Supply of Goods and Services Act 1996

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SUPPLY OF GOODS AND SERVICES ACT

1996

Supply of Goods and Services Act 1996 Index

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SUPPLY OF GOODS AND SERVICES ACT 1996

Index Section Page

PART 1 – IMPORTED TERMS IN CONTRACTS RELATING TO

GOODS 5

Implied terms as to title 5

1 Implied terms as to title: sale of goods ........................................................................ 5

2 Implied terms as to title: hire-purchase ....................................................................... 6

3 Implied terms as to title: other contracts for transfer of property in goods ........... 7

4 Implied terms about right to transfer possession: hire of goods ............................. 8

Transfer of goods by description 8

5 Sale by description .......................................................................................................... 8

6 Hire-purchase by description ....................................................................................... 8

7 Other transfers of goods by description ...................................................................... 9

8 Hire of goods by description ......................................................................................... 9

Implied terms about quality or fitness 9

9 Implied terms about quality or fitness: sale of goods ................................................ 9

10 Implied terms about quality or fitness: hire-purchase ............................................ 10

11 Implied terms about quality or fitness: other contracts for transfer of

goods .............................................................................................................................. 11

12 Implied terms about quality or fitness: hire of goods ............................................. 12

Sale etc. by sample 13

13 Implied term in sale by sample ................................................................................... 13

14 Implied term in hire-purchase by sample ................................................................. 13

15 Implied term where transfer is by sample ................................................................ 14

16 Implied term where hire is by sample ....................................................................... 14

Supplemental 15

17 Modification of remedies for breach of condition in non-consumer cases ........... 15

18 Exclusion of implied terms .......................................................................................... 16

19 Contracts to which Part 1 applies ............................................................................... 17

20 Interpretation of Part 1: general .................................................................................. 18

PART 2 – IMPLIED TERMS IN CONTRACTS FOR SUPPLY OF

Index Supply of Goods and Services Act 1996

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SERVICES 20

21 The contracts concerned .............................................................................................. 20

22 Implied term about care and skill .............................................................................. 21

23 Implied term about time for performance ................................................................ 21

24 Implied term about consideration ............................................................................. 21

25 Exclusion of implied terms, etc .................................................................................. 21

26 Interpretation of Part 2 ................................................................................................ 22

PART 3 – MISCELLANEOUS AND SUPPLEMENTAL 22

Sale of goods 22

27 Goods forming part of a bulk ..................................................................................... 22

28 Acceptance or rejection of goods ............................................................................... 22

29 Regulations as to consumer credit ............................................................................. 22

30 Transitional provisions and savings .......................................................................... 22

31 Minor and consequential amendments and repeals ............................................... 23

32 Short title and commencement ................................................................................... 23

SCHEDULE 1 25

MATTERS RELEVANT TO REASONABLENESS OF CONTRACT TERMS 25

SCHEDULE 2 25

TRANSITIONAL PROVISIONS AND SAVINGS 25

SCHEDULE 3 36

MINOR AND CONSEQUENTIAL AMENDMENTS 36

SCHEDULE 4 36

ENACTMENTS REPEALED 36

ENDNOTES 37

TABLE OF LEGISLATION HISTORY 37

TABLE OF RENUMBERED PROVISIONS 37

TABLE OF ENDNOTE REFERENCES 37

Supply of Goods and Services Act 1996 Section 1


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SUPPLY OF GOODS AND SERVICES ACT 1996

Received Royal Assent: 18 June 1996

Passed: 19 June 1996

Commenced: 19 August 1996

AN ACT to re-enact with amendments the enactments relating to terms implied

in contracts for the supply of goods and services; to amend the Sale of Goods Act

1983 and the Moneylenders Act 1991; and for connected purposes.

PART 1 – IMPORTED TERMS IN CONTRACTS RELATING TO

GOODS

Implied terms as to title

1 Implied terms as to title: sale of goods

[1983/9/12; P1979/54/12]

(1) In a contract of sale, other than one to which subsection (2) applies,

there are —

(a) an implied condition on the part of the seller that in the case of a

sale he has a right to sell the goods, and in the case of an

agreement to sell he will have such a right at the time when the

property is to pass; and

(b) an implied warranty that —

(i) the goods are free, and will remain free until the time when

the property is to pass, from any charge or encumbrance

not disclosed or known to the buyer before the contract is

made, and

(ii) the buyer will enjoy quiet possession of the goods except

so far as it may be disturbed by the owner or other person

entitled to the benefit of any charge or encumbrance so

disclosed or known.

(2) Where, in the case of a contract of sale there appears from the contract, or

there is to be inferred from its circumstances, an intention that the seller

Section 2 Supply of Goods and Services Act 1996


should transfer only such title as he or a third person may have, there are

implied warranties —

(a) that all charges or encumbrances known to the seller and not

known to the buyer have been disclosed to the buyer before the

contract is made; and

(b) an implied warranty that none of the following will disturb the

buyer’s quiet possession of the goods —

(i) the seller;

(ii) in a case where the parties to the contract intend that the

seller should transfer only such title as a third person may

have, that person;

(iii) anyone claiming through or under the seller or that third

person otherwise than under a charge or encumbrance

disclosed or known to the buyer before the contract is

made.

2 Implied terms as to title: hire-purchase

[1976/8/8; P1973/13/8]

(1) In every hire-purchase agreement, other than one to which subsection (2)

applies, there are —

(a) an implied condition on the part of the owner that he will have a

right to sell the goods at the time when the property is to pass;

and

(b) an implied warranty that the goods are free, and will remain free

until the time when the property is to pass, from any charge or

encumbrance not disclosed or known to the hirer before the

agreement is made and that the hirer will enjoy quiet possession

of the goods except so far as it may be disturbed by any person

entitled to the benefit of any charge or encumbrance so disclosed

or known.

(2) Where in the case of a hire-purchase agreement there appears from the

agreement, or there is to [be] inferred from its circumstances, an

intention that the owner should transfer only such title as he or a third

person may have, there are implied warranties —

(a) that all charges or encumbrances known to the owner and not

known to the hirer have been disclosed to the hirer before the

agreement is made; and

(b) that none of the following will disturb the hirer’s quiet possession

of the goods —

(i) the owner;



(ii) in a case where the parties to the agreement intend that

any title which may be transferred shall be only such title

as a third person may have, that person;

(iii) anyone claiming through or under the owner or that third

person otherwise than under a charge or encumbrance

disclosed or known to the hirer before the agreement is

made.

