Reading Texts:
1.
Brian Havvey and Deborah
Perry, The Law of Consumer Protection and Fair
Trading.
2.
W. Gowan and H. Ervine, Consumer
Protection Law in Scotland.
3.
Robert Lowe & Geoffery
Woodroffee, Consumer Law and Practice
4.
David Oughton & John Lowry, Textbook
on Consumer Law
5.
R. Cranston, Consumer Law and
Practice
6.
Okech-Owiti (ed) Consumer
Protection: Theory, Law and Practice
7.
Ben Shihanya, Compilation of
consumer laws
Consumer
Protection
In
Kenya there is no specific law dealing with consumer law. The law is scattered
in various statutes and private law measures. In Kenyan laws there are two
measures:
1.
Private law measures, contained
in certain topics in the Law of Contract and Law of tort, which are relevant.
2.
Public law measures. Public law
measures that indirectly protect the consumer. In UK they have a specific
consumer protection law, The Consumer Protection Act 1987.
The
most important statutes are:
1.
The Trade Descriptions Act, which follows the British law. It covers that if
you make certain descriptions in goods and services and if that description is
false you are covered by the Act. It contains very comprehensive measures.
3.
The Standards Act. This deals
with certain specific standards and any person who is either manufacturing,
producing or exporting, the goods must be according to the specifications
set by this Act. The statute also establishes the Kenya Bureau of Standards.
4.
The Weights and Measures Act.
Under this law contains measures against shortfalls. Weights and Measures
Department, created under the act, enforces this Act.
5.
The Restrictive Trade Practices,
Monopolies and Price Control Act
6.
The Foods, Drugs and Chemical
Substances Act
7.
The Pharmacy and Poisons Act.
Controls quality and sale of drugs and over the counter sales.
8.
The Public Health Act.
9.
The Fertilizers and Animal
Foodstuffs Act. What kind of fertilizers to be use and quality of animal foods.
Then
there are Acts which control professions:
The
Law society of Kenya Act
The
Medical and Dentists Act
The
Nurses Act
The
Architect Act.
In
private law measures there are also Acts of Parliament.
The
Private Law Measures
Law
of Contract
Law
of contract, general as well special contracts for consumer protection:
The
Sale of Goods Act
The
Hire Purchase Act
Misrepresentation:
This is one of the most important provisions. This is a pre-contract statement
that is false/misleading. If it is false then the party who has made the false
statement has made misrepresentation and therefore the contract is voidable.
Note the Trade Descriptions Act. Statements made before contract include
advertisement (which is an invitation), catalogues, brochures, price list, etc.
in which they are supplying certain information. If these are false, can this
be taken as misrepresentation?
Sales
of Goods Act is also a special contract. There are certain terms that are
implied in every contract of sale. Protects the consumer directly. Before this
act the rule was let the buyer be aware.
Terms
are express agreement between the parties. They are part of the contract. May
be express or may be implied.
How
can terms be implied? The several ways: (1) implied by customs in a trade or
business (2) statute such as the Hire Purchase and Sale of Goods Acts; (3)
courts, in order to give business efficacy to the contract then the court will
imply certain terms; judicial decisions of the courts.
Consumer
protection covers goods as well as services.
Inclusive
definitions—such as the Sale of Goods
a.
Exhaustive definitions
b.
Chattels personal
c.
Chattels real
d.
Moveable property
e.
Immoveable property
f.
Choses in action (claims that
are actionable)
Goods
under the Sale of Goods Act does not include money, choses in action, land and
structures on land
Davies
v Samuels: the question arose whether services are covered
in the Sale of Goods Act. A husband went to a dentist for dentures for his wife
and they agreed on a certain price. The dentist made the dentures for the wife
but they did not fit properly. The dentist said we never agreed that they
should fit your wife’s jaws. Husband refused to pay and the dentist sued him
for breach of contract. And the question was whether it was a contract for the
sale of goods or the provision of services? The court said if was a contract of
sale of goods, then the Act will apply, if not it will not apply. The court
said it will imply certain conditions: if it was service provided it must fit
the purpose for which it was intended.
The
deficiency of contract: they do not cover a third party benefiting the
contract. Privity of contract. This is the main weakness of the contract law.
So their scope is limited. The other problem is the questions you have to
answer:
Who
is the consumer?
Why
protect the consumer?
What
measures to protect the consumer?
Who
is the consumer? How do you define the consumer? The Molony Committee was
establish to suggest ways and means to protect the consumer. It gave the
definition: “Any person who purchases goods and affected by it is a consumer.”
But this definition does not cover consumer of services. This is another
drawback to the contract law – it only protects the person who has made the
contract. In tort these conditions are not required.
Exclusion
clauses or limitation clauses. Here the law allows a party to the contract to
exclude or limit his liability. Kenya follows the common law ( if is
reasonable). But in UK they have The Unfair Contract Terms Act, e.g. injury and
death cannot be excluded from a contract.
The tort law
The
main rules
1.
Negligence, provided in Danogue
v Stevens is still relevant to consumer protection. The manufacturer owes a
duty of care to the ultimate consumer (House of Lords decision).
2.
Product liability rule. If a
manufacturer sup0plies unsafe goods to a consumer he shall be liable for
defective product under the principle of Donogue v Stevens (1932). The Donogue
v Steven expanded. In UK and USA product liability is also a statutory provision.
In Kenya it is common law, under tort.
The
neighbour principle. Lord Atkin asked, who is my neighbour…the person who is in
your contemplation …when you are directing your mind to …your neighbour is your
consumer. So a consumer who is a person who uses goods or services and affected
by it, any person. We are widening the definition of consumer.
Christine
Mpaka, Consumer Protection: defines consumer as any person who uses goods or
services and affected by it, any person. We are widening the definition of
consumer.
In
Donoghue a consumer is the ultimate consumer.
Here
a consumer defined as a person who uses goods or services and is affected by
it.
Ralph
Nader—guru of consumerism—said consumer protection must be a
constitutional right and consumer means any citizens who has suffered
because of the provisions of goods or services.
Occupier’s
liability. Covered by The Occupiers Liability Act. There are two situations,
(1) the occupancy duty and (2) activity duty.
The
Sarit Centre case.
Why
protect the consumer? What do you protect the consumer from?
Consumer
does not know what is in the goods and therefore needs to be protected from
unsafe goods.
Secondly,
the consumer needs to be protected from deficient quality of goods or services,
i.e. the quality is poor.
Thirdly,
the consumer needs to be protected from fraudulent or misleading or undesirable
trading practices.
Fourthly,
the consumer needs to be protected from insufficient information to exercise
prudent judgment
Fifthly,
economic exploitation because of lack of competition or excessive prices.
Sixthly,
protection from short measures or weights
Seventhly,
protection from eviction and excessive rents
All
these are legal measures. But there are also extra-legal measures where you do
not go to court, such as consumer organizations
Consumer
education: the consumer must be educated about their rights and the services
and goods that are available in the market.
Introduction
to Consumer Protection Law
The
rise of consumerism in the 20th century coupled with the
multiplication of products and services in the market has led to increased
problems for consumers with regard to the quality of goods and services and
their prices and general availability. The choice for the consumer is made
difficult due to the range of available options and aggressive advertisement
for each type of goods and services. Some goods and services call for
expertise in discerning what shortcomings might have and such expertise may not
be available to all consumers. The interest of multinational corporations
in the world market present its special problems for developing countries who
do not measure up to the bargaining muscle of the said corporations. Such
corporations may offer different standards of goods in the developing countries
from those they offer in developed countries and therefore there is a need for
legal mechanisms to regulate consumer products and services.
Definition
of Consumers
In
the literal sense a consumer is a person who purchases goods or services.
The Molony Committee on consumer protection in Britain regarded a consumer as
one who purchases or hire-purchases goods for private use or consumption.
The
private consumer of services is a consumer though the Molony Committee did not
consider it. Thus under this definition the consumer is purchaser of
goods or services supplied by another. However if we take consumer as a
person who purchases goods or services, then a Construction Company purchasing
building materials for use in the construction of housing estate would be
acting as a consumer. However, for the purpose of consumer protection law
the term consumer has a narrow meaning which is based on capacity in which the
consumer acquires goods or services and the capacity in which the supplier of
goods or services supply them.
The
general view of the consumer or at least that given by modern consumer
legislation is often individual dealing with a commercial enterprise.
However it is also the case that the term consumer encompasses a person who
makes use of the services provided by the public sector undertakings or private
monopolies subject to public control. On this basis consumer protection
law would also cover complaints by individuals about services provided by
public sector undertakings such as Kenya Railways, Kenya Power and Lighting
Company, Kenya Airways and city councils. Furthermore in the public
sector the consumer might also have reason to complain about the services he
has received in government hospitals.
These
definitions of consumer are narrower and also broader at the same time.
They are narrower in the sense that the consumer is defined as a person who
purchases goods or services in that situation the definition covers only
consumers who have contractual relationships with the supplier of goods or
services. At the same time they are broader in the sense that they apply
also to those consumers who consume goods in manufacturing of other goods.
Christine
Mpaka defines consumer as any person who uses any goods or services and can be
any person who is affected by the use of those goods and services supplied by
other persons. This definition is wider than the other
definitions because it has been realized that limiting the term consumer to
purchasers is undesirable because many people use goods or services that they
have not bought and if those goods occasion harm to a user as opposed to
purchaser, he or she would be left without a remedy hence the definition of a
consumer should be broadened to include anyone who consumes goods or services
at the end of the chain of production. The definition by Mpaka is wider
in the sense that it covers both the contractual and non-contractual consumer.
In
Donaghue v Stevenson it was held by the House of Lords that a
manufacturer is liable for defective product to the ultimate consumer even if
there is no contractual relationship between them. In that case a
consumer has been defined as a person who is in contemplation of the supplier
by directing his mind to the acts or omissions in question. This would
cover all types of consumers for example in case of certain services such as
medical services avail free of charge.
The
American guru of consumerism Ralph Nader has taken the view that the term
consumer should be equated with the word citizen and that the consumer
protection law should be regarded as an aspect of protection of civil rights.
