amendments in the sale of goods act 1979
following the implementation of directive 1999/44/ec
in the united kingdom
Dionysios P. Flambouras*
I. Introductory remarks
Directive 1999/44/EC of the European Parliament and of the Council of
25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees1 (referred to below as ‘the Directive’) has been implemented in the United Kingdom by virtue of the Sale and Supply of Goods
to Consumers Regulations 20022 (referred to below collectively as ‘the
Regulations’ and each one as a ‘Regulation’)3.
* Adjunct Lecturer of Civil Law, Department of Economics, University of Athens; Attorney-at-Law, Solicitor in England & Wales; LL.M. (Bristol), M. Stud. (Oxford), Dr Jur.
(Athens). Member, M&P Bernitsas Law Offices, Athens, Greece.
This note is an extended written version of an oral presentation made under the same title
in English by the writer for the purposes of an international seminar under the title “The
new law of sale”. The international seminar took place in the Law School of Athens on 19
and 20 October 2007, under the auspices of Professor Dr Harm Peter Westermann (University of Tübingen, Germany) and Prof. Dr Panagiotis Papanikolaou (Law School of Athens,
Greece). The writer wishes to thank Prof. Papanikolaou and also Dr Antonis Karabatzos
(Lecturer of Civil Law, University of Athens) for their kindly inviting him to participate in
the international seminar with his presentation, as well as the productive discussions during the drafting of the study.
1 OJ L 171/12, 1999.
Statutory Instrument 2002 no. 3045.
3 There was considerable criticism as to whether the Directive should be implemented
or not in the United Kingdom. See A. Karabatzos in P.A. Papanikolaou, Kl. Roussos, K.
2 RHDI 64 (2011)
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The Regulations made amendments to existing legislation on the sale
and supply of goods and unfair terms in order to provide additional remedies to consumers in certain circumstances. In particular following the
implementation of the Directive in the United Kingdom a few important
statutory instruments have been amended.
More specifically:
• Regulation 1 sets the territorial scope of the Regulations and the
exact time that they come into force (that is 31 March 2003);
• Regulation 2 provides the meaning of various definitions used
throughout the Regulations (and therefore throughout the amended
statutory instruments) (operative provision);
• Regulations 3, 4, 5 and 6 include amendments in or inclusions to
the Sale of Goods Act 1979 (referred to below as ‘the SGA’);
• Regulations 7, 8, 9 and 10 amend the Supply of Goods and Services
Act 1982;
• Regulation 13 amends the Supply of Goods (Implied Terms) Act
1973;
• Regulation 14 amends Unfair Contract terms Act 1977; and
• Regulation 15 deals with consumer guarantees (operative provision).
The purpose of this paper is to present in brief the amendments that the
implementation of the Directive has brought into the SGA. Each set of
amendments in the SGA will be examined with reference to the relevant
article of the Directive.
II. SGA
A. General information – scope of application
The SGA has replaced the Sale of Goods Act 1893 and has been previously amended by virtue of the Sale of Goods (Amendment) Act 1995.
The SGA applies to all contracts of sale made after 1 January 1894 (section 1(2) SGA) and further provides that a “contract of sale of goods is a
contract by which the seller transfers or agrees to transfer the property in
goods to the buyer for a money consideration, called the price” (section
2(1) SGA)4.
Christodoulou & Ant. Karabatzos, The new law of seller’s liability (Athens/Komotini 2003)
244 et seq. [in Greek].
4 The SGA further eliminates the meaning of the contract of sale by providing that contract of sale includes an agreement to sell as well as a sale (s. 61(1) SGA).
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B. Existing remedies of the buyer for breach of contract
(other than non-delivery of goods) under the SGA
In English law the seller may deliver goods to the buyer, but may still
have breached a contractual term. The remedy(-ies) to be granted under
the SGA (prior to the implementation of the Directive) depends to a large
part on the nature of the term which has been breached by the seller (that
is whether the breached term is a condition, a warranty or an intermediate-innominate term)5.