3 Implied terms as to title: other contracts for transfer of property in

goods

[1985/1/2; P1982/29/2]

(1) In a contract for the transfer of goods, other than one to which subsection

(2) applies, there are —

(a) an implied condition on the part of the transferor that —

(i) in the case of a transfer of the property in the goods, he has

a right to transfer the property and,

(ii) in the case of an agreement to transfer the property in the

goods, he will have such a right at the time when the

property is to be transferred; and

(b) an implied warranty that —

(i) the goods are free, and will remain free until the time when

the property is to be transferred, from any charge or

encumbrance not disclosed or known to the transferee

before the contract is made, and

(ii) the transferee will enjoy quiet possession of the goods

except so far as it may be disturbed by the owner or other

person entitled to the benefit of any charge or

encumbrance so disclosed or known.

(2) Where, in the case of a contract for the transfer of goods, there appears

from the contract, or there is to be inferred from its circumstances, an

intention that the transferor should transfer only such title as he or a

third person may have, there are —

(a) an implied warranty that all charges or encumbrances known to

the transferor and not known to the transferee have been

disclosed to the transferee before the contract is made; and

(b) an implied warranty that none of the following will disturb the

transferee’s quiet possession of the goods —

(i) the transferor;

(ii) in a case where the parties to the contract intend that the

transferor should transfer only such title as a third person

may have, that person;



(iii) anyone claiming through or under the transferor or that

third person otherwise than under a charge or

encumbrance disclosed or known to the transferee before

the contract is made.

4 Implied terms about right to transfer possession: hire of goods

[1985/1/7; P1982/29/7]

(1) In a contract for the hire of goods there is an implied condition on the

part of the bailor that —

(a) in the case of a bailment, he has a right to transfer possession of

the goods by way of hire for the period of the bailment, and

(b) in the case of an agreement to bail, he will have such a right at the

time of the bailment.

(2) In a contract for the hire of goods there is also an implied warranty that

the bailee will enjoy quiet possession of the goods for the period of the

bailment except so far as the possession may be disturbed by the owner

or other person entitled to the benefit of any charge or encumbrance

disclosed or known to the bailee before the contract is made.

(3) Subsections (1) and (2) do not affect the right of the bailor to repossess

the goods under an express or implied term of the contract.

Transfer of goods by description

5 Sale by description

[1983/9/13; P1979/54/13]

(1) Where there is a contract for the sale of goods by description, there is an

implied condition that the goods will correspond with the description.

(2) If the sale is by sample as well as by description it is not sufficient that

the bulk of the goods corresponds with the sample if the goods do not

also correspond with the description.

(3) A sale of goods is not prevented from being a sale by description by

reason only that, being exposed for sale or hire, they are selected by the

buyer.

6 Hire-purchase by description

[1976/8/9; P1973/13/9]

(1) Where under a hire-purchase agreement goods are let by description,

there is an implied condition that the goods will correspond with the

description.



(2) If under the agreement the goods are let by reference to a sample as well

as a description, it is not sufficient that the bulk of the goods corresponds

with the sample if the goods do not also correspond with the description.

(3) Goods shall not be prevented from being let by description by reason

only that, being exposed for sale or hire, they are selected by the hirer.

7 Other transfers of goods by description

[1985/1/3; P1982/29/3]

(1) Where, under a contract for the transfer of goods, the transferor transfers

or agrees to transfer the property in the goods by description, there is an

implied condition that the goods will correspond with the description.

(2) If the transferor transfers or agrees to transfer the property in the goods

by sample as well as by description it is not sufficient that the bulk of the

goods corresponds with the sample if the goods do not also correspond

with the description.

(3) A contract is not prevented from falling within subsection (1) by reason

only that, being exposed for supply, the goods are selected by the

transferee.

8 Hire of goods by description

[1985/1/8; P1982/29/8]

(1) Where, under a contract for the hire of goods, the bailor bails or agrees to

bail the goods by description, there is an implied condition that the

goods will correspond with the description.

(2) If under the contract the bailor bails or agrees to bail the goods by

reference to a sample as well as a description it is not sufficient that the

bulk of the goods corresponds with the sample if the goods do not also

correspond with the description.

(3) A contract is not prevented from falling within subsection (1) by reason

only that, being exposed for supply, the goods are selected by the bailee.

Implied terms about quality or fitness

9 Implied terms about quality or fitness: sale of goods

[1983/9/14; P1979/54/14; P1994/35/1]

(1) Except as provided by this section and section 13 and subject to any other

enactment, there is no implied condition or warranty about the quality or

fitness for any particular purpose of goods supplied under a contract of

sale.

(2) Where the seller sells goods in the course of a business, there is an

implied condition that the goods supplied under the contract are of

satisfactory quality.


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(3) The condition implied by subsection (2) does not extend to any matter

making the quality of goods unsatisfactory —

(a) which is specifically drawn to the buyer’s attention before the

contract is made,

(b) where the buyer examines the goods before the contract is made,

which that examination ought to reveal, or

(c) in the case of a contract for sale by sample, which would have

been apparent on a reasonable examination of the sample.

(4) Where the seller sells goods in the course of a business and the buyer,

expressly or by implication, makes known to the seller any particular

purpose for which the goods are being bought, there is an implied

condition that the goods supplied under the contract are reasonably fit

for that purpose, whether or not that is a purpose for which such goods

are commonly supplied, except where the circumstances show that the

buyer does not rely, or that it is unreasonable for him to rely, on the skill

or judgment of the seller.

(5) An implied condition or warranty about quality or fitness for a particular

purpose may be annexed to a contract of sale by usage.

(6) The preceding provisions of this section apply to a sale by a person who

in the course of a business is acting as agent for another as they apply to

a sale by a principal in the course of a business, except where that other

is not selling in the course of a business and either the buyer knows that

fact or reasonable steps are taken to bring it to the notice of the buyer

before the contract is made.

(7) In the application of subsection (4) to an agreement for the sale of goods

under which the whole or part of the purchase price is payable by

instalments, any reference to the seller includes a reference to the person

by whom any antecedent negotiations are conducted.

10 Implied terms about quality or fitness: hire-purchase

[1976/8/9; P1973/13/10; P1994/35/2/4]

(1) Except as provided by this section and section 14 and subject to the

provisions of any other enactment, there is no implied condition or

warranty as to the quality or fitness for any particular purpose of goods

let under a hire-purchase agreement.

(2) Where the owner lets goods under a hire-purchase agreement in the

course of a business, there is an implied condition that the goods

supplied under the agreement are of satisfactory quality.



(a) which is specifically drawn to the attention of the hirer before the

agreement is made,


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(b) where the hirer examines the goods before the agreement is made,


(c) where the goods are let by reference to a sample, which would

have been apparent on a reasonable examination of the sample.

(4) Where the owner lets goods under a hire-purchase agreement in the

course of a business and the hirer, expressly or by implication, makes

known to the owner any particular purpose for which the goods are

being hired, there is an implied condition that the goods supplied under

the agreement are reasonably fit for that purpose, whether or not that is a

purpose for which such goods are commonly supplied, except where the

circumstances show that the hirer does not rely, or that it is unreasonable

for him to rely, on the skill or judgment of the owner.

