Task 2
Prepare a set of notes which:-
a) Identifies the main types of express terms in a standard form contract. You need to include express and implied terms and the distinction between them.
b) Using your chosen contracts, or any other relevant examples, select a number of significant express terms and describe their meaning as they apply in your chosen contracts. (Significant terms should include clauses such as: – time for performance and rejection of goods, price variation, payment terms, quality and quantity of goods delivered, reservation of title, exclusion clauses). (P4)
c) Explain the effect of each of the terms identified in part a on both parties to the contract. (P5)
d) Evaluate the effectiveness of the chosen terms (D1)
(The effectiveness of the terms should be considered from the point of view of both parties to the contract, for example businesses expecting to protect themselves from losses through non-payment or claims for incomplete performance, consumers with respect to receiving defective goods, poor service or late delivery. You should also be evaluating against up to date legislation which impacts on common contractual terms e.g. Unfair contract Terms Act 1077, Unfair Terms in Consumer Contract Regulations, Distance Selling Regulations, Consumer Rights Act etc.)
Introduction
These set of notes will identify the main types of express terms in a standard form contract. It will include expressed and implied terms and the distinction between them. A number of expressed and implied terms will be identified and explained in relation to two chosen contracts.
These set of notes will also explain the effect of each of the terms identified on both parties to both contracts and an evaluation will take place on the effectiveness of the chosen terms from the point of view of both parties to the contract.
P4, P5, D1
Standard form contract
A standard form contract is a contract between two parties, where the terms and conditions of the contract are set by one of the parties, and the other party has little or no ability to negotiate more favourable terms and so is placed in a “take it or leave it” position. Standard form, business-to-consumer contracts fulfil an important role in the distribution of products and services. These contracts have the potential to reduce transaction costs for businesses by eliminating the need to negotiate the many details of a contract for each instance a product is sold or a service is used. However, these contracts also have the ability to trick or abuse consumers because of the unequal bargaining power between the parties.
Expressed terms
Expressed terms are the terms that the parties specifically and mutually agree to. They may be written or verbal. If they are verbal terms, the courts will have to determine what the parties may have said. If they are written, it is in clear writing what expressed terms the parties have agreed to. Expressed terms are those agreed between the parties themselves.
Types of expressed terms include charges, delivery, returns and payment.
Implied terms
Implied terms are the terms in which it has not been mentioned by either party that will nonetheless be included in the contract. Typically, this is because the contract does not make any commercial sense without that term. There are two main types of implied term which are terms implied are courts and terms implied by statute.
Implied terms are as important as express terms and sometimes more important. If there is an implied term that conflicts with an express term, the express term will normally override the implied term. However, if the term is implied by statute, the implied term will override any express term agreed by the parties.
Types of implied terms include satisfactory quality, fit for purpose and the right to sell the product or service. Terms can be implied in different ways;
- Terms implied by custom – These are the terms that are implied to exist in contracts because of a local custom that exists and is a custom generally regarded as being associated with such contracts. Such custom needs to be reasonable and certain.
- Terms implied by courts – The courts may determine that the parties intended a term to be included in the contract based on the facts even if it was not specifically expressed in the contact. The court may also imply a term if they consider that the law implies such a term into the contract based on common law decisions.
- Terms implied by legislation – Terms are included and implied into contracts by right of legislation. For example, the Consumer Rights Act 2015 implies terms regarding consumer protection into all sales of goods contracts and these terms cannot be excluded in any consumer contract.
A condition is a term or requirement stated in a contract which must be met for the other party to have the duty to fulfil their obligations. A warranty is an assurance, promise, or guaranty by one party that a particular statement of fact is true and may be relied upon by the other party. A breach of condition will entitle the injured party to repudiate the contract and claim damages (financial compensation). Breach of warranty gives the injured party the right to claim damages but not repudiation of contract. Conditions and warranties are both included in standard form contracts.
Difference between expressed terms and implied terms
The main difference between expressed and implied terms are that express terms are those that are specifically written into the contract, for example pay and hours of work. Implied terms are those that are not written in but a court would assume them to be there, such things as mutual trust and confidence. Implied terms are known to both parties too, however they are assumed to exist in the first place which is another reason why they are not stated like an express term is.
