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GAZETTE
SEPTEMBER 1981
install it. If conditions of sale include an undertaking by
the seller to perform any service for the buyer, then the
provisions of sections 39 and 40 must be noted. Section
39 provides that certain terms are to be implied in every
contract for the supply of a service where the supplier is
acting in the course of a business. Briefly, these terms are:
(1) that the supplier has the necessary skill to render
the service;
(2) that he will supply the service with due skill, care
and diligence;
(3) that, where materials are used, they will be sound
and reasonably fit for the purpose for which they
are required; and
(4) that, where goods are supplied under the
contract, they will be of merchantable quality.
16
These terms may be negatived or varied, but they will not
be negatived by an express term unless it is inconsistent
with them.
17
Section 40(3) provides that a term negatives
or varies a term implied under section 39 if it "purports to
exclude or restrict, or has the effect of excluding or
restricting, the operation of any provision of that section,
or the exercise of a right conferred by any provision of
that section, or any liability of the supplier for breach of a
term implied by any provision of that section." Thus a
term in conditions of sale which limits liability to a fixed
amount will be a term negativing or varying the section
39 implied terms. Section 40(1) places an important
limitation on the right to negative or vary the terms
implied under section 39. It provides that an express term
negativing or varying the section 39 implied term must,
where the recipient of the service deals as consumer, be
shown to be fair and reasonable and to have been
specifically brought to his attention.
Problems similar to those raised by section 11 (4) arise in
relation to section 41(4) which deals with statements
restricting the rights of a recipient of a service. This sub-
section provides that it is an offence for a person in the
course of a business to furnish to the recipient of a service
(inter alia) any document including a statement,
irrespective of its legal effect, which sets out, limits or
describes rights conferred on him or liabilities to him in
relation to goods acquired by him, unless the statement is
accompanied by a clear and conspicious declaration that
the contractual rights which the recipient enjoys by virtue
of section 39 are in no way prejudiced by it. In other
words, all conditions of sale which cover not only the
provision of a service, but also deal with the recipient's
rights of liabilities in relation to goods acquired, must
contain the prescribed clear and conspicuous declaration
vouchsafing the recipient's rights under section 39. Once
again the Act is difficult to understand, in that it expressly
authorises the exclusion of the section 39 implied terms,
subject to the sole limitation that, where the recipient
deals as consumer, the exclusion must have been
specifically brought to his attention and be fair and
reasonable. So what is the draftsman to do? The
straightforward solution is to delete any reference to the
recipient's rights or liabilities in relation to goods acquired
by him under the contract. This means, in effect, that the
supplier of a service cannot protect himself in relation to
any goods supplied by him. The more daring draftsman
may venture to rely on the provisions of section 40(1)
allowing the exclusion of the section 39 implied terms and
ignore section
41(4).
Such a course of action, however,
raises the same dangers as have already been outlined in
relation to section 11 (4).
Future developments
The draftsman should be aware that certain important
provisions of the Act may in the future be brought into
force by ministerial order so as to affect conditions of
sale.
18
For example, under section 53, the minister is
empowered to prohibit the use in the course of a business
of a printed contract, guarantee or other specified class of
document unless printed in type of a prescribed size. He is
also empowered, under section 52, to order that a person
using a standard form of contract in the course of a
business give notice to the public as to whether or not he
is willing to contract on any other terms.
Conclusion
Clearly the 1980 Act is fraught with problems for the
draftsman of commercial conditions of sale. It is perhaps
worth mentioning that many of those problems were
brought to the attention of the author within a matter of
weeks of the Act coming into force. Of course one should
expect that common sense will prevail and that the Act
will be applied in a sensible way, but it seems a pity that
an Act so important to the commerce of the country
should already give rise to such difficulty and
controversy. •
Footnotes
1. Section 12 of the Table inserted by section 10 of the Sale of
Goods and Supply of Services Act, 1980.
2. Section 13 of the Table inserted by section 10.
3. Section 14(1) of the Table inserted by section 10.
4. Section 14(2) and (4) of the Table inserted by section 10. The
term "merchantable quality" now has the meaning given to it in
section 14(3) of the Table inserted by section 10.
5. Section 15 of the Table inserted by section 10.
6. Section 55(1) of the Table inserted by section 22. But if a
draftsman wishes to exclude or vary a statutory implied term, he must
do so with precision. It is not sufficient to provide an express condition
or warranty in the conditions of sale: section 55(2) of the Table
inserted by section 22.
7. Section 55(3) of the Table inserted by section 22.
8. Section 55(4) of the Table inserted by section 22. It should be
noted that in the case of what the Act terms a "contract for the
international sale of goods" all the statutory implied terms (including
section 12) can be excluded from the contract: section 61(6)(a)
inserted by section 24. A "contract for the international sale of goods"
has the meaning attached to it in section 6 l(6Xb) inserted by section
24.
9. It should be noted that under section 3 (3) the onus will rest on
the party alleging that another did not deal as consumer to show that
he did not.
10. First edition (1974) at pages 450-451.
1 J. As in
Anderson, Ltd
. v.
Daniel
[1924] 1K. B. 138 where a
seller of fertilisers lost his action against the buyer for the price of the
goods sold because he had failed to furnish the buyer with an invoice
required by statute setting out the percentages of certain chemical
substances in the goods.
12.
St. John Shipping Corporation v. Joseph Rank Ltd.
[19571 1
Q. B. 267;
Archbolds (Freightage) Ltd.
v.
S. Spanglett Ltd. [
19611 1
Q. B. 374; and
Shaw v. Groom
[19701 2 Q. B. 504.
13. Sections 15-19.
14. Section 16.
15. Section 16(6).
16. For the definition of "merchantable quality" see the meaning
nowassigned to it in section 14(3) of the Table inserted by section 10.
17. Section 40(1) and (2).
18. Sections 50-54.
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