Keenan and Riches’BUSINESS LAW

Chapter 10 Contracts for the supply of

goods and services

Learning objectives

After studying this chapter you should understand the following main points:

■the legislative framework governing contracts for sale and supply of

goods and services;

■the ways in which a manufacturer may be liable in contract for defective

goods.

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In this chapter we explore the legal rules which regulate
contracts for the supply of goods and services. The rights
and responsibilities of the parties are determined primar-
ily by agreement. However, Parliament has intervened
increasingly in this area of law to provide a statutory
framework for such transactions. We will examine the
statutory framework in detail. The key pieces of legisla-
tion are set out in Fig 10.1. The chapter concludes by

considering the effectiveness of the law of contract as a

means of providing redress in respect of defective goods

and services, and the responsibility in contract of a man-

ufacturer for his products.

Sale of goods

The law relating to contracts for the sale of goods is con-

tained in the Sale of Goods Act 1979. This Act replaced

the original Sale of Goods Act 1893 and included all

the amendments that had been made in the intervening

years. The 1979 Act has been amended by four pieces

of legislation: the Sale and Supply of Goods Act 1994,

and the Sale of Goods (Amendment) Acts 1994 and

1995 and the Sale and Supply of Goods to Consumers

Regulations 2002. The Sale of Goods Act 1979 provides

a framework for the relationship between the buyer

and seller and covers such matters as the rights and

duties of the parties and their remedies in the event of

a breach.

It would be wrong to think that the Act governs every

aspect of a sale of goods contract. Many of the general

principles of contract law which we studied in Chapter 7

still apply. A valid contract for the sale of goods, just like

any other contract, must possess all the essential ele-

ments. The rules relating to the requirements of offer

and acceptance, intention, consideration, etc. are largely

untouched by the Act. The other important thing to

remember is that the Act, in general, does not stop the

Type of Sale of goods Supply of goods

contract and services

Main Act Sale of Goods Supply of Goods

Act 1979 and Services

Act 1982

Amended by Sale and Supply Sale and Supply of

of Goods Goods Act 1994

Act 1994

Sale of Goods Sale and Supply

(Amendment) of Goods to

Act 1994 Consumers

Regulations 2002

Sale of Goods

(Amendment)

Act 1995

Sale and Supply

of Goods to

Consumers

Regulations 2002

Figure 10.1Legislation governing contracts for
the sale and supply of goods and services