(5) An implied condition or warranty as to quality or fitness for a particular

purpose may be annexed to a hire-purchase agreement by usage.

(6) The preceding provisions of this section apply to a hire-purchase

agreement made by a person who in the course of a business is acting as

agent for the owner as they apply to an agreement made by the owner in

the course of a business, except where the owner is not letting in the

course of a business and either the hirer knows that fact or reasonable

steps are taken to bring it to the notice of the hirer before the agreement

is made.

(7) Any reference in subsection (4) to the owner includes a reference to the

person by whom any antecedent negotiations are conducted.

11 Implied terms about quality or fitness: other contracts for transfer of

goods

[1985/1/4; P1982/29/4; P1994/35/2/6]



warranty about the quality or fitness for any particular purpose of goods

supplied under a contract for the transfer of goods.

(2) Where, under such a contract, 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.



(a) which is specifically drawn to the transferee’s attention before the

contract is made,

(b) where the transferee examines the goods before the contract is

made, which that examination ought to reveal, or


Page 12 AT 16 of 1996 c

(c) where the property in the goods is transferred by reference to a

sample, which would have been apparent on a reasonable

examination of the sample.


the property in goods in the course of a business and the transferee,

expressly or by implication, makes known to the transferor any

particular purpose for which the goods are being acquired, there is an

implied condition that the goods supplied under the contract are

reasonably fit for that purpose, whether or not that is a purpose for

which such goods are commonly supplied, except where the

circumstances show that the transferee does not rely, or that it is

unreasonable for him to rely, on the skill or judgment of the transferor.


purpose may be annexed by usage to a contract for the transfer of goods.

(6) The preceding provisions of this section apply to a transfer by a person

who in the course of a business is acting as agent for another as they

apply to a transfer by a principal in the course of a business, except

where that other is not transferring in the course of a business and either

the transferee knows that fact or reasonable steps are taken to bring it to

the transferee’s notice before the contract concerned is made.

(7) In the application of subsection (4) to a contract for the transfer of goods

under which the consideration or part of the consideration for the

transfer is a sum payable by instalments, any reference to the transferor

includes a reference to the person by whom any antecedent negotiations

are conducted.

12 Implied terms about quality or fitness: hire of goods

[1985/1/9; P1982/29/9; P1994/35/2/6]



warranty about the quality or fitness for any particular purpose of goods

bailed under a contract for the hire of goods.

(2) Where, under such a contract, the bailor bails goods in the course of a

business, there is an implied condition that the goods supplied under the

contract are of satisfactory quality.



(a) which is specifically drawn to the bailee’s attention before the

contract is made,

(b) where the bailee examines the goods before the contract is made,



c AT 16 of 1996 Page 13

(c) where the goods are bailed by reference to a sample, which would

have been apparent on a reasonable examination of the sample.

(4) Where, under a contract for the hire of goods, the bailor bails goods in

the course of a business and the bailee, expressly or by implication,

makes known to the bailor any particular purpose for which the goods

are being bailed, there is an implied condition that the goods supplied

under the contract are reasonably fit for that purpose, whether or not

that is a purpose for which such goods are commonly supplied, except

where the circumstances show that the bailee does not rely, or that it is

unreasonable for him to rely, on the skill or judgment of the bailor.


purpose may be annexed by usage to a contract for the hire of goods.

(6) The preceding provisions of this section apply to a bailment by a person

who in the course of a business is acting as agent for another as they

apply to a bailment by a principal in the course of a business, except

where that other is not bailing in the course of a business and either the

bailee knows that fact or reasonable steps are taken to bring it to the

bailee’s notice before the contract concerned is made.

(7) In subsection (4) any reference to the bailor includes a reference to the

person by whom any antecedent negotiations are conducted.

Sale etc. by sample

13 Implied term in sale by sample

[1983/9/15; P1979/54/15; P1994/35/1]

(1) In a contract for sale by sample there is an implied condition —

(a) that the bulk will correspond with the sample in quality; and

(b) that the goods will be free from any defect, making their quality

unsatisfactory, which would not be apparent on reasonable


(2) For the purposes of this section a contract of sale is a contract for sale by

sample where there is an express or implied term to that effect in the

contract.

14 Implied term in hire-purchase by sample

[1976/8/11; P1973/13/11; P1994/35/2/6]

(1) Where under a hire-purchase agreement goods are let by reference to a

sample, there is an implied condition —

(a) that the bulk will correspond with the sample in quality;

(b) that the hirer will have a reasonable opportunity of comparing the

bulk with the sample; and


Page 14 AT 16 of 1996 c

(c) that the goods will be free from any defect, making their quality



(2) For the purposes of this section goods are let by reference to a sample

where there is an express or implied term to that effect in the hire-

purchase agreement concerned.

15 Implied term where transfer is by sample

[1985/1/5; P1982/29/5; P1994/35/2/6]


or agrees to transfer the property in the goods by reference to a sample,

there is an implied condition —

(a) that the bulk will correspond with the sample in quality;

(b) that the transferee will have a reasonable opportunity of

comparing the bulk with the sample; and




(2) For the purposes of this section a transferor transfers or agrees to transfer

the property in goods by reference to a sample where there is an express

or implied term to that effect in the contract concerned.

16 Implied term where hire is by sample

[1985/1/10; P1982/29/10; P1994/35/2/6]

(1) Where, under a contract for the hire of goods, the bailor bails or agrees to

bail the goods by reference to a sample, there is an implied condition —

(a) that the bulk will correspond with the sample in quality; and

(b) that the bailee will have a reasonable opportunity of comparing

the bulk with the sample; and




(2) For the purposes of this section a bailor bails or agrees to bail goods by

reference to a sample where there is an express or implied term to that

effect in the contract concerned.


c AT 16 of 1996 Page 15

Supplemental

17 Modification of remedies for breach of condition in non-consumer

cases

[P1973/13/11A; P1979/54/15A; P1982/29/5A,10A; P1994/35/4 etc.]

(1) Where in the case of a contract of sale —

(a) the buyer would, apart from this subsection, have the right to

reject goods by reason of a breach on the part of the seller of a

term implied by section 5, 9 or 13, but

(b) the breach is so slight that it would be unreasonable for him to

reject them,

then, if the buyer does not deal as consumer, the breach is not to be

treated as a breach of condition but may be treated as a breach of

warranty.

(2) Where in the case of a hire-purchase agreement —

(a) the hirer would, apart from this subsection, have the right to reject

by reason of a breach on the part of the owner of a term implied

by section 6, 10 or 14(1)(a) or (c), but


reject them,

then, if the hirer does not deal as consumer, the breach is not to be


warranty.

