Sale of Goods Act

Sale of Goods Act

The Sale of Goods Act 1979 was introduced to offer greater protection to consumers and/or purchasers when they have entered into a contract for goods or services. When a contract is entered into between a buyer and a seller, guarantees come into being which relate to the suitability, quality and standard of the product being supplied.

Since the Sale of Goods Act was introduced in 1979 there have been a number of statutory changes to the legislation until it was replaced by the Consumer Rights Act 2015. Although the earlier Act has been repealed, it still remains enforceable for business to business transactions which involve the purchase and sale of goods.

Sale of Goods Act

The Consumer Rights Act 2015 aimed to consolidate all of the previous legislation which related to consumers as well as introducing some new elements to consumer law.

The new Act also replaces the following Acts;

Unfair Terms in Consumer Contracts Regulations 1999

Unfair Contract Terms Act 1977

Supply of Goods and Services Act 1982

The rights of consumers in relation to unfair terms and sale of goods remain relatively unchanged but are further clarified in the new legislation. In addition, substantial changes have been made to the way in which consumers can seek appropriate remedies in relation to faulty goods.

The remit of the new legislation however excludes business to business sales. Consumers in the new legislation are defined as an individual rather than a business who are purchasing or selling a product which is outside of their profession, trade, business or craft. Small businesses have to review existing legislation to find suitable protection under products or services which are defective.

The new legislation is broadly divided into three separate parts. The first part relates to a contract for services, goods or digital content. The second part of the Act relates to unfair terms and the third part was developed to outline miscellaneous provisions which also include powers of enforcement.

Part 1 Consumer Contracts

The first part of the new legislation defines the minimum rights which apply to consumers for contracts associated with the purchase of goods and services as well as digital content. Part 1 also includes a number of significant changes. The most notable change is perhaps the inclusion of digital products including digital content and was welcomed by many consumers.

Before the 2015 legislation digital goods or services were not deemed to be considered a ‘product’. This would mean that a consumer who purchased a music CD would be covered but a downloaded album would not. The new legislation covers the downloadable content too.

The remedy available to the buyer in relation to faulty goods have also been changed. In Section 22 of the legislation, it states that there is now a fixed time period of 30 days in which time the consumer is within their rights to reject a product which is faulty. If a consumer does not decline the faulty product within the 30 day period, they may still require the product is to be repaired or replaced if faulty.

If the product is still faulty after the repair or replacement, the consumer is entitled to additional remedy such as a reduction in the price or a full refund.

Part 2 Unfair Terms

This section of the Act replaces the previous Unfair Trading from Consumer Contracts Regulations. Although the obligations under the contract are binding to the trader, they are not to the consumer. A list of the proposed unfair terms is listed in detail in the Unfair Trading legislation.

Changes to the legislation incorporate increased the ability of a court to intervene in consumer contracts. One of the most significant changes is that the new legislation can be applied to all consumer and business contracts regardless of whether these contracts were negotiated on an individual basis with the consumer.

Another change introduced by the new Sales of goods Act and subsequent legislation was core terms exclusions. There have been many discussions about ancillary charges which are often found in the terms and conditions of many contracts. It was concluded by the court that unauthorized overdraft charges were excluded from an assessment of fairness because they were terms that applied to pricing.

The Law Commission expressed their concern and highlighted that price comparison websites actively encourage businesses to advertise low prices to encourage consumers to purchase their products or services. Businesses would then profit from ancillary charges which are included in the ‘small print’. It was deemed to be unfair that these charges were not highlighted to customers when they were making a purchase. The Commission then provided several recommendations;

Exclusions should only apply to elements of terms which clearly define the subject or price of the contract

For the exclusion to apply, all terms should be clearly displayed

Section 71 of the new legislation will impose an obligation on the court to consider whether the terms in a contract are fair even if they are not raised by an issue by the parties who are involved.

Product Quality

As with the previous legislation, all products supplied by businesses should be fit for purpose, as described and of a sufficient quality. Products, whether they are digital or physical have to meet a specific set of standards;

Quality – When products are received they should be of a satisfactory quality. This means that they should arrive in good condition and not be faulty or damaged.

Fit for Purpose – The product received by the consumer should serve the purpose for which they have been purchased

Accurate – Goods should reflect the product that you purchased and be accurately described

Making a Claim

If you have purchased something and it fails to meet the three criteria outlined above, you are entitled to make a claim under the Consumer Rights Act. There are several ways of achieving a resolution depending on the circumstances and the steps you have taken to resolve the situation.

Under the Consumer Rights Act you can make a claim against the retailer or the company who sold you the item rather than the manufacturer. The nature of the claim will depend on the amount of time which has elapsed since the purchase.

30 Day Guarantee

The legislation states that you can return a product within 30 days if it is not fit for purpose, inaccurately described or of poor quality for a full refund.

After the 30 days has elapsed, you are not legally entitled to obtaining a refund even if the product develops a defect.

Sale of Goods Act

Sale of Goods Act – Replacement or Repair

Under the Sale of Goods Act if the product develops a fault outside of the 30 day returns period, the retailer must be provided with the opportunity to repair or replace the product. Consumers can ask retailers to replace or repair a faulty product but they can determine which they want to do, usually they will choose which is the cheapest.

  • If the repair or replacement does not solve the problem, you can claim a refund or a reduction in the price if you would like to keep the product.
  • The consumer is entitled to either a partial or full refund rather than a repair or replacement if;
  • The cost of replacement or repair is not equal to the value of the product
  • A replacement or repair of the product is not viable
  • Significant inconvenience would be caused if repair or replacement carried out
  • If the repair would take a significant amount of time

If the replacement or repair of a product is not practical or the repair does not solve the problem or the replacement is also of a defective nature, the consumer has a right to obtain a refund up to 100% of the price paid or you can reject the product and obtain a full refund.

Sale of Goods Act – After Six Months

Once the first six months have elapsed the burden of proof shifts to the consumer to prove that the product was faulty when it was delivered. This may require an expert report or evidence of issues experienced with other products.

Consumers have six years to file a claim at the small claims court for defective products under the Sale of Goods Act.

Sale of Goods Act-Delivery

Retailers are accountable for the condition of the product until it reaches you. This means that if a courier damages a product, the retailer is liable rather than the delivery firm.

Unless an extended delivery period has been defined, the usual delivery timeframe is 30 days.

If the retailer fails to deliver your product within this timeframe you can;

  • Cancel the purchase and obtain a full refund if the delivery was later than what had been agreed and it was crucial that the item was delivered in the agreed time
  • Cancel the order for a full refund if the delivery time isn’t vital but an alternative delivery schedule cannot be agreed.

Consumer law is complex and there are various rights and responsibilities that consumers have when they purchase a product or service. The new legislation has also been implemented to address the requirements of the modern day consumer, incorporating digital content as well as physical products. Laws such as the Sales of Goods Act are in place to protect the consumer ensuring that they receive products which are of an acceptable quality and fit for purpose.

About the author:

This article was written by a member of the Expert Answers legal advice team. Expert Answers provides online legal advice on all aspects of UK Law to users in the United Kingdom.