Commercial Law Module Handbook 23-24 (22 Sept 23)

COMMERICAL
LAW
2023-2024
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TABLE OF CONTENTS
Overview......................................................................................................................................................................8
Assessible Learning Outcomes.................................................................................................................................8
Additional Learning Outcomes.................................................................................................................................8
Outline Content....................................................................................................................................................... 8
sectioni 1: An Introduction to Commercial law..........................................................................................................10
What is Commercial Law?......................................................................................................................................10
Domestic and Transnational Commercial Law.......................................................................................................11
Great Debates in Commercial Law: Interventionist v. Non-Interventionist Approaches........................................11
Section 2: an introduction to the Sale of Goods Act 1979..........................................................................................13
SGA 1979: Background...........................................................................................................................................13
The interpretation of commercial contracts by the Courts....................................................................................14
Good faith in commercial contracts.......................................................................................................................17
Section 3: The scope of the SGA 1979........................................................................................................................21
SGA 1979: Scope....................................................................................................................................................21
‘Transfer / Agreement to Transfer’ Property.........................................................................................................21
Goods.....................................................................................................................................................................22
Does computer software fall within the definition of ‘GooDs’?.............................................................................22
Contracts v. Contracts for Work and Materials......................................................................................................23
Money Consideration.............................................................................................................................................24
Section 4: the structure of the SGA 1979...................................................................................................................27
Part II: Formation of the Contract..........................................................................................................................27
Part III: Effects of the Contract...............................................................................................................................27
Part IV: Performance of the Contract.....................................................................................................................28
Parts V & VI: Actions for Breach of Contract..........................................................................................................28
Part VII: Supplementary.........................................................................................................................................29
Section 5: an introduction to consumer law & policy................................................................................................30
Background............................................................................................................................................................34
Aims of the CRA 2015.............................................................................................................................................34
Definition of a consumer........................................................................................................................................35
Implied Terms Prior to CRA 2015...........................................................................................................................36
Computer software................................................................................................................................................37
Consolidation in CRA 2015.....................................................................................................................................37
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Further Reading..................................................................................................................................................... 38
SEMINAR ONE: The Scope of the Sale of Goods Act 1979 and the Consumer Rights Act 2015..................................39
BACKGROUND (link to overall module and other topics).......................................................................................39
PREPARATION (reading, research tasks etc.).........................................................................................................39
SCHEDULE OF SEMINAR ACTIVITIES.......................................................................................................................39
EXERCISES (please come prepared to discuss the following issues).......................................................................40
CONSOLIDATION (after the seminar).....................................................................................................................41
Section 7: Obligations Under Sale of Goods Contracts - Sales to Non-Consumers.....................................................42
Express Terms........................................................................................................................................................42
Delivery & Payment...............................................................................................................................................42
Implied terms.........................................................................................................................................................43
Types of Terms Implied by the Courts....................................................................................................................43
Terms Implied by Statute.......................................................................................................................................43
Further Reading..................................................................................................................................................... 48
Section 8: Obligations Under Contracts to Consumers..............................................................................................50
CRA 2015, Part 1, Chapter 2, Supply of goods to consumers.................................................................................50
Methodology......................................................................................................................................................... 51
CRA 2015, Part 1, Chapter 4, Provision of Services to Consumers.........................................................................51
Section 9: Remedies of the Seller...............................................................................................................................53
Personal Remedies of the Seller.............................................................................................................................53
Real Remedies of the Seller...................................................................................................................................54
Section 10: Remedies of Non-Consumer Buyers........................................................................................................56
Specific Performance.............................................................................................................................................56
Rejection of Goods.................................................................................................................................................56
Doctrine of Acceptance..........................................................................................................................................57
Damages................................................................................................................................................................ 59
Section 11: Remedies of Consumer Buyers................................................................................................................61
Consumer Rights Act 2015.....................................................................................................................................61
Further Reading..................................................................................................................................................... 62
Section 12: Exclusion and Limitation Clauses.............................................................................................................63
What is an Exclusion Clause?.................................................................................................................................63
The Benefits of Exclusion / Limitation Clauses?.....................................................................................................63
Potential Problems with Exclusion / Limitation Clauses?.......................................................................................63
Regulation of Exclusion and Limitation Clauses.....................................................................................................63
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The Clause Must be Part of the Contract (“Incorporated” into the Contract)........................................................64
Construction.......................................................................................................................................................... 65
Legislative Controls: CRA 2015 AND UCTA 1977....................................................................................................65
Further Reading..................................................................................................................................................... 71
SEMINAR TWO: Obligations Under Sale of Goods Contracts.....................................................................................72
EXERCISES (please come prepared to discuss the following issues).......................................................................73
Section 13: Goods No Longer in Existence at Date of Contract..................................................................................75
the Position at Common Law: the doctrine of common mistake...........................................................................75
s.6 SGA and A Misunderstanding of Couturier v. Hastie (1856) 5 HLC 673.............................................................75
Specific and unascertained goods..........................................................................................................................75
Meaning of “Perished”?.........................................................................................................................................76
Further Reading..................................................................................................................................................... 77
SECTION 14: Post Contractual Loss of Goods and Other Forms of Subsequent Impossibility....................................77
The position at common law: the doctrine of frustration......................................................................................77
S.7, SGA 1979.........................................................................................................................................................78
Further reading......................................................................................................................................................79
SEMINAR THREE: Remedies and Restricting Liability.................................................................................................80
DISCUSSION POINTS (please come prepared to discuss the following issues).......................................................81
Section 15: Passing of Property..................................................................................................................................85
What is meant by property?..................................................................................................................................85
The Significance of the Passing of Property in Goods............................................................................................85
When does Property Pass from Seller to Buyer?....................................................................................................85
Contracts for the Sale of Specific Goods................................................................................................................86
Contracts on a ‘sale or return basis’.......................................................................................................................87
Contracts for the sale of Unascertained Goods......................................................................................................88
Ascertainment by exhaustion................................................................................................................................89
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Evaluation of s.16 SGA 1979..................................................................................................................................91
The Sale of Goods (Amendment) Act 1995............................................................................................................92
Passing of Property in Consumer Contracts...........................................................................................................93
Further Reading..................................................................................................................................................... 96
SEMINAR FOUR: Property and Risk............................................................................................................................97
DISCUSSION POINTS (please come prepared to discuss the following issues).......................................................98
CONSOLIDATION (after the seminar)...................................................................................................................100
Section 16 Non-Owners and the Principle of Nemo Dat Quod Non Habet...............................................................102
Principle of Nemo Dat Quod Non Habet..............................................................................................................102
Incoherent Exceptions?........................................................................................................................................103
Two Innocent Parties?.........................................................................................................................................103
Reform?............................................................................................................................................................... 104
Exceptions to the Principle of Nemo Dat Quod Non Habet..................................................................................105
Exception One: Consent.......................................................................................................................................105
Exception Two: Authority/Agency........................................................................................................................105
Actual authority................................................................................................................................................... 106
Ratification...........................................................................................................................................................106
Apparent Authority..............................................................................................................................................106
Exception Three: Special Powers of Sale..............................................................................................................107
Exception Four: Estoppel.....................................................................................................................................107
Estoppel by representation..................................................................................................................................108
Estoppel by Negligence?......................................................................................................................................109
Exception Five: Factors Act 1889, s.2(1)...............................................................................................................111
s2(1) ‘Mercantile Agents’.....................................................................................................................................111
s2(1) ‘Consent’.....................................................................................................................................................112
S2(1) “Ordinary course of business”:...................................................................................................................112
S2(1) “Other disposition”:....................................................................................................................................112
Exception Six: Sale of Goods Act 1979, s.23.........................................................................................................113
Exception Seven: Factors Act 1889, s.8 (Seller in Possession).............................................................................113
S8: ‘IN POSSESSION’.............................................................................................................................................114
s.8 “Delivery or transfer”.....................................................................................................................................115
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S.8: “Sale, pledge or other disposition”................................................................................................................115
Exception Eight: Factors Act 1889, s.9 (Buyer in Possession)...............................................................................116
S9: “A Person who has “bought or agreed to buy goods”....................................................................................117
S9: Possession and Consent.................................................................................................................................118
s.9 “Delivery or Transfer of the Goods”...............................................................................................................118
S9: “Sale, Pledge or Other Disposition”................................................................................................................118
S:9 Good faith...................................................................................................................................................... 119
Effect of s.9.......................................................................................................................................................... 119
Effect of s.9 where the Seller is not the Owner....................................................................................................119
Exception Nine: Hire Purchase Act 1964, Part III.................................................................................................121
Further Reading...................................................................................................................................................122
SEMINAR FIVE: Exceptions to the Principle of nemo dat quod non habet, including Agency...................................123
BACKGROUND (link to overall module and other topics).....................................................................................123
PREPARATION (reading, research tasks etc.).......................................................................................................123
SCHEDULE OF SEMINAR ACTIVITIES.....................................................................................................................124
DISCUSSION POINTS (please come prepared to discuss the following issues).....................................................124
CONSOLIDATION (after the seminar)...................................................................................................................126
APPENDIX 1: THE SALE OF GOODS ACT 1979...........................................................................................................128
PART I..................................................................................................................................................................128
Contracts to Which Act Applies............................................................................................................................128
PART II.................................................................................................................................................................128
Formation of the Contract...................................................................................................................................128
PART III................................................................................................................................................................135
Effects of the Contract.........................................................................................................................................135
PART IV............................................................................................................................................................... 141
Performance of the Contract...............................................................................................................................142
PART V................................................................................................................................................................ 147
Rights of Unpaid Seller Against the Goods...........................................................................................................147
PART VI............................................................................................................................................................... 151
Actions for Breach of the Contract.......................................................................................................................151
PART VII.............................................................................................................................................................. 154
Supplementary.....................................................................................................................................................154
APPENDIX 2: THE CONSUMER RIGHTS ACT 2015.....................................................................................................159
CHAPTER 1............................................................................................................................................................... 159
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1 Where Part 1 applies...................................................................................................................................159
2 Key definitions.............................................................................................................................................160
CHAPTER 2............................................................................................................................................................... 160
3 Contracts covered by this Chapter..............................................................................................................160
4 Ownership of goods....................................................................................................................................161
5 Sales contracts............................................................................................................................................161
6 Contracts for the hire of goods...................................................................................................................162
7 Hire-purchase agreements..........................................................................................................................162
8 Contracts for transfer of goods...................................................................................................................162
9 Goods to be of satisfactory quality..............................................................................................................163
10 Goods to be fit for particular purpose.........................................................................................................164
11 Goods to be as described............................................................................................................................164
12 Other pre-contract information included in contract..................................................................................165
13 Goods to match a sample............................................................................................................................165
14 Goods to match a model seen or examined................................................................................................165
15 Installation as part of conformity of the goods with the contract...............................................................166
16 Goods not conforming to contract if digital content does not conform......................................................166
17 Trader to have right to supply the goods etc..............................................................................................166
18 No other requirement to treat term about quality or fitness as included...................................................167
19 Consumer's rights to enforce terms about goods.......................................................................................168
20 Right to reject..............................................................................................................................................169
21 Partial rejection of goods............................................................................................................................171
22 Time limit for short-term right to reject......................................................................................................172
23 Right to repair or replacement....................................................................................................................173
24 Right to price reduction or final right to reject............................................................................................173
25 Delivery of wrong quantity..........................................................................................................................175
26 Instalment deliveries...................................................................................................................................176
27 Consignation, or payment into court, in Scotland.......................................................................................176
28 Delivery of goods........................................................................................................................................177
29 Passing of risk..............................................................................................................................................178
30 Goods under guarantee..............................................................................................................................178
31 Liability that cannot be excluded or restricted............................................................................................179
32 [F1Contracts applying law of a country other than the UK]..........................................................................180
CHAPTER 3............................................................................................................................................................... 181
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34 Digital content to be of satisfactory quality................................................................................................182
35 Digital content to be fit for particular purpose............................................................................................183
36 Digital content to be as described...............................................................................................................183
37 Other pre-contract information included in contract..................................................................................184
38 No other requirement to treat term about quality or fitness as included...................................................184
39 Supply by transmission and facilities for continued transmission...............................................................184
40 Quality, fitness and description of content supplied subject to modifications............................................185
41 Trader's right to supply digital content.......................................................................................................186
42 Consumer's rights to enforce terms about digital content..........................................................................186
43 Right to repair or replacement....................................................................................................................187
44 Right to price reduction...............................................................................................................................188
45 Right to a refund.........................................................................................................................................188
46 Remedy for damage to device or to other digital content..........................................................................188
CHAPTER 4............................................................................................................................................................... 190
49 Service to be performed with reasonable care and skill.............................................................................191
50 Information about the trader or service to be binding................................................................................191
51 Reasonable price to be paid for a service....................................................................................................191
52 Service to be performed within a reasonable time.....................................................................................192
53 Relation to other law on contract terms.....................................................................................................192
54 Consumer's rights to enforce terms about services....................................................................................192
55 Right to repeat performance.......................................................................................................................193
56 Right to price reduction...............................................................................................................................194
CHAPTER 5............................................................................................................................................................... 195
58 Powers of the court.....................................................................................................................................195
59 Interpretation..............................................................................................................................................196
60 Changes to other legislation........................................................................................................................196
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OVERVIEW
Welcome to the Commercial Law module!

Our module aims to introduce module members to some of the fundamental principles of
Commercial Law through a critical examination of, and engagement with, relevant case law,
legislation, business practice, academic work, historical influences, economic drivers and
public policy;
Our module focuses primarily on the study of the law surrounding contracts for the sale of
goods although module members will also be introduced to the concept and law of agency;
The module builds on module members' knowledge of Contract Law and it aims to equip
students with a critical appreciation of some of the central pillars of Commercial Law
Our focus is on the law relevant to commercial transactions in England and Wales,
although comparative and transnational perspectives will be drawn upon from time to time.
ASSESSIBLE LEARNING OUTCOMES
Students who pass this module will be able to:
 demonstrate a critical knowledge and understanding of the operation of sale of goods

contracts and the law relevant to sale of goods transactions;
 demonstrate a knowledge and understanding of the concept and law of agency; and
 apply precedents and statutory provisions to fact-based scenarios so as to reach clear and
supportable conclusions.
ADDITIONAL LEARNING OUTCOMES
Students will be provided with opportunities:
 to develop their oral communication skills and the skill of legal writing;
 to develop their analytical abilities;
 to enhance their use of technical and complex material;
 to improve their engagement in group interaction by working in groups.
OUTLINE CONTENT
Topics covered on this module will include:

 The nature and context of Commercial Law;
 The nature of the contract for the sale of goods and the ambit of the Sale of Goods Act
1979;
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 The impact of the Consumer Rights Act 2015;
 Obligations and rights of sellers and buyers;
 Exclusion and limitation clauses;
 Passing of property and risk in goods;
 Sales by non-owners (nemo dat quod non habet);
 Delivery obligations;
 Remedies of buyers and sellers;
 The concept and nature of agency.
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SECTIONI 1: AN INTRODUCTION TO COMMERCIAL LAW
WHAT IS COMMERCIAL LAW?
“…the totality of the law’s response to the needs and practices of the mercantile
community”. (E McKendrick, Goode and McKendrick on Commercial Law (6th edition,
LexisNexis, 2020).
The Dynamic Nature of Commercial Law…

“One of the most powerful influences on human activity is the driving force of trade…wars may
break out, large areas of a country may be devastated by natural disaster, but somehow traders
find ways of establishing and continuing business relationships…[T]he ingenuity of the trader
in constantly developing new sales techniques, new instruments to accommodate more
efficiently the requirements of the commercial community, new methods of surmounting
hurdles thrown up by the law or by the actions of governments.” (E McKendrick, Goode and
McKendrick on Commercial Law (6th edition, LexisNexis, 2020) p.3).
Responses to new technology…

Directive (EU) 2019/770 of the European Parliament and of the Council of 20 May 2019 on
certain aspects concerning contracts for the supply of digital content and digital services (OJ L
136, 22.5.2019, p. 1–27):
“The purpose of this Directive is to contribute to the proper functioning of the internal market
while providing for a high level of consumer protection, by laying down common rules on
certain requirements concerning contracts between traders and consumers for the supply of
digital content or digital services...” (Article 1).
[Cf. also Department for Digital, Culture, Media and Sport Department for Business, Energy and
Industrial Strategy, A new pro-competition regime for digital markets (2021) and the
Government response to the consultation on a new pro-competition regime for digital markets
(2022). See also the Digital Markets, Competition and Consumers Bill]
The creative and entrepreneurial role of lawyers…

“The practicing lawyers are the main creative element, reacting to the needs of their client; the
courts then respond to the devices which the lawyers develop approving (with or without
qualification) or disapproving. Importantly, common law courts have in the main approved –
instead of being too concerned with elaborate edifices or logical consistency, common law courts
have crafted doctrinal lines consistent with commercial needs in a largely pragmatic manner”.
(R. Cranston, ‘Doctrine and Practice in Commercial Law’ in K. Hawkins, The Human Face of
Law – Essays in Honour of Donald Harris (Clarendon Press, 1997) pp.218-219).
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DOMESTIC AND TRANSNATIONAL COMMERCIAL LAW
Commercial law may relate to purely domestic transactions or it may relate to cross-border
(transnational transactions).
Challenges for Transnational Commercial Law?

“Overseas sales give rise to special problems mainly because there is often a considerable lapse
of time between the despatch of the goods and their arrival at the agreed or contemplated
destination. During this period, the parties are exposed to three types of risk: financial,
physical and legal. So far as the financial risk is concerned, the seller will want to obtain
payment as early as possible and to retain some interest in the goods, at least by way of security,
until he has received, or been adequately assured of receiving, payment. On the other hand, the
buyer will not want to pay for goods, which he has not yet received, until he has acquired an
interest in the goods on which he can rely by way of security in the event of the seller's
insolvency before actual delivery of the goods. To a large extent these conflicting desires have
been reconciled by the law relating to documents of title to goods, to the passing of property in
goods in transit, and to the unpaid seller's rights against the goods.”
“The physical risks arise from the possibility that the goods may be lost or damaged, or may
deteriorate, in transit. The legal responsibility for such loss may lie on the buyer or on the seller
or on some third person, such as the carrier. As between buyer and seller, the allocation of this
responsibility depends partly on the rules relating to risk, and partly on the obligations
undertaken by the parties: for example as to the quality of the goods at the time of shipment, or
as to packing. What has here been called the legal risk arises mainly because of governmental
interference with the export or import of goods.” (M. Bridge, Benjamin's Sale of Goods, (11th
edn., Sweet and Maxwell, 2020) 18-001).
Litigate, Litigate, Litigate?

“There has been surprisingly little research on these issues, but such as there is suggests that the
law of contract is of much less importance to business people than lawyers would like to think.
In particular, where parties to a long-standing business relationship find themselves in a dispute,
the maintenance of their relationship is likely to be a much stronger influence over the way
they resolve their differences than are strict legal rights between the parties, as determined
by the law of contract.” (R. Stone & J. Devenney, The Modern Law of Contract (14th edn.,
Routledge, 2022) pp.22-23).
GREAT DEBATES IN COMMERCIAL LAW: INTERVENTIONIST V. NON-INTERVENTIONIST APPROACHES
“…respect for party autonomy. This can clearly be seen in the law of contract, with its central
doctrines of freedom and sanctity of contract and its refusal to question the adequacy of
consideration or to intervene in contracts on the basis of ‘fairness’. This non-interventionist
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approach is justified on the basis that it ‘facilitates the conduct of trade’ by promoting
certainty.” (R. Bradgate, Commercial Law (3rd edn., Butterworths, 2000) at p.6).
“…given that the European consumer marketplace is nowadays a densely regulated zone
(where transactional obligations are contractual only in a severely attenuated sense), the
relevant question is whether the regulatory purposes (whatever they might be) are likely to be
advanced by introducing particular network effects; or, if we were to be more critical, the
question would be whether some specified legitimate regulatory purposes would be assisted by
the introduction of networks.” (R. Brownsword, ‘Contract in a Networked World’ in L. Di
Matteo, K. Rowley, Q. Zhou & S. Saintier, Current Issues in Commercial Contracts:
Transatlantic Perspectives (Cambridge University Press, 2013) at p.118).
 Further Reading
E. Baskind, G. Osborne & L. Roach, Commercial Law (3rd edn., Oxford University Press, 2022)
Ch1;
D Fox, RJC Munday, B Soyer,, AM Tettenborn & PG Turner, Sealy and Hooley’s Commercial
Law: Text, Cases, and Materials (6th edn., Oxford University Press, 2020) Ch1.
TALKING POINT
Are there arguments for a more interventionist approach to Commercial Law?
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SECTION 2: AN INTRODUCTION TO THE SALE OF GOODS ACT 1979
 Our module focuses on the sale of goods;

 Central to the law relating to the sale of goods is the Sale of Goods Act 1979 (SGA
1979);
 The SGA 1979 can be traced back to the SGA 1893;
 The SGA 1893 sought to codify the law on sale of goods in the UK and, given the
different systems within the UK, that was a challenging agenda.
SGA 1979: BACKGROUND
“The Sale of Goods Bill, as originally drafted by Sir Mackenzie Chalmers in 1888, was intended
to apply only in the common law jurisdictions of England, Wales and Ireland, but in the course
of its passage through Parliament it was amended so as to extend its operation to Scotland. The
effect of this was that a common legislated code was superimposed on two fundamentally
different legal systems. The Act of 1893 did not attempt to sweep away all the basic conceptual
and procedural differences between the two systems: there was a generous duplication of
terminology; and some provisions were specifically made to apply only in one jurisdiction or the
other. In some instances, the Act was based on a rule of Scots law which had no counterpart in
English common law. But these are isolated provisions: the Act of 1893 is in no sense a
codification of the law of Scotland as it stood at that time.” (M. Bridge, Benjamin's Sale of
Goods (11th edn., Sweet and Maxwell, 2020) 1-001).
On interpreting the SGA 1893/1979:

“I think the proper course is in the first instance to examine the language of the statute and to ask
what is its natural meaning, uninfluenced by any considerations derived from the previous state
of the law, and not to start with inquiring how the law previously stood, and then, assuming that
it was probably intended to leave it unaltered, to see if the words of the enactment will bear an
interpretation in conformity with this view.” (Bank of England v Vagliano Bros [1891] A.C. 107
at 144 per Lord Hershell).
The international impact of SGA 1893/1979:

“The Act of 1893 has been adopted with little modification in many jurisdictions of the
Commonwealth of Nations (formerly called the British Commonwealth). In the United
States, the first of the two uniform codes governing sales, the Uniform Sales Act, was
substantially modelled upon the English legislation, so that decisions and commentaries relating
to it may be relevant and helpful in England. But this legislation has now been replaced in all
states except Louisiana by the Uniform Commercial Code, which is not derived from the English
Act and is in many respects fundamentally different from it.” (M. Bridge, Benjamin's Sale of
Goods (11th edn., Sweet and Maxwell, 2020) 1-001).
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“For various reasons, some of them historical, English law plays a leading role as the
governing law of international commodities sales. The great majority of reported cases
involve transactions and parties that have no physical connection at all with the United Kingdom.
The leading role played by English law and by the rules and by-laws of the Liverpool Cotton
Trading Association has been noted by Professor Bernstein in her study on cotton sales, though
cotton sales do not feature in the reported case law which instead is concentrated heavily on
grain and feedstuffs, with oil playing an increasing role in recent years. A quite typical example
of a transaction unconnected with England would be a sale, by an Argentinian seller to a Swiss
buyer, of soya bean meal in bulk to be loaded in a Gulf of Mexico port on CIF Antwerp terms
and paid for cash against documents in US dollars.” (M. Bridge, Uniformity and Diversity in the
Law of International Sales (2003) 15 Pace International Law Review 55 at 58).
The role of the common law

The SGA 1893 was replaced and consolidated by the SGA 1979. The SGA 1979 remains one of
the key pieces of legislation in the UK in respect of the sale of goods although it has been
amended on a number of occasions (including recently by the Consumer Rights Act 2015 – see
later in module). Yet, even in relation to the sale of goods between commercial parties, the SGA
1979 is not a complete code:
“The rules of the common law, including the law merchant, except in so far as they are
inconsistent with the provisions of legislation including this Act and the Consumer Rights Act
2015, 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.” (s.62(2), Sale of Goods Act 1979).
In particular, the SGA 1979 is built upon the law of contract:
“My Lords, since I believe that the basic principle of the English common law of contract,
including that part of it which is codified in the Sale of Goods Act 1893, is to give effect to the
common intention of the parties as to their mutual promises in the sense that I have just
described, I prefer to deal with each appeal by considering first the transaction between the buyer
and the seller in the light of common sense and good faith in business, before examining the
particular provisions of the code upon which the parties rely”. (Ashington Piggeries Ltd v
Christopher Hill Ltd [1972] A.C. 441 at 502 per Lord Halsbury L.C.).
THE INTERPRETATION OF COMMERCIAL CONTRACTS BY THE COURTS
Note the move from literal to contextual interpretation of contracts…
“No contracts are made in a vacuum: there is always a setting in which they have to be
placed. The nature of what is legitimate to have regard to is usually described as “the
surrounding circumstances” but this phrase is imprecise: it can be illustrated but hardly defined.
In a commercial contract it is certainly right that the Court should know the commercial purpose
15
of the contract and this in turn presupposes knowledge of the genesis of the transaction, the
background, the context, the market in which the parties are operating ” (Reardon Smith Line
Ltd v Hansen-Tangen [1976] 1 WLR 989 at 995 per Lord Wilberforce).
“(1) Interpretation is the ascertainment of the meaning which the document would convey to a
reasonable person having all the background knowledge which would reasonably have
been available to the parties in the situation in which they were at the time of the contract.
(2) The background was famously referred to by Lord Wilberforce as the “matrix of fact”, but
this phrase is, if anything, an understated description of what the background may include.
Subject to the requirement that it should have been reasonably available to the parties and to the
exception to be mentioned next, it includes absolutely anything which would have affected the
way in which the language of the document would have been understood by a reasonable man.”
(Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at
912 per Lord Hoffmann).
“The language used by the parties will often have more than one potential meaning. I would
accept the submission made on behalf of the appellants that the exercise of construction is
essentially one unitary exercise in which the court must consider the language used and ascertain
what a reasonable person, that is a person who has all the background knowledge which would
reasonably have been available to the parties in the situation in which they were at the time of the
contract, would have understood the parties to have meant. In doing so, the court must have
regard to all the relevant surrounding circumstances. If there are two possible constructions,
the court is entitled to prefer the construction which is consistent with business common
sense and to reject the other.” (Rainy Sky S. A. and others v Kookmin Bank [2011] UKSC 50 at
[21] per Lord Clarke).
What is the risk of relying too heavily on commercial common sense?

“First, the reliance placed in some cases on commercial common sense and surrounding
circumstances (eg in Chartbrook, paras 16-26) should not be invoked to undervalue the
importance of the language of the provision which is to be construed. The exercise of
interpreting a provision involves identifying what the parties meant through the eyes of a
reasonable reader, and, save perhaps in a very unusual case, that meaning is most obviously to be
gleaned from the language of the provision. Unlike commercial common sense and the
surrounding circumstances, the parties have control over the language they use in a
contract. And, again save perhaps in a very unusual case, the parties must have been specifically
focussing on the issue covered by the provision when agreeing the wording of that provision.”
(Arnold v Britton [2015] UKSC 36 at [17] per Lord Neuberger (with whom Lord Sumption and
Lord Hughes agreed)).
“It is not appropriate in this case to reformulate the guidance given in Rainy Sky and Arnold; the
legal profession has sufficient judicial statements of this nature. But it may assist if I explain
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briefly why I do not accept the proposition that Arnold involved a recalibration of the
approach summarised in Rainy Sky…Lord Clarke elegantly summarised the approach to
construction in Rainy Sky at para 21f. In Arnold all of the judgments confirmed the approach
in Rainy Sky (Lord Neuberger paras 13-14; Lord Hodge para 76; and Lord Carnwath para 108).
Interpretation is, as Lord Clarke stated in Rainy Sky (para 21), a unitary exercise; where there are
rival meanings, the court can give weight to the implications of rival constructions by reaching a
view as to which construction is more consistent with business common sense.” (Wood v Capita
Insurance Services Limited [2017] UKSC 24 at [9]-[11] per Lord Hodge (with whom Lord
Neuberger, Lord Mance, Lord Clarke and Lord Sumption agreed)).
“But, in striking a balance between the indications given by the language and the
implications of the competing constructions the court must consider the quality of drafting
of the clause (Rainy Sky para 26, citing Mance LJ in Gan Insurance Co Ltd v Tai Ping Insurance
Co Ltd (No 2) [2001] 2 All ER (Comm) 299 paras 13 and 16); and it must also be alive to the
possibility that one side may have agreed to something which with hindsight did not serve
his interest: Arnold (paras 20 and 77). Similarly, the court must not lose sight of the
possibility that a provision may be a negotiated compromise or that the negotiators were not
able to agree more precise terms.” (Wood v Capita Insurance Services Limited [2017] UKSC 24
at [9]-[11] per Lord Hodge (with whom Lord Neuberger, Lord Mance, Lord Clarke and Lord
Sumption agreed)).
See also
Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd [2023] UKSC 2
Facts: A landlord and tenant case where the landlord had to issue an annual certificate of the
service charge payable by the tenant. This certificate was stated to be conclusive "as to the
amount of the total cost and the sum payable by the tenant" unless there was a "manifest or
mathematical error or fraud”.Tenant felt the certificates were excessive but landlord argued they
were conclusive (subject to limited defences).
Held: Supreme Court noted that the landlord’s interpretation seemed to fit well with the
certification provisions. However, the Supreme Court (with Lord Briggs dissenting) felt such an
interpretation had some “uncommercial consequences”. Therefore, the SC interpretated the
clause as conclusive as to what had to be paid on certification (thereby assuring the landlord of a
prompt payment) BUT it did not stop the tenant subsequently challenging the amount paid.
In other words, it was a “pay now, argue later” clause.
Nord Naphtha Ltd v New Stream Trading AG [2021] EWCA Civ 1829
Facts: A case which involved a contract to supply diesel.
17
The contract was terminated following a force majeure event and the key issue was whether or
not the intended suppliers of the diesel were required to repay an advance payment.
This in turn raised an issue about the correct interpretation of Clause 14.5 of the contract which
provided that "...nothing herein shall impair the obligations by the Seller to repay to the Buyer
the amount of the advance payment or any Outstanding Advance Amount under this Contract in
the event that the delivery...is not made...due to Force Majeure Event".
The suppliers argued that this clause did not create a right of repayment (it merely preserved any
rights which might otherwise exist).
Held: The Court of Appeal disagreed and held that Clause 14.5 did create a right of repayment in
such circumstances. Interpreting the Clause in the light of the experience of the parties and
noting that the contract was sometimes “clumsily drafted”, the Court of Appeal held that the
words "...nothing herein shall impair…” were merely introductory and not intended to act as a
limitation. Moreover, the Court of Appeal was of the opinion that such a conclusion was
supported by business common sense, it not making business common sense for a buyer to not
have a right of repayment in such force majeure circumstances.
GOOD FAITH IN COMMERCIAL CONTRACTS
There is no overriding express doctrine of good faith in relation to the sale of goods in the
UK…
“British courts have energetically rejected this doctrine on several occasions treating it like a
contagious disease of alien origin, as 'inherently repugnant to the adversarial position of the
parties' and as 'unworkable in practice'.” (G. Teubner, ‘Legal Irritants: Good Faith in British Law
or How Unifying Law Ends Up in New Divergences’ (1998) 61 MLR 11).
“In many civil law systems, and perhaps in most legal systems outside the common law world,
the law of obligations recognises and enforces an overriding principle that in making and
carrying out contracts parties should act in good faith. This does not simply mean that they
should not deceive each other, a principle which any legal system must recognise; its effect is
perhaps most aptly conveyed by such metaphorical colloquialisms as ‘playing fair’,…’putting
one's cards face upwards on the table’.” (Interfoto Picture Library Ltd. v Stiletto Visual
Programmes Ltd. [1989] Q.B. 433 at 439 per Bingham LJ).
“English law has, characteristically, committed itself to no such overriding principle but
has developed piecemeal solutions in response to demonstrated problems of unfairness.
Many examples could be given. Thus equity has intervened to strike down unconscionable
bargains…The common law also has made its contribution, by holding that certain classes of
contract require the utmost good faith…and in many other ways.” (Interfoto Picture Library Ltd.
v Stiletto Visual Programmes Ltd. [1989] Q.B. 433 at 439 per Bingham LJ).
Should English Law recognise an overriding duty of ‘good faith’?
18
“I doubt that English law has reached the stage, however, where it is ready to recognise a
requirement of good faith as a duty implied by law, even as a default rule, into all
commercial contracts. Nevertheless, there seems to me to be no difficulty, following the
established methodology of English law for the implication of terms in fact, in implying such a
duty in any ordinary commercial contract based on the presumed intention of the parties.” (Yam
Seng Pte Ltd v. International Trade Corp Ltd [2013] EWHC 111 (QB) at [131] per Leggatt J.).
“Importantly for present purposes, the relevant background against which contracts are made
includes not only matters of fact known to the parties but also shared values and norms of
behaviour. Some of these are norms that command general social acceptance; others may be
specific to a particular trade or commercial activity; others…arising from features of the
particular contractual relationship. Many such norms are naturally taken for granted by the
parties when making any contract…” (Yam Seng Pte Ltd v. International Trade Corp Ltd [2013]
EWHC 111 (QB) at [131] per Leggatt J.).
“These cases, both appellate and first instance, all demonstrate in my judgment that there is
no general duty of good faith in all commercial contracts, but that such a duty could be
implied into some contracts, where it was in accordance with the presumed intention of the
parties. Whether any contract is relational is heavily dependent upon context, as well as the
terms. The circumstances of the relationship, defined by the terms of the agreement, set in its
commercial context, is what decides whether a contract is relational or not.” (Alan Bates and
Others v Post Office Limited (No. 3: Common Issues) [2019] EWHC 606 (QB) at [721] per
Fraser J).
“I consider that there is a specie of contracts, which are most usefully termed "relational
contracts", in which there is implied an obligation of good faith (which is also termed "fair
dealing" in some of the cases). This means that the parties must refrain from conduct which
in the relevant context would be regarded as commercially unacceptable by reasonable and
honest people. An implied duty of good faith does not mean solely that the parties must be
honest.” (Alan Bates and Others v Post Office Limited (No. 3: Common Issues) [2019] EWHC
606 (QB) at [711] per Fraser J).
(cf. Pakistan International Airline Corporation v Times Travel (UK) Ltd [2021] UKSC 40 in the
context of duress).
Link to legal certainty for business parties..?

See: MSC Mediterranean Shipping Co SA v Cottonex Anstalt [2016] EWCA Civ 789:
“The judge [at first instance, Leggatt J] drew support for his conclusion from what he described
as an increasing recognition in the common law world of the need for good faith in
contractual dealings. The recognition of a general duty of good faith would be a significant step
in the development of our law of contract with potentially far-reaching consequences and I do
not think it is necessary or desirable to resort to it in order to decide the outcome of the present
19
case. It is interesting to note that in the case to which the judge referred as providing support for
his view, Bhasin v Hrynew, 2014 SCC 71, [2014] 3 S.C.R.494, the Supreme Court of Canada
recognised that in Mid Essex Hospital Services NHS Trust v Compass Group UK and Ireland
[2013] EWCA Civ 200 this court had recently reiterated that English law does not recognise any
general duty of good faith in matters of contract…”
“There is in my view a real danger that if a general principle of good faith were established
it would be invoked as often to undermine as to support the terms in which the parties have
reached agreement. The danger is not dissimilar to that posed by too liberal an approach to
construction, against which the Supreme Court warned in Arnold v Britton [2015] UKSC 36,
[2015] AC 1619.” (MSC Mediterranean Shipping Co SA v Cottonex Anstalt [2016] EWCA Civ
789 at [45] per Moore-Bick LJ).
Note also traditionally strict approach in England and Wales (for example, Re Moore & Co
and Laudauer & Co [1921] 2 KB 519 (buyer able to reject goods where some packed in crates of
24 instead of 30 as required under contract)).
TALKING POINT
Should the law in England & Wales recognise a general duty of good faith in commercial
contracts?
20
SECTION 3: THE SCOPE OF THE SGA 1979
TALKING POINT
To what extent, if at all, are default rules useful in commercial law?
 SGA 1979 applies to contracts of sale of goods (therefore need to distinguish from, for
example, hire purchase transactions – see below).
 Until recently the SGA 1979 applied to commercial sales and consumer sales (cf. the
fundamental changes by the Consumer Rights Act 2015 – see later).
 The SGA 1979 can apply to both domestic sales and international sales (cf. R. Bradgate,
Commercial Law (3rd edn., Butterworths, 2000) at 766).
SGA 1979: SCOPE
“A contract of 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.” (SGA 1979,
s.2).
The general Law of Contract applies (offer, acceptance, consideration, intention to create legal
relations etc.) See: Norweb v. Dixon [1995] 3 All ER 952 (court held that a particular
relationship between a customer and an electricity company was not contractual in nature as the
latter was under a statutory duty to supply the electricity (provided certain requirements were
met)).
‘TRANSFER / AGREEMENT TO TRANSFER’ PROPERTY
“…̒property’ means the general property in goods, and not merely a special property” (s.61 SGA
1979);
Therefore neither contracts of hire nor (at least initially) contracts of hire-purchase are covered
by the SGA 1979.
Note also the controversial decision in PST Energy 7 Shipping LLC Product Shipping &
Trading SA v. OW Bunker Malta Ltd [2016] UKSC 23 (contract which envisaged consumption
of bunkers before buyer became owner of them held not to be a contract of sale of goods).
21
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”
(s.61, SGA 1979);
Therefore the SGA 1979 does not apply to contracts to sale land.
In Morgan v. Russell [1909] 1 KB 357 a contract to sale cinders laying on a particular piece of
land was held not to be a contract of sale of goods (cf. “things attached to or forming part of the
land which are agreed to be severed before sale or under the contract of sale”).
Application to human body parts (cf. Yearworth v. North Bristol NHS Trust [2009] EWCA Civ
37 – property in frozen sperm)?
DOES COMPUTER SOFTWARE FALL WITHIN THE DEFINITION OF ‘GOODS’?
St Albans City and DC v International Computers Ltd [1997]

“Suppose I buy an instruction manual on the maintenance and repair of a particular make of car.
The instructions are wrong in an important respect. Anybody who follows them is likely to cause
serious damage to the engine of his car. In my view the instructions are an integral part of the
manual. The manual including the instructions, whether in a book or a video cassette, would in
my opinion be “goods” within the meaning of the Sale of Goods Act, and the defective
instructions would result in a breach of the implied terms in section 14…”
“If this is correct, I can see no logical reason why it should not also be correct in relation to
a computer disc onto which a program designed and intended to instruct or enable a
computer to achieve particular functions has been encoded. If the disc is sold or hired by
the computer manufacturer, but the program is defective, in my opinion there would prima
facie be a breach of the terms as to quality and fitness for purpose implied by the Sale of
Goods Act or the Act of 1982.” (St Albans City and DC v International Computers Ltd [1997]
F.S.R. 251 at 265 per Sir Iain Glidewell).
Software Incubator Limited v Computer Associates UK Limited

Note: this was a case about the meaning of ‘goods’ under Council Directive 86/653/EEC
(‘Commercial Agents’), not the SGA 1979.
High Court
“The first point to note is that these observations [by the judge in St Albans City] were clearly
obiter. The second is that, whatever the perception may have been in 1996, there is no logic in
making the status of software as goods (or not) turn on the medium by which they were delivered
or installed, as noted above.” (Software Incubator Limited v Computer Associates UK Limited
[2016] EWHC 1587 (QB) at [52] per HHJ Waksman QC (sitting as a Judge of the High Court)).
22
Court of Appeal
“55 However, despite the problems of principle which arise if one excludes electronically
supplied software from the definition of goods, I am not persuaded that it is open to this court
to impute what many might think was a common-sense meaning of "goods" to the
legislators of the Directive in 1986 and the Regulations in 1993 when the Directive was
implemented. To do so would be contrary to precedent. This court cannot simply ignore the
weight of judicial authority that supports maintaining the tangible/intangible distinction.”
(Software Incubator Limited v Computer Associates UK Limited [2018] EWCA Civ 518 per
Gloster LJ).
Supreme Court
The case was appealed to the Supreme Court and the Supreme Court decided to refer certain
questions to the CJEU.
CJEU
The Court (Fourth Chamber) held on 16 th September 2021 “…Article 1(2) of Council Directive
86/653/EEC of 18 December 1986 on the coordination of the laws of the Member States
relating to self-employed commercial agents must be interpreted as meaning that it can cover
the supply, in return for payment of a fee, of computer software to a customer by electronic
means where that supply is accompanied by the grant of a perpetual licence to use that
software”
Licence or transfer of ownership?

