Question 1
Issue
We are required to determine whether or not Jenny can successfully bring a claim from Remi as a result of the injury that she has suffered at his bar. The issue here therefore would be whether or not the sign that Remi has displayed (seeking to avoid liability for personal injury) is effective in releasing him from any liability he may have as a result of leaving out a box of Tequila on the stage.
Rules
The law that is required therefore to be considered is the law relating to exclusion clauses. There are a number of tests to be satisfied in order to establish whether or not an exclusion clause is valid. The first requirement is to establish whether or not the exclusion clause has been effectively incorporated into the contract. This clause is effectively contained within an “unsigned” document, and there are particular rules relating to whether or not a clause will be incorporated into an unsigned document. The law states that in order to determine whether or not a clause has be interpreted then consideration must be given as to whether a reasonable person would consider this to be incorporated and thus effective[1]. A further requirement in establishing effectiveness is to determine whether or not the clause has been brought to the attention of the person who it is against and whether or not it was brought to the attention of that party at the time of entering into the contract.[2] The other requirement is that reasonable and sufficient notice should be given to the person on who the clause is made against.[3]
Where there is doubt or ambiguity over what the clause means then the rule is that interpretation will be contra-performa, this means as against the party who has relied on it. When attempting to interpret the clause the courts will consider the main purpose of the contract and then determine whether or not the clause is consistent with the main purpose of a contract.[4] If the clause is not consistent with the main purpose of the contract then it will not be validated.
In addition to the common law scheme, there is also a statutory scheme that should be considered, and this is that that is found under the Unfair Terms in Contract to Act 1977 (“UCTA 1977”). The section that is of particular relevance here is s2(1) which states that 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.
s2 (2) of UCTA 1977 liability for negligence for any other loss other than personal injury 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.
Analysis
Applying the law to the facts in the instance case there is no indication that the clause has been (ever) brought to Jenny’s attention. But we do note that she is a “regular” customer and therefore this clause may be incorporated by a course of dealings[5] or as some kind of trade usage, although it is assumed that there is no trade usage as between the parties.
Assuming that we do conclude that the clause has effectively been incorporated into the contract, consideration should be given to how the court may interpret that clause. There does not appear to be any ambiguity in this clause and it seems to be clear as exactly what Remi hoped to exclude liability for. When attempting to interpret the clause the courts will consider the main purpose of the contract and then determine whether or not the clause is consistent with the main purpose of a contract.[6] If the clause is not consistent with the main purpose of the contract then it will not be validated.
By virtue of UCTA Remi will not be permitted to exclude damages for the personal injury and the resultant damages that she has occurred as a result of falling over the box of Tequila.
The other thing that Jenny has damaged is her watch and this will need to be considered separately as under s2 (2) of UCTA 1977 liability for negligence for any other loss can be excluded provided the term or notice satisfies the requirement of reasonableness. This provision applies a test of reasonableness to disclaimers for tortious liability[7]. This may therefore lead to a finding that Jenny is not able to claim for her watch that has been damaged but will as discussed above claim for the personal injury and resultant loss.
Conclusion
It is likely that Jenny will not able to claim for her watch that has been damaged but will as discussed above claim for the personal injury and resultant loss.
Question 2
Issue
In this question the issue appears to centre around the fact that Tania has purchased what she believed to be a particular and expensive type of guitar. She has purchased it for £900 and discovers, shortly after her purchase that the guitar is in fact only worth £40.
Rules
The Sales of Goods Act 1979 introduces into contracts some implied conditions and one of these is contained within s13 and states that it a condition of a sale of goods where the sale is by description that the goods comply with that particular description.
The issue of whether a person deals as a consumer or not was discussed in the case of R & B Customs Brokers v UDT[8] took a broad view of who would be considered to be a consumer and concluded that business which does not regularly deal in the goods forming the subject matter of the contract would render the party to the contract a consumer.
S14 of the Sales of Goods act incorporates into the contract a requirement that goods that are sold in the course of business be of satisfactory quality[9] and that in addition they should be fit for any particular purpose that is made known to the seller[10]. S14 then sets out a list of factors that might be taken into consideration when considering this particular issue. One of these issues is the description that is applied to the goods in question. Therefore if, as is the case here, the goods happen to be described as second hand then deficiencies in the goods would be acceptable[11]. Furthermore one of the relevant considerations will also be the price of the goods, and therefore this may be taken into account when considering whether or not Tania has a remedy.
A further consideration is s14(3) which states that where a buyer wants goods for a particular purpose and the buyer is aware of this there is an implied term that goods will be reasonably fit for this purpose[12]. Unless, which may well be the case here, the seller can prove that the buyer either did not rely on that or it was unreasonable to rely on the seller’s judgement. However as the case of Ashington Piggeries v Christopher Hill[13] demonstrates, even partial reliance on the skill and judgement of the seller will be adequate to bring s14(3) into play.
Analysis
Before considering the relevance of the sale of goods it is important to establish whether or not Tania is dealing as a consumer, and we would conclude that Tania as a consumer. Returning therefore to s13, if Tania can show that the goods do not match the description of the goods then she will be entitled to reject them. It is thought however that she would not be entitled to as no description was applied to the goods that would lead her to believe that this was a genuine guitar, and in fact she was told by the sales assistant that they were awaiting an authentication certificate and was advised to wait for that. This may be the case here because Remi Stores advised Tania to wait for authentication, therefore suggestion until that was received it was unreasonable to rely on the judgement of Remi Stores, however considering the Ashington Piggeries claim this might not be the case.
