UNIVERSITY OF EDINBURGH

SCHOOL OF LAW

COMMERCIAL LAW (ORDINARY) 2022/2023

SALE OF GOODS

Introduction

Contracts for sale of goods are by far the most common form of commercial transaction and
impact upon many other areas of commercial law, some of which are covered in this course,
including carriage, negotiable instruments, credit, debt, guarantees and insurance. This part
of the course is therefore designed to cover the key elements of sale of goods. However, it
is expected that students will already be familiar with the basic principles to be discussed
such as contract and property law rules and principles.

The law in this area changed with the coming into force of the Consumer Rights Act 2015
(CRA) on 1 Oct 2015. Chapter 2 of CRA deals with several issues regarding contracts for
the sale of goods between a trader and consumer. The Sale of Goods Act 1979 (SOGA)
used to apply to all contracts for the sale of goods – both consumer and non-consumer.
Certain provisions of SOGA continue to apply to consumer sales contracts while others no
longer apply – with the relevant provisions now being found in the CRA. SOGA continues to
apply to all other contracts for the sale of goods, significantly contracts between two
commercial parties, neither of whom is a consumer.

Key reading:
For Commercial Sale of Goods

 Macgregor et al, Commercial Law in Scotland, 6th ed, 2020, chapter 1

 The Sale of Goods Act 1979, as amended (included in Avizandum statutes on Scots
Commercial and Consumer Law, 2020-21 and available online)

For Consumer Sale of Goods

 Macgregor et al, Commercial Law in Scotland, 6th ed, 2020, chapter 1

 Parts 1 and 2 of the Consumer Rights Act 2015 (included in Avizandum statutes on
Scots Commercial and Consumer Law, 2020-21 and available online)
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  SOGA continues to be relevant for certain aspects of consumer sales.

For E-Commerce

 Macgregor et al, Commercial Law in Scotland, 6th ed, 2020, chapter 2

 The Consumer Contracts (Information, Cancellation and Additional Charges)
Regulations 2013 (included in Avizandum statutes on Scots Commercial and
Consumer Law, 2020-21 and available online)
 The Electronic Commerce (EC Directive) Regulations 2002

Additional reading:

 Twigg-Flesner, MacQueen and others, Atiyah and Adams’ Sale of Goods, 14th ed,
2021 for commercial sales
 Ervine, Consumer Law in Scotland, 5th ed, 2015, chapters 3 and 4 for consumer
sales
 Goode and McKendrick on Commercial Law, 6th ed, 2020, Part Two
 Black (ed), Business Law in Scotland, 4th ed, 2019 chapter 7 in relation to e-
commerce.

I. THE CONTRACT OF SALE

1. What is a contract of sale of goods?

Section 2(1) SOGA: “A contract of sale of goods is a contract by which the seller transfers or
agrees to transfer the property in the goods to the buyer for a money consideration called
the price.”
Distinguish between a sale and an agreement to sell: s2(4) and (5) SOGA.
Hughes v Pendragon Sabre (t/a Porsche Centre Bolton) [2016] 1 Lloyd’s Rep 311
Section 5(1) CRA “A contract is a sales contract if under it (a) the trader transfers or agrees
to transfer ownership of goods to the consumer and (b) the consumer pays or agrees to pay
the price.”
Note the clarification provided in s5(2) where goods are manufactured or produced for the
trader to supply them to the consumer.

2. Five key elements

i. Two parties: a buyer and a seller

ii. A contract
iii. Transfer of property
iv. Goods
v. The price

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i A Buyer and a Seller

Vitally important to distinguish between a consumer and non-consumer buyer. Where a

consumer buyer – the CRA mainly applies and in some specific circumstances the SOGA,
where a non-consumer (a commercial) buyer the SOGA. The law offers more protectionary
measures for consumer (B2C) contracts than for commercial (B2B) contracts because of the
uneven power balance between the parties in B2C contracts.
The buyer and seller are defined in s61(1) SOGA.
CRA only applies with the contract is between a trader and consumer: s1(1). Defined in s2:
a trader means a person acting for purposes relating to that person’s trade, business, craft,
or profession, whether acting personally or through another person….
Includes a trader acting as an intermediary on behalf of a private individual who has not duly
informed the consumer of fact that owner of goods is a private individual: Wathelet v Garage
Bietheres (C-149/15), judgement of 9 Nov 2016, available at
http://curia.europa.eu/juris/document/document.jsf?
text=&docid=185221&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=142
168

Business defined as including activities of any governmental department or local or public

authority: s2(7) CRA.

A consumer means an individual acting for purposes that are wholly or mainly outside that
individual’s trade, business, craft, or profession. Except (for the most part) an individual
buying second hand goods at a public auction in person (s2(5) CRA).
ii The Contract
General principles of contract law will apply to the sales contract: there must be consensus
in idem; parties must have capacity, etc.

(For further reference, see MacQueen and Thomson, Contract Law in Scotland, 5th ed, 2020;
or Black, Woolman on Contract, 6th ed)

Capacity – general law on capacity applies. s3 SOGA.

Form – may be written, oral or constituted by the conduct of the parties. s4 SOGA, S1(2)
CRA.

Following the coming into force of The Consumer Contracts (Information, Cancellation
and Additional Charges) Regulations 2013 (“the 2013 Regulations”) on 13 June 2013 a
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trader is under a number of obligations to a consumer in on-premises, off-premises or
distance contracts. There are some contracts that the 2013 Regulations do not apply to,
including contracts for the supply of foodstuffs, beverages or other goods intended for
current consumption in the household and which are supplied by a trader on frequent or
regular rounds to the consumer’s home, residence or workplace – reg 6, the sale of a
medicinal product under prescription – reg 7(2).

