Business contract

Topics: Contract, Tort, Duty of care Pages: 8 (2484 words) Published: April 19, 2015
Question 1:
a) Explain the main characteristics of a consumer contract.

Sale of Goods Act 1979 (SOGA 1979) is amended by Sale and Supply of Goods Act 1994 and the Sale and Supply of Goods to Consumers Regulations 2002

The Contract for Sale of Goods

A contract for the sale of goods is ‘a contract in which the seller transfers, or agrees to transfer, the property in goods to a buyer for a money consideration, called the price’

This contract contains two conditions, Both ‘sale’ and ‘agreement to sell, the seller can transfer the goods immediately and is willing and able to do ,there is some sort of condition that must be fulfilled firstly. Legal effect: In ‘sale, purchaser obtains a real right over the goods as property passing, In ‘agreement to sell’: purchaser only holds a personal right against the seller in respect of the contract.

The ‘Goods
“all corporeal moveable except money; and in particular ‘goods’ includes emblements, industrial growing crops and things attached to or forming part of the land which are agreed to be severed before sale or under a contract of sale.”

But there are two should be excluding: the first is incorporeal movables; the other one is heritable property, such as land and building.

Consumer contract is that supplied for private use or consumption.

b) Explain the implied terms in the Sale of Goods Act 1979
Implied Terms of SOGA 1979 which are automatically incorporated into a contract by SOGA 1979. There are four breaches of Section 12, 13, 14 and 15

Section 12– Title
It has two main points
The first one is implied condition which means the seller has, or will have at the time when property in the goods is to be transferred, a right to sell the goods. The second one is implied warranty, it tell us the buyer shall have quiet possession of the goods and that the goods are free of any encumbrance or challenge by a third party (unless disclosed to the buyer when the contract is made)

Section 12 cannot be excluded or restricted by agreement.
See cases
1. Niblett Ltd v Confectioners Materials Co. 1921
2. McDonald VS Provan Ltd 1960

Section 13 – Sale by Description
An implied condition: The goods will correspond to the description. If a description is applied to the goods, it is a sale by description even though the buyer may have inspected the goods. Apply to all sales both by private individuals and by business.

See the Case:
Grant v Australian Knitting Mills 1936

Section 14
Section 14 – ‘Satisfactory Quality
Only apply where goods are sold in the course of a business (the seller is in business). But it doesn’t cover private sales.

We need to know the goods are to be of a standard(S14 (2a))that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all other relevant circumstances. There are factors potentially relevant: S14 (2b)

Fitness for the purpose for which goods of the kind in question are commonly supplied Appearance and finish
Freedom from minor defects
Safety and
Durability
But the buyer should notice that the buyer’s attention is drawn to defects before the contract is made, or the buyer examines the goods before the contract is made, and the examination ought to reveal the defects. Sale by sample, the matter would have been noticed on a reasonable examination of the sample.

Section 14 (3) – Reasonable Fitness for the Purpose
it is said the goods are reasonably fit for a particular purpose applies, and where the seller sells the goods in the course of business. The buyer expresses or by implication makes known to the seller the particular purpose for which the goods are bought.

Unless the circumstances show that
a) The buyer does not rely, or that
b) It is unreasonable for him to rely, on the skill or judgment of the seller.

Section 14 – Some others

If a buyer has special needs, the buyer must make these...
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