NSW What happens if you exclude Sale of Goods Act in a contract?

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sammie_t

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25 March 2020
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I have a problem question to do and in the contract, the seller includes the term: 'The purchaser agrees that the Sale of Goods Act 1923 (NSW) does not apply to this transaction.' Is this allowed, and if so, if they have breached terms under this act, do they get penalised at all? The buyer accepted the contract but failed to read the terms and conditions (laziness), so what action, if any, can the buyer take out on the seller? Thanks
 

Rob Legat - SBPL

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By "I've got a problem question to do..." you mean this is a question you've been given to answer as part of your education and not a real life situation, right? If so, you need to post in the Australian Law Students Forum and not expect us to answer your question for you. You need to do the work yourself, so give us your initial thoughts so we can give you feedback, or ask where you should start looking, or similar.
 

sammie_t

Member
25 March 2020
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Yes it is a homework question and I do have my take:
My interpretation is that businesses when selling to another business are allowed to include such clauses in their conditions. By including the clause that 'the sale of goods act does not apply to this transaction', and the buyer also expressing their agreement to these terms, there is a contract between the two parties and an agreement that this act will not apply to their transaction. Subsequently, the seller ultimately provided a defective product that didn't match description, was not fit for purpose and quality and did not match the sample given. In a normal case with the Act being present, the seller would be in breach of these statutory terms. However, since the two parties have agreed that the Act won't apply to their transaction, the seller is exempt from liability and the buyer cannot pursue.
 

Rob Legat - SBPL

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Okay, so I suggest you have a look at/consider the following:

- Part 8 of the Sale of Goods Act, particularly section 64 (I note you mention 'business to business' in your latest post, but there was no mention of that in your question);

- The Australian Consumer Law, particularly with respect to unfair contract terms in standard form contracts (which do apply business to business in most cases); and

- The general notion of unconscionable conduct.
 

sammie_t

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25 March 2020
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Thanks :) I was going to look into Unfair Contract Terms, but this is part of ACL yes? The question says not to include ACL in the answer, so I'll just have a look at that section. Thanks again
 

Rod

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Your original question says the buyer is a purchaser. IE we do not know if the purchaser is a consumer or business.

Your second post only answers the question where a purchaser is a business. In this scenario you need to expand your answer as only some terms can be excluded, not the whole Act (hint see s.57, and note interaction with s.19).

And add in comments about whether exclusion of liability was sufficiently brought to the purchaser's attention, and whether the exclusion of the whole Act is excessively wide.

Also remember:
  • no-one can contract out of the law unless the law expressly says so; and
  • contract law is common law. Legislation always trumps common law unless it says it doesn't, either expressly, or by necessary implication.
Bring your argument together with relevant case law.