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Tanzania Legal Management Of Contracts

From the very beginning of the human being, mankind has been in contractual relationship of one sort or another. When one enters into marriage that is contract. Selling and buying of commodities is another form of contract, when one buys a ticket for transport, he is engaging in contractual relationship. Partnership, lease, trade agreement are some of the many forms of the contract. In fact, there is no final list of the contracts.

As time passes, more and more complicated contracts have been entered between parties concerned. These contracts involve individuals or individual and the Government institutions or Non- Government organizations. Emerging of different contracts with their complications requires definite contracts well organized legal structures and working judicial institutions to interpret the law and give right to the parties deserving.

In line with that, this work will be focusing on following areas;

Position and management of contracts in the United Kingdom and Tanzania as well as comparison of legal framework of these two countries.

The benefit of CISG when both parties to the contract are signatories of the United Nations agreement.

To describe the goods the seller purveys and the reasons the buyer is prepared to enter into a contract to buy such goods. To outline the differences sale of goods and supply of services.

To give highlight of case law applicable to the provision of software.

To provide comparison between the contracts of employment in Tanzania and the contract of employment in United Kingdom.

This work will discuss briefly the creation of the contracts, rights and liabilities of the parties in the contract. It will highlight the remedies in case there is a breach of the contract. Eventually, the development and advantages of CISG membership will be

Discussed in brief.


One Legal Dictionary defined contract as ‘A legally binding agreement creating enforceable obligations" (Curdozon L.B (2002) [1] 

According to Sir William Salmond, a contract is an agreement creating and defining the obligation between two or more parties. [2] 

An agreement does not necessarily to mean a contract as the former does not invite legal enforcement while the latter calls for the legal measures and the parties intend enforcement of the law for the their entered agreement.

In English law contract is a bargain, each party gives something to the other and gets something in return under mutual promise, therefore the contract should be carried out, under obligation theory a party is obliged to carry out promise. (Wright, D (2004) [3] 


However for a contract to be valid, it must contain the following essential elements. Namely; there must be a Consideration, parties must have a capacity to contract, parties must have free will (consent)to contract, parties must have intended to create a legal relationship, and words must be certain.

In all circumstances, a valid contract requires an offer from one part and unconditional acceptance by the other party and the acceptance should be communicated to the one who made the offer (Venkatesa T.S (2004) [4] . The contracting parties should agree about the subject matter at the same time and in the same sense (Venkatesa, T.S (2004) [5] 


It should be noted from the very beginning that Tanzania was the English colony hence most of her laws were imported from United Kingdom via India. Law of contract is not exceptional.

In giving short historical background of English law, the prominent book says: [6] 

“English contract law as we know it today developed around a form of action known as the action of assumpsit, which came into prominence in the early sixteenth century as a remedy for the breach of informal agreements reached by word of mouth-by ‘parol’.

The early common law was largely concerned with serous crime and land tenure, and Glanvill, writing in about 1180, tells us that in his time, ‘it is not the custom of the court of the Lord King to protect private agreements’. Three centuries were to pass before the common law courts acquired a general jurisdiction over both formal and informal contracts. But the limitations upon the scope of the common law of contract at any given time did not mean that there then existed no forum for contractual business, but merely that remedies had to be sought elsewhere. For the common law evolved in a society served by a bewildering diversity of courts outside the common law system, enforcing a variety of bodies of law. Thus there were county courts, borough courts, courts of markets and fairs, courts of universities, courts of the Church, courts of manors, and courts of privileged paces such as the Cinque Ports. Many such courts handled contractual business.

