Reference to statute
Parliament takes a somewhat paternalistic view of consumer protection,
largely because the average member of the public is unaware of the need to
protect rights until a problem arises. Certain terms are therefore designated
conditions within consumer contracts. The Sale of Goods Act (1979, as
amended) makes the following provision in section 15:
s.15 (2) ‘In the case of a contract for sale by sample there is an implied
condition – that the bulk will correspond with the sample in quality.’In this case Parliment is stating that such a term, implied into a consumer
contract will be a condition rather than a warranty.
This statutory provision is not negotiable, and is not open to dispute
according to the wishes of the parties. It is included automatically in a
consumer contract if relevant.
Consideration of the terms by the courts
If statute is not applicable, and there is no label placed on the terms by the
parties at the outset, then issues are resolved by comparison with other
cases.
To find that the owner had breached a warranty would leave the contract
intact and provide damages. This would compensate for loss, but would still
leave the hirer at a disadvantage as he would still be without a ship. To find
that the owner had breached a condition would allow the hirer to repudiate,
or free himself from the agreement, and charter another ship.
112 Contract law
The Mihalis Angelos (1970)
A ship was chartered in May 1965 for a journey from North Vietnam
to Hamburg. There was a clause in the charterparty (the written
document of agreement) that the ship would be ready to load on 1 July- On this date it was in the Pacific and unable to meet the deadline.
There was clearly a breach, but of what type? It was held that this was
a breach of condition. In a charterparty the ship owner and hirer meet
on equal terms. They or their lawyers seek a firm foundation of
principle upon which to work, and need definite rules.
Was this remedy satisfactory for the hirer?