Jersey & Guernsey Law Review – October 2009

An introduction to the Supply of Goods and Services (Jersey) Law 2009

1  The freedom of parties to agree contractual terms of their own choosing is a fundamental tenet of Jersey customary law. The concept usually is encapsulated in the maxim “la convention fait la loi des parties”. Parties, however, do not always deal on equal terms. This is particularly so for a consumer who is ordinarily at a disadvantage in knowing precisely what his or her rights are under customary law and also finds little alternative but to contract on the printed terms of a retailer. Whilst customary law provides for certain obligations in a contract of sale (eg the seller’s obligation that goods are free from vices cachés), there has been, until now, no adequate statutory framework to protect the Jersey consumer from this inequality of bargaining position. Fortunately, we now have the Supply of Goods and Services (Jersey) Law 2009 (the “2009 Law”) which came into force on 1 September 2009.

2  The report of the Minister for Economic Development in 2008 accompanying the draft Law hailed it as “probably the most significant advancement in providing clarity of consumer contractual rights in Jersey’s history”. It is also important, however, to appreciate that the 2009 Law goes a great deal further than providing protection for consumers. This article highlights some of the key provisions of the Law and, where relevant, compares those provisions with the previous position under customary law. It also considers to what extent, if any, parties may be able to exclude rights, duties and liabilities arising under the 2009 Law. For a more detailed analysis of the 2009 Law, reference to traditional English texts^[2] will be necessary given that the 2009 Law is based upon various English statutes.

Background and drafting considerations

3  As will readily be discerned from even a brief perusal of the arrangement of its articles, the 2009 Law is based upon the Sale of Goods Act 1979, the Supply of Goods Implied Terms Act 1973 and the Supply of Goods and Services Act 1982. The decision to follow such English statutes was heavily influenced by the existing trade and commercial links with the UK and the fact that both retailers and consumers in the Island had some familiarity with the UK legal position.^[3] In fact, many local consumers have long proceeded under the impression (encouraged by the printed terms or notices of retailers) that they enjoyed the same rights as their UKcounterparts. As was noted in this Review in February 2002—

“… it is simply wrong for Jersey consumers to be lulled into a false sense of security that they have the same rights, and that the traders who operate in Jersey have the same duties, as their counterparts in the UK. The use of notices by some international companies in Jersey to the effect that their refund policies ‘do not affect [the consumer’s] statutory rights’ reinforces the consumer’s misapprehension that s/he enjoys such rights”.^[4]

4  The lack of clarity of and accessibility to the existing customary law for consumers had long been considered an unsatisfactory state of affairs and the target of many initiatives for change. Upon more detailed legal analysis, however, there were many aspects of the English law relating to the sale and supply of goods and services that could also be found in Jersey’s customary law and as developed in cases coming before the Jersey courts, particularly those in the latter half of the 20th century.^[5] Unfortunately, the road to achieving change has been a long one and many initiatives have stalled along the way.^[6]

5  The issue of consumer protection was examined afresh in 2001, when the then Industries Committee^[7] commissioned Mr Mark Boleat to produce a report on the state of consumer protection in the Island. Mr Boleat noted that Jersey’s framework for consumer protection was then “woefully inadequate”.^[8] His recommendations included the implementation of legislation to regulate distance selling (mail order, telephone sales and e-commerce) legislation to promote product safety and legislation to “imply terms into consumer contracts so as to prevent the consumer from being misled and dishonestly treated”.^[9]

6  Whilst Boleat’s recommendations were generally welcomed, some commentators felt that he did not go far enough.^[10] Nevertheless, legislation that has already been enacted covers the first of his two recommendations: Consumer Safety (Jersey) Law 2006 and the Distance Selling (Jersey) Law 2007. The 2009 Law seeks to address the last, its stated aim being “to achieve the policy objectives described [in Mr Boleat’s Review] and to clarify the respective rights of buyers and sellers in a way that is consistent with the underlying concepts of the Jersey law of contract”.^[11]

7  Following the Boleat Review and a JCRA Consultation in December of the same year,^[12] Jersey’s Trading Standards Department took the lead in pushing forward what has since become the 2009 Law; the first set of drafting instructions being settled in 2004. The drafting process involved detailed consideration of the Island’s customary law on matters of contract and relevant English legislation. Following lengthy consultation, in May 2008 the draft law and accompanying report was lodged au greffe for consideration by the States and, as stated earlier, has now been approved and come into force. The Law, however, will only apply where the relevant contract is entered into on or after 1 September 2009^[13] so that the pre-existing law will continue to apply to contracts before this date.

