Professional Documents
Culture Documents
1.1 PRELIMINARY
1.2. INTRODUCTION
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See, for example, The Hansa Nord [1976] QB 44, [1975] 3 All ER 739 (CA)
1.2.4 Relationship between the common law and the law under the SGA
`The rules of the common law, including the law merchant, except in so far as they are
inconsistent with the provisions of this Act, and in particular the rules relating to the law
of principal and agent and the effect of fraud, misrepresentation, duress or coercion,
mistake, or other invalidating cause, apply to contracts for the sale of goods’
s62(2) SGA
1.3 DEFINITIONS
1.3.1 The contract for the sale of goods, sale, agreement to sell
`A contract for the sale of goods is a contract by which the seller transfers or agrees to
transfer the property in goods to the buyer for a money consideration, called the price.’
s2(1) SGA
See also s2(4)-(5) and s61(1)
1.3.2 Goods
‘“goods” includes all personal chattels other than things in action and money, and in
Scotland all corporeal moveables except money; and in particular “goods” includes
emblements, industrial growing crops, and things attached to or forming part of the land
which are agreed to be severed before sale or under the contract of sale and includes an
undivided share in goods;’
s61(1) SGA (as amended by sec. 2 (c) the Sale of Goods (Amendment) Act 1995)
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(i) Is a sixpence money? See R v Thompson [1980] QB 229, [1980] 2 All ER 103 (CA).
(ii) Where/how does the SGA draw a dividing line between goods and land?
(iii) Are some transactions both a contract for the sale of goods under the SGA and a
contract for the sale or transfer of an interest in land under the Law of Property Act 1925?
(iv) If the answer to (iii) is yes, in the event of a clash do the provisions of the SGA or the
rules of land law prevail?
Has the distinction between fructus industriales and fructus naturales survived the
enactment of the SGA 1979? What is the role of severance under the 1979 Act?
Sealy and Hooley state (at page 272) that: “It may be helpful to classify ‘future
goods’ into various sub-categories. These will include:
1. goods to be manufactured by the seller;
2. goods to be acquired by the seller (by purchase, gift, succession or otherwise -
e.g. fish which he expects or hopes to catch); goods not yet in existence (e.g.
lambs to be born next spring, fruit or potatoes to be harvested next autumn);
and
3. (possibly) things which do exist, but are not yet “goods” (e.g. minerals not yet
extracted but still forming part of the land).”
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Sealy states that unascertained goods fall into three main categories:
1. generic goods sold by description (commodities such as grain, coal, oil);
2. goods not yet in existence, to be grown or manufactured;
3. a part as yet unidentified out of a specific or identified bulk, e.g. 10 tonnes out
of the 100 tons of potatoes now in my store.
1.3.5 Property
‘“property” means the general property in the goods not just a special property’
s61(1) SGA
G Battersby and A D Preston ‘The Concepts of “Property”, “Title” and “Owner”
used in the Sale of Goods Act 1893 (1972) 35 Modern Law Review 268-288
McClure, Stebbings and Goldberg ‘The History of a Hunt for Simplicity and
Coherence in the Field of “Ownership”, “Possession”, “Property” and “Title”
in the Sale of Goods Act” [1992] Denning Law Journal 103-136
C L Ho, ‘Some Reflections on “Property” and “Title” in the Sale of Goods
Act’ [1997] Cambridge Law Journal 571-598
G Battersby ‘A reconsideration of “property” and “title” in the Sale of Goods Act’
[2001] Journal of Business Law 1-13
1.3.6 Price
‘(1) The price in a contract of sale may be fixed by the contract, or may be left to be
fixed in a manner agreed by contract, or may be determined in the course of dealing between
the parties.
(2) Where the price is not determined as mentioned in subsection (1) above the buyer
must pay a reasonable price.
(3) What is a reasonable price is a question of fact dependent on the circumstances of
each particular case.’
s8 SGA
What is the true contractual position in a situation where a customer agrees to purchase
goods from a retailer by credit or debit card with the knowledge that a 2.5 per cent fee of
the total purchase price would go to another company, unassociated with the retailer, for
card-handling services? See Revenue and Customs Commissioners v Debenhams Retail
plc [2005] EWCA 892 overruling [2004] EWHC 1540 (Ch), [2004] STC 1132
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1.4.1 Introduction
Section 17 Statute of Frauds Act 1677 (re-enacted with changes s4 SGA 1893)
Sec.1 Law Reform (Enforcement of Contracts) Act 1954 repealed the above.
1.4.7 Sale of goods distinguished from a contract for work and materials
Clay v Yates (1856) 1 H & N 73, Lee v Griffin (1861) 1 B & S 272
Cammell Laird & Manganese Bronze & Brass Co Ltd [1934] AC 402 (HL)
Robinson v Graves [1935] 1 KB 579 (CA)
Lockett v Charles Ltd [1938] 4 All ER 170
Dodd v Wilson [1946] 2 All ER 691
J Marcel (Furriers) Ltd v Tapper [1953] 1 WLR 49
Philip Head & Sons Ltd v Showfronts Ltd [1970] 1 Lloyd’s Rep 140
H Parsons (Livestock) Ltd v Uttley Ingham & Co Ltd [1978] QB 791 (CA)
Jones v Gallagher [2004] EWCA Civ 10, [2005] 1 Lloyd's Rep. 377
Given the repeal of s4 of the Sale of Goods Act 1893 in 1954 how important is the
distinction between sales of goods and contracts for the supply of work and materials?
