Consumer Credit and the Law of Agency

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Name: Harry Atkins
Consumers, Credit and the law of agency

A) Explain the main provisions of the Sale of Goods Act 1979 and the remedies available to consumers against sellers; The Sales of Goods Act 1979 is “a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration called the price (s 2(1))” (Keenan. D, 2000, page 251). The Sales of Goods Act is designed to enforce rules when selling and buying goods to ensure that both parties are treated fairly by the other. Each contract varies in detail where the larger, more expensive goods being sold will face more consideration (e.g. a car or house) and will have a more detailed contract, compared to those that are exchanged simply without a detailed contract (e.g. a loaf of bread or a newspaper). The Sale of Goods act specifically covers goods and not contracts involving hire of products, or use of products for work and materials. For example hiring a product isn’t considered to be a contract under the Sale of Goods Act 1979 as the hirer only gets to trial the product for a limited time and has the option to purchase the product still. Once purchased the contract then falls under the Sale of Goods Act. There a certain provisions of the Sale of Goods Act which must be addressed by both the buyer and the seller. These can fall under the implied terms of the contract and are those that both parties must abide by to avoid a breach of contract. The main provisions of this Act are; to protect buyers from buying goods of sellers who are not entitled to sell the goods, Rowland v Divall [1923] 2 KB 500 (section 12) , any goods sold by a description must then match the description told to the buyer by the seller, Arcos v Ranaason [1933] AC 470 (section 13), all goods sold must reach the satisfactory standard of quality, Stevenson v Rogers [1999] 1 All ER 613 (section 14), and that goods that are sold by sample must be of the same quality and match that of the goods trialled by sample, Drummond v Van Ingen (1887) (section 15). Section 48 of the Sale of Goods Act 1979 lists available remedies for consumers against sellers. This section lists three different remedies which are: repair or replacement, reduction of price, and rescission of contract. A case most famous for negligence by a manufacturer is the Donoghue v Stevenson [1932] AC 562 case. “It was in this case that the House of Lords formulated the test that the duty of care in negligence is based on the foresight of the reasonable man” (Keenan. D, 2000, page 282). This case created the rule that applies to defective goods that cause injury to a consumer. “A breach of an implied term is not a contravention of any statutory prohibition, but is the breach of a term of a contract.” (Goldring. J, 1998, page 88). This statement made by John Golding shows that in a case of consumer remedy for a good, depending on whether it is a breach of “warranty” or “ condition” then this is treated the same as a breach of contract and the consumer will be awarded with a form of compensation.

B) What is a Defective GOOD? Explain the remedies available against the producer of defective goods; The Sale of Goods Act 1979 has always stated that goods sold by anyone must be of merchantable quality. As this title wasn’t specific enough and didn’t cover that a product should be fit for all purpose, the Act then changed it to say that goods must be of satisfactory quality. This meant that the product should be fit for all purposes. A defective good is “Consumable, commercially produced and distributed good that is (1) unfit for its intended use, (2) dangerous or harmful for normal use, (3) does not carry adequate instructions for its use, or (4) is inherently dangerous due to defective design, assembly, or manufacture. See also defect.” (, Two cases related heavily to defected goods are the Donoghue...
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