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Topic 10- Consumer Protection (Section 14: Quality of the Goods (S14((2): …
Topic 10- Consumer Protection
Introduction
Unequal Bargaining Power
Generally presumed that the contracting parties are meeting on equal terms and are beginning from positions of equal bargaining power
Reality= this is not always the case
Often one of he parties o a contract in much stronger bargaining poisition than the other
Irealnd
Traditional approach= 'caveat emptor' or 'let the buyer beware'
BUT repaced by pro-consumer approach- encapsulted under umbreall of consumer protection legislation
Sale of Goods Act 1893/ Sale of Goods and Supply of Services Act 1980
Principle pieces of legislation
These pieces of legisllation contain cerain standard terms, which are to be implied into all contracts for the sale of goods
Earlier approach under 1893 Act- the terms would be implied as long as relevant agreement contained no provision to the contrary
This changed under 1980 act- IMPLICATION OF THESE PROVISIONS MANDATORY
SECTION 62 1893 ACT DEFINES GOODS
Goods include all chatels personal other than things in action and money
The term includes emblements, indusrial growing crops and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale
Section 12 1893 Act
Implies 3 terms re title into consumer contracts
IMPLIED WARRANTY:t that the purchaser will have
quiet possession
of goods in question
i.e. no one will impede purchaser's use of goods
2/3 are implied warranties= any breach will result in claim for damages
IMPLIED WARRANTY: that the goods are free from charges or encumbrances i.e. there are no outstanding claims in respect of the goods by any third parties
IMPLIED CONDITION: vendor has
good title
to the goods in question and as such, has the right to sell these goods
Any breach of condition= termination of contract
12(2): Parties may agree that the vendor will only transfer title as he/she or a third part possesses
Requirement re title = limited to the extent that the seller's rights have been fully disclosed
O'Reilly v Fireman:
This term applies even in cases where the seller is unaware of the fact that he does not possess any title to pass
s22 1980 Act: these provisions cannot be excluded from any contract for the sale of goods
If these terms are not included, contract will be deemed void
Section 13: Sale by Descriptin
Implied condition
In order to qualify as a sale by description it must be estab the
description of goods was considered a vital part of the contract
Harlingdon v Hull Fine Art:
Noted when commenting on similar English Legislation- the description must be influential in the sale, not necessarily alone, but so as to become an essential term
Description v Quality
A distinction must be made between the descripiton of the goods and their quality
A description of the goods involves details concerning the essential characteristics of the item
e.g. a dress describe as being mde of finest quality silk
poor quality silk - s 13 would no apply as - inaccurate description of the goods
Oscar Chess v Williams:
held that statements made regarding the age and mileage of a motor vehicle were not considered to be sale by way of description
Ashington Piggeries v Christopher Hill:
Pig meal was contaminated with a chemical
P argued it did not match description as it had detiled ingredients and the chemical was not in it
Held: Court disagreed
It was held the contaiment was a defect in the quality of the product, herring meal, not a different ingredient
Section 14: Quality of the Goods
S14((2):
Implies a condition into all contracts where the seller sells goods in the course of a business
that those goods will be of merchantable quality
Restrictions
Applies only to goods sold during course of a business
Provision may be excluded where defect in quality has been brought to th eattention of the pruchaser
Excluded where purchaser has inspected the goods prior to purchase and where the defect would have been obvious upon such inspection
e.g. of buyer beware to a certain extent
Merchantable Quality
Question as to whether goods re of merchantable quality qu of fact
s14(3): decribes goods as being of merchantable quality if they are
fit for the purpose(s) for which goods of that kind are ordinarily bought
as durable as is reasonable in accordance with their description, price and all other relevant circumstances
McDermott:
Acknowledges- this definition has yet to be extensively considered in a modern Irish case
Seems claims re merchantable quality will be determined on case-by-case basis
Lutton v Saville
:
P bought 3 year old car, D represented it had not suffered any damage
It had
entitled to rescind the contract
it is just as important not to modify a clear definition contained in a statute by incorporating inconsistent statements from previous judicial decisions as to avoid treating judicial observations made in the context of the facts and issues in particular cases as complete definitions
Bernstein v Pamson Motors:
Stated second hard car would be considered of merchantible qualuty if it could be driven safely
Much higher expectations of a brand new car
Rogers v Parish:
Held that a brand new car that had a faulty engine and gearbox, as well as some damage to exterior was unmerchantable under circumstances
Fit For Purpose
Vendor will not be liable where he/she could not have reasonably foreseen the purpose for which the goods were bought
