Commercial & Consumer Law Revision Notes
Sale of Goods
IMPLIED TERMS
STATUTORY IMPLIED TERMS
- Satisfactory quality
• SOG
• CR
- Fitness for purpose
• SOGA
• CR
DEFINITION OF A CONSUMER
- Consumer Rights Act 2015, s.2(3): “Consumer” means an individual acting for purposes that
are wholly or mainly outside that individual’s trade, business, craft or profession
S.14(2) SOGA: IMPLIED TERMS ABOUT QUALITY OR FITNESS
- (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 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) tness for all the purposes for which goods of the kind in question are commonly
supplied
- (b) appearance and nis
- (c) freedom from minor defect
- (d) safet
- (e) durabilit
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, SALES IN THE COURSE OF A BUSINESS
Stevenson v Roger
- Sale of the shing boat by a sherman was regarded a sale in the course of a business
- What happens if the product is ancillary to the business
- Question in this case: if a sherman sells a shing boat, is this sale in the course of a
business? The courts said YE
MERCHANTABLE QUALITY [SATISFACTORY QUALITY]
- If it is suitable for one purpose, it can be considered good for all
Aswan Engineering v Lupdin
- “To bring section 14(2) into operation, a buyer had to show that goods had been
bought by description from a seller dealing in goods of that description. If so….., the
goods were required to be of merchantable quality. In order to comply with that
requirement, the goods did not have to be suitable for every purpose within a range of
purposes for which the goods were normally bought under the description. It was suf cient if
they were suitable for one or more such purposes without abatement of price, since, if they
were, they were commercially saleable under that description.”
• Per Lloyd L.J. in Aswan at 1
SATISFACTORY QUALIT
Relevant factors under section 14(2A) SOGA (s. 9 CRA echoes SOGA)
Descriptio
• Bartlett v Sydney Marcus [1965] 1 WLR 101
- The level of quality depends on the circumstances (e.g. second-hand goods cannot
be expected to be in perfect condition (e.g. defective clutch)) However, if the defect is
suf ciently serious a second-hand car can be of unsatisfactory qualit
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, • Shine v General Guarantee Corporation [1988] 1 All ER 911
- A 20-months-old car was regarded of unsatisfactory quality because it had been
submerged in water before the sale (without the knowledge of the buyer) and had
been treated as a “write-off” by its insurer
Pric
• Brown (BS) & Son Ltd v Craiks Ltd [1970] 1 All ER 82
- The buyer of industrial fabric found it unsuitable for making into dresses. This good was
regarded as merchantable quality because it was suitable for other industrial
purposes and could be sold without any substantial reduction of the pric
• H Beecham & Co v Francis Howard [1921] VL
- Buyer purchased timber for piano making
- Quite expensive — £4 per unit
- Turned out to be defective
- Could only be used to construct boxes
- Was actually £1.5 per unit
- Because there was such a big price difference the court said it was unsatisfactory
Fitness for all purposes for which goods are commonly supplied/appearance and
nish/freedom from minor defect
• Rogers v Parish [1987] QB 93
- A new Range Rover had minor defects to the engine and bodywork. For motor vehicles
the purposes includes not merely the purpose of driving, but doing so with the
appropriate degree of comfort, ease of handling and pride in the vehicle’s
appearance. The appropriate degree varies with the price, the description and other
factors (e.g. for a vehicle sold as new, the performance and nish to be expected are
those of a model of average standard). Defects in appearance can render a vehicle
unmerchantable
- Use for driving and showing off were valid
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, SAFETY AND DURABILITY
Safety
• Lee v York Coach and Marine
- 2nd hand car which is not safe to be driven on the road (e.g.brakes don't work) is
not of satisfactory quality (except if it is only sold for scrap
• Bernstein v Pamsun Motors
- Car delivered to buyer 3 weeks before purported rejection
- In the interval the buyer had driven it 140 miles
- Car broke down incurring towing costs
- Upon complaining to the seller, the problem was xed on the warranty of the
manufacturer
- Buyer insisted on rescinding the contract and being paid damages
• Held:
- Contract could not be rescinded but the buyer was entitled to damages
- The nature of the particular defect, discovered ex post facto, and the speed
with which it might have been discovered, are irrelevant to the concept of
reasonable time in s.35 of SOGA
- “The complexity of the intended function of the goods is clearly of prime
consideration. What is a reasonable time in relation to a bicycle would hardly
suf ce for a nuclear submarine
• Per Rougier J
Durability
• Goods must be of satisfactory quality for a reasonable period of time after delivery
• Mash & Murell v Joseph Emmanue
- If goods have to be despatched to the buyer by carrier, it is reasonable to expect
the goods to be of such quality as to be able to withstand a normal journey
- Good was potatoes
- Arrived in rotten state
- Unsatisfactory quality
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Sale of Goods
IMPLIED TERMS
STATUTORY IMPLIED TERMS
- Satisfactory quality
• SOG
• CR
- Fitness for purpose
• SOGA
• CR
DEFINITION OF A CONSUMER
- Consumer Rights Act 2015, s.2(3): “Consumer” means an individual acting for purposes that
are wholly or mainly outside that individual’s trade, business, craft or profession
S.14(2) SOGA: IMPLIED TERMS ABOUT QUALITY OR FITNESS
- (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 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) tness for all the purposes for which goods of the kind in question are commonly
supplied
- (b) appearance and nis
- (c) freedom from minor defect
- (d) safet
- (e) durabilit
1
A
fi A
y
y
fi h
s
.
