Unit 21 – Aspects of Contract and Business Law

P6 explain the law with respect to consumer protection in given situations

Recap last sessionAssignment 2 – Due 24th January 2013

To achieve these criteria you are going to produce a table followed by a report.The table will have three columns.a) the clause from your selected contractb) the clause re-written into understandable English (P4)c) the impact of that clause (P5)The report will be your evaluation for D1

Specification Content• Sale of goods: • definitions of goods; • implied terms for title, description, fitness,

satisfactory quality; • Sample under Sale of Goods Act 1979 (as amended)

• Supply of goods and services: • definitions; • implied terms for supply of goods and services,

work and materials; • Implied terms for hire of goods under Supply of

Goods and Services Act 1982

P6 explain the law with respect to consumer protection in given situations

P6 requires an explanation of the effect of legislation on contracts for the sale of goods and sale of services, or a combination of the two. Currently, this would include the Sale of Goods Act 1979 implied terms in sections 12-15. The explanation needs to include all technical terms used, such as satisfactory quality and an investigation of the law set out in the Supply of Goods and Services Act 1982 and associated legislation and cases

M2 analyse how consumers are protected in the event of breach of contract for the supply/sale of goods or services

M2 can then be covered on the basis of some hypothetical failures in a consumer contract. For example, failure of the modem firewall or a broadband connection in the context of a contract for broadband connection. Learners would need to apply relevant legislation to the relevant terms and conclude the likely outcome. This is likely to include examination of exclusion clauses and the legislation that applies to the validity of such terms.

Assignment 3

Scenario: You are now working in Student Services at Grimsby Institute. The learning mentors are very happy with the resources you have produced. They feed back to you that they too are learning a lot. You explain that what you have talked about so far is pure contract law, and that there are additional laws and protections in consumer law. The learning mentors have asked you if you would produce some information for them on consumer law.

Task 1 (P6 - part) Interim Deadline – 07/02/13Create a one-page web-page explaining the law given to consumers when buying clothes.

Task 2 (P6 - part) Interim Deadline – 07/02/13Create a second page to your web-page explaining the law given to consumers when buying an internet service contract.

Task 3 (M2) Interim Deadline – 07/02/13Write a report, and add it to the web-page you created earlier. In the report analyse how consumers are protected when something goes wrong and the contract is breached. This can either be for a problem with the clothes such as the seams giving way, or failure of a broadband connection in the context of a contract for broadband connection.

Sale of Goodskey legislation is the Sale of Goods Act

1979The Sales of Goods Act 1979 S2(1) defines a

contract of a sale of goods as:‘A contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration called price.’

only those contracts which fall within it are covered by the Act

Definition of goods

Goods include all tangible items of property such as food, clothes and furniture.

Land and money are excluded from the definition.

Implied termsSOGA (1979) has a series of conditions

that are automatically included in every contract dealing with sales.

These conditions include information dealing with:◦Title – S12◦Description – S13◦Fitness & Quality – S14◦Sale by Sample – S15

S12 Title (right to sell)In S12 there is an implied condition

on the part of the seller having the right to sell the goods.

A seller will be liable for breach of contract if they cannot pass a good title to the buyer.

Over to youFind out what happened in the case

of Rowland v Divall (1923).◦What was the case about?◦What was the result?◦Do you agree with the result?

Upload this into the Moodle slot.

S13 Description (goods match their description) In S13 for any contract for the sale of goods by

description there is an implied term that the goods will correspond with that description.

The description of the goods may cover such matters as size, quantity, weight, ingredients and origin as well as how the goods are packed.

The slightest departure from this description gives the buyer the right to reject the goods for breach of contract.

Over to youFind details of Beale v Taylor (1967)

◦What was the case about?◦What was the result?◦Do you agree with the result?

Student Book 2 page 101Case Study: F W Moore & Co v Landauer

& Co [1921]

S14 Satisfactory Quality and Fitness for PurposeThere is no general duty placed on private sellers

to make sure that the goods sold are of correct quality and suitability. This preserves the principle of caveat emptor, buyer beware.

If something is sold in the course of business then the principle is different, the goods sold should be of satisfactory quality except where the defects are bought to the buyers attention before the contract is made or ought to have been noticed by the buyer if they have examined the goods.

S14 does not impose absolute standards of quality with which all goods must comply. However goods must be satisfactory to a reasonable person.

The goods supplied should also be fit for purpose for which they are supplied. This ensures that they are safe, durable and long lasting

In the course of a business when the seller sells the goods it is implied that the buyer has expressly made known to the seller the particular purpose that they needed the goods for.

It is vital that a seller is told if a particular product is to be used for a particular purpose this will offer then a degree for protection under the legislation.

Over to youFind details of

◦Priest v Last (1903)◦Bernstein v Pamson Motors (1987)

◦What were the cases about?◦What was the result in each case?◦Do you agree with the results?

Specification Content• Sale of goods:

definitions of goods; implied terms for title, description, fitness,

satisfactory quality; • Sample under Sale of Goods Act 1979 (as amended)

• Supply of goods and services: • definitions; • implied terms for supply of goods and services,

work and materials; • Implied terms for hire of goods under Supply of

Goods and Services Act 1982

Over to youStudent Book 2 page 102

Case StudyRogers v Parish (Scarborough) Ltd [1987]

Activity: Fit for purpose

Complete both in the relevant Moodle slots.

