Sale of Goods Act of 1979 was a legal document drafted from a combination of three commercial legislations. The act is a comprehensive document that is codified from commercial laws, such as the Sale of Goods Act 1893, Bill of Exchange Act 1882, and the Marine Insurance Act 1906. It is important to continually review the Act Sale of Goods Act of 1979 to ascertain whether it is still relevant in modern business environment. As a result, this report seeks to establish whether the changing social atmosphere calls for amendment of the Act in a bid to address modern issues.
Implied Terms in the Description of Goods
The Sale of Goods Act of 1979 stipulates that whenever there is a contract, there should be a clear description of implied terms that any good must correspond to such a description as long as the description is within the jurisdiction of Wales, Northern Ireland, and England. According to the Sale of Goods Act of 1979 as quoted in The Nationwide Mediation Academy, “If the sale is by the sample as well as by description it is not sufficient that the bulk of the goods correspond to the sample if they do not also correspond to the description.”In addition, description in the implied terms of the Sale of Goods Act of 1979 provides that the act should not separate reasoning behind sales by description but that buyers too must select them.
In the definition of sales by description with regard to “Unseen Goods”, as the long as a buyer does not see but singly depends on sale by description, such a sale is the sale by description. In the case of Varley v Whipp, the seller described the goods in contention as new in the previous year.In the meantime, the buyer had not seen the reaping machine and by the time the buyer saw the machine, he found it too old to accept. In determining the case, the court ruled that this was a sale by description. On review, however, the main point was that the description did not correspond to the seller’s description and that it was difficult for the buyer to accept the machine as it was. This case vividly demonstrates the fact that as long as there are concerns for a specific contractual agreement for goods hold, the act should apply to all prospective and unascertained goods in the future. In this sense, sales by description ought to cover catalogue purchases or placement of orders via a dealer.
The other issue that the Varley v Whipp case and the Sale of Goods Act of 1979 seem to overlook is the value of depreciation. Depreciation in general refers to the loss of value of a commodity due to wear and tear. This loss must be accounted for annually to help in the estimation of goods’ worth in the subsequent years. If such a provision was included in the act, the buyer would use such an argument to claim that the description of the machine did not correspond to the description at the time of dispute.
The description of inspected goods with regard to the Sale of Goods Act of 1979 “Inspected Goods” would apply even for an advert statement in the description of a contract. In the case of Beale v Taylor, the buyer of the product made the purchase with reference to advert description.The car was advertised as a 1961 Herald Convertible that was a welded model of an earlier 1961 model. In this regard, the Sale of Goods Act of 1979 demonstrates that sale by description applies even if a buyer had earlier seen and approved goods. In addition, as (ref1) notes, “Under s13 (3) Sale of Goods Act of 1979, a sale of goods is not prevented from being a sale by the description by reason only that, being exposed for sale or hire, they are selected by the buyer.” This provision applies even to sale by description of goods in supermarkets or retail stores but only when sale by description involves goods that are chosen and handed over without labelling word exchange in adverts.
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Implied terms in the description of goods depend on which words are selected and used in accordance with s13 of the Sale of Goods Act of 1979. For a descriptive statement to form part of the sale it must be included in a contract; otherwise, it would be a sheer representation. This provision was applied in the ruling of the Oscar Chess v Williams’ case. Incorporation of describing words into a contract does not automatically become part of the s13 of the Sale of Goods Act of 1979.However, they will apply if there is a substantial ingredient in describing what is contained in the s13.
With regard to how well goods comply with their description, the description must be in line with the generally accepted terms in trade. A generally accepted word would form part of the solution in any given case if facts were relevant. This means that the Sale of Goods Act of 1979 is concerned not with the metaphysical issues but with the wider common sense relevant to a group of people in a particular line of business. Hence, if “bullish” in stock market means a performing stock then the definition would meet all requirements.
As mentioned in the preceding statements, goods may comply with s13 as provided for by the act. Nonetheless, there should be a link between s13 and s14 so that description alone does not apply to poor quality or unfit commodities. Goods must be durable, without minor defects, safe for consumption, and have the non-defective appearance. On the other hand, commodities may be satisfactory and safe for consumption but fail to correspond to their description. According to the Nationwide Mediation Academy, “Statements as to the quality are not normally descriptive but there may be an overlap.” For instance, if an ingredient of a mango juice is described as pure mango but a manufacturer uses industrial sugar, then there is a breach of s14 of the Sale of Goods Act of 1979.
The modern buyer is highly informed and competition in many sectors of economy is becoming stiffer. George observes that, “The more advanced features allow weak links and friend-of-a-friend links to be exploited for social or business networking purposes. A user may exploit these applications to find contacts, or to understand what relationships exist.” Every social networking site brings on unique experiences and features that can only be unlocked by exploring the existing diversity. An innovative firm must therefore target the over 400 million Facebook users in its entrepreneurial organization.
IT platform creates a dynamic world of business and as such, maintaining flexibility is important. Flexibility creates entrepreneurial standoff, especially in constantly evolving sectors or industry. “Since resources are to be in tune with the emerging opportunities and threats, there is a need for dynamic resource strategies to support the evolving product-market strategy.”
