AcF270 Week 18 Supporting notes

Sale of Goods Act

商业法律代写 In contracts for the sale of goods and supply of services certain basic provisions are implied by statute in order to provide…

In contracts for the sale of goods and supply of services certain basic provisions are implied by statute in order to provide protection to purchasers. The main provisions derive from the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982. The Sale of Goods Act protects purchasers where the seller does not have the right to sell the goods (s.12). Where the goods are sold by description there is an implied term that the goods will correspond to that description (s.13). Businesses must ensure that the goods they sell are of satisfactory quality and fit for their purpose (s.14). Where the goods are sold by sample there is an implied term that the goods will correspond to the sample in quality (s.15).

Where the goods are supplied along with a service then the Supply of Goods and Services Act 1982 applies. This implies the identical provisions as the Sale of Goods Act in relation to the goods supplied. In addition there are implied terms that the service must be carried out with reasonable care and skill (s.13), that the service will be carried out within a reasonable time (s.14) and where no price is agreed a reasonable price will be paid (s.15).

Sale of Goods Act 1979

 

Summary 商业法律代写

The Sale of Goods Act 1979 provides four main protections for buyers:

  1. The seller must have the right to sell the goods (S.12)
  2. Goods sold by description must correspond to the description (S.13)
  3. Goods must be of satisfactory quality (s.14)
  4. Goods sold by sample, the goods must correspond to the sample in quality (s.15)

The Sale of Goods Act applies to all contracts for the sale of goods, however, s.14 is more limited in its scope in that it only applies where goods are sold in the course of a business. Also where the goods are sold in the course of a business the provisions of the Sale of Goods Act are reinforced with the protection offered by the Unfair Contract Terms Act 1977 which prohibits their exclusion

These protections are in the form of statutory implied terms. This means that the Sale of Goods Act will put these terms into all contracts for the sale of goods no matter what the parties themselves have agreed in the terms and conditions of sale. A contract is for the sale of goods provided it is a contract to transfer ownership of goods (as opposed to a hire agreement) and the goods are exchanged for money. This excludes contracts of barter unless money is also given.

The main provisions

S.12 implied terms as to title 商业法律代写

S.12 applies to all contracts for sale of goods so it will cover private sales in addition to where goods have been purchased from a shop or other business.

S.12(1) implies a term that the seller has the right to sell the goods. This covers situations where the seller is selling stolen goods (whether the actual thief or a subsequent sale in the chain). This term is a condition in all sales.

A buyer who treats the contract as repudiated is entitled to return of the full purchase price even if they have enjoyed use of the goods for some time.

Rowland v Divall [1923] 2 KB 500

In addition to applying to stolen goods s.12(1) also applies where the seller does not have the right to sell the goods where to do so would be breach of trademark, patent or copyright:

Niblett v Confectioners’ Material [1921] 3 KB 387 商业法律代写

 

s.12(2) (a) implies a term that the goods are free from any undisclosed charge or encumbrance. This applies where for example goods which are still subject to HP terms have been sold without telling the purchaser of the HP agreement or where any other debt has been secured on the goods. This term is only a warranty so whilst the purchaser can claim for any loss caused by the charge or encumbrance they cannot end the contract.

S.12 (2)(b) implies a term that the purchaser will enjoy quiet possession of the goods. This acts as an ongoing assurance that no one will interfere with the buyer’s right to possess or use the goods. This term is a warranty.

 
Microbeads v Vinehurst Road Markings [1975] 1 WLR

S.13 sale by description 商业法律代写

s.13(1) provides that where there is a contract for the sale of goods by description, there is an implied term that the goods will correspond with the description.

This section applies where the sale is solely by description. If the buyer sees the actual goods before the sale then s.13 cannot be relied upon:

Harlington & Leinster v Christopher Hull Fine Art [1991] 1 QB 564

S.13 is simply concerned with description and not quality.

The term implied by s.13 is a condition in relation to consumer sales but an innominate term in relation to non-consumer sales.

 

S.14 Implied term as to quality

S.14 only applies where the seller sells goods in the course of a business. It therefore does not apply to private sales although there may be an action for breach of an express term or misrepresentation in some circumstances.

The question of whether goods were sold in the course of a business was considered in:

Liability under s.14 is strict and not dependant of proof of fault on the part of the seller.

The relevant parts of s.14 are as follows:

(2) Where the seller sells goods in the course of a business, there is an implied term that the goods supplied under the contract are of satisfactory quality. 商业法律代写

 

(2A) For the purposes of this Act, 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 (if relevant) and all the other relevant circumstances.

商业法律代写
商业法律代写

(2B) For the purposes of this Act, the quality of goods includes their state and condition and the following (among others) are in appropriate cases aspects of the quality of goods—

(a) fitness for all the purposes for which goods of the kind in question are commonly supplied,
(b) appearance and finish,

(c) freedom from minor defects,
(d) safety, and

e) durability. 商业法律代写

Applying this section a judge would thus consider whether a reasonable person would regard the goods as of satisfactory quality looking at the stated aspects in addition to all other relevant circumstances. Looking at fitness for purpose, the judge, will consider whether the goods are fit for the purpose the goods are commonly supplied so for example if you purchase a hairdryer and use it to dry your clothes, the judge is unlikely to conclude there has been a breach as the goods were not used for their common purpose. Conversely if you purchase a pair of shoes which fall apart after a few days wear, the seller cannot simply state they were fashion shoes and not intended for wearing full time.

In addition to the statutory guidance a court applies the acceptability and usability tests to help determine if the goods in question are of satisfactory quality.

