A brief overview to The Sale of Goods Act 1979 PDF

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A brief overview to The Sale of Goods Act 1979 The Sales of Goods Act 1979 is an Act that regulates the sale of goods that are bought and sold in the UK and the binding contract between both parties. The contract of sale states that the transfer of property from a seller to a buyer is completed through a money transaction, known as the price. Goods must determine a level of satisfactory quality for the price that the consumer is willing to pay, and meeting the description and relevant factors at time of purchase. These factors might include the level of expectation that an item may conjure, for example, second hand goods will provide much less expectation than that of a brand new product which will have a much higher expectation with regards to its quality and will cause concern about expectation if it has a defect. Goods should be fit for purpose, i.e that they are capable of carrying out the purpose for what they were designed to do. A seller should express the purpose of their goods and has a responsibility to make sure that they attain that state. The Sale of Goods Act amendment in March 2012 states that if a fault occurs with a product within the first 6 months of purchase, the consumer is entitled to assume that it was sold to them with the defect present. This means that the goods were not of a reasonable standard at the time of purchase and the vendor is in breach of their statutory and contractual obligations, whereby the Act protecting customers through their statutory consumer rights. Referring back to the original Act of 1979, these consumer rights covers anyone who purchases faulty goods becomes entitled to a free refund(either in full or in part), replacement or repair service, and the onus falls on the retailer to provide this.

Sale of Goods Act 1979 – Summary Introduction This summary examines the Sale of Goods Act 1979 (“the Act”) within its context: why it was drafted, what are its important provisions, and how it has changed since it came into force. It is submitted that the Sale of Goods Act 1979 has been part of a change in consumer dealings, with its most significant contributions being to the rights consumers have where they buy products that turn out to be faulty. Indeed, its use has been so central to implied terms in particular, that one author has been criticised for failing to see the contribution of the Act to the law of implied terms.[1] At the same time, the Act’s importance has to an extent been diminished by the introduction of very recent legislation.[2] Rationale for Drafting The Act codified various provisions, such as the formation of contract, which was already prevalent and well-established in common law.[3] However, its contribution was to enhance consumer confidence. It has been argued that without the Act, and its successors, there would be little protection for consumers.[4] This imbalance of consumer rights would lead to significant caution, and even “defensive consumerism.”[5] If consumers believe they have few rights when purchasing goods, then they are slow to trust newer and less-familiar brands, and will continue to buy goods from established brands, even where those goods actually lack in quality. Therefore, if the legislature does not guarantee certain minimums for consumer confidence, competition would suffer.[6] In summary, the Act was brought about due to a concern for protecting consumer rights, and thereby promoting consumer confidence and increase competition amongst producers. Provisions of Note The Act is recognised for its contribution to the law of implied terms. Sections 12-15 provide guidance on the existence and scope of implied terms relating to title, quality, sale by description, and sale by sample. It has been submitted these sections are central to any considerations about implied terms.[7] Section 14 is important because of its use of several concepts. First, it implies several terms into all contracts, those terms being that the goods are of satisfactory quality, which is evaluated by reference to the “state and condition” of the goods. [8] Second, the section contains an important proviso: the terms are only implied when the sale is conducted “in the course of a business.” [9]

The “valuable decision”[10] of MacDonald v Pollock[11] – a Scottish case which nevertheless provides important guidance for applying the Act across the UK [12] – has recognised this section to have far-reaching consequences for business-to-consumer and business-to-business transactions, because the definition of a business is now a material issue.[13] Section 15A refers to remedies for breach of conditions in non-consumer cases. This section says a buyer may claim for breach of warranty, but not repudiate a contract, where “the breach is so slight it would be unreasonable for [the buyer] to reject [the goods].” [14] This section has been argued as “central to elements of commercial practice” – as in one case [15] – to concepts of description, condition, and rejection.[16] The Act makes other specific additions to contract law designed to protect specific consumers. Section 3 of the Act gives detail about “necessaries” purchased by a minor. According to that section, necessaries – defined as “goods suitable to the condition in life of the minor and to his actual requirements at the time of sale and delivery” – must be sold/purchased at a “reasonable” price.[17] That section also requires a reasonable price must be paid by a person who “by reason of drunkenness is incompetent to contract.”[18] In conclusion, it is submitted the Act has codified the law, provided guidance on various miscellaneous issues, and has been most significant for its contributions to consumer protection and commercial practice through the use of implied terms. Redefined and Repealed First, the Act and its place in consumer dealings has been further expanded on by subsequent legislation, in particular the Unfair Terms in Consumer Contracts Regulations 1999.[19] These Regulations have added “to the consternation of UK lawyers”,[20] the requirement by businesses to show good faith. This is a form of dealing which is often seen in Continental European jurisdictions, but much less often in English law, which has “freedom of contract” as its object. [21] Due to it not being part of English jurisprudence, the concept of good faith “remains primitive.”[22] Nevertheless, these legislative developments have been accommodated, if only to some extent, because of the detail given by the Act to implied terms.[23] The Act has also been recently subjected to a reduction in its scope. The Consumer Rights Act 2015 (“the 2015 Act”), which came into force in October 2015, repealed a significant portion of the Act.[24] The Act formerly had provisions relating to unfair terms of contract in dealings vis-àvis consumers and businesses.[25] All of those provisions have now been repealed and replaced by the 2015 Act.[26] Importantly, the 2015 Act has enshrined consumer protections relating to digital