Exclusion clauses
Exclusion clauses are clauses, usually written down, that say that one party to the contract will not be responsible for certain happenings.
These clauses can be valid as long as:
- they have been properly included in the contract and
- Are not contrary to law.
To be properly included in the contract, the clause cannot be tacked on after the contract has been made. If there is a signed contract containing the clause, this will usually have the effect of including it. If there is no signed contract, but there are printed documents or signs posted stating the terms, these can be included in the contract if they are brought to your attention before the contract is made.
The use of exclusion clauses by parties in contracts has always been subject to disapproval by the courts. This is because exclusion clauses are usually inserted into the contracts by the more powerful party to take advantage of the smaller and weaker party to the contract. To overcome this, rules have been implemented by the court which states when the use of an exclusion clause is allowed. There is also legislation that states when an exclusion clause is capable or not capable of being enforced against an injured party.
- Purchasing a product from JD
3 Express terms in the contract
Delivery –
“Our carrier delivers between 7.30am and 10pm, and in some cases a signature may be required. If you are not around, the carrier will try your neighbours, or (if a signature is not required) will try to find a safe, dry place to leave your parcel. Alternatively, they’ll leave a calling card with the details on how to re-arrange delivery. Or depending on the courier a redelivery attempt may be made without contact. Please note deliveries outside of the UK can take anything up to 10 working days and sometimes longer. Check with your local postal service to check if any attempt has been made at delivery as you may have been out when they called.”
The delivery term in this contract sets out the terms which are agreed upon by JD and the customer purchasing the product. In this contract, these express term sets out the protocol of delivery by the JD Company and as a result of the customer of JD creating the contract, they are agreeing to the delivery terms. This will mean, for example, they are agreeing to the product being left in a safe, dry place if they are not at home. This delivery term also sets out a time for delivery clause, being between 7.30am-10.00pm. This means that the product will be delivered within this time frame and if it isn’t, JD has breached the contract.
This delivery term set out by JD has effects on both parties to the contract. It affects JD as they must deliver the product within the times they have stated. It also protects them if they deliver the product when the customer is not at home as this is stated within this term. This term also has an effect on the customer as they are agreeing to the product being delivered then they are not at home. If delivered when the customer is not at home, they have no right to file a law suit against JD as they have agreed to this term that it can be delivered when they are not at home.
This term is effective in that it sets out a clear term for both JD and the customer to understand. It is effective in protecting the company through the times of delivery being stated. This also is effective in relation to the customer protecting themselves in relation to late delivery. It isn’t as effective for the customer however; as they really have no protection in relation to if the product is stolen after delivery for example. After looking at this term, it is more effective for JD than it is for the customer – which is often the case in contracts where one party is much more powerful that the other.
Returns –
“You have 14 days to notify us that you wish to return your order. Please return your goods to us within 14 days of cancellation. If you would like an exchange send back to us within 28 days. If you’ve paid by credit or debit card you can pop down to one of our stores nationwide, take your dispatch note and the goods you want to return, and the store team will be happy to offer you a refund or exchange. If you’ve paid using PayPal or Apple Pay, your local store will send your order back to our distribution centre on your behalf so the transaction can be reversed, or your order can be exchanged and resent back out to you. Collect from Store orders delivered to alternative collection point cannot be returned in that store. Personalised items will only be accepted if the personalisation text is incorrect or if the product is faulty. Please note, orders purchased on the UK site cannot be returned or exchanged to any of our stores outside the UK. We will ordinarily refund the full purchase price together with the standard delivery charge paid as long as we receive your order within the cancellation period. If you chose to pay extra for express delivery, we will only refund the cost of standard delivery. Please note though that if you want to return only some items but keep the rest of your order, you may not be entitled to a refund of the delivery charge.”
