Explain the implied terms in a contract for the sale of goods under the Sale of Goods Act 1979. In your answer, discuss the terms relating to title, description, satisfactory quality, fitness for purpose, and sale by sample.
In this essay, the implied terms that exist in contracts for the sale of goods under the Sale of Goods Act 1979 will be explained. The purpose of these terms is to provide a level of protection for buyers, ensuring that they receive goods which meet a certain standard. This discussion will cover the important implied terms relating to the seller’s right to sell the goods (title), the correspondence of goods with their description, their quality and fitness for purpose, and the rules that apply in a sale by sample. For each term, the relevant statutory provisions and case law will be used to illustrate how they operate in practice.
Implied Term as to Title
The most fundamental obligation of a seller is to be able to pass good title to the buyer. This is protected by section 12 of the Sale of Goods Act 1979 (SGA 1979). Section 12(1) implies a condition into the contract that the seller has a right to sell the goods at the time when property is to pass. This means that the seller must be the legal owner or have the owner's authority to sell.
The significance of this term is demonstrated in the case of Rowland v Divall [1923] 2 KB 500. Here, the claimant bought a car from the defendant and used it for several months. It then transpired that the defendant did not have title to the car, as it had been stolen. The claimant had to return the car to the true owner. The court held that the defendant was in breach of the implied condition as to title under the equivalent provision of the earlier Sale of Goods Act 1893. As the claimant had not received ownership of the car, which was the whole point of the contract, there was a total failure of consideration. Consequently, the claimant was entitled to recover the full purchase price he had paid, without any deduction for his use of the car. This demonstrates that the right to receive good title is central to the contract.
In addition to the condition as to title, section 12(2) implies two further warranties. Firstly, that the goods are free from any charge or encumbrance not disclosed to the buyer before the contract is made. Secondly, that the buyer will enjoy quiet possession of the goods. This protection is so important that under the Unfair Contract Terms Act 1977, a seller can never exclude or restrict liability for breach of the implied terms in section 12 of the SGA 1979.
Implied Term as to Description
Many contracts for the sale of goods involve a description of what is being sold. Section 13(1) of the SGA 1979 provides that where there is a contract for the sale of goods by description, there is an implied condition that the goods will correspond with that description. This applies to a wide range of sales, from specific goods chosen in a shop to goods ordered online.
The courts have historically taken a very strict approach to this section. In Arcos Ltd v E A Ronaasen & Son [1933] AC 470, buyers contracted for wooden staves described as being half an inch thick. The staves delivered were mostly 9/16 of an inch thick, but this did not affect their intended use for making barrels. The House of Lords held that the buyers were entitled to reject the goods because they did not match the description. The fact that they were still commercially usable was irrelevant.
However, for the term to be invoked, the buyer must have relied on the description. In Harlingdon & Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd [1991] 1 QB 564, the claimant, an art dealer, bought a painting described in the catalogue as being by the German artist Gabriele Münter. The sellers made it clear they were not experts on German paintings. The buyer sent their own experts to inspect the painting before purchasing it. The painting later turned out to be a forgery. The Court of Appeal held that there was no breach of section 13. The buyer had not relied on the seller's description but on the judgement of their own experts. Therefore, the description of the painting as being by Münter was not an essential term of the contract.
Implied Term as to Satisfactory Quality
One of the most significant protections for a buyer is the implied term relating to the quality of the goods. Section 14(2) of the SGA 1979 states that where a seller sells goods in the course of a business, there is an implied condition that the goods supplied under the contract are of satisfactory quality. This term only applies when the seller is acting 'in the course of a business', a phrase which has been interpreted broadly by the courts. In Stevenson v Rogers [1999] QB 1028, a fisherman who sold his fishing boat was held to have done so in the course of his business, even though selling boats was not his regular trade.
Section 14(2A) defines "satisfactory quality" by stating that goods meet the standard that a reasonable person would regard as satisfactory, taking account of any description, the price, and all other relevant circumstances. To assist the courts, section 14(2B) provides a non-exhaustive list of factors to be considered, including fitness for all common purposes, appearance and finish, freedom from minor defects, safety, and durability.
