfactory quality.     as a breach of condition but may be treated as a breach of warranty. (2) This section applies unless a contrary intention appears in, or is to be implied from, the contract. (3) It is for the transferor to show that a breach fell within subsection (1)(b) above. Contracts for the hire of goods 6 The contracts concerned (1) In this Act a “contract for the hire of goods” means a contract under which one person bails or agrees to bail goods to another by way of hire, other than a hire- purchase agreement. (3) For the purposes of this Act a contract is a contract for the hire of goods whether or not services are also provided or to be provided under the contract, and whatever is the nature of the consideration for the bailment or agreement to bail by way of hire. 7 Implied terms about right to transfer possession, etc (1) In a contract for the hire of goods there is an implied condition on the part of the bailor that in the case of a bailment he has a right to transfer possession of the goods by way of hire for the period of the bailment and in the case of an agreement to bail he will have such a right at the time of the bailment. (2) In a contract for the hire of goods there is also an implied warranty that the bailee will enjoy quiet possession of the goods for the period of the bailment except so far as the possession may be disturbed by the owner or other person entitled to the benefit of any charge or encumbrance disclosed or known to the bailee before the contract is made. (3) The preceding provisions of this section do not affect the right of the bailor to repossess the goods under an express or implied term of the contract. 8 Implied terms where hire is by description (1) This section applies where, under a contract for the hire of goods, the bailor bails or agrees to bail the goods by description. (2) In such a case there is an implied condition that the goods will correspond with the description. (3) If under the contract the bailor bails or agrees to bail the goods by reference to a sample as well as a description it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description. (4) A contract is not prevented from falling within subsection (1) above by reason only that, being exposed for supply, the goods are selected by the bailee.     9 Implied terms about quality or fitness (1) Except as provided by this section and section 10 below and subject to the provisions of any other enactment, there is no implied condition or warranty about the quality or fitness for any particular purpose of goods bailed under a contract for the hire of goods. (2) Where, under such a contract, the bailor bails goods in the course of a business, there is an implied condition that the goods supplied under the contract are of satisfactory quality. (2A) For the purposes of this section and section 10 below, goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the consideration for the bailment (if relevant) and all the other relevant circumstances. (2B) If the bailee deals as consumer, the relevant circumstances mentioned in subsection (2A) above include any public statements on the specific characteristics of the goods made about them by the bailor, the producer or his representative, particularly in advertising or on labelling. (2C) A public statement is not by virtue of subsection (2B) above a relevant circumstance for the purposes of subsection (2A) above in the case of a contract for the hire of goods, if the bailor shows that— (a) at the time the contract was made, he was not, and could not reasonably have been, aware of the statement; (b) before the contract was made, the statement had been withdrawn in public or, to the extent that it contained anything which was incorrect or misleading, it had been corrected in public; or (c) the decision to acquire the goods could not have been influenced by the statement. (2D) Subsections (2B) and (2C) above do not prevent any public statement from being a relevant circumstance for the purposes of subsection (2A) above (whether or not the bailee deals as consumer) if the statement would have been such a circumstance apart from those subsections. (3) The condition implied by subsection (2) above does not extend to any matter making the quality of goods unsatisfactory— (a) which is specifically drawn to the bailee's attention before the contract is made; (b) where the bailee examines the goods before the contract is made, which that examination ought to reveal; or (c) where the goods are bailed by reference to a sample, which would have been apparent on a reasonable examination of the sample. (4) Subsection (5) below applies where, under a contract for the hire of goods, the     bailor bails goods in the course of a business and the bailee, expressly or by implication, makes known— (a) to the bailor in the course of negotiations conducted by him in relation to the making of the contract; or (b) to a credit-broker in the course of negotiations conducted by that broker in relation to goods sold by him to the bailor before forming the subject matter of the contract, any particular purpose for which the goods are being bailed. (5) In that case there is (subject to subsection (6) below) an implied condition that the goods supplied under the contract are reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied. (6) Subsection (5) above does not apply where the circumstances show that the bailee does not rely, or that it is unreasonable for him to rely, on the skill or judgment of the bailor or credit- broker. (7) An implied condition or warranty about quality or fitness for a particular purpose may be annexed by usage to a contract for the hire of goods. (8) The preceding provisions of this section apply to a bailment by a person who in the course of a business is acting as agent for another as they apply to a bailment by a principal in the course of a business, except where that other is not bailing in the course of a business and either the bailee knows that fact or reasonable steps are taken to bring it to the bailee’s notice before the contract concerned is made. 10 Implied terms where hire is by sample (1) This section applies where, under a contract for the hire of goods, the bailor bails or agrees to bail the goods by reference to a sample. (2) In such a case there is an implied condition— (a) that the bulk will correspond with the sample in quality; and (b) that the bailee will have a reasonable opportunity of comparing the bulk with the sample; and (c) that the goods will be free from any defect, making their quality unsatisfactory, which would not be apparent on reasonable examination of the sample. (4) For the purposes of this section a bailor bails or agrees to bail goods by reference to a sample where there is an express or implied term to that effect in the contract concerned.     