 

The Acceptability Test – Applies to consumer transactions 商业法律代写

The acceptability test looks at whether a reasonable purchaser would have accepted the goods at the same price had they known of the defect:

Shine v General Guarantee Corp [1988] 1 All ER 911

 

The Usability Test – Applies to business to business transactions

The usability test is less generous than the acceptability test. This test requires the court to consider if a reasonable purchaser could have used the goods for purposes for which the goods were commonly supplied:

 

Aswan Engineering v Lupdine [1987] 1 All ER 135           

S.14 (2C) provides certain limitations to the application of s.14(2) as follows:

(2C) The term implied by subsection (2) above does not extend to any matter making the quality of goods unsatisfactory—

(a) which is specifically drawn to the buyer’s attention before the contract is made:

(b) where the buyer examines the goods before the contract is made, which that examination ought to reveal, or

(c) in the case of a contract for sale by sample, which would have been apparent on a reasonable examination of the sample.

S14 is a condition in a consumer sale and an innominate term in a non-consumer sale

 

S.15 Sale by Sample 商业法律代写

S.15 applies to all sales by sample irrespective of whether it is a private sale, consumer sale or business to business sale.

S.15 (2) provides that in a contract for sale by sample there is an implied term-

 

(a) that the bulk will correspond with the sample in quality;

(b) that the goods will be free from any defect, making their quality unsatisfactory, which would not be apparent on reasonable examination of the sample.

Note that s.15 only relates to quality and not to other matters such as colour. S.15 is a condition in a consumer sale and an innominate term in non- consumer sales.

Consumer Rights Act 2015

The Consumer Rights Act 2015 (CRA) applies to consumer contracts for the supply of goods, digital content, or services made on or after 1 October 2015.  A consumer contract is one made between a trader and a consumer.  The Act seeks to protect a consumer by implying various terms into contracts and giving a consumer special remedies where the contract is breached by the trader.

A trader is defined as a ‘person acting for purposes relating to that person’s trade, business. Craft, or profession, whether acting personally or through another person acting in the trader’s name or on the trader’s behalf’.

A consumer is defined as ‘an individual acting for purposes that are wholly or mainly outside that individual’s trade, craft or profession’.  In other words, it must be an individual and not a business or company involved in the contract.

Many of the implied terms under the CRA are similar to those under SGA including s17 the seller has the right to supply the goods; s11 in contracts to supply goods by description, the goods will match the description; s9 the quality of goods is satisfactory; s10 the goods supplied are reasonably fit for purpose; s13 where goods are supplied by reference to a sample the goods will match the sample.

 

Consumers are afforded additional remedies under CRA . 商业法律代写

  1. Ss20 and 22 The short term right to reject
    This lasts for 30 days unless the goods are likely to perish in a shorter period of time (in which case it is the shorter period of time).  The 30 day period is paused if the consumer asks for repair or replacement during this period.  When a consumer rejects goods he can claim a full refund which must be given without undue delay.  If the consumer paid money under the contract, this should be repaid in the same method of payment.
  2. s23 The right to repair or replacement
    If the consumer has lost or chooses not to exercise his right to reject goods, he will usually be entitled to claim a repair or replacement.  The trader must repair or replace in a reasonable time and without undue inconvenience to the consumer.
  3. ss20 and 24 The right to a price reduction or the final right to rejection
    If repair or replacement is not available or is unsuccessful after at least one attempt, or is not provided within a reasonable time. And without significant inconvenience to the consumer, then the consumer can claim a price reduction or reject the goods..

 

Supply of Goods and Services Act 1982

Where goods are supplied in addition to services, e.g. the installing of a new boiler, or the fitting of new engine parts in a car, the goods are covered by the Supply of Goods and Services Act 1982) (SGSA) rather than the Sale of goods Act. The SGSA is divided into two parts Part 1 covers the supply of goods and part 2 covers the supply of services. Part 1 covers contracts which transfer property in goods and hire contracts. Part 1B provides additional remedies for consumers.

 

Part 1 Supply of goods 商业法律代写

S.1 Defines contracts which transfer property in goods and excludes the following type of contracts:
(a) contracts for the Sale of goods: (Covered by Sale of Goods Act)
(b) contracts for hire purchase;
(c) contracts involving trading stamps
(d) contracts made by deed where there is no consideration
(e) a contract intended to operate by way of mortgage, pledge or charge

Sections 2-5 replicate the provisions in the Sale of Goods Act sections 12-15 in relation to title, description, satisfactory quality and sample.

  1. 5Aprovides that in non-consumer sales the terms implied by sections 2-5 are innominate terms
  2. 6defines a contract for the hire of goods and excludes contracts of hire purchase and contracts using trading stamps.

Sections 7-10 again replicate sections 12-15 of the Sale of Goods Act in relation to title description, satisfactory quality and sample.

 

Part 1B

Part 1b S.11 provides additional remedies for consumers which replicate those in s 48 of the Sale of Goods Act in relation to repair or replace, reduction in price and rescission.

Part 2 Supply of services 商业法律代写


S.12 SGSA defines contracts for the supply of services. It excludes contracts of apprenticeships, but includes any agreement for the supply of services irrespective of whether goods are also supplied. There is no requirement for money consideration.

S.13 SGSA implies a term where the supplier acts in the course of a business, that the services will be carried out with reasonable care and skill.

S.14 SGSA implies a term where the service is carried out in the course of a business. And no time is specified, that the service will be carried out within a reasonable time. What is considered a reasonable time is a question of fact and will depend on the circumstances.

S.15 SGSA where a service is carried out and no price has been agreed there is an implied term that a reasonable charge is payable. This is not limited to services supplied in the course of a business. What is a reasonable charge is a question of fact to be determined in the circumstances.

 

Further reading:

 

Law Commission Consultation Paper 188 Consumer Remedies for Faulty Goods Nov 2008

 

Office of Fair Trading response to consultation, Consumer Remedies for Faulty Goods, February 2009

 
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