Explain what is meant by an unfair term in a contract and describe and evaluate the effect(s) thereon of the Unfair Terms in Consumer Contracts Regulations 1999
Explain what is meant by an unfair term in a contract and describe and evaluate the effect(s) thereon of the Unfair Terms in Consumer Contracts Regulations 1999. After the Treaty of Maastricht, the European Community made a directive on Unfair Terms in Consumer Contracts 1993. This instructed member states to pass domestic legislation to provide consumer protection. As a result, the UK Government made the Unfair Terms in Consumer Contracts Regulations 1994 which have now been replaced by the Unfair Terms in Consumer Contracts Regulations 1999. The main aim of the new regulations is for UK Law to be drafted more closely to the wording of the European Legislation, to help prevent discrepancies between the two. The principle change from the 1994 regulations and the 1999 regulations are simply that more institutions are now able to enforce the legislation, beyond the Director-General of Fair Trading. An unfair term is defined in Regulation 5(1) of the Unfair Terms in Consumer Contracts Regulations 1999 as; ' A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties rights and obligations arising under the contract, to the detriment of the consumer' 1 In addition to this Reg 6 of the same Regulations states that, ' .....the fairness of a contractual
contract law case
X owns a holiday cottage in a remote mountain area. In May he agreed to let it to Y from 1-15 August. Y paid a deposit of £ 200. On the afternoon of 31 July, after Y and his family had set off from their home near London, a landslide rendered the cottage uninhabitable. X, who had recently spent £ 500 on redecoration in preparation for Y's visit, was unable to contact Y, and Y only found out what had happened when he arrived at the cottage. Y spent £ 200 on hotel accommodation for the night before returning home next day. Y and his family were very disappointed at not having the holiday they had planned. Y is now demanding that X should return his deposit and pay him compensation. Advise X. What difference, if any, would it make if the damage to the cottage had been caused by a fire carelessly started by X? SUGGESTED ANSWER : In advising X, it has to be determine whether the contract between Y and X has been frustrated, and if so can Y demand for his deposit and further compensation. Frustration occurs when without default of either party to the contract, the contractual obligation has became incapable of being performed Amalgamated Investment v John Walker. There are 2 test for frustration. By the Implied Term Theory test there is an implied term in every contract that if the contract is incapable of being performed without default of either party the contract is
Exclusion clause
EXCLUSION CLAUSE An exclusion / exemption clause is a clause which if incorporated in the contract will entitle the party seeking to rely on it to exclude or exempt all the liabilities arising from a breach of contract. (And a limitation clause only seeks to limit the liabilities arising from a breach of contract). In order for a party to rely on an exclusion clause he has to first show that clause was incorporated as a term of the contract. At common law an exclusion clause can be incorporated in two ways: by advance notice to the other party that the exclusion clause is to be a term of the contract, & by the signature of the party agreeing to be bound by the exclusion clause. A notice can be given in three ways: notice by display (Olley v. Marlborough Court); notice in a document (Parker v. South Easteern Railway, Chapelton v. Barry Udc); notice by a course of dealing (Henry Kendall v. William Lillico). In the absence of fraud if a party signs the document containing the exclusion clause then it is conclusive evidence that the clause has been incorporated into the contract as a term of the contract (Parker v. South Eastern Railway). And it is immaterial that the party signing the document is illiterate or even blind (L'estrange v. Graucob). If the exclusion clause is properly incorporated into the contract it can even exempt a party for a breach of a fundamental
Consumer Law in Australia.
A consumer is someone who purchases or uses goods or services. Overtime there has been a need for greater consumer protection due to various methods of which manufactures/suppliers can use to exploit the vulnerability of consumers. These methods include: undue influences, unconscionable conduct, misleading and deceptive behaviour, which are evident in various contemporary issues, such as credit and marketing innovations. As a result of increasing consumer awareness due to various acts, cases, media reports, the concept of justice has been reformed to achieve greater consumer redress. Credit is the purchase of good and services in advance of future payments such as the use of credit cards and loans. Our society is becoming more 'cashless', with credit providers making loans more accessible than ever before. The growing risk of exploitation by unscrupulous lenders is inevitable as the number of purchases via credit is becoming a more popular means of purchasing goods and services. Most of the responses to issues involving the use of credit are legal responses as most aspects of credit transactions are regulated by the consumer credit code. Credit issues that affect consumers include, unfair contract terms. This is where a contract is unfair as a result of a party's unconscionable conduct. Unconscionable conduct is one party's exploitation of the vulnerability of another party
Offers may be withdrawn at any time up until acceptance Discuss the extent to which you agree with this statement and analyse the rules which determine the validity of the withdrawal of an offer.
