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CHAPTER 2

THE WEAPONS OF LAW

2.4.3Supply of Services
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We have already seen, in Section 2.3.5, how provisions relating to misrepresentation were passed into U.K. Law under the Misrepresentation Act 1967. We also saw how similar provisions were not given statutory effect in Irish Law until some thirteen years later, under the Sale of Goods and Supply of Services Act 1980. But this Irish Act also gave statutory effect to many other provisions that had been already enacted in the United Kingdom under such Acts as: the Sale of Goods (Implied Terms) Act 1973, the Unfair Contract Terms Act 1977 and the Sale of Goods Act 1979.


While the Irish legislature had the benefit of hindsight with regard to the provisions already in force in the U.K., it also had the benefit of hindsight with regard to omissions. In this regard the Irish Sale of Goods and Supply of Services Act 1980 gave statutory effect to various provisions regarding the ‘supply of services’. Such provisions, which gave statutory effect to existing Common Law requirements, were not adequately covered by U.K. statute until the enactment of the Supply of Goods and Services Act 1982 and the related Supply of Goods and Services (Exclusion of Implied Terms) Order 1985.21




In the matter of the statutory provisions regarding the ‘supply of services’, of particular import to the subject matter of this website-book are the following elements (the provisions, as described here, being those pertaining to Irish Sale of Goods and Supply of Services Act 1980) :

(1)

Implied Terms.

Subject to the ‘exclusion of implied terms’ as described in this Act, in every contract for the supply of a service where the ‘supplier’ is acting in the course of a business, the following terms are implied —

(a)

that the supplier has the necessary skill to render the service,

(b)

that he will supply the service with due skill, care and diligence,

(c)

that, where materials are used, they will be sound and reasonably fit for the purpose for which they are required.

(2)

Exclusion of Implied Terms.

Subject to the provisions of this Act, any term of a contract implied by virtue of ‘(1) above’ may be negatived or varied by an express term of the contract, except that where the recipient of the service deals as a consumer it must be shown that the express term is fair and reasonable AND has been specifically brought to his attention.

Note! Remember ‘Guidelines’ for Application of the Reasonableness Test, as has already been described in Section 2.2.4 (c)!

(3)

Statements purporting to restrict rights of the recipient of service.

(a)

It shall be an offence for a person in the course of a business to furnish or cause to be furnished a document including any statement likely to be taken as indicating that a right or the exercise of a right conferred by, or a liability arising by virtue of the “implied terms” described in this Act is restricted or excluded otherwise than by the exclusions described in this Act.

(b)

It shall be an offence for a person in the course of a business to furnish to the recipient of a service any document including, any statement, irrespective of its legal effect, which sets out, limits or describes rights conferred on the recipient or liabilities to the recipient in relation to goods acquired by him or any statement likely to be taken as such a statement, unless that statement is accompanied by a clear and conspicuous declaration that the contractual rights which the recipient enjoys by virtue of the “implied terms” described in this Act are in no way prejudiced by the relevant statement.


Again, it is the Director General of Fair Trading, in the U.K., and the relevant Government Minister or the Director of Consumer Affairs, in Ireland, who is empowered to bring proceedings under these Acts, but again, a guilty verdict flowing from such proceedings, or being guilty of an offence under the provisions of the Act, proceedings notwithstanding, adds to the injured party's armoury.

But, again, these offences must first come to the knowledge of the Prosecuting Authority.





Further statutory provisions regarding the ‘supply of services’, that were specific to dealings with 'consumers' (and that are of relevance to the subject matter of this book), followed from European Council Directive 93/13/EEC: The Unfair Terms in Consumer Contracts Regulations. These Regulations came into force in Ireland on 1st January 1995, and in the U.K. on 1st July 1995. Their statutory effect is therefore only relevant to contracts concluded in each respective jurisdiction from those dates.


However, once again, these Regulations are an express manifestation of the application of learned legal minds to precedents already existing within European Common Law Jurisdictions (including both the United Kingdom and Ireland). As such, they provide a clearly considered and focused interpretation of those Common Law precedents.


