Case study business law
Report for Winston
Introduction
Winston and his partners had entered into a contract of sale which as the law permits in section 4 can be made partly by word of mouth and partly by writing. In the court the part that then remains is to prove that those terms that are claimed to have been made orally were agreed upon by both sides. As in the case for Daly, he made Winston sign a sale contract of which the property in transfer did not meet the description of Winston of a truck whose capacity was a tone. The vehicle fell short of Winston’s description as well as risking the life of the operators because of either incomplete or false information. Thus he has a legal battle to chase. From the look of things it seems that Daly was aware of the conditions of the vehicle as to draft the part that excludes from filing claims of warranty or condition.
Express and implied terms
Express terms are the terms that were initially and particularly mentioned before engaging in a contract; they were agreed upon by the parties engaging in the exchange before the commitment to the contract. Implied terms on the other hand include those terms that came up after the agreement and they were never mentioned during or before the signing of the contract however they are included for the contract to make commercial sense (Smithies D 2007).
Terms that may be implied include terms that are considered obvious by the court and to the parties involved. There are also conditions that the court feels is the way the two parties ought to have behaved when signing the contract. Customary terms may include the particular terms that are accepted in that line of trade or locality. In this case the implied terms include the fact that the Winston ought to have been told the right information about the truck before bargaining.
Sale of goods act 1979
Section 14 of the act states that the goods under sale must be of satisfactory quality that any reasonable person would be satisfied well enough to agree to buy. As well as the fact that they should meet the person’s description of what functions he/she wants the goods for. Here there is the implied assessment that they are fit for the purpose for which they are sought. Section 13 requires that goods sold must be of the same description given to the buyer. The leaking fuel system, clutch, engine capacity and limit of load that the truck could carry does meet Winston purposeful description.
According to section 35(4) the buyer is deemed to have accepted the goods if reasonable time elapses without complaint from the buyer. The buyer deserves some reasonable time to inspect the property he/she has bought. According to section 35(2) before the buyer having a chance to check the goods then it shall be taken that he/she has not accepted the goods. In the case of Winston versus Daly, Winston knew after the inspection of a mechanic the worse condition of the truck which Daly had not mentioned when they signed the sale contract.
The oil leak and defective clutch
There is the acceptability test that the truck goes through while there is also the usability test that will be determined by the court. In acceptability test, it will probably be found that Wiston or any reasonable buyer would not have accepted the vehicle unless its price is reduced. In this case it would apply to the oil leak which would have been found by inspection. In the usability test the court will note that the truck failed to function properly because it was being misused. In this case it would apply to the brakes and the clutch was used for a weight beyond their capacity.
The verbal negotiations
Section 4 acknowledges the verbal negotiations so long as the two sides can agree on the things they discussed orally before signing the sale contract. In this case there are two parts of verbal negotiations; the one for the condition and the price then later for bringing in the vehicle to the garage. Winston and partner wanted a vehicle with ample space which could carry loads up to one turn. The clock showed very few kilometers which would make someone believe that even though it was second hand, it had not been used for long and was barely new. The report that Winston gave after a week to Daly about the leaking fuel was timely as required by law in section 35(4). After Winston was unable to appear in the first week because he was using the truck, Daly formed the assumption under section 35(4) that retaining for reasonable time without contacting the seller for rejection; is same as accepting the delivery.
Exclusion clause
As in this case, it is a business to business sale (Daly car sales and Winston & partners) they can exclude liability when it is found under reasonable conditions. The test for reasonableness is set out in section 11, when condition is to be treated as warrant, section11 (3&4) provides for the filing of claims for damages but not the rejection of goods. Reasonable is taken to mean the conditions were fair with regard to the circumstances under which the contract was made or ought to have been if both parties were aware of the instance that brings about the breach of contract. The consideration lies on whether the customer knew or ought to have known the existence and extent of the term. In this case the leaking oil was not known and the supposed capacity of truck was also not verified. Also there is the consideration of whether the buyer was granted some inducement to accept a good not matching his discretional function. In this case though it is not mentioned but it could be the low price (4500 pounds) that had made the Winston & partners to accept the sale contract for it would be doubtable to sell such a truck with only 480072km for the given amount if it had no problem. The bargaining power of both sides taking into account the possible solutions that could be hanging around for the buyer to choose from. For when has few options then he/she would possibly accept the deal that satisfies his/her current need. Taking these into consideration the court would determine whether there is a breach on which the buyer can lay claim on. In business sales it is noted that there is excludability when there is a breach (based on sections 12 to 15 of SGA) of contract according to section 6 of the Unfair Contract Terms Act 1977 (UTCA).