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Are contracts for the sale of computer software governed by the SGA? If your answer
to this question is no, what legal regime governs the sale of computer software?
Robert Bradgate ‘Beyond the Millennium - The Legal Issues: Sale of Goods
Issues and the Millennium Bug’ (1999) 2 The Journal of Information, Law and
Technology (http://www2.warwick.ac.uk/fac/soc/law/elj/jilt/1999_2/bradgate)
Paul Eden ‘Electronic Commerce – Law and Policy’ in The Internet, Law and
Society edited by Clive Walker et al (Longman, 2000) chapter 15 (pp.349-369)
Sarah Green and Djakhongir Saidov “Software as goods” [2007] JBL 161-181
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See Frank Meisel “A Nod and a Wink – the Problem of Disappointed Buyers at
Auction” in F. Meisel and P. J. Cook (eds) Property and Protection – Essays in
Honour of Brian W Harvey (Hart, 2000) 289-304. See also Frank Meisel “What
price auctions without reserve?” (2001) 64 MLR 468-72 and Karen Scott “The
auction house: with or without reserve?” [2001] LMCLQ 334-7.
1.5.3 Mistake
62(2) SGA
1.5.4 Formalities
‘(1) Subject to this and any other Act, a contract of sale may be made in writing (either with
or without seal), or by word of mouth, or partly in writing and partly by word of mouth,
or may be implied from the conduct of the parties.
(2) Nothing in this section affects the law relating to corporations.’
Section 4 SGA
2.1 INTRODUCTION
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What is the relationship between s6 SGA and the doctrine of common mistake?
Can the decision in McRae be reconciled with the statutory rule laid down by s6?
‘Where there is an agreement to sell specific 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’
s7 SGA
Howell v Coupland (1876) 1 QBD 258 (CA)
2.3 FRUSTRATION
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Is it ever possible for a contract for the sale of generic goods sold purely by
description to be frustrated?
Is Howell v Coupland an example of what is now covered by s7 of the SGA,
common-law frustration or a contract for the sale of goods the acquisition of
which depends on a contingency (s5(2) of the SGA)?
Compare the provisions of Article 79 of the United Nations Convention on
Contracts for the International Sale of Goods (CISG) (also known as the
Vienna Sales Convention) and the doctrine of frustration in English law.
Which of the two is, in your view, better suited to the needs of the commercial
community?
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Section 20A SGA was introduced by the Sale of Goods (Amendment) Act 1995 and
it applies to contracts entered into on or after 19 September 1995.
For a discussion of the effect of the Sale of Goods (Amendment) Act 1995 see:
Burns ‘Better Late than Never: Reform of the Law on the Sale of Goods
forming Part of a Bulk’ (1996) 59 MLR 260-271;
Ulph ‘The Sale of Goods (Amendment) Act: co-ownership and the rogue
seller’ [1996] LMCLQ 93; and
Gullifer ‘Constructive Possession after the Sale of Goods (Amendment) Act
1995’ [1999] LMCLQ 93
For a discussion of the (potential) role of equitable property interests in the sphere of
bulk (and non-bulk) sales see, inter alia:
Worthington ‘Sorting Out Ownership Interests in a Bulk: Gifts, Sales and
Trusts’ [1999] Journal of Business Law 1-21 (which may be contrasted with)
Eden ‘The Equitable Ownership of Shares’ in E Cooke (ed) Modern Studies
in Property Law: Volume II – Property 2002 (Hart, 2003) 183-201 and
Eden ‘Re Goldcorp Exchange Ltd Revisited’ in E Cooke (ed) Modern Studies
in Property Law: Volume III – Property 2004 (Hart, 2005) 177-199.
2.4.2 Ascertainment
ascertainment by exhaustion
Wait & James v Midland Bank (1926) Com Cas 172 (KBD)
The Elafi [1982] 1 All ER 208 (QBD)
See also section 18 rule 5 sub-sections (3) and (4) (inserted by the Sale of Goods
(Amendment) Act 1995 applies to contracts entered into on or after 19 Sept. 1995)
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and it is immaterial whether the time for payment or the time for delivery, or both, be
postponed.’
unconditional contract
specific goods
deliverable state
Tarling v Baxter (1827) 6 B & C 360 (KB)
Dennant v Skinner [1948] 2 KB 164
Kursell v Timber Operators & Contractors Ltd [1927] 1 KB 298 (CA)
Underwood Ltd v Burgh Castle Brick & Cement Syndicate Ltd [1922] 1 KB 123
Philip Head & Sons Ltd v Showfronts Ltd [1970] 1 Lloyd’s Rep 140 (QBD)
2.5.2 Rule 2: specific goods to be put into a deliverable state by the seller
‘Rule 2. - Where there is a contract for the sale of specific goods and the seller is bound to
do something to the goods for the purpose of putting them in a deliverable state, the property
does not pass until the thing is done and the buyer has notice that it has been done.’
