Sale of Goods

Ewan McKendrick, Ewan McKendrick

• Publisher: Informa Law from Routledge
• Year: 2020
• ISBN:
  9781000286298
• Edition: 1
• Topic: Law
• Subtopic: Commercial Law
• Index: Law

Sale of goods transactions are central to commercial life. This book provides an essential up-to-date and clear account of the law as it stands today, giving you the confidence to offer the best possible resolution for your clients. Written by a team of specialists drawn from both the academic world and professional practice, Sale of Goods provides a clear and accurate account of the law relating to the sale of goods. It provides complete analysis of the Sales of Goods Act 1979, together with amendments made to the Act in 1994 and 1995 - ensuring that your understanding is current and complete.

CHAPTER 1

INTRODUCTION: THE CONTRACT FOR THE SALE OF GOODS

D J Stephens

1. General introduction

2. The essence of a contract for the sale of goods

(a) Contract

(b) Seller

(c) Transfers or agrees to transfer

(d) Property

(e) Goods

(f) Buyer

(g) Price

3. Contract of sale distinguished from other contracts

4. A European or international sales law?

1. GENERAL INTRODUCTION

1–001

Introduction. There are millions of contracts for the sale of goods entered into and performed every day. Such contracts are entered into in supermarkets, small shops, outdoor markets and private dwellings. The very fact that such an observation can be made without having first to define the elements of a transaction for the sale of goods shows how much the concept of sale is part of everyday life and familiar to author and reader alike. The overwhelming majority of these sale transactions occur without legal or practical difficulties. However, this is largely because the legal framework reflects the long established expectations of buyers and sellers. In basic terms the seller requires to be paid and the buyer requires property (ownership) and possession of the goods which, in addition, are expected to be of satisfactory quality. All these ideas require detailed analysis but the basics are familiar world-wide. Historically, there was one legal framework which was applied to all sales of all types of goods— whether the “goods” involved were small everyday items or large commercial bulk quantities. Although that legal framework did not distinguish between different types of “goods” it did distinguish between different types of sellers.

Thus it differentiated and still distinguishes between sales in the course of the seller’s business and private sales where both the buyer and the seller are private individuals who are not acting in the course of a business.¹ Sales by a seller in the course of his business are subdivided into commercial sales where both parties are acting in the course of a business and consumer sales where the buyer is acting personally. Historically, the uniform approach to sale of goods was based on a number of common law principles and one, in particular, the principle of caveat emptor—let the buyer beware. In modern times statutory intervention has occurred increasingly to protect consumers from some of the excesses which the free market system has not prevented.² The modern approach is increasingly to protect consumers by statutory modification of the common law rules but to allow the general principles associated with freedom of contract to operate between commercial parties to an agreement to sell goods. Although the word “consumer” has been used to indicate different things in different situations, in the context of a contract for the sale of goods it is used to indicate that the buyer does not buy the goods in the course of a business³ and that the goods are of a type which are ordinarily supplied for private use or consumption.⁴

1–002

One law of sales. This leads to a consideration of the question whether there is one law of sale of goods or whether the topic should be analysed from distinct points of view viz. commercial sales, consumer sales and private sales. The difficulty with the latter view is that there are many rules which are generally applicable to all forms of sale. It is conceptually convenient and suits practitioners and academics alike to teach the law as one body of legal principle pointing out, in context, the variations between commercial, consumer and private sales. This will be the approach which will be adopted in this work. Yet it must be conceded that there has been a degree of fragmentation of the law of sale of goods in recent years; in particular, commercial sales and consumer sales are increasingly the subject of distinct regulation. For example, one consequence of the enactment of the Unfair Contract Terms Act 1977 is that the distinction between sales where the buyer buys in the course of a business and sales where he does not purchase in the course of a business has become increasingly important.⁵ Difficulties have also arisen in terms of ascertaining the relationship between the law of sale of goods and more general developments in the evolution of the common law. In fact, one of the particular problems which one faces when seeking to analyse the law of sale of goods is to establish the impact which more general developments in the fields of contract and tort are likely to have or have had on the law relating to the sale of goods. For example, the precise implications of the ruling that there can be concurrent liability in contract and tort⁶ still remain to be worked out in the context of contracts for the sale of goods.⁷ In general terms, the law of sale remains an amalgam of the general principles of contract (and to a lesser extent equity) and the principles of tort developed after the introduction of the modern tort of negligence in 1932 in Donoghue v. Stevenson.⁸ Sometimes, changes stemming from these roots have a “knock-on” effect which have to be worked out in the context of contracts for the sale of goods.⁹ However, many writers still stress the undoubted historical truth that the rules applicable to contracts for the sale of goods are largely a product of the developments in the law of contract.¹⁰

1. That the Sale of Goods Act 1979 can in certain circumstances apply to a contract between a private buyer and a private seller is clear from cases such as Beale v. Taylor [1967] 1 W.L.R. 1193 (application of s. 13 of the Act to a private sale).

2. See, for example, the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999/2083), both of which are discussed in more detail in Chap. 11.

3. The meaning of “in the course of a business” in the context of s. 12 of the Unfair Contract Terms Act 1977 was considered by the Court of Appeal in R & B Customs Brokers Co. Ltd v. United Dominions Trust Ltd (Saunders Abbott (1980) Ltd, third party) [1988] 1 W.L.R. 321. But the meaning of “in the course of a business” can vary, depending on the section of the Act which is applicable: see, for example, Stevenson v. Rogers [1999] 2 W.L.R. 1064 where a broader approach to the interpretation of “in the course of a business” was adopted by the Court of Appeal when seeking to interpret that phrase where it appears in s. 14(2) of the Sale of Goods Act 1979 (see further 8–003 and 11–029 below).

4. See Sale of Goods Act 1979, s. 61(5A) which requires that references to dealing as consumer in the Sale of Goods Act 1979 are to be construed in accordance with Part I of the Unfair Contract Terms Act 1977. Part I of the latter Act, in s. 12(1) provides: “A party to a contract ‘deals as consumer’ in relation to another party if—(a) he neither makes the contract in the course of a business nor holds himself out as doing so; and (b) the other party does make the contract in the course of a business; and (c) in the case of a contract governed by the law of sale of goods or hire-purchase, or by section 7 of this Act, the goods passing under or in pursuance of the contract are of a type ordinarily supplied for private use or consumption.” See further 11–026—11–031.

1–003

Historical resume. It was as late as the end of the nineteenth century when, under the draftsmanship of Sir Mackenzie Chalmers, the first Sale of Goods Act, in the form of the Sale of Goods Act 1893, was passed. This provided the first statutory framework for the law relating to the sale of goods. Parliament was able to provide a uniform, principled legal framework which applied equally to commercial and other sales. It was couched in general terms and did not try to provide for every possible contingency by dotting every “i” and crossing every “t”. Its clarity and simpl...