Sale of Goods Contract Essentials
40 Questions
2 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the general approach of the courts when parties make an incompetent agreement?

  • The courts will penalize the parties for incompetence.
  • The courts will correct the agreement immediately.
  • The courts will declare the agreement void.
  • The courts will leave the agreement as it is. (correct)

    • What is an agreement to agree?

  • A contract that has expired.
  • An agreement to enter into a contract at a later date. (correct)
  • A contract that is already in force.
  • An agreement to enter into a contract immediately.

    • What is the key difference between lock-in agreements and lock-out agreements?

  • Lock-in agreements are enforceable, while lock-out agreements are not.
  • Lock-out agreements are enforceable, while lock-in agreements are not. (correct)
  • Lock-out agreements are only used in contracts between individuals.
  • Lock-in agreements are used in international trade, while lock-out agreements are used in domestic trade.

    • What is the effect of a cancellation clause that is too wide?

    <p>It invalidates the contract altogether.</p> Signup and view all the answers

    What is required for a mistake to render a contract void?

    <p>The mistake must occur before the contract is made.</p> Signup and view all the answers

    What is the result of a court finding that a contract is void due to mistake?

    <p>The contract is void.</p> Signup and view all the answers

    What is the case that determined that lock-in agreements are not enforceable?

    <p>Walford v Miles.</p> Signup and view all the answers

    What type of mistake can render a contract void?

    <p>A mistake of fact.</p> Signup and view all the answers

    What is the seller entitled to be paid in according to s28?

    <p>In cash</p> Signup and view all the answers

    What happens if a cheque is not honoured?

    <p>The seller can sue the buyer</p> Signup and view all the answers

    What is the consequence of payment by credit card?

    <p>The seller cannot sue the buyer if the credit card company fails to pay</p> Signup and view all the answers

    Why is it advisable to include a provision ensuring that payment takes place only when a cheque has been cleared?

    <p>To protect the seller in case the cheque is not honoured</p> Signup and view all the answers

    Why is it sensible to include a specific contractual provision to allow the seller to claim interest in the event of late payment?

    <p>Because certain statutes allow interest to be awarded for late payment</p> Signup and view all the answers

    When does the credit period commence?

    <p>When the seller issues an invoice</p> Signup and view all the answers

    What is the significance of the Law Reform (Miscellaneous Provisions) Act 1934?

    <p>It allows the seller to claim interest for late payment</p> Signup and view all the answers

    Why is it in the seller's interests to make time for payment of the essence?

    <p>To protect the seller's interests</p> Signup and view all the answers

    What is the main obligation of the seller in a sale of goods contract?

    <p>To deliver goods of a certain description and quality</p> Signup and view all the answers

    What type of terms are considered fundamental to the contract and breach of which will entitle a party to terminate?

    <p>Representations and Conditions</p> Signup and view all the answers

    What is the purpose of an indemnity clause in a contract?

    <p>To make good another's loss on the happening of a particular event</p> Signup and view all the answers

    What is the term for standard clauses which are common to agreements of a certain type?

    <p>Boiler-plate clauses</p> Signup and view all the answers

    What is the purpose of a Limitations and Exclusions clause in a contract?

    <p>To limit or exclude a party's liability</p> Signup and view all the answers

    What type of clause provides that all of the obligations of the parties are recorded in one document?

    <p>Entire Agreement Clause</p> Signup and view all the answers

    What is the term for the end of the contract where the parties provide their signatures?

    <p>Execution clause</p> Signup and view all the answers

    What is the main obligation of the buyer in a sale of goods contract?

    <p>To pay the price</p> Signup and view all the answers

    What is the main purpose of a No-Authority Clause in a contract?

    <p>To prevent unauthorised variations to contracts by limiting who within a business is able to agree to a valid variation</p> Signup and view all the answers

    What is the term for a clause that prevents oral variations to a contract?

    <p>No-Oral-Modification (NOM) clause</p> Signup and view all the answers

    What was the outcome of the MWB Business Exchange Centres Ltd v Rock Advertising Ltd case?

    <p>The Supreme Court held that a NOM clause is legally effective</p> Signup and view all the answers

    What is the consequence of including a NOM clause in a contract?

    <p>Parties must comply with the formalities set out in the clause if they wish to vary the contract</p> Signup and view all the answers

    What is the purpose of restricting the grant of variations or waivers to certain members of staff?

    <p>To prevent unauthorised variations to contracts</p> Signup and view all the answers

    What is the effect of a seller reneging on their promise to accept £8,000 for goods?

    <p>The seller can demand an extra £2,000 from the buyer as payment is not a continuing obligation</p> Signup and view all the answers

    What is the consequence of not complying with the formalities set out in a NOM clause?

