Supply of Goods and Services Act 1982

Question 1

The Supply of Goods and Services Act 1982 (SGSA) provides for the implication of terms in:

Answer 1

(a) Certain contracts for the transfer of property in goods;

(b) Contracts for the hire of goods;

(c) Contracts for the supply of services.

The SGSA 1982 also governs the exclusion of such implied terms.

Question 2

Does the Supply of Goods and Services Act 1982 apply to consumer contracts?

Answer 2

Again, it is important to note 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.

Question 3

Contracts for the transfer of property in goods

For the purposes of the SGSA, pursuant to s1 a ‘contract for the transfer of goods’ means…

Answer 3

…a contract under which one person transfers or agrees to transfer to another the property in goods (broadly, these are contracts where ownership of the goods changes hands) other than any of the following:

(a) A contract of sale of goods;

(b) A hire purchase agreement;

(c) A contract under which the property in goods is or is to be transferred in exchange for trading stamps;

(d) A transfer made by deed for which there is no consideration other than presumed consideration;

(e) A contract intended to operate by way of security.

Question 4

In any contract for the transfer of goods, terms will be implied corresponding to those which are implied in the case of contracts for the sale of goods. They are implied terms regarding…

Answer 4

…title (s 2), implied terms where transfer is by description (s 3), implied terms about quality or fitness (s 4) and implied terms where transfer is by sample (s 5). Those terms are not addressed in detail in this element.

Question 5

Contracts for the hire of goods

For the purposes of the SGSA, pursuant to s 6 a ‘contract for the hire of goods’ means…

Answer 5

…a contract under which one person bails or agrees to bail goods to another by way of hire (broadly, this means contracts where party A owns the goods but party B voluntarily has possession of the goods – this is what happens in a common hire arrangement) other than any of the following:

(a) A hire purchase agreement;

(b) A contract under which goods are bailed in exchange for trading stamps.

Question 6

In any contract for the hire of goods, terms will be implied corresponding to those which are implied in the case of contracts for the sale of goods (as amended). They are:

Answer 6

Implied terms about the right to transfer possession (s 7 – this is equivalent to the implied term concerning title in a sale of goods contract),

implied terms where hire is by description (s 8),

implied terms about quality or fitness (s 9)

and implied terms where hire is by sample (s 10).

Question 7

Contracts for the supply of services

The SGSA 1982 provides for the following implied terms in any contract for the supply of a service:

Answer 7

(a) Care and skill: where the supplier is acting in the course of a business there is an implied term that the supplier will carry out the service with a reasonable care and skill: s 13.

(b) Time of performance: where the supplier is acting in the course of a business and the time for the service to be carried out is not fixed by the contract, left to be fixed in a manner agreed by the contract or determined by the course of dealing between the parties, there is an implied term that the supplier will carry out the service within a reasonable time: s 14.

(c) Consideration: where the consideration for the service is not determined by the contract, left to be determined in a manner to be agreed by the contract or determined by the course of dealing between the parties, there is an implied term that the party contracting with the supplier will pay a reasonable charge: s15.

What is a reasonable charge and a reasonable time is a question of fact and will depend on the particular circumstances.

Question 8

Describe the contracting out of terms implied under the SGSA

Answer 8

In the case of contracts for transfer of goods or the hire of goods, under s 11 a supplier may negative or vary the terms set out in this element, subject to the provisions of the Unfair Contract Terms Act 1977 (UCTA).

Similarly, in the case of contracts for the supply of services, under s 16 a party may contract out of the implied terms set out in this element, subject to the provisions of UCTA.

UCTA does in fact significantly limit the ability to negative / vary these terms.

The detail of this is not addressed in this element.