Trader and consumer are defined in reg 4 – same as definition in CRA (see above).

On premises contract – defined in reg 5 – as a contract between a trader and consumer

which is neither a distance contract or an off-premises contract. See e-commerce (below) re
distance contracts. Off-premises contracts are generally not entered into in the business
premises of the trader. On premises contract will include many regular sales of goods –
where the contract is entered into between the parties when they are on the trader’s
business premises.

Reg 9(1) of the 2013 Regulations provides that before a consumer is bound by an on-
premises contract the trader must give or make available to the consumer certain
information set out in Schedule 1 in a clear and comprehensible manner, if that information
is not already apparent from the context. Reg 9 does not apply to a contract which involves a
day-to-day transaction and is performed immediately the contract is entered into – reg 9(2).
The information set out in Schedule 1 includes the main characteristics of the goods, the
identity of the trader, the total price of the goods including taxes, arrangements for payment,
delivery, performance, time of delivery and the trader’s complaint handling policy.

The information provided (except the main characteristics of the goods) is to be treated as a
term of the contract and any change made before or after the contract is entered into is
ineffective unless the change was expressly agreed between the consumer and trader: CRA
s12.

iii Transfer of Property

SOGA only applies where property in goods is being transferred. See PST Energy 7
Shipping LLC v OW Bunker Malta Ltd [2016] AC 1034 (but parties can call things to which
SOGA does not apply “sale of goods” contracts as a term of art - see Cockett Marine Oil
DMCC v ING Bank NV [2019] EWHC 1533 (Comm)).
Wood v TUI Travel plc (t/a First Choice [2017] 2 All ER (Comm) 734.
Only a sales contract under CRA 15 if ownership in the goods is being transferred. Note
however CRA also applies to all supplies of goods such as hire and hire purchase, but these
contracts are not the focus of these lectures.

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s2(2) SOGA and s3(5)(a) CRA: There may be a contract of sale between one part owner
and another.
s2(4) SOGA: “Where…the property in the goods is transferred from the seller to the buyer
the contract is called sale.”
s2(5) SOGA: “Where… the transfer of the property in the goods is to take place at a future
time… the contract is called an agreement to sell.”
S5(1) CRA – there is a sales contract if the trader transfers or agrees to transfer ownership
of the goods to the consumer.

iv Goods
s61 SOGA: “ ‘goods’ includes… 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”

Atiyah et al note that this definition is “virtually all-embracing” – but there are exceptions and
problem areas.

Software:
Beta Computer Systems (Europe) Ltd v Adobe Computer Systems (Europe) Ltd 1996 SLT
604
St Albans DC v International Computers Ltd [1996] 4 All ER 481
Computer Associates UK Ltd v The Software Incubator Ltd [2018] EWCA Civ 518
Although for consumer contracts issue dealt with by s16 CRA (see Part III below).

Supply of services:
Robinson v Graves [1935] 1 KB 579

S2(8) CRA: ‘goods’ means any tangible moveable items…. CRA does not apply to contracts
for a trader to supply coins or notes to a consumer for use as currency: s3(3)(a). Note that
CRA also applies to the supply of services (chapter 4 CRA) and digital content (chapter 3
CRA) but we are concerned in these lectures with sale of goods.

v The Price

s2(1) SOGA – need for a money consideration called the price. No such express
requirement in CRA but by implication: s5(1)(b) – consumer must pay or agree to pay the
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price and also s8 – there is a contract for the transfer of goods (not a sales contract) where
the consumer provides or agrees to provide consideration otherwise by paying a price.

In a commercial sales contract the price may be set out in the contract or may be left to be
fixed in a manner agreed by the contract or may be determined by the course of dealing
between the parties; s8(1) SOGA.

If no price is stipulated, then the buyer must pay a “reasonable price”: s8(2) and 8(3) SOGA.

Glynwed Distribution v S Koronka & Co 1977 SC 1

Likely that the issue will not often arise in consumer sales where the price of the goods for
sale is generally clearly marked. Also recall that the trader has an obligation to provide the
consumer with the price – reg 9 of the 2013 Regulations (although remember that reg 9 does
not apply to a contract which involves a day to day transaction and is performed immediately
the contract is entered into).

II. PASSING OF PROPERTY, RISK AND TITLE

1. The Passing of Property

The rules are the same for commercial and consumer sales – s4 CRA refers to the relevant
provisions of SOGA.

Distinguish between property (ownership) and possession of the goods.

Section 17 SOGA: “… property in [the goods] is transferred to the buyer at such time as the
parties to the contract intend it to be transferred.” In determining the intention of the parties
regard needs to be had to the terms of the contract, conduct of the parties and
circumstances of the case.

Where having considered the contract, parties’ conduct and circumstances it remains
unclear when the parties intended property in the goods to pass use section 18: provides 5
rules for ascertaining the intention of the parties as to passing of property:

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Rule 1.— Where there is an unconditional contract for the sale of specific goods in a
deliverable state the property in the goods passes to the buyer when the contract is made,
and it is immaterial whether the time of payment or the time of delivery, or both, are
postponed.

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 into a deliverable state, the
property does not pass until the thing is done and the buyer has notice that it has been
done.

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 purpose 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.

