SALE AND SUPPLY OF GOODS

INTRODUCTION

One of the most common transactions entered into by businesses is the contract for the sale of goods to other businesses or consumers. However, goods may be supplied under contracts other than sale, as follows, for example:

• Contracts of hire

Here, the owner of goods transfers possession for a fixed period but retains ownership; common examples are television rental and car hire.

• Contracts of hire purchase

The owner of goods transfers possession of the goods, but does not transfer ownership of them unless and until the hirer has paid all of the agreed instalments and has exercised his or her option to purchase.

Furthermore, a person may be supplied with goods other than under a contract; for example:

• By gift

   Gifts are voluntary transfers of ownership to a person who does not give any          consideration in return for the ownership.

It should also be appreciated that the sale and supply of goods can give rise to both civil and criminal liability, the latter being of particular importance in relation to the protection of consumers.

      A detailed examination of the laws relating to all transactions for the sale or supply of goods is outside the remit of this book; civil and criminal laws relating to the commonest of such transactions will be considered, namely:

• Civil liability:

❍ Sale of Goods Act 1979;

❍ Supply of Goods and Services Act 1982;

❍ Consumer Protection Regulations 2000;

❍ Part I of the Consumer Protection Act 1987.

• Criminal liability:

❍ Part II of the Consumer Protection Act 1987;

❍ General Product Safety Regulations 1994;

❍ Trade Descriptions Act 1968.

 THE SALE OF GOODS ACT 1979

This Act has been amended by the Sale and Supply of Goods Act 1994, the Sale of Goods  Act 1994 and the Sale of Goods  Act 1995. All references to the SoGA 1979 are to the provisions as amended.

            Note should also be taken of the Sale and Supply of Goods to Consumers Regulations 2002  these result from an EC Directive The 2002 Regulations make amendments to the SoGA 1979, mainly where the buyer of goods is a consumer; the Regulations define a ‘consumer’ as a natural person who is acting for purposes which are outside his business.

 Definition

Under s 2 a contract for the sale of goods is ‘a contract by which the seller transfers or agrees to transfer the property in the goods to the buyer for a money consideration, called the price’.

            In this context, ‘property’ means ‘ownership’, so the object of such a contract is to transfer ownership in the goods to the buyer; however, the contract is only covered by the SoGA 1979 if the buyer’s consideration is money. Accordingly, an exchange of goods is not within the Act; following the decision in Connell Estate Agents v Begej  however, it can be argued that part exchange contracts are within the Act, particularly where the value of the goods given in part exchange is apparent. Section 2 also requires that ‘goods’, as defined in s 61 of the SoGA 1979, are the subject matter of the contract. In general, the word ‘goods’ includes personal property of a moveable type For example, crops become goods on harvesting and money becomes goods when antique or collectable. However, there are specific exclusions from the definition of ‘goods’, for example:

• real property  and

• choses in action

 Form of the agreement

The basic essentials for forming any contract such as capacity to contract, must be met, but there are no formal requirements: the contract can be oral, written or even inferred from conduct, as might be the case in a supermarket sale, where the parties are unlikely to actually state that they wish to buy and sell the goods!