Conclusion
In conclusion therefore and in all the circumstances and considering that Tania would have been dealing as a consumer, it would be reasonable for her to rely on the skill and judgement of the seller, and whilst the authentication had not been received the fact that it was sold at the price it was and the seller believed it to be a particular type of guitar may well be sufficient to bring s14(3) into play, thus entitling Tania to reject the goods and repudiate the contract.
Question 3
Issue
The important issue in the final scenario is whether or not a contract ever came into existence. It is trite law that in order for a contract to exist there must be offer and acceptance. The difficulty here is establishing whether or not the advertisement for the music system was a valid offer and therefore whether or not Remi’s acceptance of the “offer” leads there to be a valid contract in place.
Rules
An offer must contain all the important terms of the contract and be capable of acceptance.[14] This can be distinguished between an invitation to treat, which can be described not as an offer but as indication that a party is willing to consider entering into a contract[15]. It is likely, and case law suggests that an advertisement, wherever it is placed will be an invitation to treat as opposed to an offer. This was the case in Patridge v Crittenden[16] which related to a newspaper advertisement, however there is no reason to believe that this will not apply to adverts on the internet, as this is the same principle simply just a different medium[17].
A counter offer creates a power of acceptance in the previous offeror[18].
A quick reference should be made to revocation of offers. Revocation of offers will be effective provided that they are communicated before acceptance takes place[19]. This will be the case regardless of the fact that the offeror may have stated that the offer be open for a particular length of time[20].
Analysis
If this is an invitation to treat then Remi has not accept the offer but has rather made an offer to purchase the music system. This offer is then rejected by the EAR ltd. As this is an offer that is rejected then Remi offering £5250 is another offer which is again rejected. Ear Ltd responds by making a counter-offer and will therefore extinguish any other offers that have been made by Remi. There appears to be no acceptance of any of the offers made by either EAR Ltd or Remi ltd, and as such it cannot be said that a contract exists. If viewed from a different angle, .i.e. it is considered the original advertisement was in fact an offer, there would still be in place no valid contract. The reason for this is that Remi does not accept the first offer and his offer will be considered a counter offer, extinguishing the original offer, and so this goes on during the transaction.
The final issue that arises appears to be in relation to when the final email would be considered to be received as this may have well created a contract. There is little guidance on the rules on instantaneous communication, save for telex and these guidelines will be applied to email. In Entores v Miles Far East Corp[21] it was held that communication of acceptance would take place where it was received when considering a telex[22]. It therefore may be that this last email can be considered received and if this is the case then a valid contract would come into existence as Remi accepted Ears Ltd offer.
Conclusion
It would appear therefore in conclusion that regardless of whether or not the original advertisement can be seen as an invitation to treat or an offer – a valid contract does not ever appear to come into existence, the reason for this is that there is not at any point in time a matching offer and acceptance and as was indicated in the introduction these elements are essential for a valid contract to exist.
Cases
Ashington Piggeries v Christopher Hill [1972] AC 441
Bishop and Baxter Ltd v Anglo-Eastern Trading and Industrial Co Ltd [1944] KB 12
Chappleton v Barry UDC [1940]
Dickinson v Dodds (1876) 2 Ch D 463
Entores v Miles Far East Corpn [1955] 2 QB 327
Evans Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078
Harvey v Facey [1893] AC 552
Hyde v Wrench (1840) 3 Beav 334
Jewson Ltd v Boyhan [2003] EWCA Civ 1030
LeftKowitz v Great Minneapolis Surplus Stores (1957) 86 NW 2d 689
McCutcheon v MacBrayne [1964] 1 WLR 125
Olley v Marlborough Court [1949] 1 KB 532
Parker v SE Railway Co (1877) 2 CPD 416
R & B Customs Brokers v UDT [1988] 1 WLR 321
Rogers v Parish (Scarborough) Ltd [1987] QB 933
Routledge v Grant (1828) 4 Bing 683
Spurling v Bradshaw [1956] 2 All ER 121
Smith v Eric Bush [1989] 2 All ER 514
The Brimnes [1975] QB 929
Thompson v LMS Railway [1930] 1 KB 41
Legislation
Sale of Goods Act 1979
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] Evans Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078
[5] Spurling v Bradshaw [1956] 2 All ER 121; McCutcheon v MacBrayne [1964] 1 WLR 125
[6] Evans Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078
[7] Smith v Eric Bush [1989] 2 All ER 514
[8] [1988] 1 WLR 321
[9] S14(2) Sale of Goods Act 1979
[10] S14(3) Sale of Goods Act 1979
[11] See Rogers v Parish (Scarborough) Ltd
[12] See Jewson Ltd v Boyhan [2003] EWCA Civ 1030
[13] [1972] AC 441
[14] Hyde v Wrench (1840) 3 Beav 334
[15] Harvey v Facey [1893] AC 552
[16] [1968] 1 WLR 1204
[17] But see the case of LeftKowitz v Great Minneapolis Surplus Stores (1957) 86 NW 2d 689
[18] Bishop and Baxter Ltd v Anglo-Eastern Trading and Industrial Co Ltd [1944] KB 12
[19] Dickinson v Dodds (1876) 2 Ch D 463
[20] Routledge v Grant (1828) 4 Bing 683
[21] Entores v Miles Far East Corpn [1955] 2 QB 327
[22] See also The Brimnes [1975] QB 929