The case of Rogers v Parish (Scarborough) Ltd [1987] QB 933 provides a useful example. The claimant bought a new Range Rover which had several minor defects in the engine, gearbox and bodywork, although it was still driveable. The Court of Appeal held that for a brand new, premium vehicle, the expectation of quality is higher. The presence of even minor cosmetic defects meant that the car was not of satisfactory quality, and the buyer was entitled to reject it.
This protection is not absolute. Section 14(2C) provides that the term does not apply to any defect which is 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.
Implied Term as to Fitness for a Particular Purpose
In addition to being of satisfactory quality, goods must also be fit for any specific purpose the buyer has. Section 14(3) of the SGA 1979 implies a condition that if the buyer, expressly or by implication, makes known to the seller any particular purpose for which the goods are being bought, the goods must be reasonably fit for that purpose. Like section 14(2), this term only applies where the seller is acting in the course of a business.
If the goods only have one obvious purpose, the buyer does not need to state it. However, if the buyer requires the goods for a non-common or specific purpose, they must communicate this to the seller to be protected. The case of Griffiths v Peter Conway Ltd [1939] 1 All ER 685 illustrates this. A woman with abnormally sensitive skin bought a tweed coat and subsequently suffered from dermatitis. Her claim for breach of fitness for purpose failed because she had not informed the seller of her sensitive skin, and the coat was perfectly fit for use by a normal person.
The buyer must also show that they relied on the seller’s skill and judgement. In Baldry v Marshall [1925] 1 KB 260, a buyer asked for a car that would be suitable for touring. He was sold a Bugatti, which proved to be unsuitable for that purpose. The court found that the seller was in breach of the implied condition of fitness for purpose because the buyer had made his specific requirements known and had relied on the seller to provide a suitable car.
Implied Term in Sale by Sample
Finally, where a buyer agrees to purchase goods on the basis of a sample, section 15 of the SGA 1979 provides protection. This type of sale creates three implied conditions. First, that the bulk of the goods will correspond with the sample in quality. Second, that the buyer will have a reasonable opportunity of comparing the bulk with the sample.
The third condition, in section 15(2)(c), is that the goods will be free from any defect making their quality unsatisfactory, which would not be apparent on a reasonable examination of the sample. This protects the buyer against latent defects which are present in both the sample and the bulk, but which are not discoverable upon a normal inspection.
In Godley v Perry [1960] 1 WLR 9, a boy bought a plastic catapult which broke in use, causing him to lose an eye. The shopkeeper had bought the catapults from a wholesaler after testing a sample by pulling back the elastic. The court held that the defect (brittle plastic) was not something that a reasonable examination of the sample would have revealed. Therefore, the wholesaler was in breach of section 15(2)(c) in their contract with the shopkeeper, who was in turn able to claim against them.
Conclusion
In conclusion, the Sale of Goods Act 1979 plays a crucial role in English contract law by implying several key terms into contracts for the sale of goods. These terms provide a fundamental baseline of protection for buyers. The Act ensures that a buyer is guaranteed good title to the goods, and that the goods will match their description. Furthermore, where the seller is a business, the goods must be of satisfactory quality and fit for any purpose which the buyer has made known. Finally, in sales by sample, the bulk must correspond to the sample and be free of hidden defects. Together, these statutory provisions create a legal framework that promotes fairness and confidence in commercial transactions.
References
Cases
Arcos Ltd v E A Ronaasen & Son [1933] AC 470
Baldry v Marshall [1925] 1 KB 260
Godley v Perry [1960] 1 WLR 9
Griffiths v Peter Conway Ltd [1939] 1 All ER 685
Harlingdon & Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd [1991] 1 QB 564
Rogers v Parish (Scarborough) Ltd [1987] QB 933
Rowland v Divall [1923] 2 KB 500
Stevenson v Rogers [1999] QB 1028
Legislation
Sale of Goods Act 1979
Unfair Contract Terms Act 1977
