Essay: Sale of Goods Act problem law scenario

In the scenario given, we need to establish whether a formality of a contract has been formed between Bruce and Matilda’s home in regards to Bruce’s request for the landscaping services for his premises. We can identify that there are three main legal issues that arise and these are; firstly the injury Bruce encounters when the work has finished.

The negligent work done to the property that causes damage and Bruce loses time and profit because of this, creating a second issue. Finally, the breach of contract in regards to the failure to complete the work as agreed. The main concern in this case is that Matilda’s Home have created five exclusion clauses within their contract to exclude or limit their liability for breach of contract, damage to property or negligence, if upheld this of course leaves no avenue for Bruce to sue; however, the courts may look at two key pieces of legislation which could be considered within this scenario and these are The Unfair Contract Terms Act 1977 & The Supply of Goods and Services Act 1982. In addition to this, the common law is also worth commenting on, as it is important to note that Bruce may be entitled to compensation under this as well as the legislation mentioned above. I will therefore advice Bruce as to whether he may be able to escape liability in regards to the clauses implemented within the contract by Matilda’s Home using the aforementioned legislation and common law but also whether Bruce may receive a legal remedy.

Both Bruce and Matilda’s Home are both acting in the course of business and liability for business can be defined as ‘liability for breach of obligations or duties arising from things done or to be done by a person in the course of a business (where his own business or another’s); or from the occupation of premises used for business purposes of the occupier;’ . Therefore we will look into both parties in a ‘ business liability’ context if a contract is present.

LEGAL APPLICATION TO THE ISSUE; COMMON LAW

A valid contract needs to exist in order for Bruce and Matilda’s home to be bound, meaning four requirements have to be fulfilled. Therefore the elements required for a valid contract are; offer, acceptance, consideration and intention to create legal relations. These off course are all present in this contract when Matilda’s Home offers their services and Bruce accepts in a written form contract. An intention is also present because of the arrangement that Matilda’s Home will turn up on a particular day to work and that the Psychic Caf?? will be closed by Bruce so the work can commence, which is an indication for consideration placing Bruce at a detriment.

We can therefore identify from the above that there is a valid contract. Hence that, we would need to explore the exclusion clauses laid down by Matilda’s and whether they apply to Bruce, as he has never worked with Matilda’s Home before and at the verbal contract point, Matilda’s do not indicate what their terms and conditions are after having a ‘ lengthy discussion’ in regards to the arrangements of the landscaping. Therefore the standard terms and conditions also known as the exclusion clauses under the contract of law can only be incorporated in three ways and Matilda’s wishing to rely on the clauses set out would have to prove that it actually formed part of that contract. Therefore, the incorporation within a contract occurs through a signature even if the term is not read, by notice where it’s vital to have this sufficiently and lastly where the parties have had a previous course of dealings.

In addition to this, we could therefore establish that a signature has been placed within the contract and that Bruce may be bound by the conditions laid down within the contract. However, there is no indication to suggest that any past dealings have occurred, so Bruce cannot be bound. Meanwhile, when considering the incorporation of notice we can clearly identify that at the verbal level Matilda’s Home fails to indicate what their terms and conditions are, nevertheless the question would be whether the reasonable man would have notice, taking into consideration the special knowledge and skill Matilda’s Home would have as they are contractors and these would be seen as standard conditions in the business. Therefore, it would be very difficult to show a court an indication of notice given to Bruce as Matilda’s Home gave the terms after the discussion was made in a written form. (To be read again, wording.)

One issue which occurs in the law of contract is Bruce received the contract and ‘read the terms carefully and noted that they seemed overly cautious in his opinion’ even though Bruce till now would not have been bound, having a contract and reading it, means acceptance occurred. Therefore in regards to notice here, we can clearly identify that it does not exist because the scenario clearly suggests ‘ to sign and to return the slip with a deposit’ had he not done so the work would not have carried on. Furthermore, Matilda’s home cannot argue that they had laid out any terms and conditions orally (even though they should have done or briefly due to the nature of their work to have been carried out as professionals) but not enforced it within the contract written, would be absurd and invalid. Moreover, even though Bruce may be bound because of the acceptance of the contract, Matilda’s home may be bound for not giving notice to Bruce about the standard exclusion clauses in advance due to their profession and possibly the delicacy of the wok undertaken, making the contract not valid. UCTA 1977 of s. 1 (1) clearly states ‘ negligence means the breach of any common law duty to take reasonable care or exercise reasonable skill’.

