What is it and when does it apply
The Sale of Goods Act 1979 offers additional protection to consumers and purchasers in contracts for the supply of goods. The Act implies such terms automatically into any contract between buyer and seller and makes guarantees to the buyer regarding the quality, suitability and standard of the goods supplied. Sections 12-15 of the Act handle different aspects of the implied terms being; Title (s.12), Correspondence with Description (s.13), Satisfactory Quality (s.14(2)), Fitness for Purpose (s.14(3)) and Goods sold by Sample (s.15).
It is possible for sellers to expressly remove the ‘implied’ terms by incorporating a negating term in the contract, but these are strictly assessed in accordance with the Unfair Contract Act 1977 and may be disallowed if the court deems them unreasonable.
There are also similar requirements of quality under Sections 12-16 of the Supply of Goods and Services Act 1982 in relation to businesses providing a service (as opposed to selling a product).
Section 12 of the Act implies a term that the seller of the goods has title to those goods i.e. he owns them and/or has the authority to sell them. Once transferred the term also pledges that the buyer will take those goods free from any encumbrances and is entitled to enjoy ‘quiet possession’ of them.
Therefore the seller should disclose any known encumbrances regarding title to the buyer, such as when the seller only has limited ownership or a 3rd party has a charge (potential claim to ownership) against the property. Under the Unfair Contract Terms Act 1977 this implied term cannot be excluded or varied.
Correspondence with description
Section 13 is an assurance that the goods being sold correspond with any description of them. It applies even if the goods have been exposed to and chosen by the buyer, like in a self-service shop. Also the descriptive words must be in reference to the substance of the goods, so certain irrelevant or unimportant descriptive statements might not be included under this section.
When the goods are being sold by sample (see below), it matters not that the rest of the bulk corresponds with the shown sample if the goods do not correspond with the description.
Section 14(2) only applies to contracts where the goods are sold in the course of a business (e.g. from a shop), otherwise the buyer is deemed to have bought the goods regardless of quality. This section inserts an implied condition that the goods are of a satisfactory quality. It does not apply however, where the seller has drawn the buyer’s attention to those defects, or where the buyer has had an opportunity to examine the goods and the defects should have been apparent.
What is satisfactory quality?
Other factors are taken into account to assess what is ‘satisfactory quality’. The assessment is made objectively, so is in relation to what a ‘reasonable’ ordinary person would think and not on the buyer’s personal opinion. The assessment should take account of the description of the goods, the price and all other relevant circumstances. Therefore a more expensive product advertised as “luxury” should be of a higher quality than one would expect of a cheaper alternative.
Quality of the goods refers to their state and condition on being supplied and should take into account other factors such as: fitness for all the purposes of which goods of that kind are usually supplied; appearance & finish; freedom from minor defects; safety; and durability. This condition also extends to all extraneous items supplied under the contract such as packaging and containers.
Fitness for Purpose
Section 14(3) inserts a term into all contracts for the supply of goods in the course of a business that the goods are reasonably fit for the purpose for which they were bought. Therefore if a buyer discloses to the seller what he intends to use the goods for, or if this should be apparent to the seller for any reason (such as a statement made by the buyer or the business usually conducted by the buyer), then the goods should be fit for that purpose. The skill and experience of the seller in his ability to ascertain the buyer’s purpose is also taken into account. Furthermore, the requirement would apply even if the purpose is different from what would be usually expected for goods of that type.
Sale by sample
Section 15 applies to contracts for the sale of goods by sample. This is where a buyer is shown a sample of a unit or a batch of units and then orders a large quantity of those goods. Section 15 simply includes two terms into such a contract. Firstly, that the bulk of the goods will correspond with the quality of the shown sample. Secondly, to a similar effect, that the goods will be free from any defects which would not have been apparent on an inspection of the sample.
If you have purchased a product and do not feel it is of a satisfactory quality in accordance with the factors discussed above you should be entitled to return that product as there has potentially been a breach of contract (unless the contract expressly avoids the powers of the Act – see above). This is a different matter from when shops offer a guarantee that you can swap goods or return them if you are just ‘unsatisfied’, instead it relates to when the goods are simply not good enough for their purpose. Therefore if you feel a product’s quality is not good enough, you are entitled to a refund and not a swap or store credit as some stores or suppliers might try to convince you.