Does property always pass under contracts to supply software (cf. Beta Computers (Europe) Ltd
v. Adobe Systems Ltd 1996 SLT 604)?
What about bespoke software (is this a contract for a service – cf. Salvage Association v. CAP
Financial Services Ltd ((CA) unreported, 9 July 1993))?
CONTRACTS V. CONTRACTS FOR WORK AND MATERIALS
Before considering the final requirement of s.2 SGA 1979, we need to distinguish contracts of
sale of goods from contracts for work and materials (to which the SGA 1979 does not apply).
For example, if you take your car for a service and, as part of the service, the garage puts oil into
the engine of your car, is that a contract of sale of goods?
 Clay v. Yates (1856) 1 H & N 73 (contract for printer to print a book held, on a substance of
contract test, to be a contract of work and materials);
 Lee v. Griffin (1861) 1 B & S 272 (contract for dentist to make and supply false teeth held,
focusing on the end product, to be a sale);
23
 Robinson v. Graves [1935] 1 KB 579 (contract for a portrait was held, on a substance of the
contract test, to be a contract for work and materials).
Note if a contract is one for work and materials, the Supply of Goods and Services Act 1982
applies.
MONEY CONSIDERATION
S.2 SGA 1979 also requires “…a money consideration, called the price”.
Does this cover payment by cheque, debit card or credit card?
Gifts of goods are, therefore, not covered by the SGA 1979 as there is no consideration (see also
Gregor Fisken Ltd v Carl [2021] EWCA Civ 792 at [68]-[71] for the arguments which might
arise here).
What about ‘buy one, get one free offers’ (cf. Esso Petroleum Ltd v. Customs and Excise Comrs
[1976] 1 All ER 117 (offer of ‘free’ commemorative coin with purchase of 4 gallons of petrol
might be contractually binding although not necessarily a contract of sale of goods))?
Contracts of barter are also not covered by the SGA 1979.
What about part-exchange transactions (very common in, for example, the car industry –see GJ
Dawson (Clapham) Ltd v. H & G Dutfield [1936] 2 All ER 232)?
Aldridge v. Johnson (1857) 7 E&B 885 (court held the exchange of 100 quarters of barley (worth
a certain amount per quarter) for 32 bullocks and £23 in cash amounted to contract of sale of
goods).
Note also s.8, SGA 1979:

“(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 the contract, or may be determined by the course of dealing between the
parties.
(2) Where the price is not determined as mentioned in sub-section (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.”
However, the fact that the price was not agreed may indicate that there was no contract (see May
& Butcher v. R [1934] 2 KB 17 and compare Barton v Morris [2023] UKSC 3).
24
Discuss whether or not EACH of the following, unconnected, situations would come within
the ambit of the Sale of Goods Act 1979:
(i) the purchase of a bottle of gas, where the buyer pays using a cheque;
(ii) a hire-purchase transaction; and
(iii) a contract under which a solicitor undertakes, for a monetary consideration, to produce a
legal document.
25
SECTION 4: THE STRUCTURE OF THE SGA 1979
SGA 1979: Structure
Part I: Contracts to which Act applies;

Part II: Formation of the Contract;
Part III: Effects of the Contract;
Part IV: Performance of the Contract;
Part V: Rights of Unpaid Seller Against the Goods;
Part VI: Actions for Breach of Contract;
Part VII: Supplementary.
PART II: FORMATION OF THE CONTRACT
In addition to the express terms of a contract, the SGA 1979 implies a number of terms into
contract of sales of goods (on exclusion of these terms see, for example, the Unfair Contract
Terms Act 1977, s.6).
“The third category is terms implied by law. This occurs when incidents are impliedly annexed
to particular forms of contracts, e.g. contracts for building work, contracts of sale, hire, etc.
Such implied terms operate as default rules. By and large such implied terms have crystallised in
statute or case law. But there is scope for further development.” (Lord Steyn, ‘Contract Law:
Fulfilling the Reasonable Expectations of Honest Men’ (1997) 113 LQR 433, 441–442).
PART III: EFFECTS OF THE CONTRACT
Part III deals with, amongst other issues, passing of property in goods.
Central role of property under the SGA 1979

“….at one level, it is not surprising that personal property law was excluded from the scope of
the CESL. In particular, we can recall the debates around the inclusion of property law in the
DCFR, with Hans Schulte-Nölke arguing that "in order to facilitate the political acceptance of
the DCFR, property law should be excluded from its ambit". More specifically, "[t]he meaning
of ‘property law’ depends upon the legal tradition in which the term is used“ [S. Van Erp,
"DCFR and Property Law" in Common Frame of Reference and Existing EC Contract Law
(2009), p.258], as does, as Von Bar and Drobnig observe, the interaction between property
26
law and contact law...” (J. Devenney & M. Kenny, ‘Omission of Personal Property from the
Proposed CESL: The Hamlet Syndrome...Without the Prince?’ [2015] The Journal of Business
Law 607 at 610).
Passing of Property in Goods

The whereabouts of property is highly significant in English Law for the following (non-
exhaustive) reasons:
 it impacts on whether the seller or buyer bears the risk of loss of, or damage to, the goods
(SGA 1979, s.20);
 it impacts on whether a contract of sale of goods can be frustrated (SGA 1979, s.7);
 it impacts on a seller’s ability to claim the price of the goods (SGA 1979, s.49);
 it has real ramifications should either the seller or the buyer become insolvent.
Note also the important provisions in SGA 1979 ss.21-26 on the transfer of property by a non-
owner.
PART IV: PERFORMANCE OF THE CONTRACT
“Unless otherwise agreed, delivery of the goods and payment of the price are concurrent
conditions, that is to say, the seller must be ready and willing to give possession of the goods to
the buyer in exchange for the price and the buyer must be ready and willing to pay the price in
exchange for possession of the goods” (s.28 SGA 1979).
PARTS V & VI: ACTIONS FOR BREACH OF CONTRACT
SGA 1979, Parts V and VI dealt with remedies for breach of contract:
o Specific performance is available (SGA 1979, s.52) but it is an exceptional
remedy;
o Key remedies are rejection and/or damages;
o Remedy of rejection will, generally, depend on type of term breached.
Traditional distinction between conditions and warranties:

“The categorisation of terms as either conditions or warranties implies that the actual
consequence of a particular breach is not a relevant factor. Once a term is a ‘condition’, any
breach of it will be repudiatory, no matter that it can be easily remedied or has on this occasion
caused no substantial loss to the other party. Similarly, whatever the consequences of a breach of
warranty, and however great the losses it causes, it will never give rise to the right to terminate
the contract. This approach is therefore rigid, and may appear to cause injustice in some cases,
but it has the merit of certainty in that the parties can be aware in advance what the legal
consequences of any particular breach will be.” (R. Stone & J. Devenney, The Modern Law of
Contract (13th edn., Routledge, 2022) p.475).
27
A third type of term…
“There are times when the categorisation of terms in the way outlined in the previous sections
does not work and, at least since 1962, the courts have recognised that it is necessary to have an
intermediate category. The leading case is Hong Kong Fir Shipping Co v Kawasaki Kisen
Kaisha Ltd, though some would argue that earlier decisions were, in fact, based on the same
considerations…So, on this analysis, the focus is not on the parties’ intentions at the time of the
contract, but on the effect of the actual breach which has occurred…If the breach is so serious as
to strike fundamentally at the purpose of the contract, then it will be treated as repudiatory, in the
same way as if it was a breach of condition; if it is less serious, it will give rise only to a remedy
in damages, like a warranty.” (R. Stone & J. Devenney, The Modern Law of Contract (13th edn.,
Routledge, 2022) pp.475-476).
PART VII: SUPPLEMENTARY
For example, s.61 deals with interpretation of the Act.
28
SECTION 5: AN INTRODUCTION TO CONSUMER LAW & POLICY
What is the purpose of Consumer Law?

“Consumer law and consumer regulation are ostensibly aimed at providing consumers with
protection from, and rights against, producers and suppliers of goods and services. But how
necessary are those measures? To what extent are consumers disadvantaged? And how should
we see the consumer, and, more fundamentally, consumption itself?...The problems that
consumers face in the market are not the same for all consumers and can fall most heavily on
vulnerable consumers…” (C. Scott & J. Black, Cranston’s Consumers and the Law (3rd edn.,
Butterworths, London, 2000) pp.1-4).
“[EU] consumer law is based on a different understanding of the consumer and the role of
consumer policy than national consumer law. [EU] consumer law sees the importance of the
consumer in terms of promoting the integrity of the market: a market which depends on
consumer confidence in cross-border transactions. National consumer law is based on other,
more social, policy imperatives…”
“…whether redistributive, social justice or contract freedom-based. National policy-makers have
[traditionally?] not promoted consumer protection out of concern with the “integrity of the
market” but have sought to distinguish between the weak and the strong. [EU] consumer policy
is quite different and demarcation differs.” (B. Heiderhoff & M. Kenny, ‘The Commission’s
2007 Green Paper on the Consumer Acquis: deliberate deliberation?’ [2007] ELR 740 at 742).
EU Consumer Law Drivers

A key driver to EU initiatives is the concern of some that differences in, for example, the
contract laws of Member States negatively impacts on the development of the internal market.
The Green Paper on policy options for progress towards a European Contract Law for
consumers and businesses (COM(2010)348 final) stated:
“The internal market is built on a multitude of contracts governed by different national contract
laws. Yet, differences between national contract laws may entail additional transaction costs
and legal uncertainty for businesses and lead to a lack of consumer confidence in the
internal market. Divergences in contract law rules may require businesses to adapt their
contractual terms. Furthermore, national laws are rarely available in other European
languages…” (p.2)
Consumer Protection Policy & Information

The provision of information to consumers is a cornerstone of recent reforms in the UK and this
is often linked to a market driven view of consumer protection:
29
“Simplifying and reforming consumer law should make markets work more effectively and
drive economic growth. It is widely recognised that well-functioning competitive markets
encourage growth by creating incentives for firms to become more efficient and innovative
to compete for customers. Markets can only be fully competitive if consumers are active
and confident, meaning that they are willing to challenge firms to provide a better deal, switch
between suppliers, and take up new products.” (Department for Business, Innovation and Skills,
Draft Consumer Rights Bill: Government Response to Consultations on Consumer Rights
(BIS/13/916, June 2013) p.9).
Dynamic Relationship with EU Consumer Law

The foregoing also provides a glimpse of the (hitherto!) dynamic relationship between EU and
national consumer laws but what about the impact of Brexit?
“…the Great Repeal Bill…[will]…remove the European Communities Act 1972 from the statute
book and convert the ‘acquis’ – the body of existing EU law – into domestic law. This means
that, wherever practical and appropriate, the same rules and laws will apply on the day
after we leave the EU as they did before… This allows businesses to continue trading in the
knowledge that the rules will not change significantly overnight and provides fairness to
individuals whose rights and obligations will not be subject to sudden change. It will also be
important for business in both the UK and the EU to have as much certainty as possible as early
as possible…Once we have left the EU, Parliament (and, where appropriate, the devolved
legislatures) will then be able to decide which elements of that law to keep, amend or repeal .”
(HM Government, The United Kingdom’s exit from and new partnership with the European
Union ((2017), Cm 9417) at 1.1ff (emphasis added).)
See also European Union (Withdrawal) Act 2018, s.2(1):

“EU-derived domestic legislation, as it has effect in domestic law immediately before IP
completion day, continues to have effect in domestic law on and after IP completion day.”
“…[F]or as long as EU-derived law remains on the UK statute book, it is essential that there is a
common understanding of what that law means. The Government believes that this is best
achieved by providing for continuity in how that law is interpreted before and after exit day. To
maximise certainty, therefore, the Bill will provide that any question as to the meaning of EU-
derived law will be determined in the UK courts by reference to the CJEU’s case law as it
exists on the day we leave the EU. Everyone will have been operating on the basis that the law
means what the CJEU has already determined it does, and any other starting point would be to
change the law.” (Department for Exiting the European Union, Legislating for the United
Kingdom’s withdrawal from the European Union (Cm 9446, updated May 2017) at 2.14).
Future of retained consumer law?
30
On 31st January 2022 the Prime Minister announced an intention to introduce a Brexit Freedoms
Bill:
“The Bill will make it easier to amend or remove outdated ‘retained EU law’ - legacy EU
law kept on the statute book after Brexit as a bridging measure – and will accompany a
major cross-government drive to reform, repeal and replace outdated EU law. These
reforms will cut £1 billion of red tape for UK businesses, ease regulatory burdens and contribute
to the government’s mission to unite and level up the country. Many EU laws kept on after
Brexit were agreed as a messy compromise between 28 different EU member states and often did
not reflect the UK’s own priorities or objectives – nor did many receive sufficient scrutiny in our
democratic institutions. Having regained our independence, we can now ensure that our
regulations are tailor-made to the UK’s own needs.”
Retained EU Law (Revocation and Reform) Bill 2022 (as introduced 22 September 2022):
Clause 1(1): “The following are revoked at the end of 2023— (a) EU-derived subordinate
legislation; (b) retained direct EU legislation.”
Clause 2: “Subsection (1) does not apply to an instrument, or a provision of an instrument, that is
specified in regulations made by a relevant national authority”.
The Retained EU Law (Revocation and Reform) Act 2023 is more modest than originally
proposed. Nevertheless, it will repeal, at the end of 2023, a significant number of EU-derived
subordinate legislation, and retained EU Law will become known as assimilated law.
Future EU initiatives…
“The UK and the EU would maintain a common rulebook for goods including agri-food, with
the UK making an upfront choice to commit by treaty to ongoing harmonisation with EU
rules on goods, covering only those necessary to provide for frictionless trade at the border. This
common rulebook would be legislated for by the UK Parliament, as set out in detail in chapter
4.” (HM Government, THE FUTURE RELATIONSHIP BETWEEN THE UNITED KINGDOM
AND THE EUROPEAN UNION, Cm 9593 (July 2018) at [11])
Cf. the limited consumer law commitments in EU-UK Trade and Co-Operation Agreement
agreed by negotiation teams from the EU and UK on 24th December 2020.
More recent EU developments…

o Directive (EU) 2019/771 of the European Parliament and of the Council of 20 May 2019
on certain aspects concerning contracts for the sale of goods, amending Regulation (EU)
2017/2394 and Directive 2009/22/EC, and repealing Directive 1999/44/EC;
o Directive (EU) 2019/770 of the European Parliament and of the Council of 20 May 2019
on certain aspects concerning contracts for the supply of digital content and digital
31
services [cf. Part Two, Heading One, Title III of the EU-UK Trade and Co-Operation
Agreement agreed by negotiation teams from the EU and UK on 24th December 2020].
Future of UK consumer policy

Need to develop a post-Brexit vision for Consumer Law in UK (compare, for example, “a more
active pro-competition strategy to deliver more targeted and effective pro-competitive
interventions” (Department for Business, Energy and Industrial Strategy, Reforming Competition
and Consumer Policy Driving growth and delivering competitive markets that work for
consumers (2021) at 0.15)).
32
SECTION 6: AN INTRODUCTION TO THE CONSUMER RIGHTS ACT 2015
BACKGROUND
The Consumer Rights Act 2015 (CRA 2015) sought to enact “fundamental” reform of
Consumer Law in the UK.
It gained Royal Assent on 26th March 2015 after an epic passage through Parliament and,
before its introduction into Parliament, a huge consultation process.
Many of the provisions we shall consider came into force on 1st October 2015.
The CRA 2015 is a hugely significant piece of legislation for both consumers and businesses.
Related Reforms
The CRA 2015 was also part of a package of reforms to Consumer Law at both national and EU
level, for example:
o Consumer Rights (Payment Surcharges) Regulations 2012;

o Consumer Contracts (Information, Cancellation and Additional Charges) Regulations
2013 (CC(ICAC) 2013); and
o Consumer Protection (Amendment) Regulations 2014 (CPAR 2014).
[Note now Digital Markets, Competition and Consumers Bill].
AIMS OF THE CRA 2015
The aims of the CRA 2015 were:
o to streamline consumer rights;

o to clarify aspects of consumer law (cf. Salt v. Stratstone Specialist Limited [2015]
EWCA Civ 745 at [49] per Roth J.);
o to modernise consumer law, particularly for the digital age;
o to deregulate for businesses; and
o to selectively enhance consumer protection in the UK.
DEFINITION OF A CONSUMER
33
Our first question is who is a consumer?
Background: Definitions of Consumers
“…for the purposes of consumer protection law, the term ‘consumer’ [often] has a narrower
meaning which is based on the capacity in which the consumer and the supplier of the goods of
services supplied have acted…[and] statutes which purport to protect consumer interests contain
relevant, but limited definitions.” D. Oughton & J. Lowry, Consumer Law, (Blackstone Press,
1997) p. 1).
“…One of the policy objectives is to align, as far as possible, the definitions of certain key
terms across the Act and other consumer law…to facilitate easier interpretation and clearer
application of the law. These terms are “trader,” “consumer,” “goods” and “digital content”.”
(Consumer Rights Act 2015: Explanatory Notes at [34]).
Parts 1 and 2 of the Consumer Rights Act 2015 apply to contracts between a consumer and a
trader (see s.1 and s.61), with those terms being defined in s.2.
A ‘trader’ is defined as “…a person acting for purposes relating to that person’s trade, business,
craft or profession, whether acting personally or through another person acting in the trader’s
name or on the trader’s behalf”.
A ‘consumer’ “means an individual acting for purposes that are wholly or mainly outside that
individual’s trade, business, craft or profession.”
Thus, for these purposes, a company cannot be a consumer.
In Weco Projects ApS v Loro Piana [2020] EWHC 2150 (Comm) a person who entered into a
contract for the transportation of a yacht was not regarded as a consumer as part of the purpose
of transporting the yacht was to use it for business purposes (and this purpose was more than
negligible).
See also:
Payward Inc v Chechetkin [2023] EWHC 1780 (Comm) (lawyer who traded significant amounts
of cryptocurrency was a consumer as his profession was still a lawyer).
Eternity Sky Investments Ltd v Mrs Xiaomin Zhang [2023] EWHC 1964 (Comm).
Facts: This case involved a company managed and controlled by Mr Zhang, who had
approximately an 18% in the company. Mrs Zhang had a shareholding of around 0.4% although
she was not involved in the running of the company. Mrs Zhang signed a personal guarantee in
respect of the company. Subsequently Mrs Zhang argued that aspects of the personal guarantee
were contrary to the unfair terms provisions in the Consumer Rights Act 2015. The raised the
question of whether or not Mrs Zhang was a consumer in relation to the personal guarantee.
Held: Bright J. held that Mrs Zhang entered the personal guarantee as a consumer. In so doing,
found that she had no “functional link” in running the company. The learned judge stated (at
[85]): “Her essential reason for doing so [entering the personal guarantee] was because of her
34
husband's involvement in the company. The effect of her own shareholding on her decision-
making could only ever have been marginal.”
IMPLIED TERMS PRIOR TO CRA 2015
As already noted, prior to the CRA 2015 various terms were implied into various contracts to
supply goods to consumers (and indeed others)…
For example:
o Sale of Goods Act 1979, ss.12-15 (in relation to contracts of sale of goods);
o Supply of Goods (Implied Terms) Act 1973, ss.8-11 (in relation to hire purchase
contracts);
o Supply of Goods and Services Act 1982, ss.7-10 (in relation to hire contracts) and ss.2-5
(contracts for work and materials).
14(2) of Sale of Goods Act 1979 (prior to CRA 2015):
“Where the seller sells goods in the course of a business, there is an implied term that the goods
supplied under the contract are of satisfactory quality…”
14(3) of the Sale of Goods Act 1979 (prior to the CRA 2015):
“Where the seller sells goods in the course of a business and the buyer, expressly or by
implication, makes known—
to the seller, or
where the purchase price or part of it is payable by instalments and the goods were previously
sold by a credit-broker to the seller, to that credit-broker…”
14(3) of the Sale of Goods Act 1979 (prior to the CRA 2015):
“…any particular purpose for which the goods are being bought, there is an implied term that the
goods supplied under the contract are reasonably fit for that purpose, whether or not that is a
purpose 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 judgment of the
seller or credit-broker.”
35
COMPUTER SOFTWARE
As noted above there was/is some doubt as to whether computer software would be covered by,
for example, the Sale of Goods Act 1979…
CONSOLIDATION IN CRA 2015
Part 1, Chapter 2 consolidates (and develops) some of the above legislation into Chapter 2 which
applies as follows:
S.3(1) “This Chapter applies to a contract for a trader to supply goods to a consumer.
(2) It applies only if the contract is one of these (defined for the purposes of this Part in sections
5 to 8)—
a sales contract;
a contract for the hire of goods;
a hire-purchase agreement;
a contract for transfer of goods.”
For example (we shall return to this issue in more detail later):
S.9: “(1) Every contract to supply goods is to be treated as including a term that the quality of the
goods is satisfactory.”
Digital Content and the CRA 2015 (Part 1, Chapter 3)

S.33(1) “This Chapter applies to a contract for a trader to supply digital content to a
consumer, if it is supplied or to be supplied for a price paid by the consumer.
(2) This Chapter also applies to a contract for a trader to supply digital content to a consumer, if
—
it is supplied free with goods or services or other digital content for which the consumer pays a
price, and
it is not generally available to consumers unless they have paid a price for it or for goods or
services or other digital content.” (s.33).
S.34: “(1) Every contract to supply digital content is to be treated as including a term that the
quality of the digital content is satisfactory.”
36
FURTHER READING
E. Baskind, G. Osborne & L. Roach, Commercial Law (4th edn., Oxford University Press, 2022)
pp.223-230;
J. Devenney, ‘The legacy of the Cameron-Clegg coalition programme of reform of the law on
the supply of goods, digital content and services to consumers’ [2018] Journal of Business Law
485.
37
SEMINAR ONE: THE SCOPE OF THE SALE OF GOODS ACT 1979 AND THE CONSUMER RIGHTS
ACT 2015
BACKGROUND (LINK TO OVERALL MODULE AND OTHER TOPICS)
In this seminar we explore some of the foundations of Commercial Law: the meaning of
Commercial Law; the nature of Commercial Law; and some of the key drivers of
Commercial Law. Our module focuses on one of the central pillars of Commercial Law:
the law relating to the sale of goods. In this seminar we explore the scope and ambit of
the two key pieces of legislation in this area: the Sale of Goods Act 1979 (which now
focuses, albeit not exclusively, on commercial sales) and the Consumer Rights Act 2015
(which focuses on consumer sales). These topics provide a gateway into many of the
other topics we shall consider. Thus, for example, if you have a situation raising questions
about the quality of goods in a commercial sale, you might be tempted to go straight to
s.14(2), Sale of Goods Act 1979; but remember s.14(2) is only directly relevant if the Sale
of Goods Act 1979 is applicable, so you will first need to consider s.2, Sale of Goods Act
1979!
PREPARATION (READING, RESEARCH TASKS ETC.)
Complete reading associated with relevant lecture:

E. Baskind, G. Osborne & L. Roach, Commercial Law, Ch.1 & Ch. 10;
MA Clarke, RJA Hooley, RJC Munday, LS Sealy, AM Tettenborn & PG Turner, Commercial
Law: Text, Cases, and Materials, Ch.1 & Ch.8.
Additional essential reading:

H. Moore, ‘Unconventional "sales"’ (2016) 75 Cambridge Law Journal 465;
S. Green & D. Saidov, ‘Software as Goods’ [2007] Journal of Business Law 161;
P. Giliker, ‘The Consumer Rights Act 2015 - a bastion of European consumer rights?’ (2017)
37 Legal Studies 78;
J. Devenney, ‘The legacy of the Cameron-Clegg coalition programme of reform of the law
on the supply of goods, digital content and services to consumers’ [2018] Journal of
Business Law 485
SCHEDULE OF SEMINAR ACTIVITIES
38
TIME (minutes) ACTIVITY
0 -5 Introductions and attendance register
5 - 50 Discussion of module questions
50 - 55 Break
70 - 110 Formative workshop to develop employability skills.

 What is ‘commercial awareness’ and why is it important?
 Introduction to the Case Study, Foxhill House v Techtastic
Solutions
110 End of seminar
EXERCISES (PLEASE COME PREPARED TO DISCUSS THE FOLLOWING ISSUES)
Exercise One
(i) What is meant by Commercial Law? What drives Commercial Law? What policy
considerations underpin Commercial Law?
(ii) What is the significance and ambit of the Sale of Goods Act 1979?
(iii) What is the significance of PST Energy 7 Shipping LLC Product Shipping SA v.
OW Buker Malta Ltd [2016] UKSC 23.
Exercise Two
39
Discuss whether or not EACH of the following, unconnected, situations would come
within the ambit of the Sale of Goods Act 1979:
(i) the purchase of mushrooms growing in the seller’s garden;

(ii) the purchase of human blood;
(iii) the purchase of a new car, the consideration for which is £2,000 plus the
buyer’s current car;
(iv) the purchase of a yacht where the property in the yacht will not pass until the
buyer has made twelve monthly instalments of £1,000;
(v) the promotion in a supermarket which entitles a person who has purchased a
bottle of lemonade to an additional bottle of lemonade free of charge;
(vi) the purchase of a meal in a restaurant;
(vii) the purchase of a pile of rubble for use in the construction of roads. The
rubble constitutes the remains of two houses destroyed by a bomb during the
last World War;
(viii) the purchase of a Roman coin; and
(ix) the purchase of computer software;
Exercise Three
What were the aims of the Consumer Rights Act 2015 and were those aims achieved?
Exercise Four
Critically discuss whether commercial parties are and should be under a duty to act in
good faith.
CONSOLIDATION (AFTER THE SEMINAR)

Review notes and supplement where necessary. You may find the following further
resources helpful:
A. Samuels, ‘The Consumer Rights Act 2015’ [2016] Journal of Business Law 159;
A. Rodger, ‘The Codification of Commercial Law in Victorian Britain’ (1992) 108 Law
Quarterly Review 570.
40
SECTION 7: OBLIGATIONS UNDER SALE OF GOODS CONTRACTS - SALES TO NON-
CONSUMERS
EXPRESS TERMS
Our starting point = express terms of the contract.

Usually the parties will agree on the basic terms of a contract.
For example, in a contract for the sale of goods the contract would be expected to cover the price
and quantity of the goods, the specifications, and the time and method of delivery.
On classification of such terms see L Schuler AG v Wickman Machine Tool Sales Ltd [1974]
A.C. 235.
DELIVERY & PAYMENT
“Unless otherwise agreed, delivery of the goods and payment of the price are concurrent
conditions, that is to say, the seller must be ready and willing to give possession of the goods to
the buyer in exchange for the price and the buyer must be ready and willing to pay the price in
exchange for possession of the goods” (s.28 SGA 1979).
Delivery does not necessarily mean that S has to transport the goods to, for example, B’s place of
business: “means voluntary transfer of possession from one person to another” (s.61).
Place of delivery S.29(2): “Apart from any such contract, express or implied, the place of
delivery is the seller's place of business if he has one, and if not, his residence; except that, if
the contract is for the sale of specific goods, which to the knowledge of the parties when the
contract is made are in some other place, then that place is the place of delivery.”
See also Albright & Wilson v. Biachem Ltd [2002] UKHL 37.
Refusal to take delivery might amount to a repudiatory breach of contract: see Fercomental
SARL v. Mediterranean Shipping [1988] 2 All ER 742.
41
S.29(5): “Demand or tender of delivery may be treated as ineffectual unless made at a reasonable
hour; and what is a reasonable hour is a question of fact”.
Time of delivery: s.10 states that whether or not time is of the essence depends on the terms of
the contract (although in commercial contracts time will in fact often be of the essence: Bunge v.
Tradax [1981] 1 WLR 711).
Delivery of Wrong Quantity

o Less: B can reject the goods or accept the goods and pay for them at the contractual rate
(s.30(1));
o More: B can (i) reject all the goods, (ii) accept the goods included in the contract or (iii)
accept all the goods and pay for them at contractual rate (s.30(2) and (3));
o However: cannot reject the whole delivery if discrepancy is (i) de minimis or (ii) so slight
as to be unreasonable to reject the whole (s.30(2A));
o De Minimis: Shipton, Anderson v. Weil Bros [1912] 1 KB 574 (sale of 4,500 tons of
wheat (+/- 10%) – S delivered 4950 tons and 55Ib – 55Ib over – de minimis).
IMPLIED TERMS
The express terms of the contract may be supplemented by implied terms.
TYPES OF TERMS IMPLIED BY THE COURTS
o Terms implied in law (as a matter of policy);

o Terms implied in fact (as representing the parties presumed intentions).
TERMS IMPLIED BY STATUTE
SGA 1979, s.12 (Right to Sell)

“(1) 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 a 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…(5A) As regards England and Wales and Northern Ireland, the term implied by
subsection (1) above is a condition and the terms implied by subsections (2), (4) and (5) above
are warranties.”
S.12(1) goes beyond situations where S does not pass good title to B: see Niblett Ltd v.
Confectioners’ Materials Co Ltd [1921] 3 KB 387 (S sold condensed milk to B with the brand
name ‘nissly’ – this infringed Nestlé’s trademark, who obtained injunction – B successfully
claimed breach of s.12(1) – S no right to sell as could be stopped by process of law).
42
Cf. Great Elephant Corp v Trafigura Beheer BV [2012] EWHC 1745 (Comm) and [2013]
EWCA Civ 905 (no breach of s.12(1) where the goods (oil) were loaded on a ship in Nigeria but
prevented from leaving by local authorities – still had ‘right to sell’ – s.12(2)(b) breached (see
below)).
Rowland v Divall [1923] 2 KB 500:

The plaintiff (innocently) sold a stolen car onto the defendant. Breach of s.12 as the plaintiff did
not have the right to sell the car. The defendant was entitled to get their money back even though
the plaintiff was not at fault.
Owner
Thief
Seller
Buyer
X
SGA 1979, s.12 – Additional Warranties
SGA 1979, s.12 also includes two implied warranties: that the goods are free from any charge or
encumbrance (s.12(2)(a)) and that B will have quiet possession of the goods (s.12(2)(b)).
See, for example, Rubicon Computer Systems v. United Paints Ltd (2000) 2 TCLR 454 (S
inserted timelock into computer as a result of a dispute – breach of s.12(2)(b)).
SGA 1979, s.13 (Correspondence with Description)

“(1) Where there is a contract for the sale of goods by description, there is an implied term that
the goods will correspond with the description. (1A) As regards England and Wales and
Northern Ireland, the term implied by subsection (1) above is a condition.”
“A sale of goods is not prevented from being a sale by description by reason only that, being
exposed for sale or hire, they are selected by the buyer”: s.13(3) SGA 1979;
Harlingdon & Leinster Ltd v. Christopher Hull Fine Art Ltd [1991] 1 QB 564 (sale of painter
thought to be by a famous artist – S was not a specialist but B was a specialist in area – no “sale
43
by description” as could not reasonably have been expected that B would rely on description
given by S).
In Qatar Investment & Projects Development Holding Co v John Eskenazi Ltd [2022] EWHC
3023 (Comm) Jacob J. noted (at [122]) the difficulties of analysing Harlingdon & Leinster Ltd v
Christopher Hull Fine Art Ltd [1991] 1 QB 564. Qatar Investment concerned the sale of items
thought to be antiquities but which turned out to be modern forgeries. Jacob J. held that there
was no express term relating to the origin of the items as, at least in this context, statements of
opinion usually did not become terms of the contract. However, there was an implied term that
the seller honestly and reasonably believed the items to be antiquities.
Section 13 does not cover all descriptive words used in negotiations – does not abolish the
traditional distinction between terms and representations (Oscar Chess Ltd. v. Williams [1957] 1
All ER 325).
Note also traditionally strict approach in England and Wales (for example, Re Moore & Co
and Laudauer & Co [1921] 2 KB 519 (buyer able to reject goods where some packed in crates of
24 instead of 30 as required under contract)).
Arcos Ltd v EA Ronaasen [1933] AC 470:
o Sale of wooden staves, to be ½ inch thick;
o 95% were 1/8 inch smaller;
o Still suitable for use but not as described;
o Breach of s.13;
o Buyer could reject the staves and get money back.
A more generic approach?