In addition the Court of Chancery in the fifteenth century developed an extensive contractual jurisdiction. The story of the growth of the common law in contract law and elsewhere is the story of the expansion of the common law courts’ jurisdiction at the expense of other jurisdictions, and the consequential development- whether by invention or reception- of common law with which to regulate the newly acquired business"


Currently, many of the principles of English contract law are the developments of the law as were developed from 18th and 19th centuries. By then government or Court paid little attention to the formation of the contract as it was presumed that the parties could eater into any agreement they wished under the doctrine of freedom of contract. Intervention of law could take place in case of illegality, found mistake or legal wrongdoing. Today courts interprets the law and parliament passes legislation to intervene and protect parties such as tenants, employees, consumers who eventually turn out to be in disadvantage side or weaker parties (Duxbury, R (2006) [7] 


Formerly contract were classified into deeds, simple contracts, bilateral and unilateral contracts (Duxbury, R.(2006)6. Simple contracts may be made orally or in writing without complex terms and conditions. A deed must be in writing and signed by parties. Currently contracts are grouped in bilateral and unilateral contracts. (Professor Mellor, D. 2010) [8] .


Bilateral contract does involve parties to the contract who fulfill elements of the contract. For example in a contract for the sale of goods, the buyer promises to pay the price and the seller promises to deliver the goods. However in unilateral contracts, one promise to do something in return of an act of the other party as opposed to mere exchange of promises. In unilateral contract only one party is bound to do something. For example, no one is bound to search for the lost item but if any person being aware of the offer, recovers the lost item and returns it to the owner, and then he is entitled to the reward. Unilateral contract when made are open to the whole world. Any one interested can act be party to the contract and becomes party of it.


An offer which also known as proposal ma be defined as ‘statement of willingness to contract on specified terms made with the intention that, if unconditionally accepted, it will create a binding contract’. (Nditi, NNN (1995) [9] an offer may be express or implied from conduct. It may be addressed to one particular person, a group of person, or the world at large. This was said in the case of Garlil V. Carbolic Smoke Ball Co, CA [10] where the Court made precedence that and offer may be made to the whole world. This decision was adopted in Bowerman V. Association of British Travel Agents Ltd. [11] 


Acceptance may be defined as an unconditional assent, communicated by the offeree to the offeror, to all terms of the offer, made with the intention of accepting. Whether an acceptance has in fact occurred is ascertained objectively from the behavior of the parties including any correspondence that has passed between them [12] 


Something, which is actually given or accepted in return for a promise it is some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other. Currie v Misa [13] consideration must be communicated to the offeror.

Generall, past consideration are not acceptable as consideration save for a few exceptions, in Tanzania past consideration could amount to consideration. The quoted Section 2(d) of the Act, reads; has done or abstain from doing…’

The offeree must accept the exact terms proposed by the offeror unconditionally; that is without introducing any new terms which the offeror has not had the opportunity to consider. The introduction of new terms is referred to as a counter offer and its effect in law is to bring to an end the original offer and make in its place, a new offer. This principle was highlighted in the case of Hyde v. Wrench, 1840 [14] defendant offered to sell a farm to the claimant for pound 1,000. In reply, the claimant offered Pound 950 . this was rejected by the defendant. Later, the claimant purported to accept the original offer of Pound 1,000. It was held there was no contract; the counter offer of Pound 950 had impliedly rejected the original offer which was no longer capable of acceptance.


Section 10 and 11 of the Sale of Goods Act [15] , deals with the ascertainment of price. Section of 10 of the Ac [16] t deals with the both sales and agreement to sell while section 11 applies only to agreement to sell.

Section 10 (1) of the Act [17] provides as follows:

“The price in the contract of sale may be fixed by the contract or may be left to be fixed in a manner thereby agreed, or may be determined by the course of dealing between the parties"

Only if the methods in section 10 (1) of the Sales of Goods Act [18] do not result in a price being determined does Section 10 (2) of the Sales of Goods Act come into play and provides that the buyer must pay a reasonable price.

In relation to the determination of the price under Section 10 of the Sales of Goods Act [19] , most of the problems have concerned transactions where the price has not been specifically agreed but is left for determination at some later time. In Tanzanian case of Alfi East Africa Ltd v. Themi Industries & Distributors Agency Ltd. [20] the Court of Appeal annulled the decision of the trial Court and held that price is a fundamental matter in an agreement of sale, and as there was no agreed price there was no agreement; and hence in terms of section 29 of the Law of Contract Act [21] the agreement was void for uncertainty.

