This set of notes helped me prepare for my Contract Law exam and I achieved a 2.1 in my exam, graduating with a first class honours overall. This document sets out the key principles and cases to cite in your exams.
Background - Third attempt to implement the EU directive into domestic law. The approach
Parliament took is to ‘copy out’ the directive without scrutinising or fixing any ambiguities.
Meant that they could not be liable for failure to implement the directive properly and ensures
uniformity but left ambiguities and made some litigation unpredictable.
Domestic legislation is interpreted literally with focus on the language used whereas the Court of
Justice of the EU have a more purposive approach as to the purpose of the directive.
o In some case UK courts have deployed a purposive approach. The directive did not apply
to the sale of land but because the French text of the directive means both movable and
immovable property, it would have undermined the goal of uniformity if it applied in
France but not UK so courts found it did apply to sale of land.
o In other cases, UK courts have been criticised for placing emphasis on the construction
of the words. Office of Fair Trading v Abbey National plc [2009]
No attempts made to integrate the older regulations 1994 or 1999 with the existing legislations
(UCTA 1977). The two have significant differences as UCTA only applies to exclusion clauses and
the CRA to ALL terms. BUT they overlap as both cover exclusion of negligence liability resulting
in death or personal injury, under UCTA these exclusion terms are void but under the directive
they are indicatively unfair.
Content – Between a ‘trader’ and ‘consumer’
Trader under section 2(1) of the Act is ‘person acting for the purposes relating to that person’s
trade, business, craft or profession, whether acting personally or through another person acting
in the trader’s name or on the trader’s behalf.
Trader covers government departments, local or public authorities, non-profit organisations
when selling goods to the public.
Consumer under section 2(3) as ‘an individual acting for purposes that are wholly or mainly
outside the individual’s trade, business, craft or profession’. Covers instances of someone who
purchased a computer for personal use which is occasionally used for business purposes to claim
protection under the act.
Onus on trader to prove the individual was not acting wholly or mainly outside of their trade,
business etc.
Excludes certain contracts from its scope like employment contracts, section 61 (2)
Includes any consumer notices relating to the rights of the consumer or purporting to exclude
trader’s liability to consumer. Unfair terms and notices are NOT BINDING.
Section 71 – Courts must consider whether a term is unfair if terms of a contract is in question
even if the parties don’t indicate this as an issue.
Section 72 – Part 2 of the Act applies to secondary contracts where rights of a person are limited
under another contract.
‘Unfair terms’
Section 62 (4) – A term is unfair if, contrary to the requirement of good faith, it causes a
significant imbalance in the parties’ rights and obligations under the contract, detriment of the
consumer. Both components are important and there’s a cumulative test.
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