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This scenario concerns the sale of desks by Evans Furniture and the different parties that are involved in the different transactions

Introduction

It is difficult to define the right to privacy in a definitive manner and the lack of a coherent definition of ‘privacy’ lies at the heart of lack of legislative will in creating a comprehensive privacy law or creating a specific tort of invasion of privacy. The notion of privacy may well mean different things to different people. Another factor responsible for lack of legislative will is the obvious conflict posed in interests of privacy and freedom of expression. Both rights are recognised by the European Convention of Human Rights (ECHR), and therefore balancing is required between these two rights.

Introduction

This scenario concerns the sale of desks by Evans Furniture and the different parties that are involved in the different transactions. This report considers the legal rights and liabilities that arise from these transactions with respect to Evans Furniture, Westway Office, Higgins Office and the customers who bought desks from the retail section of Evans.

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Standard Form Contract: Clause 1 – Aim and Impact

The first clause of the Standard Form Contract provides that no amendments or modifications to the conditions of the contract and, in particular, no terms or conditions of purchase of the buyer shall form part of the contract or be binding upon the seller unless expressly agreed to in writing and signed by the seller. This can be related to the parol evidence rule, which provides that once there is a written contract, no external evidence prior to the contract or after the formation of the contract can be used to amend the existing written contract between the parties (Waddams, 2011). Courts rely on the parol evidence rule to uphold the contract in its written form so that parties cannot bring extrinsic evidence to add to, vary, or contradict the written terms of the contract (McKendrick, 2012, p. 149). What Clause 1 of the standard form contract is aiming to achieve is to ensure that the written terms that are contained in the contract are the only ones that bind the seller unless he agrees to some other terms in writing and signs the document. The Clause 1 will be successful in achieving this aim because courts are also usually in favour of not allowing any modification or amendment to the written contract except when the amendment is contained in a document that is signed by both parties. It has been held that the written document is the sole repository of the terms of the contract (Shogun Finance Ltd v Hudson, [2003] UKHL 62, 2003).

Standard Form Contract: Clause 9 – Aim and Impact

Clause 9 of the Standard Form Contract relates to limitation and exclusion clauses. Exclusion clauses or limitations clauses seek to Sub clause A provides that in event of there being a defect in the goods, the seller shall be liable only to the extent of replacing the goods or refunding the payments made by the buyer. Sub clause B is an exclusionary clause, which seeks to exclude the liability of the seller for any negligence on their part or on the part of their agents or employees. Section 2 of the Unfair Contract Terms Act 1977 prevents the seller from excluding or restricting any right or remedy in respect of the liability arising out of negligence. However, the liability is not excluded in the event of personal injury or death under sub clause c, which is in compliance with Section of the Unfair Contract Terms Act and also Consumer Rights Act 2015, section 65(1), both of which bar exclusion clauses that seek to exclude liability for personal injury or death caused by negligence. Moreover, the last sub clause of Clause 9 passes the reasonableness test because it does not seek to limit liability for breach of implied terms as to title, quality, fitness and purpose. The clause will be effective because none of the sub clauses breach any fundamental term of agreement (Karsales v Wallis, [1956] EWCA Civ 4, 1956). In the present scenario, the exclusion clause can be relied upon by Evans for the defective benches that the customers are complaining for their loose drawer handles. This clause can also be used to evade liability for the destruction of the 60 desks due to fire.

Passing of Property to Westway

A contract for sale of goods has been formed between Evans Furniture and Westway Office Equipment on the 5th December when Westway sent a written letter of acceptance of the offer as well as communicated with the Sales Manager on the phone. However, the title of the goods has not passed to Westway. Generally speaking, property in unascertained goods does not pass to the buyer until the goods are ascertained (Sale of Goods Act, Section 16). The Sale of Goods Act 1979, Section 17(1) provides that in case of sale of specific and ascertained goods, property in the goods passes to the buyer only at such time when the parties to the contract have intended such property to pass to the buyer. Clause 6 of the Standard Form Contract clearly states that “the property in the goods shall remain with the seller until the seller has received payment in full for the goods and all the sums owing to the seller on whatever grounds.” Therefore, the title of the goods will not pass to Westway until Westway pays the price for the desks as well as the costs of the transportation of the desks as per the Clause 3 of the Standard Form Contract. Clause 7 of the Standard Form Contract provides that the risk of the goods has passed to the buyer at the time of entering into the contract. One of the consequences of the buyer bearing a risk at the time of loss or damage is that the goods must be paid for

