Supply of Goods and Services Act 1996

Link to law: https://legislation.gov.im/cms/images/LEGISLATION/PRINCIPAL/1996/1996-0016/SupplyofGoodsandServicesAct1996_1.pdf
Published: 2012-09-01

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Supply of Goods and Services Act 1996

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AT 16 of 1996

SUPPLY OF GOODS AND SERVICES ACT

1996

Supply of Goods and Services Act 1996 Index


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SUPPLY OF GOODS AND SERVICES ACT 1996

Index Section Page

PART 1 – IMPORTED TERMS IN CONTRACTS RELATING TO

GOODS 5

Implied terms as to title 5

1 Implied terms as to title: sale of goods ........................................................................ 5
2 Implied terms as to title: hire-purchase ....................................................................... 6
3 Implied terms as to title: other contracts for transfer of property in goods ........... 7
4 Implied terms about right to transfer possession: hire of goods ............................. 8
Transfer of goods by description 8

5 Sale by description .......................................................................................................... 8
6 Hire-purchase by description ....................................................................................... 8
7 Other transfers of goods by description ...................................................................... 9
8 Hire of goods by description ......................................................................................... 9
Implied terms about quality or fitness 9

9 Implied terms about quality or fitness: sale of goods ................................................ 9
10 Implied terms about quality or fitness: hire-purchase ............................................ 10
11 Implied terms about quality or fitness: other contracts for transfer of
goods .............................................................................................................................. 11
12 Implied terms about quality or fitness: hire of goods ............................................. 12
Sale etc. by sample 13

13 Implied term in sale by sample ................................................................................... 13
14 Implied term in hire-purchase by sample ................................................................. 13
15 Implied term where transfer is by sample ................................................................ 14
16 Implied term where hire is by sample ....................................................................... 14
Supplemental 15

17 Modification of remedies for breach of condition in non-consumer cases ........... 15
18 Exclusion of implied terms .......................................................................................... 16
19 Contracts to which Part 1 applies ............................................................................... 17
20 Interpretation of Part 1: general .................................................................................. 18
PART 2 – IMPLIED TERMS IN CONTRACTS FOR SUPPLY OF

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SERVICES 20

21 The contracts concerned .............................................................................................. 20
22 Implied term about care and skill .............................................................................. 21
23 Implied term about time for performance ................................................................ 21
24 Implied term about consideration ............................................................................. 21
25 Exclusion of implied terms, etc .................................................................................. 21
26 Interpretation of Part 2 ................................................................................................ 22
PART 3 – MISCELLANEOUS AND SUPPLEMENTAL 22

Sale of goods 22

27 Goods forming part of a bulk ..................................................................................... 22
28 Acceptance or rejection of goods ............................................................................... 22
29 Regulations as to consumer credit ............................................................................. 22
30 Transitional provisions and savings .......................................................................... 22
31 Minor and consequential amendments and repeals ............................................... 23
32 Short title and commencement ................................................................................... 23
SCHEDULE 1 25

MATTERS RELEVANT TO REASONABLENESS OF CONTRACT TERMS 25
SCHEDULE 2 25

TRANSITIONAL PROVISIONS AND SAVINGS 25
SCHEDULE 3 36

MINOR AND CONSEQUENTIAL AMENDMENTS 36
SCHEDULE 4 36

ENACTMENTS REPEALED 36
ENDNOTES 37

TABLE OF LEGISLATION HISTORY 37
TABLE OF RENUMBERED PROVISIONS 37
TABLE OF ENDNOTE REFERENCES 37

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SUPPLY OF GOODS AND SERVICES ACT 1996

Received Royal Assent: 18 June 1996
Passed: 19 June 1996
Commenced: 19 August 1996
AN ACT
to re-enact with amendments the enactments relating to terms implied
in contracts for the supply of goods and services; to amend the Sale of Goods Act
1983 and the Moneylenders Act 1991; and for connected purposes.
PART 1 – IMPORTED TERMS IN CONTRACTS RELATING TO

GOODS

Implied terms as to title
1 Implied terms as to title: sale of goods

[1983/9/12; P1979/54/12]
(1) In a contract of sale, other than one to which subsection (2) applies,
there are —
(a) an implied condition on the part of the seller that in the case of a
sale he has a right to sell the goods, and in the case of an
agreement to sell he will have such a right at the time when the
property is to pass; and
(b) an implied warranty that —
(i) the goods are free, and will remain free until the time when
the property is to pass, from any charge or encumbrance
not disclosed or known to the buyer before the contract is
made, and
(ii) the buyer will enjoy quiet possession of the goods except
so far as it may be disturbed by the owner or other person
entitled to the benefit of any charge or encumbrance so
disclosed or known.
(2) Where, in the case of a contract of sale there appears from the contract, or
there is to be inferred from its circumstances, an intention that the seller
Section 2 Supply of Goods and Services Act 1996


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should transfer only such title as he or a third person may have, there are
implied warranties —
(a) that all charges or encumbrances known to the seller and not
known to the buyer have been disclosed to the buyer before the
contract is made; and
(b) an implied warranty that none of the following will disturb the
buyer’s quiet possession of the goods —
(i) the seller;
(ii) in a case where the parties to the contract intend that the
seller should transfer only such title as a third person may
have, that person;
(iii) anyone claiming through or under the seller or that third
person otherwise than under a charge or encumbrance
disclosed or known to the buyer before the contract is
made.
2 Implied terms as to title: hire-purchase

[1976/8/8; P1973/13/8]
(1) In every hire-purchase agreement, other than one to which subsection (2)
applies, there are —
(a) an implied condition on the part of the owner that he will have a
right to sell the goods at the time when the property is to pass;
and
(b) an implied warranty that the goods are free, and will remain free
until the time when the property is to pass, from any charge or
encumbrance not disclosed or known to the hirer before the
agreement is made and that the hirer will enjoy quiet possession
of the goods except so far as it may be disturbed by any person
entitled to the benefit of any charge or encumbrance so disclosed
or known.
(2) Where in the case of a hire-purchase agreement there appears from the
agreement, or there is to [be] inferred from its circumstances, an
intention that the owner should transfer only such title as he or a third
person may have, there are implied warranties —
(a) that all charges or encumbrances known to the owner and not
known to the hirer have been disclosed to the hirer before the
agreement is made; and
(b) that none of the following will disturb the hirer’s quiet possession
of the goods —
(i) the owner;
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(ii) in a case where the parties to the agreement intend that
any title which may be transferred shall be only such title
as a third person may have, that person;
(iii) anyone claiming through or under the owner or that third
person otherwise than under a charge or encumbrance
disclosed or known to the hirer before the agreement is
made.
3 Implied terms as to title: other contracts for transfer of property in

goods

[1985/1/2; P1982/29/2]
(1) In a contract for the transfer of goods, other than one to which subsection
(2) applies, there are —
(a) an implied condition on the part of the transferor that —
(i) in the case of a transfer of the property in the goods, he has
a right to transfer the property and,
(ii) in the case of an agreement to transfer the property in the
goods, he will have such a right at the time when the
property is to be transferred; and
(b) an implied warranty that —
(i) the goods are free, and will remain free until the time when
the property is to be transferred, from any charge or
encumbrance not disclosed or known to the transferee
before the contract is made, and
(ii) the transferee will enjoy quiet possession of the goods
except so far as it may be disturbed by the owner or other
person entitled to the benefit of any charge or
encumbrance so disclosed or known.
(2) Where, in the case of a contract for the transfer of goods, there appears
from the contract, or there is to be inferred from its circumstances, an
intention that the transferor should transfer only such title as he or a
third person may have, there are —
(a) an implied warranty that all charges or encumbrances known to
the transferor and not known to the transferee have been
disclosed to the transferee before the contract is made; and
(b) an implied warranty that none of the following will disturb the
transferee’s quiet possession of the goods —
(i) the transferor;
(ii) in a case where the parties to the contract intend that the
transferor should transfer only such title as a third person
may have, that person;
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(iii) anyone claiming through or under the transferor or that
third person otherwise than under a charge or
encumbrance disclosed or known to the transferee before
the contract is made.
4 Implied terms about right to transfer possession: hire of goods