2.5.3 Rule 3: specific goods to be weighed, measured etc. to ascertain the price
‘Rule 3. - Where there is a contract for the sale of specific goods in a deliverable state but
the seller is bound to weigh, measure, test or do some other act or thing with reference to the
goods for the purposes of ascertaining the price, the property does not pass until the act or
thing is done and the buyer has notice that it has been done.’
Turley v Bates (1863) 2 H & C 200; 159 ER 83 (CE)
Nanka-Bruce v Commonwealth Trust [1926] AC 77 (PC)
Castle v Playford (1872) LR 7 Exch 98 (CE)
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with the assent of the seller, the property in the goods then passes to the buyer; and the assent
may be express or implied, and may be given either before or after the appropriation is made.
(2) Where, in pursuance of the contract, the seller delivers the goods to the buyer or
to a carrier or other bailee or custodier (whether named by the buyer or not) for the purpose
of transmission to the buyer, and does not reserve the right of disposal, he is taken to have
unconditionally appropriated the goods to the contract.
(3) Where there is a contract for the sale of a specified quantity of unascertained
goods in a deliverable state forming part of a bulk which is identified either in the contract or
by subsequent agreement between the parties and the bulk is reduced to (or to less than) that
quantity, then, if the buyer under that contract is the only buyer to whom goods are then due
out of the bulk—
(a) the remaining goods are to be taken as appropriated to that contract at the
time when the bulk is so reduced; and
(b) the property in those goods then passes to that buyer.
(4) Paragraph (3) above applies also (with the necessary modifications) where a bulk
is reduced to (or to less than) the aggregate of the quantities due to a single buyer under
separate contracts relating to that bulk and he is the only buyer to whom goods are then due
out of that bulk.
Wait v Baker (1848) 2 Exch 1; 154 ER 380 (CE)
Aldridge v Johnson (1857) 7 E & B 885; 119 ER 1476 (QB)
Pignataro v Gilroy [1919] 1 KB 459; 88 LJKB 726 (KB)
Carlos Federspeil & Co SA v Charles Twigg & Co Ltd [1957] 1 Lloyd’s Rep 240
Wardar’s Import & Export) Co Ltd v W Norwood & Sons Ltd [1968] 2 QB 663 (CA)
Kulkarni v Manor Credit (Davenham) Ltd [2010] EWCA Civ 69
‘Ostensible or apparent authority.... is merely a form of estoppel, indeed, it has been termed
agency by estoppel, and you cannot call in aid an estoppel unless you have three ingredients:
(i) a representation, (ii) reliance on the representation, and (iii) an alteration of your position
resulting from such reliance.’
Rama Corpn Ltd v Proved Tin and General Investments Ltd [1952] 2 QB 147 (QBD)
‘We may lay it down as a general principle that, wherever one of two innocent persons must
suffer by the acts of a third, he who has enabled such third person to occasion the loss must
sustain it’
This dictum of Ashhurst J in Lickbarrow v Mason (1787) 2 Term Rep 63 at 70 is
much quoted but rarely applied and may be termed a dictum of last resort.
Commonwealth Trust v Akotey [1926] AC 72 (PC)
Eastern Distributors Ltd v Goldring [1957] 2 QB 600 (CA)
Henderson & Co v Williams [1895] 1 QB 521 (CA)
Farquharson Bros & Co v C King & Co [1902] AC 325 (HL)
Central Newbury Car Auctions Ltd v Unity Finance Ltd [1957] 1 QB 371 (CA)
Mercantile Credit Co Ltd v Hamblin [1965] 2 QB 242 (CA)
Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890 (HL)
Powell v Wiltshire [2004] EWCA Civ 534, [2005] QB 117
Industrial and Corporate Finance Ltd v Wyder Group Ltd t/a Ducati (2008)
152(37) SJLB 31
Should there be a broad principle that whenever one person entrusts their goods to
another, an innocent purchaser from the latter should get good title?
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‘For the purposes of this Act, the expression “mercantile agent” shall mean a mercantile
agent having in the customary course of his business as such agent authority either to sell
goods or consign goods for the purpose of sale, or to buy goods, or to raise money on the
security of goods:’
s1(1) Factors Act 1889 (see also section 26 of the Sale of Goods Act 1979)
Weiner v Harris [1910] 1 KB 285 (CA)
Lowther v Harris [1927] 1 KB 393 (KBD)
Budberg v Jerwood (1934) 51 TLR 99 (KBD)
Pearson v Rose & Young Ltd [1951] 1 KB 275 (CA)
Staffs Motor Guarantee Ltd v British Wagon Co Ltd [1934] 2 KB 305 (KBD)
Astley Industrial Trust Ltd v Millar [1968] 2 All ER 36 (QBD)
Folkes v King [1923] 1 KB 282 (CA)
Heap v Motorists’ Advisory Agency Ltd [1923] 1 KB 577
‘The expression “document of title” shall include any bill of lading, dock warrant,
warehouse-keeper’s certificate, and warrant or order for the delivery of goods, and any other
document used in the ordinary course of business as proof of the possession or control of
the goods, or authorising or purporting to authorise, either by endorsement or delivery, the
possessor of the document to transfer or receive goods thereby represented,’
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3.2.8 Seventh exception: sale by unpaid seller under s48 SGA 1979
‘Where an unpaid seller who has exercised his right of lien or retention or stoppage in
transit re-sells the goods, the buyer acquires a good title to them as against the original
buyer.’
