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4â Sale of Goods Act 1979, section 13: compliance with description |
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unusual to sell or buy a share in a racehorse. If the owner of one share wants to |
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sell that share, he cannot be subject to an implied condition that he has the right |
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to sell the whole of the goods. His title is limited to a share in them. Equally, |
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the seller may be selling the title owned by a third party rather than, or in add- |
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ition to, any title that he possesses himself. Section 12(3) addresses the situ- |
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ation where the contract provides, or it can be inferred from the circumstances, |
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that the seller should only transfer such title as he or a third party possesses. In |
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such a situation, section 12(4) implies a warranty that all charges and encum- |
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brances known to the seller and not known to the buyer have been disclosed to |
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the buyer before the contract is made. Further, section 12(5) creates an implied |
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warranty that the quiet possession of the buyer will not be disturbed by the |
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seller, the relevant third party or anyone claiming under them otherwise than |
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under a disclosed encumbrance. |
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Q2 Analyse the remit of section 12 and consider whether, in the event of a |
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breach, it is appropriate for the buyer to be able to recover the full contract |
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price of the goods despite the fact that he may have had the use of the goods for |
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some considerable time after purchasing them and before rejecting them. |
4â Sale of Goods Act 1979, section 13: compliance with description
(a)â Ambit of the condition
The implied condition of compliance with description, found in section 13 of the 1979 Act, applies in all contracts for the sale of goods irrespective of whether the seller is a business or a private seller. Thus, liability will arise in a commercial contract if the goods subject to the contract have been misdescribed but, equally, will arise in a private sale when an individual sells an item through the classified advertisements of the local newspaper. However, the available remedy for breach will vary depending whether the buyer is a consumer or a non-consumer for, as mentioned previously, while the consumer buyer will have a right to reject the goods for a breach of section 13, the nonconsumer buyer will be restricted to a claim for damages if the breach is so slight as to render rejection unreasonable.23
Section 13(1) stipulates that when goods are sold by description, there is an implied condition24 that the goods supplied must comply with that description. This raises various issues, in particular, what constitutes a ‘sale by description’ for the purposes of the Act, the relationship between section 13 and the common law regarding misrepresentation and how to identify which descriptive words will attract liability.
23 Sale of Goods Act 1979, s.15A.
24 Ibid. s.13(1) describes it as an implied term, but it is rendered an implied condition in England and Wales by virtue of s.13(1A). In Scotland, the word ‘term’ prevails.
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The implied conditions in sale of goods contracts |
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(b)â What constitutes a ‘sale by description’
It has long been accepted that a sale by description will necessarily occur where the buyer has not seen the goods but is relying on a description of them.25 Thus, it follows that a purchase of ‘future goods’26 or unascertained goods27 must necessarily involve a sale by description, a fact becoming more significant with the rise of sales on the Internet.28 Unascertained goods includes goods sold via catalogues, the Internet, advertisements on the television or simply ordered from a seller without the actual item being identified at the time of sale. The sale of ‘future goods’ encompasses situations in which the item is to be made, to the order of the individual buyer, after the contract has been concluded. This would include personal items such as bespoke tailoring or commercial items such as specially constituted animal feed or purpose-built machinery.
Less clear originally, was the situation if the buyer had, prior to purchase, seen or even examined the actual goods that were to change hands under the contract. Such a sale is a sale of specific goods29 rather than future or unascertained ones and the issue arose as to whether it could it still be a sale by description if a description had been applied at the time of sale. This situation was clarified in Lord Wright’s judgment in Grant v. Australian Knitting Mills,30 which confirmed that there is a sale by description:
even though the buyer is buying something displayed before him on the counter: a thing is sold by description, though it is specific, so long as it is sold not merely as the specific thing but as a thing corresponding to a description.31
On that basis, the Court of Appeal held that the plaintiff was entitled to succeed in Beale v. Taylor32 even though he had seen and examined the car in question, because a description had also been applied to it in an advertisement. The car had been described as a ‘1961 Herald’ when, unknown to both buyer and seller, the car was a ‘cut and shut’ in which two halves of two different vehicles had been welded together with only the back half of the vehicle dating from 1961, the front half being from an earlier model.33 This wider approach has been reinforced by the current section 13(3), which makes clear that:
25Varley v. Whipp [1900] 1 QB 513.
26Defined in Sale of Goods Act 1979, s.61 as being ‘goods to be manufactured or acquired by the seller after the making of the contract of sale’.
27Goods are ‘unascertained’ if the actual goods that will pass from seller to buyer under the terms of the contract cannot be identified at the time that the contract is made. When the goods are ultimately identified they are reclassified as ‘ascertained goods’.
28For a discussion of Internet sales and what information must be provided to the buyer see Part 2 Chapter 5.
29Defined in Sale of Goods Act 1979, s.61 as being ‘goods identified and agreed upon at the time a contract of sale is made’.
30 [1936] AC 85.â 31â Ibid. 100.â 32â [1967] 1 WLR 1193.
