In this question we have been asked to advise Lorna on whether she has any right of action against the company under her contract. Lorna also wants to know whether any action could be taken against Wooden Wonders in order to prevent them from engaging in what she believes is misleading advertising in the future. I found that there are a few issues that arise throughout this question that I will discuss individually, then I will discuss the remedies available to Lorna.
Issue 1 – Reliance on Description
Firstly, Lorna relied on the description of the floor to make the purchase. S.13 of the Sale of Goods Act (SOGA) is relevant here. Lorna was going off of an advertisement that purported the product to be various things such as; being surface treated in order to be maintenance free, that it preserves colour and that it is protected from scratches and stains. It is evident that this was a sale by description as Lorna was persuaded by the advertisement which stated the wooden floors various characteristics. When applying S.13, there are four questions that must be asked as nearly all sales are sales by description.
Do you have a sale of good by description?
Did the buyer rely on the description?
Are the descriptive words used terms of the contract and were the goods sold by reference to the description?
Do the goods match the description?
We are satisfied by the information given to us that Lorna heavily relied on the description. We also must look at if the words in question were used to identify the goods rather than their intrinsic qualities. In my opinion Lorna lists her requirements and the sales person went and recommended this particular solid oak floor whose advertisement stated those characteristics. I would see these as intrinsic characteristics of this particular floor as not every floor would have these qualities and evidently it is being advertised as a premium type of floor. It is important to note that the advertisement does not say whether it is or is not suitable for under floor heating. It also fails to say on the advertisement that the oak is sourced from sustainable forests, nor does it mention that it is in compliance with the responsible forestry code or that it is part of an extensive reforestation programme. In the case of Arcos Ltd v EA Ronaasen there was a contract for the sale of a quantity of wooden staves as being 1/2 inch thick, the staves delivered were 9/16 inches thick and the buyer rejected the goods under S.13 as they were not as described. Although Lorna did not give any specifics like measurements, there were intrinsic characteristics drawn from the advertisement of the solid oak.
Issue 2 – Merchantable Quality and Fitness for Particular Purpose
We can apply S.14 of the SOGA here because the seller isn’t a consumer. The seller is selling in the course of a business so according to S.14(2) where the seller sells goods in the course of a business there us 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 be revealed. An example of this is the Stevenson v. Rogers case where the defendant tried to argue that selling boats was not in the course of his business so that S.14 would not apply however it was held that it was a sale in the house of the business and therefore the defendant did have to ensure the boat was of satisfactory quality. Now satisfied that this is a sale in the course of a business and that S.14 does apply we look at S.14(3) and the main parts of this definition are that; Goods must be fit for purpose or purposes for which they are commonly bought and; Goods must be durable as reasonable to expect. Lorna made known to the seller the particular purpose for which this floor was being purchased for, it must be hardwearing and fit to support an underfloor heating system. S.14(4) deals with fitness for particular purpose. Particular purpose can be expressed or implied, in Lorna’s case she specifically said that she required the floor to be hardwearing and suitable to support an underfloor heating system. The sales person, after hearing what the purpose for the floor was went on the recommend the solid oak. Lorna relied on his skill and judgement. Consumer buyers will normally be taken to have relied on the seller’s skill and judgement, the burden of proof is then on the seller to show that the buyer did not rely. In the case of Draper v Rubenstein a well established butcher bought cattle that were deemed unfit for human consumption. It was held that he could not reply on S.14 of the SOGA as he as a professional should have known better. This just shows the absolute necessity of making the sell aware of the particular purpose.
Issue 3 – Durability
Lorna purchased this particular type of floor because it had a specific purpose, to be hardwearing and provide strength and general structural support to her home and also Lorna needed this floor to be able to support an underfloor heating system that she wanted to install. By this reasoning the floor Lorna required needed to be a multipurpose good with strong durability, not only did it need to have the basic functions of a wooden floor but it also must be able to cope with the varying temperatures and pressures it may be subject too with an underfloor heating system in place underneath it.