Rule 4.— When goods are delivered to the buyer on approval or on sale or return the
property in the goods passes to the buyer when the buyer signifies his approval or
acceptance to the seller; or does something inconsistent with the seller’s ownership of the
goods; or if the buyer does not signify his approval or acceptance to the seller but retains the
goods without giving notice of rejection, then, if a time has been fixed for the return of the
goods, on the expiration of that time, and, if no time has been fixed, on the expiration of a
reasonable time.

Rule 5.—
(1) Where there is a contract for the sale of unascertained or future goods by description,
and goods of that description and in a deliverable state are unconditionally appropriated to
the contract, either by the seller with the assent of the buyer, or by the buyer with the assent
of the seller, the property in the goods then passes to the buyer; the assent may be express
or implied, and may be given either before or after the appropriation is made.

Section 16 SOGA: unascertained goods but see the exception in s20A SOGA.
Retention of title clauses and “all sums” clauses:

Section 19 SOGA: reservation of right of disposal (in conjunction with s17(1).)

 *Armour v Thyysen Edelstahlwerke AG [1991] 2 AC 339; 1990 SLT 891

 Aluminium Industrie Vassen BV v Romalpa Aluminium [1976] 2 All ER 552
 *Clark Taylor v Quality Site Development (Edinburgh) Ltd 1981 SC 111

Additional Reading:

 Gretton and Reid, “All Sums Retention of Title”, 1989 SLT (News) 185
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  Clark, “All Sums Retention of Title”, 1991 SLT (News) 155

2. Title to Goods

“It has long been established that as a matter of contractual obligation the seller’s
transfer of an indefeasible title is fundamental to the agreement.” (see discussion in
Goode and McKendrick)

The property / commercial contract dilemma created by sales by a non-owner:

“In the development of our law, two principles have striven for mastery. The first is
for the protection of property: no one can give a better title than he himself
possesses. The second is for the protection of commercial transactions: the person
who takes in good faith and for value without notice should get a good title.”
(Lord Denning, Bishopsgate Motor Finance Corporation Ltd v Transport Brakes Ltd
[1949] 1 KB 322, at 336-337.)

The legal response? The rules are the same for commercial and consumer sales – the
provisions are found in SOGA.

(a) Section 21 SOGA: nemo dat quod non habet plus statutory form of personal bar:

“… where goods are sold by a person who is not their owner, and who does not sell
them under the authority or with the consent of the owner, the buyer acquires no
better title to the goods than the seller had, unless the owner of the goods is by his
conduct precluded from denying the seller’s authority to sell.”

(b) Section 23 SOGA: Sale under voidable title

(c) Section 24 SOGA: Seller in possession after sale

*Michael Gerson (Leasing) Ltd v Wilkinson [2000] 3 WLR 1645

(d) Section 25 SOGA: Buyer in possession after sale

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*Archivent Sales and Development v Strathclyde Regional Council 1985 SLT 154
*Four Point Garage Ltd v Carter [1985] 3 All ER 12
Thomas Graham and Sons Ltd v Glenrothes Development Corp 1967 SC 284

Note also sale by an agent – s2(1) of the Factors Act 1889

3. The Passing of Risk

For commercial sales s 20(1) SOGA applies: goods remain at the seller’s risk until property
in them passes to the buyer but when the property in them is transferred to the buyer the
goods are at the buyer’s risk whether delivery has been made or not BUT…

s 20(2) SOGA: where delivery has been delayed through the fault of either buyer / seller the
goods are at the risk of the party at fault in relation to any loss which might not have
occurred but for such fault.
Demby Hamilton & Co Ltd v Barden [1949] 1 All ER 435

In consumer contracts s29(2) CRA applies: the goods remain at the trader’s risk until they
come into the physical possession of the consumer or a person identified by the consumer to
take possession of the goods. However, where the goods are delivered to a carrier
commissioned by the consumer to deliver the goods and the carrier is not a carrier the trader
has named as an option for the consumer the goods are at the consumer’s risk from delivery
to the carrier.

III. THE SELLER’S DUTIES AND THE BUYER’S REMEDIES

1. The Seller’s Duties

Two main duties:

(a) The duty to deliver
(b) The duty to provide goods conform to contract

(a) Delivery

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s61 SOGA and s59 CRA define delivery as: “the voluntary transfer of possession from one
person to another”.

See s 27 SOGA: the duty to deliver, supplemented by s29 SOGA which sets out rules about
delivery.

For consumer sales see also s 28 CRA – note the need to deliver goods no more than 30
days after the day on which the sales contract was entered unless the contract provides
otherwise. Where delivery within agreed time essential and goods not delivered consumer
can treat the contract as at an end. Where time of delivery not essential consumer may
specify further additional period in which delivery must take place and if not delivered the
consumer can treat the contract as at an end. Where contract treated as at an end the
consumer entitled to be reimbursed without undue delay.

For rules regarding delivery of the wrong quantity see s30 SOGA and s25 CRA.

Consider the interplay between the seller’s duty to deliver and the buyer’s duty to accept
(discussed below, in Part IV).

(b) Goods Conform to Contract

In every contract of sale of goods, there are a number of provisions that will always apply.
Under SOGA these were referred to as implied terms. This terminology does not appear in
CRA, but the import is the same – it provides that every contract for the sale of goods is to
be treated as including a term that….

Title to the goods

s12 SOGA creates an implied term in commercial sales that:

12(1): in the case of sale the seller has the right to sell the goods and in the case of an
agreement to sell will have such a right at the time when property in the goods is to pass.

12(2)(a): the goods are free, and will remain free until the time when the property is to pass,
from any charge or encumbrance not disclosed or known to the buyer before the contract is
made, and

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(b) the buyer will enjoy quiet possession of the goods except in so far as it may be disturbed
by the owner or other person entitled to the benefit of any charge or encumbrance so
disclosed or known.

