Commercial Law
Statutory Terms in the Sale of Goods
You should to be able to:
Describe the concept of a sale of goods under both SGA and CRA;
Describe various iterations of a sale contract, e.g. credit sale; conditional sale;
Distinguish a sale from other analogous contracts, e.g. hire purchase;
Appreciate the broader implications of tangibility as being at the heart of the definition
of ‘goods’ and have an initial understanding of the approach thereto of the CRA 2015.
Contracts of sale vary enormously. At one extreme one may find a written contract containing many
detailed clauses setting out the terms of the contract. At the other extreme, the parties may have
expressly agreed only as to which goods were being sold and how much the price was. In the latter
case the parties have left much unsaid, e.g. as to delivery, payment, the transfer of ownership, the
quality of the goods etc
The original Sale of Goods Act 1893 was intended not to dictate to the parties what the terms of the
bargain should be, but only to provide solutions to problems and questions unforeseen and
unconsidered by the parties – so most of the sections only applied with the absence of contrary
agreement by the parties
The Sale of Goods Acts are based upon the idea of the freedom to contract although the Unfair
Contract Terms Act 1977 made a large inroad into this notion and s.55 SGA 1979 reads as follows:
‘‘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”
Rights of Third Parties
As a general rule only the buyer and the seller can sue or be sued on a contract of sale. This
results from two aspects of the privity of contract doctrine. First, the contract can be
enforced only against someone who is party to it. Secondly, only someone who is a party to
the contract can enforce it.
Express Terms
Although the parties are free to agree what terms they choose, they will not be bound by
any term which is not properly incorporated in the contract. In the case of terms in a written
contract signed by both parties, there will be no doubt that the terms have been properly
incorporated.
Often, however, the terms will not be in a signed contract. It is perfectly possible for the
parties to incorporate terms by agreeing to them either orally or in writing whether or not
signed.
Statutory Terms in the Sale of Goods
You should to be able to:
Describe the concept of a sale of goods under both SGA and CRA;
Describe various iterations of a sale contract, e.g. credit sale; conditional sale;
Distinguish a sale from other analogous contracts, e.g. hire purchase;
Appreciate the broader implications of tangibility as being at the heart of the definition
of ‘goods’ and have an initial understanding of the approach thereto of the CRA 2015.
Contracts of sale vary enormously. At one extreme one may find a written contract containing many
detailed clauses setting out the terms of the contract. At the other extreme, the parties may have
expressly agreed only as to which goods were being sold and how much the price was. In the latter
case the parties have left much unsaid, e.g. as to delivery, payment, the transfer of ownership, the
quality of the goods etc
The original Sale of Goods Act 1893 was intended not to dictate to the parties what the terms of the
bargain should be, but only to provide solutions to problems and questions unforeseen and
unconsidered by the parties – so most of the sections only applied with the absence of contrary
agreement by the parties
The Sale of Goods Acts are based upon the idea of the freedom to contract although the Unfair
Contract Terms Act 1977 made a large inroad into this notion and s.55 SGA 1979 reads as follows:
‘‘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”
Rights of Third Parties
As a general rule only the buyer and the seller can sue or be sued on a contract of sale. This
results from two aspects of the privity of contract doctrine. First, the contract can be
enforced only against someone who is party to it. Secondly, only someone who is a party to
the contract can enforce it.
Express Terms
Although the parties are free to agree what terms they choose, they will not be bound by
any term which is not properly incorporated in the contract. In the case of terms in a written
contract signed by both parties, there will be no doubt that the terms have been properly
incorporated.
Often, however, the terms will not be in a signed contract. It is perfectly possible for the
parties to incorporate terms by agreeing to them either orally or in writing whether or not
signed.
