Scope

Scope of the Act

The Sale of Goods 1893 was a codification of the pre-existing law.   In this respect, it is similar to the Partnership Act and the Bill of Exchange Act.  The courts regard it as a complete code of the law. However as a codification, the courts may look at the pre-existing law in interpreting the Act.

The Sale of Goods Act applies to contracts for the sale of goods only.  A sale takes place when goods are transferred from the seller to the buyer under a contract.  The contract for sale is an agreement by which ownership of the goods is to transfer at a future date, subject to compliance with the terms of the contract.

The sale of goods and supply of services legislation distinguishes between commercial sales (business to business) and sales to consumers by businesses. The legislation provides stronger protection for consumer sales.  Certain implied conditions and terms cannot be varied in the case of consumer sales.  In contrast, in the case of sales to businesses they may be upheld unconditionally or in some cases, to the extent, they are fair and reasonable.


Sale of Goods

There must be a contract or a transfer by sale. Where goods are bartered or exchanged, the Sale of Goods Act does not apply.  where goods are supplied on approval, there is neither an agreement for sale or a sale. A transfer of goods by way of security falls outside the legislation. So too do transfers by persons in possession of goods with no right to sell.

By reason of this definition, certain types of transactions fall outside the Sale of Goods Act.  Some of these transactions are subject to separate regulation such as under the consumer credit legislation.

The Act does not apply to a transfer of money.  Money cannot be sold.  Coins or notes may be the subject of a contract for sale, for example, if they are being sold as antiques.

Goods, for the purposes of the Sale of Goods Act, are tangible movable items. They include crops and agricultural produce. Modern amendments have extended the legislation to the supply of services. The legislation applicable to the supply of services is considerably less extensive than that applicable to the sale of goods.

In some cases, what is provided may include elements of a service and the provision of goods. Where the skill and labour predominate over a supply of goods,  it is likely to be a supply of services rather than a sale of goods. Conversely where the supply of goods predominates over the supply of services, then there is a sale of goods for the purpose of the legislation.


Price

Generally, if no price is agreed, there is no contract, due to the absence of a necessary and vital term.  An agreement to agree a future price is usually insufficiently certain.   However, there may be a contract, if there is a clear intention to enter an agreement. The courts hold that there is a contract and imply that there is to be a reasonable price.

Under the Sale of Goods Act, the price may be fixed by the contract, may arise from a course of dealing or by the customs of the trade.  In the absence of an agreement on the price, the buyer must pay a reasonable price.  If the contract specifies how the price is to be agreed or determined, this will apply.

If goods are sent to a buyer and are appropriated and accepted by him, without a contract, he will usually be obliged to pay a reasonable price under principles of restitution.


Requirement for Writing in Some Cases

A contract for the sale of goods for more than €12.70 (£10), that is not evidenced in writing, is not enforceable unless all or part of the goods has been accepted and received, the buyer has given something in earnest, or the buyer has made a part payment. In the absence of these factors, a note or memorandum written and signed by the party against whom the contract is to be enforced is required.

Acceptance refers to the acceptance of the goods, rather than acceptance of the contract.  A part payment or full payment of itself makes the contract enforceable.

There must be acceptance and receipt or payment by the party against whom the contract is enforced.  What is required as “giving something in earnest” is unclear.  The view has been expressed that giving some kind of document, card or acknowledgement is sufficient.


Consumer Protection Formation Issues

In some contexts, consumer protection laws supplement the Sale of Goods Act in respect of the formation of the contract.  Consumer credit sales, hire purchase and leasing contracts for goods, must be in a prescribed format and in writing. Certain procedures must be followed under the Consumer Credit Act.  (See the separate chapters in this regard).

Distance contracts and contracts negotiated away from the seller’s place of business require that the trader give written terms of the contract that certain information be given in writing, including confirmation of the consumer’s right to cancel.  The requirement for pre-contract information now extends to contracts made with consumers by a trader on the premises. Failure to provide the requisite material will make the contract unenforceable.


Bill of Sale

A document which transfers the ownership of goods is a bill of sale.  There is a separate type of bill of sale, a security bill of sale which effects a mortgage of goods.  The Bill of Sale Act applies where goods are transferred by a document in writing.  The requirements are potentially onerous. The transfer of goods by a bill of sale is subject to stamp duty.

Generally, there is a contract for the sale of the goods followed by a transfer by delivery (i.e. other than by a transfer document).  The Bill of Sales legislation does not apply to transfers of goods in the ordinary course of business.   It does not apply where there is no written transfer of the goods.

Where there is a failure to comply with the Bill of Sales Act, the transfer may be void against bankruptcy officers and creditors.  (Where the seller retains possession)??

The Bill of Sales legislation does not apply to conditional sales, as there is no purchase and mortgage back by the buyer.  The buyer does not acquire the title in the first place. Hire purchase avoids the legislation as there is no agreement to purchase. The buyer has an option to purchase.


Goods

Goods include personal property.  This covers tangible goods other than land. Ships,  aircraft and vehicles are goods.  Animals and harvested crops are goods.  Goods do not include intangible rights although physical devices in which the intangible intellectual property is coded or held,  are goods.

