Legal Rules, Statutory Provisions And Remedies Relating To The Sale Of Goods And Supply Of Services

You have gained employment in a large legal practice. As part of your induction you are spending some time working in five different parts of the organisation. In each department you are expected to carry out tasks on behalf of a senior partner

Analyse the following business situations. Advise the customers on their rights and remedies which relate to the sale and supply of goods and services.

In order to give appropriate advice you should:

•Apply the legal rules on implied terms relating to the sale of goods and supply of services

•Apply the statutory provisions on the transfer of property and possession

•Evaluate the statutory provisions on buyer's and seller's remedies 

In the following situation advise G and H Holmes on their rights and remedies

A local financial services company - G and H Holmes - decides to refurbish the reception area of its offices. They order the following items from local furniture supplier, Hopkins Limited:

•A new carpet which Hopkins needs to order specially because they do not stock the required colour 2 bookcases from Hopkins stock. The supplier agrees to remove decorative features from the top and sides, so that they will fit the available space in the reception area

•A new reception desk and chair and two small leather settees which the senior partner has chosen from stock on display at Hopkins  

•A new reception desk and chair and two small leather settees which the senior partner has chosen from stock on display at Hopkins 

The night before the carpet and furniture is to be delivered and fitted, the Hopkins Limited store is destroyed by fire and all the items ordered are damaged beyond use. In the following situation advise Mr and Mrs Green on the rights and the remedies available to them. 

Mr and Mrs Green want an extension on their house. They ask three local building firms to provide estimates. The cheapest is Easybuild Ltd whose estimate is £8,000. They ask Easybuild to carry out the work and sign a contract with them. The contract does not mention the price payable or how long the work will take to complete. The workmen start in March but do not finish the job until the following February. The Greens are not happy with the work as the brick colour of the extension does not match closely to the house and soon after completion the flat roof of the extension leaks.

Implied Terms Relating to the Sale of Goods and Supply of Services

The main objects of the sale of goods services are to provide safe transaction process to the buyers so that there interest could be secured. The enactment of the Sale of Goods Act 1979, Supply of Goods and Services Act 1982 are to fulfil such criteria. There are certain implied terms mentioned under the sale of goods that provides the conditions and warranties in a sale (Akrami, Yusoff and Isa 2018). Apart from the implied terms, there are express terms too, which have been mentioned in the agreement clearly. However, it is important to discuss about the implied terms of the sale, as they are not mentioned in the deed specifically. Following are treated as implied terms of a sale of goods:

• The first implied term in this regard is the title. It indicates the rights of the seller to verify whether the seller has the right to sell those goods or not.
• Second term is the description of the goods. According to this, description is important to understand the consistency of the goods. Further, the features, trademark and label of the goods have been mentioned in this process (Bradgate and Twigg-Flesner 2013).
• It has been mentioned under section 17 of the Act that the sample of the goods should have certain consistency with the original product of the goods and it should be flawless.
• However, according to section 15 of the Act, sample of the goods is not enough and there should be certain description mentioned on the sample. The nature of the sample should be simple and compatible.
• The fitness and quality of the goods should be ensured and the goods should meet all the expectations in this regard. In this case, the term “warranty” can be used. According to section 16(3) of the Act, the warranty certificate should be annexed on the goods relating to the quality and fitness of the goods.

Apart from the sale of goods, there are certain implied terms mentioned in the Supply of Goods and Services Act. According to section 12 of the Act, apprenticeship’s contract must be excluded from the original agreement and matters relating to the money considerations should be excluded from that. Further, it has been stated in section 13 of the Act, the business is depending on the care and skills of the suppliers. Additionally, the price and quality of the products should be reasonable and should be annexed on the product (Means 2017).  

Under the Sale of Goods, there are certain provisions regarding the transfer of property and the related section in this mater are section 18 to section 25 of the Act. The main point of view of these sections is as follows:

• Except the unascertained goods, the goods should be certain while transferred to the buyer;
• Intentions of the parties play an important role in this case and the intention in this matter should be fixed;
• According to section 20 of the Act, in case of unconditional contract, the nature of the goods should be specified and in the absence of the same, the time of payment or delivery of the goods could be postponed (Knapp, Crystal and Prince 2016).
• The seller should have to act for the interest of the buyer and in this case. They could do anything as per the choice of the buyer;
• Quality, quantity and weight of the goods should be verified by the seller before transfer the same to the buyer.
• Further, it has been stated in section 23(2) of the Act that after delivering a product to the buyer, if the seller does not receive the right of dispose of the goods or the products, he could appropriate the goods to the contract unconditionally.

Statutory provisions on the remedies of buyers and sellers:

The main subject matter of the case is based on the remedies of the buyers and the sellers.

The delivered goods should be consistent with the quality and if the description does not match up with the delivered goods, the buyer can reject the product. Further, time should be maintained in all aspects and in case of failure on the part of the seller to deliver the product in time, there is a right on the part of the buyer to reject such product (Bridge 2017). Further, same remedies can be available to the buyer if the seller refused to deliver the product to the buyer. In case of breach of warranty, buyer can request the seller for diminution or extinction of price of the product.

In case the buyer does not pay off the seller for the delivered goods, seller could exercise certain power against the seller. In this case, the seller can ask for lien on the part of the seller, seller’s right to stoppage in transit or seller’s right to resale.

Considering the rights of the buyer, it can be stated that G and H Holmes can sue the Hopkins Limited for non-deliver the products in time. However, the accident that took place in Hopkins was unavoidable and the company has no liability regarding the mishap. They are not responsible for that and therefore, G and H Holmes could not ask for compensation from the seller (Hopkins Limited).

Considering the case of Mr. Green, it can be stated that they can sue the housing department for non-maintenance of the contractual work. According to section 12 of the Supply of Goods and Services Act, money consideration may not be a part of the contract. Further, according to section 13 of the Act, the supplier should be careful while delivering the services. In this case, the building firm has failed to comply with this and therefore, they have to face proceedings.

References:

Akrami, F., Yusoff, S.S.A. and Isa, S.M., 2018. Open Price Term under the United Kingdom Sale of Goods Act 1979. Jurnal Undang-undang & Masyarakat (Journal of Law & Society), 21(2).

Baldwin, C.Y. and Henkel, J., 2015. Modularity and intellectual property protection. Strategic Management Journal, 36(11), pp.1637-1655.

Bradgate, R. and Twigg-Flesner, C., 2013. Blackstone Press Limited. 

Bridge, M., 2017. The UK Supreme Court decision in The Res Cogitans and the cardinal role of property in sales law. Sing. J. Legal Stud., p.345.

Cette, G., Lopez, J. and Mairesse, J., 2016. Market regulations, prices, and productivity. American Economic Review, 106(5), pp.104-08.

Choi, N., & Choi, Y. S. (2016). Recent developments in competition law and intellectual property relating to reverse payment agreements: a comparative perspective. QUEEN MARY JOURNAL OF INTELLECTUAL PROPERTY, 6(3), 380-391.

Collins, D.M., 2014. Default notices: the de minimus test. Journal of International Banking Law and Regulation, 29.   

Fina, S. and Lentner, G., 2017. The New Generation of International Investment Agreements Adopted by the EU and Its Implications for the Protection of Intellectual Property Rights.

Gray, R., Wight, R. and Cooke, W., 2016. Lstas Complete Credit Agreement Guide. Mcgraw-hill Education-Europe.