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National Diploma Business Unit 21: Aspects of business and contract law M2 - analyse how consumers are protected

in the event of breach of a contract for the supply/sale of goods or services Implied terms are essentially a provision in the contract while not expressly stated, are part of the contract as it is necessary for the obvious intentions of the parties involved to be fulfilled. These terms are incorporated into statutes such as the Sale of Goods Act 1979. Section 12 Title The person selling the goods has to have the legal right to sell them when the time has come to pass them on. The other implied terms are that the buyer will be able to enjoy possession of the goods and that they will be clear of all nuisances such as others having a third party right over the products (lien). See Rowland v Divall Section 13 Description An accurate description of the items is essential where the consumer buys the goods based on the description. The goods must match the description as well as being of satisfactory quality and fit for purpose. If this is not the case, the buyer should receive a repair, replacement or some form of compensation. See Harlingdon v. Christopher Hull Section 14 Fitness and Satisfactory Quality Under section 14, all goods are expected to be of a satisfactory quality meaning that should be at a standard which can be reasonably regarded as satisfactory. Another point to consider is that if the buyer states that they require the goods for a specific purpose then there is an implied term that they are fit for this use. The terms implied under this section only apply when the sellers activities are during the course of business. In the course of business is usually defined as any activity which is related to the activities of the organisation. For example, a factory purchasing a coach to transport their staff is considered in the course of business See Stevenson v. Rogers

Satisfactory quality, s14 The quality of the goods sold must be satisfactory and be of a standard that would be considered satisfactory but a reasonable person. Other things such as the price of the goods, description and other factors should be taken into consideration when determining satisfactory quality. For instance, if the goods are second hand, the expected standard would fall - See Bernstien v. Pamsons Motors Ltd Another factor which can affect the quality expected would be the reputation of the brand name which would significantly increase the standard expected of it. Fitness for purpose (section 14) Under this part of the act, if a buyer makes it clear what the item is going to be used for, it is the sellers duty to ensure that the goods provided are fit for the purpose intended. It sufficient that the buyer will If the buyer expressly or impliedly makes his purpose for the goods known to the seller, the seller is obliged to make sure the goods provided are fit for that purpose, if it is reasonable for the buyer to rely on the seller's knowledge and expertise as in the Godley v Perry case. Sale by sample (section 15) When goods are purchased by bulk, the buyer has usually inspected a sample of the goods and makes the purchase based on what they see then. Therefore, the seller has to ensure that every single item matches with the quality of the sample which was shown.

National Diploma Business Unit 21: Aspects of business and contract law Remedies available in the event of a breach of contract M3 analyse the remedies available to a business provider in the event of breach of a contract for the supply of goods or services. If one of the contracting party breaches a contract or fails to fulfil the contractual obligations for whatever reason it will usually leave the other party at some kind of loss/disadvantage. In such cases, the claimant can pursue this breach of contract through the courts and below are some of the various types of remedies which may be ordered in order to help them recoup any losses that they may have incurred. Specific performance If an order for specific performance is given in the event of a breach of contract, it essentially forces the defendant to carry out the terms of the contract and therefore fulfil their contractual obligations. Specific performance is usually ordered where it is difficult to establish monetary damages or it is inappropriate for the situation. It is a discretionary remedy and is not always available in all cases or disputes. For example, if the defendant breached a contract where they agreed to hand over a large real estate property, the court will order specific performance rather than awarding damages to the defendant. Injunction An injunction is a court order which prevents the defendant from carrying out an act which results in the breach of a contract. The three types of injunction are: An Interlocutory injunction is a temporary injunction; which only lasts until the end of the trial during which the injunction was sought. The purpose of this temporary injunction is to keep things as they stand before the final hearing of the case. A prohibitory injunction orders a defendant not to do something in breach of contract. It is usually imposed to prevent an act which could cause a threatened but non-existing loss/breach of contract. A mandatory injunction requires a defendant to take positive actions which reverses or completely offsets the effects of the existing breach. Mandatory injunctions are quite rare in practise and are mainly used to redress an unlawful act. In the past, these kinds of injunctions have been used to completely remove buildings or other structures which have been constructed illegally on another individuals land.

Lien A lien is the right of a contracting-party to take possession of a specific asset of the other contracting party, in case the contract is not performed according to its terms. The right to retain the property of another by way of a lien is a powerful legal remedy and allows the claimant to retain physical possession/control over anothers property until the payment has been received. This means that the lien holder has rights of possession over the property but only as a means of security for the claim. Rejection The rejection or refusal of an offer by the person to whom it is made causes the offer to lapse. However, if the goods are not up to the required standards stated in the contract, the may be rejected once the offer has been accepted. However, the rejection must be made within a reasonable timeframe and the seller be given sufficient notice of the rejection. Acceptance of an offer can also be retracted if there is a malfunction or defect with the product which affects the value of the product. In such a case, the retraction of the offer must be made clear to the buyer as soon as the defect has been discovered. Unliquidated damages Unliquidated damages are sums of money which are not established before hand by the contracting parties as a form of compensation for breach of contract but are decided upon by a court after the breach has taken place. In most cases, unliquidated damages are unlimited and cover all the various costs that result from a breach of contract as a result of the other partys actions or inability for whatever reason to fulfil the obligations of the contract. However, the claimant will have to show the full extent to which the breach of contract has impacted on them in terms of loss and inconvenience before being able to take action to recover it.