In particular:
• If the seller’s breach of contract is a breach of condition (or commits a serious breach of an intermediate term) and therefore goes to
the root of the contract, the seller is entitled to reject the goods and
repudiate the contract6.
5 The classification of a term as a condition depends on the contractual will of the parties. On this basis the parties normally characterize a term as a condition. However, it is
more difficult for the buyer to reject the goods and terminate the contract where the term,
which has been breached by the seller, is not a condition but an intermediate (innominate)
term, breach of which may or may not entitle the innocent party to treat the contract as
discharged, in accordance with the nature and consequences of breach. In such case the
buyer will only be entitled to terminate further performance of the contract where the consequences of the breach are sufficiently serious; that is to say, the buyer has been deprived
of substantially the whole benefit which it was intended that he would obtain from the performance of the contract (on the above classification, Hong Kong Fir Shipping Co. Ltd v.
Kawasaki Kisen Kaisha Ltd [1962] 2 Q.B. 26). The above is a test for the buyer to satisfy. It
is noted that in the SGA certain obligations of the sellers are expressly classified as conditions. On this basis implied terms relating to title to sell (s. 12 SGA), correspondence with
description (s. 13 SGA) and sample (s. 15 SGA), satisfactory quality (s. 14(2) SGA) and
fitness for purpose (s. 14(3) SGA) are all declared by the SGA to be conditions (ss. 12(5A),
13(1A), 14(6) and 15(3) SGA); accordingly any breach of the above obligations entitles the
buyer (subject to s. 15A SGA) to reject the goods and terminate further performance of the
contract (as to the implied terms see also IV.D supra). A limit to the buyer’s right to reject
the goods in the above circumstances is set by s. 15A SGA, which states that, where the
buyer does not deal as a consumer and has established the existence of a right to reject by
virtue of a breach by the seller of one of the implied terms contained in ss. 13-15 SGA but
the consequences of the breach are so ‘slight’ that it would be unreasonable for him to reject
the goods, then the buyer is confined to a remedy in damages and cannot reject the goods.
It is for the seller though to show that the breach is so slight that it would be unreasonable
for the buyer to reject the goods. See E. McKendrick in idem (ed.), Sale of goods (London
2000) 379 et seq., 407 et seq.
6 P.S. Atiyah, J.N. Adams & H. MacQueen, The sale of goods (10th edn, London 2001)
78 where the following is stated: “a condition is a term which, without being the fundamental obligation imposed by the contract, is still of such vital importance that it goes to the root
of the transaction. The importance of a condition in contracts for the sale of goods is that
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•
If the seller’s breach of contract is a breach of warranty (or where the
buyer elects (or is compelled)7 to treat any breach of a condition on
the part of the seller as a breach of warranty) the buyer is entitled to:
(a) set up against the seller the breach of warranty in diminution or
extinction of the price (SGA s. 53(1)(a)); or
(b) maintain an action against the seller for damages for the breach
of warranty (SGA s. 53(1)(b))8.
• The seller may request from the court to order specific performance
(SGA s. 52)9.
The remedies listed above (hereinafter referred to as ‘the existing remedies’)
remain available to all buyers (consumers /non-consumers) after implementation of the Directive10.
its breach, if committed by the seller, may give the buyer the right to reject the goods completely and to decline to pay the price, or if he has already paid it, to recover it”.
7 If the buyer elects to accept the goods, he loses the right to reject them. In addition,
the buyer may in certain circumstances also be deemed to have accepted the goods and thus
lost his right of rejection or termination (ss. 11(4) and 34-35 SGA). The buyer is deemed
to have accepted the goods in three situations: (a) if he expressly intimates his acceptance;
(b) if he does some act inconsistent with the seller’s ownership of the goods (for instance
any act of the buyer treating the goods as his own); or (c) if, after the lapse of a reasonable
time, the buyer retains the goods without indicating that he is rejecting them (s. 35 SGA).