“The "description" by which unascertained goods are sold is, in my view, confined to those
words in the contract which were intended by the parties to identify the kind of goods
which were to be supplied. It is open to the parties to use a description as broad or narrow as
they choose. But ultimately the test is whether the buyer could fairly and reasonably refuse to
accept the physical goods proffered to him on the ground that their failure to correspond with
that part of what was said about them in the contract makes them goods of a different kind from
those he had agreed to buy. The key to section 13 is identification.” (Ashington Piggeries Ltd v
Christopher Hill Ltd [1972] A.C. 441 at 503 per Lord Diplock).
(Cf. the approval of the strict approach in Arcos in the even more recent case of Local Boy'z Ltd
v Malu NV [2021] EWHC 2439 (Comm) where face masks did not correspond with the
description presented in a photograph prior to an order being placed).
SGA 1979, s.14(2) (Satisfactory Quality)

“(2) Where the seller sells goods in the course of a business, there is an implied term that the
goods supplied under the contract are of satisfactory quality.
44
(2A) For the purposes of this Act, 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.”
“[C]ourse of a business” – does this mean the S has to be in the business of selling those types of
goods? See Stevenson v. Rogers [1999] QB 1028 (fisherman sold trawler);
“[G]oods supplied under the contract” includes packaging and also the impact of goods which
should not have been included (Wilson v. Rickett [1954] 1 QB 598 (explosives in delivery of
coal)).
“(2B) For the purposes of this Act, the quality of goods includes their state and condition and the
following (among others) are in appropriate cases aspects of the quality of goods—
fitness for all the purposes for which goods of the kind in question are commonly supplied,
appearance and finish,
freedom from minor defects,
safety, and
durability.”
(On durability see Dana UK Axle Ltd v Freudenberg FST GmbH [2021] EWHC 1751 (TCC))
The fact that something could have been made safer does not necessarily mean it is of
unsatisfactory quality. Equally clear safety warnings are not necessarily a defence to a claim of
unsatisfactory quality: Medivance v. Gaslane [2002] EWCA Civ 500.
“(2C) The term implied by subsection (2) above does not extend to any matter making the
quality of goods unsatisfactory—
which is specifically drawn to the buyer's attention before the contract is made,
where the buyer examines the goods before the contract is made, which that examination ought
to reveal, or
in the case of a contract for sale by sample, which would have been apparent on a reasonable
examination of the sample”.
“(6) As regards England and Wales and Northern Ireland, the terms implied by subsections (2)
and (3) above are conditions.”
Case example: Bramhill v. Edwards [2004] EWCA Civ 403 (motor home slightly too wide to be
lawfully driven on UK roads – did this make it of unsatisfactory quality?)
“In my view, there was ample evidence, albeit of a secondary and circumstantial nature, to which
the Judge referred in paragraphs 38, 39 and 40 of his judgment, on which he was entitled to
45
conclude that the authorities had turned a blind eye to wide-spread breaches of the Regulations
and that that was well-known to enthusiasts for such vehicles in this specialist trade.” ([38] per
Auld LJ)
See also
Provimi France SAS v Stour Bay Co Ltd [2022] EWHC 218 (Comm).
Facts: a buyer purchased Vitamin D3 and incorporated it into poultry feed. Subsequently the
Vitamin D3 degraded (probably as a result of a heatwave (see [303])), causing problems for the
poultry which consumed the relevant feed. The buyer claimed the supplier was in breach of
contract by not coating the Vitamin D3 in gelatine (which would probably have protected the
Vitamin D3 (see [302])).
Held: David Edwards QC, sitting as a Deputy Judge of the High Court, disagreed that this was a
requirement of the contract. The buyer also argued that the goods were not of satisfactory quality
under the Sale of Goods Act 1979, s.14(2). However, the learned judge also rejected this
argument on the ground that s.14(2) was excluded by the terms of the contract. Moreover, he
held that the Vitamin D3 was of satisfactory quality as there were warnings about its robustness,
and the buyers knew it was not coated in gelatine .
See also:
E. Baskind, G. Osborne & L. Roach, Commercial Law (4th edn., Oxford University Press, 2022),
Chapter 15.
SGA 1979, s.14(3) (Fitness for Purpose)

“(3) Where the seller sells goods in the course of a business and the buyer, expressly or by
implication, makes known—
to the seller, or
where the purchase price or part of it is payable by instalments and the goods were previously
sold by a credit-broker to the seller, to that credit-broker…”
“…any particular purpose for which the goods are being bought, there is an implied term that the
goods supplied under the contract are reasonably fit for that purpose, whether or not that is a
purpose 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 judgment of the
seller or credit-broker.”
Griffiths v. Peter Conway Ltd [1939] 1 All ER 685 (B, who had hyper-sensitive skin, suffered an
allergic reaction to a tweed coat – S not liable under s.14(3) as not informed of skin condition)
Ashington Piggeries Ltd v Christopher Hill Ltd [1972] A.C. 441 (contract to purchase herring
meal - general purpose (use in production of animal feed) known but not specific purpose
(animal feed for mink) not known – herring meal contaminated – bad for all animals but fatal to
46
mink – breach of s.14(3) – general purpose known and making feed for mink was a not
unforeseeable use within that broad range!);
Jewson v. Kelly [2003] EWCA Civ 1030 (no breach of s.14(3) in relation to boilers which
reduced SAP rating of flat – no specific details of flat given).
SGA 1979, s.15 (Correspondence with Sample)

(2) In the case of a contract for sale by sample there is an implied term—
that the bulk will correspond with the sample in quality;
…
that the goods will be free from any defect, making their quality unsatisfactory, which would not
be apparent on reasonable examination of the sample.
(3) As regards England and Wales and Northern Ireland, the term implied by subsection (2)
above is a condition.”
Talking point
Last month Steve, an art dealer, noticed a painting in Terry’s shop which he believed to be by a
famous painter. During discussions, Terry showed Steve an old catalogue entry which appeared
to confirm that the painting was indeed by a famous painter. Steve initially agreed to purchase
the painting for £15,000, although Terry later agreed to accept £10,000 plus a sculpture owned
by Steve. Steve and Terry entered into a written agreement for the sale of the painting. Steve
paid £10,000 using his debit card. Steve has now discovered that the painting is in fact an
extremely good forgery which is only worth approximately £1000. An allegation has also been
made that the painting which Terry sold to Steve actually belonged to Michael who had left it
with Terry to obtain valuations. Steve is now demanding a refund. Moreover Terry demands an
additional £5,000 as the sculpture he acquired from Steve was cracked.
Advise Terry.
FURTHER READING
Chs 14 & 15;
Law: Text, Cases, and Materials (6th edn., Oxford University Press, 2020) Chs 11 & 12.
47
SECTION 8: OBLIGATIONS UNDER CONTRACTS TO CONSUMERS
CRA 2015, PART 1, CHAPTER 2, SUPPLY OF GOODS TO CONSUMERS
Remember:
S.3(1) “This Chapter applies to a contract for a trader to supply goods to a consumer.
5 to 8)—
a sales contract;
a contract for the hire of goods;
a hire-purchase agreement;
a contract for transfer of goods.”
Some Familiar Terms…
o Goods must be of satisfactory quality (s.9) (see also Pendragon v Coom [2021] 3
WLUK 366 where a puppy with hip dysplasia was held not to be of satisfactory quality);
o Goods must be fit for a particular purpose (s.10);
o Goods must correspond with sample (s.13); and
o The trader must have the right to supply the goods etc. (s.17).
Some New Terms

s.12: “(2) Where regulation 9, 10 or 13 of the Consumer Contracts (Information, Cancellation
and Additional Charges) Regulations 2013 (SI 2013/3134) required the trader to provide
information to the consumer before the contract became binding, any of that information that
was provided by the trader other than information about the goods and mentioned in paragraph
(a) of Schedule 1 or 2 to the Regulations (main characteristics of goods) is to be treated as
included as a term of the contract.” (s.12).
[Note Digital Markets, Competition and Consumers Bill].
s.14: “(1) This section applies to a contract to supply goods by reference to a model of the goods
that is seen or examined by the consumer before entering into the contract. (2) Every contract to
which this section applies is to be treated as including a term that the goods will 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 consumer enters into the contract.”
METHODOLOGY
48
Two notable features of the overall approach of the Consumer Rights Act 2015 in this regard:
First, there is a subtle shift away from the language of an implied term to merely “including a
term” in the relevant contract.
Presumably this shift was made on the ground that the new language is clearer to consumers
although it is difficult to envisage that this will have any more than a marginal gain in this
respect.
Secondly, and more importantly, unlike under, for example, the Sale of Goods Act 1979 such
terms are not classified as conditions or warranties with the associated impact on available
remedies.
Instead, as we shall see below, the Consumer Rights Act 2015 expressly sets out the remedies for
breach of these statutory terms.
At one level this, as was the intention, simplifies this area of law: there is no need for businesses
or consumers to understand the significance of the distinction between conditions and warranties.
Yet any such gains need to be set against the complexity of the (partial) remedial framework
under the Act.
CRA 2015, PART 1, CHAPTER 4, PROVISION OF SERVICES TO CONSUMERS
Chapter 4 of Part 1 of the CRA 2015 applies to contracts for traders to supply services to
consumers (note s.48(5) and also wider regulatory context).
s.49(1) CRA 2015 provides: “Every contract to supply a service is to be treated as including a
term that the trader must perform the service with reasonable care and skill”.
This resonates with the pre-CRA 2015 law (Supply of Goods and Services Act 1982, s.13).
Further Terms of Contract:

50(1): “Every contract to supply a service is to be treated as including as a term of the contract
anything that is said or written to the consumer, by or on behalf of the trader, about the
trader or the service, if—
it is taken into account by the consumer when deciding to enter into the contract, or
it is taken into account by the consumer when making any decision about the service after
entering into the contract.”
S.50: “(3) Without prejudice to subsection (1), any information provided by the trader in
accordance with regulation 9, 10 or 13 of the Consumer Contracts (Information, Cancellation
and Additional Charges) Regulations 2013 (SI 2013/3134) is to be treated as included as a term
of the contract.”
49
[Note Digital Markets, Competition and Consumers Bill].
Non-Exclusion:
S.57(1): “A term of a contract to supply services is not binding on the consumer to the extent that
it would exclude the trader's liability arising under section 49 (service to be performed with
reasonable care and skill).
(2) Subject to section 50(2), a term of a contract to supply services is not binding on the
consumer to the extent that it would exclude the trader's liability arising under section 50
(information about trader or service to be binding).”
“(3) A term of a contract to supply services is not binding on the consumer to the extent that it
would restrict the trader's liability arising under any of sections 49 and 50 and, where they
apply, sections 51 and 52 (reasonable price and reasonable time), if it would prevent the
consumer in an appropriate case from recovering the price paid or the value of any other
consideration. (If it would not prevent the consumer from doing so, Part 2 (unfair terms) may
apply.)”
50
SECTION 9: REMEDIES OF THE SELLER
Personal remedies v. real remedies

 Seller’s real remedies = remedies against the goods, which is particularly significant
where the B becomes insolvent
 Seller’s personal remedies = an action for the price and damages.
PERSONAL REMEDIES OF THE SELLER
Action for the price: an action for a liquidated sum (therefore do not have to show loss, that the
loss was not too remote etc.).
S.49 SGA 1979:

“(1) Where, under a contract of sale, the property in the goods has passed to the buyer and he
wrongfully neglects or refuses to pay for the goods according to the terms of the contract,
the seller may maintain an action against him for the price of the goods.
(2) Where, under a contract of sale, the price is payable on a day certain irrespective of
delivery and the buyer wrongfully neglects or refuses to pay such price, the seller may
maintain an action for the price, although the property in the goods has not passed and the goods
have not been appropriated to the contract.”
Readie Construction Ltd v Geo Quarries Ltd [2021]

An interesting issue arose in Readie Construction Ltd v Geo Quarries Ltd [2021] EWHC 3030
(QB) around the interpretation of s.49.
In that case it had been conceded that, on the facts, the supplier of the goods could only bring an
action for the price if the requirements of s.49(2) were satisfied (s.49(1) was not applicable due
to a retention of title clause).
The difficulty was that, under the contract, delivery of the goods was a pre-condition of the
payment of the price.
Therefore, it was argued, that the price was not “payable on a day certain irrespective of
delivery”.
This argument was rejected with the judge, Martin Spencer J., relying on a decision of the High
Court of Singapore in Mitsubishi Corp RTM International Pte Ltd v Kyen Resources Pte Ltd
[2019] SGHCR 6 where it was held that the phrase in question “means that the time for payment
may be, but need not be contingent on delivery or the time of delivery” ([62]).
Note PST Energy 7 Shipping LLC Product Shipping & Trading SA v. OW Bunker Malta Ltd
[2016] UKSC 23 (s.49 not exhaustive – might be able to claim price where risk (but not
property) has passed and goods destroyed).
51
On the possibility of the parties excluding s.49 see Rolls-Royce Holdings PLC v Goodrich
Corporation [2023] EWHC 1637 (Comm) at [236].
Damages: general rules for assessing damages for breach of contract apply here (to refresh your
understanding of which see R. Stone & J. Devenney, The Modern Law of Contract (14th edn.,
Routledge, 2022) Ch. 15).
The SGA 1979 translates these general principles into specific rules for use in particular
situations:
Damages for non-acceptance:

“(1) Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the
seller may maintain an action against him for damages for non-acceptance.
(2) The measure of damages is the estimated loss directly and naturally resulting, in the
ordinary course of events, from the buyer'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 contract price and the market or
current price at the time or times when the goods ought to have been accepted or (if no time
was fixed for acceptance) at the time of the refusal to accept.” (s.50)
Delayed Acceptance:
“(1) When the seller is ready and willing to deliver the goods, and requests the buyer to take
delivery, and the buyer does not within a reasonable time after such request take delivery of the
goods, he is liable to the seller for any loss occasioned by his neglect or refusal to take
delivery, and also for a reasonable charge for the care and custody of the goods.
(2) Nothing in this section affects the rights of the seller where the neglect or refusal of the
buyer to take delivery amounts to a repudiation of the contract.” (s.37).
REAL REMEDIES OF THE SELLER
Ss.38-39 give an unpaid seller three real remedies: a lien, stoppage in transit (where B
becomes insolvent) and a right to resale.
Unpaid seller defined in s.38 (essentially refers to situations where the whole of the price has not
been paid or tendered).
What is a lien (see Hammonds v. Barclay (1802) 2 East 227)?
Stoppage in transit essentially allows S to regain their lien.
Right to resale (s.48) essentially allows S to recoup losses by re-selling goods if B still does not
pay.
52
53
SECTION 10: REMEDIES OF NON-CONSUMER BUYERS
SPECIFIC PERFORMANCE
“In any action for breach of contract to deliver specific or ascertained goods the court may, if it
thinks fit, on the plaintiff's application, by its judgment or decree direct that the contract shall be
performed specifically, without giving the defendant the option of retaining the goods on
payment of damages.” (s.52)
Rarely awarded in practice – only awarded where damages would be inadequate (cf. Cohen v.
Roche [1927] 1 KB 169 (refused in respect of the sale of particular antiques))
Cf. Gregor Fisken Ltd v Carl [2020] EWHC 1385 (Comm) where the court awarded specific
performance in respect of a unique and original gearbox to a Ferrari purchased for $US44.
Approved on appeal: [2021] EWCA Civ 792.
See also Gravelor Shipping Limited v GTLK Asia M5 Limited [2023] EWHC 131 at [99] (might
be awarded where defendant ‘not good for the money’).
“̒specific goods” means goods identified and agreed on at the time a contract of sale is made and
includes an undivided share, specified as a fraction or percentage, of goods identified and agreed
on as aforesaid” (s.61).
Can specific performance be claimed in respect of unascertained goods? Cf. Sky Petroleum v.
VIP Petroleum [1974] 1 All ER 954, VTB Commodities Trading DAC v JSC Antipinsky Refinery
[2020] EWHC 72 (Comm) and Qatar Airways Group QCSC v Airbus SAS [2022] EWHC 1247
(TCC).
REJECTION OF GOODS
Powerful self-help remedy.

When might a B have the right to reject goods?
o Pursuant to express right in contract;
o Pursuant to a statutory right (e.g. s.30 SGA 1979 – delivery of wrong quantity);
o Following a breach of condition (e.g. the conditions in ss.12-15 SGA 1979);
o Following a serious breach of an innominate term.
Clear words/action needed to reject (Lee v. York Coach and Marine [1977] RTR 35 (merely
telling someone that you have the right to reject is insufficient);
Consequences of rejection of goods?
54
o B can refuse to pay the price (or can recover price already paid on grounds of a total
failure of consideration);
o B may be able to claim damages for non-delivery (see below);
o If property has passed, it re-vests in S;
o B not obliged to return the goods to S, S usually must collect (s.36);
o B may also be able to terminate the contract.
Limitation of Right of Rejection

There are a number of limitations on the right to reject – common law doctrines of affirmation,
waiver and estoppel (much will depend on the precise facts of the case and the source of the right
to reject);
An important limitation on the right to reject for breach of condition is the doctrine of
acceptance…
DOCTRINE OF ACCEPTANCE
“(1) The buyer is deemed to have accepted the goods subject to subsection (2) below—
when he intimates to the seller that he has accepted them, or
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 the goods without intimating to the seller that he has rejected them.” (SGA
1979, s.35).
Acceptance by express intimation and an inconsistent act with the ownership of the seller are
both subject to s.35(2) (B must have a reasonable opportunity to examine the goods before
there will be acceptance).
o Armaghdown Motors v. Gray [1963] NZLR 5 (registration of car in buyer’s name = an
inconsistent act (dubious?);
o Fiat Auto Financial Services v. Connelly 2007 S.L.T. (Sh Ct) 111 (taxi driven for 40,000
miles not an inconsistent act – parties in discussions during this period).
See also Galtrade Limited v BP Oil International Limited [2021] EWHC 1796 (Comm) at [105]
(linking concept of an “inconsistent act” to the contractual framework): “…I struggle to see how
the mere acceptance of the cargo prior to the contractual testing upon which the Defendant had
insisted would be an act inconsistent with the exercise of the Claimant’s right to reject (if it had
such a right).”
55
Question: does the seller need to know of the “inconsistent act”? It seems not: see Phoenix
Interior Design Ltd v Henley Homes Plc, Union Street Holdings Ltd [2021] EWHC 1573 (QB) at
[103].
Note s.35(6): “The buyer is not by virtue of this section deemed to have accepted the goods
merely because—(a) he asks for, or agrees to, their repair by or under an arrangement with
the seller, or (b) the goods are delivered to another under a sub-sale or other disposition.” (Cf.
Jones v. Gallagher [2004] EWCA Civ 10).
Reasonable time?
Traditionally very limited (see Bernstein v. Pamson Motors [1987] 2 All ER 220 – right lost
within 3 weeks).
SGA 1979 amended. S.35(5) now provides: “The questions that are material in determining for
the purposes of subsection (4) above whether a reasonable time has elapsed include whether the
buyer has had a reasonable opportunity of examining the goods for the purpose mentioned in
subsection (2) above.”
Question: does this qualification around a reasonable opportunity to examine the goods apply
where the buyer already knows the seller is in breach of contract? This point was raised but not
decided in Galtrade Limited v BP Oil International Limited [2021] EWHC 1796 (Comm).
Clegg v. Anderson [2003] EWCA Civ 320:

o Yacht delivered in August 2000;
o At time of delivery S informed B that keel heavier than the manufacturers specification;
o Discussions between S and B in August and September;
o B wanted information about the impact of the heavier keel;
o Information received 15 February 2001;
o Three weeks later B sought to reject:
o Too late? No – rejection still possible;
o Time parties in discussions may be disregarded;
o Bernstein no longer good law;
See also Truk (UK) v. Tokmakidis [2000] 1 LL Rep 543.

Rejection
Note also s.35A (possibility of partial rejection).
Maple Flock v. Universal Furniture Products [1934] 1 KB 148 and Local Boy'z Ltd v Malu NV
[2021] EWHC 2439 (Comm) (application to instalment contracts).
Can the B use the goods after he/she hs rejected them? Alan King v Black Horse Limited (t/a
Jaguar Financial Services) v Park's (Ayr) Limited [2023] SAC (Civ) 4 would suggest not (and to
do so might be regarded as a retraction of the rejection).
56
DAMAGES
Damages: again general rules for assessing damages for breach of contract apply here (to refresh
your understanding of which see R. Stone & J. Devenney, The Modern Law of Contract (14th
edn., Routledge, 2022) Ch. 15);
The SGA 1979 translates these general principles into specific rules for use in particular
situations:
Damages for non-delivery:
“(1) Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer
may maintain an action against the seller for damages for non-delivery.
(2) The measure of 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 contract price and the market or
current price of the goods at the time or times when they ought to have been delivered or (if
no time was fixed) at the time of the refusal to deliver.” (s.51)
Damages for defective goods (where the goods are not rejected)…
“(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 difference between
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.” (SGA 1979, s.53)
See, generally, BP Oil International Ltd v Glencore Energy UK Ltd [2022] EWHC 499 (Comm).
Additional losses (e.g. personal injury) can also be recovered (see Godley v. Perry [1960] 1 All
ER 36 (loss of an eye)).
Delayed Delivery?
Not specifically dealt with by the SGA 1979;
If time was of the essence (see above) then delayed delivery may entitle B to reject the goods and
claim for non-delivery.
If rejection is not available or is not chosen, then damages calculated using common law rules.
Profit-earning chattels – calculation may be lost profit during period of unavailability (see
Victoria Laundry v. Newman [1949] 2 KB 528)
If goods bought for resale, the measure may be the amount by which the value of the goods has
fallen during the period of delay.
57
58
SECTION 11: REMEDIES OF CONSUMER BUYERS
CONSUMER RIGHTS ACT 2015
Goods: We noted above that the Consumer Rights Act 2015 expressly sets out some of the
remedies for breach of the terms it treats as included into contracts to supply goods to
consumers…
S.19(3) “If the goods do not conform to the contract because of a breach of any of the terms
described in sections 9, 10, 11, 13 and 14, or if they do not conform to the contract under section
16, the consumer's rights (and the provisions about them and when they are available) are—
the short-term right to reject (sections 20 and 22) [essentially 30 days];
the right to repair or replacement (section 23); and
the right to a price reduction or the final right to reject (sections 20 and 24). [(b) and (c)
operate in a hierarchical fashion]”.
See also Gordon v Volkswagen Financial Services (UK) Ltd (t/a Audi Finance) [2019] 4 WLUK
476 and Anette Pendragon v Judy Coom [2021] 3 WLUK 366.
S.19(9): “This Chapter does not prevent the consumer seeking other remedies—
for a breach of a term that this Chapter requires to be treated as included in the contract,
on the grounds that, under section 15 or 16, goods do not conform to the contract, or
for a breach of a requirement stated in the contract.”
Significance of CRA 2015 on Provision of Services

Additional Remedies:
S.54: “(1) The consumer's rights under this section and sections 55 and 56 do not affect any
rights that the contract provides for, if those are not inconsistent.
(2) In this section and section 55 a reference to a service conforming to a contract is a reference
to—
the service being performed in accordance with section 49 [reasonable care and skill], or
the service conforming to a term that section 50 [particular statements to consumers] requires to
be treated as included in the contract and that relates to the performance of the service.”
“(3) If the service does not conform to the contract, the consumer's rights (and the provisions
about them and when they are available) are—
the right to require repeat performance (see section 55);
59
the right to a price reduction (see section 56).”
S.55(1): “The right to require repeat performance is a right to require the trader to perform the
service again, to the extent necessary to complete its performance in conformity with the
contract.”
S.56(1): “The right to a price reduction is the right to require the trader to reduce the price to the
consumer by an appropriate amount (including the right to receive a refund for anything already
paid above the reduced amount).”
FURTHER READING
Ch16 & Ch17;
Law: Text, Cases, and Materials (6th edn., Oxford University Press, 2020) Ch13 & Ch14.
60
SECTION 12: EXCLUSION AND LIMITATION CLAUSES
WHAT IS AN EXCLUSION CLAUSE?
A working definition of an exclusion clause is a clause which purports to exclude liability and /
or remedies for a breach of contract and / or negligence.
In modern commercial transactions, contracting parties use exclusion clauses to allocate the risk
of certain events and to keep costs down.
THE BENEFITS OF EXCLUSION / LIMITATION CLAUSES?
If A hires B to store his goods, a clause in the contract between A and B may exclude B’s
liability to compensate A in the event that the goods are damaged in storage. Hence, A takes the
risk that he may suffer a loss. This will be reflected in the price of the contract between A and B:
A will have to either insure against the risk of loss, or self-insure, and thus the price payable to B
will be reduced. If A wants to enter into a contract with B under which he has a right of recourse
to B if the goods are damaged, i.e. a contract where B takes the risk of damage to the goods, then
the price payable to B will increase.
(Example taken from Irish Law Reform Commission Report on Privity of Contract (LRC 88 –
2008)).
POTENTIAL PROBLEMS WITH EXCLUSION / LIMITATION CLAUSES?
Exclusion clauses can be ‘unfair’, especially in standard form contracts or consumer contracts
where there is an inequality of bargaining power.
The courts thus traditionally take a strict approach to exclusion clauses and there are some
statutory restrictions on exclusion clauses.
REGULATION OF EXCLUSION AND LIMITATION CLAUSES
Before an exclusion or limitation clause can be relied upon, as a matter of Contract Law, three
hurdles must be overcome:
o The clause must be shown to have been part of the contract (incorporation of terms);
o The clause must be shown to cover the liability in question (the construction test);
61
o The clause must not be rendered unenforceable by the Unfair Contract Terms Act 1977
or the Consumer Rights Act 2015.
THE CLAUSE MUST BE PART OF THE CONTRACT (“INCORPORATED” INTO THE CONTRACT)
If you sign a document which includes the exclusion clause, the clause is traditionally regarded
part of the contract, regardless of whether or not you have read it;
If the document is not signed, the clause usually must be brought to the attention of the other
party before the contract is concluded. It is said that the other party must have “reasonable
notice” of the clause.
Thornton v Shoe Lane Parking [1971] 2 QB 163

o Plaintiff left his car in a multi-storey car park;
o A ticket received on entering stated “this ticket is issued subject to the conditions of issue
as displayed on the premises”;
o Plaintiff could see there was printing on the ticket but did not read it;
o Inside the car park, a notice with a set of printed conditions excluded liability for injuries
to customers;
o The plaintiff was injured in an accident in the car park.
Held: contract was concluded when he received the ticket, and could not be altered by words
printed on ticket or a notice inside the car park. The exclusion clause was not binding on the
plaintiff.
Olley v Marlborough Court [1949] 1 KB 532

o A couple paid for a hotel room at reception;
o In their bedroom, a notice excluded liability for loss of valuables;
o A fur coat was stolen from the room.
Held: the notice was not incorporated into the contract as they only had notice of it after the
contract was entered into.
Interfoto Picture Library v Stiletto Visual Programmes [1988] 1 All ER 348

o S hired 47 photos from Interfoto on 5 March;
o The delivery note stated that the photos were to be returned within 14 days or a penalty of
£5 & VAT per day would be charged;
o The transparencies were returned on 2 April and Interfoto sued for £3,783.
Held: this was an onerous clause which had not specifically been brought to S’s attention. The
clause was not part of the contract.
62
CONSTRUCTION
Traditionally the exclusion clause would be Interpreted in favour of the person who did not draft
it. This was/is called the “contra proferentem” rule.
The courts also took a strict view of exclusion clauses which were very broad, or which
attempted to exclude liability for the very thing contracted for.
Conformity with modern approaches to interpretation (see above)?
The Federal Republic of Nigeria v JP Morgan Chase Bank, N.A. [2019]

In The Federal Republic of Nigeria v JP Morgan Chase Bank, N.A. [2019] EWHC 347 Andrews
Burrows QC (sitting as a Judge of the High Court) stated:
“34. When Lord Hoffmann set out the modern approach to contractual interpretation in
Investment Compensation Scheme v West Bromwich, he said, at 912: ‘Almost all the old
intellectual baggage of “legal” interpretation has been discarded’. One question that arises,
therefore, is whether the traditional rule of interpretation contra proferentem survives and in what
form… the recent authorities…indicate that the law is as follows:
The ambiguity of who is the ‘proferens’ (is it the person who drew up the exemption or the
person relying on it?) means that reference to a contra proferentem rule is problematic.”
“ii. In any event, the modern objective and contextual approach to the meaning of the words,
with business common sense and purpose also being relevant in some cases, renders it
unnecessary to regard there as being a separate contra proferentem rule.
Applying the modern approach, the force of what was the contra proferentem rule is embraced
by recognising that a party is unlikely to have agreed to give up a valuable right that it would
otherwise have had without clear words. And as Moore-Bick LJ put it in the Stocznia case, at
[23], ‘The more valuable the right, the clearer the language will need to be’. So, for example,
clear words will generally be needed before a court will conclude that the agreement excludes a
party’s liability for its own negligence.”
LEGISLATIVE CONTROLS: CRA 2015 AND UCTA 1977
Prior to the CRA 2015

“3. As the law currently stands, there are two major pieces of legislation dealing with unfair
contract terms. The Unfair Contract Terms Act 1977 sets out the traditional UK approach, while
the Unfair Terms in Consumer Contracts Regulations 1999 implement the 1993 EU Directive.
The two laws contain inconsistent and overlapping provisions, using different language and
concepts to produce similar but not identical effects. A law that affects ordinary people in
their everyday lives had been made unnecessarily complicated and difficult.” (Unfair Terms in
Contracts, 2005, Law Com No 292, Scot Law Com, No 199, Cm 6464).
Impact of CRA 2015
63
The CRA 2015 seeks to consolidate the regulation of unfair terms (including exclusion and
limitation clauses in consumer contracts);
In broad terms, the CRA 2015 provides that (i) consumer contracts are to be taken out of the
scope of the Unfair Contract Terms Act 1977 and that (ii) the Unfair Terms in Consumer
Contracts Regulations 1999 are revoked (see Schedule 4 but subject to transitional provisions)
and replaced by provisions in the CRA 2015.
CRA 2015: Key Date
o Key date is 1 October 2015 (see Consumer Rights Act 2015 (Commencement No. 3,
Transitional Provisions, Savings and Consequential Amendments) Order 2015/1630);
o If the contract was entered into before this date, it is essentially necessary to consider
UCTA 1977 (before amended by the CRA 2015) and the UTCCR 1999;
o If the contract was entered into after this date, it is necessary to the amended UCTA
1977 in relation to non-consumer contracts and to consider the CRA 2015 in relation
to consumer contracts.
Exclusion and Limitation Clauses in Non-Consumer Contracts

3 key provisions for our syllabus:
“(1) A person cannot by reference to any contract term or to a notice given to persons generally
or to particular persons exclude or restrict his liability for death or personal injury resulting
from negligence.
(2) In the case of other loss or damage, a person cannot so exclude or restrict his liability for
negligence except in so far as the term or notice satisfies the requirement of reasonableness.”
(s.2, UCTA 1977).
“(1) This section applies as between contracting parties where one of them deals on the other's
written standard terms of business.
(2) As against that party, the other cannot by reference to any contract term—
when himself in breach of contract, exclude or restrict any liability of his in respect of the
breach; or
claim to be entitled—
to render a contractual performance substantially different from that which was reasonably
expected of him, or
in respect of the whole or any part of his contractual obligation, to render no performance at
all…”
…except in so far as (in any of the cases mentioned above in this subsection) the contract
term satisfies the requirement of reasonableness.” (s.3, UCTA 1977).
64
“(1) Liability for breach of the obligations arising from—
section 12 of the Sale of Goods Act 1979 (seller's implied undertakings as to title, etc.)…
cannot be excluded or restricted by reference to any contract term.
(1A) Liability for breach of the obligations arising from—
section 13, 14 or 15 of the 1979 Act (seller's implied undertakings as to conformity of goods
with description or sample, or as to their quality or fitness for a particular purpose)…cannot be
excluded or restricted by reference to a contract term except in so far as the term satisfies
the requirement of reasonableness.” (s.6, UCTA 1977).
Exclusion and Limitation Clauses in Consumer Contracts

o Engages the ‘unfair term’ provisions in the CRA 2015;
o The provisions on ‘unfair terms’ are largely, although not entirely, contained in Part 2 of
the CRA 2015.
Part 1 of the CRA 2015 also includes some specific provisions on unfair terms such as:
s.31(1): “(1) A term of a contract to supply goods is not binding on the consumer to the extent
that it would exclude or restrict the trader's liability arising under any of these provisions—
section 9 (goods to be of satisfactory quality);
section 10 (goods to be fit for particular purpose);
section 11 (goods to be as described);
(d) section 12 (other pre-contract information included in contract);
section 13 (goods to match a sample);
section 14 (goods to match a model seen or examined);
(g) section 15 (installation as part of conformity of the goods with the contract)…”
Structure of New Unfair
Terms Regime
“(h) section 16 (goods not conforming to contract if digital content does not
conform);
section 17 (trader to have right to supply the goods etc);
(j) section 28 (delivery of goods);
(k) section 29 (passing of risk).”
s.57 (see earlier).
Application of New Unfair Terms Regime
65
Some contracts are generally excluded from the ambit of Part 2 of the CRA 2015 (e.g.
contracts of employment (s.61(2)));
Similarly some types of contractual term are excluded from being assessed for fairness
under Part 2 of the CRA 2015, notably:
S.64: “(1) A term of a consumer contract may not be assessed for fairness under section 62 to the
extent that—
it specifies the main subject matter of the contract [cf. terms which define risk in an insurance
context], or
the assessment is of the appropriateness of the price payable under the contract by
comparison with the goods, digital content or services supplied under it.
(2) Subsection (1) excludes a term from an assessment under section 62 only if it is transparent
and prominent.”
Conformity with EU Law (and does this now matter)?

“…in these circumstances English courts should seek to give effect to the interpretation and
guidance of the Court of Justice of the EU in their application of s.64(1)(b) of the 2015 Act
following the principle of the conforming interpretation of UK legislation implementing EU
directives, though the difficulty in doing so would be whether the English court would consider
this “possible” given the wording of s.64(1)(b) and its background in the Law Commissions'
earlier Advice.” (H. Beale (ed.), Chitty on Contracts, (33rd Edn., Sweet & Maxwell, London,
2018) para. 38-368).
Note: Competition and Markets Authority v Care UK Health and Social Holdings Ltd [2021]
EWHC 2088 (Ch) (which demonstrates the continuing relevance of EU consumer law in this
area).
See also Eternity Sky Investments Ltd v Mrs Xiaomin Zhang [2023] EWHC 1964 (Comm).
Section 62(1) provides that an unfair term will not be binding on a consumer.
The CRA 2015 adopts a dual approach to enforcement:

Private Enforcement: by a consumer (indeed under s.71 a Court may be required to consider
whether or not a particular term is unfair even where the issue has not been raised by the parties);
Public Enforcement: Schedule 3 provides the Competition and Markets Authority and other
regulators with various enforcement powers in relation to Part 2.
The test for ‘unfairness’ is contained in Section 62(4) and significantly it is not limited to non-
negotiated terms as under the UTCCR 1999:
66
“(4) A term is unfair if, contrary to the requirement of good faith, it causes a significant
imbalance in the parties' rights and obligations under the contract to the detriment of the
consumer.”
“Good faith in this context is not an artificial or technical concept; nor, since Lord Mansfield was
its champion, is it a concept wholly unfamiliar to British lawyers. It looks to good standards of
commercial morality and practice.”
(Director General of Fair Trading v. First National Bank plc [2001] UKHL 52 at [17] per Lord
Bingham).
“The fairness test thus includes the following main elements: significant imbalance to the
detriment of the consumer and good faith. It must, however, be emphasised that the overall
requirement is a unitary one – the question is whether a term is unfair… A rigid approach to
assessing fairness, involving an artificial exercise broken into separate parts, is not
appropriate.” (CMA, Unfair contract terms guidance: Guidance on the unfair terms provisions
in the Consumer Rights Act 2015 (July 2015) para. 2.10).
“In order to achieve the openness required by good faith, terms should be ‘expressed fully,
clearly and legibly, containing no concealed pitfalls or traps. Appropriate prominence
should be given to terms which might operate disadvantageously’ to the consumer.
Consumers should not be assumed necessarily to be able themselves to identify (particularly in
longer contracts) terms which are important, or which may operate to their disadvantage or
which would be likely to surprise them, if drawn to their attention.” (CMA, Unfair
contract terms guidance: Guidance on the unfair terms provisions in the Consumer Rights Act
2015 (July 2015) para. 2.22)
S.68(1): “A trader must ensure that a written term of a consumer contract, or a consumer notice
in writing, is transparent.”
S.69(1): “If a term in a consumer contract, or a consumer notice, could have different meanings,
the meaning that is most favourable to the consumer is to prevail.”
“…openness is not enough on its own, since good faith relates to the content of terms as
well as the way they are expressed. Fair dealing has been authoritatively said to require
that, in drafting and using contract terms, a trader ‘should not, whether deliberately or
unconsciously, take advantage’ of the consumers' circumstances to their detriment…The
CMA considers the CJEU’s approach demonstrates that businesses need, in formulating their
contract terms, not just to resist the temptation to take advantage, but actively to take the
legitimate interests of the consumer into account.” (CMA, Unfair contract terms guidance:
Guidance on the unfair terms provisions in the Consumer Rights Act 2015 (July 2015) para.
2.23ff).
67
See also James Robert Longley v PPB Entertainment Limited, PPB Counterparty Services
Limited, PPB Games Limited [2022] EWHC 977 (QB) at [102.2].
Part 1 of Schedule 2 contains an “indicative and non-exhaustive” list of terms which might be
regarded as unfair:
“A term which has the object or effect of inappropriately excluding or limiting the legal
rights of the consumer in relation to the trader or another party in the event of total or partial
non-performance or inadequate performance by the trader of any of the contractual obligations”;
“A term which has the object or effect of permitting the trader to retain sums paid by the
consumer where the consumer decides not to conclude or perform the contract, without
providing for the consumer to receive compensation of an equivalent amount from the trader
where the trader is the party cancelling the contract”;
“A term which has the object or effect of authorising the trader to dissolve the contract on
a discretionary basis where the same facility is not granted to the consumer, or permitting
the trader to retain the sums paid for services not yet supplied by the trader where it is the trader
who dissolves the contract”;
“A term which has the object or effect of irrevocably binding the consumer to terms with
which the consumer has had no real opportunity of becoming acquainted before the
conclusion of the contract”;
“A term which has the object or effect of permitting the trader to determine the characteristics of
the subject matter of the contract after the consumer has become bound by it”;
“A term which has the object or effect of limiting the trader's obligation to respect commitments
undertaken by the trader's agents or making the trader's commitments subject to compliance with
a particular formality.”
Peabody Trust Governors v. Reeve [2009] L. & T.R. 6 (variation clause challenged):
“In order to satisfy the requirements of the 1999 Regulations [now CRA 2015], any such
unilateral variation clause would need at a minimum to take full and proper account of the
commonsense guidelines set out by the Office of Fair Trading [now CMA] for tenancy
agreements.”
FURTHER READING
68
R. Stone & J. Devenney, The Modern Law of Contract (14th edn., Routledge, 2022) Ch.7.
Talking point
Paula needs a pair of shoes to wear to the evening party of a wedding. She buys a pair of plain
black sandals with a small heel from her local shoe shop, McKenna’s. She wears the shoe to the
wedding party, but to her embarrassment the heel of one shoe breaks early on in the evening and
she cannot wear the shoes for the remainder of the night. When she brings the shoes back to
McKenna’s shop, Mr McKenna, the shop owner, points to a term of the contract of sale, written
on the sales receipt, which states “McKenna’s shoe shop has a no-returns policy”. Advise Paula.
Talking point
Seán selects a sandwich from a shelf in a shop and purchases it from the shop owner, Samantha.
The sandwich package has a label which describes it as a “Cottage cheese and cucumber
sandwich”. When Seán eats the sandwich he realises it contains chicken. He is horrified because
he is a strict vegetarian. Advise Seán
69
SEMINAR TWO: OBLIGATIONS UNDER SALE OF GOODS CONTRACTS
What are the obligations and rights of parties to a sale of goods contract? Our starting
point is to consider the express terms of the contract. This can raise difficulties of
interpretation as parties can disagree about the meaning of a particular term. Thus in the
first part of this seminar we shall consider modern approaches to the interpretation of
contracts. The express terms of a sale of goods contract are supplemented by implied
rights and obligations. This may be through a term implied at common law. It may also
be through implication or inclusion of a term through statute (as under the Sale of Goods
Act 1979 or the Consumer Rights Act 2015). We shall explore these important implied
rights and obligations in the remainder of this seminar.

