Statutory Implied Terms: Consumers’ rights


For the purpose of the article, the seller acts as a trader (an individual who is acting under the course of business, therefore acting for purposes relating to that individual’s trade, business or profession) and the buyer as a consumer (a person who is acting for purposes that are wholly or mainly outside that individual’s trade, business or profession).

The Law

In a contractual relationship between the seller and the buyer, a great number of the parties’ obligations will usually be expressed within the contract. Nevertheless, the parties may fail to predict some eventualities that could take place during the execution of the contract. For that reason the Law on the Sale of Goods of 1994 (10(I)/1994) (from now referred to as “the Law)” has adopted a series of implied terms that grant some additional rights to the consumers.

These rights should be treated as an integral part of the contract between the parties, despite the fact that are not included in the contractual agreement. They enhance the protection of the consumers and places them in a better position than they could have been, as they may be considered the weaker party in the transaction.

The Law has set forth that any breach of the implied terms comes from the trader, entitles the consumer to terminate the contract, reject the supplied goods and seek for damages.

Implied Terms

The provisions of the Law specifies that the goods purchased, should be supplied as described. This term will apply if, before the contract was made, the seller provided information to the buyer about the main characteristics of the goods and the latter agreed to enter into the contract without seeing those specific goods. On the condition that this information formed part of the contract and the consumer relied on the trader’s description alone, the goods supplied to the buyer need to correspond with the description provided by the seller.

This condition clarifies that if the sale was made based on both the description and the sample, the goods purchased must satisfy both of those requirements. Additionally, it is stated that the sale of goods may still constitute a sale by description even if the consumers are able to see the goods and select them by themselves.

The consumer holds the right to put an end to the contract and claim damages if the goods supplied by the trader are not of a satisfactory quality. The list of matters taken into consideration is not exhaustive but, the Law itself cites the following grounds. The goods must have a satisfactory appearance, finish and durability (this requires a reasonable resistance to time and use). The Law also states that the goods have to fit for all the purposes for which they are usually supplied, they should be free of minor defects and safe to use.

For the operation of the Law, the test which is used for this provision is whether a reasonable person, taking into consideration any description made, the price of the goods and any other relevant situation (such as advertisements etc.), would have consider the goods satisfactory.

Nonetheless, the Law indicates some exceptions to this rule. The implied terms do not extend to cover any unsatisfactory goods if before making the contract, the consumer was aware of the defect or any issue that renders the goods unsatisfactory. Moreover, the Law does not protect the consumer who, prior to the agreement, examined the goods in such a way that would have revealed any damage or defect. In addition, if the goods were supplied by sample and on a reasonable examination of the latter the consumer could have been able to detect that issue, the goods will not be considered unsatisfactory for the purpose of the provision.

Furthermore, it is defined by the Law that the goods need to fit for a particular purpose. In this case, before the contract was made, the consumer has to indicate (expressly or impliedly) to the seller that the goods will be used for a specific purpose. Notwithstanding the provision, if the consumer did not enter into the contract dependent on the seller’s skill and knowledge, he/she does not possess the rights mentioned above. Similarly, the goods supplied should fit to the specific purpose for which they were purchased, unless it was not unreasonable to rely on the skill or knowledge of the seller.

Lastly, goods have to match the sample. When the parties make a contractual agreement for the sale of goods and this agreement is based on a sample, the trader has the obligation to supply the consumer with goods that correspond with that sample’s quality. In order to comply with the terms, the goods supplied should be free from any defects (which renders their quality unsatisfactory) that were not apparent on a reasonable examination of the sample.