Sale of Goods Act 1979 in the Modern Business - Essay Example

Sale of Goods Act 1979 in the Modern Business The government has always tried to come up with ways to make commerce easy and to bring some level of order and sanity in the commerce world. The commerce world is made of different types of people who operate in a private level. This requires the provision of laws that govern their transactions and relations. There have been so many legislations which have been effected in this regard, one of which the Act of 1979 for sale of goods which was geared towards creating a trusting and effective commerce environment. Some of these old laws have been regarded as obsolete and not relevant in the modern commerce world. This paper looks at the Sale of Goods Act of 1979 with regard to its relevance in the modern business environment. It does this by looking at some of the changes which have happened in the recent times, such as the introduction of ecommerce and how this affects the relevance of the Act. The Sale of Goods Act of 1979 was meant to make the transaction of goods between one individual and another easy. It took care of how goods are transferred from one point to the other and also the contractual obligation that regard such transaction. The act also details the issues of how ownership is transferred, and what triggers this ownership transfer. Like most acts which are meant to make the business world run in a smooth way, the act has a number of issues which must be taken into consideration. This is because as Rotherham (89) argues, the business world has evolved a lot in the past twenty years and although the Sale of Goods Act 1979 was amended in 1995 to highlight some new challenges in the business world, it still faces many issues as the nature of business has changed. Some of these issues include the following; Internal trade and the existence of different laws in different countries When the act was being drafted 35 years ago in 1979, the nature of business was much differentiated from the way it is today. International trade was not as established as it is today. Because of this, the Act seems to have only considered the transaction of business within the borders and between people under the same legal jurisdiction. However, international trade has changed over time and in the modern commerce world, it is often that individuals are trading across the UK borders and the international borders. This brings in numerous challenges because the parties to a business translation may not necessarily be under the English law. The Sale of Goods Act 1979 lacks a lot with regard to dealing with this modern business environment. Transfer of ownership The Act of 1979 has several rules as regards the transfer of ownership. This is a challenge to most modern businesses because of two major factors. One such factor is the fact that modern businesses deal with bulk of goods and therefore transfer of ownership can under the provisions of the Sale of Goods Act 1979 be a big challenge. For instance, most manufacturers today deal with bulky sales where the buyer buys the product and ownership is transferred while the products are still in the manufacturer’s warehouse. This presents a challenge with regard to responsibility and liability. If the Sale of Goods Act 1979 was to be considered, the issue would be the fact that most of the manufactures would have a lot of liability for goods they don’t own. Under the modern business system which is being used by most countries, the buyer owns the product once he or she has already agreed to the terms of the sale and the payment has been done (Debattista 19). In fact, in most cases, the payment does not even need to have gone through, especially considering the many kinds of transactions which are likely to go on with regard to payment. This modern arrangement of goods transfer seems to suit many businesses and has therefore become the de facto method of goods transfer. If the provisions and requirements of the Sale of Goods Act 1979 were to be considered, there would arise other issues such as insurance for the goods. In this regard, the Act seems to be short of reliability with regard to the modern business environment. Ecommerce and the Sale of Goods Act 1979 Another interesting issue is the issues of e commerce. As Alghamdi (195) says, ecommerce has a number of factors which make it very different from the traditional business. While in a traditional business environment the buyer and the seller seem to have a direct relationship, the ecommerce platform seem to be of a very different nature which makes it hard to be governed by the Sale of Goods Act 1979. First, ecommerce in most cases involves many individuals, most of whose are not only anonymous but also are independent from each other (Spindler & Börner 89). A product sold through ecommerce may be transacted between many people before it reaches the final user. This is because of the logistics used in the ecommerce business environment. To begin with, when a customer buys a product from an ecommerce site, the product is then sent to a logistics provider such as DHL or Wells Fargo. This will then take a few days before the product finally reaches the end user. The product may take up to a whole month in the custody of the logistics provider and it is hard to therefore determine on whose ownership the item is during this period. This provides for a very big challenge and there is a need to make sure that these challenges are addressed in order to guarantee that the ecommerce is well regulated. This is especially with regard to the fact that ecommerce is expected to be the de facto mode of commerce for most of goods transaction in the future. Ecommerce is growing at a very high rate, which indicates that many sellers will have to do business online in the future. This provides for two main challenges. First, it means that the geographical borders are no longer important in terms of trade since individuals can easily order goods from any location in the world, and receive the goods (Kouladis, 190). Secondly, it means that the rules of transaction have to be realigned in order to be in line with the rules of the ecommerce environment, definitely, the provisions of the Sale of Goods Act 1979 fails to provide for a useful platform to manage the ecommerce environment because by the time the Act was drafted, ecommerce was not yet in place. This is especially with regard to section 16 of the Act of 1979 which says that goods must be ascertained. By “ascertained” it means that for the transfer of the goods to be affected or recognized as having taken place, the buyer must have received the goods and seen their conditions. This poses a big challenge in a modern business world which is very different from the traditional one. For instance, in the case above about ecommerce, traders have to transfer the goods from their premise to the logistics provider. Many cases in this regard the fact that if there is an issue with the logistics firm, it is not easy to establish who would take liability. A good example of this is the IKEA case where a customer ordered a piece of furniture and never got the furniture. In the case, the seller, (IKEA) claimed that the furniture had been dispatched to the logistics firm and the logistics firm claimed that it never received the product. In such a case, it becomes very hard to identify who should take the liability and who should incur the loss, should such a product disappear and not be recovered. Of