E. Baskind, G. Osborne & L. Roach, Commercial Law, Ch. 14 and Ch. 15;
Law: Text, Cases, and Materials, Ch 11 and Ch 12.

G. McMeel, ‘The rise of commercial construction in contract law’ [1998] Lloyd’s Maritime
and Commercial Law Quarterly 382;
I. Brown, ‘Forgery, Fine Art and the Sale of Goods’ (1990) 106 Law Quarterly Review 561;
Bramhill v. Edwards [2004] EWCA Civ 403;
R. Havelock, ‘The "unitary exercise" of contractual interpretation’ (2017) 76 Cambridge
Law Journal 486
70
50 - 55 Break

 An introduction to legal documentation: correspondence,
chronologies, briefing notes, attendance notes, bundles, witness
statements, pleadings (claim form, defence)
110 End of seminar
EXERCISES (PLEASE COME PREPARED TO DISCUSS THE FOLLOWING ISSUES)

Exercise One
Critically discuss the approach the courts take to the interpretation of commercial
agreements.
Exercise Two
Neil wishes to purchase 10 pints of milk for his café business. He telephones Harry, his
71
milkman, to ask if Harry will sell and deliver 10 pints of milk to him. As there is a milk
shortage, Harry informs Neil that he can only sell and deliver five pints of milk to Neil.
Neil says that this will be fine. However, by mistake, Harry delivers six pints of milk to
Neil.
Discuss.
Exercise Three
‘A seller of goods must have title to the goods to pass good title to her buyer.’
Discuss.
Exercise Four
Crankbrook Ltd. sells various types of new and second-hand trucks. Crankbrook Ltd. runs
this business from premises in Rockbeare. Earlier this year Eoin visited these premises.
Eoin, who runs a haulage business, wished to purchase a truck and trailer for transporting
foodstuffs. Whilst walking around the premises Eoin noticed a huge second-hand truck
and trailer which he became interested in buying (Crankbrook Ltd. had recently imported
this truck from the USA). After discussing this truck and trailer with Crankbrook Ltd. and
briefly examining it, Eoin decided to buy it. Crankbrook Ltd. and Eoin agreed a sale. After
paying using his credit card Eoin drove the truck and trailer back to Rockbeare.
Soon after purchasing the truck and trailer it was discovered that some industrial cleaning
materials, not suitable for use on trailers being used to transport foodstuffs, had been left
in the back of the trailer and had leaked. Eoin also discovered a problem with one of the
doors on the trailer. Crankbrook Ltd. agreed to fix the door. However, despite working on
the trailer for over three weeks, the problem was not remedied. When Eoin subsequently
complained about the situation, Crankbrook Ltd refused to do anything further and stated
that this was now Eoin’s problem. Eoin has now also been informed that the trailer is
slightly too wide to be lawfully driven on United Kingdom roads.
Advise Eoin the liability, if any, of Crankbrook Ltd.

resources helpful:
W. C. Ervine, ‘Satisfactory Quality: What does it Mean?’ [2004] Journal of Business
72
Law 68;
C. Twigg-Flesner, ‘The Relationship Between Satisfactory Quality and Fitness for
Purpose’ (2004) 63 Cambridge Law Journal 22.
73
SECTION 13: GOODS NO LONGER IN EXISTENCE AT DATE OF CONTRACT
THE POSITION AT COMMON LAW: THE DOCTRINE OF COMMON MISTAKE
At common law this may engage the doctrine of common mistake (see generally A. Chandler, J.
Devenney & J. Poole, ‘Common Mistake: Theoretical Justification and Remedial Inflexibility’
[2004] JBL 34 -58).
The important point to note is that at common law the doctrine of common mistake is subject
to the terms of the contract (see also John Lobb Ltd v John Lobb SAS [2021] EWHC 1226 (Ch)
and [2022] EWHC 2306 (Ch)). Therefore if we were to apply the common law rules to a
situation where the goods have already perished at the date of the contract, there would be at
least 4 possible outcomes:
 The contract is void for common mistake (Bell v. Lever Bros [1932] AC 161); or
 The contract was subject to a condition precedent that the goods are in existence
meaning neither party is bound (Associated Japanese Bank v. Credit du Nord SA [1988] 3
All ER 902); or
 S promised that the goods were in existence, meaning that S is now in breach (McRae
v. Commonwealth Disposals (1951) 84 CLR 377); or
 B might have taken the risk as to whether the goods were in existence (sometimes
referred to as ‘buying a chance’) in which case s/he is still liable to pay (cf. Couturier v.
Hastie (1856) 5 HLC 673).
S.6 SGA AND A MISUNDERSTANDING OF COUTURIER V. HASTIE (1856) 5 HLC 673
For many years Couturier v. Hastie (1856) 5 HLC 673 was thought to be authority for the
proposition that when specific goods have perished before the contract is concluded, the contract
is void (see P.S. Atiyah (1957) 73 LQR 349). This was partially codified in the SGA 1979, s.6:
“Where there is a contract for the sale of specific goods, and the goods without the knowledge
of the seller have perished at the time when the contract is made, the contract is void.”
Prima facie s.6 does not appear to be subject to the terms of the contract (e.g. what happens if S
explicitly promises the goods are in existence – see McRae v. Commonwealth Disposals (1951)
84 CLR 377) – is this correct (cf. Joseph Constantine SS Ltd v. Imperial Smelting [1942] AC 154
at 184 per Lord Wright (obiter))?
S.6 only applies to specific goods.
SPECIFIC AND UNASCERTAINED GOODS
“̒specific goods’ means goods identified and agreed on at the time a contract of sale is made
and includes an undivided share, specified as a fraction or percentage, of goods identified and
agreed on as aforesaid” (s.61 SGA 1979).
For example the sale of my (only) old car. By implication unascertained goods are not identified
and agreed upon at the time of the contract of sale: for example, the sale of a car of a particular
specification from a showroom catalogue.
74
Specific goods involve the sale of particular identified goods (e.g. my old car – we have agreed
upon the sale of that particular car). By contrast unascertained goods involve the sale of goods
of a particular specification but where no particular goods have been identified (e.g. buying a
particular model of Volvo from a car showroom catalogue – the dealer can supply any car
which meets the agreed specifications).
Unascertained goods may be further sub-categorised into purely generic goods (e.g. 100 tons of
barley) or quasi-specific goods (e.g. 100 tons of barley from a particular field or warehouse).
Can a contract for unascertained goods be void for common mistake at common law on the
ground that the goods have perished?
Generally not as S has promised to supply B with goods of a particular description rather than
particular, identified goods – therefore S can usually acquire appropriate goods from another
source (Intertradex SA v. Lesieur Tourteaux [1977] 2 Lloyd’s Rep 146);
cf. quasi-specific goods and Howell v. Coupland (1876) 1 QBD 258 (case on subsequent
impossibility – see below).
MEANING OF “PERISHED”?
S.6 only applies where the goods have perished (other cases – e.g. res sua - would be dealt with
by the common law).
S.6 does not apply where the goods have never existed (McRae v. Commonwealth Disposals
(1951) 84 CLR 377).
In Asfar v. Blundell [1896] 1 QB 123 dates were contaminated with sewerage – held perished for
insurance purposes (although could, apparently, have been used for making alcohol).
Cf. Horn v. Minister of Food [1948] 2 All ER 1036 (rotten potatoes had not perished – harsh?);
Stolen goods may also have “perished” (see Barrow, Lane & Ballard Ltd v. Philip Phillips & Co
Ltd [1929] 1 KB 574).
What is the position where only part of the goods perish?
Barrow, Lane & Ballard Ltd v. Philip Phillips & Co Ltd [1929] 1 KB 574 – S sold 700 bags of
nuts believed to be in a particular warehouse – in fact 109 had been stolen – contract held void
despite the fact that 591 still available.
Cf. HR & S Sainsbury Ltd v. Street [1972] 1 WLR 834 (actually a case on subsequent
impossibility but McKenna J held that S had to offer the available goods to the B (although B did
not have to accept)).
FURTHER READING
Ch13;
Law: Text, Cases, and Materials (6th edn., Oxford University Press, 2020) pp.343-355.
75
SECTION 14: POST CONTRACTUAL LOSS OF GOODS AND OTHER FORMS OF SUBSEQUENT
IMPOSSIBILITY
THE POSITION AT COMMON LAW: THE DOCTRINE OF FRUSTRATION
When goods perish after the contract has been formed this may raise issues of risk (see, for
example, SGA 1979, s.20, below). It may also raise the issue of whether or not the contract has
been frustrated.
The modern statement of the doctrine of frustration can be found in Davis Contractors Ltd v
Fareham UDC [1956] AC 696 at 728–29:
“So perhaps it would be simpler to say at the outset that frustration occurs whenever the law
recognises that without default of either party a contractual obligation has become incapable
of being performed because the circumstance in which performance is called for would
render it a thing radically different from that which was undertaken by the contract. Non
haec in foedera veni. It was not this that I promised to do.”
3 key points concerning common law frustration:

 It is not limited to situations where the goods perish (it also covers, for example,
subsequent illegality);
 It is subject to the terms of the contract; and
 It is difficult to establish…
Tsakiroglou & Co v Noblee and Thorl [1962] AC 93

Facts: The appellants agreed to sell groundnuts to the respondents to be shipped from Port Sudan
to Hamburg. Both parties expected that the shipment would be made via the Suez Canal, but this
was not specified in the contract.bThe Suez Canal was closed by the Egyptian government, and
this meant that the goods would have had to be shipped via the Cape of Good Hope, extending
the time for delivery by about four weeks. The appellants failed to ship the goods and the
respondents sued for non-performance. The appellants argued that the contract had been
frustrated.
Held: The House of Lords held that this was not frustration. The route for shipment had not been
specified in the contract, nor was any precise delivery date agreed. The fact that the rerouting
would cost more was regarded as irrelevant. The appellants were in breach of contract and the
respondents entitled to succeed in their action.
S.7, SGA 1979
The SGA 1979 includes a ‘partial’ codification of the doctrine of frustration:
76
“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.”
Section 7 only applies where:
 the goods have perished (on which, see above) – other cases of subsequent impossibility
(e.g. illegality) are dealt with by the common law; and
 there is an agreement to sell i.e. property has not passed.
Can a sale of goods contract where the property has passed be frustrated at common law?
Generally no as the essence of a contract of sale of goods is the passing of property (see Re
Shipton [1915] 3 K.B. 676).
Cf. Kursell v. Timber Operators and Contracts Ltd [1927] 1 KB 298 – concerned the contract for
the sale of timber from a Latvian forest – the contract was frustrated (by the nationalisation of
the forest) – Court held that property had not passed – Scrutton LJ went further and held that
even if the property had passed the contract was frustrated as there was still much to be
done to the timber (cutting, measurement etc.).
S.7 SGA only applies to specific goods – can a contract for unascertained goods be frustrated at
common law? Generally no – if an anticipated source fails, the S can usually get the goods from
another source (see Blackburn Bobbin v. Allen [1918] 2 KB 467 cf. re Badische Co Ltd [1921] 2
Ch 331);
The position may be different in respect of quasi-specific goods (HR & S Sainsbury Ltd v. Street
[1972] 1 WR 834 – above). See also CTI Group Inc v. Transclear SA [2008] EWCA Civ 856 at
[23] where Moore-Bick LJ stated:
“These authorities, in particular Société Co-operative Suisse des Céréales et Matières
Fourragères v La Plata Cereal Company S.A. and Lewis Emanuel & Son Ltd v Sammut , make it
clear that the principles of frustration are capable of applying to a contract for the sale by
description of unascertained goods of a specified origin, a conclusion that is also supported by
the observations of Russell J. in In re Badische Co Ltd [1921] 2 Ch. 331 at pages 381–383,
another case on which Mr. Nolan relied. However, they also make it clear that, in the absence
of some exceptional supervening event, such a contract will not be frustrated simply by a
failure on the part of the ultimate supplier to make goods available for delivery. The reason
for that is not far to seek: it is implicit in a contract of this kind that the seller will either supply
the goods himself or (more likely) will make arrangements, directly or indirectly, for the goods
to be supplied by others. In other words, he undertakes a personal obligation to procure the
delivery of contractual goods and thereby takes the risk of his supplier's failure to perform….”
“That obligation will be discharged by frustration if a supervening event not contemplated by the
contract renders that performance impossible or fundamentally different from what was
originally envisaged, but most events which result in the failure of a supplier to provide the
goods will not fall into that category. A few, however, such as a prohibition of export rendering
the shipment of the goods unlawful, usually will. It is not surprising, therefore, that the
authorities support Mr. Kenny's submission that the contract will not be frustrated if, although
delivery remains physically and legally possible, the seller's supplier chooses (for whatever
reason) not to make the goods available.”
77
On the consequences of frustration see, for example, R. Stone & J. Devenney, The Modern Law
of Contract (14th edn., Routledge, 2021) pp.436-445. Note that, somewhat strangely the Law
Reform (Frustrated Contracts) Act 1943 does not apply to cases falling within s.7 SGA 1979
(see s.2(5) LR(FC)A 1943).
Talking Point: were contracts frustrated by the consequences of COVID? Cf. Li Ching Wing v.
Xuan Yi Xiong [2003] HKDC 54 and Salam Air SAOC v Latam Airlines Groups SA [2020]
EWHC 2414 (Comm).
FURTHER READING
C. Macmillan, ‘The impact of Brexit upon English contract law’ (2016) King’s Law Journal 420
[and see now Canary Wharf (BP4) T1 Ltd v European Medicines Agency [2019] EWHC 921
(Ch)];
Ch13;
Law: Text, Cases, and Materials (6th edn., Oxford University Press, 2020) pp.348-355.
78
SEMINAR THREE: REMEDIES AND RESTRICTING LIABILITY
In Seminar Two we explored obligations and rights in sale of goods contracts. What
happens if such an obligation or right is breached? What remedies are available to a
seller or buyer? To what extent can a seller or buyer exclude or restrict potential liability
and/or remedies? In this seminar we shall consider the potential menu of remedies
available to a seller or buyer when the other party is in breach. We shall also consider the
validity of attempts to exclude or limit such liability and/or remedies. (You may find it
very useful to refresh relevant Contract Law principles: see R. Stone & J. Devenney, The
Modern Law of Contract (13th edn., Routledge, 2019) Ch. 6 and Ch.7).

E. Baskind, G. Osborne & L. Roach, Commercial Law, (Ch.16 and Ch.17;
Law: Text, Cases, and Materials, Ch.13 and Ch.14.

J. Adams, ‘Damages in Sale of Goods: A Critique of the Provisions of the Sale of Goods Act’
[2002] Journal of Business Law 553;
C. Willett, M. Morgan-Taylor and A. Naidoo, ‘The Sale and Supply of Goods to Consumers
Regulations’ [2004] Journal of Business Law 94 [refers to pre-Consumer Rights Act 2015
position although many of the issues are still highly relevant];
V. Mak, ‘The Seller’s Right to Cure Defective Performance – A Reappraisal’ [2007] Lloyd’s
Maritime and Commercial Law Quarterly 409.
79
50 - 55 Break

 Understanding the client’s position – why is context so
important? How does it affect the advice given?
 This seminar will look at various case studies.
110 End of seminar
DISCUSSION POINTS (PLEASE COME PREPARED TO DISCUSS THE FOLLOWING ISSUES)
Exercise One
What is the significance of the distinction between real remedies and personal remedies?
Exercise Two
80
‘The success of English commercial law is based upon the availability of adequate
remedies to ensure that, first, contracts of sale can be properly enforced and, second, that
adequate redress is available for their non-performance.’
Critically discuss.
Exercise Three
Critically discuss the remedies provided by the Consumer Rights Act 2015 for consumers.
Exercise Four
Last month, in a bid to attract customers to his pub during big sporting events, Eoin
decided to buy a new television for his pub. He visited the premises of Omega Ltd. and he
agreed to purchase a particular television. Omega Ltd were running a special promotion
which meant that every customer received a "free" industry popcorn machine when they
purchased a new television. Omega Ltd agreed to accept Eoin's old (pub) television in
part-payment for his new television and Eoin paid the remainder of the purchase price
using his store card. Eoin was given a receipt and on the back of this receipt the following
notice appeared: "All liability is limited to the return of the purchase price of the
television."
When Eoin got the television back to his pub, he noticed that there were a number of
scratches on it. Eoin also discovered that some of the functions on the television did not
work. Moreover, last week Eoin received an electric shock from the television; Eoin
contends that this was the result of the television not fully complying with the relevant UK
safety standards. Omega Ltd have unsuccessfully attempted to repair Eoin's television on
a number of occasions. Moreover the "free" popcorn machine has never worked and Eoin
has now discovered that the television cannot receive digital pictures.
Advise Eoin on Omega Ltd’s liability. Would your advice be different if Eoin had
purchased the television from his local supermarket for his personal use and paid all of
the price using his debit card?
81
resources helpful:
D. Harris, ‘Specific Performance – A Regular Remedy for Consumers?’ (2003) 119
Law Quarterly Review 541;
R. Goode, ‘The Concept and Implications of a Market in Commercial Law’ [1991]
Lloyd’s Maritime and Commercial Law Quarterly 177.
82
83
SECTION 15: PASSING OF PROPERTY
Remember the wording of s.2(1) SGA 1979:

“A contract of 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.” (SGA 1979, s.2).
WHAT IS MEANT BY PROPERTY?
“In everyday parlance it is common for the word ‘property’ to be used as a reference to a ‘thing’.
Thus – in this sense – a car is property, a table is property, a kettle is property, etc. Yet lawyers
use the word ‘property’ in a different way. More specifically, lawyers use the word ‘property’
to refer to the relationship (and associated rights) between an individual (or individuals)
and a ‘thing’.” (J. Devenney, ‘Aspects of Property, Security and Guarantees’ in M. Furmston &
J. Chuah, Commercial Law (2nd edn., Pearson, 2013) at p.6).
“…̒property’ means the general property in goods, and not merely a special property” (s.61 SGA
1979);
Therefore, as we have already noted, neither contracts of hire nor (at least initially) contracts of
hire-purchase are covered by the SGA 1979.
THE SIGNIFICANCE OF THE PASSING OF PROPERTY IN GOODS
The whereabouts of property is highly significant in English Law for the following (non-
exhaustive) reasons:
it impacts on whether the seller or buyer bears the risk of loss of, or damage to, the goods (SGA
1979, s.20 although note s.20(4) SGA 1979 and s.29 CRA 2015);
 it impacts on whether a contract of sale of goods can be frustrated (SGA 1979, s.7);
 it impacts on a seller’s ability to claim the price of the goods (SGA 1979, s.49);
 it has real ramifications should either the seller or the buyer become insolvent.
WHEN DOES PROPERTY PASS FROM SELLER TO BUYER?
The Sale of Goods Act 1979, ss.16-20B deal with when property passes under a contract of sale
of goods. In this context the SGA 1979 makes a distinction between:
 Contracts for the sale of specific goods;
 Goods delivered on approval, or on sale or return; and
 Contracts for the sale of unascertained goods.
Property passes when the parties intend it to pass:
“(1) Where there is a contract for the sale of specific or ascertained goods the property in them is
transferred to the buyer at such time as the parties to the contract intend it to be transferred.
84
(2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms
of the contract, the conduct of the parties and the circumstances of the case” (s.17).
CONTRACTS FOR THE SALE OF SPECIFIC GOODS
In practice it may be difficult to determine the intention of the parties, so s.18 provides a number
of presumptive rules for determining intention (rules 1-3 are relevant to specific goods).
S.18, Rule 1
“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, be
postponed.”
Unconditional contract: some debate about meaning of this phrase but probably means that
contract is not subject to a condition precedent (e.g. government approval), a retention of title
clause etc.
Deliverable state: “Goods are in a deliverable state within the meaning of this Act when they are
in such a state that the buyer would under the contract be bound to take delivery of them”
(s.61(5)).
Underwood Ltd v. Burgh Caste Brick [1922] 1 KB 343:

Facts: P agreed to sell condensing machine to D. Machine weighed over 30 tons and was
cemented to the floor. P had to detach it from the floor and dismantle it.
Held: property did not pass when contract made as not in a deliverable state at that point.
Head v. Showfronts [1970] 1 Lloyd’s Rep 140 (actually case under Rule 5(1):
Facts: P sold carpet to D. P required to lay carpet but, before it was laid, carpet was stolen.
Held: carpet not in a deliverable state;
Remember s.18 rules are presumptive rules.
S.18, Rule 2
“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.”
S.18, Rule 3
“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
85
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.”
S.18, Rule 3 only applies where the seller is bound to weigh, measure etc. (cf. Nanka-Bruce v.
Commonwealth Trust [1926] AC 77 – sub-buyer had to weigh the cocoa). If rule 3 does not
apply, it does not necessarily follow that property passes immediately (that will depend on
intention).
CONTRACTS ON A ‘SALE OR RETURN BASIS’
“Sale or Return”
“Rule 4.— When goods are delivered to the buyer on approval or on sale or return or other
similar terms the property in the goods passes to the buyer:— (a) when he signifies his
approval or acceptance to the seller or does any other act adopting the transaction;
(b) if he 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.” (s.18).
S.18, Rule 4
“[O]ther act adopting the transaction”: for example resale of goods (Kirkham v. Attenborough
[1897] 1 QB 201). On non-acceptance see:
Atari Corporation v. Electronics Boutique Stores [1998] 1 All ER 1010.
Facts: E were retailers who had stores all over the country. Contracted with Atari for the supply
of a quantity of a computer game called Jaguar. Terms were “sale or return” until 31 January
1996. The game did not sell too well and on 19 th January E decided to stop selling it. E notified
Atari of this and indicated that unsold games would be transferred to E’s warehouse so a detailed
list of remaining games could be made.
Held: Court held that this was an effective rejection despite the facts that (a) the goods were not
immediately ready for collection and (b) the quantity and identity of the rejected games was not
immediately known.
Alternatively property may pass by the passage of time (either past a specific time for rejecting
or, if no such time given, after a reasonable time):
Poole v. Smith’s Car Sales [1962] 1 WLR 744
Facts: involved a sale or return transaction between two car dealers.
Held: Court held that a reasonable time had elapsed taking into account (a) the declining second
hand market at that time of year; (b) the rapid depreciation of the car; (c) S’s requests for return;
and (d) the temporary nature of the arrangement (it was essentially a holiday arrangement).
86
CONTRACTS FOR THE SALE OF UNASCERTAINED GOODS
Again the intention of the parties is the cornerstone of the rules relating to when property
passes in unascertained goods.
S.18, Rule 5 provides presumptive guidance on intention. However, this is subject to s.16 SGA
1979: “Subject to section 20A below where there is a contract for the sale of unascertained goods
no property in the goods is transferred to the buyer unless and until the goods are
ascertained”.
S.18, 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; and the assent may be express or
implied, and may be given either before or after the appropriation is made.”
S.18, Rule 5(1)
“[D]eliverable state”: see s.18, Rule 1 (above).
“[U]nconditionally appropriated”: s.18, Rule 5(2) provides some assistance here – “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 to be taken to have unconditionally
appropriated the goods to the contract”.
Carlos Federspiel v. Twigg [1957] 1 Lloyd’s Rep 240

Facts: S manufactured bicycles for B. Packed into containers with the B’s name and address on
the containers. Before containers shipped S became insolvent.
Held: Pearson J held there was not an “unconditional appropriation”: For unconditional
appropriation the goods need to be irrevocably attached to the contract;merely setting aside
goods which are expected to be used to fulfil the order is insufficient.
Hendy Lennox v. Grahame Puttick [1984] 2 All ER 152

Facts: Contract for sale of generators. S sent B invoices and delivery notes containing the
individual serial numbers of the generators.
Held: property passed.
Aldridge v Johnson (1857) 7 E&B 885

Facts: Contract for sale of 200 sacks of barley. The sacks were provided by B. S filled 155
sacks but on the eve of bankruptcy, emptied the sacks back into the bulk.
Held: property had passed when sacks filled. (A surprising decision?)
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Facts: Noblett v. Hopkinson [1905] 2 KB 214
Facts: Contract for the sale of half a gallon of beer to be delivered on a Sunday. Beer poured on
Saturday night into a bottle belonging to the seller.
Held: no appropriation on Saturday; therefore offence committed when beer delivered on the
Sunday!
Wardar v. Norwood [1968] 2 QB 663

Facts: S contracted to sell 600 cartons of frozen kidneys (out of 1500 cartons) held in a cold
store. S gave B a delivery note to obtain the cartons of kidneys; B’s representative arrived at the
cold store to find 600 cartons of kidneys on the pavement awaiting collection.
Held: the 600 cartons of kidneys were appropriated to the contract when the delivery note was
tendered and accepted by the warehousemen.
S.18, 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; and the assent may be express or
implied, and may be given either before or after the appropriation is made.”
The unconditional appropriation must be with the assent of the other party; in Pignatoro v.
Gilroy [1919] 1 KB 459 assent was inferred from a month’s silence.
Remember no property will pass unless there is also ascertainment (see Healey v. Howlett [1917]
1 KB 337 – D ordered 20 boxes of fish from P – sent from Ireland with 170 other boxes – no
ascertainment until segregated at other end of journey).
ASCERTAINMENT BY EXHAUSTION
At common law it became established that goods could be ascertained by exhaustion (Wait &
James v. Midland Bank (1926) 24 Ll LR 313).
For example:
 S has a barrel containing 30 gallons of cider;
 S sells 10 gallons from the barrel to B1, 10 gallons from the barrel to B2 and 10 gallons
from the barrel to B3;
 The parties intend the property to pass immediately (although, of course, this is not
possible by virtue of s.16);
 S draws 10 gallons from the barrel and gives it to B1;
 S then draws 10 gallons from the barrel and gives it to B2;
 The remaining 10 gallons passes to B3 by virtue of ascertainment by exhaustion.
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In The Elafi [1982] 1 All ER 208 Mustill J. took this reasoning further, applying it to situations
where, in our example, B3 is entitled to a portion of the bulk under more than one contract:
 S has a barrel containing 30 gallons of cider;
 S sells 10 gallons from the barrel to B1, 10 gallons from the barrel to B2 and 10 gallons
from the barrel to B3;
 The parties intend the property to pass immediately (although, of course, this is not
possible by virtue of s.16);
 B2 sells her entitlement to B3;
 S draws 10 gallons from the barrel and gives it to B1;
 The remaining 20 gallons passes to B3 by virtue of ascertainment by exhaustion.
Compare Re London Wine (1986) BCC 121

 S sold wine to various customers but remained in possession of the wine;
 B’s paid for the wine and storage costs;
 None of the wine was earmarked for particular customers;
 S became insolvent;
 Could B’s claim wine from receiver?
 No – although complex as different groups of customers with slightly different
arguments;
Group One: claimed they each had bought the entire stock of a particular description of wine
and, therefore, there was ascertainment by exhaustion. Oliver J disagreed. Although S probably
intended to use wine already owned, there was nothing to stop S ultimately using other wine to
fulfil orders. This was not a case of quasi-specific goods.
Group Two: claimed between them they had bought the entire stock of a particular description
of wine and, therefore, there was ascertainment by exhaustion. Oliver J disagreed. Although S
probably intended to use wine already owned, there was nothing to stop S ultimately using other
wine to fulfil orders. This was not a case of quasi-specific goods.
Group Three: they had received acknowledgements that the company held wine for them but
failed as no ascertainment for purposes of s.16.
Talking point: Do you agree with the decisions in this case?
Results of these cases now confirmed by the SGA 1979 (as amended by the Sale of Goods
(Amendment) Act 1995…
S.18, Rules 5(3) and (4)
“(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
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quantity, then, if the buyer under that contract is the only buyer to whom goods are then
due out of the bulk—
the remaining goods are to be taken as appropriated to that contract at the time when the bulk is
so reduced; and
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.”
EVALUATION OF S.16 SGA 1979
To what extent can s.16 SGA 1979 result in harsh results (cf. Law Commission, Report on Sale
of Goods Forming Part of a Bulk (1993))?
Over the years a number of attempts have been made to side-step s.16. Most, although not all, of
these attempts were unsuccessful (e.g. in Re London Wine an argument using a tenancy in
common failed).
Re Wait [1927] 1 Ch 606

Facts: Wait had 1000 tons of wheat loaded on The Challenger. Sold 500 tons to B who paid for
the 500 tons. Subsequently Wait became bankrupt and the trustee in bankruptcy claimed all 1000
tons. B claimed he had an equitable charge over 500 tons of the wheat.
Held: Court of Appeal rejected this argument; Atkin LJ said that equity could not intervene as
the SGA 1979 was a complete code on passing of property (approved in Re Goldcorp [1995] 1
AC 74).
Re Stapylton Fletcher [1995] 1 All ER 192

Facts: another situation where wine was sold and stored by S. Cases of wine which became
subject to a contract of sale were separated from S’s ordinary trading stock and transferred to
warehouse stacks. Wine stored by type and vintage but not marked for individual customers;
Held: Judge Paul Baker QC held that when the wine was segregated it became ascertained for the
purposes of s.16 (despite the fact that it was not marked for individual customers). He said that
ascertainment was different where S made constructive delivery to themselves as
warehousemen (very controversial!). Re London Wine was distinguished by this process of
segregation. Property then passed in accordance with the intention of the parties. It was held that
the intention was that the customers should become tenants in common with other buyers of
particular wines.
THE SALE OF GOODS (AMENDMENT) ACT 1995
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SG(A)A 1995 was passed in response to some of the harsh consequences relating to the passing
of property in unascertained goods. It added a s.20A and s.20B into the SGA 1979.
S.20A allows some property to pass prior to ascertainment (remember s.16 is now subject to
s.20A). S.20A allows the “property in an undivided share in the bulk” to be transferred to a B
who becomes an “owner in common of the bulk” (s.20A(2)).
This provides some protection for B against S’s insolvency. B gets an “undivided share” in a
bulk, not property in any particular goods (passing of property in particular goods is still
governed by ss.16-18 SGA 1979).
S.20A can be excluded by contrary intention.
“This section applies to a contract for the sale of a specified quantity of unascertained goods if
the following conditions are met—
the goods or some of them form part of a bulk which is identified either in the contract or
by subsequent agreement between the parties; and
the buyer has paid the price for some or all of the goods which are the subject of the
contract and which form part of the bulk.” (s.20A(1)).
Specified quantity (not a fraction – see Law Commission at para 6.3).

Meaning of bulk?
S.61: “̒bulk’ means a mass or collection of goods of the same kind which— (a) is contained in a
defined space or area; and (b) is such that any goods in the bulk are interchangeable with
any other goods therein of the same number or quantity”;
Law Commission (at para 4.3) gave the following as examples of identified bulks:
 Cargo of wheat on a named ship;
 Oil in an identified storage tank;
 Cases of wine (all of the same kind) in an identified cellar.
Does the phrase “of the same kind” mean the goods have to be identical or is a more generic test
appropriate (cf. potatoes). Does a roll of carpet come within the definition of a bulk?
Quadra Commodities SA v XL Insurance Co [2022] EWHC 431 (Comm)

Facts: In Quadra Commodities SA v XL Insurance Co SE [2022] EWHC 431 (Comm) Butcher J.
considered the operation of s.20A(1). In that case there was no identification of the bulk in the
contract and so the issue was whether or not the bulk had been subsequently agreed by the
parties. More specifically it was argued that the bulk was identified through warehouse receipts.
However, the warehouse receipts only stated that the goods were stored at the warehouses of E;
the warehouse receipts did not give the precise warehouse and indeed the evidence was that
goods were moved between silos.
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Held: Butcher J., accepted (at [111]) that “…a site, and even an extensive one, [with a number of
warehouse] may constitute a defined ‘area’, and further that there may be cases where the parties
agree that the bulk is all the goods of a certain type within that area”.
However, relying on a decision of the High Court of Singapore in RBG Resources Plc (in liq) v
Banque Cantonale Vaudoise [2004] 3 SLR (R) 42, the learned judge held that the failure to
specify the precise warehouse(s) meant the bulk had not been subsequently identified by the
parties.
S.20A – Extent of Share?

“(3) Subject to subsection (4) below, for the purposes of this section, the undivided share of a
buyer in a bulk at any time shall be such share as the quantity of goods paid for and due to
the buyer out of the bulk bears to the quantity of goods in the bulk at that time.
(4) Where the aggregate of the undivided shares of buyers in a bulk determined under subsection
(3) above would at any time exceed the whole of the bulk at that time, the undivided share in the
bulk of each buyer shall be reduced proportionately so that the aggregate of the undivided shares
is equal to the whole bulk.”
S.20B deals with miscellaneous issues (e.g. deemed consent between co-owners as otherwise all
deals with the bulk would require the consent of all co-owners).
PASSING OF PROPERTY IN CONSUMER CONTRACTS
The Consumer Rights Act 2015 does not contain its own provision on the passing of property:
S.4(2): For the time when ownership of goods is transferred, see in particular the following
provisions of the Sale of Goods Act 1979 (which relate to contracts of sale)—
The section 16: goods must be ascertained rules

section 17: property passes when intended to pass
section 18: rules for ascertaining intention
section 19: reservation of right of disposal
section 20A: undivided shares in goods forming part of a bulk
section 20B: deemed consent by co-owner to dealings in bulk goods

governing the passing of property where a consumer pays in advance for unascertained goods are
currently subject to proposals for reform.
The Law Commission, Consumer Prepayments on Retailer Insolvency ((2015) Consultation
Paper No. 221) p1:
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“Consumers often pay for goods and services in advance of receiving them. This is common
practice for a range of products - from flights and theatre tickets to football season tickets and
magazine subscriptions. Many furniture retailers rely on receiving deposits to place orders with
suppliers. Holiday companies and hotels need the security of payment in advance to ensure
consumers do not cancel at the last minute…the gift card…market in the United Kingdom was
valued at £5.4 billion…”
“If the company that has taken the prepayment becomes insolvent, consumers risk losing
their money. Insolvency law does not give consumers any special protection. Along with
trade suppliers, landlords, HMRC and others, consumers are unsecured creditors who will not
receive anything until secured creditors (such as banks and investment funds) and preferential
creditors (such as employees) have been paid. This does not mean that consumers always lose
out. There is a wide variety of ways in which consumers may be protected - through industry-
specific schemes, through protections provided to those who pay with credit and debit cards…
However, such protection is patchy and cannot always be relied on.”
“The report sets out five recommendations which would improve consumers’ position on
insolvency:
• Regulating Christmas and similar savings schemes, which pose a particular risk to
vulnerable consumers.
• Introducing a general power for Government to require prepayment protection in sectors
which pose a particular risk to consumers.
• Giving consumers more information about obtaining a refund through their debit or credit card
issuer…
• Making a limited change to the insolvency hierarchy, to give a preference to the most
vulnerable category of prepaying consumers.
• Making changes to the rules on when consumers acquire ownership of goods.” (Law
Commission website, July 2016).
“The new rules should state that:

For specific goods, which are identified at the time of the contract, ownership should be
transferred at the time the contract is made. This should apply even if the retailer has agreed to
alter the goods in some way before the consumer takes possession.
For unascertained or future goods, which are not identified at the time of the contract, ownership
should be transferred when goods are identified for fulfilment of the contract…”
“(3) The legislation should include the following non-exhaustive list of events and circumstances
which would be sufficient to identify goods to the contract:
the goods have been altered to the consumer’s own specifications;
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the goods have been labelled with the consumer’s name or set aside for the consumer in a
way which is intended to be permanent;
the consumer is told that goods bearing a unique identifier will be used to fulfil the contract;
the consumer has physically examined and accepted the goods;
the goods are handed to a courier to be delivered to the consumer; or
the goods are delivered to the consumer.” (Law Commission, Consumer Prepayments on Retailer
Insolvency ((2016) Law Com No 368) p114).
“The government will explore options for taking forward the proposals to grant the Secretary of
State a power to require protection of consumer prepayments in sectors which, in the opinion of
the Secretary of State, pose a significant risk to consumers and to mandate protection for
consumer prepayments in schemes such as Christmas savings clubs and others where it becomes
apparent that there are significant risks to consumers. This includes further consultation on the
detail of the proposals and in particular exploring the technicalities of how we would
implement the proposals to transfer of ownership of goods in advance of any legislation.”
(Department for Business, Energy and Industrial Strategy, LAW COMMISSION REPORT ON
CONSUMER PREPAYMENTS ON RETAILER INSOLVENCY – GOVERNMENT
RESPONSE (December 2018) p.20)
The Law Commission’s work has continued with the issuing of a draft Bill and consultation
paper on its proposals (Law Commission Consultation Paper, Consumer Sales Contracts:
Transfer of Ownership (Consultation Paper 246 (2020)).
For the final draft Bill see: Law Commission Consultation Paper, Consumer Sales Contracts:
Transfer of Ownership (Law Com 398, (2021)). This would insert a new ss18A and 18B into the
Consumer Rights Act 2015.
S.18B(3) provides that “the contract is to be treated as including a term that ownership of the
goods, or the share of the goods, transfers to the consumer when the first of…” a number of
things occur including “(a) the goods are physically labelled with the consumer’s name in a
way that is intended by the trader to be permanent; (b) the goods are physically set aside for
the consumer in a way that is intended by the trader to be permanent…”.
Note that the draft s.18B does not apply to conditional sales (s.18B(1)).
FURTHER READING
Ch11;
https://www.lawcom.gov.uk/project/consumer-sales-contracts-transfer-of-ownership/
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95
SEMINAR FOUR: PROPERTY AND RISK
Personal property is a fundamental concept in Commercial Law (see J. Devenney, ‘Aspects

of Property, Security and Guarantees’, in M. Furmston and J. Chuah, Commercial Law,
(2nd edn., Pearson Publishing, 2012)) and goes to the root of a sale of goods contract (see
s.2, Sale of Goods Act 1979, considered in Seminar One). In this seminar we explore the
nature and significance of personal property for sales law as well as the rules which
govern when property passes between seller and buyer.

