Implied terms under Sale of Goods Act 1979 s 14
In these contract law notes we provide a bite sized overview of Implied terms under Sale of Goods Act 1979 s 14 and Remedies for breach of the implied terms.
s 14(1)
Sale in course of business:
R&B Customs Brokers v UDT [1988] 1 All ER 847 (noted BBF 997)
Car bought by company for personal use of director. Case under UCTA 1977.
Stevenson v Rogers [1999] 1 All E.R. 613 (noted BBF 996)
Sale of fishing boat by fisherman
The obligations: s 14(2): satisfactory quality
(i) Until 1994: Merchantability
Grant v Australian Knitting Mills (1933) 50 CLR 387, 418
Cammell Laird & Co Ltd v Manganese Bronze and Brass Co Ltd [1934] AC 402, 430.
Henry Kendall & Sons v William Lillico & Sons [1969] 2 AC 31
Pheasants killed by meal which contained groundnuts contaminated with aflatoxin
Aswan Engineering Co v Lupdine [1987] 1 WLR 1
Pails used for waterproofing compound collapsed when left stacked in hot sunlight at Middle eastern port
Cehave NV v Bremer, The Hansa Nord [1975] 3 All ER 739 (noted BBF 570)
Citrus pulp pellets which had been damaged by getting wet were rejected by buyer; but at auction later buyer bought the same pellets through a third party and used them for original purpose
(ii) From 1994: Satisfactory quality
Law Commission Report No.160 (BBF 437)
Sale and Supply of Goods Act 1994, s.1
Bernstein v Pamson Motors [1987] 2 All ER 220
Car engine seized up but fully repairable
(iii) From 2002:
CSD art 2, esp 2(2)(d) and 2.4 (statements by producer or representative)
Sale and Supply of Goods to Consumers Regulations 2002, reg 3
SGA s 14(2D)-(2F)
Installation: CSD art (5); Supply of Goods and Services Act 1982, s 11S
s 14(3) fitness for particular purpose
NB Replaces SGA 1893 s 14(1)
Ashington Piggeries v Christopher Hill [1972] AC 441 (M)
Animal food compounded to buyers' formula fed to mink, which were killed by DMNA in the herring meal
Griffiths v Peter Conway [1939] 1 All ER 685
Harris Tweed coat caused P dermatitis
Slater v Finnings [1996] 3 All ER 398 (M)
Camshaft for boat engine did not work because of some unusual idiosyncrasy of particular boat
Remedies for breach of the implied terms
(i) General rules (including B2B sales)
Specific performance: s 52
Falcke v Gray (1859) 4 Drew 651 (BBF 709)
Chinese vase
Behnke v Bede Shipping [1927] 1 KB 649 (noted BBF 710)
Contract to sell old and therefore cheap ship but with new engines and boiler, so could be placed on German ship register without delay.
Société des Industries Métallurgiques v Bronx Engineering [1975] 1 Lloyd’s Rep 465 (BBF 710)
To get a replacement machine would take 9 months
Sky Petroleum v VIP [1974] 1 WLR 576 (BBF 712)
Fuel not available from any other source during oil crisis
Rejection
SGA ss. 11(2)-(4), 13(1A), 14(6), 15(3)
Slight breaches: s 15A (inserted by S&SoGA 1994)
Law Commission Report No.160 (BBF 594)
Refuse to accept (“withhold performance”)
SGA s 28
Termination
- time of essence: Hartley v Hymans [1920] 3 KB 484 (BBF 574)
McCardie J: “In ordinary commercial contracts for the sale of goods, the rule clearly is, that time is prima facie of the essence with respect to delivery.”
- time not of essence: Universal Cargo Carriers Corp v Citati [1957] 2 QB 401 (noted BBF 574)
Devlin J.: “Frustrating delay”
- time "made of essence" by giving reasonable notice:
United Scientific Holdings v Burnley BC [1978] AC 904 (noted BBF 575)
Right to tender conforming goods (“cure”)?
Borrowman, Phillips & Co v Free & Hollis (1878) 4 QBD 500 (noted BBF 573)
- exception: where non-conformity amounts to anticipatory repudiation:
Millar’s Karri and Jarrah Co v Weddell, Turner & Co (1908) 14 Com Cas 25, 29 (noted BBF 587)
Damages
SGA ss 51, 53
Loss of right to reject
SGA ss 34, 35, 35A
- intimation of acceptance: s 35(1)(a)
- after delivery, act inconsistent with ownership of seller: s 35(1)(b)
- S 35(2): reasonable opportunity to examine before right lost
- lapse of reasonable time: s 35(4), (5)
Bernstein v Pamson Motors [1987] 2 All ER 220 (M)
Three weeks, during much of which time P was in hospital and unable to drive car
Rogers v Parish (Scarborough) Ltd [1987] QB 933
Range Rover had series of defects to engine, gearbox and body work, but buyer drove 5,500 miles in it in six months
Clegg v Anderson [2003] EWCA Civ 320, [2003] 2 Lloyd’s Rep 32
Yacht: nature of problem not known
asking for repair? s 35(6)
J & H Ritchie Ltd v Lloyd Ltd [2007] UKHL 9, [2007] 2 All ER 353 (M)
Goods repaired but sellers refused to say what had been wrong, buyer concerned further damage might have been caused, rejected
(ii) Consumer sales:
(a) 1994 reforms
s 15A: not applicable
s 35(3): right to have reasonable time for examination before any loss of right to reject cannot be lost “by agreement, waiver or otherwise”
No “long-term right to reject”: Law Commission report No 160, paras 5.6-5.13
(b) CSD Arts 3 and 5
Vienna Convention on International Sale of Goods 1980 (CISG)
SGA ss. 48A-48F
“Non-conformity”: s 48F
Presumption of non-conformity: s 48A(3), (4)
Remedies: s 48A(2)
Repair
Replacement
Reduction of price (cf SGA s 53(1)(a))
Rescission
Hierarchy/ 2 stages (1) repair or replacement; if fail
(2) reduction of price or rescission
B may demand repair or replacement unless impossible / disproportionate: s 48B
- Choice of repair or replacement? s 48B(3), (4)
- S must then repair in reasonable time/without significant inconvenience to B
- specific performance: s 48E
B cannot reduce price or rescind unless
- B not entitled to rep/rep because impossible/disproportionate: s 48C(2)(a); or
- has demanded and S has failed to rep/rep properly: s 48C(2)(b)
- meanwhile B cannot terminate for breach of condition: s 48D
- if rescission, allowance for use: s 48(3)
Can S insist on attempting to rep/rep?
Time limits: CSD art 5(1) and (2)