However, the buyer is not to be deemed to have accepted the goods by express intimidation
or by doing an act inconsistent with the seller’s ownership unless he has first had a reasonable opportunity of examining them to ascertain whether they are in conformity with the
contract (SAG s. 35(2)). With respect to the issue of acceptance (or deemed acceptance) see
M. Bridge, The sale of goods (Oxford 1998) 167 et seq.
8 The measure of damages for breach of warranty is the estimated loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty (s. 53(2) SGA).
9 52(1) SGA provides: “If any action for breach of contract to deliver specific or ascertained goods the court may, if it thinks fit on the plaintiff’s application, by its judgment or
decree direct that the contract shall be performed specifically, without giving the defendant
the option of retaining the goods on payment of damages”. It is noted though that specific performance of sale contract is only very rarely awarded in common law jurisdictions.
Since specific performance is an equitable remedy it will normally only be granted if there
is no other adequate remedy available (for instance it will not be awarded if damages would
provide a sufficient remedy (Co-operative Insurance Society v Argyll Stores (Holdings) Ltd
[1998] AC 1, 11; Re Wait [1927] 1 Ch. 606, 630 which held that: “Courts of equity did not
decree specific performance in contracts for the sale of commodities which would be ordinarily obtained in the market where damages were a sufficient remedy”. On this basis specific performance could only be granted to compel sellers to transfer rare or unique items
and no order would be made if the goods were of a very ordinary description and could be
obtained elsewhere. On this issue see D.R. Harris, Benjamin’s sale of goods (by Guest and
others) (London 1997) 966 et seq., in particular §17-092.
10 R. Bradgate & C. Twigg-Flesner, Blackstone’s guide to consumer sales and associated guarantees (Oxford 2003) 106.
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III. Scope of application of the amendments in the SGA
Any amendment made in the SGA under the relevant Regulations only
applies:
(a) if the buyer ‘deals as consumer’ (with respect to England, Wales
and Northern Ireland); or
(b) “if a contract of sale is a consumer contract” (with respect to Scotland).
For the purposes of the SGA:
• the buyer deals as a ‘consumer’ if: (a) he does not make the contract
in the course of business; and (b) the seller makes the contract in the
course of a business;
• ‘consumer contract’ means a contract where the buyer deals (and
the seller does not deal) as a consumer11.
IV. Article 3 – consumer’s additional rights
A. General remarks
Regulation 5 has added a new Part 5A titled ‘Additional rights of buyer
in consumer cases’ in the SGA. This Part 5A consists of section 48A
(Introductory), 48B (Repair or replacement of the goods), 48C (Reduction
of purchase price or rescission of contract), 48D (Relation to the remedies
etc), 48E (Powers of the court) and 48(F) (Conformity with the contract).
Section 48A provides that:
(i) if the buyer deals as a consumer (in Scotland, if there is a consumer
contract in which the buyer is a consumer); and
(ii) the goods do not conform to the contract of sale at the time of delivery12,
11 Definition used in s. 25 Unfair Contract Terms Act 1977. This definition of consumer
is more ‘wide’ than the definition provided in the Directive; however, since the Directive allows for derogations from its provisions to the extent that such derogations promote a higher level of consumer protection (Directive Art. 8(2)) the retention of the “in the course of
business” formula is allowed: Bradgate & Twigg-Flesner, supra note, 34. It is further noted
that for the purposes of the SGA the burden of proving that a contract is not to be regarded
as a consumer contract shall lie on the seller (section 61(1) SGA).
12 Prior to the implementation of the Directive, English law required goods to conform
to the contract at the time when risk passed from seller to buyer (normally at the same time
as the transfer of property (VI infra). D. Flambouras, The allocation and the transfer of
risk in the contract of sale of goods – Comparative review (Greek, English, American law
and the Vienna Convention for the international sale of goods) (Athens/Komotini 2007) 83
(with further references to legal doctrine and case law in note 138) [in Greek].
