Question 1
Issue
The issue here is whether or not Jenny is able to claim from Remi as a result of the injury that she has suffered or whether Remi’s sign means that he is able to avoid liability.
Rules
The rules will now be outlined. The first part of the legal test relating to exclusion clauses requires the person seeking to rely on the exclusion cause to establish that the clause in question has been incorporated into the contract. The law makes a distinction between signed and unsigned document. In order to determine whether or not the exclusion clause has been incorporated the test is whether or not the reasonable person would assume to contain contractual terms, and not in a document[1]. In addition to be incorporated it must be brought the attention of the other party at the time at which the contract was entered into[2] and in addition reasonably sufficient notice should be given[3]. What will be considered to be reasonable will be considered by the court on a case by case basis[4]. Another way in which a clause can be incorporated is by a previous course of dealings[5] or through this can be created through trade usage and custom[6].
The second thing to consider is how to interpret the clause. There is a general rule that if there is any ambiguity or uncertainty as to the meaning of the clause in question the court will determine it contra-performa .i.e. against the party has included it in the contract, Another way in which interpretation of the clause may be undertaken is to look at the main purpose rule which states that the court can strike out an exemption clause which is inconsistent with or repugnant to the main purpose of a contract.[7]
In addition to the common law regime, the statutory regime should be considered. This is dealt with under the Unfair Terms in Contract Act 1977 (“UCTA 1977”) Under s2(1) no one acting in the course of a business can exclude or restrict his liability in negligence for death or personal injury by means of a term in a contract or by way of notice.
In addition under s2 (2) of UCTA 1977 liability for negligence for any other kind of loss or damage can be excluded provided the term or notice satisfies the requirement of reasonableness. Under s11 (3) in relation to a notice the requirement of reasonableness is that it should be fair and reasonable to allow reliance on it, having regard to all the circumstances obtaining when the liability arose or (but for the notice) would have arisen. This provision applies a test of reasonableness to disclaimers for tortious liability[8].
Analysis
The notice in the bar can be considered to be an exclusion clause. In addition it is an exclusion clause that is contained in a notice near the bar and not in any contract and for this reason will be considered to be unsigned document and they will be the relevant rules. It would seem that it has not been incorporated however it may still apply as we are told that Jenny s a regular visitor to the club and incorporation may occur where there has been a previous course of dealings[9]. Alternatively this can be created through trade usage and custom[10]. In terms of whether or not this notice was clear there certainly does not appear to be any ambiguity here and it seems quite clear what Remi means. Whilst it would appear that Remi would succeed on this basis, account should be taken of UCTA. Under UCTA Remi cannot exclude liability for loss or personal injury element and Remi will therefore be responsible for the injury caused to Jenny. In terms of the loss to her watch this will be subject to the test of reasonableness and therefore damages for recovery may not be possible or they may be limited.
Conclusion
It would therefore appear that subject to this test of reasonableness the damage to Jenny’s watch may well be excluded and she may not be able to claim for that. The likelihood is that she will only be able to claim for her personal injury but not the damage to any physical property.
Question 2
Issue
The issue in relation to this problem is that Tania has visited Remi’s Place and sees what she considers to be a 1965 Fender Stratocaster guitar in the shop, which is on sale for the price of £900, and she, as an antiques dealer believes that it is an original Stratocaster and accordingly wishes to purchase it. She is told by the sales assistant that are waiting for this to be authenticated and could she wait for the certificate. Tania, considering herself to be an expert decides that she need not wait any longer and pays £900 for the guitar then and there. Later on she learns that this is in fact a fact guitar and is only worth £40 as a cheap copy.
Rules
In order to determine whether a clause in a contract is a representation (.i.e that it was a particular type of guitar) several factors can be taken into account such as; the importance that attached to the representation[11] and the level of expertise of the other party[12]. More importance will be attached if the representation is writing – clearly in this case as the whole agreement is oral this cannot be considered a factor. Assuming that this is a term of the contract it must then be determined whether or not this is a condition or a warranty, conditions[13] “go to the root of the contract” and warranties are ancillary terms. As there is no written agreement the court will give effect to what they believe is the intention of the party.
