Sale of Goods The Sale of Goods Act 1979 The Sales of Goods Act 1979 is an Act that regulates the sale of goods that are bought and sold in the UK and the binding contract between both parties. Since 1979, there have been numerous minor statutory amendments and additions to the 1979 Act. The act covers and defines various areas and activities, some of which are outlined below; 1. Types of goods Under the Sales of Goods Act 1979, there are 4 types of goods; - Existing: These are goods that are in existence (owned/possessed by the seller) at time of making contract sale - Future goods; These are goods to be manufactured or acquired by the seller after the making of the contract of sale. - Goods which have perished: These are goods which without the knowledge of the seller have perished at the time when the contract of sale is made. That means, by the time the agreement is being made, the goods have already perished. Such a contract is void. - Goods perishing before sale (handover) but after agreement to sell: This refers to goods that had not perished at the point of signing the contract but do so before they are handed over to the buyer and neither of the parties is at fault. The agreement is avoided. 2. Sale by sample A contract of sale is a contract for sale by sample where there is an express or implied term to that effect in the contract. That means the contract clearly states that the sale is being made based on a sample provided by the seller. In the case of a contract for sale by sample there are implied conditions(a) That the bulk will correspond with the sample in quality (b) That the buyer will have a reasonable opportunity of comparing the bulk with the sample (c) That the goods will be free from any defect, rendering them unmerchantable (not suitable for purchase or sale.) 3. The price The Sale of Goods Act states that the transfer of property from a seller to a buyer is completed through a money transaction, known as the price. Ascertainment of price. The price in a contract of sale may be 1. Fixed by the contract, or 2. May be left to be fixed in a manner agreed by the contract, or 3. May be determined by the course of dealing between the parties. Where the price is not determined, the buyer must pay a reasonable price. What is a reasonable price will depend on the circumstances of each particular case. 4. Agreement to sell at valuation. Where there is an agreement to sell goods on the terms that the price is to be fixed by the valuation of a third party, and he cannot or does not make the valuation, the agreement is avoided; but if the goods or any part of them have been delivered to and appropriated by the buyer he must pay a reasonable price for them. Where the third party is prevented from making the valuation by the fault of the seller or buyer, the party not at fault may maintain an action for damages against the party at fault. 5. Quality criteria The Sale of Goods Act states that goods delivered or sold must be of satisfactory quality and fit for purpose. Fit for purpose means that the goods will provide the benefit or meet the purpose advertised by the seller. Goods sold must also be as described – that is they should match the product shown at the time of selling or they must meet the specifications and description provided in any brochure. If any of these criteria are not met, then the customer can claim against the retailer (rather than the manufacturer) for breach of contract. 6. Time deadlines for returning faulty products Customers must return faulty products within a reasonable time frame (usually three to four weeks) in order to claim a refund. The definition of reasonable time depends on the type of product and the nature of the fault. The customer has the right to ask the retailer to replace or repair the product if it is not possible to refund it. The retailer must repair or replace faulty goods within a reasonable time without causing significant inconvenience to the customer. If the retailer is unwilling to repair the goods, the customer may: - ask the retailer to reduce the purchase price ask the retailer to refund all the money back and deduct a usage payment – known as recision Alternatively, the customer can hire a third party to repair the goods and ask the retailer to pay the repair fees either directly, or reimbursing the customer. 7. Time period to claim in court In England and Wales, there is a maximum time period of six years in which the buyer may claim compensation for faulty goods via the courts. If customer has taken the matter to the court, it is his or her responsibility to prove that the goods are faulty or not fit for purpose. If the customer claims that a problem arose within the six months of buying the product, then the retailer has to prove that the product he or she sold was as described, of satisfactory quality and fit for purpose. The retailer may be able to claim that the problem is not due to the quality of the product but because of unfair usage or accidental damage. Usage deemed to be unfair would be that in situations in which the labelling or instructions advise against. If a problem arises after six months of use, the customer can still that a faulty product was sold to him or her, but that the fault did not become apparent until after six months had passed. It is then the responsibility of the customer to prove that he or she used the product fairly and that the damage or fault is not due to everyday wear and tear. AMENDMENTS TO The Sale of Goods Act 1979 Sale and Supply of Goods Act 1994 The Sale and Supply of Goods Act 1994, which amended the Sale of Goods Act 1979, and governs both consumer and commercial contracts. The Act governs the sale of the following goods: a. specific goods - goods that are identified and agreed to be purchased by the buyer b. future goods - goods that are to be manufactured or acquired to the buyer’s specification c. unascertained goods - goods defined by description or by samples and forming part of a larger consignment The key amendment in the 1994 act; Goods must fit the description used in any advert, label, or packaging etc that relates to them - such as the year or make, type, colour, size or materials used. These must be accurate. The goods must also be of satisfactory quality - and should be fit for their purpose. A retailer has a legal obligation to sort out a buyers problem if the goods do not meet these requirements, as long as the buyer acts within a 'reasonable time'; However, this period is not defined. The Consumer Rights Act 2015 This Act came into force from 1st October 2015, whereby some Acts were repealed and others were amended key of which are as follows; The Consumer Rights Act came into force in October 2015, which in many ways amends the Sale of Goods Act, Some rules which came with the new act are outlined below; The sale and supply of goods - The person transferring or selling the goods must have the right to do so and the goods must be of a satisfactory quality. Goods must be of a standard that a reasonable person would regard as satisfactory. Quality is a general term, which covers a number of matters including: a. Fitness for all the purposes for which goods of that kind are usually supplied (appearance and Finish) b. Freedom from minor defects c. Safety d. Durability - Goods must match the description, sample or model. The description, sample or display model of the goods must conform to the goods supplied. - Goods must be installed correctly, where installation has been agreed as part of the contract. - The consumer can reject the goods within 30 days unless the expected life of the goods is shorter e.g. highly perishable goods. One can also choose repair or replacement in this time and up to 6 months after purchase as it is assumed that the fault was there at the time of delivery unless the trader can prove otherwise. If more than six months have passed, one has to prove the defect was there at the time of delivery. Some defects do not become apparent until some time after delivery, and in these cases it is enough to prove that there was an underlying or hidden defect at that time. - All these rules in the Consumer Rights Act 2015 apply for distance selling and digital goods. The Act defines ‘digital content’ as meaning ‘data which are produced and supplied in digital form’. with reasonable care and skill.
