Remedy to Recover Damages for the Loss - Case Study Example

Contract – Tort Law In this problem,the legal issues to be addressed are, whether Everyday Cars can rely on the exclusion clause and whether Alan has any remedy to recover damages for the loss caused to him due to the total breakdown of car. In this endeavour, Alan has to establish that Everyday Cars cannot rely on the exemption clause in the standard terms of the contract. Consumers have certain rights against breach of contract, hence, it is important to determine, if a purchaser is a consumer. This helps to assess the rights of the purchaser to claim damages in instances of breach of contract. According to the existing statute, a consumer is a person who acts for reasons or consequences that are beyond the scope of his business, profession or trade1 Hence It is essential to determine whether a purchaser of goods is a consumer. The latter is any individual whose trade, business or profession is unrelated to the purchase made by him. In our case Alan purchased the vehicle for use in his catering business. He is not in the business of purchasing and selling vehicles, therefore he is a consumer. Everyday Cars are liable for the damages and physical injuries caused to Alan. They cannot exclude liability, relying on the exemption clause incorporated in the sale agreement with Alan. This is because, the Unfair Contract Terms Act precludes exemption clauses that seek to avoid liability for physical injuries and death caused to a consumer of their products. The Sale of Goods Act (SGA) protects the interests of consumers and provides remedies for breach of contract. These remedies include repair, substitution, partial refund, rejection, and full refund. Moreover, if the goods develop a defect, within six months of the sale, then it is to be assumed that the defect existed at the time of their sale2. Hence ,it is essential to note that the Sale of Goods Act implies a contractual term, which requires goods sold to necessarily be of satisfactory quality. However, this implied term becomes germane, only when the goods in question, had been sold in the due course of business. As such, implied terms in contracts, which are enjoined upon by the statute; stipulate that goods supplied under a contract must be of satisfactory quality3. In addition, such goods have to be realistically suitable for the purpose for which the buyer had purchased them, and must be in accordance with the description by which they had been supplied. These requirements provide several significant advantages to a purchaser of goods. Furthermore, these stipulations render the supplier liable for the goods supplied. As such, the basic and crucial condition that goods sold must be of satisfactory quality occurs automatically, whenever goods are sold in the due course of business4. For example, in Beale v Taylor, the court held the purchase of a vehicle that had been described by the seller, to be a sale by description5. If the buyer of goods had relied on their description, while making the purchase, and if that description had been incorrect, then as per the provisions of the Sale of Goods Act, the buyer can reject the goods. Contracts, involving sale of goods by description, include the implication that such goods have to conform to the description provided in the contractual terms6. Moreover, if the goods sold, can be utilized only for a single specific purpose, then there is no necessity for the purchaser to query the seller about the suitability of those goods for his purpose7. A product that is flawed is also substandard; this was the ruling in Godley v. Perry8. The Sale of Goods Act declares that “in a consumer contract breach of an implied term relating to satisfactory quality, fitness for purpose, description, or conformance with sample is always a material breach9.” Moreover, as per the Sale of Goods Act, there is an implied term regarding the quality and fitness for the purpose of the goods sold to a consumer. In addition, Everyday Cars cannot evade liability, by declaring that no statutory terms would be applicable to its contracts; because, the Unfair Contract Terms Act, does not permit any exemption clause to circumvent the requirements of statutory requirements. Since the seller had infringed the implied terms that had been deemed to be essential conditions, by the statute; Everyday Cars are liable to make a full refund of the cost of the car to Alan, under the provisions of the Sale of Goods Act10. The latter can rescind the contract, as well as claim compensation for the personal injuries caused to him and his car. As such, the vehicle sold by the Everyday cars was not road worthy.Hence,Everyday cars is liable for the physical injury and monetary loss caused to Alan. Duty of care is crucial in