The return terms in the contract of purchasing a JD product clearly sets out the terms which are agreed upon by JD and the customer purchasing the product. In this contract, these express term sets out the returns policy by the JD Company and as a result of the customer of JD creating the contract, they are agreeing to the return terms. This will mean, for example, the customer is agreeing to return the product within 14 days of cancellation. The return terms clearly set out the way in which customers should return goods and the time they should do so. If a customer wishes to return a product after 14 days, they are not entitled to a refund as the contract clearly states this at the time of purchase.
The return terms set out by JD has effects on both parties to the contract. It affects JD as they must exchange goods which are returned within 28 days, and give a refund to goods returned within 14 days. It also affects JD as they do not have to give refunds if they feel an item is not faulty. These terms also state that JD do not have to refund for the price of express delivery and may only refund the price of standard delivery. The customer is also affected by this term as they must return an item within 14 days if they wish for a refund or 28 days if they wish for an exchange. It also affects the customer as they cannot exchange or receive a refund for goods in the UK if they have been purchased outside of the UK.
This term is effective in that it sets out clear terms for both JD and the customer to understand. It is effective in protecting the company through the time frame customers should return goods and the scenarios in which they can reject exchanges and refunds. The Consumer Protection Regulations 2000 would affect this as it states the amount of time allowed for rejection of goods. The return terms are also effective for the customer as they are aware of their rights in relation to returning products to JD. When looking at JD’s return terms, the terms are more effective from the company’s point of view. These terms keep JD right and lay out clearly the periods of notice they wish to receive in relation to returns and exchanges and when they can reject returns and exchanges.
Cancellation –
“You may be able to cancel your order but we’re pretty quick at picking and packing your order which means you’ll need to be quick. You can cancel your order up to 30 minutes after placing but you’ll need to contact our Customer Service team to do it. We do offer free return by post and in store, so if you no longer want your order you can return it to us.”
The cancellation term in this contract sets out the terms which are agreed upon by JD and the customer purchasing the product. In this contract, these express term sets out the cancellation terms by the JD Company and as a result of the customer of JD creating the contract, they are agreeing to the cancellation terms. This will mean, for example, they are agreeing that they cannot cancel an order after 30 minutes of placing the order. This cancellation term also sets out the zero charge to the customer if returned by post and in store. An order can be cancelled within 30 minutes and if it is, JD is obliged to cancel the order.
These cancellation terms set out by JD affect both parties to the contract (JD and the customer). It affects JD as they must cancel the customer’s order if it is cancelled within 30 minutes of the order being placed. They also must offer free return to their customers by post and in store as this is stated within this term. This term also has an effect on the customer as if they do not cancel the order within 30 minutes of placing the order, the order will be placed and delivered.
This term is effective in protecting the company through the time the customer has to cancel their order and the order being placed. This also is effective in relation to the customer protecting themselves in relation to the cancellation of their order. JD must cancel an order if it is cancelled within 30 minutes of the customer placing the order. This must be effective as the Consumer Protection from Unfair Trading Regulations 2008 states “If a trader has signed up to a code of practice, then if it fails to follow this code, it could be a breach of the Regulations.”
Implied terms in the contract
Goods to be of satisfactory quality – Sales of Goods Act 1979 – (now known as Consumer Rights Act 2015)
“(1) every contract to supply goods is to be treated as including a term that the quality of the goods is satisfactory.
(2)The quality of goods is satisfactory if they meet the standard that a reasonable person would consider satisfactory, taking account of—
(A) Any description of the goods,
(b) The price or other consideration for the goods (if relevant), and
(c) All the other relevant circumstances (see subsection (5)).
(3)The quality of goods includes their state and condition; and the following aspects (among others) are in appropriate cases aspects of the quality of goods—
(A) Fitness for all the purposes for which goods of that kind are usually supplied;
(b) Appearance and finish;
(c) Freedom from minor defects;
(D) Safety;
(e) Durability.
(4)The term mentioned in subsection (1) does not cover anything which makes the quality of the goods unsatisfactory—
(a) Which is specifically drawn to the consumer’s attention before the contract is made,
(b) Where the consumer examines the goods before the contract is made, which that examination ought to reveal, or
(c) In the case of a contract to supply goods by sample, which would have been apparent on a reasonable examination of the sample.