Question : ‘ Offers may be withdrawn at any time up until acceptance’ Discuss the extent to which you agree with this statement and analyse the rules which determine the validity of the withdrawal of an offer. The English law on the formation of contract generally requires there to be an offer and acceptance. By the presence of both only then a legally binding bilateral contract can be formed. It is not necessary for a contract to be in a written form. A contract is an exchange of promises and it lies fundamentally at the heart commercial transaction. Contract is an agreement between a person who makes an offer which is known as an offeror and a person who accepts the offer which is known as and offeree. An offer can be accepted or even rejected. In addition to that, it can also be revoked at any time up until acceptance. This is also known as revocation of an offer. This principle was laid down in an old case of Payne v Cave . Once an offer has been accepted by an offeree, a binding contract is formed and the offer ends ultimately. Nevertheless, there are a number of rules apply in relation with the withdrawal of an offer. If an offeror withdraws from an offer but fail to communicate his withdrawal to the offeree, the offer is still considered as valid. Hence it is indeed vital for the offeror to bring the news of his withdrawal to the attention of the
Assess the amount of protection which the law gives to a minor who enters a contract with an adult
Assess the amount of protection which the law gives to a minor who enters a contract with an adult The basic principle of the present law is that a minor must be protected against his immaturity in his dealings with other persons. At the same time the policy of the law is to mitigate some of the hardships that might be imposed on persons dealing with a minor, so as to encourage them to enter into contracts that are for the minor's benefit. The contracts of a minor may be dealing with under the following three headings: contracts that are binding on the minor; contracts that are deemed void by the Infants Relief Act 1874; contracts that are binding on a minor unless and until he repudiates them. Where a minor enter into a contract with another person, whereby that person sells or supplies him with a necessary or necessaries, the contract will bind the minor. The courts have considered it in the minor's interest ( as well as that of the other party ) that he should be able to enter into binding contracts for necessaries. The law relating to the sale of necessary goods is governed by S2 of the SGA 1893, and the law relating to the supply of other necessaries is governed by the common law. In substance, however, the concept of what a necessary means is the same whether the statute or the common law applies. By way of extension of the concept of necessaries, certain contracts
Misrepresentation Case. After a few days use, Bianca discovered the Adventurer ZX was totally unsuitable for her busy bar and restaurant.
QUESTION 2 Question: Bianca went to Crystal Sounds Ltd, a leading music system specialist, to buy a DVD player for her busy bar and restaurant. She told Miles, the salesman, that she needed a powerful DVD player because the restaurant became noisy at busy periods. Miles showed Bianca the Adventurer ZX player, which he said was “sophisticated, yet very user friendly”, honestly believing this to be the case. Miles also said “in my opinion, this model will be perfect for you as the sound quality is superb even at a high volume.” In fact, the Adventurer ZX system was a brand new model which had just been delivered to the shop, so Miles had never had an opportunity to hear how it sounded when played. Bianca declined the opportunity to listen to the Adventurer ZX system. She was in a hurry and decided to buy the system on the basis of what she had been told about it by Miles. After a few days use, Bianca discovered the Adventurer ZX was totally unsuitable for her busy bar and restaurant. The sound quality was poor and even at full volume it could not be heard over the voices of her customers. To make matters worse, the system was very complicated to operate. Advise Bianca whether she has any contractual rights and remedies for misrepresentation. This question is concerned with misrepresentation. A misrepresentation is defined as a false statement of fact that
Innominate terms
INNOMINATE TERMS Sometimes it is hard to determine the status of terms, thus an intermediate category for such terms is developed- innominate terms. Whether termination is available depends on the ‘waiting and seeing’ at time of the breach and whether it is so fundamental to strike the fundamental purpose of the contract. If the breach is serious, it will be classified as a condition and able to be rescinded. and if it is not, it will be classified as a warranty- where rescission is not available. The parties may describe the terms as condition themselves. An examination of innominate terms, the courts will not take this as decisive but judge on the facts of the case. They are thus giventoo much discretion and this may potentially be unjust to parties who has really mean the terms to be construed as condtions.zl In the case of Hong Kong Fir Shipping vKawasaki, Here the claimants have chartered a ship for 2 years. Due to faulty engines and inadequate staff, 20 weeks of the charter has been lost to carry out repairs. The ship was contracted to be ‘in every way fitted for ordinary cargo service’ Hence the defendants have obviously able to claim damages but instead they chose to rescind the contract. The claimants sued for wrongful repudiation- claiming that their breach did not entitle them to sue for damages, Conventionally, the courts will determine the status of
Aspects of Contract and Business Law Case Studies
Temuulen Od-Ochir Unit 21 Aspects of Contract and Business Law 726073 BTEC Extended Diploma in Business INTRODUCTION Contract law is important for businesses because any promises or agreement made in a business should be binding which according to the law should involve some form of exchanges. It would be impossible to run a business without a contract as that would not make promises binding. For example: suppliers would be very reluctant to supply their product to a retail store if that retail store could suddenly decide they are going to buy from different supplier and do not expect to compensate for the money they put in. The contract law helps the innocent party to recover financially given that the contract has been performed as agreed by them. The law helps the organisation to know what to expect if the agreement is not carried and the law doesn’t allow those who fail to perform get away with their breach. Task 1 Below is a contract for the sale of Solid and Frogged bricks for a company building house. Agreement of supplying Bricks Supplier: Amersham &Wycombe Buyer: Temuulen Date to be delivered : **/**/**** Date of Signing : **/**/**** Material Name Unit Price (per unit) Total Price Solid Bricks 50000 £3.50 175.000 Frogged
Assess the problems that arise through terminating and offer
Assess the problems that arise through terminating and offer There are six different ways in which an offer can be terminated, these method are, Acceptance, Rejection, Revocation, Lapse of time, Failure to comply with conditions and Death. Alongside these ways of terminating an offer come problems. The problems that can arise with some of these methods including counter offers being made, revocation of a unilateral offer and the postal rule can cause problems for acceptance and revocation. A counter offer is an offer which has been made in response to a previous offer made by the offeree to the offeror, usually during negotiations when putting together the final contract. By making a counter offer the first offer that was given now becomes void and the counter offer must now be accepted or rejected for it to be recognised as part of the contract. If the original offer has been rejected and another offer put forward in its place is also rejected then the original offer cannot then be accepted, there is no way of going back to the original offer as seen in Hyde v Wrench (1840) in which Wrench had offered to sell Hyde his farm for £1,000, but Hyde rejected this by making a counter-offer and saying he would pay £950. Wrench decided to reject Hyde’s offer therefore forming no contract. As soon as Wrench rejected this offer Hyde said he would go back to the original price