S15 SampleS15 provides that in a contract of sale by

sample there is an implied condition that:◦The bulk will correspond with the sample in

quality.◦The buyer will have a reasonable opportunity

of comparing the bulk with the sample◦The goods will be free from any defect making

their quality unsatisfactory which would not be apparent on reasonable examination of the sample.

Over to youFind details of

◦Godley v Perry (1960)

◦What was the case about?◦What was the result of the case?◦Do you agree with the result?

Over to you

SOAG Summary activity on Moodle. For each scenario explain whether there is a breach of the Sale of Goods Act.

Specification Content Sale of goods:

definitions of goods; implied terms for title, description, fitness,

satisfactory quality; Sample under Sale of Goods Act 1979 (as amended)

• Supply of goods and services: • definitions; • implied terms for supply of goods and services, work

and materials; • Implied terms for hire of goods under Supply of

Goods and Services Act 1982

Assignment 3

Scenario: You are now working in Student Services at Grimsby Institute. The learning mentors are very happy with the resources you have produced. They feed back to you that they too are learning a lot. You explain that what you have talked about so far is pure contract law, and that there are additional laws and protections in consumer law. The learning mentors have asked you if you would produce some information for them on consumer law.

Task 1 (P6 - part) Interim Deadline – 07/02/13Create a one-page web-page explaining the law given to consumers when buying clothes.

Supply of goods and servicesThe SOGA 1979 only applies to contracts

where goods are sold for money. It does not cover other methods of obtaining goods nor does it cover the provision of services.

The Supply of Goods and Services Act 1982 was passed to give terms that had previously been implied by common law in contracts for services.

The legislation was passed to protect transactions covered under the sale of goods.

◦contracts for supply of goods and services◦ for work and materials including

building work, car repairs, installation work such as central heating and double

glazing, hairdressing and gardening,

◦contracts where no money changed hands such as exchange or barter, contracts for free gifts

◦contracts for hire of goods including cars, machinery and clothing

Implied terms for supply of goods and services, work and materialsS2 contains an implied condition that the transferor has

the legal right to transfer the propertyS3 states when the transfer is for goods or services by

description when there is an implied condition that the goods will correspond to that description.

S4 provides that when goods are transferred in the ordinary course of business there is an implied condition that the goods are suitable quality and fit for the purpose.

S5 refers to the transfer of goods for a sample then there is an implied condition that the bulk will correspond with the sample.

Implied terms for hire of goods under Supply of Goods and Services Act 1982

This act deals with implied terms that apply to contracts where one person agrees to bail goods to another person by way of hire.

Different sections of the act deal with the various implied teams and conditions.

Remedies broadly the same as for the breach of contracts under the sale of goods.

S7 defines that there is an implied condition that the bailor has the right to transfer the goods.

S8 provides that when there is a contract for hire of goods by description, there is an implied condition that the goods will match that description.

S9 states that where goods are hired in the course a business there is an implied condition that the goods are satisfactory quality and reasonably fit for the purpose hired.

S10 covers implied conditions in relation to contracts for the hire of goods by sample whereby the bulk must match the sample.

Specification Content• Sale of goods: • definitions of goods; • implied terms for title, description, fitness,

satisfactory quality; • Sample under Sale of Goods Act 1979 (as amended)

• Supply of goods and services: • definitions; • implied terms for supply of goods and services, work

and materials; • Implied terms for hire of goods under Supply of

Goods and Services Act 1982

False trade descriptionWhen the parties to a contract begin

negotiations and start to form a contract there will be several representations made by the seller about the items being sold.

This may involve the description of a product. Any description of goods and services given by a person acting in the course of a trade or business should be accurate and not misleading.

Trade Description Act 1968This Act makes it illegal to mislead a consumer by

a false description.A description of a good that is sold or hired must

be accurate.The description could be in writing, in an

advertisement, in an illustration or given orally in a sales pitch.

The description itself can cover factors such as quantity and size, composition, method, place and date of manufacture, fitness for stated purpose, endorsement by people or organisation

Links to misrepresentationBusinesses that break these terms will be in

breach of contractIn certain cases might face criminal

prosecution.If offering to supply services,

accommodation or facilities it is a criminal offence for the bailor or transferor to make a statement about the provision, nature, manner, location or approval of the services accommodation or facilities.

If a person is found guilty of an offence under the Act, they could receive an unlimited fine or up to two years of imprisonment.

Breaking the Trade Description Act is a criminal offence and also makes the person liable for misrepresentation for which damages may also be awarded.

Assignment 3

Scenario: You are now working in Student Services at Grimsby Institute. The learning mentors are very happy with the resources you have produced. They feed back to you that they too are learning a lot. You explain that what you have talked about so far is pure contract law, and that there are additional laws and protections in consumer law. The learning mentors have asked you if you would produce some information for them on consumer law.

Task 1 (P6 - part) Interim Deadline – 07/02/13Create a one-page web-page explaining the law given to consumers when buying clothes.

Task 2 (P6 - part) Interim Deadline – 07/02/13Create a second page to your web-page explaining the law given to consumers when buying an internet service contract.

Task 3 (M2) Interim Deadline – 07/02/13Write a report, and add it to the web-page you created earlier. In the report analyse how consumers are protected when something goes wrong and the contract is breached. This can either be for a problem with the clothes such as the seams giving way, or failure of a broadband connection in the context of a contract for broadband connection.