The Gazette 1981

SEPTEMBER 1981

GAZETTE

consumer sales (as, indeed, its wording suggests), how does one account for the express provision in sections 55(4) allowing for the exclusion of implied terms in non- consumer transactions? Moreover, if the section 11(4) offence applies to non-consumer sales, its effect is to outlaw conditions of sale in such cases, in so far as they exclude the statutory implied terms from the contract. Such a drastic change could not, one hopes, be effected by the legislature in such an oblique way. Section 11 (4) makes for two distinct difficulties where conditions of sale are being prepared for non-consumer transactions. First, the draftsman must point out the terms of the sub-section to a client and explain that, on a literal interpretation of it, the conditions of sale, assuming they contain the usual exclusion clauses without the redeeming "clear and conspicuous declaration," may give rise to prosecution for an offence. (The conditions would not, of course, leave open this danger if they fail to exclude the provisions of sections 12 and 15 of the 1893 Act and contain a clear and conspicuous declaration to that effect). This advice can, doubtless, be qualified by the comment that, since it was apparently the intention of the legislature that section 11 (4) should only apply to consumer transactions, the likelihood of any such prosecution must be very small indeed. But there is a second danger brought about by section 11 (4). Suppose goods are sold to a purchaser, who does not deal as consumer, subject to conditions of sale containing the usual exclusion clauses and omitting the section 11(4) "Clear and conspicuous declaration". And suppose this purchaser refuses to pay for the goods and is sued for the price. Can he not argue, in defence, that the contract is unenforceable due to illegality in that conditions of sale were furnished to him descriptive of his rights but failing to contain the prescribed "clear and conspicuous declaration" in breach of section 11(4)? The authorities suggest that the answer to this question requires an investigation of the intention of the legislature. The purchaser's point would seem to have validity if the legislature intended that the entire contract should be nullified where it is performed in the manner made illegal by statute. 11 But if the intention of the legislature was that the performance of the prohibited act should only result in the imposition of a charge or penalty, then the enforceability of the contract is not affected. 12 There is little evidence to support a contention that the legislature intended that an entire contract of sale should be invalidated owing to a failure to comply with section 11 (4). But this does not completely dispose of the difficulty. For a court might still take the view that, while the contract remains enforceable, the provisions set out in the conditions of sale cannot be relied upon. This is a real danger and, pending a decision of the Irish courts on the point, the legal adviser can do little more than make his client aware of the danger. The guarantee provisions Another problem for the draftsman of conditions of sale is brought about by the guarantee provisions of the 1980 Act. 13 A "guarantee" is defined in section 15 as any "document, notice or other written statement, howsoever described, supplied by a manufacturer or other supplier, other than a retailer, in connection with the supply of any goods and indicating that the manufacturer or other

supplier will service, repair or otherwise deal with the goods following purchase." It is, probably, a fair assumption that the legislature intended to refer here to the guarantee cards or warranty cards which are often furnished with manufactured goods. But the careful draftsman of conditions of sale will note that the definition is a very broad one: it extends to any document furnished with goods which indicates that the manufacturer or other supplier, provided he is not also the retailer, will "service, repair or otherwise deal" with the goods after purchase. Many conditions of sale provided that, in the event of a complaint being made by the buyer that the goods are defective, they must be returned to the seller who, if satisfied as to the validity of the complaint, will repair or replace them. It seems that such a provision now comes within the definition of a guarantee under section 15. Again, this is a result which the legislature may not have intended. Nevertheless, if the point were to be judicially considered, then it is not unreasonable to conjecture that a court might well conclude that such a provision in conditions of sale constitutes a guarantee. Pedantic as it may seem, the cautious draftsman must assume, for the time being at any rate, that conditions of sale which are prepared for a manufacturer or supplier other than a retailer and contain an undertaking to "repair or otherwise deal with the goods following purchase" constitute a guarantee for the purposes of the 1980 Act. Therefore, the conditions of sale must comply with the terms prescribed for a guarantee. 14 In summary, the Act requires that a guarantee: (1) be legible and refer only to specific goods or to one category of goods; (2) state clearly the name and address of the person supplying the guarantee; (3) state clearly the duration of the guarantee from the date of purchase; (4) state clearly the procedure for presenting a claim under the guarantee which must not be more difficult than ordinary or normal commercial procedure; and (5) state clearly the undertakings given in relation to the goods and what charges, including the cost of carriage, the buyer must meet. Failure to comply with the requirements for the terms of a guarantee is an offence. 13 A client must also be advised as to the effect of the conditions of sale being rendered a guarantee by virtue of the undertaking to repair or replace the goods sold. In particular, he must be advised with regard to the effect of section 19(1). This sub-section breaches the doctrine of privity of contract by providing that a right of action is to be conferred on the buyer of goods either to enforce the guarantee or for damages against a manufacturer or other supplier who fails to observe its terms; and this right is expressly provided to exist "as if that manufacturer or supplier had sold the goods to the buyer." Assuming that an undertaking in conditions of sale to repair or replace goods does render the conditions a guarantee for the purposes of the Act, section 19(1) means, in effect, that the ultimate purchaser may have an action against the manufacturer or supplier furnishing the conditions to enforce the terms of the guarantee or for damages. Conditions of sale that also provide for the rendering of a service Conditions of sale often provide not only for the sale of goods but also for the supply of some service by the seller to the buyer. For example, where highly technical equipment is being sold, the seller may undertake to

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