Case Study 1
Under the Sale of Goods Act 1979, A contract of Sale is a contract where a seller transfers or agrees to transfer goods or a service to a buyer for money, in the course of a business. The transfer must be for money, barter or exchange are not covered. The Act covers sales and agreements to sell. Question 2
In contracts for the sale of goods and supply of services certain basic provisions are implied by statute in order to provide protection to purchasers. The main provisions derive from the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982. Section 12 of The Sale of Goods Act protects purchasers where the seller does not have the right to sell the goods. Section 13 relates when the goods are sold by description there is an implied term that the goods will correspond to that description. Section 14 of the Act ensures that businesses must sell goods that are of satisfactory quality and fit for their purpose. Where the goods are sold by sample there is an implied term in Section 15 that the goods will correspond to the sample in quality Section 12 applies to all contracts for sale of goods so it will cover private sales in addition to where goods have been purchased from a shop or other business. Is the implied term that relates to title, The seller must have the right to sell the goods, that they are free from any undisclosed charge or encumbrance. Sub section (1) implies a term that the seller has the right to sell the goods. This covers situations where the seller is selling stolen goods (whether the actual thief or a subsequent sale in the chain). This term is a condition in all sales. In addition to applying to stolen goods Section 12(1) also applies where the seller does not have the right to sell the goods where to do so would be breach of trademark, patent or copyright: for example, Niblett v Confectioners' Material (1921), where Niblett purchased 1000 tins of condensed milk from Confections’ Materials. The tins were labelled 'Nissly'. Nestle claimed that if they attempted to sell these on, they would apply for an injunction to prevent the sale as the label was very similar to their own labels for their condensed milk. Niblett agreed not to sell them and brought an action against the sellers. Sub section (2)(b) implies a term that the purchaser will enjoy quiet possession of the goods. This acts as an on-going assurance that no one will interfere with the buyer’s right to possess or use the goods. As in the case of Microbeads v Vinehurst Road Markings (1975) Microbeads purchased some road marking machines. After the purchase a third party was granted a patent right in the machines. This meant that Microbeads could not use the machines unless they were granted a licence to do so. There was no breach of section 12(1) as at the time of the sale the seller had the right to sell the goods. However, there was a breach of Section 12(2) in that the buyer could not enjoy quiet possession of the goods. Section 13 of the Act states that where there is a contract for the sale of goods by description, there is an implied term that the goods will correspond with the description. If the buyer sees the actual goods before the sale then Section 13 cannot be relied upon as in the case of Harlington & Leinster v Christopher Hull Fine Art (1991). The painting was described in an auction catalogue as being by German impressionist artist Gabrielle Munter. Both the buyers and the sellers were London art dealers. The sellers were not experts on German paintings whilst the buyers specialised in German paintings. The purchasers sent their experts to inspect the painting before agreeing to purchase. After the sale the buyers discovered that the painting was a fake and worth less than £100. They brought an action based on...
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