Importance of Consumer Protection - Essay Example

Consumer Protection - Sale of Goods School Consumer Protection - Sale of Goods The government in its attempt to provide security to a buyer in such a retail environment has proposed a few laws which ascertain certain rights to every individual, commonly referred to as Consumer Laws. The Supply of Goods and Services Act 1982 offers a few remedies in cases of breach of such contracts which is applicable in the course of business. Let us now consider the case of Jim Fenton in the light of the above said Act. Super Slammer Tennis Racquet Upon reviewing the circumstances in this case I would offer Jim the following explanation and advice: The issue here is not whether a sale occurred, but with the goods, in this case the Super Slammer Tennis Racquet (SS), meeting the expectations of the consumer. Upon seeing the advertisement in the Old Castle newspaper regarding the racquet, which read: " "Slammer Racquets PLC announce the arrival of the Superslammer Tennis Racquet This is a fantastic new tennis racquet specially designed for beginners. Its unique anti-scratch finish means that however many times you knock it, scratch it, drop it, the scratches will not show. Your racquet will look as good as a new after many years of use. Buy one now from your Slammer Stockist."' Jim had certain expectations as to its performance. According the Sales of Good Act 1979, terms are implied in a contract of sale: the goods much match the description; the condition of the goods must be satisfactory; there must be satisfactory quality; and lastly, the good must be 'reasonably fit' for the purpose for which the consumer is buying them.1 Each of these terms must conform to the contract of sale. In this case Jim had, upon joining the Old Castle Racquets Club (hereafter, ORC) and seeing the advertisement, decided to purchase the SS after paying his yearly fee of 200 to ORC and signing up for a sex week period of tennis lessons at a price of 120. Completing his transactions at ORC Jim immediately went to Old Castle Sports and Leisure (hereafter, OSL) and purchased a SS racquet for 250, paying in cash. Jim's dissatisfaction arose when after only several weeks of using the SS, contrary to the advertisement's assertions and the warranty which came with the SS the surface had become very scratched and by week three the racquet was totally unusable when the handle came off. In determining the remedies available to Jim it is necessary to show that there was a breach of contract which leads us back to the four terms of a contract: description, condition, quality and fitness. In Harlingdon & Leinster Enterprises v Christopher Hull Fine Art Ltd [1991] 1 QB 5642 the court found that "for the sale to be 'by' description the description had to be influential in the sale so as to become an essential term or condition of the contract." In Jim's the case the description (i.e. the advertisement) was an essential reason he purchased the SS as evidenced by his actions and speed with which he viewed the advertisement and the immediately proceeded to OSR to purchase the SS. Also, in Beale v Taylor [1967] 3 All ER 2533 the court found that "the buyer was entitled to damages because, although the description of the goods were not false to the knowledge of either the seller or the buyer, yet fundamentally the seller was selling goods of the description advertised." As in Jim's case even if the seller (OSL) was unaware that the advertising of the SS was wrong, Jim had purchased the SS based on that description. Satisfactory condition4 is the next term to consider which relates to satisfactory condition.5 Rogers v Parish (Scarborough) Ltd [1987] QB 9336 found that the court upheld that goods unfit7 for use purchased are unmerchantable. As in Jim's case, he purchased an expensive racquet for the sole purpose of taking lesson and playing tennis. The inherent quality issues rendered the SS unmerchantable. In Stevenson v Rogers [1999] 1 All ER 6138 on appeal the court held that within the context of statutory implications during the normal course of business such phrasing does not apply the Trade Descriptions Act 1968 and the Unfair Contract Terms Act 1977 in cases of the consumer in relation to SOGA 14 and the consumer. Having shown breach in several instances before proceeding to determine if the breaches are of condition or warranty, there is one more precontractual area to consider. Per SOGA any statement, be it orally or verbally, that the seller, manufacturer or someone working in behalf the manufacture in relation to the four essential terms pertaining to the characteristics of the goods9 makes regarding the labelling or advertising must ensure such statements are factual as the become a part of the contract of sale. There is an exception10 to this but in this case it does not apply. As Patrick an employee of OSL was bound by the statement made by the manufacture (the advertisement) the breach of the contract of sale was shown. The lapse of time between the statement and the contract of sale have implications as to whether the statement is held as contractual or not. In Routledge v McKay [1954] 1 WLR 61511 the court held that a significant lapse of time did negate the effect of the statement. In Jim's case he purchased the SS immediately after seeing the advertisement rendering this contractual in nature Intent is the next area to examine to determine the contractual effect of the advertisement. Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965] 1 WLR 623 CA.12 In this case the court held that statements made which induced the other party to enter into a contract constituted a prima facie case for inferring a warranty. This case supports the fact the upon paying for his membership and lessons, Jim saw the advertisement for the SS; knowing he was a novice and reading the assertions of the advertisement caused him to choose the SS to purchase. Therefore, these two cases show that the statement is a part of the contract of sale. Determined to be contractual, whether the breach is of a condition or warranty, Consider Smith v Chadwick (1884) 9 App Cas 187, 196-713. In Smith the court held that "I think that if it is proved that the defendants made a statement to the plaintiff of such a nature as would be likely to induce a person to enter into a contract, and it is proved that the plaintiff did enter into the contract, it is a fair inference of fact that he was induced to do so by the statement.". Like wise in Poussard v Spiers and Pond (1876) 1 QBD 410 the court held the statement was a vital part of the inducement to purchase. Therefore as in Jim's case the statement is a breach of warranty. As such the remedies as show in s53 entitle him to 250 for the SS, 60 of the missing lessons caused by the loss of the racquet and any other award deemed by the court. TV1 The contractual issue to consider in this case was whether or not Valueview had the right to sell TV1 to Jim. An implied portion of any contract is that per s12 that the seller "has the right to sell the goods." As evidence by the police confiscating the TV Valueview did not have title; therefore did not have the right to sell Jim the TV. Lord Denning stated in Bishopsgate Motor Finance Corp. Ltd v Transport Brakes Ltd [1949] 1 KB 322: "In the development of our law two principles have striven for mastery. The first is for the protection of property; no one can give a better title than he himself possesses. The second is for the protection of commercial transactions; the person who takes in good faith and for value without notice should get a good title." Nemo dat quod non habet: "Meaning: no one can give something he has not got. Someone who has not got good title to goods and is not authorised by the owner to sell them cannot pass on good title to them" The contract in this case is breached by the condition of the term as to the seller's right to sell the goods, even if in good faith. This is shown in s12 that says when the seller does not have title and sell to the buyer; the buyer acquires no better title than did the seller unless the owner by his own actions is precluded from denying the seller to sell the goods. SOGA goes on to state that: "there is also an implied [term] that- (a) 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(b) the buyer will enjoy quiet possession of the goods except 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." In determining acceptance of non-acceptance of the goods in this case to determine the remedy afford Jim we look at s12(4) which shows that "The buyer may therefore reject the goods even though in other circumstances he would be deemed to have 'accepted'- eg where he has had the use of the goods for several months." In Rowland v Divall [1923] 2 KB 50014 s11 (4) a stolen car was sold by the thief to an innocent party who later sold it to someone else who again sold it. When the car was confiscated from the police months after the last 'owner' had it in his possession he rejected the sale from the seller and was refunded his money even though he had driven the car for some time. The seller in turn took the person he sold to court. The court held that "the defendant (B) was in breach of s 12 of The Sale of Goods Act, there had been a total failure of consideration in spite of the fact that C had had the use of the car. Restitution of the purchase price was allowed, with no deduction for the period of use, on the basis that C had contracted for the ownership of the car and not