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then the buyer (the consumer) is entitled to the following additional
remedies:
(a) to require the seller to repair or replace the goods (under section
48B; see IV.E.1 supra); or
(b) to require the seller to reduce the purchase price of the goods to
the buyer by an appropriate amount (under section 48C; see IV.E.2
supra); or
(c) to rescind the contract with regard to the goods in question (under
section 48C; see IV.E.2 supra).
The remedies set out in items (a)–(c) above (hereinafter collectively
referred to as ‘the additional remedies’ and each an ‘additional remedy’)
are granted to the consumer in addition to the existing remedies (II.B
supra). Consumers therefore continue to be entitled to rights to reject and
terminate the contract, claim damages and seek specific performance of
the contract even after the implementation of the Directive. Since this provision gives consumers additional rights not available under the Directive,
it is permitted by EC law13.
B. Test for non-conformity
The general requirement in article 2(1) of the Directive that the seller
must deliver to the buyer goods which are in conformity with the contract
has not been implemented in the SGA. The conformity test, allowing the
buyer to exercise the additional remedies, is determined by reference to
the existing provisions of the SGA.
In particular, s. 48F SGA provides that goods do not conform to a contract of sale if there is, in relation to the goods, a breach of:
(a) an express term of the contract; or
(b) a term implied by sections 13, 14 and 15 of the SGA.
In particular certain terms are implied into the contract of sale by the
SGA and also where appropriate in the Supply of Goods and Services
Act 1982. These implied terms are the following (hereinafter collectively
referred to as ‘the implied terms’ and each ‘an implied term’):
(a) where there is a sale of goods by description [there is an implied term]
that the goods will correspond with their description (s. 13(1) SGA);
(b) where the seller sells goods in the course of business [there is an
implied term] that the goods are of satisfactory quality (s. 14(2)
13 Bradgate & Twigg-Flesner, supra note 10, 116. However, it has been suggested that
retaining the existing SGA remedial regime alongside the new regime derived from the Directive creates a number of difficulties, for instance resulting in two sets of apparently similar remedies existing in parallel: cf. Bradgate & Twigg-Flessner, supra note 10, 123.
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SGA) and fit for the purposes for which the goods are commonly
supplied or normally used (s. 14(2B SGA);
(c) in the case of a contract of sale by sample, there is an implied term that
the bulk of the goods will correspond with the sample (s. 13(2) SGA)14.
If the seller is liable for breach of any implied term of the contract, then
he is liable for goods which do not conform to the contract (SGA s. 48(F))
and the consumer is entitled to the additional remedies (IV.E supra).
As mentioned, no attempt has been made to implement the general conformity requirement in article 2(1) of the Directive. The assumption seems to
have been that the implied terms (as modified to implement the specific provisions of article 2 of the Directive (V infra)) cover the conformity requirement included in article 2(1) of the Directive. However, this approach has
been criticised since there are differences between the Directive’s and the
English domestic provisions (implied terms), which may raise doubts as to
the whether the Directive has been properly implemented15.
C. Presumption of non-conformity
Goods which do not conform to the contract of sale at any time within
the period of six months starting with the date on which the goods were
delivered to the buyer must be taken not to have so conformed at that date
(s. 48A(3) SGA).
However this presumption is rebutted if the seller proves that the goods
conformed at that date [i.e. the date of delivery] (s. 48A(4)(a) SGA).
This presumption only applies with respect to the additional remedies
(IV.A supra) and not the existing remedies (II.B. supra). Accordingly if
a consumer opts to reject the goods and terminate the contract or claim
damages, he will have to prove that the goods did not conform with the
contract at the time of delivery16 whereas if he seeks repair or replacement
14 Atiyah,
Adams & MacQueen, supra note 6, 137 et seq.; P. Mitchell in McKendrick
(ed.) supra note 5, 379 et seq.; Bridge, supra note 7, 272 et seq. See also note 5 supra.