The second aspect of the definition of merchantable quality provides that the goods must be ‘as durable as is reasonable to expect having regard to any description applied to them, the price (if relevant) and all other relevant circumstances’. This basically means that the goods must be durable for a reasonable time. A good example of this is the Mash and Murrell v Joseph case, where the sellers sold potatoes, they didn’t last the journey and rotted and in the end the seller was liable as the continuing durability of an item is relevant in so far as it relates to the condition of it at the time of sale. There are factors that are to be taken into consideration when determining if the goods are of merchantable quality, the definition makes it clear that all relevant circumstances should be taken into account and balances against each other. Firstly it is Description, the description applied to the goofs will affect the standard that can be reasonably expected of them. In Lorna’s case the floor is described as a solid oak floor which is surface treated in order to be maintenance free, it preserves colour, and that it is protected from stains and scratches. In general it is expected to be a floor of a higher standard. Secondly is Price, the higher the price being sought for the goods, the greater the quality that can be reasonably expected of them. Lorna is recommended the solid oak which is more expensive than what she originally thought. Thirdly is Safety, defects which render the good as unsafe can then be regarded as making them unmerchantable, after three months the floors in Lorna’s home because warped as they were not suitable for underfloor heating. This is unsafe. Lastly, Minor and Cosmetic Defects, these are often called non-functional defects as the goods may often still be usable for their common purpose. In a commercial case, the courts may be reluctant to hold goods to be unmerchantable so as to allow a buyer to reject them where the defect is minor however in Lorna’s case after three months her floors had changed c colour and had numerous stains and scratches, even though it was advertised that they were protected against such defects.
Issue 4 -Incorporation of Exemption Clauses
The case of James Elliot v Asphalt deals with the incorporation of exemption clauses. Although this case is business to business, I assume the same standard would apply to the average consumer. This case has been refereed to the European courts where it is being settled, this will have a lasting impact on how Irish case law is decided in the future. During this case there was an issue regarding the terms and conditions of the contract, it include an exemption clause which significantly limited the liability for any loss arising from the supply of defective material. Its liability was limited to the cost of replacing the defective material. There was an incorporation by signature among others such as credit notes, through the on site foreman and by reference to trade custom. The supreme court laid out that to be a contractual document and to be binding it must be a document that contains contractual terms or a document which reasonable people would expect contains contractual terms, it must set out the terms and conditions or refer to specific and conditions well known in the particular industry. It is not sufficient to refer to unspecified terms and conditions and nor is it sufficient to state that the terms are available on request and it must be timely i.e. be provided before the contract is concluded. In this case the delivery docket was not a contractual document. So much like Lorna’s signature, the foreman signature on the delivery docket would not be sufficient to incorporate Irish Asphalts terms and conditions into the contract between parties.
Remedies
Firstly I would like to say that in my opinion, Lorna could pursue this case in either the SOGA or the 2003 Regulations. The SOGA provides the buyer three remedies:
The right to reject
The right to damages
Specific Performance
In my option Lorna could go for the remedy of the right to damages. Any breach of contract by the seller entitles the buyer to claim damages in respect of any loss caused by the breach.
Secondly under the Consumer Sale Regulations 2003, is the EC Regulations 2003 these regulations were implemented in Ireland in order to transpose the Consumer Sales Directive 1999, these regulations provide further, alternative protection to consumer buyers with relation to quality of goods supplied and in relation to buyer’s remedies. The consumer is free to choose either the provisions of the Regulations or the provisions of the SOGA, whichever is deemed to give them better protection, and in my option i think that I would advise Lorna to go with the Consumer Sales Regulations 2003.
There are certainly a few regulations in which are applicable to Lorna’s case. Firstly there is S.5 (2) – Consumer goods are presumed to be in conformity with the contract of sale if they :
comply with the description given by the seller and possess the qualities of the goods which the seller has held out to the consumer as a sample or model,
are fit for any particular purpose for which the consumer requires them and which he or she made known to the seller at the time of conclusion of the contract and which the seller has accepted,
are fit for the purposes for which goods of the same type are normally used
show the quality and performance which are normal in goods of the same type and which the consumer can reasonably expect, given the nature of the goods and taking into account any public statements on the specific characteristics of the goods made about them by the seller the producer or his representative, particularly in advertising or on labelling.
S. 5(2)(a) & S.5(2)(d) – are directly relevant to Lorna's case.
Secondly we look at S.7(1) -The seller shall be liable to the consumer for any lack of conformity referred to in Regulation 5 which exists at the time the goods were delivered.
Then we move onto S.7 (2) – this would be the remedy to S.7(1). The remedies under the 2003 Regulations 7(2) provides that there are four remedies available to the buyer:
Repair
Replacement
Reduction in Price
Conclusion
As we are told in the question Lorna wants to be refunded for the price of the floor and also wants damages to cover the cost of removal and installation of a new floor. In my opinion I think Lorna does have a case against Wooden Wonders and she does have a right of action against the company under her contract as the floor was not what she agreed to. She should pursue for the right for damages under the SOGA