merely the ability to use it." The basic point of law in this case is defective title of ownership in goods cannot pass on a good title to a subsequent buyer, even if that buyer purchases in good faith. However per SOGA 1979 Jim can claim non-acceptance of TV1. His remedy is to repudiate the contract and recovery his 1000 he had paid for the television. Additionally, per SGA s51, 4 he could, if applicable petition the court for award of damages if he can show additional loss. TV2 In the case of TV2 the contractual quandary here was the latent quality issue of the television. Having signed for delivery of the TV and signing for receipt of such that it was received in satisfactory condition, Jim fell and ended up in the hospital for months; thereby, he was unable to have use of the television. The conditions of the contract of sale had been met. The issue became the latent quality issue of the TV when Jim finally had the chance to inspect it and found it to not be functioning. Since it was within six months of the purchase per The Sale and Supply of Goods to Consumers Regulations 2002 48(3) states "For the purposes of subsection (1) (b) above goods which do not conform to the contract of sale at any time within the period of six months starting with the date on which the goods were delivered to the buyer must be taken not to have so conformed at that date." The seller is under obligation within the first six months to show that there were no inherent quality issues. The fact that Jim had been hospitalised further supports his case that he had not, before this point informed the seller of the quality issue. There for the contract was breach as the TV2 did not conform to the contract due to its latent quality issues and it being unmerchantable as previously shown in Rogers's v Parish (Scarborough) Ltd [1987] QB 933. Per Part 5A Additional rights of buyer in consumer cases, If a seller is in breach of one of the implied terms found in ss.13-15 then the basic remedy of a consumer is to reject the goods for breach of the implied condition (the consumer can, of course, affirm the contract and sue for damages). The new Part 5A (ss.48A-48F) now gives the consumer the additional remedies of repair or replacement of the goods (s.48B), or a reduction of purchase price or rescission of contract (s.48C). This was upheld in Clegg v Olle Andersson (2003) in which case a couple purchased a yacht that was to conform to certain manufactures specifications which it was later determined was not met. The couple returned the yacht and received a replacement from the seller. As the contract was breach and the goods did not conform to the contract. Jim's remedy is to return the TV2 to Costcutters and make arrangements for replacement or repair within a reasonable timeframe. OSL and the Super Slammer When considering this case in respect to a business in contrast to a consumer acting on an individual basis. There are some distinct differences as the consumer is afforded additional protections not given to businesses entering into contract of sales within the scope of their businesses dealings. Assuming the facts are identical in this case, OSL having found the contract in breach would have the following remedies available. Per s53 (1) and (2): '(1) Where there is a breach of warranty by the seller, or where the buyer elects (or is compelled) to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer is not by reason only of such breach of warranty entitled to reject the goods; but he may - (a) set up against the seller the breach of warranty in diminution or extinction of the price, or (b) maintain an action against the seller for damages for the breach of warranty. (2) The measure of damages for breach of warranty is the estimated loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty.' In most cases and as remedy recommended to OSL if they so choose, I would recommend repudiating the contract, rejection of good and to seek damages if they can show cause. References Beale v Taylor [1967] 3 All ER 253 Bishopsgate Motor Finance Corp. Ltd v Transport Brakes Ltd [1949] 1 KB 322 Clegg v Olle Andersson (2003) Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965] 1 WLR 623 CA Harlingdon & Leinster Enterprises v Christopher Hull Fine Art Ltd [1991] 1 QB 564 Poussard v Spiers and Pond (1876) 1 QBD 410 Rogers v Parish (Scarborough) Ltd [1987] QB 933 Routledge v McKay [1954] 1 WLR 615 Rowland v Divall [1923] 2 KB 500 The Sales of Goods Act 1979 Sale and Supply of Goods Act 1994 Sale and Supply of Goods to Consumers Regulations 2002 Sale of Goods to Consumers Regulation 2004 Smith v Chadwick (1884) 9 App Cas 187, 196-7 Stevenson v Rogers [1999] 1 All ER 613 Trade Descriptions Act 1968 Unfair Contract Terms Act 1977 Read More