15 Bradgate & Twigg-Flesner, supra note 10, 73 et seq. The authors list the differences
between the text of the Directive and the text of the implied terms (as the latter were amended following the implementation of the Directive).
16 Prior to the implementation of the Directive, English law required goods to conform
to the contract at the time when risk passed from seller to buyer (normally risk passes at the
same time as property (VI infra and note 12 supra). Following the implementation of the
Directive on consumer contracts, risk passes upon delivery of the goods to the consumer (s.
20(a) SGA; VI infra). On this basis, if a consumer opts to reject the goods and terminate the
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of the goods on the grounds of the same lack of conformity he can rely on
the six-month presumption17.
D. Effect of buyer’s awareness of the lack of conformity
Pursuant to s. 14(2C) SGA the seller is not liable for a lack of conformity (and therefore cannot exercise the additional remedies) if that lack of
conformity is:
(a) specifically drawn to the buyer’s attention before the contract is
made;
(b) where the buyer examines the goods before the contract is made, [a
lack of conformity] which that examination ought to reveal; or
(c) in the case of a contract for sale by sample, [a lack of conformity]
which would have been apparent on a reasonable examination of
the sample18.
E. Additional remedies in detail
1. Repair or replacement of the goods
Pursuant to s. 48B(2)(b) SGA in the event that the consumer successfully exercises the right of repair or replacement, the seller must:
(a) repair/replace the goods within a reasonable time but without causing significant inconvenience to the consumer; and
(b) bear any necessary costs, including in particular labour, materials
and postage.
Pursuant to s. 48B(3) SGA a consumer’s remedy for repair or replacement of the goods cannot be exercised if that remedy is:
(a) impossible; or
(b) disproportionate to the other of those remedies (e.g. the remedy of
replacement is disproportionate to the remedy of replacement); or
(c) disproportionate in comparison to an appropriate reduction in the
purchase price or rescission.
The test for disproportionallity is provided by s. 48B(4) SGA which provides that one remedy is disproportionate in comparison to the other if the
contract or claim damages, he will have to prove that the goods did not conform with the
contract at the time of delivery (since this is the time that risk passes).
17 Bradgate & Twigg-Flesner, supra note 10, 118.
18 The above English provision is more favorable to the consumer than article 2(3) of
the Directive. For a detailed comparison see Bradgate & Twigg-Flesner, supra note 10, 78.
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one [remedy] imposes costs on the seller which, in comparison to those
imposed on him by the other, are unreasonable, taking into account:
(a) the value which the goods would have if they conformed to the contract of sale;
(b) the significance of the lack of conformity; and
(c) whether the other remedy could be effected without significant
inconvenience19 to the buyer.
Based on the text of s. 48B(2)(b) SGA one may conclude that with
respect to the conditions for the exercise of the repair /replacement remedy the British legislator deviated from article 3 of the Directive20.
2. Reduction of price – rescission of contract
Pursuant to s. 48C(2) SGA the remedies of reduction of price or rescission may only be exercised by the consumer subject to any of the following conditions:
(a) if the consumer cannot require repair or replacement of the goods
(due to impossibility or disproportionallity, see IV.E.1 supra); or
(b) the consumer has required the seller to repair or replace the goods,
but the seller cannot do so within a reasonable time and without significant inconvenience to the consumer (see IV.E.1 supra).
In particular, pursuant to s. 48C SGA, the consumer may:
(a) require the seller to reduce the purchase price of the goods in question to the consumer by an appropriate amount; or
(b) rescind the contract with regards to those goods.
19 Any question as to what is a reasonable time or significant inconvenience, is to be determined by reference to: (a) the nature of the goods and (b) the purpose for which the goods
were acquired (s. 48B(5) SGA).
