Sale of Goods Act 1979: Legal Analysis and Commentaries

Picture of Rowan T. Moyo, Ph.D.

Rowan T. Moyo, Ph.D.

What is the Sale of Goods Act 1979?

The Sale of Goods Act 1979 is a piece of legislation in the United Kingdom that outlines the rights and responsibilities of buyers and sellers in contracts for the sale of goods.

It covers various aspects such as the transfer of property, implied conditions and warranties, remedies for breach of contract, and the rights of unpaid sellers.

The Sale of Goods Act provides guidelines for determining when property in goods is transferred, the quality of goods, and the remedies available to buyers and sellers in case of breach of contract.

It also addresses specific scenarios such as sales by sample, sales by description, and sales on approval or return.

Who does the Sale of Goods Act 1979 apply to?

The Sale of Goods Act 1979 applies to a wide range of individuals and entities involved in the sale of goods.

It primarily applies to contracts of sale of goods made on or after January 1894, with specific modifications for contracts made on certain dates as outlined in the Act.

The Act covers contracts of sale of goods, which are defined as contracts where the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, known as the price.

This encompasses transactions between businesses, as well as transactions involving consumers and sellers.

The Act also addresses the rights and responsibilities of buyers and sellers, including implied conditions and warranties, remedies for breach of contract, and the transfer of property in goods.

Furthermore, the Act has been the subject of comparative studies and reviews in various jurisdictions, indicating its relevance to international trade and commerce.

Additionally, the Act has been examined in the context of digital content sales, intellectual property rights, and the obligations of sellers with embedded software, highlighting its applicability to modern technological advancements and the evolving nature of commercial transactions.

Therefore, the Sale of Goods Act 1979 applies to a broad spectrum of commercial activities, including domestic and international sales, and it is relevant to both traditional and digital goods transactions.

What are the main provisions of the Sale of Goods Act 1979?

The Sale of Goods Act 1979 encompasses several key provisions that regulate contracts for the sale of goods.

These provisions include the determination of whether a stipulation in a contract is a condition or a warranty, the implied terms about title, the transfer of property as between seller and buyer, implied terms about quality or fitness, sale by sample, and the rights of unpaid sellers against the goods.

The Act also addresses the rights and remedies of both buyers and sellers, including the seller’s right of lien or retention, stoppage in transit, and the buyer’s remedies for breach of contract.

Furthermore, the Act outlines the implications of specific scenarios such as the sale of specific or ascertained goods, the buyer’s liability for delivery of goods, and the seller’s remedies for the buyer’s neglect or refusal to take delivery.

Additionally, the Act covers the seller’s right of stoppage in transit, re-sale by the seller, and the attachment of goods in Scotland.

These provisions collectively establish the legal framework for the sale of goods, outlining the rights, obligations, and remedies of both buyers and sellers in commercial transactions

How are goods described in the Sale of Goods Act?

In the Sale of Goods Act 1979, goods are described as all personal chattels other than things in action and money, and in Scotland, all corporeal moveables except money.

This 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.

The Act also specifies that “goods” includes specific categories such as future goods, specific goods, and goods sold by sample or description, encompassing a wide range of tangible items and commodities.

Read article: Is Merchandise Inventory a Current Asset?

What are the implied terms in a contract of sale under the Act?

The Sale of Goods Act 1979 outlines several implied terms in a contract of sale, which establish the rights and obligations of both the buyer and the seller.

These implied terms are fundamental in regulating the sale of goods and ensuring that both parties are protected under the law.

  • Implied Condition of Title: The seller implicitly warrants that they have the right to sell the goods and that the buyer will have and enjoy quiet possession of the goods. Additionally, there is an implied warranty that the goods will be free from any charge or encumbrance not disclosed or known to the buyer before the contract is made.
  • Implied Condition of Description: In a contract for the sale of goods by description, there is an implied condition that the goods will correspond with the description. 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.
  • Implied Condition of Quality or Fitness: Where the seller sells goods in the course of a business, there is an implied condition that the goods supplied under the contract are of merchantable quality. Furthermore, if the buyer makes known to the seller any particular purpose for which the goods are being bought, there is an implied condition 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 seller’s skill or judgment.

What does ‘fit for purpose’ mean under the Sale of Goods Act 1979?

Under the Sale of Goods Act 1979, ‘fit for purpose’ means that when the buyer, either expressly or by implication, communicates to the seller a specific purpose for which the goods are being purchased, there is an implied condition that the goods supplied under the contract are reasonably fit for that purpose.

