The Sale of Goods Act 1979 - Essay Example

Vauxhall Astra Under section 14(2) of the Sale of Goods Act 1979, Andy is en d to goods of a satisfactory quality when he purchases such goods from a buyer who sells such goods in the course of business. While making the purchase of the second hand Vauxhall Astra, Andy had an opportunity to examine the car. In the test drive he observed a fault with the breaks. Thereafter pursuant to his rights under section 48C of the 1979 Act he obtained a price reduction of 400 pounds. Thereafter, allowing the reduction the dealer said. This is a quantity car, l dont want any complains from you. You must take it in the condition in which you found it. This statement by itself does not shield the seller from liability. Under section 6(2)(a) of the Unfair Contract Terms Act 1977, as against a person dealing as consumer, 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 any contract term. Dealing as a Consumer is defined under section 12 of the Unfair Contract Terms Act 1977.1 An individual deals as a consumer when he neither makes the contract in the course of a business nor holds himself out as doing so the other party does make the contract in the course of a business. The second hand good was not bought in a public auction, and therefore the burden of proving that the purchase was not made as a consumer lies on the seller either because the seller did not sell in the course of business or the buyer did buy or held out to buy in the course of business. The mere fact that Andy had paid the purchase price from his business account does not lead to a conclusion that he was dealing in the course of business and not as a consumer. In fact, his intention was to use the car principally for shopping and collecting the children from school but he did expect occasionally to use it in his business for urgent collections and deliveries of materials. Under section 14(2A) of the 1979 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. Furthermore, under section 14(2B), 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) freedom from minor defects, (c) safety, and (d) durability. The description of the goods as provided by the seller at the time of sale represented to Andy that the car was a quantity car, and the seller didnt want any complains from him. He must take it in the condition in which he found it. Therefore, a reasonable person in Andy’s position would have been aware that the car might be subject to defects and might require repair as the same was a quantity car. It would be unreasonable for Andy to expect too good a performance or durability from the car. Further, a relevant circumstance to be kept in mind in this regard is that the car was second-hand. Moreover, the fact that Andy had an opportunity to test-drive the car and did not find the defect in the clutch might lead to a conclusion that the defect was not present at the time of sale. In Thain v Anniesland Trade Centre2 the court held that a second hand Renault 19 which was 5- 6 years old and had done some 80 thousand miles, for GBP 2995, and which broke down some two weeks after sale when its gear box failed, was not unsatisfactory as durability was not a quality which a reasonable buyer would expect. In considering the cars fitness for its purpose the failure of an experienced witness to detect any of the symptoms prior to the cars purchase, and the car proving reasonably fit for its purpose during the initial period of use after its acquisition, provided a justifiable basis for the conclusion that the defect was not present when the car was sold. The Court further held that that the defect could have emerged at any time given the age and mileage of the car, and in buying the car the pursuer had immediately assumed the risk of repair, durability not being a quality that a reasonable person would have demanded from a second-hand car. Therefore, the seller is not liable for the clutch seizing up after three weeks of the purchase of the car and any claim made by Andy under the Sale of Good Act 1979 in a Court is likely to fail. Gold Ornamental Lamp a) Civil Liability The retailers are liable to Andy for violation of section 14(2) of the Sale of Goods Act 1979. Section 14(2B) enumerates safety as one of the aspects of quality. Any reasonable person under the circumstances would regard an electrical lamp which violated the Safety Regulations by using too high a flash point, as not being of satisfactory quality as the same violated elementary safety norms. Andy is therefore entitled to repudiation of the contract of sale and full refund and consequential damages. The importer of the lamp is liable to George for his personal injury under section 2(1) of the Consumer Protection Act 1987 read with section 2(2)(c) of the Act which makes importers liable for any defect in the products. Under section 3(1) of the said Act, there is a defect in a product if the safety of the product is not such as persons are generally entitled to expect. At the least persons are entitled to expect compliance with the safety regulations of the country.3 b) Criminal Liability The importer faces criminal liability under the General Product Safety Regulations 2005. Under Regulation 2(b)(ii) of the said Regulations a producer would include an importer. Regulation 5 of the said Regulations provides that no producer shall place a product on the market unless the product is a safe product. Under regulation 20 contravention of regulation 5 is a criminal offense. Furthermore, the importer issued a certificate to the retailers that the goods complied with this countrys safety requirements. This amounts to a trade description under section 2(1)(g) of the Trade Descriptions Act 1968 as it represents that the goods conform to the standards of safety issued by the state. However, the goods in fact contravened the safety regulations. Therefore, the importer is also liable under section 1 of the Trade Descriptions Act 1968 which provides that any