*DISCLAIMER*
The notes below are adapted from the
Kenyatta University,UoN and Moi Teaching module and the students are
adviced to take keen notice of the various legal and judicial reforms that
might have been ocassioned since the module was adapted. the laws and statutes
might also have changed or been repealed and the students are to be wary and
consult the various statutes reffered to herein
Consumer protection
In Kenya there is no specific law
dealing with consumer law. The law is scattered in various statutes and private
law measures. In Kenyan laws there are two measures:
1.
Private law measures, contained in certain topics in the Law of Contract and
Law of tort, which are relevant.
2.
Public law measures. Public law measures that indirectly protect the
consumer. In UK they have a specific consumer protection law, The Consumer
Protection Act 1987.
The most important statutes are:
1. The Trade Descriptions Act, which
follows the British law. It covers that if you make certain descriptions in
goods and services and if that description is false you are covered by the Act.
It contains very comprehensive measures.
3.
The Standards Act. This deals with certain specific standards and any person
who is either manufacturing, producing or exporting, the goods must be
according to the specifications set by this Act. The statute also establishes
the Kenya Bureau of Standards.
4.
The Weights and Measures Act. Under this law contains measures against
shortfalls. Weights and Measures Department, created under the act, enforces
this Act.
5.
The Restrictive Trade Practices, Monopolies and Price Control Act
6.
The Foods, Drugs and Chemical Substances Act
7.
The Pharmacy and Poisons Act. Controls quality and sale of drugs and over
the counter sales.
8.
The Public Health Act.
9.
The Fertilizers and Animal Foodstuffs Act. What kind of fertilizers to be
use and quality of animal foods.
Then there are Acts which control professions:
The Law society of Kenya Act
The Medical and Dentists Act
The Nurses Act
The Architect Act.
In private law measures there are also
Acts of Parliament.
The
Private Law Measures
Law of Contract
Law of contract, general as well
special contracts for consumer protection:
The Sale of Goods Act
The Hire Purchase Act
Misrepresentation: This is one of
the most important provisions. This is a pre-contract statement that is
false/misleading. If it is false then the party who has made the false statement
has made misrepresentation and therefore the contract is voidable. Note
the Trade Descriptions Act. Statements made before contract include
advertisement (which is an invitation), catalogues, brochures, price list, etc.
in which they are supplying certain information. If these are false, can this
be taken as misrepresentation?
Sales of Goods Act is also a special
contract. There are certain terms that are implied in every contract of sale.
Protects the consumer directly. Before this act the rule was Let the buyer be
aware.
Terms are express agreement between the
parties. They are part of the contract. May be express or may be implied.
How can terms be implied? The several
ways: (1) implied by customs in a trade or business (2) statute such as the
Hire Purchase and Sale of Goods Acts; (3) courts, in order to give business
efficacy to the contract then the court will imply certain terms; judicial
decisions of the courts.
Consumer protection covers goods as
well as services.
Inclusive definitions—such as the
Sale of Goods
Exhaustive definitions
Chattels personal
Chattels real
Moveable property
Immoveable property
Choses in action (claims that are
actionable)
Goods under the Sale of Goods Act does
not include money, choses in action, land and structures on land
Davies v Samuels: the question arose
whether services are covered in the Sale of Goods Act. A husband went to a
dentist for dentures for his wife and they agreed on a certain price. The
dentist made the dentures for the wife but they did not fit properly. The
dentist said we never agreed that they should fit your wife’s jaws. Husband
refused to pay and the dentist sued him for breach of contract. And the
question was whether it was a contract for the sale of goods or the provision
of services? The court said if was a contract of sale of goods, then the Act
will apply, if not it will not apply. The court said it will imply certain
conditions: if it was service provided it must fit the purpose for which it was
intended.
The deficiency of contract: they do not
cover a third party benefiting the contract. Privity of contract. This is the
main weakness of the contract law. So their scope is limited.
The other problem is the questions you
have to answer:
Who is the consumer?
Why protect the consumer?
What measures to protect the
consumer?
Who is the consumer? How do you define
the consumer? The Molony Committee was establish to suggest ways and means to
protect the consumer. It gave the definition: “Any person who purchases goods
and affected by it is a consumer.” But this definition does not cover consumer
of services. This is another drawback to the contract law – it only protects
the person who has made the contract.
In tort these conditions are not
required.
Exclusion clauses or limitation
clauses.
Here the law allows a party to the
contract to exclude or limit his liability. Kenya follows the common law ( if
is reasonable). But in UK they have The Unfair Contract Terms Act, e.g. injury
and death cannot be excluded from a contract.
The
tort law
The main rules
1.
Negligence, provided in Danogue v Stevens is still relevant to consumer
protection. The manufacturer owes a duty of care to the ultimate consumer
(House of Lords decision).
2.
Product liability rule. If a manufacturer sup0plies unsafe goods to a
consumer he shall be liable for defective product under the principle of
Donogue v Stevens (1932). The Donogue v Steven expanded. In UK and USA product
liability is also a statutory provision. In Kenya it is common law, under tort.
The neighbour principle. Lord Atkin
asked, who is my neighbour…the person who is in your contemplation …when you
are directing your mind to …your neighbour is your consumer. So a consumer who
is a person who uses goods or services and affected by it, any person. We are
widening the definition of consumer.
Christine Mpaka, Consumer Protection:
defines consumer as any person who uses goods or services and affected by it,
any person. We are widening the definition of consumer.
In Donogue a consumer is the ultimate
consumer.
Here a consumer defined as a person who
uses goods or services and is affected by it.
Ralph Nader—guru of consumerism—said
consumer protection must be a constitutional right and consumer means any
citizens who has suffered because of the provisions of goods or services.
Occupier’s liability. Covered by The
Occupiers Liability Act. There are two situations, (1) the occupancy duty and
(2) activity duty.
The Sarit Centre case.
Why protect the consumer? What do you
protect the consumer from?
Consumer does not know what is in the
goods and therefore needs to be protected from unsafe goods.
Secondly, the consumer needs to be
protected from deficient quality of goods or services, i.e. the quality is
poor.
Thirdly, the consumer needs to be
protected from fraudulent or misleading or undesirable trading practices.
Fourthly, the consumer needs to be
protected from insufficient information to exercise prudent judgment
Fifthly, economic exploitation because
of lack of competition or excessive prices.
Sixthly, protection from short measures
or weights
Sevenly, protection from eviction and
excessive rents
All these are legal measures. But there
are also extra-legal measures where you do not go to court, such as consumer
organizations
Consumer education: the consumer must
be educated about their rights and the services and goods that are available in
the market.
Which. Gives such
education in UK.
Introduction to
Consumer Protection Law
The rise of consumerism in the 20th
century coupled with the multiplication of products and services in the market
has led to increased problems for consumers with regard to the quality of goods
and services and their prices and general availability. The choice for
the consumer is made difficult due to the range of available options and
aggressive advertisement for each type of goods and services. Some goods
and services call for expertise in discerning what shortcomings might have and
such expertise may not be available to all consumers. The interest of
multinational corporations in the world market present its special problems for
developing countries who do not measure up to the bargaining muscle of the said
corporations. Such corporations may offer different standards of goods in
the developing countries from those they offer in developed countries and
therefore there is a need for legal mechanisms to regulate consumer products
and services.
Definition of
Consumers
In the literal sense a consumer is a
person who purchases goods or services. The Molony Committee on consumer
protection in Britain regarded a consumer as one who purchases or
hire-purchases goods for private use or consumption.
The private consumer of services is a
consumer though the Molony Committee did not consider it. Thus under this
definition the consumer is purchaser of goods or services supplied by
another. However if we take consumer as a person who purchases goods or
services, then a Construction Company purchasing building materials for use in
the construction of housing estate would be acting as a consumer.
However, for the purpose of consumer protection law the term consumer has a
narrow meaning which is based on capacity in which the consumer acquires goods
or services and the capacity in which the supplier of goods or services supply
them.
The general view of the consumer or at
least that given by modern consumer legislation is often individual dealing
with a commercial enterprise. However it is also the case that the term
consumer encompasses a person who makes use of the services provided by the
public sector undertakings or private monopolies subject to public
control. On this basis consumer protection law would also cover
complaints by individuals about services provided by public sector undertakings
such as Kenya Railways, Kenya Power and Lighting Company, Kenya Airways and
city councils. Furthermore in the public sector the consumer might also
have reason to complain about the services he has received in government
hospitals.
These definitions of consumer are
narrower and also broader at the same time. They are narrower in the
sense that the consumer is defined as a person who purchases goods or services
in that situation the definition covers only consumers who have contractual
relationships with the supplier of goods or services. At the same time
they are broader in the sense that they apply also to those consumers who consume
goods in manufacturing of other goods.
Christine Mpaka defines consumer as any
person who uses any goods or services and can be any person who is affected by
the use of those goods and services supplied by other persons. This
definition is wider than the other definitions because it has been realized
that limiting the term consumer to purchasers is undesirable because many
people use goods or services that they have not bought and if those goods
occasion harm to a user as opposed to purchaser, he or she would be left
without a remedy hence the definition of a consumer should be broadened to
include anyone who consumes goods or services at the end of the chain of
production. The definition by Mpaka is wider in the sense that it covers
both the contractual and non-contractual consumer.
In Donaghue v Stevenson it was
held by the House of Lords that a manufacturer is liable for defective product
to the ultimate consumer even if there is no contractual relationship between
them. In that case a consumer has been defined as a person who is in
contemplation of the supplier by directing his mind to the acts or omissions in
question. This would cover all types of consumers for example in case of
certain services such as medical services avail free of charge.
The American guru of consumerism Ralph
Nader has taken the view that the term consumer should be equated with the word
citizen and that the consumer protection law should be regarded as an aspect of
protection of civil rights.
CONSUMER PROTECTION
The term consumer protection has been
taken to mean those measures which contribute directly or indirectly to the
consumer assurance that he will buy goods of a suitable quality appropriate to
his purpose. That they will give him reasonable use and if he has just
complaints there will be means for redress (Molony Committee Report) thus the
term consumer protection covers a wide range of areas including
(a)
Unsafe products or goods;
(b)
Qualitatively deficient goods or services;
(c)
Fraudulent misleading or unfair trade practices;
(d)
Insufficient information to exercise a prudent buying decision;
(e)
Economic exploitation through lack of competition;
(f)
Protection from excessive prices or charges;
(g)
Protection from short measures;
(h)
Protection from health hazards.
The European Council adopted a consumer
protection and information programme listing five fundamental rights of the
consumer
1.
The right to protection against health and safety hazards;
2.
The right to protection of economic interest;
3.
The right to advice, help and redress;
4.
The right to information and education;
5.
The right to consultation and representation
The term consumer protection involves
two aspects; a preventive one and a remedial one. The former encompasses
measures that regulate the supply and quantity of goods or services ensuring
that the consumer is not ripped off. It also includes the education of
the consumer to make him conversant with the varieties of goods and services
available to him thus enabling him to make an informed choice on any particular
product or service. This measure also educates the consumer to make him
conversant with his rights. The latter measure is concerned with the
redress for those consumers whose interest have been adversely affected for
example the standard set in the Kenya Bureau of Standards established under
that Act is a preventive measure for consumer protection in the sense that no
goods below a certain standard can be supplied in Kenya whether locally manufactured
or imported.
