Clearly therefore, the right of a consumer buyer to reject goods which fail to conform to the contract terms is a remedy which is imputed with a large degree of importance. It is apparent however that in some circumstances this significantly powerful right in the buyer's battle against faulty goods can be lost by operation of the law;
"Where a contract of sale is not severable and the buyer has accepted the goods or part of them, the breach of a condition to be fulfilled by the seller can only be treated as a breach of warranty and not as a ground for rejecting the goods and treating the contract as repudiated, unless there is an express or implied term of the contract to that effect"3.
Acceptance is deemed to have taken place in three basic circumstances. The third of these situations as contained in ss34 & 35 of the Sale of Goods Act is arguably the most common way in which consumers will lose the right to reject. Under this heading the buyer effectively accepts the goods when "after the lapse of reasonable time he retains the goods without intimating to the seller that he has rejected them"4. The manner in which this subsection can act against the buyer is demonstrated in the leading case of Bernstein v Pamson Motors (Golders Green) Ltd5.
This case concerned a dispute over the breakdown of a new Nissan Laurel car purchased by Mr Leslie Bernstein from the defendants, the retailer; Pamsons Motors of Golders Green. The case attracted interest from both the Automobile Association and Nissan who provided backing to the parties. It is apparent that the organisations viewed the case as a "vehicle" in order to determine the proper solution to a commonly occurring situation in the motorcar trade- both organisations hoped to gain some more specific guidance on the meaning of merchantability. Much of Rougier's judgement is dominated by discussion of this issue. Rather than any significant redefinition of this term as perhaps was hoped for, he refrains from any real departure from the status quo. In this way the widely accepted statutory definition is reinforced.
"The goods should be in a state that the buyer...knowing what hidden defects exists and not being limited to their apparent condition would buy them without abatement of the price obtainable for such goods if in reasonable sound order and without special terms"6
It is fair to say that this demonstrates sound judgement on Rougier's behalf. The definition far from creating injustice for buyers of goods does in fact promote a fair outcome. The way in which it is framed is left deliberately broad so it can be readily applied to a wide variety of situations. In this way Rougier goes on to explain how the term merchantability is applied to the situation in question. Here it was discussed that although the defect that caused the breakdown was relatively minor (a "drop of free floating sealant"), the knock on effect was enough to cause considerable discomfort to the driver of the car. Accordingly although the defect was repairable it was enough to render the car unfit for its purpose so as to render it as unmerchantable.
It should be noted therefore that the first part of the judgement in this case is favourable to the buyer of goods in that it allows for a certain amount of leeway. It is the second issue raised in the case however that has raised controversy and is argued to have created obstacles for buyers of faulty goods. The defendants challenged the plaintiffs right to reject the car on a second ground. Before rejecting the car on the basis of the breakdown Mr Bernstein had usage of the car for a total of 27 days and 140 miles. The defendant's argument centred on the fact that Mr Bernstein had in fact accepted the goods due to a lapse of reasonable time and the condition of the contract. That the car was not fit for it’s purpose should in fact be treated as a warranty. Hence the only remedy available would be that of damages. Thus the question before the court was what could be regarded as reasonable time in the context of the trade of motorcars. The statutory explanation of reasonable time is to be found in s (59) but is couched in somewhat general terms defining reasonable time as a question of fact. The defendants then submitted that the reasonable time must involve enough time to examine and inspect the vehicle with regards to its general working order as opposed to any defect in particular.
Rougier ruled that such a submission was in his opinion correct. He reasoned that s(35) created its own implied affirmation of this by effectively stating the goods were accepted once the buyer had retained them for a reasonable period of time. Such a statement is notably lacking in any qualification there is no need for an opportunity to discover any latent faults. Instead it was argued the concept of reasonable time should be applied objectively towards what is reasonable in terms of an ordinary commercial transaction between seller and buyer. Rougier pointed to the importance of allowing Sellers to achieve finality in their transactions allowing them to close their ledger within a fair period of time after the transaction is complete. Instead of qualifying reasonable time with reference to the defect the judge contended that the nature of the machinery at fault should be considered.