course the issue here is about the time and situation at which the ownership of the product can be said to have been affected. The seller may argue the transfer of ownership could have happened immediately after the product was transferred to the logistics provider since the logistics provide was acting on behalf of the buyer. However, the buyer could argue that the ownership of the product did not get effect because he never actually received (ascertained) the product. These are some of the issues which must be taken care of in order to make sure that the act is relevant to a modern business environment. International sellers In fact, most products in UK today are products which have been bought from other countries and not in the country. This may indicate that it is hard to sustain the Sale of Goods Act 1979 due to the fact that many of the products being sold in the UK today are sold from outside the country. The sellers are therefore not people who are under the jurisdiction of the UK law and therefore may not be obliged to observe the laws of the land. This is especially more serious with consideration of ecommerce which happens in a more unregulated and dynamic environment which may not necessarily be easy to control. Some relevant parts Although the Sale of Goods Act 1979 fails to meet some of the needs of the modern business world, it still plays a big role in protecting buyers in the modern world. This is because the Act of 1979 provides for some requirements in terms of the kinds of goods which sellers must sell. The Act first begins by identifying that the seller will have the right to sell his or her goods. However, the important highlight of the Act has to do with modern issues such as advertising. The act looks at the issue of advertising and makes a number of recommendations. It also considers that advertising can occur in a number of ways which must be addressed in order to protect the customer from being cheated by the sellers. In this regard, the act looks at descriptive advertising and requires that sellers will provide goods which correspond to the goods they described in their advertising. This is the most important issues in the Act 1979 with regard to modern business. People are now more than ever bombarded with advertisements which now appear in all mass media from radio to television to bill boards. Audio visual advertisements as found on televisions and other outlets such as social media (YouTube) can be misleading with regard to the quality of a product. In this regard, this Act is a way to protect the consumers by requiring that the sellers will not exaggerate the qualities of their product while advertising. More often than not, an advertisement in the media may seem to exaggerate the qualities of their product. In this case, the sellers can be sued and brought to the hand of law for misleading the people about the quality of the goods they are selling. Businesses and people are required to make sure that the description of the product they give about a product they are selling must be go with the product they are selling. This part of the Sale of Goods Act 1979 is going to remain relevant and even become more useful in this information age. In the information age, information is becoming the main product that people are buying. Having the guarantee that the information is not misleading is one of the things that must be considered in a very serious way. At the same time, the Sale of Goods Act 1979 also looks at the issue of free samples. Although the use of free samples is not used extensively as a way to promote businesses, most manufactures still do use this as an advertisement. The Act 1979 requires that the seller is using free sample as a way to inform his potential customers about the product that he makes sure that the actual product is of a quality that is as good as the free sample. This is important in protecting the consumers from deceitful sellers. However, it is necessary to note that while the Sale of Goods Act 1979 has these provisions which are supposed to protect the consumer, the issue is that they are dormant and that they are never enforced. There is for instance no way to make sure that the sellers especially the many manufacturers who advertise on television are able to live by the standards and that the information they give about their products is the exact representation of their product. Recent years have seen an increase in advertisements and there is a competition among commercial competitors to sell their product to the public. Many advertisements, apart from looking inappropriate, may also seem misleading. How the Sale of Goods Act 1979 protects the consumers may not necessarily be clear. However, its existence is important because it means that if any person buys something and later feels that he was cheated in that the quality of the product is not the same condition as described by the seller in an advertisement, the buyer has a platform to take the seller to a court of law and get compensated for any damage. This is especially with regard to high-cost items such as cars etc. Other products may also require that the seller is more honest with regard to the quality of the product, and especially the way the product is going to affect the end user. This includes such products as medical equipment which if quality is low, may lead to human health and life being put at risk. While this provision of the Sale of Goods Act 1979 may protect the consumer in this way, it may not protect the small consumer or the consumer of the small products. The sale of convenience products such as home utilities, clothes etc may not be well covered by this Act. A person may not be willing or even able to take his case to a court of law to litigate against a seller because for instance the shirt he bought from a local seller was not of the quality that the seller described. The act also talks about quality of goods sold. In the Act of 1979, the act requires that the goods be of satisfactory quality. This is also very important in a modern business situation. The only issue with this is the fact that there could be no way to quantify or determine what level of quality is satisfactory. The modern business environment, unlike the earlier days, is full of manufacturers of all types and levels. While some target the lower cream of the market, other target the ordinary person who is looking for a cheap product. A good example is the smart phone market. The industry is made of all types of players from those who look for the upper market (such as Apple, Inc) to those who target the low end market (such as Huawei from China). These two sellers can be said to provide the buyer with quality goods, yet the quality differs in a very big way between the products of each. The enforcement of the Sale of Goods Act 1979 in this regard may not necessarily be practical. Works Cited: Alghamdi, Abdulhadi. The Law of E-Commerce: E-Contracts, E-Business. London, Uk: AuthorHouse, 2011. Print. Debattista, Charles. Sale of goods carried by sea. London, UK: Butterworths, 1990. Print. Kouladis, Nicholas. Principles of Law Relating to International Trade. Berlin, HB: Springer, 2006. Print. Rotherham, Craig. Proprietary Remedies in Context: A Study in the Judicial Redistribution of Property Rights. London, UK: Hart Publishing, 2002. Print. Spindler, Gerald & Börner, Fritjof. E-Commerce Law in Europe and the USA: Volume 9 of Herausforderungen an das Management. Berlin, HB: Springer, 2002. Print. Read More