Topic 3

Terms & SOGO

 been seen in thecontract

fcan
Different types of contract terms
Express term expresslymention theterms no matter noralhritn
sales4goodscontract
Implied term 1 Case law 2 legislating erennotsldedengdsmu
benmph
Condition (more important term) moreserious consequencemthdesaipei
Warranty (less important term) less serious consequence
eg.Anylegalhiabihgarnngoutdthnanhut
Exemption clause exemptthe liability bankButgoingtobe
reliable

clause is forceable
Not all theexmpeim
 毀約 的補償
Remedies for breach of contract

ěnerxpmigutdr
• Damages (breach of warranty/condition)
ask to refund
Monetary compensation that covers the loss of the innocent party

last
The compensation only covers loss that is reasonably foreseeable
1000 for12months

• Rescission (breach of condition) heinousconsequence

Too luckymonth
Cancellation of the contract
The parties will be restored to their respective position before the contract was formed
Condition or warranty?
hiolhttle rent condition
A. You shall pay the monthly rent at HKD5000 on or before the first day of each month.

mktwdamageshepmra.se
wananty
B. You have to conduct maintenance for the air conditioner in every four months. Otherwise,
you will be liable for the repair cost if the air conditioner is not functioning well.
minior issue
C. The 100KG of coffee bean shall be delivered by 31 January 2021. condition

Puugohet contract Onüme Delivery

 bench of condition natureofcontact mainpurpose that storage
rescission ohontracttnchimtntrutlxpay
Seapower v Assure [2001] HKEC 1517
Damage moneycompensation to ralueotgarn
Fact:

If
The plaintiff was a coolstore operator.
The defendant stored some garlic in the plaintiff’s warehouse.
The defendant formed an oral contract with the plaintiff, and one of the terms was about the storage
temperature of the garlic.
The plaintiff failed to comply with the temperature of storage and the garlic deteriorated.
The plaintiff sued against the defendant for the unpaid storage fee. The defendant refused to pay and
counter-claimed.
Held:
The court held that there was a breach of express contract terms.
oral contract
Imphedtemease
The Moorcook (1889) 14 PD 64
Fact:
A wharf owner agreed to let a ship-owner to use the wharf for loading and unloading.
The vessel hit the river bed and was damaged.
In the contract there was no express term that required the wharf owner to ensure that the river
bed was safe for the shipowner.
airplanename
hharfonnerrehned to compensate_an
guatmputon
Held:
if Xnhartmnerbears
responsibility
inns 䲜 嵤 毙 shippingmhsg
For the reason of business efficacy, the wharf owner should be liable.

The court implied a term to thecontract

Bsues fortheuseofnharf
The wharf owner be
should liable在
any say
 A statement will be regarded as a
contract term if it is made……

nudity
A. before the formation of contract
B. at the formation of contract Possible
C. after the formation of contract
i A only
ii B only
iii A and B not to
allowed term 啦 formation
incooperatethe
agree signthe
supplement
iv A, B and C
v I don’t know
but it both party
agreement
newtermscanbeadded
sales4goods ordnance
SOGO Section 2A: enjoy lben愁品der SOGO
Definition of a ‘consumer’
(1)A party to a contract of sale deals as consumer (以消費者身分交易) in relation to another
party if— (Amended E.R. 4 of 2018)
commercial transactions
(a)he neither makes the contract in the course of a business nor holds himself out as doing so;

I
(b)the other party does make the contract in the course of a business; and
(c)the goods passing under or in pursuance of the contract are of a type ordinarily supplied for
private use or consumption.
(2)Notwithstanding subsection (1), on a sale by auction or by competitive tender the buyer is not
in any circumstances to be regarded as dealing as consumer.
(3)It is for the person claiming that a party does not deal as consumer to prove that he does not.
SOGO Section 2(1): Definition of ‘goods’
lgdsforpersonal 非⼟地實崖
Goods (貨、貨品) includes all chattels personal other than things in action and money. The
term includes emblements, industrial growing crops, and things attached to or forming part of
the land which are agreed to be severed before sale or under the contract of sale
Not real property