CONSUMER
PROTECTION
The
term consumer protection has been taken to mean those measures which contribute
directly or indirectly to the consumer assurance that he will buy goods of a
suitable quality appropriate to his purpose. That they will give him
reasonable use and if he has just complaints there will be means for redress
(Molony Committee Report) thus the term consumer protection covers a wide range
of areas including
a.
Unsafe products or goods;
b.
Qualitatively deficient goods or
services;
c.
Fraudulent misleading or unfair
trade practices;
d.
Insufficient information to
exercise a prudent buying decision;
e.
Economic exploitation through
lack of competition;
f.
Protection from excessive prices
or charges;
g.
Protection from short measures;
h.
Protection from health hazards.
The
European Council adopted a consumer protection and information programme
listing five fundamental rights of the consumer
1.
The right to protection against
health and safety hazards;
2.
The right to protection of
economic interest;
3.
The right to advice, help and
redress;
4.
The right to information and
education;
5.
The right to consultation and
representation
The
term consumer protection involves two aspects; a preventive one and a remedial
one. The former encompasses measures that regulate the supply and
quantity of goods or services ensuring that the consumer is not ripped
off. It also includes the education of the consumer to make him
conversant with the varieties of goods and services available to him thus
enabling him to make an informed choice on any particular product or
service. This measure also educates the consumer to make him conversant
with his rights. The latter measure is concerned with the redress for
those consumers whose interest have been adversely affected for example the
standard set in the Kenya Bureau of Standards established under that Act is a
preventive measure for consumer protection in the sense that no goods below a
certain standard can be supplied in Kenya whether locally manufactured or
imported.
On
the other hand the Sale of Goods Act is a remedial measure in that if a seller
is in breach of an implied term under the Act the buyer can sue the seller for
damages.
Given
that nobody is compelled to use goods or services supplied to him, the question
arises why a consumer needs to be protected. In the modern society most
people find themselves in a situation where they have to purchase or use
certain goods or services. The buyer or user is not always at par with
the seller or provider of the service. He does not have the same
bargaining power as that of the supplier. The monopoly enjoyed by certain
providers of goods or services makes it easy for such providers to dictate the
terms to the consumer.
The
other issue that needs to be addressed is what would comprise the consumer
interests. These are discernible expectations of consumer with regard to
product and services that he must make use of. The consumer expects that
the product or services are suitable and appropriate for his intended
purpose. These expectations can be elusive if products or services are
falsely described or they are qualitatively deficient or unsafe. The
consumer can only find out the defect once he has purchased or used goods or
services. The consumer is also concerned particularly in Kenya about the
availability of products and services that he needs. Price is also of
importance to a consumer. This regulates what a consumer considers to be
his needs. The price tag is a determinant for most consumers and the
cheaper the product the better for the consumer.
In
the case prepaid goods the consumer wishes to be sure that the marked quantity
is the actual quantity of goods supplied. He is also concerned about the
safety of the products or services. In this respect he would also like to
have adequate information about the use of any product or service to avoid
endangering his and lives of others.
Consumer
Protection Measures:
There
are several legal instruments to regulate consumer products and services.
However it must be said at the outset that there is no specific legislation in
Kenya to protect consumers as such but there are several private law and public
law measures which touch upon the consumer protection though these measures are
not directly concerned with the consumer protection.
PRIVATE
LAW MEASURES
Consumer
protection in private law falls within the domain of contract and tort since
all the rights in the two categories are private law rights, the aggrieved
consumer has to identify his claim and proceed to bargain for it and find a
claim should the need arise to obtain redress. The state’s only
involvement here is by availing its personnel to deal with the complaint once a
suit is filed in a court. Should the consumer decide to take no action,
then the state has absolutely no interest in the affair and the consumer bears
the loss on disadvantage.
Contract
The
Law of Contract plays some role in protection of consumers. The areas of
general law of contract which have a bearing on consumer protection are:
1.
Misrepresentation;
2.
Terms implied by courts in
relation to services; and
3.
The Exclusion Clauses.
The
law of contract is based on the concept of equal bargaining power.
Consequently parties to a contract are deemed to be capable of negotiating
terms that are fair to themselves. This assumption of equality is
untenable. In the case of many products and services many undertakings
that have monopoly in supply of goods and services can easily dictate the terms
to the consumers. They can assume an attitude of take it or leave
it. This places the consumer in a very difficult position given that he
requires those services or products and may not be able to do without
them. Once a consumer enters into a contract with a supplier of goods or
services, it is up to him to enforce the contract in case of breach. If
he is ignorant of his rights, then he remains without redress even in instances
where the consumer is cognizant of his rights he may be discouraged by the
amount of time it takes to see a matter determined in a court of law. The
lawyer’s fee for services may also be prohibitive. The law of contract
has ingrained in its principles that do not generally favour all consumers for
example the doctrine of the privity of contract prohibits a person to seek
redress when he has no contractual relationship with the supplier.
The
Sale of Goods Act and the Hire Purchase Act are special types of
contract. The Sale of Goods Act gives certain rights to the buyer of
goods and it implies certain terms in each and every contract for sale of goods
though the parties to the contract of sale may opt out of this implied terms by
means of expressed agreements. These implied terms include that the
seller should have the right to sell, the buyer should have quiet possession of
the goods and the goods supplied must be free from any charge or
encumbrance. It also covers sale by restrictions, the term as to
merchantability and fitness for purpose and the sale by sample as relates the
sale by description and sample.
The
Hire Purchase Act also gives certain rights to the hirer. This includes
terms similar to those implied under the Sale of Goods Act. The Hire
Purchase Act also protects a hirer by means of several rights which are
protected under the Act such as where the hirer has paid two thirds or more of
his instalments the owner of the goods cannot take repossession of the goods
without an order from the court.
Law
of Tort
Under
the law of tort the consumer can seek redress from the provider of goods or
services if he can prove negligence on the part of such provider that leads to
harm befalling him. The remedies in tort law are wider in the sense that
although there is no privity of contract between the ultimate consumer and the
manufacturer, the manufacturer of supplier maybe held liable for
negligence.
A
consumer can also fall to the law of tort in instances where he is dissatisfied
with the quality of services he obtains from a professional person such as a
doctor or a lawyer. In certain cases the law of tort can also provide
remedies for negligent misstatement causing economic loss. However the
law of tort has its own weaknesses. The main weaknesses that it is a part
of private law and therefore it is for the consumer himself to take an
action. Sometimes the consumer may not be aware of his rights or he may
be reluctant to go for time consuming litigation.
PUBLIC
LAW MEASURES
In
Kenya certain statutes have been enacted which indirectly protects consumers or
they regulate consumer’s products of services. These laws are
prescriptive, prohibitive and protective. They carry sanctions which are
restrictive, prohibitive and protective. They carry sanctions which are
to be enforced as penalties against non-conformers. The state places
positive duties on providers or sellers of certain services and goods. It uses
its machinery to detect non-conformers and proceeds to prosecute the culprits.
The complexity of the market has dictated this developments. Measures cannot be
left to the consumer and provider to negotiate as this may occasion a lot of
inconvenience on the ignorant consumer who may not be able for instance to tell
that the pre-packed food is unwholesome or of less weight than indicated on the
package. Public law takes the form of statutes enacted empowering certain
government sponsored bodies or departments to ensure the adherence of such
standards of products or services. The full range of public law measures is
very extensive. The following examples show some of their ambit.
the
trade descriptions act
The
Trade Descriptions Act controls business activities at large in so far as they
involve descriptions of goods or services. Criminal sanctions are provided for non-compliance.
Standards
Act
Under
the Standards Act the Kenya Bureau of Standards is set up to promote
standardization in industrial area to provide facilities for testing
instruments and commodities. The Act provides for the inspection of goods to
comply withy certain specifications to ensure that they conform to the
standards specified by the bureau. The Act makes it’s an offence to resist the
visit of the inspectors in the discharge of their duties for which sentences or
fines or imprisonment are imposed. The court is given powers to order
confiscation of all substandard goods that often again the provisions of the
Act the Bureau investigates complaints from consumers who purchase
unsatisfactory goods and offers suggestions on improvement of future
production.
The
Weight and Measures Act
The
Weight and Measures Act is concerned with the accuracy of weighing and
measuring at the time of sale to the consumer. All weighing and measuring
machines are required to bear a stamp of verification showing that they are
accurate instruments. Inspectors are empowered by the Act to inspect and test
all such machines and ensure they are in correct mechanical condition. Breaches
of prohibition imposed by the Act are punishable as offences. Such prohibitions
are against selling goods that are less than the indicated quantity. The Act
creates an agency in the form of the Weights and Measures Department in
the Ministry of Commerce whose inspectors are trained all over the country in
the lacuna of legislation is with respect to imported goods. The Act makes no
provisions in relation to import goods and the limited protection it offers is
diluted by this fact.
the food
drugs and chemical substances act
The
Food Drugs and Chemical Substances Act makes provision for the prevention of
adulteration of food, drugs and chemical substances. It is an offence to sell
any food that contains poisonous substances or that is unwholesome or unfit for
human consumption or that is adulterated or that consists in whole or in part
of any filthy, putrid, disgusting, rotten, decomposed or deceased substances or
foreign matter. It also makes it an offence for any person to sell,
prepare, package, convey, store or display for sale any food under unsanitary
conditions. Similar rules apply to drugs and cosmetics. With
respect to cosmetics the Act provides that any person who sells any cosmetics
that contains any substance that may cause injury to the health of the user is
guilty of an offence. Cosmetics and drugs should also not be prepared,
preserved, packed or stored under unsanitary conditions. Provisions are
also made for supervision, entry and inspection to ensure that the Act is
complied with. Penalties are prescribed for those breaching the
provisions.
the fertilizers and animal foodstuffs act
The
fertilizers and animal foodstuffs Act regulates the importation, manufacture
and sale of agricultural fertilizers and animal foodstuffs and substances of
animal origin intended for the manufacture of such fertilizers and
foodstuffs. It provides among other things that no person shall import
any fertilizer or any foodstuff which contain bone or any other substance
derived from animal carcass unless he furnishes a certificate from the country
of the origin showing that the bone or substance has been completely sterilized
and is free from pathogenic or disease causing organism. All the breaches
of the provisions of the Act are punishable as offences. It makes
provisions for inspection of all relevant stuff and of plants producing such
stuff to ensure that they are wholesome.
