SALES OF GOODS

Topics Included:
- SGA 1979
- Two New Acts
- Section 3
- Sections 6 & 7
- Section 4
- Section 12 (1)
- Section 13 (1)
- Section 13 (3)
- Section 14 (2)
- Section 14 (2A)
- Section 14 (2B)
- Section 14 (2C)
- Section 14 (3)
- Section 15 (1)
- Sections 12-15
- Section 15 (A)
- Section 8 (2)
- UCTA 1977 & Section 12
- SGA 1979 Sections 13-15
- Supply of Goods & Services Act 1982

1
Cases Discussed:
Case #1: ROWLAND v DIVALL
Case #2: VARLEY v WHIPP
Case #3: GRANT v AKM
Case #4: ASHINGTON PIGGERIES v CHRISTOPHER HILL
Case #5: ARCOS v RONAASEN
Case #6: GODLEY v PERRY
Case #7: GEDDLING v MARSH
Case #8: JENSON v KELLY

2
- SGA 1979:
• The law relating to the Sales of Goods contract is contained in
the Sale of Goods Act 1979 and in the cases which apply and
interpret the act.
• The act consolidated the law previously contained in the Sale
of Goods Act 1893 and subsequent cases.
• You will find that many of the cases used to explain the law
actually involved interpretation of the earlier act.

- Two New Acts:

• Changes were made by two new acts , both of which came
into force on January 3rd 1995.
• The Sale & Supply of Goods Act 1994 and The Sale of Goods
Act 1994.
• Further change was made by The Sale of Goods Act 1995.
• It is important to realise that all the usual rules relating to
contract apply to The Sale of Goods contract.
• The Sale of Goods Act 1979 adds more rules which are
specific to the sale of goods contract.

- Section 3:
• In particular, Section 3 says that rules as to capacity are the
same as in any other contract.

- Sections 6 & 7:
• Section 6 relates to mistake and Section 7 to frustration.

3
- Section 4:
• Section 4 says that no particular formalities are needed to
make a sale of goods contract. Most Sale of Goods contracts
are small contracts of the kind made over the shop counter
everyday.

- Section 12 (1):
• Section 12 (1) states that in a contract of sale, there is an
implied condition that the seller has a right to sell the goods. If
this implied term is breached, the buyer will be able tto recover
the price of goods no matter how long he has been in
possession of them.
• In ROWLAND v DIVALL, the seller was liable for breach of
Section 12 when he sold a stolen car. The buyer was able to
rcover the money paid for the car.

- Section 13 (1):
• Section 13 (1) states that if the sale of goods is one by
description, there is an implied term that the goods will match
the description.
• In VARLEY v WHIPP, it was held that the sale is one by
description if the buyer has not seen the goods and is relying
upon description alone. However this is no longer true today.

- Section 13 (3):
• Section 13 (3) makes it clear that a sale can still be one of
description where the buyer has selected the goods himself.
• In GRANT v AKM, Lord Wright stated "there is a sale by
description even though the buyer is buying something
4
displayed before him".
• In ASHINGTON PIGGERIES v CHRISTOPHER HILL, Lord Diplock
explained that description words are those words which
"identify the kind of goods to be supplied". Judges adopt a
strict approach where descriptive words are used.
• In ARCOS v RONAASEN, Lord Atkin stated "a ton does not
mean about a ton or a yard about a yard."
• Section 13 applies to business sales as well as private sales.

- Section 14 (2):
• Section 14 (2) states that when the sale is in a course of
business there is an implied term that the goods should be of
satisfactory quality.

- Section 14 (2A):
• Section 14 (2A) states that goods are of satisfactory quality if
a reasonable man would regard them as satisfactory.

- Section 14 (2B):
• Section 14 (2B) lists factors which the judges would look at
when deciding whether an item is satisfactory.
• Such as, the item must be fit for the purpose it is commonly
sold for, should have a good appearance and finish. It should be
safe and durable and should be free from the minor defects.
• The test of satisfactory quality replaces the old test of
merchantable quality. However, the change of words do not
bring about any change of substance.
• In GODLEY v PERRY, a six year old boy was blinded in one eye
when his plastic catapult shattered during normal use. It was
held that the toy was not of merchantable quality and the boy
5
was entitled to damages.
• In GEDDLING v MARSH, it was held that the mineral water
was not of satisfactory quality because the bottles in which it
was stored was not of good quality.

- Section 14 (2C):
• Section 14 (2C) provides that the seller would not be liable if
the defect is specifically drawn to the buyer's attention before
the contract is made or if the buyer examines goods and the
defect is such which a reasonable examination ought to reveal.

- Section 14 (3):
• Section 14 (3) states that where the buyer makes it known
that the goods are being bought for a particular purpose then
they should be fit for that particular purpose.
• In JENSON v KELLY it was held that although the boiler
worked well, it was not regarded as satisfactory quality because
the buyer had specifically asked for a boiler which would
provide efficient low cost heating. The boiler failed to meet this
claim.
• Section 14 applies to business sales.

- Section 15 (1):
• Section 15 (1) provides that when goods are sold by a sample
they must match the sample and they should also be free from
defects which would rendered them as unsatisfactory.

- Sections 12-15:
• Sections 12-15 are implied terms that is conditions and the
breach of their terms will entitle the injured party to rescind
6
the contract.
• The buyer can return the goods and demand a refund.
• Damages will be claimed if financial loss has occured due to
the breach.

- Section 15 (A):
• The 1994 amendments have inserted Section 15 (A) into a
Sales & Goods Act which now states that where the damage is
minor, recession may not be allowed and only damages can be
claimed.

- Section 8 (2):
• Section 8 (2) states that where the prize is not fixed by the
parties beforehand then the buyer must pay a reasonable price.

- UCTA 1977 & Section 12:

• According to the UCTA 1977 the seller can never exclude
liability for breach of Section 12 of the Sales & Goods Act 1979,
whether dealing with a consumer or a non-consumer.

- SGA 1979 Sections 13-15:

• The seller cannot exclude liability for breach of Sections 13-15
of the Sales & Goods Act 1979 when dealing with a non-
consumer provided the clause is reasonable.

- Supply of Goods & Services Act 1982:

• The SGA 1979 deals with contracts of sale and higher
purchase where as, the Sales of Goods & Services Act 1982
deals with the supply of goods and services.
• The Sales of Goods and Services Act 1982 implies the same
7
term into the contract of higher as Sections 12-15 of the SGA
1979.
• Sections 13-15 deal with the supply of services.
• According to Section 13, if a service is being supplied the work
must be carried out with reasonable care and skill.