SALE OF GOODS – STATUTORY TERMS
Sale by description, satisfactory quality and fitness for purpose (SGA 1979 and CRA 2015)
Statutory Terms in the SOG’s – Handbook
TERM SGA 1979 CRA 2015
Right to Sell s.12(1) s.17(1)(b)
Freedom from charge s.12(2)(a) s.17(2)(a) and s.17(2)
or encumbrance (b)
Quiet possession s.12(2)(b) s.17(2)(c)
Correspondence to s.13(1) s.11(1)
description
Satisfactory quality s.14(2) s.9(1)
Fitness for Purpose s.14(3) s.10(3)
Correspondence with s.15(2) s.13(2)
sample
Pre-contract N/A s.12(2)
information
Goods to match a N/A s.14(2)
model seen or
examined
The CRA applies, as per s.5(1), to sales contracts where ownership passes from
trader to consumer.
The SGA applies, as per s.2(1), to contracts of sale where property passes from seller
to buyer.
Some problems can be solved by the Consumer Rights Act alone, some by the Sale of
Goods Act alone, and some problems require consideration of both Acts.
SGA 1979:
Implied Terms as to Title:
Right to sell –
s.12:
“(1) In a contract of sale, other than one to which subsection (3) below applies, there is an implied
[term] on the part of the seller that in the case of a sale he has a right to sell the goods, and in the
case of an agreement to sell he will have such a right at the time when the property is to pass.”
, (2) In a contract of sale, other than one to which subsection (3) below applies, there is also an
implied [term] that—
(a) the goods are free, and will remain free until the time when the property is to pass, from any
charge or encumbrance not disclosed or known to the buyer before the contract is made, and
(b) the buyer will enjoy quiet possession of the goods except so far as it may be disturbed by the
owner or other person entitled to the benefit of any charge or encumbrance so disclosed or known.”
(3) This subsection applies to a contract of sale in the case of which there appears from the contract
or is to be inferred from its circumstances an intention that the seller should transfer only such title
as he or a third person may have.”
Section 12(1) implies a condition on the part of the seller that they have a right to sell the goods or
where there is an agreement to sell (for example, a conditional sale, see s.2(5)) that the seller will
have the right to sell the goods when property is to pass.
Rowland v Divall [1923] 2 KB 500 --- The claimant, a car dealer, bought a car from the defendant for
£334. He painted the car and put it in his showroom and sold it to a customer for £400. Two months
later the car was impounded by the police as it had been stolen. It was then returned to the original
owner. Both the claimant and defendant were unaware that the car had been stolen. The claimant
returned the £400 to the customer and brought a claim against the defendant under the Sale of
Goods Act.
Held: The defendant did not have the right to sell the goods as he did not obtain good title from the
thief. Ownership remained with the original owner. The defendant had 2 months use of the car
which he did not have to pay for and the claimant was not entitled to any compensation for the
work carried out on the car.
Butterworth v Kingsway Motors [1954] 1 WLR 1286 --- a hire purchase finance company let a car to A
on hire purchase. A mistakenly, thought that she had ‘a right to sell the car’ provided she continued
to pay the hire purchase installments, and she purportedly to sell it to B. The car passed through
several hands and finally the defendant sold it to the claimant for ₤ 1,275. After the claimant had
used the car for nearly a year, he received a notification from the finance company claiming the
delivery up to them of the vehicle. The plaintiff therefore claimed from the defendant the whole
purchase price for the breach of s12(1). Within a week however, A paid the final installment, so the
title passed to her and this fed the defective titles of all the subsequent purchasers. The market had
in fact dropped and the car by the time worth only ₤ 800; thus the claimant made a profit of ₤475.
Niblett v Confectioners Materials Co Ltd [1921] 3 KB 251 --- the seller sold to Buyer 1000 cases of
condensed milk in tins which bore the label of Nestles Condensed Milk Co. Nestles complained and
threatened with legal action for this infringement. The tins were detained in customs and buyer was
compelled to remove the labels in order to secure the release of the goods. The tins then could be
sold at a reduced price. The court of Appeal held that the buyer was entitled to damages for breach
of s12(1) by the seller.
Karflex Ltd v Poole [1933] 2 KB 251 --- Hire purchase agreement. Paid for car monthly, fell into
arrears with monthly payments, plaintiff re-took possession of motor car. Plaintiffs were not entitled
to recover any damages and the defendant was entitled to recover the amount already paid by him.
