Sale of Goods Act 1979


The Sale of Goods Act 1979 is an Act of the Parliament of the United Kingdom which regulated English contract law and UK commercial law in respect of goods that are sold and bought. The Act consolidated the original Sale of Goods Act 1893 and subsequent legislation, which in turn had codified and consolidated the law. Since 1979, there have been numerous minor statutory amendments and additions to the 1979 Act. It was replaced for some aspects of consumer contracts from 1 October 2015 by the Consumer Rights Act 2015 but remains the primary legislation underpinning Business-to-business transactions involving selling or buying goods.
The Act applies to contracts where property in 'goods' are transferred or agreed to be transferred for a monetary consideration, in other words: where property in personal chattels is sold.

Part II, contract formation

Sections 2 to 15B concern how a contract is formed and, in particular, contains standardised implied terms in all contracts for sale.
Section 3 provides that if goods are sold and delivered to minors or those mentally incapacitated the minor will be liable to pay a reasonable price if the goods are necessaries. Necessaries are goods suitable to the persons' condition of life and actual requirements at the time of contracting. Under sections 6 and 7, concerning specific goods that perish, a contract is void where they perish before and avoided where they perish after contract formation.. Under section 8 the price is a money consideration given in exchange for property in goods. If the price, or means to ascertain a price, is not agreed, the buyer will be required to pay a reasonable price.
Breach of these terms by the seller may give rise to an action for damages, and in the case of those terms which are also conditions, termination of the contract. Where the slightness of the breach renders it unreasonable for a non-consumer buyer to reject the goods, for breach of the implied terms as to description, quality or fitness or sample, then the buyer can only claim damages for a breach of warranty. This amendment moderates the traditionally strict approach of English Law to contractual breach in a commercial context.
Section 12 incorporates into the contract a term that the seller either has legal title to the property to be sold or that he will have title at the time when property is to pass. Section 13 provides that where the buyer is sold goods by description, the goods must correspond with this description. Harlingdon v Christopher Hull held that this implied term may only be breached if the buyer relied upon the description. Therefore, if the buyer is an expert, reliance may not be established.
Section 14 states that terms are implicitly about quality and title and are only relevant where the seller is acting in the course of a business. There is no requirement as to the status of the buyer. The phrase "in the course of a business" has received much judicial consideration. Some judges have applied definitions found in other acts, but the case of Stevenson v Rogers gives a wide definition to this requirement. It will encompass activity which is ancillary or loosely related to the business of a company. To use Richards' example, a bank that sells a company car will be acting in the course of a business.
;Satisfactory quality, s 14: The quality of the goods sold must be satisfactory. The Act provides an objective test to determine satisfactory quality; the standard that a reasonable person would regard as satisfactory, taking into account the price, description and any other relevant factors. The courts have identified certain factors that may raise or lower the expectation of satisfaction. Second hand goods, per Bernstein v. Pamson Motors Ltd., will attract a lower expectation. On the other hand, goods of a reputable brand may attract a higher expectation, the judge in Bernstien used the example of a small ping on a Rolls-Royce being unsatisfactory. 'Other relevant factors' may include advertising in the case of consumer contracts.
;Fitness for purpose, s14 : If the buyer expressly or implicitly makes his purpose for the goods known to the seller, the seller is obliged to make sure the goods provided are fit for that purpose, if it is reasonable for the buyer to rely on the seller's expertise. An example of the application of this provision can be found in Godley v Perry.
Under section 15, when goods are bought by bulk and the buyer has tested or examined a small number of those goods, the seller is obliged to make sure that every item in the bulk corresponds with the quality of the sample tested or examined.

Part III, effects of the contract

Sections 16 to 26 concern a contract's effects, and in particular the transfer of property and title. Under section 16, property cannot pass unless the goods are ascertained. Section 18 provides presumptions to determine when property will pass, both for specific goods and goods unascertained at the time of contracting. These 'rules' can be excluded by contrary implication or express agreement.
;Seller does not have title: if the seller does not own the goods, the buyer generally cannot gain title, but he can sue for breach of the implied term as to title. This is subject to numerous exceptions in closely defined circumstances, for example: s.2 Factors Act 1889, ss. 21, 24, 25 SGA 1979.
;Seller has voidable title: where the seller holds voidable title, title can pass to a buyer in good faith. If title is voided before the contract of sale is concluded, title cannot pass.

Part IV, contract performance

Sections 27 to 39 concern performance of the contract. Under section 29, concerning the place of transfer, where location is not stipulated, the buyer must collect the goods at the sellers' place of business. The seller must be prepared to deliver them to the entrance of his place of business. If the contract was concluded by a means of communication at a distance and the buyer is a consumer, this provision is disapplied and the Consumer Protection Regulations 2000 apply instead. However, it is changed today and what applies is The Consumer Contracts Regulations 2013.
Within six months, beginning at the time at which the goods were delivered, the buyer can require the seller to repair the goods, reduce the price, or rescind the contract where the buyer successfully claims that the goods were not in accordance with the contract at the time of delivery. The seller can defeat this claim if "it is established that the goods did so conform" at the time of delivery, or the measure is "incompatible with the nature of the goods or the nature of the lack of conformity.
;Consumer requires repair or replacement: The seller must repair or replace the goods within a reasonable amount of time, incurring all costs necessary to perform this task. This cannot be required if it is impossible or disproportionate in consideration of other available remedies.
;Consumer requires reduction or rescission: This is only available where repair or replacement is impossible or the seller is taking an unreasonable amount of time to perform these requirements. Any reimbursement must take into account any use that the buyer has had out of the goods.

Part VI, Actions for contract breach

Sections 49 to 54 concern actions for breach of contract.

Part VII, supplementary

Terms from the Sale of Goods Act will not be incorporated into the contract where they have been expressly excluded, or express terms conflict with them. These exclusions may be invalid under common law, the Unfair Contract Terms Act 1977, or in consumer cases the Unfair Terms in Consumer Contracts Regulations 1999. If the term excluding these implied terms is struck out, the implied term will be effective.
Under the Unfair Contract Terms Act 1977, section 12 may never be excluded, and sections 13 to 15 may never be excluded where the buyer is a consumer.

Future prospects

The 1979 Act was preceded by the original Sale of Goods Act 1893, a statute drafted by Sir Mackenzie Chalmers,. The success of both the 1893 and 1979 statutes was largely down to their conciseness and to Sir Mackenzie's clarity of expression. In the 1990s, a number of short statutes were passed to amend the 1979 Act, and a new updated and consolidated Act is considered to be overdue.