(5)The relevant circumstances mentioned in subsection (2) (c) include any public statement about the specific characteristics of the goods made by the trader, the producer or any representative of the trader or the producer.
(6)That includes, in particular, any public statement made in advertising or labelling.
(7)But a public statement is not a relevant circumstance for the purposes of subsection (2) (c) if the trader shows that—
(a) When the contract was made, the trader was not, and could not reasonably have been, aware of the statement,
(b) Before the contract was made, the statement had been publicly withdrawn or, to the extent that it contained anything which was incorrect or misleading, it had been publicly corrected, or
(c) The consumer’s decision to contract for the goods could not have been influenced by the statement.
(8) In a contract to supply goods a term about the quality of the goods may be treated as included as a matter of custom.
(9) See section 19 for a consumer’s rights if the trader is in breach of a term that this section requires to be treated as included in a contract.”
The implied term ‘Goods to be of satisfactory quality’ from the Consumer Rights Act 2015 clearly sets out the principles of quality with relation to the product being sold. For JD, this will include selling a product which is of satisfactory quality, fit for purpose, freedom from minor defects and safe to use. As a result of signing the contract, the customer will expect all of the above to be correct against the law. This implied term also sets out clearly for JD and the consumer the stage at which the product should be examined to identify defects.
This implied term will have effects on both parties to the contract (JD and the customer who is purchasing the product). It affects JD as they must be selling a product which is no less than that of satisfactory quality. It also must be as described and if JD fail in fulfilling these terms, they may become liable to unprotection in the contract. This implied term also has effects on the consumer. It affects them as it states that if they make a purchase after an inspection of the product, they cannot blame JD for selling them a good which is of unsatisfactory quality as they had the chance to see and review the product.
The ‘Goods to be of satisfactory quality’ implied term is effective in protecting the company as well as the consumer. It protects JD from claims for incomplete performance of supplying a product which is of unsatisfactory quality. It also is effective in protecting the consumer with respect to receiving defective goods. This is effective against legislation such as the Consumer Rights Act as, for example JD would be protected if the consumer bought the product after inspecting it as this implied term clearly states this.
Goods to be as described – Sale of Goods Act 1979 – (now known as Consumer Rights Act 2015)
“(1) every contract to supply goods by description is to be treated as including a term that the goods will match the description.
(2)If the supply is by sample as well as by description, it is not sufficient that the bulk of the goods match the sample if the goods do not also match the description.
(3)A supply of goods is not prevented from being a supply by description just because—
(A) The goods are exposed for supply, and
(b) They are selected by the consumer.
(4)Any information that is provided by the trader about the goods and is information mentioned in paragraph (a) of Schedule 1 or 2 to the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (SI 2013/3134) (main characteristics of goods) is to be treated as included as a term of the contract.
(5)A change to any of that information made before entering into the contract or later, is not effective unless expressly agreed between the consumer and the trader.
(6)See section 2(5) and (6) for the application of subsections (4) and (5) where goods are sold at public auction.
(7)See section 19 for a consumer’s rights if the trader is in breach of a term that this section requires to be treated as included in a contract.”
The implied term ‘Goods to be as described’ from the Consumer Rights Act 2015 clearly sets out that goods must be as they are described at the time of sale (before the contract is made). For JD, this will include selling a product which is as described and which is the same as the sample used. As a result of signing the contract, the customer will expect all of the above to be correct against the law. This implied term also sets out clearly for JD and the consumer that products must be exactly as the description states.
This implied term will have effects on both parties to the contract (JD and the customer who is purchasing the product). It affects JD as they must be selling a product which is exactly as described and if they do not, they have breached the contract. If JD fail in fulfilling these terms, they may become liable to unprotection in the contract. This implied term also has effects on the consumer. It affects them as if they purchase a product which is not as described, they will be entitled to sue JD under the Misrepresentation Act 1967.