content. On the one hand, these changes are significant: the 2015 Act has introduced these protections because issues relating to digital content, such as methods of delivery to smartphones and the purchase of apps, were not envisaged at the time of the Sale of Goods Act. [27] To a degree therefore, the 1979 Act has been superseded. However, the Act still provides important concepts: the 2015 Act has principles of quality and fitness for purpose that are very similar to the 1979 Act.[28] Therefore, the Act continues to be relevant.

Conclusion It is submitted the Act has been part of, and has helped to develop, consumer protection. It has been part of an effort to boost competition by giving consumers certain assurances about their rights when purchasing from businesses (hence why the definition of a “business” is such an important issue). To an extent, subsequent developments have introduced concepts to consumerto-business dealings that were not envisaged in the Act. Nevertheless, it is submitted these developments were only possible, at least in part, due to the foundations of the Act and its provisions relating to implied terms.

Sales of Goods Act Details The Sales of Goods Act 1979 This is the act of English parliament which deals with the sale and buying of goods. The Act includes sections from sales of goods Act 1983 and subsequent legislation. The Act 1979 is a consulate form of regulations regarding sales of goods act. The sales of goods act 1979 have undergone minor statutory changes and needs new consolidation.

Details of Sales of Goods Act 1979 

SGA performs several functions.

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SGA describes a small number of essential legal rules and regulations but these restrictions are minimal.

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SGA has implied terms and presumptions but it provides protections to sales in the presence or absence of contract.

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The absence of contract will follow the terms within SGA.

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Due to efficiency, legal certainty and protection cover , several jurisdictions have adopted legislation in almost all territories of British Empire and most of common wealth countries.

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The SGA is applied to sale of goods where goods are sold to transfer or agreed to transfer. In this case goods are transferred or promised to transfer by sale from possession of seller to the possession of buyer.

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The buyers have certain rights and protections under SGA. The SGA provides rights and protections to buyer under various sections.

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The terms described under these sections are applied to all goods sold but section 14 is especially concerned with the sale of goods in the course business.

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Certain sections of SGA providing protection to buyer are described in table.

Main protections of SGA Section

Details

Section 12

Seller must have the right to sell goods

Section 13

Sold goods must comply with the description of goods.

Section 14

Sold goods must be of good quality

Section 15

Sold goods by sample method must comply with the quality of the sample presented before ordering.

Sections of Sales Goods Act are applied to apply to all types of sales whatever is the type of business. However, the section 14 is limited to business sale. The business sale is also protected under another law known as’The Unfair Contract Act 1977’

Sales of goods act (SGA) and perception. SGA provides several protections to buyer. These protections are described as implied terms in SGA. It means that these terms will apply to all sales of goods without the consideration of any agreed term and condition of the sale among parties. It means that terms of SGA will be enforced to all contract of sales without considering either the contract between parties is present or not. The buyer can claim whenever the implied term of m of SGA has been breeched. The remedy will be according to the breech of term. There are several perceptions in SGA where seller cannot take benefit of hidden facts. Some of the expressed terms include warranties, innominate terms and conditions. Conditions are the terms expressed in contract and breach of condition written in contract will enable the effected party to claim damages. The damage may be money or the repudiation of the contract. The repudiation of the contract means cancellation of the contract relieving both parties free from their contractual liability. Warranty is another important term agreed in the contract. The manufacturer’s warranty is separate term and shouldn’t be confused with the seller’s warranty. There are certain other terms which cannot be classed as warranties or conditions.

These terms are called as innominate terms. However, these terms are classified according to their consequences. If consequences are light then these terms are taken as condition and if the consequences are extreme then, these are taken as warranties. Other perception of SGA comes from limitation act. According t limitation act claim should be filed with in six years of the breach of contract (Limitation act S.5). Let’s see what are the sections of SGA which create a sense perception among parties.

SECTIONS,CONTRACT AND PERCEPTION SECTION DETAIL EXAMPLE & ILLUSTRATION Section 12 is apparently applied to all contracts for sales of goods. In fact it also provide protection to private sale as a well where goods are sold or bought from

Section 12(1) An example of perception in SGA comes from Section 12(1) which seems to be harsh with innocent seller of stolen goods. Even the seller of stolen goods is innocent and has no knowledge of stolen goods. If he sells the stolen goods, the buyer has right to claim back full amount even if he has used the things but seller will not get back things as these belong to the original sellers Example; (Rowland v Divall 1923). Illustration; The section 12(1) is not only concerned with stolen goods but also things which a seller cannot sell legally. For example, selling’s of copy right things without licence to sell.

SECTION DETAIL EXAMPLE & ILLUSTRATION (Section 12(2) a).

