Implied Terms 3B

Question 1

What are express terms?

Answer 1

Specifically identified and agreed by the parties expressed in writing or orally.

Question 2

What are implied terms?

Answer 2

Put into contracts by courts where they have not been specified or agreed by the parties.

Question 3

What three ways can terms be put into contracts?

Answer 3

Custom or trade usage (B2B/C2C)
Common law by implying by fact or law (B2B/C2C)
Statute (B2C)

Question 4

When are terms implied by custom?

Answer 4

When it is customary or usual to have the terms in the contract for that specific trade.

Question 5

What case is used for Custom/ trade usage?

Answer 5

British Crane Hire Corp v IPH

Question 6

What did the court decide in British crane hire corp v IPH?

Answer 6

The term in the trade’s standard contract should be implied in the verbal contract because it was a term normally in these contracts.

Question 7

What does implying by fact mean?

Answer 7

The parties probably intended the situation to be covered by a term but did not state it.

Question 8

What does Irwin v LCC say?

Answer 8

It says that the term will not be implied through fact without both parties agreeing on it. (Decided by the House of Lords)

Question 9

What does Marks and Spencer v Paribas say?

Answer 9

There are 2 ways to work out whether court would imply by fact.

Question 10

What is the 1st test?

Answer 10

The business efficacy test.

Question 11

What is the business efficacy test?

Answer 11

Where the contract simply would not work without the term, therefore it must have been the parties’ intent to include it.

Question 12

What case is used for the business efficacy test?

Answer 12

The Moorcock

Question 13

What is the 2nd test?

Answer 13

The officious bystander test

Question 14

What is the officious bystander test?

Answer 14

it is a test to see if the term is something the parties very obviously wanted in the contract, so it literally goes without saying.

Question 15

What case is used for the officious bystander test?

Answer 15

Shirlaw v Southern Foundries

Question 16

How does implying the terms by law work?

Answer 16

These are not based on the intention of the parties but what obligations the courts feel should naturally arise in a contractual relationship.

Question 17

What are some eval points for Irwin?

Answer 17

Good - flexible, equalises bargaining power, eventually certain.
Bad - Initially uncertain, freedom of contract is disregarded.

Question 18

When are terms implied by statute?

Answer 18

Where protection is needed for parties in a weaker bargaining position, such as consumers and employees.

Question 19

What act is used for B2C contracts?

Answer 19

The Consumer Rights Act 2015

Question 20

What does s2 define a consumer as?

Answer 20

A party entering into a contract for purposes that are wholly or mainly outside of the individual’s trade or business.

Question 21

What does s2 define a trader as?

Answer 21

A person acting for purposes relating to their trade or business.

Question 22

What does s9 say?

Answer 22

The goods must be of satisfactory quality.

Question 23

What factors are looked at to decide if it is of satisfactory quality?

Answer 23

Price paid
Description of quality
Fit for purpose
Safe
Durable
Free from minor defects

Question 24

What does s10 say?

Answer 24

The goods must be fit for a specific purpose when mentioned.

Question 25

What case is used for s10?

Answer 25

Baldry v Marshall

Question 26

What does Baldry v Marshall say?

Answer 26

The seller is relied on therefore it is reasonable to assume it is fit for purpose.

Question 27

What does s11 say?

Answer 27

There is an implied condition that where goods are sold by description, they will correspond with that description.

Question 28

What case is used for s11?

Answer 28

Re Moore and Co

Question 29

What does Re Moore and Co say?

Answer 29

The goods were packed differently than described therefore did not match the description despite being the correct number and product.

Question 30

What is the first remedy for goods?

Answer 30

s20 - Short term right to reject. One can claim a full refund within 30 days (shorter for perishable goods) Refund should be given without delay within 14 days.

Question 31

What is the 2nd remedy for goods?

Answer 31

s23 - Right to repair or replace. The trader must do so within a reasonable time and without significant inconvenience. Applies both within and after 30 days.

Question 32

What is the 3rd remedy for goods?

Answer 32

s24 - Right to a price reduction or right to reject. Only use if trader is unable to repair or replace (s23). Full refund can be made for first 6 months. After that a price reduction can be made.