On the other hand the Sale of Goods Act
is a remedial measure in that if a seller is in breach of an implied term under
the Act the buyer can sue the seller for damages.
Given that nobody is compelled to use
goods or services supplied to him, the question arises why a consumer needs to
be protected. In the modern society most people find themselves in a
situation where they have to purchase or use certain goods or services.
The buyer or user is not always at par with the seller or provider of the
service. He does not have the same bargaining power as that of the
supplier. The monopoly enjoyed by certain providers of goods or services
makes it easy for such providers to dictate the terms to the consumer.
The other issue that needs to be
addressed is what would comprise the consumer interests. These are
discernible expectations of consumer with regard to product and services that
he must make use of. The consumer expects that the product or services are
suitable and appropriate for his intended purpose. These
expectations can be elusive if products or services are falsely described or
they are qualitatively deficient or unsafe. The consumer can only find
out the defect once he has purchased or used goods or services. The
consumer is also concerned particularly in Kenya about the availability of
products and services that he needs. Price is also of importance to a
consumer. This regulates what a consumer considers to be his needs.
The price tag is a determinant for most consumers and the cheaper the product
the better for the consumer.
In the case prepaid goods the consumer
wishes to be sure that the marked quantity is the actual quantity of goods
supplied. He is also concerned about the safety of the products or
services. In this respect he would also like to have adequate information
about the use of any product or service to avoid endangering his and lives of
others.
Consumer Protection Measures:
There are several legal instruments to
regulate consumer products and services. However it must be said at the
outset that there is no specific legislation in Kenya to protect consumers as
such but there are several private law and public law measures which touch upon
the consumer protection though these measures are not directly concerned with
the consumer protection.
PRIVATE LAW MEASURES
Consumer protection in private law
falls within the domain of contract and tort since all the rights in the two
categories are private law rights, the aggrieved consumer has to identify his
claim and proceed to bargain for it and find a claim should the need arise to
obtain redress. The state’s only involvement here is by availing its
personnel to deal with the complaint once a suit is filed in a court.
Should the consumer decide to take no action, then the state has absolutely no
interest in the affair and the consumer bears the loss on disadvantage.
Contract
The Law of Contract plays some role in
protection of consumers. The areas of general law of contract which have
a bearing on consumer protection are:
1.
Misrepresentation;
2.
Terms implied by courts in relation to services; and
3.
the Exclusion Clauses.
The law of contract is based on the
concept of equal bargaining power. Consequently parties to a contract are
deemed to be capable of negotiating terms that are fair to themselves.
This assumption of equality is untenable. In the case of many products
and services many undertakings that have monopoly in supply of goods and
services can easily dictate the terms to the consumers. They can assume
an attitude of take it or leave it. This places the consumer in a very
difficult position given that he requires those services or products and may
not be able to do without them. Once a consumer enters into a contract
with a supplier of goods or services, it is up to him to enforce the contract
in case of breach. If he is ignorant of his rights, then he remains
without redress even in instances where the consumer is cognizant of his rights
he may be discouraged by the amount of time it takes to see a matter
determined in a court of law. The lawyers fee for services may also
be prohibitive. The law of contract has ingrained in its principles that
do not generally favour all consumers for example the doctrine of the privity
of contract prohibits a person to seek redress when he has no contractual
relationship with the supplier.
The Sale of Goods Act and the Hire
Purchase Act are special types of contract. The Sale of Goods Act gives
certain rights to the buyer of goods and it implies certain terms in each and
every contract for sale of goods though the parties to the contract of sale may
opt out of this implied terms by means of expressed agreements. These
implied terms include that the seller should have the right to sell, the buyer
should have quiet possession of the goods and the goods supplied must be free
from any charge or encumbrance. It also covers sale by restrictions, the
term as to merchantability and fitness for purpose and the sale by sample as
relates the sale by description and sample.
The Hire Purchase Act also gives
certain rights to the hirer. This includes terms similar to those
implied under the Sale of Goods Act. The Hire Purchase Act also protects
a hirer by means of several rights which are protected under the Act such as
where the hirer has paid two thirds or more of his instalments the owner of the
goods cannot take repossession of the goods without an order from the court.
Law of Tort
Under the law of tort the consumer can
seek redress from the provider of goods or services if he can prove negligence
on the part of such provider that leads to harm befalling him. The
remedies in tort law are wider in the sense that although there is no privity
of contract between the ultimate consumer and the manufacturer, the
manufacturer of supplier maybe held liable for negligence.
A consumer can also fall to the law of
tort in instances where he is dissatisfied with the quality of services he
obtains from a professional person such as a doctor or a lawyer. In
certain cases the law of tort can also provide remedies for negligent
misstatement causing economic loss. However the law of tort has its own
weaknesses. The main weaknesses that it is a part of private law and
therefore it is for the consumer himself to take an action. Sometimes the
consumer may not be aware of his rights or he may be reluctant to go for time
consuming litigation.
PUBLIC LAW MEASURES
In Kenya certain statutes have been
enacted which indirectly protects consumers or they regulate consumers products
of services. These laws are prescriptive, prohibitive and
protective. They carry sanctions which are restrictive, prohibitive and
protective. They carry sanctions which are to be enforced as penalties
against non-conformers. The state places positive duties on providers or
sellers of certain services and goods. It uses its machinery to detect
non-conformers and proceeds to prosecute the culprits. The complexity of the
market has dictated this developments. Measures cannot be left to the consumer
and provider to negotiate as this may occasion a lot of inconvenience on the
ignorant consumer who may not be able for instance to tell that the pre-packed
food is unwholesome or of less weight than indicated on the package. Public law
takes the form of statutes enacted empowering certain government
sponsored bodies or departments to ensure the adherence of such standards of
products or services. The full range of public law measures is very extensive.
The following examples show some of their ambit.
the trade descriptions act
The Trade Descriptions Act controls
business activities at large in so far as they involve descriptions of goods or
services. Criminal sanctions are provided for non-compliance.
Standards Act
Under the Standards Act the Kenya
Bureau of Standards is set up to promote standardization in industrial area to
provide facilities for testing instruments and commodities. The Act provides
for the inspection of goods to comply withy certain specifications to ensure
that they conform with the standards specified by the bureau. The Act makes its
an offence to resist the visit of the inspectors in the discharge of their
duties for which sentences or fines or imprisonment are imposed. The court is
given powers to order confiscation of all substandard goods that often again
the provisions of the Act the Bureau investigates complaints from consumers who
purchase unsatisfactory goods and offers suggestions on improvement of future
production.
The Weight and Measures Act
The Weight and Measures Act is
concerned with the accuracy of weighing and measuring at the time of sale to
the consumer. All weighing and measuring machines are required to bear a stamp
of verification showing that they are accurate instruments. Inspectors are
empowered by the Act to inspect and test all such machines and ensure they are
in correct mechanical condition. Breaches of prohibition imposed by the Act are
punishable as offences. Such prohibitions are against selling goods that are
less than the indicated quantity. The Act creates an agency in the form
of the Weights and Measures Department in the Ministry of Commerce who9se
inspectors are trained all over the country in the lacuna of legislation is
with respect to imported goods. The Act makes no provisions in relation to
import goods and the limited protection it offers is diluted by this fact.
the food drugs and chemical substances act
The Food Drugs and Chemical Substances
Act makes provision for the prevention of adulteration of food, drugs and
chemical substances. It is an offence to sell any food that contains poisonous
substances or that is unwholesome or unfit for human consumption or that is
adulterated or that consists in whole or in part of any filthy, putrid,
disgusting, rotten, decomposed or deceased substances or foreign matter.
It also makes it an offence for any person to sell, prepare, package, convey,
store or display for sale any food under unsanitary conditions. Similar
rules apply to drugs and cosmetics. With respect to cosmetics the Act
provides that any person who sells any cosmetics that contains any substance
that may cause injury to the health of the user is guilty of an offence.
Cosmetics and drugs should also not be prepared, preserved, packed or stored
under unsanitary conditions. Provisions are also made for supervision,
entry and inspection to ensure that the Act is complied with. Penalties
are prescribed for those breaching the provisions.
the fertilizers
and animal foodstuffs act
The fertilizers and animal foodstuffs
Act regulates the importation, manufacture and sale of agricultural fertilizers
and animal foodstuffs and substances of animal origin intended for the manufacture
of such fertilizers and foodstuffs. It provides among other things that
no person shall import any fertilizer or any foodstuff which contain bone or
any other substance derived from animal carcass unless he furnishes a
certificate from the country of the origin showing that the bone or substance
has been completely sterilized and is free from pathogenic or disease causing
organism. All the breaches of the provisions of the Act are punishable as
offences. It makes provisions for inspection of all relevant stuff and of
plants producing such stuff to ensure that they are wholesome.
THE PUBLIC HEALTH ACT
The Public Health Act makes provisions
for securing and maintaining health. It requires the notification of infectious
diseases and enjoins occupants of buildings to report the existence of such a
disease to the health authorities. The Act makes it an offence for any
person to willfully expose himself in a public place while suffering from such
a disease. Persons infected with venereal diseases are enjoined by the
Act to seek medical treatment and not to take up employment in places selling
food or involving the care of young persons. The Act also requires
warnings of risk to be printed in cigarette packets. Penalties in the form of
fines and imprisonment are prescribed. The Act also makes detailed
provisions with regard to leprosy, smallpox, sanitation of housing, water
supplies, meat, milk, mosquitoes and cemeteries etc prescribing penalties for
all such offences.
THE RESTRICTIVE
TRADE PRACTICES, MONOPOLIES AND PRICE CONTROL ACT
This Act attempts to encourage
competition in the market and for that purpose it controls concentration of
government power and mergers and takeovers. It also controls restrictive
trade practices such as price fixing, discriminatory trade practices, control
of output of goods or services, withholding of supply, market division,
territorial restrictions, resale price maintenance, tying practices for
collusive binding, collusive tendering and refusal to deal. The Act also
makes provisions for price control although at the moment there is no item
under the price control provisions of the Act but these provisions have not
been repealed and can be used to buy the government if it desires so.
THE MEDICAL PRACTITIONERS AND DENTISTS
ACT
This Act prohibits unqualified persons
from practicing medicine by implication therefore any person who holds himself
out as a practitioner may be relied upon by the consumer as being
qualified. If there is any misfeasance by a medical practitioner the
consumer of services received from such a practitioner can be reported to the
Medical Practitioner and the Dentist Board who may investigate the matter and
can take disciplinary action against the practitioners.
Consumer Protection
Law-Lecture 3
Implied terms:
Merchantable quality
Fitness for purpose
Conditions: the seller sells in the
course of business.
The seller must sale or supply in the
course of business. But other conditions will apply even in private sales, such
as description, sample.
The Trade Descriptions Act requires
that the buyer must acquire the goods in a non-business capacity.
Case of a car hire firms. Used to buy
new cars and after two years they used to sell those cars. Are they selling the
course of business? What the House of Lords said is that you have to consider
how often they sell. If they do it regularly then they are doing it in the
course of business.
