Act Summary
Introduction
This summary examines the Sale of Goods Act 1979 (“the Act”) within its context: why it was drafted, what are its important provisions, and how it has changed since it came into force. It is submitted that the Sale of Goods Act 1979 has been part of a change in consumer dealings, with its most significant contributions being to the rights consumers have where they buy products that turn out to be faulty. Indeed, its use has been so central to implied terms in particular, that one author has been criticised for failing to see the contribution of the Act to the law of implied terms.[1] At the same time, the Act’s importance has to an extent been diminished by the introduction of very recent legislation.[2]
Rationale for Drafting
The Act codified various provisions, such as the formation of contract, which was already prevalent and well-established in common law.[3] However, its contribution was to enhance consumer confidence. It has been argued that without the Act, and its successors, there would be little protection for consumers.[4] This imbalance of consumer rights would lead to significant caution, and even “defensive consumerism.”[5] If consumers believe they have few rights when purchasing goods, then they are slow to trust newer and less-familiar brands, and will continue to buy goods from established brands, even where those goods actually lack in quality. Therefore, if the legislature does not guarantee certain minimums for consumer confidence, competition would suffer.[6] In summary, the Act was brought about due to a concern for protecting consumer rights, and thereby promoting consumer confidence and increase competition amongst producers.
Provisions of Note
The Act is recognised for its contribution to the law of implied terms. Sections 12-15 provide guidance on the existence and scope of implied terms relating to title, quality, sale by description, and sale by sample. It has been submitted these sections are central to any considerations about implied terms.[7]
Section 14 is important because of its use of several concepts. First, it implies several terms into all contracts, those terms being that the goods are of satisfactory quality, which is evaluated by reference to the “state and condition” of the goods.[8] Second, the section contains an important proviso: the terms are only implied when the sale is conducted “in the course of a business.”[9] The “valuable decision”[10] of MacDonald v Pollock[11] – a Scottish case which nevertheless provides important guidance for applying the Act across the UK[12] – has recognised this section to have far-reaching consequences for business-to-consumer and business-to-business transactions, because the definition of a business is now a material issue.[13]
Section 15A refers to remedies for breach of conditions in non-consumer cases. This section says a buyer may claim for breach of warranty, but not repudiate a contract, where “the breach is so slight it would be unreasonable for [the buyer] to reject [the goods].”[14] This section has been argued as “central to elements of commercial practice” – as in one case[15] – to concepts of description, condition, and rejection.[16]
The Act makes other specific additions to contract law designed to protect specific consumers. Section 3 of the Act gives detail about “necessaries” purchased by a minor. According to that section, necessaries – defined as “goods suitable to the condition in life of the minor and to his actual requirements at the time of sale and delivery” – must be sold/purchased at a “reasonable” price.[17] That section also requires a reasonable price must be paid by a person who “by reason of drunkenness is incompetent to contract.”[18]
In conclusion, it is submitted the Act has codified the law, provided guidance on various miscellaneous issues, and has been most significant for its contributions to consumer protection and commercial practice through the use of implied terms.
Redefined and Repealed
First, the Act’s role in consumer dealings has been supplemented by subsequent legislation, in particular the Unfair Terms in Consumer Contracts Regulations 1999.[19] These Regulations introduced, “to the consternation of UK lawyers”,[20] a requirement that contractual terms be assessed according to a standard of good faith. This concept is more commonly associated with Continental European legal systems and sits somewhat uneasily within English contract law, which has traditionally emphasised freedom of contract.[21] Because it has not historically been a central feature of English jurisprudence, the concept of good faith has been described as remaining relatively “primitive”.[22] Nevertheless, these developments operated alongside the framework of the Act, particularly in relation to the Act’s detailed provisions concerning implied terms.[23]
The Act has also more recently been affected by a change in the structure of consumer protection law. The Consumer Rights Act 2015 (“the 2015 Act”), which came into force in October 2015, introduced a new consolidated framework governing consumer contracts.[24] In particular, it replaced the earlier regime governing unfair terms and consumer rights in relation to goods.[25] These provisions now apply where a trader supplies goods to a consumer, and therefore overlap with areas that had previously been governed by the Sale of Goods Act.[26] Importantly, the 2015 Act also introduced statutory protections relating to digital content, reflecting developments in modern commerce such as the supply of software, apps and other downloadable products that were not envisaged when the Sale of Goods Act was enacted.[27] To that extent, the Act’s role in consumer transactions has been reduced. However, the Act continues to remain significant, particularly in business-to-business transactions, and many of the principles reflected in the 2015 Act – including those relating to quality and fitness for purpose – are derived from the framework originally developed under the 1979 Act.[28]
Conclusion
It is submitted the Act has been part of, and has helped to develop, consumer protection. It has been part of an effort to boost competition by giving consumers certain assurances about their rights when purchasing from businesses (hence why the definition of a “business” is such an important issue). To an extent, subsequent developments have introduced concepts to consumer-to-business dealings that were not envisaged in the Act. Nevertheless, it is submitted these developments were only possible, at least in part, due to the foundations of the Act and its provisions relating to implied terms.