other, are unreasonable, taking into account— (a) the value which the goods would have if they conformed to the contract for the transfer of goods; (b) the significance of the lack of conformity to the contract for the transfer of goods; and (c) whether the other remedy could be effected without significant inconvenience to the transferee. (5) Any question as to what is a reasonable time or significant inconvenience is to be determined by reference to— (a) the nature of the goods; and (b) the purpose for which the goods were acquired. 11P Reduction of purchase price or rescission of contract (1) If section 11M above applies, the transferee may— (a) require the transferor to reduce the purchase price of the goods in question to the transferee by an appropriate amount; or (b) rescind the contract with regard to those goods, if the condition in subsection (2) below is satisfied. (2) The condition is that— (a) by virtue of section 11N(3) above the transferee may require neither repair nor replacement of the goods; or (b) the transferee has required the transferor to repair or replace the goods, but the transferor is in breach of the requirement of section 11N(2)(a) above to do so within a reasonable time and without significant inconvenience to the transferee. (3) If the transferee rescinds the contract, any reimbursement to the transferee may be reduced to take account of the use he has had of the goods since they were delivered to him. 11Q Relation to other remedies etc (1) If the transferee requires the transferor to repair or replace the goods the transferee must not act under subsection (2) until he has given the transferor a reasonable time in which to repair or replace (as the case may be) the goods. (2) The transferee acts under this subsection if— (a) he rejects the goods and terminates the contract for breach of condition; (c) he requires the goods to be replaced or repaired (as the case may be).     11R Powers of the court (1) In any proceedings in which a remedy is sought by virtue of this Part the court, in addition to any other power it has, may act under this section. (2) On the application of the transferee the court may make an order requiring specific performance by the transferor of any obligation imposed on him by virtue of section 11N above. (3) Subsection (4) applies if— (a) the transferee requires the transferor to give effect to a remedy under section 11N or 11P above or has claims to rescind under section 11P; but (b) the court decides that another remedy under section 11N or 11P is appropriate. (4) The court may proceed— (a) as if the transferee had required the transferor to give effect to the other remedy, or if the other remedy is rescission under section 11P; (b) as if the transferee had claimed to rescind the contract under that section. (5) If the transferee has claimed to rescind the contract the court may order that any reimbursement to the transferee is reduced to take account of the use he has had of the goods since they were delivered to him. (6) The court may make an order under this section unconditionally or on such terms and conditions as to damages, payment of the price and otherwise as it thinks just. 11S Conformity with the contract (1) Goods do not conform to a contract for the supply or transfer of goods if— (a) there is, in relation to the goods, a breach of an express term of the contract or a term implied by section 3, 4 or 5 above; or (b) installation of the goods forms part of the contract for the transfer of goods, and the goods were installed by the transferor, or under his responsibility, in breach of the term implied by section 13 below. Part II Supply of Services 12 The contracts concerned (1) In this Act a “contract for the supply of a service” means, subject to subsection (2) below, a contract under which a person (“the supplier”) agrees to carry out a service.     (2) For the purposes of this Act, a contract of service or apprenticeship is not a contract for the supply of a service. (3) Subject to subsection (2) above, a contract is a contract for the supply of a service for the purposes of this Act whether or not goods are also— (a) transferred or to be transferred; or (b) bailed or to be bailed by way of hire, under the contract, and whatever is the nature of the consideration for which the service is to be carried out. (4) The Board may make rules to provide that one or more of sections 13 to 15 below shall not apply to services of a description specified in the rules, and such rules may make different provision for different circumstances. 13 Implied term about care and skill In a contract for the supply of a service where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill. 14 Implied term about time for performance (1) Where, under a contract for the supply of a service by a supplier acting in the course of a business, the time for the service to be carried out is not fixed by the contract, left to be fixed in a manner agreed by the contract or determined by the course of dealing between the parties, there is an implied term that the supplier will carry out the service within a reasonable time. (2) What is a reasonable time is a question of fact. 15 Implied term about consideration (1) Where, under a contract for the supply of a service, the consideration for the service is not determined by the contract, left to be determined in a manner agreed by the contract or determined by the course of dealing between the parties, there is an implied term that the party contracting with the supplier will pay a reasonable charge. (2) What is a reasonable charge is a question of fact. 16 Exclusion of implied terms, etc (1) Where a right, duty or liability would arise under a contract for the supply of a service by virtue of this Part of this Act, it may (subject to subsection (2) below and the 1977 Act) be negatived or varied by express agreement, or by the course of dealing between the parties, or by such usage as binds both parties to the contract. (2) An express term does not negative a term implied by this Part of this Act unless inconsistent with it.