The Trade
Descriptions Act
Sale or supply must be in the course of
business or the buyer must acquire the goods or business in a non-business
capacity. Several consumer protection statutes require that the seller or
supplier must sale or supply in the course of business. For examples the Sales
of goods Act provides that the implied condition of merchantable quality and
fitness for purpose shall be implied in a context of sale only if the seller
sales in the course of his business. Similarly section of the Trade
Descriptions Act provides that the false trade description applies only where
any person applies a false trade description or supplies or offers to supply
any foods in the course of any trade.
Similarly in Britain section 12 of the
Unfair Contracts Act 1977 provides a provision that a party makes the contract
in the course of business. [This Act deals mainly with exclusion clauses. In
Kenya there is no statutory law to the effect and common law is what applies.]
It seems plain that they cover not only a seller making a regular sale of goods
in which he deals but a seller who buy by way of business, manufactures or
obtains or sells a commodity for the first time. This is supported by authority
on Sale of Goods Act (“deals in goods of that description”). It could then be
argued that the purpose of the wording in this context is to exclude only sales
by purely private sellers. It appears that a farmer who sells off a surplus
tractor or a medical practitioner or advocate or local government department
disposing of surplus equipment for example sells a used typewriter used in the
course of business and so attracts the operation of the statutory term.
In Havering LBC v Stevenson,
a car hire firm had a false trade description as to mileage. Though not car
dealers the firm regularly sold its cars after a period of use, it was held by
the divisional court that the sale was in the course of its trade or business
as a car hire firm.
And in Fletcher v Stedmore the
defendant was a panel beater who bought, repaired and sold old cars. A dealer
and his prospective customer visited him and he falsely stated that the car had
a little good engine. The panel beater sold the repaired car to the dealer and
he resold it to the customer who was impressed the panel beater’s remarks
despite the lack of any contextual relationship between the eventual buyer and
the panel beater, the latter was directed to be convicted of applying a false
trade description in the course of his trade or business contrary to 11(a) of
UK law (section 3(a) of Kenya law).
Also in Davis v Sumner the
activities of a self-employed courier whose car’s odometer had gone right round
the clock, thus presenting a false reading when reviewed on his sale of the
car. Here he owned the car but in the past he had hired his vehicles. The House
of Lords held that a normal business practice of buying and disposing of cars
had not been established and therefore the relevant sale was therefore not
caught by the provisions in section 11(a) (section 3 (a) of Kenya Trade
Descriptions Act). This decision of the House of Lords suggests that there must
be at least some degree of regularity. Sporadic sales would not be covered.
Individual not acting
in a business capacity
The standard perception of a consumer
is often individual purchaser or acquirer of goods or services. Generally a
consumer is regarded as a non-business purchaser of goods or services but
sometimes it is difficult to decide when a person acts in a business capacity.
In a broad sense, every time a company enters into a contract it does so in the
service of its business because if it was not the case the transaction would be
ultra vires. Thus it could be argued that where a company, which runs a
grocer’s shop, buys a new delivery van, it acts in the course of the business.
And alternative view is that a company can be a consumer purchaser where the
purchase is not for some definite business purpose and is one which is not
regularly made by that company.
In a civil case, R & B Customs
Brokers Company Ltd United Dominion Trust Ltd, the plaintiff company was
carrying on the business of freight forwarding agency purchased a car bought
for business use and for private use of its director. It was alleged that the
defendant finance company was in the breach of the implied terms in the Sale of
Goods Act that the car would be fit for the purpose for which it was intended,
namely, driving it in English weather conditions since the roof had leaked.
However, the defendant finance company
sought to rely on an exclusion clause in the contract. Liability for implied
terms under the UK Unfair Contract Act cannot be excluded where the buyer deals
as a consumer. The court of appeal held that since the purchase of the case was
only incidental to the business of a freight forwarding agent the transaction
would not be seen as an integral part of business carried on by the plaintiff
as there as no degree of regularity in the type of purchase concerned.
It therefore follows that the company
had purchased as a consumer and the provisions of the Unfair Contracts Act
prevented the exclusion clause from taking effect. It may be noted that the
Unfair Contracts Act is not applicable in Kenya and the exclusion clauses are
still governed in Kenya by the common law and such exclusion clauses shall be
valid unless they are reasonable. Also under the Sale of Goods Act the parties
whose contract of sale of goods can exclude implied terms under the Act by
means of an express contract.
The decision of the court of appeal in R&
B Customs Broker Ltd may be criticized on a number of grounds:
First the interpretation put by the
court of appeal of Unfair Contracts Act may not give effect to the intention of
Parliament. The Act distinguishes between a business purchaser and a consumer
and does not require the court to consider the purpose for which the goods are
required.
Second the decision for the ban on the
use of exclusion clauses on consumer protection is that the consumer is weak in
terms of bargaining power but the same cannot be said of a business consumer
particularly a company. Dillan LJ in R&B Customs Brokers considered
obiter that had the purchaser been in the cause of business the exclusion
clause would have satisfied the reasonableness test because the company was
dealing in the course of business. It appears that this is the true position of
law with regard to Kenya.
Third, even if the plaintiff did not
contract in the course of the business, there is a strong argument to the
effect that company held itself out as acting in the course of business since the
company made the contract in its corporate name. When these matters taken
together put to a purchase in the course of business and not one made by a
consumer devoid of commercial experience.
The Trade
Descriptions Act: The Trade Descriptions Act in Kenya follows exactly the same
The Trade Descriptions Act of UK.
Section 3 of Kenya The Trade
Descriptions Act equivalent to section 11 of UK.
Section 4 of Kenya The Trade
Descriptions Act equivalent to section 14 (2) of UK. This is with regard to
services.
Section 6 of Kenya The Trade
Descriptions Act equivalent to section 14 of UK (This is in regard to
services).
Section 8 of Kenya The Trade
Descriptions Act equivalent to section 2 (a) of UK.
Section 9 of Kenya The Trade
Descriptions Act equivalent to section 2 of UK.
Section 10 of Kenya The Trade
Descriptions Act equivalent to section 4 of UK
Section 11 of Kenya The Trade
Descriptions Act equivalent to section 5 of UK.
Section 19 of Kenya The Trade Descriptions
Act equivalent to section 24 of UK. This section is very important: it provides
the defenses.
Prohibition of false
trade descriptions in relations to goods
It has been recognized that there is a
need to protect consumers and honest traders alike against the misleading
practice of falsely describing goods in the course of trade. The Trade
Descriptions Act has created two major offences of strict liability in relation
to goods, namely that of applying false trade descriptions to goods in the course
of trade and supplying or offering to supply in the course of trade any goods
to which a false trade description is applied. Goods have been defined under
section 2 (1) of the Act to include ships and aircraft, things attached to land
and growing crops. Ship has again been defined to include any boat and any
other description of vessel used in navigation.
Section 3 of the Act creates two
offences by providing:
Section 3 any person who in the course
of any trade (a) applies a false trade description to any goods or (b)
supplies or offers to supply any goods to which a false trade description is
applied--
shall be guilty of an offence.
First type of offence
This definition has several elements
and to understand the provisions in section 3 it is necessary to analyze a
number of points in order:
1.
Any person. This includes a limited company. Section 16 special contains
provisions dealing withy offences by corporations making any director, manager,
secretary or other similar officers jointly liable if the offence is proved to
have been committed with their consent or connivance or is attributable to
negligence on their part. Any person may also include a manufacturer, a
wholesaler, and a retailer. It is also possible for a buyer to apply a false
description. In Fletcher v Budgen, a car dealer told a private customer
that his car was irreparable and fit only for a scrap. The dealer then bought
it for two pounds, carried out repairs costing 56 pounds, obtained a test
certificate and advertised it for sale at 135 pounds. The divisional court held
that an offence would be committed by a buyer who applied a false trade
description to goods, for example, fit only for scrap when buying them in the
course of his trade or business.
2.
Trade. Trade is defined by section 2 of the Act to include business and
profession.
3.
In the course of a trade of business.
4.
Applies. The word applies in section 3A is amplified by section 10 of the
Act. A person applies a trade description to goods if he (a) fixes or
annexes it to or in any manner makes it on or incorporate it with (i) the goods
themselves or (ii) anything in, on, or with which the goods are supplied; or
(b) places the goods in, on or with anything with the trade description has
been affixed or annexed to, marked on or incorporated with or places such any
such thing with the goods; or (c) uses the trade description in any manner
likely to be taken as offering to the goods.
In Donnelly v Rowlands a milk
retailer sold milk bottles. The foil caps of which read “Untreated milk
produced from TT Cows” followed by his name and address. The bottles themselves
were marked with the names of various suppliers to whom the actual bottles
belonged. The prosecution appealed from the magistrate dismissal of the
information alleging that he had sold bottles of milk to which false trade
description had been applied. The appeal was also dismissed by the divisional
court. On further appeal it was held that the words on the cap of the milk
bottles were inaccurate trade description and the words on the milk bottles
which could have been false trade description had the public been misled into
thinking that the names thereon had something to do with the production of milk
could only reasonably apply to the ownership of the bottles. The defendant was
therefore saved by the wording on the cap, which was required by the
regulations.
Consumer Protection- Lecture 4
In most cases the trader has quite clearly
described the goods and thus applied a trade description to them. However, the
terms applied was given a wider meaning by the divisional court. In Tarleton
Engineering Company v Naffrass a dealer sold a car with a false odometer
reading. He had not altered the odometer himself. He did not know it was false,
nor did he repeat the reading. It was held he had applied a false trade
description to the car.
It is difficult to justify such a wide
interpretation of any of the expressions used in section 10. However, it was
possible to bring the prosecution under section 3 (b) on the grounds that the
trader had supplied the car with a false trade description.
Nevertheless, it now seems to be settled
beyond doubt that a person applies a description to goods even in the absence
of a written or oral statement if he fails to take steps to correct a
misunderstanding which is induced by a description borne by the goods
themselves. Thus in Davies v Sumner the defendant applied a false trade
description to the car in that he represented that it had travelled 18,100
miles while the true mileage was 118,100 by merely standing by and not
disclosing the truth.
Supplying goods with a false trade
description: Section 3 (b)
The second of the offences contained in
section 3 is committed when a person supplies or offers to supply any goods to
which a false trade description is applied. By virtue of section 2(2) (a) a
person exposing goods for supply or having goods in his possession for supply
shall be deemed to offer to supply them. This section is deliberately widely
drafted. It avoids the type of difficulties found in such cases as Fisher v
Bell, where flick knives were displayed in a shop window. This was held to
be an invitation to treat rather than an offer for sale. Such goods would have
been exposed for sale even if the goods to which a false trade description is
applied belong to someone else so that it could not be said that the seller has
in his possession for supply. He still exposes them for supply. The trade
Descriptions Act provides that the position for supply is proved whether or not
the supplier is selling to the public. It may be noted that the word “supply”
is wider than “sale” and would seem to cover free gifts, if the supply is made
in the course of trade or business as well as hire and hire purchase
transactions, goods for gift token, and the like.
Knowledge
It appears from Cottee v Douglas
Seaton Ltd that a supplier does not commit this offence if he neither
applies the description to the goods himself nor knew or had means
of knowing that this has been done by another. However, where a supplier knows
that a description has been applied even though he does not know that it is
false he is liable; for example, selling a car within inaccurate odometer. In
the above case, dealer A patched up the bodywork of the car, which he
sold to dealer B. The repair was so skillfully done that B did not discover it.
