Sales of Goods Act 1923 - Assignment Example

Commercial Law SALES OF GOODS ACT 1923 (NSW) Sales of Goods Act recognizes sale to a consumer if goods are bought for private use or consumption. As per section 62, if a person does not buy and hold himself as buying in the course of a business, it is considered a consumer sale. There is no monetary limit on the value of goods bought in a consumer sale under this Act. Section 64(3) says that goods are considered not of merchantable quality if they are not found fit for the purpose or purposes for which they are commonly used having reasonable regard to their price and description. It will not apply to second-hand goods unless it is in the agreement between parties and in which case seller’s liability is limited to the cash price paid. Any defect in the goods can be brought to the buyers’ notice and recorded in the contract as per section 64(4) in which case implied conditions and warranties under this act will not apply. Section 64(1) makes provisions in a contract excluding the provisions of sections 18, 19, & 20 void. Section 64(2) makes an express warranty or condition in a contract cannot negative an implied condition as to merchantable quality guaranteed under this act. Section 64(3) says what a merchantable quality is. As stated above it should be fit for the purpose for which it is generally bought with quality consistent with the price and description. Section 63 puts the onus of proving that a sale is a consumer sale on the party who is raising the dispute. Sections 19(1), (2) & (4) of the Act deal with “known particular purpose, Merchantable Quality and implied condition or warranty.1 In the instant case Sandy has apparently bought the hoist and jack for her private use though these goods are not consumer goods in the sense they are generally used in garages. The hoist is functioning only for the limited purpose of lifting her conventional sedans and not fit for lifting heavier vehicles which the seller had assured. First of all Sandy should prove that it is a consumer sale as the onus is on her as provided under section 63. As per section 62, she need not have informed the seller that she was purchasing the hoist and jack for private use as the section makes it obligatory to inform the seller only if it is in the course of business. Therefore, Sandy has the right to remedies under the act since the hoist is not fit for handling heavier vehicles. As regards Gary who is a garage owner, he should have informed the seller that he purchased the said goods in the course of his business. He also was assured by the seller that the hoist was fit for lifting heavier vehicles and as such operations of section 19 (1) & (2) concerning implied conditions as to quality or fitness come into play especially because Gary did not examine goods before the purchase. Though he has rights under section 64, he still is entitled to remedies for breach of implied conditions as to quality and fitness as per section 19. FAIR TRADING ACT 1987 (NSW) Section 5 of the Act gives meaning of the consumer. Subsections 5 (1) (a) and (b) say that a consumer is person who buys goods or services from a supplier and buys land other than land used for commercial or industrial purposes. Section 5(2) excludes goods and services sold for re-supply or in the course of a business other for farming purposes. In this connection, section 43 lays certain acts of the supplier as unconscionable conducts and the section 5 (2) is subject to this section 43.2 Section 40 L (1) covers goods acquired for personal use or consumption. 40 L (2) (a) and (b) deal with quality of goods and terms of contract respectively. 40 L (3) explains merchantable quality consistent with price and description commonly bought. Section 40M is the provision that prevents any provision in a contract restricting mainly the applicability of liability arising out of breach of a warranty or condition and the section 40N dealing with rescission of contract. Section 40 Q (1) and (2) provide for implied assurances as regards to quality or fitness of goods supplied. The implied condition of merchantable quality is subject to the supplier informing the consumer of any defects before entering into contract and when the consumer himself examines quality of goods by which defects if any ought to be revealed before making the contract. Section 40 Q (2) provides that when the consumer makes known to the supplier or to the negotiating person the purpose for which he is buying the goods expressly or by implication, it becomes an implied condition that such a purpose is covered regardless of the fact that such goods are commonly supplied except when the consumer has not relied on skill and judgement of the supplier.3 Under these of provisions also, Sandy who fits with the definition of the consumer as per the combined reading of section 5 (1) & (2), is entitled for the rights of rescission under the act. She has bought the hoist for personal use. Her claim is supported by the fact of merchantable quality which the supplier has assured. He did not inform of any deficiency in the lifting capacity of the hoist nor did the consumer verify herself the fitness of the purpose, relying on the skill or judgement of the supplier. As for Gary, he cannot be treated as a consumer as he bought the goods for rendering services which is covered by the exclusions under section 5 (2). Hence he has no right to claim under the Fair Trading Act for the deficiencies even though conditions for which are all present had he purchased the hoist as a consumer. As Fair Trading Act 1987 is a consumer protection law, there is no scope for Gary to claim under its provisions. TRADE PRACTICES ACT 1974 (cth) Section 4 B provides for a ceiling on the price to be covered by this Act for person, acquiring goods as a consumer without any other condition. Section 4B (1) (a) (ii) provides that if the price acquired exceeds the prescribed amount, then the goods must be of a kind ordinarily acquired by for personal, domestic or household use or it must be commercial road vehicle. And he should not have purchased for re-supply or any other process. Similarly section 4B (1) (b), applies to services acquired by a consumer within the prescribe limit of amount or in case of exceeding the prescribed value, then it should be for personal use, consumption or domestic use. The prescribed limit is $ 40,000 as per section 4 B (2) (1) (a).4 Section 66 (1) deals with quality of goods, contract before date of commencement, antecedent negotiations and 66 (2) deals with the meaning of merchantable quality. Section 68 provides for nullifying any a term of contract which is inconsistent with or countering the provisions of the relative division. The derogating provision in a contract can not also take away a right conferred. It cannot also release a corporation from its liability for breach of warranty or condition. Section 75 A providing for rescission of contracts also cannot be contracted out by any fresh terms of contract. Section 68(2) provides such a restricting provision in a contract shall be so construed only if it is inconsistent or expressly against the relative section.5 Section 71 (1) and 71(2) deal with implied undertakings for quality and fitness. While section 71 (1) provides for implied conditions for quality and fitness of the goods supplied by a corporation, it is exempted from liability for non compliance if the corporation already brings to the notice of the consumer any defects in the goods to be purchased or if the consumer himself examines the quality before purchasing which act must have revealed to him any defects present in the goods. Section 71(2) provides for assumption that any conditions of quality discussed in the antecedent negotiations shall be implied to have been warranted under the contact actually made.6 In the case of Sandy, she can be considered a consumer under this Act even though it exceeds $40,000 in retail value if hoist can be considered the kind of goods meant for personal use. Since the retail value is not accurately given, it is quite possible that retail value is less than $ 40,000 in which case also Sandy can be considered a consumer. Further whether the seller is a corporation is to be ascertained since sections 71 (1) & 71(2) specifically covers sale by a corporation. Since the seller is said to have already claimed that the hoist will lift heavier vehicles, the implied conditions will apply. She can apply for remedies under section 75 A. As for Gary, if the value does not exceed $ 40,000, it is immaterial if he is a consumer or otherwise. If the vale is in excess of $ 40,000, he being not a consumer can not claim under the act since the Act is basically consumer protection legislation. It assumed that the seller is a corporation. In all the above three legislations sale by auction is not covered. Bibliography CCH, Contract Law Commentary, Consumer Sale, retrieved 12 May 2009 Commonwealth Consolidated Acts, TRADE PRACTICES ACT 1974, retrieved 12 May 2009 < http://www.austlii.edu.au/au/legis/cth/consol_act/tpa1974149/index.html> New South Wales Consolidated Acts, Fair Trading Act 1987, retrieved 12 May 2009 < http://www.austlii.edu.au/au/legis/nsw/consol_act/fta1987117/> Read More