[1985/1/7; P1982/29/7]
(1) In a contract for the hire of goods there is an implied condition on the
part of the bailor that —
(a) in the case of a bailment, he has a right to transfer possession of
the goods by way of hire for the period of the bailment, and
(b) in the case of an agreement to bail, he will have such a right at the
time of the bailment.
(2) In a contract for the hire of goods there is also an implied warranty that
the bailee will enjoy quiet possession of the goods for the period of the
bailment except so far as the possession may be disturbed by the owner
or other person entitled to the benefit of any charge or encumbrance
disclosed or known to the bailee before the contract is made.
(3) Subsections (1) and (2) do not affect the right of the bailor to repossess
the goods under an express or implied term of the contract.
Transfer of goods by description
5 Sale by description

[1983/9/13; P1979/54/13]
(1) Where there is a contract for the sale of goods by description, there is an
implied condition that the goods will correspond with the description.
(2) If the sale is by sample as well as by description it is not sufficient that
the bulk of the goods corresponds with the sample if the goods do not
also correspond with the description.
(3) A sale of goods is not prevented from being a sale by description by
reason only that, being exposed for sale or hire, they are selected by the
buyer.
6 Hire-purchase by description

[1976/8/9; P1973/13/9]
(1) Where under a hire-purchase agreement goods are let by description,
there is an implied condition that the goods will correspond with the
description.
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(2) If under the agreement the goods are let by reference to a sample as well
as a description, it is not sufficient that the bulk of the goods corresponds
with the sample if the goods do not also correspond with the description.
(3) Goods shall not be prevented from being let by description by reason
only that, being exposed for sale or hire, they are selected by the hirer.
7 Other transfers of goods by description

[1985/1/3; P1982/29/3]
(1) Where, under a contract for the transfer of goods, the transferor transfers
or agrees to transfer the property in the goods by description, there is an
implied condition that the goods will correspond with the description.
(2) If the transferor transfers or agrees to transfer the property in the goods
by sample as well as by description it is not sufficient that the bulk of the
goods corresponds with the sample if the goods do not also correspond
with the description.
(3) A contract is not prevented from falling within subsection (1) by reason
only that, being exposed for supply, the goods are selected by the
transferee.
8 Hire of goods by description

[1985/1/8; P1982/29/8]
(1) Where, under a contract for the hire of goods, the bailor bails or agrees to
bail the goods by description, there is an implied condition that the
goods will correspond with the description.
(2) If under the contract the bailor bails or agrees to bail the goods by
reference to a sample as well as a description it is not sufficient that the
bulk of the goods corresponds with the sample if the goods do not also
correspond with the description.
(3) A contract is not prevented from falling within subsection (1) by reason
only that, being exposed for supply, the goods are selected by the bailee.
Implied terms about quality or fitness
9 Implied terms about quality or fitness: sale of goods

[1983/9/14; P1979/54/14; P1994/35/1]
(1) Except as provided by this section and section 13 and subject to any other
enactment, there is no implied condition or warranty about the quality or
fitness for any particular purpose of goods supplied under a contract of
sale.
(2) Where the seller sells goods in the course of a business, there is an
implied condition that the goods supplied under the contract are of
satisfactory quality.
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(3) The condition implied by subsection (2) does not extend to any matter
making the quality of goods unsatisfactory —
(a) which is specifically drawn to the buyer’s attention before the
contract is made,
(b) where the buyer examines the goods before the contract is made,
which that examination ought to reveal, or
(c) in the case of a contract for sale by sample, which would have
been apparent on a reasonable examination of the sample.
(4) Where the seller sells goods in the course of a business and the buyer,
expressly or by implication, makes known to the seller any particular
purpose for which the goods are being bought, there is an implied
condition that the goods supplied under the contract are reasonably fit
for that purpose, whether or not that is a purpose for which such goods
are commonly supplied, except where the circumstances show that the
buyer does not rely, or that it is unreasonable for him to rely, on the skill
or judgment of the seller.
(5) An implied condition or warranty about quality or fitness for a particular
purpose may be annexed to a contract of sale by usage.
(6) The preceding provisions of this section apply to a sale by a person who
in the course of a business is acting as agent for another as they apply to
a sale by a principal in the course of a business, except where that other
is not selling in the course of a business and either the buyer knows that
fact or reasonable steps are taken to bring it to the notice of the buyer
before the contract is made.
(7) In the application of subsection (4) to an agreement for the sale of goods
under which the whole or part of the purchase price is payable by
instalments, any reference to the seller includes a reference to the person
by whom any antecedent negotiations are conducted.
10 Implied terms about quality or fitness: hire-purchase

[1976/8/9; P1973/13/10; P1994/35/2/4]
(1) Except as provided by this section and section 14 and subject to the
provisions of any other enactment, there is no implied condition or
warranty as to the quality or fitness for any particular purpose of goods
let under a hire-purchase agreement.
(2) Where the owner lets goods under a hire-purchase agreement in the
course of a business, there is an implied condition that the goods
supplied under the agreement are of satisfactory quality.
(3) The condition implied by subsection (2) does not extend to any matter
making the quality of goods unsatisfactory —
(a) which is specifically drawn to the attention of the hirer before the
agreement is made,
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(b) where the hirer examines the goods before the agreement is made,
which that examination ought to reveal, or
(c) where the goods are let by reference to a sample, which would
have been apparent on a reasonable examination of the sample.
(4) Where the owner lets goods under a hire-purchase agreement in the
course of a business and the hirer, expressly or by implication, makes
known to the owner any particular purpose for which the goods are
being hired, there is an implied condition that the goods supplied under
the agreement are reasonably fit for that purpose, whether or not that is a
purpose for which such goods are commonly supplied, except where the
circumstances show that the hirer does not rely, or that it is unreasonable
for him to rely, on the skill or judgment of the owner.
(5) An implied condition or warranty as to quality or fitness for a particular
purpose may be annexed to a hire-purchase agreement by usage.
(6) The preceding provisions of this section apply to a hire-purchase
agreement made by a person who in the course of a business is acting as
agent for the owner as they apply to an agreement made by the owner in
the course of a business, except where the owner is not letting in the
course of a business and either the hirer knows that fact or reasonable
steps are taken to bring it to the notice of the hirer before the agreement
is made.
(7) Any reference in subsection (4) to the owner includes a reference to the
person by whom any antecedent negotiations are conducted.
11 Implied terms about quality or fitness: other contracts for transfer of

