Agnes has a contract with Noyz. A contract does not necessarily have to be in a written format. A contract exists when three basic criteria have been fulfilled. An offer must be made; Agnes made an offer for the compact disc displayed as an invitation to treat by Noyz. The offer must be accepted; Noyz accepted Agnes' offer on the compact disc. Consideration must be given; Noyz received money in return for the compact disc and Agnes received the compact disc in return for an agreed amount of money. If any part of this contract is breached, the contract is made void.

The law considers that retailers of goods are liable for breaches of contract, such as products being faulty, not the manufacturer.

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S 14 of the Sale of Goods Act provides that goods should satisfy three basic conditions:

'Of satisfactory quality' according to the sales description, cost and any other relevant factors. This includes appearance, safety and durability. Items should be free from defect, except when openly sold as sub-standard products. As the compact disc was not sold as sub-standard, it is expected that it would be of satisfactory standard. An example where a product was not of satisfactory quality can be seen in Grant v Australian Knitting Mills Ltd (1936) here the claimant was sold undergarments contaminated with chemicals used in preparation of the material. This caused dermatological problems for the claimant and it was held that the goods were not of satisfactory quality. Were the compact disc to be considered not of satisfactory quality, this would clearly be a breach of contract.

'Fit for purpose'. This incorporates all of the common purposes of the product in question, not just the likely purposes (as was the case prior to the current Sale of Goods Act). A compact disc would be expected to be fit for the purpose of being played in a compact disc player. Therefore, if it is not fit do so, the contract has been breached. An example where a product's fitness for purpose was questioned can be seen in Aswan Engineering Co. v Lupine Ltd (1987). In this case the claimant bought a quantity of pails which disintegrated having failed to contain the retailer's waterproof solution. The pails were stacked six high in Kuwait and left in temperatures of around 70 degrees centigrade. It was held that the goods were fit for their purpose under s.14 (6) Sale of Goods Act 1979 if they were fit for one of the purposes for which they were commonly bought.

The damage, which occurred was beyond the range of reasonable foreseeablity and therefore beyond the manufacturer's duty of care. This is unlikely to be the case in relation to Agnes' claim, as playing the compact disc in a compact disc player is clearly a foreseeable action and therefore any damage caused by this would also be foreseeable. Instructions must be taken in relation to how Agnes treated the compact disc as this may affect whether a claim would succeed. However, if she treated it in the usual manner out of extreme heat and away from harm's way (i.e. in a CD case where it would not get scratched or broken) the compact disc may well be deemed not fit for its purpose. It is worth noting that a compact disc would be expected to be fit for its purpose for longer than one month.

As described by the packaging, sales display or according to statements from the retailer. In Rogers v Parish (Scarborough) Ltd (1987) the description given to a second hand car as 'Top Range' was deemed to be enough to invoke an opinion that the car was of a higher standard. In doing so, selling a car that was not of this standard was contrary to the Sale of Goods Act. Further instructions need to be taken in relation to the packaging, sales display or statements from the retailer. For example, was it stated that the compact disc was of a high standard or quality, or adversely, that it would not be expected to last longer than a specific amount of playing time? Was any suggestion made as to how the disc should be kept or treated?

' If the supplier of goods or services is in breach of a condition of the contract, (i.e. not compliant to s 14 Sale of Goods Act) the consumer may treat (her) own contractual performance obligation as being at an end, thereby allowing (her) to decline to pay or to recover the price and sue for damages in respect of any proved, foreseeable loss suffered by (her) as a result of the breach of contract.'1

The first issue in relation to claims against the manufacturer is that, as they conduct their business in the USA, they are out of the jurisdiction of the United Kingdom. This may cause difficulties (and unnecessary expenses).

As Agnes' contract is with the retailer, a claim against the manufacturer would be less likely to succeed. However. It is worth noting for future reference that were Agnes to have received the compact disc as a gift, she would not have a contract with the retailers and would therefore be free to go directly to the manufacturers as a third party.