In the common law generally, it is clear that a signature contained within a contract clearly suggest that the terms included have been agreed upon by the parties. Thus, in order for Bruce to be bound by the contract laid out it is vital that in respect of a contract being signed with the exclusion of misrepresentation and fraud interfering would be that the, ‘party signing is bound and it is wholly immaterial whether he has read the document or not’ as per Lord Justice Scrutton in his judgement . Therefore, LJ Scrutton’s judgement, clearly demonstrated that regardless whether Bruce read all the terms in the contract, so long as he signed it (as he did) will be seen as an incorporated written contract being bound by those terms, which may be argued by Matilda’s, unless proved otherwise by legislation which protects customers in certain circumstances even when signed.
( Look at the wording off this’ try find any similarities anywhere else)

In addition to the above, the exception in regards to where a signature is placed within a contract but not bound is where we can identify from the given scenario that Bruce clearly laid out what he required in the garden orally, before a quote or contact was even made for him. The exception here lies within the case of Curtis v Chemical Cleaning and Dyeing Co Ltd, which clearly indicates that where there is potentially an oral agreement it is possible for the contract that has been signed to be overridden . For this reason, the fact that nothing was nearly the same as Bruce had initially requested could potentially raise a claim meaning the exclusion clauses put forward by Matilda’s Home may well not be relied upon because of misrepresenting the effect of the exclusion clause. Bruce had made it very clear before the contract was signed as to what he wanted in the garden and what he did not want ‘removed or damaged’. Therefore, it was made very clear to Matilda’s home to what expectation they had to meet regardless of the contract being signed by Bruce, so this may be argued on Bruce’s behalf.

Finally, we now move to Bruce’s contract with Matilda’s Home overall in respect of the common law. As previously mentioned the contract contains several clauses purporting to exclude liability for damage and injury as well as breach of contract in any circumstances. We have established that the clause was in a written format and because Bruce signed this, he will be eligibly bound according to the case of L’Estrange v F Graucob Limited (1934) . It is apparent that Matilda’s took reasonable steps to ensure that the clause in the contract is brought to the attention of Bruce following the case of Parker v South Eastern Railway 1877 . Nevertheless, Matilda’s Home are seeking to restrict their liability for negligence by relying on legislation which exempts an individual from liability. In particular the Unfair Contract Terms Act 1977 is of relevance and will be discussed below in more depth. ( CHECK, USURE TO KEEP THE WORDING OR NOT)
LEGAL APPLICATION TO THE ISSUE; STATUTORY PROTECTIONS

We need to therefore ask the question whether the damages caused to Bruce are of so, that Matilda’s Home is to be liable? Therefore, s.2 (2) of the UCTA 1977 states ‘ In the case of other loss or damage, a person cannot so exclude or restrict his liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness’ . Further to this, s.11 (1) explains the ‘reasonableness’ test by suggesting that ‘ the term shall have been a fair and reasonable one to be included having regard to the circumstances which were, or sought reasonably to have been, known to or in the contemplation of the parties when the contract was made’ . Making the burden of proof to be proven by Matilda’s Home in regards to the exclusion clause being reasonable.

In regards to the above, we can apply term 9 to the Supply of Goods and Services Act 1982 which states that ‘ a contract for the transfer of goods’ means contract under which one person transfers or agreed to transfer to another the property in goods, other than an expected contract’ clearly demonstrating that individuals who provide such a trade are covered by the act. In this scenario we can establish that services were to be carried out in Bruce’s premises by the contractors and protection by the law may given, depending on the circumstances. Therefore, Bruce will be provided a service with goods which includes, ‘mix of new plants’ ‘ landscaping’ and the ‘maintenance’ as requested orally and then acceptance occurred via signature. Further to this, the act applies only where there is an expressed term and therefore because we can establish that there is a business to business contract relationship orally the act is available to be replied upon by the parties.

Nonetheless, Bruce actually discovers that the plants he had agreed on were not planted ‘ ‘cheaper varieties planted’ meaning not being of satisfactory quality . Secondly, his ‘beloved marple sapling had be replaced’ suggesting the landscaping was not provided as described . Finally, the equipment used was not fit for their purpose ; a ‘herbicide’ was used instead of a ‘fertiliser’. We can therefore assume that term 9 should not be upheld because of the work not being satisfactory. Matilda’s were aware what was expected of them as Bruce laid out the proportion very clearly before the contract was signed, bringing it also to the attention of the contractors, and despite Bruce contracting on behalf of his business suggests that surely if any changes were to occur throughout the operation of the landscaping he should have been informed about the ‘impracticability’ as the exclusion clause included ‘ but not limited to’ meaning the implementation of the plans were subject to change and that reasonable notice to inform Bruce was required in that respect, as the situation may have been different then. Whereas, now it would lead to a breach of contract taking into account there being ‘ an implied term that the supplier will carry out the service with reasonable care and skill’ this was obviously not the case. Overall, Matilda’s Home do not have a remedy under the SGSA 1982 as they have failed to meet the requirements within the act nor do they have a remedy under s.1 of the UCTA 1977 .Thus creating the detriment themselves by Bruce suffering economic loss as well as harm creating a health and safety issue, whereby Matilda’s are breaching s.3 and s.2 of the UCTA 1977 also .

