Sales - Implied Terms

Sale of Goods Act 1979 - key definitions

S2: contract of sale of goods is when the seller transfers/agrees to transfer goods to the buyer for money / s61: goods includes all personal chattels other than actions and money

St Albans City v International Computers

Software can be classified as goods if supplied on a tangible medium

Acceptance and rejection

SGA s35 / accepting some goods doesn’t remove buyer’s right to reject other, defective goods + repairing it doesn’t remove right to reject

Sale of Goods Act 1979 - s13

SGA s13 = correspondence with description / minor flaws not a breach in specific goods (as not a sale by description) - applies more for un-ascertained goods

Arcos v Ronaasen 1993 - case summary (s13)

Ronaasen ordered timber from Arcos, meant to be half an inch thick -but a bit thicker / court ruled in Ronaasen’s favour

Arcos v Ronaasen 1993 - Lord Atkin + main point (PT rule) (s13)

Lord Atkin: ‘a ton does not mean about a ton’ / established the strict rule of perfect tender (can reject even if deviation is minor + still fit for purpose)

Reardon Smith v Hansen-Tangen - case summary (s13)

Charter-party described a new oil tanker as being built in Osaka - wrong / court ruled hull number not part of the description (label identified the vessel, not essential part of the description = change had no practical difference)

Harlingdon & Leinster v Christopher Hill Fine Art - case facts (s13)

CHFA to sell 2 oil paintings described as works by Münter - disclaimed they had no expertise in the area / H&L had expertise, inspected then bought the paining / were fakes

Harlingdon & Leinster v Christopher Hill Fine Art - ruling (s13)

Court of Appeal ruled in CHFA’s favour / only sale by description if relied on description - specific goods, was inspected, experts / but could claim under tort of misrepresentation

Satisfactory quality

SGA s14(2) - must be of SQ to a reasonable person’s view (also takes description + price into consideration / strict liability - regardless if seller knew of fault in quality / doesn’t apply if buyer knew before contract + where buyers examine goods before (Thornett v Beers)

Rogers v Parish - case summary (s14(2))

Purchased new Range Rover - kept it for 6 months despite defects (tried to fix but failed) / Court ruled goods were delivered as defective - breached SQ, being reparable does not mean SQ

Aswan Engineering v Lupdine - case summary (s14(2 and 3))

Lupdine manufactured liquid waterproofing - shipped to Kuwait, melted due to extreme heat / Court ruled not a breach - fit for normal purposes and merchantable, extreme weather beyond control

Fitness for purpose

SGA s14(3) / liable if not fit for purpose (if particular purpose was made known to seller and buyer relied on that)

Jewson v Boyhan - case summary (s14(3))

Bought boilers for 12 apartments - poor energy efficiency made flats hard to sell / court ruled in Jewson’s favour - boilers intrinsically sound, Boyhan only wanted ordinary boilers - didn’t specify energy efficient ones

Jewson v Boyhan - Sedley LJ (s14(3))

Sedley LJ: ‘he got exactly what he had bargained for’

Excluding implied terms

S13-14 applies unless contract specifically excludes liability / but limits to this (UCTA 1977 - Mitchel v Finney Lock Seeds, loss so huge) / courts consider inequality of bargaining power, buyers’ lack of knowledge and reduced ability to insure against

Excluding implied terms - legislation

SGA 1979 - s55 (exclusion clauses subject to UCTA / UCTA 1977 - s6 (exclusion clauses must be reasonable) + s11 (objective test for reasonability)

Britvic Soft Drinks v Messer - case summary

Supplied CO2 with small amounts of benzene - violated SQ/FP / courts rejected the exclusion clause (unreasonable - despite equality of bargaining power, buyer couldn’t have been aware)

Excluding implied terms - normative considerations

Efficiency and public policy / fairness (inequality of knowledge, party responsible should be liable)

Academic - Collins - overview

Collins argues that implied terms are grounded in the broader contractual principle of food faith / so contracts should be interpreted to support cooperation, reciprocity, etc.

Academic - Collins - key takeaway + normative question

ITs aren’t just technical gap-filling, but an expression of the underlying principle of good faith / more substantive role / normative question - should English law prioritise freedom or fairness?

Academic - Whitford - overview

Challenges the idea that contracts should be understood as purely formal/transactional / ITs needed to account for parties’ ongoing relationships

Justifications for s13-14

Fairness (buyers often disadvantaged - sellers also better insured) / ITs can be justified not merely as paternalistic protection of buyers, but as mechanisms for allocating risk and responsibility efficiently between commercial parties

Caveat emptor (traditional vs now)

Traditionally = caveat emptor / increasing shift to buyer protections (SGA s13-14, UCTA 1977) - maxim has been qualified in modern commercial law / modern law better balanced

Reform proposals for SGA

SGA should include intangible, digital goods (counter - separate IP/copyright legislation, better to split them for conceptual clarity) / gray area between Arcos and Reardon - clearer framework for what counts as part of description?