S14 of the Sale of Goods act which states that goods should be of satisfactory quality[14] and fit for the purpose stated by the buyer[15]. S14(2) states that the standard that it is to be expected is that of a “reasonable person would regard as satisfactory, taking account of any description of the goods, price (if relevant) and all other relevant circumstances”. Then at S14(2)B lists there are a number of other factors that should be taken into consideration when assessing satisfactory quality to include the state and condition of the goods, fitness for all purposes which goods of the kind in question are commonly supplied[16], appearance and finish[17], freedom from minor defects[18], safety[19] and durability[20].
As indicated above section 14(2A) indicates that the description that is applied to goods will affect the standard that is reasonably expected of those goods in question. This means that if goods were described as being second hand, a lower standard would be expected than if goods were described as brand new. An example of this can be seen in the case of Rogers’s v Parish (Scarborough) Ltd[21] in which the Court of Appeal held that deficiencies that would be acceptable in a second hand vehicle[22] would not be acceptable in a brand new vehicle. S14 (2A), also indicates that price will be a relevant consideration. Although it can be concluded that payment of a high price will necessarily raise the price and conversely the payment of a lower price will indicate a lower quality of goods that can be expected[23].
Analysis
It would appear that the requirement that the guitar be a Fender Stratocaster is a term of the contract between Tania and Remi’s Place. This is because this has been specifically as stated by Tania we will assume this to be a condition. However equally Tania relies on her own expertise and is not prepared to wait for a authentication certificate, indicating perhaps that the authenticity is not that important to her. The fact that the guitar is not a Stratocaster may be a breach of the statutory terms and in particular s13 of the Sale of Goods Act 1979 which requires the goods to correspond to any description given to them[24]. If it is not a breach of this statutory term it may well be a breach of s14 and therefore that the contract is refutable on the basis that she paid a price for this which would be expected to be paid in relation to an original and therefore it could be argued that she expected to receive an original
Conclusion
No representations were made by Remi and the guitar was a second hand model and therefore she could not expect it to be perfect and accordingly it is unlikely that Tania will be able to recover damages.
Question 3
Issue
The issue in this question is whether or not Remi has a valid contract.
Rules
English Contract Law requires there to be a valid offer and acceptance for a contract to exist. The issue therefore is whether or not the advertisement for the music system, which is found on the internet, is an offer. In order for an offer to exist it must set out, or refer to, all the important terms of the contract and the. If it does not do so, not only will it not be a valid acceptance, but it will be regarded as a counter offer which prevents the original offer from being accepted later[25]. An offer can generally be withdrawn at any time before acceptance is complete.
Advertisements do not generally amount to an offer and are generally considered to be well invitation to treat. An invitation to treat is not an offer but is a mere declaration of willingness to enter into negotiations; it is not an offer, and cannot be accepted so as to form a binding contract[26]. A relevant authority is Patridge v Crittenden[27], in which an advertisement was placed in newspaper advertising bramble finches for sale at 25 shillings each. It was held that this advertisement was not an “offer” but simply an invitation to treat. This can be explained on the basis that the person placing the advertisement would only have had a limited supply of the products advertised and therefore could not have had the intention that he would be bound by every person who responded to the advert.
The general rule is that an acceptance is not communicated until it is actually brought to the notice of the offeror: for example, an attempted acceptance is not communicated if it is sent on a teleprinter (or, it is suggested, by e-mail) after the line has failed[28].
Returning to the issue of counter-offers, in order to amount to a counter-offer, a declaration must be legally operative as an offer and it will put an end to the previous offers. A counter offer will only be created if it creates a power of acceptance in the previous offeror[29]; and that acceptance will commonly be found in a commencement of performance[30], or even possibly by silence1. A counter-offer should be differentiated from an inquiry, application of which does not itself tender any new terms on which the offeree is willing to be bound, but merely seeks either (1) further elucidation of the meaning or terms of the offer; or (2) to put additional or different terms into the mouth of the offeror[31].
Analysis
Remi’s first acceptance of the offer will not be valid as this is not an offer but an invitation to treat and will not in fact be acceptance but will instead amount to an offer to buy the sound system and therefore The Ear Ltd are free to accept or reject Remi’s offer to buy. They choose to reject it by saying that this is unacceptable. Remi therefore makes a second offer for £5250; this is an offer again because as explained above the website does not contain an offer but an invitation to treat. In response to this offer Ear Ltd make a counter-offer for £6500. This counter offer will Ear Ltd are now not free to accept any of the original offers made by Remi. Ear Ltd’s counter-offer will extinguish all other offers made by Remi.