person who, in the course of a trade or business applies a false trade description to any goods; or supplies or offers to supply any goods to which a false trade description is applied; shall, be guilty of an offence. Regulation 8 of the General Product Safety Regulations 2005 also imposes a duty on the distributor to act with due care in order to help ensure compliance with the applicable safety requirements and in particular a distributor shall not supply, a product to any person which he knows or should have presumed, on the basis of the information in his possession and as a professional, is a dangerous product. The regulation also obligates distributors to participate in monitoring the safety of a product placed on the market, in particular by— (i) passing on information on the risks posed by the product, (ii) keeping the documentation necessary for tracing the origin of the product, (iii) producing the documentation necessary for tracing the origin of the product, and (iv) cooperating in action taken by a producer or an enforcement authority to avoid the risks. Contravention of the aforesaid regulation is a criminal offence under regulation 20. However, the retailers might escape criminal liability under regulation 29 which provides that in proceedings against a person for an offence under these Regulations it shall be a defence for that person to show that he took all reasonable steps and exercised all due diligence to avoid committing the offence. In the instant case, the retailers had obtained a certificate from the importer as to the fact that the lamps complied with safety requirements.4 However, Deborah L. Parry has observed that when seeking to rely on information supplied by another, the court will have regard to the steps taken or which might reasonably be taken to verify the information and whether there were any reasons to disbelieve the information.5 Thus, mere reliance on the certificate would not discharge the burden of showing due diligence. In this regard the Court would also be required to scrutinize the tests supervised the retailers Quality Director on the product. Especially it would scrutinize the checking system operated by the retailers, the size of the samples in the test, whether the test was properly devised and implemented.6 Computer and Chess Game It is important at the outset to analyse whether the computer and the chess program supplied therewith are goods for the purposes of the Sale of Goods Act 1979. While the computer hardware is certainly “goods” within the meaning the 1979 Act,7 the fact that the software is not a physical entity may lead to doubts as to whether it falls within the definition of goods. The question was decided in the case of St Albans City Council v International Computers Ltd.8 Sir Iain Glidewell held that the word software may be used to describe both the program algorithm itself and the floppy disk on which the program is supplied, but that goods as defined in the Sale of Goods Act could only refer to a physical item. He concluded that the classification of the contract would depend on the manner in which the program is supplied. Where the program is supplied on a physical medium such as floppy disk or CD-ROM there is a supply of goods. Where, on the other hand, the program is supplied without the supply of any physical item, there is no sale of goods. Nevertheless, he concluded, even if the contract is not one for the supply of goods, that does not preclude the implication into the contract, at common law, of terms that the program will be reasonably fit for the customers purpose. In the present case, the chess game was either supplied by installing it into the computer prior to the sale of the computer or on a separate medium like a CD or floppy along with the computer. In the former case, the game was supplied on a physical medium, the computer and both were sold to Andy as a non-severable unit and Andy paid 2500 pounds for the same. In Toby Constructions Products Pty Ltd v Computa Bar (Sales) Pty Ltd,9 the Supreme Court of New South Wales, held that a sale of a computer system comprising hardware and software was a sale of goods. It was accepted as good law by Sir Iain Glidewell LJ in St Albans City Council v International Computers Ltd.10 Even if it was supplied separately on a floppy or CD as games commonly are, or separately installed or downloaded through the Internet, they still comprise goods within the meaning of the 1979 Act. In any event, it is still subject to an implied term of fitness for purpose.11 The Chess Program was certainly fit for its purpose as there was no defect in its performance. Andy was simply able to beat the program at chess every time whereas the shop had stated that the Chess Program was the best programme in the country. No-one has ever won a game against it". Now, the requirement that goods must correspond with description applies where goods are supplied by description, and it has been held that in this context description is limited to those words which identify essential commercial attributes of the item sold.12 Amongst the factors which the court will consider when deciding whether descriptive words form part of the description by which goods are sold is whether they were influential in the sale and whether the buyer could reasonably be expected to rely on the words in question when buying the goods.13 Now a reasonable person who buys a computer game, does not buy because he wants to lose every game. He buys it to pit his skills against the computer to try and win the game. He simply expects a challenging game. Simply, because a person may be sufficiently skilled to beat the game every time does not mean that the game is in any way defective. The fact that Andy took the game which was recommended as the best programme, shows that he is sufficiently skilled in the game of chess. In this context, the statement14 made by the salesman, was merely a puff and not a description on which a reasonable person