Xsupplyutsernu
anhut
Xemployment
 daimucsission cancellationof
_breach of condition
untrue
SOGO S.15 Sale by description 4632
(1)Where there is a contract for the sale of goods by description, there is an implied condition
that the goods shall correspond with the description; and if the sale is by sample, as well as by
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. (Amended 58 of 1977 s. 5)

(2)A sale of goods shall not be prevented from being a sale by description by reason only that,
being exposed for sale or hire, they are selected by the buyer. (Added 58 of 1977 s. 5) [cf. 1973 c.
13 s. 2 U.K.]
Buying pen
xexpressionterm implied a term
legislation
Implied term How
 term condition
Buanch4implied
SOGO S.16 2 385 Trecsissim 47 06
Implied undertakings as to quality of fitness
(1)This section provides for the circumstances in which, and the extent to which, there is any
implied condition or warranty as to the quality or fitness for any particular purpose of goods
supplied under a contract of sale. (Replaced 85 of 1994 s. 4)
1hrauasmabepeiddhmég
Application sell it for
(2)Where the seller sells goods in the course pnhtftanpertnmtnntnanr
1的
of a business, there is an implied condition that the
goods supplied under the contract are of merchantable quality, except that there is no such
defends
condition—
ugpemcannotnneecarǎynynkdonn
(a)as regards defects specifically drawn to the buyer’s attention before the contract is made; or

i
(b)if the buyer examines the goods before the contract is made, as regards defects which that
examination ought to reveal; or (Amended 85 of 1994 s. 4) should
buyer awauotdhts
(c)if the contract is a contract for sale by sample, as regards defects which would have been
apparent on a reasonable examination of the sample. (Added 85 of 1994 s. 4)

Defutscanbgtnnd on sample
SOGO S.16
DVD players
fwyymbgh4
(3)Where the seller sells goods in the course of a business and the buyer, expressly or by
implication, makes known to the seller any particular purpose for which the goods are being
bought, there is an implied condition that the goods supplied under the contract 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 buyer does not rely, or that it is
unreasonable for him to rely, on the seller’s skill or judgment.

l
(4)An implied condition or warranty as to quality or fitness for a particular purpose may be
annexed to a contract of sale by usage.

skip
SOGO S.16 作 by agent
(5)Subsections (1), (2), (3) and (4) apply to a sale by a person who in the course of a business is
acting as agent for another as they apply to a sale by a principal in the course of a business,
except where that other is not selling in the course of a business and either the buyer knows
that fact or reasonable steps are taken to bring it to the notice of the buyer before the contract
is made.
(6)In the application of subsection (3) to an agreement for the sale of goods under which the
purchase price or part of it is payable by instalments any reference to the seller shall include a
reference to the person by whom any antecedent negotiations are conducted.
SOGO S.16
(7)In subsection (6) antecedent negotiations ( 事 先 商 議 ) means any negotiations or
arrangements with the buyer whereby he was induced to make the agreement or which
otherwise promoted the transaction to which the agreement relates.
(8)Except as provided by this section and section 17, and subject to the provisions of any other
enactment, there is no implied condition or warranty as to the quality or fitness for any
particular purpose of goods supplied under a contract of sale. (Added 85 of 1994 s. 4)
notanpgwithsnmhguanch 4 mphedaihm
SOGO S.17 Sale by sample 48 5
(1)A contract of sale is a contract for sale by sample where there is a term in the contract, express
or implied, to that effect.
(2)In the case of a contract for sale by sample—
(a)there is an implied condition that the bulk shall correspond with the sample in quality;
(b)there is an implied condition that the buyer shall have a reasonable opportunity of comparing
the bulk with the sample;

l
(c)there is an implied condition that the goods shall be free from any defect, rendering them
unmerchantable, which would not be apparent on reasonable examination of the sample.
ncmsumeienjoysan advantage
49 19
I
Control of Exemption Clauses Ordinance
Section 11(2) Consumer ant
As against a person dealing as consumer, liability for breach of the obligations arising from
section 15, 16 or 17 of the Sale of Goods Ordinance (Cap. 26) (seller’s implied undertakings as to
conformity of goods with description or sample, or as to their quality or fitness for a particular
purpose) cannot be excluded or restricted by reference to any contract term.