goods

[1985/1/4; P1982/29/4; P1994/35/2/6]
(1) Except as provided by this section and section 15 and subject to the
provisions of any other enactment, there is no implied condition or
warranty about the quality or fitness for any particular purpose of goods
supplied under a contract for the transfer of goods.
(2) Where, under such a contract, the transferor transfers the property in
goods in the course of a business, there is an implied condition that the
goods supplied under the contract are of satisfactory quality.
(3) The condition implied by subsection (2) does not extend to any matter
making the quality of goods unsatisfactory —
(a) which is specifically drawn to the transferee’s attention before the
contract is made,
(b) where the transferee examines the goods before the contract is
made, which that examination ought to reveal, or
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(c) where the property in the goods is transferred by reference to a
sample, which would have been apparent on a reasonable
examination of the sample.
(4) Where, under a contract for the transfer of goods, the transferor transfers
the property in goods in the course of a business and the transferee,
expressly or by implication, makes known to the transferor any
particular purpose for which the goods are being acquired, there is an
implied condition that the goods supplied under the contract are
reasonably fit for that purpose, whether or not that is a purpose for
which such goods are commonly supplied, except where the
circumstances show that the transferee does not rely, or that it is
unreasonable for him to rely, on the skill or judgment of the transferor.
(5) An implied condition or warranty about quality or fitness for a particular
purpose may be annexed by usage to a contract for the transfer of goods.
(6) The preceding provisions of this section apply to a transfer by a person
who in the course of a business is acting as agent for another as they
apply to a transfer by a principal in the course of a business, except
where that other is not transferring in the course of a business and either
the transferee knows that fact or reasonable steps are taken to bring it to
the transferee’s notice before the contract concerned is made.
(7) In the application of subsection (4) to a contract for the transfer of goods
under which the consideration or part of the consideration for the
transfer is a sum payable by instalments, any reference to the transferor
includes a reference to the person by whom any antecedent negotiations
are conducted.
12 Implied terms about quality or fitness: hire of goods

[1985/1/9; P1982/29/9; P1994/35/2/6]
(1) Except as provided by this section and section 16 and subject to the
provisions of any other enactment, there is no implied condition or
warranty about the quality or fitness for any particular purpose of goods
bailed under a contract for the hire of goods.
(2) Where, under such a contract, the bailor bails goods in the course of a
business, there is an implied condition that the goods supplied under the
contract are of satisfactory quality.
(3) The condition implied by subsection (2) does not extend to any matter
making the quality of goods unsatisfactory —
(a) which is specifically drawn to the bailee’s attention before the
contract is made,
(b) where the bailee examines the goods before the contract is made,
which that examination ought to reveal, or
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(c) where the goods are bailed by reference to a sample, which would
have been apparent on a reasonable examination of the sample.
(4) Where, under a contract for the hire of goods, the bailor bails goods in
the course of a business and the bailee, expressly or by implication,
makes known to the bailor any particular purpose for which the goods
are being bailed, there is an implied condition that the goods supplied
under the contract are reasonably fit for that purpose, whether or not
that is a purpose for which such goods are commonly supplied, except
where the circumstances show that the bailee does not rely, or that it is
unreasonable for him to rely, on the skill or judgment of the bailor.
(5) An implied condition or warranty about quality or fitness for a particular
purpose may be annexed by usage to a contract for the hire of goods.
(6) The preceding provisions of this section apply to a bailment by a person
who in the course of a business is acting as agent for another as they
apply to a bailment by a principal in the course of a business, except
where that other is not bailing in the course of a business and either the
bailee knows that fact or reasonable steps are taken to bring it to the
bailee’s notice before the contract concerned is made.
(7) In subsection (4) any reference to the bailor includes a reference to the
person by whom any antecedent negotiations are conducted.
Sale etc. by sample
13 Implied term in sale by sample

[1983/9/15; P1979/54/15; P1994/35/1]
(1) In a contract for sale by sample there is an implied condition —
(a) that the bulk will correspond with the sample in quality; and
(b) that the goods will be free from any defect, making their quality
unsatisfactory, which would not be apparent on reasonable
examination of the sample.
(2) For the purposes of this section a contract of sale is a contract for sale by
sample where there is an express or implied term to that effect in the
contract.
14 Implied term in hire-purchase by sample

[1976/8/11; P1973/13/11; P1994/35/2/6]
(1) Where under a hire-purchase agreement goods are let by reference to a
sample, there is an implied condition —
(a) that the bulk will correspond with the sample in quality;
(b) that the hirer will have a reasonable opportunity of comparing the
bulk with the sample; and
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(c) that the goods will be free from any defect, making their quality
unsatisfactory, which would not be apparent on reasonable
examination of the sample.
(2) For the purposes of this section goods are let by reference to a sample
where there is an express or implied term to that effect in the hire-
purchase agreement concerned.
15 Implied term where transfer is by sample

[1985/1/5; P1982/29/5; P1994/35/2/6]
(1) Where, under a contract for the transfer of goods, the transferor transfers
or agrees to transfer the property in the goods by reference to a sample,
there is an implied condition —
(a) that the bulk will correspond with the sample in quality;
(b) that the transferee will have a reasonable opportunity of
comparing the bulk with the sample; and
(c) that the goods will be free from any defect, making their quality
unsatisfactory, which would not be apparent on reasonable
examination of the sample.
(2) For the purposes of this section a transferor transfers or agrees to transfer
the property in goods by reference to a sample where there is an express
or implied term to that effect in the contract concerned.
16 Implied term where hire is by sample

[1985/1/10; P1982/29/10; P1994/35/2/6]
(1) Where, under a contract for the hire of goods, the bailor bails or agrees to
bail the goods by reference to a sample, there is an implied condition —
(a) that the bulk will correspond with the sample in quality; and
(b) that the bailee will have a reasonable opportunity of comparing
the bulk with the sample; and
(c) that the goods will be free from any defect, making their quality
unsatisfactory, which would not be apparent on reasonable
examination of the sample.
(2) For the purposes of this section a bailor bails or agrees to bail goods by
reference to a sample where there is an express or implied term to that
effect in the contract concerned.
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Supplemental
17 Modification of remedies for breach of condition in non-consumer

cases

[P1973/13/11A; P1979/54/15A; P1982/29/5A,10A; P1994/35/4 etc.]
(1) Where in the case of a contract of sale —
(a) the buyer would, apart from this subsection, have the right to
reject goods by reason of a breach on the part of the seller of a
term implied by section 5, 9 or 13, but
(b) the breach is so slight that it would be unreasonable for him to
reject them,
then, if the buyer does not deal as consumer, the breach is not to be
treated as a breach of condition but may be treated as a breach of
warranty.
(2) Where in the case of a hire-purchase agreement —
(a) the hirer would, apart from this subsection, have the right to reject
by reason of a breach on the part of the owner of a term implied
by section 6, 10 or 14(1)(a) or (c), but
(b) the breach is so slight that it would be unreasonable for him to
reject them,
then, if the hirer does not deal as consumer, the breach is not to be
treated as a breach of condition but may be treated as a breach of
warranty.
(3) Where in the case of a contract for the transfer of goods —
(a) the transferee would, apart from this subsection, have the right to
treat the contract as repudiated by reason of a breach on the part
of the transferor of a term implied by section 7, 11 or 15(1)(a) or
(c), but
(b) the breach is so slight that it would be unreasonable for him to
do so,
then, if the transferee does not deal as consumer, the breach is not to be
treated as a breach of condition but may be treated as a breach of
warranty.
(4) Where in the case of a contract for the hire of goods —
(a) the bailee would, apart from this subsection, have the right to
treat the contract as repudiated by reason of a breach on the part
of the bailor of a term implied by section 8, 12 or 16(1)(a) or (c),
but
(b) the breach is so slight that it would be unreasonable for him to
do so,
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then, if the bailee does not deal as consumer, the breach is not to be
treated as a breach of condition but may be treated as a breach of
warranty.
(5) This section applies unless a contrary intention appears in, or is to be
implied from, the contract or agreement in question.
(6) It is for the seller, owner, transferor or bailor to show that a breach fell
within subsection (1)(b), (2)(b), (3)(b) or (4)(b), as the case may be.
18 Exclusion of implied terms