33The court’s approach in this case may have been affected by the fact that, as the sale was a private sale, there was no opportunity for the buyer to bring a case under Sale of Goods Act 1979, s.14 (merchantable quality), which might have been a more appropriate action.
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4â Sale of Goods Act 1979, section 13: compliance with description |
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A sale of goods is not prevented from being a sale by description by reason only that, the goods being exposed for sale or hire, are selected by the buyer.
While the buyer may not have seen the actual item that he will acquire under the contract, he may have seen and examined a sample of the product. Section 13(2) makes clear that this does not affect the requirement that the goods actually provided under the contract must comply with any description applied to them irrespective of whether they correspond with the sample that the buyer has seen. It provides that:
If the sale is by sample as well as by description it is not sufficient that the bulk of the goods correspond with the sample if the goods do not also correspond with the description.34
It seems, therefore, that virtually all contracts for the sale of goods can fall within section 13(1) as long as a relevant description has been applied and the sale is not one in which the buyer has stipulated that this item and only this item will suffice, irrespective of any description applied to it. A further gloss has been put on this, however, by the judgment of Nourse LJ in the decision of Harlingdon & Leinster Enterprises Ltd v. Christopher Hull Fine Art Ltd,35 in which he opined that:
there cannot be a contract for the sale of goods by description where it is not within the reasonable contemplation of the parties that the buyer is relying on the description.36
Thus, in the absence of reliance, a description might be included as part of the pre-contractual negotiations but not be classed as a sale by description for the purposes of section 13 as long as the parties did not intend the description to become a term of the contract. The Harlingdon case involved the sale of oil paintings attributed to the German expressionist artist, Gabriele Münter, and described as such in a catalogue. The defendant seller was not an expert in German expressionist painting, a fact he made clear to the plaintiff buyer, who was an expert. The Court of Appeal found for the defendant on the basis that there was no common intention that the description be relied upon and, indeed, the declaration by the seller of his lack of expertise confirmed that view.37 The description was not intended by the parties to become part of the contract and, as such, was not actionable.
It is important to understand the relationship between section 13, express terms of the contract and contractual misrepresentation. Section 13, being statutory in origin, will, of course, take precedence over any contract term or
34 |
Idid. s.15, which deals with sales by sample, is considered in detail below. |
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[1991] 1 QB 564.â 36â Ibid. 574. |
37Contrast the decision of Ojjeh v. Waller; Ojjeh v. Galerie Moderne (unreported, 1998) concerning the sale of some Lalique glass in which the seller was the expert and it was intended that the description would be relied upon. The seller was held liable under s.13.
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The implied conditions in sale of goods contracts |
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misrepresentation which may conflict with it. That said, the express terms of a contract may include a descriptive term, which, if sufficiently significant to be classed as a condition, has the potential to give rise to a situation whereby the implied condition under section 13 involves compliance with an express condition of the contract. Equally however, express contractual terms that are descriptive in nature but are not classed as ‘descriptions’ for the purposes of section 13 may still give rise to liability as a contractual warranty or innominate term giving the buyer a right to a remedy, dependent upon the severity and impact of the breach.38 Naturally, this liability would be in addition to any liability that might arise under section 13 in respect of other descriptions within the contract. Further, it is important to note that section 13 does not affect the common law concept39 of misrepresentation. An inaccurate description used in pre-contractual negotiations and which does not subsequently become a contractual term can still attract liability as a misrepresentation, with the relevant remedy being dependent on whether it was innocent, negligent or fraudulent.
Fundamental to this discussion of what constitutes a ‘sale by description’ is an analysis of the criteria by which a contractual description will be judged to determine whether it falls within the ambit of section 13. A useful dicta in this regard is that of Lord Diplock in Ashington Piggeries v. Christopher Hill Ltd,40 which focused on the issue of identification:
The ‘description’ … is, in my view, confined to those words in the contract which were intended by the parties to identify the kind of goods which were to be supplied … the test is whether the buyer could fairly and reasonably refuse to accept the physical goods proffered to him on the ground that their failure to correspond with what was said about them makes them goods of a different kind from those he had agreed to buy. The key to s.13 is identification.41
The term ‘identification’ can support two interpretations, the wider one encompassing, for example, words that allow the location of the specific item to be identified, and a narrower approach which is limited to words that identify a specific factor or characteristic of the goods, such as size, composition or age. The latter approach is to be preferred, as demonstrated in the House of Lords’ decision in Reardon Smith Lines v. Hansen Tangen,42 in which it was held that descriptive words identifying the shipyard in which a ship was to be built did not fall within section 13 as they were of no real concern to the contracting parties, who were more concerned with the specific attributes of the vessel. This case also reinforces the distinction between contractual descriptions giving rise to section 13 liability and contractual descriptions that give rise to remedies as a breach of warranty or innominate term.
Q3 Analyse the meaning and ambit of the phrase ‘sale by description’.
38Cehave NV v. Bremer Handelgeselschaft (The Hansa Nord) [1976] QB 44.
39Taylor v. Combined Buyers Ltd [1924] NZLR 627.
40 [1972] AC 441.â 41â Ibid. 503.â 42â [1976] 1 WLR 989.