Section 10 of the Sale of Good Act allows prices to be fixed by the contract or later i.e after conclusion of the contract either by a manner agreed by the parties or by the course of dealing between the parties. In the Alfi’s case (above), however, while paragraph (e) of the agreement provided for the mode of payment of the price, the price itself had not been fixed nor had the parties agreed.

On the manner of fixing the price in future and no course of dealing between the parties which could determine the price in future.


A well drafted contract must contain provisions providing for both right and liabilities of the parties. The contract should further provide remedies to the innocent part in case of breach by the other party. Where a contract does not provide for remedies in cases of breach, recourse will be had to the provisions of the law on the subject.(Luoga, & as all (1996) [22] 

Even where a contract has limitation clause, the same doe not completely absolve a party from liability but instead it place a limit, a ceiling, on the maximum liability. For example, in Ailsa Craig Fishing v. Malvern Fishing [23] (another spectacular Securicor case) a limitation clause limited liability to Pound 1.000, so that the damages could be less than but not more than Pound 1.000 (even though the actual loss caused was assessed at Pound 55,000). Care and scrutiny is much required on contracts which purport to exclude a party from liability arising from fraud or negligence in the cause of execution of the agreement.

In the case of Canada Steamship Lines Vs. The King [24] the Court set up criteria to be observed when confronted with the applicability of an exclusive clause in a contract. The test includes;

Does the clause expressly exempt from negligence, in which case it is effective or

Are the words wide enough in their ordinary meaning to cover negligence, in which case the clause may still be effective, unless

There is some head of damaged other negligence (not fanciful or remote) which the words could be construed as applying to rather than to negligence.

Contractor carries unlimited liability for negligence (causing death to another person, or damage to another’s property)

Exclusion clauses are not permitted in some laws like the Health and Safety at Work Act, Employers Liability Act, Occupiers Liability Act and the Visitors Act.


Some terms are so fundamental to the purpose of the contract that it is almost inconceivable that the parties could have agreed to exclude liability for their breach [25] . Lord Roskill in The TFL Prosperity [26] confirmed that the courts will rarely conclude that the parties intended to exclude liability for a fundamental breach, he said that the charter in that case virtually ceases to be a contract for the letting of the vessel ‘ if the exclusion clause is interpreted so that fundamental terms could be breached without financial redress.

Several remedies area available when a contract is breached, as discussed below

The first common remedy is to seek specific performance; Where the innocent party is of the view that the breach of the contract by the other party cannot be atoned by monetary compensations, he may seek specific performance of the contract. If a party is not interested to compel the other to adhere to the terms of the contract by the specific performance, he may file a suit for damages for breach of contract. [27] 

The others celebrated remedy is quantum meruit; where a party is paid as per amount of the contract performed before its termination by breach.


Section 37 of the Sale of Goods Act [28] provides for circumstances where property does not pass under section 18 to21 of the Sale of Goods Act, it must finally pass on ‘acceptance’ of the goods by the buyer within the meaning of section 37. In which the buyer is deemed to have accepted the goods when, after he initiates to the seller tat he has accepted them or when the goods have been delivered to him and he has had reasonable opportunity to examine the goods, either he does any act in relation to the goods which is inconsistent with the ownership of the seller; or after the lapse of a reasonable time he retains the goods without intimating to the seller that he has rejected them.

The buyer loses his right to reject the goods when the accepts them. If the goods delivered in fact are of the wrong quantity description or quantity conditions stipulated in sections 15-17 of the Sale of Goods Act, property in the goods will revert to the seller [29] 


The sale and supply of good in Tanzania is governed by the Sale of Goods Act.22 it was adopted from India on 15th May 1931 as the sale of Goods Ordinance. The major amendments to the Act were done in 1963 through the Ordinance No. 55 of 1963.

