BetterLawNotes-5 (2)

CONTRACT LAW

(i) Would Ruby have any liability to Finn apart from her T & Cs?

Given that both Ruby and Finn appear to have been acting in the course of a business, it will have been an implied term of the contract under s 13 SoGaSA 1982 that the installation would be carried out with reasonable care and skill. Clearly it wasn’t. As the damage to the door was caused by the breach and is not too remote, Ruby will, apart from her T & Cs, be liable for the repair cost.
Again, given that both Ruby and Finn appear to have been acting in the course of a business, it will also have been a term of the contract (either under s 14(2) & (3) SGA 1979 or s 4(2) & (3) SoGaSA 1982) that the coffee machine would be of satisfactory quality and fit for purpose. Again, clearly it wasn’t. Liability is strict: it is irrelevant that the defect was hidden and not the fault of Ruby. As such Ruby will be in breach of the terms. Given that the personal injury and the repair cost were caused by the breach and are not too remote, Ruby will, apart from the T & Cs, be liable to pay damages.

 

(ii) Are Ruby’s T & Cs incorporated into her contract with Finn?

It follows that Ruby will be liable in full for to Finn for the costs of repairing the machine and the door and for Finn’s personal injury unless her T & Cs limit or exclude those liabilities. To do so, the T & Cs must have been incorporated into the contract.

It seems fairly clear that Ruby’s T & Cs would be held to have been incorporated into the contract for the sale/supply of the machine, as the icon and link on the website would be considered as reasonable steps by Ruby to bring the T & Cs to Finn’s attention: see, eg, Interfoto v Stiletto. But one issue is whether Ruby’s agreement to install the machine constitutes a separate contract from the contract for the sale of the machine. If it does, then it is arguable that Ruby’s T & Cs do not apply to the installation as Ruby failed to take reasonable steps to bring them to Finn’s attention. If this is the case, Ruby would then be liable for the damage to the glass door.

 

(iii) Do Ruby’s T & Cs cover the liabilities which have arisen?

Condition 1 seems to cover the liability which would other arise for the breach of the terms implied by s 14 (or s 4).
It might be argued that applying the contra proferentem rule to condition 2, the limitation is ineffective because the condition does not expressly refer to negligence: see, eg, Canada Steamship v The King. However, given that Finn is acting in the course of a business, a court may adopt a less paternalistic approach and conclude that it would/should have been reasonably obvious to Finn that Ruby intended to limit liability for negligence: see, eg, HIH Casualty v Chase Manhattan.

 

(iv) Are Ruby’s T & Cs unenforceable under UCTA?

Assuming that Ruby’s T & Cs were incorporated and that properly construed they apply to the liabilities which have arisen, it becomes necessary to consider whether they are unenforceable under UCTA. Condition 1 falls under s 6(1A)/7(1A) and will only be enforceable if it satisfies the requirement of reasonableness: see s 11 and Schedule 2.

The same outcome obtains for Condition 2: s 2(2) of UCTA applies because the damage to the door amounts to ‘other loss or damage’ and not ‘death or personal injury’ to which s 2(1) applies.

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