(3) Where in the case of a contract for the transfer of goods —

(a) the transferee would, apart from this subsection, have the right to

treat the contract as repudiated by reason of a breach on the part

of the transferor of a term implied by section 7, 11 or 15(1)(a) or

(c), but


do so,

then, if the transferee does not deal as consumer, the breach is not to be


warranty.

(4) Where in the case of a contract for the hire of goods —

(a) the bailee would, apart from this subsection, have the right to

treat the contract as repudiated by reason of a breach on the part

of the bailor of a term implied by section 8, 12 or 16(1)(a) or (c),

but


do so,


Page 16 AT 16 of 1996 c

then, if the bailee does not deal as consumer, the breach is not to be


warranty.

(5) This section applies unless a contrary intention appears in, or is to be

implied from, the contract or agreement in question.

(6) It is for the seller, owner, transferor or bailor to show that a breach fell

within subsection (1)(b), (2)(b), (3)(b) or (4)(b), as the case may be.

18 Exclusion of implied terms

[1980/18/9, 10; P1977/50/6, 7]

(1) Liability for breach of the obligations arising under sections 1 to 3

(implied terms as to title in contracts for sale etc.) cannot be excluded or

restricted by reference to any contract term.

(2) Liability for breach of the obligations arising under section 4 (implied

terms as to title in contracts for hire) cannot be excluded or restricted by

reference to any contract term, except so far as the term satisfies the

requirement of reasonableness.

(3) As against a person dealing as consumer, liability for breach of the

obligations arising under —

(a) sections 5 to 8 (sale etc. by description),

(b) sections 9 to 12 (quality or fitness), and

(c) sections 13 to 16 (sale by sample etc.),

cannot be excluded or restricted by reference to any contract term.

(4) As against a person dealing otherwise than as consumer, the liability

specified in subsection (3) can be excluded or restricted by reference to a

contract term, but only so far as the term satisfies the requirement of

reasonableness.

(5) In relation to a contract term, the requirement of reasonableness for the

purposes of this section is that the term is a fair and reasonable one to be

included, having regard to —

(a) the circumstances which were, or ought reasonably to have been,

known or in the contemplation of the parties when the contract or

agreement in question was made; and

(b) in particular to any of the matters specified in Schedule 1 which

appear to be relevant;

but paragraph (b) does not prevent the court or arbitrator holding, in

accordance with any rule of law, that a term which purports to exclude

or restrict any relevant liability is not a term of the contract.

(6) It is for the person claiming that a contract term satisfies the requirement

of reasonableness to show that it does.


c AT 16 of 1996 Page 17

(7) The following provisions of the Misrepresentation and Unfair Contract

Terms Act 1980 apply in relation to this section as follows —

(a) section 15 (exemption clauses) applies in relation to subsections

(1) to (6) as it applies in relation to Part II (in particular, sections 5

and 8) of that Act;

(b) section 17 (international contracts) applies to the limits imposed

by this section as it applies to the limits imposed by that Act;

(c) section 18 (choice of law clauses) applies in relation to subsections

(1) to (6) as it applies in relation to the provisions of that Act;

(d) paragraphs 3 and 4 of Schedule 4 (saving for statutory terms etc.)

apply to subsections (1) to (6) as they apply to Parts II to IV of

that Act.

(8) Subject to the preceding provisions of this section —

(a) nothing in this Part affects section 54 of the Sale of Goods Act 1983

(rights etc. under contract of sale may be varied by express

agreement, course of dealing or binding usage);

(b) where a right, duty or liability would arise under a hire-purchase

agreement, a contract for the transfer of goods or a contract for the

hire of goods by implication of law, it may be negatived or varied

by express agreement, by the course of dealing between the

parties or by such usage as binds both parties to the contract.

(9) An express condition or warranty does not negative a condition or

warranty implied by this Act unless inconsistent with it.

(10) Nothing in this Part prejudices the operation of any other enactment or

any rule of law whereby any condition or warranty (other than one

relating to quality or fitness) is to be implied in a contract to which

sections 1 to 16 apply.

19 Contracts to which Part 1 applies

(1) In this Part —

“contract of sale” means a contract for sale of goods, that is, a contract by which

the seller transfers or agrees to transfer the property in goods to the

buyer for a money consideration (called the price), and includes both an

agreement to sell and a sale (within the meaning of the Sale of Goods Act

1983);

“hire-purchase agreement” means an agreement for the bailment of goods

under which the bailee may buy the goods or under which the property

in the goods will or may pass to the bailee;

“contract for the transfer of goods” means a contract under which one person

transfers or agrees to transfer to another the property in goods, other

than —


Page 18 AT 16 of 1996 c

(a) a contract of sale;

(b) a hire-purchase agreement;

(c) a transfer or agreement to transfer which is made by deed and for

which there is no consideration other than the presumed

consideration imported by the deed;

(d) a contract intended to operate by way of mortgage, pledge, charge

or other security;

“contract for the hire of goods” means a contract under which one person bails

or agrees to bail goods to another by way of hire, other than a hire-

purchase agreement.

(2) Where by virtue of 2 or more agreements, none of which by itself

constitutes a hire-purchase agreement, there is a bailment of goods and

either the bailee may buy the goods, or the property therein will or may

pass to the bailee, the agreements shall be treated for the purposes of this

Part as a single agreement made at the time when the last of the

agreements was made.

(3) For the purposes of this Part —

(a) a contract is a contract for the transfer of goods whether or not

services are also provided or to be provided under the contract,

and (subject to subsection (1)) whatever is the nature of the

consideration for the transfer or agreement to transfer;

(b) a contract is a contract for the hire of goods whether or not

services are also provided or to be provided under the contract,

and (subject to subsection (1)) whatever is the nature of the

consideration for the bailment or agreement to bail by way of hire.

20 Interpretation of Part 1: general

[1983/9/59; P1979/54/61]

(1) In this Part —

“antecedent negotiations”, in relation to any agreement, means any

negotiations or arrangements with the buyer whereby he was induced to

make the agreement or which otherwise promoted the transaction to

which the agreement relates;

“bailee”, in relation to a contract for the hire of goods, means (depending on the

context) a person to whom the goods are bailed under the contract, or a

person to whom they are to be so bailed, or a person to whom the rights

under the contract of either of those persons have passed;

“bailor”, in relation to a contract for the hire of goods, means (depending on the

context) a person who bails the goods under the contract, or a person

who agrees to do so, or a person to whom the duties under the contract

of either of those persons have passed;


c AT 16 of 1996 Page 19

“business” includes a profession and the activities of any Department,

Statutory Board or other public or local authority;

“buyer” means a person who buys or agrees to buy goods;

“goods” includes all personal chattels other than things in action and money;

and in particular “goods” includes emblements, industrial growing

crops, and things attached to or forming part of the land which are

agreed to be severed before sale, transfer or bailment or under the

contract concerned;