Unlike in the United Kingdom where there are two pieces of legislation namely, the Sale of Goods Act, and Supply of Service Act, Tanzania has only the Sale of Goods Act. And the Law of Contract Act. Contracts for supply of goods in Tanzania are dealt with under the provisions of the Law of Contract Act guides the sale agreement, by providing potential elements, for sale contract to succeed.

In the United Kingdom, the sale of goods is regulated by the Sale of Goods Act of 1979.

Other laws on the sale of good and supply of services in the United Kingdom includes;

Supply of Goods & Services Act 1982; Consumer Protection Act 1987 based on EC Directive 85/374; Sale & Supply of Goods Act 1994; Enterprise Act 2002.

In Tanzania, the law regulating the buyers and sellers visa is the consumer is not adequate enough. Other than the sale of Goods Act the other law regulating sale of goods and services are the Fair Competition Act [30] which prohibits unfair trade practices and consumer protection, Energy and Water Utility Act (EWURA) [31] which regulates Energy and Water sector and the Tanzania Communications companies. Most of the consumers are not aware of the existence of these laws and no sufficient effort is being made to import awareness to people.

In case of lacuna in Tanzania laws, recourse is being made to common law. For instance, in the case of Tanganyika Garage Ltd v Marceli G Mafuruki 23 the Court held;

Common low is to be used.


CISG stands for Contracts on International Sale of Goods. It is the creature of international trade agreement adopted in 1980 at the Vienna Convention for the International Sale of Goods. Its aim is to eliminate any ambiguity resulting from various domestic laws related to the international sales of goods. The Convention remained inoperative until 1988 when the tenth member ratified the convention.

Under Article 99 of the Convention, it could not become operational unless a minimum of 10 members stated ratified. Currently there are 73 signatory countries to this convention; however, United Kingdom and Tanzania are not signatories to this convention. Some of the signatories countries are: Germany, Japan, Switzerland and Uganda

The Convention for the contracts on International Sale of Goods does bring in many benefits such as:

Firstly, through this agreement, international trade becomes increasingly Hassle-free, and the possibilities for dispute to occurrence lowered, on the bases that it is the uniform sale of goods law which cut across the globe, as it applies to contracts between companies located in different countries [32] ,

Secondly, CISG is noted for its simplicity CISG proclaims a practical approach that recognizes freedom of contract: "A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses.

Thirdly, The CISG law is superior to domestic commercial laws, notwithstanding the fact that, CISG is not mentioned specifically within a contract made between two companies of different states that ratified the convention, the companies are legal bound. However in order to have the parts of the convention excluded, the contract has to explicitly mention the convention or the parts of it that parties have adopted this agreement. [33] 

Fourthly, The CISG can be both a discretional as well as mandatory set of rules. It is discretionary when both parties agree to be bound by its rules; it has mandatory application when the parties do not choose to use it but become bound to it by virtue of its automatic application. As a result of the mandatory application of the CISG, most international sale of goods contracts with parties in western countries will be subject to the CISG, unless specifically excluded in accordance with the CISG's terms. [34] 

 Fifthly, CISG has a unified code of rules and regulations, making importing and exporting and other facets of international trade easier. Instead of dealing with the domestic laws for international trade in several foreign countries, companies can readily apply CISG. [35] 

 The convention is also a great way to build trust. Domestic laws within a foreign country can be interpreted in different ways, while the interpretations of CISG are static.

Litigation, arbitration and mediation are some of the methods used for resolving disputes relating to CISG. But the most preferred method is Arbitration.

 Under the CISG, the buyer must examine the goods as soon as practicable and notify the seller of any lack of conformity within a reasonable time after a defect has been discovered, or at the latest, within 2 years of delivery. Failure to conduct this examination or make the complaint forfeits the buyer's right to reject the goods and, more significantly, the right to claim damages or a price reduction. The notice must be sufficient to specify the nature of the defects. The provisions that allow the buyer to refuse deliveries of nonconforming or defective goods. Entitles the innocent party to remedies known as "avoidance of the contract" under the CISG. These terms refer to a party's right to cancel contract.

