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Three Key Points About the Sale of Goods Act 

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As an online business, you must abide by particular laws when carrying out your business activities, just as you would if your business was a traditional retailer. For example, the Consumers Rights Act 2015 and the Unfair Contract Terms Act 1977. However, laws for your online business can get confusing, but you must understand and abide by them. They can apply to the particular purpose of the product, for example, and can apply to existing goods and future goods. If you do not abide by the Sale of Goods Act, for example, a buyer can sue you for breach of contract. This article will, therefore, explain three crucial points to note about the Sale of Goods Act 1979.

What is the Sale of Goods Act? 

The Sale of Goods Act 1979 is a piece of UK legislation to protect customers when they buy products. It ensures they have particular rights in terms of the goods they buy. It does not, however, apply to services.

The Sale of Goods Act means you must ensure the goods you sell online are:

  • of satisfactory quality;
  • are as they are described; and
  • fit for purpose, so do what you, as the seller, say they can do.

As the Act is statutory UK law, you cannot choose whether it applies to your online business. It is, therefore, irrelevant if it is not in your business terms and conditions.  

1. When Does It Apply?

An important point to note about the Sale of Goods Act, which you may not know, is that most of what it covers now applies through the Consumers Rights Act 2015. This is particularly the case in terms of areas which apply to consumers. The Consumers Rights Act 2015 effectively replaces the Sale of Goods Act for consumers. The Act, therefore, only applies to consumers now for any products they purchased before 30th September 2015. However, naturally, as the provisions for consumers are now in other UK legislation, you still have to abide by the details of the law in the Act.

Instead, the Sale of Goods Act applies for business-to-business sales. So, if you are an online business which, for example, supplies goods to a dropship business, it applies. The Act is also relevant to both written sale of goods contracts and verbal ones. However, you should note that the Act does not apply to goods that business buys on hire purchase.

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2. What Does Acceptance Mean?

The Sale of Goods Act is particular in terms of what acceptance means. It is essential as an eCommerce brand that you understand this so you know when another business has accepted your goods. There are two main ways your buyer accepts the products you sell to them. This is when:

  1. the business that buys your products tells you they have accepted them; or
  2. you deliver the buyer the products, they carry out an action which shows that they consider you to no longer own them.

Point two could occur, for example, where the business you sell your goods to places them for sale on their website.

You should note that a buyer does not accept your goods if you have not given them a reasonable chance to examine them where they have not already done so. A reasonable time is a time which allows an examination of the purpose the goods are for. Your buyer needs to check that they match the contractual description and are the same as any sample you have previously given if it is a sale-by-sample.

3. What Are the Implied Terms?

The Sale of Goods Act contains implied terms in it. This means there are rules of the Act that you must abide by, but these are not expressly stated in the Act. These include:

  • your legal right to sell the goods to the buyer at the point of sale;
  • the buyer’s right to enjoy goods in peace once you sell them; and
  • your obligation as the seller to tell the buyer about all costs associated with the goods. 
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Key Takeaways

The Sale of Goods Act is a crucial piece of UK law that applies to your eCommerce business. Whilst it no longer covers consumer sales, the areas it covers are now in the Consumer Rights Act, so the detail of the law still applies. The Sale of Goods Act applies to your business-to-business sales and protects the quality and purpose of the goods. This article has explained three essential points about the Act. It describes when it applies and how. The article also presents how to understand acceptance of the Act. The third important point the article covers about the Sale of Goods Act is that it contains implied terms.

If you need help determining if your eCommerce business is in compliance with the Sale of Goods Act, contact our experienced eCommerce lawyers as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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