This condition applies whether or not the purpose is one for which such goods are commonly supplied, unless the circumstances show that the buyer does not rely, or it is unreasonable for the buyer to rely, on the seller’s skill or judgment.

What is the difference between ‘condition’ and ‘warranty’ under the Sale of Goods Act?

In the Sale of Goods Act 1979, a condition is a fundamental term of a contract, the breach of which gives the aggrieved party the right to treat the contract as repudiated, allowing them to reject the goods and claim damages.

On the other hand, a warranty is a less critical term, the breach of which gives rise to a claim for damages but does not entitle the aggrieved party to reject the goods and treat the contract as repudiated.

The distinction between a condition and a warranty depends on the construction of the contract, and a stipulation may be a condition even if it is called a warranty in the contract.

Additionally, in cases where a contract of sale is not severable and the buyer has accepted the goods, the breach of a condition can only be treated as a breach of warranty, unless there is an express or implied term of the contract to the contrary.

Furthermore, in Scotland, failure by the seller to perform any material part of a contract of sale is considered a breach of contract, entitling the buyer to reject the goods and treat the contract as repudiated, or to retain the goods and claim compensation or damages

What impact does the Sale of Goods Act have on online sales?

The Sale of Goods Act 1979 has a significant impact on online sales by establishing legal standards for the quality and fitness of goods sold through digital platforms.

The Act’s provisions regarding merchantable quality and fitness for purpose apply to online transactions, ensuring that goods sold online meet the same standards as those sold through traditional channels.

This means that sellers are obligated to provide goods that are of satisfactory quality, fit for their intended purpose, and match their description, regardless of the sales medium.

Additionally, the Act’s provisions on the rights and remedies of buyers and sellers in case of breach of contract apply to online sales, providing legal recourse for consumers and businesses involved in e-commerce transactions.

Furthermore, the Act’s regulations on the transfer of property, delivery, and acceptance of goods also apply to online sales, ensuring that the legal framework for commercial transactions is upheld in the digital marketplace.

How does the Sale of Goods Act define ‘merchantable quality’?

The Sale of Goods Act 1979 defines ‘merchantable quality’ as a standard that goods must meet to be considered of satisfactory quality.

According to the Sale of Goods Act, goods are of merchantable quality if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect, considering any description applied to them, the price, and all other relevant circumstances.

This definition implies that the goods should be suitable for their commonly intended use and should meet the expectations of an average consumer purchasing goods of that kind.

The Act also specifies that goods are of merchantable quality if they are as fit for the purpose for which they are commonly bought as it is reasonable to expect, taking into account any description applied to them, the price, and all other relevant circumstances.

Therefore, the Sale of Goods Act 1979 sets a standard for merchantable quality that considers the intended purpose of the goods, any descriptions or representations made about the goods, and the overall circumstances of the sale.

Read article: Why Specific Performance Matters in Real Estate Contracts

What is the relationship between the Sale of Goods Act and the Consumer Rights Act 2015?

The Sale of Goods Act 1979 and the Consumer Rights Act 2015 are both significant pieces of legislation that regulate the sale of goods and consumer rights in the United Kingdom.

The Consumer Rights Act 2015, which came into force on October 1, 2015, represents a comprehensive overhaul of consumer law, consolidating and simplifying key consumer rights and providing a modern framework for consumer protection.

It supersedes and consolidates several previous consumer laws, including the Sale of Goods Act 1979, and introduces new provisions to address the complexities and uncertainties in consumer rights and redress mechanisms.

The Consumer Rights Act 2015 sets out specific standards for products, including requirements for satisfactory quality, fitness for purpose, matching the description, and correct installation.

It also introduces measures to protect consumers from hidden charges and unfair terms in consumer contracts.

The relationship between the two acts is one of evolution and consolidation. The Consumer Rights Act 2015 builds upon the foundation laid by the Sale of Goods Act 1979, incorporating and expanding upon many of its provisions while also introducing new rights and obligations for both consumers and traders.

While the Sale of Goods Act 1979 continues to apply to certain aspects of business-to-business contracts and specific provisions, the Consumer Rights Act 2015 represents a significant modernisation and harmonisation of consumer legislation, aiming to provide a simpler, coherent framework for consumer rights and redress mechanisms.

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References

Picture of Rowan T. Moyo, Ph.D.

Rowan T. Moyo, Ph.D.

Rowan has been a Business Legal Practitioner since 2009. He has an Advanced LLM Degree in Business Law and a Professional Doctorate in Anti-Money Laundering. He has published in the areas of Money Laundering, Corporate Crime, Public Law & Policy, Sovereign Debt, Commercial Law and Foreign Direct Investment.

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