 The following are the instances where the CISG provisions apply:-

According to art.1,

(1): "This Convention applies to contracts of sale of goods between parties whose places of business are in different States; 

(a) when the States are Contracting States; or 

(b) when the rules of private international law lead to the application of the law of a Contracting State" 

Before they conclude the contract, the parties must be aware of the fact that the headquarters are in different states. Contracting states, in the sense of the CISG, means the signatory states (Art.91). [36] 

 According to Article 11 of CISG: 

“A contract of sale need not be concluded in or evidenced in writing and is not subject to any other requirement as to form. It may be proved by any means, including witness."

However it is highly recommended, even more than in the case of a domestic contract that is included in the contract.

The provisions in the CISG attempt to facilitate the successful completion of an exchange of international goods by discouraging contractual breakdowns, even when events go awry. In this respect, the CISG goes far beyond the legal architecture of the Universal Commercial Code (UCC). Many provisions encourage, or even require, communication and reasonable conduct between the parties to resolve problems before a total contractual breakdown. In this respect, the CISG promotes freedom of contract over the regulation of private international behaviour. In doing so, it allows businesspersons to operate more efficiently in the growing international marketplace by replacing potentially litigious legal regimes, such as the UCC, with a set of laws that allows for self-regulation

If parties wish their contract to be guided by CISG they must clearly stat that in the pleading otherwise the local laws of the jurisdiction will apply. The principle was laid in the case of Attorney Trust and CM Magnetics Corporation Vs Videotape Computer Product, Inc, and Videotape Products, Inc. [37] In the case the buyer originated from United States and the Seller from the Republic of China. Both countries are signatories of CISG. The federal Court held that the District Court was right to use the local law of California because parties did not stat in their pleadings that they wanted CISG to be used and only cited the California law.

Where CISG apply between parties, a dispute may be referred in any local Court for determination. The Complainant is only required to cite in the pleadings that he/she would prefer the use of CISG in determining the dispute. A good example where CISG was employed is N.V.A.R (Seller) from Germany Vs N.V.I (Seller from France), [38] the Court of first instance desisted to determine the matter on reasons that it was incompetent to acknowledge an international dispute between parties, Nullifying the decision of the lower Court, the Appellate Court held the lower Court ad jurisdiction to determine a dispute arising from CISG.

The following areas are covered by the CISG contract namely, The obligation of the buyer and seller, Delivery, Risk and payment, Delivery of goods, Conformity of goods, Damages and Reclamation of goods, (professor Mellor(2010) [39] 

The CISG sets forth rules of contract law in many respects namely, the CISG has a mirror-image rule for the battle of the forms; it has no parole evidence rule; it has no statute of frauds; it has no perfect tender rule; and there is a greater availability of specific performance under the CISG than there is under the common law.


The legal principles and policies in East Africa are somehow similar because they were under the British protectorate and as a result they all use the same Common law legal system in their jurisdictions.

This part however will concentrate to show the comparisons between the two countries that is United Republic of Tanzania and United Kingdom.

In both countries the law requires the employer to do inter alia the following things; -

Keep the written record of the employee even when an employee is engaged on an oral contract. In the United Kingdom the employer must keep the following records of the employee. [40] 

The identity of the parties

The date on which the employees period of continuous employment began (taking into account any employment with a previous employer which counts towards that period)

The scale or rate of remuneration, or the method of calculating remuneration is not defined in the statute and ought to be regarded as including all financial benefits.

Any terms and conditions relating to hours of work and normal working hours.

The place of work, or if employee is required or permitted to work at various places and indication of the employers address.

The title of the job or a brief description of the employees work.

