The Law of Contract - Essay Example

The Law of Contract Part One In respect of Maggie’s rights, Vis –a – Vis English Rail, it has to be ascertained whether English Rail can rely on exemption clauses to evade liability for the damage caused to her. For an exemption clause to be valid it has to be incorporated in the contractual agreement; it should unambiguously cover the liability; reasonable notice should have been provided1; and it should not be prohibited by statute or other legislation, such as the UTCCR and UCTA2. Maggie was unable to obtain a ticket from the ticket machine, as it was not functioning. A notice had been placed near the machine, which stated that English Rail was in no way liable for any damage caused to passengers. Maggie, a seller of handmade cakes, purchased a ticket to Surbiton at the King’s Loo Station, in order to meet a seller of cake boxes, namely Boxes & Things. The reverse side of the ticket stated that it was issued according to the standard terms and conditions of English Rail, which were available at their website. One of these clauses held that English Rail was not liable for any loss or damage caused to its passengers. This exclusion clause had not been incorporated into the contract; because it was available only at the website, whose address was printed on the reverse of the ticket. As such, the contract had been completed with the issue of the ticket to Maggie. Consequently, the exemption clause is invalid. An exclusion clause is valid only if it had been incorporated into the contract either before or at the time of concluding the contract3. In Olley v Marlborough Court Hotel, a notice had been displayed in the hotel room, which could not be seen at the time of booking the hotel room. The court held that this exemption clause could not be incorporated into the contract4. On boarding the train, Maggie slipped on the carriage’s floor and injured her ankle and damaged her new coat. She lost her balance, because the English Rail staff had failed to clean tea spilt previously on the carriage floor. The objective of exemption clauses is to exclude liability of one of the parties. However, the Unfair Contract Terms Act, states that no contractual exclusion term can either limit or preclude liability, in cases involving negligence that resulted in injury or death of an individual. Moreover, in instances entailing a term of notice that is unreasonable; liability for negligence cannot be mitigated or excluded5. The redoubtable Lord Denning, in Spurling v Bradshaw, opined that certain exclusion clauses were to be printed conspicuously and in red ink on the relevant document. Therefore, considerable importance is attached to exemption clauses by the courts6. No such prominent notice was given to Maggie, and the reverse of the ticket contained a direction to view the website of English Rail, for information regarding its rules. As such, the exclusion clause was not incorporated into the contract, prior to the completion of the contract. Hence it is invalid. In Thornton v Shoe Lane Parking, the court rejected the exclusion clause, and ruled that printing the exclusion clause on the reverse of the ticket constituted insufficient notice to customers7. Due to the gross negligence of English Rail’s staff, Maggie sustained injury to her ankle and her new coat was damaged. According to the Unfair Contract Terms Act, no contractual exclusion term can exclude liability or limit liability, in any manner, in cases involving negligence that resulted in injury or the death of an individual8. Consequently, English Rail will be liable for the loss or injury caused to Maggie, on account of their negligence. She can claim damages for her torn coat and sprained ankle. English Rail cannot rely on the exemption clause to avoid damages or responsibility for the loss caused to Maggie. Part Two At the offices of Boxes & Things, Maggie informed the proprietrix, Victoria that she required cake boxes of specific dimensions. However, on delivery, some of the boxes were found to be unsuitable for her purpose, due to being smaller. Subsequently, she was able to procure boxes that satisfied her specific requirements more economically; hence, she was desirous of rescinding the contract and obtaining a refund of the money she had paid. The implied term in every sale of goods transaction, requires these goods to be appropriate for the buyer’s purpose that has been informed to the seller9. This implied term is applicable to all the instances of sale of goods, in the course of business, regardless of whether purpose has been explicitly or implicitly made known to the seller. This term does not apply if the buyer decides about the appropriateness of the goods for his purpose, without resorting to the skill and judgment of the seller. According to section 14(2) of the SGA, goods sold must be of satisfactory quality and in compliance with the description provided at the time of sale. Moreover, such goods must reasonably serve the intended purpose of the buyer. The Sale and Supply of Goods to Consumers Regulations 2002 permits consumers to reject the goods or to claim compensation, if these goods are defective or unsuited for the purpose for which they had been purchased10. In Slater v Finning Ltd, the court held that failure on the part of buyer to inform the seller of any abnormal features required in goods purchased would prevent the buyer from seeking damages under Section 14(3) of the Sale of Goods Act11. In Preist v Last the court held that the reason for purchasing goods can be either implied or express. If the goods to be purchased can be utilised only for a single purpose, then there is no need to investigate the appropriateness of the goods for that purpose12. Under the Sale of Goods Act the seller is under an obligation to inform the buyer about the appropriateness of the goods for the specific purpose of the buyer13. These implied terms provide sufficient grounds for buyers to sue the seller for damages in cases of breach. The fundamental requirement of the SGA is that the goods supplied in the due course of business, should be of satisfactory quality14. It is very important to determine whether a purchaser can be deemed to be a consumer, in order to assess his rights, in instances of breach of contract. The statute states that a consumer is a person who acts for reasons that fall beyond the purview of his business, profession or trade15. In Davies v Sumner, it was held that although the car was used to earn money, its sale was not an integral part of the business16. An amendment to section 15 a UK Sale of Goods Act 1979 precludes rejection of goods by the buyer, if there is minimal discrepancy in conformity with sample, quality and fitness. However, this amendment is inapplicable to a consumer buyer. Maggie is a consumer buyer, because she is a seller of cakes and uses the boxes for packing them. As such, she is not in the business of buying and selling cake boxes. These boxes are ancillary to her business. The SGA provides certain remedies for breach of contract in sale of goods. These remedies are repair, substitution, partial refund, rejection and full refund. In addition, if a defect arises within six months of the sale, then it is to be construed that the defect was present at the time of the sale of those goods17. Maggie had ordered the boxes for a specific purpose. Some of the boxes supplied to her under the contract of sale of goods, were not in conformity with what she had specified at the time of agreement with Victoria. These boxes do not serve the purpose for which she had purchased these boxes. Hence, she can reject the goods in their totality or require Victoria to substitute the non – conforming portion of the consignment18. List of References Davies v Sumner (1984) 3 All ER 831 Hardwick Game Farm v Suffolk Agricultural etc Association (1969) 2 AC 31 Olley v Marlborough Court Hotel (1949) 1 KB 532 Preist v Last (1903) 2 KB 148 Richard Lawson, 2005, Exclusion Clauses and Unfair Contract Terms, Sweet & Maxwell Richard Taylor, 2007, Contract Law Directions, Oxford University Press Section 2, Unfair Contract Terms Act 1977 Section 3(1), Consumer Contracts Regulations 1999 Section 14(2), Sale of Goods Act 1979 Section 14(3), Sale of Goods Act Section 16(a), Sale of Goods Act 1979 Section 48 A (3), Sale of Goods Act 1979 Section 48, The Sale and Supply of Goods to Consumers Regulations 2002 Slater v Finning Ltd (1997) A.C. 473 Spurling Ltd v Bradshaw (1956) 1 WLR 461 Thornton v Shoe Lane Parking Ltd (1971) 1 All ER 686 Read More