The most useful dictionary definition of a ‘consumer’ is “someone who buys goods and services for personal use or need” (Chambers’ 21st Century Dictionary). All consumer transactions are based on the law of contract. The consumer agrees to purchase goods or services and the seller in return provide those goods or services. Every exchange of goods is an agreement between the buyer and seller thus making them based on the law of contact. The major act that supports and assists consumers is the Sale of Goods Act 1979 (SGA), as amended by the Sale and Supply of Goods Act 1994 and Supply of Goods to Consumers Regulations 2002.
The Sale of Goods Act covers transactions where ‘goods’ are transferred for “monetary consideration, called the price”(Nutshells p. 1). In the course of this essay I will be looking at the relevant Acts in order to establish how the law seeks to protect the consumer. In the light of the question, by looking at the useful dictionary definition and the definition provided by the relevant statutes, which states that a consumer is ‘a natural person entering into a contract with another in the course of business’ we can see that Lil clearly fits the definition of a ‘consumer’ by meeting both the definitions set out.
In order to proceed we must now define the seller and what it means to be ‘in the course of business’. This phrase can be used in both civil and criminal law and the courts in relation have tried to keep the meaning same across both sections, R&B Customs Brokers Co Ltd v.
united Dominion Trust Ltd (a civil case) which followed the guidance in Davies v. Summer (a criminal case). In relation to our scenario as the goods, which in this case is the shoes, are transferred for a monetary consideration, the sale is governed by the Sale of Goods Act 1979.
Under this Act the implied terms set out by S. 14 only apply when the goods are sold in the course of business with the transaction being an integral part of the business, with some degree of regularity and in the nature of trade and carried out with a view to making a profit, this can be seen in the case of Stevenson v. Rogers (1999). This section does not cover any private sales and there is an exception where the sale is carried out as a hobby, with no significant profit being made.
In the light of our scenario we can clearly name ‘Tuffstuff’ as the seller and acting ‘in the course of business’ because the goods (shoes) where sold within the store where transaction is an integral part of their business. There is a degree of regularity because they are constantly in the course of business selling shoes thus being in the nature of trade with a view to making profit from their sales. Now that I have identified the parties to the valid contract I will be looking at the terms implied by the Sale of Goods Act 1979. Sections 12,13,14 and 15 of this Act imply terms into contracts for the sale of goods.
The essential issue here is whether the goods (shoes) where fit for their purpose. Section 14 (3) of the SGA 1979 states that the ‘seller sells goods… any particular purpose… for which such goods are commonly supplied’ (P. 11 Unit Guide). By using and applying this rule to the facts of the case we can see that purpose of the goods are essential. This is to say whether or not the purpose is one for which such goods are commonly supplied and used for or one that the consumer has used it for.
The purpose could be made known by implication where the purposes of the goods in question are obvious, e. . a hot water bottle in the case of Preist v. Last 1903 (Consumer Law P. 45). In relation to our case facts we do not know what kind of shop the consumer brought the shoes from or the type of shoes they’ve brought in detail, we can only rely on the statement made by the shop manager which states that the shoes were not ‘intended for use on rugged terrain’. It is stated that consumers frequently buy one-purpose goods where no advice is taken from the seller regarding the goods because the purpose is implied being only one-purpose goods hence breaching S. 14 (2) and 14(3) if the goods are defective.
In relation to multi-purpose goods the buyer is advised to ask as many questions as possible about the goods and what they can use it for in order to benefit under S. 14 (3). This can be seen in the case of Griffiths v. Peter Conway Ltd 1939 where the buyers skin condition was not communicated to the seller thus there was no breach of S. 14 (2) or S. 14 (3). If in cases such as this the buyer does not communicate what they intend to use the goods for, other then their normal purpose, then the extent of the sellers obligation is to ensure that the goods are fit for what their original purpose is for (Jewson Ltd v.
Kelly 2003). In the light of our scenario we can see that the consumer used the shoes on a ‘hill-walking holiday’. The shoes are one-purpose goods and are not intended for specifically to be used on rugged terrain, as the retailer reasonably assumed. There was no communication between Lil and the seller prior to the sale regarding if the shoes could be used for ‘hill-walking’, if however Lil asked many questions and gathered information regarding the goods then she could have got the maximum benefit under S. 14 (3). Section. 14 SGA implies that goods must be of satisfactory quality.
In order to advise Lil on her contractual rights it is vital to understand this section of the Act. To begin with, the topic here regards the quality and fitness of the product in concern. Section. 14 (2) states that ‘Where the seller sells goods…. supplied are of satisfactory quality’. In order to move on we must understand what ‘satisfactory quality’ means. Before 1994 the test was to see if the goods were of merchantable quality. This was later replaced by the test of ‘satisfactory quality’. The need for this change was highlighted in the case of Bernstein v.
Pamson Motors (1987) (Consumer Law P. 45). The wording of the SGA 1979 was amended with the passing of SGA Amendment Act 1979 which now states that goods are of satisfactory quality if they ‘meet the standard that a reasonable person would regard as satisfactory’ (P. 11 Unit Guide) taking account of any description of the goods, the price and all other relevant circumstances (s. 14 (2a)). Also s. 14 (2b) states that quality of goods include their state or condition and 5 other points (A. ‘Fitness for all… commonly supplied’, B. ‘appearance and finish’, C. ‘freedom from minor defects’, D. safety’ and E. ‘durability’ (P. 11 Unit Guide)). In the light of our case points A, D and possibly E clearly apply as relevant and need to be considered because the other 2 quality points can be seen as fulfilled by the seller. The shoes purchased by the consumer were not durable and had fallen apart making them unwearable which could be unsafe for the consumer. The fact that the shoes were not durable could mean they are not of satisfactory quality under the SGA 1979. The case of Bernstein v. Pamson Motors (1987) could be useful under the durability section.