Sale of goods

General application

8  The 2009 Law applies to all contracts for the sale of goods^[14] including conditional sale agreements^[15] and, inter alia, imposes various “warranties” on the part of the seller. The meaning of “warranty” in this context is of garantie or obligation upon the part of the seller and is not intended to mirror the meaning of a warranty found in the Sale of Goods Act 1979 whereby a remedy in damages only is available.^[16]

9  A further important difference is the ambit of the 2009 Law which is wider than its English counterpart; the latter only applying by virtue of s 2(1) where there is a “money consideration, called the price”. Instead, by art 11 of the 2009 Law, the contract of sale must merely be “onerous” defined as “contrat à titre onéreux”. Accordingly, the 2009 Law merely requires value to be given rather than specifically money. The reference to “ascertainment of price” in art 17(3) being based upon “money factors or on other factors … or on both” reinforces this important difference.^[17] English cases such as Esso Petroleum Co v Commissioners of Customs & Excise^[18] would therefore be decided differently in Jersey and would fall within the 2009 Law as a contract for the sale of goods. Further, a contract of barter would also fall to be classed as one of sale in Jersey but would not be so described under the Sale of Goods Act 1979.

Customary law—hidden defects and examination

10  As noted above, under Jersey customary law, the seller guarantees that the goods sold are free from “vices cachés” or hidden defects. It is important to note that such a guarantee arises whether or not a seller is acting in the course of a business or acting in a private capacity. In the case of Kwanza Hotels Ltd v Sogeo Co Ltd^[19]the Court of Appeal stated that the doctrine applied not only to physical faults, but also to “legal limitations of the enjoyment of the purchaser of the thing sold”.^[20]

11  Domat, in his “Les Loix Civiles” at 34, refers to the promise of the vendor to retake the goods or lessen the price in the event of a vice or defect in the goods that render them “inutile à son usage, ou trop incommode” which may be translated as “unfit or so inconvenient for its use/purpose”. (The resonance between this and the requirements of s 14 of the Sale of Goods Act 1979 scarcely needs emphasising.)

12  Pothier (also being of high authority in this area) at para 203 of his Traité du Contrat de Vente stated that to constitute a vice caché a defect must be of sufficient significance such as to render the goods useless, nearly useless or “hurtful” for the purpose for which the goods are used—

“Le vendeur, par la nature du contrat de vente, est tenu de garantir l’acheteur, que la chose vendue est exempte de certains vices qui sont de nature à rendre ou presque inutile, ou même quelquefois nuisible, l’usage pour lequel cette chose est dans le commerce”.

13  Pothier goes on to describe the constituent elements to an action by the purchaser for breach of this guarantee, which in translation are as follows—

“… there must be a concurrence of four things: 1. the defect must be of the number of those, which, according to the local usage, are considered redhibitory; 2. it must not have been known by the buyer; 3. it must not have been excepted from the obligation of warranty, by a particular clause of the contract; and 4. it must have existed at the time of the contract”.

14  The seller can, therefore, escape liability upon one of four grounds: (i) the defect is not serious enough (but see further below); (ii) the purchaser knew (or ought to have known) of the defect; (iii) there is a clause contained within the contract excluding the seller’s liability (but note the limits on this below); and (iv) the defect did not exist at the time that the sale took place.

