Last edited 08 Oct 2020

Supply of Goods and Services Act

The common law rules have now in part been replaced (in relation to goods) and in part supplemented (in relation to services) by a statutory code, the Supply of Goods and Services Act 1982 (as amended by the Sale and Supply of Goods Act 1994), which governs all contracts made after 4 January 1983.

Section 4 of the Act, as amended, sets out the code for quality and fitness. Section 4(2) of the Act provides that goods shall be of a satisfactory quality, i.e. they should meet the standard that a reasonable person would regard as satisfactory taking account of any description, price and all other relevant circumstances. By section 4(3) the following matters were excluded from the statutory warranty:

Matters which are specifically drawn to the transferee's attention before the contract is made; or
Where the transferee examines the goods before the contract is made, matters which that examination ought to reveal; or
Where the property is transferred by reference to a sample, matters which would have been apparent on reasonable examination of the sample.

Sections 4(4) and 4(5) provide that where the purpose for which the goods are being acquired is made known to the party contracting to buy the same, whether expressly or by implication, there is an implied condition that the goods should be reasonably fit for their purpose, whether or not that is a purpose for which such goods are commonly supplied.

Section 4(6) creates a proviso whereby the fitness for purpose condition does not apply if the other party does not rely, or it was unreasonable for them to rely, on the skill or judgment of the party providing the goods.

Section 1(3) of the Act provides that a contract is a contract for the transfer of goods even though services are to be provided under the same contract. It follows that section 4 applies to the materials part of a contract for the supply of work and materials. A building contract is a contract for the supply of work and materials.

Section 13 of the Act deals with a contract for services and provides that there shall be an implied term that the contractor will carry out the services with reasonable care and skill. Unlike the statutory warranties as to quality and fitness of goods, section 13 does not exclude the common law rules in so far as those rules impose a stricter duty than the Act. It follows that the decisions in Young & Marten Limted v Macmanus Childs Limited and Gloucestershire County Council v Richardson are still of relevance.