Supply of Services – Liability and Protection

Supply of Services (Implied Terms) Ordinance (Cap. 457)

Liability and protection:

When a consumer buys a service but the contract itself is silent on certain aspects, the parties can rely on the Supply of Services (Implied Terms) Ordinance (“SS(IT)O”), which provides:

  • services should be carried out with reasonable care and skill (which generally means the services must meet the standard that a reasonable person would regard as satisfactory) (section 5 of the SS(IT)O);
  • services should be performed within a reasonable time if the time of performance has not been fixed by the contract (section 6 of the SS(IT)O); and
  • a reasonable charge should be paid if the charge has not been fixed by the contract (section 7 of the SS(IT)O).

If service suppliers fail to meet any one of the above conditions, they would be “in breach of contract”. Under these circumstances, consumers are entitled to sue defaulting suppliers for compensation.

Exemption Clauses:

Section 8(1) of the SS(IT)O provides that as against a party to a contract for the supply of a service who deals as a consumer, the other party (the service supplier) cannot, by reference to any contract term, exclude or restrict any liability of his arising under the contract by virtue of this Ordinance. In other words, the supplier cannot impose a contract term that excludes or restricts his liability on breach of contract.

“Consumer” as defined in the Ordinance

You are a “consumer” under section 4 of the SS(IT)O if:

  • you neither make the contract in the course of a business (a commercial transaction) nor hold yourself out as doing so;
  • the other party does make the contract in the course of a business (a commercial transaction); and
  • the services provided to you under, or in pursuance of, the contract are of a type ordinarily supplied or provided for private consumption or benefit.

In other words, you are dealing as a “consumer” if you hire a trader or a company (or its staff) to supply services to you for your own consumption. Examples include the transportation service provided by a taxi driver, car repairing services provided by a garage, or hairdressing services provided by a salon, etc.

According to section 3 of the SS(IT)O, however, a contract of employment or a contract of apprenticeship is NOT equivalent to a contract for the supply of service.

Checklist–   You should know that: Supply of service in Hong Kong is mainly governed by Supply of Services (Implied Terms) Ordinance (“SS(IT)O”). Service suppliers can be liable for breach of contract and consumers are entitled to sue defaulting suppliers for compensation. Service suppliers cannot impose a contract term that excludes or restricts his liability on breach of contract. SSO only protect ‘consumers’ defined in SS(IT)O.

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