15  As regards (ii), Jersey customary law therefore imposes a positive and arguably rather onerous duty on the purchaser to examine the goods prior to purchase. In essence the purchaser is fixed with the knowledge that a theoretical examination should have revealed. As was stated in Kwanza:

“A fault is not ‘hidden’ if the purchaser could have discovered it either by examining the thing sold himself or (as Pothier expressly said) by getting it examined by somebody better qualified. The critical question is whether the fault would have been revealed by an examination, more than superficial but less than minute, such as a reasonably careful purchaser could have made either himself or through someone appointed for the purpose. This does not mean an examination involving taking the thing sold to pieces or, on the sale of a building, such steps as taking up floors or removing wall coverings”.^[21]

16  The Jersey courts have held this duty to extend even to an examination that was not customary to carry out (see Kwanza^[22]) and as including a duty to have a horse vetted to determine its age, which was argued in that case to be material to the purchaser,^[23]and even the removal of the underseal of a Porsche to reveal corrosion.^[24]

17  In these respects, it is submitted that Jersey case law has somewhat drifted away from the safe anchorage of Pothier and Domat who both refer to the fact that the defect must “easily” be perceived^[25] although it is fair to record that authority is not altogether consistent in this area as the Court of Appeal noted in Kwanza.^[26]

18  Pothier goes on to say at para 235 of his Traité, that even defects that are not serious enough (ie not “redhibitory”) will still give rise to liability on the part of the seller, if he knows of them, but has failed to warn the purchaser. Refreshingly, Pothier emphasises how important it is that the parties act in good faith.

Differences under the 2009 Law—satisfactory quality and examination

19  Now the 2009 Law largely mirrors the current English statutory position and provides firstly by art 23(1) that there “is no warranty about the quality or fitness for any particular purpose of the goods supplied under a contract of sale of goods”. Article 23(2) then provides that 23(1) shall have effect “(a) despite any rule of customary law; (b) except as provided by this Article and Articles 24 and 25; and (c) subject to any other enactment”.

20  As an exception to the general rule, art 23(3) provides for the position where a seller supplies goods under a contract of sale in the course of a business. In such circumstances there is an implied term to the effect that “the seller warrants that the goods supplied under the contract are of satisfactory quality”.

21  “Quality” is defined in art 4^[27] and 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 for them (if relevant) and all other relevant circumstances”.^[28] In the event that the purchaser is dealing as a consumer^[29] then such circumstances may include public statements (including labelling or adverts) as to the specific characteristics of the goods.^[30]

22  It is important to note the various changes from the customary law position. Firstly, art 23(3) only applies when the seller is acting in the course of the business. Secondly, there is now no requirement for the purchaser to examine the goods, but where s/he does, defects that that particular examination ought to have revealed cannot be the subject of a subsequent complaint by the purchaser. (The position is the same where the faults are pointed out to the purchaser prior to sale.^[31]) Finally, there is greater clarity and provision in the 2009 Law as to what renders the goods defective and, indeed, is in terms that are more favourable to the buyer than arguably exists at customary law. Consumer expectations are no doubt higher now than they were several centuries ago (for instance when Pothier was writing) and such a development appears entirely reasonable if the law in this area is to avoid being “set in the aspic of the 18th century”.^[32]

23  Other provisions to note on examination of goods under the new Law are arts 63 and 64. Pursuant to art 64, a buyer is deemed to have accepted goods on various grounds and, for example, if he has had “a reasonable opportunity of examining them”.^[33] The effect of such provisions is not to bar all relief but means that the purchaser can no longer reject the goods on the basis that the contract is repudiated and must instead sue for damages. This is unfortunately not expressly stated but is implicit from art 88 of the 2009 Law “Remedy for breach of contract” which sets out the buyer’s right “in any case, to claim damages” and also to reject the goods where the contract can be treated “as repudiated”. This is based upon the provisions of the Sale of Goods Act 1979 and further follows Jersey case law such as Hamon v Webster^[34] to the effect that a contract can be terminated for a repudiatory breach of contract and without prior recourse to the court. (Hamon v Webster is particularly noteworthy for its statement that “Jersey law was the same as English law in this area” and that this reflected “the requirements of a modern commercial community”.)^[35]

24  The Law also goes on to provide that, subject to certain specified exceptions, where a seller sells in the course of business and the buyer makes it known expressly or by implication any particular purpose for which the goods are being bought, the seller warrants that the goods are reasonably fit for that particular purpose, whether or not that is a purpose for which such goods are commonly supplied.^[36] This mirrors the English position.

