It is clear based on the facts from Document 1 that Caroline is the consumer and Kitchen Supply Limited is the trader which concludes that it’s a trader to consumer contract. It is defined that a trader means a person acting for purposes relating to that person’s trade, business, craft or profession, whether acting personally or through another person acting in the trader’s name or on the trader’s behalf1 and a consumer means an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession2 under the Consumer Rights Act 2015(CRA 2015). The contract arose between Caroline and Kitchen Supply Limited would be a Sale of Goods Contract which is defined as the trader transfers or agrees to transfer ownership of goods to the consumer3 and the consumer pays or agrees to pay the price4 under the statutory provisions of CRA 2015.
Despite the enactment of CRA 2015 which governs the consumer rights, for the time when ownership of goods is transferred, see the following provisions of the Sale of Goods Act 1979 (SGA1979)5. The purpose of this question is that to advice Caroline on her legal position in relation to the goods she purchased from Kitchen Supply Limited (KSL). Speaking of goods however, it can be categorised into two main categories, firstly, unascertained goods which means goods which are defined by its description and secondly, specific goods which are identified and agreed upon the time the contract is made6 and includes an undivided share, specified as a fraction or percentage, of goods identified and agreed aforesaid. However, for clarity each goods would be discussed individually hereafter.
The first item to be discussed would be the Hexa 300 Fridge which costs Caroline £800 and she was told that this was the last available model as the Hexa range had been discontinued. These facts clearly show that this Hexa Fridge would fall under the definition of specific goods7 since it happens to be the last available model and discontinued. Due to the availability of the Hexa Fridge, it is clear that the item was identified and agreed upon the time the contract was made. The relevant case law for this situation would be the case of Kursell v Timber Operators which stated the goods being sold must be identified8.
The definition and classification for the goods Hexa fridge is done, however, it is also significant to discuss Section 17 of the SGA 1979 which states that specific goods pass to the purchaser at the time the parties intend the goods to be transferred9. Secondly, this statutory provision also states that the goods will be transferred if the contract have expressly stated10 which lacks in this situation and this problem may conclude the intention of both parties for the goods to be passed remains uncertain.
If the question of when the parties intended to pass the property remains unclear, hence, the property passes according to any of the five rules listed in the virtue of Section 18 of the SGA 197911. In this situation the rule 1 which states that where there is an unconditional contract for the sale of specific goods in a deliverable state the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, be postponed12. For the fridge to pass under this rule 1 it has to satisfy the conditions in the rule.
The first requirement would be, there must be an unconditional contract for the sale of specific goods. Unconditional contract means a contract not bound to any conditions or not containing any conditions which may prevent rule 1 from applying into the contract13. Secondly, the specific goods must be in a deliverable state where the buyer be bound to take delivery of the goods under the contract14, therefore in this situation the fridge was in a condition contrast with the case of Underwood where there were no need for the fridge to be moved from elsewhere15. Since the presence of unconditional contract and deliverable state of the goods with the nature of the goods being a specific goods in this situation, it is immaterial whether the time of payment or the time of delivery, hence, it is clear that the fridge would pass to Caroline even though she has not paid or didn’t receive the goods. Therefore, this makes Caroline as a secured creditor.
The upcoming item to be discussed would be the Stainless-Steel Sink costing Caroline £250. It is clear that this item would be classified as an unascertained goods. Generally, the SGA 1979 does not give an accurate definition for an unascertained goods, however, as discussed previously unascertained goods are items which are not identified and agreed upon at the time of contracting16. The SGA 1979 distinguishes unascertained goods into two categories which are specified amount of unascertained goods out of an unidentified bulk and purely generic unascertained goods. This concludes that the stainless-steel sink would fall under the purely generic unascertained goods. When an unascertained goods needs to be passed there has to be ascertainment and appropriation.
The SGA 1979 states that no property is to be transferred to the buyer in the sale of unascertained goods contract unless the goods are ascertained17 which is subject to section 20A SGA 1979. If the goods have not been ascertained it would not transfer to Caroline, thus, she will remain an unsecured creditor. However, if the goods have been ascertained, then section 17 of the SGA 1979 needs to be considered. The section 17 states that the sale of an ascertained goods transfers to the buyer when the parties intend to transfer the goods18 and ascertaining the intention of the parties regard shall be had to the terms of the contract19. The section 18 of the SGA 1979 also plays a part in explaining the passing of a generic unascertained goods. When there is a sale of unascertained goods in a deliverable state which are unconditionally appropriated either by the seller with the buyer’s assent or the buyer with the seller’s assent, the goods then passes to the buyer20.