S17 CRA provides that each consumer contract will contain provisions to the same effect.

Niblett Ltd v Confectioners’ Materials Co [1921] 3 KB 387

Correspondence with Description

s13 SOGA and s11 CRA.

Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441

Quality

S14 SOGA and s 9 CRA – where goods are supplied in the course of a business, there is a
term that the goods supplied under the contract are of satisfactory quality.

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: s14(2A) SOGA and s 9(2) CRA.

The quality of goods includes their state and condition, and the following five factors are
listed as being aspects of quality:

(a) fitness for all purposes for which goods of the kind in question are commonly
supplied
(b) appearance and finish
(c) freedom from minor defects:
 Millars of Falkirk v Turpie 1976 SLT (Notes) 66
(d) safety
(e) durability

s14(2B) SOGA and s9(3) CRA.

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Note that these are illustrative and non-exhaustive: other factors may well be relevant.

 Douglas v Glenvarigill Co Ltd [2010] CSOH 14

 Lamarra v Capital Bank plc 2006 SLT 1053
 Bon Accord Granite v Buchan 2005 GWD 28-531
 Aberdeen Joinery Windows and Doors Limited v Salaam Aberdeen Sheriff Court, 16
October 2009 (scotcourts.gov.uk)
 Clegg v Olle Andersson t/a Nordic Marine [2003] EWCA Civ 320
 Bernstein v Pamson Motors (Golders Green) Ltd [1987] 2 All ER 220
 Thain v Anniesland Trade Centre, 1997 SLT (Sh Ct) 102

The implied term as to satisfactory quality does not extend to any matter making the quality
of the goods unsatisfactory which is (i) specifically drawn to the buyer’s attention before the
contract is made or (ii) where the buyer examines the goods before the contract is made,
which that examination ought to reveal: s14(2C) SOGA and s9(4) CRA.

See the important Inner House decision in *MacDonald v Pollock [2012] CSIH 12; 2012
S.L.T. 462, which is commented on in the following article - Ervine, “Clarifying the Sale of
Goods Act”
2012 SLT (News) 187.

Fitness for a Particular Purpose

Where the buyer expressly or by implication makes known to the seller (who is selling in the
course of a business) a particular purpose for which the goods are being bought the goods
must be reasonably fit for that purpose, whether or not that purpose is one for which such
goods are commonly supplied, EXCEPT where the circumstances show that the buyer does
not rely, or that it is unreasonable for him to rely, on the skill or judgement of the seller:
S14(3) SOGA and s10 CRA.

 Grant v Australian Knitting Mills Ltd [1936] AC 85

 Balmoral Group Ltd v Borealis (UK) Ltd [2006] EWHC 1900 Comm (NB This judgment
runs to 579 paragraphs in length – the key discussion of s14 of the Act is at paras 140-
152)
 Jewson Ltd v Boyhan [2003] EWCA Civ 1030

Fitness for purpose is assessed by considering whether a reasonable person in the position
of the buyer would consider the goods fit for purpose - Fluor Ltd v Shanghai Zhenhua Heavy
Industries Ltd [2016] EWHC 2062.

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Correspondence with Sample

In the case of a contract for sale by sample the goods must correspond with the sample and
the goods must be free from any defect that makes their quality unsatisfactory that would not
be apparent on a reasonable examination of the sample: s15 SOGA and s 13 CRA. Note
s13(2)(a) that excludes any difference between the sample and the goods brought to the
consumer’s attention before the contract was made.

Correspondence with Model

There is no provision in SOGA for commercial sales re this. S14 CRA provides that where
goods have been sold with reference to a model seen or examined by the consumer before
the contract is entered into the goods must match the model except to the extent that any
differences between the model and the goods are brought to the consumer’s attention
before the contract is entered into.

Installation and Digital Content

These provisions apply only to consumer sales contracts:

S15 – goods will not conform to contract where installation of the goods forms part of the
contract; the goods are installed by the trader or under his responsibility and the goods are
installed incorrectly.

S16 – goods do not conform to contract if the goods are an item that includes digital content
and the digital content does not conform to the contract to supply it.

2. Exclusion of terms provided by law

For commercial sales s 20 Unfair Contract Terms Act 1977 provides that any attempt to
exclude or restrict liability under:
(i) s12 SOGA is void.
(ii) ss13 – 15 SOGA must be fair and reasonable to be effective.

For consumer sales s31 CRA provides that a term of a contract is not binding on the
consumer to the extent that it would exclude or restrict the trader’s liability under s9-17 and
28-29 CRA. This occurs where the term purports to restrict a right or remedy; or make a right

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or remedy or its enforcement subject to a restrictive or onerous condition; or allows a trader
to put a person at a disadvantage as a result of pursuing the right or remedy.

3. The Buyer’s Remedies – Commercial Sales Contracts

Section 15B SOGA: where the seller breaches any term of the contract the buyer shall be
entitled –
(a) to claim damages, and
(b) if the breach is material, to reject any goods delivered under the contract and treat it as
repudiated.

Wilson v AGCO Finance Ltd 2018 GWD 14-192

Section 53A SOGA – sets out that the measure of damages for the seller’s breach of
contract is the estimated loss directly and naturally resulting, in the ordinary course of
events, from the breach. Where the breach is the delivery of goods not of the required
quality and the buyer retains the goods, the loss is prima facie the difference between the
value of the goods at the time of delivery and the value they would have had if they had
been of the required quality.

