Sales of goods and servicesthe legal framework law for New Zealand business. Implied terms in relation to title and passing of risk and title, also perishing and where it is not excluded. Sale of Goods Act 1908applies to goods Generally not affected by the CRA Consumer Guarantees Act 1993largely replaces the SoG in consumer sales.
Sales of goods and servicesthe legal framework law for New Zealand business. Implied terms in relation to title and passing of risk and title, also perishing and where it is not excluded. Sale of Goods Act 1908applies to goods Generally not affected by the CRA Consumer Guarantees Act 1993largely replaces the SoG in consumer sales.
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Sales of goods and servicesthe legal framework law for New Zealand business. Implied terms in relation to title and passing of risk and title, also perishing and where it is not excluded. Sale of Goods Act 1908applies to goods Generally not affected by the CRA Consumer Guarantees Act 1993largely replaces the SoG in consumer sales.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
Focus on two aspects The sale or other supply of goods and services- the legal framework Undertakings and promises made prior to the sale or other supply of goods or services
law for New Zealand business 2
first The legal framework applying to the sale or other supply of goods and services
law for New Zealand business 3
Statutory framework Nineteenth century law merchant (UK) provided for a legal framework for contracts for the sale of goods (but not in relation to the supply of services) These included implied terms in relation to: Title Quality And provisions relating to passing of property etc law for New Zealand business 4 And then Moves to codify/ rationalise these in the Sale of Goods Act 1893 However, this was only a framework- always allowed the parties to reach a different contract (contract out of the Act) New Zealand adopted this Act in 1908 law for New Zealand business 5 And then It became increasingly evident that the Act had serious limitations Not suitable in an industrialised, technologised economy with extended distribution chains involving little association between manufacturer and user and little control for the retailer Specific-purpose statutes modified the provisions in different situations, made the Sale of Goods Act look increasingly silly (egs: Hire Purchase Act 1971, Contractual Remedies Act 1979) law for New Zealand business 6 And then Proposals since 1972 to alter the terms of the Sale of Goods Act to meet current expectations, particularly in relation to: Promises relating to title Promises relating to quality
law for New Zealand business 7
Results: Changes since 1972 but rather than a complete revamp of the Sale of Goods Act, the change has come through several statutes- underlying ideas: Some contracting parties need protection, others are powerful enough to make their own deals The law needs to be consistent New Zealand should encourage international trade law for New Zealand business 8 So what do we have?
Sale of Goods Act 1908- applies to
goods Generally not affected by the CRA Consumer Guarantees Act 1993- largely replaces the SoG in consumer sales However, SOG Act still relevant for implied terms re passing of risk and title, also perishing and where it is not excluded (s56) Also, nb, the SoG (United Nations Convention) Act 1994 law for New Zealand business 9 So what provisions are of most importance? Title and perishing
law for New Zealand business 10
S8- idea of perishing of goods
Not only destruction but also
where they are no longer fit for their intended and obvious purpose (nb- case of McRae v Commonwealth Disposals Commission (1951))
law for New Zealand business 11
Concept of property- inderlies issues of title and risk Title Right of alienation or disposal Possession Risk Not all of these need to be in the hands of the same person Nb concepts of “general” and “special” property
law for New Zealand business 12
Nb title Condition that the Seller has the right to sell the goods when title is to pass (s14(a)) Meaning- not straightforward Niblett v Confectioners’ Material Co Ltd (1921) Nemo dat quod non habet- Rowland v Divall (1923) (importance of the effect of the breach)- now seen as voidable rather than void Warranty of quiet possession- against consequences of faulty title Warranty the goods are free of charge law for New Zealand business 13 Passing of Property- specific goods (s19) When parties intended property to pass S20, 4 rules that apply- if unconditional contract of goods in a deliverable state, it is when the contract is made If something to be done before a deliverable state is reached, property passes when the buyer knows that has been done If something needs to be done by the seller to ascertain the price, property passes when the buyer knows that has been done If good provided on appro, property passes when the buyer signifies approval or after a reasonable time
