Sale of Goods Act 1979 Commercial law (uk) - Assignment Example

Introduction I will be taking a balanced position in this discussion, because It is my belief that this is what the Sale of Goods Act 1979 represents to both the consumer and commercial entities which might be compelled to use its statutes for relief. It is my position that the consideration of the Sale of Goods Act 1979 unsuitable as a consumer code and more suitable as a commercial code, is mere semantics. I will show throughout my discussion that the act applies and offers relief to consumers and business on an equal plain. As a matter of fact, I have used situations in a consumer setting and a commercial setting where the same statutes are applicable. 1 2 Sale of Goods Act 1979 If one were to adopt the narrow semantic position in this discussion, then one could conceivably argue that The Sale of Goods Act 1979 is more suitable as a commercial code. After all it was created specifically to address itself to commercial transactions between parties. In that these transactions almost always pertain to providing a good for a fee, this type of undertaking in an of themselves can be classified as a commercial transaction. The thrust of the Sale of Goods Act and its intent is to provide a net for all transactions; consumer and business. When one views the Act in its totality, it is readily discernable that it is an interchangeable document. Which attempts to address all of the possibilities which might surface during the course of a transaction. It was through the formulation of contracts that man was able to expand the acts of liaise faire and enter into deals. A contract is formed by agreement between two parties to the contract; the parties must choose to enter into a binding agreement; in a ordinary buyer to seller contract this may entail; the seller agrees to provide the buyer an item at a stated price. The seller (may be implied or explicit) then agrees to deliver the item in a reasonable or merchantable (satisfactory) condition to the buyer. The buyer having agreed with the conditions of the purchase agrees to pay the seller his previously stated price upon delivery of the item. This is a bilateral contract, wherein each party has taken on an obligation to do something, in return for something. The promise which has been made by each party makes the "verbal" contract (may be formal or informal), binding. If any term or condition in this legally binding contract is breached by either party, the contract can then be voided. 3 As we find in Baldry v. Marshall [1925]; B owned a racing car but his wife refused to ride in it. He approached M, a car dealer, requesting details of Bugatti cars, about which he (B) knew nothing. He asked for a car that would be comfortable and suitable for touring purposes, and the dealer recommended a Bugatti. B agreed to buy a Bugatti; after inspecting the chassis. Once completed, it was obvious that the car was a racing car and not suitable for touring. He returned the car and sued for one thousand pounds that he had already paid under the contract. The court held; that B had relied upon the skill and judgement of M, and that it was in the course of M's business to supply cars. Hence, there had been a breach of the Sale of Goods Act 1979 S 14 (3). When a purchaser relies upon the skill and judgment of a seller and that seller is acting within the course of his business, then the purposes of S 14 (3), goods must be suitable for the purpose made known to the seller if a breach is to be avoided. Even if the goods are of merchantable (satisfactory) quality; other implied terms must be satisfied. S14 (3) precludes the seller from talking out of both sides of his mouth and attempting to pass an undesired item off on a consumer. Additionally, the statute covering breach of stipulation can be found in The Sale of Goods Act 1979 in S 14 (2b). The issue is supported in law by Smith v. Land and House Property Corporation [1884] 28 CHD 7 South Australia, where the court held; "a statement of opinion can be regarded as a statement of fact in certain situations. Such a situation will be where the maker of the statement has greater knowledge or appears by implication, to be able to support the statement". (Smith) This case is buttressed by Dimmock v. Hallet [1866] and Bisset v. Wilkinson [1927] AC 177. Also in Schawel v. 4 Reade [1913] 46 ILT 281, the court found that; "the strength of the inducement can be important, the more emphasis put on representation, the more likely it will be the courts will regard this as a term". (Schawel) As well the courts will often attempt to find a collateral contract by interpreting the representation as a promise accompanied by some sort of consideration (See Heibut, Symons & Co, v. Buckleton [1913] AC 30 (HL) the court held; "the collateral contract will have the affect of adding the representation as a term of the contract. If representation is found to be a term then the normal remedies for breach of contract apply". (Heibut) The above-mention cases were all commercial transactions and their focus concerned that of a consumer seeking relief under the applicable statutes of The Sale of Goods Act 1979. I will now cite some situations, and cases where businesses will be seeking similar relief under the applicable statues of the Sale of Goods Act 1975. When we view Stevenson v. Rogers [1999] 2 WLR 1064, Mr. Rogers was a fisherman and he sold a boat to Mr. Stevenson. Mr. Stevenson was not happy about the boat (the jelle) and claimed that Rogers was in breach of S 14(2) of The Sale of Goods Act 1979. The court held that the Sale of Goods Act 1979, intended to catch all sales of goods made by businesses, whether or not the sales were a regular trade of that business. Therefore, the boat that Rogers sold, even though he was a fisherman, was a sale in the course of business. Let us say that company A sought to purchase a coffee machine for one of its stores. Company B agrees to present a demonstration of a machine it manufactures for 5 possible placement in the store of company A. Company A's manager is concerned whether the machine being demonstrated by company B, can cope up with the demand which a busy urban location will require. The owner of company B assures the manager of company A, that the coffee machine on demonstration can accommodate his stores heavy demand. On this assurance from the owner of company B, the manager of company A places an order and pays for