“the person by whom any antecedent negotiations are conducted” means the

person by whom the negotiations or arrangements in question were

conducted or made in the course of a business carried on by him;

“property” means the general property in goods, and not merely a special

property;

“sale” includes a bargain and sale as well as a sale and delivery;

“seller” means a person who sells or agrees to sell goods;

“transferee”, in relation to a contract for the transfer of goods, means

(depending on the context) a person to whom the property in the goods

is transferred under the contract, or a person to whom the property is to

be so transferred, or a person to whom the rights under the contract of

either of those persons have passed;

“transferor”, in relation to a contract for the transfer of goods, means

(depending on the context) a person who transfers the property in the

goods under the contract, or a person who agrees to do so, or a person to

whom the duties under the contract of either of those persons have

passed;

“warranty” means an agreement with reference to goods which are the subject

of a contract of sale, but collateral to the main purpose of such contract,

the breach of which gives rise to a claim for damages, but not to a right to

reject the goods and treat the contract as repudiated.

(2) In subsection (1), in the definitions of bailee, bailor, transferee and

transferor, a reference to rights or duties passing is to their passing by

assignment, operation of law or otherwise.

(3) For the purposes of this Part, negotiations conducted or arrangements

made by a servant or agent, if conducted or made by him in the course of

his employment or agency, shall be treated as conducted or made by his

employer or principal.

(4) For the purposes of this Part —

(a) 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 or other consideration (if

relevant) and all the other relevant circumstances; and


Page 20 AT 16 of 1996 c

(b) the quality of goods includes their state and condition and the

following (among others) are in appropriate cases aspects of the

quality of goods —

(i) fitness for all the purposes for which goods of the kind in

question are commonly supplied,

(ii) appearance and finish,

(iii) freedom from minor defects,

(iv) safety, and

(v) durability.

(5) For the purposes of this Part a party to a contract ‘deals as consumer’ in

relation to another party if —

(a) he neither makes the contract in the course of a business nor holds

himself out as doing so;

(b) the other party does make the contract in the course of a business;

and

(c) the goods passing under or in pursuance of the contract are of a

type ordinarily supplied for private use or consumption;

but on a sale by auction or by competitive tender the buyer is not in any

circumstances to be regarded as dealing as consumer.

(6) Except in the case of a sale by auction or by competitive tender, it is for a

person claiming that a party does not deal as consumer to show that he

does not.

PART 2 – IMPLIED TERMS IN CONTRACTS FOR SUPPLY OF

SERVICES

21 The contracts concerned

[1985/14/12; P1982/29/12]

(1) In this Part a “contract for the supply of a service” means, subject to

subsection (2), a contract under which a person (the supplier) agrees to

carry out a service.

(2) For the purposes of this Part, a contract of service or apprenticeship is

not a contract for the supply of a service.

(3) Subject to subsection (2), a contract is a contract for the supply of a

service for the purposes of this Part whether or not goods are also —

(a) transferred or to be transferred, or

(b) bailed or to be bailed by way of hire,

under the contract, and whatever is the nature of the consideration for

which the service is to be carried out.


c AT 16 of 1996 Page 21

(4) The Isle of Man Office of Fair Trading may by order provide that one or

more of sections 22 to 24 shall not apply to services of a description

specified in the order, and such an order may make different provision

for different circumstances.1

(5) An order under subsection (4) shall not have effect unless it is approved

by Tynwald.

22 Implied term about care and skill

[1985/1/13; P1982/29/13]

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.

23 Implied term about time for performance

[1985/1/4; P1982/29/14]

(1) 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.

(2) What is a reasonable time is a question of fact.

24 Implied term about consideration

[1985/1/15; P1982/29/15]

(1) 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.

(2) What is a reasonable charge is a question of fact.

25 Exclusion of implied terms, etc

[1982/29/16]

(1) Where a right, duty or liability would arise under a contract for the

supply of a service by virtue of this Part, it may (subject to subsection (2)

and to Parts II and III of the Misrepresentation and Unfair Contract Terms

Act 1980) be negatived or varied by express agreement, or by the course

of dealing between the parties, or by such usage as binds both parties to

the contract.

(2) An express term does not negative a term implied by this Part unless

inconsistent with it.


Page 22 AT 16 of 1996 c

(3) Nothing in this Part prejudices —

(a) any rule of law which imposes on the supplier a duty stricter than

that imposed by section 23 or 24; or

(b) subject to paragraph (a), any rule of law whereby any term not

inconsistent with this Part is to be implied in a contract for the

supply of a service.

(4) This Part has effect subject to any other enactment which defines or

restricts the rights, duties or liabilities arising in connection with a

service of any description.

26 Interpretation of Part 2

[P1982/29/18; P1994/35/2/6]

In this Part “business” has the same meaning as in Part 1.

PART 3 – MISCELLANEOUS AND SUPPLEMENTAL

Sale of goods

27 Goods forming part of a bulk

(1) [Amends rule 5 of section 18 of the Sale of Goods Act 1983 by adding

paragraphs (3) and (4).]

(2) [Inserts sections 20A and 20B in the Sale of Goods Act 1983.]

28 Acceptance or rejection of goods

[Substitutes sections 34, 35 and 35A for sections 34 and 35 of the Sale of Goods Act

1983.]

Consumer Credit

29 Regulations as to consumer credit

[Amends section 8 of the Moneylenders Act 1991 by adding subsections (3) and

(4).]

Supplemental

30 Transitional provisions and savings

The transitional provisions and savings in Schedule 2 shall have effect.


c AT 16 of 1996 Page 23

31 Minor and consequential amendments and repeals

(1) The enactments specified in Schedule 3 are amended in accordance with

that Schedule.

(2) The enactments specified in Schedule 4 are repealed to the extent

specified in column 3 of that Schedule.

32 Short title and commencement

(1) This Act may be cited as the Supply of Goods and Services Act 1996.

(2) This Act shall come into operation at the end of the period of 2 months

beginning with the day on which it is passed.2

Supply of Goods and Services Act 1996 Schedule 1

c AT 16 of 1996 Page 25

Schedule 1

MATTERS RELEVANT TO REASONABLENESS OF CONTRACT TERMS

Section 18(5)(b)

1. The strength of the bargaining positions of the parties relative to each

other, taking into account (among other things) alternative means by

which the requirements of the person to whom the goods were supplied

(‘the customer’) could have been met.

2. Whether the customer received an inducement to agree to the term, or in

accepting it had an opportunity of entering into a similar contract with

other persons, but without having to accept a similar term.

3. Whether the customer knew or ought reasonably to have known of the

existence and extent of the term (having regard, among other things, to

any custom of the trade and any previous course of dealing between the

parties).