[1980/18/9, 10; P1977/50/6, 7]
(1) Liability for breach of the obligations arising under sections 1 to 3
(implied terms as to title in contracts for sale etc.) cannot be excluded or
restricted by reference to any contract term.
(2) Liability for breach of the obligations arising under section 4 (implied
terms as to title in contracts for hire) cannot be excluded or restricted by
reference to any contract term, except so far as the term satisfies the
requirement of reasonableness.
(3) As against a person dealing as consumer, liability for breach of the
obligations arising under —
(a) sections 5 to 8 (sale etc. by description),
(b) sections 9 to 12 (quality or fitness), and
(c) sections 13 to 16 (sale by sample etc.),
cannot be excluded or restricted by reference to any contract term.
(4) As against a person dealing otherwise than as consumer, the liability
specified in subsection (3) can be excluded or restricted by reference to a
contract term, but only so far as the term satisfies the requirement of
reasonableness.
(5) In relation to a contract term, the requirement of reasonableness for the
purposes of this section is that the term is a fair and reasonable one to be
included, having regard to —
(a) the circumstances which were, or ought reasonably to have been,
known or in the contemplation of the parties when the contract or
agreement in question was made; and
(b) in particular to any of the matters specified in Schedule 1 which
appear to be relevant;
but paragraph (b) does not prevent the court or arbitrator holding, in
accordance with any rule of law, that a term which purports to exclude
or restrict any relevant liability is not a term of the contract.
(6) It is for the person claiming that a contract term satisfies the requirement
of reasonableness to show that it does.
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(7) The following provisions of the Misrepresentation and Unfair Contract
Terms Act 1980 apply in relation to this section as follows —
(a) section 15 (exemption clauses) applies in relation to subsections
(1) to (6) as it applies in relation to Part II (in particular, sections 5
and 8) of that Act;
(b) section 17 (international contracts) applies to the limits imposed
by this section as it applies to the limits imposed by that Act;
(c) section 18 (choice of law clauses) applies in relation to subsections
(1) to (6) as it applies in relation to the provisions of that Act;
(d) paragraphs 3 and 4 of Schedule 4 (saving for statutory terms etc.)
apply to subsections (1) to (6) as they apply to Parts II to IV of
that Act.
(8) Subject to the preceding provisions of this section —
(a) nothing in this Part affects section 54 of the Sale of Goods Act 1983
(rights etc. under contract of sale may be varied by express
agreement, course of dealing or binding usage);
(b) where a right, duty or liability would arise under a hire-purchase
agreement, a contract for the transfer of goods or a contract for the
hire of goods by implication of law, it may be negatived or varied
by express agreement, by the course of dealing between the
parties or by such usage as binds both parties to the contract.
(9) An express condition or warranty does not negative a condition or
warranty implied by this Act unless inconsistent with it.
(10) Nothing in this Part prejudices the operation of any other enactment or
any rule of law whereby any condition or warranty (other than one
relating to quality or fitness) is to be implied in a contract to which
sections 1 to 16 apply.
19 Contracts to which Part 1 applies

(1) In this Part —
“contract of sale
” means a contract for sale of goods, that is, a contract by which
the seller transfers or agrees to transfer the property in goods to the
buyer for a money consideration (called the price), and includes both an
agreement to sell and a sale (within the meaning of the Sale of Goods Act
1983);
“hire-purchase agreement
” means an agreement for the bailment of goods
under which the bailee may buy the goods or under which the property
in the goods will or may pass to the bailee;
“contract for the transfer of goods
” means a contract under which one person
transfers or agrees to transfer to another the property in goods, other
than —
Section 20 Supply of Goods and Services Act 1996


Page 18 AT 16 of 1996 c

(a) a contract of sale;
(b) a hire-purchase agreement;
(c) a transfer or agreement to transfer which is made by deed and for
which there is no consideration other than the presumed
consideration imported by the deed;
(d) a contract intended to operate by way of mortgage, pledge, charge
or other security;
“contract for the hire of goods
” means a contract under which one person bails
or agrees to bail goods to another by way of hire, other than a hire-
purchase agreement.
(2) Where by virtue of 2 or more agreements, none of which by itself
constitutes a hire-purchase agreement, there is a bailment of goods and
either the bailee may buy the goods, or the property therein will or may
pass to the bailee, the agreements shall be treated for the purposes of this
Part as a single agreement made at the time when the last of the
agreements was made.
(3) For the purposes of this Part —
(a) a contract is a contract for the transfer of goods whether or not
services are also provided or to be provided under the contract,
and (subject to subsection (1)) whatever is the nature of the
consideration for the transfer or agreement to transfer;
(b) a contract is a contract for the hire of goods whether or not
services are also provided or to be provided under the contract,
and (subject to subsection (1)) whatever is the nature of the
consideration for the bailment or agreement to bail by way of hire.
20 Interpretation of Part 1: general

[1983/9/59; P1979/54/61]
(1) In this Part —
“antecedent negotiations
”, in relation to any agreement, means any
negotiations or arrangements with the buyer whereby he was induced to
make the agreement or which otherwise promoted the transaction to
which the agreement relates;
“bailee
”, in relation to a contract for the hire of goods, means (depending on the
context) a person to whom the goods are bailed under the contract, or a
person to whom they are to be so bailed, or a person to whom the rights
under the contract of either of those persons have passed;
“bailor
”, in relation to a contract for the hire of goods, means (depending on the
context) a person who bails the goods under the contract, or a person
who agrees to do so, or a person to whom the duties under the contract
of either of those persons have passed;
Supply of Goods and Services Act 1996 Section 20