the machine on the spot. One week after the delivery of the machine, it develops a defect, and a repairman from company B was dispatched to correct the malfunction. The coffee machine functioned well for two weeks after the repair and then malfunctioned again. The owner of company B, again dispatched a repairman to repair the malfunction. But it was determined by the repairman that the malfunction could not be corrected on the company A's premises, and it would be best to remove it and repair it at the shop of company B. During the interim while the machine was out for repairs, the manager of company A, reviewed some consumer information on the machine type, and he discovered that the machine type was not compatible with the hard water which is supplied throughout his district and at his location. He felt put upon that the owner of company B, who was also the manufacturer, had not appraised him of this fact. Moreover, he knew, no matter what repairs or adjustments company B was making at their shop, the coffee machine was not compatible. Therefore, he rang up the owner of Company B and informed her of his findings and the condition of the water. He then requested that she keep the machine and return his money. The owner of company B refused. In S 14 of the Sale of Goods Act 1979, as in Priest v. Last [1903] the court held; 6 : the vendor must be made aware of any unusual use for which the item is intended. Otherwise, in normal use for ordinary purpose, the purchaser need not stipulate the intended usage"(Priest) Further in Arcos LTD v. Ronaasen & Son [1933] AC 470, the court held; the rule is strict in relation to performance of a contract-all obligations must be performed as agreed, if the goods do not comply with the description then the contract is breached". (Arcos) Additionally in Frost v. Alesbury Diaries [1905] 1 KB 608, the court held; "it was irrelevant that all reasonable precautions had been taken, liability for defective products is strict"(Frost) In S 14 (2) of the SOGA 1979, and in Wilson v. Rickett, Cockerall & Co. LTD [1954], in referring to this section the court held; "the goods supplied must be considered in the units and measures in which they were supplied when examining quality" (Wilson) In this instance "units and measures" translates into durability and compatibility. Further the ruling in Wilson v. Pickett goes on to point out S 14 of the SOGA 1979; "that it will apply only where the purchaser has relied upon the vendors skill and expertise. It goes on to point out that under the SOGA 1979; " the assumption that a purchaser, when purchasing goods under a trade name, does not rely on the vendors expertise, no longer exist". (Wilson) It should be noted that whether the coffee machine was repaired or replaced, none of the remedies suggested by company B would suffice in resolving company A's situation. Because the coffee machine (model) was incompatible with the water. The SOGA 1979 goes only so far as to suggest that a repair or exchange be made when a defective product is exchanged between contracting parties. The owner of company B 7 stated unconditionally prior to the sale that the coffee machine would be adequate. Whether the owner of company B knew, or did not know about the water situation in the area of Company A's location, she should have known. Consequently when we view Baldry v. Marshall [1925], the court held; " where a purchaser relies on the skill and judgment of a seller and that seller is acting within the course of his business, then for the purpose of the SOGA 1979 S 14 (3), goods must be suitable for the purpose made known to the seller, if a breach is to be avoided. Even if the goods are of merchantable (satisfactory) quality, other implied terms must be satisfied". (Baldry) In closing on this matter, so as to make the example complete, I will mention Goss v. Chilcott Holdings Company LTD where the court held; When one is considering the law of failure of consideration and of the quasi-contractual right to recover money on these grounds, it is generally speaking not to the promise which is referred to as the consideration, but the performance of that promisethere are endless examples which show that money can be recovered, as for a complete failure of consideration in cases where the promise was given but not fulfilled. (Goss) And lastly, lets take a quick look at international sales of goods, which is almost always a transaction between two commercial entities. I will make this brief because I do want to provide a conclusion or summary within the perimeters of the page limit of this assignment. Lets say that company X, places an import order with company Y for two tons of coffee beans, which he pays for in advance. And company Y orders the coffee beans from his contact in Ghana. The ships final destination is the homeport of company Y. But 8 before it reaches the Port of company Y, it stops at a port to off load and on load some additional cargo. When the ship reaches the port of company Y, it is discovered that there is a shortfall on the two tons of coffee beans order and paid for by company X. Instead of two tons, there is now only one ton and no one knows what happened to them. Under the SOGA 1979 what remedies are available to company X The SOGA 1979 S6 states; Where there is a contract for the sale of specific goods, and the goods perish without the knowledge of the seller have perished at the time the contract is made, the contract in void. I have presented a number of sections of the SOGA 1979 and in some instances I have presented the same sections and applied them to consumer as well as commercial situations. My position on the semantical identification of the SOGA 1979 holds firm justification for my position of whether one elects to label it tamates, or tomatoes, it has just as many applications to consumer situations as it has to purely business situations. And it is appropriate to be called a consumer code. Works Cited Arcos LTD v. Ronaasen & Son [1933] AC 470 Baldry v. Marshall [1925] Bisset v. Wilkinson [1927] AC 177 Dimmock v. Hallet [1866] Frost v. Alesbury Diaries [1905] 1 KB 608 Goss v. Chilcott Holdings Company LTD Heibut, Simmons & Co. v. Buckleton [1913] AC 30 (HL) Priest v. Last [1903] Schawel v. Reade [1913] 46 ILT 281 Smith v. Land and House Property Corporation [1884] 28 CHD 7 South Australia Sale of Goods Act 1979 Stevenson v. Rogers [1999] 2 WLR 1064 Wilson v. Rickett, Cockerall & Co, LTD [1954] Read More