Essay
Unit 21 Aspects of Contract and Business Law - P5
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- PEARSON (PEARSON)
Unit 21 Aspects of Contract and Business Law - P5
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P5 Kojar AhmedAll contracts will have contractual terms that have to be met by both parties. One such term is time
for performance. This is the time that has been agreed upon by both parties in which a service will
be carried out or when a product will be provided or delivered. For example, a business owner may
agree with their supplier on a date or time in which supplies will be delivered. If products arrive and
they are not in the agreed upon state or the correct quantity then a business has the right to reject
goods. The Sale of Goods Act of 1979 states that if a customer is given goods which are unfit for
purpose or not as described then they have the right to reject them and demand for their money
back. However, the consumer must demand their money back and reject the goods within a
reasonable time, usually 30 days if a product has been bought in a store or a day or two for delivered
goods.
Another term that is found in many contracts is payment terms and price variations. The Supply of
Goods Act of 1982 states a business must not charge a customer what they have already agreed to. If
no price has been agreed to then the customer must pay a ‘reasonable price’, what this reasonable
price is will depend on the quality of the product/service provided. This term is widely applied in
garages where they may be unsure of what is wrong with a vehicle and will instead give an estimate
as to what it’ll cost rather than a specific price.
When suppliers make deals with businesses to deliver a certain amount of goods at a specified time,
they should ensure that they are always providing the agreed upon quantity and quality of goods. If
not, then the business has the right to legally reject these goods as they breach the terms of the
contract. This has been specified by the Sale of Goods Act of 1979.
Reservation of title if a contractual term that states a business has the right to reserve their goods
until the price from them has been paid in full. This is an express term that is used in many
businesses such as retailers. This essentially means the consumer has no title over the goods until
they have paid the full price form them, giving the seller the right to withhold any goods. This also
applies to services such as dry cleaners where they have the right to withhold your goods until they
have received full payment. This can also apply if for example a customer has had their car washed
but has refused to pay for the service, the business would have the right to withhold the vehicle until
the full price of the service has been paid.
Exclusion clauses are where sellers attempt to avoid any liability for their actions if something
happens to go wrong. This usually occurs when individuals sign up for something which has the
potential to seriously injure them, although if any Injury or death does occur then it is likely the seller
will still be liable. An example of this in retail would be if a product accessory states that it takes no
liability for causing damage to a product if it used incorrectly.
One of the most common types of contracts between a business and a customer is a Standard Form
Contract. This is similar to a written contract in that there is usually a transaction of some sort
involved, these two are different in that written contracts can be negotiated easier than standard
form contracts, this is because standards form contracts are on a ‘take it or leave it’ basis and have to
be agreed upon by the seller and the customer. An example of a standard form contract may be
when a business sells a car to a customer. The customer may ask for certain add-ons for the car and
this will then have to be agreed upon by both parties in the contract before it is signed. There are
many parameters that have to be agreed upon by both parties, these include but are not limited to:
● The nature of the product/service that is provided
● Any extra benefits/guarantees that are to be provided
● How long the service/agreement is due to last
● How much the product/service will cost and how/when it will be paid for
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