Consumers in the Law - Essay Example

Number Teacher’s Word Count: 2427 Consumers in the Law In the scenario involving Amir, Amir is involved in purchasing a few different items which turn out to have different problems. Each contract will be analysed in order to find any possible remedies for Amir as well as any other parties to the contract. In the first scenario involving Amir’s purchase of the second-hand Ford Galaxy, it would initially seem like this would be a contract for specific goods as described in s.61(1) of the Sale of Goods Act 19791 with the price ascertained prior to the purchase of the item as outlined by s.8 Sale of Goods Act 1979.2 The first issue that arises for Amir is that he notices the faulty brakes on the test drive. He agrees to accept a price reduction of £500 as well as the dealer being responsible for fixing the brakes. This does not bring about any other issue in the scenario so it would seem as though the dealer’s agreement to accept less as well as fix the problem would not be disputed. The amendment to initial offer would constitute as a condition, as defined in the case of Wallis v Pratt [1911] AC 394 as: "[a condition is] an obligation which goes so directly to the substance of the contract, or in other words, is so essential to it very nature that its non-performance may fairly be considered by the other party, as a substantial failure to perform the contract at all.”3 If the dealer did not fix the brakes, then Amir would be able to repudiate the contract or sue for damages; however, this was not the case in this scenario.4 Another operating issue that is important to note is if Amir is dealing as a consumer or operating in the course of business. The facts indicate that although he intends to use it mainly for personal use, he also intended to use it for business purposes, and more importantly, the purchase money came out of his business account. If the court determines that Amir is operating within the course of business, he will not be protected under the additional consumer protection given under s.48 Sale of Goods Act1979, as well as provisions contained within the Unfair Terms in Consumer Contracts Regulations 1999, among others.5 This issue becomes relevant with regards to the situation involving the clutch. Amir seems to be seeking rescission. There are three problems with this is. The first issue is whether or not it can be seen that Amir is acting as a consumer. If it can be seen that Amir was acting as a consumer, he would be protected by s.48A(3) Sale of Goods Act which indicates that: “...goods which do not conform to the contract of sale at any time within the period of six months starting with the date on which the goods were delivered to the buyer must be taken not to have so conformed at that date.”6 Amir’s best argument to prove he was acting as a consumer is that his wife was driving the car at the time; however, since the purchase money came from his business account this would seemingly not suffice. If the consumer argument fails, Amir can still rely on s.14(2) of the Sale of Goods Act 1979, which states: “Where the seller sells goods in the course of business, there is an implied condition that the goods supplied under the contract are of satisfactory quality.”7 The question here is if 3 weeks of the car being used by Amir and his Wife presumably would negate this as it may be seen by the court that the goods were of satisfactory quality at the time of the sale. It is important to note the rule in Crowther v Shannon Motor Company [1975] 1 WLR 30, which indicates that goods which break down within a short time of purchase may be evidence that they were defective at the time of sale.8 Also, s.14(2C)(b) would work against Amir as he did inspect the car prior to purchase and most likely would have noticed a clutch problem since he noticed a brake problem on the same test drive.9 It is also important to note that the dealer said ‘This is a quality car, I don’t want any complaints from you. You must take it in the condition in which you find it.’ By agreeing to the contract under this condition, paying the relatively low purchase price of £2900, and having been able to take the car for a test drive and actually identifying another mechanical issue, it can be seen that Amir is agreeing to the ‘as is’ sale based on his presumed knowledge as the limitation of liability clause may be seen to be reasonable under s.11 of the Unfair Contract Terms Act 1977.10 Depending on how the court determines his position, he may either be stuck with the car as well as the repair bill or he may be entitled to a remedy of a repair of the clutch. Amir’s second purchase is that of a gold ornamental lamp. Amir seems to be acting as a consumer in this transaction as there is no evidence to affirm otherwise. Here, Amir could rely on s.14 of the Sale of goods Act 1979 as the goods were obviously not of satisfactory quality11, and he could also rely on s.48A(3) of the Sale of Goods Act 1979 the goods proved defective within 6 months of purchase.12 He can elect replacement or repair within a reasonable amount of time and must give the seller a reasonable opportunity to comply; however, if these are not possible, then Amir would be allowed to rescind the contract.13 The damage that the explosion had caused George is the next issue for this purchase. Due to the Contracts (Rights of Third Parties) Act 1999, third parties cannot sue under a Sale of Goods contract.14 However, claims can be brought in Tort against the manufacturer where the injured party can prove that their negligence had caused them damages based on the principle in Donoghue v Stevenson [1932] AC 562.15 More importantly, the Consumer Protection Act 1987 (EC Directive 85/374/EEDC) provides alternative remedies to third party consumers who have suffered an injury to their person.16 The act allows the victim to initially pursue the producer, then the importer if the producer