Implied Terms on the Sale of Goods
The Sale of Goods Act provides rules which apply to contracts for the sale of goods. In cases where a consumer is involved (a sale to a member of the public) there are certain rules which are mandatory and the parties cannot be “contracted out”. This means that the contract cannot take away these rights, even if both the business and consumer agree that they will not apply. In the case of dealings by businesses with non consumers and other businesses, it may be possible to take out the rights concerned by stating this in the contract, provided that the removal is reasonable.
There are certain implied terms and conditions that apply when goods are sold. It is implied that the seller is the owner of the items concerned and is entitled to sell them. Title (valid ownership) cannot be sold if they the seller does not have it. Therefore, if a third party maintains a claim against the purchaser of goods, he in turn will have a claim against the seller for breach of the implied promise of valid ownership. The same rules apply to goods sold on hire purchase, credit or conditional sale agreements.
Where goods are sold and the seller mis-states certain facts (e.g. a “2007” car) the purchaser may be able to cancel the contract and/or claim compensation if he can later show that this was the case. If the statement is untrue, it does not matter that the seller believed it to be true. A dishonest statement would in fact, have criminal consequences for the seller.
Where goods are sold by description, there is an implied term that they will correspond with the description. Where goods are sold by sample it is implied that the goods will correspond with the sample. A description might include such matters as “Irish Beef”.
Although the general principle of law is “buyer beware” there are various rights in consumer protection legislation which effectively changes the position to some extent in the case of the sale of goods by a business to a consumer. A “consumer” is someone who is not acting in a business; essentially it means someone buying in a personal capacity.
It is implied that goods are of “satisfactory quality”. This gives a purchaser very significant rights. Satisfactory quality is the standard that a reasonable person would regard as satisfactory, taking account of the description, price and all other relevant circumstances. The quality of the goods includes their state and condition, their fitness for the purpose concerned, their appearance and finish, freedom from any defects, safety and durability.
In the case of services, it is implied term that services are carried out with reasonable care and skill within a reasonable time.
This implied term covers goods that simply do not work, that do not work properly or satisfactorily or in a manner that they could be reasonably expected to work. It will also cover other matters such as freedom from defects. For example, minor defects on a new item may entitle the customer to return the goods or claim compensation.
It is also implied on the sale of goods by a business to a consumer, that the goods are fit for their normal purpose. Where the buyer points out a particular purpose or intended use, it is implied that the goods will be fit for this purpose. It might be implied from the circumstances why a purchaser wants a particular item. Unless the seller points out that they are not suitable for this purpose, the seller will be liable if they are not fit for this purpose.
The implied terms apply to the sale of new and second hand goods. However, a customer is not entitled to the same expectations of second hand goods as of new goods. What is unsatisfactory in the case of a new item, may be satisfactory in the case of a second hand item.
Where goods break down, say a year after they were purchased outside a manufacturers’ guarantee period, the consumer may still be able to show that the good was unsatisfactory at the beginning. However it may not be easy. The seller may be able to show things that could have caused the breakdown in the meantime. It will be up to the buyer to prove a link between the failure and the original condition.
Many of the rules which apply to goods also apply to services. It is an implied term of a contract for the provision of services that the supplier will carry out the service with reasonable care and skill. Therefore a customer may be entitled to refuse to pay or at least a reduction of price if a service is not delivered to the requisite standard.
Rights on Breach of Implied Terms
If there is a breach of one of the above implied conditions consumer/purchasers will have certain rights. The purchaser will have rights to compensation in money or return of goods (in some circumstances) on the basis of the seller’s breach of the implied terms of the sale contract. Purchasers may also have rights against the manufacturer or other parties. Manufacturers may be liable because of breach of product safety legislation or by reason of a guarantee or warranty they have given.
A consumer is not obliged to pay for goods where they do not comply with the implied terms or where the seller has not complied with his contract. A consumer need not pay for goods if he has not ordered them.
Where a consumer believes that goods do not conform to the condition required by the contract or implied by law, they can be rejected. The consumer would generally be entitled to a refund and compensation for loss and expense incurred as a result of the rejection. Customers generally lose their right to reject goods, if they are accepted. Goods are accepted when they are used or kept for a reasonable time. Even if the goods are accepted the customer may be entitled to compensation for the defect.
The Sale and Supply of Goods to Consumers Regulations 2002 provide additional rights of consumers where there is a breach of a sale and supply contract. If goods break down or develop a fault within a period of six months they are presumed not to be faulty on the date of the original contract. This means that it is a matter for the seller or manufacturer to prove that they were not faulty at the time of sale.
Where a seller has breached the implied terms of sale the buyer may have a right to return the goods depending on whether they have been accepted and on how serious the defect is, or a right to compensation. If a buyer requests a seller to repair or replace faulty goods the seller must repair or replace the goods within a reasonable time, without causing a significant inconvenience to the buyer. It must bear the costs, including labour, packaging, postage etc. The right does not apply if repair would be impossible or disproportionate. If the goods are not replaced then the buyer will still have other remedies.
The buyer has a right to require the seller to reduce the price by an appropriate amount or cancel the contract. The right to claim for full reimbursement may be cut down by reference to the use he has had of the goods since they were delivered. The above rights are additional statutory rights over and above the existing common law rules. In a dispute the Court may order the remedy that is appropriate.