s48(2) SGA
Sections 48(3)-(4) SGA set out the circumstances in which the unpaid seller has a
right of resale. They are:
1. where the unpaid seller gives notice to the buyer of his intention to re-sell and the
buyer does not, within a reasonable time pay or tender the price;
2. where the goods are of a perishable nature (NB – notice not required); and
3. where the seller expressly reserves the right of re-sale in the event of the buyer’s
default and the buyer defaults (NB - the seller does not have to be unpaid!).
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4.1 INTRODUCTION
When does a reservation of title clause become a charge and, thus, void unless
registered under Part 25 of the Companies Act 2006?
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for the payment of the debt, must necessarily be regarded as creating a mortgage or charge,
as the case may be.’
Has Slade J’s much quoted dictum survived the rejection of the scintilla temporis
fiction in Abbey National Building Society v Cann [1991] 2 AC 56 (HL)?
See R Gregory ‘Romalpa clauses as unregistered charges - a fundamental shift?’
(1990) 106 LQR 550. But see also Stroud Agricultural Systems Ltd v John Laing
Construction Ltd [1994] BCC 18
Clough Mill Ltd v Martin [1985] 1 WLR 111, [1984] 3 All ER 982 (CA)
Armour v Thyssen Edelstahlwerke AG [1991] 2 AC 339 (HL)
Consider the situation where the buyer of unaltered goods subject to a simple
reservation of title clause goes into liquidation with only a small portion of the
purchase price unpaid. Will the seller be able to retake the goods and resell them? If
the resale raises more than the portion of the purchase price outstanding who is
entitled to the surplus? Would it matter whether the goods were divisible or
indivisible? Would it make a difference if the reservation of title clause was an “all
moneys” clause rather than a “simple” clause? Is Rowland v Divall [1923] 2 KB 500
(CA) relevant here? [See the judgment of Goff LJ in Clough Mill Ltd v Martin]
In determining whether the seller retains title to synthesised or mixed goods the courts
tend to ask whether the goods are reducible to their original materials or not but Goff LJ
(in Clough Mill Ltd v Martin) suggested that it should be possible to resolve such
questions by careful drafting i.e. there is no reason why express terms of a contract cannot
displace the normal rule that ownership of synthesised goods resides with the synthesiser.
Would an approach based on the relative importance of the constituents be preferable?
4.3 REFORM
Diamond A Review of Security Interests in Property (1989) Chapter 17 and para 23.6
Registration of Security Interests: Company Charges and Property other than Land
(Law Com Consultation Paper 164) paras 5.9-5.12, 16-6.21 and 7.24-7.26
Company Security Interests: A Consultative Report (Law Com C-Paper 176) paras
2.81-2.137 and Company Security Interests (Law Com Report 296) paras 1.60-1.66
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The Sale of Goods Act 1979 was amended by the Sale and Supply of Goods Act 1994
that came into effect on 3 January 1995. The 1994 Act is the legislative expression of the
Law Commission’s recommendations contained in Sale and Supply of Goods L Com 160,
1987. See Michael Bridge “The Sale and Supply of Goods Act 1994” [1995] JBL 398-
408 and Geraint Howells “The modernization of sales law?” [1994] LMCLQ 191-7.
More recently the Sale of Goods Act 1979 has been amended the Sale and Supply of
Goods to Consumers Regulations 2002 (SI 3045/2002). These Regulations implement
the 1999 EC Directive 1999/44/EC on Certain Aspects of Sale of Consumer Goods and
Associated Guarantees. See Chris Willett, Martin Morgan-Taylor and Andre Naidoo
“The Sale and Supply of Goods to Consumers Regulations” [2004] JBL 94-120. See also
Michael Bridge “What is to be done about sale of goods” (2003) 119 LQR 173-177.
5.1 INTRODUCTION
A criticism of the reclassification of most of the implied terms in the Sale of Goods Act
as innominate terms is that the right of the innocent party to treat the contract as at an end
will depend on whether the buyer has been deprived ‘of substantially the whole benefit
which it was intended that he should obtain from the contract’ (per Diplock LJ in Hong
Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 (CA) at 70).
‘This test which is the same as that for frustration, can make it extremely difficult for the
innocent party to reject’ (Sale and Supply of Goods (L Com 160, 1987) para 2.25).
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correspondence with description - s13 SGA (see also “new” s13(1A) SGA)
satisfactory quality - s14(2) SGA - previously “merchantable quality”
fitness for purpose - s14(3) SGA (see also “new” s14(6) SGA)
correspondence with sample s15 SGA (see especially “new” s15(3) SGA)
What effect, if any, has the reclassification of the implied conditions and warranties in
ss11-15 of the Sale of Goods Act 1979 as terms had on a buyer’s remedies?