Section 11(3) Not aboutconsumercontrast

As against a person dealing otherwise than as consumer, the liability specified in subsection (2)
can be excluded or restricted by reference to a contract term, but only in so far as the term
satisfies the requirement of reasonableness.
 5041

Control of Exemption Clauses Ordinance

exmpeimchuse
The matters to which the court or arbitrator shall have regard in particular for the purposes of sections
11(3) and 12(3) and 4 are any of the following which appear to be relevant—
Neasmable
(a)the strength of the bargaining positions of the parties relative to each other, taking into account
(among other things) alternative means by which the customer’s requirements could have been met;
(b)whether the customer received an inducement to agree to the term, or in accepting it had an
opportunity of entering into a similar contract with other persons, but without having to accept a
similar term;
Bdoennltlmowexmpeimdauhe Xtmable
(c)whether the customer 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 excludes or restricts any relevant liability if some condition is not complied with,
whether it was reasonable at the time of the contract to expect that compliance with that condition
would be practicable;
(e)whether the goods were manufactured, processed or adapted to the special order of the customer.
 5139
Olley v Marlbourough Court [1949] 1 KB 352
Fact:
The customers paid deposit at the service counter of a hotel to book a room.
They went to their room in which there was a notice saying that the hotel was not liable to its
customers if their luggage was lost or stolen due to its negligence. clause
exemption
Their luggage was stolen due to the negligence of the hotel staff (they failed to prevent the key to the
hotel room from being stolen).

Held: _Exemptimdanheshonnahhmatimofahut
The exemption clause was ineffective in a contract law action as it was not a contract term. It was
shown to the customers after the formation of the contract between them and the hotel (the contract
was formed at the service counter).

If effatine putthenote at theserna counter

inform consumer
 Test reasonableness
Always Win v Autofit [1995] 2 HKC 48
Fact:
The plaintiff delivered a BMW to the defendant for repair.
The car was stolen due to the negligence of the defendant.
There was an exemption clause in the Repair Order and Receipt which stated that “"The
Company (i.e. the Defendant) shall not be responsible for any loss and/or damage to the
Customer's vehicle or any articles attached to or left inside the vehicle whilst on the Company's
premises or under the Company's control from whatsoever cause arising.”

Xhnsnmuanhut test
reasonableness
Two companies
Always Win v Autofit [1995] 2 HKC 48
D hshmadn4hauant.nl of car
“……I am of the view that Clause 6 does not satisfy the reasonableness test. This
is the case of a consumer entrusting its car to a car repairer for repair. The
consumer has no control of the car during the time when it was in the possession
of the repairer. How could it be reasonable if the repairer could disclaim liability
if the car was lost during the time when it had possession of it and when the loss
was due to negligence of the repairer? Why should the consumer seek further
redress against another party if liability can be established against the repairer
but for the exclusion clause?” (para 45)
Always Win v Autofit [1995] 2 HKC 48
plaintiffxknowledge
“……Although Mr Choi received education up to the secondary school level, he
did not need to write or speak English in his business. He could not fully
understand the printed clauses. I accept his evidence in this regard. The
Defendant is a member of the Guardforce Group, which is of very substantial
scale. It is insured and it has superior bargaining power in the transaction with
the Plaintiff.” (para 45)
_strength

Held Exetmptimchsinettutiu
Tutorial question
You randomly walk on the street and find a ramen shop that looks attractive and you decide to
dine in this ramen shop.
Step 1. You read the advertisement outside the shop saying $90 dollars per ramen. Limited to
100 bowls per day.
Step 2. You walk into the shop, sit down, and read the menu. xtrxstmgmdnahmtobe
Step 3. You order the ramen from the waiter. Her bound bypnmse
Step 4. The waiter confirms the order, and ask the kitchen to prepare the ramen.
Step 5. The ramen is delivered to you and you finish the ramen.
xmptame
n_n
Step 6. You go to the cashier and pay for the ramen.
Aueptanuhmupealltem
Is there a contract? Analyze the four elements of contract here.
⼩RamenPasta zmphmdemtnkw
kgisalahm
Not tmerchnnable quality
stomach