Similar, things with bar or debt can’t be sold without disclosing it to buyer section 12(2b). When under warranty, the purchaser can only claim the loss but cannot claim for the cancellation of the contract.The possession of goods by buyer is protected by implied term of warranty in section 12(2b). Section 13 The buyer is protected by implied term of warranty in section 12(2b). Other section enlightens the implied condition of sale of goods by description. Section 13 of SGA provides implied term sold goods must correspond to the actual description of goods at the time of sale. Section 13 only apply where buyer buy goods by looking n the description of things. However section 13 will not apply if buy has physically seen the things before buying. The section 13 is concerned with the description of goods but not the quality of things. Example; Harlington & Leister Enterprises versus Christopher Hull Fine Art 1991 Example; Moore & Landauer 1921

SECTION DETAIL EXAMPLE & ILLUSTRATION The section S14 S14 is a condition in a consumer sale and an innominate term in a non – consumer sale. The section S14 is limited and applies to sale of goods when goods are sold within a business. S14 doesnot apply to sale of goods in private capacity. However, misrepresentation or breach of an expressed term may result in breach of the contract. The sale of goods in the course of business has been given a broad context by court. The responsibility under section 14 of SGA is strict and independent of the proof of the fault on seller.

An example of court decision explains the section 14 for a fisherman who sold his boat (Stevenson v Rogers 1999). The fisher man was not in business of selling boats but he was held in breach f section 14 of SGA. The president can be used for the sale of cars in private capacity.

SECTION DETAIL EXAMPLE & ILLUSTRATION Section 14 (2A) Section 14 (2A) explain the satisfactory quality and the factors which should be considered while regarding a good as satisfactory quality. These factors include any description of things, the price and other relevant circumstances. Court considers following facts before deciding either breach of SGA has happened or not. Following must be considered; Was purchased made in private or business capacity? Was purchased of acceptable goods and at acceptable price? Were the goods used accurately and reasonably? The above mentioned first two points are used in acceptability test and third point is used to access the reasonable using by usability test.

SECTION DETAIL EXAMPLE & ILLUSTRATION The section 14 (2B) The section 14 (2B) also describe that thev quality of goods include the state and condition of the goods.The parts of section 14 provide sufficient information for a judge to decide the quality of goods to be satisfactory or not.

S.14 (2C) Section 14(2c) provides certain limitation on the application of section 14(2). According to section 14(2c), the implied term doesnot extend to any matter to make quality of goods unsatisfactory. It explains certain facts like Was attention drawn to buyer before the sale? Did and where the buyer examined the goods before sale? Was sample apparent and seen by the buyer before the sale of goods?

. SECTION DETAIL EXAMPLE S.48B (1) Repair or replacement Section 48 B provides right to buyer to claim to seller to repair or replace the goods at seller’s expense. The seller must do it within the reasonable time. The buyer will loose the right to reject the goods if he makes such type of request unless the seller is not able to respond within a reasonable time. However, seller is free to repair or replace the goods if it is impossible to do so.

SECTION DETAIL EXAMPLE S48C(1) Reduction of price There may be situation when it is not possible to repair or replace the goods on request of buyer. In this case section 48C(1) provide remedy to buyer . The seller may be required to reduce the purchased price. This is a secondary remedy. The buyer must request to replace or repair the

goods and if not complied within a reasonable time, then buyewr can request to reduce the price of the purchase.

SECTION DETAIL EXAMPLE S. 48C (2) Rescission of the contract Section 48C(2) provide another relief where seller cannot replace or repair goods. Then both parties can go back on position before making the contract. In this case buyer will return the goods while seller will return the price. However, the seller can deduct any value which he thinks the buyer have had from the use of the goods.

SECTIONS,CONTRACT AND PERCEPTION (Continued) SECTION DETAIL EXAMPLE S.15 Sale by Sample Section 15 apply to all sales by sample. It covers both sales by sample in private or business capacity. Section 15(2) states that in sample sale, there is an implied term that the bulk of goods will correspond with the sample of goods. The goods will be free from any defect and will be of satisfactory quality. The section 15 is only concerned with the quality of goods and not to the properties like colour of the goods. The Section 15 describes a condition in a consumer sale but it is an innominate term in non-consumer sales.

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. Strict character of English Commercial Law The SGA is quite strict as an English law. It has implied terms and perceptions but it provide full protection to buyer and seller. For deciding the viability of the sale of goods, there are two test which are considered for correct sale of goods. One is called acceptability test and other is called usability test. In acceptability test, it is assessed that purchaser has accepted the goods on reasonable price while having the knowledge of the defect. A case known as ‘Shine V General Gurantee corp in 1988’ is an example of acceptability test. In this case a car was purchased from a dealer as second hand car. Later to the sale of car it was revealed that car had been involved in an accident and sub-merged under the water. The judge has concern that a reasonable person will not buy damaged car but at substantially reduced price. The second test is known as usability test. It is applied to business transactions. It is less specific test than the acceptability test. It lets court to look at the fact that the purchaser has used the goods in a reaso...