[Hint: the Sale and Supply of Goods Act 1994 attempts to introduce a distinction between
consumer and non-consumer cases. See “new” s15A SGA]
5.2.1 Title
‘In a contract of sale, other than one to which subsection (3) below applies, there is an
implied term on the part of the seller that in the case of a sale he has the right to sell the
goods, and in the case of an agreement to sell he will have such a right at the time when the
property is to pass.’
s12(1) SGA
Rowland v Divall [1923] 2 KB 500 (CA)
Niblett Ltd v Confectioners’ Material Co [1921] 3 KB 387 (CA)
Butterworth v Kingsway Motors [1954] 1 WLR 1286
Barber v NSW Bank plc [1996] 1 WLR 641, [1996] 1 All ER 906 (CA)
Law Reform Committee 12th Report – Transfer of Title to Chattels (1967) para 36.
5.2.3 The implied terms as to freedom from encumbrances and quiet possession
ss12(2)(a) and (b) SGA
Mason v Burningham [1949] 2 KB 545 (CA)
Microbeads AC v Vinhurst Road Markings Ltd [1975] 1 WLR 218 (CA)
At what time do s12(1) and s12(2)(b) have to be satisfied?
Where there has been a breach of s12(1) (title), there will usually be a breach of s12(2)(b)
(quiet possession). Under what circumstances would an innocent party elect to rely on
s12(2)(b) rather than s12(1)?
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Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989 (HL)
Harlingdon & Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd [1991] 1 QB
564, [1990] 1 All ER 737 (CA)
Notwithstanding the extension of the concept of a sale by description in the cases to
include sales of specific goods that the buyer has seen and inspected, it must be stressed
that not all sales with a description are sales by description. In order for a contract to be a
sale by description, the descriptive statement relied on must be a term of the contract and
not a mere representation inducing the buyer to enter into the contract. Are all the cases
reconcilable with this proposition?
Section 13 has been described as curious by some commentators who point out that the
seller’s duty to deliver goods of the description by which they were sold is better regarded
as an express obligation rather than an implied term. Do you agree?
5.4.3 The implied term that the goods are of satisfactory quality
(2) Where the seller sells in the course of a business, there is an implied term that the
goods supplied under the contract are of satisfactory quality.
Wilson v Rickett, Cockerell & Co Ltd [1954] 1 QB 589, [1954] 1 All ER 868 (CA)
(2A) For the purposes of this Act, goods are of a 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 other relevant circumstances.
(2B) For the purposes of this Act, the quality of the goods includes their state and
condition and the following (among others) are in appropriate 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.
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SW Tubes v. Owen Stuart [2002] EWCA Civ 854 – section 14(2B)(d) “safety”
Bramhill v Edwards [2004] EWCA Civ 403, [2004] 2 Lloyd’s Rep 653 (CA)
Darren Egan v Motor Services (Bath) Ltd [2007] EWCA Civ 1002
Lowe v W Machell Joinery Ltd [2011] EWCA Civ 794
(2C) The term implied by subsection (2) does not extend to any matter making the goods
unsatisfactory-
(a) which is specifically drawn to the buyer’s attention before the contract is made,
(b) where the buyer examines the goods before the contract is made, which that1
examination ought to reveal, or
(c) in the case of a sale by sample, which would have been apparent on a reasonable
examination of the sample.’
Mitchell ‘The Development of Quality Obligations in the Sale of Goods’ (2001) 117
LQR 645-663
Hedley “Quality of Goods, Information and the Death of Contract” [2001] JBL 114-125
Ervine “Satisfactory Quality: What does it Mean?” [2004] JBL 684-703.
To what extent will the post-1973 cases defining merchantable quality, such as Aswan
Engineering Establishment Co v Lupdine Ltd [1987] 1 WLR 1 (CA), be of assistance
in defining the new concept of satisfactory quality?
Section 14(2D) makes public statements made about specific characteristics of the
goods made by “the seller, the producer or his representative, particularly in
advertising or on labelling” part of the circumstances mentioned in subsection (2A)
where the buyer deals as a consumer. Section 14(2E) allows the seller to escape
liability for misleading public statements where the seller can show (NB – onus!):
a) At the time the contract was made, the seller was unaware of the statement;
b) Before the contract was made, the statement was withdrawn or corrected; or
c) The decision to buy the goods could not have been influenced by the
statement.
1
From 1893-1973 the word that in section 14(2C)(b) read such. Is this a distinction or just a difference?
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Bristol Tramways & Carriage Co Ltd v Fiat Motors Ltd [1910] 2 KB 831 (CA)
Cammell Laird & Manganese Bronze & Brass Co Ltd [1934] AC 402 (HL)
Teheran-Europe Co Ltd v S T Belton (Tractors) Ltd [1968] 2 QB 545 (CA)
Henry Kendall & Sons v William Lillico & Sons Ltd [1969] 2 AC 31 (HL) (also
known as Hardwick Game Farm v SAPPA)
Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441 (HL)
Slater v Finning [1997] AC 473, [1996] 3 All ER 398 (HL)
Britvic Soft Drinks Ltd v Messer UK Ltd [2002] 1 Lloyd’s Rep 20, on appeal [2002]
EWCA Civ 548, [2002] 2 Lloyd’s Rep 368 (CA)
Hamilton v Papakura District Council [2002] UKPC 9 noted in (2002) 118 LQR 538
Jewson Ltd v Kelly [2003] EWCA Civ 1030, [2004] 1 Lloyd’s Rep 505 (CA)
What is the relationship between section 14(2) and 14(3) of the Sale of Goods Act?
