The Seller's Duties and the Buyer's Remedies Flashcards
What are the seller’s duties?
The seller has two main duties:
⁃ 1) Duty to deliver
⁃ 2) Duty to provide goods that conform to contract
What is the seller’s duty to deliver?
Under s 27 the seller is under a duty to deliver the goods in accordance with the contract.
⁃ s 61 defines delivery as: “the voluntary transfer of possession from one person to another”.
⁃ This means that the seller need not physically deliver the goods to the purchaser - he simply has to voluntarily transfer possession (so the buyer could come and collect etc).
What are the provisions in relation to the absence of further information in the contract for delivery?
s 29 makes further provisions about delivery in the absence of further provisions in the contract.
⁃ In the absence of other provisions, the place of the delivery is the seller’s place of business (i.e. the buyer must come and get the goods).
⁃ If the seller doesn’t have a place of business, then the place of delivery is the seller’s residence, unless the contract is for specific goods which (to the knowledge of the parties when the contract is made) are in some other place - then the place of delivery is this place.[ So in the case of specific goods which the seller owns but are in e.g. a warehouse rather than his possession, if this is known to both parties then the place of delivery will be this place.]
⁃ If the contract provides the seller is to sell the goods to the buyer but there is no time set out then they must be delivered within a reasonable period of time.
⁃ Where the goods are in possession of a third party at the time of sale (i.e. a custodian), delivery doesn’t take place unless or until the third party acknowledges to the buyer that he now holds the goods on the buyer’s behalf.
What happens if the buyer receives the wrong quantity?
s 30(1): concerns delivery of wrong quantity - the buyer may reject them or keep them, paying at the contract rate. Where he delivers more than the agreed amount of goods the buyer may reject them all, or reject only the excess, or keep them all, paying at the contract rate (s30(2), (3)). In either case, the buyer may not reject the whole of the goods delivered unless the shortfall or excess is material.
What does Reg 42 of the 2013 Regulations provide for?
Provides that unless there is an agreed time or period for delivery in the contract between the trader and consumer the contract is to be treated as including a term that the trader must deliver the goods without unreasonable delay and in any event, not more than 30 days after the day on which the contract is entered into.
What is the general rule about the goods conforming to contract?
If the parties contract over the sale of golden delicious apples but the seller delivers pink ladies, then the goods would not conform to the contract since it is a breach of an express term.
What are the implied terms in the SOGA in relation to goods?
Section 12: Implied Terms.
⁃ s 12(1): it is an implied term that in the case of sale the seller has the right to sell the goods and in the case of an agreement to sell will have such a right at the time when property in the goods is to pass.
⁃ s 12(2)(a): it is also implied that “the goods are free, and will remain free until the time when the property is to pass, from any charge or encumbrance not disclosed or known to the buyer before the contract is made, and
⁃ s 12(2)(b) the buyer will enjoy quiet possession of the goods except in so far as it may be disturbed by the owner or other person entitled to the benefit of any charge or encumbrance so disclosed or known[ So unless otherwise disclosed the buyer is entitled to expect that they will be able to enjoy quiet possession and are receiving title free of encumbrances.].”
Niblett v Confectioners’ Materials [1921]
Defendant had agreed to sell condensed milk to the plaintiff and the goods arrived at their destination but bore a brand that infringed trademarks of another manufacturer. The goods were detained by customs. The plaintiffs had to remove the name of the brand in order to obtain possession from customs. Since they were then unbranded they could only be sold at a loss.
⁃ The court held that the defendant had broken the implied term in s 12(1) since they did not have the right to sell the goods because the goods infringed a third party’s trademark. However, this will only be an infringement if the patent is granted before the time of sale (Microbeads AC v Vinhurst Road Markings Ltd)
What are the implied terms in relation to correspondence with description?
Section 13:
⁃ Where there is a contact for the sale of goods by description[ All generic sales will be sale by description (e.g. contract to purchase a tonne of coal, the goods you receive must by coal.], there is an implied term that the goods will correspond with that description.
⁃ Section 13(3): a sale of goods is not prevented from being a sale by description[ So it is to do with description rather than quality (see case below)] simply because the goods have been exposed for sale and have been selected by the buyer.
⁃ This means that where a person goes into a shop and picks up a sweater which states on the label that it is a cashmere sweater - this is still a sale of goods by description despite the fact that the buyer has chosen it; the sweater must be a cashmere sweater.
Ashington Piggeries Ltd v Christopher Hill Ltd [1972]
⁃ The plaintiffs contracted with the defendants to mix and deliver animal foodstuff known as ‘kingsize’ to the defendants. The weight of the ingredients was provided by the defendants to the plaintiffs. The defendants were mink-breeders and they knew what they wanted the kingsize to contain. The kingsize supplied caused thousands of mink to die because it contained a contaminated ingredient which was toxic to the mink. The plaintiffs used this to make up the kingsize but they had received this from a third party supplier. Plaintiffs sued defendants for the price of the kingsize; defendants raised a counterclaim based inter alia on s 13 - that the contaminated ingredient wasn’t an authorised ingredient in the formula. The court held that the plaintiffs were not in breach of s 13; the fact the contaminated substance was toxic to the mink did not mean that it had been misdescribed.