4. Where the term excludes or restricts any relevant liability if some

condition is not complied with, whether it was reasonable at the time of

the contract to expect that compliance with that condition would be

practicable.

5. Whether the goods were manufactured, processed or adapted to the

special order of the customer.

SCHEDULE 2

[Section 30]

TRANSITIONAL PROVISIONS AND SAVINGS

1 Sections 1 to 4: implied terms as to title

(1) In relation to a contract made before 18th June 1976, for section 1

substitute —

“1 In a contract of sale, unless the circumstances of the contract are such as to

show a different intention, there is —

(a) an implied condition on the part of the seller that in the case of a

sale he has a right to sell the goods, and in the case of an

agreement to sell he will have such a right at the time when the

property is to pass;

(b) an implied warranty that the buyer will have and enjoy quiet

possession of the goods;

(c) an implied warranty that the goods will be free from any charge

or encumbrance in favour of any third party, not declared or

SCHEDULE 2 Supply of Goods and Services Act 1996

Page 26 AT 16 of 1996 c

known to the buyer before or at the time when the contract is

made.”.

(2) Section 2 does not apply to a hire-purchase agreement made before 18th

June 1976.

(3) Sections 3 and 4 do not apply to a contract made before 1st June 1985.

2 Sections 5 to 8: transfer of goods by description

(1) Sections 5(3) and 6(2) do not apply to a contract made before 18th

June 1976.

(2) Sections 7 and 8 do not apply to contracts made before 1st June 1985.

3 Sections 9 to 12: implied terms as to quality or fitness

(1) In relation to a contract made before 18th June 1976 for section 9

substitute —

“9 (1) Subject to this and any other Act, there is no implied condition or

warranty about the quality or fitness for any particular purpose of

goods supplied under a contract of sale.

(2) Where the buyer, expressly or by implication, makes known to the

seller the particular purpose for which the goods are required, so

as to show that the buyer relies on the seller’s skill or judgment,

and the goods are of a description which it is in the course of the

seller’s business to supply (whether he is the manufacturer or

not), there is an implied condition that the goods will be

reasonably fit for such purpose, except that in the case of a

contract for the sale of a specified article under its patent or other

trade name there is no implied condition as to its fitness for any

particular purpose.

(3) Where goods are bought by description from a seller who deals in

goods of that description (whether he is the manufacturer or not),

there is an implied condition that the goods will be of

merchantable quality; but if the buyer has examined the goods,

there is no implied condition as regards defects which such

examination ought to have revealed.

(4) An implied condition or warranty about quality or fitness for a

particular purpose may be annexed by the usage of trade.

(5) An express condition or warranty does not negative a condition or

warranty implied by this Act unless inconsistent with it.”.

(2) In relation to a contract of sale made on or after 18th June 1976 and

before commencement, for section 9 substitute —

“9 (1) Except as provided by this section and section 13 and subject to

any other enactment, there is no implied condition or warranty

Supply of Goods and Services Act 1996 SCHEDULE 2

c AT 16 of 1996 Page 27

about the quality or fitness for any particular purpose of goods

supplied under a contract of sale.

(2) Where the seller sells goods in the course of a business, there is an

implied condition that the goods supplied under the contract are

of merchantable quality, except that there is no such condition —

(a) as regards defects specifically drawn to the buyer’s

attention before the contract is made; or

(b) if the buyer examines the goods before the contract is

made, as regards defects which that examination ought to

reveal.

(3) Where the seller sells goods in the course of a business and the

buyer, expressly or by implication, makes known to the seller any

particular purpose for which the goods are being bought, there is

an implied condition that the goods supplied under the contract

are reasonably fit for that purpose, whether or not that is a

purpose for which such goods are commonly supplied, except

where the circumstances show that the buyer does not rely, or

that it is unreasonable for him to rely, on the seller’s skill or

judgment.


particular purpose may be annexed to a contract of sale by usage.

(5) The preceding provisions of this section apply to a sale by a

person who in the course of a business is acting as agent for

another as they apply to a sale by a principal in the course of a

business, except where that other is not selling in the course of a

business and either the buyer knows that fact or reasonable steps

are taken to bring it to the notice of the buyer before the contract

is made.

(6) Goods of any kind are of merchantable quality within the

meaning of subsection (2) if they are fit for the purpose or

purposes for which goods of that kind are commonly bought as it

is reasonable to expect having regard to any description applied

to them, the price (if relevant) and all the other relevant

circumstances.

(7) In the application of subsection (3) to an agreement for the sale of

goods under which the whole or part of the purchase price is

payable by instalments, any reference to their seller includes a

reference to the person by whom any antecedent negotiations are

conducted.”.

(3) In relation to a hire-purchase agreement made before 18th June 1976, for

section 10 substitute —

“10 (1) Where, in the case of a hire-purchase agreement to which the

Hire-Purchase Act 1939 applies, the hirer expressly or by


Page 28 AT 16 of 1996 c

implication makes known the particular purpose for which the

goods are required, there shall be an implied condition that the

goods shall be reasonably fit for such purpose.

(2) Subject to subsection (3), in a hire-purchase agreement to which

the Hire-Purchase Act 1939 applies there is an implied condition

that the goods are of merchantable quality.

(3) No such condition is implied —

(a) where the goods are let as second-hand goods and the note

or memorandum of the agreement made in pursuance of

section 3 of the Hire-Purchase Act 1939 contains a

statement to that effect;

(b) as regards defects of which the owner could not reasonably

have been aware at the time when the agreement was

made; or

(c) if the hirer has examined the goods or a sample of them, as

regards defects which the examination ought to have

revealed.”.

(4) In relation to a hire-purchase agreement made on or after 18th June 1976

and before commencement, for section 10 substitute —


any other enactment, there is no implied condition or warranty

about the quality or fitness for any particular purpose of goods let

under a hire-purchase agreement.

(2) Where the owner lets goods in the course of a business, there is an

implied condition that the goods supplied under the agreement

are of merchantable quality, except that there is no such

condition —

(a) as regards defects specifically drawn to the hirer’s

attention before the agreement is made; or

(b) if the hirer examines the goods before the agreement is


reveal.

(3) Where the owner lets goods in the course of a business and the

hirer, expressly or by implication, makes known to the owner or

the person by whom any antecedent negotiations are conducted

any particular purpose for which the goods are being hired, there

is an implied condition that the goods supplied under the

agreement are reasonably fit for that purpose, whether or not that

is a purpose for which such goods are commonly supplied, except

where the circumstances show that the hirer does not rely, or that

it is unreasonable for him to rely, on the skill or judgment of the

owner or that person.


c AT 16 of 1996 Page 29


particular purpose may be annexed to a hire-purchase agreement

by usage.

