The Sale of Goods Act

Contributed by Ian Macdonald and Su Mahalingham and current to 1 September 2005

This Act came into operation in 1895 and reflects a concern by the Government of the time that buyers ought to have some protection in relation to defective goods.

Up until the introduction of this law, a general principle known as caveat emptor (let the buyer beware) applied in relation to the purchase of goods. This principle was based on the notion that if goods were purchased, it was up to the buyer to check whether or not there were any defects in the goods. If there were, and the buyer bought the goods, then the buyer had no cause to complain. In 1895 this principle was eroded to some extent by what is known as the implied obligations. These obligations were contained in several sections of the Sale of Goods Act (ss.12-15).

The Sale of Goods Act implied obligations apply only to contractual-based sales between sellers and buyers of goods. They do not extend to offer protection for defective services nor do they give a buyer any claim against a manufacturer, as the buyer does not have a contract with a manufacturer.

EXCLUDING THE OBLIGATIONS

One of the most limiting provisions of the Sale of Goods Act is section 54 which allows a seller to “take away” the obligations imposed by the Act. This means in effect that although Parliament had “superimposed” obligations into contracts for the sale of goods to buyers, the seller can simply take away those rights by a provision in the contract itself (known as an exclusion clause). This has the net effect of leaving the buyer back in the position of caveat emptor, as frequently the buyer will sign away the implied obligations in the contract document.

THE NEW WAVE OF CONSUMER PROTECTION LAW

Because of the limitations of the Sale of Goods Act to sales of goods, and the opportunity for a seller to take away the rights pursuant to the use of section 54, it became necessary to revamp the whole notion of consumer protection offered by implied obligations. This revamping was achieved by the Federal Government in 1974, with the enactment of the TPA, and again in 1987 by the WA parliament in a mirror copy of the TPA called the Fair Trading Act.