.
—
, SALES IN THE COURSE OF A BUSINESS
Stevenson v Roger
- Sale of the shing boat by a sherman was regarded a sale in the course of a business
- What happens if the product is ancillary to the business
- Question in this case: if a sherman sells a shing boat, is this sale in the course of a
business? The courts said YE
MERCHANTABLE QUALITY [SATISFACTORY QUALITY]
- If it is suitable for one purpose, it can be considered good for all
Aswan Engineering v Lupdin
- “To bring section 14(2) into operation, a buyer had to show that goods had been
bought by description from a seller dealing in goods of that description. If so….., the
goods were required to be of merchantable quality. In order to comply with that
requirement, the goods did not have to be suitable for every purpose within a range of
purposes for which the goods were normally bought under the description. It was suf cient if
they were suitable for one or more such purposes without abatement of price, since, if they
were, they were commercially saleable under that description.”
• Per Lloyd L.J. in Aswan at 1
SATISFACTORY QUALIT
Relevant factors under section 14(2A) SOGA (s. 9 CRA echoes SOGA)
Descriptio
• Bartlett v Sydney Marcus [1965] 1 WLR 101
- The level of quality depends on the circumstances (e.g. second-hand goods cannot
be expected to be in perfect condition (e.g. defective clutch)) However, if the defect is
suf ciently serious a second-hand car can be of unsatisfactory qualit
2
fi n
fi s
Y
fifi 2
S
e
3
fi ?
:
y
fi
, • Shine v General Guarantee Corporation [1988] 1 All ER 911
- A 20-months-old car was regarded of unsatisfactory quality because it had been
submerged in water before the sale (without the knowledge of the buyer) and had
been treated as a “write-off” by its insurer
Pric
• Brown (BS) & Son Ltd v Craiks Ltd [1970] 1 All ER 82
- The buyer of industrial fabric found it unsuitable for making into dresses. This good was
regarded as merchantable quality because it was suitable for other industrial
purposes and could be sold without any substantial reduction of the pric
• H Beecham & Co v Francis Howard [1921] VL
- Buyer purchased timber for piano making
- Quite expensive — £4 per unit
- Turned out to be defective
- Could only be used to construct boxes
- Was actually £1.5 per unit
- Because there was such a big price difference the court said it was unsatisfactory
Fitness for all purposes for which goods are commonly supplied/appearance and
nish/freedom from minor defect
• Rogers v Parish [1987] QB 93
- A new Range Rover had minor defects to the engine and bodywork. For motor vehicles
the purposes includes not merely the purpose of driving, but doing so with the
appropriate degree of comfort, ease of handling and pride in the vehicle’s
appearance. The appropriate degree varies with the price, the description and other
factors (e.g. for a vehicle sold as new, the performance and nish to be expected are
those of a model of average standard). Defects in appearance can render a vehicle
unmerchantable
- Use for driving and showing off were valid
3
fi e
.
3
s
R
3
fi e
, SAFETY AND DURABILITY
Safety
• Lee v York Coach and Marine
- 2nd hand car which is not safe to be driven on the road (e.g.brakes don't work) is
not of satisfactory quality (except if it is only sold for scrap
• Bernstein v Pamsun Motors
- Car delivered to buyer 3 weeks before purported rejection
- In the interval the buyer had driven it 140 miles
- Car broke down incurring towing costs
- Upon complaining to the seller, the problem was xed on the warranty of the
manufacturer
- Buyer insisted on rescinding the contract and being paid damages
• Held:
- Contract could not be rescinded but the buyer was entitled to damages
- The nature of the particular defect, discovered ex post facto, and the speed
with which it might have been discovered, are irrelevant to the concept of
reasonable time in s.35 of SOGA
- “The complexity of the intended function of the goods is clearly of prime
consideration. What is a reasonable time in relation to a bicycle would hardly
suf ce for a nuclear submarine
• Per Rougier J
Durability
• Goods must be of satisfactory quality for a reasonable period of time after delivery
• Mash & Murell v Joseph Emmanue
- If goods have to be despatched to the buyer by carrier, it is reasonable to expect
the goods to be of such quality as to be able to withstand a normal journey
- Good was potatoes
- Arrived in rotten state
- Unsatisfactory quality
4
fi
”
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)
