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Terms Part 1, WE ARE PART OF THE ELITE SOCIETY - DR SANJHEETA, BE USEFUL…

- - - - Nature of the Relationship
        
        Per Lord Steyn in Equitable Life Assurance Society v Hyman (2002):
        
        Some terms are implied because it is a default option coming from 'particular forms of contracts'
        
        Landlord and tenant
        
        Liverpool v City Council v Irwin (1976):
        
        HoL implied duty to take reasonable care of the so called common parts (stairs, hallways and lifts etc.) on the landlord of premises with multiple occupants
        
        Employer and employee
        
        Terms are implied in employment contracts to the effect that an employer must not:
        
        Overwork staff in ways that damage their health - Johnstone v Bloomsbury Health Authority (1992)
        
        Conduct fraudulent businesses - Malik v Bank of Credit & Commerce International SA (in Liquidation) [1992]; or
        
        Go bank on an earlier promise to provide a large 'bonus pool' in a manners likely to destroy relationships of confidence + trust between employer and employee - Attrill v Dresdner Kleinwort Ltd (2012)
    - - Sales of Goods Act 1979 (Business to Business)
        
        Applies to contract for the sales of goods - defined in Section 2 "the seller transfers or agrees to transfer property in the goods to the buyer for a money consideration called the price"
        
        Section 13 - implies term that the good sold must correspond to description of it
        
        s13(1A) - term is classified as a condition
        
        s13(2) - sales of goods by sample + description. Goods must correspond to both the sample and description
        
        s13(3) - sales of description can take place in cases where buyer has seen the goods
        
        Section 14 - is amended by the Sales & Supply Goods Act 1994 and the Sales & Supply of Goods to Consumer Regulations 2002
        
        s14(2) - seller sells goods, there is implied term that goods suppled under contract in of satisfactory quality
        
        s14(2A) - satisfactory quality if that they meet standard a reasonable person considers satisfactory, taking into account of description of goods, price and other relevant conditions
        
        s14(2B) - quality of goods including their state + condition and the following:
        
        Appearance + finish
        
        No minor defects
        
        Safety
        
        Durability
        
        s14(2C) - Subsection 2 above WON'T APPLY when:
        
        Defect was specifically drawn to buyer's attention before contract is made
        
        Buyer examined goods before contract is made and examination revealed the defect
        
        In case of contract for the sale by sample, which would have been apparent on reasonable examination of the sample
        
        s14(3) - Where buyer (expessly/by implication) alerts seller a particular purpose (not by common purpose) for buying the goods in question, there is further implied term that the good is fit for that specific purpose
        
        Slater & Others v Finning Ltd (1996) - seller must be aware of the particular purpose of the goods
      - Consumer Rights Act 2015 (Business to Consumer)
        
        Imposed upon traders contracting with consumer duties that correspond to the implied terms described for B2B contracts
        
        Uses language of duties and does not make distinction of conditions and warranties
        
        Section 9 - Goods to be of satisfactory quality
        
        Every contract to supply goods is to be treated as including a term that the quality of the goods is satisfactory
        
        Quality of goods satisfactory if they meet the standard that a reasonable person would consider satisfactory, taking account of:
        
        (a) any description of goods
        
        (b) price or other consideration of goods (if relevant)
        
        (c) all other relevant circumstances (see subsection(5))
        
        Quality of goods include state + condition, and following aspects (among others) are in proper aspects of the quality of goods:
        
        (a) fitness for all purposes for which goods of that kind are usually supplied
        
        (b) appearance + finish
        
        (c) No minor defects
        
        (d) safety
        
        (e) durability
        
        Term mentioned in subsection (1) does not cover anything that makes the quality of goods unsatisfactory:
        
        (a) which is specifically drawn to consumer's attention before contract is made
        
        (b) consumer examines goods before contract is made, where examinations ought to reveal or
        (c) in the case of contract to supply goods by sample, that would have been apparent on a reasonable examination of the sample
        
        Section 10 - Goods to be fit for particular purpose
        
        (1) Subsection (3) applies to a contract to supply goods if before contract is made, the consumer informs toe trader (express or by implication) any particular purpose for which the consumer is contracting the goods
        (3) Contract is to be treated as including a term that goods are reasonably fit for that purpose, whether or not that is a purpose for which goods of that kind are usually supplied
        