B sold it to C. It was held that B had not committed an offence under section
1(1)(b) [Section 3(b) of Kenya Act] as he was unaware of the defect.
Knowledge that a trade
description was applied was essential. In short, knowledge of the existence of
the description is a pre-requisite but not the knowledge of its falsity.
Time
of application
No offences are committed under section
3 where the description is applied to goods after they have been supplied. In Hall
v Wickens the division court upheld the acquittal of a motor
dealer who had falsely described a car as not being in need of repair 40
days after supplying it to a customer. Hence the description must precede
or be contemporaneous with the supply of goods.
Trade
descriptions in advertisements
Advertisements tend to generalize so it
is necessary to provide a fair test to enable the court to identify whether a
particular advertisement applicable to a class of goods had applied a false
description to particular goods. The Act provides that the trade description
shall be taken as referring to all goods of the class whether or not in
existence at the time the advertisement is published for the purpose of
determining whether an offence under section 3 has been committed.
Advertisement has been widely defined
by section 2 (1) to include a catalogue, a circular and a price list. But
a printed, filmed or broadcast trade description is not deemed to be made in
the course of trade or business unless it forms part of the advertisement
[Section 2(2)(b)]. This provision is designed to prevent prosecutions founded
on descriptions contained in genuine news items.
A
false trade description to any goods: sections 8 and 9
The definition of a false trade
description is contained in sections 8 and 9 of the Act. Section 9 says that a
false trade description is a trade description, which is false to a material
degree and also includes within the expression clause, descriptions which
though not false are misleading.
Anything likely to be taken for an
indication of the methods specified in section 8 though not a trade description
which if false is deemed a false trade description under section 9 (3).
The term trade description is defined
comprehensively in section 8 as an indication direct or indirect and by
whatever means given of any of the following matters:
Section 8 (1) (a): identity, quantity,
size or gauge
For the purpose of the Act quantity
includes matters such as length, height, width, area, volume and capacity
Section 8(1) (b): method of manufacture,
production, processing or reconditioning
This clause covers statements to the
effect that the consumer goods had been made or processed in a particular
manner such as homegrown or handmade but whether this provision would apply to
a claim that eggs are “free range” is possibly doubtful although the word
production is broad enough to cover the matter and in any case either
section 8 (1) (e) or (g) might apply .
Section 8(1) (c): Composition
This provision covers statements
concerning the material from which an article is made, for example a statement
to the effect that bread is made from whole meal grain. Similarly a knife is
made from Sheffield steel or that the content of a specified package contains
sardines would fall under section 8 (1) ( c). Similarly a manufacturer who
claims to produce vegetable lard (pig fat) also represents the
composition of this product since the word lard without further qualification
denotes the use of pig fat but in Wolkind v Pura Foods Ltd
the description “vegetable lard” was considered to be the correct description
because the qualification “vegetable” with the word lard indicates that
the product is made of vegetables and not of pig fat.
Similarly the term “composition” would
include misdescriptions such as natural mineral water; or a mixture of
cotton and linen described as linen, or artificial silk stockings described as
silk.
A more modern case illustrates that
composition includes component parts. In British Gas Corporation v
Lubock, a Gas Board brochure stated with regard to gas cookers for sale
that “ignition is by hand-held battery torch”. This was held to be a trade
description relating to composition of goods and an offence was committed when
a cooker in a modified form was sold without a torch despite a notice that the
specification might be changed without notice. This description would also be
regarded as coming within clause (e) of section 8 (2), any physical
characteristics not included in clauses from (a) to (d) of section 8 (1)
Clause 8 (1) © also appears to go
further than the ingredients from which the thing is made and may also
include parts missing from the goods intended to be supplied as a
package.
Section (8) (1) (d): Fitness for
purpose, strength, performance, behaviour or accuracy
A description of a commodity such as
the methods listed here are all of qualitative nature which is
inevitably likely to produce problems because the required quality of
goods will depend on a range of factors including the price of the goods. Where
a car dealer makes an extravagant statement about the physical performance
of a second hand car section 8(1) (d) may apply.
Also to describe an unroadworthy
vehicle as a beautiful, a good little runner or as having a good engine
would appear to amount to the application of the trade description
relating to the quality of its performance. See Robertson v Dicicco
where it was held that the question to consider is what the ordinary man would
place in the words used in the description. This statement appears remarkably
similar to trade puffs, which do not attract liability for misrepresentation
under the law of contract.
Less difficulty has been encountered in
respect of objectively quantifiable statement about the performance. For example
a diver’s watch described as waterproof is not which fills with water
being immersed in a body of water for an hour, or to describe such a watch when
it leaks (See Sherrat v Geralds). Or to state that a microscope is
capable of magnifying up to 455 times when its maximum useful magnification is
120 times (See Dixons Ltd v Barnett) is to represent the performance
capabilities of the articles to which the description is applied.
Section 8 (1) (e): Any physical
characteristics no included in the preceding paragraph
In this if anything is omitted from the
list of characteristics in section 8 (1) (a) to 8(1) (d), section 8 (1)
(e) provide a safety net in relation to such physical characteristics. It would
appear that the statement relating to component parts applied to goods supplied
such as free gifts or a car to which additional accessories such as a tool kit
or a sun proof is fitted are best explained as relating to physical
characteristics not covered by earlier paragraphs of section 8 (1).
Section 8 (1) (h)
A description of a commodity such as
Norfolk King turkey or Havana cigars or Kitui honey would appear to fall under
section 8 (1) (d), but conventional description arising out of trade uses
properly does not. Yorkshire pudding or Cheddah cheese are not required to be
produced only in the area the name suggests.
This paragraph also covers false
statements about the date of manufacture, e.g. in Ront Ledge v Ariza Motors
Ltd, it was held that an offence was committed under section (1) (section 3
of the Kenya Act). A car registered in 1972 was sold as a new 1975 model.
Even qualified statement of the age of
the vehicle may not be sufficient to escape liability. Thus it would be unwise
for a car dealer to state the approximate year of manufacture of the car as
1987 when he is not sure how old the care is (See R v Coventry City
Justices ex parte Farrand)
Consumer Law-Lecture 5
Section 8 (1) (e): any physical
characteristics not included in the preceding paragraphs
This is the most frequently involved
category of misdescription. The vast category of cases under this paragraph
have been those involving the altering of car odometers in Macnab v
Alexanders of Greenock Ltd it was stated that the distance which a car has
traveled is just as much a part of its history as the places where it has been
and the persons who owned it. The odometer figures is if accurate a
silent historical record previous use.
Section
8 (1) (f): testing by any person and the result thereof
The wording of this paragraph seems to
require a statement to the effect that goods have been tested and that they
have passed this test. This paragraph may not cover that a car has been
to an AA test without further indication that the test has been passed with
would probably not be suffiicent. This is considered to be a defect in the Act
and it has been proposed that where there is a reference to testing it should
be presumed in absence of a statement to the contrary that there is an
indication that the test has been passed.
A statement to the effect that a car
has a Ministry of Transport certificate would fall within this paragraph since
the granting of certificate is conditional of the goods satisfying the
MOT requirements. In this later event the seller of the car would be guilty of
an offence but the content of the certificate is not to be taken as trade
description applied by the garage providing the certificate since it clearly
states it is not to be relied on (see Corfield v Sevenways Garage Ltd).
In any event the statement is not associated with the supply of the
goods.
Section
8 (1) (g): approval by any person or conformity with a type approved by
any person
A statement to the effect that the
goods confirms to Kenya Bureau of Standards specifications or merely display a
kite mark, or Ag mark would fall under this provision. Similarly a claim to the
effect that the goods are approved by a particular body, for example AA or a
trade association or trade union could also suffice . It may also be the case
that the use of trade mark of a manufacturer with national reputation can be
said to imply conformity with a type approved by another person.
False representations of government
approval or claims that goods have been supplied to another person
constitute the formation of the offences in their own right. This paragraph was
introduced to get false claims such as that certain encyclopedia were
approved by a well-known educational institution.
Section
8 (1) (h): place or date of manufacture, production, processing or
reconditioning
Section 8 (1) (h)
A description of a commodity such as
Norfolk King turkey or Havana cigars or Kitui honey would appear to fall under
section 8 (1) (d), but conventional description arising out of trade uses
properly does not. Yorkshire pudding or Cheddah cheese are not required to be
produced only in the area the name suggests.
This paragraph also covers false
statements about the date of manufacture, e.g. in Ront Ledge v Ariza Motors
Ltd, it was held that an offence was committed under section (1) (section 3
of the Kenya Act). A car registered in 1972 was sold as a new 1975 model.
Even qualified statement of the age of
the vehicle may not be sufficient to escape liability. Thus it would be unwise
for a car dealer to state the approximate year of manufacture of the car as
1987 when he is not sure how old the care is (See R v Coventry City
Justices ex parte Farrand).
Section
8 (1) (i): person by whom manufactured, produced, processed or reconditioned
This covers goods which have been
manufactured in the country in which last underwent a treatment or processing
resulting in substantial change. Thus a trade description is applied where a
petrol filling station advertises its products as Esso petroleum when it is
trading in another product. See case of Roberts v Seven Petroleum Trading Co.
In such cases the inference was that the advertised brand was being supplied.
It follows from that where a name is printed on the goods it indicates that
they have been manufactured by the persons named. It is because of this
many suppliers of own brand products would be in serious difficulties.
Section
8 (1) (j): other history, including previous ownership or use
This covers such descriptions as
railway lost property, unclaimed goods at the port, army surplus goods, one
lay-owner and the like. And an indication of a vehicle’s age by reference to
its date of registration or its suffix letter on a number plate is covered by this
provision.
The majority of cases which have fallen
within this paragraph have included inaccurate odometer reading on motor
vehicles. But other matters relate to past history of the goods made available for
supply will also be relevant. For example, a statement to the effect that the
goods are shop-soiled, fire-damaged or salvaged stock would appear to relate to
past history of the goods in question.
Matters not covered by the
section 8 (1)
One of the major problems of the list
of prohibited statements is that there could be circumstances in which a
statement may mislead but they do not fall within any of the stated categories
of trade description. For example, a statement to the effect worth a particular
amount or represent “extra value” cannot amount to a trade description. In Cadbury
Ltd v Halliday it was held that Cadbury chocolate supplied represent extra
value could amount to a description as the assertion was not factual and
therefore incapable of precise ascertainment.
However, it is arguable that a
reasonable person might regard a statement such as extra value as
implying extra chocolate for the same price and might therefore
fall within section 8 (1) (a) because it is a statement relating to quantity.
Others that might not be covered under section 8 (1) which may give a
misleading impression include indications of the identity of the supplier or
distributor of goods. A statement concerning the commercial standing of the
manufacturer, supplier or distributor of goods such as ability to
provide and after-sales service and a false statement about the content
printed and recorded material.
