The Sale of Goods Act 1979 - Essay Example

The Sale of Goods Act 1979 contains no definition of what it means when it speaks (in Section 13) of a contract for the sale of goods being a sale 'by description'. One must look to the contract as a whole to identify the kind of goods that the seller was agreeing to sell and the buyer agreeing to buy." Style: APA Language Style: English UK Answer: In order to answer this question it is necessary to discuss about Section 13 of The Sale of Goods Act 1979. Section 13(1) of The Sale of Goods Act 1979 states that 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. Section 13(1A) of This Act provides as regards England and Wales, the term implied by subsection (1) above is a condition. Under Section 13 of the Act there is an implied condition in a contract of sale, upon the supplier of a service in a contract that the goods will correspond with the description, which will apply to any sale where the purchaser does not see the goods before he buys them & when acting in the course of a business that he will carry out the service with reasonable contractual period. Even if the purchaser has seen the goods, there may be a sale by description if he has relied upon the description. In this question it need to discuss While 'description' itself is an ordinary English word, the Sale of Goods Act 1979 contains no definition of what it means when it speaks (in Section 13) of a contract for the sale of goods being a sale 'by description'. And then it needs to discuss that a contract is from between parties when the seller was agreeing to sell and the buyer agreeing to buy. Now it need to discuss about condition, sale 'by description', current possession, and misrepresentation. First, one has to decide what is the meaning of sale by description. In the case of Varley v Whipp1 it has been held that this phrase must apply to all cases where the purchaser has not seen the goods but is relying on the description alone. Therefore, a sale must be by description if it is of future, or unascertained goods. But in addition, the term applies in many cases even where the buyer has seen the goods. Not only the term "sale by description" includes goods of a generic kind, for example, a packet of brand X cigarettes but also specific goods when they are sold as a thing corresponding to description. In the case of Beale v Taylor2 the subject matter of the contract was described as a 1961 Triumph Herald Convertible and the plaintiff saw the car and bought it. In fact, it turned out to be two different cars joined together. It was held that the car did not comply with the description. In Grant v Australian Knitting Mills [1936] the sale of woolen underwear was held to be a sale by description even though the buyer was buying something displayed before him on the counter. But a sale is not a "sale by description" where the buyer makes it clear that he is buying a particular thing because of its unique qualities, and that no other will do, or where there is absolutely no reliance by the buyer on the description (Harlingdon Ltd v Christopher Hull Fine Art Ltd3). In other words it appears that the only case of a sale not being by description occurs where the buyer makes it clear that he is buying a particular thing because of its unique qualities and that no other will do. For this reason, the sale of manufactured item will nearly always be a sale by description (except where it is second hand) because articles made to an identical design are not generally bought as unique goods but as goods corresponding to that design. In the Harlingdon case, the buyer was a professional art dealer who knew the seller had no experience or knowledge of the type of painting being said. There was accordingly no breach of s. 13 when the painting turned out to be a forgery. The buyer had placed no reliance on the seller's description. These cases suggest that the real question at issue in deciding whether the sale should be classified as a "sale by description" is whether the buyer has agreed to buy a specific thing exactly as it stands to the exclusion of all liability on the part of the seller. This section is strictly applied particularly in commercial cases in favour of the buyer. Any deviation from the description may lead to a breach of s. 13. In Arcos Ltd v Ronaasen 4the seller sold some wooden staves, which was supposed to be half an inch thick, to the buyers. A large proportion of these staves were between half and 9/16 of an inch thick although it was found that they were fit for their purpose and merchantable. Nevertheless, the HL held that there was a breach of section. 13. It was stated that if the article, which the buyer had purchased, was not in fact the article that had been delivered, they were entitled to reject it, even though it was the commercial equivalent of what they had bought. Lord Atkin in his famous speech stated: "A ton does not mean about a ton, or a yard about a yard. Still less, when you descend to minute measurements, does half an inch mean about half an inch" Similarly, in the case of Re Moore & Co.5, a consignment of canned fruit was ordered to be delivered in boxes of 30 tins. Some of the boxes supplied contained only 24 tins, but the total number of tins supplied were in accordance with the terms of the agreement and there were no complaints as to their quality. But it was held that the sellers were in breach of the section. In the later case of Reardon Smith Lines Ltd 6 the House of Lords criticized the Re Moore decision as excessively technical and doubted the correctness of the same. In this case the ship builders contracted to build a vessel to a certain specification at yard no. 354 at Osaka Zone but the ship was in fact built in another yard. It was held that there was no substantial importance or legal significance as to where the ship was built and also there was