The same applies to Tanzania; the Act [41] provides the same that subject to section 19(2), an employer shall supply to employee, when the employee commences employment, with the following particulars in writing name-

Name , age, permanent address and sex of the employee, Place of recruitment; Job description; Date of commencement; Form and duration of the contract; Place of work; Hours of work; Remuneration, the method of its calculation, and details of any benefit or payment in kind and; Any other prescribed matter.

In Tanzania Section 15 of the Employment Act [42] require the employer to supply to the employee on commencement of employment written statement of particulars including;

Name, age, permanent address and sex of the employee, Place of recruitment, Job description; Date of commencement; Form and duration of contract; Place of work; Hours of work; Remuneration, the method of its calculations, and details of any benefits or payments in kind and Any other prescribed matter.

Also, the provisions of the law look the same both under the United Kingdom and under the United Republic of Tanzania on the issue of Public holidays. In United Kingdom 36, Employees are entitled to be paid if required to work on a public holiday. Holiday entitlement should be calculated by dividing the annual salary by the number of working days 37. In Tanzania 38, if and employee works on a public holiday specified in the Public Holidays Act, the employer shall pay the employee double the employee’s basic wage for each hour worked on that day.

Sick leave:

Sick leave entitlements vary from job to job, and there are different sick pay schemes in operation. In United Kingdom they have arranged statutory sick pay and Contractual/ Company sick pay. Statutory sick pay is the minimum amount an employer must pay one by law when one is off sick. One needs to be earning Pound 95 before tax and NI in order to qualify. Payment is Pound 79.15 pw for up to 26 weeks, but this doesn’t kick in until the fourth day of one sick leave.

Sick pay. Ones employer may offer a contractual sick pay scheme that goes beyond the legal minimum. A typical scheme usually starts after a minimum period of service for example, a two or three month probationary period.

In Tanzania Act [43] an employee shall be entitled to sick leave for at least 126 days in any leave cycle. The sick leave referred to in subsection (1) shall be calculated as follow;

The first 63 days shall be paid full wages

The second 63 days shall be paid half wages

3. Notwithstanding the provisions of subsection (2), an employer shall not be required

to pay and employee for sick leave if-

The employee fails to produce a medical certificate; or

The employee is entitled to paid sick leave under any law, fund or collective agreement.

Both Acts have provisions relating to working hours. In the United Kingdom if one is over 18, he has to work a maximum of 48 hours per week while in Tanzania 41 an employee is required to work an average of six days in any week, 45 hours in any week and nine hours in any day. The law further limits permissible overtime hours to 50 overtime hours in any four weeks. [44] 

The major difference between the ordinary business contracts and employment contracts is that they must meet the minimum statutory standard terms and are not permitted to agree below the minimum standards set in the employment law. In ordinary business contract, as much as a contract is entered by mutual consent of parties for a law full object and a law fully object consideration, it is enforceable.

The rationale of setting p the minimum standards in employment contacts is to protect the employee. Normally and employee is a weak party and in most cases can hardly negotiate on equal footing with the employer.

For instance, while and employee is at liberty to terminate an employment contract by issuing to the employer a one month notice or payment in lieu thereof, the employer does not have such a right. For an employer to terminate a contract of employment, he must prove that there are fair reasons and has to adhere to fair procedure in terminating the employment. Further, whenever a contract of employment is terminated, it si the duty of the employer to prove that termination was fair. The proof however is on preponderance of probability.



‘Goods’ is defined is section 2 (1) of the Tanzanian Sales of Good Act [45] ,; Goods include all chattels personal other than things in action and money. The term includes implements, industrial growing crops, and things attached to or forming part of the land, which are agreed to be severed before sale or under contract of sale.’