The buyer can lose the right to reject the goods if he is deemed to have accepted the goods
in terms of s35 SOGA – discussed further in Part IV below.
Section 35A SOGA: gives the buyer a right of partial rejection of the goods unless the
contrary is set out or can be implied from the contract. The buyer therefore has 4 options
where there is a material breach of contract by the seller. He can:

1. accept all of the goods (and claim damages): s15B(1)(a) SOGA

2. reject all of the goods: s15B(1)(b) SOGA
3. reject only some of the disconforming goods (and claim damages): s35A and 15B(1)
(a) SOGA
4. reject all of the disconforming goods (and keep those that conform): s35A SOGA

Section 30 SOGA – sets out what the buyer can do where the wrong quantity of goods is
delivered.

Section 51 SOGA: entitles the buyer to claim damages for wrongful non-delivery and
confirms the measure of damages available to the buyer as the estimated loss directly and
naturally resulting, in the ordinary course of events, from the breach. Where there is an
available market for the goods the measure of damages is prima facie the difference
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between the contract price and market price of the goods at the time when the goods ought
to have been delivered.
Hughes v Pendragon Sabre (t/a Porsche Centre Bolton) [2016] 1 Lloyd’s Rep 311

Section 52 SOGA: entitles the buyer to seek specific implement

4. The Buyer’s Remedies – Consumer Sales Contracts

S19 CRA: remedies available-

1. short term right to reject (for breach of s9, 10, 11, 13, 14 or 16 CRA)
2. right to repair or replacement (for breach of s9, 10, 11, 13, 14, 15 or 16 CRA)
3. right to a price reduction or the final right to reject (for breach of s9, 10, 11, 13, 14, 15
or 16 CRA)
For breach of s17 the buyer has the right to reject

See also s28 CRA (above) regarding remedies available where the seller fails to deliver
within the agreed time.

When a consumer seeks to exercise a remedy other than the short term right to reject the
consumer benefits from s19(14) and (15) CRA which provide that if goods do not conform to
contract at any time within 6 months of delivery they will be taken not to have conformed to
the contract on the date of delivery except where it is established that the goods did conform
to the contract when they were delivered to the consumer or the application of this rule is
incompatible with the nature of the goods or with how they fail to conform to the contract.

O’Farrell v Moroney SA1046/8, 2008 Sheriff Court (RONALD O'FARRELL v. STEPHEN MORONEY
(scotcourts.gov.uk)

Short term right to reject – s20 and 22 CRA

Must be exercised within 30 days:

 after ownership of the goods has passed to the consumer OR where the sale is a
conditional sale agreement within 30 days of the consumer having possession of the
goods AND
 the goods have been delivered AND
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 where the contract requires the trader to install the goods or take other action to enable
the consumer to use them the trader has notified the consumer that the action has been
taken (s22(3))
 except where the goods are reasonably expected to perish after a shorter period – in that
case the time limit for exercising the short term right to reject is the end of that shorter
period.

This period cannot be shortened by agreement (s22(2)) but can be extended (s22(1)). Will
also be extended when consumer agrees to repair or replacement within the 30 day or
shorter period for rejection (s22(6) and (7)).

Effect of exercising right to reject – contract treated as at an end (s20(4)).

Exercising the right to reject – the consumer must indicate to the trader that he is rejecting
the goods and treating the contact as at an end – that indication must be something the
consumer does or says but must be clear (s20(5) and (6)).
From the time the right is exercised the trader has a duty to give the consumer a refund
which must be given without undue delay and within 14 days of the day the trader agrees the
consumer entitled to refund (s20(7)(a) and (15)). The consumer has a duty to make the
goods available for collection by the trader or if there is an agreement for the consumer to
return the goods to return them. The trader must bear any reasonable costs of returning the
goods except costs incurred where a consumer returns goods in person to the place where
the consumer took possession of them (s20(7)(b) and (8)).
The consumer should retain the property until it is returned to the seller – see Johnston v
R&J Leather (Scotland) Ltd [2019] SAC (Civ) 1. For further reading on this case, see ARC
Simpson, ‘The Better View? Johnston v R&J Leather (Scotland) Ltd (2020) 24 Edinburgh
Law Review 411.

Right to Repair or Replacement – s23 CRA

If requested to repair or replace the goods the trader must do so within a reasonable time
and without significant inconvenience to the consumer. The trader must bear the necessary
costs incurred in the repair or replacement (s23(2)). The consumer cannot require repair or
replacement where repair or replacement is either impossible or disproportionate compared
to the other remedy (s23(3) and (4)). A consumer who seeks repair cannot seek
replacement or exercise the short term right to reject without giving the trader a reasonable
time to repair (s23(6)). Similarly, a consumer who seeks replacement goods cannot seek
their repair or exercise the short term right to reject without giving the trader a reasonable
time to replace them (s23(7)).

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Right to Price Reduction or Final Right to Reject – s24 CRA

The right to a price reduction is the right to require the trader to reduce by an appropriate
amount the price of the goods or to receive a refund of anything already paid above the
reduced price. The amount of the reduction may, where appropriate, be the full price (s24(1)
and (2)).

The effect of the final right to reject and how to exercise this remedy – see the notes above
on the short term right to reject – same rules apply. NB no time limit for the final right to
reject.

A consumer with a right to a price reduction and the final right to reject may only exercise
one of these remedies and may only do so:

 after 1 repair or 1 replacement (see above) the goods do not conform to the contract;
 because repair and replacement are impossible; or
 the consumer has sought repair or replacement but the trader has failed to do so
within a reasonable time and without significant inconvenience to the consumer
(s24(5)).