c AT 16 of 1996 Page 19

“business
” includes a profession and the activities of any Department,
Statutory Board or other public or local authority;
“buyer
” means a person who buys or agrees to buy goods;
“goods
” includes all personal chattels other than things in action and money;
and in particular “goods
” includes emblements, industrial growing
crops, and things attached to or forming part of the land which are
agreed to be severed before sale, transfer or bailment or under the
contract concerned;
“the person by whom any antecedent negotiations are conducted
” means the
person by whom the negotiations or arrangements in question were
conducted or made in the course of a business carried on by him;
“property
” means the general property in goods, and not merely a special
property;
“sale
” includes a bargain and sale as well as a sale and delivery;
“seller
” means a person who sells or agrees to sell goods;
“transferee
”, in relation to a contract for the transfer of goods, means
(depending on the context) a person to whom the property in the goods
is transferred under the contract, or a person to whom the property is to
be so transferred, or a person to whom the rights under the contract of
either of those persons have passed;
“transferor
”, in relation to a contract for the transfer of goods, means
(depending on the context) a person who transfers the property in the
goods under the contract, or a person who agrees to do so, or a person to
whom the duties under the contract of either of those persons have
passed;
“warranty
” means an agreement with reference to goods which are the subject
of a contract of sale, but collateral to the main purpose of such contract,
the breach of which gives rise to a claim for damages, but not to a right to
reject the goods and treat the contract as repudiated.
(2) In subsection (1), in the definitions of bailee, bailor, transferee and
transferor, a reference to rights or duties passing is to their passing by
assignment, operation of law or otherwise.
(3) For the purposes of this Part, negotiations conducted or arrangements
made by a servant or agent, if conducted or made by him in the course of
his employment or agency, shall be treated as conducted or made by his
employer or principal.
(4) For the purposes of this Part —
(a) goods are of satisfactory quality if they meet the standard that a
reasonable person would regard as satisfactory, taking account of
any description of the goods, the price or other consideration (if
relevant) and all the other relevant circumstances; and
Section 21 Supply of Goods and Services Act 1996


Page 20 AT 16 of 1996 c

(b) the quality of goods includes their state and condition and the
following (among others) are in appropriate cases aspects of the
quality of goods —
(i) fitness for all the purposes for which goods of the kind in
question are commonly supplied,
(ii) appearance and finish,
(iii) freedom from minor defects,
(iv) safety, and
(v) durability.
(5) For the purposes of this Part a party to a contract ‘deals as consumer’ in
relation to another party if —
(a) he neither makes the contract in the course of a business nor holds
himself out as doing so;
(b) the other party does make the contract in the course of a business;
and
(c) the goods passing under or in pursuance of the contract are of a
type ordinarily supplied for private use or consumption;
but on a sale by auction or by competitive tender the buyer is not in any
circumstances to be regarded as dealing as consumer.
(6) Except in the case of a sale by auction or by competitive tender, it is for a
person claiming that a party does not deal as consumer to show that he
does not.
PART 2 – IMPLIED TERMS IN CONTRACTS FOR SUPPLY OF

SERVICES

21 The contracts concerned

[1985/14/12; P1982/29/12]
(1) In this Part a “contract for the supply of a service
” means, subject to
subsection (2), a contract under which a person (the supplier) agrees to
carry out a service.
(2) For the purposes of this Part, a contract of service or apprenticeship is
not a contract for the supply of a service.
(3) Subject to subsection (2), a contract is a contract for the supply of a
service for the purposes of this Part whether or not goods are also —
(a) transferred or to be transferred, or
(b) bailed or to be bailed by way of hire,
under the contract, and whatever is the nature of the consideration for
which the service is to be carried out.
Supply of Goods and Services Act 1996 Section 22


c AT 16 of 1996 Page 21

(4) The Isle of Man Office of Fair Trading may by order provide that one or
more of sections 22 to 24 shall not apply to services of a description
specified in the order, and such an order may make different provision
for different circumstances.1

(5) An order under subsection (4) shall not have effect unless it is approved
by Tynwald.
22 Implied term about care and skill

[1985/1/13; P1982/29/13]
In a contract for the supply of a service where the supplier is acting in the
course of a business, there is an implied term that the supplier will carry out the
service with reasonable care and skill.
23 Implied term about time for performance

[1985/1/4; P1982/29/14]
(1) Where, under a contract for the supply of a service by a supplier acting
in the course of a business, the time for the service to be carried out is not
fixed by the contract, left to be fixed in a manner agreed by the contract
or determined by the course of dealing between the parties, there is an
implied term that the supplier will carry out the service within a
reasonable time.
(2) What is a reasonable time is a question of fact.
24 Implied term about consideration

[1985/1/15; P1982/29/15]
(1) Where, under a contract for the supply of a service, the consideration for
the service is not determined by the contract, left to be determined in a
manner agreed by the contract or determined by the course of dealing
between the parties, there is an implied term that the party contracting
with the supplier will pay a reasonable charge.
(2) What is a reasonable charge is a question of fact.
25 Exclusion of implied terms, etc

[1982/29/16]
(1) Where a right, duty or liability would arise under a contract for the
supply of a service by virtue of this Part, it may (subject to subsection (2)
and to Parts II and III of the Misrepresentation and Unfair Contract Terms
Act 1980) be negatived or varied by express agreement, or by the course
of dealing between the parties, or by such usage as binds both parties to
the contract.
(2) An express term does not negative a term implied by this Part unless
inconsistent with it.
Section 26 Supply of Goods and Services Act 1996


Page 22 AT 16 of 1996 c

(3) Nothing in this Part prejudices —
(a) any rule of law which imposes on the supplier a duty stricter than
that imposed by section 23 or 24; or
(b) subject to paragraph (a), any rule of law whereby any term not
inconsistent with this Part is to be implied in a contract for the
supply of a service.
(4) This Part has effect subject to any other enactment which defines or
restricts the rights, duties or liabilities arising in connection with a
service of any description.
26 Interpretation of Part 2

[P1982/29/18; P1994/35/2/6]
In this Part “business
” has the same meaning as in Part 1.
PART 3 – MISCELLANEOUS AND SUPPLEMENTAL

Sale of goods
27 Goods forming part of a bulk

(1) [Amends rule 5 of section 18 of the Sale of Goods Act 1983 by adding
paragraphs (3) and (4).]
(2) [Inserts sections 20A and 20B in the Sale of Goods Act 1983.]
28 Acceptance or rejection of goods

[Substitutes sections 34, 35 and 35A for sections 34 and 35 of the Sale of Goods Act
1983.]
Consumer Credit
29 Regulations as to consumer credit

[Amends section 8 of the Moneylenders Act 1991 by adding subsections (3) and
(4).]
Supplemental
30 Transitional provisions and savings

The transitional provisions and savings in Schedule 2 shall have effect.
Supply of Goods and Services Act 1996 Section 31


c AT 16 of 1996 Page 23

31 Minor and consequential amendments and repeals

(1) The enactments specified in Schedule 3 are amended in accordance with
that Schedule.
(2) The enactments specified in Schedule 4 are repealed to the extent
specified in column 3 of that Schedule.
32 Short title and commencement

(1) This Act may be cited as the Supply of Goods and Services Act 1996.
(2) This Act shall come into operation at the end of the period of 2 months
beginning with the day on which it is passed.2

Supply of Goods and Services Act 1996 Schedule 1



c AT 16 of 1996 Page 25

Schedule 1

MATTERS RELEVANT TO REASONABLENESS OF CONTRACT TERMS

Section 18(5)(b)
1. The strength of the bargaining positions of the parties relative to each
other, taking into account (among other things) alternative means by
which the requirements of the person to whom the goods were supplied
(‘the customer’) could have been met.
2. Whether the customer received an inducement to agree to the term, or in
accepting it had an opportunity of entering into a similar contract with
other persons, but without having to accept a similar term.
3. Whether the customer knew or ought reasonably to have known of the
existence and extent of the term (having regard, among other things, to
any custom of the trade and any previous course of dealing between the
parties).
4. Where the term excludes or restricts any relevant liability if some
condition is not complied with, whether it was reasonable at the time of
the contract to expect that compliance with that condition would be
practicable.
5. Whether the goods were manufactured, processed or adapted to the
special order of the customer.
SCHEDULE 2