Private sales

25  Completely unlike the position under the Sale of Goods Act 1979, however, is art 24 which deals with the position of private sellers (ie those not selling in the course of a business). Given that s 14 of the 1979 Act protects buyers only when the seller acts in the course of a business, whereas Jersey’s customary law position applied to all sales and had no such restriction, a decision was required as to whether or not the 2009 Law should seek to preserve the wider Jersey position, to follow the UK—even if this meant a narrowing of the protection afforded to consumers—or to adopt a some intermediate position. The latter option proved to be the preferred course and felt to be consistent with Pothier’s duty of good faith to retain certain minimum obligations upon a private seller. It gave rise to art 24 of the 2009 Law.

26  By art 24(1), a private “seller warrants that the seller has disclosed to the buyer all defects in the goods that render the goods not of satisfactory quality, being defects of which the seller is aware”. However, art 24(2) is important because it provides an important qualification to this warranty which only applies to the extent that had the seller been acting in the course of a business, there would also have been a breach of the warranty provided in art 23(3). Putting it the other way round, which may be more digestible, a private seller would only be liable, therefore, to the extent that a business seller would also have been liable and he was aware of the defects. (The disclosure of such defects as expressly required in art 24(1) being an aspect also considered in a business sale where the warranty does not apply to defects “specifically drawn to the buyer’s attention before the contract is made”.^[37])

27  Further warranties as to description^[38] and title^[39] are also implied into all contracts for the sale of goods (and whether or not the seller is acting in the course of a business.) Under art 22, where sale is by description, the seller warrants that the goods will correspond with that description. As to title, the seller’s warranty that s/he has the right to sell the goods at the time property in the goods is to pass and that those goods are free and will remain free from charges and encumbrances corresponds with, for example, Pothier’s account of the obligation of the seller to “to defend and warrant the buyer against all evictions, in relation to the thing [sold]”.^[40]

Sale by person not the owner

28  In general, contracts in England and in Jersey may suffer from defects that have been described as either rendering the contract entirely void (void ab initio) or merely voidable and in the latter case, the contract exists until such time as it is avoided. In Selby v Romeril^[41] however, such well understood terminology was apparently replaced by the French classification of nullité absolue and nullité relative which in fact entail different legal consequences and arguably has led to confusion in this area.^[42] More generally, since the maxim that possession of goods gives title (en fait de meubles, possession vaut titre) has recently been found not to apply in Jersey (see Mendonca v Le Boutillier),^[43] the 2009 Law is notable for giving clarity and a degree of protection to buyers of goods by ensuring that they receive good title.

29  Article 49 of the 2009 Law (“seller with voidable title”) mirrors s 23 of the Sale of Goods Act 1979 and enables buyers, in specified circumstances, to obtain title to goods despite the fact that the seller’s title is based upon a voidable contract and therefore capable of being set aside. Similarly art 50 (“seller in possession after sale”) and 51 (“buyer in possession after sale”) make provision for good title to be passed to a third party on a subsequent sale when otherwise good title would not have been capable of being conferred. Interestingly, even at customary law, Pothier refers to certain exceptions to the nemo dat quod non habet rule and for example at para 320 to his Traité du Contrat de Vente, that a seller in possession of goods that have already been sold, may still pass good title to a third party: this being the effect of s 24 of the Sale of Goods Act 1979 and now also art 50 of the 2009 Law.

A brief guide to the buyer’s remedies

30  It is impossible to examine the numerous other provisions of this statute that relate to contracts of sale in an article of this length, but there is an important area that should be highlighted and that relates to remedies. Parts 8–11 of the 2009 Law deal with the performance of the contract, the rights of the seller and buyer and the various actions for breach of contract that may be brought. In respect of a buyer of goods, there are a number of important issues which merit some mention and clarification if only because of their complexity.

