Characteristics of English Sale of Goods Act

Over the years a large amount of commercial law grew up most of it by traders. We can see that significant amount of this man made law is now embedded in statute law through Acts of parliament such as the sale of goods Act. The sale of goods is the most common type of commercial transaction. Before 1893 the law governing the sale of goods was almost based on cases decided by the courts at common law. The sale of goods is the central topic of in commercial law. In uk the modern law of sale is largely contained in the sale of goods Act 1979. The sale of goods act is considered as simple. Some of its provisions relating to the quality of goods supplied under the contract are well known. One of the good things about the sale of Goods Act is its clarity and the shortness of the act. It is very easy to read and understand. However the appearance of simplicity is sometimes create a number of problems. It is noted that the 1979 Act is not a complete code so that much of the law relevant to sale of goods transaction must be found outside the Act. The sale of good is an everyday transaction, so the law should be accessible clear and comprehensible to those it affects. But the modern law no longer satisfies the criteria of accessibility, clarity and comprehensibility. It is true that the law never was completely codified and its provisions were technical. The 1979 Act which itself was intended to simplify the law by consolidating it , but must be read subject to the amending Acts of 1994 and 1995 and some other legislations. There are some striking features in this act there is no distinction between consumer and commercial sale. Some words are not defined eg: condition. Some of the languages used is archaic and may be difficult to the conditions of modern commerce, eg: merchantable quality. It is noted that there are some strict characters in English commercial law subject to some areas . But that has been regulated through statute and case law.

CHARACTERISTICS OF ENGLISH SALE OF GOODS ACT:

Let us examine the strict characteristics’ of English law and it has been regulated through statute and case law.

1. Contract but not sale:

The sale of goods only applies to contracts for the sale of goods as defined in the Act. There are some contracts as part of sale but that will not be considered as sale.

Eg: free gift offers by a retailer or manufacturer as part of sale promotion there may be a contract but the contract will generally not be one of sale.

Case: Esso petrolieum Ltd v Customs and excise commission [1976] All ER 117

2. Contract of sale inferred from the conduct:

It is a characteristic of English sale act a contract may be inferred from the conduct of the parties.

Eg: if a seller despatches goods in responce to an order, he accepts an offer from the buyer and a contract is formed.

3. Contract of sale upon a contingency:

By virtue of this act there may be a contract for the sale of goods whose acquisition by the seller depends on a contingency.

Case law: Sainsbury Ltd v street[1972]3 All ER 1127

4. Price fixing by third party:

By section 9 of the sale of goods Act a third party can fix price. Where there is no valour named but the contract is for a sale at valuation the court may treat that as an agreement to pay reasonable price.

Case: sudbrook trading estate v egglton [1983]1 AC 444

5. Work and materials:

The distinction between contracts of sale and contracts for work and materials has always been a particularly difficult one. The courts have resolved this distinction through many cases.

Clay v Yates [1856]1 H&N73

A contract for a printer to print a book, the printer supplying the paper, was interpreted as one for work and materials

Lee v griffin [1861]1B&S 272

A contract for a dentist to make and supply false teeth was a sale of the finished product

6. Computer software:

The classification of contract for supply of computer software has provoked much debate. This issue has now arisen in several decided cases but has not yet been conclusively settled.

Case: amstard plc v Seagate technology inc [1997] 86 BLR34

It has been held that computer hardware is good and a contract for the sale of computer hardware should therefore be a contract for the sale of goods

St Albans city and district council v International computer Ltd [1996]4All ER 481

It has been held that a contract for the supply of a computer system comprising hardware and software was a contract for the sale of goods.

7. Time is of the essence:

By virtue of se section 29(5)and 29(3) the goods to be delivered at the time stipulated by the contract of sale or within a reasonable time. If not then the buyer is entitled to damage. But by virtue of section 10(2) if the time and date for the delivery are fixed with certainty in accordance with the terms of contract and if delivery is late then the buyer is entitled to terminate the contract at once, even though the delay is slight.

Case:cie commercial sucres et denrees v c czarnikow ltd, the naxas [1990] 3 All ER 641 HL

8. Sale by description:

By virtue of section 13 of the SoGA 1979 where goods are sold by description they will correspond with the description.

If a buyer wishes to bring a claim for breach of the implied terms in s 13 the following question must be answered.

a. Was the sale was a sale by description?

b. What was the description by which the goods were sold?

Where a seller sells unascertained generic or future goods the sale must be by description. But in some other sales where the goods are specific also considered as sale by description.

