Sale of goods contracts

Do you sell goods to consumers or businesses?

Are your standard terms enforceable?

Business sales

In the absence of written terms the Sale of Goods Act 1979 provides for implied terms regarding:

• the price for the goods;
• the standard of the goods;
• how the goods will be delivered.

A seller should always have written terms in place so that they can vary the implied terms to their advantage. A seller will also want to restrict their liability under the contract as far as possible. However, the Unfair Contract Terms Act 1977 applies to sale of goods contracts and if a restriction of liability does not comply with applicable legislation it will be wholly unenforceable.

Consumer sales

The requirements on sales to consumers are more onerous than those for sales to businesses. The Unfair Terms in Customer Contracts Regulations 1999 apply to standard terms (more commonly referred to as the “small print”) in business-to-consumer contracts. Your standard terms may be included in the small print in sales documents, terms and conditions on your website, sales literature or in statements made by your sales team.

You are required to act in good faith and it is important that your standard terms (amongst other things):

• do not include unfair terms – this means they should not be weighted against the consumer;
• have the rights and obligations of each party stated clearly;
• are not ambiguous and open to differing interpretations;
• do not have the potential to be misleading;
• do not give your business an unfair advantage (you are required to act in good faith).

In addition, businesses who operate as online retailers have to comply with, amongst other legislation e.g. E-Commerce Regulations, Distance Selling Regulations, Consumer Protection and Unfair Trading Regulations. It is not sufficient to upload your standard terms and conditions to your website or to cut and paste the terms and conditions used by your competitors – see online terms and conditions.

Both written and verbal information comes within the ambit of the Unfair Terms in Customer Contracts Regulations 1999.

If your own terms and conditions need a spruce up, contact us to review them to ensure that they are enforceable, and protect you as far as possible.

Based in Stoke-on-Trent, Staffordshire, our commercial lawyers have a reputation for providing accurate advice, and dealing with complex problems in an efficient manner.   To find out more, contact us on 01782 577000.