20 Based on the text of art. 3(3) of the Directive, there is an opinion that the disproportionality test only applies between the remedy of repair and that of replacement and that
there is no room for application of the test with respect to the remedies of rescission and
price reduction; another opinion suggests that the disproportionality test also applies between the remedy of repair or replacement and the remedies of rescission and contract reduction. s. 48B(3) SGA avoided the ambiguity of the text of the Directive and explicitly
resolved this point by providing that the consumer may not require repair or replacement
where that remedy is impossible, or disproportionate in comparison with the other remedy,
or disproportionate in comparison with the price reduction or rescission. It is submitted,
however, (Bradgate & Twigg-Flesner, supra note 10, 119) that this provision is not to the
benefit of the consumer seeking repair or replacement, because those remedies will generally be more burdensome and therefore disproportionate in comparison with price reduction.
As a result this could be deemed as an incorrect implementation of the proportionality test.
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If the consumer opts to rescind the contract, any reimbursement (e.g.
return of price already paid) to the consumer may be reduced to take
account of the use that he has had of the goods since they were delivered
to him (s. 48C(3) SGA)21.
Based on the above analysis one may conclude that with respect to the
conditions for the exercise of those remedies the British legislator followed article 3 of the Directive. It is noted, however, that no exception to
the exercise of the right of rescission similar to this of article 3(6) of the
Directive (minor non-conformity)22 has been expressly23 incorporated in
the SGA by virtue of Regulation 5.
F. Additional remedies:
interrelationship between themselves and with existing remedies
S. 48D SGA has no equivalent in the Directive and deals with the relationship between the existing remedies and the additional remedies. This
provision was necessary because of the decision of the United Kingdom to
retain the existing remedies.
S. 48D SGA provides that where the consumer has asked for repair or
replacement he must give the seller a reasonable time in which to effect
the repair or replacement before:
(a) seeking the alternative remedy or
(b) exercising the right to reject the goods and terminate the contract
(II.B supra)24.
On this basis a consumer who has requested repair can subsequently
request replacement (or vice versa) but only after he has given the seller a
reasonable time to effect the first (requested) remedy. In addition, 48D(2)
(a) SGA effectively suspends the consumer’s existing right to reject the
goods and terminate the contract where he asks for repair /replacement. If
21 This reduction of price is also provided by s. 48E(6) SGA; see IV.G infra.
Which provides: “The consumer is not entitled to have the contract rescinded if the
lack of conformity is minor”.
23 S. 48E(6) SGA allows the court to make any order “unconditionally or on such terms
and conditions as to damages, payment of the price and otherwise as it thinks fit”, thus enabling the court to refuse to permit the buyer to rescind the contract in the case of a minor
lack of conformity (see IV.G. infra).
24 It is noted that the consumer may not reject the goods and terminate the contract on
the grounds of lack of conformity in respect of which he has sought repair or replacement.
See Bradgate & Twigg-Flesner, supra note 10, 120.
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the repair /replacement is not effected within a reasonable time, the consumer’s right to terminate the contract revives25.
S. 48D SGA does not address the relationship between the additional remedies and the consumer’s existing remedy to claim damages ( II.B supra).
It appears that the availability of damages in addition or as an alternative to
any of the additional remedies is covered by the court’s general discretion
in s. 48E(6) SGA to make any order under that section “on such terms and
conditions as to damages, […] as it thinks just” (see IV.G infra)26.
Criticism has been exercised over s. 48D SGA since it restricts the remedies available to the consumer and may lead to the UK being held to have
improperly implemented the Directive27.