Case: Varley v Whipp [1900] 1 QB 513

It was held that, where S sold specific goods which B had not seen,the sale was sale by description.

In Grant v Australian knitting Mills Ltd [1936] AC 85

It was held that a sale could be by description even though the buyer had seen the goods

Beale v Taylor[1967] 1 WLR 1193,CA

A 1200 badge on a second hand car was held to be part of the description of the car.

By virtue of section 13(3) it is clear now that a sale is not prevented from being a sale by description by reason only that, being exposed for sale or hire, they are selected by the buyer

It is also noted that all the statement made about goods during pre-contract negotiation will not be terms of the contract. Some may be mere puffs or sale talk and other may mere representations.

Oscar chess Ltd v Williams[1957]1 WLR 370,CA

It has been held that such statements not intended to form part of the contract will not be part of description by which the goods are sold.

If such description influences the buyer then only he can reject the goods under this ground

Where the description identify the commercial characteristics of the goods that goods are only sold by description.

Ashington Piggeries Ltd v Christopher Hill Ltd[1973]AC 441

In this case Lord Diplock said that: ‘the description by which unascertained goods are sold is, in my view, confined to those words in the contract which were intended by the parties to identify the kind of goods to be supplied.

Where the goods are described in detail, the goods must correspond to every element of the description by which description they are sold. Any discrepancy between the goods and the description will be a breach of contract.

Arcos v Ronaasen[1933]AC 470 HL

In this case the buyer orderd half-inch thick timber the seller delivered varied in thickness but were perfectly fit for the buyers purpose. Nevertheless, the buyer was held entitled to reject.

9. Satisfactory quality:

a. in the course of business,

Section 14(2) implies a condition that where goods are sold in the course of a business, the goods supplied will be of satisfactory quality. The implied terms in section 14 only apply where the seller sells in the course of a business. The meaning of “in the course of a business has been given a broad interpretation. Let us examine some case law regarding this phrase.

Stevenson v rogers [1999]QB 1028

In this case the court of appeal had to consider the meaning of `in the course of business` in s 14 of the 1979 Act. The court of appeal adopted a purposive approach to the interpretation of the provision and after held that the expression `in the course course of a business` in s 14 should be given a wide interpretation so that any sale by a business is a sale `in the course of a business` for the purpose of s 14.

b. satisfactory quality,

by virtue of section 14(2) of the sale of good Act the goods must be satisfactory quality , which applies to all contracts made after 3 January 1995.this section was introduced by the sale and supply of goods Act 1994. It replaces the phrase `merchantable quality`.

Section 14(2b) of the act creates a checklist relevant to the quality of goods . this list of factors in s14(2b)is not intended to be exclusive .

c. exceptions:

The implied condition of satisfactory quality is strict no defence is available to seller but there are two exceptions.

By virtue of section 14(c)

a. where the defects are specifically drawn to the attention of the buyer

b. where the buyer examines goods before the contract is made and this reveals certain defects.

9. Fitness for purpose:

By virtue of section 14(3) of the act where the buyer makes known to the seller any purpose for which the goods are to be used, then the goods supplied under the contract must be reasonably fit for that purpose.

Sometimes the buyer will not indicate his purpose or will do so only in general terms.

Such a situation some problem may arise.

In kendall &sons v Lillico &sons Ltd[1969] 2 AC 31

It has been held that the buyer can take action under section 14(3) if the buyer indicates a range of purposes the goods must be reasonably fit for any reasonably foreseeable purpose within that broad range

10. Sale by sample:

Section15 of the SoGa 1979 deal with sale by sample . This section implies the following two conditions into the contract:

a. the bulk must correspond with the sample

b. the bulk must be free from hidden defects.

Godly v Perry[1960] 1 All ER 36

It was held that the defect was not discoverable on a reasonable examination and held seller is liable

Performance of contract:

Section 16-20 0f the SoGa1979 deals with the passing of property by seller to buyer. It is the peculiarity of the English sale of goods the buyer can become owner of the goods before they are delivered to him.

The following are some rules relating to passing of property:

a. intention of the parties.(section 17 of the SoGa 1979)

The property will be passed with the intention of the parties. Intention may be express or implied

b. specific goods.(section 18 of SoGa1979)

There are three rules relating to specific goods which will regulate the passing of property in specific goods.

c. unascertained goods.(section 18 rule 5 SoGa1979)

The unascertained goods will pass only when the goods have been ascertained.