#10190 - Breach Of Contract Exclusion Of Liability I

(1): Claimant’s cause of action

Step 1 Relevant Terms in the Contract Say there is a contract between S & B to____. Include all info relating to performance of the contract. (Mind ST&C being exchanged as this will change offer and acceptance order.) Express: Implied:
s. 10 Time is not of the essence (Unless delivery date expressly stated *(Hartley v Hymans))* s.12 to pass good title s.13 description s.14(2) Satisfactory quality	s.29 S to deliver the goods s.27 B to accept Delivery & Pay s.30 Delivery of wrong quantity s.14(3) Fitness for purpose s.15 Sample
Step 2 ¿Are the terms incorporated? Either by: Signature Notice Previous Course of dealings
Step 3 Identify the Breach of Contract + Remedy Say which relevant terms of the contract and how they have been breached and remedy: Breach of Condition: Repudiate Cont + Recover Price + Damages (Hadley v Baxendale) Breach of Warranty : Damages but NO right to repudiate Contract ¿What does the Client actually want? Breach - Damages may be awarded + interests under: Law Reform Act + Late Payment of Commercial Debts Act + Late Payment of Commercial Debts Regulations. (S wants own i rate to avoid having to rely on these)(incentivise B to pay quickly by giving an early payment discount) If breach of an express term, say that it goes to the heart of the contract, so will be a condition. Therefore, can (e.g. reject the goods) terminate the contract and seek damages.

Step 1 Relevant Terms in the Contract

Say there is a contract between S & B to____. Include all info relating to performance of the contract. (Mind ST&C being exchanged as this will change offer and acceptance order.)

Express:
Implied:

s. 10 Time is not of the essence (Unless delivery date expressly stated (Hartley v Hymans))

s.12 to pass good title

s.13 description

s.14(2) Satisfactory quality

s.29 S to deliver the goods

s.27 B to accept Delivery & Pay

s.30 Delivery of wrong quantity

s.14(3) Fitness for purpose

s.15 Sample

Step 2 ¿Are the terms incorporated? Either by:

Signature
Notice
Previous Course of dealings

Step 3 Identify the Breach of Contract + Remedy

Say which relevant terms of the contract and how they have been breached and remedy:

Breach of Condition: Repudiate Cont + Recover Price + Damages (Hadley v Baxendale)
Breach of Warranty : Damages but NO right to repudiate Contract
¿What does the Client actually want?

Breach - Damages may be awarded + interests under: Law Reform Act + Late Payment of Commercial Debts Act + Late Payment of Commercial Debts Regulations. (S wants own i rate to avoid having to rely on these)(incentivise B to pay quickly by giving an early payment discount)

If breach of an express term, say that it goes to the heart of the contract, so will be a condition. Therefore, can (e.g. reject the goods) terminate the contract and seek damages.

(2): Defence ¿Has liability been excluded?

Step 4 Slight Breach + Acceptance: s.15A = B’s right to reject is lost where the sale is not a consumer sale and the breach is so light that it would be unreasonable for B to reject the goods. Applies only to ss.13, 14 & 15, NOT to a stipulation concerning time of delivery. If a slight breach occurs it renders the term a warranty rather than a condition (nor right to reject/terminate). Apply to facts s.35 = B’s lost of right to reject when B: tells S it has accepted the goods, or does something inconsistent with S’s ownership after the goods have been delivered to it. s.35(4) = B losses right to reject it retains the goods beyond reasonable period under s.34(B’s right to inspect the goods)
Step 5 ¿Is the Exclusion Clause incorporated into the Contract? Either by: Signature Notice Previous Course of dealings NB. Look out whose ST&Cs apply. In the battle of the forms “The last shot wins”.
Step 5 Construction: ¿Does the exclusion/limitation cover the breach? Step 6 ¿Is the Clause invalidated by UCTA>: S.13: of UCTA states that a clause excluding liability either for description/ quality/ fitness/ purpose of the goods is subject to the reasonableness test in s.11. S.2: Liability for Negligence S.3: Sale of Goods B2B on Seller’s ST&Cs (exclusion of s.13,14 & 15 may be valid only so far as reasonable) S.6: Sale of Goods: Restrictions on what can be excluded: S.6(1) Business & Consumer Buyers: s.12 – Title S.6(2) Consumers: s.13, 14, 15 – (Consumer Defined @ s.12) S.6(3) Business: s.13,14 & 15 only so far as reasonable. S.11: Reasonableness Test Schedule 2: Reasonableness Factors TB 94 Caselaw: Watford Electronics Ltd v Sanderson – TB 95 Step 7 Conclusion:

Step 4 Slight Breach + Acceptance:

s.15A = B’s right to reject is lost where the sale is not a consumer sale and the breach is so light that it would be unreasonable for B to reject the goods. Applies only to ss.13, 14 & 15, NOT to a stipulation concerning time of delivery. If a slight breach occurs it renders the term a warranty rather than a condition (nor right to reject/terminate). Apply to facts
s.35 = B’s lost of right to reject when B: tells S it has accepted the goods, or does something inconsistent with S’s ownership after the goods have been delivered to it.
s.35(4) = B losses right to reject it retains the goods beyond reasonable period under s.34(B’s right to inspect the goods)

Step 5 ¿Is the Exclusion Clause incorporated into the Contract? Either by:

Signature
Notice
Previous Course of dealings

NB. Look out whose ST&Cs apply. In the battle of the forms “The last shot wins”.

Step 5 Construction:

¿Does the exclusion/limitation cover the breach?

Step 6 ¿Is the Clause invalidated by UCTA>:

S.13: of UCTA states that a clause excluding liability either for description/ quality/ fitness/ purpose of the goods is subject to the reasonableness test in s.11.
S.2: Liability for Negligence
S.3: Sale of Goods B2B on Seller’s ST&Cs (exclusion of s.13,14 & 15 may be valid only so far as reasonable)
S.6: Sale of Goods:

Restrictions on what can be excluded:
- S.6(1) Business & Consumer Buyers: s.12 – Title
- S.6(2) Consumers: s.13, 14, 15 – (Consumer Defined @ s.12)
  - S.6(3) Business: s.13,14 & 15 only so far as reasonable.

S.11: Reasonableness Test
Schedule 2: Reasonableness Factors TB 94
Caselaw: Watford Electronics Ltd v Sanderson – TB 95

Step 7 Conclusion:

Misrepresentation may be possible for either party. Usually for the buyer in these cases. Did the B buy a product that did not comply with its description or was not what the B expressly or impliedly told the S. Misrep = a statement of fact made by one P to the other before or at the time of the contract which induced the other party to enter into the contract. Main remedy is termination.

#10190 - Breach Of Contract Exclusion Of Liability I - International Commercial Law

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