E. Baskind, G. Osborne & L. Roach, Commercial Law, Ch.11 and Ch.13;
Law: Text, Cases, and Materials, Ch. 9.

L. Gullifer, ‘"Sales" on retention of title terms: is the English law analysis broken?’ (2017)
133 Law Quarterly Review 244;
J. Ulph, ‘The Sale of Goods (Amendment) Act 1995: Co-ownership and the Rogue Seller’
[1996] Lloyd’s Maritime and Commercial Law Quarterly 93.
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50 - 55 Break

 Negotiation – why is this a key skill for any commercial lawyer?
 What strategies should be used?
 This workshop will provide an opportunity to practice negotiation
skills
110 End of seminar
Exercise One
What is meant by personal property? What is the significance of the passing of property
in sale of goods contracts? What is meant by risk and why is it significant?
Exercise Two
To what extent, if at all, do the rules on the passing of property in goods cause particular
problems for consumers? See:
https://www.lawcom.gov.uk/project/consumer-prepayments-on-retailer-insolvency
Exercise Three
Giles, a farmer, wishes to sell his only tractor. On Monday 16th April he places an advert
to that effect in the local newspaper. Later that day Chris views the tractor and agrees to
buy it. Chris explains that he will not be able to pay for the tractor until 19th April. Giles
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is reluctant to allow Chris to have possession of the tractor before Chris has paid for it.
Accordingly, it is agreed that the parties will meet on 19th April. At that meeting Chris will
pay for the tractor and he will then be allowed to take possession of it.
On 19th April Chris goes to the farm to collect and pay for the tractor. However, the farm
is locked and Giles does not appear to be there. Accordingly, Chris telephones the mobile
phone of Giles. Giles, who is at the Galway Races, answers and, when he realises that he
has forgotten to meet Chris, apologises. The parties arrange to complete the transaction
on 20th April instead. However, during a storm on the night of 19 th April the tractor is hit
by a bolt of lightening and destroyed.
On 21st April Kate, who has just returned from holiday, reads the previous weeks’ local
newspaper. She telephones Giles in the hope of purchasing the tractor. Giles tells he that
he has already sold it. At this point Giles remembers that Charlie, another farmer, had
offered to sell a particular tractor to him. Sensing a chance to earn some money, Giles
offers to sell Charlie’s tractor to Katie on the understanding that he will procure it from
Charlie. Katie is happy with the arrangement as she had previously seen Charlie’s tractor.
However, she thought this tractor had been stolen. Nevertheless, after Giles assures her
that the tractor has not been stolen, she agrees to this arrangement. It turns out that the
tractor had been stolen a week earlier.
On 22 April Amy visits the farm. She wishes to purchase some potatoes. Giles informs
her that he only has two sacks of potatoes left. Amy agrees to buy them both. When she
get home and opens the sacks, she finds that the potatoes are mouldy.
Discuss.
Exercise Four
WOW! Co. [WC] were, for many years, suppliers of fine ciders. Part of WC’s stock of cider
was already bottled but the majority of WC’s stock was stored in large oak vats. WC is
now insolvent. In the week before WC became insolvent the following events occurred:
(i) Jim agreed to buy 10 litres of sweet cider from WC. WC were to arrange
for the transportation of this cider to Jim. WC filled 10 one-litre bottles
with cider from a vat containing 100 litres of cider. These bottles were
then labelled with Jim’s name and address. WC also telephoned Jim to
inform him that his cider had been bottled. However, the transportation
had not yet been arranged;
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(ii) Kate agreed to buy 10 litres of medium dry cider from WC. Unbeknown to
Kate, her order was equal to WC’s total stock of medium dry cider. WC
bottled this cider and transferred it to their warehouse;
(iii) Adele visited WC’s shop. Whilst browsing the bottle racks she noticed a
brand of cider called Sidmouth Twister. She told WC’s manager, Matthew,
that she would like to buy some bottles of Sidmouth Twister as an
investment but she did not have room to store it. Matthew told her that if
she purchased some bottles of this cider, WC would store it for her. He
explained that it would be separated from WC’s trading stock and stored
along with cider belonging to other customers. Adele agreed to buy 10
bottles of Sidmouth Twister and to have it stored by WC. WC separated 10
bottles of cider from the trading stock and placed it, unmarked, with cider
stored for other customers;
(iv) Rebecca visited WC’s shop. She agreed to purchase six bottles of cider
from the rack nearest the door (there were 100 bottles in this particular
rack). No bottles were selected by WC for Rebecca.
Discuss.
resources helpful:
K. Llewellyn, ‘Through Title to Contract and a Bit Beyond’ (1937-8) 15 New York
University Law Quarterly 157;
L. Sealy, ‘Risk in the Law of Sale’ [1972B] Cambridge Law Journal 225.
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100
SECTION 16 NON-OWNERS AND THE PRINCIPLE OF NEMO DAT QUOD NON HABET
We recently considered the significance of the passing of property in contracts of sale of goods
and the rules which determine when property passes in such contracts. Implicit in our discussion
of these issues was the assumption that the person selling the goods (S) was the owner (O) of
the goods. We now consider the principle of nemo dat quod non habet.
Here we are dealing with situations where the seller of the goods is not the owner of the goods
and may, in fact, to use the terminology in some of the cases, be a rogue (R)!
The key question is whether or not a non-owner (say R) can transfer good title in the goods
to the buyer (B).
If R is not able to transfer good title to B, then the real owner of the goods (O) may be able to
reclaim them from B under, for example, the Torts (Interference with Goods) Act 1977, s.3(2).
In such circumstances, B may be in an unenviable position: if B has paid R for the goods, B may
have a personal action against R for the return of the price and/or damages but those
remedies will be of little use if, as has happened in many of the cases, R is either insolvent
or has absconded!
By contrast if R is able to transfer good title to B, O may be in the unenviable position - O may
have personal remedies against R yet again those remedies will be of little use if R is either
insolvent or has absconded.
PRINCIPLE OF NEMO DAT QUOD NON HABET
Our starting point is the common law principle of nemo dat quod non habet; nobody can give
better title than they have themselves. Applying this principle to the above scenario, O would be
able to reclaim the goods from B, (perhaps) leaving B in a difficult situation.
s.21 SGA 1979
“(1) Subject to this Act, 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.”
101
As is apparent from s.21, the nemo dat quod non habet principle is not absolute; there are a
number of exceptions (situations where a non-owner can pass good title to B).
At this point we see competing policy aims such as the protection of property (which would tend
towards protecting O) or the facilitation of commerce (which might tend towards protecting B, if
B acted in good faith, as, not to do so, might impede commercial transactions).
These competing policy aims were identified by Denning LJ in Bishopsgate Motor Finance Corp
Ltd v Transport Brakes Ltd [1949] 1 K.B. 322 at pp.336-337:
“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. The first principle has held sway for a long time, but it has
been modified by the common law itself and by statute so as to meet the needs of our own
times”.
INCOHERENT EXCEPTIONS?
“Statutory protection for the bona fide purchaser has developed in a piecemeal and haphazard
fashion; and some of the relevant provisions have been so drafter and interpreted as to make their
application depend not on principles of equity or justice but on fine technicalities which have
little rhyme and less reason” (The Crowther Committee on Consumer Credit, (1971) Cmnd 4596,
para 4.2.8).
TWO INNOCENT PARTIES?
A key issue, where both O and B are ‘innocent victims’ of R, relates to how the law balances, or
should balance, competing policy aims. In Lickbarrow v. Mason (1787) 2 TR 63 Ashhurst J.
famously stated:
“…whenever one of two innocent persons must suffer by the acts of a third, he who has enabled
such third persons to occasion the loss must sustain it.”
We can, of course, debate the concept of enabling but there is a bigger problem.
It is not always easy to identify whether O or B is ‘more’ innocent. Thus in Shogun Finance
Limited v Hudson (FC) [2003] UKHL 62 at [181]-[182] Lord Walker noted:
“181. A recurring theme in the authorities, starting with the very first sentence of the speech of
Lord Cairns LC in Cundy v Lindsay (1878) 3 App Cas 459, 463, is the Court's difficulty in
deciding which of two innocent parties should bear the loss caused by the fraud of a third person
(who may be beyond the reach of the law). Typically one innocent party is a seller who has
parted with goods to a rogue, without obtaining payment in cash, and the other innocent party
has bought the same goods from the rogue for cash. But although the Court recognises both as
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innocent there is sometimes an inclination to regard the eventual buyer from the rogue as
the more deserving of sympathy…”
“Thus Lord Denning MR said in Lewis v Averay [1972] 1 QB 198, 207,
‘As I listened to the argument in this case, I felt it wrong that an innocent purchaser
(who knew nothing of what passed between the seller and the rogue) should have his
title depend on such refinements. After all, he has acted with complete
circumspection and in entire good faith: whereas it was the seller who let the rogue
have the goods and thus enabled him to commit the fraud’…”.
“182. In that case both of the innocent parties were young men and both might be thought to
have been over-trusting. By contrast in Phillips v Brooks Ltd [1919] 2 KB 243, the seller was an
Oxford Street jeweller, and the ultimate holder was a pawnbroker, both of whom were
presumably experienced in their trades. In other cases one or other of the innocent parties may
appear to have a stronger claim on the Court's sympathy. But your Lordships have to lay down a
general rule to cover the generality of cases, and it would not be right to make any general
assumption as to one innocent party being more deserving than the other. That is especially
true in this case which is concerned, not with a sale but with a hire-purchase transaction, and in
which the issue to be decided is (as Lord Hobhouse has pointed out) ultimately a question of
statutory construction.”
REFORM?
In Ingram v. Little [1961] 1 QB 31 at 73-74 Devlin LJ (dissenting) suggested a different solution:

“For the doing of justice, the relevant question in this sort of case is not whether the contract was
void or voidable, but which of two innocent parties shall suffer for the fraud of a third. The plain
answer is that the loss should be divided between them in such proportion as is just in all
the circumstances. If it be pure misfortune, the loss should be borne equally; if the fault or
imprudence of either party has caused or contributed to the loss, it should be borne by that party
in the whole…In saying this, I am suggesting nothing novel, for this sort of observation has often
been made. But it is only in comparatively recent times that the idea of giving to a court power to
apportion loss has found a place in our law. I have in mind particularly the Law Reform Acts of
1935, 1943 and 1945, that dealt respectively with joint tortfeasors, frustrated contracts and
contributory negligence.”
Yet such a solution raises further practical difficulties and was rejected by the 1966 Law
Reform Committee (Cmnd 2958, (1966)).
Indeed, whilst it is largely recognised that this area of law is in need of some revision, it is not
clear whether there is the appetite to take forward such a revision. Thus in the Law
Commission’s Eleventh Programme of Reform (Law Com 330 (2011)) it was stated:
“3.4 This project was also included in our Ninth Programme. The project would consider
circumstances where a person buys an item in good faith only to discover that the seller did not
own it, or that it is subject to a claim by a third party. The basic rule is summed up by the maxim
“nemo dat quod non habet” (one cannot give what one does not have). However, the rule is
subject to an array of piecemeal exceptions and has been criticised as overly harsh on innocent
buyers. The issues involved in this project remain controversial.”
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EXCEPTIONS TO THE PRINCIPLE OF NEMO DAT QUOD NON HABET
Exception One: Consent;

Exception Two: Agency;
Exception Three: Powers of Sale;
Exception Four; Estoppel;
Exception Five: s.2, Factors Act 1889;
Exception Six: S.23 SGA 1979;
Exception Seven: s.8, Factors Act 1889 (Seller in Possession);
Exception Eight: s.9 Factors Act 1889 (Buyer in Possession);
Exception Nine: Part III Hire Purchase Act 1964.
EXCEPTION ONE: CONSENT
Unsurprisingly s.21 is made subject to situations where the goods are sold “with the consent of
the owner”. This might, for example, apply in relation to retention of title clauses where O sells,
subject to a retention of title clause, goods to B who, with O’s consent, sells them to a sub-buyer
(B2).
EXCEPTION TWO: AUTHORITY/AGENCY
S.21 also refers to agency (authority) as an exception to the principle of nemo dat quod non
habet. Agency rules are also applicable by virtue of s.62(2) SGA 1979.
Where the agent actually has his/her principal’s authority to sell the goods, the agent cannot
really be classified as a rogue.
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ACTUAL AUTHORITY
Actual authority may be express or implied. Implied actual authority may include:
 Incidental authority (an agent may, for example, have been given actual authority to
enter into a transaction (such as selling P’s goods) – this authority may include implied
authority for acts necessary to complete this transaction, (such as negotiating the price));
 Usual authority (authority which is usual in the A’s position given A’s role, trade,
business etc. (see Hely-Hutchinson v. Brayhead [1968] 1 QB 549)); and
 Customary authority (authority which is usual in a particular market or location (see
Cropper v. Cook (1867-68) LR 3 CP 194)).
RATIFICATION
Ratification – in some P can retrospectively authorise an agent’s actions (see Bolton Partners
Ltd v. Lambert (1889) LR 41 ChD 295).
APPARENT AUTHORITY
Sometimes a P will be bound by an A’s actions despite the fact that A did not have actual
authority (express or implied). Of particular interest in the current context is the concept of
apparent or ostensible authority.
Apparent or ostensible authority can arise in a number of ways including where A is placed in a
position where A usually has particular authority (but, unbeknown to T, A does not actually
have authority on this occasion).
Freeman & Lockyer v. Buckhurst Park (Mangal) Properties Ltd [1964] 2 QB 480
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Facts: Kapoor was a director of Buckhurst, a company formed to purchase and resell a large
estate. Kapoor acted as managing director of Buckhurst, with the board’s acquiescence although
he had never been formally appointed to that role, He engaged a firm of architects who after
completing their work claimed payment. Buckhurst refused to pay on the ground that Kapoor
had no authority to enter this contract.
Held: Kapoor had apparent authority.
“Ostensible or apparent authority is the authority of an agent as it appears to others. It
often coincides with actual authority. Thus, when the board appoint one of their number to be
managing director, they invest him not only with implied authority, but also with ostensible
authority to do all such things as fall within the usual scope of that office. Other people who see
him acting as managing director are entitled to assume that he has the usual authority of a
managing director. But sometimes ostensible authority exceeds actual authority. For instance,
when the board appoint the managing director, they may expressly limit his authority by saying
he is not to order goods worth more than £500 without the sanction of the board. In that case his
actual authority is subject to the £500 limitation, but his ostensible authority includes all the
usual authority of a managing director. The company is bound by his ostensible authority in his
dealings with those who do not know of the limitation.” (Hely-Hutchinson v. Brayhead [1968] 1
QB 549 at 583 per Lord Denning MR).
Basis for apparent authority (disputed by academics!):
“Ostensible or apparent authority which negatives the existence of actual 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) a reliance on the
representation, and (iii) an alteration of your position resulting from such reliance” (Rama
Corporation LD. v Proved Tin and General Investments LD. [1952] 2 Q.B. 147 at 149 per Slade
J);
Generally the representation cannot come from the A (cf. First Energy (UK) Ltd v. Hungarian
International Bank Ltd [1993] BCC 533).
[See also exception four (estoppel) and exception five (s.2, Factors Act 1889)].
EXCEPTION THREE: SPECIAL POWERS OF SALE
S.21(2)(b) provides that the nemo dat quod non habet principle in the earlier part of that section
does not affect “the validity of any contract of sale under any special common law or statutory
power of sale or under the order of a court of competent jurisdiction”.
There are many different types of common law and statutory powers of sale. In Bulbruin Ltd v
Romanyszyn [1994] R.T.R. 273 the Court of Appeal dealt with an exception to the nemo dat
quod non habet principle under the Road Traffic Regulation Act 1984 and the Removal and
Disposal of Vehicles Regulations 1986, Regulation 15.
EXCEPTION FOUR: ESTOPPEL
S.21 states that the principle of nemo dat quod non habet will not apply where “...the owner [O]
of the goods is by his conduct precluded from denying the seller's [R’s] authority to sell”;
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This refers to a particular principle of estoppel. However it is important to appreciate that, unlike
some estoppels, this type of estoppel is more than an evidential tool; it can actually transfer
O’s title to B (Eastern Distributors Ltd v. Goldring [1957] 2 QB 600).
So when will O be “precluded” from denying R’s authority to sell? How wide (or narrow) is this
exception? Will O be so “precluded” whenever, to use the famous theme from Ashhurst J. in
Lickbarrow v. Mason (1787) 2 TR 63, he has “enabled” R to cause a loss?
A useful starting point is the following example given by Lord MacNaughton in Farquharson
Brothers & Co.v. C. King & Co. [1902] AC 325 at 335:
“Nothing is better settled than this, that if a person buys a chattel and it turns out that the chattel
was found by the person who professed to sell it, the true owner can recover his property, unless
there has been a sale in market overt. The right of the true owner is not prejudiced or affected
by his carelessness in losing the chattel, however gross it may have been. If I lose a valuable
dog and find it afterwards in the possession of a gentleman who bought it from somebody
whom he believed to be the owner, it is no answer to me to say that he never would have
been cheated into buying the dog if I had chained it up or put a collar on it or kept it under
proper control. If a person leaves a watch or a ring on a seat in the park or on a table at a cafe
and it ultimately gets into the hands of a bona fide purchaser, it is no answer to the true owner to
say that it was his carelessness and nothing else that enabled the finder to pass it off as his own.”
Similarly an O is generally not “precluded from denying” R’s authority to sell simply by the fact
that O gave R possession of the goods:
Central Newbury Car Auctions Ltd. v Unity Finance Ltd. [1957] 1 Q.B. 371
Facts: R discussed with O acquiring a car on hire-purchase. The transaction was to involve a
finance company. After completing various forms, R was permitted to leave with the car and
registration book. Ultimately the finance company refused the hire-purchase proposal and the
car was found in the possession of B. B contended that O were “precluded” from denying R’s
authority to sell as O had permitted R to take possession of the car and the registration book.
Held: (Denning LJ dissenting) that there was no estoppel. Merely giving R possession of the
goods was not sufficient and a car registration book was not a document of title.
ESTOPPEL BY REPRESENTATION
In Mercantile Bank of India Ltd v. Central Bank of India Ltd [1938] AC 287 Lord Wright spoke
of an estoppel by representation. Indeed for many years Professor Atiyah argued that this
exception to the principle of nemo dat quod non habet requires a representation (an approach
endorsed by Popplewell J. in Lenn Mayhew-Lewis v. Westminster Scaffolding plc (5th March
1999, unreported)).
The key requirements of estoppel by representation are: (i) a representation by O that R is
either the true O or has O’s authority to sell the goods and (ii) reliance.
(i) A representation
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Eastern Distributors Ltd v. Goldring [1957] 2 QB 600
Facts: The O of a van (Murphy) wanted to use the van to raise money. O and R (Coker), who
was a motor dealer, completed HP forms for a finance company so that it appeared that R was
the true O, and O was his customer. The HP proposal was accepted meaning that the finance
company purchased the van from R and let it back to O on HP terms. O did not pay the
instalments and sold the car to B. Did B get good title?
Held: (Devlin J. giving the judgment of the Court) the finance company obtained title by
estoppel from O as a result of the way in which the forms were filled out. The original
owner (Murphy) did not regain title when the van was let under a HP agreement to him and so he
could not transfer good title to B.
The representation does, however, need to be voluntary. Thus in Debs v Sibec Developments
Ltd [1990] R.T.R. 91, where the alleged representation was made at gunpoint, Simon Brown J.
stated:
“As it seems to me, the owner who is induced to sign a document by force, not least at gunpoint,
must be in at least as good and quite arguably a better position than one who signs as a result
of fraud. Certainly there was here no want of reasonable care by the plaintiff in signing the
receipt document. I am clear that it cannot therefore found a defence of estoppel by
representation against him.”
(ii) Reliance
In addition the representation by O must have been relied upon by B. (Farquharson Brothers &
Co. v. C. King & Co. [1902] AC 325 at 341). It is not clear whether or not the reliance needs to
be reasonable (for a suggestion that reliance needs to be reasonable see General Guarantee v.
East Anglian Finance Ltd (unreported, 25 June 1999)).
ESTOPPEL BY NEGLIGENCE?
In Mercantile Bank of India Ltd v. Central Bank of India Ltd [1938] AC 287 Lord Wright
referred to the notion of estoppel by negligence. Yet, as we have seen, merely giving possession
of goods or documents of titles to R is insufficient to found estoppel for the purposes of s.21.
A number of principles can be distilled from the judgment of Popplewell J. in in Lenn Mayhew-
Lewi v. Westminster Scaffolding plc (5th March 1999, unreported):
(i) Estoppel by negligence requires O to owe B (or the world) a relevant duty of care;
(ii) That duty must have been breached by O; and
(iii) There must be a causal link between O’s negligence and B purchasing the goods.
(i) Duty of Care?
Moorgate Mercantile Co. Ltd. v Twitchings [1977] A.C. 890
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Facts: O let a car on hire-purchase terms to R who sold it to B. Before purchasing the car, B had
checked with the HPI whether or not the car was subject to a hire-purchase agreement (the vast
majority of such hire-purchase agreements were registered with HPI although it was not
compulsory to do so). B purchased the car after HPI could find no record of a hire-purchase
agreement relating to the car in question. The question was whether or not O’s failure to register
with the HPI created an estoppel by negligence against them.
Held: (Lord Wilberforce and Lord Salmon dissenting) there was no estoppel by negligence as
there was no duty to register with the HPI.
Mercantile Credit Co Ltd v Hamblin [1965] 2 QB 242

Facts: O, the owner of a car, wished to use the car as security for a loan. She went to R who
seemed to be a perfectly respectable car dealer. O signed a number of HP forms (thinking they
were forms to use the car as security). O was given a blank cheque and allowed to keep
possession of the car. R sought to sell the car, using the HP forms, to B, a finance company, and
one of the questions was whether O was estopped by negligence from denying her title.
Held: O did owe B a duty of care given the ‘proximity’ between O and persons in B’s position.
(ii) Breach?
If a duty of care can be established, the next issue is, of course, whether or not that duty has been
breached. Indeed in Mercantile Credit Co Ltd v Hamblin [1965] 2 QB 242 the Court of Appeal
held that O was not in breach of the duty which she owed to B, Pearson LJ stating:
“The next question is whether she committed any breach of duty, that is to say, whether she was
negligent. On the peculiar facts of this case I think that there should not be a finding of
negligence against her. She was well acquainted with the dealer, who was apparently
respectable, solvent and prosperous, and the blank cheque which he gave her would
naturally give her confidence that she could rely on his due performance of the
arrangement which they had made.”
(iii) Causation?
If a duty of care can be established and that duty has been breached, the next issue is whether or
not the breach caused B’s loss.
EXCEPTION FIVE: FACTORS ACT 1889, S.2(1)
A non-owner (“R”) who sells goods with the actual authority of the owner can pass good title to
those goods (although as R has O’s actual authority, R is not really a rogue!). Equally a non-
owner who lacks O’s actual authority to sale the goods, may, on general agency principles, be
able to pass good title to the goods if the sale is within the scope of R’s ostensible/apparent
authority and/or usual authority;
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s.2(1), Factors Act 1889 links to these notions; in broad terms s.2(1) deals with unauthorised
dispositions (authorised dispositions would be covered by the actual authority) by mercantile
agents; and, if the relevant requirements are met, the unauthorised disposition is essentially
regarded as having been authorised. This exception is grounded in the needs of the commercial
community.
“(1) Where a mercantile agent is, with the consent of the owner, in possession of goods or of
the documents of title to goods, any sale, pledge, or other disposition of the goods, made by
him when acting in the ordinary course of business of a mercantile agent, shall, subject to the
provisions of this Act, be as valid as if he were expressly authorised by the owner of the
goods to make the same; provided that the person taking under the disposition acts in good
faith, and has not at the time of the disposition notice that the person making the
disposition has not authority to make the same.” Factors Act 1889, s.2(1)
Of course, as we have seen, merely giving somebody possession of goods/documents of title is
not sufficient to create an estoppel. The key point here is that it is the combination of the
mercantile agent having possession of the goods/documents of title and their status as a
mercantile agent which gives rise to the misleading picture;
Mercantile agent being somebody who “in the customary course of his business as such agent
authority either to sell goods, or to consign goods for the purpose of sale, or to buy goods, or to
raise money on the security of goods” (s.1(1)).
S2(1) ‘MERCANTILE AGENTS’
Pivotal to the exception in s2(1) Factors Act 1889 is R’s status as a “mercantile agent”. It is,
therefore, unfortunate that the concept of a mercantile agent is a little hazy, not least as the
phrase is not commonly in use and the courts have, sometimes, given the interpretation of a
mercantile agent in s.1(1) a rather generous reading.
A useful starting point is Goode and McKendrick’s notion of a “professional dealer”
(McKendrick, Goode on Commercial Law, (5th edn., Penguin, 2016) p.462). See also Fadallah v.
Pollack [2013] EWHC 3159 (needs to buy and sell on behalf of others);
There have also been a number of cases involving car/art/antiques/jewellery dealers (see e.g.
Lowther v. Harris [1927] 1 KB 393). It is clear that a mere employee is not a mercantile agent
(Lamb v. Attenborough (1862) 1 B. & S. 831). On the other hand, a “mercantile agent” does not
need to act for more than one principal and, indeed, the transaction in question may be the first
time that R acted as a mercantile agent.
Section 2(1) Factors Act 1889 states that the mercantile agent needs to be in possession (see
Beverley Acceptances v. Oakley [1982] RTR 417) of the goods or documents of title). S.1(3)
provides that goods shall “include wares and merchandise”. The definition of goods generally
does not create a problem although in Pearson v. Rose & Young [1951] 1 KB 275 it was held that
in the context of a car, goods meant car PLUS registration document!
We shall return to the significance of this case below but it should be noted that the Court of
Appeal in Stadium Finance v. Robbins [1962] 3 WLR 453 was clearly uncomfortable with such
an approach.
Exception Five: Factors Act 1889, s.2(1)
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S2(1) ‘CONSENT’
At one time it was thought that there would be no consent of O was tricked into giving the goods
to the mercantile agent (Oppenheimer v. Fraser [1907] 2 KB 50). However, this changed with
Pearson v. Rose & Young [1951] 1 KB 275 (although still no consent if you are tricked in such a
way that you do not know you are giving possession).
Pearson v. Rose & Young [1951] 1 KB 275

Facts: O left car with MA with instructions to obtain offers but not to sell it. MA orchestrated
an emergency which meant that O rushed-off leaving registration book.
Held: MA in possession of car with consent of owner but not registration book with consent of
owner. Goods = car + registration book, therefore S.2 not applicable.
It seems MA must also be in possession as an MA (Astley International Trust v. Miller [1968] 2

All ER 36).
S2(1) “ORDINARY COURSE OF BUSINESS”:
This includes proper business hours, place of business etc. (see Oppenheimer v. Attenborough
[1908] 1 KB 221). In Stadium Finance v. Robbins [1962] 3 WLR 453 Court of Appeal held that
sale of car without registration document was not a sale in the ordinary course of business.
S2(1) “OTHER DISPOSITION”:
See Exception Seven below (s.8 Factors Act 1889)
EXCEPTION SIX: SALE OF GOODS ACT 1979, S.23
It is commonplace to consider s.23 Sale of Goods Act 1979 as an exception to the principle of
nemo dat quod non habet although it is possible to debate the extent to which it is really an
exception to that principle. S.23 applies where a party (whom, for the sake of convenience we
shall call R) gets title to goods from O but, for some reason such as misrepresentation, R’s title
is voidable but R sells the goods to B before O avoids R’s title (at common law the same
principle applies where R pledges the goods - Phillips v Brooks [1919] 2 KB 243).
In such circumstances, if the requirements of s.23 are fulfilled, B gets good title. S.23 is set-out
in the following terms:
“When the seller of goods has a voidable title to them, but his title has not been avoided at the
time of the sale, the buyer acquires a good title to the goods, provided he buys them in good
faith and without notice of the seller's defect of title.”
When might a title be voidable?
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In cases where R has a voidable title, it is important, for the purposes of s.23, that O avoids that
title before R sells the goods to B. So how does O avoid the R’s title?
In general terms, O’s decision to rescind the transaction needs to be communicated to R (see
Reese River Silver Mining Co v Smith (1869) L.R. 4 H.L. 64 at 74) but what if R, being a rogue,
disappears? The issue was considered by the Court of Appeal in Car and Universal Finance Co.
Ltd. v Caldwell [1965] 1 Q.B. 525 who held that in such circumstances O should evidence a clear
intention and take reasonable steps (such as informing the police).
EXCEPTION SEVEN: FACTORS ACT 1889, S.8 (SELLER IN POSSESSION)
S.8, Factors Act 1889 provides a further exception to the principle of nemo dat quod non habet:
“Where a person, having sold goods, continues, or is, in possession of the goods or of the
documents of title to the goods, the delivery or transfer by that person, or by a mercantile
agent acting for him, of the goods or documents of title under any sale, pledge, or other
disposition thereof, or under any agreement for sale, pledge, or other disposition thereof, to any
person receiving the same in good faith and without notice of the previous sale, shall have the
same effect as if the person making the delivery or transfer were expressly authorised by
the owner of the goods to make the same.”
Curiously s.8 Factors Act 1889 is reproduced, with the omission of some words in s.24 Sale of
Goods Act 1979. We will focus on s.8 of the Factors Act 1889 given that it is expressed in wider
terms.
In broad terms, s.8 may apply in situations where O sells goods to B1 and property in those
goods passes to B1 but O remains in possession of the goods and purports to sell them to B2
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S8: ‘IN POSSESSION’
“[A] a person, having sold goods, continues, or is, in possession of the goods or of the
documents of title to the goods”: at one time it was thought that the person would have to
remain in possession as a seller (Staffs Motor Guarantee v. British Wagon [1934] 2 KB 305);
however, in Pacific Motors Auctions v. Motor Credits [1965] AC 867 it was held that this was
not necessary (key is continuity of possession).
This was approved by the Court of Appeal in Worcester Works Finance v. Cooden Engineering
[1972] 1 QB 210. The Court of Appeal in Worcester Works cited the New Zealand case of
Mitchell v. Jones (1905) 24 NZLR 932 (“or in possession” refers to situations where O did not
have possession of goods when s/he sold them).
S.8 “DELIVERY OR TRANSFER”
“Delivery or transfer” of goods/documents of title to B2: includes actual delivery but what
about constructive delivery?
In constructive delivery the physical possession is not altered but right to possession is altered;
see Gerson v. Wilkinson [2000] 3 WLR 1645 (constructive delivery is sufficient – sale and
leaseback to B2 but remained with O throughout).
S.8: “SALE, PLEDGE OR OTHER DISPOSITION ”
“To my mind the word "disposition" is a very wide word. In Carter v. Carter [1896] 1 Ch. 62, 67,
Stirling J. said that it extends "to all acts by which a new interest (legal or equitable) in the
property is effectually created." That was under an entirely different statute, but I would apply
that wide meaning in this section. When the Cooden company retook this car (because the
cheque had not been met) there was clearly a transfer back to them of property in the goods.
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They would not thereafter be able to sue on the cheque. By retaking the goods they impliedly
gave up their remedy on the cheque. That retransfer of the property back to the Cooden company
was a "disposition" within the section.” (Worcester Works Finance v Cooden Engineering Co
[1972] 1 QB 210 at 218 per Lord Denning M.R).
Worcester Works Finance v Cooden Engineering Co [1972] 1 QB 210

Facts: D sold car to G; G paid with cheque which was dishonoured. G sold car to P but remained
in possession. D, with consent of G, retook car;
Held: when G sold car to P but remained in possession, he became a seller in possession.
Retaking of the car with consent was a “disposition” therefore D protected.
EXCEPTION EIGHT: FACTORS ACT 1889, S.9 (BUYER IN POSSESSION)
S.9, Factors Act 1889 provides a further exception to the principle of nemo dat quod non habet:
“Where a person, having bought or agreed to buy goods, obtains with the consent of the seller
possession of the goods or the documents of title to the goods, the delivery or transfer, by
that person or by a mercantile agent acting for him, of the goods or documents of title, under
any sale, pledge, or other disposition thereof, or under any agreement for sale, pledge, or other
disposition thereof, to any person receiving the same in good faith and without notice of any
lien or other right of the original seller in respect of the goods, shall have the same effect as
if the person making the delivery or transfer were a mercantile agent in possession of the
goods or documents of title with the consent of the owner.”
Curiously s.9 Factors Act 1889 is reproduced, with the omission of some words (the utility of
which, as we shall see, are unclear), in s.25, Sale of Goods Act 1979. We will focus on s.9 of the
Factors Act 1889 given that it is expressed in wider terms.
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In broad terms, s.9 may apply in situations where a seller (O) lets a person who has “agreed to
buy” goods (R) have possession of those goods before the property in those goods have passed,
and R wrongly attempts to sell those goods to B. In such circumstances, if the requirements of
s.9 are fulfilled, B may obtain good title.
S9: “A PERSON WHO HAS “BOUGHT OR AGREED TO BUY GOODS”
S.9 only applies where R has “bought or agreed to buy goods”. The fact that one circumstance
where s.9 might apply is where R has “bought” the goods is puzzling; if ‘R’ has property in the
goods he or she can pass property in the goods without need for recourse to any exception to the
principle of nemo dat quod non habet!
We will, therefore, focus on situations where R has “agreed to buy” the goods.
Significantly a bailee under a hire purchase agreement is not somebody who, at least initially,
has “agreed to buy” the goods subject to the hire purchase transaction (Helby v. Matthews [1895]
AC 471). By contrast, conditional sale agreements were traditionally regarded as situations
where R had “agreed to buy” the goods (Lee v. Butler [1893] 2 QB 318). The distinction
between a conditional sale agreement and a hire purchase agreement is that under a conditional
sale agreement the buyer is committed from the outset to buying the goods; whereas under a
hire purchase agreement the bailee is not committed to buying the goods from the outset
(although it is highly likely that they will do so).
On the other hand, it is not always easy to distinguish these two types of transaction (see, for
example, Forthright Finance Ltd v. Carlyle Finance Ltd [1997] 4 All ER 90), particularly where
the price payable under a conditional sale agreement is to be paid in instalments - functionally
the two types of agreement are very similar. Indeed s.9 has now been amended, so that Lee v.
Butler is largely reversed, by the following addition:
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“For the purposes of this section—
the buyer under a conditional sale agreement shall be deemed not to be a person who has
bought or agreed to buy goods, and
“conditional sale agreement” means an agreement for the sale of goods which is a consumer
credit agreement within the meaning of the Consumer Credit Act 1974 under which the purchase
price or part of it is payable by instalments, and the property in the goods is to remain in the
seller (notwithstanding that the buyer is to be in possession of the goods) until such conditions as
to the payment of instalments or otherwise as may be specified in the agreement are fulfilled.”
(s.9).
S9: POSSESSION AND CONSENT
Under s.9 the goods must be in the possession of R with the consent of the seller (O); in terms of
consent, we can refer back to our discussion under s.2, Factors Act 1889. “Possession” clearly
includes actual possession but it has also been interpreted to include some forms of constructive
possession:
Four Point Garage v Carter [1985] 3 All ER 12

Facts: At R’s request, S delivered the goods directly to B (R’s buyer). Did this mean that R had
not been in possession, as required by s.9, at the relevant time?
Held: s.9 applicable as, although R did not get physical possession, S constructively delivered
the goods to R who constructively delivered them to B.
S.9 “DELIVERY OR TRANSFER OF THE GOODS”
The next requirement under s.9 is for R to deliver or transfer the goods to B. As Four Point
Garage v Carter [1985] 3 All ER 12 demonstrates, it is (sometimes) sufficient if R
constructively delivers the goods to B;
The transfer or delivery must, however, be voluntary;
Thus in Forsythe International (UK) Ltd v Silver Shipping Co Ltd (The Saetta) [1993] 2 Lloyd’s
Rep 268 s.9 did not apply as the bunkers (the goods in question) were involuntarily taken from
R when the ship on which they were held was retaken by the owners of that ship (who were not
the owners of the bunkers).
S9: “SALE, PLEDGE OR OTHER DISPOSITION”
The delivery or transfer of the goods must be: “under any sale, pledge, or other disposition
thereof, or under any agreement for sale, pledge, or other disposition thereof…”;
We can refer to our discussion in relation to s.8 Factors Act in relation to the meaning of
“disposition”. The underlined words, which as noted above are omitted from s.25 Sale of Goods
Act 1979, require some discussion. In particular, what is the significance of those words?
There is some authority to the effect that these words protect B from an action in conversion
where R delivers or transfers the goods to B under an agreement for sale, pledge, or other
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disposition (Shenstone & Co v Hilton [1894] 2 QB 452). However, a B who receives goods
“under any agreement for sale, pledge, or other disposition thereof” does not obtain title to the
goods.
Thus in Re Highway Foods International Ltd [1995] BCC 271 E. G. Nugee QC essentially had to
consider the situation where R obtains goods subject to a retention of title clause and then
disposes of them to a B also subject to a retention of title clause;
The learned Judge held:
“In my judgment the suggestion is not well-founded. It is quite true that, under s. 9 , unlike s. 25
of the Sale of Goods Act 1979 , s. 2(1) applies where the buyer in possession has entered into an
agreement for sale to a sub-purchaser as well as where he has actually sold; but the effect of s.
2(1) is only to render the buyer's agreement for sale as valid as if it had been expressly authorised
by the seller; and this is not enough to get the sub-purchaser home if the conditions for the
passing of title under the buyer's agreement for sale to the sub-purchaser have not been
satisfied.”
S:9 GOOD FAITH
To gain the protection of s.9, B must take the goods in good faith and without notice of the rights
of O.
EFFECT OF S.9
As E. G. Nugee QC noted in Re Highway Foods International Ltd the way in which the effect of
s.9 is phrased is intriguing.
The effect of s.8 Factors Act 1889 is that the disposition has “…the same effect as if the person
making the delivery or transfer [R] were expressly authorised by the owner of the goods to make
the same”. By contrast the effect of s.9 is expressed differently: “[s.9]…shall have the same
effect as if the person making the delivery or transfer were a mercantile agent in possession of
the goods or documents of title with the consent of the owner.”
In other words, s.9 links its effect to the effect a delivery or transfer by a mercantile agent etc.
would have had. Under s.2 Factors Act 1889, unauthorised dispositions by mercantile agents can
be effective if the relevant criteria are satisfied including that the disposition was in the ordinary
course of business of a mercantile agent.
Therefore, in Lambert v. G&C Finance (1963) Sol Jo 666 it was held that s.9 would only provide
B with protection if R was acting in the ordinary course of business as a mercantile agent. One
difficulty with this view is, of course, that R is not (normally) a mercantile agent! That difficulty
was dismissed by the Court of Appeal in Newtons of Wembley v. Williams [1965] 1 QB 560
(does this narrow protection under s.9?).
EFFECT OF S.9 WHERE THE SELLER IS NOT THE OWNER
So far we have proceeded on the assumption that the S (who gives possession of the goods to R)
is the O…
117
What is the position where S is not O? It is perhaps best to explain this with an example:
O owns a car which is stolen by a thief (T);
T (now S) sells the car to B1 who sells the car to B2….
Obviously T(S) does not get title from O and B1 does not get good title from T(S) as none of the
exceptions to the principle of nemo dat quod non habet seem to apply;
But what about B2? Is B2 protected by s.9?
If we look at s.9 B1 is, of course, somebody who has bought or agreed to buy the goods and is
somebody who has acquired possession of the goods with the consent of the seller (in this case
T)!
The effect of s.9 is phrased in terms of the title of O not the title of S (the thief!);
“[s.9]…shall have the same effect as if the person making the delivery or transfer were a
mercantile agent in possession of the goods or documents of title with the consent of the owner.”
(emphasis added).
118
This question was considered by the House of Lords in National Employers Mutual General
Insurance Association v Jones [1990] 1 AC 24 who dismissed the possibility that B2 would gain
good title in such circumstances with Lord Goff stating:
“In my opinion, section 9 of the Factors Act 1889 must be read as providing that the delivery or
transfer given by the intermediate transferor (B) shall have the same effect as if he was a
mercantile agent in possession of the goods or documents of title with the consent of the
owner who entrusted them to him (A). Such a construction is, in my opinion, to be derived
from the terms of section 2(1) of the Act, to which section 9 evidently refers, and also from the
legislative context which I have already discussed. The same construction must, of course, be
placed upon section 25(1) of the Sale of Goods Act 1979.”
Heathrow Truck Centre Ltd v Motability Operations Ltd [2021] 12 WLUK 545
Facts: In Heathrow Truck Centre Ltd v Motability Operations Ltd [2021] 12 WLUK 545 FCA
sold, subject to a retention of title clause, particular vehicles to the claimant. The claimant sold
these vehicles to LDL, a company which modified vehicles for users with disabilities. LDL
subsequently sold these vehicles to the defendant. LDL never paid the claimant for the vehicles
and subsequently went into administration. The question was whether or not the claimant or
defendant had title to the relevant vehicles.
One argument considered by the court was whether or not the Sale of Goods Act 1979, s.25
assisted the defendant.
Held: The court held that s.25 did assist the defendant. Although the claimant did not initially
have full title (as they themselves had bought the goods from FCA subject to a retention of title
clause) they did have a more limited (possessory) title which LDL could pass to the defendants
under s.25. Moreover, once the claimant did pay FCA for the vehicles, this title was fed along
the chain to the defendant (see, in particular, [91]).
EXCEPTION NINE: HIRE PURCHASE ACT 1964, PART III
For the purposes of the Factors Act 1889, s.9 a bailee under a hire-purchase agreement (and,
indeed, some conditional sales) is not a person who has “agreed to buy” goods. This, of course,
means that a person (B) who purchases goods from a bailee under a hire-purchase agreement,
and some conditional sales, (R) is not protected by s.9.
However, in the context of motor vehicles, B may be protected by the Hire-Purchase Act 1964
(as amended).
In broad terms, Part III of the Hire Purchase Act 1964 (as amended) enables, in defined
circumstances, a hire-purchaser or conditional buyer (R) of a motor vehicle to pass good title to
B despite the fact that they (R) do not have title to the motor vehicle.
Part III of the Hire Purchase Act 1964 applies “…where a motor vehicle has been bailed or (in
Scotland) hired under a hire-purchase agreement, or has been agreed to be sold under a
119
conditional sale agreement, and, before the property in the vehicle has become vested in the
debtor, he disposes of the vehicle to another person” (s.27(1));
Disposition “…means any sale or contract of sale (including a conditional sale agreement), any
bailment or (in Scotland) hiring under a hire-purchase agreement and any transfer of the property
in goods in pursuance of a provision in that behalf contained in a hire-purchase agreement, and
includes any transaction purporting to be a disposition (as so defined) and “dispose of” shall be
construed accordingly” (s.29 and see also VFS Financial Services Ltd v. JF Plant Tyres Ltd
[2013] 1 WLR 2987);
Where Part III of the Hire Purchase Act 1964 is applicable, a distinction needs to be made
between situations where R (the hire-purchaser or conditional buyer) disposes of the motor
vehicle to a “private purchaser” and situations where R disposes of the motor vehicle to a “trade
or finance purchaser”;
The distinction is important as, essentially, if this disposition is made directly to a “private
purchaser”, the “private purchaser” may obtain good title. By contrast if this disposition is made
directly to a “trade or finance purchaser”, the “trade or finance purchaser” will not obtain good
title (although, by virtue of s.27(3) a subsequent “private purchaser” may do so).
In Stevenson v Beverley Bentinck Ltd. [1976] 1 W.L.R. 483 the Court of Appeal held that a
person would still be a “trade or finance purchaser” even if, on the occasion in question, they
purchased the motor vehicle for their private use. B must have acted in “good faith”. The key to
this phrase seems to be honesty even if that honesty was less than wise (see Dodds v. Yorkshire
Bank Finance [1992] CCLR 92).
FURTHER READING
A. Tettenborn, ‘Transfer of chattels by non-owners: still an open problem’ (2018) 77 Cambridge

Law Journal 151;
Ch12;
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SEMINAR FIVE: EXCEPTIONS TO THE PRINCIPLE OF NEMO DAT QUOD NON HABET,
INCLUDING AGENCY
In Seminar Four we explored two main themes: the significance of the passing of property
in contracts of sale of goods and the rules which determine when property passes in such
contracts. Implicit in our discussion of these issues was the assumption that the person
selling the goods (S) was the owner (O) of the goods. In this seminar we consider the
principle of nemo dat quod non habet. Here we are dealing with situations where the
seller of the goods is not the owner of the goods. The key question is whether or not a
non-owner (R) can transfer good title in the goods to the buyer (B). If R is not able to
transfer good title to B, then the real owner of the goods (O) may be able to reclaim them
from B. In such circumstances, B may be in an unenviable position: if B has paid R for the
goods, B may have a personal action against R for the return of the price and/or damages
(see Seminar Three) but those remedies will be of little use if, as has happened in many of
the cases, R is either insolvent or has absconded! By contrast if R is able to transfer good
title to B, O may be in the unenviable position: O may have personal remedies against R;
yet again those remedies will be of little use if R is either insolvent or has absconded. Our
starting point is the common law principle of nemo dat quod non habet; nobody can give
better title than they have themselves. However, there are a number of exceptions to
this principle including various forms of agency. We shall explore these exceptions giving
particular emphasis to agency (as it is a principle of more general importance to
Commercial Law).