The ‘Goods to be as described’ implied term is effective in protecting the company as well as the consumer. It protects JD from consumers making false accusations that the product they purchased was not as described. It also is effective in protecting the consumer with respect to receiving goods which were not as stated in the description at the time of the contract being created. This is effective against legislation such as the Consumer Rights Act as, for example JD would be protected if the consumer bought the product after reading the description and claimed it wasn’t as described when indeed it was.
Goods to be fit for particular purpose – Sale of Goods Act 1979 – (now known as Consumer Rights Act 2015)
“(1) Subsection (3) applies to a contract to supply goods if before the contract is made the consumer makes known to the trader (expressly or by implication) any particular purpose for which the consumer is contracting for the goods.
(2)Subsection (3) also applies to a contract to supply goods if—
(a) The goods were previously sold by a credit-broker to the trader,
(b)in the case of a sales contract or contract for transfer of goods, the consideration or part of it is a sum payable by instalments, and
(c) Before the contract is made, the consumer makes known to the credit-broker (expressly or by implication) any particular purpose for which the consumer is contracting for the goods.
(3)The contract is to be treated as including a term that the goods are reasonably fit for that purpose, whether or not that is a purpose for which goods of that kind are usually supplied.
(4)Subsection (3) does not apply if the circumstances show that the consumer does not rely, or it is unreasonable for the consumer to rely, on the skill or judgment of the trader or credit broker.
(5)In a contract to supply goods a term about the fitness of the goods for a particular purpose may be treated as included as a matter of custom.
(6)See section 19 for a consumer’s rights if the trader is in breach of a term that this section requires to be treated as included in a contract.”
The implied term ‘Goods to be fit for a particular purpose” from the Consumer Rights Act 2015 clearly sets out the principles of the circumstances when a product is sold as being fit for purpose. For JD, this will include selling a product which is fit for the purpose in which the consumer requires it for. As a result of signing the contract, the customer will expect their product to be fit for the purpose they need it for. This implied term also sets out clearly for JD and the consumer the stage at which the products purpose is identified and this is before the contract is made.
This implied term will have effects on both parties to the contract (JD and the customer who is purchasing the product). It affects JD as they must be selling a product which is fit for the purpose of what the consumer demands. If the consumer states what they want the product for and JD supply a product which isn’t fit for this particular purpose, they may become liable to unprotection in the contract. This implied term also has effects on the consumer. It affects them as it states that if they do not make it clear what the purpose of their desired product is at the time of creating the contract, then JD are not to be held responsible as – in a sense – they were unaware of what the customer wanted. Under the Unfair Terms in Consumer Contract Regulations, the consumer will be protected here for example if they are sold a product which wasn’t fit for the purpose they stated they were going to use it for.
The ‘Goods to be fit for a particular purpose’ implied term is effective in protecting the company as well as the consumer. It protects JD from claims for incomplete performance of supplying a product which wasn’t fit for the particular purpose the consumer demanded it for. It also is effective in protecting the consumer with respect to receiving a product which is fit for the particular purpose (which they must have stated before the contract was created). This is effective against legislation such as the Consumer Rights Act as, for example JD would be protected if the consumer bought the product without stating its particular purpose and then decided it wasn’t suitable. This is because the contract was already created before the consumer stated its particular purpose
- O2 phone contract
Express terms in the contract
Application –
“(A) the prices in these Tariff Terms are correct at the time they are posted online on o2.co.uk, but are subject to change. There are specific terms about our charges in paragraph 5 of your Pay Monthly Mobile Agreement. If you have a Tariff which allows access to the 4G network, additional 4G terms may apply. If you have a Tariff which is part of a Sharer Plan, additional terms will apply.
(b) These are our Tariff Terms for Pay Monthly customers applicable after 11 November 2014 they’ll apply to you if are on Pay Monthly on or after 11 November 2014. We reserve the right to amend these Tariff Terms from time to time, please check o2.co.uk/terms for our the most up-to-date terms.
(c) Our Pay Monthly tariffs are subject to status, a credit-check, payment by direct debit and the terms of a 30-day, 12, 18 or 24 month minimum term Pay Monthly Mobile Agreement.
