Section 2: Business Contracts

  The Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982 lay down fundamental terms about the sale of goods and contracts for the supply of goods and services which all business contracts must comply with. They are as follows: • the seller must have title • goods/services must be of merchantable quality • goods/services must be fit for a particular purpose • goods/services must be as described • there must be no misrepresentations At common law, suppliers of services, e. g. plumbers, builders, repairers, etc., have a duty to exercise reasonable care and skill in carrying out their jobs. Professionals, e. g. solicitors have to exercise the degree of care which is to be expected of a professional man of ordinary competence and experience. These common law duties have now been clarified and enhanced by the 1982 Act. The 1982 Act implies in each contract, under which a person agrees to carry out the service, that the supplier will carry out the service with reasonable care and skill. It must be noted, however, that this applies only where the services are provided as part of a business, but does not apply to services given free, nor to advocates in connection with their appearances in court, company directors or building societies. The main standard terms and conditions of a contract are as follows: • Names of the parties to the contract • Subject of the contract • Price • Terms of delivery • Time of delivery • Terms of payment, including time of payment, currency in which payment is to be made, etc. • Risk and property • Warranties • Arbitration • Termination • Governing law The contract is to stipulate which legal system is to regulate any dispute. This is very important, as otherwise large sums can be spent just deciding which legal system applies.

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