The Term Quality of Goods - Case Study Example

The term quality of goods con s their condition and under apposite instances, “fitness for all the purposes for which goods of the kind in question are commonly supplied; appearance and finish; freedom from minor defects; safety; durability.1” However, implied terms are inapplicable in respect of certain matters that render the quality of goods unsatisfactory, namely, facts that have been specifically made known to the purchaser prior to the formation of the contract; before the contract had been made, the goods had been examined by the purchaser in a manner which would have revealed the defects; or in contracts for sale by sample, any matter that a reasonable examination should have revealed. The major implied terms in contracts of sale are that goods must be in conformity with their description; appropriate for the purpose made known to the seller; should be of a satisfactory quality; and the seller should have the right to sell these goods. Section 13 of the Sale of Goods Act 1979, states that 1. Where there is a contract for the sale of goods by description, there is an implied term that the goods will correspond with the description. 2. If the sale is by sample as well as by description it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description. 3. A sale of goods 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. Under section 13 of the Sale of Goods Act 1979, goods that have not been correctly described can be rejected only in the event of the buyer relying on such description. In contracts specifying sale of goods by description a condition that these goods have to correspond to the description is inherent by implication. In Beale v Taylor2 the buyer purchased a vehicle after inspection, which had been described by the seller. The court held that this was a sale by description. In Harlingdon & Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd3 a transaction between two art dealers was not considered to be a sale by description as the buyer was competent to rely on his own expertise to assess the value of the painting. In goods sold to a buyer, an implied term exists, which requires that these goods should be appropriate for any purpose that has been made known to the seller.4 Applicability extends to instances where the purpose is express or implied; only when sale is in the course of business. It does not apply if the buyer decides on his own without relying on the sellers skill or judgment. Sometimes the goods received, though free of defects, nevertheless, do not serve the purpose for which they had been bought and the seller knew about this fact. In Slater v Finning Ltd5 it was held that if an abnormal feature had not been revealed to the seller a claim under section 14(3) of the SGA would fail. The reason for which goods are bought can be implied as well as expressed. If goods can be used only for one purpose then it is not necessary for the customer to enquire regarding appropriateness of those goods for that purpose, as was held in Preist v Last6. Lampard purchased a motorbike from Crouch after seeing a newspaper advertisement and taking a trial ride on the bike. Subsequently, the rear tyre burst and the mechanic at the place of repair declared that ‘The rear tyre was illegal, the engine had not been serviced for ages, the fuel and oil filters were blocked and that the vehicle had travelled around 20,000 miles since a service.’ This was vastly different to what Crouch had declared. Lampard asked Crouch to return his money due to these drawbacks with the vehicle, but Crouch refused to either comment or return the money. In Carlill v. Smokeball, the defendant contented that their newspaper advertisement was for the general public and was therefore not a valid offer. However, the court held that it was a contract as the plaintiff had performed the terms of the offer7. Therefore, Crouch’s advertisement constitutes a valid offer, because, Lampard had purchased the bike relying on this advertisement. Where the contract insists upon a sale that is by sample as well as by description then the goods have to correspond both with the sample as well as with the description8. Although, Lampard had taken a test drive, it is not possible for a person who is not a mechanic to determine the quality of the engine and other technical defects in the vehicle. Since, Lampard had relied on the description, while assessing the quality of the vehicle, it is a description sale. However, the vehicle was not compatible to the description. This constitutes a material breach of the contract. Section 14(2) of the Sale of Goods Act implies a term in contracts that goods purchased will be of satisfactory quality. This is applicable only if the goods were sold in the course of a business. Moreover, the statutory implied terms that goods supplied under a contract must be of satisfactory quality, reasonably fit for the buyers purpose and must conform to the description by which they are supplied offer a number of advantages to a potential plaintiff. They make the supplier liable for the goods supplied. The central requirement that the goods supplied must be of satisfactory quality, arises automatically wherever goods are sold in the course of a business9. Moreover, implied terms have been deemed to be conditions by the statute, therefore, their infringement empowers the buyer to reject such goods and claim a full refund of the price, without any concession for any use he may have made of the goods. In Godley v. Perry10 it was held that a defect that renders a product unsafe also renders it unsatisfactory. While Lampard was driving the vehicle, the rear wheel tyre burst and Lampard narrowly escaped injury, hence, the vehicle is unsatisfactory. In Lambert v. Lewis it was held that a coupling of a Landrover had not lasted for a reasonable time as it had failed within seventeen months of purchase. The vehicle purchased by Lampard had to be repaired by the third week of the sale; therefore, this constitutes a breach of the implied term of durability. Section 15 B(2) of the Sale of Goods Act states that “in a consumer contract breach of an implied term relating to satisfactory quality, fitness for purpose, description, or conformance with sample is always a material breach.” Section 53(2) of the SGA states that damages claimed as consequential losses should be those ‘directly and naturally resulting, in the ordinary course of events, from the breach …’ However, in the event of acceptance, material breach is to be treated as a minor breach for which the remedy is only damages. The right to reject is, however, lost if the buyer has accepted the goods or is taken to have done so, including by retaining them beyond a reasonable time without rejecting them. Since 1994 the assessment of what is a reasonable time must take into account whether the buyer has had a reasonable time to examine the goods for conformity with the contract11. According to section 35 of the SGA a buyer accepts goods by intimating his acceptance to the seller; by acts after delivery, which are inconsistent with the sellers ownership and by retention of the goods, without rejection, for a reasonable period of time. In case, the buyer had retained the goods for a reasonable period of time, then rejection is not possible and the only remedy will be damages. This was illustrated in Bernstein v. Pamson Motors12. Subsequently, the SGA was amended in order to provide a reasonable opportunity to examine goods prior to deciding that the consumers have accepted the goods. The remedies available for breach of contract of sale are repair; replacement; partial refund; rejection and full refund. Moreover, if a defect occurs within six months of sale then such defect is deemed to have been present at the time of sale13. Therefore, Lampard is entitled to a full refund of the cost of the vehicle as well as damages for the accident that took place. References Beale v Taylor. (1967) 1 WLR 1193. Bernstein v Pamson Motors (Golders Green) Ltd (1987) 2 All ER 220. Carlill v. Carbolic Smoke Ball Co. (1892) 2 QB 484. Godley v. Perry. (1960) 1 All ER 36 QB. Harlingdon and Leinster Enterprises Ltd -v- Christopher Hull Fine Art Ltd (1991) 1 QB 564; (1989) 3 WLR 13; (1990) 1 All ER 737. Preist v Last. (1903) 2 KB148. Section 13. Sale of Goods Act 1979. Section 14(2). Sale of Goods Act 1979. Section 14(2)(B), Sale of Goods Act as inserted by the 1994 Act. Section 14(3). Sale of Goods Act 1979. Section 35(5). Sale of Goods Act 1979. Section 48 A (3). Sale of Goods Act 1979. Slater v. Finning Ltd. (1997) A.C. 473. Read More