law for New Zealand business 14
Passing of Property- unascertained goods S18-when they are ascertained and in a deliverable state Unconditionally appropriated with concurrence of both parties Once identified and delivered without reservation to the buyer or agent
law for New Zealand business 15
Rules in s20
Normally all aspects of property will
pass at the same time All these rules do not apply if the parties have expressed a contrary intention One obvious issue is reservation of title- issues of right to sell, rights to proceeds of sale and security interests
law for New Zealand business 16
S21(1)-Reservation of title
The seller may reserve the right of
disposal until certain conditions are fulfuilled- most likely of these is payment- if the goods have been wrongly sold, the seller is entitled to the proceeds- Len Vigden Ski v Timaru Marine Supplies (1986) More complicated form as used in the Romalpa case- Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd (1976)- right to trace- buyer is the bailee, agent orZealand law for New fiduciary business 17 Effect of Romalpa- added complications Ok if confined to tracing and right to recover But- difficulties if the goods extend to manufacture/processing Re Bond Worth (1980) – Court held the clause to be an unregistered charge- void Whenuapai Joinery v Trust Bank Central (1994)- Court held the joinery had become part of the real estate
law for New Zealand business 18
Romalpa Clauses- later developments and resolutions Registration under the PPSA- Have a look here for a tutorial on how to use the register: http://www.ppsr.govt.nz/search/cad/dbssite Will talk about this more in a couple of weeks The PPSA will replace a romalpa clause regime with a registrable charge regime Creation of a trust- put the money in there law for New Zealand business 19 An aside: the Sale of Goods (United Nations Convention) Act 1994 Deals with issues of international sales of goods Does not deal with passing of title or risk Provides for a core of consistent rules about implied terms in such contracts, ascertaining price and timing/durration of offer, acceptance and valid contracts Provides for means of ascertaining the “proper” law to settle disputes law for New Zealand business 20 And consumer-related legislation- why? Limited definition of “goods” – degree of uncertainty with mixed contracts Ability to contract out Ignored the reality of retailers being mere middlemen/distributors Dubious application and scope of the implied terms in ss 15 and 16 (purpose, merchantable quality and sale by description) law for New Zealand business 21 What sort of supplies are covered? Supplies of gds and ss to consumers (s2) Consumer?- a person acquiring goods or services of a kind ordinarily acquired for personal, household or domestic use or consumption Not where the acquisition is for: • Resale • Consumption in the course of production or manufacture law for New Zealand business 22 How is this status determined? Objective- what would someone ordinarily use these goods or services for? Subjective- what is this person acquiring them for? Nb-these are treated as culmulative Nb- no specific limit on value although value may be relevant for determining purpose law for New Zealand business 23 Supplier? Provider of gds or ss to a consumer in the course of trade. The supply can be by way of: Sale Exchange Lease Hire/hp Gift Provision or grant (nb does not apply to where a charitable organisation distributes for the benefit of the recipient) law for New Zealand business 24 What happens if the Act applies? The Act provides for implied terms and for specific remedies Other legislation also applies if relevant- eg Door to Door Sales Act, Contractual Remedies Act
law for New Zealand business 25
Coverage Goods- including land fixtures But does not include electrical power Implied terms re goods can apply even if that component was minor (ie largely services) Second hand is included But not where auction or competitive tender (s41(3)) law for New Zealand business 26 Next question: what are the specific provisions? That is for next week along with an examination of the pre-sale protection given by the Fair Trading Act 1986
The Courts Role ”Is To Help Business Men Not Hinder Them, We Are There To Give Effect To Their Transactions, Not To Frustrate Them, We Are There To Oil The Wheels Of Commerce, Not To Put A Spanner In The Works, Or Even Grit In The Oil” [Goff]