In some exceptional circumstances, the manufacturer may be liable, for example, if an unsafe product injures a consumer, or if the manufacturer acted negligently. The following quote from Donoghue v Stevenson (1932) details the extent of a manufacturer's liability.

'A manufacturer of products, which he sells in such form as to show that he intends them to reach the ultimate consumer in the form in which they left him with no possibility of intermediate examination and with the knowledge that the absence of reasonable care in the preparation or putting up of the product will result in an injury to the consumer's life or property, owes a duty to the consumer to take reasonable care.'

It is clearly foreseeable to the manufacturer that the final consumer (Agnes) would be affected by his acts or omissions and therefore may well be found liable, were his conduct found to be negligent.

A defective product is such if it is unreasonably dangerous to the user, beyond that which would be contemplated by the ordinary user. Of course, it would not be expected that a compact disc would be in any way dangerous if used in the correct (and foreseeable) manner.

It is clear that the disc is defective. As this is the case, it is not of a satisfactory standard and not fit for its purpose. In all likelihood, a claim in relation the disc would be successful, as it was presumably defective at the time of purchase (an expert may need to be instructed in order to ascertain that this is the case). In terms of damages for the defective disc, it is unlikely that more than the cost of the defective product would be received.

A defective product is a legal cause of damage if it directly and in natural and continuous sequence produces or contributes substantially to producing such damage, so that it can reasonably be said that, but for the defective condition, the damage complained of would not have occurred. (The 'but for test of causation). This would have to be considered in Agnes' case as on the evidence provided, it is not clear whether or not a causal link between the defective disc, and the damage caused could be established.

It is difficult to advise as to the damage of the compact disc player on the information provided. Many intervening factors may have affected the damage to the compact disc player. For example, the issue of the feasibility of a defective Compact Disc causing a player to set alight is not entirely plausible. It may be the case that the player was defective and caused problems with the disc and not other way round. Again, it may be necessary to instruct an expert in relation to this matter.

According to The Trading Standards' web site, 'no refund' signs are illegal and the trader could be prosecuted. This is because the retailer by displaying such a sign is attempting to exclude liability for any defective products or negligence. According to s 11 of The Unfair Contract Terms Act (1977), all attempts to exclude or limit liability will be subject to the requirement of reasonableness. It would not be deemed reasonable to exclude all possibility of liability whatever the circumstances.

Were the exemption clause to have been created in such a way as to be deemed fair and reasonable, the issue of whether it was sufficiently brought to Agnes' notice would be relevant. According to obiter in Olley v Marlborough Court (1949) knowledge of an exemption clause can be implied when the parties have acted on the same terms in previous transactions. Usually an exemption clause would not be legal if it is not brought to the attention of the consumer, however, Agnes bought a Compact Disc once a month from Noyz and therefore, even if she had not seen the clause during the current transaction she is likely to have been aware of it from previous transactions. Fortunately this is unlikely to be an issue, as the term, in my opinion would not be held to be valid

Further instructions may need to be taken in relation to how the player came to be set alight, how the compact disc was defective (i.e. broken, scratched, flimsy etc) and how the compact disc was kept (i.e. in its case with all other discs, or loose on top of the player)

The main issue in this case is that of contract. Agnes has a contract with Noyz. This was breached when they supplied her with a defective product. Damage was caused because of the defective product and therefore the contract was void and Agnes' money should be returned.

Agnes has a good case in relation to claiming back the purchase price of the compact disc. This is not a matter, which in all likelihood will end up in court. For the cost concerned I would not recommend instructing a solicitor. I would advise Agnes to make a claim to the small claims tribunal, although it would not surprise me if the matter were resolved with the means of a strongly worded letter.

The issue relating to the player, as discussed above is far more complicated. Perhaps the next step in this matter should be to instruct an expert to ascertain why the player set alight. It is unlikely that this is solely a result of the defective disc, and therefore there may be a possible claim against the retailers or manufacturers of the player in relation to whether this is also defective