If the consumer exercises the final right to reject any refund to the consumer may be
reduced by a deduction for use, to take account of the use the consumer has had of the
goods since they were delivered except where the consumer had the goods because the
trader failed to collect them (s24(8) and (9)). NO deduction can be made if the final right to
reject is exercised in the first 6 months (from ownership passing to the consumer or
possession in the case of a conditional sale; goods being delivered; and where required by
the contract goods installed or other action has to be taken before the consumer can use the
goods that has taken place and the consumer has been notified of that) UNLESS the goods
are a motor vehicle (s24(10)).

There is a partial right to reject in s21 CRA and rules regarding delivery of the wrong quantity
in s25 CRA.

s19(9) CRA makes clear that the remedies set out in CRA do not prevent the consumer from
seeking other remedies for breach of the sales contract, which may include damages or
specific performance. However a consumer cannot use a breach of a term that the CRA
provides is a term of the sales contract to hold the contract as at an end except in
accordance with the provisions on the right to reject set out in the CRA.

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5. Additional Remedies available to Consumers where the Trader carries out a
Prohibited Practice

In addition to the remedies available under the CRA (discussed above) a consumer buyer
may have additional rights where the trader has committed a prohibited practice in terms of
Part 4A of the Consumer Protection from Unfair Trading Regulations 2008 (SI 1277/2008).
These Regulations are not in the Avizandum Statute’s on Scots Commercial and Consumer
Law 2020-21 but can be accessed via Westlaw.

The Regulations deal with a number of unfair practices that a trader should not use.
However, our focus is limited to the provisions in the 2008 Regulations which may have an
effect on a contract for the sale of goods between a trader and a consumer. For further
details on the Regulations see para 1.13.1.5 of Macgregor et al, Commercial Law in
Scotland.

Part 4A was added to the Regulations in 2014. It applies to contracts entered into after 1
October 2014.

Part 4A may apply to sales contracts concluded between traders and consumers for the sale
of goods. A trader is a person acting for purposes relating to that person’s business. A
consumer is an individual acting for purposes that are wholly or mainly outside that
individual’s business. “Product” is defined widely and includes goods – reg 2.

A prohibited practice means a commercial practice which is (i) a misleading action or (ii)
aggressive – reg 27B. A commercial practice is any act, omission, course of conduct,
representation or commercial communication (including advertising and marketing) by a
trader which is directly connected with the promotion, sale or supply of a product to
consumers, whether occurring before, during or after a commercial transaction in relation to
the product – reg 2.

A commercial practice is a misleading action if

 it contains false information and is untruthful in relation to a number of matters including

the existence and nature of the product, the main characteristics of the product and
price; or
 the information or its overall presentation in any way deceives or is likely to deceive the
average consumer in relation to a number of matters including the existence and nature
of the product, the main characteristics of the product and price even if the information is
factually correct; and

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 it causes or is likely to cause the average consumer to make a transactional decision he
would not have taken otherwise.
or

 the commercial practice concerns any marketing of a product which creates confusion
with any products, trademarks, trade names or other distinguishing marks of a
competitor; or
 concerns a failure by a trader to comply with a commitment contained in a code of
conduct which the trader has undertaken to comply with; and
 it causes or is likely to cause the average consumer to make a transactional decision he
would not have taken otherwise – reg 5.

A commercial practice is aggressive if, in its factual context, taking account of all its features
and circumstances it significantly impairs or is likely to significantly impair the average
consumer’s freedom of choice or conduct in relation to the product through the use of
harassment, coercion or undue influence and it causes or is likely to cause the average
consumer to make a transactional decision he would not have taken otherwise. In
determining whether the commercial practice is aggressive account is taken of a number of
factors including its timing, location, nature or persistence; the use of threatening or abusive
language or behaviour; and any threat to take legal action which cannot legally be taken –
reg 7.

An average consumer is taken to be reasonably well informed, reasonably observant and

circumspect – reg 2 (1) and (2). However where there is a clearly identifiable group of
consumers which is particularly vulnerable to the commercial practice or underlying product
because of their mental or physical infirmity, age or credulity in a way in which the trader
could reasonably be expected to foresee and where the commercial practice is likely to
materially distort the economic behaviour only of that group an average consumer is an
average member of that group – reg 2(5).

Where a prohibited practice takes place which is a significant factor in the consumer’s
decision to enter into the contract the consumer may seek redress – reg 27A. Redress takes
a number of forms:
1. A right to unwind the contract – reg 27E
2. A right to a discount – reg 27I
3. A right to damages – reg 27J

To exercise the right to unwind the consumer must indicate to the trader that he rejects the
goods. This can be done by something the consumer says or does must it must be clear –
reg 27E(2). This indication must be given within 90 days of the later of (i) the day on which
the consumer enters into the contract or (ii) the goods being delivered; and at a time when
the goods are still capable of being rejected – reg 27E(1), (3)-(4). Goods are capable of
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being rejected if they have not been fully consumed – reg 27E(8) and (9). The effect of
exercising the right to unwind is that

 the contract comes to an end so that the consumer and the trader are released from
their obligations;
 the trader must give the consumer a refund; and
 the consumer must make the goods available for collection by the trader – reg 27F.

The right to a discount can be exercised where the right to unwind has not been exercised.
Payment under the contract is reduced as follows:

 where the prohibited practice is more than minor – 25%

 where the prohibited practice is significant – 50%
 where the prohibited practice is serious – 75%
 where the prohibited practice is very serious – 100% - reg 27I(4).

