- •Commercial Law
- •Contents
- •Preface
- •Abbreviations
- •Table of Statutory Provisions
- •Table of Cases
- •1 Introduction
- •1 Introduction
- •2 What is agency?
- •3 Nature and characteristics of agency
- •4 The different types of agency
- •5 Conclusion
- •6 Recommended reading
- •1 Introduction
- •2 The authority of an agent
- •3 Agency by ratification
- •4 Agency of necessity
- •5 Conclusion
- •6 Recommended reading
- •1 Introduction
- •2 Duties of an agent
- •3 Rights of an agent
- •4 Commercial agents and principals
- •5 Disclosed agency
- •6 Undisclosed agency
- •7 Termination of agency
- •8 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Development of the sale of goods
- •4 Equality of bargaining power: non-consumers and consumers
- •5 Impact of the European Union
- •6 Contract of sale
- •7 Contracts for non-monetary consideration
- •8 Contracts for the transfer of property or possession
- •9 Recommended reading
- •1 Introduction
- •2 Background
- •3 Sale of Goods Act 1979, section 12: the right to sell
- •4 Sale of Goods Act 1979, section 13: compliance with description
- •5 Sale of Goods Act 1979, section 14(2): satisfactory quality
- •6 Sale of Goods Act 1979, section 14(3): fitness for purpose
- •7 Sale of Goods Act 1979, section 15: sale by sample
- •8 Exclusion and limitation of liability
- •9 Acceptance
- •10 Remedies
- •11 Recommended reading
- •1 Introduction
- •2 Background to the passage of property and risk
- •3 Rules governing the passage of property
- •4 Passage of risk
- •5 The nemo dat exceptions
- •6 Delivery and payment
- •7 Remedies
- •8 Recommended reading
- •1 Introduction
- •2 Background
- •3 Provision of Services Regulations 2009
- •4 Supply of Goods and Services Act 1982
- •5 Recommended reading
- •1 Introduction
- •2 Background
- •3 Electronic Commerce (EC Directive) Regulations 2002
- •4 Distance selling
- •5 Recommended reading
- •Introduction
- •1 Introduction
- •2 CIF contracts
- •3 FOB contracts
- •4 Ex Works
- •5 FAS contracts
- •6 Conclusion
- •7 Recommended reading
- •1 Introduction and background
- •2 Structure and scope
- •3 UNIDROIT Principles of International Commercial Contracts
- •4 Conclusion
- •5 Recommended reading
- •1 Introduction and background
- •2 Open account
- •3 Bills of exchange
- •4 Documentary collections
- •5 Introduction to letters of credit
- •6 Factoring
- •7 Forfaiting
- •8 Conclusion
- •9 Recommended reading
- •1 Introduction
- •2 Hague and Hague-Visby Rules
- •3 Charterparties
- •4 Time charterparty
- •5 Common law obligations of the shipper
- •6 Common law obligations of the carrier
- •7 Bills of lading
- •8 Electronic bills of lading
- •9 Conclusion
- •10 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Development of negligence
- •4 The move to strict liability
- •5 Types of defect
- •6 Developments in strict liability
- •7 Recommended reading
- •1 Introduction
- •2 Personnel
- •3 Meaning of ‘product’
- •4 Defectiveness
- •5 Defences
- •6 Contributory negligence
- •7 Recoverable damage
- •8 Limitations on liability
- •9 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Enforcement strategy
- •4 Criminal law controls
- •5 Civil law enforcement
- •6 Recommended reading
- •1 Introduction
- •2 Scope of the 2008 Regulations
- •3 Prohibition against unfair commercial practices
- •4 Codes of practice
- •5 Misleading actions
- •6 Misleading omissions
- •7 Aggressive commercial practices
- •8 Commercial practices which are automatically unfair
- •9 Offences
- •10 Recommended reading
- •1 Introduction
- •2 Background
- •3 Controls over misleading advertising
- •4 Comparative advertising
- •5 Promotion of misleading or comparative advertising
- •6 Recommended reading
- •1 Introduction
- •1 Introduction
- •2 History of banking regulation: early policy initiatives
- •3 New Labour and a new policy
- •4 The Financial Services Authority
- •5 The Coalition government
- •6 Conclusion
- •7 Recommended reading
- •1 Introduction
- •2 What is a bank?