E. Baskind, G. Osborne & L. Roach, Commercial Law, Chs. 3-5 and Ch. 12;
Law: Text, Cases, and Materials, Chs. 4-5.
J. Devenney, ‘Dispositions Under the Hire-Purchase Act 1964 and the Principle of Nemo
Dat Quod Non Habet’ (2014) 71 Student Law Review 10;
L. Merrett, ‘Is Possession Nine Tenths of the Law of Sale of Goods?’ (2010) 69 Cambridge
121
Law Journal 236;
G. McMeel, ‘The Philosophical Foundations of the Law of Agency’ (2000) 116 Law
Quarterly Review 387.
50 - 55 Break
70 - 110 Formative workshop to develop employability skills

 Money matters – why is an understanding of finance so
important?
 What effect do legal costs have on whether parties litigate?
 Why is it important to know how to analyse a set of
accounts?
 This workshop will provide opportunities to understand and
practise key financial skills
110 End of seminar
Exercise One
122
“The essential characteristic of an agent is that he is invested with a legal power to alter
his principal’s legal relations with third persons: the principal is under a correlative liability
to have his legal relations altered. It is submitted that this power-liability relation is the
essence of the relationship of principal and agent. The rules which normally attach to the
parties, the normal incidents of the relation, are ancillary to this power-liability relation.”
F.E. Dowrick, ‘The Relationship of Principal and Agent’ (1954) 17 Modern Law Review 24
at 36.
Exercise Two
Critically discuss the extent to which the principle of nemo dat quod non habet and the
exceptions thereto are in need of reform.
Exercise Three
Arnold contracts to sell his Steinway grand piano to Betty for £50,000. Betty pays him
twenty per cent of this price as a deposit. She is concerned about the state of the piano,
though, and asks him to have the piano tuned and slightly repaired. She agrees to pay
him the balance of the purchase price once this has occurred. Accordingly, Arnold takes
the piano to a music shop owned by Carlotta (an accredited Steinway restorer). Carlotta
mentions to Arnold that the piano is a rare model and probably worth much more than
£50,000. Arnold, who is short of money, asks Carlotta to see if she can obtain any higher
offers for his Steinway piano.
David, one of Carlotta’s regular customers, sees the piano in Carlotta’s workshop and tells
her that he is willing to pay £75,000 for the piano on behalf of his daughter, Eleanor.
Eleanor is a concert pianist in need of a better piano. David asks Carlotta to carry out a
complete repair of the piano and agrees to pay an extra £1,000 for this repair.
After Carlotta has finished the repair, Eleanor decides to borrow the piano for two weeks
to see how it performs in practice. After the two weeks, Eleanor returns the piano to
Carlotta for some final adjustments and to replace some of the hammers. When Eleanor
returns to collect the piano and to pay for it, Arnold and Betty arrive at Carlotta’s shop.
Each of them also demands the piano from Carlotta.
Advise the parties.
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Exercise Four
A owns a vintage Bentley which he leaves with B, a specialist dealer, to have valued. B
persuades him to register the car in Wood’s Vintage Car Guide and asks A to leave the
car’s registration document with B so that the registration can be effected. The following
day B sells the car to C, and absconds. C later sells it to Fleecem Finance, who in turn let it
to D under a hire-purchase contract. D subsequently sells the car to E, a motor dealer,
under a private contract, after taking the car to the auction at the quarterly fair in his local
town. E leaves the car with D, as he has business in another part of the market, and D
sells the car to F, also by private contract.
Advise the parties.
resources helpful:
A. Chandler & J. Devenney, ‘Mistake as to Identity and the Threads of Objectivity’
[2004] The Journal of Obligations and Remedies 7;
I. Brown, ‘The Agent’s Apparent Authority: Paradigm or Paradox?’ [1995] Journal of
Business Law 360.
124
125
APPENDIX 1: THE SALE OF GOODS ACT 1979
Sale of Goods Act 1979

1979 CHAPTER 54
An Act to consolidate the law relating to the sale of goods.
[6th December 1979]
PART I
CONTRACTS TO WHICH ACT APPLIES
1 Contracts to which Act applies.
(1) This Act applies to contracts of sale of goods made on or after (but not to those made before) 1
January 1894.
(2) In relation to contracts made on certain dates, this Act applies subject to the modification of certain of
its sections as mentioned in Schedule 1 below.
(3) Any such modification is indicated in the section concerned by a reference to Schedule 1 below.
(4) Accordingly, where a section does not contain such a reference, this Act applies in relation to the
contract concerned without such modification of the section.
(5) Certain sections or subsections of this Act do not apply to a contract to which Chapter 2 of Part 1 of
the Consumer Rights Act 2015 applies.
(6) Where that is the case it is indicated in the section concerned.
PART II
FORMATION OF THE CONTRACT
2 Contract of sale.
(1) A contract of 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.
(2) There may be a contract of sale between one part owner and another.
(3) A contract of sale may be absolute or conditional.
(4) Where under a contract of sale the property in the goods is transferred from the seller to the buyer the
contract is called a sale.
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(5) Where under a contract of sale the transfer of the property in the goods is to take place at a future time
or subject to some condition later to be fulfilled the contract is called an agreement to sell.
(6) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to
which the property in the goods is to be transferred.
3 Capacity to buy and sell.
(1) Capacity to buy and sell is regulated by the general law concerning capacity to contract and to transfer
and acquire property.
(2) Where necessaries are sold and delivered to a minor or to a person who by reason of mental
incapacity or drunkenness is incompetent to contract, he must pay a reasonable price for them.
(3) In subsection (2) above “necessaries” means goods suitable to the condition in life of the minor or
other person concerned and to his actual requirements at the time of the sale and delivery.
4 How contract of sale is made.
(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.
5 Existing or future goods.
(1) The goods which form the subject of a contract of sale may be either existing goods, owned or
possessed by the seller, or goods to be manufactured or acquired by him after the making of the
contract of sale, in this Act called future goods.
(2) There may be a contract for the sale of goods the acquisition of which by the seller depends on a
contingency which may or may not happen.
(3) Where by a contract of sale the seller purports to effect a present sale of future goods, the contract
operates as an agreement to sell the goods.
6 Goods which have perished.
Where there is a contract for the sale of specific goods, and the goods without the knowledge of the
seller have perished at the time when the contract is made, the contract is void.
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7 Goods perishing before sale but after agreement to sell.
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.
8 Ascertainment of 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 the contract, or may be determined by the course of dealing between the parties.
(2) Where the price is not determined as mentioned in sub-section (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.
9 Agreement to sell at valuation.
(1) Where there is an agreement to sell goods on the terms that the price is to be fixed by the valuation of
a third party, and he cannot or does not make the valuation, the agreement is avoided; but if the goods
or any part of them have been delivered to and appropriated by the buyer he must pay a reasonable
price for them.
(2) Where the third party is prevented from making the valuation by the fault of the seller or buyer, the
party not at fault may maintain an action for damages against the party at fault.
10 Stipulations about time.
(1) Unless a different intention appears from the terms of the contract, stipulations as to time of payment
are not of the essence of a contract of sale.
(2) Whether any other stipulation as to time is or is not of the essence of the contract depends on the
terms of the contract.
(3) In a contract of sale “month” prima facie means calendar month.
11 When condition to be treated as warranty.
(1) This section does not apply to Scotland.
(2) Where a contract of sale is subject to a condition to be fulfilled by the seller, the buyer may waive the
condition, or may elect to treat the breach of the condition as a breach of warranty and not as a ground
for treating the contract as repudiated.
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(3) Whether a stipulation in a contract of sale is a condition, the breach of which may give rise to a right to
treat the contract as repudiated, or a warranty, the breach of which may give rise to a claim for
damages but not to a right to reject the goods and treat the contract as repudiated, depends in each
case on the construction of the contract; and a stipulation may be a condition, though called a warranty
in the contract.
(4) Subject to section 35A below where a contract of sale is not severable and the buyer has accepted
the goods or part of them, the breach of a condition to be fulfilled by the seller can only be treated as a
breach of warranty, and not as a ground for rejecting the goods and treating the contract as
repudiated, unless there is an express or implied term of the contract to that effect.
(4A) Subsection (4) does not apply to a contract to which Chapter 2 of Part 1 of the Consumer Rights Act
2015 applies (but see the provision made about such contracts in sections 19 to 22 of that Act).
(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) Nothing in this section affects a condition or warranty whose fulfilment is excused by law by reason of
impossibility or otherwise.
(7) Paragraph 2 of Schedule 1 below applies in relation to a contract made before 22 April 1967 or (in the
application of this Act to Northern Ireland) 28 July 1967.
12 Implied terms about title, etc.
(1) 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 a 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.
(2) In a contract of sale, other than one to which subsection (3) below applies, there is also an
implied term that—
(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
(b) the buyer will enjoy quiet possession of the goods except 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.
(3) This subsection applies to a contract of sale in the case of which there appears from the contract or is
to be inferred from its circumstances an intention that the seller should transfer only such title as he or
a third person may have.
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(4) In a contract to which subsection (3) above applies there is an implied that all charges or
encumbrances known to the seller and not known to the buyer have been disclosed to the buyer
before the contract is made.
(5) In a contract to which subsection (3) above applies there is also an implied term that none of the
following will disturb the buyer’s quiet possession of the goods, namely—
(a) the seller;
(b) in a case where the parties to the contract intend that the seller should transfer only such title as a
third person may have, that person;
(c) anyone claiming through or under the seller or that third person otherwise than under a charge or
encumbrance disclosed or known to the buyer before the contract is made.
(5A) As regards England and Wales and Northern Ireland, the term implied by subsection (1) above is a
condition and the terms implied by subsections (2), (4) and (5) above are warranties.
(6) Paragraph 3 of Schedule 1 below applies in relation to a contract made before 18 May 1973.
(7)This section does not apply to a contract to which Chapter 2 of Part 1 of the Consumer Rights Act 2015
applies (but see the provision made about such contracts in section 17 of that Act).
13 Sale by description.
(1) Where there is a contract for the sale of goods by description, there is an implied term that the goods
will correspond with the description.
(1A) As regards England and Wales and Northern Ireland, the term implied by subsection (1) above is a
condition.
(2) If the sale is by sample as well as by description it is not sufficient that the bulk of the goods
corresponds with the sample if the goods do not also correspond with the description.
(3) A sale of goods is not prevented from being a sale by description by reason only that, being exposed
for sale or hire, they are selected by the buyer.
(5) This section does not apply to a contract to which Chapter 2 of Part 1 of the Consumer Rights Act
2015 applies (but see the provision made about such contracts in section 11 of that Act).
14 Implied terms about quality or fitness.
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(1) Except as provided by this section and section 15 below and subject to any other enactment, there is
no implied term about the quality or fitness for any particular purpose of goods supplied under a
contract of sale.
(2) Where the seller sells goods in the course of a business, there is an implied term that the goods
supplied under the contract are of satisfactory quality.
(2A) For the purposes of this Act, 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.
(2B) For the purposes of this Act, the quality of 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.
(2C) The term implied by subsection (2) above does not extend to any matter making the quality of 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 that examination ought to
reveal, or
(c) in the case of a contract for sale by sample, which would have been apparent on a reasonable
examination of the sample.
( 2D ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
( 2E ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
( 2F ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) Where the seller sells goods in the course of a business and the buyer, expressly or by implication,
makes known—
(a) to the seller, or
(b) where the purchase price or part of it is payable by instalments and the goods were previously sold by
a credit-broker to the seller, to that credit-broker,
131
any particular purpose for which the goods are being bought, there is an implied term that the goods
supplied under the contract are reasonably fit for that purpose, whether or not that is a purpose 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 judgment of the seller or credit-broker.
(4) An implied term about quality or fitness for a particular purpose may be annexed to a contract of sale
by usage.
(5) The preceding provisions of this section apply to a sale by a person who in the course of a business is
acting as agent for another as they apply to a sale by a principal in the course of a business, except
where that other is not selling in the course of a business and either the buyer knows that fact or
reasonable steps are taken to bring it to the notice of the buyer before the contract is made.
(6) As regards England and Wales and Northern Ireland, the terms implied by subsections (2) and (3)
above are conditions.
(7) Paragraph 5 of Schedule 1 below applies in relation to a contract made on or after 18 May 1973 and
before the appointed day, and paragraph 6 in relation to one made before 18 May 1973.
(8) In subsection (7) above and paragraph 5 of Schedule 1 below references to the appointed day are to
the day appointed for the purposes of those provisions by an order of the Secretary of State made by
statutory instrument.
2015 applies (but see the provision made about such contracts in sections 9, 10 and 18 of that Act).
15 Sale by sample.
(1) A contract of sale is a contract for sale by sample where there is an express or implied term to that
effect in the contract.
(2) In the case of a contract for sale by sample there is an implied term—
(a) that the bulk will correspond with the sample in quality;
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) that the goods will be free from any defect, making their quality unsatisfactory, which would not
be apparent on reasonable examination of the sample.
(3) As regards England and Wales and Northern Ireland, the term implied by subsection (2) above is a
condition.
132
2015 applies (but see the provision made about such contracts in sections 13 and 18 of that Act).
15A Modification of remedies for breach of condition in non-consumer cases.
(1) Where in the case of a contract of sale—
(a) the buyer would, apart from this subsection, have the right to reject goods by reason of a breach on
the part of the seller of a term implied by section 13, 14 or 15 above, but
(b) the breach is so slight that it would be unreasonable for him to reject them,
the breach is not to be treated as a breach of condition but may be treated as a breach of warranty.
(2) This section applies unless a contrary intention appears in, or is to be implied from, the contract.
(3) It is for the seller to show that a breach fell within subsection (1)(b) above.
15B Remedies for breach of contract as respects Scotland.
(1) Where in a contract of sale the seller is in breach of any term of the contract (express or implied), 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.
2015 applies (but see the provision made about such contracts in sections 19 to 22 of that Act).
(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3)This section applies to Scotland only.
PART III
EFFECTS OF THE CONTRACT
16 Goods must be ascertained.
Subject to section 20A below where there is a contract for the sale of unascertained goods no property in the
goods is transferred to the buyer unless and until the goods are ascertained.
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17 Property passes when intended to pass.
(1) Where there is a contract for the sale of specific or ascertained goods the property in them is
transferred to the buyer at such time as the parties to the contract intend it to be transferred.
(2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the
contract, the conduct of the parties and the circumstances of the case.
18 Rules for ascertaining intention.
Unless a different intention appears, the following are rules for ascertaining the intention of the parties
as to the time at which the property in the goods is to pass to the buyer.
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, be 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 or other similar terms the
property in the goods passes to the buyer:—
(a) when he signifies his approval or acceptance to the seller or does any other act adopting the
transaction;
(b) if he 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
134
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; 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 to
be 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.
19 Reservation of right of disposal.
(1) Where there is a contract for the sale of specific goods or where goods are subsequently appropriated
to the contract, the seller may, by the terms of the contract or appropriation, reserve the right of
disposal of the goods until certain conditions are fulfilled; and in such a case, notwithstanding the
delivery of the goods to the buyer, or to a carrier or other bailee or custodier for the purpose of
transmission to the buyer, the property in the goods does not pass to the buyer until the conditions
imposed by the seller are fulfilled.
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(2) Where goods are shipped, and by the bill of lading the goods are deliverable to the order of the seller
or his agent, the seller is prima facie to be taken to reserve the right of disposal.
(3) Where the seller of goods draws on the buyer for the price, and transmits the bill of exchange and bill
of lading to the buyer together to secure acceptance or payment of the bill of exchange, the buyer is
bound to return the bill of lading if he does not honour the bill of exchange, and if he wrongfully retains
the bill of lading the property in the goods does not pass to him.
20 Passing of risk.
(1) Unless otherwise agreed, the goods remain at the seller’s risk until the property in them is transferred
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.
(2) But where delivery has been delayed through the fault of either buyer or seller the goods are at the risk
of the party at fault as regards any loss which might not have occurred but for such fault.
(3) Nothing in this section affects the duties or liabilities of either seller or buyer as a bailee or custodier of
the goods of the other party.
20A Undivided shares in goods forming part of a bulk.
(1) This section applies to a contract for the sale of a specified quantity of unascertained goods if the
following conditions are met—
(a) the goods or some of them form part of a bulk which is identified either in the contract or by
subsequent agreement between the parties; and
(b) the buyer has paid the price for some or all of the goods which are the subject of the contract and
which form part of the bulk.
(2) Where this section applies, then (unless the parties agree otherwise), as soon as the conditions
specified in paragraphs (a) and (b) of subsection (1) above are met or at such later time as the parties
may agree—
(a) property in an undivided share in the bulk is transferred to the buyer, and
(b )the buyer becomes an owner in common of the bulk.
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(3) Subject to subsection (4) below, for the purposes of this section, the undivided share of a buyer in a
bulk at any time shall be such share as the quantity of goods paid for and due to the buyer out of the
bulk bears to the quantity of goods in the bulk at that time.
(4) Where the aggregate of the undivided shares of buyers in a bulk determined under subsection (3)
above would at any time exceed the whole of the bulk at that time, the undivided share in the bulk of
each buyer shall be reduced proportionately so that the aggregate of the undivided shares is equal to
the whole bulk.
(5) Where a buyer has paid the price for only some of the goods due to him out of a bulk, any delivery to
the buyer out of the bulk shall, for the purposes of this section, be ascribed in the first place to the
goods in respect of which payment has been made.
(6) For the purposes of this section payment of part of the price for any goods shall be treated as payment
for a corresponding part of the goods.
20B Deemed consent by co-owner to dealings in bulk goods.
(1) A person who has become an owner in common of a bulk by virtue of section 20A above shall be
deemed to have consented to—
(a) any delivery of goods out of the bulk to any other owner in common of the bulk, being goods which are
due to him under his contract;
(b) any dealing with or removal, delivery or disposal of goods in the bulk by any other person who is an
owner in common of the bulk in so far as the goods fall within that co-owner’s undivided share in the
bulk at the time of the dealing, removal, delivery or disposal.
(2) No cause of action shall accrue to anyone against a person by reason of that person having acted in
accordance with paragraph (a) or (b) of subsection (1) above in reliance on any consent deemed to
have been given under that subsection.
(3) Nothing in this section or section 20A above shall—
(a) impose an obligation on a buyer of goods out of a bulk to compensate any other buyer of goods out of
that bulk for any shortfall in the goods received by that other buyer;
(b) affect any contractual arrangement between buyers of goods out of a bulk for adjustments between
themselves; or
(c) affect the rights of any buyer under his contract.]
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21 Sale by person not the owner.
(1) Subject to this Act, 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.
(2) Nothing in this Act affects—
(a) the provisions of the Factors Acts or any enactment enabling the apparent owner of goods to dispose
of them as if he were their true owner;
(b) the validity of any contract of sale under any special common law or statutory power of sale or under
the order of a court of competent jurisdiction.
22 Market overt.
(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) Paragraph 8 of Schedule 1 below applies in relation to a contract under which goods were sold before
1 January 1968 or (in the application of this Act to Northern Ireland) 29 August 1967.
23 Sale under voidable title.
When the seller of goods has a voidable title to them, but his title has not been avoided at the time of
the sale, the buyer acquires a good title to the goods, provided he buys them in good faith and without
notice of the seller’s defect of title.
24 Seller in possession after sale.
Where a person having sold goods continues or is in possession of the goods, or of the documents of
title to the goods, the delivery or transfer by that person, or by a mercantile agent acting for him, of the
goods or documents of title under any sale, pledge, or other disposition thereof, to any person
receiving the same in good faith and without notice of the previous sale, has the same effect as if the
person making the delivery or transfer were expressly authorised by the owner of the goods to make
the same.
25 Buyer in possession after sale.
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(1) Where a person having bought or agreed to buy goods obtains, with the consent of the seller,
possession of the goods or the documents of title to the goods, the delivery or transfer by that person,
or by a mercantile agent acting for him, of the goods or documents of title, under any sale, pledge, or
other disposition thereof, to any person receiving the same in good faith and without notice of any lien
or other right of the original seller in respect of the goods, has the same effect as if the person making
the delivery or transfer were a mercantile agent in possession of the goods or documents of title with
the consent of the owner.
(2) For the purposes of subsection (1) above—
(a) the buyer under a conditional sale agreement is to be taken not to be a person who has bought or
agreed to buy goods, and
(b) “conditional sale agreement” means an agreement for the sale of goods which is a consumer credit
agreement within the meaning of the M1Consumer Credit Act 1974 under which the purchase price or
part of it is payable by instalments, and the property in the goods is to remain in the seller
(notwithstanding that the buyer is to be in possession of the goods) until such conditions as to the
payment of instalments or otherwise as may be specified in the agreement are fulfilled.
(3) Paragraph 9 of Schedule 1 below applies in relation to a contract under which a person buys or agrees
to buy goods and which is made before the appointed day.
(4) In subsection (3) above and paragraph 9 of Schedule 1 below references to the appointed day are to
the day appointed for the purposes of those provisions by an order of the Secretary of State made by
26 Supplementary to sections 24 and 25.
In sections 24 and 25 above “mercantile agent” means a mercantile agent having in the customary
course of his business as such agent authority either—
(a) to sell goods, or
(b) to consign goods for the purpose of sale, or
(c) to buy goods, or
(d) to raise money on the security of goods.
PART IV
PERFORMANCE OF THE CONTRACT
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27 Duties of seller and buyer.
It is the duty of the seller to deliver the goods, and of the buyer to accept and pay for them, in
accordance with the terms of the contract of sale.
28 Payment and delivery are concurrent conditions.
Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions,
that is to say, the seller must be ready and willing to give possession of the goods to the buyer in exchange
for the price and the buyer must be ready and willing to pay the price in exchange for possession of
the goods.
29 Rules about delivery.
(1) Whether it is for the buyer to take possession of the goods or for the seller to send them to the buyer is
a question depending in each case on the contract, express or implied, between the parties.
(2) Apart from any such contract, express or implied, the place of delivery is the seller’s place of business
if he has one, and if not, his residence; except that, if the contract is for the sale of specific goods,
which to the knowledge of the parties when the contract is made are in some other place, then that
place is the place of delivery.
(3) Where under the contract of sale the seller is bound to send the goods to the buyer, but no time for
sending them is fixed, the seller is bound to send them within a reasonable time.
(4) Where the goods at the time of sale are in the possession of a third person, there is no delivery by
seller to buyer unless and until the third person acknowledges to the buyer that he holds the goods on
his behalf; but nothing in this section affects the operation of the issue or transfer of any document of
title to goods.
(5) Demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour; and
what is a reasonable hour is a question of fact.
(6) Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state
must be borne by the seller.
30 Delivery of wrong quantity.
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(1) Where the seller delivers to the buyer a quantity of goods less than he contracted to sell, the buyer
may reject them, but if the buyer accepts the goods so delivered he must pay for them at the contract
rate.
(2) Where the seller delivers to the buyer a quantity of goods larger than he contracted to sell, the buyer
may accept the goods included in the contract and reject the rest, or he may reject the whole.
(2A) A buyer may not—
(a) where the seller delivers a quantity of goods less than he contracted to sell, reject the goods under
subsection (1) above, or
(b) where the seller delivers a quantity of goods larger than he contracted to sell, reject the whole under
subsection (2) above,
if the shortfall or, as the case may be, excess is so slight that it would be unreasonable for him to do
so.
(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.
(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) This section is subject to any usage of trade, special agreement, or course of dealing between the
parties.
31 Instalment deliveries.
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(1) Unless otherwise agreed, the buyer of goods is not bound to accept delivery of them by instalments.
(2) Where there is a contract for the sale of goods to be delivered by stated instalments, which are to be
separately paid for, and the seller makes defective deliveries in respect of one or more instalments, or
the buyer neglects or refuses to take delivery of or pay for one or more instalments, it is a question in
each case depending on the terms of the contract and the circumstances of the case whether the
breach of contract is a repudiation of the whole contract or whether it is a severable breach giving rise
to a claim for compensation but not to a right to treat the whole contract as repudiated.
32 Delivery to carrier.
(1) Where, in pursuance of a contract of sale, the seller is authorised or required to send the goods to the
buyer, delivery of the goods to a carrier (whether named by the buyer or not) for the purpose of
transmission to the buyer is prima facie deemed to be a delivery of the goods to the buyer.
(2) Unless otherwise authorised by the buyer, the seller must make such contract with the carrier on
behalf of the buyer as may be reasonable having regard to the nature of the goods and the other
circumstances of the case; and if the seller omits to do so, and the goods are lost or damaged in
course of transit, the buyer may decline to treat the delivery to the carrier as a delivery to himself or
may hold the seller responsible in damages.
(3) Unless otherwise agreed, where goods are sent by the seller to the buyer by a route involving sea
transit, under circumstances in which it is usual to insure, the seller must give such notice to the buyer
as may enable him to insure them during their sea transit; and if the seller fails to do so, the goods are
at his risk during such sea transit.
33 Risk where goods are delivered at distant place.
(1) Where the seller of goods agrees to deliver them at his own risk at a place other than that where they
are when sold, the buyer must nevertheless (unless otherwise agreed) take any risk of deterioration in
the goods necessarily incident to the course of transit.
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34 Buyer’s right of examining the goods.
(1) Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound on
request to afford the buyer a reasonable opportunity of examining the goods for the purpose of
ascertaining whether they are in conformity with the contract and, in the case of a contract for sale by
sample, of comparing the bulk with the sample.
(2) Nothing in this section affects the operation of section 22 (time limit for short-term right to reject) of the
Consumer Rights Act 2015.
35 Acceptance.
(1) The buyer is deemed to have accepted the goods subject to subsection (2) below—
(a) when he intimates to the seller that he has accepted them, or
(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.
(2) Where goods are delivered to the buyer, and he has not previously examined them, he is not deemed
to have accepted them under subsection (1) above until he has had a reasonable opportunity of
examining them for the purpose—
(a) of ascertaining whether they are in conformity with the contract, and
(b) in the case of a contract for sale by sample, of comparing the bulk with the sample.
(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) The buyer is also deemed to have accepted the goods when after the lapse of a reasonable time he
retains the goods without intimating to the seller that he has rejected them.
(5) The questions that are material in determining for the purposes of subsection (4) above whether a
reasonable time has elapsed include whether the buyer has had a reasonable opportunity of
examining the goods for the purpose mentioned in subsection (2) above.
(6) The buyer is not by virtue of this section deemed to have accepted the goods merely because—
(a) he asks for, or agrees to, their repair by or under an arrangement with the seller, or
(b) the goods are delivered to another under a sub-sale or other disposition.
(7) Where the contract is for the sale of goods making one or more commercial units, a buyer accepting
any goods included in a unit is deemed to have accepted all the goods making the unit; and in this
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subsection “ commercial unit ” means a unit division of which would materially impair the value of the
goods or the character of the unit.
(8) Paragraph 10 of Schedule 1 below applies in relation to a contract made before 22 April 1967 or (in
the application of this Act to Northern Ireland) 28 July 1967.
35A Right of partial rejection.
(1) If the buyer—
(a) has the right to reject the goods by reason of a breach on the part of the seller that affects some or all
of them, but
(b) accepts some of the goods, including, where there are any goods unaffected by the breach, all such
goods,
he does not by accepting them lose his right to reject the rest.
(2) In the case of a buyer having the right to reject an instalment of goods, subsection (1) above applies
as if references to the goods were references to the goods comprised in the instalment.
(3) For the purposes of subsection (1) above, goods are affected by a breach if by reason of the breach
they are not in conformity with the contract.
(4) This section applies unless a contrary intention appears in, or is to be implied from, the contract.
36 Buyer not bound to return rejected goods.
(1) Unless otherwise agreed, where goods are delivered to the buyer, and he refuses to accept them,
having the right to do so, he is not bound to return them to the seller, but it is sufficient if he intimates
to the seller that he refuses to accept them.
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37 Buyer’s liability for not taking delivery of goods.
(1) When the seller is ready and willing to deliver the goods, and requests the buyer to take delivery, and
the buyer does not within a reasonable time after such request take delivery of the goods, he is liable
to the seller for any loss occasioned by his neglect or refusal to take delivery, and also for a
reasonable charge for the care and custody of the goods.
(2) Nothing in this section affects the rights of the seller where the neglect or refusal of the buyer to take
delivery amounts to a repudiation of the contract.
PART V
RIGHTS OF UNPAID SELLER AGAINST THE GOODS
38 Unpaid seller defined.
(1) The seller of goods is an unpaid seller within the meaning of this Act—
(a) when the whole of the price has not been paid or tendered;
(b) when a bill of exchange or other negotiable instrument has been received as conditional payment, and
the condition on which it was received has not been fulfilled by reason of the dishonour of the
instrument or otherwise.
(2) In this Part of this Act “seller” includes any person who is in the position of a seller, as, for instance, an
agent of the seller to whom the bill of lading has been indorsed, or a consignor or agent who has
himself paid (or is directly responsible for) the price.
39 Unpaid seller’s rights.
(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.
145
40 Attachment by seller in Scotland.
In Scotland a seller of goods may attach them while in his own hands or possession by arrestment or
poinding; and such arrestment or poinding shall have the same operation and effect in a competition or
otherwise as an arrestment or poinding by a third party.
41 Seller’s lien.
(1) Subject to this Act, the unpaid seller of goods who is in possession of them is entitled to retain
possession of them until payment or tender of the price in the following cases:—
(a) where the goods have been sold without any stipulation as to credit;
(b) where the goods have been sold on credit but the term of credit has expired;
(c) where the buyer becomes insolvent.
(2) The seller may exercise his lien or right of retention notwithstanding that he is in possession of the
goods as agent or bailee or custodier for the buyer.
42 Part delivery.
Where an unpaid seller has made part delivery of the goods, he may exercise his lien or right of
retention on the remainder, unless such part delivery has been made under such circumstances as to
show an agreement to waive the lien or right of retention.
43 Termination of lien.
(1) The unpaid seller of goods loses his lien or right of retention in respect of them—
(a) when he delivers the goods to a carrier or other bailee or custodier for the purpose of transmission to
the buyer without reserving the right of disposal of the goods;
(b) when the buyer or his agent lawfully obtains possession of the goods;
(c) by waiver of the lien or right of retention.
(2) An unpaid seller of goods who has a lien or right of retention in respect of them does not lose his lien
or right of retention by reason only that he has obtained judgment or decree for the price of the goods.
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44 Right of stoppage in transit.
Subject to this Act, when the buyer of goods becomes insolvent the unpaid seller who has parted with
the possession of the goods has the right of stopping them in transit, that is to say, he may resume
possession of the goods as long as they are in course of transit, and may retain them until payment or
tender of the price.
45 Duration of transit.
(1) Goods are deemed to be in course of transit from the time when they are delivered to a carrier or other
bailee or custodier for the purpose of transmission to the buyer, until the buyer or his agent in that
behalf takes delivery of them from the carrier or other bailee or custodier.
(2) If the buyer or his agent in that behalf obtains delivery of the goods before their arrival at the appointed
destination, the transit is at an end.
(3) If, after the arrival of the goods at the appointed destination, the carrier or other bailee or custodier
acknowledges to the buyer or his agent that he holds the goods on his behalf and continues in
possession of them as bailee or custodier for the buyer or his agent, the transit is at an end, and it is
immaterial that a further destination for the goods may have been indicated by the buyer.
(4) If the goods are rejected by the buyer, and the carrier or other bailee or custodier continues in
possession of them, the transit is not deemed to be at an end, even if the seller has refused to receive
them back.
(5) When goods are delivered to a ship chartered by the buyer it is a question depending on the
circumstances of the particular case whether they are in the possession of the master as a carrier or
as agent to the buyer.
(6) Where the carrier or other bailee or custodier wrongfully refuses to deliver the goods to the buyer or
his agent in that behalf, the transit is deemed to be at an end.
(7) Where part delivery of the goods has been made to the buyer or his agent in that behalf, the remainder
of the goods may be stopped in transit, unless such part delivery has been made under such
circumstances as to show an agreement to give up possession of the whole of the goods.
46 How stoppage in transit is effected.
(1) The unpaid seller may exercise his right of stoppage in transit either by taking actual possession of the
goods or by giving notice of his claim to the carrier or other bailee or custodier in whose possession
the goods are.
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(2) The notice may be given either to the person in actual possession of the goods or to his principal.
(3) If given to the principal, the notice is ineffective unless given at such time and under such
circumstances that the principal, by the exercise of reasonable diligence, may communicate it to his
servant or agent in time to prevent a delivery to the buyer.
(4) When notice of stoppage in transit is given by the seller to the carrier or other bailee or custodier in
possession of the goods, he must re-deliver the goods to, or according to the directions of, the seller;
and the expenses of the re-delivery must be borne by the seller.
47 Effect of sub-sale etc. by buyer.
(1) Subject to this Act, the unpaid seller’s right of lien or retention or stoppage in transit is not affected by
any sale or other disposition of the goods which the buyer may have made, unless the seller has
assented to it.
(2) Where a document of title to goods has been lawfully transferred to any person as buyer or owner of
the goods, and that person transfers the document to a person who take it in good faith and for
valuable consideration, then—
(a) if the last-mentioned transfer was by way of sale the unpaid seller’s right of lien or retention or
stoppage in transit is defeated; and
(b) if the last-mentioned transfer was made by way of pledge or other disposition for value, the unpaid
seller’s right of lien or retention or stoppage in transit can only be exercised subject to the rights of the
transferee.
48 Rescission: and re-sale by seller.
(1) Subject to this section, a contract of sale is not rescinded by the mere exercise by an unpaid seller of
his right of lien or retention or stoppage in transit.
(2) 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.
(3) Where the goods are of a perishable nature, or 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, the unpaid
seller may re-sell the goods and recover from the original buyer damages for any loss occasioned by
his breach of contract.
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(4) Where the seller expressly reserves the right of re-sale in case the buyer should make default, and on
the buyer making default re-sells the goods, the original contract of sale is rescinded but without
prejudice to any claim the seller may have for damages.
PART VI
ACTIONS FOR BREACH OF THE CONTRACT
49 Action for price.
(1) Where, under a contract of sale, the property in the goods has passed to the buyer and he wrongfully
neglects or refuses to pay for the goods according to the terms of the contract, the seller may maintain
an action against him for the price of the goods.
(2) Where, under a contract of sale, the price is payable on a day certain irrespective of delivery and the
buyer wrongfully neglects or refuses to pay such price, the seller may maintain an action for the price,
although the property in the goods has not passed and the goods have not been appropriated to the
contract.
(3) Nothing in this section prejudices the right of the seller in Scotland to recover interest on the price from
the date of tender of the goods, or from the date on which the price was payable, as the case may be.
50 Damages for non-acceptance.
(1) Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may
maintain an action against him for damages for non-acceptance.
(2) The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course
of events, from the buyer’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 contract price and the market or current price at the time
or times when the goods ought to have been accepted or (if no time was fixed for acceptance) at the
time of the refusal to accept.
51 Damages for non-delivery.
(1) Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may
maintain an action against the seller for damages for non-delivery.
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(2) The measure of 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 contract price and the market or current price of the
goods at the time or times when they ought to have been delivered or (if no time was fixed) at the time
of the refusal to deliver.
52 Specific performance.
(1) In any action for breach of contract to deliver specific or ascertained goods the court may, if it thinks fit,
on the plaintiff’s application, by its judgment or decree direct that the contract shall be performed
specifically, without giving the defendant the option of retaining the goods on payment of damages.
(2) The plaintiff’s application may be made at any time before judgment or decree.
(3) The judgment or decree may be unconditional, or on such terms and conditions as to damages,
payment of the price and otherwise as seem just to the court.
(4) The provisions of this section shall be deemed to be supplementary to, and not in derogation of, the
right of specific implement in Scotland.
53 Remedy for breach of warranty.
(1) Where there is a breach of warranty by the seller, or where the buyer elects (or is compelled) to treat
any breach of a 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 the 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.
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(3) In the case of breach of warranty of quality such loss is prima facie the difference between 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.
(4A) This section does not apply to a contract to which Chapter 2 of Part 1 of the Consumer Rights Act
53A Measure of damages as respects Scotland.
(1) 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.
(2) Where the seller’s breach consists of the delivery of goods which are not of the quality required by the
contract and the buyer retains the goods, such loss as aforesaid is prima facie the difference between
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 contract.
(2A) This section does not apply to a contract to which Chapter 2 of Part 1 of the Consumer Rights Act
(3) This section applies to Scotland only.
54 Interest, etc.
(1) Nothing in this Act affects the right of the buyer or the seller to recover interest or special damages in
any case where by law interest or special damages may be recoverable, or to recover money paid
where the consideration for the payment of it has failed.
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PART VII
SUPPLEMENTARY
55 Exclusion of implied terms.
(1) Where a right, duty or liability would arise under a contract of sale of goods by implication of law, it
may (subject to the Unfair Contract Terms Act 1977) be negatived or varied by express agreement, or
by the course of dealing between the parties, or by such usage as binds both parties to the contract.
(2) An express term does not negative a term implied by this Act unless inconsistent with it.
(3) Paragraph 11 of Schedule 1 below applies in relation to a contract made on or after 18 May 1973 and
before 1 February 1978, and paragraph 12 in relation to one made before 18 May 1973.
56 Conflict of laws.
Paragraph 13 of Schedule 1 below applies in relation to a contract made on or after 18 May 1973 and
before 1 February 1978, so as to make provision about conflict of laws in relation to such a contract.
57 Auction sales.
(1) Where goods are put up for sale by auction in lots, each lot is prima facie deemed to be the subject of
a separate contract of sale.
(2) A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer,
or in other customary manner; and until the announcement is made any bidder may retract his bid.
(3) A sale by auction may be notified to be subject to a reserve or upset price, and a right to bid may also
be reserved expressly by or on behalf of the seller.
(4) Where a sale by auction is not notified to be subject to a right to bid by or on behalf of the seller, it is
not lawful for the seller to bid himself or to employ any person to bid at the sale, or for the auctioneer
knowingly to take any bid from the seller or any such person.
(5) A sale contravening subsection (4) above may be treated as fraudulent by the buyer.
(6) Where, in respect of a sale by auction, a right to bid is expressly reserved (but not otherwise) the seller
or any one person on his behalf may bid at the auction.
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58 Payment into court in Scotland.
(1) In Scotland where a buyer has elected to accept goods which he might have rejected, and to treat a
breach of contract as only giving rise to a claim for damages, he may, in an action by the seller for the
price, be required, in the discretion of the court before which the action depends, to consign or pay into
court the price of the goods, or part of the price, or to give other reasonable security for its due
payment.
2015 applies (but see the provision made about such contracts in section 27 of that Act). ]
59 Reasonable time a question of fact.
Where a reference is made in this Act to a reasonable time the question what is a reasonable time is a
question of fact.
60 Rights etc. enforceable by action.
Where a right, duty or liability is declared by this Act, it may (unless otherwise provided by this Act) be
enforced by action.
61 Interpretation.
(1) In this Act, unless the context or subject matter otherwise requires,—
 “action” includes counterclaim and set-off, and in Scotland condescendence and claim and
compensation;
 “ bulk ” means a mass or collection of goods of the same kind which—