The seriousness of the prohibited practice is assessed by reference to:

 the behaviour of the person who engaged in the practice;

 the impact of the practice on the consumer; and
 the time that has elapsed since the prohibited practice took place.

However, where the following conditions are fulfilled the percentages noted above do not
apply:

 the amount payable exceeds £5,000

 the market price of the product at the time the consumer entered into the contract is
lower than the amount payable for it under the contract and
 there is clear evidence of the difference between the market price of the product and
the amount payable for it under the contract.

In that case the percentage reduction is the percentage difference between the market price
for the product at the time the consumer entered the contract and the amount payable under
the contract – reg 27I(6) and (7).

If the consumer has already made the payment he is entitled to receive back the relevant
percentage of the payment – reg 27I(2).

The consumer has the right to damages if the consumer has incurred financial loss which he
would not have incurred if the prohibited practice had not taken place; or has suffered alarm,
distress or physical inconvenience or discomfort which he would not have suffered if the
prohibited practice had not taken place – reg 27J(1). The right to damages for financial loss
does not include damages for the difference between the market price and the price payable
under the contract – reg 27J(3) – dealt with by way of discount (above). Damages are not
payable if the trader can prove that the prohibited practice occurred due to:
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  a mistake
 reliance on information supplied to the trader by another person
 the act or default of a person other than the trader
 an accident or
 another cause beyond the trader’s control

and that the trader took all reasonable precautions and exercised all due diligence to avoid
the occurrence of the prohibited practice – reg 27J(5).

A consumer wishing to exercise these rights of redress may bring court action to enforce the
right in the sheriff court or the Court of Session – reg 27K

IV. THE BUYER’S DUTIES AND THE SELLER’S REMEDIES

1. The Buyer’s Duties

(It is interesting to note that the duties of the seller occupy 200 pages of Atiyah et al,
whereas the duties of the buyer can be adequately discussed in 6 pages!)

Section 27 SOGA (applicable to both commercial and consumer contracts): the corollary of
the seller’s duty to deliver is the buyer’s duty to accept the goods and pay for them.

Section 28 SOGA (applicable to both commercial and consumer contracts) confirms that
payment and delivery are concurrent conditions.

Section 10 SOGA (applicable to both commercial and consumer contracts): time not of the
essence as regards time of payment “unless a different intention appears from the terms of
the contract”.

Section 35 SOGA governs “acceptance” of the goods by the buyer. This section ONLY
applies to commercial sales contracts.

“Acceptance” occurs when the buyer:

35(1)(a) intimates to the seller that he has accepted them, or

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 (b) when the goods have been delivered to him and he does any act in relation to
them which is inconsistent with the ownership of the seller.
(4) The buyer is also deemed to have accepted the goods when after the lapse of a
reasonable time he retains them without intimating to the seller that he has rejected
them.

*Douglas v Glenvarigill Co Ltd [2010] CSOH 14

However by virtue of section 35(2) when goods are delivered to a buyer who has not
previously examined them the buyer is not deemed to have accepted the goods until he has
had a reasonable period for examining them to ascertain that they are in conformity with the
contract or, if it is a contract for sale by sample, in accordance with the sample.

Section 35(6): the buyer is not deemed to have accepted the goods merely because he asks
for or agrees to their repair by or under an arrangement with the seller.

*J&H Ritchie v Lloyd Ltd [2007] UKHL 9

For further reading on this case see:

 Kelvin Low, “Repair, rejection and rescission: an uneasy resolution”, (2007) LQR
536
 Kelry Loi: “Sale of goods in Scotland – repairing defects in the law: J&H Ritchie v
Lloyd Ltd”, 2007 JBL 807

2. The Seller’s remedies

“The seller’s remedies for breach by the buyer… fall broadly into two groups: those
which enable the seller, if he wishes, to disengage from the transaction, and those
which assume continuance of the contract.” (Goode)

Section 49: entitles the seller to raise an action for the price

Section 50: the seller may claim damages for non-acceptance. The measure of damages is
the estimated loss directly and naturally resulting in the ordinary course of events from the
buyer’s breach. Where there is an available market in the goods the measure of damages is
prima facie the difference between the contract price and the market price at the time the
goods ought to have been accepted.
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Section 37: if the buyer does not take delivery of the goods within a reasonable time after
being requested by the seller to take delivery he is liable to the seller for any loss occasioned
by his refusal to take delivery and also for a reasonable charge for the care and custody of
the goods.

An unpaid seller has additional remedies, which can be taken against the goods. These
remedies are a right of retention or lien (s39 and 41) (note that the right of lien can be lost -
s43); stoppage in transit when the buyer is insolvent (s44); and a right of resale (s48).

V. ECOMMERCE
See Chapter 2 of Macgregor et al Commercial Law in Scotland.
When sellers wish to trade online, they must take account of additional legislation, notably
The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations
2013 the “2013 Regulations” (mentioned above) and Electronic Commerce (EC Directive)
Regulations 2002 (SI 2002/2013) (“the EC Regulations”). Despite Brexit, EU-derived
domestic legislation, as it has effect in domestic law prior to 31 December 2019, continues to
have effect even following the end of the Brexit Implementation Period under European
Union (Withdrawal) Act 2018 s2. This means that the EC Regulations still apply
notwithstanding Brexit.

The EC REGULATIONS regulate providers of “information society services” – broad

definition – and covers “any service normally provided for remuneration, at a distance, by
means of electronic equipment for the processing (including digital compression) and
storage of data, and at the individual request of a recipient of a service” – see regulation 2.

