#15492 - Intro To Sale Of Goods Contracts - International Commercial Law

• Sale of Goods Act 1979, as amended by:

a) the Sale and Supply of Goods Act 1994

b) the Sale of Goods (Amendment) Act 1994

c) the Sale of Goods (Amendment) Act 1995

• If goods supplied with services, Supply of Goods and Services Act 1982 (SGSA 1982) applies

• Unfair Contract Terms Act 1977 (UCTA 1977) deals with exclusion clauses

• SGA, s. 61: “all personal chattels other than things in action and money”

• E.g. not land, cheques, services

• May be either existing (present) or future goods (SGA, 5(1))

• Existing goods may be

• Specific goods, identifiable at time of contract (2007 grey Mercedes, reg. T15 SHR)

• Unascertained purely generic goods (100 tons of potatoes)

• Specific quantity of goods from identified bulk (100 tons of potatoes from 200 tons currently stored in warehouse in Chatteris)

• Future goods do not yet exist (e.g. next year’s crop); never specific

• Where goods have perished, contract is void (SGA, s. 6)

• Regulated by Consumer Credit Act 1974

• Buyer buys the goods from the finance house, pursuant to the credit agreement

• Operating leases (short-term, multiple-use hire)

• Finance leases (equipment supplied to one user for course of its working life (e.g. computers)

• s. 12 – Title

• s. 13 – Correspondence with description

• s. 14 – Quality and fitness for purpose

• s. 15 – Correspondence with sample

• Terms implied into all commercial contracts but parties may expressly agree to exclude them (w/ exception of s. 12), subject to UCTA 1977

• CISG, 41: S must deliver goods free of any claims of TPs

• USS, 2-312: implied warranty that S will pass good title

• PICC / PECL: no specific provision on title (but duty of good faith)

• s. 13(1): implies that good sold should comply with their description, e.g. on website, in catalogue, brochures, advertisements

• CONDITION (s. 13(1A)

• B must know or, and have relied on, the description

• Breach of s. 13 may also amount to misrepresentation

• s. 14(2): goods must be, objectively, of satisfactory quality

• Factors take into account:

• price and description (14(2A);

• fitness for purpose, appearance and finish, freedom from minor defects, safety and durability (s. 14(2B)); those relevant to circumstances

• S not liable if defect specifically drawn to B’s attention before contract made (s. 14(2C))

• CONDITION (s. 14(6))

• CISG, 35: goods must be fit for purpose

• UCC, 2-314: goods must be fit for their ordinary purpose

• PICC: obligation to perform to rble standard may be interpreted as imposing that goods are fit for purpose, if purpose already known to S

• PECL: obligation to perform to an adequate standard , assuming purpose made known

• s. 15(2): implies term that where sale is by sample, the bulk of the goods will correspond with the sample in quality; must also be free of any defect , not apparent on rble examination, which would render the quality unsatisfactory

• CONDITION (s. 15(3))

• Breach of any term except 12(2) is a breach of CONDITION

• B may :

• Reject goods (but see below for limitations)

• Repudiate contract

• Recover price from S

• Claim damages for further loss, e.g. profit

• Limits on right to reject:

• Slight breach (s. 15A): if breach is so slight, unrble for B to reject

• Acceptance by B (s. 35): B loses right to reject if accepts the goods, does sthg inconsistent with S’s ownership of the goods after delivery, or retains the goods beyond rble period (35(4))

• Misrepresentation Act 1967

• If a pre-contractual misrepresentation has become a term of the contract (e.g. through s. 13), or contract has been performed, B may still rescind (MA, s. 1)

• Rescission for misrep is barred by affirmation, lapse of time, inability to restore parties to original position, or goods being acquired by innocent party

• Damages also available for misrep but no ‘double recovery’

• Same as for SGA implied terms (see Table below)

• Additional implied terms:

• Goods must match any model consumer has seen / examined

• Goods must be correctly installed

• If no agreed delivery period, goods must be delivered w/out undue delay (max. 30 days)