Question - Contract Law

krpc

Hello,

A curious legal question:

There are 2 parties, person A and person B, and eachs agrees to a contract (including Terms & Conditions).

Person A is a business/sole trader and person B is a consumer.

The contract commenced in circa 2005, but person A had amended it between then and now (sometime in 2006 or 2007) but had failed to provide notice of this amendment to person B.

The contract states that should an amendment be made to it then person B would be supplied 1 months notice. Person B received no notice but continued using the service that Person A's business provided on the understanding that the service was governed through the original contract.

Person B discovered the amendment, circa 2009, due to a degredation in service. Person B complained to Person A about the change in contract.

Person A states that, as a certain amount of time has passed since the initial contract change was made, the consumer's continued usage of the service is deemed as acceptance (even though the consumer knew nothing of the change).

The question here is: in contract law, what is the period of time that needs to lapse before an amended contract is considered to be accepted, even though one of the parties was unaware but their continued usage of a service was deemed to fulfill this concept of acceptance?

MrPudding

rc_irl wrote: »

Hello,

A curious legal question:

There are 2 parties, person A and person B, and eachs agrees to a contract (including Terms & Conditions).

Person A is a business/sole trader and person B is a consumer.

The contract commenced in circa 2005, but person A had amended it between then and now (sometime in 2006 or 2007) but had failed to provide notice of this amendment to person B.

The contract states that should an amendment be made to it then person B would be supplied 1 months notice. Person B received no notice but continued using the service that Person A's business provided on the understanding that the service was governed through the original contract.

Person B discovered the amendment, circa 2009, due to a degredation in service. Person B complained to Person A about the change in contract.

Person A states that, as a certain amount of time has passed since the initial contract change was made, the consumer's continued usage of the service is deemed as acceptance (even though the consumer knew nothing of the change).

The question here is: in contract law, what is the period of time that needs to lapse before an amended contract is considered to be accepted, even though one of the parties was unaware but their continued usage of a service was deemed to fulfill this concept of acceptance?

First of all, I am a mere student, and I am presuming this is a purely theoretical question... Speaking form a UK contract point of view, not sure if it is quite the same as in Ireland, I don't think there is a period of time. Changing the terms of a contract is a fairly big deal, and I am not sure a change which has not been communicated can be deemed accepted simply through usage.

There are also questions of consideration. If the amendment means one of the parties has to accept less than was originally contracted for then the party making the change will have to provide new consideration.

MrP

krpc

MrPudding wrote: »

First of all, I am a mere student, and I am presuming this is a purely theoretical question... Speaking form a UK contract point of view, not sure if it is quite the same as in Ireland, I don't think there is a period of time. Changing the terms of a contract is a fairly big deal, and I am not sure a change which has not been communicated can be deemed accepted simply through usage.

Thanks for the response!

The question does have practical application, although for the purpose of this thread, it is theoretical.

MrPudding wrote: »

There are also questions of consideration. If the amendment means one of the parties has to accept less than was originally contracted for then the party making the change will have to provide new consideration.

MrP

The amendment does indeed mean that one of the parties has had to accept a "less than" (what was originally agreed) service.

Farcear

Hmm... well, as a general rule, you cannot unilaterally alter a contract. So, in order to do so, there must have been an express term in the contract allowing you to do so along the lines of:

"Party A may unilaterally alter this contract, subject to supplying Party B with notice in writing within one month.."

First, I disagree with MrP on the point that Party A would needs to provide new consideration after altering the contract. All Party A is doing here is enforcing one of its existing contractual rights to provide a lower level of service, not creating a new agreement.

Second, on the substantive issue, the question is not "what is the period of time that needs to lapse before an amended contract is considered to be accepted?" but rather "what is the consequence of Party A failing to provide notice to Party B?".

Arguably, depending on the precise nature/wording of the notice clause, this could leave Party A open to an action for breach of contract for failing to provide the originally specified level of service -- as they had not fulfilled the notice requirements to provide a lower quality of service.

krpc

Farcear wrote: »

Hmm... well, as a general rule, you cannot unilaterally alter a contract. So, in order to do so, there must have been an express term in the contract allowing you to do so along the lines of:

"Party A may unilaterally alter this contract, subject to supplying Party B with notice in writing within one month.."

First, I disagree with MrP on the point that Party A would needs to provide new consideration after altering the contract. All Party A is doing here is enforcing one of its existing contractual rights to provide a lower level of service, not creating a new agreement.

Second, on the substantive issue, the question is not "what is the period of time that needs to lapse before an amended contract is considered to be accepted?" but rather "what is the consequence of Party A failing to provide notice to Party B?".

Arguably, depending on the precise nature/wording of the notice clause, this could leave Party A open to an action for breach of contract for failing to provide the originally specified level of service -- as they had not fulfilled the notice requirements to provide a lower quality of service.

Thanks for the detailed response, Farcear!

I should mention that in this theoretical scenario it is not that Party A changed the wording of the contract, but more so included an additional term or clause.

For the purpose of clarification: Party A advertises a service and terms the service as unlimited. Party B signs up for the service and agrees to a contract (and T&C's). Party B is understanding, as per the contract, that the service is unlimited. Four years later, Party B discovers that approximately one year after the signing of the contract, Party A had amended the contract to include a new clause: a fair use policy. Party A confirms that there was no fair use policy when Party B signed the contract. This fair use policy limits Party B's usage of the service. The contract stipulated that Party A has the authority to amend the terms and conditions of the contract, and will give Party B one months notice prior to the effect of any change. Party A never informed Party B of this change. Party A begins imposing sanctions on Party B's usage of the service. Party A cites that Party B's continue usage of the service was deemed acceptance as X amount of time had passed.

r14

If you are actually dealing as a consumer all types of legislation will apply to protect you. Specifically the UTCC Regulations will apply, unless the terms have been individually negotiated - ie did you sign standard T&C with the service provider or did the two of you sit down and hammer it out.

If the term is unfair it will not apply. In particular look at Schedule 1,which provides the following terms are unfair:

(j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract; and

(k) enabling the seller or supplier to alter unilaterally without a valid reason any characteristics of the product or service to be provided.

You will, in addition, have other rights (eg Sale of Goods Act) which will help you deal with this situation but if you want to explore those options you should really consult a solicitor.

krpc

r14 wrote: »

If you are actually dealing as a consumer all types of legislation will apply to protect you. Specifically the UTCC Regulations will apply, unless the terms have been individually negotiated - ie did you sign standard T&C with the service provider or did the two of you sit down and hammer it out.

If the term is unfair it will not apply. In particular look at Schedule 1,which provides the following terms are unfair:

(j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract; and

(k) enabling the seller or supplier to alter unilaterally without a valid reason any characteristics of the product or service to be provided.

You will, in addition, have other rights (eg Sale of Goods Act) which will help you deal with this situation but if you want to explore those options you should really consult a solicitor.

Thanks, r14!

In terms of this thread, there is no intent to take legal action on this matter. My primary reason was to try find out, as a mere curiosity, what the time frame was for a contract to be automatically deemed accepted when a change has been made if a consumer continues to use the service (but is unaware of the change in contract).

The UTCC Regulations will be an interested Sunday afternoon read

krpc

r14 wrote: »

If you are actually dealing as a consumer all types of legislation will apply to protect you. Specifically the UTCC Regulations will apply, unless the terms have been individually negotiated - ie did you sign standard T&C with the service provider or did the two of you sit down and hammer it out.

It was a standard agreement (T&Cs) with the service provider.