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This is hypothetical, but similar fact patterns have occurred in reality. I'm interested in UK law here. Also, I'm not a law student, and this is not my homework.

Suppose that Alice buys a Device. The Device was manufactured by MegaCorp and sold to Alice by retailer Bloggs Gadgets. It comes with a one year warranty.

The Device is designed to connect via the Internet to servers run by MegaCorp. This is required for much (though not all) of its advertised functionality. Alice purchased the Device for these Internet-enabled functions.

Two years after Alice purchased the Device MegaCorp discontinued the Device line and shuttered its servers. Alice was left with a Device that still theoretically worked, but could not be used for the purpose she had purchased it for.

Alice wants either a refund or for the servers to be re-enabled. On the refund, she argues that an electronic device might reasonably be expected to last 10 years, but she has only had 2 years use, so she wants 80% of the purchase price refunded.

  • Both Bloggs and MegaCorp argue that the warranty was only for one year, so they are not obliged to do anything; Alice is in the same position as if the Device had suffered a hardware failure.

  • MegaCorp refers to the terms in their End User License Agreement, which state that their services may be withdrawn at any time and for any reason.

  • MegaCorp also argues that only 10% of the Device price was for the servers, so even following Alice's logic below, she is only due 8% of the purchase price, not 80%.

  • MegaCorp disclaim any contract with Alice; her contract, they argue, was with Bloggs.

  • Bloggs argues that the servers are the responsibility of MegaCorp, and that Bloggs had met all their contractual obligations once the warranty term expired.

Alice contends that part of the price of the Device was the cost of running the servers, and that there was an implied term of contract that these servers would continue to be available for as long as the Device was working. She also argues that the Unfair Contract Terms Act prohibits service contracts in which the supply of the services is entirely at the discretion of the supplier.

Can Alice claim the 80% of the cost of the Device from either Bloggs or MegaCorp? If Alice must claim from Bloggs, can Bloggs then claim from MegaCorp?

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    With the speed of changes in todays technology why would there be any expectation of using the same device 10 years from now?
    – Joe W
    Feb 21, 2022 at 2:10
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    @JoeW: Because it ain't broke? Feb 21, 2022 at 8:32
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    There are plenty of fully functional devices that are no longer supported well before the 10 year mark for various reasons. When dealing with technology there is more then asking if it broke or not to know if it will work.
    – Joe W
    Feb 21, 2022 at 13:29

1 Answer 1

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MegaCorp refers to the terms in their End User License Agreement, which state that their services may be withdrawn at any time and for any reason.

Alice would/should have been aware of that term. Nevertheless, she proceeded to buying the Device on her silent and conscious assumption that

... there was an implied term of contract that these servers would continue to be available for as long as the Device was working

— and that this implied term will supercede the MegaCorp's explicit term of service withdrawal because the latter was in breach of

... the Unfair Contract Terms Act [which] prohibits service contracts in which the supply of the services is entirely at the discretion of the supplier.

So, Alice essentially purportedly avoided meeting of the minds when forming the contract in favour of her silent presumption that the law will enforce the contract terms her way instead. The essential element of meeting of the minds is therefore absent, which means there was no contract in the first place.

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    If there's no contract wouldn't that mean Alice still owns the money and Bloggs still owns the Device? How would ownership be swapped without a contract?
    – bdsl
    Jan 25, 2022 at 18:13
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    @bdsl Ownership doesn't swap indeed. Possession does. It will stay that way unless the parties voluntarily (or through the court) swap it back.
    – Greendrake
    Jan 25, 2022 at 23:19
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    @Greendrake Not so, at least in the UK. Unusual or onerous terms are not included in a contract unless specifically bought to the counterparty's attention (meaning, something more than fine print that nobody ever reads). mondaq.com/uk/consumer-law/64244/unusual-or-onerous-terms Feb 21, 2022 at 8:31
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    @Greendrake They are a standard part of UK law. Feb 21, 2022 at 10:22
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    @PaulJohnson And so what? The scope of this question is limited. Why worry about laws that do not apply to the described situation?
    – Greendrake
    Feb 21, 2022 at 10:31

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