G. Powers of the court
S. 48E SGA sets out the powers of the court in proceedings for an additional remedy under Part 5A (IV.A supra). More specifically s. 48E SGA
gives the court extensive powers to order specific performance of the
rights to repair and replacement (s. 48E(1) & (2) SGA). Then the court is
given a wide discretion on the consumer’s application for any additional
remedy to award any other additional remedy (instead of the requested
one) “if it considers that another remedy under SGA ss 48B or 48C is
appropriate” (ss 48E(3) & (4) SGA). This would mean, for instance, that
if the consumer requests replacement of defective goods and, although
replacement is neither impossible nor disproportionate, the seller refuses
to provide a replacement, the court could order price reduction in lieu on
the grounds that it would be ‘more appropriate’28.
25 However, in this instance it is doubted whether the consumer might be deemed to
have accepted the goods (by firstly requesting repair /replacement) and therefore may have
lost his right to terminate the contract (ss. 11(4) and 34-35 SGA); Bradgate & Twigg-Flesner, supra note 10, 124.
26 Ibid., 125 who further point out that if the consumer has requested repair or replacement and wishes to withdraw that request and claim damages instead, this could be resolved
in two ways (since s. 48D SGA does not provide for that): (a) the consumer does not have a
right to claim damages at all (since it has opted for repair/replacement); or (b) the consumer
can claim damages but only if the seller had reasonable time in which to effect the repair
or replacement and he did not (same limitation as with respect to the right to terminate).
The same writers (at page 125) suggest that option (b) is the ‘only sensible interpretation’.
27 Bradgate & Twigg-Flesner, supra note 10, 120.
28 Ibid., 122-123 who further submit “that this is a wide discretion for which there appears to be no basis in the Directive … In order to avoid this result [i.e. a breach of the Di-
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It is further provided that if the consumer has rescinded the contract, the
court may order that any reimbursement to the consumer (e.g. return of
price) is reduced to take account of the use he (the consumer) has had of
the goods since they were delivered to him (48E(5) SGA)29.
Finally s. 48E(6) SGA allows the court to make any order “unconditionally or on such terms and conditions as to damages, payment of the price
and otherwise at it thinks just”. This is again a wide discretion. It would
permit the court to award damages in addition to any of the additional
remedies requested by the consumer and would also enable the court to
refuse to permit the buyer to rescind the contract in the case of a minor
lack of conformity (as provided in art. 3(6) of the Directive which has not
explicitly been implemented in English law)30.
H. Limitation
The buyer must bring an action against the seller for non-conforming
goods within 6 years of the breach of contract (s. 5 Limitation Act 1980).
V. Article 2 of the Directive:
seller’s liability for public statements
Regulation 3 makes amendments to section 14 of the SGA in order to
give effect to the provisions of Article 2 of the Directive which relate to
the seller’s liability for public statements made by the seller, the producer
or his representative.
As already mentioned SGA s. 14(2) provides that “where the seller sells
goods in the course of business, there is an implied term that the goods
supplied under the contract are of satisfactory quality” (with respect to
other implied terms see IV.B supra). Then section 14(2A) explains the
meaning of ‘satisfactory quality’ by providing that
“goods are of satisfactory quality if they meet the standard that a reasonable
person would regard as satisfactory, taking account of any description of the
goods, the price (if relevant) and all other circumstances”31.
rective] the court would have to interpret section 48D in a more restricted manner and exercise its discretion strictly in accordance with the remedial hierarchy in the Directive itself”.
29 This reduction of price is also provided by s. 48C(3) SGA (see II.B supra).
30 Bradgate & Twigg-Flesner, supra note 10, 123. See IV.E.2 supra.
31 Section 14 deals with the important issue of implied terms about quality or fitness.
For an analysis see P. Mitchell in McKendrick (ed.), supra note 5, 379 et seq.
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It is at this point that Regulation 3 clarifies further the meaning of ‘other
circumstances’ by adding a new section (2D) (thus incorporating part of
the wording of article 2(2)(d) of the Directive) which only applies to consumers or consumer contracts (see III supra) and which provides:
“(2D) […] the relevant circumstances mentioned in subsection (2A) above
include any public statements on the specific characteristics of the goods
made about them by the seller, the producer or his representative, particularly in advertising or on labeling”.
