Hayley Garnett, Solicitor
Do you own or run a business? Do you sell goods in the course of your business? If so, are you aware of the implied terms that automatically form part of your contract of sale, whether they are written in there or not?
Under the Sale of Goods Act 1979, certain obligations are placed on businesses who sell goods. The main obligations are:
1)     You must have the right to sell the goods – i.e. you own the goods, or will do prior to the sale completing
2)     Goods will correspond with description – e.g. if you tell your customer that the clothing she has ordered is made from cashmere then it mustn’t turn out to be wool!
3)     Goods must be of satisfactory quality – the definition of this differs according to the goods sold however in a dispute the court will look at durability, appearance and finish, freedom from minor defects and safety – e.g. a brand new car costing £20,000 will be expected to be near perfect, whereas your obligations in respect of a car sold of 10 years of age for £500 will be far less onerous
4)     Fitness for purpose – the goods supplied must be capable of carrying out the purpose for which they are supplied. This also applies if a customer tells you specifically why they are buying the product. If you do not believe the product can perform that service you have a duty to advise the customer
5)     Goods will correspond with sample – e.g. if you sell a customer 10 tonnes of potatoes it is not possible for him to inspect each potato and so the onus is on you to ensure that all potatoes correspond to the potato originally shown to your customer
Whilst these obligations are implied into your contract it is possible, in some cases, to exclude or vary these provisions. This is however, limited by the Unfair Contract Terms Act and the Unfair Terms in Consumer Contract Regulations.
Should you be found to have breached one of these terms, depending on whether the term is a condition or a warranty, your customer will be entitled to claim damages from you or reject the goods. In some circumstances you can be subject to Strict Liability – i.e. even if you are not at fault in any way you are still liable for a breach.
Whilst most businesses are aware of the maxim ‘Caveat Emptor’ or Buyer Beware, perhaps the maxim should read, ‘Seller Beware’.
For more information regarding Sale of Goods and how to protect your business please contact Hayley Garnett at Heptonstalls LLP on 01405 765661
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