tort cases. The House of Lords developed a three – stage test in Caparo v Dickman to determine existence of duty of care. First, whether the consequences of the defendant’s actions were foreseeable; secondly, if there had been adequate proximity; and finally, whether such imposition would be fair, just and reasonable11. This constitutes the proximity test; and in another case, their Lordships ruled that the nature of the relationship between the parties to the case determines applicability of the proximity test12. Manufacturers of goods must ensure that the goods produced by them should reach the consumer in the same quality and form. This is because; it would be difficult to examine the goods, while in transit. A manufacturer has to realise that negligently manufactured products could cause physical injuries to consumers or result in damage to their interests. As such, a manufacturer owes a duty of care towards his consumers. This rule applies even if the manufacturer is not aware of the dangerous character of the product, and there is no contractual relationship with the consumer13. According to Lord Atkin, duty of care evolved from the principle that people have to take reasonable care to avert acts or omissions, which they can reasonably foresee as capable of causing injury to their neighbours. As such, every individual should take all possible care to avoid the infliction of direct injuries to others, due to their acts or omissions14. The Supply of Goods and Services Act 1982 states that the supplier of a service has to exhibit reasonable care and expertise, while providing services to consumers. Furthermore, such service has to be completed within a reasonable period of time. In our present problem, Alan’s negligence, while supplying the food, caused the participants in Peter’s lectures to fall seriously ill. Peter had been compelled to refund £3,000 to the participants of his lectures. This loss will have to be borne by Alan, because as an experienced caterer he should have exercised greater care, while supplying the cooked chicken. Cookers –R–us will also be liable for the loss caused to Peter, because it had sold a defective microwave oven to Alan. Furthermore, Alan had been in the habit of providing Peter with invoices that included a clause, which stated that he was not responsible for the quality of the food supplied. However, these invoices had invariably; reached Peter after the event had been completed. Therefore, such notice does not comprise a part of the contract. Consequently it is invalid. It is the objective of an exemption clause in a contract to circumvent liability. The Unfair Contract Terms Act disallows exemption clauses that seek to obviate or reduce liability, for the death or injury resulting from their negligence15. Moreover, a statutory requirement cannot be rescinded by an exemption clause. In Hardwick Game Farm v Suffolk, it was held that exclusion clauses included either before or at the time of concluding the contract, were valid16. In Olley v Marlborough Court Hotel, the Court did not permit inclusion of an exclusion clause in the contract17. In Thornton v Shoe Lane Parking case, the Court rejected the exclusion clause printed on the reverse of the parking ticket, because it provided customers with inadequate notice18. In addition, Cookers –R–us has breached contractual terms, because it had failed to live up to its promise to provide a free pair of gloves for any purchase in excess of £100, and Alan had paid £ 250 for the microwave oven. This is in accordance with the decision in the Carbolic Smoke Ball case. In this case, the defendant, promised in an advertisement to pay £100 to anyone who contracted the flu virus, after using their product for two weeks. In this case, the court held that an advertisement is an offer if something is done in pursuant to that advertisement19. Alan had purchased the goods over and above the value specified by the Cookers –R–us for availing the free gloves. Hence Cookers –R–us is liable for breach of contract, since they had not provided Alan with gloves, as promised in their advertisement. Bibliography Anns v Merton London Borough [1978] AC 728 Beale v Taylor [1967] 1 WLR 1193 Caparo v Dickman [1990] 1All ER 568 Consumer Contracts Regulations 1999 Donoghue (or McAlister) v Stevenson [1932] All ER Rep 1 Godley v Perry [1960] 1 All ER 36 (QB) Hardwick Game Farm v Suffolk Agricultural etc Association (1969) 2 AC 31 Louisa Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256 Olley v Marlborough Court Hotel (1949) 1 KB 532 Preist v Last [1903] 2 KB148 Sale of Goods Act 1979 Supply of Goods and Services Act 1982 The Unfair Terms in Consumer Contracts Regulations 1999 Thornton v Shoe Lane Parking Ltd [1971] 1 All ER 686 Unfair Contract Terms Act 1977 Read More