BPP University College Of Professional Studies Limited (BPP)
(Distinction level notes). Summary of how to approach the Remedies question in the BPP GDL Contract exam. Set out in the exact exam structure BPP encourage students to adopt (including all required definitions, key cases and principles). Covers assessment of unliquidated damages (expectation intere...
BPP University College Of Professional Studies Limited (BPP)
Graduate Diploma in Law
Contract Law
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Consolidation – Exemption Clauses II
Lyla owns a small children’s nursery called ‘Mucky Duck Day Care’ (‘MDDC’). She wants to be able to take
the children out for walks in the countryside. She visits ‘Mums & Dads’, a leading global nursery retailer, to
look for a pram. She explains to the shop assistant that she will be using the pram along the rugged hillside
paths that surround MDDC. The shop assistant suggests the 'Pushmepullyou' pram, describing it as ‘perfect
for off-road territory’. Lyla says that it sounds ideal.
The shop assistant asks her to sign a form headed: 'Mums & Dads – What You Need to Know'. Lyla asks
what she is signing and the shop assistant replies, 'Oh, you know ... the usual'. Lyla signs it without reading
it and hands over her money. Lyla does not notice that the form contains Mums & Dads’ standard terms and
conditions in very small writing. Clause five of the standard terms and conditions states that:
‘Mums & Dads accepts no liability for breach of any express or implied terms.’
Lyla decides to take the Pushmepullyou for a test run before using it to transport any children. Lyla is
irritated as the steering does not work properly on uneven surfaces. A short while later, as she is pushing
the pram down a steep hill, the brakes fail causing the pram to collide with a lorry. Lyla escapes without
injury, but the pram is damaged beyond repair.
Lyla contacts Better Builders plc, a large construction company, as she wants to build an extension to the
nursery. Mr Green, the owner of Better Builders plc, visits Lyla’s nursery to assess the job and then sends
her a written quotation for the work. At the bottom of the written quotation, there is a sentence in red which
states:
‘Better Builders plc accepts no liability for any loss or damage howsoever caused.’
Lyla does not notice this clause. Lyla is happy with the quotation and telephones Mr Green to accept.
On the day that Better Builders plc starts work, one of its workmen drills into an electric cable, causing a fire.
Lyla suffers lung damage from smoke inhalation and the damage to MDDC is estimated at £10,000.
Advise the parties as to any rights and liabilities which may arise in the law of contract.
MDDC v MUMS &DADS
Identify type of contract: B2B
Terms:
o Express oral term = ‘Perfect for off-road territory’
o SGA = Implied terms:
S14(2) – Goods of a satisfactory quality (applies because goods purchased in course of business).
14(3) – Fit for purpose (applies because L has communicated to seller purpose for which they
need it).
Express Oral Term
‘Perfect for off-road territory’.
o Timing – Routledge v McKay (Made just before entering into the contract).
o Importance – Bannerman v White (made known importance for business purpose at the time of
contracting).
o Specialist knowledge – Oscar Chess; Dick Bentley – Disparity of knowledge – salesperson should know
about the prams. They have the greater level of knowledge.
BREACH: The pram is clearly not perfect for off-road terrain – it cannot be used there without breaking.
CATEGORISATION: Can we argue it goes to the root of the contract?
o At least an argument it could be a condition – it goes to the root of the contract for the purpose
communicated.
o Alternatively – could be an innominate term. Hong Kong Fir – Does it deprive the innocent party of
substantially whole of the benefit of the contract? – Yes, it has been rendered entirely unusable as a
result of it not being perfect for off-road terrain.
o Therefore will be an innominate term treated like a condition.
REMEDY: Terminate + Damages.
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