31  Aside from specific performance^[44] of a contract under art 87, the buyer’s general remedies are set out in art 88. This consists under art 88(1)(a) “in any case, to claim damages” and under art 88(1)(b) to reject the goods “where the breach is material” and “to treat the contract as repudiated”.

32  Where, however, “the buyer deals as consumer”, ie where the seller acts in the course of a business, the buyer does not so act and the goods are of a type ordinarily supplied for private use or consumption (see art 2), then there are extra rights and safeguards. By art 88(2), for example, breaches of the seller’s warranties under the 2009 Law are automatically deemed to be a material breach and therefore give rise to a right to reject the goods. In non-consumer cases, however, it will be necessary for the buyer to show that the breach is sufficiently serious to be described as “material” and this is evidently intended to prevent abuse of a right to reject by taking advantage of a trivial breach when the parties are there likely to be dealing on equal terms. In England, the comparable (but differently worded section) is s 15A of the Sale of Goods Act 1979. Non-consumer cases could of course involve both seller and buyer acting in the course of a business but also a private sale covered by art 24 of the 2009 Law.

33  Where for example a right to reject the goods has been exercised or there has been non-delivery, art 90 of the 2009 Law also makes clear that the buyer may “recover money paid … if the objet for the payment of it has failed”. This article mirrors s 54 of the Sale of Goods Act 1979 but note should be made that a reference to a failure of “consideration” has been omitted given that Jersey contract law is underpinned by cause and not consideration. The inclusion of art 90, however, is interesting because hitherto Jersey law has not been wholly clear as to whether or not the concept of a total failure of cause/consideration exists in this jurisdiction and as to its precise theoretical basis. The Jersey Court of Appeal appears to have thought that it did exist in Burke v Sogex International Ltd^[45] although it left open the question as to whether or not “consideration” or “cause” was the relevant element. In fact, it is striking that a parallel between the English concept of a failure of consideration may be made with an action en nullité^[46] and further, the failure of a party to perform his/her obligation would justify an action en résolution under French and Jersey law to similar effect. The drafters of art 90 of the 2009 Law clearly also felt this to be the case because they made reference to these specific actions in the article.

34  In consumer cases, however, it is extremely important to be aware of a raft of additional rights that are conferred upon a buyer under Part 10 of the 2009 Law. Article 80(3) provides a rebuttable presumption that goods that did not conform to the contract of sale at any time within 6 months of delivery (eg were defective) also did not conform at the date of delivery. This, of course, makes the buyer’s task all the easier from an evidential perspective of pursuing his remedies.

35  By art 79(2), the buyer is given the additional rights to require the seller to repair or replace the goods, or in certain circumstances to reduce the price by an appropriate amount or rescind the contract. It is noteworthy that the seller cannot insist on any of these alternatives but where the remedy chosen of repair or replacement is not possible or is disproportionate to another alternative, the buyer cannot insist on his preferred option. When neither repair nor replacement is an option, diminution in the price or rescission are then available. (See art 81.) In such circumstances, rescission is in addition to the right to reject the goods under art 88^[47] but suffers from the obligation to give some allowance for use of the goods under art 81(3) and also under art 83(5) (“powers of the court”). Chitty on Contracts^[48] observes that as the common law remedies of rejection and/or damages are normally superior for a buyer, “advisers may find it prudent to take care not to fall by accident into some of the procedures” of this Part.

36  Aside from the remedies touched upon in the 2009 Law itself, it is also important not to ignore other causes of action and remedies that may arise, for example, as a result of misrepresentation or in tort but which are outside the scope of this article.

Hire-purchase

37  Hire-purchase agreements are defined in art 1 as involving the hire of goods but where the property in the goods will pass to the hirer in specified circumstances, most commonly by the exercise of an option. Commonly, the hirer will take the goods (often a vehicle) on hire-purchase from a finance house (“the supplier”), having been introduced to that finance house by a dealer (“credit-broker”) who has sold the goods to that finance company.

