Making a Contract
When you sell a car or carry out servicing or repair work, a contract is formed between you and your customer. The contract does not have to be in writing unless it concerns supplying credit. However, where contracts are complex or involve expensive goods or services, it is likely that there will be a written contract eg a car purchase.
Although most terms and conditions of a contract will be negotiated directly between the two parties, eg price of goods, colour, size, delivery date etc, the law adds certain terms and conditions which form part of the contract whether or not they are discussed by the parties. These implied terms and conditions cannot be removed from the deal even if the customer agrees or signs a statement to that effect. For example a statement “No warranty implied or given” cannot remove these terms.
An important point to note is that these implied terms exist between you and your customer and are not replaced by any warranty issued by a manufacturer. Rectifying any breach of contract is your responsibility and any manufacturer’s warranty is in addition to your customers’ rights against you.
The Sale of Goods
The Sale of Goods Act says that:-
- You must have a legal right to sell the car.
For example, you do not have a right to sell a car still subject to a hire purchase agreement as it belongs to the finance company.
- The goods should be of satisfactory quality.
This means that the goods should meet standards that a reasonable person would regard as satisfactory, taking into account any description applied to them, the price, age and any other relevant circumstances.
When considering the question of quality, regard should be had to the following:-
- fitness for the purposes for which this type of goods are commonly supplied,
- appearance and finish,
- freedom from minor defects,
- safety,
- durability.
- The goods must be fit for the purpose
This means that the car should be capable of performing all the tasks that would normally be expected of a car of its type. In addition, if the customer specified any particular purpose such as towing a caravan, the car must be suitable for that task.
- The goods must correspond with any description applied to them.
For example, a car described as a 1993 registered 1300cc, must have been registered in that year and have that engine size. The seller of goods will be responsible for any misdescription of those goods and as well as his civil liability, may also be liable to criminal proceedings.
If the goods you have sold are not of satisfactory quality, do not correspond with their description or are not fit for their purpose, your customer can claim against you for the cost of having faults put right and in some cases may be able to reject the goods and claim a full refund.
Servicing and Repair Contracts
- Any materials or components supplied as part of a contract to repair or service a car should also satisfy the above requirements. In addition, the supply of goods and services act imposes additional obligations on a trader who repairs or services cars.
- This act says that any work you carry out must be done with reasonable care and skill. This means that the work should be carried out to a standard that a reasonable person would expect.
- Where no price was agreed prior to the work being done, the consumer shall be expected to pay only a reasonable charge. This does not allow a business to undertake work that was not previously sanctioned by a customer. It merely prevents exorbitant charges being made after the completion of any agreed work.
- Where no time limit was agreed prior to commencement, the work must be completed within a reasonable time. This is meant to give customers a remedy where a trader causes unnecessary delays in finishing work.
If you or your employees do not satisfy the requirements described above, your customer will have a claim against you for breach of contract. This means that they may be able to claim against you the price they have paid for the work and in some cases, any reasonably foreseeable costs they have incurred arising from the breach.
This leaflet is a brief summary of the law and is intended for general guidance only and should not be taken as being an authoritative legal document. For specific advice please contact Wigan Trading Standards.