THE
PUBLIC HEALTH ACT
The
Public Health Act makes provisions for securing and maintaining health. It
requires the notification of infectious diseases and enjoins occupants of
buildings to report the existence of such a disease to the health
authorities. The Act makes it an offence for any person to willfully
expose himself in a public place while suffering from such a disease.
Persons infected with venereal diseases are enjoined by the Act to seek medical
treatment and not to take up employment in places selling food or involving the
care of young persons. The Act also requires warnings of risk to be
printed in cigarette packets. Penalties in the form of fines and imprisonment
are prescribed. The Act also makes detailed provisions with regard to
leprosy, smallpox, sanitation of housing, water supplies, meat, milk,
mosquitoes and cemeteries etc prescribing penalties for all such offences.
THE RESTRICTIVE TRADE PRACTICES, MONOPOLIES AND
PRICE CONTROL ACT
This
Act attempts to encourage competition in the market and for that purpose it
controls concentration of government power and mergers and takeovers. It
also controls restrictive trade practices such as price fixing, discriminatory
trade practices, control of output of goods or services, withholding of supply,
market division, territorial restrictions, resale price maintenance, tying
practices for collusive binding, collusive tendering and refusal to deal.
The Act also makes provisions for price control although at the moment there is
no item under the price control provisions of the Act but these provisions have
not been repealed and can be used to buy the government if it desires so.
THE
MEDICAL PRACTITIONERS AND DENTISTS ACT
This
Act prohibits unqualified persons from practicing medicine by implication
therefore any person who holds himself out as a practitioner may be relied upon
by the consumer as being qualified. If there is any misfeasance by a
medical practitioner the consumer of services received from such a practitioner
can be reported to the Medical Practitioner and the Dentist Board who may
investigate the matter and can take disciplinary action against the
practitioners.
Implied
terms:
Merchantable
quality
Fitness
for purpose
Conditions:
the seller sells in the course of business.
The
seller must sale or supply in the course of business. But other conditions will
apply even in private sales, such as description, sample.
The
Trade Descriptions Act requires that the buyer must acquire the goods in a
non-business capacity. Case of a car hire firms. Used to buy new cars and after
two years they used to sell those cars. Are they selling the course of
business? What the House of Lords said is that you have to consider how often
they sell. If they do it regularly then they are doing it in the course of
business.
The Trade Descriptions Act
Sale
or supply must be in the course of business or the buyer must acquire the goods
or business in a non-business capacity. Several consumer protection statutes
require that the seller or supplier must sale or supply in the course of
business. For examples the Sales of goods Act provides that the implied
condition of merchantable quality and fitness for purpose shall be implied in a
context of sale only if the seller sales in the course of his business.
Similarly section of the Trade Descriptions Act provides that the false trade
description applies only where any person applies a false trade description or
supplies or offers to supply any foods in the course of any trade.
Similarly
in Britain section 12 of the Unfair Contracts Act 1977 provides a provision
that a party makes the contract in the course of business. [This Act deals
mainly with exclusion clauses. In Kenya there is no statutory law to the effect
and common law is what applies.] It seems plain that they cover not only a
seller making a regular sale of goods in which he deals but a seller who buy by
way of business, manufactures or obtains or sells a commodity for the first
time. This is supported by authority on Sale of Goods Act (“deals in goods of
that description”). It could then be argued that the purpose of the wording in
this context is to exclude only sales by purely private sellers. It appears
that a farmer who sells off a surplus tractor or a medical practitioner or
advocate or local government department disposing of surplus equipment for
example sells a used typewriter used in the course of business and so attracts
the operation of the statutory term.
In
Havering LBC v Stevenson, a car hire firm had a false trade description
as to mileage. Though not car dealers the firm regularly sold its cars after a
period of use, it was held by the divisional court that the sale was in the
course of its trade or business as a car hire firm.
And
in Fletcher v Stedmore the defendant was a panel beater who
bought, repaired and sold old cars. A dealer and his prospective customer
visited him and he falsely stated that the car had a little good engine. The
panel beater sold the repaired car to the dealer and he resold it to the
customer who was impressed the panel beater’s remarks despite the lack of any
contextual relationship between the eventual buyer and the panel beater, the
latter was directed to be convicted of applying a false trade description in
the course of his trade or business contrary to 11(a) of UK law (section 3(a)
of Kenya law).
Also
in Davis v Sumner the activities of a self-employed courier whose
car’s odometer had gone right round the clock, thus presenting a false reading
when reviewed on his sale of the car. Here he owned the car but in the past he
had hired his vehicles. The House of Lords held that a normal business practice
of buying and disposing of cars had not been established and therefore the
relevant sale was therefore not caught by the provisions in section 11(a)
(section 3 (a) of Kenya Trade Descriptions Act). This decision of the House of
Lords suggests that there must be at least some degree of regularity. Sporadic
sales would not be covered.
Individual not acting in a
business capacity
The
standard perception of a consumer is often individual purchaser or acquirer of
goods or services. Generally a consumer is regarded as a non-business purchaser
of goods or services but sometimes it is difficult to decide when a person acts
in a business capacity. In a broad sense, every time a company enters into a
contract it does so in the service of its business because if it was not the
case the transaction would be ultra vires. Thus it could be argued that where a
company, which runs a grocer’s shop, buys a new delivery van, it acts in the
course of the business. And alternative view is that a company can be a
consumer purchaser where the purchase is not for some definite business purpose
and is one which is not regularly made by that company.
In
a civil case, R & B Customs Brokers Company Ltd United Dominion Trust
Ltd, the plaintiff company was carrying on the business of freight
forwarding agency purchased a car bought for business use and for private use
of its director. It was alleged that the defendant finance company was in the
breach of the implied terms in the Sale of Goods Act that the car would be fit
for the purpose for which it was intended, namely, driving it in English
weather conditions since the roof had leaked.
However,
the defendant finance company sought to rely on an exclusion clause in the
contract. Liability for implied terms under the UK Unfair Contract Act cannot
be excluded where the buyer deals as a consumer. The court of appeal held that
since the purchase of the case was only incidental to the business of a freight
forwarding agent the transaction would not be seen as an integral part of
business carried on by the plaintiff as there as no degree of regularity in the
type of purchase concerned.
It
therefore follows that the company had purchased as a consumer and the
provisions of the Unfair Contracts Act prevented the exclusion clause from
taking effect. It may be noted that the Unfair Contracts Act is not applicable
in Kenya and the exclusion clauses are still governed in Kenya by the common
law and such exclusion clauses shall be valid unless they are reasonable. Also
under the Sale of Goods Act the parties whose contract of sale of goods can
exclude implied terms under the Act by means of an express contract.
The
decision of the court of appeal in R& B Customs Broker Ltd
may be criticized on a number of grounds:
First
the interpretation put by the court of appeal of Unfair Contracts Act may not
give effect to the intention of Parliament. The Act distinguishes between a
business purchaser and a consumer and does not require the court to consider
the purpose for which the goods are required.
Second
the decision for the ban on the use of exclusion clauses on consumer protection
is that the consumer is weak in terms of bargaining power but the same cannot
be said of a business consumer particularly a company. Dillan LJ in R&B
Customs Brokers considered obiter that had the purchaser been in the
cause of business the exclusion clause would have satisfied the reasonableness
test because the company was dealing in the course of business. It appears that
this is the true position of law with regard to Kenya.
Third,
even if the plaintiff did not contract in the course of the business, there is
a strong argument to the effect that company held itself out as acting in the
course of business since the company made the contract in its corporate name.
When these matters taken together put to a purchase in the course of business
and not one made by a consumer devoid of commercial experience.
The Trade Descriptions Act: The
Trade Descriptions Act in Kenya follows exactly the same The Trade Descriptions
Act of UK.
Section
3 of Kenya, The Trade Descriptions Act equivalent to section 11 of UK
Section
4 of Kenya The Trade Descriptions Act equivalent to section 14 (2) of UK. This
is with regard to services.
Section
6 of Kenya The Trade Descriptions Act equivalent to section 14 of UK (This is
in regard to services).
Section
8 of Kenya The Trade Descriptions Act equivalent to section 2 (a) of UK.
Section
9 of Kenya The Trade Descriptions Act equivalent to section 2 of UK.
Section
10 of Kenya The Trade Descriptions Act equivalent to section 4 of UK
Section
11 of Kenya The Trade Descriptions Act equivalent to section 5 of UK.
Section
19 of Kenya The Trade Descriptions Act equivalent to section 24 of UK. This
section is very important: it provides the defenses.
Prohibition of false trade
descriptions in relations to goods
It
has been recognized that there is a need to protect consumers and honest
traders alike against the misleading practice of falsely describing goods in
the course of trade. The Trade Descriptions Act has created two major offences
of strict liability in relation to goods, namely that of applying false trade
descriptions to goods in the course of trade and supplying or offering to
supply in the course of trade any goods to which a false trade description is
applied. Goods have been defined under section 2 (1) of the Act to include
ships and aircraft, things attached to land and growing crops. Ship has again
been defined to include any boat and any other description of vessel used in
navigation.
Section
3 of the Act creates two offences by providing:
Section
3 any person who in the course of any trade (a) applies a false trade
description to any goods or (b) supplies or offers to supply any goods to which
a false trade description is applied--
shall
be guilty of an offence.
First
type of offence
This
definition has several elements and to understand the provisions in section 3
it is necessary to analyze a number of points in order:
1.
Any person. This includes a
limited company. Section 16 special contains provisions dealing withy offences
by corporations making any director, manager, secretary or other similar
officers jointly liable if the offence is proved to have been committed with
their consent or connivance or is attributable to negligence on their part. Any
person may also include a manufacturer, a wholesaler, and a retailer. It is
also possible for a buyer to apply a false description. In Fletcher v Budgen,
a car dealer told a private customer that his car was irreparable and fit only
for a scrap. The dealer then bought it for two pounds, carried out repairs
costing 56 pounds, obtained a test certificate and advertised it for sale at
135 pounds. The divisional court held that an offence would be committed by a
buyer who applied a false trade description to goods, for example, fit only for
scrap when buying them in the course of his trade or business.