(d) All prices shown include VAT, unless otherwise stated. Prices are correct at the time of publication but are subject to change. Please check the website regularly for details.”
The application term in this contract sets out the terms which are agreed upon by 02 and the customer purchasing the service which is a phone contract. In this contract, these express term sets out the terms of the pricing involved within the contract and as a result of the customer of 02 creating the contract, they are agreeing to the application terms. This will mean, for example, they are agreeing to the service price changing if 02 decide it is due to change. This application term also sets out the payment tariff clauses such as 30-day, 12, 18 or 24 month term pay monthly mobile agreement. This means that the services charge will be billed in the agreed frequency and if it is not, 02 have breached the contract and are liable to being sued.
This application term set out by 02 has effects on both parties to the contract. It affects 02 as they must charge the customer the correct amounts stated in the contract and in the correct frequencies. It also protects them if they change the price of the service as the contract states that prices are subject to change. It also protects them further as it states that for additional services in the contract such as availing of 4G, additional terms will apply. This term also has an effect on the customer as they are agreeing to being billed the correct amount in accordance to the contract and in the correct frequency of time. This affects them as they have protection if they are undercharged or overcharged at any given stage which will mean 02 have broken the contract.
This term is effective in that it sets out a clear term for both 02 and the customer to understand. It is effective in protecting the company through the frequency of payment options as well as their ability to change prices within the contract. This also is effective in relation to the customer protecting themselves in relation to how much they are billed. It isn’t as effective for the customer however, as they really have no protection in relation to when and how much 02 increase the price by. However, if t02 change the price without warning the customer, they may file a lawsuit under Unfair Terms in Consumer Contract Regulations. After looking at this term, it is more effective for 02 than it is for the customer as they have the ability to change different parts of the contract when they want, and have the ability to add additional terms – which is often the case in contracts where one party is much more powerful that the other.
Using your services –
“(A) you need network coverage to be able to use our services. 4G is only available in selected areas. Predicted network coverage can be found here
(b) You may not use your Service(s) for any number ranges which we reasonably believe are being used for call forwarding services, concurrent calling, paging services, onward calling services or numbers that pay revenue share.
(c) Your tariff usage is subject to our ‘excessive usage policy’ (outlined in this clause 1.5(c) and clause 4.9 of these Tariff Terms) at all times. This means that your usage must be for private and personal purposes and that of a legitimate consumer. You may not use your SIM card:
i) In, or connected to, any device other than the one which it was supplied with or the type intended by us for use with. (For example a mobile phone simplicity tariff SIM card is intended for use in a mobile phone not a modem);
ii) Or in such a way that we reasonably believe adversely impacts our Network or the service to our other customers”
The ‘Using your services’ terms in the contract of purchasing an 02 mobile contract clearly sets out the terms which are agreed upon by 02 and the customer purchasing the service. In this contract, the express term sets out the coverage of the mobile and the tariff usage and as a result of the customer of 02 creating the contract, they are agreeing to the ‘Using your services’ terms. This will mean, for example, the customer is agreeing to only using their SIM card in the device which was supplied with it. The ‘Using your services’ terms clearly set out the way in which customers should use the service they are being sold. If a customer uses a USB in another device which it wasn’t sold with, they have broken this contract and 02 could take appropriate action against them such as permanently cancelling their contract.
The ‘Using your services’ terms set out by 02 has effects on both parties to the contract. It affects 02 as they must supply the network coverage they are stating they make available to their customers. These terms also state that 02 subject their customer’s tariff usages with their excessive usage policy to ensure they are fulfilling the terms of the contract. The customer is also affected by this term as they must not use the SIM card given with their mobile in any other device as this is breaching the contract. It also affects the customer as they are banned from using the service for number ranges which 02 believe are being used for call forwarding services or numbers that pay a revenue share.
