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SCHEDULES

SCHEDULE 4.U.K. MINOR AND CONSEQUENTIAL AMENDMENTS

PART I U.K. UNITED KINGDOM

M1Supply of Goods (Implied Terms) Act 1973U.K.

Marginal Citations

X135U.K.For sections 8 to 12 substitute the following sections (which reproduce the existing provisions of those sections subject only to changes in terminology)—

8 Implied terms as to title.

(1)In every hire-purchase agreement, other than one to which subsection (2) below applies, there is—

(a)an implied condition on the part of the creditor that he will have a right to sell the goods at the time when the property is to pass ; and

(b)an implied warranty that—

(i)the goods are free, and will remain free until the time when the property is to pass, from any charge or encumbrance not disclosed or known to the person to whom the goods are bailed or (in Scotland) hired before the agreement is made, and

(ii)that person will enjoy quiet possession of the goods except so far as it may be disturbed by any person entitled to the benefit of any charge or encumbrance so disclosed or known.

(2)In a hire-purchase agreement, in the case of which there appears from the agreement or is to be inferred from the circumstances of the agreement an intention that the creditor should transfer only such title as he or a third person may have, there is—

(a)an implied warranty that all charges or encumbrances known to the creditor and not known to the person to whom the goods are bailed or hired have been disclosed to that person before the agreement is made ; and

(b)an implied warranty that neither—

(i)the creditor; nor

(ii)in a case where the parties to the agreement intend that any title which may be transferred shall be only such title as a third person may have, that person ; nor

(iii)anyone claiming through or under the creditor or that third person otherwise than under a charge or encumbrance disclosed or known to the person to whom the goods are bailed or hired, before the agreement is made ;

will disturb, the quiet possession of the person to whom the goods are bailed or hired.

9 Bailing or hiring by description.

(1)Where under a hire-purchase agreement goods are bailed or (in Scotland) hired by description, there is an implied condition that the goods will correspond with the description, and if under the agreement the goods are bailed or hired by reference to a sample as well as a description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description.

(2)Goods shall not be prevented from being bailed of hired by description by reason only that, being exposed for sale, bailment or hire, they are selected by the person to whom they are bailed or hired.

10 Implied undertakings as to quality or fitness.

(1)Except as provided by this section and section 11 below and subject to the provisions of any other enactment, including any enactment of the Parliament of Northern Ireland or the Northern Ireland Assembly, there is no implied condition or warranty as to the quality or fitness for any particular purpose of goods bailed or (in Scotland) hired under a hire-purchase agreement.

(2)Where the creditor bails or hires goods under a hire-purchase agreement in the course of a business, there is an implied condition that the goods are of merchantable quality, except that there is no such condition—

(a)as regards defects specifically drawn to the attention of the person to whom the goods are bailed or hired before the agreement is made; or

(b)if that person examines the goods before the agreement is made, as regards defects which that examination ought to reveal.

(3)Where the creditor bails or hires goods under a hire-purchase agreement in the course of a business and the person to whom the goods are bailed or hired, expressly or by implication, makes known—

(a)to the creditor in the course of negotiations conducted by the creditor in relation to the making of the hire-purchase agreement, or

(b)to a credit-broker in the course of negotiations conducted by that broker in relation to goods sold by him to the creditor before forming the subject matter of the hire-purchase agreement,

any particular purpose for which the goods are being bailed or hired, there is an implied condition that the goods supplied under the agreement are reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied, except where the circumstances show that the person to whom the goods are bailed or hired does not rely, or that it is unreasonable for him to rely, on the skill or judgement of the creditor or credit-broker.

(4)An implied condition or warranty as to quality or fitness for a particular purpose may be annexed to a hire-purchase agreement by usage.

(5)The preceding provisions of this section apply to a hire-purchase agreement made by a person who in the course of a business is acting as agent for the creditor as they apply to an agreement made by the creditor in the course of a business, except where the creditor is not bailing or hiring in the course of a business and either the person to whom the goods are bailed or hired knows that fact or reasonable steps are taken to bring it to the notice of that person before the agreement is made.