2.
Trade. Trade is defined by
section 2 of the Act to include business and profession.
3.
In the course of a trade of
business.
4.
Applies. The word applies in
section 3A is amplified by section 10 of the Act. A person applies a trade
description to goods if he (a) fixes or annexes it to or in any manner
makes it on or incorporate it with (i) the goods themselves or (ii) anything
in, on, or with which the goods are supplied; or (b) places the goods in, on or
with anything with the trade description has been affixed or annexed to, marked
on or incorporated with or places such any such thing with the goods; or (c)
uses the trade description in any manner likely to be taken as offering to the
goods.
In Donnelly
v Rowlands a milk retailer sold milk bottles. The foil caps of which read
“Untreated milk produced from TT Cows” followed by his name and address. The
bottles themselves were marked with the names of various suppliers to whom the
actual bottles belonged. The prosecution appealed from the magistrate
dismissal of the information alleging that he had sold bottles of milk to which
false trade description had been applied. The appeal was also dismissed by the
divisional court. On further appeal it was held that the words on the cap of
the milk bottles were inaccurate trade description and the words on the milk
bottles which could have been false trade description had the public been
misled into thinking that the names thereon had something to do with the
production of milk could only reasonably apply to the ownership of the bottles.
The defendant was therefore saved by the wording on the cap, which was required
by the regulations.
Section
8 (1) (e): any physical characteristics not included in the preceding
paragraphs
This
is the most frequently involved category of mis-description. The vast category
of cases under this paragraph have been those involving the altering of
car odometers in Macnab v Alexanders of Greenock Ltd it was
stated that the distance which a car has traveled is just as much a part of its
history as the places where it has been and the persons who owned it. The
odometer figures is if accurate a silent historical record previous use.
Section 8 (1) (f): testing by
any person and the result thereof
The
wording of this paragraph seems to require a statement to the effect that goods
have been tested and that they have passed this test. This paragraph may not
cover that a car has been to an AA test without further indication that the
test has been passed with would probably not be sufficient. This is considered
to be a defect in the Act and it has been proposed that where there is a
reference to testing it should be presumed in absence of a statement to the
contrary that there is an indication that the test has been passed.
A
statement to the effect that a car has a Ministry of Transport certificate
would fall within this paragraph since the granting of certificate is
conditional of the goods satisfying the MOT requirements. In this later event
the seller of the car would be guilty of an offence but the content of the
certificate is not to be taken as trade description applied by the garage
providing the certificate since it clearly states it is not to be relied on (see
Corfield v Sevenways Garage Ltd). In any event the statement
is not associated with the supply of the goods.
Section 8 (1) (g):
approval by any person or conformity with a type approved by any person
A
statement to the effect that the goods confirms to Kenya Bureau of Standards
specifications or merely display a kite mark, or Ag mark would fall under this
provision. Similarly a claim to the effect that the goods are approved by a
particular body, for example AA or a trade association or trade union could
also suffice . It may also be the case that the use of trade mark of a
manufacturer with national reputation can be said to imply conformity with a
type approved by another person.
False
representations of government approval or claims that goods have been supplied
to another person constitute the formation of the offences in their own right.
This paragraph was introduced to get false claims such as that certain
encyclopedia was approved by a well-known educational institution.
Section 8 (1) (h): place or date
of manufacture, production, processing or reconditioning
Section
8 (1) (h)
A
description of a commodity such as Norfolk King Turkey or Havana cigars or
Kitui honey would appear to fall under section 8 (1) (d), but conventional
description arising out of trade uses properly does not. Yorkshire pudding or
Cheddah cheese are not required to be produced only in the area the name
suggests.
This
paragraph also covers false statements about the date of manufacture, e.g. in Ront
Ledge v Ariza Motors Ltd, it was held that an offence was committed
under section (1) (section 3 of the Kenya Act). A car registered in 1972 was
sold as a new 1975 model.
Even
qualified statement of the age of the vehicle may not be sufficient to escape
liability. Thus it would be unwise for a car dealer to state the approximate
year of manufacture of the car as 1987 when he is not sure how old the care
is (See R v Coventry City Justices ex parte Farrand).
Section 8 (1) (i): person by
whom manufactured, produced, processed or reconditioned
This
covers goods which have been manufactured in the country in which last
underwent a treatment or processing resulting in substantial change. Thus a
trade description is applied where a petrol filling station advertises its
products as Esso petroleum when it is trading in another product. See case of Roberts
v Seven Petroleum Trading Co. In such cases the inference was that the
advertised brand was being supplied. It follows from that where a name is
printed on the goods it indicates that they have been manufactured by the
persons named. It is because of this many suppliers of own brand products would
be in serious difficulties.
Section 8 (1) (j): other
history, including previous ownership or use
This
covers such descriptions as railway lost property, unclaimed goods at the port,
army surplus goods, one lay-owner and the like. And an indication of a
vehicle’s age by reference to its date of registration or its suffix letter on
a number plate is covered by this provision.
The
majority of cases which have fallen within this paragraph have included
inaccurate odometer reading on motor vehicles. But other matters relate to past
history of the goods made available for supply will also be relevant. For
example, a statement to the effect that the goods are shop-soiled, fire-damaged
or salvaged stock would appear to relate to past history of the goods in
question.
Matters
not covered by the section 8 (1)
One
of the major problems of the list of prohibited statements is that there could
be circumstances in which a statement may mislead but they do not fall within
any of the stated categories of trade description. For example, a statement to
the effect worth a particular amount or represent “extra value” cannot amount
to a trade description. In Cadbury Ltd v Halliday it was held that
Cadbury chocolate supplied represent extra value could amount to a description
as the assertion was not factual and therefore incapable of precise
ascertainment.
However,
it is arguable that a reasonable person might regard a statement such as extra
value as implying extra chocolate for the same price and might
therefore fall within section 8 (1) (a) because it is a statement
relating to quantity. Others that might not be covered under section 8 (1)
which may give a misleading impression include indications of the identity of
the supplier or distributor of goods. A statement concerning the commercial
standing of the manufacturer, supplier or distributor of goods such as ability
to provide and after-sales service and a false statement about the content
printed and recorded material.
Implied trade description
The
Trade Descriptions Act provides that a statement in respect of one of the
listed matters may be made directly or indirectly but this still requires an
express written or oral statement to how they made the goods to which the
description applies. It would appear that in addition to express statement a
trade description may also be implied from the conduct of the defendant.
Support for this view can be gleaned from the Act itself which extends the
definition of a trade description to include anything likely to be taken at
indication of a matter listed in section 8(1).
The
fact that there may be liability for an implied trade description is gathered
from a number of falsified odometer reading cases. In a number of these cases
there was a strictly no express statement but the court had no difficulty in
applying he provisions of the Act to them. Similarly cars may be repaired in
such a way that they tell a lie about themselves. However this principle cannot
be taken too far. It follows from this that there must be a positive statement
on the part of the defendant in order to give rise to a liability under the
Act. However, it will appear to be the case that a person can give an indirect
indication of a matter listed in section 8(1)(a).
Falsity
By
virtue of section 9 of the Trade Descriptions Act a false trade description is
one which is false to a material degree. This definition is based on the
requirement that the description must be of such substance that it is capable
of inducing a purchaser. Thus a statement which amounts to nothing more than a
trade puff will not be treated as a false trade description on the basis that
such a statement is not capable of inducing a purchaser (See Cadbury Ltd
v Halliday). Where a statement is capable of verification it will
attract liability only if it is false to a material degree. This suggests that
a statement can be technically false; it is not likely to mislead anyone hence
no offence is committed (See Donnelly v Rowlands).
A
statement may also be false to a material degree not by virtue of what it
says but by virtue of what it leaves out. For example to describe a motor
vehicle manufactured in 1972 but registered in 1975 as new 1975 model is
materially false since an average person would take the description to mean
that the vehicle was manufactured in 1975 (Routledge v Anza Motors Ltd).
However to call a car new when it suffered superficial damage which have been
repaired using new part does not amount to commission of an offence (R v
Ford Motors Ltd).
It
is clear from these cases that whether or not a description will be held to be
false to a material degree will depend on the context in which the words are
used. For example, if what has been done to a new car is likely to diminish it
value the description new may be regarded as false. Similarly the language used
by the defendant will also matter. For example, one word taken on its own may
be materially false but if it is qualified by other words it may become
accurate. For example, the word ‘lard” implies the presence of pig fat but the
words “vegetable lard” implies a different commodity when the statement on the
packaging is that 100 percent vegetable oil is used (See Wolkind v
Pura Foods Ltd).
False descriptions relating to
services
Section
6 of the Trade Descriptions Act lays down provisions to control statements
about services, accommodation, or facilities provided by any person in the
course of any trade. It may be noted that a consumer is just as much concerned
with the quality of the services as with the quality and safety of the goods
which he acquires. In some cases the purchaser of many consumer goods will also
involve making arrangements for services in the form of maintenance agreements.
The term services, accommodation or facilities are not defined under the Act.
However, section 6 (3) states that in relation to any services consisting
of or including the application of any treatment or process or the
carrying out of any pairs the matters specified in section 6(1) shall be taken
to include the effect of the treatment, process or repair. There has been some
doubt in the UK whether professional services are included under the Act but in
R v Breeze it was held that professional services are covered by the
Act. However, this problem does not arise in relation to Kenya because section
2 (1) defines trade to include any business and profession. Here again the oral
as well as written statements are included.
However,
although a statement made after the supply of goods has been complete is not an
offence under section 3. Section 6 has a wide application. In Breed v
Cluett a builder built a bungalow, sold it and afterwards falsely
stated that it was covered by 10 years guarantee by a particular organization.
The divisional court held that this was a statement as to the provision of
services within section 14 of UK Act (section 6 of the Kenya Act).