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6.1 Introduction
As students will no doubt have grasped, the general Commercial Law texts are not
particularly strong on their coverage of Consumer Law. Regard might also be had to:
Bradgate and Twigg-Flesner Blackstone’s Guide to Consumer Sales and Associated
Guarantees (OUP, 2003)
J K Macleod Consumer Sales Law 2 ed (Routledge-Cavendish, 2007)
Law Commission Simplifying Consumer Legislation: A Response to the DTI (2004)
– Part 3 Private Rights: The Sale and Supply of Goods and Services pages 10-13
(1) The limits imposed by this Act on the extent to which a person may exclude or
restrict liability by reference to a contract term do not apply to liability arising
under such a contract as is described in subsection (3) below.
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(2) The terms of such a contract are not subject to any requirement of reasonableness
under section 3 or 4: and nothing in Part II of this Act shall require the
incorporation of the terms of such a contract to be fair and reasonable for them to
have effect.
(3) Subject to subsection (4), that description of contract is one whose characteristics
are the following—
(a) either it is a contract of sale of goods or it is one under or in pursuance of
which the possession or ownership of goods passes; and
(b) it is made by parties whose places of business (or, if they have none, habitual
residences) are in the territories of different States (the Channel Islands and
the Isle of Man being treated for this purpose as different States from the
United Kingdom).
(4) A contract falls within subsection (3) above only if either—
(a) the goods in question are, at the time of the conclusion of the contract, in the
course of carriage, or will be carried, from the territory of one State to the
territory of another; or
(b) the acts constituting the offer and acceptance have been done in the territories
of different States; or
(c) the contract provides for the goods to be delivered to the territory of a State
other than that within whose territory those acts were done.
(1) Where goods are sold or otherwise supplied to a consumer which are offered with a
consumer guarantee, the consumer guarantee takes effect at the time the goods are
delivered as a contractual obligation owed by the guarantor under the conditions set
out in the guarantee statement and the associated advertising.
(2) The guarantor shall ensure that the guarantee sets out in plain intelligible language the
contents of the guarantee and the essential particulars necessary for making claims
under the guarantee, notably the duration and territorial scope of the guarantee as well
as the name and address of the guarantor.
(3) On request by the consumer to a person to whom paragraph (4) applies, the guarantee
shall within a reasonable time be made available in writing or in another durable
medium available and accessible to him.
(4) This paragraph applies to the guarantor and any other person who offers to consumers
the goods which are the subject of the guarantee for sale or supply.
(5) Where consumer goods are offered with a consumer guarantee, and where those goods
are offered within the territory of the United Kingdom, then the guarantor shall ensure
that the consumer guarantee is written in English.
(6) If the guarantor fails to comply with the provisions of paragraphs (2) or (5) above, or a
person to whom paragraph (4) applies fails to comply with paragraph (3) then the
enforcement authority may apply for an injunction or (in Scotland) an order of specific
implement against that person requiring him to comply.
(7) The court on application under this Regulation may grant an injunction or (in
Scotland) an order of specific implement on such terms as it thinks fit.
Reg. 15 Sale and Supply of Goods to Consumers Regulations 2002 (SI 2002/3045).
See also sections 5 and 19 of the Unfair Contract Terms Act 1977
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7.1 INTRODUCTION
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(2B) It is for the seller to show that a shortfall or excess fell within subsection (2A)
above.
(2C) Subsections (2A) and (2B) above do not apply to Scotland.
(2D) Where the seller delivers a quantity of goods--
(a) less than he contracted to sell, the buyer shall not be entitled to reject the goods
under subsection (1) above,
(b) larger than he contracted to sell the buyer shall not be entitled to reject the whole
under subsection (2) above,
unless the shortfall or excess is material.
(2E) Subsection (2D) above applies to Scotland only.
(3) Where the seller delivers to the buyer a quantity of goods larger than he contracted to
sell and the buyer accepts the whole of the goods so delivered he must pay for them
at the contract rate.
[...]
(5) This section is subject to any usage of trade, special agreement, or course of dealing
between the parties
s30 SGA (as amended by the Sale and Supply of Goods Act 1994)
Shipton, Anderson & Co Ltd v Weil Brothers & Co [1912] 1 KB 574 – the de minimis rule
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8.1.3 The concept of an available market and the market price rule
Charter v Sullivan [1957] 2 QB 117, [1957] 1 All ER 809 (CA)
Thompson Ltd v Robinson (Gunmakers) Ltd [1955] Ch 177, [1955] 1 All ER 154
Lazenby Garages Ltd v Wright [1976] 1 WLR 459, [1976] 2 All ER 770 (CA)
Tredegar Iron & Coal Co Ltd v Hawthorn Bros & Co (1902) 18 TLR 716
Muller, MacLean & Co v Leslie & Anderson (1921) 8 Ll L Rep 328
Shearson Lehman Hutton Inc v Maclaine Watson & Co Ltd (No 2) [1990] 3 All
ER 723 (QBD)
See also J N Adams, “Damages in the Sale of Goods” [2002] JBL 553
8.2.1 Introduction
(1) Subject to this and any other Act, notwithstanding that the property in the goods may
have passed to the buyer, the unpaid seller of goods, as such, has by implication of
law-
(a) a lien on the goods or right to retain them for the price while he is in possession
of them;
(b) in case of the insolvency of the buyer, a right of stopping the goods in transit
after he has parted with the possession of them;
(c) a right of re-sale as limited by this Act.