Conditions and warranties
These are main contractual terms which affect the outcome of the sale contract strongly while warranties is a legal term which refers to contractual terms but which do not form the central part of the contract or the basis for transaction. Winston had signed on documents which had excluded the claim of warranties and conditions. The issue of condition comes in because Daly left out information that could have altered the terms of the contract. The issue of a leaking fuel tank and the limit of mass that the truck could carry are faults that could lead to claims of conditions.
Consumer and non-consumer sales
Consumer sale refers to the sale of goods in the normal business process of exchange that involves the sale of a good usually bought by private individuals for consumption. Such goods when sold to businesses are still considered consumer sale. Non-consumer sale includes all the goods sold that are meant for production of other goods. In this case the truck is a consumer good even though it is used for business purposes. In this case, it is a consumer sale and the law shall be applied accordingly.
Remedies
The normal remedies are those of repudiation (rejecting the goods and being refunded) and settling of damages caused by the breach in monetary value. It applies to private sales, business to business according to section 35A of SGA. The impact of the forms he signed that revoked any attempts to file for a condition or warranty shall hold based on the decision of the court on what Winston ought to had known or found out by himself. In this case, it seems Daly Company was aware of the faults of the vehicle but withheld the information to have advantage of stronger bargaining power than would have been had Winston known of the defects.
The seller under section 48B (1) may be required to repair the truck or meet the cost of its repair within a reasonable time. Daly’s company may be required to reduce the price of the vehicle by refunding Winston some amount of the purchase price under section 48C (1). Lastly the court may apply rescission of contract where the two parties are taken back to their initial position to bargain again and the buyer is refunded his payment while the seller may charge for the benefits the truck had been for Winston during the 6 weeks under section 48C (2). http://www.consumeractiongroup.co.uk/forum/showthread.php?117106-Sale-of-Goods-basic-guide-to-rights-and-obligations
Commercial court
The hearing of claims arising form business transactions are heard in the Commercial court which is a sub-division of the Queen’s Bench Division of the High Court of Justice.
The procedures at the court begin with the identification of the case as falling under the list that of commercial related cases for purposes of Civil Procedure Rules (CPR). The next step is the entry of the case in the commercial list. A commercial list is a list in which claims are entered for trial in the commercial court of the Queen’s Bench division. Thereafter follows the provision for the patents court division which is usually for the transfer of proceedings to the Patent county court. Allocation of patent courts business. Follows service of documents as stipulated by CPR and then there is the experimental evidence chance which is granted 21 days to file or prove its point (Grainger I et al 2000).
Statement of cases is also a procedure of which the statement has been limited to 25 pages. There is time for the witness statement and the expert evidence. Thereafter there is the disclosure which spells out thee list of issues to be solved. Costs incurred may have an upper limit of 250,000 pounds. Case management is the making of decisions based on what has been provided to that moment. No trial should be allotted more than 13 weeks (Jacksons MP 2010).
References
- Smithies D (2007) Contract express and implied terms http://tutor2u.net/law/notes/contract-express-implied-terms.html retrieved 25th June 2011.
- Sale of goods-basic guide to rights and obligations http://www.consumeractiongroup.co.uk/forum/showthread.php?117106-Sale-of-Goods-basic-guide-to-rights-and-obligations retrieved 26th June 2011
- Grainger I et al (2000) Civil Procedure rules in action Cavendish Publishing limited, London UK.
- Jackson MP (2010)Review of civil Litigation costs: Preliminary Report, Ministry of Justice stationery Office Belfast UK.