S.13 Sale Of Goods Act 1979, a Myth?

It has been almost four decades since Sales of Goods Act 1979 received royal assent but the commercial sector has significantly changed. It has been the role of the judiciary to interpret the Sales of Goods Act in the best possible way to keep up with the rapid changes in the commercial sector. S.13 is one of those unfortunate pieces of legislation where the judiciary has repeatedly turned down claims pursued under s.13 SoGA. This article explores the case law citing s.13, with the main focus on the Court of Appeal’s recent decision in Brewer v Mann [2012] EWCA Civ 246 (CA) which compliments the decision submitted by Court of Appeal in Harlington v Christopher Hull [1990] 1 All ER 737 (CA). The article goes on to address the questions raised and distinguished in Ashington Piggeries Ltd v Christopher Hill Ltd [1972] 1 A.C. 441 (HL) showing that not all words form part of the description. The article will also establish how the characteristics of s.13 changed, especially after introduction of s.15A, which was added by the Sales of Good Act 1994, s.4 (1). The article will determine the relationship between s.13 and s.14 SoGA and analyse whether the s.13 is redundant.

There is confusion as far as s.13 Sale of Goods Act 1979 is concerned as it needs to be sale by description in order for the section to kick in. In order for the sale to be sale by description, there needs to be description upon which the buyer relies upon. That description must have been influential in the decision of the buyer to enter into the contract. If the buyer does not rely on the description or that description was not influential then it was not the intention of the parties for that description to form as essential terms of the contract. If it is not an essential term of the contract, it cannot be sale by description. For instance, in the German Münter painting case of Harlington v Christopher Hull [1990] 1 All ER 737 (CA), the court stated that the seller’s opinion as to the attributes of the painting do not amount to the term of the description because the buyer did not rely on it. The buyer was not influenced by that description which is why the ‘Münter painting’ did not form part of the description of the contract. The court would have said unless the seller gives a guarantee about the attributes of the painting, it does not form part of the description of the contract. If the seller gives the guarantee then it is probably an express term of the contract and s.13 applies.

This is now being supported and confirmed by the Court of Appeal case of Brewer v Mann [2012] EWCA Civ 246 (CA). The CA refused first instance’s verdict. The buyer took the car on a finance agreement of  £425,000, she ran into financial difficulties. 14 months later, she commenced litigation for breach of description because she then found out that 1930 Speed 6 Engine is in fact 1927 Speed 6 Engine. The question for the court was whether this was a breach of s.13? The CA held there was no breach of s.13 because the car was correctly described as 1930 speed 6 Bentley because firstly, a speed 6 Bentley is still a speed 6 Bentley even if the engine was not wholly original. This is because the custom of the second hand car market is that as long as part of the original engine is 1930 speed 6 and has chassis number on it is the same then that is sufficient. More importantly, the court went on to say that what the dealer says about the originality of the car merely goes to the opinion. It was only an opinion that it is a 1930 Speed 6 Bentley and it does not amount to statement of fact. The court stated where the seller gives a reasonable opinion it is absolutely fine. The older the car, classier the item is, then it is more reasonable that the dealer’s words were opinion. This in a way supports what the Harlington case stated in the sense that the attributes of the painting is just an opinion. The third concept Brewer v Mann 2012 states was that the price that a buyer pays goes to act as evidence as how much originality or provenance of this item is, but if you want a guarantee of that provenance then buyer should pay extra to the seller to give him the guarantee. The same thing was explained in Harlington case.

From the above cases, it is quite clear that the buyer might give relevance to the description, but relevance is not same thing as reliance. The latter occurs when the words are influential. This is evident between the parties that it should form as an essential term of the contract. If there is no term then it is impossible to bring a claim under s.13. This notion supports that there is a bit of confusion with s.13.

In the case of Reardon Smith Lines v Hansen Tangen [1976] 1 WLR 989 (HL), an oil tank under the contract was supposed to be built in yard 354, however the yard was too small to build the tank. Therefore, the seller built it 300 miles away, however the tank prices went down and the buyer wanted out of the contract. The buyer claimed breach of express term and s.13. The court rejected his claim and held that a term such as the tank having to be built in yard 354 does not form part of the description. The parties could not have intended that to be an essential term of the contract. If there is not an express term then there is no question of s.13. Although s.13 states the implied condition that goods must correspond to the description only, this is only applied if the sale is by description. Whether something is sale by description will depend on how much reliance and influence it has and whether the parties intended to form part of the express term. Until then s.13 should not be applicable.

