Overview of English Sale of Goods Law - Coursework Example

Critically Analyzing the English Sale of Goods Law Overview of English Sale of Goods Law In United Kingdom, every transaction (which may include buying and selling, repairing, manufacturing, hire-purchase, insurance and employment) requires a legally binding written agreement as stipulated in the law referred to as the Contract Law. And a sub-section of this Contract Law deals entirely with the sales of goods and services: this is called English Sale of Goods Law (Furmston 1) On record, the Sale of Goods Act 1893 was drafted as the first Sale Law by Sir Mackenzie Chalmers. The subsequent one was the Sale of Goods Act 1979. The Act contains codes that guide every transaction among traders as they go about their processes of buying and selling (Furmston 2) 　　　　　　　Characteristics of English Sale of Goods Law It has been observed that English Sale of Goods Law is strict, certain and predictable. However, this report evaluates this strictness of English Commercial Law as it deals with the issues concerning traders. The strict character of English Sale of Goods Laws, typically as indicated in both Sale of Goods Acts 1893 and 1979 reveals itself in the following criteria: (a) Pricing: The English Sale of Goods Law establishes stringent codes about the pricing structure for the goods that are to be bought or sold. Section 9 (2) of the Law states that when a third party who is delegated to make the price valuation for a transaction is prevented from doing so by the fault of the seller or buyer, the party not at fault may maintain an action for damages against the party faulty. This aspect of the Sale of Goods Act has been widely criticized for its high-handedness in the issue of pricing evaluation by a third party that had been prevented from doing. Using the following example would shed more light on why experts have been complaining about this strict part of the law. Take for instance, a U.K manufacturer of foods that imports eggs from China through a third party (particularly a commercial agent based in U.K). Having recognized that it was the responsibility of the commercial agent to appropriate or evaluate how much the manufacturer is going to pay to Chinese seller for several shipments of tens of thousands crates of eggs. But if as a result of a sudden breakout of deadly disease in China (as it was many years back when SARS affected so many chickens in China), and the manufacturer requested that the final pricing of the current orders and the subsequent ones be suspended, the Sale of Goods Act allows the Chinese seller to seek damages at the court of law. It is obvious that this code of the law didn’t not provide a vivid description of what factors may be accepted as genuine excuses for a buyer or seller to halt the price evaluation process by a third party. In business, there are no certainties: unexpected circumstances may change the way transactions are being carried out. But Section 9 (2) doesn’t offer a leeway for the default party to present reasons for disrupting price evaluation by the third party. Still on pricing, the Sale of Goods Act doesn’t provide any protection for a buyer or seller whose price of contract has been fixed before the economy is affected by inflation or deflation. At the moment, the housing market is seriously affected by the current financial crisis; however, Section 8 (1) which states that if a contract price has been agreed upon, under no circumstances will the price of contract be changed. It is clear that the value and financial worth of homes are crashing: so, a contract that was made years before the current crisis stays at that amount of money agreed upon in the contract. This is really too strict. (b) Delivery: The Sale of Goods Act 1979 indicates in Section 32 (2) and (3) that if a seller refuses to alert the buyer of a possible change in the route of delivery, and using the sea or other routes where insurance of the goods is necessary, if an event of damage or loss occurs during the delivery, the seller is solely responsible for the loss (Jeloschek 69). This code doesn’t recognize that the seller may opt for the sea route because it is always cheaper than the other modes of transportation. One could observe strictness against the activity of the seller. It is generally believed that the code could have given the options of delivery so as to give the seller other alternatives, and for which all the risks would not be transferred to the seller alone. Another strict of the English Sale of Goods Law occurs in the time of delivery. The law only recognizes the effect of natural disasters or other force majeure as the only cogent reason why any seller could deliver goods late to the buyer. This doesn’t put into consideration issues like fault development in the course of production (which is quite inevitable); it doesn’t give the seller some protection due to human failures or even health problems. Any act of late delivery, in English Sale of Goods Act is deemed illegal, and the unhappy party in this transaction could seek legal redress or maintain an action for damages payment. This is obviously too strict: there are other factors of life that may cause a seller not to meet the deadline of supply he/she has agreed with the buyer. There may be a fire outbreak, or sudden shortage of raw materials or even the death of one of the company’s founding partners, which may ground operational activities at the company. Also Section 30 (1) states that a buyer may completely reject goods delivered by a seller if they were not what he/she had ordered for. This means that if a buyer requests for made-in-U.K scissors but the seller decided to supply made-in-China, the Sale of Goods Act doesn’t encourage the buyer to go into discussion as whether the supplied goods could be accepted while