would rely. Mere puffs by sales men do not give rise to contractual terms according to the maxim Simplex commendatio non obligat. This principle is also recognized in section 14(2E)(c) of the 1979 Act. As far as the defective number keyboard on the keyboard is concerned, it certainly renders the product not of satisfactory quality even though the defect might be considered slight. Under section 14(2B) of the 1979 Act, one of the enumerated aspects of quality is freedom from minor defects. Therefore, Andy has a right to repudiate the contract and ask for a refund. Furthermore, under section 11(4) subject to section 35A where the goods are not severable where 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. Therefore, if Andy is shown to have accepted the goods then he is only entitled to the credit voucher and not to the refund. However, under section 35A, a buyer is not deemed to have accepted the goods unless he has had a reasonable opportunity to examine its conformity. However, the buyer is 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. Therefore, provided that Andy has rejected the goods within a reasonable time after the purchase, he is entitled to a full refund if the Chess Game was installed into the computer prior to sale, in which case it is not severable. In case, the computer game was supplied on a separate medium like a CD or floppy, he is entitled to reject only the computer and get the proportionate refund and not the Chess programme. Washing Machine Andy’s problem with the washing machine is factually similar to the case of Rogers v Parish (Scarborough) Ltd.15 In that case, the plaintiffs purchased a Range Rover motor vehicle from the defendants. The vehicle, which was sold as new, was found to be defective in a number of respects and, with the agreement of all parties, another Range Rover was substituted for it on the same terms. Upon delivery the engine, gearbox and bodywork of the replacement vehicle were substantially defective. In the six months following delivery the first plaintiff drove the vehicle but with no satisfaction, and a number of attempts were made to rectify the defects. The Plaintiff brought an action in which he alleged that the defendants had been in breach of the express condition of the contracts that the vehicle was new and of the conditions implied by section 14 of the Sale of Goods Act 1979 (prior to the 1994 Amendment) that it should be of merchantable quality and reasonably fit for its purpose, and claimed a declaration that they had been entitled to repudiate the contracts, repayment of all sums paid to the defendants under or in connection with the contracts, and damages. The judge found that the vehicle had properly been described as new and that, since none of the defects had rendered the vehicle unroadworthy, unusable or unfit for the normal purposes for which a Range Rover was used, it had been of merchantable quality and reasonably fit for its purpose when delivered and dismissed the plaintiffs claim. However, it is humbly submitted that the aforesaid decision would not be the right precedent in the present context. After the 1994 amendment to the 1979 Act, the standard has been changed from merchantable quality to satisfactory quality. Though satisfactory quality is to be judged at the time of the sale, under section 14(2B) of the 1979 Act, now durability is also an essential aspect of quality. Therefore, while there might not have been a defect at the time when the washing machine was purchased it might still not satisfy “satisfactory quality” if it lacks satisfactory durability. The Sale of Goods Act 1979 does not provide any definition of durability. In Thain v Anniesland Trade Centre16, the court suggested obiter that a new car could be expected to work trouble-free at least for the duration of the manufacturer’s guarantee. Therefore, according to the aforesaid obiter, the goods should be durable at least as long as the manufacturer’s guarantee lasts. Twigg-Flesner disapproves of the aforesaid test as referring to a manufacturer’s guarantee in applying the satisfactory quality test could result in a reduction in consumers’ rights.17 Therefore, Twigg-Flesner suggests that at best, it may be possible to argue that there is a presumption that goods which fail before the guarantee period has expired were not of satisfactory quality.18 The test which the aforesaid author lays down is that a product is not of sufficient durability if the particular product has broken down significantly sooner than would ordinarily be expected of a product of the same type. Products which fail at a point significantly before that average time would then not be of satisfactory quality.19 Taking the specific example of washing machines, Twigg-Flesner observes that it is common for washing machines to work without problems for five or six years (or even longer). If a particular washing machine broke down after seven months of normal use, it would seem probable that there was something wrong with it at the time of sale. The consumer would therefore have a good chance of claiming successfully that the washing machine is not of satisfactory quality.20 The washing machine in the instant case had broken down once within one month of the purchase. The same was then repaired. Thereafter if the machine has broken down again whether or not the warranty period has still not expired, if it is significantly less than 5 or 6 years, the period which a washing machine is ordinarily expected to work without breaking down, Andy is entitled to reject the goods and claim a refund as a breach of a condition of satisfactory quality has occurred. This condition cannot be treated to have been transformed into a warranty whose breach only entitles Andy to damages and not rejection under section 11(4) of the 1979 Act, since simply because he has accepted a repair to the washing machine once does not mean he has accepted the goods itself under section 35A(6) of the 1979 Act. Read More