2026 update
The Sale of Goods Act 1979 remains an important statute, but its present role is more limited than this summary suggests. Since 1 October 2015, the Consumer Rights Act 2015 has largely replaced the Sale of Goods Act regime for consumer contracts, including the main statutory rights relating to satisfactory quality, fitness for purpose and matching description. The Sale of Goods Act 1979 therefore now operates mainly in business-to-business sales and other non-consumer transactions. In addition, the former Unfair Terms in Consumer Contracts Regulations 1999 have been replaced by the Consumer Rights Act 2015, so references to those Regulations should now be treated as historical only.
BIBLIOGRAPHY
Cases
Arcos Ltd v EA Ronaasen and Son [1933] A.C. 470
MacDonald v Pollock [2012] CSIH 12 (IH (Ex Div)
Statutes
Consumer Rights Act 2015
Sale of Goods Act 1979
Unfair Terms in Consumer Contracts Regulations 1999
Journal articles
Oliver Bray, Ben Kerry, ‘Digital Content under the Consumer Rights Act 2015’ (2015) Ent. L. R. 271
David Campbell, ‘Contract Law and Contract Practice: Bridging the Gap Between Legal Reasoning and Commercial Expectation’ (2014) L.Q.R. 526
Cowan Ervine, ‘Clarifying the Sale of Goods Act’ (2012) S.L.T. 187
Cowan Ervine, ‘Implied Terms in English Contract Law’ (2012) J.B.L. 163
Paula Giliker, ‘The influence of EU and European human rights law on English private law’ (2015) I.C.L.Q. 237
Reshma Korde, ‘Good Faith and Freedom of Contract’ (2000) UCL Juris. Rev. 142
Andre Naidoo, ‘Consumer remedies following the sale of faulty goods’ (2011) J.B.L. 805
Eimear O’Brien, ‘The UK Consumer Rights Act 2015: unfair contract terms considered’ (2015) Comp. & Risk 12
Website
Daniel Greenberg, ‘Contracts: Implied Terms’ accessed at http://login.westlaw.co.uk/maf/wluk/app/document?docguid=I947D3FF03E2311E298C9E4E30120A4B4&context=13&crumb-action=replace&crumb-label=Contracts: implied terms at 18th February 2016
FOOTNOTES
[1] Cowan Ervine, ‘Implied Terms in English Contract Law’ (2012) J.B.L. 163, p 163
[2] Consumer Rights Act 2015
[3] Andre Naidoo, ‘Consumer remedies following the sale of faulty goods’ (2011) J.B.L. 805, p 806
[4] Ibid, p 806
[5] Ibid, p 806
[6] Ibid, p 807
[7] Daniel Greenberg, ‘Contracts: Implied Terms’ accessed at http://login.westlaw.co.uk/maf/wluk/app/document?docguid=I947D3FF03E2311E298C9E4E30120A4B4&context=13&crumb-action=replace&crumb-label=Contracts: implied terms at 18th February 2016
[8] Sale of Goods Act 1979, s.14
[9] Ibid, s.14(2)
[10] Cowan Ervine, ‘Clarifying the Sale of Goods Act’ (2012) S.L.T. 187, p 191
[11] [2012] CSIH 12 (IH (Ex Div)
[12] n 10, p 187
[13] n 11
[14] Sale of Goods Act 1979, s.15A(1)(b)
[15] Arcos Ltd v EA Ronaasen and Son [1933] A.C. 470
[16] David Campbell, ‘Contract Law and Contract Practice: Bridging the Gap Between Legal Reasoning and Commercial Expectation’ (2014) L.Q.R. 526, p 527
[17] Ibid, s.3
[18] Ibid, s.3
[19] Paula Giliker, ‘The influence of EU and European human rights law on English private law’ (2015) I.C.L.Q. 237, p 44
[20] Ibid, p 44
[21] Ibid, p 44
[22] Reshma Korde, ‘Good Faith and Freedom of Contract’ (2000) UCL Juris. Rev. 142, p 151
[23] Ibid, p 151
[24] Eimear O’Brien, ‘The UK Consumer Rights Act 2015: unfair contract terms considered’ (2015) Comp. & Risk 12, p 14
[25] Sale of Goods Act 1979, ss. 48A-F
[26] Schedule 1, para 27
[27] Oliver Bray, Ben Kerry, ‘Digital Content under the Consumer Rights Act 2015’ (2015) Ent. L. R. 271, p 271
[28] Ibid, p 271