Freedom from Encumbrances and Quiet Possession
Sale by description, satisfactory quality and fitness for purpose (SGA 1979 and CRA 2015)
Statutory Terms in the SOG’s – Handbook
TERM SGA 1979 CRA 2015
Right to Sell s.12(1) s.17(1)(b)
Freedom from charge s.12(2)(a) s.17(2)(a) and s.17(2)
or encumbrance (b)
Quiet possession s.12(2)(b) s.17(2)(c)
Correspondence to s.13(1) s.11(1)
description
Satisfactory quality s.14(2) s.9(1)
Fitness for Purpose s.14(3) s.10(3)
Correspondence with s.15(2) s.13(2)
sample
Pre-contract N/A s.12(2)
information
Goods to match a N/A s.14(2)
model seen or
examined
The CRA applies, as per s.5(1), to sales contracts where ownership passes from
trader to consumer.
The SGA applies, as per s.2(1), to contracts of sale where property passes from seller
to buyer.
Some problems can be solved by the Consumer Rights Act alone, some by the Sale of
Goods Act alone, and some problems require consideration of both Acts.
SGA 1979:
Implied Terms as to Title:
Right to sell –
s.12:
“(1) In a contract of sale, other than one to which subsection (3) below applies, there is an implied
[term] on the part of the seller that in the case of a sale he has a right to sell the goods, and in the
case of an agreement to sell he will have such a right at the time when the property is to pass.”
, (2) In a contract of sale, other than one to which subsection (3) below applies, there is also an
implied [term] that—
(a) the goods are free, and will remain free until the time when the property is to pass, from any
charge or encumbrance not disclosed or known to the buyer before the contract is made, and
(b) the buyer will enjoy quiet possession of the goods except so far as it may be disturbed by the
owner or other person entitled to the benefit of any charge or encumbrance so disclosed or known.”
(3) This subsection applies to a contract of sale in the case of which there appears from the contract
or is to be inferred from its circumstances an intention that the seller should transfer only such title
as he or a third person may have.”
Section 12(1) implies a condition on the part of the seller that they have a right to sell the goods or
where there is an agreement to sell (for example, a conditional sale, see s.2(5)) that the seller will
have the right to sell the goods when property is to pass.
Rowland v Divall [1923] 2 KB 500 --- The claimant, a car dealer, bought a car from the defendant for
£334. He painted the car and put it in his showroom and sold it to a customer for £400. Two months
later the car was impounded by the police as it had been stolen. It was then returned to the original
owner. Both the claimant and defendant were unaware that the car had been stolen. The claimant
returned the £400 to the customer and brought a claim against the defendant under the Sale of
Goods Act.
Held: The defendant did not have the right to sell the goods as he did not obtain good title from the
thief. Ownership remained with the original owner. The defendant had 2 months use of the car
which he did not have to pay for and the claimant was not entitled to any compensation for the
work carried out on the car.
Butterworth v Kingsway Motors [1954] 1 WLR 1286 --- a hire purchase finance company let a car to A
on hire purchase. A mistakenly, thought that she had ‘a right to sell the car’ provided she continued
to pay the hire purchase installments, and she purportedly to sell it to B. The car passed through
several hands and finally the defendant sold it to the claimant for ₤ 1,275. After the claimant had
used the car for nearly a year, he received a notification from the finance company claiming the
delivery up to them of the vehicle. The plaintiff therefore claimed from the defendant the whole
purchase price for the breach of s12(1). Within a week however, A paid the final installment, so the
title passed to her and this fed the defective titles of all the subsequent purchasers. The market had
in fact dropped and the car by the time worth only ₤ 800; thus the claimant made a profit of ₤475.
Niblett v Confectioners Materials Co Ltd [1921] 3 KB 251 --- the seller sold to Buyer 1000 cases of
condensed milk in tins which bore the label of Nestles Condensed Milk Co. Nestles complained and
threatened with legal action for this infringement. The tins were detained in customs and buyer was
compelled to remove the labels in order to secure the release of the goods. The tins then could be
sold at a reduced price. The court of Appeal held that the buyer was entitled to damages for breach
of s12(1) by the seller.
Karflex Ltd v Poole [1933] 2 KB 251 --- Hire purchase agreement. Paid for car monthly, fell into
arrears with monthly payments, plaintiff re-took possession of motor car. Plaintiffs were not entitled
to recover any damages and the defendant was entitled to recover the amount already paid by him.
Freedom from Encumbrances and Quiet Possession
