Goods

Introduction to goods

  • The consumer rights law provides that the goods have to meet certain standards and specifications before they can be sold by a trader.
  • These standards include that the goods must be of
  1. satisfactory quality, and
  2. must correspond to their description
  • These standards are also ‘implied terms’ of the contract. This means that it might not be expressly stated in the contract that the goods must be of satisfactory quality and quantity but they are implied in the contract.
  • These implied terms are categorised as either ‘conditions’ or ‘warranties’.

Example

Mark bought a Mobile phone from a reputable phone outlet. Upon opening the package and turning the phone on Mark felt that it is slow to process the instruction and also the back cover felt bit different. Mark’s contract is silent on these faults.

However, under consumer rights, Mark has a certain expectation, and also the goods he purchased must be of a satisfactory quality. These terms are implied in his contract. Mark can return his phone and can seek for a replacement and the seller is obliged to do so. Mark can also terminate his contract as well and if he has suffered some loss due to the poor quality of the product then he can also claim damages as well.

  • Where there is a breach of an implied term which is treated as a condition, the consumer can choose to either treat the contract as terminated or continue with the contract but claim damages.
  • Most statutory implied terms are categorised as conditions. Statutory terms are the terms which are enforced by law, these terms may not be expressly agreed or written in a contract but implied by the consumer law. A buyer and seller do not have to negotiate these terms, for example, it is implied by law that the goods sold must be of satisfactory quality. The breach of such implied term is treated as a breach of condition.
  • Implied terms regarding goods being free from third party rights were categorised as being ‘warranties’.
  • Where there is a breach of a warranty, the consumer may claim damages. The measure of damages is the estimated loss directly or naturally resulting, in the ordinary course of events, from the breach of warranty.

Contractual Rights

These are a set of rights set out by consumer law for the protection of a consumer when he/she deals with a trader who then supplies goods or services under a contract. The breach of contractual rights is treated as a breach of a contract. These statutory contractual rights include

  • A right to reject the goods within an initial period, varying from 14 to 28 days.
  • A right to repair or replacement, and a subsequent right to a reduction in the price. (keeping the goods)
  • A right to reject the goods for a refund. (subject to deduction of use in some cases).

A contract will be treated as a contract for a supply of goods if it is a

  • A sales contract, or
  • A contract for the hire of goods, or
  • A Hire Purchase Agreement, or
  • A contract for transfer of goods.

A contract to supply goods also includes following

  • Contracts entered into between one-part owner with another part owner.
  • Contracts for the transfer of undivided shares in goods.
  • Contracts that are absolute and contracts that are conditional.

Types of goods

There are two types of goods that can make up the subject of a contract of sale.

  • Existing Goods
  • Future Goods

Existing goods are those goods which are currently in the possession of a seller and are readily available to be dispatched to a buyer.

The future goods are those goods which are currently going through the process of manufacturing, and which are not in the possession of a seller, however, seller and buyer may have agreed to a contract of sale of such goods.

Example

Mark was in search of a sofa. He went to his local furniture shop and purchased a sofa which was on display. Mark took the possession of the sofa. The sofa will be treated as existing goods.

Mark in search of a Sofa agreed with a national Sofa Retailer to buy a particular leather sofa which will be delivered before charismas. This contract between Mark and National Sofa retailer is for Future Goods.

Goods

Goods can be categorised into two different categories.

  • Specific Goods
  • Unascertained Goods

The first category is ‘specific goods’. ‘Specific goods’ means goods that are identified and agreed upon at the time the contract of sale is made. (It also includes an undivided share, specified as a fraction or percentage).

The second category is ‘unascertained goods’. There is no definition of unascertained goods but it is said to be anything that is not specific goods and which is unascertainable.

Disclaimer

While every effort has been made to ensure the accuracy of the information provided in this article, it does not constitute legal advice and cannot be relied upon as such. Each legal case and issue may have unique facts and circumstances, as a result legalally does not accept any responsibility for liabilities arising as a result of reliance upon the information provided. For further help and guidance, you can always rely on and seek advice from our experienced lawyers.

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