The
distinction between this case and Hall v Wickens under
section 3 is that the provision of services may involve continuing obligation
and had there been a guarantee that builder could have been called upon
to provide the services during the guarantee period. This connection between
the supply of services and the defendant’s statement was emphasized by the
court of appeal in R v Bevelectric Ltd, etc. The three defendants
were a company carrying on a washing machine repair business, a director and an
employer. The statement that motors needed to be replaced implied that a
genuine assessment had been made on the extent of any necessary repairs. They
argued that the word provided in section 40 (1) (b) (iii) (Section 6.
They
argued that the word provided in section 40 (1) (b) (iii) (Section 6 (1)
(b) (ii) of Kenya) covered statement as to services which traders were offering
to supply or when on the course of supply but not those which had been
provided in the past. The court of appeal disagreed with their argument and
upheld their conviction on the ground that a false statement about services
already provided is within the section if it was connected or associated
with the supply of the services in question.
Conditions of application of
section 6
Not
all misdescriptions of services are covered by the provisions of the Trade
Descriptions Act since there is a detailed list of matters in respect of which
an offence may be committed. Furthermore there is a mens rea
requirement as to the facts of the offence created. These matters apart,
section 6 provide that it is an offence for any person acting in the course of
a trade of business to make a prohibited statement. It follows that as in the
case of section 3 an offence may be committed by any person whether he be the
supplier of services or not provided he acts in the course of trade. Thus an
offence may be committed buy someone who is not the supplier but has an
interest in the outcome of the transaction entered by the customer. In Britain,
a question arose whether a trade includes he activities of the profession for
the purpose of section 14 of the UK Act.
In
R v Breeze it has been held that section 14 (section 6 of Kenya) was capable of
applying to false statements concerning qualifications since such indication is
likely to be taken to refer to the quality of services provided.
For
the purposes of section 6 a statement must have been made. One obvious example
of making a statement arises when a statement is made by another person. It is
possible for a statement to be made without it being communicated to another.
For example a statement is made when it is published in brochures which are
posted in bulk to travel agents, when the message is passed by telephone, when
the information is pushed to clients, and when the information is relayed by
the persons to whom it is communicated.
Section
6 is not concerned with the statement that induces a contract; it does not
matter that an offending statement is made after the conclusion of he relevant
contract. Thus a mechanic who makes a false statement about the work he has
carried out on his client’s car may still be treated as an offence under
section 6 where he has already paid for the work done.
It
is clear from section 6(1) of the Act that the knowledge of the falsity of a
statement or recklessness in making the statement an alternative requirement.
Section 6 (1) provides that it shall be an offence for any person in any course
of trade
a.
to make a statement which he
knows to be false or
b.
recklessly to make a
statement which is false.
Knowledge of the falsity of a
statement
At
first sight the wording used in section 6(1) (a) would appear to suggest
that it is a mens rea offence. However, the House of Lords
in Wings Ltd v Ellis have analyzed section 14 of the
UK Act for Lord Scarman the basic issues between the parties was whether proper
construction of section 14 (a) where the defendant had no knowledge of the
falsity of the statement at the time of its publication but knew of the falsity
and at the time when the statement was made by the complainant.
The
facts of this case were as follows: for 1981-82 winter season the appellant
tour operator had distributed to travel agent a brochure giving details
of accommodation provided for customers. Shortly after, the brochure was
distributed. The tour operator discovered that the brochure contained a
statement which was false to a material degree, namely that the accommodation
provided in a hotel in Sri Lanka was with air conditioning. In May 1981 the
mistake was discovered and steps were taken to mitigate its effects but W had
booked a holiday in January 1982 depending on an amended brochure. At that time
he read the brochure that tour operators were aware that the statement was
false.
The
House of Lords unanimously upheld the prosecutor’s appeal against the
divisional court which had quashed the original conviction of the tour
operators. The brochure was inaccurate and the respondent knew that it was
inaccurate and therefore W was misled. The ingredient for an offence under
section 14 of the Act were thus compounded in view of the House of Lords to
hold otherwise would be to emasculate section 14 and to placed a premium on
carelessness by the respondent. It was pointed out that although the tour
operators never intended to make a false statement to W an offence has
been committed under section 14.
The
tour operator had not attempted to put forward a defence under section 24
(section 19 of the Kenya Act) which might otherwise would have been available
that the commission of the offence was due to a mistake and all reasonable
precautions and due diligence had been exercised to prevent the commission of
the offence.
Lord
Branden
in a concurring speech added that he would have regarded the false statement
about air conditioning contained in the respondent brochure as having been a
continuing false statement, which is as false statement which continues to be
made so long as such brochure was in circulation without effective correction.
Form this decision it appears that the House of Lords in this case held that
the offence created under section 14 (section 6 of the Kenya Act) is in fact
one of semi-strict liability.
Recklessly
Another
distinction between this offence and section 3 offences is that sections 6 also
require that the person makes the false statement recklessly. A reckless
statement is defined by section 6 (2) (b) as a statement made regardless of the
whether it is true or false and whether or not the person making it had reason
for believing that it might be false.
Lord
Parker CJ in Sunair Holidays Ltd v Dodd stated obiter that
the Act imported the common law definition of reckless. In this case travel
agents in their brochure described accommodation at a hotel as twin-bedded
rooms with private bath, shower, WC, and terrace.. They had a contract with the
hotel to provide such accommodation. Two persons booked a holiday with them on
this basis but on arrival were given rooms without terraces. It was held by the
divisional court that no offence had been committed. At the time the statement
was made the accommodation existed and the statement was perfectly true.
Nothing which happens afterwards would alter the accuracy of the description
when it was made. Further the definition of reckless does not include
negligence.
However
a different view was taken by the divisional court in MFI Warehouses v
Nattrass. Here a mail order company advertised goods for 14 days free
approval and carriage free. These offers were intended to cover only some of
the goods in the advertisement but appeared to relate to all of them. The
company’s conviction for recklessly making the false statement as to the
provision of facilities was upheld on appeal. The court considered that the
chairman of the company had given insufficient care to his perusal of the
advertisement so that the company had been reckless as to its content.
While
this case to an extent throws doubt on the dictum of Lord Parker and appears to
give a wide meaning to the words recklessly and the point of Sunair
Holidays Ltd still stands. No offence is committed merely because the
trader fails to provide services with the description provided that the
services or accommodation existed when the statement was made and
provided that he then had intended on providing them.
When a statement is made
A
question to be answered in Wings Ltd v Ellis was what was meant by
the word ”make” statement. In section 14 (1) [Section 6 (1) of the Kenya
Act] the question is particularly important in relation to brochures issued by
tour operators and others where many may be published and read by different
members of the public or a period of many months. Other statements in the
brochure made when the brochure is published or read by the members of the
public .In R v Thomson Holidays Ltd the court of appeal
decided that a statement is made only when communicated to someone. For
example by reading although approving the decision in Thomson as
correct, the House of Lords has not accepted the court of appeal’s
reasoning. A statement may be made although not communicated to anyone.
Future Services
A
decision showing that promises about provision of services in future are not
caught by section 6. In Beckett v Cohen a builder agreed to build
for the customer a garage like his neighbours within ten days and did not do
so. The divisional court upheld the magistrate’s court dismissal of
information. This was a statement made in regard to the future. The Act could
not be used to make a breach of contract into criminal offence.
As
the law now stands careful analysis is required of the relevant statement to a
ascertain whether their promises in the nature of forecaster or whether
the statement although relating to services to be performed in future also
contained a statement of existing facts.
This
interpretation of the section erodes very substantially the protection afforded
to consumers. Even so if the accommodation is advertised which at the time of
the publication of the holiday brochure does not exist then the offence can be
committed.
In
R v Clarkson Holidays Ltd a brochure stated that Clarkson
hotels were chosen for their cleanliness, good food, and efficiency of service
ad included a picture of a large modern hotel with swimming pool. This turned
out to be an artist’s impression. The hotel which was still in the course of
construction was not finished by the time the holiday makers arrived and was
never intended to be ready by then. According an offence had been committed
under the Act.
Similarly
in British Airways Board v Taylor
A
prospective passenger was booked by BOAC on a flight to Bermuda and a letter
confirming the reservation had been received. BOAC in common with many
other airlines operated an overbooking policy usually on correct assumption
that some passengers will fail to arrive at the airport but not seat was
available for the prospective passenger when he arrived at the airport. The
House of Lords held that the statement in the letter was false within section
16 [section 6 (2) of the Kenya Act] and in particular it was stated that the
facts illustrated the assumption of existing facts and a promise of future conduct
may both be found in one and the same statement. The factual statement here was
that booking would be confirmed when the booking policy made it impossible to
do this. However, the appeal was allowed in the airline’s favour on the
technical ground that the British Airways were not criminally liable for the
act of the former BOAC.
Facilities and prices
Section
4 of the Trade Descriptions Act was concerned only with the price of the goods.
Under section 4 false or misleading indication as to price has been made an
offence. However, there is no provision under the Act in relation to false or
misleading indications as to price at which services are offered. In the UK
this gap has been filled by section 200 of the Consumer Protection Act 1987
which covers goods, services, accommodation or facilities. However, before that
attempts were made to increase the price of services into section 14 [section 6
(2) of the Kenya Act] by a broad interpretation of the word facilities in
section 6. A number of decisions of the divisional court show that the
provision is to be construed strictly. In Newell v Hicks, it was
pointed out that although the word facility is used widely in commercial
circles to describe almost anything available commercially. When the word
appears in a criminal stature it was wrong to stretch its meaning in that way.
In
Newell, motor dealers advertised a video cassette recorder absolutely
free with every registration of Renault car ordered within a specified period.
The trade-in allowance of old vehicles however was reduced where customers
wished to take up the offer. The divisional court held that the statement fell
outside section 14 [section 6 of Kenya] because:
1.
The offer of a free recorder was
a statement about the supply of goods; and section 14 (1) did not cover a false
statement about the price at which services or facilities were provided.
Yet
this case is not authority for the proposition that section 6 has no
application merely because the suppliers statement relates to an
ancillary to goods. Thus in Bambury v Hounslow it has
been held to cover a three-month guarantee of a second-hand car; also a
statement in Kinchin v Aston Park Scooters that the purchaser of
a moped would receive a year’s insurance.
Defences
Section
19 of the Act [equivalent to section 24 of the UK Act]:
1.
a mistake: applies to the person
charged
2.
