Statutory controls of exclusion and limitation clauses and Other remedies

Control within the SGA 1979

Section 13 states that in all contracts when goods are sold by description or sample there is an implied condition that they will correspond with the description or sample. this applies even if the buyer examines and still selects the goods.

Section 14(2) states that when goods are sold in the course of a business there is an implied condition that they will be of satisfactory quality.

Section 14(3) states when goods are sold in the course of a business and the buyer makes known any particular purpose for which the goods are being bought, there is an implied condition that the goods are reasonably fit for purpose. this is the case whether or not the purpose made known by the buyer is the purpose for which the good is commonly supplied.

Control within the SGSA 1982

Sections 3 & 4 are the equivalent to ss13, 14(2) and 14(3) of the SGA 1979 but cover goods transferred under a contract of service.

Section 13 states that in a contract for supply of services, when the supplier is acting in the courser of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill.

Section 14 states that in a contract for the supply of a service, when the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service within a reasonable time.

Control under the Unfair Contract Terms Act 1997

This statute focuses on exclusion and limitation clauses in an attempt to protect consumers. Section 11 states the requirement of a term being reasonable. that the term should have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have know to or in contemplation of the parties when the contract was made.

Factors the courts will consider are:

The relative strength of the parties bargaining positions

Whether the customer was given any inducement to agree to the excllusion or limitation term.

Whether the customer should have know of the term

Whether the goods were altered or adapted at the customers request

Cases:

George Mitchell Ltd v Finney Lock Seeds Ltd (1983)

Watford Electronics Ltd v Sanderson CFL (2001)

Granville Oil & Chemicals Ltd v Davis Turner & Co. Ltd (2003)

Control within the Unfair Terms in Consumer Contract Regulations 1999

The UTCCR covers every term in a contract made between a consumer and a seller or supplier, not just exclusion or limitation clauses. if under the UTCCR a term is found to be unfair then that term will not be contractually binding. UTCCR only protects consumers.

There are certain factors which must be considered by the court:

The relative bargaining strength of the parties

A term requiring the consumer to pay a disproportionately high amount of compensation for a breach 

A term requiring the consumer to complete oblogations even if the seller or supplier does not perform his

Special requirements placed on the consumer

Will not apply if the term is in plain, intelligible language and relates to a core contractual term or the adequacy of the price or remuneration for goods or services provided.

Rejection

If there is a breach of a term implied by ss13, 14(2) or 14(3) of the SGA or ss3 and/or 4 of the SGSA the buyer has the right to treat the contract as ended and to return the goods i.e reject the goods. The implied terms are conditions so the claimant can repudiate and/or claim damages.

Rescission

His remedy is found mainly in cases of misrepresentation. the effect is that it places the parties in their pre contractual positions and if that is not possible then rescission is not awarded.

Injunction 

An injunction is usually awarded when damages are not an adequate remedy and the rights of the of the claimant need protecting. 

An injunction will not be awarded for a party to complete a personal service, as the court is unable to supervise such an order.

Case - Page One Records Ltd v Britton

Specific Performance

This is when the court orders a party who is in breach to complete their side of the contract. this is a very rare remedy and will only be awarded when the subject matter of the contract is unique and an award of damages would be an inadequate remedy, e.g. a contract for the sale of land or a Picasso painting.