[Section 30]
TRANSITIONAL PROVISIONS AND SAVINGS

1 Sections 1 to 4: implied terms as to title

(1) In relation to a contract made before 18th June 1976, for section 1
substitute —
“1
In a contract of sale, unless the circumstances of the contract are such as to
show a different intention, there is —
(a) an implied condition on the part of the seller that in the case of a
sale he has a right to sell the goods, and in the case of an
agreement to sell he will have such a right at the time when the
property is to pass;
(b) an implied warranty that the buyer will have and enjoy quiet
possession of the goods;
(c) an implied warranty that the goods will be free from any charge
or encumbrance in favour of any third party, not declared or
SCHEDULE 2
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known to the buyer before or at the time when the contract is
made.”.
(2) Section 2 does not apply to a hire-purchase agreement made before 18th
June 1976.
(3) Sections 3 and 4 do not apply to a contract made before 1st June 1985.
2 Sections 5 to 8: transfer of goods by description

(1) Sections 5(3) and 6(2) do not apply to a contract made before 18th
June 1976.
(2) Sections 7 and 8 do not apply to contracts made before 1st June 1985.
3 Sections 9 to 12: implied terms as to quality or fitness

(1) In relation to a contract made before 18th June 1976 for section 9
substitute —
“9
(1) Subject to this and any other Act, there is no implied condition or
warranty about the quality or fitness for any particular purpose of
goods supplied under a contract of sale.
(2) Where the buyer, expressly or by implication, makes known to the
seller the particular purpose for which the goods are required, so
as to show that the buyer relies on the seller’s skill or judgment,
and the goods are of a description which it is in the course of the
seller’s business to supply (whether he is the manufacturer or
not), there is an implied condition that the goods will be
reasonably fit for such purpose, except that in the case of a
contract for the sale of a specified article under its patent or other
trade name there is no implied condition as to its fitness for any
particular purpose.
(3) Where goods are bought by description from a seller who deals in
goods of that description (whether he is the manufacturer or not),
there is an implied condition that the goods will be of
merchantable quality; but if the buyer has examined the goods,
there is no implied condition as regards defects which such
examination ought to have revealed.
(4) An implied condition or warranty about quality or fitness for a
particular purpose may be annexed by the usage of trade.
(5) An express condition or warranty does not negative a condition or
warranty implied by this Act unless inconsistent with it.”.
(2) In relation to a contract of sale made on or after 18th June 1976 and
before commencement, for section 9 substitute —
“9
(1) Except as provided by this section and section 13 and subject to
any other enactment, there is no implied condition or warranty
Supply of Goods and Services Act 1996 SCHEDULE 2



c AT 16 of 1996 Page 27

about the quality or fitness for any particular purpose of goods
supplied under a contract of sale.
(2) Where the seller sells goods in the course of a business, there is an
implied condition that the goods supplied under the contract are
of merchantable quality, except that there is no such condition —
(a) as regards defects specifically drawn to the buyer’s
attention before the contract is made; or
(b) if the buyer examines the goods before the contract is
made, as regards defects which that examination ought to
reveal.
(3) Where the seller sells goods in the course of a business and the
buyer, expressly or by implication, makes known to the seller any
particular purpose for which the goods are being bought, there is
an implied condition that the goods supplied under the contract
are reasonably fit for that purpose, whether or not that is a
purpose for which such goods are commonly supplied, except
where the circumstances show that the buyer does not rely, or
that it is unreasonable for him to rely, on the seller’s skill or
judgment.
(4) An implied condition or warranty about quality or fitness for a
particular purpose may be annexed to a contract of sale by usage.
(5) The preceding provisions of this section apply to a sale by a
person who in the course of a business is acting as agent for
another as they apply to a sale by a principal in the course of a
business, except where that other is not selling in the course of a
business and either the buyer knows that fact or reasonable steps
are taken to bring it to the notice of the buyer before the contract
is made.
(6) Goods of any kind are of merchantable quality within the
meaning of subsection (2) if they are fit for the purpose or
purposes for which goods of that kind are commonly bought as it
is reasonable to expect having regard to any description applied
to them, the price (if relevant) and all the other relevant
circumstances.
(7) In the application of subsection (3) to an agreement for the sale of
goods under which the whole or part of the purchase price is
payable by instalments, any reference to their seller includes a
reference to the person by whom any antecedent negotiations are
conducted.”.
(3) In relation to a hire-purchase agreement made before 18th June 1976, for
section 10 substitute —
“10
(1) Where, in the case of a hire-purchase agreement to which the
Hire-Purchase Act 1939 applies, the hirer expressly or by
SCHEDULE 2
Supply of Goods and Services Act 1996


Page 28 AT 16 of 1996 c

implication makes known the particular purpose for which the
goods are required, there shall be an implied condition that the
goods shall be reasonably fit for such purpose.
(2) Subject to subsection (3), in a hire-purchase agreement to which
the Hire-Purchase Act 1939 applies there is an implied condition
that the goods are of merchantable quality.
(3) No such condition is implied —
(a) where the goods are let as second-hand goods and the note
or memorandum of the agreement made in pursuance of
section 3 of the Hire-Purchase Act 1939 contains a
statement to that effect;
(b) as regards defects of which the owner could not reasonably
have been aware at the time when the agreement was
made; or
(c) if the hirer has examined the goods or a sample of them, as
regards defects which the examination ought to have
revealed.”.
(4) In relation to a hire-purchase agreement made on or after 18th June 1976
and before commencement, for section 10 substitute —
“10 (1) Except as provided by this section and section 14 and subject to
any other enactment, there is no implied condition or warranty
about the quality or fitness for any particular purpose of goods let
under a hire-purchase agreement.
(2) Where the owner lets goods in the course of a business, there is an
implied condition that the goods supplied under the agreement
are of merchantable quality, except that there is no such
condition —
(a) as regards defects specifically drawn to the hirer’s
attention before the agreement is made; or
(b) if the hirer examines the goods before the agreement is
made, as regards defects which that examination ought to
reveal.
(3) Where the owner lets goods in the course of a business and the
hirer, expressly or by implication, makes known to the owner or
the person by whom any antecedent negotiations are conducted
any particular purpose for which the goods are being hired, there
is an implied condition that the goods supplied under the
agreement are reasonably fit for that purpose, whether or not that
is a purpose for which such goods are commonly supplied, except
where the circumstances show that the hirer does not rely, or that
it is unreasonable for him to rely, on the skill or judgment of the
owner or that person.
Supply of Goods and Services Act 1996 SCHEDULE 2



