The Sale and Supply of Goods to Consumers Regulations - Case Study Example

Contract Law Part In instances of late delivery of goods, the seller is deemed to have breached the contract. Moreover, the buyer is en d to damages, for such breach. Contracts that specify a particular time for completion are termed as contracts where time is of the essence. In such contracts, any delay in completion, is held to be an infringement of contractual terms. Late delivery is sufficient grounds for the buyer to terminate the contract1. In Hartley v Hymans, the court ruled that in ordinary sale of goods contracts, timely delivery of goods is an essential component of the contract2. Section 29(3) of the SGA, stipulates that in the absence of specific time for effecting delivery of goods; the seller has to perforce deliver the goods, within a reasonable period of time. Moreover, section 29(5) of the SGA states that delivery should be made within a reasonable period of time, and that such reasonableness depends on the circumstances of each case. As such, a clear illustration of the principles on which damages are awarded for breach of contract was provided in Hadley v Baxendale. The court held that damages for breach of contract should be such that they had naturally followed from the breach, or which could reasonably be assumed to have been envisaged by the parties to the contract. If the contract had been formed under special circumstances that had been intimated by one party to the other, then the damages for contractual breach would be what these parties could have realistically expected from such breach3. As such, the rule in Hadley v Baxendale provides a rationale for restricting damages relating to infringement of contractual terms. In addition to being a tenet of remoteness, it also provides the dividing line of recovery4. Consequently, the NGC’s expression of inability to supply the ornamental plant pots to Gerda, within the time specified by her in the normal course of events. . Thus, the NGC is justified in demanding additional payment for speedy delivery. However, if the NGC fails to deliver the ornamental pots, within the stipulated time; Gerda can repudiate the contract or claim damages, under the provisions of the SGA 1979. Part 2 The greenhouse delivered to Hari was too small, broken and not delivered on time. Under the provisions of the sale of goods act, a retailer cannot exclude statutory implied terms. Any such act would make him liable for criminal prosecution. In addition, a retailer cannot attempt to restrict liability for breach of statutory implied terms. 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.5 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. The reason for which goods are bought can be either implied or expressed. If the customer knows that the goods are made for a specific purpose or the goods can be used for only one specific purpose then there is no need for the customer to make enquiries about the product’s appropriateness for that purpose6. Liability for death or physical injuries, resulting from negligence of the supplier of goods cannot be excluded. Liability for other losses can be excluded, provided the test of reasonableness is satisfied. Breach of contractual duty is deemed to be negligence. A retailer under a contract is expected to exercise reasonable care and skill7. The supplier of goods must deliver goods of reasonable quality, which can be determined by their appearance, finish, safety, durability, and freedom from manufacturing defects. The Sale and Supply of Goods to Consumers Regulations 2002 permits consumers to reject goods that are not suitable for the purpose for which they had been purchased or if they prove to be defective. 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 Ltd8 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 Last9. The greenhouse supplied by NGC to Hari, does not serve the purpose for which it had been purchased. Since, NGC delivered the greenhouse after the specified delivery time, as the goods were unsuitable for their intended purpose and as they were in a damaged condition, Hari can claim replacement of the greenhouse. He can also claim damages for any loss suffered by him in this regard. Part 3 Fred bought an electric hedge trimmer, based on their hyperbole. As per section 14(2) of the SGA 1979, goods sold in the normal course of business should be of satisfactory quality. Within a short period, this implement proved to be sub standard, and its blades required sharpening. This establishes the fact that the goods were not of satisfactory quality. Hence, section 14(2) SGA is breached. In addition, the lawn mower was not delivered to Fred in a timely manner. Contracts of sale, entail certain important implied terms, some of these are that goods must be in accordance with their description; should be suitable for the purpose, which is intimated to the seller; should be of satisfactory quality; and the seller should possess the right to sell the goods. Section 13 of the Sale of Goods Act 1979, specifies that 1. In a contract for the sale of goods by description, there is an implied term that the goods will conform to their description. 2. If the sale is by sample as well as by description, it is not sufficient that the bulk of the goods correspond to the sample, if the goods do not also correspond with their 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. The term quality of goods connotes their state, 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.10” Under Section 13 of the Sale of Goods Act 1979, goods that have not been correctly described can be rejected 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. The hedge trimmer had been described as the finest and longest lasting in the world. This description proved to be false, because within two weeks, its blades required to be sharpened; and a better model, manufactured by some other company was noticed by Fred. As such the NGC had misrepresented facts by stating that its electronic hedge trimmer was the best in the world. 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 due course of 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 is that the goods supplied must be of satisfactory quality and this arises automatically wherever goods are sold in the normal course of business11. In Beale v Taylor12 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 Ltd13 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. The goods sold by NGC to Fred do not correspond to their description. Therefore, Fred can reject or seek replacement of the same. Although Fred had specified that he needed the lawn mower, within 3 days, there had been a delay of 7 days. This had entailed additional expenditure to Fred, who had to get the lawn mown for £ 100. In respect of contractual terms, entailing special circumstances, damages on account of breach of contract should be such as could have been reasonably anticipated, or such terms should have been communicated to the other party. Fred had informed NGC that he had an important garden party, within 6 days, and that he required the lawn mower before that time. As such, he asked them to deliver it within 3 days. NGC failed to do so; therefore it is liable for damages on account of breach of contract. 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 sale14. Hence, Fred can reject these gadgets and also claim damages for the various losses caused to him. Bibliography Beale v Taylor (1967) 1 WLR 1193 Bradgate, Robert & White, Fidelma, 2007, Commercial Law, Oxford University Press, ISBN 0199205477, P. 131 The Sale and Supply of Goods to Consumers Regulations 2002 Hartley v Hymans (1920) KB 475 Harlingdon and Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd (1991) 1 QB 564; (1989) 3 WLR 13; (1990) 1 All ER 737 Hadley v. Baxendale 9 Exch. 341, 156 Eng. Rep. 145 (1854) Kayne, Steven B, 2005, Pharmacy business management, Pharmaceutical Press. ISBN 0853695636, 9780853695639, P 120 Preist v Last (1903) 2 KB148 Sale of Goods Act, 1979 Sale of Goods Act as inserted by the 1994 Act Slater v. Finning Ltd (1997) A.C. 473 Read More