Supply of Goods and

Services

Reminder: How to distinguish sale

of goods contract from mixed goods
and services contract

• What is the substance of the contract?

• Lee v Griffin (1861)
• Robinson v Graves [1935]
• Lockett v Charles [1938]
• Stewart v Revell’s Ltd [1952]

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 B2B or B2C?
• B2B falls under Supply of Goods and
Services Act 1982

• B2C falls under Consumer Rights Act

2015
– For contract entered into from 1st October
2015

Types of Contract
• Goods (SGA 1979)
• Non sale of goods contracts:
SGSA Part 1
Ss 2-5 apply where a
– barter or exchange (not SGA as no money
consideration);
– where there is a mixed contract, but the substance
is skill and labour with some goods supplied. Where
substance is goods: SGA applies to the goods
element of the contract.
Ss 6-10 apply to hire contracts (not HP).
SGSA Part 2- services (whatever the substance)
• In B2C after 1/10/15 all the above under CRA 2015

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 Supply of Goods and Services
Questions
• Often relate to:
– Was the service/work carried out badly or with
faulty materials?
– Did it take too long?
– How much did they charge?

Example
• Bob takes a computer in to upgrade the cd
player to a dvd player. When the computer
returns the new player will not work with
region 1 dvds.

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 Example
• Nick buys a new sink and tap and then
separately employs a plumber to fit them
in the office bathroom. After the installation
Nick discovers that the tap drips water for
3 seconds after the tap is switched off
before stopping completely

SGSA 1982
• Part 1
– Contains terms about title, description, quality
and fitness for purpose for goods that pass
under a service contract
• Part 2
– Contains terms about standard of work
carried out by supplier, timeframe and price
charged

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 Implied terms about title
• SGSA S.2 – in a contract for the transfer
of property there is an implied condition
that the transferor has a right to transfer
the property

– Corresponding term in relation to hire

contracts in s.7

– B2C = CRA s17

Implied terms where transfer is

by description
• SGSA S.3 where there is a contract to
transfer goods there is an implied term
that the goods will correspond to that
description

– B2C = CRA s.11

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 Implied terms about quality
} SGSA S4(2) - Where… the transferor transfers the
property in goods in the course of a business, there
is an implied condition that the goods supplied
under the contract are of satisfactory quality.
} …s.4(2A)goods are of satisfactory quality if they
meet the standard that a reasonable person would
regard as satisfactory, taking account of any
description of the goods, the price (if relevant) and
all the other relevant circumstances.
} B2C = CRA s9

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Satisfactory quality
• SGSA S.18(3) this includes:
– Fitness for all purposes for which goods of the
kind in question are commonly supplied
– Appearance and finnish
– Freedom from minor defects
– Safety
– Durability

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 Implied term about fitness for
specific purpose
• SGSA S.4(4) and 4(5) – where the
transferee makes known to the transferor
any specific purpose for which he wants
the goods there is an implied term that the
goods will be reasonably fit for that
specific purpose

– B2C CRA s.10

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Exempting liability for such

terms
• B2B S. 7 UCTA provides:
– As against non-consumer such liability can be
excluded in so far as it satisfies the
requirement of reasonableness

• B2C CRA s.31 provides

– Against a consumer you cannot exempt
liability for description, quality, fitness for
purpose

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 SGSA Part II
• Part II of the Act provides:
– Services are to be performed with reasonable
care and skill s.13
– Where no time for performance is fixed, it will
be carried out within a reasonable time s.14
– Where no price is fixed a reasonable charge
will be paid s.15

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Implied Terms
• SGSA S13 states:
“In a contract for the supply of a service where the
supplier is acting in the course of a business,
there is an implied term that the supplier will
carry out the service with reasonable care and
skill.”
This is an innominate term

– B2C CRA s.49 (exercise reasonable care and

skill) and s.50 (information about
trader/service)

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 Standard of care
• Must exercise reasonable care and skill of
a reasonably competent member of that
profession, calling or trade
– Bol am v Friern Hospital Management
[1957]

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Standard of Care
• If you are in a specialist field then you
should generally exercise the reasonable
care and skill of a competent specialist in
that field
– Grieves v B ay nham Miekle
– Maynard v West Midlands Regional Health
Authority
– Duchess of Argyll v Beuselinck 1972
– Matrix Securities v Theodore Goddard
– Philips v William Whiteley 1938

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 • Somebody new to the field is still judged
by the same standard of an ordinarily
competent person
– Nettleship v Weston

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Guarantee an outcome?
You don’t usually guarantee a particular result or
outcome:
Thake v Maurice [1986]

But it is possible for the parties to contractually

guarantee success or an outcome
Platform Funding Ltd v Bank of Scotland [2008]

Dove v Jarvis [2013]

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 Remedies in B2C
• For service not in compliance can ask for:
– Repair or repeat performance
– Price reduction

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Installation in B2C contracts

• CRA s.15 – if the trader is required to
supply and install the goods there is an
implied term that he will install them
correctly
– Strict liability
– Cannot exempt liability for it – CRA s.31

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 Time for performance of the contract
• Look first to see what is stated in the contract
• Was time “of the essence”?
– United Scientific Holdings v Burnley Council [1978] AC 904

• What if nothing is stated in the contract?

• SGSA s14 states
“Where, under a contract for the supply of a service by a supplier
acting in the course of a business, the time for the service to
be carried out is not fixed by the contract, left to be fixed in a
manner agreed by the contract or determined by the course of
dealing between the parties, there is an implied term that the
supplier will carry out the service within a reasonable
time.…What is a reasonable time is a question of fact.”

B2C = CRA s.52

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When must the parties perform?

• Charnock v Liverpool Corporation [1968]

– LJ Winn quoting Hick v Raymond
– ”… the only sound principle is that the 'reasonable
time' should depend on the circumstances which
actually exist … When I say the circumstances which
actually exist, I, of course, imply that those
circumstances, in so far as they involve delay, have
not been caused or contributed to by the consignee”

• Charles Rickards v Oppenheim [1950]

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 Price of the contract
The contract should set out the price

May and Butcher v R, per Lord Buckmaster:

“It is not open to them to agree that they will in future agree
upon a matter which is vital to the arrangement between
them and has not yet been determined”.

Foley v Classique Coaches

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What if no price is stated?

SGSA s15
“Where, under a contract for the supply of a service,
the consideration for the service is not
determined by the contract, left to be determined
in a manner agreed by the contract or determined
by the course of dealing between the parties, there
is an implied term that the party contracting with the
supplier will pay a reasonable charge.
…What is a reasonable charge is a question of
fact.”

B2C = CRA s.51

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 Estimates and quotes
• In determining a reasonable charge the
court may have regard to estimates or
quotes provided
– Croshaw v Pritchard (1899) 16 TLR 45

– Way v Latilla

– Sykes v Packham [2011]

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Exclusion of liability for breach

of SGSA ss.13 and 14
• these may be covered by ss. 2 & 3 of
UCTA
– If negligence liability for death/pi then cannot
exclude (s.2(1) UCTA)
– For other loss would be subject to
requirement of reasonableness (s.2(2) and 3
UCTA)

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 Exclusion of Liability in B2C
• Extra protection for consumers: CRA s.57
It is not possible to fully exempt liability for
breach of implied term under CRA s.49:
requirement to carry out a service with
reasonable care and skill
– However, it is possible to exempt liability to a
at least equal to the contract price CRA
s.57(3) though this could be challenged as an
unfair term

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