Lloyd's Maritime and Commercial Law Quarterly
CONTRACTS OF HIRE AND THE SUPPLY OF GOODS AND SERVICES ACT 1982
Professor N. E. Palmer
Head of Department of Law, University of Reading.
Introduction
Sections 6–10 of the 1982 Act attempt to create substantial parity between the terms implied in a lessee’s favour under a contract of hire and those implied in a buyer’s favour under a contract of sale. Whereas the buyer has enjoyed this statutory protection since 1893 (with amendments in 1973 and 1977) the hirer has had to wait until 90 years after the Sale of Goods Act 1893 before being given the same measure of protection.
The relevant sections of the Act did not come into force until 4th January 1983. Until that time, contracts of hire and leasing continued to be governed by the old Common Law provisions: ss. 20(3), 20(5). Unlike Part II of the Act (which deals with contracts for services) ss. 6–10 are not purely declaratory of the pre-statutory position. They extend and strengthen the terms implied into contracts of hire, both in the range of terms enacted and in their individual content. The degree to which the sections go beyond mere codification is difficult to determine with precision, because the preexisting Common Law was itself uncertain in many respects. But it is probably true to say that the Common Law terms implied into hirings were inferior to those implied into sales in four important respects:
- (1) The terms in contracts of hire were fewer in number than those in sales; or at least, there was no secure Common Law authority for the existence in hirings of the full range of terms implied by statute in sales.
- (2) According to the bulk of authority, those terms themselves had a lower contractual status than those in sales; instead of being characterized as conditions, they were normally characterized as mere warranties or, at best, innominate terms.
- (3) In at least one case (the implied term as to reasonable fitness) the Common Law authorities tended to impose a lower standard of liability on the lessor than the Sale of Goods Act imposed on the seller and to suggest that responsibility for their breach was not strict but depended on the failure to exercise some degree of care.
- (4) In contrast to the Supply of Goods (Implied Terms) Act 1973, the lessor remained capable until 1st February 1978 of contractually excluding liability for breach of the terms implied in the lessee’s favour. Not until the Unfair Contract Terms Act 1977 was any control imposed upon such exclusions equivalent to that operating in sales: s. 7. Even now, the lessor enjoys more generous treatment in the matter of exclusion clauses than his commercial counterpart, the seller or other transferor of title to goods, or the lessor on hire-purchase.
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