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4(1)The Supply of Goods (Implied Terms) Act 1973 is amended as follows.E+W+S+N.I.
(2)In section 8 (implied terms as to title)—
(a)for “condition” (in subsection (1)(a)) and for “warranty” (in subsections (1)(b), (2)(a) and (2)(b)) there is substituted “ term ”; and
(b)at the end of that section there is inserted—
“(3)As regards England and Wales and Northern Ireland, the term implied by subsection (1)(a) above is a condition and the terms implied by subsections (1)(b), (2)(a) and (2)(b) above are warranties.”
(3)In section 9 (bailing or hiring by description)—
(a)in subsection (1) for “condition” there is substituted “ term ”; and
(b)after that subsection there is inserted—
“(1A)As regards England and Wales and Northern Ireland, the term implied by subsection (1) above is a condition.”
(4)In section 10 (implied undertakings as to quality or fitness)—
(a)for subsection (2) there is substituted—
“(2)Where the creditor bails or hires goods under a hire purchase agreement in the course of a business, there is an implied term that the goods supplied under the agreement are of satisfactory quality.
(2A)For the purposes of this Act, goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all the other relevant circumstances.
(2B)For the purposes of this Act, the quality of goods includes their state and condition and the following (among others) are in appropriate cases aspects of the quality of goods—
(a)fitness for all the purposes for which goods of the kind in question are commonly supplied,
(b)appearance and finish,
(c)freedom from minor defects,
(2C)The term implied by subsection (2) above does not extend to any matter making the quality of goods unsatisfactory—
(a)which is specifically drawn to the attention of the person to whom the goods are bailed or hired before the agreement is made,
(b)where that person examines the goods before the agreement is made, which that examination ought to reveal, or
(c)where the goods are bailed or hired by reference to a sample, which would have been apparent on a reasonable examination of the sample”;
(b)for “condition or warranty” (in subsections (1) and (4)) and for “condition” (in subsection (3)) there is substituted “ term ”; and
(c)after subsection (6) there is inserted—
“(7)As regards England and Wales and Northern Ireland, the terms implied by subsections (2) and (3) above are conditions.”
(5)In section 11 (samples)—
(a)at the beginning there is inserted “ (1) ”;
(b)for “condition” there is substituted “ term ”;
(c)in paragraph (c) for “rendering them unmerchantable” there is substituted “ making their quality unsatisfactory ”; and
(d)at the end there is inserted—
“(2)As regards England and Wales and Northern Ireland, the term implied by subsection (1) above is a condition.”
(6)After that section there is inserted the following section—
(1)Where in the case of a hire purchase agreement—
(a)the person to whom goods are bailed would, apart from this subsection, have the right to reject them by reason of a breach on the part of the creditor of a term implied by section 9, 10 or 11(1)(a) or (c) above, but
(b)the breach is so slight that it would be unreasonable for him to reject them,
then, if the person to whom the goods are bailed does not deal as consumer, the breach is not to be treated as a breach of condition but may be treated as a breach of warranty.
(2)This section applies unless a contrary intention appears in, or is to be implied from, the agreement.
(3)It is for the creditor to show—
(a)that a breach fell within subsection (1)(b) above, and
(b)that the person to whom the goods were bailed did not deal as consumer.
(4)The references in this section to dealing as consumer are to be construed in accordance with Part I of the Unfair Contract Terms Act 1977.
(5)This section does not apply to Scotland.”
(7)For section 12 (exclusion of implied terms and conditions) there is substituted the following section—
An express term does not negative a term implied by this Act unless inconsistent with it.”
(8)After section 12 there is inserted the following section—
(1)Where in a hire-purchase agreement the creditor is in breach of any term of the agreement (express or implied), the person to whom the goods are hired shall be entitled—
(a)to claim damages, and
(b)if the breach is material, to reject any goods delivered under the agreement and treat it as repudiated.
(2)Where a hire-purchase agreement is a consumer contract, then, for the purposes of subsection (1) above, breach by the creditor of any term (express or implied)—
(a)as to the quality of the goods or their fitness for a purpose,
(b)if the goods are, or are to be, hired by description, that the goods will correspond with the description,
(c)if the goods are, or are to be, hired by reference to a sample, that the bulk will correspond with the sample in quality,
shall be deemed to be a material breach.
(3)In subsection (2) above “consumer contract” has the same meaning as in section 25(1) of the Unfair Contract Terms Act 1977; and for the purposes of that subsection the onus of proving that a hire-purchase agreement is not to be regarded as a consumer contract shall lie on the creditor.
(4)This section applies to Scotland only.”
(9)In section 15 (supplementary)—
(a)in subsection (1), the words from “ “condition” and “warranty”” to “material to the agreement” are omitted;
(b)subsection (2) is omitted; and
(c)in subsection (4), for “condition or warranty” there is substituted “ term ”.
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