Reliance on information supplied
by another person: useful for a retailer.
3.
act or default of another person
4.
Tesco
Supermarket Ltd v Natrass
There
was a chain of supermarkets in the UK. In one branch there was a notice that
prices had been reduced placed outside the supermarket. But the prices paid for
items were higher than those advertised. The supermarket was charged of false
price indication. The offence was committed by the branch manager but not the
director. In criminal liability of corporations the company could be held
liable. The branch manager is not the company and the company could not
held liable. The defendant must have exercised the necessary care and due
diligence.
4.
Accident: defendant claim that
offence occurred due to accident
5.
Some other cause beyond.
Unavoidable circumstances his control.
The
liability for offenses under section 3 is strict where the offence under
section under section 6 is committed if the trader knows the statement to be
false and makes it recklessly.
However,
certain defences are available. Section 19 (1) applies to both types of
offenses and section 19 (3) assist only in cases of prosecution under section 3
(b). Section 20 is confined to innocent publication of advertisements.
The general defense
The
defense provided by section 19 (1) may be used by the defendant when charged
with the offense under section 6 in relation to services or under section 3 (a)
for supplying goods with false trade description. However, the court of appeal
decided in R v Southwood that it is not available in respect of
charge under section 3 (a) where the defendant applied the description himself.
This case is concerned with false odometer. It was pointed out by Lord
Lane CJ: “By his initial actions in falsifying the instrument he has not taken
any precautions let alone any reasonable precautions.”
Section
19 (1) provides as follows: Any proceedings for an offence under this Act save
as here in the Act provided be a defense for a person charged to prove:
(a)that
the commission of the offence was due to a mistake or reliance to information
supplied to him or to the act or default of another person or to an accident or
other cause beyond his control. It may be split into five defences. The
defendant must prove that the commission of the offence was due to any one of
the following causes:
1.
A mistake
As
far as mistake is concerned this is available only where the mistake is made by
the defendant himself. It cannot be used where someone else’s mistake is
involved; for example an employer pleading the mistake of an employee. See Birkenhead
& District Cooperative Society v Roberts.
2.
Reliance on information supplied to him
This
defence can be taken most of the time by the retailer who generally relies on
the information supplied to him by the manufacturers.
In
case of odometer readings the seller may rely on the information supplied to
him by the previous owner.
3.
Act or default of another person
The
defence most frequently relied upon is that the offence was due to the act or
default of another person, for example, an odometer was run back by the
previous owner. When the employer is charged he may rely on the default of his
employee. When the Act first came into force it was thought that the defence
could only be used where the employee was in a junior position but it appears
to have been quickly settled that even where the person was a branch manager
the defense is still available. However, when the employer is a company it is
necessary to distinguish between those employees or officers who are the
directing mind and will of the company where their defaults are the defaults of
the company and those employees who are thus not identified with the company
then the company can claim their defaults as those of another person.
In
Tesco Supermarkets Ltd v Nattrass,
the
House of Lords discussed the difficulties in cases where a corporation is
charged for criminal offences. In this case the supermarket at one of their
branches outside the supermarket advertised for a particular type of soap
powder at reduced price. However, the supermarket had ran out of the reduced
packs and when a customer bought a pack he was charged the full price for the
pack.
The
House of Lords held that where a person charged is a limited liability company
the only person who can be identified with the controlling mind and will of the
company are the board of directors, the managing director and any other
superior officer to whom the board has delegated full discretion to act
independently from the board. Thus though the general manager may be the
company’s directing mind and will but the supermarket branch manager was not
accordingly since the offence was caused by the failure on the part of the
branch manager to ensure that sufficient packs at reduced price were available
Tesco were able to rely on his default. In other words the House of Lords held
that a branch manager of a large company was another person it being not possible
to identify him as the directing mind and will of the company. Only senior
members of the company could be so regarded. It has been argued that this
decision has undermined the purpose of the Act.
However
in MacGuirre v Sitting Bourne Cooperative Society it was pointed
out that the defence was not available unless all reasonable inquries had
been made to try to establish that actual person responsible for the
offence and that it was not sufficient simply to produce a list of all the
staff who might have been responsible. Further, to rely on this defence section
19(2) requires the defendant at least seven clear days before the hearing to
serve on the prosecutor a written notice giving such information
identifying the person.
4.
An accident
The
defendant may rely o the defense of accident when he can prove that the cause
of the offence was an accident.
5.
Some cause beyond his control
If
the crime has been committed because of some cause or circumstances beyond the
control of the defendant he can rely on this defence.
These
differences are available under section 19(1 (a). But he still has to prove
under section 19 (1) (b) that he took all the precautions and exercised all due
diligence.
Due diligence defence
It
is not enough for the defendant to prove one of the five defences in section
19(1) (a). He must also prove that he falls within what is now popularly
known as due diligence defence, namely that he took all reasonable precautions
and exercised all due diligence to avoid the commission of
such an offence by himself or in any other person under his control. The case
law would seem to sup-port the preposition that to avail himself of this part
of the defence the accused must show that he had set up a system of
designed to prevent the errors and that the system was adequately operated.
These factors have generally been considered by the courts in relation to the
default defence particularly with regard to its application in the areas of
vicarious liability, odometers and sampling.
Vicarious liability
When
an employer is charged with an offence because of the conduct of an employee
and endeavours to rid himself of this vicarious liability by showing that the
offence was due to the act or default of the employee broadly the employer will
be acquitted if he can show that he is personally blameless. Obviously when
this defense is used, somebody is to blame. The question is whether the offence
had occurred in spite of the precautions and diligence of the employer. In Tesco
Supermarkets the House of Lords rejected the argument that the employer
has to show that he and all other persons to whom he has delegated
responsibility are blameless. The company was held to have satisfied the
requirements of reasonable precautions and due diligence under section 19 (1)
(b) by having a chain of command with a careful system of control and
supervision even though one of the cog in this machine , the branch manager of
the supermarket, had failed to carry out his responsibilities properly.
Odometres
The
second area where due diligence defence is of special significance relates to
false odometer readings. Sometimes a car dealer honestly supplies a vehicle
with an odometer which unknown to him had been tempered with by an earlier
owner. Assuming that he can prove that the offence was due to reliance on
information supplied or the default of another person, the question arises
whether he can also prove that he took precautions and was diligent.
This
normally involves checking which the person from whom he bought the vehicle and
if he has the registration document with the previous owners to verify the
mileage. However, in Neish v Gore the divisional court said that
it was impossible to lay down as a general rule that a dealer selling a
second-hand car must have the log book and check with the previous owners. In
that case the defence was available to a dealer who bought from somebody with
whom he had been dong business for years and resold the car before receiving
the log book from the seller.
Sampling
Where
the suppliers dealing with large quantities of goods and relying on sampling to
show that they had been taking reasonable precautions and with due diligence.
In Rotherham Metropolitan BC v Raysun(UK) Ltd, the defendants ,
large-scale importers of Far East products imported once a year 100,000 packets
of children’s wax crayons from Hong Kong. Their agents in Hong Kong had
samples analysed and had to send back only adverse reports but none of such
reports were received. The defendants tested in England a single packet. They
sold crayons as poisonless. The black crayons contained excessive amounts
of toxic materials. The divisional court rejected their defense under
section 24 (1) [section 19(1) of Kenyan Act]. They had not checked that
the Hong Kong analysis were in fact taking place and their sample in England
was very moderate, thus they have not taken the reasonable precautions and
there was no diligency on their part.
Suppliers defence
In
Naish v Gore the dealer also relied on the defence in section 24
(3)[section 19 (3) of the Kenyan Act] this is confined to the offence of
supplying goods with a false trade description under section 3 (b). the
“defences “in any proceedings for an offence under this Act for supplying or
failing to supply goods to which a false trade description is applied it shall
be a defence for the person charged to prove that he did not know and could not
with reasonable diligence have a ascertained that the goods did not conform to
the description or that the description had been applied to the goods.
The
comment made earlier with regard to due diligence in section 19 (1) appear
relevant here as the use of the adjective “reasonable” rather than “due” is not
intended to affect or reduce the standard of diligence. For
example in Simmons v Ravenhill another odometer case the defence
failed because in view of low mileage of 19,000 km the dealer
should have made inquiries with the previous owner. The divisional court stated
however generally it would be unreasonable to expect a dealer to check with all
the previous owners.
By-pass provision
Although
the so-called by-pass provision in section 18 of the Kenyan Act is not a
defence, it is appropriate to deal with it at this point in view of its
close interaction with the defence in section 19 (1). Section 18 states “where
the commission by any person of an offence under this Act is due to an act or
default of another person that other person shall be guilty of the offence and
a person may be charged and convicted of the offence by virtue of this section
whether or not proceedings are taken against the first person.
Thus
this section enables a prosecution to be brought against a person whose act of
default has caused another person to commit an offence even if the other
person has not been prosecuted. Thus where A commits an offence but the
real culprit is B, B may be prosecuted for the offence committed by A , it is
irrelevant whether or not proceedings have been taken against A. The corollary
is that if no offence is committed by A, B cannot be prosecuted under
this section.
In
Coupe v Guyett it was suggested that section 23 (section 18)and
section 24 (section 19) could be fitted together where the first person
referred to in section 18 has a defence or merit and without reliance on
section 19 it is not possible to operate section 19 so as to render
guilty the person whose act or default gave rise to the matter in the
compliant. It was argued in that case that section 18 comes into play only
where the first person escape prosecution by taking advantage of the due
diligence defence under section 19.
Innocent publication of
advertisements
Section
I (b) of the TDA upholds a special defence in case of
advertisements. In a proceedings for an offence relating to the
publication of advertisement the defendant is free from liability if he
can prove that
a.
the advertisement was received
and published in the course of a business involving such publication
b.
he did not know and had no
reason to know that the publication would amount to an offence under the Act
The
defence protects not only the publishers themselves, for example of newspapers
and magazines but also those who arrange for the publication of advertisements.