The section 18 contains elements which needs to be considered before concluding whether the goods have been passed to Caroline. The first element would be deliverable state which has been discussed previously in rule 1. The second element would be an unconditional appropriation, this means that some ascertained and identified goods should be irrevocable attached for the contract in question21. The third element in this section would be the assent, assent simply means consent and here in this situation the buyer or the seller should have assented for the goods to pass. In this situation, the stainless-steel sink may not pass to Caroline since no unconditional appropriation occurred as stated in the case of Carlos Federspiel22. Apart from that, assent from the buyer or the seller did not occur in this situation, hence it is clear that the goods would not pass to Caroline.
The third item to be discussed would be the Mowlam Steam Oven stored at shelf C of Zone A of KSL’s warehouse costing Caroline £900. This item would fall under the category of unascertained goods similar to the stainless-steel sink discussed previously, however, unlike the stainless-steel sink, this item would fall under the category of unascertained goods out of an unidentified bulk. Again, in order for this item to be transferred to the buyer the goods need to be ascertained23. If the goods are not ascertained, it is crucial to consider whether the goods are part of a specified bulk. If the goods are not part of a specified bulk, it may not pass to Caroline as per section 16 of the SGA 1979. However, since the goods are in a specified quantity of unascertained goods which are part of the bulk and Caroline has paid for the goods, hence, section 20A needs to be considered here.
The conditions need to be met in order for Section 20A24 to apply, firstly would be, the contract between Caroline and KSL for the purchase of the Mowlam steam oven must be for the sale of a specified quantity of unascertained goods. Secondly, the oven must form a part of a bulk which is identified either in the contract or by subsequent agreement between the parties and thirdly, the buyer must have paid the price for some or all the goods which are subject to the contract which forms part of the bulk which has been done by Caroline already. Based on the facts given, all the conditions under section 20A are met
Before engaging with the purpose of question 2, it is significant to identify the parties and the contract arose between the parties. The first party would be Caroline whom is the consumer and BeeWarm Limited(BL) whom happens to be the trader. Based on the facts, it clearly shows that the contract arose between Caroline and BL is a trader to consumer contract, however the app sold by BL would be classified as a sale of digital content contract since the BL sold the BeeWarm app to Caroline for £99 under Section 5 since BL tries to transfer the ownership to Caroline and Caroline agrees to pay for the price mentioned25. The definition for trader and consumer have been given previously in question 1. The purpose of this question is to advise on Caroline’s legal rights and remedies in relation to the app purchased from the BL.
The area of breach done by BL towards Caroline would be the breach of statutory right in trader to consumer contracts. Under the CRA 2015 this breach would fall under the digital content. This rights apply when a consumer pays for a digital content or where it is supplied free with paid for goods, services or other digital content. Digital content is defined as data which are produced and supplied in digital form26 which is the app produced by BL. In order to discuss the breach done by BL the relevant sections in CRA 2015 needs to be considered. The first section to be considered would be the section 34, this section states that every contract of supply of digital content is to be treated as the quality of the digital content is satisfactory27 and the evaluation of the satisfactory quality would be determined by the reasonable man’s standard in accordance to the case of Clegg v Anderson28.
The standard of satisfactory quality that Caroline would consider is by taking into account of the description of the digital content, the price mentioned for the digital content and all other relevant circumstances29. Apart from that the CRA 2015 also provides some aspects which explains the quality of a digital content30 where Caroline may rely for bringing an action against BL, which are, the app Caroline purchased should fit for the purposes for which the digital content which is the app bought by Caroline. Secondly, the purchased app should be free from any minor defects. Thirdly, the app should have its own safety features and finally the app should be durable. In this scenario, the app is clearly not functioning for the purpose it was purchased which means that the app by BL is not promising a merchantable quality for Caroline which also happened in the case of Rogers v Parish31 and this also explains that it failed as a satisfactory quality since it lacked in its durability where the app failed to function even from the very beginning. Apart from section 34, Caroline also may rely on the Section 35 of the CRA 2015 which explains the digital content to be fit for particular purpose32.
The Section 35 applies to a contract to supply digital content where before the contract is made the Caroline has to inform the trader by expressly or impliedly of any specific purpose for which Caroline is purchasing the digital content33 and by following this provision its implied that the purpose of the BeeWarm app is to control the heating system in Caroline’s house. It is clear that the prime purpose for Caroline to purchase this app would be to control the heating system and this would be considered as an implied information that the trader has to have a knowledge on. The subsection 3 explains that the term which is to control the heating system as the particular purpose of the app to be regarded as a term of the contract34. Hence, this shows that BL is also in breach of section 35 CRA 2015.