The British legislator then sets the exceptions to the mentioned rule
of section 14(2D) SGA by adding a new section 14(2E). Section 14(2E)
incorporates, slightly amended in the interests of clarity and completeness,
the wording of article 2(4) of the Directive and provides:
“(2E) A public statement is not by virtue of subsection (2D) above a relevant circumstance for the purposes of subsection (2A) above in the case of
a contract of sale, if the seller shows that:
(a)[at the time the contract was made,] he was not, and could not reasonably have been, aware of the statement,
(a)(b)[before the contract was made, the statement had been withdrawn in
public, or] to the extent that it contained anything which was incorrect or misleading, it had been corrected in public; or
(c)the decision to buy the goods could not have been influenced by the
statement”.
Finally, the newly added section 14(2)(F) provides that a public statement may be considered a ‘relevant circumstance’ for the purposes of section 14(2)(A) irrespectively of whether the buyer is a consumer or not or
whether the contract of sale is a consumer contract or not. On this basis
the relevant provisions of article 2(2)(d) and 2(4) of the Directive can be
extended to non-consumer contracts of sale.
VI. Passing of risk
S. 20(1) SGA provides that, unless otherwise agreed, risk is transferred
to the buyer together with ownership over the goods. This is an important
rule of English law and disconnects the moment that risk passes to the
buyer from the time delivery of the goods to the buyer is effected.
Regulation 4 has now added a new s. 20(4) in the SGA which provides
that if the buyer is a consumer or the contract of sale is a consumer contract the risk passes to the buyer upon delivery of the goods to him. There-
476
Dionysios P. Flambouras
[RHDI 64:463
fore in shipment contracts the consumer will not bear the transit risks as
was the case prior to the implementation of the Directive32.
This is considered a major development and brings the English law approach
as to the transfer of risk closer to the continental approach based on which the
transfer of risk is connected to delivery of the goods to the buyer33.
VII. Conclusion
The Directive effected a significant change to the rights of the consumer
in the event of the seller delivering to the consumer goods which are not
in conformity with the terms of the contract of sale. In order not to reduce
existing levels of consumer protection it was decided in the United Kingdom to retain the existing SGA remedies (IV.B supra) alongside the additional remedies (IV.A supra) deriving from the Directive. This approach
creates a number of difficulties, for instance resulting in two sets of apparently similar remedies existing in parallel (right to rescind under the
Directive and right to reject the goods and terminate the contract under
the SGA). In addition, some provisions of the Directive have not been
implemented or have been implemented incorrectly and in other instances
courts have been granted with wide discretion (IV.G) and as a result there
is a risk that the United Kingdom may be found not to have (or not to
have properly implemented) the Directive (see IV.E.1 note 19 and IV.F.
supra). Finally, of major importance is the fact that the Directive’s primary remedies of repair and replacement are based on an entirely different philosophy from the philosophy which underlines the SGA’s right of
rejection: in particular, under the SGA the buyer’s primary remedy is to be
released from the contract, obtain damages and buy a replacement in the
market (and respectively the remedy of specific performance is granted
under exceptional circumstances); on the other hand under the Directive
the buyer’s primary remedy is to have the contract specifically enforced
by demanding cure thus giving a leading role to specific performance34.
On this basis one may conclude that the implementation of the Directive
into English sales law has resulted to a radical amendment in the consumer’s rights in the event of non-conformity of the goods and it is without
doubt that such amendment indicates the adoption of a different philosophy into the English consumer law being the pacta sunt servanda continental approach.
32 S. 18 Rule 5(2) SGA. See also Bradgate & Twigg-Flesner, supra note 10, 81, 116.
Flambouras, supra note 12, 257, 276.
34 Bradgate & Twigg-Flesner, supra note 10, 123.
33