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Boon
In the
cour
se
of
busi
nes
s In the course of a business
The phrase in the course of a business A1 is
used to:
a)
place liability in respect of implied
conditions in the supply and/sale of
goods under the Sale of Goods and
Supply of Goods Act1;
b)
Narrow meaning
The English courts have taken a narrow view of
when a buyer is deemed to have entered the
transaction in the course of a business 7. For a
freight-forwarding company that bought for a car
for both the personal use of its executive as well
as for company use and signed the agreement
in its name, the company was held not to be
dealing as consumer under the Unfair Contract
Terms Act as the purchase was merely
incidental to its business, and the necessary
degree of regularity had not been established,
and also the company had not held itself out as
making the contract in the course of business.8
Even if a company had signed a form stating
that they would be using the car for the
purposes of their business, this did not make it a
transaction entered into by the company in the
course of its business.8A This meant that the
implied contractual term purporting to exclude
liability for fitness for purpose was not of effect.9
Under this test, it is the transaction and not the
goods that must be integral to the business.10
Lee Chai
Boon
Wide meaning
For whether seller supplied in the course of a
business pursuant to section
14(2) of the Sale of Goods Act,
the English courts have adopted a
wide meaning of in the course of
business13.
So the sale of a
vessel by a seller who carried on
the business of a fisherman was
held to have sold the vessel (used
in the business) in the course of a
business.14 (The seller had sold
the vessel with a view to getting a
replacement for his business.)
This was so even though a strict
application of the narrow view of
in the course of a business
would have yielded a different
result15. This was justified by the
need to extend wider protection to
a
consumer
following
the
amendment of the Sale of Goods
Act.16 The court noted that to have
held that the sale of the very
asset without which the seller
could not have carried on his
business (with the intention of
purchasing a replacement for the
purpose
of
continuing
his
business) was not a sale made in
the course of a business, would
2.
Lee Chai
Boon
4.
4A.
5.
6.
7.
8.
Lee Chai
Boon
by Jeffrey Lee
For further enquiries please email:
jeffreylee@leechaiboon.com