Law of Sale of Goods (Part I)

The Sale of Goods Act performs several functions. The Act lays down a small number of compulsory legal rules, but these restrictions are minimal. The majority of the Act is concerned with a vast amount of presumptions and implied terms, which aim to reflect the commercial expectations in the most commonly agreed sales contracts. In the absence of contrary agreement these terms will govern a contract within the Act's remit.

for the contract to be valid and not have any future issues or breaches of contract. Contracts must

However, “Although warranties solve the problem of the seller having better information than the buyer, they also create a form of moral hazard” (4 Pindyck/Rubinfield, 7e, Prentice

(4) Where the term excludes or restricts any relevant liability if some condition is not complied with, whether it was reasonable at the time of the contract to expect that compliance with that condition would be practicable.

“…the ownership of the goods shall remain with the Seller which reserves the right to dispose of the goods until payment in full for all goods supplied has been received by it or until such time as the buyer sells the goods to its customers by way of bona fide sale at full market value.”

The issue of categorising terms into ‘condition’ and ‘warranty’ primarily concerned with the decision as to whether rescission is available. The Sale of Goods Act 1893 categorised terms for who’s breach rescission is available as “conditions” and where only damages are

The buyer 's obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product.

Repudiation involves the bringing to an end the contract. This remedy is only available for a breach of condition as opposed to breach of warranty:

A national unfair contract terms law which covers standard form consumer and small business contracts

Section 15 applies to contracts for the sale of goods by sample. This is where a buyer is shown a sample of a unit or a batch of units and then orders a large quantity of those goods. Section 15 simply includes two terms into such a contract. Firstly, that the bulk of the goods will correspond with the quality of the shown sample. Secondly, to a similar effect, that the goods will be free from any defects which would not have been apparent on an inspection of the sample.

Conditions and warranties are types of terms applicable within a contract. When a breach of warranty occurs the consequences and remedies available to the innocent parties will differ than if a condition is breached. The Sale of Goods Act 1979 designates certain terms as warranties, breach of which does not allow the buyer to treat the contract as dis-charged, but merely to sue for damages, which is applicable to non-insurance contracts only.

.1 Explain the importance of the essential elements required for the formation of a valid contract in the following situations: P1.1

Article 1481. In the contract of sale of goods by description or by sample, the contract may be rescinded if the bulk of the goods

There are several remedies provided under the Sale of Goods Act for breach of contract of sales of goods:

When a contract has been broken by the party who suffers by such breach1is entitled to receive from the party who has broken the , contract compensation for any loss or damage caused to him by whch the natural course of things from such breach or which the parties knew when they made the contract ,to be likely to result from breach of it , such compensation is not to be given by the any remote loss or the damage sustained by the reason of breach.