Implied
trade description
The Trade Descriptions Act provides
that a statement in respect of one of the listed matters may be made directly
or indirectly but this still requires an express written or oral statement to
how they made the goods to which the description applies. It would appear that
in addition to express statement a trade description may also be implied from
the conduct of the defendant. Support for this view can be gleaned from the Act
itself which extends the definition of a trade description to
include anything likely to be taken at indication of a matter
listed in section 8(1). The fact that there may be liability for an
implied trade description is gathered from a number of falsified
odometer reading cases. In a number of these cases there was a strictly
no express statement but the court had no difficulty in applying he provisions
of the Act to them. Similarly cars may be repaired in such a way that they tell
a lie about themselves. However this principle cannot be taken too far. It
follows from this that there must be a positive statement on the part of the
defendant in order to give rise to a liability under the Act. However, it will
appear to be the case that a person can give an indirect indication of a matter
listed in section 8(1)(a).
Falsity
By virtue of section 9 of the Trade
Descriptions Act a false trade description is one which is false to a material
degree. This definition is based on the requirement that the description
must be of such substance that it is capable of inducing a purchaser. Thus a
statement which amounts to nothing more than a trade puff will not be
treated as a false trade description on the basis that such a statement is not
capable of inducing a purchaser (See Cadbury Ltd v Halliday). Where a
statement is capable of verification it will attract liability only if it is
false to a material degree. This suggests that a statement can be technically
false; it is not likely to mislead anyone hence no offence is committed
(See Donnelly v Rowlands).
A statement may also be false to a
material degree not by virtue of what it says but by virtue of what it
leaves out. For example to describe a motor vehicle manufactured in 1972 but
registered in 1975 as new 1975 model is materially false since an average
person would take the description to mean that the vehicle was manufactured in
1975 (Routledge v Anza Motors Ltd). However to call a car new when it
suffered superficial damage which have been repaired using new part does not
amount to commission of an offence (R v Ford Motors Ltd).
It is clear from these cases that
whether or not a description will be held to be false to a material degree will
depend on the context in which the words are used. For example, if what has
been done to a new car is likely to diminish it value the description new may
be regarded as false. Similarly the language used by the defendant will also
matter. For example, one word taken on its own may be materially false but if
it is qualified by other words it may become accurate. For example, the word
‘lard” implies the presence of pig fat but the words “vegetable lard” implies a
different commodity when the statement on the packaging is that 100
percent vegetable oil is used (See Wolkind v Pura Foods Ltd).
False
descriptions relating to services
Section 6 of the Trade Descriptions Act
lays down provisions to control statements about services, accommodation, or
facilities provided by any person in the course of any trade. It may be
noted that a consumer is just as much concerned with the quality of the
services as with the quality and safety of the goods which he acquires. In some
cases the purchaser of many consumer goods will also involve making
arrangements for services in the form of maintenance agreements. The term
services, accommodation or facilities are not defined under the Act. However,
section 6 (3) states that in relation to any services consisting of or
including the application of any treatment or process or the carrying out
of any pairs the matters specified in section 6(1) shall be taken to include
the effect of the treatment, process or repair. There has been some doubt in
the UK whether professional services are included under the Act but in R v
Breeze it was held that professional services are covered by the Act.
However, this problem does not arise in relation to Kenya because section 2 (1)
defines trade to include any business and profession. Here again the oral as
well as written statements are included.
However, although a statement made
after the supply of goods have been complete is not an offence under section 3.
Section 6 has a wide application. In Breed v Cluett a builder built a
bungalow, sold it and afterwards falsely stated that it was covered by 10 years
guarantee by a particular organization. The divisional court held that this was
a statement as to the provision of services within section 14 of UK Act
(section 6 of the Kenya Act).
The distinction between this case and Hall
v Wickens under section 3 is that the provision of services may
involve continuing obligation and had there been a guarantee that builder
could have been called upon to provide the services during the guarantee
period. This connection between the supply of services and the defendant’s
statement was emphasized by the court of appeal in R v Bevelectric Ltd,
etc. The three defendants were a company carrying on a washing machine
repair business, a director and an employer. The statement that motors needed
to be replaced implied that a genuine assessment had been made on the extent of
any necessary repairs. They argued that the word provided in section 40
(1) (b) (iii) (Section 6. They argued that the word provided in section
40 (1) (b) (iii) (Section 6 (1) (b) (ii) of Kenya) covered statement as to
services which traders were offering to supply or when on the course of supply
but not those which had been provided in the past. The court of appeal
disagreed with their argument and upheld their conviction on the ground that a
false statement about services already provided is within the section if
it was connected or associated with the supply of the services in question.
Conditions
of application of section 6
Not all misdescriptions of services are
covered by the provisions of the Trade Descriptions Act since there is a
detailed list of matters in respect of which an offence may be committed.
Furthermore there is a mens rea requirement as to the facts of the offence
created. This matter apart, section 6 provide that it is an offence for any
person acting in the course of a trade of business to make a prohibited
statement. It follows that as in the case of section 3 an offence may be
committed by any person whether he be the supplier of services or not provided
he acts in the course of trade. Thus an offence may be committed buy someone
who is not the supplier but has an interest in the outcome of the
transaction entered by the customer. In Britain, a question arose whether a
trade includes he activities of the profession for the purpose of section
14 of the UK Act.
In R v Breeze it has been held that
section 14 (section 6 of Kenya) was capable of applying to false statements
concerning qualifications since such indication is likely to be taken to refer
to the quality of services provided.
For the purposes of section 6 a
statement must have been made . One obvious example of making a statement arises
when a statement is made by another person. It is possible for a
statement to be made without it being communicated to another. For example a
statement is made when it is published in brochures which are posted in
bulk to travel agents, when the message is passed by telephone, when the
information is pushed to clients, and when the information is relayed by the
persons to whom it is communicated.
Section 6 is not concerned with the
statement that induces a contract; it does not matter that an offending
statement is made after the conclusion of he relevant contract. Thus a mechanic
who makes a false statement about the work he has carried out on his client’s
car may still be treated as an offence under section 6 where he has already
paid for the work done.
Consumer Protection- Lecture 6
It is clear from section 6(1) of the
Act that the knowledge of the falsity of a statement or recklessness in making
the statement are alternative requirements. Section 6 (1) provides that it
shall be an offence for any person in any course of trade
(a) to
make a statement which he knows to be false or
(b) recklessly
to make a statement which is false.
Knowledge
of the falsity of a statement
At first sight the wording used in
section 6(1) (a) would appear to suggest that it is a mens rea offence.
However, the House of Lords in Wings Ltd v Ellis have analyzed
section 14 of the UK Act for Lord Scarman the basic issues between the parties
was whether proper construction of section 14 (a) where the defendant had no
knowledge of the falsity of the statement at the time of its publication but
knew of the falsity and at the time when the statement was made by the
complainant. The facts of this case were as follows: for 1981-82 winter season
the appellant tour operator had distributed to travel agent a brochure
giving details of accommodation provided for customers. Shortly after, the
brochure was distributed . The tour operator discovered that the brochure
contained a statement which was false to a material degree, namely that
the accommodation provided in a hotel in Sri Lanka was with air conditioning.
In May 1981 the mistake was discovered and steps were taken to mitigate its
effects but W had booked a holiday in January 1982 depending on an amended
brochure. At that time he read the brochure that tour operators were
aware that the statement was false. The House of Lords unanimously upheld
the prosecutor’s appeal against the divisional court which had
quashed the original conviction of the tour operators. The brochure was
inaccurate and the respondent knew that it was inaccurate and therefore W
was misled. The ingredient for an offence under section 14 of the Act were thus
compounded in view of the House of Lords to hold otherwise would be to emasculate
section 14 and to placed a premium on carelessness by the respondent. It was
pointed out that although the tour operators never intended to make a
false statement to W an offence has been committed under section 14.
The tour operator had not attempted to
put forward a defence under section 24 (section 19 of the Kenya Act) which
might otherwise would have been available that the commission of the offence
was due to a mistake and all reasonable precautions and due diligence had
been exercised to prevent the commission of the offence.
Lord Branden in a concurring speech
added that he would have regarded the false statement about air conditioning
contained in the respondent brochure as having been a continuing false
statement, that is as false statement which continue to be made so long
as such brochure was in circulation without effective correction.
Form this decision it appears that the House of Lords in this case held
that the offence created under section 14 (section 6 of the Kenya Act) is
in fact one of semi-strict liability.
Recklessly
Another distinction between this
offence and section 3 offences is that sections 6 also requires that the
person makes the false statement recklessly. A reckless statement is defined by
section 6 (2) (b) as a statement made regardless of the whether it is true or
false and whether or not the person making it had reason for believing
that it might be false.
Lord Parker CJ in Sunair
Holidays Ltd v Dodd stated obiter that the Act imported the common
law definition of reckless. In this case travel agents in their brochure
described accommodation at a hotel as twin-bedded rooms with private
bath, shower, WC, and terrace.. They had a contract with the hotel to provide
such accommodation. Two persons booked a holiday with them on this basis but on
arrival were given rooms without terraces. It was held by the divisional court
that no offence had been committed. At the time the statement was made
the accommodation existed and the statement was perfectly true. Nothing which
happen afterwards would alter the accuracy of the description when it was made.
Further the definition of reckless does not include negligence.
However a different view was taken by
the divisional court in MFI Warehouses v Nattrass. Here a mail order
company advertised goods for 14 days free approval and carriage free.
These offers were intended to cover only some of the goods in the advertisement
but appeared to relate to all of them. The company’s conviction for recklessly
making the false statement as to the provision of facilities was upheld on
appeal. The court considered that the chairman of the company had given
insufficient care to his perusal of the advertisement so that the company
had been reckless as to its content.
While this case to an extent throws
doubt on the dictum of Lord Parker and appears to give a wide meaning to the
words recklessly and the point of Sunair Holidays Ltd still stands. No
offence is committed merely because the trader fails to provide services with
the description provided that the services or accommodation existed when
the statement was made and provided that he then had intended on
providing them.
When
a statement is made
A question to be answered in Wings
Ltd v Ellis was what was meant by the word ”make” statement. In
section14 (1) [Section 6 (1) of the Kenya Act] the question is
particularly6 important in relation to brochures issued by tour operators and
others where many may be published and read by different members of the public
or a period of many months. Other statements in the brochure made when the
brochure is published or read by the members of the public .In R v Thomson
Holidays Ltd the court of appeal decided that a statement is made
only when communicated to someone. For example by reading although approving
the decision in Thomson as correct, the House of Lords has not
accepted the court of appeal’s reasoning. A statement may be made
although not communicated to anyone.
Future
Services
A decision showing that promises about
provision of services in future are not caught by section 6. In Beckett
v Cohen a builder agreed to build for the customer a garage like his
neighbours within ten days and did not do so. The divisional court upheld
the magistrate’s court dismissal of information. This was a statement
made in regard to the future. The Act could not be used to make a breach of
contract into criminal offence.
As the law now stands careful
analysis is required of the relevant statement to a ascertain whether
their promises in the nature of forecaster or whether the statement
although relating to services to be performed in future also contained a
statement of existing facts.
This interpretation of the section
erodes very substantially the protection afforded to consumers. Even so if the
accommodation is advertised which at the time of the publication of the holiday
brochure does not exist then the offence can be committed.