14(4): Purchaser, either expressly or by implication, makes the seller aware of teh purpose for which goods are being bought= IMPLIED CONDITION that the goods will be reasonably fit for that purpose, regardless of whether or not that is a purpose for which the goods are commonly supplied
Wallis v Russell
: P went to fishmonger in order to purchase two fresh crabs for tea
Fishmonger had not fresh crabs left but offered to sell two boiled crabs instead
P bought crabs, which caused food poisoning
Held: Fishmongher knew the crabs were going to be eaten and despute the fact the defect was not obvious from reasonable inspection, fishmonger was still considered liable
goods were not fit for the purpose for which they had been pruchased
Skill and judgement
S14(4)
: the seller will not be liable where the purchases chooses not to rely, or indeed it is unreasonable for him/her to rely , on the vendor's skill or judgement
Draper v Ruberstein:
: Well-established butcher bought cattle that were subsequently discovered to be unfit for human consumption
Held: Court rejected his claim against D on basis that the D had relied on his own superior skill and knowledge as a butcher
Multiple purposes
James Ellio Construction v Irish Aspalt Ltd:
Facs case concerning the supply of infill
Issue: Whether infill supplied was fit for purpose
Infill was not fit for every purpose the buyer wished to use it for
Held: THe purpose must be indicted by the buyer, whcih it was not in this case
Since infill was fit for other purposes, of which i could beused and was used, it was not held to be unfit for purpose
therefore of merchantable quality
Section 15: Sale by Sample
IMPLIED CONDITION that where goods are sold by sample, the quality of the goods will correspond to the sample
Purchaser has an implied right to examine the sample in order to a make a judgement on the quality of the goods
Indeed, where both the sample and corresponding bulk are determined to be of unmerchantable quality, the vendor will be liable for both
However, if it is possible upon inspection of the sample to discover the presence of the defect, then the vendor may escape liability
Applicability of Exclusion Clauses to the Provisions of the Legislation
Section 12 1893 Act: Can never be contracted out of
s55(3) provides that any term purporting to do so is void
see s22 of 1980 act for this
s40 1980 Act: Implied terms can be contracted out of in contracts for the supply of services
However, where the recipient of the esrvice is a consumer it must be shown
the term is
fair and reasonable
and has
has been brought to the consumer's attention
Some of the implied terms of the Sale of Goods Act 1893 and Sale of Goods supply and Services Act 1980 may be contracted out of by way of an exclusion clause in certain circumstances
s55(4): Where buyer is a consumer, s13 (description), s14 (merchantable quality and s15 (Sale by Sample) cannot be contracted out of
s55(4): where buyer is not a consumer - an exclusion clause will be enforceable only if it can be established that the term is
fair and reasonable
NOTE: These acts apply to businesses dealing with eahother
Heightened protection for consumers but still apply
Who is a consumer?
A person is a consumer when he/she purchases good or orders services
not
through the course of his or her normal business
Furthermore, the vendor or supplier with whcih the purported is dealing must, but contrast,
be
acting in the course of his or her business
Not a consumer contract-
Where one consumer enters into contract with another consumer e.g. for private sale of dog- this will not be considered a consumer contract
If roles are reversed and consumer attempts to sell goods to business person- not a consumer contract
Non Consumer Contracts: FAIR AND REASONABLE
Courts may take a number of factors into account when trying to determine whether a clause is fair and reasonable
George Mitchell v Finney Lock seeds
:
Facts: p purchased what he believed a Dutch Winter cabbage seed from a seed merchant
Had been given a different seed of a defective variety
crop failed and P sued
Held: Clause that limited liability for defective seeds to the price of seed was unfair and unreasonable
Took into account
The fact there was a serious loss involved
the fact the D had compensated other wronged parties
the fact they were in a stronger position to obtain insurance to cater for such losses
SEE SCHEDULE 3- FAIR AND REASONABLE TEST AND CONDITIONS
Exclusion clauses will be permissible in context of non-consumer contracts in respect on s13, 14, and 15 if that can be said to be FAIR AND REASONABLE
Court will have regard to following factors
The relative bargaining power of the parties
The availability of methods of obtaining goods or securing services
Whether or not the party was induced into entering into the contract
Whether the customer had knowledge- actual or constructive- of the term (having regard to custom of trade or through a course of dealing)
Whether compliance with an obligation placed on the customer was practicable
Whether or not the goods in qu were made to the customer order
Edmund Murray v BP International Foundations
Facts: oil rig built to the specification of the purchaser
However Ds hired on basis of their expertise and could not use an exclusion clause to avoid liabiliy when the rig was found to be improperly constructed
such term= not fair and reasonable
James Elliot Construction: It is what fair and reasonable having regard to circumstances