38  Different provisions of the Law apply to hire-purchase agreements and notably Part 5 (“warranties in hire-purchase”) and Part 7 (“effect of certain contracts relating to motor vehicles”). Particular articles of Part 11 (“actions for breach of contract”) also apply to hire purchase agreements.

39  Again, there is no warranty about the quality or fitness of goods unless the supplier (as defined in art 1) supplies the goods in the course of a business,^[49] which ordinarily would be the case. There are similar implied warranties as to description and title as for contracts for the sale of goods.^[50]

40  In fact, given pre-existing Jersey case law in this area,^[51] which has tended to follow the UK position, much of these legislative provisions that apply to hire-purchase will not be too surprising. One point that should be noted, however, is the interaction between existing case law and the 2009 Law. In Julian S Hodge Bank (Jersey) Ltd v Richomme^[52] the Royal Court somewhat controversially accepted that the dealer in a hire-purchase agreement was and should be viewed as the agent of the finance company in respect of representations made by the dealer. Such a position seems now well established in Jersey and obviously operates in the hirer’s interest because it permits the hirer to hold the finance company liable for the defaults of a third party and with whom there is usually no direct contractual relationship. Certain provisions of the 2009 Law reinforce the pre-existing position by fixing the supplier or finance company with the acts of others, such as the advertising campaign of the manufacturer where the hirer deals as consumer under art 31(2) (“satisfactory quality”) or the knowledge of the credit-broker that the goods were being hired for a particular purpose under art 34(5) (“warranty as to quality or fitness”).

41  One of the main reforms of the 2009 Law, however, is to improve the position of innocent purchasers of vehicles that turn out wrongly to have been sold because they are subject to a hire-purchase or conditional sale agreement. Pursuant to art 53(2) if the third party is a private purchaser and purchases the motor vehicle in good faith^[53] and without actual knowledge of the first agreement,^[54] then “the disposition shall have effect as if the supplier’s or seller’s title to the vehicle has been vested in the hirer or buyer immediately before the disposition”.

42  This position is in contrast to that prior to the Law, where the third party purchaser in such circumstances would not have acquired good title to the vehicle. The effect of the new Law is that, for example, the supplier under a hire-purchase agreement, commonly a finance company, will now only have recourse against the hirer who should not have sold the vehicle on. Under the customary law (which will of course still apply to contracts made prior to 1 September) the third party purchaser would be liable (in conversion) to deliver up any such motor vehicle to the supplier or, alternatively, in damages. The fact that the sale was made by a non-owner does not, of itself, provide a defence.^[55]

Supply of services

43  Part 4 of the 2009 Law makes provision for the supply of services and, inter alia, specifies various warranties that are given by a supplier. Whilst such provisions are useful in providing clarification, there is little contained in this Part that will cause surprise to those familiar with the pre-existing non-statutory position.

Exclusion clauses

Customary law

44  As has been stated at the start of this article, the immediate difficulty with applying, without qualification, the concept of “freedom of contract” is that parties do not always deal on equal terms. Under Jersey law there are, however, some limits to such a maxim, as is referred to in the case of Wallis v Taylor^[56] where Pothier (cited once again) was approved to the effect that the contract must not contain anything that is contrary to law or “good morals”, and that the agreement is reached between parties capable of entering into a contract. Further, in Basden Hotel Ltd v Dormy Hotel^[57] the Royal Court stated that the phrase contractual terms “contrary to the law”, included terms that were contrary to public policy. The court, however, left unexplained how one was to discover what public policy was, upon any given contractual term.