In R v Clarkson Holidays Ltd a
brochure stated that Clarkson hotels were were chosen for their cleanliness,
good food, and efficiency of service ad included a picture of a large modern
hotel with swimming pool. This turned out to be an artist’s impression. The
hotel which was still in the course of construction was not finished by the
time the holiday makers arrived and was never intended to be ready by then.
According an offence had been committed under the Act. Similarly in British
Airways Board v Taylor a prospective passenger was booked by BOAC on
a flight to Bermuda and a letter confirming the reservation had been
received. BOAC in common with many other airlines operated an overbooking
policy usually on correct assumption that some passengers will fail to arrive at
the4 airport but not seat was available for the prospective passenger when he
arrived at the airport. The House of Lords held that the statement in the
letter was false within section 16 [section 6 (2) of the Kenya Act] and in
particular it was stated that the facts illustrated the assumption of existing
facts and a promise of future conduct may both be found in one and the same
statement. The factual statement here was that booking would be confirmed when
the booking policy made it impossible to do this. However4, the appeal was
allowed in the airline’s favour on the technical ground that the British
Airways were not criminally liable for the act of the former BOAC.
Facilities
and prices
Section 4 of the Trade Descriptions Act
was concerned only with the price of the goods. Under section 4 false or
misleading indication as to price has been made an offence. However, there is
no provision under the Act in relation to false or misleading indications as to
price at which services are offered. In the UK this gap has been filled by
section 200 of the Consumer Protection Act 1987 which covers goods, services,
accommodation or facilities. However, before that attempts were made to
increase the price of services into section 14 [section 6 (2) of the
Kenya Act] by a broad interpretation of the word facilities in section 6. A
number of decisions of the divisional court show that the provision is to be
construed strictly. In Newell v Hicks, it was pointed out that although
the word facility is used widely in commercial circles to describe almost
anything available commercially. When the word appears in a criminal stature it
was wrong to stretch its meaning in that way.
In Newell, motor dealers
advertised a video cassette recorder absolutely free with every registration of
Renault car ordered within a specified period. The trade-in allowance of
old vehicles however was reduced where customers wished to take up the offer.
The divisional court held that the statement fell outside section 14 [section 6
of Kenya] because:
(i)
the offer of a free recorder was a statement about the supply of goods; and
(ii)
section 14 (1) did not cover a false statement about the price at which
services or facilities were provided.
Yet this case is not authority for the
proposition that section 6 has no application merely because the suppliers
statement relates to an ancilliary to goods. Thus in Bambury v
Hounslow it has been held to cover a three-month guarantee of a
second-hand car; also a statement in Kinchin v Aston Park Scooters that
the purchaser of a moped would receive a year’s insurance.
Defences
Section 19 of the Act [equivalent to
section 24 of the UK Act]:
i)
a mistake: applies to the person charged
ii)
reliance on information supplied by another person: useful for a retailer.
iii)
act or default of another person
Tesco Supermarket Ltd
v Natrass
There was a chain of supermarkets in
the UK. In one branch there was a notice that prices had been reduced placed
outside the supermarket. But the prices paid for items were higher than those
advertised. The supermarket was charged of false price indication. The offence
was committed by the branch manager but not the director. In criminal liability
of corporations the company could be held liable. The branch manager is
not the company and the company could not held liable. The defendant must have
exercised the necessary care and due diligence.
iv)
Accident: defendant claim that offence occurred due to accident
v)
Some other cause beyond. Unavoidable circumstances his control.
The liability for offenses under
section 3 is strict where the offence under section under section 6 is
committed if the trader knows the statement to be false and makes it
recklessly.
However, certain defences are
available. Section 19 (1) applies to both types of offenses and section 19 (3)
assist only in cases of prosecution under section 3 (b). Section 20 is confined
to innocent publication of advertisements.
The
general defense
The defense provided by section 19 (1)
may be used by the defendant when charged with the offense under section 6 in
relation to services or under section 3 (a) for supplying goods with false
trade description. However, the court of appeal decided in R v Southwood
that it is not available in respect of charge under section 3 (a) where the
defendant applied the description himself. This case is concerned with false odometer.
It was pointed out by Lord Lane CJ: “By his initial actions in falsifying
the instrument he has not taken any precautions let alone any reasonable
precautions.”
Section 19 (1) provides as follows: Any
proceedings for an offence under this Act save as here in the Act provided be a
defense for a person charged to prove:
(a)that the commission of the offence
was due to a mistake or reliance to information supplied to him or to the act
or default of another person or to an accident or other cause beyond his
control. It may be split into five defences. The defendant must prove that the
commission of the offence was due to any one of the following causes:
i) a mistake
As far as mistake is concerned this is
available only where the mistake is made by the defendant himself. It cannot be
used where someone else’s mistake is involved; for example an employer pleading
the mistake of an employee. See Birkenhead & District Cooperative
Society v Roberts.
ii) Reliance on information supplied to
him
This defence can be taken most of the
time by the retailer who generally relies on the information supplied to him by
the manufacturers.
Assignment
1.
Discuss how the Standards Act protects the consumer. Also examine the Kenya
Bureau of Standards in the protection of the consumer; or
2.
Discuss the provisions of the Weights and Measures Act relating to the
protection of the consumer. Also examine the role the Weights and Measures Act
department.
Due the week before exams.
Consumer Protection-Lecture 7
2. Reliance on information supplied to
him
In case of odometer readings the seller
may rely on the information supplied to him by the previous owner.
3. Act or default of another person
The defence most frequently relied upon
is that the offence was due to the act or default of another person, for
example, an odometer was run back by the previous owner. When the employer is
charged he may rely on the default of his employee. When the Act first came
into force it was thought that the defence could only be used where the
employee was in a junior position but it appears to have been quickly settled
that even where the person was a branch manager the defense is still available.
However, when the employer is a company it is necessary to distinguish between
those employees or officers who are the directing mind and will of the company
where their defaults are the defaults of the company and those employees who
are thus not identified with the company then the company can claim their
defaults as those of another person. In Tesco Supermarkets Ltd v Nattrass,
the House of Lords discussed the difficulties in cases where a corporation is
charged for criminal offences. In this case the supermarket at one of their
branches outside the supermarket advertised for a particular type of soap
powder at reduced price. However, the supermarket had ran out of the reduced
packs and when a customer bought a pack he was charged the full price for the
pack.
The House of Lords held that where a
person charged is a limited liability company the only person who can be
identified with the controlling mind and will of the company are the board of
directors, the managing director and any other superior officer to whom the board
has delegated full discretion to act independently from the board. Thus though
the general manager may be the company’s directing mind and will but the
supermarket branch manager was not accordingly since the offence was caused by
the failure on the part of the branch manager to ensure that sufficient packs
at reduced price were available Tesco were able to rely on his default. In
other words the House of Lords held that a branch manager of a large company
was another person it being not possible to identify him as the directing mind
and will of the company. Only senior members of the company could be so
regarded. It has been argued that this decision has undermined the
purpose of the Act. However in MacGuirre v Sitting Bourne Cooperative
Society it was pointed out that the defence was not available unless
all reasonable inquries had been made to try to establish that actual
person responsible for the offence and that it was not sufficient simply to
produce a list of all the staff who might have been responsible. Further, to
rely on this defence section 19(2) requires the defendant at least seven clear
days before the hearing to serve on the prosecutor a written notice giving such
information identifying the person.
4. An accident
The defendant may rely o the defense of
accident when he can prove that the cause of the offence was an accident.
5. Some cause beyond his control
If the crime has been committed because
of some cause or circumstances beyond the control of the defendant he can rely
on this defence.
These differences are available under
section 19(1 (a). But he still has to prove under section 19 (1) (b) that he
took all the precautions and exercised all due diligence.
Due
diligence defence
It is not enough for the
defendant to prove one of the five defences in section 19(1) (a). He must also
prove that he falls within what is now popularly known as due diligence
defence, namely that he took all reasonable precautions and exercised all
due diligence to avoid the commission of such an offence by himself
or in any other person under his control. The case law would seem to sup-port
the preposition that to avail himself of this part of the defence the accused
must show that he had set up a system of designed to prevent the errors
and that the system was adequately operated. These factors have generally been
considered by the courts in relation to the default defence particularly with
regard to its application in the areas of vicarious liability, odometers and
sampling.
Vicarious
liability
When an employer is charged with an
offence because of the conduct of an employee and endeavours to rid himself of
this vicarious liability by showing that the offence was due to the act or
default of the employee broadly the employer will be acquitted if he can show
that he is personally blameless. Obviously when this defense is used, somebody
is to blame. The question is whether the offence had occurred in spite of the
precautions and diligence of the employer. In Tesco Supermarkets the
House of Lords rejected the argument that the employer has to show that he and
all other persons to whom he has delegated responsibility are blameless. The
company was held to have satisfied the requirements of reasonable
precautions and due diligence under section 19 (1) (b) by having a chain of
command with a careful system of control and supervision even though one of the
cog in this machine , the branch manager of the supermarket, had failed to
carry out his responsibilities properly.
Odometres
The second area where due diligence
defence is of special significance relates to false odometer readings.
Sometimes a car dealer honestly supplies a vehicle with an odometer which
unknown to him had been tempered with by an earlier owner. Assuming that he can
prove that the offence was due to reliance on information supplied or the
default of another person, the question arises whether he can also prove that
he took precautions and was diligent. This normally involves checking which the
person from whom he bought the vehicle and if he has the registration document
with the previous owners to verify the mileage. However, in Neish v Gore
the divisional court said that it was impossible to lay down as a general rule
that a dealer selling a second-hand car must have the log book and check with
the previous owners. In that case the defence was available to a dealer who
bought from somebody with whom he had been dong business for years and resold
the car before receiving the log book from the seller.
Sampling
Where the suppliers dealing with large
quantities of goods and relying on sampling to show that they had been taking
reasonable precautions and with due diligence. In Rotherham Metropolitan BC
v Raysun(UK) Ltd, the defendants , large-scale importers of Far East
products imported once a year 100,000 packets of children’s wax crayons
from Hong Kong. Their agents in Hong Kong had samples analysed and had to
send back only adverse reports but none of such reports were received.
The defendants tested in England a single packet. They sold crayons as
poisonless. The black crayons contained excessive amounts of toxic
materials. The divisional court rejected their defense under section 24 (1)
[section 19(1) of Kenyan Act]. They had not checked that the Hong Kong
analysis were in fact taking place and their sample in England was very
moderate, thus they have not taken the reasonable precautions and there was no
diligency on their part.
Suppliers
defence
In Naish v Gore the dealer also
relied on the defence in section24 (3)[section 19 (3) of the Kenyan Act] this
is confined to the offence of supplying goods with a false trade description
under section 3 (b). the “defences “ in any proceedings for an offence under
this Act for supplying or failing to supply goods to which a false trade description
is applied it shall be a defence for the person charged to prove that he did
not know and could not with reasonable diligence have a ascertained that
the goods did not conform to the description or that the description had been
applied to the goods.
The comment made earlier with regard to
due diligence in section 19 (1) appear relevant here as the use of the
adjective “reasonable” rather than “due” is not intended to affect
or reduce the standard of diligence. For example in Simmons v
Ravenhill another odometer case the defence failed because in view
of low mileage of 19,000 km the dealer should have made inquiries with
the previous owner. The divisional court stated however generally it would be
unreasonable to expect a dealer to check with all the previous owners.
