The Gazette 1981

GAZETTE

SEPTEMBER 1981

consumer sales (as, indeed, its wording suggests), how

does one account for the express provision in sections

55(4) allowing for the exclusion of implied terms in non-

consumer transactions? Moreover, if the section 11(4)

offence applies to non-consumer sales, its effect is to

outlaw conditions of sale in such cases, in so far as they

exclude the statutory implied terms from the contract.

Such a drastic change could not, one hopes, be effected

by the legislature in such an oblique way.

Section 11 (4) makes for two distinct difficulties where

conditions of sale are being prepared for non-consumer

transactions. First, the draftsman must point out the

terms of the sub-section to a client and explain that, on a

literal interpretation of it, the conditions of sale, assuming

they contain the usual exclusion clauses without the

redeeming "clear and conspicuous declaration," may give

rise to prosecution for an offence. (The conditions would

not, of course, leave open this danger if they fail to

exclude the provisions of sections 12 and 15 of the 1893

Act and contain a clear and conspicuous declaration to

that effect). This advice can, doubtless, be qualified by the

comment that, since it was apparently the intention of the

legislature that section 11 (4) should only apply to

consumer transactions, the likelihood of any such

prosecution must be very small indeed.

But there is a second danger brought about by section

11 (4). Suppose goods are sold to a purchaser, who does

not deal as consumer, subject to conditions of sale

containing the usual exclusion clauses and omitting the

section 11(4) "Clear and conspicuous declaration". And

suppose this purchaser refuses to pay for the goods and is

sued for the price. Can he not argue, in defence, that the

contract is unenforceable due to illegality in that

conditions of sale were furnished to him descriptive of his

rights but failing to contain the prescribed "clear and

conspicuous declaration" in breach of section 11(4)? The

authorities suggest that the answer to this question

requires an investigation of the intention of the legislature.

The purchaser's point would seem to have validity if the

legislature intended that the entire contract should be

nullified where it is performed in the manner made illegal

by statute.

But if the intention of the legislature was that

the performance of the prohibited act should only result in

the imposition of a charge or penalty, then the

enforceability of the contract is not affected.

There is

little evidence to support a contention that the legislature

intended that an entire contract of sale should be

invalidated owing to a failure to comply with section

11 (4). But this does not completely dispose of the

difficulty. For a court might still take the view that, while

the contract remains enforceable, the provisions set out in

the conditions of sale cannot be relied upon. This is a real

danger and, pending a decision of the Irish courts on the

point, the legal adviser can do little more than make his

client aware of the danger.

The guarantee provisions

Another problem for the draftsman of conditions of sale

is brought about by the guarantee provisions of the 1980

Act.

A "guarantee" is defined in section 15 as any

"document, notice or other written statement, howsoever

described, supplied by a manufacturer or other supplier,

other than a retailer, in connection with the supply of any

goods and indicating that the manufacturer or other

supplier will service, repair or otherwise deal with the

goods following purchase." It is, probably, a fair

assumption that the legislature intended to refer here to

the guarantee cards or warranty cards which are often

furnished with manufactured goods. But the careful

draftsman of conditions of sale will note that the definition

is a very broad one: it extends to any document furnished

with goods which indicates that the manufacturer or other

supplier, provided he is not also the retailer, will "service,

repair or otherwise deal" with the goods after purchase.

Many conditions of sale provided that, in the event of a

complaint being made by the buyer that the goods are

defective, they must be returned to the seller who, if

satisfied as to the validity of the complaint, will repair or

replace them. It seems that such a provision now comes

within the definition of a guarantee under section 15.

Again, this is a result which the legislature may not have

intended. Nevertheless, if the point were to be judicially

considered, then it is not unreasonable to conjecture that

a court might well conclude that such a provision in

conditions of sale constitutes a guarantee. Pedantic as it

may seem, the cautious draftsman must assume, for the

time being at any rate, that conditions of sale which are

prepared for a manufacturer or supplier other than a

retailer and contain an undertaking to "repair or

otherwise deal with the goods following purchase"

constitute a guarantee for the purposes of the 1980 Act.

Therefore, the conditions of sale must comply with the

terms prescribed for a guarantee.

In summary, the Act

requires that a guarantee: (1) be legible and refer only to

specific goods or to one category of goods; (2) state

clearly the name and address of the person supplying the

guarantee; (3) state clearly the duration of the guarantee

from the date of purchase; (4) state clearly the procedure

for presenting a claim under the guarantee which must

not be more difficult than ordinary or normal commercial

procedure; and (5) state clearly the undertakings given in

relation to the goods and what charges, including the cost

of carriage, the buyer must meet. Failure to comply with

the requirements for the terms of a guarantee is an

offence.

A client must also be advised as to the effect of the

conditions of sale being rendered a guarantee by virtue of

the undertaking to repair or replace the goods sold. In

particular, he must be advised with regard to the effect of

section 19(1). This sub-section breaches the doctrine of

privity of contract by providing that a right of action is to

be conferred on the buyer of goods either to enforce the

guarantee or for damages against a manufacturer or other

supplier who fails to observe its terms; and this right is

expressly provided to exist "as if that manufacturer or

supplier had sold the goods to the buyer." Assuming that

an undertaking in conditions of sale to repair or replace

goods does render the conditions a guarantee for the

purposes of the Act, section 19(1) means, in effect, that

the ultimate purchaser may have an action against the

manufacturer or supplier furnishing the conditions to

enforce the terms of the guarantee or for damages.

Conditions of sale that also provide for the rendering of a

service

Conditions of sale often provide not only for the sale of

goods but also for the supply of some service by the seller

to the buyer. For example, where highly technical

equipment is being sold, the seller may undertake to

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