Types of Contracts
What is a contract of sale?
A contract where ownership of goods transfers immediately upon purchase.
What is the implied term about ownership?
The seller must have the legal right to sell the goods (Sale of Goods Act 1979, s.12).
What law prevents businesses from excluding liability?
The Unfair Contract Terms Act 1977.
What can a buyer do if goods are misdescribed?
Reject the goods and claim a refund.
What law governs sales of goods?
The Sale of Goods Act 1979.
What is an agreement to sell?
A contract where ownership transfers at a future date or when conditions are met.
What does s.13 require?
Goods must match their description given at the time of sale.
Can a seller avoid responsibility for defective goods?
No, sellers are strictly liable under the Sale of Goods Act 1979.
What does strict liability mean for sellers?
To test how changes in key assumptions affect project outcomes.
What is the main consideration in a sale of goods contract?
Money (the price paid for the goods).
What is a hire-purchase contract?
A contract where the buyer pays in installments and only owns the goods after the final payment.
What is meant by “satisfactory quality”?
Goods must meet the standard that a reasonable person would expect, considering price and description (s.14(2)).
What case involved a stolen car?
Rowland v Divall (1923) – the buyer got a refund because the seller never had legal ownership.
What is the main remedy if goods are not fit for purpose?
The buyer can reject them or demand a replacement/refund.
What are “future goods”?
Goods that do not exist at the time of sale but will be manufactured or acquired later.
What is a barter contract?
A contract where goods are exchanged without money being involved.
What is an example of fitness for purpose?
If a buyer tells a seller they need a waterproof watch, the watch must function underwater (s.14(3)).
What case involved a defective product?
Godley v Perry (1960) – a child was injured by a defective toy, and the shopkeeper was held liable.
What law protects consumers from unfair exclusions?
The Unfair Contract Terms Act 1977 prevents businesses from avoiding liability for faulty goods.
When does ownership transfer in an agreement to sell?
When the agreed-upon conditions are met (e.g., final payment is made).
What is a goods & services contract?
A contract where a service is provided alongside goods, such as car repairs that include replacement parts.
What happens when a sample does not match bulk goods?
The buyer can reject the goods under Sale by Sample rules (s.15).
What happens if a buyer accepts faulty goods too late?
They may lose the right to reject them and can only claim for damages.
What is the consequence of accepting defective goods?
The buyer may have to keep them and can only claim compensation instead of a refund.
What is the consequence of breaching an implied term?
The buyer may be entitled to reject the goods, claim damages, or both.