Even if the words were influential and the buyer did rely on them, not all words constitute part of the description. In Ashington Piggeries Ltd v Christopher Hill Ltd. [1972] 1 A.C. 441 (HL), the seller did provide the herring meal, however the buyer complained that it was not the herring meal that he wanted under the contract. The seller was experienced in producing animal food but never produced mink feed before, however the buyer gave the seller a detailed formula. One of the ingredients was herring meal, however the seller used a particular type called Norwegian herring meal which was infected by a preservative which in turn caused a chemical reaction. This produced DMNA which caused potential of liver diseases from the mink feed. The buyer sued for breach of s.13 SOGA 1979. The court stated that there was no breach because there was nothing in the herring meal that rendered the description incorrect.

The buyers in Ashington cited Pinnock v Lewis & Peat [1923] 1 KB 690 The case dealt with the sale of copra cake with castor beans resulting in poisoning, where the court held there was breach of s.13 SOGA 1979. The buyers in Ashington advanced their argument that the contract stated herring meal and the seller provided the buyer with herring meal plus DMNA. The court rejected this argument and held the herring meal contained the preservative that caused the chemical reaction, which produced DNMA. DNMA was not something that was added to the herring meal unlike in the case of Pinnock. Although the herring meal was contaminated it did not alter the description that it was herring meal. Therefore, the buyer did receiver herring meal. Just because it was contaminated, it did not lose its identity as a herring meal. Lord Diplock further stated that “defect went to quality not identity as herring meal.”

There is a correlation between s.13 and s.14. Lord Denning in Toepfer v Continental [1974] 1 Lloyd LR 1 gave the example of “New Laid Eggs”. Lord Denning stated “new laid” forms part of the quality and description, which demonstrates there is a relationship between s.13 and s.14. The description is that it has to be “new laid” which is essential part of the good. It cannot be other type of eggs. If the buyer cannot sue under s.13 then he has to prove the defect goes relates to the quality which will result in breach of s.14. The problem is if the seller does not sell in the course of the business then the buyer cannot sue for the breach of s.14.

When there is sale by description then the seller must comply exactly to the terms. In Arcos v Ranaason [1933] AC 470, the staves were 1/16^th inch over-sized and the court held the buyer could reject the goods because there was a breach of s.13.  In Re Moore & Landauer [1921] 2 KB 519 (CA), the buyer got 3,000 tins of fruit but packed in a different order. The court held the buyer does not need to suffer any damage in order to claim for s.13 and the packaging was put together in the exact way described by the buyer under the contract, resulting in a breach of s.13. However, now we have s.15A SOGA 1979, where if the breach is so small and it involves a business buyer then the court has the discretion to treat that breach as a breach of a warranty instead of an implied condition. It can be complex to claim under s.13 as a breach of the condition when it involves business buyer because of s.15A.

Even if the buyer selects the goods by himself, it is still sale by description because of s.13(3). In Beale v Tayler[1967] 3 All ER 253 (CA), the seller advertised a 1961 white herald convertible, where the buyer took the car then he realized that only part of the car was 1961 white herald convertible. The court held it was breach of s.13 even though the buyer examined the car by himself. We can only assume that we now have Brewer v Mann, unless the seller guarantee, what the seller says is only a mere opinion. Brewer’s case is a very recent case and in Beale v Taylor, the court would have held 1961 white convertible was an express term. Even if the buyer never sees the goods then it is most probably a sale by description like in Varley v Whipp [1900] 1 Q.B. 513. Divisional Court where the seller described the sewing machine to the buyer as “nearly new and hardly used”. The court suggested that where the buyer has not seen the goods then it is certainly goes to the description.

There is also the issue as to whether s.13 is redundant because in order for it to apply, there must be an essential express term as to the description. If there is an express term then what is the use of s.13? S.13 is not totally redundant as there is one preferential benefit. If we sue for breach of express term as to the description then the court will see if the term is a condition or warranty. The court would look at the seriousness of the breach and call it an intermediate term. If the consequences were serious then it most likely be breach of a condition otherwise it is breach of a warranty meaning that buyer will only receive damages. However, the benefit of s.13 is that it is an implied condition and it entitles the buyer to reject and will be refunded the money and in addition will be able to claim damages depending on what type of loss he suffered. S.13 is a valuable section of the Sale of Goods Act 1979, however it can be restrictive due to s.15.