THE SUPPLY OF GOODS AND SERVICES (JERSEY) LAW 2009 ("the Law")
Heralded as "probably the most significant advancement in providing clarity of consumer contractual rights in Jersey’s history", the Law came into force on 1 September 2009. It complements the Consumer Safety (Jersey) Law 2006 and the Distance Selling (Jersey) Law 2007, aimed at respectively general product safety and purchasing goods otherwise than face-to-face. Much reliance is placed on the corresponding English legislation giving effect to similar such rights.
The Law results from concern that the customary law of Jersey, which differs in certain fundamental respects from the common law of England and Wales as regards matters of contract, might not be clear or effective or provide an acceptable level of consumer protection. Hence the Law is intended to set out a clear framework for the respective rights of buyer and seller/supplier and it also provides for certain additional rights of the buyer, when he is dealing as a consumer.
It is not possible in this brief commentary to address the detail of such a comprehensive law and I shall only highlight the main points of relevance or interest. The Law only applies to contracts within its scope and entered into after the Law comes into force and so does not apply to contracts already made before 1 September 2009. The principal focus of the Law is the sale of goods, however, contracts for the supply of services and hire purchase agreements and certain contracts relating to motor vehicles are also addressed (as defined by the Law). It covers not just the position between commercial supplier, retailer or trader and the ordinary consumer but also business-to-business dealings and contracts between private persons.
The Law extends inter alia to what is known as an "onerous" contract under Jersey customary law, meaning a contract involving a form of payment and includes a contract for the sale of goods and for the supply of a service. In particular in future, it will be necessary to consider the "statutory" rights provided for under the Law alongside any customary law protections. From a buyer’s angle, the Law provides for particular warranties to be implied, if not already express, in relation to the sale of goods (and in similar terms into hire-purchase agreements), namely as to title in and over the goods, the description of the goods, the quality and fitness of the goods, disclosure of certain defects and with regard to sales by sample. The particular warranty in a contract for the supply of a service is that the services will be delivered with reasonable skill and care. Such warranties might have been implied anyway under the customary law but the Law now makes the position clear.
There are detailed provisions as to when the property in goods passes, namely as and when intended, with additional guidance as to intention be reference to statutory rules of interpretation and dealing with who is at risk as a result. Performance in terms of payment by buyer and delivery by seller and the unpaid seller’s rights are also dealt with in detail. Performance, unless excused under the Law or by agreement, will still be required, even if the goods in question have been lost or destroyed, either by the buyer in terms of paying the price or by the seller in delivering the goods purchased. Hence, insurance may well also be a sensible option.
Ordinarily, the parties will have agreed a specific time for the delivery of goods or services and of course a particular price. The Law provides expressly for a default position, so that, in the absence of any express provision, performance will have to be rendered within a reasonable time or a reasonable price will have to be paid.
Strictly speaking, as to the warranty relating to the quality and fitness of the goods sold, the principal position now is that no warranty is provided. However, this is subject to exceptions and a principal exception is the warranty given as to "satisfactory quality" where the seller sells the goods in the course of his business. In this regard, this means the quality, as judged by reference to the fitness for purpose, appearance and finish, absence of (major) defect, safety and durability. The test is an objective one of fact i.e. what the reasonable person would regard as satisfactory. The warranty does not extend to matters rendering the quality unsatisfactory, if brought to the attention of the buyer or if they are or should be obvious upon examination. Further exceptions arise relating to the disclosure of certain defects and sales by sample and finally where other enactments make due provision.
The additional consumer rights principally surround the seller’s obligation, where goods do not conform, to repair or replace the goods or to reduce the price or rescind the contract. The Law finally makes provision for remedies and deals expressly with sales at auction, as a miscellaneous matter.
It will be seen from the following that the Law is of particular interest and relevance to those who buy and sell goods and services, in an everyday context, whether private persons or commercial businesses. A consumer context will be quite usual, such as where the person in the street buys goods across the counter in a shop. Equally, where services are acquired from say a builder or a financial services provider (such as a bank, trust company or insurance broker), the latter will be required to exercise reasonable skill and care.
Under the Law, in relation to contracts for the sale of goods or supply of services or hire purchase agreements, the statutory rights can be excluded, limited or otherwise varied in a number of ways - express agreement, a course of dealing between the parties or an usage binding both parties to a contract. The term "course of dealing" is not defined but there would have to be some previous transactional history to support it. Usage is also not defined but particular markets or trades may have particular customs, practices or usages. There is no direct equivalent of the statutory rules in England relating to the exclusion or limitation of the operation of unfair contract terms, although the Law expressly envisages that the States may make provision in this regard. Equally, the States might seek to prevent or restrict any exclusion of civil liability or the parties’ ability to agree to exclude the Law or to specify the inclusion of further automatic terms.
Viberts would of course be happy to assist clients to review their existing terms of business or other standard contract terms, in the light of this Law. Please contact Zoe Blomfield on 632205 or zoe.blomfield@viberts.com or Andrew Deighton on 632242 or andrew.deighton@viberts.com.