⁃ As part of this action the plaintiffs sued their third party supplier. The contract between them had sold the ingredient as “fair, average quality”. The court held that “fair, average quality” was not part of the description. Despite the fact the quality was not up to scratch, it matched the description, thus there was no breach of s 13 here either.
- Lord Diplock [ “Description is confined to those words in the contract which were intended by the parties to identify the kind of goods to be supplied. it is open to the parties to use a description as broad or as narrow as they choose. but ultimately the test is whether the buyer could fairly and reasonably refuse to accept the physical goods proffered to him not he ground that their failure to correspond with that part of what was said about them int he contract makes them goods of a different kind from those he agreed to buy”. ]defined the characteristics which form part of the description.
What are the implied terms in relation to quality and fitness?
⁃ s 14(1): “except as provided by this section and section 15 below… there is no implied term about the quality or fitness for any particular purpose of goods supplied under a contract of sale.”
⁃ s 14(2): “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 quality and fit for the buyer’s purpose”
⁃ s 14(2A): “… 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”
⁃ s 14(2B): the quality of goods includes their state and condition and the following five factors[ These are not exhaustive.] are listed as being aspects of quality:
⁃ (a) fitness for all purposes for which goods of the kind in question are commonly supplied
⁃ (b) appearance and finish
⁃ (c) freedom from minor defects[ The following case occurred before there was any provision concerning freedom from minor defects in the SOGA. The inclusion of this provision concerning freedom from minor defects effectively reverses the following decision:
Millars of Falkirk v Turpie 1976 SLT (Notes) 66:
Defender purchased a car from the pursuer. Car had a defect which the pursuer could easily have fixed. An initial attempt was made to resolve the matter but the defender wouldn’t allow the pursuer to carry out any further repairs. The defender purported to reject the car on the basis that the pursuer was in breach of the implied terms that the goods were to be of merchantable (satisfactory) quality. The Court held that the car was of satisfactory quality and easily fit for purpose which a new motor car is designed to serve. The court had taken account of a number of factors: the defect was a minor one, the pursuer was willing and anxious to cure the defect, the defect was obvious and the risk of any danger was slight, many new cars have some defects on delivery.
So now, if there is a minor defect then this may mean the goods are unsatisfactory quality - it will depend upon the other factors (a)-(e).]
⁃ (d) safety
⁃ (e) durability
- (f) relevant circumstances e.g advertising, labels, public statements (added by Reg 3 2002 Regulations)
s 14(2C): the implied term as to satisfactory quality does not extend to any matter making the quality of the goods unsatisfactory which is:
(i) specifically drawn to the buyer's attention before the contract is made or (ii) where the buyer examines the goods before the contract is made, which that examination ought to reveal.
⁃ So s 14(2C) makes clear that is only applies where an examination has been carried out or the defect has specifically been drawn to the buyer’s attention:
s 14(3): implied term of fitness for any purposes expressly or impliedly intimated to the seller by the buyer whether or not that purpose is one 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 judgement of the seller[ E.g. if there is a buyer who is particularly knowledgeable about the goods and the buyer does not have particular knowledge, then it may be argued that it is not reasonable for the buyer to rely on the skill and judgement of the specialist.].
⁃ NB there is an interaction between 14(3) and 14(2B). In some circumstances one will be more advantageous to the buyer.
Lamarra v Capital Bank plc 2006
This case concerned hire rather than sale but in relation to hire of goods there are statutory provisions in terms of satisfactory quality that are identical to SOGA.
⁃ The court had to determine whether a manufacturers warranty regarding a vehicle could be taken into account as a relevant circumstance in determining whether goods were satisfactory quality. It was held this warranty should not be taken into account. This means that under s 14(2A), “all the other relevant circumstances” only refers to circumstances bearing upon the quality of the goods in question. Since the warranty didn’t bear on the quality of the goods it was not a relevant circumstance.
Clegg v Olle Andersson t/a Nordic Marine [2003]
⁃ Court had to determine whether a yacht with an overweight keel (so obviously not perfect) was of satisfactory quality. Court found it was not of satisfactory quality given the adverse effect on safety.
⁃ Also there as a need for more than minimal remedial works to rectify this problem. However, it was noted that just because a defect can be fixed cheaply would not mean that a good is of satisfactory quality.
- Held: satisfactory quality is considered from the standpoint of the hypothetical reasonable person: that standard does not import expertise.
MacDonald v Pollock [2012]
defender sold pursuer a cruise vessel that used to be a fishing vessel for £75k. Pursuer had a marine engineer carry out a survey before the purchase and received a favourable report. Pursuer himself carried out a short sea trial and was satisfied that everything was fine. Pursuer paid the price and took delivery. Soon after the pursuer discovered a significant problem with the vessel’s engine. It was then inspected by another marine engineer who thought it would cost £50k to remedy. Court held that s 14(2C) concerned the examination which was in fact conducted and any defects that that particular examination ought to have revealed. So provided the issue with the engine should not have been discovered by the examinations carried out prior to the sale, there was a breach of s 14.
Grant v Australian Knitting Mills Ltd [1936]
⁃ If there is only one purpose for which the goods could be used then the buyer does not need to inform the seller of this purpose. There is no duty to inform of the obvious.
- By contrast if the goods have a number of purposes, in order to rely on s 14(3) the buyer will have to make known to the seller the particular purpose for which he hopes to use the goods [Flynn v Scott].
