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.

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

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

The absence of contract will follow the terms within SGA.

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.

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.

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

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.

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

Main protections of SGA

Section

Detail

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

Section15

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.

SECTIONS,CONTRACT AND PERCEPTION (Continued)

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

SECTIONS,CONTRACT AND PERCEPTION (Continued)

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.

SECTIONS,CONTRACT AND PERCEPTION (Continued)

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.

SECTIONS,CONTRACT AND PERCEPTION (Continued)

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?

.

SECTIONS,CONTRACT AND PERCEPTION (Continued)

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.

SECTIONS,CONTRACT AND PERCEPTION (Continued)

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.

SECTIONS,CONTRACT AND PERCEPTION (Continued)

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 hve 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 reasonable way as the goods were supplied for use.

A good example of usability test comes from a case known as Aswan Engineering v Lupdine in 1987. In this case plastic pails were held of satisfactory quality as these were left outside in extreme temperature up to 70%. The SGA also provides the remedy where goods donot conform to the contract. It could be at the time of goods delivery or within six months of delivery of goods. The SGA part 5A provide remedy to damages available in both private and business remedies. The Section 61 defines the meaning of consumer for the purpose of SGA 5A. A person may behave as a consumer if he donot make contract or a business can be considered as consumer if goods are ordinary supplied for private use.

Sales of goods act and contract

SGA provide full protection either liability is coded in contract or not. Both private and business sales are protected by liability either contract ispresent or not. The private sales are protected by liabilities present in SGA while business sales are also protected by unfair contract terms act(UCTA) 1977. The section 6 of UCTA covers the sales protection by creating fact that a business can never be excluded from liability from implied terms of section 12-15 of SGA. However in case of business agreement, both parties can agree to exclude their liability if they want to do so. Section 11 also explain the term of reasonability. It explains that that the term must be reasonable and fair to both parties at the time of its creation. The schedule 2 of SGA also explains the regard terminology. (a) The strength of the bargaining parties should consider the requirement of eaxh other. (b)The customer can agree a similar contract with other party provided the term is different.(c)The customer reasonably should know the existence of term.(d)If a term restricts or excludes a liability, the term should be practical and reasonable at the time of contract.(e) The sale is also depends if the goods were prepared , processed and manufactured specially for the customer.