SALE OF GOODS:
The concept of a sale of goods – historical development, legislation (SGA and CRA), cases, definitions
and academic commentary:
Historical development of Sale of Goods:
The law relating to the sale of goods was, prior to October 2015, dealt with primarily under
the Sale of Goods Act 1979.
Though substantially amended by legislation such as the Sale and Supply of Goods Act 1994;
the Sale of Goods (Amendment) Act 1995; the Unfair Terms in Consumer Contracts
Regulations 1999; and the Sale and Supply of Goods to Consumers Regulations 2002, the
Sale of Goods Act 1979 remained in many ways heavily grounded in its predecessor, the Sale
of Goods Act 1893.
The 1893 Act codified the common law rules relating to the Sale of Goods. Those rules
which were not codified are preserved in so far as they are consistent with the express
provisions of the Act.
The Consumer Rights Act 2015:
Incorporate certain aspects of the Consumer Rights Directive (Directive 2011/83/EU) (CRD)
which had not been fully implemented by other legislation.
‘core’ consumer rights according to BIS: (i) Right to get what you pay for; (ii) Right that goods
and digital content are fit for purpose and services are provided with reasonable care and
skill; (iii) Right that faults in what you buy will be put right free of charge, or a refund or
replacement provided.
What the new Act has done, however, is substantially diminish the scope of the Sale of
Goods Act 1979. What used to cover all contracts for the sale of goods, now only applies
where the 2015 Act does not.
Mohammad El-Gendi, ‘The Consumer Rights Act 2015: a one stop shop of consumer rights” (2017)
Queen Mary Law Journal: About CRA – “It is much clearer to see what exactly consumers’ rights are
and what are the remedies available to them. Legal practitioners no longer have to jump between
acts and regulations, trying to understand what remedies (if any) their client is entitled to and make
sense of unnecessary overlapping in law. Hence, it very much is a ‘one stop shop’ for consumer
rights”.
Section 1: (1) agreement between trader and consumer for trader to supply goods, digital content or
services, if agreement is a contract.
Section 2: “Goods”.
S2(2) CRA 2015: a trader is defined as “a person acting for purposes relating to that person's trade,
business, craft or profession, whether acting personally or through another person acting in the
trader's name or on the trader's behalf”.
S2(3) CRA 2015: a consumer is defined as “an individual acting for purposes that are wholly or mainly
outside that individual's trade, business, craft or profession” (s.2(3)).
S3 CRA 2015: “goods contracts” contracts are contracts “for a trader to supply goods to a
consumer”.
Section 5 defines two forms of ‘sales contract’:
“(1) A contract is a sales contract if under it— (a) the trader transfers or agrees to transfer ownership
of goods to the consumer, and (b) the consumer pays or agrees to pay the price.
(2) A contract is a sales contract (whether or not it would be one under subsection (1)) if under the
contract—
, (a) goods are to be manufactured or produced and the trader agrees to supply them to the
consumer,
(b) on being supplied, the goods will be owned by the consumer, and
(c) the consumer pays or agrees to pay the price.”
Sale of Goods Act 1979:
Section 2(1) SGA defines a contract for sale of goods as one under which a seller agrees to transfer
property in goods to a buyer for a money consideration, “the price”.
Section 61(1) defines the term ‘goods’ as including personal chattels.
Definition does not include industrial growing of crops and things attached to or forming part of the
land unless they have been severed before or under the contract of sale.
Also Intellectual Property rights are excluded, e.g., copyrights, patents and trade marks are not
‘personal chattels’.
Morgan v Russell & Sons [1909] 1 K.B. 357 --- Extracted minerals are not goods under SGA 1979.
Moss v Hancock [1899] 2 Q.B. 111 --- Money is expressly excluded, but a coin bought by a collector is
not.
CRA 2015 –
s.2(8): ““Goods” means any tangible moveable items, but that includes water, gas and electricity if
and only if they are put up for supply in a limited volume or set quantity.”
s.5 - classifies goods which may form the subject matter of a contract for the sale of goods as
follows:
Existing goods which may either be (i) specific; or (ii) unascertained.
Future goods.
Future Goods:
Howell v Coupland (1873-74) LR 9 QB 462 --- Farmer sold in March, for delivery upon harvesting the
following autumn, 200 tons of potatoes to come from his farm. In fact, only 80 tons were harvested.
The buyer accepted delivery of the 80 tons and brought an action for damages for non-delivery of
the balance of 120 tons.
Held: The unforeseen potato blight which caused the reduced amount of potatoes being harvested,
released the seller from his obligation to deliver any more than what had been harvested. The
contributing factor to this decision was that the buyer was happy to accept the delivery of 80 tons.
Under s.5 there may be a contract for the sale of goods, the acquisition of which (by the seller)
depends on a contingency which may or may not happen. A contingent sale should therefore be
distinguished from the sale of chance (e.g., where there is a risk of the goods never coming into
existence).
Examples of future goods:
275 tons of barley to be grown by the seller (see Sainsbury v Street [1972] 1 WLR. 834.)
Animal feedstuff to be made according to a specification supplied by the buyer (see
Ashington Piggeries v Hill [1971] 2 W.L.R.1051)
A ship to be built by the seller to a specification (McDougall v Aeromarine of Emsworth
[1958] 1 W.L.R.1126.)
Logically future goods will normally fall into the category of unascertained goods.
However, few circumstances, future goods be specific, i.e. identified and agreed upon at the time of
contract? - Varley v Whipp.