(2) Where the property in goods has not passed to the buyer, the unpaid seller has (in
addition to his other remedies) a right of withholding delivery similar to and co-
extensive with his rights of lien or retention and stoppage in transit where the
property has passed to the buyer
s39 SGA
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2. the seller is unpaid and the goods are perishable (s48(3) SGA);
3. the seller expressly reserves the right of resale in case the buyer should make
default (s48(4) SGA).
R V Ward Ltd v Bignall [1967] 1 QB 534, [1967] 2 All ER 449 (CA)
What is the relationship between s48(2) and s24 SGA (s8 Factors Act 1889)?
8.3.1 Introduction
The Law Commission Sale and Supply of Goods (L Com 160, 1987) Part 5
Directive 99/44/EC of the European Parliament and of the Council of 25 May 1999
on certain aspects of the sale of consumer goods and associated guarantees
8.3.2 Rejection
ss11, 34, 35 and 35A SGA (as amended by the SSGA 1994 and SI 2002/3045)
Borrowman, Phillips & Co v Free and Hollis (1878) 4 QBD 500 (CA)
Perkins v Bell [1893] 1 QB 193, [1891-94] All ER Rep 884 (CA)
Hardy & Co v Hillerns & Fowler [1923] 2 KB 490 (CA)
The Kanchenjunga [1990] 1 Lloyd’s Rep 391 (HL)
Truk (UK) Ltd v Takmakidis GmbH [2000] 1 Lloyd's Rep. 543
Clegg v Olle Andersson (T/A Nordic Marine) [2003] EWCA Civ 320, [2003] 2
Lloyd’s Rep 32 [NB: holding that Bernstein v Pamson Motors [1987] 2 All ER 220
no longer represents the law in the light of the Sale and Supply of Goods Act 1994]
Jones v Gallagher [2004] EWCA Civ 10, [2005] 1 Lloyd's Rep. 377 (noted in (2004)
120 LQR 558-563)
J&H Ritchie Ltd v Lloyd Ltd [2007] UKHL 9, [2007] 1 WLR 670, [2007] 2 All ER
353 (noted in (2007) 70 MLR1002-1007 and [2007] LMCLQ 449-453).
See also Vanessa Mak “The seller’s right to cure defective performance – a
reappraisal” [2007] LMCLQ 409-424
Section 11(3) SGA seems to recognise that a breach of a condition gives the buyer
two rights: (a) to reject the goods, and (b) to treat the contract as repudiated, in which
case the buyer will be entitled to terminate the contract. It is important to distinguish
between these two rights because, although the buyer cannot terminate the contract
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without first rejecting the goods, the two rights can be exercised separately so that
the buyer can reject without terminating.
Are there circumstances in which the buyer is entitled to reject but not to terminate?
After rejection by the buyer, who bears the risk of accidental loss or damage?
‘(1) Where the seller wrongfully neglects or refuses to deliver the goods, the buyer
may maintain an action against him for damages for non-delivery.
(2) The measure of the damages is the estimated loss directly and naturally resulting
in the ordinary course of events, from the seller’s breach of contract.
(3) Where there is an available market for the goods in question the measure of
damages is prima facie to be ascertained by the difference between the contact price
and the market or current price at the time or times when they ought to have been
delivered or (if no time was fixed for acceptance) at the time of the refusal to
deliver.’
s51 SGA
Hadley v Baxendale (1854) 9 Exch 341, 156 ER 145, [1843-60] All ER Rep 461
Melachrino v Nickoll & Knight [1920] 1 KB 693, [1918-19] All ER Rep 856
Tai Hing Cotton Mill Ltd v Kamsing Knitting Factory [1979] AC 91 (PC)
Williams v Reynolds (1865) 6 B & S 495, 34 LJQB 221
Williams Bros v E T Agius Ltd [1914] AC 510, [1914-15] All ER Rep 97 (HL)
The Sale of Goods Act 1979 contains no special provisions relating to the late
delivery of goods that the buyer chooses to accept. The issue is thus subject to
the normal principles applicable to contracts generally. If there is an available
market, prima facie the measure of damages is the difference between the
market price on the contractual date of delivery and the date of acceptance. In
a rising market, the buyer will not have suffered any loss but in a falling market
the buyer’s losses may be substantial. If there is no available market for the
goods in question the ordinary contractual measure of damages will apply.
See Koufos v C Czarnikow Ltd: The Heron II [1969] 1 AC 350 (HL) and
Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528
(CA).