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4â Sale of Goods Act 1979, section 13: compliance with description |
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(c)â Compliance with description
Compliance with section 13 requires complete compliance with the contract description. Thus, in Arcos Ltd v. Ronaasen & Son,43 the seller was held liable for the sale of wooden staves to be used for making barrels. The contract stipulated that the staves were to be half an inch thick but the majority of them exceeded that size, although they were still found to be merchantable under the contract description. Lord Atkin, in the House of Lords, upholding the right of the buyer to reject the goods under section 13, said:
If the written contract specifies conditions of weight, measurement and the like, these conditions must be complied with. A ton does not mean about a ton, or a yard about a yard. Still less when you descend to minute measurements does ½ inch mean about ½ inch. If the seller wants a margin he must and in my experience does stipulate for it.44
This is not, of course, to undermine the de minimus rule. The requirement for exact compliance may, of itself, lead to unsatisfactory decisions such as occurred in Re Moore & Co. Ltd v. Landauer & Co. Ltd,45 a case now criticised as being excessively technical,46 in which the buyer was allowed to reject 3,000 cans of fruit on the basis that they were packed in cartons of 24 tins each instead of the 30 tins stipulated in the contract, despite the volume of the goods and their value being unchanged.
A breach of section 13, being a breach of condition, allows the buyer to reject the goods and recover the full contract price, although this remedy has been limited by the impact of section 15A, which restricts the remedy available to a non-consumer buyer to damages where the breach is so slight as to render rejection unreasonable. Equally, while section 6 of the Unfair Contract Terms Act 1977 prevents the exclusion or limitation of section 13 liability to a buyer dealing as a consumer,47 such exclusion or limitation is permissible against a non-consumer buyer to the extent that it is reasonable.48
(d)â Relationship between sections 13 and 14
In practice, liability under sections 13 and 14 of the 1979 Act may arise out of the same set of circumstances and thus it would be relatively easy to assume that the two are closely and inextricably linked. However, while the link may exist in situations where the description applied relates directly to the quality or fitness for purpose of the goods, it would be wrong to assume that they do not exist independently of each other. The example usually quoted of a direct link between the two is the New Zealand case of Cotter v. Luckie,49 which
43 [1933] AC 470.â 44â Ibid. 479.â 45â [1921] 2 KB 519.
46See Lord Wilberforce in Reardon Smith Lines, above n. 42.
47Unfair Contract Terms Act 1977, s.6(2).
48 Ibid. s.6(3).â 49â [1918] NZLR 811.
90 The implied conditions in sale of goods contracts
related to the sale of a bull described as being a ‘pure bred polled Angus bull’. Both seller and buyer knew that the animal was being bought for breeding purposes to produce stock of the same quality. In the event, the bull was unable to breed. The court held it was a sale by description in which the description related to the quality of the animal and its fitness for purpose as a breeding bull, for otherwise the description was meaningless. Hence, it is clearly possible to include a description in the contract which relates directly to the quality and fitness for purpose of the goods such that a breach of the provision could give rise both to an action under section 13 for sale by description and under section 14 for breach of satisfactory quality or fitness for purpose or both, dependent on the facts. However, it is worth noting that the court will not infer statements about quality into contractual descriptions. Thus, in the decision of Ashington Piggeries Ltd v. Christopher Hill Ltd,50 animal feed for mink was sold as being ‘herring meal’. In the event, it was contaminated with a toxin that was fatal to mink but the House of Lords held that it was still properly described as being ‘herring meal’ as the statement made no inference as to the quality or nature of the goods.
However, each of the sections is capable of existing independently and liability can arise under the one without the other. Thus, an item can match its description perfectly and yet not be of a satisfactory quality, as happened in the Ashington case; and, equally, an item may be perfectly satisfactory and fit for its purpose and yet not be as described. Thus, for example, a car sold as an ‘1800cc’ vehicle will be perfectly satisfactory and fit for the purpose of being used as car despite the fact that the engine capacity might be different. Equally, an item might be of appropriate quality and function perfectly well despite being manufactured by a different manufacturer from the one quoted in any description. In either of these situations, the buyer will have a valid claim for a breach of either section 13 or section 14, as appropriate, without a claim arising in respect of the other.
Two other situations can arise in which the buyer might want to take an action under section 13 for a breach of description where, on the facts, a claim under section 14 might seem more appropriate. The first is when the seller is a private seller and is not selling ‘in the course of a business’. As mentioned previously, section 14 only applies when the seller is selling in the course of a business and, as such, a claim about the goods not being of a satisfactory quality or fit for their intended purpose cannot be taken against a private seller and the buyer must resort to other possibilities, such as section 13. This is most graphically demonstrated in the case of Beale v. Taylor, referred to previously, concerning the sale of the ‘cut and shut’ car described as being a ‘1961 Herald’, when only one half of the car dated from that year. A claim regarding the quality and fitness for purpose of the vehicle would have made more sense but, as the car was bought in a private sale, that option was not open to the buyer. It is entirely
50 [1972] AC 441.