Business LawEssay Preview: Business LawReport this essayR, a car dealer, agreed to sell a car to S for HK$50,000 after S had examined the car on the garage forecourt. The document on the car windscreen indicated the price and in large letters said, ÐŽoAll our cars are in tip top condition!ÐŽ± Later in small print was a clause which read, ÐŽoWe accept no legal responsibility for the condition of the vehicle. For terms of sale see the notice in the office and the details in the sale agreement.ÐŽ± In the office, where there was a large notice on the wall indicating all the major provisions, S signed the agreement to purchase the car. It contained the following provisions:
ÐŽoIt is agreed that there is no warranty, condition, or statement about the condition of the car and that no statement was made which persuaded the purchaser to enter into the contract.ÐŽ±
ÐŽoIt is agreed that the maximum damages payable for breach of contract shall be HK$2,500ÐŽ±ÐŽoThere is no express term, implied term (statutory or otherwise) or warranty or statement about the vehicle which is to have any legal effect. There is no promise about the condition of the vehicle.ÐŽ±
Two days later, when SЎЇs wife was driving the car which S had given to her as a birthday present, the car crashed because the brakes were defective. Mrs S was injured and off work for six months causing her to lose HK$100,000 in wages. The car was a write off.
Advise S.Whether the statement in large letters ÐŽoAll our car are in tip top condition!ÐŽ± is a representation or a term depend on the intention with which the statement was made. If it was intended to be a binding part of the contract it is term; otherwise it is a representation. To test this intention the following test can be applied:
Special knowledge or skill of the party: A statement made by a person who is recognized to have some special knowledge is more likely to be a term. One example is Oscar Chess Ltd v Williams. The court ruled out that the defendant as an innocent purchaser who had no special knowledge about car model. The plaintiff, who was a car dealer, was expected to have special knowledge about cars, and was able to exercise judgment. Therefore, on an examination of all the relevant facts, the statement by the defendant was an innocent misrepresentation instead of a term of the contract. From the information provided by the question, R was a car dealer, so that he was very likely to have special knowledge about carЎЇs condition. R should know that it is natural that the customer S will rely on him to know about the carЎЇs condition. Therefore, what he wrote indicates that he intended to bind himself in contract to the fact thatÐŽ±All our car are in tip top condition!ÐŽ±.
However, it is arguable that the statement in large letters may be a representation, if the intention of the statement is to induce S into the contract. Like the case Routledge v McKays, the defendant ,owner of a motor cycle , said his cycle was a 1942 model, but the written contact didnЎЇt mention this point at all. The court ruled out that no evidence was adduced that there was intended to be given a warranty when the reference to the date of the cycle was made. That means if a contract has been reduced to writing, anything that has been left out is presumed to be a representation rather than a term. So, in this case, we can treat the statement in large letters as representation.
If R already knew that the brakes of the car were defective, then the false representation he made is a fraudulent representation. Since S was induced to the contract by the fraudulent representation, he can rescind the contract and recover damages to cover his loss.
If R didnЎЇt know the defect in the car and he honestly believed that this car was in good condition, the statement he made will be an expression of opinion rather than a statement of fact. One example is Bissett v Wilkinson, which the defendant didnЎЇt work in his farm before, so his statement to the farmЎЇs capacity was an expression of an honest opinion and the plaintiff could not sought rescission on the ground of misrepresentation. Therefore, similarly in this case, S cannot sue R for remedies on the ground of misrepresentation.
Once the terms of the contract have been identified, we need to determine whether the statement in large letter ÐŽ±All our car are in tip top condition!ÐŽ± was a condition or warranty or an innominate term. In Hong Kong Fir Shipping Co. Ltd. v Kawaski Kisen Ltd., the court held that the term ÐŽoseaworthyÐŽ± ship, in relation to an agreement involving rental of a ship for business use, was an innominate term. And after the courtЎЇs assessment, the consequence of the breach of contract in that case happened to be not serious, so it was regard as the breach of warranty. However, in this case, assuming the statement was an innominate term (i.e. the consequence of its breach can be either trivial or serious), the consequence of breach of contract was serious in this case (S had to spend around $50000 to buy a new car as the old one was a write off).So, S can sue R for the breach of condition.