no misrepresentation as there was no suggestion that the ship builders did not intend to build the ship there. In the complicated case of Ashington Piggeries v Christopher Hill Ltd7, HL discussed the issue as to whether compliance of the goods of the with all parts of a description is required by s. 13, or whether parts of the description can be treated as giving rise to breach of warranty only. It was held that not all-descriptive words automatically fall within s. 13. It was further held that only the descriptive words, which are to be treated as the subject of s.13, are words, which identify the subject matter of the contract. According to s. 13(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. This covers the situation where at a supermarket the shopper himself selects goods from the self. If a customer shopper selects a packet labeled CEYLON TEA, which in fact turns out to be CHINA TEA, there will be a breach of s.13. In order to classify the terms, they must be divided between conditions and warranties. A breach of a condition of the contract enables the innocent party to treat him as discharged from further performance, or to affirm the contract and claim damages. A breach of warranty however will only give rise to a claim for damages. Definition was given in Wallis, Sons & Wells v Pratt & Hyanes 8-conditions are terms "which go on to the substance of the contract, or in other words, are so essential to its very nature that their non performance may fairly be considered as a substantial failure to perform the contract at all. Section 11 (3) of The Sale of Goods Act 1979 states that whether a stipulation in a contract of sale of goods is a condition or warranty will depend in each case on the construction of the contract. It is also clear from the case law that there must be some reliance by the buyer on the words which from part of the description for it to be a sale by description. In Reardon Smith Lines Ltd v Hansen Tanzen9 decision, the HL held that the mark identification given to an oil tanker did not from part of the description as it was unimportant and no reliance had been placed on it. It has also been seen above that in the Harlingdon case, CA decided that in a transaction between two arts dealers, the buyer did not rely on the description so it was not a sale by description. The seller had attempted to make it clear that he was not an expert in a particular field of painting and that the buyer basically bought the painting at his own work. However, in standard consumer cases, the buyer will heavily rely on the description, e.g. 100% wool sweater; 1999 Ford Escort, 10000 miles; and the problem of it not being a sale description because of lake of reliance on the description will not normally arise. Section 13(2) states that if the sale is by sample as well as by description it is not sufficient that the bulk of the goods correspond with the sample, if the goods corresponds with the description. This is particularly useful in furniture sales where consumers are likely to choose from samples. If the carpet is described as 100% wool, even if the consumer is given the same carpet as he sample, if the carpet is not 100% wool there is a breach of condition. Since s. 13 is a condition, the buyer is able in terms of a remedy to reject the goods and obtain a refund. This remedy may be used in conjunction with s.30, which stipulates what a consumer buyer can do when he ends up with different quantities from what was ordered. Because a different amount has been obtained, there has been a breach of description. Section 30 states that where the seller delivers to the buyer a quantity of goods less than he contracted to sale, the buyer may reject them, but if the buyer accepts the goods so delivered he must pay for them at the contract rate. Section 14 of SGA 1979 is probably the best known & it relates to satisfactory quality or formerly merchantable & that goods be fit for a particular purpose. Under this section goods will be considered to be of satisfactory quality "if they are as fit for the purpose(s) for which goods of that kind are commonly bought as it is reasonable to expect having regard to any description applied to them, the price (if relevant) and All Other Relevant Circumstances" Section 15 of the Sale of Goods Act 1979 deals with sales by sample. The section provides that there is an implied condition that the bulk will correspond with the sample in quality; that the purchaser will have a reasonable opportunity of comparing the bulk with the sample; that the goods in question are free from defects making them unmerchantable, which on reasonable examination of the sample would not be readily apparent. According to s.15 (1), 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. Under s.15 (2), in such contracts there is an implied condition. In each case it will be necessary to decide whether or not the contract regarding the supply will be covered by the Act. Note that under s 14 there are no implied conditions or warranties as to quality or fitness in any contract of sale except as provided under that section. Section. 