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Commercial Law and Practice WS06 D1e
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Commercial Law and Practice WS06 D1e
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LEGAL PRACTICE COURSECommercial Law and Practice
Workshop 6
Topic(s):
Sale of Goods Act 1979
Retention of Title clauses
Exclusion Clauses
Unfair Contract Terms Act 1977
Misrepresentation Act 1967
Learning Outcomes:
By the end of this session you will be able to:
Analyse a sale of goods dispute from a legal perspective, identifying the claims available
to both parties
Analyse a sale of goods dispute from a commercial perspective, identifying how a party’s
sales documentation process could be improved
Apply your knowledge of the Sale of Goods Act 1979, Unfair Contract Terms Act 1977
and Misrepresentation Act 1967 to a practical scenario
Session Activities:
Analyse a specific example of a sale of goods dispute and, within the context of that
particular example, describe the claims and remedies potentially available to the buyer
and seller
Identify how a seller could protect itself commercially by changing its sales and
documentation process
Materials Attached:
Pre-session Task, consisting of email from supervisor attaching (i) telephone transcript
and (ii) client’s terms and conditions of supply (2020 and 2013 versions)
In-session Task, consisting of email from supervisor
Materials provided in Session:
None
Preparation for Session:
Revise your work to date in relation to contract law, sale of goods and exclusion clauses.
You should review your notes from Large Group 1, Workshop 1, Workshop 2 and Skills
Session 4. If you have time, review also Chapters 3 to 9 inclusive of the Commercial
manual.
Prepare an answer to the Pre-Session Task. Then, if you are able, make virtual contact
with your negotiation partner from WS5 and discuss your answer with them.
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, LEGAL PRACTICE COURSE
Consider what materials you would take into the assessment in relation to contract
law, sale of goods and exclusion clauses. Make a list before the online session.
Post-Session:
Review your notes from the session to consolidate your learning.
WS answers
There are 2 sets of standard terms and conditions of supply. One set dated 2013 and one set
dated 2020. This is because Seramica (S) has recently changed its standard terms and the
way it seeks to conclude contract with customers.
Douglas had a written correspondence with Bathroom where he made a statement about
some of the properties of the tiles that they were selling to them and he said in his letter that
tiles will reduce heating costs by around 50% which is turned out not to be true. Now S is
worried about his potential liability in relation to the statement made by Douglas.
1 Does a contract for sale of goods exist between BW and Seramica and, if so, what
terms and conditions apply to it?
-Is there a contract?
-What are its terms?
-Advice?
Here a contract has been concluded. There has been an offer, acceptance, consideration
and intention to create legal relations so a contract was created in the course of the
telephone conversation between Julia and Sophia. They agreed what to be sold so 50k tiles
in the pale blue colour. They agreed on the price 100k plus VAT. There is clearly an intention
to create legal relations. Therefore, there is a binding contract.
The contract is initially concluded on the basis of the 2013 standard terms. This is because
the parties have previously dealt with one another on those terms. In the telephone convo
parties talk about the usual terms. Sophia is saying all that seems fine. I got your order in
everything is fine. The tiles will be sent out straightaway and the invoice will follow. So the
parties have dealt with one another before. At this stage Julia Doesn’t know anything about
2020 standard terms. When its agreed that the contract will be concluded in the usual terms
this must be in the 2013 terms.
Through their course of dealing, they have probably slightly amended the standard terms of
modified the standard terms. In the Clause 2 and 3 from 2013 standard terms, there are
procedures set out there for concluding orders. In the past the parties have not kept to that.
Orders have previously been taken over the telephone no written confirmation has ever been
provided by S in their previous dealings with Bathrooms. So, it looks as if though clause 2
and 3 were modified by previous course of dealings.
On 2 occasions S has sent the 2020 terms to Bathrooms (B). You might have wondered
whether that would have the effect of amending the contract so as to incorporate the 2020
terms instead. Here though a contract has already been concluded between the parties on
the basis of 2013 terms. The only way that the contract can be amended to the 2020 terms
would be if B had agreed to this. So, when the terms are sent out by S, has B accepted it at
any stage. Nothing in the facts to suggest this has happened. The first lot of 2020 terms were
sent out to B 2 days after the orders were placed. But these weren’t received by B so they
can’t have accepted them. Later on, the terms are sent out again on the back of an invoice, B
received the invoice but there is no explicit acceptance by B of the offer of amendment.
Nothing could be construed as implicit acceptance either.
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, LEGAL PRACTICE COURSE
So, it would be very difficult for S to argue that B had accepted the 2020 terms at a later
date. Therefore, the 2013 terms will govern the contract subject to the amendment clauses 2
and 3 by course of dealings.
2. Advise Seramica as to its potential liability in respect of the statement made by
Douglas Green.
-Potential liability re Douglas Green?
-What cause of action might BW have, if any?
-Advice?
We are told that S’s Douglas, when he sent payment reminder to B dated in his covering
letter that the tiles will reduce heating costs by around 50%. This statement is incorrect. S
has now told B that the statement is not correct. Going forward this isn’t a statement that B is
going to be relying on. The concern S might have initially had might have been that they
might have liability for some kind of misrepresentation made by Douglas. But if we think
carefully about what constitutes misrep. There is no such worry here. Misrep would need to
be an untruth statement of fact by Douglas which has encouraged B to enter into the contract
and which had subsequently caused B a loss. Douglas’ statement was made after the
contract had been concluded (fortunately for S) so this couldn’t have induced B to enter into
the contract. So, there can’t be any liability for misrep. So, there is also no possibility that the
representation will have induced B to enter into any future contract. The position is now
corrected and S has apologised to B.
It looks as if S isn’t going to have a problem. There doesn’t appear to be a problem this time.
It would be useful to give S practical commercial advise about how to proceed in the future.
IN SESSION TASK
Approach to answering Qs
1. How and when was the contract formed?
2. What were the terms of that contract?
3. What are the client’s objectives?
4. What are the rights of the party not in breach?
5. Identify remedies of the party not in breach; and then
6. Advise as to course of action.
1. its potential liability in respect of the claim by the interior designer and possible
remedies for BW;
Claims by the interior designer
■ S13 SoGA
■ Clause 8.1 of standard terms (2013 version)
■ Rights/remedies of BW?
■ Have we excluded liability?
■ Measure of damages?
■ Advice?
S’s potential liability to B in respect of the claim against B by the interior designer. Secondly,
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