Sale of goods and supply of services
What is the relevant legislation?
- Sale of Goods Act 1979
- Supply of Goods and Services Act 1982
- Consumer Rights Act 2015
- Unfair Contract Terms Act 1977
The Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982 are the principal legislation when both buyer and seller are businesses.
Although in business to business contracts the parties are generally free to enter into contracts on whatever terms they see fit, consideration must be given to terms that are implied by statute.
Sale of Goods Act 1979
In relation to the supply of goods, sections 12 to 15 of Act the imply the following terms:
- Section 12 – Title
The seller must have good title to the goods, meaning he must have ownership and the right to sell the goods on.
- Section 13 – Description
The seller must sell goods corresponding with the description given. For example, if a product is advertised as a 2019 model but is in fact a 2015 model, it will not correspond with description.
- Section 14(2) – Quality
The Act sets out a list of criteria to be met for goods to be of satisfactory quality, such as durability, appearance and finish. The goods will be of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory.
- Section 14(3) – Fitness for purpose
The seller will be required to ensure that goods are reasonably fit for a specific purpose if that purpose has been brought to the attention of the seller by the buyer.
- Section 15 – Sale by sample
The seller must ensure the goods are the same condition as shown to the buyer from a sample.
Supply of Goods and Services Act 1982
This Act applies to contracts not only for goods but also for services provided. For example, in the supply of products, the seller may also be responsible for the labour necessary in the installation of the product. This Act implies very similar terms in a contract as the Sale of Goods Act 1979 but with the extra proviso that the person supplying the service must meet the standard of a reasonably competent professional, exercising reasonable care and skill. Where no price or charge has been agreed, any charge must be reasonable in the circumstances.
Consumer Rights Act 2015
This Act applies to business to consumer transactions. A consumer is an individual acting – for these purposes – wholly or mainly outside the individual’s trade, business or profession. The Act provides extensive protection to consumers, mirroring many provisions such as fitness for purpose and satisfactory quality with a right to reject faulty goods. The Act also deals with digital content such as digital software and apps.