Another provision under CRA 2015 that Caroline may rely in this situation is the section 36. This section explains that the digital content purchased by Caroline should satisfy the description given by BL for the app. This simply means that the contract to supply a digital content should be treated as including a term that the digital content sold by trader(BL) would meet any description of the digital content given by the trader towards the consumer(Caroline)35. Based on the scenario given, BL has advertised the app as allowing its users to control the house’s heating system and also the app to be compatible with all heating system. However, the app do not function as it was advertised by BL despite Caroline followed its instructions precisely, furthermore, the heating system works when other apps apart from BL’s app are used to control the heating system. This clearly shows that BL is also in breach of section 36, hence, this entitles Caroline to reject the goods since it is not as it was described in the advertisement which similarly occurred in the case of Arcos v Ronaasen36 where even if a minor defect would amount to an unsatisfactory quality despite the minor defect did not affect the goods to carry out its main purpose.
Since it is clear that BL is on breach, Caroline may seek for remedies from BL, under section 42 which gives rights to Caroline to enforce the terms about the digital content37. The subsection 2 states that if the digital content which is the app sold by BL to Caroline does not conform to be the contract, hence Caroline may rely on the rights conferred by CRA 2015 which are the right to repair or replacement and the right for a price reduction as a remedy. The first discussion would be for the section 43 which gives Caroline the right to demand for a repair or replacement. This provision states that if Caroline decides that the BL should repair or replace the digital content of the app, BL should also do so within a reasonable time and without any inconvenience to Caroline38 and BL must bear any relevant costs suffered by BL in doing so which includes cost for labours, materials or postage39. Secondly, if repairing the app would be a difficult or an impossible process to be carried out by BL, hence, section 43 would give the right for a price reduction towards Caroline. This provision explains that the right for a price reduction is the right to require BL the trader to reduce the price for Caroline the consumer by an appropriate amount40 which also includes the right to receive a refund for the payment of £99 done by Caroline. It is to be noted that Caroline may not reject the supply of the app because of its intangible in nature.
However, the facts also states that
1 Consumer Rights Act 2015, Section 2(2)
2 Consumer Rights Act 2015, Section 2(3)
3 Consumer Rights Act 2015, Section 5(1)(a)
4 Consumer Rights Act 2015, Section 5(1)(b)
5 Consumer Rights Act 2017, Section 4(2)
6 Sale of Goods Act 1979, Section 61(1)
7 Sale of Goods Act 1979, Section 61(1)
8 Kursell v Timber Operators (1927) 1 K.B. 298
9 Sale of Goods Act 1979, Section 17(1)
10 Sale of Goods Act 1979, Section 17(2)
11 Dennant v Skinner (1948) 2 K.B. 164
12 Sale of Goods Act 1979, Section 18
13 Varley v Whipp (1900) 1 Q.B. 513
14 Sale of Goods Act 1979, Section 61(5)
15 Underwood v Burgh Castle Brick and Cement Syndicate (1922) 1 K.B. 343
16 Re Wait (1927) 1 Ch. 606
17 Sale of Goods Act 1979, Section 16
18 Sale of Goods Act 1979, Section 17(1)
19 Sale of Goods Act 1979, Section 17(2)
20 Sale of Goods Act 1979, Section 18, rule 5(1)
21 R v Environment Agency, ex parte Valpak (2002) Env LR 36
22 Carlos Federspiel & Co SA v Charles Twigg & Co Ltd (1957) 1 Lloyds Rep 240
23 Sale of Goods Act 1979, Section 16
24 Sale of Goods Act 1979, Section 20A(1)
25Consumer Rights Act 2015, Section 5(1)
26Consumer Rights Act 2015, Section 2(9)
27 Consume Rights Act 2015, section 34(1)
28 Clegg v Andersson (2003) EWCA Civ 320
29 Consumer Rights Act 2015, Section 34(2)
30 Consumer Rights Act 2015, Section 34(3)
31 Rogers v Parish (Scarborough) Ltd (1987) Q.B. 933
32 Consumer Rights Act 2015, Section 35
33 Consumer Rights Act 2005, Section 35(1)
34 Consumer Rights Act 2005, Section 35(3)
35 Consumer Rights Act 2005, Section 36(1)
36 Arcos v Ronaasen & Son (1933) AC 470
37 Consumer Rights Act 2005, Section 42
38 Consumer Rights Act 2005, Secton 43(2)(a)
39 Consumer Rights Act 2005, Section 43(2)(b)
40 Consumer Rights Act 2015, Section 44(1)