(5) The preceding provisions of this section apply to a hire-purchase

agreement by a person who in the course of a business is acting as

agent for the owner as they apply to an agreement made by the

owner in the course of a business, except where the owner is not

letting in the course of a business and either the hirer knows that

fact or reasonable steps are taken to bring it to the notice of the

hirer before the contract is made.

(6) Goods of any kind are of merchantable quality within the


purposes for which goods of that kind are commonly bought as it

is reasonable to expect having regard to any description applied

to them, the price (if relevant) and all the other relevant

circumstances.”.

(5) Sections 11 and 12 do not apply to a contract made before 1st June 1985.

(6) In relation to a contract for the transfer of goods made on or after 1st

June 1985 and before commencement, for section 11 substitute —


the provisions of any other enactment, there is no implied

condition or warranty about the quality or fitness for any

particular purpose of goods supplied under a contract for the

transfer of goods.

(2) Where, under such a contract, the transferor transfers the property

in goods in the course of a business, there is (subject to subsection

(3)) an implied condition that the goods supplied under the

contract are of merchantable quality.

(3) There is no such condition as is mentioned in subsection (2) —

(a) as regards defects specifically drawn to the transferee’s


(b) if the transferee examines the goods before the contract is


reveal.

(4) Where, under a contract for the transfer of goods, the transferor

transfers the property in goods in the course of a business and the

transferee, expressly or by implication, makes known to the

transferor any particular purpose for which the goods are being

acquired, there is an implied condition that the goods supplied

under the contract are reasonably fit for that purpose, whether or

not that is a purpose for which such goods are commonly

supplied, except where the circumstances show that the transferee


Page 30 AT 16 of 1996 c

does not rely, or that it is unreasonable for him to rely, on the skill

or judgment of the transferor.

(5) An implied condition or warrant about quality or fitness for a

particular purpose may be annexed by usage to a contract for the

transfer of goods.

(6) The preceding provisions of this section apply to a transfer by a


another as they apply to a transfer by a principal in the course of a

business, except where that other is not transferring in the course

of a business and either the transferee knows that fact or

reasonable steps are taken to bring it to the transferee’s notice

before the contract concerned is made.

(6A) Goods of any kind are of merchantable quality within the


purposes for which goods of that kind are commonly supplied as

it is reasonable to expect having regard to any description applied

to them, the consideration for the transfer (if relevant) and all the

other relevant circumstances.

(7) In the application of subsection (4) to a contract for the transfer of

goods under which the consideration or part of the consideration

for the transfer is a sum payable by instalments, any reference to

the transferor includes a reference to the person by whom any

antecedent negotiations are conducted.”.

(7) In relation to a contract for the hire of goods made on or after 1st June

1985 and before commencement, for section 12 substitute —


the provisions of any other enactment, there is no implied

condition or warranty about the quality or fitness for any

particular purpose of goods bailed under a contract for the hire of

goods.

(2) Where, under such a contract, the bailor bails goods in the course

of a business, there is (subject to subsection (3)) an implied

condition that the goods supplied under the contract are of

merchantable quality.

(3) There is no such condition as is mentioned in subsection (2) —

(a) as regards defects specifically drawn to the bailee’s


(b) if the bailee examines the goods before the contract is


reveal.

(4) Where, under a contract for the hire of goods, the bailor bails

goods in the course of a business and the bailee, expressly or by

implication, makes known to the bailor any particular purpose for


c AT 16 of 1996 Page 31

which the goods are being bailed, there is an implied condition

that the goods supplied under the contract are reasonably fit for

that purpose, whether or not that is a purpose for which such

goods are commonly supplied, except where the circumstances

show that the bailee does not rely, or that it is unreasonable for

him to rely, on the skill or judgment of the bailor.


particular purpose may be annexed by usage to a contract for the

hire of goods.

(6) The preceding provisions of this section apply to a bailment by a


another as they apply to a bailment by a principal in the course of

a business, except where that other is not bailing in the course of a

business and either the bailee knows that fact or reasonable steps

are taken to bring it to the bailee’s notice before the contract

concerned is made.

(6A) Goods of any kind are of merchantable quality within the


purposes for which goods of that kind are commonly supplied as

it is reasonable to expect having regard to any description applied

to them, the consideration for the bailment (if relevant) and all the

other relevant circumstances.

(7) In subsection (4) any reference to the bailor includes a reference to

the person by whom any antecedent negotiations are conducted.”.

4 Sale etc. by sample

(1) In relation to a contract of sale made before commencement, in section

14(1), after paragraph (a) insert —

‘(aa) that the buyer will have a reasonable opportunity of comparing

the bulk with the sample; and’.

(2) In relation to a contract made before commencement, in section 13(1)(b),

14(1)(c), 15(1)(c) and 16(1)(c), for “making their quality unsatisfactory”

substitute “rendering them unmerchantable”.

(3) In relation to a contract for sale or hire-purchase agreement made on or

after 18th June 1976, or a contract for the transfer of goods or contract for

the hire of goods made on or after 1st June 1985, the word

“unmerchantable” in those provisions (modified as above) shall be

construed in accordance with section 9(6), 10(6), 11(6A) or 12(6A) (as

substituted by paragraph 3), as the case may be.

(4) Section 14 does not apply to a hire-purchase agreement made before 18th

June 1976.

(5) Sections 15 and 16 do not apply to contracts made before 1st June 1985.


Page 32 AT 16 of 1996 c

5 Modification of remedies in non-consumer cases

Section 17 does not apply to a contract made before commencement.

6 Exclusion of implied terms

(1) Section 18 does not apply to a contract (other than a contract of sale or a hire-

purchase agreement) made before 1st July 1981.

(2) In relation to a contract of sale made before 18th June 1976, for section 18

substitute —

“18 (1) Nothing in this Part affects section 54 of the Sale of Goods Act

1983 (rights etc. under contract of sale may be varied by express

agreement, course of dealing or binding usage).

(2) The seller under a conditional sale agreement to which the Hire-

Purchase Act 1939 applies shall not be entitled to rely on any

provision in the agreement excluding or modifying the condition

set out in section 9(3) unless he proves that before the agreement

was made the provision was brought to the notice of the customer

and its effect made clear to him.

(3) In this section ‘conditional sale agreement’ means a contract for

sale under which —

(a) the price or part of it is payable by instalments, and

(b) the property in the goods is to remain in the seller (even

though the buyer is to be in possession of the goods) until

such conditions as to the payment of instalments or

otherwise as may be specified in the agreement are

fulfilled.”.

(3) In relation to a hire-purchase agreement made before 18th June 1976 for

section 18 substitute —

“18 The warranties and condition set out in sections 2 and 10 shall be

implied notwithstanding any agreement to the contrary, and the owner

shall not be entitled to rely on any provision in the agreement excluding

or modifying that condition unless he proves that before the agreement

was made the provision was brought to the notice of the hirer and its

effect made clear to him.”.