cannot be found, then also the supplier when the producer and importer cannot be identified.17 The claim must be for £275 or more and it is important to note that the defective product itself is not covered as Amir must claim this separately through the means described above.18 Under s.3(1) of the Act, a product is defective: “If the safety of the product is not such as persons generally are entitled to expect.”19 The statute allows for defences which can be used by the defendant. In this case the product was imported, and based on the facts given in the scenario; the importer had given the retailers a certificate stating that the goods complied with the country’s safety requirements but in fact it actually contravened the Safety regulations due to its using too high of a flash point. This initially would point George to seek out the importer as the defendant, however, the facts also indicate that the Quality Director of the retailer had also run supervised tests on the product and they were to her satisfaction. This would allow George the option to pursue the producer (since they knew the product contravened their own country’s safety standards) or the importer (since he supplied the false documents to the retailer). Based on the retailer’s presumed lack of knowledge and having completed their own tests on the product with success, the retailer would be the only party with a potential successful defence based on the facts of this scenario. It is important to note that even if a warning label had been placed warning of the dangers of the lamp, it would probably not be sufficient.20 It is important to note that the Limitation Act 1980, s.11A, provides that George has 3 years from the date the claimant either identifies the defendant or identifies the damage/defect in order to pursue a claim for damages in court.21 With regards to Amir’s third purchase of the home computer and chess game programme, Amir has issue with the chess game for which he was told that it was: ‘The best programme in the country. No-one has ever won a game against it’. This seems to be an innominate term at the time of the contract; however, it may be seen to be a condition after the breach had occurred since the selling point of the product was that it was challenging where in fact it was quite the opposite.22 The question now is whether or not the contract is severable or not. If the contract can be severed into two separate contracts, one for the computer and one for the game, then Amir would be able to return the game and get a refund for the actual cost of the game. If, however, the contract is not seen as severable, then this may give rise to Amir seeking rescission for both the computer and the game if the contract cannot be seen as severable. According to Atiyah’s text, where there is one price paid for the whole consignment, then the contract is usually not severable; and where each item is paid for separately, the contract is usually severable.23 This is only used as a guideline as no method is foolproof. In this particular circumstance it seems as though the bill of sale would settle this issue where it will contain either an itemised list of both the computer and the game displaying their individual prices as well as a total price of £2,500 which would make the contract severable; or it would contain both items with a price of £2,500 for the lot, making it not severable. With regards to Amir’s final purchase of the washing machine, Amir’s biggest issue is that of wanting to return the machine after it had broken down a second time. When the machine broke down the first time after only one month, it was replaced under the manufacturer’s guarantee. The problem now, however, is that the machine has now broken down again and Amir’s wife, Cheryl wants Amir to get the money back to buy a different model. Prima facie, it would seem that the only remedy is that via the manufacturer’s guarantee; however, as long as Amir was dealing as a consumer, he is protected by the Sale of Goods Act 1979, which includes the 6-month presumption under s.48A.24 It is important to note that the consumer has the right to replacement or repair under s.48B of the 1979 Act, and that s.48C allows for reduction in the purchase price or rescission of the contract where replacement or repair does not occur within a reasonable amount of time.25 Although it seems as if Amir cannot outright return the item for a full refund, he may want to allow the manufacturer to replace the machine once again, and if this takes a considerable amount of time, then he could ask the court for either rescission or at least a reduction in the purchase price. It has been indicated that the washing machine was purchased for £500, so he would be able to recover £500 minus the amount taken into account for use as determined by the court. Amir has gotten himself involved in four difficult situation, but it is always important to remember that the law is there to protect the consumer as it is widely known in the retail industry that the `customer is always right`. This is now embodied in the law as there are many retailers/importers/producers that must be held accountable for various products that may not be of merchantable quality. Bibliography Books Atiyah, P.S., John N. Adams & Hector Macqueen. The Sale of Goods 11th Ed. Great Britain: Pearson Education Limited, 2005. Griffiths, Margaret. Commercial Law Textbook, Third Ed. Great Britain: Old Bailey Press, 2003. Rose, Francis. Blackstone’s Statutes on Commercial & Consumer Law 2007-2008 Sixteenth Ed. New York: Oxford University Press, 2007. Sealey, L.S. and R.J.A. Hooley Commercial Law: Text, Cases and Materials, third edition. London: Butterworths, 2003. Cases Crowther v Shannon Motor Co [1975] 1 WLR 30 Donoghue v Stevenson [1932] AC 562 Hong Kong Fir Shipping Co. Ltd v Kawasaki Kisen Kaisha [1962] QB 26 Wallis v Pratt [1911] AC 394 Worsley v Tambrands Ltd [2000] PIQR P95 Read More