Introduction
In the law of contract, terms can be either express or implied. While express terms are specifically agreed upon by the parties, implied terms are read into the contract by the courts or by statute to give effect to the parties' presumed intentions or to uphold public policy. In the context of the sale of goods, a number of the most significant implied terms are found in the Sale of Goods Act 1979 (SGA 1979). This Act historically governed both business-to-business (B2B) and business-to-consumer (B2C) transactions, but its role has been significantly altered by the Consumer Rights Act 2015 (CRA 2015), which now governs most B2C contracts. Consequently, the SGA 1979 primarily applies to B2B contracts today. This essay will explain the key terms implied into sale of goods contracts by the SGA 1979, namely the seller’s right to sell the goods (s.12), the requirement for goods to match their description (s.13), and the standards of satisfactory quality and fitness for purpose (s.14).
The Implied Term as to Title (Section 12)
Section 12 of the SGA 1979 implies a fundamental term concerning the seller's legal right to sell the goods. Under section 12(1), there is an implied condition that the seller has a right to sell the goods at the time when property is to pass. This is the core of the provision, ensuring that a buyer receives valid ownership of what they have paid for. If a seller does not have the right to sell, for instance because the goods were stolen, they are in breach of this condition.
The case of Rowland v Divall (1923) provides a clear illustration of this principle. The claimant, a car dealer, bought a car from the defendant for £334. After using the car for several months, he discovered it had been stolen and was required to return it to the true owner. The court held that the defendant was in breach of the implied condition as to title because he did not have the right to sell the car. As a result, the claimant was entitled to recover the full purchase price, despite having used the car for some time. The court reasoned that there was a total failure of consideration, as the buyer had paid for the property in the car, which he never received.
In addition, section 12(2) implies two further, less absolute, warranties. First, that the goods are free from any charge or encumbrance not disclosed to the buyer before the contract is made, and will remain so until the time when property is to pass. Second, that the buyer will enjoy quiet possession of the goods. These warranties protect the buyer from third-party interference with their use and enjoyment of the goods after the sale. Unlike the condition in section 12(1), which is absolute, a breach of these warranties will typically only give rise to a claim for damages. The protection given by section 12 is considered so fundamental that, under the Unfair Contract Terms Act 1977, it cannot be excluded or restricted by any contract term (UCTA 1977, s.6(1)).
The Implied Term as to Description (Section 13)
Section 13(1) of the SGA 1979 provides that where there is a sale of goods by description, there is an implied condition that the goods will correspond with that description. A 'sale by description' can occur in various situations, such as when a buyer orders goods from a catalogue or website. However, the term also applies where a buyer selects goods in a shop, if the goods have been described in some way, for example on the packaging.
The case of Beale v Taylor (1967) demonstrates that a sale can be by description even when the buyer has seen the goods. In this case, a car was advertised as a "Herald, convertible, white, 1961". The buyer inspected the car before purchase but later discovered that it was actually two parts of different cars welded together, only one of which was from a 1961 model. The Court of Appeal held that the seller was in breach of section 13 because the car did not correspond with its description.
Historically, the courts applied this term very strictly. In Arcos Ltd v Ronaasen & Son (1933), a contract for wooden staves described them as being half an inch thick. Most of the staves delivered were slightly thicker, but still perfectly usable for the buyer's intended purpose of making barrels. The House of Lords held that the buyers were entitled to reject the goods because they did not match the description. This strict approach allowed buyers to reject goods for minor deviations, sometimes for commercial reasons such as a fall in the market price.
However, a more flexible approach was later adopted in cases like Reardon Smith Line Ltd v Hansen-Tangen (1976), where the court distinguished between words that identify the subject matter of the contract and words which are merely descriptive. More significantly for B2B contracts, section 15A of the SGA 1979 was introduced to limit the buyer’s right to reject goods for a breach of section 13. Under section 15A, if the breach is so slight that it would be unreasonable for the buyer to reject the goods, the breach is treated as a breach of warranty, not a condition, limiting the buyer to a claim for damages. This prevents commercial buyers from using trivial discrepancies as an excuse to escape a bad bargain.
The Implied Terms as to Quality and Fitness (Section 14)
Section 14 of the SGA 1979 implies terms relating to the quality of the goods and their fitness for a particular purpose. Crucially, these terms only apply where the seller sells goods "in the course of a business" (SGA 1979, s.14(2)). The phrase "in the course of a business" has been interpreted broadly. For example, in Stevenson v Rogers (1999), it was held that a fisherman selling his fishing boat was acting in the course of his business, even though selling boats was not part of his regular trade. This means the section 14 terms apply to almost all commercial sales.
Satisfactory Quality: Section 14(2)
Section 14(2) implies a condition that goods supplied under the contract are of satisfactory quality. The Act defines "satisfactory quality" in section 14(2A) as the standard that a reasonable person would regard as satisfactory, taking into account the description of the goods, the price (if relevant), and all other relevant circumstances. This is an objective test based on the expectations of a reasonable person.
To assist in applying this test, section 14(2B) provides a non-exhaustive list of aspects of quality, including: (a) fitness for all the purposes for which goods of the kind in question are commonly supplied; (b) appearance and finish; (c) freedom from minor defects; (d) safety; and (e) durability.
For example, in Rogers v Parish (Scarborough) Ltd (1987), a new Range Rover had a number of minor defects in its engine, gearbox and bodywork. Although the car was driveable, the court held that it was not of satisfactory quality (then 'merchantable quality'). A buyer of a new, premium vehicle is entitled to expect a higher standard of performance, appearance and finish than the buyer of a cheap, second-hand car. The price and description were key factors.
However, this implied condition does not apply to defects which are specifically drawn to the buyer's attention before the contract is made, or where the buyer examines the goods before the contract and that examination ought to have revealed the defect (s.14(2C)).
Fitness for Particular Purpose: Section 14(3)
Section 14(3) implies a condition that the goods are reasonably fit for any particular purpose that the buyer, expressly or by implication, makes known to the seller. For this term to be implied, the buyer must show that they relied on the seller’s skill or judgment, and that it was reasonable for them to do so.
If a buyer wants goods for a specific, unusual purpose, they must inform the seller. In Griffiths v Peter Conway Ltd (1939), a woman with abnormally sensitive skin bought a tweed coat and developed dermatitis. She failed in her claim because she had not informed the seller of her sensitivity, and the coat was fit for use by a normal person. The seller could not be expected to provide a coat suitable for her specific condition without that knowledge. By contrast, where goods have only one common purpose, simply buying them is enough to imply that purpose. For example, buying a hot water bottle implies that it will be used to hold hot water, and the seller will be in breach if it bursts when filled (Priest v Last [1903]). Reliance on the seller's skill and judgement is often presumed where a buyer asks a seller for a product to fulfil a stated purpose, as in Baldry v Marshall (1925).
Conclusion
The Sale of Goods Act 1979 provides a crucial statutory framework of implied terms that govern commercial sale of goods contracts in England and Wales. These terms ensure that buyers receive what they bargain for: good title, goods that match their description, and goods that are of a satisfactory standard. Section 12 protects the buyer’s fundamental right to ownership. Section 13 provides that the goods must conform to their contractual description, a principle now tempered by section 15A to prevent opportunistic rejections for trivial breaches. Finally, section 14 establishes baseline standards of quality and fitness for purpose, which are essential in a commercial context. Together, these implied terms create a foundation of buyer protection, promoting fairness and certainty in B2B transactions by imposing minimum standards on sellers acting in the course of a business.
References
Atiyah, P.S., Adams, J.N. and MacQueen, H. (2010) Atiyah's Sale of Goods. 12th edn. Pearson.
Bridge, M. (2016) The Sale of Goods. 3rd edn. Oxford University Press.
McKendrick, E. (2020) Contract Law: Text, Cases, and Materials. 9th edn. Oxford University Press.
Cases
Arcos Ltd v Ronaasen & Son [1933] AC 470
Baldry v Marshall [1925] 1 KB 260
Beale v Taylor [1967] 1 WLR 1193
Bramhill v Edwards [2004] EWCA Civ 403
Griffiths v Peter Conway Ltd [1939] 1 All ER 685
Priest v Last [1903] 2 KB 148
Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989
Rogers v Parish (Scarborough) Ltd [1987] QB 933
Rowland v Divall [1923] 2 KB 500
Stevenson v Rogers [1999] QB 1028
Legislation
Consumer Rights Act 2015
Sale of Goods Act 1979
Unfair Contract Terms Act 1977