Legal Significance of Sending Desks to Loading Bay

The legal significance of the sending of the benches to the loading bay before the fire occurred is that the seller had identified or ascertained the desks that were to be delivered to Westway. When goods are appropriated to the contract, this means that they are irrevocably earmarked for the use in that contract (Carlos Federspiel & Co SA v Charles Twigg & Co Ltd [1957] 1 Lloyd's Rep 240, 1957). When the goods are earmarked in such a way, the risk will pass to the buyer and any damage to the goods will become the responsibility of the buyer. Therefore, the sending of the desks to the loading bay is legally significant as this will determine the passing of risk in the desks to Westway as per Clause 7 of the Standard Form Contract. Clause 7 clearly provides that the risk in the goods shall pass to the buyer in all respects from the date of the contract. The seller had started the process of delivery of desks to Westway before the fire broke out in the loading bay and the desks were destroyed. The legal significance of this is that both Clause 7 and Clause 8 are applicable and the risk of the goods was with Westway, while Evans was to insure the goods unless Westway specified to the contrary.

Validity of Contract between Higgins Office Store and Evans Furniture

Higgins Office Store and Evans Furniture do not have a binding contract. The Managing Director of Evans accepted the offer made by Higgins Office unaware of the sales made to public and the agreement with Westway. There can be a legally binding contract between two parties only when there is a ‘consensus ad idem’ between them (Poole, 2016). In case there in any mistake in the contract, the contract is void. A mistake can be common, mutual or unilateral (Kelly & Hammer, 2017). If the common mistake made by both parties relates to something that is fundamental to the contract, then the mistake becomes operative to make the contract void (Kelly & Hammer, 2017, p. 145). In case the subject matter of the contract is no longer in existence, then the contract is treated as void (Couturier v Hastie (1856) 5 HLC 673, 1856). In this scenario, the mistake is a common mistake because both parties believe that there are 120 benches to be sold, whereas there are only 40 benches, as 60 benches have been sold to Westway and 20 benches have been sold to public. Therefore, the subject matter of the contract between Higgins and Evans was not in existence at the time when the contract was made. Thus, the contract is void. Higgins does not have right to a legal action in this scenario.

Passing of Title to Higgins Office

Higgins Office has possession of 40 desks but they do not have title to the desks as the title of the desk can only pass under a valid contract. As the contract between Higgins and Evans is void due to the common mistake made as to the subject matter, there is no passing of title to Higgins. Nevertheless, Westway cannot claim that the 40 desks that Higgins has in possession belong to Westway because, the property in the desks belongs to Evans until the payment for the same is made by the buyer in totality. This is as per Clause 6 of the Standard Form Contract. This has not happened at this time, therefore, Westway cannot claim a property in the desks. Moreover, Clause 10 of the Standard Form Contract specifies that the seller is not liable for the non-performance of the contract due to an act of God, fire, flood, etc. The desks that were kept in the loading bay for delivery to Westway were destroyed in a fire. The putting of desks in the loading bay is significant here because this means that the seller had identified the goods that were to be delivered to Westway and put them in the loading bay. This means that Higgins cannot claim that the desks that are with Higgins be delivered to it now because the property is with Evans and Evans can sell this to anyone they choose. They are not bound to sell the desks to Westway.

Repudiation of Contract by Higgins Office

Higgins Office have possession of the desks but they do not have a valid contract with Evans as Higgins made an offer and the Managing Director of Evans accepted it, for subject matter that did not exist at the time. Higgins Office want to use the defects in the 10 desks as a ground for repudiating the contract and demanding compensation. There is no legal basis to this claim by Higgins and this claim is bound to fail. Higgins will have to return possession of the 40 desks to Evans but he cannot claim any compensation.