"The complexity of the intended function of the goods is clearly of prime consideration here. What is a reasonable time in relation to a bicycle would hardly suffice for a nuclear submarine"7
Accordingly the judge ruled in favour of the defendants by finding that on the date of 3 January 1985 when Mr Bernstein communicated his rejection to the garage such a time had already passed. In this way the plaintiff lost his right to reject the goods and the only remedy available to him was to claim for damages.
The decision in this case has come to be regarded by many commentators as somewhat harsh towards consumers. The decision has raised concern that buyers will unwittingly lose the right to reject sometimes without even being aware that they had the right in the first place. As Alan Wilson points out;
"In terms of its nature and function the car is perhaps the most expensive and sophisticated piece of machinery the consumer buys, yet after just three weeks the law denied Mr Bernstein the right to reject his car"8
Such an argument would appear valid particularly when one looks at less complex household goods. If the same timescale used in Bernstein is applied to a toaster for example, it seems likely that any period of grace for the consumer will be very short indeed. If there is such a short time period for rejection it is submitted that the requirement of durability within the implied condition of merchantability is without any real application. In consumer situations at least, the buyer is losing a most significant bargaining tool. It is also apparent that the decision has resulted in a degree of uncertainty amongst consumer groups since the reasonable time requirement is still interpreted as a question of fact.
The submission that the Bernstein case has led to injustice for buyers would seem to ring true. It is arguable that Rougier J has acted to preserve the legal proposition of commercial certainty at the expense of the buyer. In 1994 the Act was amended with a new subsection added to s (35), which added the requirement that the buyer could not lose the right to reject the goods until there had been reasonable opportunity to examine them. It has become clear that this sub section has done little to alter the position established in Bernstein
"In practice, this period is likely to be much the same as the reasonable time during which rejection must be indicated"9
However there is a suggestion that this section of law will be better clarified by the forthcoming implementation of the Consumer Guarantees Directive EU 99/44. The proposed section 48A (3) proposes that any defect, which is discovered within six months, is deemed to have existed at the time of delivery. Whilst Section 49 D says that if the buyer invokes the right to repair or replacement, he cannot reject the goods and terminate the contract for breach of condition until the seller has had a reasonable time in which to repair or offer a replacement. It is submitted that the combined effect of these two provisions will give status to the proposition that the length of reasonable time should in fact be placed at six months. It is clearly more preferable in terms of the consumer position to create a time limit, which is on a more long-term basis and framed in terms, which are clearer, and with more certainty. It is apparent that a simple remedy is needed in order for buyer's to fully utilise their rights.
At present the situation remains that there exists no long-term right of rejection. It should be noted, however, that whilst such circumstances as in Bernstein provide seemingly unjust remedies, the courts also have to give due regard to the seller's interests. It is important to afford the seller some protection from buyers who may seek to return the goods for ulterior, economic motives, particularly in circumstances whereby the seller is unable to pass the cost of return back to the party who was originally responsible for the defect. It is apparent that in allowing the buyer to seek damages the courts have attempted to seek a balance.
It can therefore be argued that the above statement contained in the question is to a large extent true, by creating such a narrow time period it seems that buyers are subject to a situation where a most fundamental right is lost. At present it seems that the decision made by Rougier remains basically intact, and until a better balance is reached between the interests of both parties involved in Sale of Goods contract it is clear that in some circumstances the buyer will be left with a remedy which does not necessarily provide them with the most favourable result. Whether the implementation of the proposed EC Directive will make for a more balanced situation remains to be seen.
Bibliography
Bradgate; Commercial Law
Atiyah; The Sale of Goods(10th ed 2000)
Bill Thomas; Ilex Special Features
Howard Johnston; Managerial Law
Alan Wilson; Consumer Policy Review
Law Commission Report no. 160 Sale and Supply Of Goods
Sale of Goods Act 1979
Consumer Guarantees Directive EU 99/44
1 Robert Bradgate;Sheffield University website
2 Howells and Weatherill 1995 p168
3 S11(4) of The sale of Goods Act 1979
4 S35(1) (c)
5 1987
6 Grant V Australian Knitting Mills Ltd (1933)
7 Rougier J; Bernstein v Pamson Motors
8 Consumer Policy Review July/ August 1995
9 Howard Johnston; Managerial Law
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Amelia Guilfoyle
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