By-pass
provision
Although the so-called by-pass
provision in section 18 of the Kenyan Act is not a defence, it is appropriate
to deal with it at this point in view of its close interaction with the
defence in section 19 (1). Section 18 states “where the commission by any
person of an offence under this Act is due to an act or default of another
person that other person shall be guilty of the offence and a person may be
charged and convicted of the offence by virtue of this section whether or not
proceedings are taken against the first person.
Thus this section enables a prosecution
to be brought against a person whose act of default has caused another person
to commit an offence even if the other person has not been prosecuted.
Thus where A commits an offence but the real culprit is B, B may be prosecuted
for the offence committed by A , it is irrelevant whether or not proceedings
have been taken against A. The corollary is that if no offence is committed
by A, B cannot be prosecuted under this section. In Coupe v Guyett it
was suggested that section 23 (section 18)and section 24 (section 19) could be
fitted together where the first person referred to in section 18 has a defence
or merit and without reliance on section 19 it is not possible to operate
section 19 so as to render guilty the person whose act or default gave
rise to the matter in the compliant. It was argued in that case that section 18
comes into play only where the first person escape prosecution by taking
advantage of the due diligence defence under section 19.
Innocent
publication of advertisements
Section I (b) of the TDA upholds a
special defence in case of advertisements. In a proceedings for an
offence relating to the publication of advertisement the defendant is
free from liability if he can prove that
a)
the advertisement was received and published in the course of a business
involving such publication
b)
he did not know and had no reason to know that the publication would amount
to an offence under the Act
The defence protects not only the
publishers themselves, for example of newspapers and magazines but also those
who arrange for the publication of advertisements.
Consumer
protection in relation to services under the private law
The
role of private law in protecting the consumer in service sector
Services encompass a wide variety of
activities. They are as diverse as laundry, dry cleaning, furniture removal,
home improvements, education services, car maintenance and repairing, banking
and insurance services and professional services. The service sector of the
economy has expanded enormously during the 20th century
and the range of services offered to the public is extremely varied and it is
sometimes said that the modern economy has become a service economy and perhaps
more than half of output is generated by the service sector. The service sector
is covered by the law of contract and the law of tort.
Terms implied in a service contract by
the court where there is a contract in place certain terms may be implied or
inferred by the judges to reinforce the language of the parties and
realize their manifest intention. In Sameuls v Davies the plaintiff was
a dentist who agreed with the defendant to make a set of false teeth for
the defendant’s wife. The teeth were made and delivered but the
defendant refused to pay for them on the ground that they were so
unsatisfactory that his wife could not use them. There was a controversy
as to whether it was a contract for the sale of goods or for work and
materials.
The controversy was as to whether the
contract was for the sale of goods or for supply of work and materials but the
court of appeal held that in the circumstances of the case the question was
irrelevant if it was a contract for the supply of materials and goods the
provision of the Sales of Goods Act applies and if it is a contract of
provision of services then they would import into the contract a term
that the teeth would be reasonably fit for the purposes. The courts have
also imported into contractual transactions for a lease of house that it shall
be reasonably fit for habitation and the date fixed for the beginning of
tenancy in Smith v Marrable it was held that if the house was
invested with bugs or if the drainage was defective or a formal occupant
suffering from TB the tenant would be entitled to repudiate the contract
and recover damages.
Consumer Protection-Lecture
8
18th June 05
Private Law measures to protect
consumer in service sector
In Reed v Dean the
Plaintiff hired the defendants motor launch for a holiday on a river two hours
after he had set out the launch caught fire, the fire fighter was out of order and
the Plaintiff suffered personal injuries and lost all his belongings. The
defendant was held liable for his failure to make the launch as fit for
purposes of hiring as reasonable care would make it.
Sometimes the court may impose on
parties a term which is reasonable in the circumstances. In Liverpool
City Council v Irwin the defendants were tenants on the 9th
floor of a 15 floor tower block owned by the Plaintiffs. There was no
formal tenancy agreement. There was a list of tenants obligations prepared
by the landlord and signed by the tenants. There was no express
undertaking of any kind by the landlord. Owing to vandalism the
amenities of the block were seriously impaired so that the lifts were regularly
out of action. The stairs were unlit and the rubbish shutes did not
work. The defendant withheld payment of rent alleging that the plaintiffs
were in breach of implied term of conflict of tenancy. But the House of
Lords rejected this argument. It was necessary to consider what
obligations the nature of contract itself implicitly requires and since it was
not possible to live in such buildings without access to the stairs and the
provisions of a lift service, it was necessary to imply some terms as to these
matters. On the other hand it was not proper to imply an absolute
obligation on the landlord to maintain these services.
Absolute obligation on the landlord to
maintain these services, it was sufficient to imply an obligation on the
landlord to take reasonable care to maintain common paths in a state of
reasonable repairs. However in this particular case it was not shown that
the landlords were in breach of that implied term. Similarly in McIntyre
v Gallagher G was a plumber who had been employed to carry out plumbing
work in a row of tenements. This included the sealing off of some
pipes. One of the pipes was not properly sealed which after sometimes
leaked causing damage to the property on the lower floors for which the
landlord was liable. Evidence proved that the proper and workmanlike
method of sealing the pipe was to solder it. In this case G or one of his
workmen had only hammered the end of the lead pipe together which eventually
leaked. He was thus held liable for failing to carry out the job with
requisite level of his skill.
In Brett v Williamson a
building contract was arranged on either a fixed price basis or as in this case
on time and lime basis. The problem resulting from the unsatisfactory
workmanship are particularly difficult to resolve in this case the plaintiff had
undertaken to lay terrazzo tiles and having done so in a manner which the
defendant regarded as unsatisfactory was obliged to bring an action for
payment. It was argued by the Plaintiff that since such tile laying was a
specialist job but had been entrusted by the defendant to him who did not claim
to be a specialist, he could not complain that the work was not up to the
standard of a specialist. It was held that the standard of care required
was that of the type of practitioner which the client believed he was dealing
with but in Dickson v The Hygienic Institute it was said that a
contractor need attain only the skill he professes.
In Mackintosh v Nelson
Brett v Williamson case was applied to slightly different circumstances
where P claimed damages for loss sustained when seriously defective work was
carried out at her house. The defendant had been an art teacher for
several years before going into business on his own account as an industrial
cleaning contractor who also undertook window cleaning, external paint work and
large scale gardening. The plaintiff had admired a sun lounge which the
defendant had built at his own home and inquired whether he could build similar
work at her house. It was clear from the evidence that the defendant held
himself out as capable both of drawing the necessary plans and carrying out the
building work in a workman like manner. The defendant argued that in the
circumstances he should be held to the standard of an amateur builder. It
was held that where one who was not a tradesman and contracts to do work for
another, he must be held to have professed the requisite skill to do the job
which he had undertaken.
A different aspect of the problem of
the standard of the work arises where the issue is not the competence which the
tradesman professes but the advice or warnings which he gives to his customers
before carrying out the job. In Terret v Murphy the owner
of a furniture shop engaged the plaintiff to paint an extension to his
shop. He was eager to have the work completed and when the painter
reported that the supplies of the primer that he wished to use would not be
available for several days, he persuaded the painter to carry on with the
job. This was done despite warnings from the painter that the absence of
the primer could result in problems later on. Problems did arise and the
owner of the shop withheld payment. Finding in favour of the Plaintiff it
was pointed out by the court that if a house owner merely asks a job to be done
then the contractor would be liable if he did not draw attention to a
particular risk but despite an earlier warning from the painter that the work
should be executed in a particular manner and the house owner instructs to
proceed in a different manner, in that case the house owner is not entitled to
say that the warning was not loud enough or that he did not appreciate the full
measure of the risk.
Consumer services may be provided
pursuant to a contract or independently of any such contract. For example
no contract exists between a hospital which is providing charitable medical
services and the patient. However, in such cases also the provider of the
services nonetheless owes a duty to take reasonable care of the consumer.
This means that a person is responsible for exercising his skill in trade or
profession and the lack of such skill will be regarded as a breach of implied
term under the contract if a contract is in place or breach of duty of care to
take reasonable care under the law of Tort. Thus in professional services
the professional person must do his job with reasonable skill and care.
In Hunter v Hanley it
was said by Lord Clyde that “where the conduct of a doctor or indeed of any
professional man is concerned, the circumstances are not so precise and
clear-cut as in the normal case. In the realm of diagnosis and treatment
there is ample scope of genuine difference of opinion and one man clearly is
not negligent merely because his conclusions differ from that of the other
professional man nor because he has displayed less skill or knowledge than
others would have shown. The true test of establishing negligence in
diagnosis or treatment on the part of a doctor is whether he has been proved to
be guilty of such failure as no other doctor of ordinary skill would be guilty
of if acting with ordinary care.
This has been interpreted to mean that
if any other professional can be found to agree with actions of the doctor or
other professional feel there is no negligence under the law of tort.
However a close reading of this case suggests that this is going too far and
the test propounded by McNair J. in Bolam v Friern Hospital Management
Committee correctly provided the test when he said of the standard
required of a doctor that “it is sufficient if he exercises the ordinary skill
of an ordinary competent man exercising that particular art.” The test is of
ordinary competent men in that profession.
This view certainly seems to be
consistent with other professional negligence cases. A professional
person does not give an absolute undertaking to achieve a particular result
that would be inappropriate in most cases of professional services a doctor in
the nature of things cannot undertake to cure his patients and a lawyer can
give no guarantee to a client that he will win his case. In Eyre v
Measday Mr and Mrs Eyre decided that they did not wish to have any more
children and consulted the defendant a gynaecologist to discuss the
sterilisation of Mrs Eyre. The Defendant explained the nature of the
operation and emphasised that it was irreversible and must be regarded as a
permanent procedure. He did not explain that there was a small risk of
failure. The Eyres believed that the result of the operation would be to
render Mrs Eyre incapable of having further children. However, after the
operation Mrs Eyre did become pregnant and had another child. She
sued the gynaecologist alleging amongst other things that there was an implied
term that she would be rendered sterile by the operation. It was held
that the Defendant had undertaken to carry out a particular type of operation
rather than to render Mrs Eyre completely sterile and that his statement that
the operation was irreversible was not an express guarantee that the operation
was bound to achieve its objectives.
A case involving professional services
which does show that a standard higher than that of due skill and care can be
expected in certain circumstances is Green & Co. (Contractors) Ltd v
Bayhnam v Meikle & Partners the Plaintiffs who were building
contractors had agreed to design and build a warehouse for a customer.
They employed the defendants who were Structural Engineers to design the
warehouse and advice them that it was essential that it should be capable of
permitting materials to be moved around on fork lift trucks. Shortly
after the warehouse was handed over to the customer the floor began to crack as
a result of vibrations caused by the forklift trucks. The Plaintiffs
accepted that they were liable to the customers and brought this action to
recover by way of indemnity from the Structural Engineers the cost of
repairs to the building. It was held that on the facts as proved in
this case there was a term to be implied into the contract that the engineers
who designed the building that would be fit for the purpose which the plaintiff
had stipulated.