The quoted Section does not provide and exhaustive list of goods. It indicates that ‘goods’ includes all personal chattels (i.e. all tangible moveable things) as opposed to real chattels (such as freehold or leasehold land), except things in action and money. ‘Things in action’ includes debts, shares, patents, trademarks, cheques and equitable interest under trusts [46] The category can loosely be defined as property or right to which a person is entitled but which cannot be reduced into physical possession and which therefore require to be enforced by a legal action [47] in other words, things in action are items of intangible property. The right to such property cannot be claimed by taking physical possession of goods but must be asserted by legal action. Contracts for the sale of such items are not contract for the sale of goods, although the physical document, in which a right is evidenced, such as an antique share certificate, could be sold as goods 44



Article 48 of an International Sales of Good Act 45 [48] , provide the reasons to why a buyer is prepared to enter into a contract to buy goods. The Section provide as hereunder:

Subject to article 49, the seller may even after the date for delivery,

remedy at his own expense any failure to perform his obligations, if he can

do so without unreasonable delay and without causing the buyer unreasonable inconvenience or uncertainty of reimbursement by the seller of expenses advanced by the buyer. However, the buyer retains any right to claim damages as provided for in this Convention.

Also, Article 46 [49] give the buyer wider discretion to enter into a contract to buy goods. The provisions states as follows:

The buyer may require performance by the seller of his obligations unless the buyer has resorted to a remedy which is inconsistent with this requirement.



A contract of sale of goods must be distinguished from several other transactions which are normally quite different from a sale of goods but which in particular circumstances, and may closely resemble such a contract.

The next part deals with sale of goods as distinguished from the supply of services.

There are some other slightly different situations where goods are supplied as an incident of the provisions of services where the contract is classified as one of services and not of sale these are usually contracts for professional services such as those of Advocates, Doctors, Architects, Accountants, Engineers and Opticians.

An example is provided in Grafton v. Armitage [50] Grafton, an engineer, was commissioned by Armitage to device a method of producing metal tubes, which might be in the production of a new type of lifebuoy, which Armitage had designed. Grafton considered the problem and produced drawings from which he built a prototype, which Armitage could inspect. Armitage refused to pay her for the work. It was held that this was a contract for service and not a contract of sale. It was never envisage that the contract should result in the production of something which would be the subject of sale

Contract by Doctor under which drugs are supplied are treated in the same way. In Roe V. Minister of Health [51] it was held that the fact that drugs are supplied in the course of treatment does not give rise to a contract of sale but to a contract for services. Similarly, it seems likely that the provision of blood to a patient would be treated in the same way. [52] 


Good can be defined as ‘all personal chattels other than things in action or money. Company shares are not goods, copyright and patents are not goods’ (Professor Mellor, D. OBD(2010) [53] 

Software can either fall in category of goods or supply of service depending on the circumstance of the each particular case. But should qualify the condition set up in the sale of Goods act for goods namely fitness for purpose, and for services should be of high quality. This approach has been applied to computer software, as good and as service.

For example, it being suggested that a contract for the supply of software supplied through physical medium such as a diskette is a good. Custom built software on a specific platform is deemed as sale of good for example billing system, the sale of good also includes the following; sale of a Compact Disc (CD) or Digital Volatile Disk (DVD) containing Music and or Video is the sale of Good. [54] 

Normally mass produced software is deemed as sale of service. The download of music from the website, and installation of the operating and application software in the computer is considered to be a supply of service. (Professor David Mellor (2010) [55] ,

The level of Liability under the statutes of Sale of Goods Act 1979 is considerably more than that applying to Supply of Goods & Services Act 1982. In Eurodynamics systems plc v General Automation Ltd. [56] Where Lord Penrose concluded that:

‘One could not describe the supply of information downloaded software over the telephone system as a sale of goods.’

In the case of St. Albans v. International Computer Limited [57] software delivered in hard media is a good and is subject to implied terms of the Sell of Goods Act.

Thus software delivered in hard media are goods, subjected to implied terms given by the Sale of Goods Ac, and those downloadable ones or supplied to Sale and Supply of Service Act.

Thus, all activities itemized as goods are governed by the Sale of Goods Act [58] and those which are supply of services taken care under the Supply of Goods Act [59] 

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