45  Given the wide and generally unregulated use of exclusion clauses in Jersey, it is difficult to see which clauses would necessarily be struck down as void against the test articulated above. Pothier does give one particular example, however, at para 211 of his Traité du Contrat de Vente. Having described the duty of a seller of goods to make known to the purchaser any defect in the goods that the seller is aware of, Pothier then states that a deliberate concealment of such defect would mean that the seller would be deprived of the right to rely upon any contractual clause exempting the seller from liability for defects in the goods sold. In essence, it would be a fraud (dol) for the seller to rely upon such a clause. Such a statement of principle further finds support in Steelux Holdings Ltd v Edmonstone ^[58] where Poingdestre was cited as to his treatment of réticence dolosive.

46  Further developments in respect of the treatment of exclusion clauses include the case of United Dominions Corporation (CI) Ltd v Pinglaux^[59] where the Royal Court followed the then English position that a person “should not be permitted” to rely upon an exclusion clause when in fundamental breach of contract. However, after the House of Lords decision in Photo Productions Ltd v Securicor Transport Ltd^[60]not to continue with such a doctrine, it remains unclear what the correct legal position is or should be in Jersey: Lydan Developments Ltd v Medens (Jersey) Ltd.^[61] The Lydan case is, however, authority for the fact that the Jersey courts will interpret an exclusion clause strictly and against the party who seeks to rely upon the same.

The position under the 2009 Law

47  It will be readily apparent that Jersey has had no clear approach to the problems posed by exclusion clauses and notably has failed to implement any statutory control. By virtue of art 91 of the 2009 Law provision is in fact made to permit the exclusion of rights, duties or liabilities in respect of a contract for the sale of goods, supply of services or a hire-purchase agreement:

“(1) If a right, duty or liability would arise, by the operation of this Law, under a contract, the right, duty or liability may be negatived or varied by express agreement, or by the course of dealing between the parties, or by such usage as binds both parties to the contract.

(2) However, an express term does not negative a warranty under this Law unless inconsistent with it”.

48  Fortunately, under art 94(3) regulations may be made inter alia preventing or restricting the use of exemption clauses or unfair terms but only in relation to the 2009 Law. No wider statutory control is provided for and none is currently under consideration, which some may find regrettable.^[62] The only problem is that at the time of writing, the 2009 Law has come into force and permits the exclusion of the protective provisions of this statute, but no regulations have yet been made regulating such clauses. It is to be hoped that the mischief that this permits is more perceived than actual, not least given that businesses depend upon their reputation in a small island community. However, even assuming that most parties might not deliberately attempt to exploit such a lacuna, there are those that might unwittingly do so through ignorance of what is ordinarily expected. The problem may be particularly acute because it is unclear whether or not even the limited customary law control of such exemption clauses is ousted by the clear wording of art 91. Whilst art 95(2) generally preserves the customary law position this only applies insofar as it is not inconsistent with the 2009 Law. Accordingly, it is submitted that for this brief period between the 2009 Law coming into force and the anticipated regulations, there is no effective control of exclusion clauses that are expressly permitted under art 91. Of course the regulations could be made retrospective but this is highly unlikely and, in itself, could be subject to challenge.

Conclusion

49  The 2009 Law has been long awaited. Nevertheless, it represents a bold and rather courageous move when the future direction of Jersey’s contract law has been very much open to debate. In its first few weeks, it appears to have been generally welcomed by consumers but there is a degree of suspicion by some businesses which are concerned that it will cause them hardship. Clearly, businesses will need to review their terms and conditions and general policies so as to ensure that they do not fall foul of the law, but it is hoped that the 2009 Law (and anticipated regulations) will in fact improve and clarify trading practices to the ultimate benefit of all concerned. It is also hoped that the 2009 Law will also provide some added impetus for reform of the procedures in the Petty Debts Court which will inevitably have to grapple with the smaller sized claims brought under the 2009 Law. Consumers, in particular, who now enjoy a plethora of rights under the 2009 Law, should not be dissuaded from using the court process by undue complexity or the prospect of a large legal bill should they lose because the other side decided to instruct a lawyer.

Timothy Hanson is a barrister, advocate and partner of Jersey law firm Hanson Renouf (www.hansonrenouf.com). Caroline Marr is a lawyer and associate of Hanson Renouf.