- •3 What is a customer?
- •4 Bank accounts
- •5 Cheques
- •6 Payment cards
- •7 Banker’s duty of confidentiality
- •8 Banking Conduct Regime
- •9 Payment Services Regulations 2009
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •2 European banking regulation
- •3 The Financial Services Authority
- •4 Financial Services Compensation Scheme
- •5 Financial Ombudsman Scheme
- •6 Financial Services and Markets Tribunal
- •7 The Bank of England
- •8 Bank insolvency
- •9 Illicit finance
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •1 Introduction
- •2 Evolution of the consumer credit market
- •3 Consumer debt, financial exclusion and over-indebtedness
- •4 Irresponsible lending
- •5 Regulation of irresponsible lending
- •6 Irresponsible borrowing
- •7 Ineffective legislative protection for consumers
- •8 A change of policy
- •9 Lessons from the United States
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •2 Crowther Committee on Consumer Credit
- •3 Consumer Credit Act 1974
- •4 Formalities
- •5 Cancellation of agreements
- •7 Documentation of credit and hire agreements
- •8 Matters arising during the currency of credit or hire agreements
- •9 Credit advertising
- •10 Credit licensing
- •11 Unfairness test
- •12 Other powers of the court
- •13 Financial Ombudsman Service
- •14 Enforcement
- •15 Consumer Credit Directive
- •16 Conclusion
- •17 Recommended reading
- •Bibliography
- •Index
110 |
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The implied conditions in sale of goods contracts |
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when the goods are in daily use, particularly if the seller refuses to accept a |
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rejection by the buyer and the latter is forced to continue using them while the |
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dispute is ongoing. Arguably, there will come a point when that continued use |
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may be classed as acceptance and possibly as an act that is inconsistent with the |
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continued ownership of the seller. That said, the court was prepared to allow |
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rejection after the lapse of six months in Rogers v. Parish146 and of two months |
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in Porter v. General Guarantee Corp.,147 a hire-purchase case decided on com- |
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mon law grounds, there being no statutory equivalent to section 35 of the 1979 |
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Act in hire-purchase legislation. |
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A significant amendment to the rules on acceptance relates to the insertion in |
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1994 of section 35A of the 1979 Act dealing with partial acceptance. Until that |
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point, partial acceptance was only permissible in severable contracts, or where |
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the seller had delivered more than the contract amount when the buyer could |
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reject the excess,148 or where the contract goods had become mixed with goods |
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of a different description.149 The current section 35A, however, has expanded |
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the opportunity for partial acceptance by extending it to goods in non-severable |
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contracts. Thus, as long as there has been a breach that gives the buyer a right to |
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reject the goods for non-conformity with the contract, he will not lose his right |
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to reject the non-conforming goods just because he has accepted those that are |
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not affected by the breach.150 Partial acceptance will still be subject to the rule |
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under section 35(7) that prohibits partial acceptance of goods in a ‘commercial |
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unit’ when the division of the unit would materially impair the value or charac- |
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ter of the goods. |
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Q12 Analyse the methods through which acceptance can occur. |
10â Remedies
The classic remedies for a breach of sections 12–15 of the Sale of Goods Act
1979 are the rejection of the goods and repudiation of the contract for a breach of condition, and a claim for damages for a breach of warranty. In respect of the former, it is possible to reject the goods without repudiating the contract if the buyer is prepared to allow the seller a second opportunity to provide goods that comply with the contract. Further, it is possible to repudiate the contract without rejecting the goods if they have not been received.