reducing the price or change other conditions on the contract of trade.. The Act strongly opposes delivery by installments in Section 31 (1): this implies that the buyer is encouraged to request for complete delivery when undergoing a transaction with the seller (Macleod 16). And this business practice doesn’t encourage small companies to grow, as they could not afford to mass-produce and supply the exact quantity of goods the buyer has requested for. (c ) Frustration from Perishable Goods: it is plainly stated in Section 7 of the Act that when there is an agreement to sell particular goods and subsequently the goods, without any fault on the part of the seller or buyer, perish before the risk passes to the buyer, the agreement is avoided. This reveals that the Act primarily inconvenienced only the buyer in this case, no matter how much of money he/she had spent to make the goods available for shipment. This theory of frustration is only common with goods that quickly perish based on weather or unexpected bacterial infection. For the fact that the Act doesn’t expect the buyer to share in the financial losses the seller may have incurred, this code appears quite strict to the sellers. (d ) Returned of destroyed goods: Section 36 states that a buyer isn’t bound to return some goods that were destroyed in the course of delivery by the seller. This is quite too harsh on the seller who had spent a lot of money to convey the goods to the buyer’s place. It should make some sense if the buyer is expected to return the delivered goods and save the seller additional cost of returning. This code of the Act is truly harsh to the seller. (e) Liability for not taking delivery of goods: Whenever the seller is ready to deliver the ordered goods to the buyer who seems not to be ready to accept the goods, the buyer becomes liable to any problems or damage that may happen to the goods, even though they are still kept at the seller’s place. This is made clear is Section 37 (1). The Act doesn’t give consideration to instances when the buyer runs out of money to make preparation take the delivery of the goods. (f) Sale by sample: It is believed that when goods are sold based on a sample the seller has shown to the buyer, the remaining bulk of purchases must retain the quality and features of the sample, and the buyer should reject them if they are not as satisfactory as the sample shown. This is indicated in Section 15 (2). What this implies is that if a seller by mistake put some goods of different quality among the goods that conform to the sampled one, the buyer should not give the seller any consideration but completely rejected the goods that have been supplied. (g) Remedies: Both the seller and the buyer have some remedies to claim in case either of the parties fail to fulfill the requirements of the contract. In case of the seller, section 50 of the Act gives the seller the right to seek damages for goods that are of quality and satisfy the requirements in the contract but are not accepted by the buyers (Connolly 161). This code is very strict to the buyer, because it doesn’t put into consideration the reasons behind rejection of the goods: this may be as a result of a slump in the market for that particular goods or financial incapability on the part of the buyer. In this case, the code lacks moral standing as it only caters for the financial aspect of the transaction. In a similar vein, section 51 of Sale of Goods Act of 1979 gives the buyer the right to seek damages for goods that are not delivered by the seller according to the agreement in the contract (Connolly 174). It is unfortunate that this section of the Act doesn’t help the seller in the sense that it refuses to recognize the possibility of unexpected factors blocking or hindering the smooth delivery of the goods as planned. This code inconveniences the seller even though it has spent a lot of money to prepare the goods for delivery. Fallouts from the strictness of English Sale of Goods Act 1979 There are perceptible fallouts from the strictness of English Sale of Goods Act of 1979: some of these include loss of huge financial resources, litigation and financial liabilities, loss of certificates of operation and the reduction in customers’ loyalty. The problems outlined above are very serious and they could make a business fold up if they are not quickly addressed. The activities of the legislature and the judiciary to change the strictness of English commercial laws As the need to protect the consumer’s interest and reduce some harshness that is inherent in English Sale of Goods Acts, the British legislature had carried two concurrent amendments to soften the effects of the codes in Acts of 1893 and 1979. One amendment was carried out in 1994: this was meant to soften the influence of strict measures in the entire Sale of Goods Act of 1974. The English legislature (House of Lords) carried out another amendment in 1995, which targets the activities of the traders (buyers and sellers) as they would affect consumers’ satisfaction. These two amendments have been able to put into consideration some palliative measures that would be helpful to reduce how buyers and sellers lose money, customers’ patronage and incur liabilities from court cases and financial losses. This doesn’t indicate that all the strict character of the English Sale of Goods Act has been removed, but it helps a little to curtail the amount of overall loses. Works Cited Furmston, Michael. Sale and Supply of Goods. London: Routledge, 2000. Connolly, Michael. Briefcase on Commercial Law. London: Routledge, 1998. Macleod, John. Consumer Sales Law. London: Cavendish Publishing, 2002. Jeloschek, Christoph. Examination and notification duties in consumer sales law: how far should we go in protecting the consumer? Munchen, Germany: Sellier, 2006. Read More