TIME FOR PERFORMANCE:
A major source of complaints from
consumers is failure of contractor to complete a job in good time or sometimes
to complete it at all. There are those cases where the days of
commencement or completion of the work has been agreed between the parties and
subsequently ignored by the contractor. The other is where no time has been
agreed for the completion of the work but the consumer thinks that the contractor
has taken unreasonably long time to complete the work. The contract may
specify the time by which the service is to be completed. This is subject to
the provision that the contractor will not be liable for failure to comply with
the time limit if his failure to do so is the fault of the client. In T
& R Duncanson v The Scottish County Investment Co. where a
plasterer was unable to complete his agreed task because the client had failed
to ensure that the other tradesmen completion of whose work was necessary to
allow him to start had kept to the schedules. If there is no complication
such as that as in this case, the question is whether the time is of
essence. There is no problem where the contract explicitly says that the
time is of the essence. It should not be necessary to use the particular
formula that time is to be of the essence. Any verse that clearly
indicates that this is the case should suffice.
The problem is more difficult where the
contract does not have such a provision, time will be assumed to be of the
essence. In a commercial contract it is probably not the case that the
consumer contracts will fall into this category. However if there is no
express term about time, a consumer is entitled to expect that a job will be
completed within a reasonable time. In Davidson v Guardian Royal
Exchange Assurance a case involving delay in repairing a car
where it was held that repairs must be completed within a reasonable
time. Similarly in Charnock v Liverpool Corporation C’s car
had been damaged in an accident and he took it to the Defendants for
repair. An estimate for the work required was agreed but the job was not
completed for eight weeks since he used the repairs for the cost of hiring a
car for 3 weeks, the period in which in his opinion the time taken for the
repair exceeded what was reasonable. It was held that there was an
implied term that the repairers could carry out the repairs with reasonable
expedition and on the facts, eight weeks was not a reasonable time.
In Charles Rickards Ltd v
Oppenheim O had placed an order in August 1947 with the defendants for
the construction of a body on the Chassis of his car. The job was to be
completed within 6 months or at the most 7 months. The job was not
completed within 7 months and the plaintiff kept pressing for delivery.
Eventually he wrote to the body builders on June 28th 1948 that he
shall be unable to accept delivery after July 25th. When the
car was not finished by the end of July O cancelled his order and when the car
was delivered to him in October he refused to accept it. It was held that
the original stipulation making time of essence of the contract was waived but
he was entitled to give reasonable notice once again making time of the
essence. On the facts of this case it was decided that the notice of 28th
June was reasonable and O was not obliged to take delivery.
GENERAL BACKGROUND
GOODS
SERVICE
DEFENCES
SERVICES
PRODUCT LIABILITY
ASSIGNMENTS ON Weights and
Measures and Standards
Product Liability
Product liability is basically a common
law remedy and can be on contract-based remedies and tort-basis remedies. In
contract-based remedies only parties to the contract can sue.
Wilson v Cockrell & Co. illustrate
the merchantable quality; the goods were defective. When she put the material
into the fireplace they exploded and she
Aylesbury Dairy Co. In this case a
person ordered some milk from a milk supplier and that milk contained typhoid
germs. The wife consumed the milk and got typhoid and late died. Husband sued
for breach of implied conditions under the Sales of Goods (fit for he purpose)
and he can either reject the goods as well he can sue for damages.
In Australian Knitting Co v Grant. In
that case a person bought some underwear from a retail. Some underwears were
shown to him and he bought one piece which he wore without washing
it and he got a skin disease, dermatitis. And sued under merchantable quality
under the Sale of Goods Act.
Manufacturer of product
Reach the ultimate consumer
In the form which left them-
intermediate examination—reasonable care in preparation and putting up the
product
Dalkon Shield
Product
liability
The majority of consumer complaints
concerning defective goods or by purchasers whose expectations are disappointed
liability for damage for a defective product is an amalgam of liability in
contract and the tort of negligence. In earlier times contract tended to
predominate in judicial pattern which produced what came to be known as the
privity of contract fallacy. The Sale of Goods Act provided a statutory
protection by implying terms into contract for the sale of goods the breach of
which gives rise to certain remedies conditions implied into contract of sale
that the goods should be merchantable and if the purpose for which the goods
were bought had been made known to the supplier the goods must be fit for
the purpose.
The liability under the Sales of
Goods Act is strict. It is irrelevant that the retailer is in no way to blame
for the defect and may lack opportunity to discover the defect nor is it
limited to protection against injury to person or property. That means in
appropriate circumstances there can be a liability for economic loss also.
Merchantable quality is defined as the
goods must be fit for the purpose or for purposes for which they are normally
bought as it is reasonable to expect having regard to the description,
the price and or the surrounding circumstances. So for example if a
person buys an electric blanket he can sue the retailer if it is unmerchantable
because its faulty wired and the person suffers electric shock and also if it
is useless and fails to heat the bed at all.
Refer to the following cases:
Frust v Aylesbury Dairy Co.
Godley v Perry. In this case a
child bought a catapult from a retailer by sample. It was defective and he
raptured his eyes when using the catapult. He sued the retailer on the grounds
that the catapult sold to him was not of merchantable quality. It was not fit
for the purpose of a toy and the retailor was liable for the condition of
the goods. The goods were bought according to sample shown.
Australian Knitting
Co v Grant
In Daniels & Daniels v R. White
& Sons Ltd & Tarbard, Mr. Daniels purchased a bottle of
lemonade from Mrs. Tarbard a retailer. It had been manufacture by R.
White & Sons and contained a quantity of carbolic acid. Mr. and Mrs
Daniel both became ill as a result of drinking it and as between
the buyers Mr. Daniels and the seller and Mrs Tarbard the condition implied by
the Sale of Goods Act were capable of applying and it was found that while
there was no implied condition of fitness since the buyer had not relied on the
seller’s skill or judgment. However, the implied condition of merchantable
quality applied and had been broken. Mr. Daniels was able to recover from Mrs
Tarbard damages for personal injuries without proving that she had been
negligent (i.e. strict liability under the Sale of Goods Act). Mrs Daniel could
not sue Mrs Tarbard but could successfully sue the manufacturers for the tort
of negligence, however on the fact she failed to prove breach of necessary duty
of care. Mr. Daniels could also have sued he manufacturers successfully in tort
had negligence been proved.
The limitation on effectiveness of
contract as a means of general consumer protection against defective
goods arise from the rules of] privity of contract. A person who is not a party
to a contract cannot benefit from that contract. So for example, if the mother
of the person who had suffered electric shock because of the faulty wiring of
an electric blanket cannot sue the retailer in contract even if suffers serious
injury. Also the purpose who has no claim in contract against the wholesaler or
the manufacturer because in that situation vertical privity denies him the
benefit of the conditions of merchantable quality or fitness for a
purpose.
Sometimes the courts have devised
certain measures to mitigate the consequences of the rules of privity of
contract. The courts have devised what is known as the doctrine of agency. In
Lockett v Charles a husband and wife took a meal together in a restaurant. The
husband ordered the food and paid for the bill. The wife contracted food
poisoning from contaminated food. It was held that the husband acted as his wife’s
agent and contracted on her behalf thus she could sue on contract for the
injuries suffered because of contaminated food. However, the circumstances
which allows an inference of agency will be strictly limited. For example, a
mother who buys goods for her child cannot be said to act as child’s
agent. She may be able to recover any loss to her caused by the injury to the
child. So if a small child is scalded by a faulty hot water bottle purchased by
mothers, the mother may sue on her contract with the retailer but the child
cannot. [This was the situation in Priest v Last. In that case the mother had
bought a hot water bottle but it was defective and because of that the child
was defected.] She will recover the cost to her of caring for her injured child
but the child will be unable to recover in contract for the pain and suffering.
Any action by the child must be in the tort of negligence. This means that
normally tort-based remedies will be pursued in those circumstances where the
consumer is debarred from using contractual remedies in cases where the
consumer having suffered damage to person or property has a choice of suing in
either contract of tort. He would normally have chosen to sue in contract
because the implied terms impose a strict liability.]In suing for damages has a
choice of suing in either contract or tort. He would normally have chosen to
sue in contract because the liability is strict.
Liability
and negligence
The development of liability in
negligence for defective goods was for the first time established in the case
of Donoghue v Stevenson. Prior to this case the ambit of liability
was extremely narrow due to the operation of what has become known as contract
fallacy. According to this fallacy there was no duty of care owed by the manufacturer
to any person who was not a party to a contract with him and who was injured or
otherwise suffered loss as a result of a defect in manufacturing of goods. This
contract fallacy was exploded by the decision of the House of Lords in Donoghue
v Stevenson where Lord Atkin laid down the following statement of
principle:
“A manufacturer of products which
he says in such a form as to show that he intends them to reach the
consumer in the form in which they left him with no reasonable possibility of intermediate
examination and with the knowledge that the absence of reasonable care in the
preparation or putting up of the products will result in an injury to the
consumers life or property owes a duty to the consumer to take that reasonable
care.”
Although this statement of principle
constituted a major step forward in the development of law it is the subject of
a number of restrictions, Donoghue v Stevenson has since been extended in its
range of application to goods and the principle of negligence derived from that
judgment remains of utmost importance even now.
Range
of defendants
Lord Atkin imposed liability on
manufacturers. The latter case law extended liability inter alia assemblers,
repairers, suppliers of drinking water, supplier of goods whether retailers or
wholesalers, builders and others. This category of persons to whom the
principle has been extended are characterized by the fact that they created he
danger or were responsible for the creation of the danger. The difficulty then
arises is whether the principle should also apply to the vendor of the
defective goods. Here the situation is different because the vendor has
not created the danger. He has simply sold the product to the consumer. Of
course such a vender could be liable in contract particularly under the Sale of
Goods Act where the subject matter of the contract between he parties was goods
but the question is: can the supplier also be liable in tort? It seems that he
may be liable in tort where he fails to inspect the goods and he is under a
duty to inspect the goods.
In Andrews v Hopkinson it was
held that a secondhand car dealer would be expected to check the steering on
used cars. Similarly in Watson v Buckley, Osborne, Garrett & Co.
wholesalers who failed to test for themselves a hair dye of dubious province
were held to be negligent. [they were selling a hair dye which was harmful to
customers; there was a duty for them to check] So the implication imposed upon
supplier does not arise in every case and even where it does arise it can be
discharged by selling the goods as seen and with all its faults and without
warranty.
Product
The second qualification in Lord
Atkin’s judgment is that it only applies to products. However the principle is not
confined to items such as food and drink but it applies to any product in any
normal domestic use including underwear, hair dye, motor car, houses and
installation in houses and even tombstones, nor is it confined to
consumers. In the strict sense it applies to the ultimate user of he product as
well as to persons within the close proximity of the product. Thus a child
scolded by the faulty hot water bottle purchased by her mother can sue in
negligence but less obvious person at risk may also be within the scope of the
manufacturer’s duty. In Barnett v H.J. Parker & Co, the proprietor of
a sweet shop was injured by a piece of metal protruding from a sweet. He was
able to recover damages from the sweet manufacturer. Similarly in Stennet
v Hancock a by-stander was held to be within the rule in Donoghue v
Stevenson.
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