Unit 21 p6

Unit 21 – Aspects of Contract
and Business Law

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

Recap last session
Assignment 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 contract
b) 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.

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 – 07/02/13
Create a one-page web-page explaining the law given to consumers when buying
clothes.

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

 Task 3 (M2) Interim Deadline – 07/02/13
Write 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.

Assignment
3

Sale of Goods
 key legislation is the Sale of Goods Act
1979
 The 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 terms
 SOGA (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 you
 Find 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 you
 Find details of Beale v Taylor (1967)
◦ What was the result?

 Student Book 2 page 101
 Case Study: F W Moore & Co v Landauer &
Co [1921]

S14 Satisfactory Quality and
Fitness for Purpose
 There 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 you
 Find 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?

• Sale of goods:
 definitions of goods;
 implied terms for title, description, fitness,
satisfactory quality;
• Sample under Sale of Goods Act 1979 (as
amended)
• definitions;
• implied terms for supply of goods and services,
work and materials;

Over to you
 Student Book 2 page 102

 Case Study
 Rogers v Parish (Scarborough) Ltd [1987]

 Activity: Fit for purpose

 Complete both in the relevant Moodle
slots.

S15 Sample
 S15 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 you
 Find details of
◦ Godley v Perry (1960)

◦ What was the result of the case?

Over to you

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

 Sale of goods:
 definitions of goods;
 implied terms for title, description, fitness, satisfactory
quality;
 Sample under Sale of Goods Act 1979 (as amended)
• definitions;
• implied terms for supply of goods and services, work
and materials;

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 –
07/02/13
Create a one-page web-page explaining the law
given to consumers when buying clothes.
Assignment
3

Supply of goods and services
 The 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 materials
 S2 contains an implied condition that the transferor
has the legal right to transfer the property
 S3 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.

• Sale of goods:
• definitions of goods;
• implied terms for title, description, fitness, satisfactory
quality;
• Sample under Sale of Goods Act 1979 (as amended)
• definitions;
• implied terms for supply of goods and services, work
and materials;

False trade description
 When 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 1968
 This 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 misrepresentation
 Businesses that break these terms will be in
breach of contract
 In 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.

Unit 21 p6

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Unit 21 p6