Consumer
protection in relation to services under the private law
The role of private law in
protecting the consumer in service sector
Services
encompass a wide variety of activities. They are as diverse as laundry, dry
cleaning, furniture removal, home improvements, education services, car
maintenance and repairing, banking and insurance services and professional
services. The service sector of the economy has expanded enormously
during the 20th century and the range of services offered to the
public is extremely varied and it is sometimes said that the modern economy has
become a service economy and perhaps more than half of output is generated by
the service sector. The service sector is covered by the law of contract and
the law of tort.
Terms
implied in a service contract by the court where there is a contract in place
certain terms may be implied or inferred by the judges to reinforce
the language of the parties and realize their manifest intention.
In
Sameuls v Davies the plaintiff was a dentist who agreed with the
defendant to make a set of false teeth for the defendant’s wife.
The teeth were made and delivered but the defendant refused to pay for
them on the ground that they were so unsatisfactory that his wife
could not use them. There was a controversy as to whether it was a
contract for the sale of goods or for work and materials.
The
controversy was as to whether the contract was for the sale of goods or for
supply of work and materials but the court of appeal held that in the
circumstances of the case the question was irrelevant if it was a contract for
the supply of materials and goods the provision of the Sales of Goods Act
applies and if it is a contract of provision of services then they would
import into the contract a term that the teeth would be reasonably fit
for the purposes. The courts have also imported into contractual transactions
for a lease of house that it shall be reasonably fit for habitation and the
date fixed for the beginning of tenancy in Smith v Marrable it was
held that if the house was invested with bugs or if the drainage was defective
or a formal occupant suffering from TB the tenant would be entitled to
repudiate the contract and recover damages.
Lesson
Eight
Private
Law measures to protect consumer in service sector
In
Reed v Dean the Plaintiff hired the defendants motor
launch for a holiday on a river two hours after he had set out the launch
caught fire, the fire fighter was out of order and the Plaintiff suffered
personal injuries and lost all his belongings. The defendant was held
liable for his failure to make the launch as fit for purposes of hiring as
reasonable care would make it.
Sometimes
the court may impose on parties a term which is reasonable in the
circumstances.
In
Liverpool City Council v Irwin
The
defendants were tenants on the 9th floor of a 15 floor tower block
owned by the Plaintiffs. There was no formal tenancy agreement.
There was a list of tenants obligations prepared by the landlord and signed by
the tenants. There was no express undertaking of any kind by the
landlord. Owing to vandalism the amenities of the block were seriously
impaired so that the lifts were regularly out of action. The stairs were
unlit and the rubbish shutes did not work. The defendant withheld payment
of rent alleging that the plaintiffs were in breach of implied term of conflict
of tenancy. But the House of Lords rejected this argument. It was
necessary to consider what obligations the nature of contract itself implicitly
requires and since it was not possible to live in such buildings without access
to the stairs and the provisions of a lift service, it was necessary to imply
some terms as to these matters. On the other hand it was not proper to
imply an absolute obligation on the landlord to maintain these services.
Absolute
obligation on the landlord to maintain these services, it was sufficient to
imply an obligation on the landlord to take reasonable care to maintain common
paths in a state of reasonable repairs. However in this particular case
it was not shown that the landlords were in breach of that implied term.
Similarly in McIntyre v Gallagher G was a
plumber who had been employed to carry out plumbing work in a row of
tenements. This included the sealing off of some pipes. One of the
pipes was not properly sealed which after sometimes leaked causing damage to
the property on the lower floors for which the landlord was liable.
Evidence proved that the proper and workmanlike method of sealing the pipe was
to solder it. In this case G or one of his workmen had only hammered the
end of the lead pipe together which eventually leaked. He was thus held
liable for failing to carry out the job with requisite level of his skill.
In
Brett v Williamson a building contract was arranged
on either a fixed price basis or as in this case on time and lime basis.
The problem resulting from the unsatisfactory workmanship are particularly
difficult to resolve in this case the plaintiff had undertaken to lay terrazzo
tiles and having done so in a manner which the defendant regarded as
unsatisfactory was obliged to bring an action for payment. It was argued
by the Plaintiff that since such tile laying was a specialist job but had been
entrusted by the defendant to him who did not claim to be a specialist, he
could not complain that the work was not up to the standard of a
specialist. It was held that the standard of care required was that of
the type of practitioner which the client believed he was dealing with but in Dickson
v The Hygienic Institute it was said that a contractor need attain
only the skill he professes.
In
Mackintosh v Nelson , Brett v Williamson case was
applied to slightly different circumstances where P claimed damages for loss
sustained when seriously defective work was carried out at her house. The
defendant had been an art teacher for several years before going into business
on his own account as an industrial cleaning contractor who also undertook
window cleaning, external paint work and large scale gardening. The
plaintiff had admired a sun lounge which the defendant had built at his own
home and inquired whether he could build similar work at her house. It
was clear from the evidence that the defendant held himself out as capable both
of drawing the necessary plans and carrying out the building work in a workman
like manner. The defendant argued that in the circumstances he should be
held to the standard of an amateur builder. It was held that where one
who was not a tradesman and contracts to do work for another, he must be held
to have professed the requisite skill to do the job which he had undertaken.
A
different aspect of the problem of the standard of the work arises where the
issue is not the competence which the tradesman professes but the advice or
warnings which he gives to his customers before carrying out the job. In Terret
v Murphy the owner of a furniture shop engaged the plaintiff to
paint an extension to his shop. He was eager to have the work completed
and when the painter reported that the supplies of the primer that he wished to
use would not be available for several days, he persuaded the painter to
carry on with the job. This was done despite warnings from the painter
that the absence of the primer could result in problems later on.
Problems did arise and the owner of the shop withheld payment.
Finding
in favour of the Plaintiff it was pointed out by the court that if a house
owner merely asks a job to be done then the contractor would be liable if he
did not draw attention to a particular risk but despite an earlier warning from
the painter that the work should be executed in a particular manner and the
house owner instructs to proceed in a different manner, in that case the house
owner is not entitled to say that the warning was not loud enough or that he
did not appreciate the full measure of the risk.
Consumer
services may be provided pursuant to a contract or independently of any such
contract. For example no contract exists between a hospital which is
providing charitable medical services and the patient. However, in such
cases also the provider of the services nonetheless owes a duty to take
reasonable care of the consumer. This means that a person is responsible
for exercising his skill in trade or profession and the lack of such skill will
be regarded as a breach of implied term under the contract if a contract is in
place or breach of duty of care to take reasonable care under the law of
Tort. Thus in professional services the professional person must do his
job with reasonable skill and care.
In
Hunter v Hanley it was said by Lord Clyde
that “where the conduct of a doctor or indeed of any professional man is
concerned, the circumstances are not so precise and clear-cut as in the normal
case. In the realm of diagnosis and treatment there is ample scope of
genuine difference of opinion and one man clearly is not negligent merely
because his conclusions differ from that of the other professional man nor
because he has displayed less skill or knowledge than others would have
shown. The true test of establishing negligence in diagnosis or treatment
on the part of a doctor is whether he has been proved to be guilty of such
failure as no other doctor of ordinary skill would be guilty of if acting with
ordinary care.
This
has been interpreted to mean that if any other professional can be found to
agree with actions of the doctor or other professional feel there is no
negligence under the law of tort. However a close reading of this case
suggests that this is going too far and the test propounded by McNair J. in Bolam
v Friern Hospital Management Committee correctly provided the test
when he said of the standard required of a doctor that “it is sufficient if he
exercises the ordinary skill of an ordinary competent man exercising that
particular art.” The test is of ordinary competent men in that profession.
This
view certainly seems to be consistent with other professional negligence
cases. A professional person does not give an absolute undertaking to
achieve a particular result that would be inappropriate in most cases of
professional services a doctor in the nature of things cannot undertake to cure
his patients and a lawyer can give no guarantee to a client that he will win
his case. In Eyre v Measday Mr and Mrs Eyre decided that
they did not wish to have any more children and consulted the defendant a
gynaecologist to discuss the sterilisation of Mrs Eyre. The Defendant
explained the nature of the operation and emphasised that it was irreversible
and must be regarded as a permanent procedure.
He
did not explain that there was a small risk of failure. The Eyres
believed that the result of the operation would be to render Mrs Eyre incapable
of having further children. However, after the operation Mrs Eyre did
become pregnant and had another child. She sued the gynaecologist
alleging amongst other things that there was an implied term that she would be
rendered sterile by the operation. It was held that the Defendant had
undertaken to carry out a particular type of operation rather than to render
Mrs Eyre completely sterile and that his statement that the operation was
irreversible was not an express guarantee that the operation was bound to
achieve its objectives.
A
case involving professional services which does show that a standard higher
than that of due skill and care can be expected in certain circumstances is Green
& Co. (Contractors) Ltd v Bayhnam v Meikle & Partners the
Plaintiffs who were building contractors had agreed to design and build a
warehouse for a customer. They employed the defendants who were
Structural Engineers to design the warehouse and advice them that it was
essential that it should be capable of permitting materials to be moved around
on fork lift trucks. Shortly after the warehouse was handed over to the
customer the floor began to crack as a result of vibrations caused by the
forklift trucks. The Plaintiffs accepted that they were liable to the
customers and brought this action to recover by way of indemnity from the
Structural Engineers the cost of repairs to the building. It was
held that on the facts as proved in this case there was a term to be implied
into the contract that the engineers who designed the building that would be fit
for the purpose which the plaintiff had stipulated.
TIME
FOR PERFORMANCE:
A
major source of complaints from consumers is failure of contractor to complete
a job in good time or sometimes to complete it at all. There are those
cases where the days of commencement or completion of the work has been agreed
between the parties and subsequently ignored by the contractor. The other is
where no time has been agreed for the completion of the work but the consumer
thinks that the contractor has taken unreasonably long time to complete the
work. The contract may specify the time by which the service is to be
completed. This is subject to the provision that the contractor will not be
liable for failure to comply with the time limit if his failure to do so is the
fault of the client.
In
T & R Duncanson v The Scottish County Investment Co.
where a plasterer was unable to complete his agreed task because the client had
failed to ensure that the other tradesmen completion of whose work was
necessary to allow him to start had kept to the schedules. If there is no
complication such as that as in this case, the question is whether the time is
of essence. There is no problem where the contract explicitly says that
the time is of the essence. It should not be necessary to use the
particular formula that time is to be of the essence. Any verse that
clearly indicates that this is the case should suffice.