These have been fast-tracked due to the development of IT and Internet platforms. Firms have adopted effective customer management service as a strategy of creating new and unique products. According to Viswanadham, “For most customers, service, and product are the same sides of a coin. Production of goods and services is an opportunity for differentiation. Loyal customers are an asset.” Improved customer service management systems are significant in making sure that customers do not abandon products in favour of other products that are perceived to be better. Customer defection is a liability as it translates to lost sales. Creating unique and superior products is the main determinant of a successful product in the market.This is because it ensures that customers remain loyal. Value addition is also a service strategy that can provide winning solutions to entrepreneurs.
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Another strategy that is relevant in the changing social environment lies in the launching of a new product and using speed as a strategy. If accomplished in fast cycle times, manufacturing processes can provide a number of advantages in capturing a significant portion of market share. As mentioned above, technology hastens speed of developing new products. This has an advantage, and as noted by Viswanadham, “Being first or second with a new chip or new device makes all the difference between winning and losing and with smaller life cycles, the market window is small.”  A firm that releases a series of new products in the market is likely to benefit from advantages of a first-mover, whereas a late entrant will face decline in market demand and low chances of becoming a market leader. Another advantage of speedy product launch is that it reduces risks. A product that has low creation time will respond quickly to new market needs than those with long creation time.
Creating a new product involves designing, prototyping, testing and marketing a new product, most of which require intellectual skills and high-level organization. The processes are mutually reinforcing, and if properly implemented result in a well-established product that sells. The four processes of product creation are technology and resource improvement, strategic product development, product development, and process review. Some firms fail to review a new product’s launch in order to have an insight into whether the launch came too early or too late.Failure rate in launching new products, however, remains slightly the same if compared with the business environment five decades ago.
In order to respond to the socio-economic changes of the modern world, firms ought to produce goods and services in line with the provisions of the Sale of Goods Act of 1979. The online platform provides new avenues that sellers can use to attract buyers. There should be amendments to sections of the act to respond to the needs of modern markets. This should, therefore, be well-documented as far as description of commodities is concerned. Online adverts have not been included in the Sale of Goods Act of 1979 but the modern business environment requires that such a description be part of a contract. An amendment to the implied terms in the Sale of Goods Act of 1979 in description of goods and hire is, therefore, justified.
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Implied Terms in Quality and Fitness of Goods
In s14 of the Sale of Goods Act of 1979 there are provisions for implied terms on quality and fitness, which are subject to other endorsements. For instance, as noted by the Nationwide Mediation Academy, “there is no implied term about the quality of fitness for any particular purpose of goods supplied under a contract of sale.” In addition, where a seller engages in sale of commodities in the course of doing business, implied condition apply under the contract if a given contract is subjected to satisfactory quality. The definition of a satisfactory quality under the implied term is the ability of goods to meet reasonable quality standards for a buyer or any other person to regard it as satisfactory. This should take account of any descriptions of goods as provided under the s13 above, inclusion of prices if necessary, and any other critical information that would be binding. In addition, Campbell notes that “where the seller delivers to the buyer a quality of goods less than he contracted to sell, the buyer may reject the goods or accept them.”
For the purpose of the Sale of Goods Act of 1979, quality of commodities refers to condition and state of those commodities and other relevant qualities. Quality must meet the fitness level for which a given commodity was supplied.The appearance, how goods are finished, freedom from defects, safety, and durability of commodities form the dynamics of quality parameters. The terms implied do not apply to goods of unsatisfactory quality; for instance, goods and services brought to the attention of buyers prior to a contractual agreement among other provisions provided for in the act. The phrase “in course of business” in the fitness and quality of goods applies to implied condition that would result in satisfactory quality in the sales of commodities.It applies to goods involved in a given course of business and not private sales. It is quite applicable in the case of Havering L. B. C v Stevenson that involved sale of company cars in a car hire business. “The court held that the sale was made in the course of a trade or business, because it was an integral part of the business carried on the car hire firm, namely to sell and replace aged hire cars on a regular basis.”
Managing new products is a critical management risk for business owners and there are strategic models to minimize risks. An example is the stage-gate system where “risks consist of two key elements, namely, the amount at stake and the probability of failure.” Developing a new product is highly risky because of huge investment requirements coupled with high uncertainty levels. In addition, high probability of failure due to complex and malfunctioning production processes may bring about confusion at decision-making phase. Remedial measures to curb new product failure include imposition of more screening controls prior to launching a new product. This reduces chances of evaluating a perceived product failure or success. Failure or success of a new product is perceived, as evaluation may not necessarily concur with market results. Evaluation process may lead to rejection of a new product that would sell or accepting a new product that would fail.
Individual entrepreneurs also face a dilemma between economic rewards and decisions on the two types of error. If an entrepreneur fails to make an innovation to improve current products, there is a likelihood of missing a potential profit avenue from a successful product launch, which corresponds to making Type I error. Alternatively, a business person may incur an economic loss by designing a new product and making Type II error. For a lower reservation level via appropriate framework like stage-gate system, an executive may lower the risks of rejecting an excellent idea or Type I error and increase a possibility of accepting a bad idea or Type II error. Acceptance by buyers should be based on the same description with regard to quality; hence, in order to respond to all these dynamics, there is a need for amendments of the Sales of Goods Act of 1979.