(4) In relation to a contract of sale made on or after 18th June 1976 and

before 1st July 1981, for section 18 substitute —

“18 (1) An express condition or warranty does not negative a condition or


(2) A term of a contract of sale or of any other contract exempting

from all or any of the provisions of section 1 is void.

(3) A term of a contract of sale or of any other contract exempting

from all or any of the provisions of section 5, 9 or 13 —


c AT 16 of 1996 Page 33

(a) is void in the case of a consumer sale, and

(b) in any other case, is not enforceable to the extent that it is

shown that it would not be fair or reasonable to allow

reliance on the term.

(4) In determining for the purposes of subsection (3) whether or not

reliance on any such term would be fair or reasonable regard shall

be had to all the circumstances of the case and in particular to the

following matters —

(a) the strength of the bargaining positions of the seller and

buyer relative to each other, taking into account, among

other things, the availability of suitable alternative

products and sources of supply;

(b) whether the buyer received an inducement to agree to the

term or in accepting it had an opportunity of buying the

goods or suitable alternatives without it from any source of

supply;

(c) whether the buyer knew or ought reasonably to have

known of the existence and extent of the term (having

regard, among other things, to any custom of the trade and

any previous course of dealing between the parties);

(d) where the term exempts from all or any of the provisions

of section 5, 9 or 13 if some condition is not complied with,

whether it was reasonable at the time of the contract to

expect that compliance with that condition would be

practicable;

(e) whether the goods were manufactured, processed, or

adapted to the special order of the buyer.

(5) Subsection (4) does not prevent the court from holding, in

accordance with any rule of law, that a term which purports to

exclude or restrict any of the provisions of section 5, 9 or 13 is not

a term of the contract.

(6) In this section ‘consumer sale’ means a sale of goods (other than a

sale by auction or by competitive tender) by a seller in the course

of a business where the goods —

(a) are of a type ordinarily bought for private use or

consumption; and

(b) are sold to a person who does not buy or hold himself out

as buying them in the course of a business.

(7) The onus of proving that a sale falls to be treated for the purposes

of this section as not being a consumer sale lies on the party so

contending.

(8) Any reference in this section to a term exempting from all or any

of the provisions of any section of this Act is a reference to a term


Page 34 AT 16 of 1996 c

which purports to exclude or restrict, or has the effect of

excluding or restricting, the operation of all or any of the

provisions of that section, or the exercise of a right conferred by

any provision of that section, or any liability of the seller for

breach of a condition or warranty implied by any provision of that

section.

(9) It is hereby declared that any reference in this section to a term of

a contract includes a reference to a term which although not

contained in a contract is incorporated in the contract by another

term of the contract.”.

(5) In relation to a hire-purchase agreement made on or after 18th June 1976

and before 1st July 1981, for section 18 substitute —

“18 (1) An express condition or warranty does not negative a condition or


(2) A term of a hire-purchase agreement or of any other agreement

exempting from all or any of the provisions of section 2 is void.

(3) A term of a hire-purchase agreement or of any other agreement

exempting from all or any of the provisions of section 6, 10

or 14 —

(a) is void in the case of a consumer agreement, and

(b) in any other case, is not enforceable to the extent that it is

shown that it would not be fair or reasonable to allow

reliance on the term.

(4) In determining for the purposes of subsection (3) whether or not

reliance on any such term would be fair or reasonable regard shall

be had to all the circumstances of the case and in particular to the

following matters —

(a) the strength of the bargaining positions of the owner and

hirer relative to each other, taking into account, among

other things, the availability of suitable alternative

products and sources of supply;

(b) whether the hirer received an inducement to agree to the

term or in accepting it had an opportunity of buying the

goods or suitable alternatives without it from any source of

supply;

(c) whether the hirer knew or ought reasonably to have

known of the existence and extent of the term (having

regard, among other things, to any custom of the trade and

any previous course of dealing between the parties);

(d) where the term exempts from all or any of the provisions

of section 6, 10 or 14 if some condition is not complied

with, whether it was reasonable at the time of the


c AT 16 of 1996 Page 35

agreement to expect that compliance with that condition

would be practicable;

(e) whether the goods were manufactured, processed, or

adapted to the special order of the hirer.

(5) Subsection (4) does not prevent the court from holding, in

accordance with any rule of law, that a term which purports to

exclude or restrict any of the provisions of section 6, 10 or 14 is not

a term of the hire-purchase agreement.

(6) In this section ‘consumer agreement’ means a hire-purchase

agreement where the owner makes the agreement in the course of

a business and the goods to which the agreement relates —

(a) are of a type ordinarily supplied for private use or

consumption; and

(b) are hired to a person who does not hire or hold himself out

as hiring them in the course of a business.

(7) The onus of proving that a hire-purchase agreement falls to be

treated for the purposes of this section as not being a consumer

agreement lies on the party so contending.

(8) Any reference in this section to a term exempting from all or any

of the provisions of any section of this Act is a reference to a term

which purports to exclude or restrict, or has the effect of

excluding or restricting, the operation of all or any of the

provisions of that section, or the exercise of a right conferred by

any provision of that section, or any liability of the owner for

breach of a condition or warranty implied by any provision of that

section.

(9) It is hereby declared that any reference in this section to a term of

an agreement includes a reference to a term which although not

contained in an agreement is incorporated in the agreement by

another term of the agreement.”.

7 Interpretation

The definition of ‘business’ in section 20 does not apply in relation to a contract

made before 18th June 1976.

8 Contracts for services

Part 2 does not apply to contracts made before 1st June 1985.

9 Goods forming part of a bulk


Schedule 3 Supply of Goods and Services Act 1996

Page 36 AT 16 of 1996 c

10 Acceptance or rejection of goods


11 Interpretation of this Schedule

In this Schedule “commencement” means the day on which this Act comes into

operation.

Schedule 3

MINOR AND CONSEQUENTIAL AMENDMENTS

Section 31(1)

[Sch 3 amends the following Acts —

Hire-Purchase Act 1973 q.v.

Misrepresentation and Unfair Contract Terms Act 1980 q.v.

Sale of Goods Act 1983 q.v]

Schedule 4

ENACTMENTS REPEALED

Section 31(2)

[Sch 4 repeals the following Acts wholly —

Supply of Goods (Implied Terms) Act 1976

Supply of Goods and Services Act 1985

and the following Acts in part —

Misrepresentation and Unfair Contract Terms Act 1980

Sale of Goods Act 1983.]

Supply of Goods and Services Act 1996 Endnotes

c AT 16 of 1996 Page 37

ENDNOTES

Table of Legislation History

Legislation Year and No Commencement

Table of Renumbered Provisions

Original Current

Table of Endnote References

1 Subs (4) amended by SD579/98. 2 Effective 19/8/1996

Documents

Supply of Goods and Services Act 1996