Chapter 10Contracts for the supply of goods and servicesquality, and that they were fit for a particular purpose.
The implied term relating to quality attracted sustained
criticism over the years. The failure to define what was
meant by ‘merchantable quality’ in the original 1893
Act was remedied in 1973 with the introduction of a
statutory definition. Goods were of merchantable qual-
ity, according to the new definition, if they were ‘as fit
for the purpose(s) for which goods of that kind are com-
monly bought as it is reasonable to expect having regard
to any description applied to them, the price (if relev-
ant) and all other relevant circumstances’. However,
the inclusion of a statutory definition of ‘merchant-
able quality’ did not completely remove the uncertainty
about the scope of the implied term. A report by the Law
Commission highlighted a number of criticisms of the
implied term of merchantable quality. The Sale and
Supply of Goods Act 1994, which came into force on
3 January 1995, implemented the recommendations of
the Law Commission contained in its Report on the Sale
and Supply of Goods(1987). The new definition of
quality applies to all contracts for the sale and supply
of goods, including all agreements for the transfer of
property in goods such as barter, work and materials,
hire-purchase, hire and the exchange of goods for trad-
ing stamps.
Caveat emptor
Section 14 starts by stating that there is no implied con-
dition or warranty as to quality or fitness for a particular
purpose, except as provided by ss 14 and 15. This pre-
serves the principle of caveat emptor: let the buyer
beware. Both of the conditions implied by s 14 apply
‘where the seller sells goods in the course of a business’.
In the following case the Court of Appeal confirmed that
the implied terms in s 14 apply to every sale by a busi-
ness, even though the goods sold may not be part of the
‘stock in trade’.
Section 14 implies two conditions into every sale by a
trader: that the goods are of satisfactory quality and that
they are fit for a particular purpose. The requirement of
s 14, that the sale must be ‘in the course of a business’,
means that the implied terms of quality and fitness can-
not apply to sales by private individuals. So, if you buy
something privately and it is defective or unsuitable, you
cannot complain under s 14.Satisfactory quality
Section 14(2), as amended by the Sale and Supply of
Goods Act 1994, provides that where a seller sells goods
in the course of a business there is an implied condition
that the goods supplied are of satisfactory quality, except
to the extent of defects which are brought specifically
to the buyer’s attention before the contract is made
or ought to have been noticed by the buyer if he has
examined the goods. Goods are of satisfactory quality
according to s 14(2A) ‘if they meet the standard that a
reasonable person would regard as satisfactory, taking
into account any description of the goods, the price (if
relevant) and all other relevant circumstances’. Section
14(2B) explains that the quality of goods includes their
state and condition and the following non-exhaustive
aspects of quality:
(a) fitness for all purposes for which goods of the kind
in question are commonly supplied;305Stevensonv Rogers(1999)A fisherman sold his only fishing boat in order to replace
it. The purchaser claimed that the boat was not of mer-
chantable (satisfactory) quality. At first instance the High
Court decided that the contract of sale did not contain
an implied term as to merchantable quality because the
sale was not ‘in the course of business’. The High Court
arrived at this conclusion by reference to the interpreta-
tion of ‘in the course of a business’ in the context of theUnfair Contract Terms Act 1977 in R & B Customs
Brokers Co Ltdv United Dominion Trust Ltd(1988)
(see Chapter 9) and cases decided under the Trade
Descriptions Act 1968 (see Havering LBCv Stevenson
(1970) and Daviesv Sumner(1984) in Chapter 12 ).
In these earlier cases, some degree of ‘regularity’ had
been required for the transaction to be ‘in the course of
a business’. Only those sales which were integral to the
business (i.e. stock in trade) would come within the
scope of business sales. The Court of Appeal held that
the sale of the fishing boat was in the course of a
business for the purposes of s 14 and that the implied
term as to merchantable quality did apply. The court was
greatly influenced by the fact that the wording of s 14 of
the Sale of Goods Act had been deliberately changed in
1973 so as to broaden the scope of its protection by
covering all sales by traders, even those which may be
incidental to the main business. The earlier authorities in
relation to the Unfair Contract Terms Act 1977 (R & B
Customs Brokers) and the Trade Descriptions Act 1968
(Havering LBCand Davies) were distinguished.