The question we need to ask is ‘how long we expect new goods to last’? From the Act this is hard to figure out because the definition states durability is a factor but does not give any further information so it is useful to look at the facts of each case in order to determine durability of new goods. In the Bernstein case Rougier J. held that the car brought was not merchantable quality because you would expect buying a new car the engine ‘would not seize up after three weeks’. In today’s case the car would not be one of satisfactory quality.
Before we come to a solid conclusion regarding Lils contractual rights and any remedies, which may exist, another issue raises. Terms in S. 13, 14 (2) and 14 (3) are all conditions. Their importance is vital as buyers are concerned because they can affect the remedies they can pursue. However S. 11 (4) of the SGA points out that ‘where a contract of sale is not severable… to be treated as a breach of warranty’ (Nutshells P. 14). The issue is whether there is evidence of acceptance of the goods, which affects the type of remedy the consumer, is entitled to claim.
Sections 34 and 35 of the SGA administrate acceptance and S. 35 declare that acceptance can occur in three ways. 1) ‘By intimation to the seller’ that is to say verbally notifying the seller that you accept the good 2) ‘by an act after delivery inconsistent with the sellers ownership’ 3) via ‘retention beyond a reasonable time’ (Consumer Law and Practice P. 110-12). In connection with our scenario the final method of acceptance (number 3) is decisive. The question we need to ask is when does the time start to run and what is considered to be reasonable?
The fundamental case of Bernstein v Pamson Motors (1987) where it was held “keeping” the car in question for three weeks constituted to acceptance, which meant the consumer, was entitled to an equitable remedy only (Nutshells P. 15). However this case was seen not to be advantageous to consumers and the amendments mean that the law is now more in favour of the consumer. The Court of Appeal recently held that Bernstein was no longer good law. In the case of Clegg v. Olle Andersson (2003) the aim behind S. 5 (5) had been achieved and that the buyer could reject his yacht even after seven months (Consumer Law and Practice P. 113) Nevertheless having possession of goods beyond reasonable period of time still constitutes acceptance but reasonableness is a question of fact and the issue of having reasonable time to examine the goods must be considered. In relation to our scenario and the case facts the question we need to ask is whether Lils holiday is reasonable time for acceptance and reasonable time to examine the goods? The facts of the cases are very special in order to come to a conclusion.
In tradition a problem like this is unlikely to arise because Lil will have a right of repair or replacement under the 2002 Regulations or, if this is not achievable, a suitable degree of reduction in the price she has paid. By looking at the case facts it could be said that Lil wore the shoes through out the holiday, even though clearly the shoes were not fit for the purpose of hill walking. This could be seen as her accepting the shoes. If after wearing the shoes Lil had realised that they were falling apart and not worn them again then she would argue that she has not accepted the goods and could reject the shoes.
We have not been told how long the holiday has been for, and the fact that she has worn the shoes through out the hill-walking holiday till the end, I believe, constitutes to Lil accepting the goods. This is to say that the term under S. 14 (3) SGA is no longer a condition and is now to be treated as a warranty only. This is governed under S. 11 (4) SGA, which provides ‘where a contract of sale is not severable and the buyer has accepted the goods the breach of any condition is to be treated as a warranty’ (Nutshells P. 14). Lil has accepted the goods so damages are the only remedy. The case of Hadley v.
Baxendale (1854) and Sections 51 to 53 SGA set out the details of the kind of damages that Lil can claim. In cases such as this most retailers offer a replacement, but because in this case Tuffstuff no longer stock the same type of shoe, then the other remedy of repair will be available. She will be entitled to damages for breach of warranty for the product S. 53 SGA. In this case it will be the cost of putting the goods right and any inconvenience of not having the goods (distress) that it may have caused. Repair of the goods is therefore the most likely and logical outcome of this case.
In connection to the alleged exclusion liability clause printed on the receipt the first point that needs to be considered is whether or not, by the common law rules, the clauses have been incorporated in the contract. First of all the type of document involved is important. In the case of Chapelton v. Barry UDC (1940) a receipt could not be expected to contain vitally important exclusion clauses and it was held that there was no incorporation. In the light of our scenario we can se that the exclusion of liability is printed on the reverse of the receipt, which was handed to Lil when she brought the shoes.
Also from the facts we can see that reasonable steps weren’t taken to bring the notice before Lil prior to the contract is made. In the light of this argument the exclusion liability will not be incorporated into the contract. However we are not aware, from the case facts, what the exclusion liability is or how vitally important it is. If the exclusion liablilty appears to be incorporated into the contract, being not vitally important, then it will be governed by UCTA (Unfair Contract Terms Act 1977).
The clause printed is trying to exclude liability. Any clause, which is trying to do this, with the effect of UCTA S. 6, will be deemed as void when the buyer is dealing as a consumer (P. 20-4 Unit Guide). The question now is whether Lil was dealing as a consumer? Again by S. 6 of UCTA a person deals as a consumer when s/he buys from someone acting in the course of business where the buyer holds himself or herself as just a private buyer and not acting in the course of a business.
From the case we can clearly see that Lil is a consumer thus making the exclusion of liability void. In addition, Consumer Transactions Order 1976 states that, a trader can be guilty of a criminal offence where they exhibit a void exclusion clause in a notice, or in this case on a till receipt. Tuffstuff therefore could be guilty of a criminal offence. Overall because acceptance has occurred by Lil the condition by S. 11 (4) of the SGA becomes a warranty for which only the damages that I have set out above could be claimed.