3 of Supply Of Goods And Service Act 1982 states that where the transferor transfers or agrees to transfer the property in the goods by description, there is an implied condition that the goods will correspond with the description. Here it has to be remember that collateral contracts which are contracts of sale of goods. If there is no money consideration that contract will not be a sale of goods contract. Thus in Esso vs. Commissioners of Customs and Excise10, although there was a contract of sale of goods in relation to the petrol, the collateral contract relating to the World Cup coin was not a contract for the sale of goods. It is difficult to imagine a dispute about title, description, quality or sample arising in relation to a World Cup coin. However, in the case of Carlill v Carbolic Smoke Ball Co11 it was held that a statement in the advertisement had a contractual effect when an invitation to treat precedes an offer was accepted. If the person who made the statement had special knowledge or knowledge as compared with the other party, then the court may be more willing to infer an intention of the parties to make that statement a term of the contract. It is natural that if the maker has such knowledge, then the people would rely on it. In Oscar Chess Ltd v Williams12, P were car dealers. They bought from D a second hand Morris, knowing that he was 1948 model; 8 months later it was found to be 1939 model. The seller being a layman, the buyer knew that he was simply repeating what he had read in the cars registration book. This had, at some stage, being forged to mis- state the years of the car's manufacture and it showed five changes of ownership between 1948 and 1954. The book was produced to the buyer. It was obvious to any reasonable buyer that the seller had no actual knowledge of when the car was registered, indeed he knew no more about this than the buyer. It was held that no recovery would allowed. P were dealers and did not check at the right time. Lord Denning said it seems to me clear that the plaintiffs, the motor dealers who bought the car, relied on the year stated in the logbook. If they had wished to make sure of it they could have checked there and then by taking the engine number and chasis number and writing to the makers. They did not do so at the time, but only eight months later. They are experts and as they did not make that check at the time. I do not think they should now be allowed to recover" Liability for breach of the implied terms in a contract for sale of goods is strict, enabling the buyer, under certain circumstance, to terminate the contract for breach of condition and return the goods, or alternatively to sue for damage (the Sale of Goods Act 1979, s. 53). Liability for Misrepresentation is strict where the warranty in question is incorporated into the contract as a term, or froms a collateral contract; however, the buyer will have the normal range of contractual remedies. In Royscot Trust Co. v Roserson13, Where the Misrepresentation is not incorporated into a contract in this way, damages are not available for a purely innocent Misrepresentation (that is to say, one which is neither fraudulent nor negligent). However if the Misrepresentor cannot show that he had reasonable grounds for making the statement he will be liable for damages under section 2(1) of the Misrepresentation Act 1967. Sometimes sellers are trying to exclude liability by using exclusion clause. Under the Unfair Contact and terns Regulations 1977 section 1(3), clauses and terms that seek to limit or exclude liability of things being done by a person in a course of business are scrutinised. However, losses from breach of the implied terms in s.13 and s. 14 cannot be excluded at all, if seller is dealing as a consumer-which appears to be the case. Finally, it may happen that the buyer relies upon s. 13, even though his complain is in a broad sense about quality where the contract contains an exclusion cause concerning matters of quality, but not for description, something that might happen despite UTCA 1977. Particular problems arise when goods are described in general terms, but some extraneous substance is included with the goods but significantly affects their utility. This point is shown by the decision of HC in the case of Ashington Piggeris v Christopher Hill 14 where 'Herring Meal' contaminated with a substance, which made it unsuitable for feeding to mink, was sold to the buyers for use as mink food. It was held that there was no breach of s. 13, because the goods were still properly described as Herring Meal and it was pointed out that not every statement about the quality of fitness of the goods could be treated as a part of the description. On the other hand, in the case of Pinnock Bros. v Lewis & Peat Ltd. 15the contract was of the sale of Copra cake but the goods delivered was in fact the mixture of Copra cake with Castor beans and it was held that the goods did not correspond with their description. As Lord Wilberforce pointed out in Ashington Piggeris case, the question whether the substance added to it, some extraneous material or is contaminated by the presence of some chemical, remains in the substance what it always was or it really becomes a different substance altogether very difficult to decide. Therefore, the question whether the goods correspond with their description is intended to be a base on a more common sense test or a mercantile character. From the above discussion it can be said that, 'description' itself is an ordinary English word but practically sale 'by description' is really useful phrase though the Sale of Goods Act 1979 contains no definition of what it means when it speaks. Bibliography: P.S. Atiyah (Author), et al, (2005), The Sale of Goods, 11th edition, (ISBN: 0582423619) Publisher: Longman; R. Lowe, G. F. Woodroffe, (2006) Consumer Law and Practice, 6th edition. Sweet & Maxwell, F. D. Rose, (2006) 'Blackstone's Statutes on Commercial and Consumer Law' 15th edition. Blackstone's statute books Cheshire, Fifoot and Furmston, Law of Contract, 14th Edition (2001), Publisher LexisNexis UK, Page 31- 73 McKendrick E. Contract Law, 5th Edition (2003), Publisher Palgrave Macmillan, UK, Page 33-57. Catharine Macmillan& Richard Stone, Elements of the Law of Contract, (2003), University of London Press. Page 19-38. Beatson. J. Anson's Law of Contract. 28th Edition (2002), Oxford, Oxford University Press. Smith .J. C. Smith & Thomas: A Casebook on Contract, 11th (London; Sweet & Maxwell 2000). Brown, I. And A, Chandler Blackstone's Q&A Law of Contract 5th Edition (2005), Oxford, Oxford University Press. Read More