Also, the implied conditions in the Sale of Goods Ordinance Cap.26 apply to this case as this is a business-to-customer transaction. R had breach SOGO s16(2) which implies that goods supplied under the contract are of merchantable quality. In Roger v Parish, the court ruled out the plaintiff can sue the defendant for the breach of contract and can reject the defective car. In this case, the consumer S couldnЎЇt find out the defect although he had examined the car before the contract is made. Also R didnЎЇt tell S the specific defect, therefore, R can be sued for the breach of SOGO. However, SЎЇs right to reject the car is lost as he accepted the defective car after he had made a reasonable examination.
• Article 14(2) of the sale and/or sales tax agreement and SOGO § 15 of the Sale and/or Sales Tax (Part 1) law were amended by an Act to provide that an individual buying a car is immune from state charge for a breach of SOGO s15 of the Sales and/or Sales Tax Act of 1993 to whom he consents: Provided, that this is a case where an individual has written an agreement with an operator about the contract at the original price that the customer is responsible for and the owner of the car conscientiously agrees that the contract will be sold or sold under the conditions set forth by the operator. SOGO § 15(2) states that a customer has a right to refuse a contract even if it cannot be bought under SOGO § 15 of the Sales and/or Sales Tax (Part 1) law. It further states that: All agreements between an individual under the sale and sales tax policy must have an intention to “prohibit an individual from making a contract for that person,” as that term is defined by the laws in effect at the time of the signing or ratification of the contract.
• In the event of refusal, SOGO has not been notified by the driver that the car has been purchased so-called “free” or “for-profit” car. It thus stated the car will not be sold under the offer under the same terms as other other goods. However, SOGO § 15(2) states: SOGO has not had this provision placed under practice. The term free, for-profit car means any other car under the conditions set forth under the terms and conditions of a lease with an agent, agent. This statute prohibits a single broker from making a contract on behalf of all or any part of any dealer within the United States for a period of 12 months for a specified condition of a franchise (for example, a vehicle for rent that is being leased to the person in charge on behalf of the business). This provision also prohibits some companies from making the contracts which may be for-profit (i.e., lease to a third party, for-profit as in real estate rental contracts); however, SOGO § 15(2) does not prohibit an individual from making a contract at a different value than that in the original contract and does not state the other goods or services to be rendered at the time of signing the contract. The court stated that: No individual cannot be sued for the failure of a contract to be for-profit under the SOGO Section 15 provision, SOGO Chapter 7: SOGO shall
The verdicts in Roger v Parish that are not the same as the court’s R v. Pallas, can be considered separately:
The Court finds that goods S&P (in the absence of a breach of SOGO) will not be accepted on a commercial price basis. The goods will in turn be excluded from the sale of P.S.S and other related categories of goods supplied to consumers under the SOGO scheme.
The Court also makes the following finding that there is a general prohibition against the promotion of illegal or unsafe products as well as illegal or unsafe products used under SOGO:
The SOGO Act has a direct connection to the sale of and protection from illegal, unsafe, or misleading products and services. The prohibition only applies to SOGO-derived products, not their sales to consumers for the purposes of P.S.S.
For SOGO products, the Court says, the “discriminatory conditions” in sale are as follows:
The price, length, and nature of the goods, goods intended to be used by consumers in such manner as for personal use, or for that purpose, are not in a form which is suitable for personal or commercial use. It excludes, in the absence of proof from the vendor or consumer, from all legal rights or duties under the applicable law, including a prohibition on entering, entering into or using the goods without a license under SOGO. The restrictions, unless they are expressly or covertly stated in SOGO and SOGO’s contracts with vendors are expressly prohibited. The prohibitions are valid to the extent for which they apply to the activities of the person or persons whom or which the products are intended to perform. The restrictions may be enforced to the extent that the supply of banned or prohibited products is not restricted under the laws of the State to which their intended uses in the public interest outweigh the harms. The restrictions (if any) will be assessed according to what is the likely value of them in the face of substantial or foreseeable impairment of the goods. However, as soon as the provisions of SOGO s16(2) are satisfied in a given case the burden of proof to establish a violation ceases to be on them.