Conclusion
There in conclusion it can be argued that there existed no contract as between Remi and Ear Ltd and Remi will not therefore be entitled to sue Ear Ltd for selling the music system to another.
Cases
Bartlett v Sidney Marcus Ltd [1965] 2 ALL ER 753
Bishop and Baxter Ltd v Anglo-Eastern Trading and Industrial Co Ltd [1944] KB 12
British Crane Hire v Ipswich Plant Hire [1974] QB 303
Brogden v Metropolitan Rly Co (1877) 2 App Cas 666
Chappleton v Barry UDC [1940]
Entores v Miles Far East Corpn [1955] 2 QB 327
Evans Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078
Gibson v Manchester City Council [1979] 1 All ER 972
Hyde v Wrench (1840) 3 Beav 334
Interfoto v Stiletto Ltd [1988] 1 All ER 348
McCutcheon v MacBrayne [1964] 1 WLR 125
Olley v Marlborough Court [1949] 1 KB 532
Parker v SE Railway Co (1877) 2 CPD 416
Priest v Last [1903] 2 QB 148
Rogers v Parish (Scarborough) Ltd [1987] QB 933
Spurling v Bradshaw [1956] 2 All ER 121
Smith v Eric Bush [1989] 2 All ER 514
Thain v Anniesland Trade Centre 1997 S.L.T
Thompson v LMS Railway [1930] 1 KB 41
Thornton v Shoe Lane Parking [1971] 1 All ER 686
Tinn v Hoffmann & Co (1873) 29 LT 271, Ex Ch
Legislation
Unfair Terms in Contract Act 1977
Books
Mckendrick E, (2003) “Contract Law”, 5th Edition, Palgrave Law Masters
Poole J, (2006) “Casebook On Contract Law”, 8th Edition, Oxford University Press
Stone R, (2005) “The Modern Law of Contract”, 6th Edition, Cavendish Press
[1] Parker v SE Railway Co (1877) 2 CPD 416; Chappleton v Barry UDC [1940]
[2] Olley v Marlborough Court [1949] 1 KB 532
[3] Thompson v LMS Railway [1930] 1 KB 41
[4] Thornton v Shoe Lane Parking [1971] 1 All ER 686; Interfoto v Stiletto Ltd [1988] 1 All ER 348
[5] Spurling v Bradshaw [1956] 2 All ER 121; McCutcheon v MacBrayne [1964] 1 WLR 125
[6] British Crane Hire v Ipswich Plant Hire [1974] QB 303
[7] Evans Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078
[8] Smith v Eric Bush [1989] 2 All ER 514
[9] Spurling v Bradshaw [1956] 2 All ER 121; McCutcheon v MacBrayne [1964] 1 WLR 125
[10] British Crane Hire v Ipswich Plant Hire [1974] QB 303
[11] Birch v Paramount Estates (1956) 167
[12] Dick Bentley Productions v Harold Smith Motors [1965] 2 All ER 65
[13] Poussard v Spiers and Pond (1876) 1 QBD 410
[14] Rogers v Parish (Scarborough) Ltd [1987] QB 933
[15] Priest v Last [1903] 2 QB 148
[16] Section 14(2)B (a)
[17] Section 14(2) B (b)
[18] Section 14(2)B(c)
[19] Section 14(2) B (d)
[20] Section 14(2) B(e)
[21] [1987] QB 933
[22] See for example Bartlett v Sidney Marcus Ltd [1965] 2 ALL ER 753;
[23] Thain v Anniesland Trade Centre 1997 S.L.T. (Sh.Ct.) 102
[24] Beale v Taylor (1967) 1 WLR 1193
[25] Hyde v Wrench (1840) 3 Beav 334
[26] Gibson v Manchester City Council [1979] 1 All ER 972
[27] [1968] 1 WLR 1204
[28] Entores v Miles Far East Corpn [1955] 2 QB 327 at 333, [1955] 2 All ER 493 at 495, CA
[29] Bishop and Baxter Ltd v Anglo-Eastern Trading and Industrial Co Ltd [1944] KB 12
[30] Brogden v Metropolitan Rly Co (1877) 2 App Cas 666
[31] Tinn v Hoffmann & Co (1873) 29 LT 271, Ex Ch