Essay
Application of SGA and UCTA Problem Question and Answer with referencing
- Module
- Company and Commercial Law
- Institution
- Staffordshire University
Analysis and application of SGA and UCTA with OSCOLA referencing.
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Module Name : LAW OF TRUSTS AND EQUITABLE REMEDIESASSIGNMENT QUESTION
Elizabeth runs a designer shoe shop called ‘‘The Diva’’ in London. Elizabeth has some high spending
regular customers who only buy from her because of her quality assurance policy. Elizabeth also accepts
special requests on a pre-order basis. Selena, a socialite, one of Elizabeth’s regular customers, pre-
ordered a pair of limited-edition crystal embellished 2022 Gnocchi shoes. Elizabeth’s regular supplier
in London could not supply this special order therefore, she contacted a Gnocchi distributer in
Manchester called Mayfair Ltd who agreed to deliver the special limited-edition crystal embellished
2022 Gnocchi shoes for £1950. Upon receipt, Elizabeth sold the pair of limited-edition crystal
embellished 2022 Gnocchi shoes to Selena for £2800.
Two weeks later, during a dinner party conversation with a renowned fashionista Lauren, Selena
discovered that the shoes she bought from Elizabeth were not special edition but a 2020 edition that are
no longer sold by Gnocchi. The next day, Selena, visibly upset, returned to Elizabeth’s store and called
her a fraud in front of other customers.
Selena’s allegation has caused much inconvenience to Elizabeth who fears her reputation for quality
shoes has been damaged. Selena has also posted against Elizabeth’s business on social media and left
some damaging feedback on Trustpilot. Additionally, Elizabeth has suffered financial loss because
customers who were present at the scene, immediately cancelled their order and left the store.
Elizabeth then contacted Mayfair Ltd who drew her attention to the following conditions in their
Contract of Sale:
Clause 8: The Seller shall have no liability for any alleged failure of the goods to conform to the contract
specification unless such failure is notified within 14 days of their being delivered.
Clause 9: The Seller shall not be liable for any economic loss suffered by the Buyer as a result of the
failure of any of the goods to conform to the contract specification including, loss of profits, business
goodwill or other consequential loss.
Clause 10: The Seller shall have no liability for any defect in the quality of the goods or their ds failure
to correspond to any description, or sample or to be fit for any purpose.
, QUESTION 01: Discuss the grounds on which Elizabeth could bring a claim for breach of contract of
sale of goods against Mayfair Ltd.
English law has different legislative regimes for the various kinds of contractual relationships that can
be formed. The Sale of Goods Act (SGA) 1979, for example, governs business-to-business transactions
such as contracts of sale of goods, which is defined in s2(1) as ‘a contract by which the seller transfers
or agrees to transfer the property in goods to the buyer for a money consideration called the price’.1 It
is necessary to determine whether the transaction between Elizabeth and Mayfair Ltd satisfies this
definition, as the answer determines the type and extent of liability borne by parties in the event of a
breach. Furthermore, the SGA implies certain terms in a contract for sale of goods irrespective of the
parties’ intentions which imposes strict liability on the seller. As per Fox, if the SGA is found not to
apply, Elizabeth would have to rely on the common law to determine liability which is likely to be fault-
based. 2
As such, the s2(1) definition can be deconstructed; since the sale and purchase of the shoes are for
purposes that are wholly or mainly part of the trades of both Elizabeth and Mayfair Ltd, the sale of the
Gnocchi shoes is likely to amount to a B2B transaction as it is performed ‘in the course of the business’,
which is defined as ‘a sale by a business’ in Stevenson v Rogers3 and expanded by the Unfair Contract
Terms Act 1977 to mean a transaction that is ‘an integral part of the business’ (R&B Customs v United
Dominions4).
Next, ‘goods’ are defined in s61(1) SGA as including ‘personal chattels other than things in action and
money’. As explained by Baskind, the shoes can be categorised as personal chattel and further classified
as a specific existing good that is identified, agreed upon and owned by the seller, Mayfair Ltd, at the
time the contract of sale was made. 5
While there is no mention of any express terms, since s2(1) is satisfied, the SGA can imply terms that
can be classified as, either (a) a condition, which typically goes to the heart of the contract, and breach
of which entitles the buyer to regard the contract as at an end, or (b) a warranty, a less significant term
that only entitles the buyer to sue for damages.6
BREACH: SECTION 13
Where there is a contract for sale of goods by description, there is an implied condition by s13 SGA
that goods will correspond with the description unless a contrary intention appears, or is to be implied
from, the contract (s55 SGA). While there is no statutory definition, case law principles provide
guidance on whether the transaction between Elizabeth and Mayfair will amount to a sale by
description. It is clear that the courts will not adopt a restrictive definition of the word ‘description’. 7
As Lord Diplock stated: ‘one must look to the contract as a whole to identify the kind of goods that the
seller was agreeing to sell and the buyer to buy’.8
1
Eric Baskind, Greg Osborne, and Lee Roach, Commercial Law (4th edn, OUP) 212.
2
David Fox and others, Sealy and Hooley’s Commercial Law: Text, Cases and Materials (6th end, OUP) Ch 8.
3
Stevenson v Rogers [1999] QB 1028 (CA).
4
R&B Customs Brokers Co. Ltd. v. United Dominions Trust Ltd [1987] EWCA Civ 3.
5
Baskind (n 1) Ch 10.
6
Ibid Ch 15.
7
Baskind (n 1) 368.
8
Berger & Co Inc v Gill & Duffus SA [1984] AC 382 (HL) 394.
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