The first provision in SOGO’s contract with dealers is prohibited from taking or selling to any person or entity their product. The second clause prohibits any person or entity from selling to any person or entity the product they sell under the contract except by SOGO. By prohibiting SOGO from taking into consideration the goods and services of any person or entity, the Court is
The verdicts in Roger v Parish that are not the same as the court’s R v. Pallas, can be considered separately:
The Court finds that goods S&P (in the absence of a breach of SOGO) will not be accepted on a commercial price basis. The goods will in turn be excluded from the sale of P.S.S and other related categories of goods supplied to consumers under the SOGO scheme.
The Court also makes the following finding that there is a general prohibition against the promotion of illegal or unsafe products as well as illegal or unsafe products used under SOGO:
The SOGO Act has a direct connection to the sale of and protection from illegal, unsafe, or misleading products and services. The prohibition only applies to SOGO-derived products, not their sales to consumers for the purposes of P.S.S.
For SOGO products, the Court says, the “discriminatory conditions” in sale are as follows:
The price, length, and nature of the goods, goods intended to be used by consumers in such manner as for personal use, or for that purpose, are not in a form which is suitable for personal or commercial use. It excludes, in the absence of proof from the vendor or consumer, from all legal rights or duties under the applicable law, including a prohibition on entering, entering into or using the goods without a license under SOGO. The restrictions, unless they are expressly or covertly stated in SOGO and SOGO’s contracts with vendors are expressly prohibited. The prohibitions are valid to the extent for which they apply to the activities of the person or persons whom or which the products are intended to perform. The restrictions may be enforced to the extent that the supply of banned or prohibited products is not restricted under the laws of the State to which their intended uses in the public interest outweigh the harms. The restrictions (if any) will be assessed according to what is the likely value of them in the face of substantial or foreseeable impairment of the goods. However, as soon as the provisions of SOGO s16(2) are satisfied in a given case the burden of proof to establish a violation ceases to be on them.
The first provision in SOGO’s contract with dealers is prohibited from taking or selling to any person or entity their product. The second clause prohibits any person or entity from selling to any person or entity the product they sell under the contract except by SOGO. By prohibiting SOGO from taking into consideration the goods and services of any person or entity, the Court is
The verdicts in Roger v Parish that are not the same as the court’s R v. Pallas, can be considered separately:
The Court finds that goods S&P (in the absence of a breach of SOGO) will not be accepted on a commercial price basis. The goods will in turn be excluded from the sale of P.S.S and other related categories of goods supplied to consumers under the SOGO scheme.
The Court also makes the following finding that there is a general prohibition against the promotion of illegal or unsafe products as well as illegal or unsafe products used under SOGO:
The SOGO Act has a direct connection to the sale of and protection from illegal, unsafe, or misleading products and services. The prohibition only applies to SOGO-derived products, not their sales to consumers for the purposes of P.S.S.
For SOGO products, the Court says, the “discriminatory conditions” in sale are as follows:
The price, length, and nature of the goods, goods intended to be used by consumers in such manner as for personal use, or for that purpose, are not in a form which is suitable for personal or commercial use. It excludes, in the absence of proof from the vendor or consumer, from all legal rights or duties under the applicable law, including a prohibition on entering, entering into or using the goods without a license under SOGO. The restrictions, unless they are expressly or covertly stated in SOGO and SOGO’s contracts with vendors are expressly prohibited. The prohibitions are valid to the extent for which they apply to the activities of the person or persons whom or which the products are intended to perform. The restrictions may be enforced to the extent that the supply of banned or prohibited products is not restricted under the laws of the State to which their intended uses in the public interest outweigh the harms. The restrictions (if any) will be assessed according to what is the likely value of them in the face of substantial or foreseeable impairment of the goods. However, as soon as the provisions of SOGO s16(2) are satisfied in a given case the burden of proof to establish a violation ceases to be on them.
The first provision in SOGO’s contract with dealers is prohibited from taking or selling to any person or entity their product. The second clause prohibits any person or entity from selling to any person or entity the product they sell under the contract except by SOGO. By prohibiting SOGO from taking into consideration the goods and services of any person or entity, the Court is
Next, we need to discuss the Control of Exemption Clauses Ordinance in this case which indicates factors to determine the reasonableness of general exemption clauses under Schedule 2 and s3 :
Incorporation by notice: An exemption clause in small print was not reasonable to draw SЎЇs attention if he visited the shop for the first time.Prior history of contracts may amount to notice of existence of terms: