The Application of the Sales of Goods Act - Case Study Example

The Problem defined Sarah, the producer of theatre production. purchased a camcorder from 'Film It Ltd' which stopped working. It was maintained that the company couldn't be held liable for any faults in equipment Joan put up an order for hire of 10 light pink dresses as shown in the sample fabric show to her from 'Glitzy Costumes Co' . However, upon receiving the dresses, she found that they did not match the description of the color or fabric as ordered to the company. The following questions arise for consideration; 1. Whether the Sarah has any legal right to fix the responsibility for her defective camcorder; 2. If yes, whom can she sue; seller or the manufacturer and what is the remedy for defective camcorder; 3. Whether Joan has any effective redressal for the defective dresses and dress supplied to her for improper description. At the outset it is important to outline and briefly discuss the legal issues involved in the case. The statutory provisions contained in the Sale of Goods Act, 1979 read with Section 15 of the Supply of Goods (Implied Terms Act, 1973) are attracted along with other relevant case law. As regards the application of the Sales of Goods Act, it is relevant to mention that provisions of Section 13 and 15 apply to all sales, irrespective of the seller's status but the quality and fitness provisions contained in14 (2) and 14(3) are attracted only where the seller sells "in the course of a business". Therefore, the status of the buyer does not matter. If these provisions are applied along with the provisions contained in Section 12 of the Unfair Contract Terms Act 1977 (UCTA) whereby the seller cannot exclude or restrict his liability under the terms as against a buyer "dealing as consumer", which requires that (a) the buyer not make the contract in the course of a business, or hold himself out as so doing, (b) the seller make the contract in the course of a business and (c) the goods be of a type ordinarily supplied for private use or consumption.Therefore, it would be seen from the above that under the provisions of the both the Acts, the phrase "in the course of a business " becomes the major determining factor. The term has been subject to interpretation in two cases. In R & B Customs Brokers Co Ltd v United Dominions Trust Ltd, (1) the Court of Appeal held that a person bought goods 'in the course of a business' for the purposes of UCTA where either (i) the purchase was an integral part of the business, or (ii) although the purchase was incidental to the business, there was a sufficient degree of regularity of similar purchases. However, in Stevenson v Rogers, (2) the Court of Appeal business is "in the course of a business. The cases are in line with a series of cases decided on the same lines. (3) What should be the standard of quality of goods is provided under the Sales of Goods Act. Until 1995, the term "merchantable" quality was used in sale of goods legislation. It became obsolete due to socio-economic changes and the test was replaced with satisfactory quality. Section 14 lays down that the goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all the other relevant circumstances. 1. [1988] 1 WLR 321 2. [1999] 1 All ER 61 3. See also; Wilson v Rickett Cockerell & Co Ltd [1954] 1 QB 598; Vacwell Engineering v BDH Chemicals [1969] 3 All ER 1681;Aswan Engineering Ltd v Lupdine Ltd (Thurgar Bolle Ltd third party) (1987) 1 All ER 135 The test of "satisfactory quality" is that of a reasonable person and it is further elaborated in Section 14 as including their state and condition and the following (among others) are inappropriate cases aspects of the quality of goods- (a) fitness for all the purposes for which goods of the kind in question are commonly supplied, (b) appearance and finish, (c) freedom from minor defects, (d) safety, and (e) durability. The potential defendants in a products case include the manufacturer, assembler, component supplier, testing laboratories, advertising agencies, distributors, retailers and repairers. (4) The law regarding the standard of quality expected in a given case is well settled. The principle implied warranty of fitness and usability was discussed in International Business Machines Co. Ltd. v. Shcherban, (5) where the building was defective on various counts, it was held that builders and sellers of new construction should be held to what is impliedly warranted - that the completed structure was designed and constructed in a reasonably workmanlike fashion. Simlilarly, iIn Hicks v. Kaufman & Broad (6) where the Plaintiff succeeded in proving that the homes built by the defendant were "inherently defective" and sued the builder and sought recovery of cost of repair. The Court of Appeal held that plaintiffs proved that their foundations contain an inherent defect 3. see generally, 8 Pacific L.J. 865 (1977), 9 (Macdonald 1999; De Lacy 1999; Brown 1999). 4. [1925] 1 D.L.R. 864, per Martin J.A. at p. 870 5. (2001) 89 Cal.App.4th 908 which is substantially certain to result in malfunction during the useful life of the product, they have established a breach of the express and implied warranties. In view of the law as discussed above, it well settled that it is the right of the plaintiff to a defect free product and the defect itself attracts award of damages to the plaintiff and if the product contains an inherent defect or any defect which renders the product non-usable then, the plaintiff can bring a effective action against the manufacturer of the product. This brings us to the issue whether supply of dress on hire can be termed as hire and is covered by Section 1.2 of the Supply of Goods and Services Act. Section 8 of the above Act applies where under a contract for the hire of goods, the bailor bails or agrees to bail the goods by description. Under Section 8 (2) in such a case there is an implied condition that the goods will correspond with the description. Under Section 8 (3) if under the contract the bailor bails or agrees to bail the goods by reference to a sample as well as a description it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description. As in case of Sale of Good Act, 1979, Supply of Goods and Services Act, 1982, under Section 9 is pari materia with Sale of Goods Act, 1979. It provides for implied terms about quality and fitness of the goods hired. Section 9(1) stipulates that Except as provided by this section and section 10 below and subject to the provisions of any other enactment, there is no implied condition or warranty about the quality or fitness for any particular purpose of goods bailed under a contract for the hire of goods. Section 9(2) stipulates that where, under such a contract, the bailor bails goods in the course of a business, there is an implied condition that the goods supplied under the contract are of satisfactory quality. The Sellers Liability is strict A sellers liability is strict when they are in breach of a term stipulated in Section 14. In relation to Section 14, the buyer need not bring on evidence the strict proof of negligence of the seller while selling goods. The only condition to bring an action under Section 14 is that goods of a satisfactory quality and reasonably fit for the purpose for which they are bought. If the goods are found to be of unsatisfactory quality or not reasonably fit for the buyers purpose then it will be held that the seller has is in breach of contract. The seller also must compensate the buyer if the defective goods damage other property or injure the buyer. If an action is being raised under the implied terms, the plaintiff can choose more than one as was held in the case of Godley Vs Perry (7) where three of the implied terms had been breached. Under section 48A and 48 B of the Sales of Goods Act, the court may grant the remedy as sought by the buyer and may require the seller- (a) to repair the goods, or (b) to replace the goods. If the buyer requires the seller to repair or replace the goods, the seller must- (a) repair or, as the case may be, replace the goods within a reasonable time but without causing significant inconvenience to the buyer; (b) bear any necessary costs incurred in doing so (including in particular the cost In the present case, legal position as discussed above, it is apparent that Sarah as well Joans can bring action against the respective provider of goods. While Sarah can bring an action against the seller as well as manufacturer of the camcorder Joans can seek remedy against the . As Sarah she has brought the camcorder in the course her business purchase being an integral part of her business. The camcorder supplied to her did not meet the criteria laid down 7. 1960) 1 WLR 9 Section 14, which is of 'satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory.' The goods supplied were neither durable nor free from minor defects. (8) Thus, the camcorder was defective and could not stand scrutiny of Section 14 of the Sale of Goods Act, 1979 having unfit for the purpose for which it was purchased. Having so considered, it may safely be concluded that Sarah can sue the Glitzy Costumes Co' for not supplying the dresses as per the description and specification given by her and the as per the sample shown to her. Having so considered, it may safely be concluded that Sarah can claim either rapair or replacement depending upon the evidence brought forward before the court. (9) As regards the dresses supplied to Joans, it is open to her to seek redressal of her remedies available to her under the provisions of Supply of Goods and Services Act as discussed above. 8. Cases pertinent to the legal position above studied: (a) Millars of Falkirk Ltd Vs Turpie (1976) SLT 66 (b) Bartlett Vs Sydney Marcus (1965) 1 WLR 1013 9. Cases pertinent to Section 14(3) studied : (a) Baldry Vs Marshall Ltd (1925) 1KB 260 (b) Frost Vs Aylesbury Dairies (1905) 1KB 608 (c) McCallum Vs Mason (1956) SC 50 (d) Griffith Vs Peter Conway (1939) 1 A11 ER 131 Read More