Sub-sale: Impact on claim of Damages

The arrangement of sub-sale by Westway Office of the 60 desks that Evans was to sell to them has certain links to claim for damages. The sub-sale of the desks was at £ 900, while Westway bought the desks for £ 570. Now Westway wants to file a claim for damages against Evans. Clause 7 of the Standard Form Contract provides that if before the property in the desks is passed to the buyer, the buyer sells the desks to anyone else, the seller shall have the right to the proceeds of the sale or to a claim of such proceeds. This is a Romalpa clause under which the supplier retains the property in the goods until the payment for the same is made to him in complete by the buyer (Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd [1976] 1 WLR 676, 1976). This is applicable to sub-sales also. Westway made an arrangement to sell the desks before the property in the desks passed to them. The question that arises is whether the claim for damages that Westway can include the loss of sub-sale due to non-delivery of the desks. It has been held that the profit or loss made by a buyer on a sub-sale is not relevant to the assessment of damages for failure to deliver the goods by the seller, unless the buyer and seller had a particular sub-sale within their contemplation when making their contract. (Louis Dreyfus Trading Ltd v Reliance Trading Ltd [2004] 2 Lloyds Rep 243, 2004). In case, the seller and the buyer had such a contemplation at the time of entering into the contract, then the buyer may be entitled to have consideration to the sub-sale for increasing his damages (Louis Dreyfus Trading Ltd v Reliance Trading Ltd [2004] 2 Lloyds Rep 243, 2004). 

Claim of Customers

In this situation, Clause 9 of the Standard Form Contract is applicable. As per this clause, in case there is some defect in the goods, the seller is liable to replace the faulty goods or refund the customers for the payments made by them at the option of the seller (Clause 9, sub clause A). This clause comes into play if the goods fail to comply with the terms of the contract. This clause should be read with sub clause D that in the event sub clause A is ineffective, the buyer cannot reject the goods and the damages recoverable should be limited to those that are reasonable for the remedying of the breach of contract. In this case, the customers are complaining that the drawers on the desk are slightly loose and there are one or two scratches on the desk. As consumers, they have certain rights under the Consumer Rights Act 2015. First, the Consumers Rights Act 2015, Section 9 (1) provides that every contract to supply goods is to be treated as including a term that the quality of the goods is satisfactory. Section 9 (2) provides that the quality of goods is satisfactory only if it meets the standard that a reasonable person would consider satisfactory, considering the description, price and all the other relevant circumstances. Finally, Section 9 (3) provides that quality of goods includes state and condition, fitness for all the purposes, appearance and finish, freedom from minor defects, safety and durability. In case the goods do not comply with the terms of the contract, then Section 19(3) provides certain remedies to the buyer. Under Sections 20 and 22, the buyer has the short-term right to reject. This right has to be exercised within 30 days of purchase and the buyer is also entitled to a full refund within this period but it lapses after 30 days. In this scenario, the customers have come to Evans for a refund after 30 days. This claim cannot succeed because it is made after the period of time specified by the law.

Conclusion

The Sale of Goods Act 1979 and the Consumer Rights Act 2015 provide many rights and remedies to the buyers of the goods. In this scenario, Westway and Evans have a contract but the desks are destroyed in the fire before the desks could be delivered. Clause 9 excludes the liability of Evans for this loss. There is no contract between Higgins and Evans as there was a common mistake as to the subject matter. Therefore, Higgins does not have title to the desks in its possession and cannot claim compensation from Evans. The customers did not make their claim for refunds within 30 days and therefore, the customers are no longer entitled to reject the goods and demand a refund.

Bibliography

    1. Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd [1976] 1 WLR 676 (1976).
    2. Carlos Federspiel & Co SA v Charles Twigg & Co Ltd [1957] 1 Lloyd's Rep 240 (1957).
    3. Couturier v Hastie (1856) 5 HLC 673 (1856).
    4. Karsales v Wallis, [1956] EWCA Civ 4 (1956).
    5. Kelly, D., & Hammer, R. (2017). Business Law. London: Taylor and Francis.
    6. Louis Dreyfus Trading Ltd v Reliance Trading Ltd [2004] 2 Lloyds Rep 243 (2004).
    7. McKendrick, E. (2012). Contract Law: Text, Cases, and Materials. Oxford: Oxford University Press.
    8. Poole, J. (2016). Textbook on Contract Law . Oxford: Oxford University Press.
    9. Shogun Finance Ltd v Hudson, [2003] UKHL 62 (2003).
    10. Waddams, S. (2011). Principle and Policy in Contract Law: Competing or Complementary Concepts? Cambridge: Cambridge University Press.

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