The Gazette 1981

SEPTEMBER 1981

GAZETTE

install it. If conditions of sale include an undertaking by the seller to perform any service for the buyer, then the provisions of sections 39 and 40 must be noted. Section 39 provides that certain terms are to be implied in every contract for the supply of a service where the supplier is acting in the course of a business. Briefly, these terms are: (1) that the supplier has the necessary skill to render the service; (2) that he will supply the service with due skill, care and diligence; (3) that, where materials are used, they will be sound and reasonably fit for the purpose for which they are required; and (4) that, where goods are supplied under the contract, they will be of merchantable quality. 16 These terms may be negatived or varied, but they will not be negatived by an express term unless it is inconsistent with them. 17 Section 40(3) provides that a term negatives or varies a term implied under section 39 if it "purports to exclude or restrict, or has the effect of excluding or restricting, the operation of any provision of that section, or the exercise of a right conferred by any provision of that section, or any liability of the supplier for breach of a term implied by any provision of that section." Thus a term in conditions of sale which limits liability to a fixed amount will be a term negativing or varying the section 39 implied terms. Section 40(1) places an important limitation on the right to negative or vary the terms implied under section 39. It provides that an express term negativing or varying the section 39 implied term must, where the recipient of the service deals as consumer, be shown to be fair and reasonable and to have been specifically brought to his attention. Problems similar to those raised by section 11 (4) arise in relation to section 41(4) which deals with statements restricting the rights of a recipient of a service. This sub- section provides that it is an offence for a person in the course of a business to furnish to the recipient of a service (inter alia) any document including a statement, irrespective of its legal effect, which sets out, limits or describes rights conferred on him or liabilities to him in relation to goods acquired by him, unless the statement is accompanied by a clear and conspicious declaration that the contractual rights which the recipient enjoys by virtue of section 39 are in no way prejudiced by it. In other words, all conditions of sale which cover not only the provision of a service, but also deal with the recipient's rights of liabilities in relation to goods acquired, must contain the prescribed clear and conspicuous declaration vouchsafing the recipient's rights under section 39. Once again the Act is difficult to understand, in that it expressly authorises the exclusion of the section 39 implied terms, subject to the sole limitation that, where the recipient deals as consumer, the exclusion must have been specifically brought to his attention and be fair and reasonable. So what is the draftsman to do? The straightforward solution is to delete any reference to the recipient's rights or liabilities in relation to goods acquired by him under the contract. This means, in effect, that the supplier of a service cannot protect himself in relation to any goods supplied by him. The more daring draftsman may venture to rely on the provisions of section 40(1) allowing the exclusion of the section 39 implied terms and ignore section 41(4). Such a course of action, however,

raises the same dangers as have already been outlined in relation to section 11 (4). Future developments The draftsman should be aware that certain important provisions of the Act may in the future be brought into force by ministerial order so as to affect conditions of sale. 18 For example, under section 53, the minister is empowered to prohibit the use in the course of a business of a printed contract, guarantee or other specified class of document unless printed in type of a prescribed size. He is also empowered, under section 52, to order that a person using a standard form of contract in the course of a business give notice to the public as to whether or not he is willing to contract on any other terms. Conclusion Clearly the 1980 Act is fraught with problems for the draftsman of commercial conditions of sale. It is perhaps worth mentioning that many of those problems were brought to the attention of the author within a matter of weeks of the Act coming into force. Of course one should expect that common sense will prevail and that the Act will be applied in a sensible way, but it seems a pity that an Act so important to the commerce of the country should already give rise to such difficulty and controversy. • Footnotes 1. Section 12 of the Table inserted by section 10 of the Sale of Goods and Supply of Services Act, 1980. 2. Section 13 of the Table inserted by section 10. 3. Section 14(1) of the Table inserted by section 10. 4. Section 14(2) and (4) of the Table inserted by section 10. The term "merchantable quality" now has the meaning given to it in section 14(3) of the Table inserted by section 10. 5. Section 15 of the Table inserted by section 10. 6. Section 55(1) of the Table inserted by section 22. But if a draftsman wishes to exclude or vary a statutory implied term, he must do so with precision. It is not sufficient to provide an express condition or warranty in the conditions of sale: section 55(2) of the Table inserted by section 22. 7. Section 55(3) of the Table inserted by section 22. 8. Section 55(4) of the Table inserted by section 22. It should be noted that in the case of what the Act terms a "contract for the international sale of goods" all the statutory implied terms (including section 12) can be excluded from the contract: section 61(6)(a) inserted by section 24. A "contract for the international sale of goods" has the meaning attached to it in section 6 l(6Xb) inserted by section 24. 9. It should be noted that under section 3 (3) the onus will rest on the party alleging that another did not deal as consumer to show that he did not. 10. First edition (1974) at pages 450-451. 1 J. As in Anderson, Ltd . v. Daniel [1924] 1K. B. 138 where a seller of fertilisers lost his action against the buyer for the price of the goods sold because he had failed to furnish the buyer with an invoice required by statute setting out the percentages of certain chemical substances in the goods. 12. St. John Shipping Corporation v. Joseph Rank Ltd. [19571 1 Q. B. 267; Archbolds (Freightage) Ltd. v. S. Spanglett Ltd. [ 19611 1 Q. B. 374; and Shaw v. Groom [19701 2 Q. B. 504. 13. Sections 15-19. 14. Section 16. 15. Section 16(6). 16. For the definition of "merchantable quality" see the meaning nowassigned to it in section 14(3) of the Table inserted by section 10. 17. Section 40(1) and (2). 18. Sections 50-54.

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