(6)In subsection (3) above and this subsection—

(a)credit-broker ” means a person acting in the course of a business of credit brokerage ;

(b)credit brokerage ” means the effecting of introductions of individuals desiring to obtain credit—

(i)to persons carrying on any business so far as it relates to the provision of credit, or

(ii)to other persons engaged in credit brokerage.

11 Samples.

Where under a hire-purchase agreement goods are bailed or (in Scotland) hired by reference to a sample, there is an implied condition—

(a)that the bulk will correspond with the sample in quality ; and

(b)that the person to whom the goods are bailed or hired will have a reasonable opportunity of comparing the bulk with the sample; and

(c)that the goods will be free from any defect, rendering them numerchantable, which would not be apparent on reasonable examination of the sample.

12 Exclusion of implied terms and conditions.

(1)An express condition or warranty does not negative a condition or warranty implied by this Act this unless inconsistent with it.

(2)A term of a hire-purchase agreement or any other agreement exempting from all or any of the provisions of section 8 above shall be void.

(3)A term of a hire-purchase agreement or any other agreement exempting from all or any of the provisions of sections 9, 10 or 11 above shall be void in the case of a consumer agreement and shall, in any other case, not be enforceable to the extent that it is shown that it would not be fair or reasonable to allow reliance on the term.

(4)In determining for the purpose of subsection (3) above whether or not reliance on any such term would be fair or reasonable regard shall be had to all the circumstances of the case and in particular to the following matters—

(a)the strength of the bargaining positions of the creditor and the person to whom the goods are bailed or hired relative to each other, taking into account, among other things, the availability of suitable alternative products and sources of supply;

(b)whether that person received an inducement to agree to the term or in accepting it had an opportunity of acquiring the goods or suitable alternatives without it from any source of supply;

(c)whether that person knew or ought reasonably to have known of the existence and extent of the term (having regard, among other things, to any custom of the trade and any previous course of dealing between the parties);

(d)where the term exempts from all or any of the provisions of sections 9, 10 or 11 above if some condition is not complied with , whether it was reasonable at the time of the agreement to expect that compliance with that condition would be practicable ;

(e)whether the goods were manufactured, processed or adapted to the special order of that person.

(5)Subsection (4) above shall not prevent the court from holding, in accordance with any rule of law, that a term which purports to exclude any or restrict any of the provisions of sections 9, 10 and 11 above is not a term of the hire-purchase agreement.

(6)In this section “consumer agreement ” means a hire-purchase agreement where the creditor makes the agreement in the course of a business and the goods to which the agreement relates—

(a)are of a type ordinarily supllied for private use or consumption ; and

(b)are bailed or (in Scotland) hired to a person who does not bail or hire them or hold himself out as bailing or hiring them in the course of a business.

(7)The onus of proving that a hire-purchase agreement is to be treated for the purposes of this section as not being a consumer agreement shall lie on the party so contending.

(8)Any reference in this section to a term exempting from all or any of the provisions of any section of this Act is a reference to a term which purports to exclude or restrict, or has the effect of excluding or restricting, the operation of all or any of the provisions of that section, or the exercise of a right conferredby any provision of that section, or any liability of the owner for breach of a condition or warranty implied by any provision of that section.

(9)It is hereby declared that any reference in this section to a term of an agreement includes a reference to a term which although not contained in an agreement is incorporated in the agreement another term of the agreement.

Editorial Information

X1The text of ss. 3(a)(b)(c), 5, 42(1)(2)(3), 192(3)(a)(b), Sch. 4 Pt. I paras. 1, 2, 5, 7 - 9, 11 - 17, 19, 22 - 28, 30 - 32, 34 - 37, Sch. 4 Pt. II paras. 39, 40, 43 -45, 49 - 51 and Sch. 5 is in the form in which it was originally enacted: it was not reproduced in Statutes in Force and does not reflect any amendments or repeals which may have been made prior to 1.2.1991.