The substantive elements of the Regulations of greatest import to the subject matter of this book are as follows:

(1)

The Unfair Terms in Consumer Contracts apply (with certain stipulated exceptions, none of which are applicable to the subject matter of this book) to any unfair term in a contract concluded between a seller of goods or supplier of services and a consumer which has not been individually negotiated.

In the context of the Unfair Terms in Consumer Contracts Regulations:

‘consumer’ means a natural person who is acting for purposes which are outside his business;

‘seller’ means a person who, acting for purposes related to his business, sells goods;

‘supplier’ means a person who, acting for purposes related to his business, supplies services.

(2)

For the purpose of the Regulations a contractual term shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer, taking into account the nature of the goods or services for which the contract was concluded and all circumstances attending the conclusion of the contract and all other terms of the contract or of another contract on which it is dependent.

(3)

In determining whether a term satisfies the requirement of good faith, regard shall be had to

—— the strength of the bargaining position of the parties,

—— whether the consumer had an inducement to agree to the term,

—— whether the goods or services were sold or supplied to the special order of the consumer, and

—— the extent to which the seller or supplier has dealt fairly and equitably with the consumer whose legitimate interests he has to take into account.

(4)

A term shall always be regarded as having not been individually negotiated where it has been drafted in advance and the consumer had therefore not been able to influence its substance, particularly in the context of a pre-formulated standard contract.

(5)

The fact that a specific term or any aspect of a term has been individually negotiated shall not exclude the application of this Regulation to the rest of the contract if an overall assessment of the contract indicates that it is nevertheless a pre-formulated standard contract.

(6)

It shall be for any seller or supplier who claims that a term was individually negotiated to show that it was.

(7)

An indicative and non-exhaustive list of the terms which may be regarded as unfair, pursuant to Article 3.3 of the Council Directive, is set out in the Annex to the Directive and in the relevant Schedule to the Regulations.

Such unfair terms include terms which have the object or effect of

—— irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract,

—— limiting the seller’s or supplier’s obligation to respect commitments undertaken by his agents or making his commitments subject to compliance with a particular formality.

(8)

A term shall not of itself be considered to be unfair by relation to the definition of the main subject matter of the contract or to the adequacy of the price and remuneration, as against the goods and services supplied, in so far as these terms are in plain, intelligible language.

(9)
(a)

In the case of contracts where all or certain terms offered to the consumer are in writing, the seller or supplier shall ensure that terms are drafted in plain, intelligible language.

(b)

Where there is a doubt about the meaning of a term, the interpretation most favourable to the consumer shall prevail.

(10)
(a)

An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer.

(b)

The contract shall continue to bind the parties, if it is capable of continuing in existence without the unfair term.

 


 


In the U.K., the Unfair Terms in Consumer Contracts Regulations were re-enacted in 1999, with some modifications to the original Regulations to reflect more closely the wording of the European Council Directive; the Consumers Association was also added to the list of Qualifying Bodies empowered under the Regulations.


An Amendment to the Regulations in 2001, which came into force on 21st May 2001, added the Financial Services Authority to the list of Qualifying Bodies and, significantly, provided that, when the Financial Services Authority exercises functions under the Regulations, it has the same powers as when it exercises its functions under the Financial Services Act 1986 or under the more recent Financial Services and Markets Act 2000.


Note! The Financial Services Act 1986, and its successor, the Financial Services and Markets Act 2000 (which came into force in December 2001), will be discussed below under Section 2.5: Statutory Legislation Governing Investment Business Relating to Consumer Credit Transactions.



In Ireland
, an Amendment to the Regulations in 2000 (applicable to contracts concluded after 2nd October 2000) provided that Consumer Organisations set up for the purposes of protecting consumer rights be allowed to apply to the High Court for an order prohibiting the use or the continued use of any term in contracts concluded by sellers or suppliers adjudged by the Court to be an unfair term.



21 Lowe and Woodroffe, Consumer Law and Practice, (4th ed.), p. 89.

 

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