This term is effective in that it sets out clear terms for both 02 and the customer to understand. It is effective in protecting the company through the use of their excessive usage policy which contains clauses in relation to these tariff terms. The ‘Using your services’ terms are also effective for the customer as they are aware of their rights in relation to using SIM cards purchased from 02 which are part of this service. When looking at 02s, ‘Using your services’ terms, the terms are more effective from the company’s point of view. These terms keep 02 in the right and lay out clearly the policy in place which they can follow back on and state clearly what the consumer can and cannot do.
Billing and other services –
“(A) If you’re allowed to pay by methods other than Direct Debit, there will be additional charges. You can contact us to find out what these charges are.
(b) Itemised billing is only available at no additional charge online. Paper bills will be available in limited circumstances to certain customers by request and for a charge.
(c) Many O2 Products and Services require registration and/or verification by text message, so devices that cannot send or receive text messages may not be able to register or use those services. Please check the relevant scheme terms or device specifications for more information.
(d) Your information will be treated in accordance with O2’s privacy policy
(e) All Pay Monthly customers are required to register their details, included a valid current email address and any other information that we reasonably request from you to maintain your account and you must ensure that this information is valid, up-to-date and accurate.
(f) You must tell us immediately if you become aware of any improper disclosure of your security information or unauthorised use of the services through your account.”
The ‘Billing and other services’ term in this contract sets out the terms which are agreed upon by 02 and the customer purchasing the service. In this contract, this express term sets out the billing options as a result of having a phone contract with 02 as well as what the customer needs to set up their service properly and as a result of the customer of 02 creating the contract, they are agreeing to the billing and other services terms. This will mean, for example, they are agreeing that the information they provide is valid, up to date and accurate. This billing and other services term also sets out the scenarios which make provoke additional charges and includes an exclusion clause for 02 as the information they receive is treated in accordance with their privacy policy.
These billing and other services terms set out by 02 affect both parties to the contract (02 and the customer). It affects 02 as they must treat their customers’ information in accordance with their privacy policy. They also must inform customers of where additional charges will apply in relation to payment methods as this is stated within this term. This term also has an effect on the customer as they must ensure all information they provide is valid, up to date and accurate – if it is not; they have breached the contract and may be sued by 02.
This term is effective as it is clearly laid out for 02 and the consumer. It is also effective in protecting the company through additional charges that they can place on the contract. This also is effective in relation to the customer protecting themselves in relation to 02 using their information as it states that 02 will use their information in accordance with their privacy policy. The billing and other services term is also effective in protecting 02 with regards to losses through non-payment or claims. An exclusion clause is placed on this term by the Unfair Trading Regulations 2008 as it states “If a trader has signed up to a code of practice, then if it fails to follow this code, it could be a breach of the Regulations.” This means 02 must for example use their customer’s information in accordance with their privacy policy.
Implied terms in the contract
Service to be performed with reasonable care and skill – Supply of Goods and Services Act 1982 – (now known as Consumer Rights Act 2015)
“(1) every contract to supply a service is to be treated as including a term that the trader must perform the service with reasonable care and skill.
(2)See section 54 for a consumer’s rights if the trader is in breach of a term that this section requires to be treated as included in a contract.”
The implied term ‘Service to be performed with reasonable care and skill’ from the Consumer Rights Act 2015 clearly sets out the principles of how 02 should provide the phone contract service with reasonable care and skill. For 02, this will include offering a service which is to done so correctly with no shortfalls. As a result of signing the contract, the customer will expect the service they receive to be carried out professionally by 02. This implied term also sets out clearly for 02 and the consumer that failure to the service being carried out with reasonable care and skill means the contract has been breached.
This implied term will have effects on both parties to the contract (02 and the customer who is purchasing the service). It affects 02 as they must be offering the service which is to be carried out with reasonable care and skill. If they fail to do this, they may become liable to un-protection in the contract as it has been breached. This implied term also has effects on the consumer. It affects them as it states that if they the trader is in breach of a term in this section, they have the right to “require repeat performance and/or a price reduction” according to the Consumers Right Act 2015.
