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Terms implied by statute 83

Circumstances in which s. 14(2) will not be implied

Even where goods are sold in the course of a business, s. 14(2C) indicates that the term as
to satisfactory quality will not be implied in two circumstances:

(i) It will not apply as regards defects which were specifically pointed out to the buyer
before the contract was made.

(ii) Where the buyer examines the goods before buying them, it will not apply as regards
defects which that examinationought to have revealed.

If a defect is specifically pointed out to the buyer, then that particular defect cannot make
the goods unsatisfactory. This is the case even if the defect proves to be more serious than
the buyer imagined.

A buyer has no obligation to examine goods before buying them. If, however, the buyer
does examine the goods, the goods cannot be rendered unsatisfactory on account of defects
which that examination ought to have revealed. However, even the most glaringly obvious
defects will make the goods unsatisfactory if the buyer chooses not to examine the goods.

Meaning of satisfactory quality

This requirement that the goods supplied under the contract must be of satisfactory quality
is relatively recent. The Sale of Goods Act 1979 was amended in 1995. Before the amend-
ment the 1979 Act implied a term that goods sold in the course of a business had to be of
merchantable quality. However, the meaning of merchantable quality had become unclear,
and so the requirement was changed to one of satisfactory quality. Section 14(2A) of the
SGA 1979 now provides the following definition of satisfactory quality.

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 the

other relevant circumstances.

We should note three things about this definition. First, the standard required is objective,
being that which a reasonable person would regard as satisfactory. Second, any description
of the goods may be taken into account. (There is no requirement here that the goods are
sold by description, as there was in the case of s. 13(1).) Third, any other relevant circum-
stances, which may include the price, can be taken into account. It is also worth noticing that
it is not only the goods sold which must be of satisfactory quality. Section 14(2) requires that
‘the goods supplied under the contract’ must be of satisfactory quality and this would
include any packaging.
Section 14(2B) lists five factors which can be taken into account in assessing the quality
of the goods.

Bartlett vSidney Marcus Ltd (1965) (Court of Appeal)

A dealer sold a second-hand car and pointed out to the buyer that the car had a defective

clutch. The buyer negotiated a reduced price to take account of the defect. Repairing the

clutch cost far more than the buyer had anticipated, and he claimed to reject the car under

s. 14(2).

HeldThe defect had been pointed out to the buyer and so it did not cause s. 14(2) to have

been breached.