Keenan and Riches’BUSINESS LAW

Chapter 9The terms of business contracts

299

1 (a)Explain what is meant by the following saying:
‘The terms of a contract must be certain or
capable of being made certain.’
(b)Consider the legal position in each of the
situations given below:
(i) Sally, an actress, accepts an offer to play
Ophelia in a new London production of
Hamlet‘at a West End salary to be mutually
agreed’. Sally and the producers cannot
agree on an appropriate salary.
(ii) Gary agrees to buy a motorcycle from
Speedy Garages Ltd ‘on usual HP terms’.
Gary has now learnt that he will be required
to pay a 50 per cent deposit. He has not
saved up enough money.
(iii) After lengthy negotiations for the sale
of a flat, Anne, the purchaser, writes to
the vendors, ‘I accept your offer to sell
12A Sea Terrace, Sandy Bar, for £150,000,
subject to the usual conditions of acceptance
appropriate to this kind of sale.’ Anne
has been offered a job 100 miles away
and now wishes to withdraw from the
purchase.
(iv) Mercurial Property Co Ltd grants a five-year
lease on shop premises to Frosted Foods Ltd
at a rent of £10,000 a year. It is agreed that
Frosted Foods Ltd will be able to extend the
lease by a further three years ‘at such rent as
may be agreed between the parties’, and that
any dispute should be referred to arbitration.

The parties have failed to agree the rent for

the extension of the lease.

2 Paul is looking for a second-hand car when he sees

an advertisement in his local evening paper which

reads:

SLICK CAR SALES LTD

Hundreds of used car bargains. Lowest prices you’ve

ever seen.

Definitely the lowest prices in Britain

All cars purchased this month will include Vehicle Tax,

Radio, Stereo and a full tank of petrol

Paul visits the showrooms of Slick Cars and

selects a car priced £1,995 which the salesman

tells him is a 1994 Mondeo which has done

30,000 miles and has had only one owner. Paul

signs a sales agreement which describes the car

as ‘1994 Ford Mondeo. Cayman Blue. Registration

Number L931 AJU’.

(a)From the facts given above, identify an example

of each of the following: trader’s puff, a

representation, a condition and a warranty.

(b)What remedies will be available to Paul if any of

the statements you identified in your answer to

(a) turns out to be false?

(c)Identify three terms which will be implied into the

contract.

3 While on holiday at the seaside, Jim agrees to take

his family to ‘Fun Park’. He pays £1 to park his car

on a car park run by the Strand Council. A notice at

Self-test questions/activities

including the Directive on Unfair Terms in Consumer
Contracts. At the time of writing the Commission was
considering what legislative changes (if any) might be
required.

Fair Trading Act 1973

Parliament chose to focus the fight against exemption
clauses by changing the civil law. The most offensive
exemptions from liability, though void, were not illegal.

Retailers continued to display notices such as ‘No

Refunds’, and to include exclusion clauses in sales agree-

ments. In many cases, the consumer was ‘conned’ into

believing that he had been deprived of his rights. The

Fair Trading Act 1973, however, opened the way for

such unfair consumer trade practices to be made illegal.

The Consumer Transactions (Restrictions on State-

ments) Order 1976 (SI 1976/1813) (as amended) makes

it a criminal offence for a trader to continue to use

exclusion clauses rendered void by ss 6 and 7 of the

Unfair Contract Terms Act 1977. This outlaws the use of

‘No money refunded’ notices.