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Contract law and the Sale of Goods act 1979

1. Contract law: introduction:

A contract can be described as a legally enforceable agreement between two or
more parties. If a party to a contract breaks part of the agreement (and consequently
breaches the contract) the other party can sue them…

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The Offer ­
A clear statement by one party of the terms on which they are willing to make a

There are complex rules around making an offer. They must be clear,
communicated to the other party, may be time limited or made subject to conditions.

They must be…

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On the point of consideration not having to be adequate we have only to look at the
sale of Barings bank to a Dutch bank for £1 after the Nick Leeson fiasco resulted in
the downfall of the merchant bank. The £1 represents consideration for the terms of
the agreement…

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Express terms ­ identified and agreed between the parties in writing or orally

Implied terms ­ implied into certain types of contracts. They can occur in 3 ways:
By custom or trade usage ­ e.g. trade guidelines such as ABTA

By the courts ­ to give a contract `business efficacy'…

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Contractual terms are defined as either

(a) conditions or

(b) warranties (promises)

A condition is a major term of a contract, breach of which will entitle e.g. the B to
end the contract and reject the goods. These terms are integral to the contract.

Warranties are minor terms of the…

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S14 (2) Implied condition that the goods are of `satisfactory quality'.

This means that when a S sells in the course of business (not a private sale), the
goods must be of a satisfactory quality. The courts will look at a number of issues
such as

Price ­ the higher…

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condition then the B can still make a claim e.g. if the goods are of unsatisfactory
quality. But if something is sold as shop soiled and the price reflects this and you
buy it you may not later be able to reject it.

Remedies available for the buyer

Reject goods…

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In practical terms, property in the goods is ownership. It is important to know that
property in goods may be transferred even though the S may still be in possession
of it.

There are legal consequences as with the transfer of property passes the transfer of
risk. Usually in consumer…

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Supply of goods and services
Product liability

1. Supply of Goods and Services Act 1982 (SGSA)

This Act applies to all goods supplied under a contract of hire or a contract for
goods and services. The main practical distinction from the Sale of Goods Act is
the element of…

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Where SERVICES are supplied the following terms are implied into contracts:

S.13 the supplier will carry out those services with reasonable skill and care

S.14 the supplier must carry out those services within a reasonable time (unless
this has already been set out in the contract).

The important thing to…


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