The 1979 Sale of Goods Act is the most comprehensive pieces of legislation on commercial law in the UK that governs, inter alia, contracts for the sale of goods, implied terms in sale of goods, rules governing the transfer and possession of property (goods) and also provides some of the remedies that purchasers (buyers) may have against sellers for defects in goods or otherwise (Dobson, Dobson & Stokes 2012, p. 10). This Act thus ensures the effectiveness of the legal relationship between businesses and customers, for it contains rules and regulations that seek to protect the rights of buyers and sellers. Through this, the law ensures that consumers or buyers are not exploited or defective goods sold to them without the possibility of them having remedies against the sellers and also equitably protects the commercial practices or activities of the seller (Pathak 2007, p. 69).
Legal Rules and Implied Terms
An implied term under the Act is defined under section 12 to mean an implied warranty or condition of a contract on the part of the seller that relates to the right to sell or agree to sell. According to Reddy and Johnson (2009) and Austen-Baker (2011), however, an implied term refers to a term of a sale contract which is not necessarily written or explicitly forming part of the contract of sale, but one which is implied either by the law or customary practice of trade to generally exist in the contract. These implied terms are meant to protect the purchaser from any possibility of the seller turning against them once a sale is completed. These are provided for under sections 12 to 15 of the Sale of Good Act (Monaghan 2015, p. 77). These terms include a warranty that the goods will remain free for sale or unencumbered until the sale agreement is completed, the enjoyment of quiet possession of goods by the buyers, condition that the goods will match or correspond to the seller’s description of them, implied condition as to the merchantable quality of the goods and their fitness for use by the buyer and an implied condition that the buyer will have a reasonable opportunity to examine the goods before making a decision to purchase. These are some of the ways through which the SGA provides legal protection to buyers, stemming from the fact that traditionally, sellers have always had a upper hand or advantage over the buyer, hence the need to create an equal playing field for both (Poole 2014, p. 206; Fuller 2010, p. 115).
Concerning an implied warranty concerning the description of goods and correspondence thereof, it was held in Harlington & Leinster v Christopher Hull Fine Art [1991] 1 QB 564 that once the buyer or their agent has had reasonable opportunity to inspect the good and is satisfied with the description they will not have any action against the seller. Here, the plaintiff bought a painting from the defendant at 6000 pounds and it was described at the auction as being done by a German impressionist. The buyer sent his experts to inspect the painting before they good agree to purchase the painting. However, after the sale, they discovered that the painting was a worthless and fake one and brought an action against the seller to recover the purchase price under section 13 of the SGA. The court argued that the sale was not by description any longer since the buyer sent their experts to examine the good and could not recover. Description can be in terms of measurement, material, and quality, colors, packing and shipping date or time.
Statutory Provisions on Transfer of Property and Possession
The general rule under modern commercial or business law of England and other common law jurisdictions is that ownership and possession cannot pass from the seller to the buyer when the seller lacks ownership rights over the good (Fitchen 2008, p. 46). Section 12 of the SGA contains an implied condition a s to title, meaning that the law presumes that the seller can only sell what they are legally entitled to sell and this applied in situations of sale of stolen goods as was the case in Rowland v Divall [1923] 2 KB 500. Here, it was held that since the car which was the subject matter of the sale had been stolen and sold to the seller who purported to sell it to the claimant, the defendant lack the right to sell the car since he had not obtained legal title from the thief. Ownership thus rested with original owner of the car and not the seller.
Further, as was held in Karlshamns Oljerfabriker v East Navigation Corp [1982] a seller cannot sell an unascertained property until it becomes ascertained. According to section 18 of the SGA 1979, ascertainment of the time at which property in goods passes to the buyer is to be inferred from the intention of the parties to the contract. This was also affirmed in Re Wait where it was held that no property in goods can pass from the seller to the buyer in unascertained goods. According to Connolly (2013), ascertainment of goods occurs when there is identification of the goods with the agreement between the parties after the contract is concluded. (p.95). That is, all the parties must agree as to the price, quantity, price and material of the goods and not be at cross purpose or be mistaken. This was also the case in Underwood Ltd v Burgh Castle Brick and Cement Syndicate [1922].
Remedies for Consumers for Defective Goods (AC 1.3, AC 1.4)
The SGA 1979 provides buyers with a litany of remedies against sale of defective products under section 52. These include the right to claim compensation, reject the defective goods and specific performance to compel the seller to perform the contract by supplying quality goods (Ryder, Griffiths & Simgh 2012). The buyer can also bring legal action against the seller for breach of warranty or condition of a contract of sale of goods (Baskind & Roach 2016, p. 112). Product liability makes manufacturers and sellers liable for any injuries to buyers as a result of defects in goods supplied. According to section 51 of the SGA 1979, in case the seller wrongfully neglects or refuses to deliver goods to the buyer, the buyer may bring an action against the seller for damages and under section 53, the buyer may reject the goods where the goods are not of the quality the buyer ordered or paid for or are defective. To determine whether the goods supplied are of the required quality or are defective, the courts use the acceptability test set out in Shine v General Guarantee Corp [1988] 1 All ER 911 and the usability test in Aswan Engineering v Lupdine [1987] 1 All ER 135. Similar remedies are found under the Supply of Goods and Services Act 1982 and include, inter alia, refund for defective goods (Fuller 2010).
References List
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Baskind, E., Osborne, G., & Roach, L., 2016. Commercial law. Oxford & New York: Oxford University Press.
Connolly, M., 2013. Briefcase on Commercial Law. New York: Routledge.
Dobson, A.P., & Stokes, R., 2012. Commercial law. London: Sweet & Maxwell.
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Fuller, G., 2010.Purchasing Contracts: A Practical Guide. USA: Spiramus Press Ltd.
Heafey, R. J. and Kennedy, D. M., 2016. Product Liability: Winning Strategies and Techniques. UK: Law Journal Press.
Monaghan, C., 2015. Beginning Business Law. UK: Routledge.
Pathak, A., 2007. Legal issues of business. New Delhi: Tata McGraw-Hill Publishing Co. Ltd.
Poole, J., 2014.Textbook on Contract Law. USA: Oxford University Press.
Reddy, J., & Johnson, H., 2009. Commercial law. London & New York: Routledge Cavendish.
Ryder, N., Griffiths, M. and Singh, L., 2012.Commercial Law: Principles and Policy. UK: Cambridge University Press.
Thampapillai, D., Tan, V. and Bozzi, C., 2015. Australian Commercial Law. UK: Cambridge University Press.
Ulph, J. and Smith, I., 2015 .The Illicit Trade in Art and Antiquities: International Recovery and Criminal and Civil Liability. UK: Bloomsbury Publishing.