    <p>The variation to the contract is invalid</p> Signup and view all the answers

    What is the main purpose of including a NOM clause in a contract?

    <p>To prevent unauthorised variations to contracts</p> Signup and view all the answers

    What is the primary factor in determining the satisfactory quality of goods in a sale?

    <p>The price of the goods</p> Signup and view all the answers

    What is implied by s14(2B) in relation to satisfactory quality?

    <p>The goods are fit for the common purposes of the goods, among other factors</p> Signup and view all the answers

    What is the primary consideration in determining whether goods are fit for a particular purpose?

    <p>The purpose the buyer makes known to the seller</p> Signup and view all the answers

    In the absence of any information to the contrary, what is the seller entitled to assume about the goods?

    <p>The goods will be used for their normal purpose</p> Signup and view all the answers

    What is the implication of s14(3) in relation to the sale of goods?

    <p>The goods are fit for a particular purpose</p> Signup and view all the answers

    What is considered in determining whether goods are of satisfactory quality?

    <p>The facts of each particular case</p> Signup and view all the answers

    What is a factor that is taken into account in determining whether goods are of satisfactory quality?

    <p>The price of the goods</p> Signup and view all the answers

    What is a consideration in determining whether goods are fit for a particular purpose?

    <p>The purpose the buyer makes known to the seller</p> Signup and view all the answers

    Study Notes

    Sale of Goods Contract

    • A seller is obliged to sell and deliver goods of a certain description and quality.
    • A buyer is obliged to pay the price.

    Representations and Conditions

    • Fundamental terms of the contract, breach of which will entitle a party to terminate.
    • Warranties are less important terms, breach of which normally gives rise to damages only.

    Indemnities

    • One party promises to make good another's loss on the happening of a particular event.

    Limitations and Exclusions

    • The contract may seek to limit or exclude a party's liability for a particular event.
    • Such limitations and exclusions will be subject to reasonableness under UCTA 1977.

    Boiler-Plate Clauses

    • Standard clauses common to agreements of a certain type.
    • Address the mechanics of an agreement and common legal points relevant to most transactions.
    • Examples include an Entire Agreement Clause.

    Execution Clause and Signature

    • The end of the contract will normally provide for the signatures of the parties.
    • Formalities required for execution depend on the identity of the parties and the type of contract.

    Agreements to Agree

    • An agreement to enter into a contract at a later date, or an agreement that a certain provision will be agreed between the parties after the commencement of the contract.
    • Such agreements are void.

    Lock-In Agreements

    • A lock-in agreement is where A is contractually obliged to negotiate with B and no-one else.
    • These are distinct from lock-out agreements, where A is not obliged to negotiate with B, but agrees not to negotiate with anyone else.
    • Lock-out agreements may be enforceable, but lock-in agreements will not be.

    Cancellation Clauses

    • If a cancellation clause in the contract is too wide, it may have the effect of invalidating the contract altogether.

    Mistake

    • An erroneous belief, at contracting, that certain facts are true, may render the contract void.
    • To have an effect on the contract, the mistake must have occurred before the contract was made.

    Drafting to Prevent Unauthorised Variation

    • No-Authority Clauses are intended to prevent unauthorised variations to contracts by limiting who within a business is able to agree to a valid variation.
    • These clauses may restrict the grant of variations or waivers to certain members of staff or prevent oral variations.

    Method of Payment

    • The seller is entitled to be paid in cash (s28).
    • It is advisable to include a provision ensuring that payment by cheque is treated as a conditional payment.
    • Payment by credit card is an absolute payment, so a failure by the credit card company to pay the seller does not entitle the seller to sue the customer.

    Interest on Late Payment

    • Certain statutes allow interest to be awarded for late payment, e.g., the Law Reform (Miscellaneous Provisions) Act 1934.
    • It is sensible to include a specific contractual provision to allow the seller to claim interest in the event of late payment.

    Satisfactory Quality

    • In a sale in the course of a business, the goods are to be, objectively, of satisfactory quality (s14(2)).
    • The price and description of the goods will be taken into account in deciding whether or not the goods are of satisfactory quality.
    • Factors to be considered include fitness for the common purposes of the goods, appearance and finish, freedom from minor defects, safety, and durability.

    Fitness for Purpose

    • s14(3) implies a term that the goods are fit for any particular purpose which the buyer makes known to the seller, either expressly or by implication.
    • In the absence of any information to the contrary, the seller is entitled to assume that the goods will be used for their normal purpose.
    • Where a buyer requires goods for a particular (non-normal) purpose, it must inform the seller before the contract is made to benefit from this right.

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Description

    This quiz covers the fundamentals of a sale of goods contract, including the obligations of the seller and buyer, and the differences between representations, conditions, and warranties.

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser