These notes consider whether a customer is simply a contracting party or whether the transaction also involves consumer protection, with reference to the Sale of Goods and Supply of Services Act, Chapter 292 of the Laws of Belize.
Who is a consumer?
A customer purchasing services is not always just a party to a standard contract. The law in Belize, primarily through the Sale of Goods and Supply of Services Act (SOGASSA), provides special protections where the customer is a ‘consumer’. This status is important because it activates certain non-excludable statutory rights.
The key definition is found in section 14 of the SOGASSA, which outlines when a party "deals as a consumer". A person deals as a consumer if two conditions are met. First, they must not make the contract in the course of a business, while the other party (the supplier) does make the contract in the course of a business. Second, the services supplied under the contract must be of a type ordinarily supplied for private use or consumption (SOGASSA, s 14(1)).
The phrase ‘in the course of a business’ is crucial. English case law interpreting similar provisions is persuasive in Belize. In R & B Customs Brokers Co Ltd v United Dominions Trust Ltd (1988), a company that was in the business of freight forwarding purchased a car for one of its directors. The car was only the second or third vehicle the company had ever bought. The Court of Appeal held that the purchase was not an integral part of the company's business, and so the transaction did not take place ‘in the course of a business’. The court decided that for a transaction to be in the course of a business, it must either be central to the business or be done with some regularity. This means that a one-off purchase by a business of something outside its usual activities could still be a consumer transaction. Therefore, identifying a consumer requires a factual analysis of the transaction’s context, not just the identity of the customer.
Statutory Rights
When a contract for the supply of a service is made, SOGASSA implies certain terms into that contract to protect the consumer. These rights exist by law and do not need to be expressly agreed upon by the parties.
The most significant implied term regarding the quality of the service is found in section 15 of SOGASSA. It states that in a contract for the supply of a service where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill. This is the core protection against substandard work.
Other implied terms include:
- Time of performance: Where the time for the service to be carried out is not fixed, there is an implied term that the supplier will carry out the service within a reasonable time (SOGASSA, s 16).
- Consideration: Where the price is not determined by the contract, there is an implied term that the party contracting with the supplier will pay a reasonable charge (SOGASSA, s 17).
Defective Services
A service is 'defective' if it breaches the implied term to provide it with 'reasonable care and skill' under section 15 of SOGASSA. This does not mean the service must be perfect or achieve a perfect result. Instead, it imposes a standard of competence.
The leading English case of Bolam v Friern Hospital Management Committee (1957), although a medical negligence case, provides a useful explanation of this standard. The court held that the test is the standard of the ordinary skilled man professing to have that special skill. A person is not negligent if they have acted in accordance with a practice accepted as proper by a responsible body of professional opinion. Therefore, a decorator who fails to prepare a wall properly before painting, causing the paint to peel, would likely be in breach of this term. However, a doctor who performs a complex operation that is ultimately unsuccessful would not be in breach if they performed it with the level of skill and care expected of a competent surgeon. The key decision for judges is to assess the supplier's conduct against the expected standards of their trade or profession, not against the outcome of the service.
Statutory Remedies
If a supplier breaches one of the implied terms under SOGASSA, the consumer has remedies available under the law of contract. Because the statutory rights are treated as terms of the contract, a failure to meet them is a breach of contract.
The primary remedy for a breach of contract is damages. The aim of damages is to compensate the consumer for the loss caused by the defective service. This would typically be the cost of putting the work right, for example, by hiring another supplier to fix the defect. As the court stated in Robinson v Harman (1848), the goal is to put the innocent party in the same position, so far as money can do it, as if the contract had been properly performed.
In cases where the breach is very serious, it may be considered a repudiatory breach, which would give the consumer the right to terminate the contract and claim damages. For example, if a builder’s work was so poor that it was dangerous and needed to be completely redone, the consumer could likely terminate the agreement and refuse to pay any outstanding amount, while also suing for the cost of demolition and rebuilding.
In conclusion, a customer for services is more than a simple contracting party; where they are a 'consumer', they are afforded significant protection by the SOGASSA. This legislation implies fundamental terms relating to the quality and performance of services, and provides a clear basis for remedies if those standards are not met.
References
Bolam v Friern Hospital Management Committee [1957] 1 WLR 582
R & B Customs Brokers Co Ltd v United Dominions Trust Ltd [1988] 1 WLR 321
Robinson v Harman (1848) 1 Ex Rep 850
Sale of Goods and Supply of Services Act, Chapter 292 of the Substantive Laws of Belize, Revised Edition 2011