(a) is contained in a defined space or area; and
(b) is such that any goods in the bulk are interchangeable with any other goods therein of the
same number or quantity;
 “business” includes a profession and the activities of any government department (including a
Northern Ireland department) or local or public authority;
 “buyer” means a person who buys or agrees to buy goods;
 “contract of sale” includes an agreement to sell as well as a sale;
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 “credit-broker” means a person acting in the course of a business of credit brokerage carried on by
him, that is a business of effecting introductions of individuals desiring to obtain credit—
(a) to persons carrying on any business so far as it relates to the provision of credit, or
(b) to other persons engaged in credit brokerage;
 “defendant” includes in Scotland defender, respondent, and claimant in a multiplepoinding;
 “delivery” means voluntary transfer of possession from one person to another ; except that in relation
to sections 20A and 20B above it includes such appropriation of goods to the contract as results in
property in the goods being transferred to the buyer;
 “document of title to goods” has the same meaning as it has in the Factors Acts;
 “Factors Acts” means the Factors Act 1889, the Factors (Scotland) 1890, and any enactment
amending or substituted for the same;
 “fault” means wrongful act or default;
 “future goods” means goods to be manufactured or acquired by the seller after the making of the
contract of sale;
 “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;
 “plaintiff” includes pursuer, complainer, claimant in a multiplepoinding and defendant or defender

counter-claiming;
 “property” means the general property in goods, and not merely a special property;
 “sale” includes a bargain and sale as well as a sale and delivery;
 “seller” means a person who sells or agrees to sell goods;
 “specific goods” means goods identified and agreed on at the time a contract of sale is made and
includes an undivided share, specified as a fraction or percentage, of goods identified and agreed on
as aforesaid;
 “warranty” (as regards England and Wales and Northern Ireland) means an agreement with reference
to goods which are the subject of a contract of sale, but collateral to the main purpose of such
contract, the breach of which gives rise to a claim for damages, but not to a right to reject the goods
and treat the contract as repudiated.
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(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) A thing is deemed to be done in good faith within the meaning of this Act when it is in fact done
honestly, whether it is done negligently or not.
(4) A person is deemed to be insolvent within the meaning of this Act if he has either ceased to pay his
debts in the ordinary course of business or he cannot pay his debts as they become due, whether
he has committed an act of bankruptcy or not, and whether he has become a notour bankrupt or
not.
(5) Goods are in a deliverable state within the meaning of this Act when they are in such a state that the
buyer would under the contract be bound to take delivery of them.
( 5A ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) As regards the definition of “business” in subsection (1) above, paragraph 14 of Schedule 1 below
applies in relation to a contract made on or after 18 May 1973 and before 1 February 1978, and
paragraph 15 in relation to one made before 18 May 1973.
62 Savings: rules of law etc.
(1) The rules in bankruptcy relating to contracts of sale apply to those contracts, notwithstanding anything
in this Act.
(2) The rules of the common law, including the law merchant, except in so far as they are inconsistent with
the provisions of legislation including this Act and the Consumer Rights Act 2015, 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.
(3) Nothing in this Act or the Sale of Goods 1893 affects the enactments relating to bills of sale, or any
enactment relating to the sale of goods which is not expressly repealed or amended by this Act or that.
(4) The provisions of this Act about contracts of sale do not apply to a transaction in the form of a contract
of sale which is intended to operate by way of mortgage, pledge, charge, or other security.
(5) Nothing in this Act prejudices or affects the landlord’s right of hypothec in Scotland.
63 Consequential amendments, repeals and savings.
(1) Without prejudice to section 17 of the Interpretation Act 1978 (repeal and re-enactment), the
enactments mentioned in Schedule 2 below have effect subject to the amendments there specified
(being amendments consequential on this Act).
155
(2) The enactments mentioned in Schedule 3 below are repealed to the extent specified in column 3, but
subject to the savings in Schedule 4 below.
(3) The savings in Schedule 4 below have effect.
64 Short title and commencement.
(1) This Act may be cited as the Sale of Goods Act 1979.
(2) This Act comes into force on 1 January 1980.
156
APPENDIX 2: THE CONSUMER RIGHTS ACT 2015
The Consumer Rights Act 2015
An Act to amend the law relating to the rights of consumers and protection of their interests;
to make provision about investigatory powers for enforcing the regulation of traders; to
make provision about private actions in competition law and the Competition Appeal
Tribunal; and for connected purposes. [26th March 2015]
BE IT ENACTED by the Queen's most Excellent Majesty, by and with the advice and consent of the
Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the
authority of the same, as follows:—
PART 1
Consumer contracts for goods, digital content and services
CHAPTER 1
INTRODUCTION
1 WHERE PART 1 APPLIES
(1) This Part applies where there is an agreement between a trader and a consumer for the
trader to supply goods, digital content or services, if the agreement is a contract.
(2) It applies whether the contract is written or oral or implied from the parties' conduct, or
more than one of these combined.
(3) Any of Chapters 2, 3 and 4 may apply to a contract—
(a) if it is a contract for the trader to supply goods, see Chapter 2;
(b) if it is a contract for the trader to supply digital content, see Chapter 3 (also,
subsection (6));
(c) if it is a contract for the trader to supply a service, see Chapter 4 (also,
subsection (6)).
(4) In each case the Chapter applies even if the contract also covers something covered by
another Chapter (a mixed contract).
(5) Two or all three of those Chapters may apply to a mixed contract.
(6) For provisions about particular mixed contracts, see—
(a) section 15 (goods and installation);
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(b) section 16 (goods and digital content).
(7) For other provision applying to contracts to which this Part applies, see Part 2 (unfair terms).
2 KEY DEFINITIONS
(1) These definitions apply in this Part (as well as the definitions in section 59).
(2) “Trader” means a person acting for purposes relating to that person's trade, business, craft
or profession, whether acting personally or through another person acting in the trader's
name or on the trader's behalf.
(3) “Consumer” means an individual acting for purposes that are wholly or mainly outside that
individual's trade, business, craft or profession.
(4) A trader claiming that an individual was not acting for purposes wholly or mainly outside the
individual's trade, business, craft or profession must prove it.
(5) For the purposes of Chapter 2, except to the extent mentioned in subsection (6), a person is
not a consumer in relation to a sales contract if—
(a) the goods are second hand goods sold at public auction, and
(b) individuals have the opportunity of attending the sale in person.
(6) A person is a consumer in relation to such a contract for the purposes of—
(a) sections 11(4) and (5), 12, 28 and 29, and
(b) the other provisions of Chapter 2 as they apply in relation to those sections.
(7) “Business” includes the activities of any government department or local or public authority.
(8) “Goods” means any tangible moveable items, but that includes water, gas and
electricity if and only if they are put up for supply in a limited volume or set quantity.
(9) “Digital content” means data which are produced and supplied in digital form.
CHAPTER 2
GOODS
What goods contracts are covered?
3 CONTRACTS COVERED BY THIS CHAPTER
(1) This Chapter applies to a contract for a trader to supply goods to a consumer.
5 to 8)—
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(a) a sales contract;
(b) a contract for the hire of goods;
(c) a hire-purchase agreement;
(d) a contract for transfer of goods.
(3) It does not apply—
(a) to a contract for a trader to supply coins or notes to a consumer for use as currency;
(b) to a contract for goods to be sold by way of execution or otherwise by authority of
law;
(c) to a contract intended to operate as a mortgage, pledge, charge or other security;
(d) in relation to England and Wales or Northern Ireland, to a contract made by
deed and for which the only consideration is the presumed consideration imported
by the deed;
(e) in relation to Scotland, to a gratuitous contract.
(4) A contract to which this Chapter applies is referred to in this Part as a “contract to supply
goods”.
(5) Contracts to supply goods include—
(a) contracts entered into between one part owner and another;
(b) contracts for the transfer of an undivided share in goods;
(c) contracts that are absolute and contracts that are conditional.
(6) Subsection (1) is subject to any provision of this Chapter that applies a section or part of a
section to only some of the kinds of contracts listed in subsection (2).
(7) A mixed contract (see section 1(4)) may be a contract of any of those kinds.
4 OWNERSHIP OF GOODS
(1) In this Chapter ownership of goods means the general property in goods, not merely a
special property.
(2) For the time when ownership of goods is transferred, see in particular the following
provisions of the Sale of Goods Act 1979 (which relate to contracts of sale)—
section 16: goods must be ascertained

section 17: property passes when intended to pass section
18: rules for ascertaining intention
section 19: reservation of right of disposal
section 20A: undivided shares in goods forming part of a bulk section 20B:
deemed consent by co-owner to dealings in bulk goods
5 SALES CONTRACTS
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(1) 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.
(2) A contract is a sales contract (whether or not it would be one under subsection (1)) if under
the contract—
(a) goods are to be manufactured or produced and the trader agrees to supply them to
the consumer,
(b) on being supplied, the goods will be owned by the consumer, and
(c) the consumer pays or agrees to pay the price.
(3) A sales contract may be conditional (see section 3(5)), but in this Part “conditional sales
contract” means a sales contract under which—
(a) the price for the goods or part of it is payable by instalments, and
(b) the trader retains ownership of the goods until the conditions specified in the
contract (for the payment of instalments or otherwise) are met;
and it makes no difference whether or not the consumer possesses the goods.
6 CONTRACTS FOR THE HIRE OF GOODS
(1) A contract is for the hire of goods if under it the trader gives or agrees to give the consumer
possession of the goods with the right to use them, subject to the terms of the contract, for
a period determined in accordance with the contract.
(2) But a contract is not for the hire of goods if it is a hire-purchase agreement.
7 HIRE-PURCHASE AGREEMENTS
(1) A contract is a hire-purchase agreement if it meets the two conditions set out below.
(2) The first condition is that under the contract goods are hired by the trader in return for
periodical payments by the consumer (and “hired” is to be read in accordance with section
6(1)).
(3) The second condition is that under the contract ownership of the goods will transfer to the
consumer if the terms of the contract are complied with and—
(a) the consumer exercises an option to buy the goods,
(b) any party to the contract does an act specified in it, or
(c) an event specified in the contract occurs.
(4) But a contract is not a hire-purchase agreement if it is a conditional sales contract.
8 CONTRACTS FOR TRANSFER OF GOODS
A contract to supply goods is a contract for transfer of goods if under it the trader transfers or
agrees to transfer ownership of the goods to the consumer and—
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(a) the consumer provides or agrees to provide consideration otherwise than by paying
a price, or
(b) the contract is, for any other reason, not a sales contract or a hire-purchase
agreement.
What statutory rights are there under a goods contract?
9 GOODS TO BE OF SATISFACTORY QUALITY
(1) Every contract to supply goods is to be treated as including a term that the quality of the
goods is satisfactory.
(2) The quality of goods is satisfactory if they meet the standard that a reasonable person
would consider satisfactory, taking account of—
(a) any description of the goods,
(b) the price or other consideration for the goods (if relevant), and
(c) all the other relevant circumstances (see subsection (5))
(3) The quality of goods includes their state and condition; and the following aspects (among
others) are in appropriate cases aspects of the quality of goods—
(a) fitness for all the purposes for which goods of that kind are usually supplied;
(b) appearance and finish;
(c) freedom from minor defects;
(d) safety;
(e) durability.
(4) The term mentioned in subsection (1) does not cover anything which makes the quality of
the goods unsatisfactory—
(a) which is specifically drawn to the consumer's attention before the contract is made,
(b) where the consumer examines the goods before the contract is made, which that
examination ought to reveal, or
(c) in the case of a contract to supply goods by sample, which would have been
apparent on a reasonable examination of the sample.
(5) The relevant circumstances mentioned in subsection (2)(c) include any public statement
about the specific characteristics of the goods made by the trader, the producer or any
representative of the trader or the producer.
(6) That includes, in particular, any public statement made in advertising or labelling.
(7) But a public statement is not a relevant circumstance for the purposes of subsection (2)
(c) if the trader shows that—
(a) when the contract was made, the trader was not, and could not reasonably have
been, aware of the statement,
(b) before the contract was made, the statement had been publicly withdrawn or, to
the extent that it contained anything which was incorrect or misleading, it had been
publicly corrected, or
(c) the consumer's decision to contract for the goods could not have been influenced
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by the statement.
(8) In a contract to supply goods a term about the quality of the goods may be treated as
included as a matter of custom.
(9) See section 19 for a consumer's rights if the trader is in breach of a term that this section
requires to be treated as included in a contract.
10 GOODS TO BE FIT FOR PARTICULAR PURPOSE
(1) Subsection (3) applies to a contract to supply goods if before the contract is made the
consumer makes known to the trader (expressly or by implication) any particular purpose
for which the consumer is contracting for the goods.
(2) Subsection (3) also applies to a contract to supply goods if—
(a) the goods were previously sold by a credit-broker to the trader,
(b) in the case of a sales contract or contract for transfer of goods, the consideration or
part of it is a sum payable by instalments, and
(c) before the contract is made, the consumer makes known to the credit-broker
(expressly or by implication) any particular purpose for which the consumer is
contracting for the goods.
(3) The contract is to be treated as including a term that the goods are reasonably fit for that
purpose, whether or not that is a purpose for which goods of that kind are usually supplied.
(4) Subsection (3) does not apply if the circumstances show that the consumer does not rely, or
it is unreasonable for the consumer to rely, on the skill or judgment of the trader or credit-
broker.
(5) In a contract to supply goods a term about the fitness of the goods for a particular purpose
may be treated as included as a matter of custom.
11 GOODS TO BE AS DESCRIBED
(1) Every contract to supply goods by description is to be treated as including a term that the
goods will match the description.
(2) If the supply is by sample as well as by description, it is not sufficient that the bulk of the
goods matches the sample if the goods do not also match the description.
(3) A supply of goods is not prevented from being a supply by description just because—
(a) the goods are exposed for supply, and
(b) they are selected by the consumer.
(4) Any information that is provided by the trader about the goods and is information
mentioned in paragraph (a) of Schedule 1 or 2 to the Consumer Contracts (Information,
Cancellation and Additional Charges) Regulations 2013 (SI 2013/3134) (main characteristics
162
of goods) is to be treated as included as a term of the contract.
(5) A change to any of that information, made before entering into the contract or later, is not
effective unless expressly agreed between the consumer and the trader.
(6) See section 2(5) and (6) for the application of subsections (4) and (5) where goods are sold
at public auction.
12 OTHER PRE-CONTRACT INFORMATION INCLUDED IN CONTRACT
(1) This section applies to any contract to supply goods.

(2) Where regulation 9, 10 or 13 of the Consumer Contracts (Information, Cancellation and
Additional Charges) Regulations 2013 (SI 2013/3134) required the trader to provide
information to the consumer before the contract became binding, any of that information
that was provided by the trader other than information about the goods and mentioned in
paragraph (a) of Schedule 1 or 2 to the Regulations (main characteristics of goods) is to be
treated as included as a term of the contract.
(4) See section 2(5) and (6) for the application of this section where goods are sold at public
auction.
requires to be treated as included in the contract.
13 GOODS TO MATCH A SAMPLE
(1) This section applies to a contract to supply goods by reference to a sample of the goods that
is seen or examined by the consumer before the contract is made.
(2) Every contract to which this section applies is to be treated as including a term that—
(a) the goods will match the sample except to the extent that any differences between
the sample and the goods are brought to the consumer's attention before the
contract is made, and
(b) the goods will be free from any defect that makes their quality unsatisfactory and
that would not be apparent on a reasonable examination of the sample.
14 GOODS TO MATCH A MODEL SEEN OR EXAMINED
(1) This section applies to a contract to supply goods by reference to a model of the goods that
163
is seen or examined by the consumer before entering into the contract.
(2) Every contract to which this section applies is to be treated as including a term that the
goods will 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 consumer enters into the
contract.
15 INSTALLATION AS PART OF CONFORMITY OF THE GOODS WITH THE CONTRACT
(1) Goods do not conform to a contract to supply goods if—

(a) installation of the goods forms part of the contract,
(b) the goods are installed by the trader or under the trader's responsibility, and
(c) the goods are installed incorrectly.
(2) See section 19 for the effect of goods not conforming to the contract.
16 GOODS NOT CONFORMING TO CONTRACT IF DIGITAL CONTENT DOES NOT CONFORM
(1) Goods (whether or not they conform otherwise to a contract to supply goods) do not
conform to it if—
(a) the goods are an item that includes digital content, and
(b) the digital content does not conform to the contract to supply that content (for
which see section 42(1)).
(2) See section 19 for the effect of goods not conforming to the contract.
17 TRADER TO HAVE RIGHT TO SUPPLY THE GOODS ETC
(1) Every contract to supply goods, except one within subsection (4), is to be treated as
including a term—
(a) in the case of a contract for the hire of goods, that at the beginning of the period of
hire the trader must have the right to transfer possession of the goods by way of
hire for that period,
(b) in any other case, that the trader must have the right to sell or transfer the goods at
the time when ownership of the goods is to be transferred.
(2) Every contract to supply goods, except a contract for the hire of goods or a contract within
subsection (4), is to be treated as including a term that—
(a) the goods are free from any charge or encumbrance not disclosed or known to the
consumer before entering into the contract,
(b) the goods will remain free from any such charge or encumbrance until ownership of
them is to be transferred, and
(c) the consumer will enjoy quiet possession of the goods except so far as it may be
disturbed by the owner or other person entitled to the benefit of any charge or
164
encumbrance so disclosed or known.
(3) Every contract for the hire of goods is to be treated as including a term that the consumer
will enjoy quiet possession of the goods for the period of the hire except so far as the
possession may be disturbed by the owner or other person entitled to the benefit of any
charge or encumbrance disclosed or known to the consumer before entering into the
contract.
(4) This subsection applies to a contract if the contract shows, or the circumstances when they
enter into the contract imply, that the trader and the consumer intend the trader to transfer
only—
(a) whatever title the trader has, even if it is limited, or
(b) whatever title a third person has, even if it is limited.
(5) Every contract within subsection (4) is to be treated as including a term that all charges or
encumbrances known to the trader and not known to the consumer were disclosed to the
consumer before entering into the contract.
(6) Every contract within subsection (4) is to be treated as including a term that the consumer's
quiet possession of the goods—
(a) will not be disturbed by the trader, and
(b) will not be disturbed by a person claiming through or under the trader, unless that
person is claiming under a charge or encumbrance that was disclosed or known to
the consumer before entering into the contract.
(7) If subsection (4)(b) applies (transfer of title that a third person has), the contract is also to be
treated as including a term that the consumer's quiet possession of the goods—
(a) will not be disturbed by the third person, and
(b) will not be disturbed by a person claiming through or under the third person, unless
the claim is under a charge or encumbrance that was disclosed or known to the
consumer before entering into the contract.
(8) In the case of a contract for the hire of goods, this section does not affect the right of the
trader to repossess the goods where the contract provides or is to be treated as providing
for this.
18 NO OTHER REQUIREMENT TO TREAT TERM ABOUT QUALITY OR FITNESS AS INCLUDED
(1) Except as provided by sections 9, 10, 13 and 16, a contract to supply goods is not to be
treated as including any term about the quality of the goods or their fitness for any
particular purpose, unless the term is expressly included in the contract.
(2) Subsection (1) is subject to provision made by any other enactment (whenever passed or
made).
What remedies are there if statutory rights under a goods contract are not met?
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19 CONSUMER'S RIGHTS TO ENFORCE TERMS ABOUT GOODS
(1) In this section and sections 22 to 24 references to goods conforming to a contract are
references to—
(a) the goods conforming to the terms described in sections 9, 10, 11, 13 and 14,
(b) the goods not failing to conform to the contract under section 15 or 16, and
(c) the goods conforming to requirements that are stated in the contract.
(2) But, for the purposes of this section and sections 22 to 24, a failure to conform as
mentioned in subsection (1)(a) to (c) is not a failure to conform to the contract if it has its
origin in materials supplied by the consumer.
(3) If the goods do not conform to the contract because of a breach of any of the terms
described in sections 9, 10, 11, 13 and 14, or if they do not conform to the contract under
section 16, the consumer's rights (and the provisions about them and when they are
available) are—
(a) the short-term right to reject (sections 20 and 22);
(b) the right to repair or replacement (section 23); and
(c) the right to a price reduction or the final right to reject (sections 20 and 24).
(4) If the goods do not conform to the contract under section 15 or because of a breach of
requirements that are stated in the contract, the consumer's rights (and the provisions
about them and when they are available) are—
(a) the right to repair or replacement (section 23); and
(b) the right to a price reduction or the final right to reject (sections 20 and 24).
(5) If the trader is in breach of a term that section 12 requires to be treated as included in the
contract, the consumer has the right to recover from the trader the amount of any costs
incurred by the consumer as a result of the breach, up to the amount of the price paid or
the value of other consideration given for the goods.
(6) If the trader is in breach of the term that section 17(1) (right to supply etc) requires to be
treated as included in the contract, the consumer has a right to reject (see section 20 for
provisions about that right and when it is available).
(7) Subsections (3) to (6) are subject to section 25 and subsections (3)(a) and (6) are subject to
section 26.
(8) Section 28 makes provision about remedies for breach of a term about the time for delivery
of goods.
(9) This Chapter does not prevent the consumer seeking other remedies—
(a) for a breach of a term that this Chapter requires to be treated as included in the
contract,
(b) on the grounds that, under section 15 or 16, goods do not conform to the
contract, or
(c) for a breach of a requirement stated in the contract.
(10) Those other remedies may be ones—
(a) in addition to a remedy referred to in subsections (3) to (6) (but not so as to recover
166
twice for the same loss), or
(b) instead of such a remedy, or
(c) where no such remedy is provided for.
(11) Those other remedies include any of the following that is open to the consumer in the
circumstances—
(a) claiming damages;
(b) seeking specific performance;
(c) seeking an order for specific implement;
(d) relying on the breach against a claim by the trader for the price;
(e) for breach of an express term, exercising a right to treat the contract as at an end.
(12) It is not open to the consumer to treat the contract as at an end for breach of a term that
this Chapter requires to be treated as included in the contract, or on the grounds that,
under section 15 or 16, goods do not conform to the contract, except as provided by
subsections (3), (4) and (6).
(13) In this Part, treating a contract as at an end means treating it as repudiated.
(14) For the purposes of subsections (3)(b) and (c) and (4), goods which do not conform to the
contract at any time within the period of six months beginning with the day on which the
goods were delivered to the consumer must be taken not to have conformed to it on that
day.
(15) Subsection (14) does not apply if—
(a) it is established that the goods did conform to the contract on that day, or
(b) its application is incompatible with the nature of the goods or with how they fail to
conform to the contract.
20 RIGHT TO REJECT
(1) The short-term right to reject is subject to section 22.

(2) The final right to reject is subject to section 24.
(3) The right to reject under section 19(6) is not limited by those sections.
(4) Each of these rights entitles the consumer to reject the goods and treat the contract as at an
end, subject to subsections (20) and (21).
(5) The right is exercised if the consumer indicates to the trader that the consumer is rejecting
the goods and treating the contract as at an end.
(6) The indication may be something the consumer says or does, but it must be clear enough to
be understood by the trader.
(7) From the time when the right is exercised—
(a) the trader has a duty to give the consumer a refund, subject to subsection (18), and
(b) 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 rejected goods) to return them
as agreed.
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(8) Whether or not the consumer has a duty to return the rejected goods, the trader must bear
any reasonable costs of returning them, other than any costs incurred by the consumer in
returning the goods in person to the place where the consumer took physical possession of
them.
(9) The consumer's entitlement to receive a refund works as follows.
(10) To the extent that the consumer paid money under the contract, the consumer is entitled to
receive back the same amount of money.
(11) To the extent that the consumer transferred anything else under the contract, the consumer
is entitled to receive back the same amount of what the consumer transferred, unless
subsection (12) applies.
(12) To the extent that the consumer transferred under the contract something for which the
same amount of the same thing cannot be substituted, the consumer is entitled to receive
back in its original state whatever the consumer transferred.
(13) If the contract is for the hire of goods, the entitlement to a refund extends only to anything
paid or otherwise transferred for a period of hire that the consumer does not get because
the contract is treated as at an end.
(14) If the contract is a hire-purchase agreement or a conditional sales contract and the contract
is treated as at an end before the whole of the price has been paid, the entitlement to a
refund extends only to the part of the price paid.
(15) A refund under this section must be given without undue delay, and in any event within 14
days beginning with the day on which the trader agrees that the consumer is entitled to a
refund.
(16) If the consumer paid money under the contract, the trader must give the refund using the
same means of payment as the consumer used, unless the consumer expressly agrees
otherwise.
(17) The trader must not impose any fee on the consumer in respect of the refund.
(18) There is no entitlement to receive a refund—
(a) if none of subsections (10) to (12) applies,
(b) to the extent that anything to which subsection (12) applies cannot be given back in
its original state, or
(c) where subsection (13) applies, to the extent that anything the consumer transferred
under the contract cannot be divided so as to give back only the amount, or part of
the amount, to which the consumer is entitled.
(19) It may be open to a consumer to claim damages where there is no entitlement to receive a
refund, or because of the limits of the entitlement, or instead of a refund.
(20) Subsection (21) qualifies the application in relation to England and Wales and Northern
Ireland of the rights mentioned in subsections (1) to (3) where—
(a) the contract is a severable contract,
(b) in relation to the final right to reject, the contract is a contract for the hire of goods,
a hire-purchase agreement or a contract for transfer of goods, and
(c) section 26(3) does not apply.
(21) The consumer is entitled, depending on the terms of the contract and the circumstances of
168
the case—
(a) to reject the goods to which a severable obligation relates and treat that obligation
as at an end (so that the entitlement to a refund relates only to what the consumer
paid or transferred in relation to that obligation), or
(b) to exercise any of the rights mentioned in subsections (1) to (3) in respect of the
whole contract.
21 PARTIAL REJECTION OF GOODS
(1) If the consumer has any of the rights mentioned in section 20(1) to (3), but does not reject
all of the goods and treat the contract as at an end, the consumer—
(a) may reject some or all of the goods that do not conform to the contract, but
(b) may not reject any goods that do conform to the contract.
(2) If the consumer is entitled to reject the goods in an instalment, but does not reject all of
those goods, the consumer—
(a) may reject some or all of the goods in the instalment that do not conform to the
contract, but
(b) may not reject any goods in the instalment that do conform to the contract.
(3) If any of the goods form a commercial unit, the consumer cannot reject some of those
goods without also rejecting the rest of them.
(4) A unit is a “commercial unit” if division of the unit would materially impair the value of the
(5) The consumer rejects goods under this section by indicating to the trader that the
consumer is rejecting the goods.
(6) The indication may be something the consumer says or does, but it must be clear
enough to be understood by the trader.
(7) From the time when a consumer rejects goods under this section—
(a) the trader has a duty to give the consumer a refund in respect of those goods
(subject to subsection (10)), and
(b) the consumer has a duty to make those goods available for collection by the trader
or (if there is an agreement for the consumer to return rejected goods) to return
them as agreed.
(8) Whether or not the consumer has a duty to return the rejected goods, the trader must bear
any reasonable costs of returning them, other than any costs incurred by the consumer in
returning those goods in person to the place where the consumer took physical possession
of them.
(9) Section 20(10) to (17) apply to a consumer's right to receive a refund under this section (and
in section 20(13) and (14) references to the contract being treated as at an end are to be
read as references to goods being rejected).
(10) That right does not apply—
(a) if none of section 20(10) to (12) applies,
(b) to the extent that anything to which section 20(12) applies cannot be given back in
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its original state, or
(c) to the extent that anything the consumer transferred under the contract cannot be
divided so as to give back only the amount, or part of the amount, to which the
consumer is entitled.
(11) It may be open to a consumer to claim damages where there is no right to receive a refund,
or because of the limits of the right, or instead of a refund.
(12) References in this section to goods conforming to a contract are to be read in accordance
with section 19(1) and (2), but they also include the goods conforming to the terms
described in section 17.
(13) Where section 20(21)(a) applies the reference in subsection (1) to the consumer treating the
contract as at an end is to be read as a reference to the consumer treating the severable
obligation as at an end.
22 TIME LIMIT FOR SHORT-TERM RIGHT TO REJECT
(1) A consumer who has the short-term right to reject loses it if the time limit for exercising it
passes without the consumer exercising it, unless the trader and the consumer agree that it
may be exercised later.
(2) An agreement under which the short-term right to reject would be lost before the time limit
passes is not binding on the consumer.
(3) The time limit for exercising the short-term right to reject (unless subsection (4) applies) is
the end of 30 days beginning with the first day after these have all happened—
(a) ownership or (in the case of a contract for the hire of goods, a hire-purchase
agreement or a conditional sales contract) possession of the goods has been
transferred to the consumer,
(b) the goods have been delivered, and
(c) 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.
(4) If any of the goods are of a kind that can reasonably be expected to perish after a shorter
period, the time limit for exercising the short-term right to reject in relation to those goods
is the end of that shorter period (but without affecting the time limit in relation to goods
that are not of that kind).
(5) Subsections (3) and (4) do not prevent the consumer exercising the short-term right to
reject before something mentioned in subsection (3)(a), (b) or (c) has happened.
(6) If the consumer requests or agrees to the repair or replacement of goods, the period
mentioned in subsection (3) or (4) stops running for the length of the waiting period.
(7) If goods supplied by the trader in response to that request or agreement do not conform to
the contract, the time limit for exercising the short-term right to reject is then either—
(a) 7 days after the waiting period ends, or
(b) if later, the original time limit for exercising that right, extended by the waiting
period.
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(8) The waiting period—
(a) begins with the day the consumer requests or agrees to the repair or
replacement of the goods, and
(b) ends with the day on which the consumer receives goods supplied by the trader in
response to the request or agreement.
23 RIGHT TO REPAIR OR REPLACEMENT
(1) This section applies if the consumer has the right to repair or replacement (see section
19(3) and (4)).
(2) If the consumer requires the trader to repair or replace the goods, the trader must—
(a) do so within a reasonable time and without significant inconvenience to the
consumer, and
(b) bear any necessary costs incurred in doing so (including in particular the cost of any
labour, materials or postage).
(3) The consumer cannot require the trader to repair or replace the goods if that remedy (the
repair or the replacement)—
(a) is impossible, or
(b) is disproportionate compared to the other of those remedies.
(4) Either of those remedies is disproportionate compared to the other if it imposes costs on
the trader which, compared to those imposed by the other, are unreasonable, taking into
account—
(a) the value which the goods would have if they conformed to the contract,
(b) the significance of the lack of conformity, and
(c) whether the other remedy could be effected without significant inconvenience to
the consumer.
(5) Any question as to what is a reasonable time or significant inconvenience is to be
determined taking account of—
(a) the nature of the goods, and
(b) the purpose for which the goods were acquired.
(6) A consumer who requires or agrees to the repair of goods cannot require the trader to
replace them, or exercise the short-term right to reject, without giving the trader a
reasonable time to repair them (unless giving the trader that time would cause significant
inconvenience to the consumer).
(7) A consumer who requires or agrees to the replacement of goods cannot require the trader
to repair them, or exercise the short-term right to reject, without giving the trader a
reasonable time to replace them (unless giving the trader that time would cause significant
inconvenience to the consumer).
(8) In this Chapter, “repair” in relation to goods that do not conform to a contract, means
making them conform.
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24 RIGHT TO PRICE REDUCTION OR FINAL RIGHT TO REJECT
(1) The right to a price reduction is the right—

(a) to require the trader to reduce by an appropriate amount the price the consumer is
required to pay under the contract, or anything else the consumer is required to
transfer under the contract, and
(b) to receive a refund from the trader for anything already paid or otherwise
transferred by the consumer above the reduced amount.
(2) The amount of the reduction may, where appropriate, be the full amount of the price or
whatever the consumer is required to transfer.
(3) Section 20(10) to (17) applies to a consumer's right to receive a refund under
subsection (1)(b).
(4) The right to a price reduction does not apply—
(a) if what the consumer is (before the reduction) required to transfer under the
contract, whether or not already transferred, cannot be divided up so as to enable
the trader to receive or retain only the reduced amount, or
(b) if anything to which section 20(12) applies cannot be given back in its original state.
(5) A consumer who has the right to a price reduction and the final right to reject may only
exercise one (not both), and may only do so in one of these situations—
(a) after one repair or one replacement, the goods do not conform to the contract;
(b) because of section 23(3) the consumer can require neither repair nor
replacement of the goods; or
(c) the consumer has required the trader to repair or replace the goods, but the trader
is in breach of the requirement of section 23(2)(a) to do so within a reasonable time
and without significant inconvenience to the consumer.
(6) There has been a repair or replacement for the purposes of subsection (5)(a) if—
(a) the consumer has requested or agreed to repair or replacement of the goods
(whether in relation to one fault or more than one), and
(b) the trader has delivered goods to the consumer, or made goods available to the
consumer, in response to the request or agreement.
(7) For the purposes of subsection (6) goods that the trader arranges to repair at the
consumer's premises are made available when the trader indicates that the repairs are
finished.
(8) 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 in the period since they were delivered, but this is subject to subsections
(9) and (10).
(9) No deduction may be made to take account of use in any period when the consumer had
the goods only because the trader failed to collect them at an agreed time.
(10) No deduction may be made if the final right to reject is exercised in the first 6 months (see
subsection (11)), unless—
(a) the goods consist of a motor vehicle, or
(b) the goods are of a description specified by order made by the Secretary of State by
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(11) In subsection (10) the first 6 months means 6 months beginning with the first day after
these have all happened—
(a) ownership or (in the case of a contract for the hire of goods, a hire-purchase
agreement or a conditional sales contract) possession of the goods has been
transferred to the consumer,
(b) the goods have been delivered, and
(c) 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.
(12) In subsection (10)(a) “motor vehicle”—
(a) in relation to Great Britain, has the same meaning as in the Road Traffic Act 1988
(see sections 185 to 194 of that Act);
(b) in relation to Northern Ireland, has the same meaning as in the Road Traffic
(Northern Ireland) Order 1995 (SI 1995/2994 (NI 18)) (see Parts I and V of that
Order).
(13) But a vehicle is not a motor vehicle for the purposes of subsection (10)(a) if it is
constructed or adapted—
(a) for the use of a person suffering from some physical defect or disability, and
(b) so that it may only be used by one such person at any one time.
(14) An order under subsection (10)(b)—
(a) may be made only if the Secretary of State is satisfied that it is appropriate to do so
because of significant detriment caused to traders as a result of the
application of subsection (10) in relation to goods of the description specified by the
order;
(b) may contain transitional or transitory provision or savings.
(15) No order may be made under subsection (10)(b) unless a draft of the statutory instrument
containing it has been laid before, and approved by a resolution of, each House of
Parliament.
Other rules about remedies under goods contracts
25 DELIVERY OF WRONG QUANTITY
(1) Where the trader delivers to the consumer a quantity of goods less than the trader
contracted to supply, the consumer may reject them, but if the consumer accepts them the
consumer must pay for them at the contract rate.
(2) Where the trader delivers to the consumer a quantity of goods larger than the trader
contracted to supply, the consumer may accept the goods included in the contract and
reject the rest, or may reject all of the goods.
(3) Where the trader delivers to the consumer a quantity of goods larger than the trader
contracted to supply and the consumer accepts all of the goods delivered, the consumer must
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pay for them at the contract rate.
(4) Where the consumer is entitled to reject goods under this section, any entitlement for the
consumer to treat the contract as at an end depends on the terms of the contract and the
circumstances of the case.
(5) The consumer rejects goods under this section by indicating to the trader that the consumer
is rejecting the goods.
(6) The indication may be something the consumer says or does, but it must be clear enough to
be understood by the trader.
(7) Subsections (1) to (3) do not prevent the consumer claiming damages, where it is open to
the consumer to do so.
(8) This section is subject to any usage of trade, special agreement, or course of dealing
between the parties.
26 INSTALMENT DELIVERIES
(1) Under a contract to supply goods, the consumer is not bound to accept delivery of the
goods by instalments, unless that has been agreed between the consumer and the trader.
(2) The following provisions apply if the contract provides for the goods to be delivered by
stated instalments, which are to be separately paid for.
(3) If the trader makes defective deliveries in respect of one or more instalments, the consumer,
apart from any entitlement to claim damages, may be (but is not necessarily) entitled—
(a) to exercise the short-term right to reject or the right to reject under section
19(6) (as applicable) in respect of the whole contract, or
(b) to reject the goods in an instalment.
(4) Whether paragraph (a) or (b) of subsection (3) (or neither) applies to a consumer depends
on the terms of the contract and the circumstances of the case.
(5) In subsection (3), making defective deliveries does not include failing to make a delivery in
accordance with section 28.
(6) If the consumer neglects or refuses to take delivery of or pay for one or more
instalments, the trader may—
(a) be entitled to treat the whole contract as at an end, or
(b) if it is a severable breach, have a claim for damages but not a right to treat the
whole contract as at an end.
(7) Whether paragraph (a) or (b) of subsection (6) (or neither) applies to a trader depends on
the terms of the contract and the circumstances of the case.
27 CONSIGNATION, OR PAYMENT INTO COURT, IN SCOTLAND
(1) Subsection (2) applies where—

(a) a consumer has not rejected goods which the consumer could have rejected for
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breach of a term mentioned in section 19(3) or (6),
(b) the consumer has chosen to treat the breach as giving rise only to a claim for
damages or to a right to rely on the breach against a claim by the trader for the
price of the goods, and
(c) the trader has begun proceedings in court to recover the price or has brought a
counter-claim for the price.
(2) The court may require the consumer—
(a) to consign, or pay into court, the price of the goods, or part of the price, or
(b) to provide some other reasonable security for payment of the price.
Other rules about goods contracts
28 DELIVERY OF GOODS
(1) This section applies to any sales contract.