c AT 16 of 1996 Page 29

(4) An implied condition or warranty about quality or fitness for a
particular purpose may be annexed to a hire-purchase agreement
by usage.
(5) The preceding provisions of this section apply to a hire-purchase
agreement by a person who in the course of a business is acting as
agent for the owner as they apply to an agreement made by the
owner in the course of a business, except where the owner is not
letting in the course of a business and either the hirer knows that
fact or reasonable steps are taken to bring it to the notice of the
hirer before the contract is made.
(6) Goods of any kind are of merchantable quality within the
meaning of subsection (2) if they are fit for the purpose or
purposes for which goods of that kind are commonly bought as it
is reasonable to expect having regard to any description applied
to them, the price (if relevant) and all the other relevant
circumstances.”.
(5) Sections 11 and 12 do not apply to a contract made before 1st June 1985.
(6) In relation to a contract for the transfer of goods made on or after 1st
June 1985 and before commencement, for section 11 substitute —
“11
(1) Except as provided by this section and section 15 and subject to
the provisions of any other enactment, there is no implied
condition or warranty about the quality or fitness for any
particular purpose of goods supplied under a contract for the
transfer of goods.
(2) Where, under such a contract, the transferor transfers the property
in goods in the course of a business, there is (subject to subsection
(3)) an implied condition that the goods supplied under the
contract are of merchantable quality.
(3) There is no such condition as is mentioned in subsection (2) —
(a) as regards defects specifically drawn to the transferee’s
attention before the contract is made; or
(b) if the transferee examines the goods before the contract is
made, as regards defects which that examination ought to
reveal.
(4) Where, under a contract for the transfer of goods, the transferor
transfers the property in goods in the course of a business and the
transferee, expressly or by implication, makes known to the
transferor any particular purpose for which the goods are being
acquired, there is an implied condition that the goods supplied
under the contract are reasonably fit for that purpose, whether or
not that is a purpose for which such goods are commonly
supplied, except where the circumstances show that the transferee
SCHEDULE 2
Supply of Goods and Services Act 1996


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does not rely, or that it is unreasonable for him to rely, on the skill
or judgment of the transferor.
(5) An implied condition or warrant about quality or fitness for a
particular purpose may be annexed by usage to a contract for the
transfer of goods.
(6) The preceding provisions of this section apply to a transfer by a
person who in the course of a business is acting as agent for
another as they apply to a transfer by a principal in the course of a
business, except where that other is not transferring in the course
of a business and either the transferee knows that fact or
reasonable steps are taken to bring it to the transferee’s notice
before the contract concerned is made.
(6A) Goods of any kind are of merchantable quality within the
meaning of subsection (2) if they are fit for the purpose or
purposes for which goods of that kind are commonly supplied as
it is reasonable to expect having regard to any description applied
to them, the consideration for the transfer (if relevant) and all the
other relevant circumstances.
(7) In the application of subsection (4) to a contract for the transfer of
goods under which the consideration or part of the consideration
for the transfer is a sum payable by instalments, any reference to
the transferor includes a reference to the person by whom any
antecedent negotiations are conducted.”.
(7) In relation to a contract for the hire of goods made on or after 1st June
1985 and before commencement, for section 12 substitute —
“12
(1) Except as provided by this section and section 16 and subject to
the provisions of any other enactment, there is no implied
condition or warranty about the quality or fitness for any
particular purpose of goods bailed under a contract for the hire of
goods.
(2) Where, under such a contract, the bailor bails goods in the course
of a business, there is (subject to subsection (3)) an implied
condition that the goods supplied under the contract are of
merchantable quality.
(3) There is no such condition as is mentioned in subsection (2) —
(a) as regards defects specifically drawn to the bailee’s
attention before the contract is made; or
(b) if the bailee examines the goods before the contract is
made, as regards defects which that examination ought to
reveal.
(4) Where, under a contract for the hire of goods, the bailor bails
goods in the course of a business and the bailee, expressly or by
implication, makes known to the bailor any particular purpose for
Supply of Goods and Services Act 1996 SCHEDULE 2



c AT 16 of 1996 Page 31

which the goods are being bailed, there is an implied condition
that the goods supplied under the contract are reasonably fit for
that purpose, whether or not that is a purpose for which such
goods are commonly supplied, except where the circumstances
show that the bailee does not rely, or that it is unreasonable for
him to rely, on the skill or judgment of the bailor.
(5) An implied condition or warranty about quality or fitness for a
particular purpose may be annexed by usage to a contract for the
hire of goods.
(6) The preceding provisions of this section apply to a bailment by a
person who in the course of a business is acting as agent for
another as they apply to a bailment by a principal in the course of
a business, except where that other is not bailing in the course of a
business and either the bailee knows that fact or reasonable steps
are taken to bring it to the bailee’s notice before the contract
concerned is made.
(6A) Goods of any kind are of merchantable quality within the
meaning of subsection (2) if they are fit for the purpose or
purposes for which goods of that kind are commonly supplied as
it is reasonable to expect having regard to any description applied
to them, the consideration for the bailment (if relevant) and all the
other relevant circumstances.
(7) In subsection (4) any reference to the bailor includes a reference to
the person by whom any antecedent negotiations are conducted.”.
4 Sale etc. by sample

(1) In relation to a contract of sale made before commencement, in section
14(1), after paragraph (a) insert —
‘(aa) that the buyer will have a reasonable opportunity of comparing
the bulk with the sample; and’.
(2) In relation to a contract made before commencement, in section 13(1)(b),
14(1)(c), 15(1)(c) and 16(1)(c), for “making their quality unsatisfactory”
substitute “rendering them unmerchantable”.
(3) In relation to a contract for sale or hire-purchase agreement made on or
after 18th June 1976, or a contract for the transfer of goods or contract for
the hire of goods made on or after 1st June 1985, the word
“unmerchantable” in those provisions (modified as above) shall be
construed in accordance with section 9(6), 10(6), 11(6A) or 12(6A) (as
substituted by paragraph 3), as the case may be.
(4) Section 14 does not apply to a hire-purchase agreement made before 18th
June 1976.
(5) Sections 15 and 16 do not apply to contracts made before 1st June 1985.
SCHEDULE 2
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Page 32 AT 16 of 1996 c

5 Modification of remedies in non-consumer cases

Section 17 does not apply to a contract made before commencement.
6 Exclusion of implied terms

(1) Section 18 does not apply to a contract (other than a contract of sale or a hire-
purchase agreement) made before 1st July 1981.
(2) In relation to a contract of sale made before 18th June 1976, for section 18
substitute —
“18
(1) Nothing in this Part affects section 54 of the Sale of Goods Act
1983 (rights etc. under contract of sale may be varied by express
agreement, course of dealing or binding usage).
(2) The seller under a conditional sale agreement to which the Hire-
Purchase Act 1939 applies shall not be entitled to rely on any
provision in the agreement excluding or modifying the condition
set out in section 9(3) unless he proves that before the agreement
was made the provision was brought to the notice of the customer
and its effect made clear to him.
(3) In this section ‘conditional sale agreement’ means a contract for
sale under which —
(a) the price or part of it is payable by instalments, and
(b) the property in the goods is to remain in the seller (even
though the buyer is to be in possession of the goods) until
such conditions as to the payment of instalments or
otherwise as may be specified in the agreement are
fulfilled.”.
(3) In relation to a hire-purchase agreement made before 18th June 1976 for
section 18 substitute —
“18
The warranties and condition set out in sections 2 and 10 shall be
implied notwithstanding any agreement to the contrary, and the owner
shall not be entitled to rely on any provision in the agreement excluding
or modifying that condition unless he proves that before the agreement
was made the provision was brought to the notice of the hirer and its
effect made clear to him.”.
(4) In relation to a contract of sale made on or after 18th June 1976 and
before 1st July 1981, for section 18 substitute —
“18
(1) An express condition or warranty does not negative a condition or
warranty implied by this Act unless inconsistent with it.
(2) A term of a contract of sale or of any other contract exempting
from all or any of the provisions of section 1 is void.
(3) A term of a contract of sale or of any other contract exempting
from all or any of the provisions of section 5, 9 or 13 —
Supply of Goods and Services Act 1996 SCHEDULE 2