Things naturally forming part of the land may constitute goods, provided that there is an intention to harvest and sever them from the land. Good include growing crops and things forming part of the land and agreed to be severed before sale.  They also include annual crops grown by agricultural labour and industrial crops not expected to be harvested within a year.

A contract may be entered for the sale of goods which do not yet exist or which are not yet owned by the seller.  If the seller does not manufacture the goods or acquire them for supply under the contract, he may be in breach of contract. Where specific goods are sold, such as a particular item, those goods must be delivered.  A similar or substitute item will not suffice.

In contrast, a sale for an unascertained or generic good may be satisfied by delivery of a generic product meeting the requisite specifications.


Sale of Goods and Supply of Services

Where there is both a contract for the sale of goods and the supply of services, the question arises as to whether the contract is primarily one for goods or primarily one for service.  When goods are provided and installed, it is likely that there is a supply of goods as the installation is generally ancillary.  In contrast, there are situations where services are provided, and goods are provided ancillary to the service.

Where goods are manufactured specifically, there may be a contract for work, services and goods. If an article is manufactured, there is likely to be a sale of goods.  There may be a contract for the sale of goods or for work and the sale of materials.  There is more likely to be a sale of goods when the product is relatively standard.  Where the supply of skill predominates and the materials are incidental a contract for services may be held to exist.


Credit Sales and Hire Purchase

A credit sale involves an immediate sale of the property in the goods and the later payment by credit.  Where there is no retention of title, then this is an ordinary sale with a deferred payment obligation.

Hire purchase is the letting of goods coupled with an option to purchase.  The option price is generally small, so that hire purchase is in substance a form of consumer credit.  The title is reserved until the option is exercised. Hire purchase or conditional sale contracts with a consumer, are subject to detailed regulation under the Consumer Credit Act.

Where a finance house finances the purchase of goods by a consumer, the finance house is deemed to be party to the sale contract.  It is accordingly liable on the implied conditions and warranties to the buyer.


Hire Purchase

Hire purchase contracts fall outside the definition of a sale of goods.  There is a contract for the bailment/hire of goods together with an option to purchase.  However, because the arrangement is in substance, similar to a credit sale, many of the protections of the Sale of Goods Act have been extended to it.

From the seller’s point of view, hire purchase has the advantage that ownership is retained.  Therefore, apart from the legislative restrictions which apply, the seller has security rights in the event of a default.  Moreover, it avoids the application of Bill of Sales Act, because the goods never come into the ownership of the buyer/hirer.


Conditional Sale with Retention of title

The seller can sell the goods, with a provision that title passes on payment.  However, this is not risk-free because the buyer in possession, may wrongfully sell the goods and give good title to a third-party buyer. A third party buyer who buys goods from a buyer in possession enjoys certain statutory protections which give him good title, even against the true owner.

A conditional sale is one in which ownership passes on payment of the full price. Under a credit sale agreement, the goods are given to the buyer, but the obligation to the pay the purchase price is deferred or may be paid over time.  However, the ownership of goods may pass immediately.  Alternatively, the seller may reserve title under the terms of the contract, until payment.


References and Sources

Irish Texts

Brian Doolan, A Casebook on Irish Business Law (1989)

Henry Ellis, Modern Irish Commercial and Consumer Law (2004)

Michael Forde, Commercial Law, 3rd Edition (2005)

Linehan, Irish Business and Commercial Law (1995)

McCormack, Reservation of Title 1990 (1994)

Patrick O’Reilly (ed.), Commercial and Consumer Law  (Statutes) (2000)

Sean Quinn (ed.), Statutes Revised on Commercial Law, 1695-1913 (1994)

Fidelma White, Commercial Law (2003) (2nd Ed 2012)

Fidelma White, Commercial and Economic Law In Ireland (2011)

Vincent Grogan, Thelma King and Edward J. Donelan, Sale of Goods and Supply of Services: A Guide to the Legislation (Law Society of Ireland, 1983)

Paul Anthony McDermott, Contract Law (Butterworths, Dublin, 2001)

2011 Report of the Sales Law Review Group,

UK texts

Atiyah and Adam’s Sale of Goods 13th Ed (2016)

Bridge, Benjamin’s Sale of Goods 9th Ed (2015);

Bridge, The Sale of Goods 3rd Ed (2014)

Blackstones’ Statutes Commercial and Consumer Law 2017

Goode on Commercial Law 5th Ed 2017

Legislation

Sale of Goods Act 1893

Sale of Goods and Supply of Services Act 1980

Electronic Commerce Act 2000

Criminal Justice (Theft and Fraud Offences) Act 2001 (50/2001)

International Carriage of Goods by Road Act 1990 (13/1990)

European Union (Consumer Information, Cancellation and Other Rights) Regulations 2013 (S.I. No. 484 of 2013)

European Communities (Certain Aspects of the Sale of Consumer Goods and Associated Guarantees) Regulations 2003 (S.I. No. 11 of 2003)