SALE OF GOODS (AMENDMENT) BILL

Order for Second Reading read. 12.40 pm

The Senior Parliamentary Secretary to the Minister for Law (Assoc. Prof. Ho Peng Kee): Sir, I beg to move, "That the Bill be now read a Second time."

The United Kingdom's Sale of Goods Act 1979 is part of our laws being applicable by virtue of the Application of English Law Act (Cap. 7A).

In the United Kingdom, changes have been made to the Sale of Goods Act 1979 by the Sale and Supply of Goods Act 1994 and by the Sale of Goods (Amendment) Act 1995.

Both the Attorney-General and the Law Reform Committee of the Singapore Academy of Law have considered these changes and have recommended that our Sale of Goods Act be similarly amended. The Law Society also commends these amendments as they reflect the changing needs of consumers.

Sir, the Bill therefore seeks to incorporate the relevant changes in our Sale of Goods Act. The amendments will bring our domestic commercial laws up to date with developments in the United Kingdom. Let me go through the main amendments.

First, under the existing section 14 of the Sale of Goods Act, there is an implied condition in every contract for the sale of goods that the goods are of merchantable quality. The expression "merchantable quality" is outmoded and inappropriate, especially in the context of a consumer transaction. Its definition also emphasises too much the concept of fitness for purpose of the goods.

Hence, the Bill replaces the implied conditions of merchantable quality with that of "satisfactory quality". This reformulated implied condition is intended to apply to all contracts for the sale of goods where the seller sells in the course of business. Whether goods are of "satisfactory quality" will be determined by reference, not only to fitness for purpose, but also to various other factors such as appearance and finish, freedom from minor defects, durability and safety for use.

Secondly, the implied terms in the existing sections 13, 14 and 15 of the Sale of Goods Act are classified as "conditions". This gives a buyer an unrestricted right to reject the goods and treat the contract as repudiated if there is a breach of one of these terms, unless the buyer is deemed to have accepted the goods under the Act.

The status quo will be preserved where consumers are concerned. For non-consumers, the law will be amended such that if the breach is so slight that it would be unreasonable for the buyer to reject the goods and treat the contract as repudiated, he will not be able to do so but will instead be able to pursue any other remedy against the seller, including the recovery of damages.

Thirdly, under the existing law, property in the goods cannot pass to the buyer until the goods are ascertained. The buyer is therefore exposed to the risk of the seller's insolvency and if the price has been paid, may lose both the price and the goods.

The amendments remedy this situation by enabling the pre-paying buyer to become an owner in common of the bulk and by laying down the legal implications of this relationship. This will give the pre-paying buyer a proprietary interest which he can enforce in the event of the seller's insolvency.

Finally, Sir, the Bill clarifies the law relating to the acceptance of goods by a buyer. Under the present law, if a buyer accepts some of the goods sold to him he will be treated as if he had accepted them all. The amendments made by the Bill will enable the buyer to accept all the goods which conform to the terms of the contract and reject all the goods that do not, or to accept the conforming goods and some of the non-conforming goods and reject the rest.

Sir, the amendments also make it clear that a buyer who asks for goods to be repaired, or agrees to their repair, will not be deemed to have accepted them merely because of his request or agreement, and that a buyer will not be deemed to have accepted the goods merely because he sub-sells them and delivers them to another person, or disposes of them in some other way.

Sir, these changes are not intended to bring about any major shift in the balance of rights and obligations as between a buyer and a seller of goods. They are to update and clarify the law relating to the sale of goods so as to benefit buyers and sellers alike.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Assoc. Prof. Ho Peng Kee].

Bill considered in Committee; reported without amendment; read a Third time and passed.