Sales of Goods Act 1979 Flashcards
The Sales of Goods Act 1979 is…
(As amended in 1994)
…is probably the most important piece of legislation in relation to the sale of goods generally.
Which Act mustn’t be confused with this Act?
It is important to note at the outset that the implied terms set out in this element do not apply to consumer contracts as defined in the Consumer Rights Act 2015.
That Act implies many similar terms into consumer contracts, but the provisions are not precisely the same, and accordingly the two situations must not be confused.
What parts are explored in this deck?
S12 – title
S13(1) – description
S14(2) – satisfactory quality
S14(3) – fit for particular purpose the purchaser has expressly or impliedly made known
S15 – the bulk of the goods must correspond with the sample
Section 12 deals with…
Implied terms as to title
Section 12 provides for the implication that the seller has the right to sell the goods.
The term implied by subsection 12(1) is categorised as a condition of the contract.
The distinction between conditions and warranties and the relevance of that distinction are not detailed in this element.
Section 13 deals with…
Correspondence with description –
Section 13(1) provides:
“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”
Where goods are described as having certain characteristics and specifications then they must correspond with that description.
The term implied by subsection 13(1) is categorised as a condition under s13(1A).
Section 14(2) deals with…
Satisfactory quality
Section 14(2) of the Sale of Goods Act 1979 (as amended) provides:
“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 quality2
According to s14(2A), the 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”
Section 14(2B) provides a checklist of what may be taken into account in assessing whether the goods are of satisfactory quality.
These are:
(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.
If goods have a self-evident purpose, eg a hot-water bottle or a pair of underpants, this self-evident purpose will clearly be covered by s14(2B)(a) as a purpose for which the ‘goods of the kind in question are commonly supplied’.
The exceptions to the implied term as to satisfactory quality are to be found in s14(2C)(a) and (b).
Thus, there is no condition as regards defects specifically drawn to the buyer’s attention before the contract was made, or, if the buyer examines the goods before the contract is made, as regards defects which that examination ought to have revealed.
Nor will a condition be implied where the seller is not selling in the course of a business.
Breach of s14(2) is classified as breach of a condition by s14(6).
Section 14(3) deals with…
…Fitness for a particular purpose
In addition to satisfactory quality, the goods should also be fit for purpose.
Section 14(3) states:
“Where the seller sells goods in the course of a business and the buyer, expressly or by implication, makes
known:
a) to the seller
b) where the purchase price or part of it is payable by instalments and the goods were previously sold by a
credit-broker to the seller, to that credit-broker,
“any particular purpose for which the goods are being bought, there is an implied term that the goods supplied
under the contract are reasonably fit for that purpose, whether or not that is a purpose for which such goods are
commonly supplied, except where the circumstances show that the buyer does not rely, or that it is unreasonable
for him to rely, on the skill or judgment of the seller or credit-broker.”
The section above makes clear that no implied condition as to fitness for a particular purpose arises where the
circumstances show that the buyer does not rely, or that it is unreasonable for him to rely, on the seller’s skill or
judgment.
Breach of s14(3) is classified as breach of a condition by s14(6).
What does Section 15 say?
Sale by sample
Where a sale is by sample, two conditions are implied into the contract by the Sale of Goods Act 1979 by virtue of s15(2):
(a) that the bulk will correspond with the sample in quality;
(b) …
(c) that the goods will be free from any defect, making their quality unsatisfactory, which would not be apparent
on reasonable examination of the sample.
Breach of s15(2) is classified as breach of a condition by s15(3), but the remedies available are subject to s15A
SGA 1979 (see later in this element)
What are the modification of remedies for breach of condition - s15A?
Although a breach of ss13, 14(2), 14(3) and 15 is breach of a condition, as stated above, this is subject to s15A.
Section 15A provides that if the breach is so slight that it would be unreasonable for the buyer to reject the
goods and repudiate the contract, the breach should be treated as a breach of warranty, which will only entitle
the buyer to claim damages.
The burden of proving that the breach is so slight and therefore unreasonable for the buyer to reject the goods
falls on the seller.
Describe contracting out of the implied terms under the Sale of Goods Act 1979 (as amended).
Section 55 indicates that a seller’s liability under ss12, 13, 14 and 15 of the SGA 1979 can be excluded and/or restricted by agreement of the parties, subject to the Unfair Contract Terms Act 1977 (UCTA).
UCTA does in fact significantly limit the ability to exclude / restrict these terms.
Under s6(1)(a) of UCTA, the implied undertaking as to title contained in s 12 SGA 1979 cannot be excluded or restricted.
Under s6(1A) of UCTA, the implied undertakings as to description, quality, fitness for purpose or sample contained in ss13-15 of the SGA can be excluded / restricted subject to the requirement of reasonableness.
The detail of this is not addressed in this element.
Summarise in relation to terms implied by the SGA 1979.
The Sale of Goods Act 1979 implies the following terms into contracts for the sale of goods:
‒ Broadly, the seller has the right to sell the goods (s.12).
‒ The goods will comply with their description (s.13).
‒ The goods will be of satisfactory quality (s.14(2)).
‒ The goods will be suitable for any purpose made known to the seller (s.14(3)).
‒ The goods will comply with any sample (s.15).
Does SGA apply to consumer contracts?
Following the enactment of the Consumer Rights Act 2015, most of the provisions of the SGA ceased to apply to trade, especially in regard to consumers.
