Supply of Goods and Services (Jersey) Law 200907 Mar 2012
The Supply of Goods and Services (Jersey) Law 2009 (the "Law") came into force on 1 September 2009. The Law is aimed at consolidating consumer protection in relation to contracts for the supply of goods, hire purchase arrangements and the supply of services. It should be noted that the Law only applies to agreements entered into on or after 1 September 2009 and does not therefore impact upon pre-existing contractual arrangements.
The Law is primarily concerned with contracts for the sale of goods, enhancing the position of the consumer through the introduction of certain automatically implied warranties as to satisfactory quality, title, description and disclosure of defects.
However, what will be of more relevance to Jersey law firms, trust companies, banks and the financial services industry as a whole, are the provisions of the Law dealing with the supply of services, which impose the following warranties and terms (unless they are expressly excluded or varied):
- a warranty that the service will be carried out with reasonable care and skill;
- a warranty, if the time for the service to be carried out is not fixed by the contract or left to be fixed in a manner agreed by the parties to the contract or determined by the course of dealing between the parties, that the service will be carried out within a reasonable time; and
- an implied term, if the price of the service is not determined by the contract or left to be determined in a manner agreed by the parties to the contract or determined by the course of dealing between the parties, that the person benefiting from the services shall be bound to pay a reasonable price.
Whilst the operation of customary law previously had the effect of implying such terms to some extent, from 1 September 2009 these terms received statutory force. The warranty as to care and skill automatically applies to all contracts, whilst the warranty for time of performance and the implied term as to price, apply only in the absence of express wording in the contract or an established course of dealing between the parties.
A breach of any of the terms implied by the Law will give rise to a remedy in damages. The Law does however, provide that the terms may be excluded or varied in the following ways:
- by express agreement between the parties, although an express term will only negate a warranty under the Law if it is inconsistent with it and the implied warranty that a service will be carried out with reasonable care and skill cannot be excluded or resulting liability restricted;
- by the course of dealing between the parties; or
- by such usage as binds both parties to the contract.
There would appear to be a degree of ambiguity in the wording of the provisions governing exclusion of the implied terms and the statute does not provide any further clarification as to their interpretation. However, it is likely that a single clause in a relevant agreement will (if appropriately worded) be sufficient for the suppliers of a service to exclude the new terms, provided that such clause expressly negatives the relevant warranty under the Law in that it is clearly inconsistent with it. Suppliers of professional services may, however, want to consider whether there could be any factor that would militate against a general exclusion of the statutory implied terms, either due to rules of professional conduct to which they are subject or simply due to the perception which might result from, for example, an exclusion of any warranty as to quality of service.
It is worth noting that the Law provides scope for the States to introduce changes to it in the future. The States have wide-ranging powers under the Law to exempt certain contracts from the provisions of the Law, impose additional terms and restrict or prohibit exclusion of the terms implied by the Law. They could, therefore, remove the current ability to exclude the statutory warranties if it was felt that their routine exclusion was leading to abuse of consumer rights. Indeed, such restrictions have been brought into effect in relation to the exclusion of certain seller's warranties under contracts for the sale of goods and suppliers warranties underline purchase contracts, and (as noted above) to prevent mitigation or exclusion of a supplier's implied warranty in a contract for provision of services that the service will be supplied with reasonable care and skill. None of these restrictions, however, apply to:
- contracts of insurance;
- contracts relating to intellectual property rights;
- contracts relating to the formation, constitution or dissolution of a body corporate or partnership; or
- contracts relating to the creation of transfer of securities or interests in securities.