The EC Regulations apply to BOTH commercial contracts and consumer contracts.

The EC regulations require sellers to provide certain information to buyers, and to stipulate
how the electronic contract can be concluded.

The necessary information specified in regulation 6 is:

1. the name of the trader;

2. the geographic address at which the trader is established;
3. contact details of the trader, including email address, which make it possible to
“contact him rapidly and communicate with him in a direct and effective manner”;

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 4. details of any trade register in which the trader is registered and means of identifying
it in that register;
5. details of the relevant supervisory authority where the trader is subject to
authorisation;
6. where the trader exercises a regulated profession, details must be provided
informing the customer of any professional body with which the trader is registered,
including jurisdiction, and reference to the professional rules applicable in that
jurisdiction; and
7. where the trader is VAT registered, its identification number must be stated.

In addition, pricing information must be stated clearly and unambiguously and must state
whether the price includes taxes and delivery costs.

Regulation 9 deals with the steps to be taken to conclude the online contract. It applies to (i)
consumer contracts; and (ii) commercial contracts unless the parties agree otherwise.
Traders are obliged to inform the customer “in a clear and unambiguous manner” of the
different technical steps to be followed to conclude the contract.

Other related obligations under regulation 9 include informing the buyer:

1. whether or not the concluded contract will be filed by the trader and whether it will be
accessible (reg 9(1(b));
2. how any input errors can be identified and corrected prior to the placing of the order
(reg 9(1)(c));
3. the languages offered for the conclusion of the contract (reg 9(1)(d));
4. details of any codes of conduct to which the trader subscribes, together with details
of how to consult those codes; (reg 9(2)) and
5. where the trader provides terms and conditions applicable to the contract to the
buyer, the trader must make them available to the buyer in a way that allows the
buyer to store and reproduce them (reg 9(3)).

The 2013 Regulations apply ONLY to consumer contracts. Certain types of contract are
excluded (see discussion at I above). A distance contract is defined (reg 5) as a contract
concluded between a trader and a consumer under an organised distance sales scheme
without the simultaneous physical presence of the trader and the consumer, with the
exclusive use of one or more means of distance communication up to and including the time
at which the contract is concluded.
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The 2013 Regulations impose information obligations on the trader and provide a right of
cancellation for the consumer where a distance contract is concluded. The information
requirements are different for distance contracts and on-premises contracts (discussed at I
above).

1. The Information Requirements

Reg 13 provides that before a consumer is bound by a distance contract the trader must
provide information listed in Schedule 2 in a clear and comprehensible manner, and in a way
appropriate to the means of distance communication used. The trader must also give or
make available to the consumer a cancellation form (which is set out in part B of Schedule
3). Schedule 2 requires a number of pieces of information to be given to the consumer
including:

 The main characteristics of the goods

 The identity of the trader

 The trader’s address and, where available, the trader’s telephone and fax numbers
and email address

 The total price of the goods including taxes

 All additional delivery charges and any other costs

 The arrangements for payment, delivery, performance and the time by which the
trader undertakes to deliver the goods

 The trader’s complaint handling policy

 The conditions, time limit and procedures for exercising a right to cancel and, where
applicable, that the consumer will have to pay the cost of returning goods where the
contract is cancelled

 The existence and conditions of after-sales customer assistance, after sales services
and commercial guarantees

 The existence of relevant codes of conduct.

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Reg 14 provides that where the distance contract is concluded by electronic means the
trader must make the consumer aware in a clear and prominent manner of certain items of
information set out in Schedule 2 (such as characteristics of the goods and price). This must
be done directly before the consumer places the order. If the trader fails to do so he will be
in breach of contract (reg 18). The trader must also ensure that the consumer when placing
the order explicitly acknowledges that the order implies an obligation to pay. If the trader fails
to do so the consumer is not bound by the contract or order (reg 14(5)).

In terms of reg 16 the trader must give the consumer confirmation of the contract on a
durable medium. This confirmation must include all of the information set out in Schedule 2
unless the trader has already provided that information to the consumer on a durable
medium prior to the conclusion of the distance contract. The confirmation must be provided
within a reasonable time after conclusion of the contract but in any event no later than the
time of delivery of the goods supplied under the contract. If the trader fails to do so he will be
in breach of contract (reg 18).

2. The Right to Cancel

The right to cancel allows the consumer to cancel the contract without the need to give a
reason within a set period of time. The right to cancel does not depend on the trader’s
breach of contract.

The right to cancel does not apply to certain contracts for the supply of goods such as
where:

 the price of the goods is dependant on fluctuations in the financial market which
cannot be controlled by the trader and which may occur within the cancellation
period

 the goods are made to the consumer’s specifications or are personalised

 the goods are liable to deteriorate or expire rapidly (see reg 28)

The right to cancel is lost where goods that are sealed for health protection or hygiene
purposes are provided to the consumer and become unsealed after delivery; where sealed
audio or video recordings or computer software is supplied and becomes unsealed after
delivery; or where the goods supplied become inseparably mixed with other items after
delivery (reg 28).

The cancellation period – regs 29-31.

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Exercising the right to cancel - reg 32.

Effect of cancellation – reg 33 - 35.

Interaction Between the EC and 2013 Regulations

While there is some overlap in terms of the information to be provided under both sets of
regulations there are differences. As such traders cannot assume that compliance with one
set of regulations will result in compliance with the other. Remember also the different scope
of the regulations – the EC Regulations apply to both commercial and consumer contracts
whereas the 2013 Regulations only apply to consumer contracts.

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