While these remedies cannot be excluded in consumer contracts, we have already seen that it is possible to exclude or limit liability for breach of sections 13–15151 and thereby for remedies in non-consumer sales.152 Remedies
146 |
[1987] 2 All ER 232.â 147â [1982] RTR 384. |
148 |
Sale of Goods Act 1979, s.30(2). |
149 |
Ibid. s.30(4) (now repealed).â 150â Ibid. s.35A(1). |
151 |
Liability for a breach of Sale of Goods Act 1979, s.12 cannot be excluded against any buyer, |
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consumer or non-consumer. |
152 |
Sale of Goods Act 1979, s.15A. |
111 |
10â Remedies |
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for non-consumer buyers have been restricted further since 1994 and the |
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insertion of section 15A of the 1979 Act, which provides that where the buyer |
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is a non-consumer and the breach of sections 13, 14 or 15 is so slight that it |
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would be unreasonable for the buyer to reject the goods, then the breach will |
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be treated as a breach of warranty instead which will sound in damages only. |
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The parties may contract either expressly or impliedly to overrule this section |
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and, when it is relied upon, the onus is on the seller to demonstrate that the |
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breach is so slight as to render rejection unreasonable. |
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The distinction between non-consumer buyers and consumer buyers is even |
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more apparent, however, when considering the new remedies introduced by |
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the Sale and Supply of Goods to Consumers Regulations 2002,153 which took |
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effect from 31 March 2003.154 The remedies are to be found in section 48A–48F |
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of the 1979 Act and comprise rights of repair, replacement of the goods, reduc- |
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tion of the purchase price and rescission of the contract. The remedies are avail- |
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able where the buyer is dealing as a consumer and the goods do not conform to |
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the contract of sale at the time of delivery. An interesting development is that |
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there is a presumption under section 48A(3) that if the goods do not conform |
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to the contract at any time within six months of delivery to the buyer, they are |
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assumed not to have complied at the time of delivery. This reverses the burden |
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of proof and requires the seller to demonstrate the non-conformity by showing |
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either that the goods did conform at the time of delivery or that six months is |
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incompatible with the nature of the goods or the nature of the non-conformity. |
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Thus, for example, perishable goods with a short life-span would be excluded |
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from this six-month presumption. |
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These remedies are in addition to those already in existence as, while the |
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United Kingdom was obliged to introduce these remedies to give effect to |
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the Directive on the sale of consumer goods and associated guarantees,155 the |
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Directive expressly permitted Member States to adopt or maintain more strin- |
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gent provisions to ensure a higher level of consumer protection.156 Thus, while |
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a consumer buyer may choose to use one of the additional remedies to request |
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a repair, replacement, etc., the buyer still has the right to reject the goods under |
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the existing regime if there has been an actionable breach of condition. It is |
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clear from the wording of the section that the buyer has the choice of remedy, |
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with section 48B(1) dealing with repair and replacement, and section 48C(1) |
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dealing with reduction of purchase price or rescission, both stating ‘the buyer |
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may require the seller…’â. This choice of remedy is important to prevent over- |
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bearing sellers from forcing weak buyers into accepting a lesser remedy against |
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their wishes when they might really prefer to enforce their traditional right of |
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rejection. The balance is restored by the provision that the buyer cannot force |
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153 |
