Business Law - Sale Of Goods
Consumer Protection Act (UK)
- What does 'sale of goods' mean?
- What are 'goods'?
- What are the three main types of goods?
- The Sale of Goods Act 1979 (UK).
- The Consumer Protection Act (UK).
- What is a 'defect'?
- Liability for defective products.
- Defence against claims.
What does 'sale of goods' mean?
Sale of Goods is the transfer of ownership of personal property in exchange for money, other goods or the performance of services. Note: Property must be tangible (physical) property.
What are 'goods'?
According to the Sales of Goods Act (UK) 'Goods' are defined as movable property other than actionable claims and money.
This includes stocks and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.
What are the 3 main types of goods?
Future goods: These are goods that have not yet been acquired, manufactured or grown by the seller.
Specific goods: These goods are identified and agreed upon at the time the contract of sale is made.
Unascertained goods: This is where a merchant agrees to sell items from their stock in their warehouse.
The raises issues based around when transfer of ownership occurs.
The Sale of Goods Act 1979 (UK)
This act originates in the United Kingdom (UK) and identifies the legal rules concerned with the most commonly agreed sales contracts. The Sale of Goods Act has now been replaced by the Consumer Protection Act 1987.
The Consumer Protection Act 1987 (UK)
This Act is a further development of the Sales Of Goods Act. It regulates contracts where goods are bought and sold. It gives consumers the right to return faulty goods and claim a refund, replacement or repair and also gives consumers additional rights when buying digital content.
The act makes the producer of the product automatically liable for any damage caused by that product.
According to Section 2(1) of the Consumer Protection Act, damage is established when there has been ‘any damage’.
This means that anyone who suffers damage as a result of a defective product may claim compensation. It is not limited to whoever bought the product.
What is a 'defect'?
There is a product defect if the safety of the product is not such as persons generally are entitled to expect. This includes products that cause risk of damage to property, as well as risks of death or personal injury.
Liability for defective products
Part 1 Section 2 of the act outlines liability to the following people where 'any damage is caused wholly or partly by a defect in a product'.
- The producer of the product.
- Any person who has held himself out to be the producer of the product. This may be by putting their name on the product or using a trademark or other distinguishing mark in relation to the product.
- Any person who has imported the product into a member State to supply it to another.
(For the full text, see Section 4 of the Consumer Protection Act)
Producers must show any of the following:
- The defect is present because of a need to comply with legal requirements
- The defendant did not supply the product to another
- The defect did not exist in the product at the relevant time
- The scientific and technical knowledge wasn't advanced enough to have known about the defect in the product at the time of production
- The product was not the main cause of damage or personal injury.
- The claim is being made more than 3 years from the date you became aware of the damage
- The claim is being made more than 10 years after the product was last put into circulation.
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