BetterLawNotes-5 (2)

CONTRACT LAW

Step one: identify the loss or damage which Cody has suffered

 Damage to the tv 

  • Personal injury 
  • Damage to the apartment 
  • Damage to the sunbed 

Step two: identify the term, or terms, of the contract, the breach of which might have caused those losses 

 Are there any relevant express terms of the contract? None that we know of. 

 Are there any relevant implied terms? 

 This appears to be a contract for the supply of goods (the sunbed) and a service (installation) in which the supplier, Dex, is a trader, and the buyer, Cody, is a consumer. As such, we need to look at the Consumer Rights Act 2015. 

 S 9 provides that the contract is to be treated as including a term that the quality of the goods (the sunbed) is satisfactory. 

 S 49 provides that the contract is to be treated as including a term that the trader (Dex) must perform the service (the installation) with reasonable care and skill. 

Step three: establish whether, on the facts, those terms have been breached by Dex 

 The term implied by s 9 CRA is breached because the sunbed does not meet the standard that a reasonable person would consider satisfactory (see ss 9(2) and 9(3)). 

 The term implied by s 49 CRA is breached because Dex carelessly knocks over the tv while installing the sunbed. 

Step four: establish whether, on the facts, those breaches caused the losses which Cody has suffered. 

 Damage to the apartment and sunbed and the personal injury are caused by breach of the term implied by s 9. 

Damage to the plasma tv is caused by a breach of the term implied by s 49. 

 It follows that Dex is prima facie liable for all of the losses which Cody has suffered, as each has been caused by Dex’s breaches of implied terms of the contract. It is therefore necessary to consider the extent to which that liability is excluded or restricted by Dex’s terms and conditions. 

Step five: is Dex’s liability excluded or limited by the terms of the contract? 

 Clause 1 has no application to loss other than damage to the plasma tv as it is only the damage to the plasma tv which is caused by negligence.  

 Clause 1 will not restrict recovery of damages for damage to the plasma tv (£2,000) as this is less than contract price (£5,000). Further, clause 2 is expressed to be subject to clause 1 and therefore cannot override it. It follows that Cody can recover for damage to the plasma tv screen. 

 However, clause 2 would appear to exclude liability arising under s 9 CRA, and thus preclude recovery of damages for all the other items of loss. 

 Therefore, we must establish whether clause 2 is effective: 

Step six: is clause 2 incorporated into the contract? 

 Dex must take reasonable steps to bring the clause to Cody’s attention (Interfoto v Stiletto). Dex does not supply a copy of the terms and conditions until two days after the contract is made: on the face of it the terms and conditions have been introduced too late to be incorporated (Olley v Marlborough Court).  

 However, Dex does refer explicitly to his terms and conditions when making the contract. Is it relevant that it takes Dex two days to supply them rather than one? Arguably not: Dex has brought the existence of the terms and conditions to Cody’s attention, and it would seem to make no difference that there is a further day’s delay in supplying them. 

 The fact that the terms and conditions are eaten by Cody’s dog should not adversely affect Dex’s position: it is up to Cody to control his dog. 

 Finally, it could be said that the clauses are not particularly onerous or unusual.  

 If the court were to conclude that Dex had failed to take reasonable steps to bring Cody’s attention to clause 2, the clause would be held not to have been incorporated, meaning that Cody could recover for the damage to apartment and sunbed and for personal injury 

 But if the court were to conclude that reasonable steps had been taken, then 

Step seven: does clause 2, properly construed, cover the liability which prima facie has arisen? 

 Yes, it refers to any ‘term’ and s 9 CRA implies a term as to quality. 

 If we assume clause 2 covers the liability, then 

Step eight: is it nevertheless unenforceable under the relevant legislation? 

 Under s 31(1)(a), clause 2 is not binding on Cody. 

 Cody can therefore recover for the damage to apartment and sunbed and for personal injury.

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