(2) Unless the trader and the consumer have agreed otherwise, the contract is to be treated as
including a term that the trader must deliver the goods to the consumer.
(3) Unless there is an agreed time or period, the contract is to be treated as including a term
that the trader must deliver the goods—
(a) without undue delay, and
(b) in any event, not more than 30 days after the day on which the contract is entered
into.
(4) In this section—
(a) an “agreed” time or period means a time or period agreed by the trader and the
consumer for delivery of the goods;
(b) if there is an obligation to deliver the goods at the time the contract is entered into,
that time counts as the “agreed” time.
(5) Subsections (6) and (7) apply if the trader does not deliver the goods in accordance with
subsection (3) or at the agreed time or within the agreed period.
(6) If the circumstances are that—
(a) the trader has refused to deliver the goods,
(b) delivery of the goods at the agreed time or within the agreed period is essential
taking into account all the relevant circumstances at the time the contract was
entered into, or
(c) the consumer told the trader before the contract was entered into that delivery in
accordance with subsection (3), or at the agreed time or within the agreed period,
was essential,
then the consumer may treat the contract as at an end.
(7) In any other circumstances, the consumer may specify a period that is appropriate in the
circumstances and require the trader to deliver the goods before the end of that period.
(8) If the consumer specifies a period under subsection (7) but the goods are not delivered
175
within that period, then the consumer may treat the contract as at an end.
(9) If the consumer treats the contract as at an end under subsection (6) or (8), the trader must
without undue delay reimburse all payments made under the contract.
(10) If subsection (6) or (8) applies but the consumer does not treat the contract as at an end—
(a) that does not prevent the consumer from cancelling the order for any of the goods
or rejecting goods that have been delivered, and
(b) the trader must without undue delay reimburse all payments made under the
contract in respect of any goods for which the consumer cancels the order or which
the consumer rejects.
(11) If any of the goods form a commercial unit, the consumer cannot reject or cancel the order
for some of those goods without also rejecting or cancelling the order for the rest of them.
(12) A unit is a “commercial unit” if division of the unit would materially impair the value of the
(13) This section does not prevent the consumer seeking other remedies where it is open to the
consumer to do so.
auction.
29 PASSING OF RISK
(1) A sales contract is to be treated as including the following provisions as terms.

(2) The goods remain at the trader's risk until they come into the physical possession of—
(a) the consumer, or
(b) a person identified by the consumer to take possession of the goods.
(3) Subsection (2) does not apply if the goods are delivered to a carrier who—
(a) is commissioned by the consumer to deliver the goods, and
(b) is not a carrier the trader named as an option for the consumer.
(4) In that case the goods are at the consumer's risk on and after delivery to the carrier.
(5) Subsection (4) does not affect any liability of the carrier to the consumer in respect of the
goods.
auction.
30 GOODS UNDER GUARANTEE
(1) This section applies where—

(a) there is a contract to supply goods, and
(b) there is a guarantee in relation to the goods.
176
(2) “Guarantee” here means an undertaking to the consumer given without extra charge by a
person acting in the course of the person's business (the “guarantor”) that, if the goods do
not meet the specifications set out in the guarantee statement or in any associated
advertising—
(a) the consumer will be reimbursed for the price paid for the goods, or
(b) the goods will be repaired, replaced or handled in any way.
(3) The 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 in any
associated advertising.
(4) The guarantor must ensure that—
(a) the guarantee sets out in plain and intelligible language the contents of the
guarantee and the essential particulars for making claims under the guarantee,
(b) the guarantee states that the consumer has statutory rights in relation to the goods
and that those rights are not affected by the guarantee, and
(c) where the goods are offered within the territory of the United Kingdom, the
guarantee is written in English.
(5) The contents of the guarantee to be set out in it include, in particular—
(a) the name and address of the guarantor, and
(b) the duration and territorial scope of the guarantee.
(6) The guarantor and any other person who offers to supply to consumers the goods which are
the subject of the guarantee must, on request by the consumer, make the guarantee
available to the consumer within a reasonable time, in writing and in a form accessible to
the consumer.
(7) What is a reasonable time is a question of fact.
(8) If a person fails to comply with a requirement of this section, the enforcement authority may
apply to the court for an injunction or (in Scotland) an order of specific implement against
that person requiring that person to comply.
(9) On an application the court may grant an injunction or (in Scotland) an order of specific
implement on such terms as it thinks appropriate.
(10) In this section—
“court” means—
(a) in relation to England and Wales, the High Court or the county court,
(b) in relation to Northern Ireland, the High Court or a county court, and
(c) in relation to Scotland, the Court of Session or the sheriff;
“enforcement authority” means—
(a) the Competition and Markets Authority,
(b) a local weights and measures authority in Great Britain, and
(c) the Department of Enterprise, Trade and Investment in Northern Ireland.
Can a trader contract out of statutory rights and remedies under a goods contract?
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31 LIABILITY THAT CANNOT BE EXCLUDED OR RESTRICTED
(1) A term of a contract to supply goods is not binding on the consumer to the extent that it
would exclude or restrict the trader's liability arising under any of these provisions—
(a) section 9 (goods to be of satisfactory quality);

(b) section 10 (goods to be fit for particular purpose);
(c) section 11 (goods to be as described);
(d) section 12 (other pre-contract information included in contract);
(e) section 13 (goods to match a sample);
(f) section 14 (goods to match a model seen or examined);
(g) section 15 (installation as part of conformity of the goods with the contract);
(h) section 16 (goods not conforming to contract if digital content does not
conform);
(i) section 17 (trader to have right to supply the goods etc);
(j) section 28 (delivery of goods);
(k) section 29 (passing of risk).
(2) That also means that a term of a contract to supply goods is not binding on the
consumer to the extent that it would—
(a) exclude or restrict a right or remedy in respect of a liability under a provision listed
in subsection (1),
(b) make such a right or remedy or its enforcement subject to a restrictive or
onerous condition,
(c) allow a trader to put a person at a disadvantage as a result of pursuing such a right
or remedy, or
(d) exclude or restrict rules of evidence or procedure.
(3) The reference in subsection (1) to excluding or restricting a liability also includes preventing
an obligation or duty arising or limiting its extent.
(4) An agreement in writing to submit present or future differences to arbitration is not to be
regarded as excluding or restricting any liability for the purposes of this section.
(5) Subsection (1)(i), and subsection (2) so far as it relates to liability under section 17, do not
apply to a term of a contract for the hire of goods.
(6) But an express term of a contract for the hire of goods is not binding on the consumer to the
extent that it would exclude or restrict a term that section 17 requires to be treated as
included in the contract, unless it is inconsistent with that term (and see also section 62
(requirement for terms to be fair)).
(7) See Schedule 3 for provision about the enforcement of this section.
32 [ F 1 CONTRACTS APPLYING LAW OF A COUNTRY OTHER THAN THE UK]
(1) If—
178
(a) the law of a country or territory other than [F2the United Kingdom or any part of the
United Kingdom] is chosen by the parties to be applicable to a sales contract, but
(b) the sales contract has a close connection with the United Kingdom,
this Chapter, except the provisions in subsection (2), applies despite that choice.
(2) The exceptions are—

(a) sections 11(4) and (5) and 12;
(b) sections 28 and 29;
(c) section 31(1)(d), (j) and (k).
(3) For cases where those provisions apply, or where the law applicable has not been chosen
F3
..., see Regulation (EC) No. 593/2008 of the European Parliament and of the Council of 17
June 2008 on the law applicable to contractual obligations [F4as that Regulation has effect as
retained direct EU legislation (including that Regulation as applied by regulation 5 of the Law
Applicable to Contractual Obligations (England and Wales and Northern Ireland) Regulations
2009 and regulation 4 of the Law Applicable to Contractual Obligations (Scotland)
Regulations 2009), unless the case is one in respect of which Regulation (EC) No. 593/2008
has effect by virtue of Article 66 of the EU withdrawal agreement, in which case see that
Regulation as it has effect by virtue of that Article.]
CHAPTER 3
DIGITAL CONTENT
What digital content contracts are covered?
(1) This Chapter applies to a contract for a trader to supply digital content to a consumer, if it is
supplied or to be supplied for a price paid by the consumer.
(2) This Chapter also applies to a contract for a trader to supply digital content to a
consumer, if—
(a) it is supplied free with goods or services or other digital content for which the
consumer pays a price, and
(b) it is not generally available to consumers unless they have paid a price for it or for
goods or services or other digital content.
(3) The references in subsections (1) and (2) to the consumer paying a price include references
to the consumer using, by way of payment, any facility for which money has been paid.
(4) A trader does not supply digital content to a consumer for the purposes of this Part merely
because the trader supplies a service by which digital content reaches the consumer.
(5) The Secretary of State may by order provide for this Chapter to apply to other contracts for a
trader to supply digital content to a consumer, if the Secretary of State is satisfied that it is
179
appropriate to do so because of significant detriment caused to consumers under contracts
of the kind to which the order relates.
(6) An order under subsection (5)—
(a) may, in particular, amend this Act;
(b) may contain transitional or transitory provision or savings.
(7) A contract to which this Chapter applies is referred to in this Part as a “contract to supply
digital content”.
(8) This section, other than subsection (4), does not limit the application of section 46.
(9) The power to make an order under subsection (5) is exercisable by statutory instrument.
(10) No order may be made under subsection (5) unless a draft of the statutory instrument
Parliament.
What statutory rights are there under a digital content contract?
34 DIGITAL CONTENT TO BE OF SATISFACTORY QUALITY
(1) Every contract to supply digital content is to be treated as including a term that the quality
of the digital content is satisfactory.
(2) The quality of digital content is satisfactory if it meets the standard that a reasonable person
would consider satisfactory, taking account of—
(a) any description of the digital content,
(b) the price mentioned in section 33(1) or (2)(b) (if relevant), and
(c) all the other relevant circumstances (see subsection (5)).
(3) The quality of digital content includes its state and condition; and the following aspects
(among others) are in appropriate cases aspects of the quality of digital content—
(a) fitness for all the purposes for which digital content of that kind is usually supplied;
(b) freedom from minor defects;
(c) safety;
(d) durability.
(4) The term mentioned in subsection (1) does not cover anything which makes the quality of the
digital content unsatisfactory—
(a) which is specifically drawn to the consumer's attention before the contract is made,
(b) where the consumer examines the digital content before the contract is made,
which that examination ought to reveal, or
(c) where the consumer examines a trial version before the contract is made, which
would have been apparent on a reasonable examination of the trial version.
(5) The relevant circumstances mentioned in subsection (2)(c) include any public statement
about the specific characteristics of the digital content made by the trader, the producer or
any representative of the trader or the producer.
180
(6) That includes, in particular, any public statement made in advertising or labelling.
(7) But a public statement is not a relevant circumstance for the purposes of subsection (2)
(c) if the trader shows that—
(a) when the contract was made, the trader was not, and could not reasonably have
been, aware of the statement,
(b) before the contract was made, the statement had been publicly withdrawn or, to
the extent that it contained anything which was incorrect or misleading, it had been
publicly corrected, or
(c) the consumer's decision to contract for the digital content could not have been
influenced by the statement.
(8) In a contract to supply digital content a term about the quality of the digital content may be
treated as included as a matter of custom.
35 DIGITAL CONTENT TO BE FIT FOR PARTICULAR PURPOSE
(1) Subsection (3) applies to a contract to supply digital content if before the contract is
made the consumer makes known to the trader (expressly or by implication) any particular
purpose for which the consumer is contracting for the digital content.
(2) Subsection (3) also applies to a contract to supply digital content if—
(a) the digital content was previously sold by a credit-broker to the trader,
(b) the consideration or part of it is a sum payable by instalments, and
(c) before the contract is made, the consumer makes known to the credit-broker
(expressly or by implication) any particular purpose for which the consumer is
contracting for the digital content.
(3) The contract is to be treated as including a term that the digital content is reasonably fit for
that purpose, whether or not that is a purpose for which digital content of that kind is
usually supplied.
(4) Subsection (3) does not apply if the circumstances show that the consumer does not rely, or
it is unreasonable for the consumer to rely, on the skill or judgment of the trader or credit-
broker.
(5) A contract to supply digital content may be treated as making provision about the fitness of
the digital content for a particular purpose as a matter of custom.
36 DIGITAL CONTENT TO BE AS DESCRIBED
(1) Every contract to supply digital content is to be treated as including a term that the digital
181
content will match any description of it given by the trader to the consumer.
(2) Where the consumer examines a trial version before the contract is made, it is not sufficient
that the digital content matches (or is better than) the trial version if the digital content
does not also match any description of it given by the trader to the consumer.
(3) Any information that is provided by the trader about the digital content that is information
mentioned in paragraph (a), (j) or (k) of Schedule 1 or paragraph (a),
(v) or (w) of Schedule 2 (main characteristics, functionality and compatibility) to the
Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013
(SI 2013/3134) is to be treated as included as a term of the contract.
37 OTHER PRE-CONTRACT INFORMATION INCLUDED IN CONTRACT
(1) This section applies to any contract to supply digital content.

(2) Where regulation 9, 10 or 13 of the Consumer Contracts (Information, Cancellation and
Additional Charges) Regulations 2013 (SI 2013/3134) required the trader to provide
information to the consumer before the contract became binding, any of that information
that was provided by the trader other than information about the digital content and
mentioned in paragraph (a), (j) or (k) of Schedule 1 or paragraph (a),(v) or (w) of Schedule
2 to the Regulations (main characteristics, functionality and compatibility) is to be treated as
included as a term of the contract.
38 NO OTHER REQUIREMENT TO TREAT TERM ABOUT QUALITY OR FITNESS AS INCLUDED
(1) Except as provided by sections 34 and 35, a contract to supply digital content is not to be
treated as including any term about the quality of the digital content or its fitness for any
particular purpose, unless the term is expressly included in the contract.
(2) Subsection (1) is subject to provision made by any other enactment, whenever passed or
made.
39 SUPPLY BY TRANSMISSION AND FACILITIES FOR CONTINUED TRANSMISSION
(1) Subsection (2) applies where there is a contract to supply digital content and the consumer's
182
access to the content on a device requires its transmission to the device under
arrangements initiated by the trader.
(2) For the purposes of this Chapter, the digital content is supplied—
(a) when the content reaches the device, or
(b) if earlier, when the content reaches another trader chosen by the consumer to
supply, under a contract with the consumer, a service by which digital content
reaches the device.
(3) Subsections (5) to (7) apply where—
(a) there is a contract to supply digital content, and
(b) after the trader (T) has supplied the digital content, the consumer is to have access
under the contract to a processing facility under arrangements made by T.
(4) A processing facility is a facility by which T or another trader will receive digital content from
the consumer and transmit digital content to the consumer (whether or not other features
are to be included under the contract).
(5) The contract is to be treated as including a term that the processing facility (with any
feature that the facility is to include under the contract) must be available to the consumer
for a reasonable time, unless a time is specified in the contract.
(6) The following provisions apply to all digital content transmitted to the consumer on each
occasion under the facility, while it is provided under the contract, as they apply to the
digital content first supplied—
(a) section 34 (quality);
(b) section 35 (fitness for a particular purpose);
(c) section 36 (description).
(7) Breach of a term treated as included under subsection (5) has the same effect as breach of a
term treated as included under those sections (see section 42).
40 QUALITY, FITNESS AND DESCRIPTION OF CONTENT SUPPLIED SUBJECT TO MODIFICATIONS
(1) Where under a contract a trader supplies digital content to a consumer subject to the right
of the trader or a third party to modify the digital content, the following provisions apply in
relation to the digital content as modified as they apply in relation to the digital content as
supplied under the contract—
(a) section 34 (quality);
(b) section 35 (fitness for a particular purpose);
(c) section 36 (description).
(2) Subsection (1)(c) does not prevent the trader from improving the features of, or adding new
features to, the digital content, as long as—
(a) the digital content continues to match the description of it given by the trader to
the consumer, and
(b) the digital content continues to conform to the information provided by the trader
as mentioned in subsection (3) of section 36, subject to any change to that
information that has been agreed in accordance with subsection (4) of that section.
183
(3) A claim on the grounds that digital content does not conform to a term described in any of
the sections listed in subsection (1) as applied by that subsection is to be treated as arising
at the time when the digital content was supplied under the contract and not the time when
it is modified.
41 TRADER'S RIGHT TO SUPPLY DIGITAL CONTENT
(1) Every contract to supply digital content is to be treated as including a term—

(a) in relation to any digital content which is supplied under the contract and which the
consumer has paid for, that the trader has the right to supply that content to the
consumer;
(b) in relation to any digital content which the trader agrees to supply under the
contract and which the consumer has paid for, that the trader will have the right to
supply it to the consumer at the time when it is to be supplied.
What remedies are there if statutory rights under a digital content contract are not met?
42 CONSUMER'S RIGHTS TO ENFORCE TERMS ABOUT DIGITAL CONTENT
(1) In this section and section 43 references to digital content conforming to a contract are
references to the digital content conforming to the terms described in sections 34, 35 and
36.
(2) If the digital content does not conform to the contract, the consumer's rights (and the
provisions about them and when they are available) are—
(a) the right to repair or replacement (see section 43);
(b) the right to a price reduction (see section 44).
(3) Section 16 also applies if an item including the digital content is supplied.
contract, the consumer has the right to recover from the trader the amount of any costs
incurred by the consumer as a result of the breach, up to the amount of the price paid for
the digital content or for any facility within section 33(3) used by the consumer.
(5) If the trader is in breach of the term that section 41(1) (right to supply the content) requires
to be treated as included in the contract, the consumer has the right to a refund (see section
45 for provisions about that right and when it is available).
(6) This Chapter does not prevent the consumer seeking other remedies for a breach of a term
to which any of subsections (2), (4) or (5) applies, instead of or in addition to a remedy
referred to there (but not so as to recover twice for the same loss).
circumstances—
184
(b) seeking to recover money paid where the consideration for payment of the money
has failed;
(c) seeking specific performance;
(d) seeking an order for specific implement;
(e) relying on the breach against a claim by the trader for the price.
(8) It is not open to the consumer to treat the contract as at an end for breach of a term to
which any of subsections (2), (4) or (5) applies.
(9) For the purposes of subsection (2), digital content which does not conform to the contract
at any time within the period of six months beginning with the day on which it was supplied
must be taken not to have conformed to the contract when it was supplied.
(10) Subsection (9) does not apply if—
(a) it is established that the digital content did conform to the contract when it was
supplied, or
(b) its application is incompatible with the nature of the digital content or with how it
fails to conform to the contract.
43 RIGHT TO REPAIR OR REPLACEMENT
(1) This section applies if the consumer has the right to repair or replacement.
(2) If the consumer requires the trader to repair or replace the digital content, the trader must
—
(a) do so within a reasonable time and without significant inconvenience to the
consumer; and
(b) bear any necessary costs incurred in doing so (including in particular the cost of any
labour, materials or postage).
(3) The consumer cannot require the trader to repair or replace the digital content if that
remedy (the repair or the replacement)—
(a) is impossible, or
(b) is disproportionate compared to the other of those remedies.
(4) Either of those remedies is disproportionate compared to the other if it imposes costs on
the trader which, compared to those imposed by the other, are unreasonable, taking into
account—
(a) the value which the digital content would have if it conformed to the contract,
(b) the significance of the lack of conformity, and
(c) whether the other remedy could be effected without significant inconvenience to
the consumer.
(a) the nature of the digital content, and
(b) the purpose for which the digital content was obtained or accessed.
(6) A consumer who requires or agrees to the repair of digital content cannot require the trader
185
to replace it without giving the trader a reasonable time to repair it (unless giving the trader
that time would cause significant inconvenience to the consumer).
(7) A consumer who requires or agrees to the replacement of digital content cannot require the
trader to repair it without giving the trader a reasonable time to replace it (unless giving the
trader that time would cause significant inconvenience to the consumer).
(8) In this Chapter, “repair” in relation to digital content that does not conform to a
contract, means making it conform.
44 RIGHT TO PRICE REDUCTION
(1) The right to a price reduction is the right to require the trader to reduce the price to the
consumer by an appropriate amount (including the right to receive a refund for anything
already paid above the reduced amount).
(2) The amount of the reduction may, where appropriate, be the full amount of the price.
(3) A consumer who has that right may only exercise it in one of these situations—
(a) because of section 43(3)(a) the consumer can require neither repair nor
replacement of the digital content, or
(b) the consumer has required the trader to repair or replace the digital content, but
the trader is in breach of the requirement of section 43(2)(a) to do so within a
reasonable time and without significant inconvenience to the consumer.
refund.
(5) The trader must give the refund using the same means of payment as the consumer used to
pay for the digital content, unless the consumer expressly agrees otherwise.
45 RIGHT TO A REFUND
(1) The right to a refund gives the consumer the right to receive a refund from the trader of all
money paid by the consumer for the digital content (subject to subsection (2)).
(2) If the breach giving the consumer the right to a refund affects only some of the digital
content supplied under the contract, the right to a refund does not extend to any part of the
price attributable to digital content that is not affected by the breach.
(3) A refund must be given without undue delay, and in any event within 14 days beginning
with the day on which the trader agrees that the consumer is entitled to a refund.
pay for the digital content, unless the consumer expressly agrees otherwise.
186
Compensation for damage to device or to other digital content
46 REMEDY FOR DAMAGE TO DEVICE OR TO OTHER DIGITAL CONTENT
(1) This section applies if—

(a) a trader supplies digital content to a consumer under a contract,
(b) the digital content causes damage to a device or to other digital content,
(c) the device or digital content that is damaged belongs to the consumer, and
(d) the damage is of a kind that would not have occurred if the trader had exercised
reasonable care and skill.
(2) If the consumer requires the trader to provide a remedy under this section, the trader must
either—
(a) repair the damage in accordance with subsection (3), or
(b) compensate the consumer for the damage with an appropriate payment.
(3) To repair the damage in accordance with this subsection, the trader must—
(a) repair the damage within a reasonable time and without significant
inconvenience to the consumer, and
(b) bear any necessary costs incurred in repairing the damage (including in
particular the cost of any labour, materials or postage).
(a) the nature of the device or digital content that is damaged, and
(b) the purpose for which it is used by the consumer.
(5) A compensation payment under this section must be made without undue delay, and in any
event within 14 days beginning with the day on which the trader agrees that the consumer
is entitled to the payment.
(6) The trader must not impose any fee on the consumer in respect of the payment.
(7) A consumer with a right to a remedy under this section may bring a claim in civil
proceedings to enforce that right.
(8) The Limitation Act 1980 and the Limitation (Northern Ireland) Order 1989 (SI 1989/1339 (NI
11)) apply to a claim under this section as if it were an action founded on simple contract.
(9) The Prescription and Limitation (Scotland) Act 1973 applies to a right to a remedy under this
section as if it were an obligation to which section 6 of that Act applies.
Can a trader contract out of statutory rights and remedies under a digital content contract?
(1) A term of a contract to supply digital content is not binding on the consumer to the extent
187
that it would exclude or restrict the trader's liability arising under any of these provisions—
(a) section 34 (digital content to be of satisfactory quality),
(b) section 35 (digital content to be fit for particular purpose),
(c) section 36 (digital content to be as described),
(d) section 37 (other pre-contract information included in contract), or
(e) section 41 (trader's right to supply digital content).
(2) That also means that a term of a contract to supply digital content is not binding on the
consumer to the extent that it would—
(a) exclude or restrict a right or remedy in respect of a liability under a provision listed
in subsection (1),
onerous condition,
or remedy, or
(3) The reference in subsection (1) to excluding or restricting a liability also includes preventing
an obligation or duty arising or limiting its extent.
(6) For provision limiting the ability of a trader under a contract within section 46 to exclude
or restrict the trader's liability under that section, see section 62.
CHAPTER 4
SERVICES
What services contracts are covered?
(1) This Chapter applies to a contract for a trader to supply a service to a consumer.
(2) That does not include a contract of employment or apprenticeship.
(3) In relation to Scotland, this Chapter does not apply to a gratuitous contract.
[F5(3A) This Chapter does not apply to anything that is governed by Regulation (EU) No 181/2011 of
the European Parliament and of the Council of 16 February 2011 concerning the rights of
passengers in bus and coach transport and amending Regulation (EC) No 2006/2004.]
188
(4) A contract to which this Chapter applies is referred to in this Part as a “contract to supply a
service”.
(5) The Secretary of State may by order made by statutory instrument provide that a provision
of this Chapter does not apply in relation to a service of a description specified in the order.
(6) The power in subsection (5) includes power to provide that a provision of this Chapter does
not apply in relation to a service of a description specified in the order in the circumstances
so specified.
(7) An order under subsection (5) may contain transitional or transitory provision or savings.
(8) No order may be made under subsection (5) unless a draft of the statutory instrument
Parliament.
What statutory rights are there under a services contract?
49 SERVICE TO BE PERFORMED WITH REASONABLE CARE AND SKILL
(1) Every contract to supply a service is to be treated as including a term that the trader must
perform the service with reasonable care and skill.
50 INFORMATION ABOUT THE TRADER OR SERVICE TO BE BINDING
(1) Every contract to supply a service is to be treated as including as a term of the contract
anything that is said or written to the consumer, by or on behalf of the trader, about the
trader or the service, if—
(a) it is taken into account by the consumer when deciding to enter into the contract, or
(b) it is taken into account by the consumer when making any decision about the
service after entering into the contract.
(2) Anything taken into account by the consumer as mentioned in subsection (1)(a) or (b) is
subject to—
(a) anything that qualified it and was said or written to the consumer by the trader on
the same occasion, and
(b) any change to it that has been expressly agreed between the consumer and the
trader (before entering into the contract or later).
(3) Without prejudice to subsection (1), any information provided by the trader in accordance
with regulation 9, 10 or 13 of the Consumer Contracts (Information, Cancellation and
Additional Charges) Regulations 2013 (SI 2013/3134) is to be treated as included as a term of
the contract.
(4) A change to any of the information mentioned in subsection (3), made before entering into
the contract or later, is not effective unless expressly agreed between the consumer and the
189
trader.
51 REASONABLE PRICE TO BE PAID FOR A SERVICE
(1) This section applies to a contract to supply a service if—

(a) the consumer has not paid a price or other consideration for the service,
(b) the contract does not expressly fix a price or other consideration, and does not say
how it is to be fixed, and
(c) anything that is to be treated under section 50 as included in the contract does not
fix a price or other consideration either.
(2) In that case the contract is to be treated as including a term that the consumer must pay a
reasonable price for the service, and no more.
(3) What is a reasonable price is a question of fact.
52 SERVICE TO BE PERFORMED WITHIN A REASONABLE TIME
(1) This section applies to a contract to supply a service, if—

(a) the contract does not expressly fix the time for the service to be performed, and
does not say how it is to be fixed, and
(b) information that is to be treated under section 50 as included in the contract does
not fix the time either.
(2) In that case the contract is to be treated as including a term that the trader must perform
the service within a reasonable time.
(3) What is a reasonable time is a question of fact.
53 RELATION TO OTHER LAW ON CONTRACT TERMS
(1) Nothing in this Chapter affects any enactment or rule of law that imposes a stricter duty on
the trader.
(2) This Chapter is subject to any other enactment which defines or restricts the rights, duties or
liabilities arising in connection with a service of any description.
What remedies are there if statutory rights under a services contract are not met?
190
54 CONSUMER'S RIGHTS TO ENFORCE TERMS ABOUT SERVICES
(1) The consumer's rights under this section and sections 55 and 56 do not affect any rights that
the contract provides for, if those are not inconsistent.
(2) In this section and section 55 a reference to a service conforming to a contract is a
reference to—
(a) the service being performed in accordance with section 49, or
(b) the service conforming to a term that section 50 requires to be treated as
included in the contract and that relates to the performance of the service.
(3) If the service does not conform to the contract, the consumer's rights (and the
provisions about them and when they are available) are—
(a) the right to require repeat performance (see section 55);
(b) the right to a price reduction (see section 56).
contract but that does not relate to the service, the consumer has the right to a price
reduction (see section 56 for provisions about that right and when it is available).
(5) If the trader is in breach of what the contract requires under section 52 (performance within
a reasonable time), the consumer has the right to a price reduction (see section 56 for
provisions about that right and when it is available).
(6) This section and sections 55 and 56 do not prevent the consumer seeking other remedies for
a breach of a term to which any of subsections (3) to (5) applies, instead of or in addition to
a remedy referred to there (but not so as to recover twice for the same loss).
circumstances—
(b) seeking to recover money paid where the consideration for payment of the money
has failed;
(c) seeking specific performance;
(d) seeking an order for specific implement;
(e) relying on the breach against a claim by the trader under the contract;
(f) exercising a right to treat the contract as at an end.
55 RIGHT TO REPEAT PERFORMANCE
(1) The right to require repeat performance is a right to require the trader to perform the
service again, to the extent necessary to complete its performance in conformity with the
contract.
(2) If the consumer requires such repeat performance, the trader—
(a) must provide it within a reasonable time and without significant
inconvenience to the consumer; and
(b) must bear any necessary costs incurred in doing so (including in particular the cost
191
of any labour or materials).
(3) The consumer cannot require repeat performance if completing performance of the service
in conformity with the contract is impossible.
(a) the nature of the service, and
(b) the purpose for which the service was to be performed.
56 RIGHT TO PRICE REDUCTION
(1) The right to a price reduction is the right to require the trader to reduce the price to the
consumer by an appropriate amount (including the right to receive a refund for anything
already paid above the reduced amount).
(2) The amount of the reduction may, where appropriate, be the full amount of the price.
(3) A consumer who has that right and the right to require repeat performance is only entitled
to a price reduction in one of these situations—
(a) because of section 55(3) the consumer cannot require repeat performance; or
(b) the consumer has required repeat performance, but the trader is in breach of the
requirement of section 55(2)(a) to do it within a reasonable time and without
significant inconvenience to the consumer.
refund.
pay for the service, unless the consumer expressly agrees otherwise.
Can a trader contract out of statutory rights and remedies under a services contract?
(1) A term of a contract to supply services is not binding on the consumer to the extent that it
would exclude the trader's liability arising under section 49 (service to be performed with
reasonable care and skill).
(2) Subject to section 50(2), a term of a contract to supply services is not binding on the
consumer to the extent that it would exclude the trader's liability arising under section 50
(information about trader or service to be binding).
(3) A term of a contract to supply services is not binding on the consumer to the extent that it
would restrict the trader's liability arising under any of sections 49 and 50 and
192
where they apply, sections 51 and 52 (reasonable price and reasonable time), if it would
prevent the consumer in an appropriate case from recovering the price paid or the value of
any other consideration. (If it would not prevent the consumer from doing so, Part 2 (unfair
terms) may apply.)
(4) That also means that a term of a contract to supply services is not binding on the
consumer to the extent that it would —
(a) exclude or restrict a right or remedy in respect of a liability under any of sections
49 to 52,
onerous condition,
or remedy, or
(5) The references in subsections (1) to (3) to excluding or restricting a liability also include
preventing an obligation or duty arising or limiting its extent.
CHAPTER 5
GENERAL AND SUPPLEMENTARY PROVISIONS
58 POWERS OF THE COURT
(1) In any proceedings in which a remedy is sought by virtue of section 19(3) or (4), 42(2) or
54(3), the court, in addition to any other power it has, may act under this section.
(2) On the application of the consumer the court may make an order requiring specific
performance or, in Scotland, specific implement by the trader of any obligation imposed on
the trader by virtue of section 23, 43 or 55.
(3) Subsection (4) applies if—
(a) the consumer claims to exercise a right under the relevant remedies provisions, but
(b) the court decides that those provisions have the effect that exercise of another right
is appropriate.
(4) The court may proceed as if the consumer had exercised that other right.
(5) If the consumer has claimed to exercise the final right to reject, the court may order that any
reimbursement to the consumer is reduced by a deduction for use, to take account of the
use the consumer has had of the goods in the period since they were delivered.
(6) Any deduction for use is limited as set out in section 24(9) and (10).
193
(7) The court may make an order under this section unconditionally or on such terms and
conditions as to damages, payment of the price and otherwise as it thinks just.
(8) The “relevant remedies provisions” are—
(a) where Chapter 2 applies, sections 23 and 24;
(b) where Chapter 3 applies, sections 43 and 44;
(c) where Chapter 4 applies, sections 55 and 56.
59 INTERPRETATION
(1) These definitions apply in this Part (as well as the key definitions in section 2)— “conditional
sales contract” has the meaning given in section 5(3); “Consumer Rights
Directive” means Directive 2011/83/EU of the
European Parliament and of the Council of 25 October 2011 on consumer
rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the
European Parliament and of the Council and repealing Council Directive 85/577/EEC
and Directive 97/7/EC of the European Parliament and of the Council;
“credit-broker” means a person acting in the course of a business of credit
brokerage carried on by that person;
“credit brokerage” means—
(a) introducing individuals who want to obtain credit to persons carrying on any
business so far as it relates to the provision of credit,
(b) introducing individuals who want to obtain goods on hire to persons carrying
on a business which comprises or relates to supplying goods under a contract
for the hire of goods, or
(c) introducing individuals who want to obtain credit, or to obtain goods on hire,
to other persons engaged in credit brokerage;
“delivery” means voluntary transfer of possession from one person to another;
“enactment” includes—
(a) an enactment contained in subordinate legislation within the meaning of the
Interpretation Act 1978,
(b) an enactment contained in, or in an instrument made under, a Measure or Act
of the National Assembly for Wales,
(c) an enactment contained in, or in an instrument made under, an Act of the
Scottish Parliament, and
(d) Ireland legislation;
“producer”, in relation to goods or digital content, means—
(a) the manufacturer,
(b) the importer into the [F6United Kingdom], or
(c) any person who purports to be a producer by placing the person's name, trade
mark or other distinctive sign on the goods or using it in connection with the
digital content.
(2) References in this Part to treating a contract as at an end are to be read in accordance with
section 19(13).
194
60 CHANGES TO OTHER LEGISLATION
Schedule 1 (amendments consequential on this Part) has effect.
195

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COMMERICAL

Welcome to the Commercial Law module!

ASSESSIBLE LEARNING OUTCOMES

Students who pass this module will be able to:

 demonstrate a critical knowledge and understanding of the operation of sale of goods

ADDITIONAL LEARNING OUTCOMES

Students will be provided with opportunities:

Topics covered on this module will include:

WHAT IS COMMERCIAL LAW?

The Dynamic Nature of Commercial Law…

Responses to new technology…

The creative and entrepreneurial role of lawyers…

Challenges for Transnational Commercial Law?

Litigate, Litigate, Litigate?

GREAT DEBATES IN COMMERCIAL LAW: INTERVENTIONIST V. NON-INTERVENTIONIST APPROACHES

Are there arguments for a more interventionist approach to Commercial Law?

 Our module focuses on the sale of goods;

SGA 1979: BACKGROUND

On interpreting the SGA 1893/1979:

The international impact of SGA 1893/1979:

The role of the common law

In particular, the SGA 1979 is built upon the law of contract:

THE INTERPRETATION OF COMMERCIAL CONTRACTS BY THE COURTS

Note the move from literal to contextual interpretation of contracts…

What is the risk of relying too heavily on commercial common sense?

In other words, it was a “pay now, argue later” clause.

GOOD FAITH IN COMMERCIAL CONTRACTS

Should English Law recognise an overriding duty of ‘good faith’?

Link to legal certainty for business parties..?

To what extent, if at all, are default rules useful in commercial law?

SGA 1979: SCOPE

‘TRANSFER / AGREEMENT TO TRANSFER’ PROPERTY

DOES COMPUTER SOFTWARE FALL WITHIN THE DEFINITION OF ‘GOODS’?

St Albans City and DC v International Computers Ltd [1997]

Software Incubator Limited v Computer Associates UK Limited

Licence or transfer of ownership?

CONTRACTS V. CONTRACTS FOR WORK AND MATERIALS

Note also s.8, SGA 1979:

SGA 1979: Structure

Part I: Contracts to which Act applies;

PART II: FORMATION OF THE CONTRACT

PART III: EFFECTS OF THE CONTRACT

Central role of property under the SGA 1979

Passing of Property in Goods

PARTS V & VI: ACTIONS FOR BREACH OF CONTRACT

Traditional distinction between conditions and warranties:

PART VII: SUPPLEMENTARY

For example, s.61 deals with interpretation of the Act.

What is the purpose of Consumer Law?

EU Consumer Law Drivers

Consumer Protection Policy & Information

Dynamic Relationship with EU Consumer Law

See also European Union (Withdrawal) Act 2018, s.2(1):

Future of retained consumer law?

More recent EU developments…

Future of UK consumer policy

o Consumer Rights (Payment Surcharges) Regulations 2012;

[Note now Digital Markets, Competition and Consumers Bill].

AIMS OF THE CRA 2015

The aims of the CRA 2015 were:

o to streamline consumer rights;

IMPLIED TERMS PRIOR TO CRA 2015

14(2) of Sale of Goods Act 1979 (prior to CRA 2015):

CONSOLIDATION IN CRA 2015