The
problem is more difficult where the contract does not have such a provision,
time will be assumed to be of the essence. In a commercial contract it is
probably not the case that the consumer contracts will fall into this
category. However if there is no express term about time, a consumer is
entitled to expect that a job will be completed within a reasonable time.
In Davidson v Guardian Royal Exchange Assurance a
case involving delay in repairing a car where it was held that repairs must be
completed within a reasonable time.
Similarly
in Charnock v Liverpool Corporation C’s car had been
damaged in an accident and he took it to the Defendants for repair. An
estimate for the work required was agreed but the job was not completed for
eight weeks since he used the repairs for the cost of hiring a car for 3 weeks,
the period in which in his opinion the time taken for the repair exceeded what
was reasonable. It was held that there was an implied term that the
repairers could carry out the repairs with reasonable expedition and on the
facts, eight weeks was not a reasonable time.
In
Charles Rickards Ltd v Oppenheim O had placed an order in
August 1947 with the defendants for the construction of a body on the Chassis
of his car. The job was to be completed within 6 months or at the most 7
months. The job was not completed within 7 months and the plaintiff kept
pressing for delivery. Eventually he wrote to the body builders on June
28th 1948 that he shall be unable to accept delivery after July 25th.
When the car was not finished by the end of July O cancelled his order and when
the car was delivered to him in October he refused to accept it. It was
held that the original stipulation making time of essence of the contract was
waived but he was entitled to give reasonable notice once again making time of
the essence. On the facts of this case it was decided that the notice of
28th June was reasonable and O was not obliged to take delivery.
Product
Liability
Product
liability is basically a common law remedy and can be on contract-based
remedies and tort-basis remedies. In contract-based remedies only parties to
the contract can sue.
Wilson
v Cockrell & Co. illustrates the merchantable
quality; the goods were defective. When she put the material into the fireplace
they exploded and she
Aylesbury
Dairy Co.
In this case a person ordered some milk from a milk supplier and that milk
contained typhoid germs. The wife consumed the milk and got typhoid and late
died. Husband sued for breach of implied conditions under the Sales of Goods
(fit for he purpose) and he can either reject the goods as well he can sue for
damages.
In
Australian Knitting Co v Grant. In that case a person bought
some underwear from a retail. Some underwears were shown to him and he
bought one piece which he wore without washing it and he got a skin
disease, dermatitis. And sued under merchantable quality under the Sale of
Goods Act.
Manufacturer
of product
Reach
the ultimate consumer
In
the form which left them- intermediate examination—reasonable care in
preparation and putting up the product
Dalkon
Shield
Product liability
The
majority of consumer complaints concerning defective goods or by purchasers
whose expectations are disappointed liability for damage for a defective
product is an amalgam of liability in contract and the tort of negligence. In
earlier times contract tended to predominate in judicial pattern which produced
what came to be known as the privity of contract fallacy. The Sale of Goods Act
provided a statutory protection by implying terms into contract for the sale of
goods the breach of which gives rise to certain remedies conditions implied
into contract of sale that the goods should be merchantable and if the purpose
for which the goods were bought had been made known to the supplier the
goods must be fit for the purpose.
The
liability under the Sales of Goods Act is strict. It is irrelevant that the
retailer is in no way to blame for the defect and may lack opportunity to
discover the defect nor is it limited to protection against injury to person or
property. That means in appropriate circumstances there can be a liability for
economic loss also.
Merchantable
quality is defined as the goods must be fit for the purpose or for purposes for
which they are normally bought as it is reasonable to expect having
regard to the description, the price and or the surrounding
circumstances. So for example if a person buys an electric blanket he can sue
the retailer if it is unmerchantable because its faulty wired and the person
suffers electric shock and also if it is useless and fails to heat the bed at
all.
Refer
to the following cases:
Frust
v Aylesbury Dairy Co.
Godley
v Perry. In this case a child bought a
catapult from a retailer by sample. It was defective and he raptured his eyes
when using the catapult. He sued the retailer on the grounds that the catapult
sold to him was not of merchantable quality. It was not fit for the purpose of
a toy and the retailor was liable for the condition of the goods. The
goods were bought according to sample shown.
Australian
Knitting Co v Grant
In
Daniels & Daniels v R. White & Sons Ltd & Tarbard,
Mr. Daniels purchased a bottle of lemonade from Mrs. Tarbard a retailer.
It had been manufacture by R. White & Sons and contained a quantity of
carbolic acid. Mr. and Mrs Daniel both became ill as a result of drinking
it and as between the buyers Mr. Daniels and the seller and Mrs Tarbard
the condition implied by the Sale of Goods Act were capable of applying and it
was found that while there was no implied condition of fitness since the buyer
had not relied on the seller’s skill or judgment.
However,
the implied condition of merchantable quality applied and had been broken. Mr.
Daniels was able to recover from Mrs Tarbard damages for personal injuries
without proving that she had been negligent (i.e. strict liability under the
Sale of Goods Act). Mrs Daniel could not sue Mrs Tarbard but could successfully
sue the manufacturers for the tort of negligence, however on the fact she
failed to prove breach of necessary duty of care. Mr. Daniels could also have
sued he manufacturers successfully in tort had negligence been proved.
The
limitation on effectiveness of contract as a means of general consumer
protection against defective goods arise from the rules of] privity of
contract. A person who is not a party to a contract cannot benefit from that
contract. So for example, if the mother of the person who had suffered electric
shock because of the faulty wiring of an electric blanket cannot sue the
retailer in contract even if suffers serious injury. Also the purpose who has
no claim in contract against the wholesaler or the manufacturer because in that
situation vertical privity denies him the benefit of the conditions of
merchantable quality or fitness for a purpose.
Sometimes
the courts have devised certain measures to mitigate the consequences of the
rules of privity of contract. The courts have devised what is known as the
doctrine of agency. In Lockett v Charles a husband and wife took a meal
together in a restaurant. The husband ordered the food and paid for the bill.
The wife contracted food poisoning from contaminated food. It was held that the
husband acted as his wife’s agent and contracted on her behalf thus she could
sue on contract for the injuries suffered because of contaminated food.
However, the circumstances which allows an inference of agency will be strictly
limited. For example, a mother who buys goods for her child cannot be said to
act as child’s agent. She may be able to recover any loss to her caused by the
injury to the child. So if a small child is scalded by a faulty hot water
bottle purchased by mothers, the mother may sue on her contract with the
retailer but the child cannot. [This was the situation in Priest v Last.
In
that case the mother had bought a hot water bottle but it was defective and
because of that the child was defected.] She will recover the cost to her of
caring for her injured child but the child will be unable to recover in
contract for the pain and suffering. Any action by the child must be in the
tort of negligence. This means that normally tort-based remedies will be
pursued in those circumstances where the consumer is debarred from using
contractual remedies in cases where the consumer having suffered damage to
person or property has a choice of suing in either contract of tort. He would
normally have chosen to sue in contract because the implied terms impose a
strict liability.]In suing for damages has a choice of suing in either contract
or tort. He would normally have chosen to sue in contract because the liability
is strict.
Liability and negligence
The
development of liability in negligence for defective goods was for the first
time established in the case of Donoghue v Stevenson. Prior
to this case the ambit of liability was extremely narrow due to the operation
of what has become known as contract fallacy. According to this fallacy there
was no duty of care owed by the manufacturer to any person who was not a party
to a contract with him and who was injured or otherwise suffered loss as a
result of a defect in manufacturing of goods. This contract fallacy was
exploded by the decision of the House of Lords in Donoghue v Stevenson
where Lord Atkin laid down the following statement of principle:
“A
manufacturer of products which he says in such a form as to show that he
intends them to reach the consumer in the form in which they left him with no
reasonable possibility of intermediate examination and with the knowledge that
the absence of reasonable care in the preparation or putting up of the products
will result in an injury to the consumers life or property owes a duty to
the consumer to take that reasonable care.”
Although
this statement of principle constituted a major step forward in the development
of law it is the subject of a number of restrictions, Donoghue v Stevenson has
since been extended in its range of application to goods and the principle of
negligence derived from that judgment remains of utmost importance even now.
Range of defendants
Lord
Atkin imposed liability on manufacturers. The latter case law extended
liability inter alia assemblers, repairers, suppliers of drinking water,
supplier of goods whether retailers or wholesalers, builders and others. This
category of persons to whom the principle has been extended are characterized
by the fact that they created he danger or were responsible for the creation of
the danger. The difficulty then arises is whether the principle should also
apply to the vendor of the defective goods. Here the situation is
different because the vendor has not created the danger. He has simply
sold the product to the consumer. Of course such a vender could be liable in
contract particularly under the Sale of Goods Act where the subject matter of
the contract between he parties was goods but the question is: can the supplier
also be liable in tort? It seems that he may be liable in tort where he fails
to inspect the goods and he is under a duty to inspect the goods.
In
Andrews v Hopkinson it was held that a secondhand car dealer
would be expected to check the steering on used cars. Similarly in Watson
v Buckley, Osborne, Garrett & Co. wholesalers who failed to test
for themselves a hair dye of dubious province were held to be negligent. [they
were selling a hair dye which was harmful to customers; there was a duty for
them to check] So the implication imposed upon supplier does not arise in every
case and even where it does arise it can be discharged by selling the goods as
seen and with all its faults and without warranty.
Product
The
second qualification in Lord Atkin’s judgment is that it only applies to
products. However the principle is not confined to items such as food and drink
but it applies to any product in any normal domestic use including underwear,
hair dye, motor car, houses and installation in houses and even
tombstones, nor is it confined to consumers. In the strict sense it applies to
the ultimate user of he product as well as to persons within the close
proximity of the product. Thus a child scolded by the faulty hot water bottle
purchased by her mother can sue in negligence but less obvious person at risk
may also be within the scope of the manufacturer’s duty. In Barnett v
H.J. Parker & Co, the proprietor of a sweet shop was injured by a piece of
metal protruding from a sweet. He was able to recover damages from the sweet
manufacturer. Similarly in Stennet v Hancock a by-stander was held
to be within the rule in Donoghue v Stevenson.
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