Furthermore, term 10 seems to have some ambiguity as to the meaning. The term clearly states ‘ reserves the right to determine’ suggesting as though it is up to Matilda’s to decide the planning as they wish, despite Bruce’s orders. Whereas, the referring to term 9 states ‘ reserves the exclusive right to deviate from the original landscaping made with the buyer’ again illustrating that its something they are permitted/obliged to do if things go wrong with the original plans. Referring to Houghton v Trafalgar Insurance both term 9 & 10 would seem unlikely to be upheld because of the two different meanings to the exclusion clause . Moreover, the reasonableness test would fail in this instance as the term is not ‘fair and reasonable one to be included in regards to the circumstances’

In addition to term 11, s.13 of the SGSA would apply, the product used was inaccurate and the performance should have been provided adequately as Matilda’s were expected to have had the average service providers quality of work, skill and care making the contractors competent when undertaking work. Hence this, damage was caused to the existing ‘roses’ where the wrong equipment was used breaching s.1 of the UCTA 1977 where the reasonableness ( worth noting that the SGSA does not define reasonablnesss) cannot be fulfilled because of the implied term about reasonable care and skill . As well as, leading to Bruce suffering from ‘ichy and sore hands and feeling of un-wellness’ breaching s.2 (1) of the UCTA 1977 where liability cannot be excluded or limited.

Bruce has suffered personal injuries in respect of clause 12. Therefore, under s.2 (1) it is clear that an individual cannot exclude or limit liability in regards to death or personal injury . In terms of the causation, we can argue that ‘but for’ the negligence of Matilda’s Home, Bruce would not have suffered such injuries had the wrong product not been supplied by the contractors. Consequently, Matilda’s cannot escape liability in regards to the injuries caused.

Additionally, the UCTA 1977 of s.3 (1) applies to term 13 referring to contractual liability. Whilst referring to this section we can clearly argue that Matilda’s Home cannot exclude or restrict liability for breach of contract against Bruce unless the reasonable requirement is satisfied . Following this argument, Bruce can issue a claim against the losses he suffered in terms of damage following s.3 (2) clearly demonstrating that ‘ Matilda’s failed to complete the work as agreed’ which therefore causes a breach of contract because of s1 (1) causing unreasonableness in their undertaking of the work .

However, Matilda’s can argue that Bruce is at fault as he was given the opportunity to ‘replace the maple sapling’. Meaning that they gave Bruce the opportunity to correct their error suggesting that he may face consequences if he does not accept the proposal. So it is necessary for Bruce to allow Matilda’s to remedy their breach by putting back the damage and also completing the work at reasonable time period as referred by in s.14 (1) of the SGSA 1982 . Matilda’s should be able to fix the work at no extra cost, if they do not accept and Bruce contracts with another supplier, then Bruce would have a claim for costs. However, Bruce was not given the chance to remedy the rest of the damaged areas, its clear that Bruce would suffer from economic loss but he should ask to have these remedied as well.

In respect of s.2 and s.3 of the UCTA 1977, these are important for the liability in regards to the injury and subsequent economic loss suffered from the work produced by Matilda’s. They had an obligation to perform a task sufficiently, however, was done negligently meaning Bruce can seek a remedy under the breach of contract .

In terms of assessing reasonableness, the courts have laid down some guidance under Schedule 2 of the UCTA 1977. In terms of the exclusion clauses put forward, we can identify that numerous issues occurred causing damage and negligence. In terms of Schedule 2 (a) UCTA 1977 this term could have been met had a reasonable service taken place . However, from Schedule 2 (e) the goods had to be of satisfactory quality and useable. This was however, not done in correspondence with Bruce’s requirements . It is worth noting also that Bruce did seek advice from an independent expert for an opinion in regards to the work done which may have been very expensive causing Bruce even more detriment.

Finally, if the Unfair Terms in Consumer Contracts Regulations is to be taken into account, we would establish that if the consumer did not suffer any unfair detriment then the clauses would not be valid. However, Bruce did suffer from unbalanced detriment causing him loss and even though he is acting on behalf of his business he will be protected from the clauses as a consumer also. Making the clauses invalid.

Source: Essay UK - http://lecloschateldon.com/essays/law/essay-sale-of-goods-act-problem-law-scenario/


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