        Section 11 - Goods to be described
        
        Every contract to supply goods by description is to be treated as including a term that the goods will match the description
        
        Section 13 - Goods to match a sample
        
        Contract so supply goods by reference to a sample of goods that is seen or examined by the consumer before the contract is made
        
        Every contract to which this section applied is to be treated as including a term that:
        
        (a) goods will match sample except to the extent where difference in sample and the goods are brought to the consumer's attention before contract is made; and
        
        (b) Goods will be free from any defect that renders quality unsatisfactory and that would not be apparent on reasonable examination of the sample
        
        Section 14 - Goods to match a model seen or examined
        
        Section applies to contract to supply goods by reference to a model of goods that is seen or examined by consumer before entering into contract
        
        Every contract to which this section applies is to be treated as including a term that goods will match model except to the extent that any difference found between model and goods are brought to the consumer's attention before entering into contract
        
        Section 49 - Service to be performed with reasonable care and skill
        
        Every contract to supply a service is to be treated as including a term that the trader must perform the service with reasonable care and skill
- - - - Basically "unclassified" terms , introduced in Hong Jong Fir Shpping Co Ltd v Kawasaki Kisen Kaisha Ltd (1962)
        
        Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd (1962):
        
        Facts:
        
        C chartered a ship to D for a period of 2 years. The engine room staff were stupid and the machinery was old which caused the ship to be unseaworthy for about 20 weeks (18 months left for usage).
        
        D claimed the contract was at the end. There was a term in the contract "the ship would in every way be fitted for cargo service". = breach of condition.
        
        C sued for wrongful termination- arguing that their breach did not entitle D to put an end to the contract but merely to claim damages
        
        Held: D not entitled to terminate the contract. The term was known as an Innominate Term. Courts will decide whether the Injured Party has the right to rescind due to seriousness of consequence of the breach.
        
        At the end of the day charter party still had 20 months of use. Charter party was not fully deprived of the whole benefit of the contract as was intended by both parties
        
        Its not the fact of breach that relieves a party from further obligations but instead the consequence of the event that caused the breach
        
        TEST: Depriving Substantially of the Whole Benefit
        
        Breach of innominate term = Remedy is not automatic
        
        Courts are given greater degrees of flexibility and will assess consequence of breach / seriousness of breach having looking at all relevant circumstances
        
        Effect of breach of the innominate will depend on the result of the breach:
        
        A) if the breach is
        
        So serious
        
        Goes to the root of the contract
        
        Where it substantially deprives the innocent party of the whole benefit that were intended under the contract
        
        Term will be known as a CONDITION = breach will not be repudiatory where injured party can either:
        
        Affirm and claim damages OR
        
        Terminate and claim damages
        
        B) If the breach is:
        
        Not so serious
        
        Does not go to root of the contract
        
        Does not deprive them of the whole benefit of the contract (injured party can still enjoy the benefit of the contract)
        
        Term will be known as WARRANTY = breach would not be repudiatory where injured party can ONLY CLAIM DAMAGES
    - - Terms that go toward root obligation of contract
        
        Obligations that go directly to the substance of the contract
        
        Essential to very nature of contract that non-performance leads to failure of contract - Wallis, Sons & Wells v Pratt & Haynes (1911)
      - Breach generally is repudiatory (AKA "to end") and innocent party is entitled to:
        
        Terminate contract and claim damages OR
        
        Affirm the contract and claim damages
        
        Poussard v Spiers & Pond (1876):
        
        Facts: Opera singer failed to appear on opening night
        
        Held: This was a breach of condition
      - Contracting parties are free to classify their terms. But they must "make it plain from the contract as whole" that it was their intention
        
        Hence whether the term is condition depends on their intention of the parties
    - - Contractual terms that contain minor/less important obligations
        
        These are collateral or secondary to the main purpose of the contract
      - Breach of such terms is not repudiatory
        
        Innocent party is only entitled to damages whether the term is a warranty. This depends on:
        
        Whether parties classified it as such (intention of parties)
        
        If not, then before courts classify term as warranty they must consider the consequence of the breach
        
        Bettini v Gye (1876):
        
        Facts: An opera singer failed to attend rehearsals
        
        Held: This is a breach of warranty. The injured party could not treat the contract as ended. They were entitled to damages only