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8.4.2 The buyer’s right to damages for breach of warranty by the seller
‘(1) Where there is a breach of warranty by the seller, or where buyer elects (or is
compelled) to treat any breach of condition on the part of the seller as a breach of
warranty, the buyer is not by reason only of such breach of warranty entitled to reject
the goods; but he may -
(a) set up against the seller the breach of warranty in diminution or extinction
of the price, or
(b) maintain an action against the seller for damages for breach of warranty.
(2) The measure of damages for breach of warranty is the estimated loss directly and
naturally resulting in the ordinary course of events, from the breach of warranty..
(3) In the case of breach of warranty of quality such loss is prima facie the value of
the goods at the time of delivery to the buyer and the value they would have had if
they had fulfilled the warranty.
(4) The fact that the buyer has set up the breach of warranty in diminution or
extinction of the price does not prevent him from maintaining an action for the same
breach of warranty if he has suffered further damage.’
s53 SGA
Slater v Hoyle & Smith Ltd [1920] 2 KB 11, [1918-19] All ER Rep 654 (CA)
Van Den Hurk v Martens & Co Ltd [1920] 1 KB 850, 89 LJQB 545
H Parsons (Livestock) Ltd v Uttley Ingham & Co Ltd [1978] QB 791 (CA)
Bence Graphics International Ltd v Fasson UK Ltd [1998] QB 87 (CA) (noted in
(1997) 113 LQR 188)
Louis Dreyfus Trading Ltd v Reliance Trading Ltd [2004] EWHC 525, [2004] 2
Lloyd’s Rep 243 (noted in (2004) 154 NLJ 1188-1189)
McSherry v Coopers Creek Vineyard Ltd (Unreported, December 21, 2004) (HC
(NZ)) (noted in (2005) 121 LQR 389)
48A Introductory
(1) This section applies if—
(a) the buyer deals as consumer or, in Scotland, there is a consumer contract in which
the buyer is a consumer, and
(b) the goods do not conform to the contract of sale at the time of delivery.
(2) If this section applies, the buyer has the right-
(a) under and in accordance with section 48B below, to require the seller to repair or
replace the goods, or
(b) under and in accordance with section 48C below-
(i) to require the seller to reduce the purchase price of the goods to the buyer by an
appropriate amount, or
(ii) to rescind the contract with regard to the goods in question.
(3) For the purposes of subsection (1)(b) above goods which do not conform to the
contract of sale at any time within the period of six months starting with the date on
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which the goods were delivered to the buyer must be taken not to have so conformed
at that date.
(4) Subsection (3) above does not apply if-
(a) it is established that the goods did so conform at that date;
(b) its application is incompatible with the nature of the goods or the nature of the lack
of conformity.
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(1) If the buyer requires the seller to repair or replace the goods the buyer must not act
under subsection (2) until he has given the seller a reasonable time in which to repair
or replace (as the case may be) the goods.
(2) The buyer acts under this subsection if-
(a) in England and Wales or Northern Ireland he rejects the goods and terminates
the contract for breach of condition;
(b) in Scotland he rejects any goods delivered under the contract and treats it as
repudiated;
(c) he requires the goods to be replaced or repaired (as the case may be).
“producer” means the manufacturer of goods, the importer of goods into the
European Economic Area or any person purporting to be a producer by placing his
name, trade mark or other distinctive sign on the goods;
(2) in section 61(1) after the definition of “property” there is inserted -
“repair” means, in cases where there is a lack of conformity in goods for the purposes
of section 48F of this Act, to bring the goods into conformity with the contract.
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9.1 Codification?
Michael Bridge, “What is to be done about sale of goods?” (2003) 119 LQR 173-177
Roy Goode, “Removing the Obstacles to Commercial Law Reform” (2007)123 LQR
602-617
Lucinda Miller, “The Common Frame of Reference and the feasibility of a common
contract law in Europe” [2007] JBL 378-411
Paul Omar, “Lessons from the French experience: the possibility of codification of
commercial law in the United Kingdom” (2007) 18 International Company and
Commercial Law Review 235-243
Kevin M Rogers, “Philosophical contrasts in commercial and consumer law – should
we codify commercial law?” (2005) 26 Business Law Review 262-266
Lord Lester of Herne Hill asked Her Majesty’s Government: “Why they have not
ratified the United Nations Convention on Contracts for the International Sale of
Goods (United Nations Convention) which came into force on 1 January 1988.”
The Parliamentary Under-Secretary of State, Department of Trade and Industry
(Lord Sainsbury of Turville): Primary legislation will be needed to implement the
United Nations Convention on Contracts for the International Sale of Goods. The
United Kingdom intends to ratify the convention, subject to the availability of
parliamentary time. There have been delays in the past for a number of reasons, but
we propose to issue a consultation document in the course of the next few months to
examine the available options. Hansard HL vol. 669 col. WA87 (7 Feb 2005)
See also the views of Lord Steyn (Hansard HL vol. 563 col. 1458-9 (3 May 1995)) and
the Scottish Law Commission Formation of Contract: Scottish Law and the United
Nations Convention on Contracts for the International Sale of Goods Scots Law Com
No. 144 (1993) (available at http://www.scotlawcom.gov.uk/downloads/rep144.pdf)
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