The ‘Service to be performed with reasonable care and skill’ implied term is effective in protecting the company as well as the consumer. It protects 02 from claims for incomplete performance of supplying a service when in fact they did carry out the service with reasonable care and skill. It also is effective in protecting the consumer with respect to receiving a service which was carried out with reasonable care and skill and nothing less. This is effective against legislation such as the Consumer Rights Act as, for example the consumer would be entitled to a price reduction if the service was seen to be carried out without reasonable care and skill by 02.
Reasonable price to be paid for a service – Supply of Goods and Services Act 1982 – (now known as Consumer Rights Act 2015)
“(1) this section applies to a contract to supply a service if—
(a) The consumer has not paid a price or other consideration for the service,
(B) The contract does not expressly fix a price or other consideration, and does not say how it is to be fixed, and
(c) Anything that is to be treated under section 50 as included in the contract does not fix a price or other consideration either.
(2)In that case the contract is to be treated as including a term that the consumer must pay a reasonable price for the service, and no more.
(3)What is a reasonable price is a question of fact.”
The implied term ‘Reasonable price to be paid for a service’ from the Consumer Rights Act 2015 clearly sets out the principles of paying a reasonable price for a service if the price is not stated in the contract. For 02, this will not be relevant as they have their prices included in their contract for the different phone tariffs available. As a result of signing the contract, the customer will be expected to pay the price stated in the contract.
This implied term has no effects on 02 or the consumer because all of their contracts in relation to mobile phone services and so there is no ‘reasonable price’ to be considered by any prices as there is already one established.
The ‘Reasonable price to be paid for a service’ implied term is effective in protecting the company as well as the consumer of a contract where no fixed price or consideration has been set. However, this contract has prices fixed to it which, although are subject to change, are in place and so this implied term does not apply to it.
Information about the trader or service to be binding – Supply of Goods and Services Act 1982 – (now known as Consumer Rights Act 2015)
“(1)Every contract to supply a service is to be treated as including as a term of the contract anything that is said or written to the consumer, by or on behalf of the trader, about the trader or the service, if—
(a) It is taken into account by the consumer when deciding to enter into the contract, or
(b) It is taken into account by the consumer when making any decision about the service after entering into the contract.
(2)Anything taken into account by the consumer as mentioned in subsection (1) (a) or (b) is subject to—
(A) Anything that qualified it and was said or written to the consumer by the trader on the same occasion, and
(b) Any change to it that has been expressly agreed between the consumer and the trader (before entering into the contract or later).
(3)Without prejudice to subsection (1), any information provided by the trader in accordance with regulation 9, 10 or 13 of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 is to be treated as included as a term of the contract.
(4)A change to any of the information mentioned in subsection (3) made before entering into the contract or later, is not effective unless expressly agreed between the consumer and the trader.”
The implied term ‘Information about the trader or service to be binding” from the Consumer Rights Act 2015 clearly sets out the principles of information taken into account by the consumer when deciding to enter into the contract or when making any decision about the service after entering into the contract. For 02, this will include selling a product which is fit for the purpose in which the consumer requires it for. As a result of signing the contract, the customer will expect their product to be fit for the purpose they need it for. This implied term also sets out clearly for JD and the consumer the stage at which the products purpose is identified and this is before the contract is made.
This implied term will have effects on both parties to the contract (02 and the customer who is purchasing the product). Information provided under the Consumer Contracts Regulations 2013 will also be a term of the contract. This gives consumers additional protection as 02 will need to consider what information they provide to consumers to encourage them to enter into the contract for the service. Consumers should be aware of the information 02 gives to them in-case there ever becomes a case where the consumer feels 02 has ‘tricked’ them into entering a contract.
The ‘Information about the trader or service to be binding’ implied term is effective in protecting the company as well as the consumer. If this term is breached by 02, the same rules apply as to whether this term can be limited or excluded. It also is effective in protecting the consumer with respect to receiving a service which they didn’t receive accurate details about (which were falsely stated before the contract was created).
This is effective against legislation such as the Consumer Rights Act as, for example 02 would be protected if the consumer bought the service having received all correct information and then decided they would claim that they didn’t receive all accurate information in relation to the service when they actually did so this acts as an exclusion clause for 02, keeping them covered by this implied term.
