Legal Article - Business Law

Satisfactory Quality: What Does it Mean?

Under the law it is stated “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 (if relevant) and all other relevant circumstances”.

and

quality includes their “state, condition, fitness for all the purposes for which the goods of the kind in question are commonly supplied, appearance and finish, freedom from minor defects, safety, durability”.

What can we understand from these definitions?

- Description is a factor. So if something is described as “shop soiled” or “ a demonstrator” then the item will not be as good as new. Some imperfections are to be expected.

- The price may be relevant. If you give some extra discount because, say, the tyres are legal and serviceable, but will need replacement shortly, then low tyre tread is not something to be complained of. If a discount is specifically given it is always wise to record on the Sales Invoice why it is being given.

- In some cases freedom from minor defects could be an issue e.g. paint imperfections on a new car, scuffs on wheel trims etc. The important point is to go back to the first part of the definition. Would a reasonable person class the car etc as satisfactory?

In an appeal case a 10-year-old Jaguar which had travelled 80,000 miles had a complete engine failure after 3 weeks and 2,300 miles from purchase. It was held in that case that the car was not of satisfactory quality nor fit for its purpose.

However in another case a car, that had travelled under half that mileage in total, and had completed only a further 800 miles before experiencing engine problems, was deemed to be fit for its purpose.

The extent of damage however would appear to be less. It was made clear by the Judge, that a purchaser of a second hand car had to expect problems to develop sooner or later.

The situation is of course different with respect to new cars. With a new car an appeal case has decided that comfort, ease of handling and pride in the car’s appearance are factors that should be considered.

There are situations where a retailer may wish to sell, say, a car or an accessory, with a particular defect and it is just not economical to repair it or the customer wants to buy it with the problem.

The law takes account of this by allowing sellers to specifically draw to the attention of the buyer particular defects.

So, if you make it clear (and we would suggest include it in writing on the sales documents) that, say, an alarm is not working, or the rear window only winds down half way, or there is a rattle from the exhaust etc then the customer has no claim against you for that fault.

Equally, if there is a defect which the basic “once over” by the customer should reveal e.g. a patch of rust on the wing, a split seat, a missing radio then the same rules apply. In all cases however we would recommend you put any defects down in writing. It will be worth its weight in gold when a dispute arises.

The customer is not obliged to examine the vehicle to any particular extent.

However, if a professional technical person examines the car e.g. AA, RAC etc then that person is acting as the agent of the customer and therefore the extent of defects expected to be revealed is much more.

If a car has been an insurance write-off (see the later section on Write Offs) then so long as it has been repaired satisfactorily and professionally there is generally no claim for a lack of satisfactory quality.

In the authors view this point may be challenged at some stage but at present this is the situation. There was one notable appeal case, which was a challenge to this point for very special circumstances.

A new car was being unloaded at the dockside and fell into the water. It was recovered, completely dried out and sold, although it was deemed to be an insurance write off. It was bought by an enthusiast of a somewhat limited model. 

 Although there was no visible deterioration at the time, the Court held that a car such as this one, should be seen as a form of investment and a purchaser would have in mind its eventual saleability and consideration must be given to the purchaser’s pride in owning a specialist car.

Anything that affects the value of a vehicle must be declared.

Published: 10 Mar 2011

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