c AT 16 of 1996 Page 33

(a) is void in the case of a consumer sale, and
(b) in any other case, is not enforceable to the extent that it is
shown that it would not be fair or reasonable to allow
reliance on the term.
(4) In determining for the purposes of subsection (3) whether or not
reliance on any such term would be fair or reasonable regard shall
be had to all the circumstances of the case and in particular to the
following matters —
(a) the strength of the bargaining positions of the seller and
buyer relative to each other, taking into account, among
other things, the availability of suitable alternative
products and sources of supply;
(b) whether the buyer received an inducement to agree to the
term or in accepting it had an opportunity of buying the
goods or suitable alternatives without it from any source of
supply;
(c) whether the buyer knew or ought reasonably to have
known of the existence and extent of the term (having
regard, among other things, to any custom of the trade and
any previous course of dealing between the parties);
(d) where the term exempts from all or any of the provisions
of section 5, 9 or 13 if some condition is not complied with,
whether it was reasonable at the time of the contract to
expect that compliance with that condition would be
practicable;
(e) whether the goods were manufactured, processed, or
adapted to the special order of the buyer.
(5) Subsection (4) does not prevent the court from holding, in
accordance with any rule of law, that a term which purports to
exclude or restrict any of the provisions of section 5, 9 or 13 is not
a term of the contract.
(6) In this section ‘consumer sale’ means a sale of goods (other than a
sale by auction or by competitive tender) by a seller in the course
of a business where the goods —
(a) are of a type ordinarily bought for private use or
consumption; and
(b) are sold to a person who does not buy or hold himself out
as buying them in the course of a business.
(7) The onus of proving that a sale falls to be treated for the purposes
of this section as not being a consumer sale lies on the party so
contending.
(8) Any reference in this section to a term exempting from all or any
of the provisions of any section of this Act is a reference to a term
SCHEDULE 2
Supply of Goods and Services Act 1996


Page 34 AT 16 of 1996 c

which purports to exclude or restrict, or has the effect of
excluding or restricting, the operation of all or any of the
provisions of that section, or the exercise of a right conferred by
any provision of that section, or any liability of the seller for
breach of a condition or warranty implied by any provision of that
section.
(9) It is hereby declared that any reference in this section to a term of
a contract includes a reference to a term which although not
contained in a contract is incorporated in the contract by another
term of the contract.”.
(5) In relation to a hire-purchase agreement made on or after 18th June 1976
and before 1st July 1981, for section 18 substitute —
“18
(1) An express condition or warranty does not negative a condition or
warranty implied by this Act unless inconsistent with it.
(2) A term of a hire-purchase agreement or of any other agreement
exempting from all or any of the provisions of section 2 is void.
(3) A term of a hire-purchase agreement or of any other agreement
exempting from all or any of the provisions of section 6, 10
or 14 —
(a) is void in the case of a consumer agreement, and
(b) in any other case, is not enforceable to the extent that it is
shown that it would not be fair or reasonable to allow
reliance on the term.
(4) In determining for the purposes of subsection (3) whether or not
reliance on any such term would be fair or reasonable regard shall
be had to all the circumstances of the case and in particular to the
following matters —
(a) the strength of the bargaining positions of the owner and
hirer relative to each other, taking into account, among
other things, the availability of suitable alternative
products and sources of supply;
(b) whether the hirer received an inducement to agree to the
term or in accepting it had an opportunity of buying the
goods or suitable alternatives without it from any source of
supply;
(c) whether the hirer knew or ought reasonably to have
known of the existence and extent of the term (having
regard, among other things, to any custom of the trade and
any previous course of dealing between the parties);
(d) where the term exempts from all or any of the provisions
of section 6, 10 or 14 if some condition is not complied
with, whether it was reasonable at the time of the
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c AT 16 of 1996 Page 35

agreement to expect that compliance with that condition
would be practicable;
(e) whether the goods were manufactured, processed, or
adapted to the special order of the hirer.
(5) Subsection (4) does not prevent the court from holding, in
accordance with any rule of law, that a term which purports to
exclude or restrict any of the provisions of section 6, 10 or 14 is not
a term of the hire-purchase agreement.
(6) In this section ‘consumer agreement’ means a hire-purchase
agreement where the owner makes the agreement in the course of
a business and the goods to which the agreement relates —
(a) are of a type ordinarily supplied for private use or
consumption; and
(b) are hired to a person who does not hire or hold himself out
as hiring them in the course of a business.
(7) The onus of proving that a hire-purchase agreement falls to be
treated for the purposes of this section as not being a consumer
agreement lies on the party so contending.
(8) Any reference in this section to a term exempting from all or any
of the provisions of any section of this Act is a reference to a term
which purports to exclude or restrict, or has the effect of
excluding or restricting, the operation of all or any of the
provisions of that section, or the exercise of a right conferred by
any provision of that section, or any liability of the owner for
breach of a condition or warranty implied by any provision of that
section.
(9) It is hereby declared that any reference in this section to a term of
an agreement includes a reference to a term which although not
contained in an agreement is incorporated in the agreement by
another term of the agreement.”.
7 Interpretation

The definition of ‘business’ in section 20 does not apply in relation to a contract
made before 18th June 1976.
8 Contracts for services

Part 2 does not apply to contracts made before 1st June 1985.
9 Goods forming part of a bulk

Section 27 does not apply to a contract made before commencement.
Schedule 3
Supply of Goods and Services Act 1996


Page 36 AT 16 of 1996 c

10 Acceptance or rejection of goods

Section 28 does not apply to a contract made before commencement.
11 Interpretation of this Schedule

In this Schedule “commencement
” means the day on which this Act comes into
operation.
Schedule 3

MINOR AND CONSEQUENTIAL AMENDMENTS

Section 31(1)
[Sch 3 amends the following Acts —
Hire-Purchase Act 1973 q.v.
Misrepresentation and Unfair Contract Terms Act 1980 q.v.
Sale of Goods Act 1983 q.v]
Schedule 4

ENACTMENTS REPEALED

Section 31(2)
[Sch 4 repeals the following Acts wholly —
Supply of Goods (Implied Terms) Act 1976
Supply of Goods and Services Act 1985
and the following Acts in part —
Misrepresentation and Unfair Contract Terms Act 1980
Sale of Goods Act 1983.]
Supply of Goods and Services Act 1996 Endnotes


c AT 16 of 1996 Page 37

ENDNOTES

Table of Legislation History

Legislation Year and No Commencement






Table of Renumbered Provisions

Original Current






Table of Endnote References

1
Subs (4) amended by SD579/98. 2
Effective 19/8/1996