SI 2002/3045. |
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154 |
The Regulations also provide for new controls over consumer guarantees, see SI 2002/3045, reg. 15. |
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155 |
Sale of Goods and Associated Guarantees Directive 99/44/EC. |
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156 |
Ibid. Art. 8. |
112 |
The implied conditions in sale of goods contracts |
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the seller to repair or replace the goods if that is impossible, or disproportion- |
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ate to the other of those remedies, or disproportionate to a reduction in the |
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price or a rescission of the contract. A remedy is deemed to be disproportion- |
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ate if it imposes unreasonable costs on the seller given the value of the goods |
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had they conformed, the significance of the lack of conformity and whether the |
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other remedy could be effected without significant inconvenience to the buyer. |
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Of note is the fact that if the buyer opts for rescission of the contract, he will |
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not necessarily receive the full value of the goods at the time of delivery, as sec- |
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tion 48C(3) provides that reimbursement to the buyer may be reduced to take |
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account of the use that he has had since the time of delivery. In that situation, |
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the buyer would be better advised, if possible, to reject the goods and repudiate |
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the contract under the traditional remedies so that he can recover the full value |
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of the goods at the time of delivery. |
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The protected position of the consumer buyer might have changed signifi- |
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cantly under proposals for new provisions in the Consumer Rights Directive.157 |
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However, in the event, the Consumer Rights Directive as enacted did not make |
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any changes. |
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Q13 Compare and contrast the remedies available to consumer buyers and |
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non-consumer |
buyers. |
11â Recommended reading
Atiyah P.S., Adams J. and MacQueen A. The Sale of Goods (11th edn, Pearson Education Ltd, Harlow, 2005)
Atiyah, P.S., Adams, J.N. and MacQueen, H. The Sale of Goods (12th edn, Pearson Education Ltd, Harlow, 2010)
Bradgate R. Commercial Law (3rd edn, Butterworths, London, 2000)
Bradgate, R. and Twigg-Flesner, C. Blackstone’s Guide to Consumer Sales and Associated Guarantees (Oxford University Press, Oxford, 2003)
Bridge M. The Sale of Goods (Oxford University Press, Oxford, 1997)
Department for Business, Enterprise and Regulatory Reform Consultation on EU Proposals for a Consumer Rights Directive (BERR, London, 2008)
Dobson P. and Stokes R. Commercial Law (7th edn, Sweet & Maxwell, London, 2008) Editorial ‘Proving goods are defective: the six month requirement’ (2009) 32(2)
Consumer Law Today 1
â ‘Satisfactory quality and the right of rejection’ (2010) Consumer Law Today 1–3 April European Commission Proposal for a Directive of the European Parliament and the
Council on consumer rights COM(2008)614 final (Brussels, 2008)
Griffiths M. and Griffiths I. Law for Purchasing and Supply (3rd edn, Pearson Education Ltd, Harlow, 2002)
Howells, G. and Weatherill, S. Consumer Protection Law (2nd edn, Ashgate Publishing Ltd, Aldershot, 2005)
157Proposal for a Directive of the European Parliament and of the Council on consumer rights COM(2008)614 final. See now Directive 2011/83/EU on consumer rights.
113 |
11â Recommended reading |
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Law Commission Sale and Supply of Goods (Report No. 160 1987)
â Consumer Remedies for Faulty Goods Report No. 317, Scottish Law Commission Report No. 216 London, 2009)
Law Commission and Scottish Law Commission Consumer Remedies for Faulty Goods. A Summary of Responses to Consultation (London, 2009)
Macleod J. Consumer Sales Law (2nd edn, Routledge-Cavendish, Abingdon, 2007) Mark M. Chalmers Sale of Goods (18th edn, Butterworths, London, 1981)
Miller, C.J. and Goldberg, R.S. Product Liability (2nd edn, Oxford University Press, Oxford, 2004)
Ramsay, I. Consumer Law and Policy: Text and Materials on Regulating Consumer Markets (2nd edn, Hart Publishing, Oxford, 2007)
Sealy, L.S. and Hooley, R.J.A. Commercial Law: Text, Cases and Materials (4th edn, Oxford University Press, Oxford, 2009)
The implied conditions are central to sale of goods law. All textbooks that include the sale of goods will include discussion of the implied terms and readers can benefit from reading the relevant parts of standards works such as Atiyah’s The Sale of Goods, Bradgate’s Commercial Law and Macleod’s Consumer Sales Law. This will also allow the reader to gain a broad appreciation of the topic and consider the growing divide between the rights of the consumer buyer and the business buyer. A developing issue relates to available remedies and readers would benefit from reading the Law Commission’s consultation on consumer remedies and the editorials from Consumer Law Today.