Sale of goods act

Habari Class! Your Guide to the Sale of Goods Act!

Welcome, future business leaders of Kenya! Mpo? Today, we are diving into a topic that affects every single one of us, every single day. Ever bought a soda from the duka? A new pair of shoes in town? Or even a phone from a shop on Luthuli Avenue? If you have, then you’ve already been part of a Contract for the Sale of Goods. But what happens when that phone stops working after one day? Or the shoes are not the leather ones you were promised? That’s where the Sale of Goods Act comes in. It’s your shield and your guide in the world of buying and selling. Let’s get started!

What Exactly is a "Contract for the Sale of Goods"?

Think of it as a formal agreement. The law defines it as a contract where the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price.

But what counts as "goods"? It's not everything!

• Goods Include: Any movable property. Think of things you can touch and move. For example, a car, a bag of maize, a smartphone, livestock, or even a software program.
• Goods DO NOT Include: Things you cannot move, like land or buildings (this is covered by property law). It also doesn't include services, like getting a haircut from your kinyozi or a ride in a matatu.

+----------------------+      +--------------------------+
|       GOODS          |      |       NOT GOODS          |
| (Covered by the Act) |      | (Not Covered by the Act) |
+----------------------+      +--------------------------+
| - A Bodaboda         |      | - A piece of land in     |
| - A bag of sukuma wiki|      |   Kitengela              |
| - An M-KOPA Solar Kit|      | - Haircut services       |
| - A new laptop       |      | - A legal consultation   |
| - Furniture (Fundi)  |      | - Money/Currency         |
+----------------------+      +--------------------------+

Sale vs. Agreement to Sell: What's the Difference?

This is a very important distinction. It’s all about when the ownership of the item passes to you.

• A Sale is when the ownership (property) of the goods passes to the buyer immediately at the time the contract is made. You walk into Naivas, pick a loaf of bread, pay for it, and walk out. That bread is yours right away. That's a sale!
• An Agreement to Sell is when the ownership of the goods will pass at a future time or when a certain condition is met. For example, you order custom-made school uniforms from a tailor. You agree on the price, but you don't own the uniforms yet. You will only own them once the tailor has finished making them and you have paid.

Scenario: Atieno goes to the Gikomba market. She sees a beautiful, ready-made kitenge dress she likes. She pays the seller KSh 1,500 and takes the dress home. This is a Sale. Her friend, Wambui, likes the design but wants it in a different fabric. She pays a deposit and agrees with the seller to come back next week to collect her custom dress. This is an Agreement to Sell.

Image Suggestion: [A vibrant, bustling open-air market in Kenya, like Gikomba or Toi Market. In the foreground, a customer is happily receiving a colorful kitenge fabric from a smiling vendor. In the background, other stalls are filled with clothes, shoes, and fresh produce, capturing the energy of Kenyan commerce.]

The Unspoken Promises: Implied Conditions & Warranties

This is the most powerful part of the Act! The law automatically includes certain promises in every contract of sale, even if you don't say them out loud. These are divided into two types:

• Conditions: These are the major, fundamental terms of the contract. If a condition is broken, the contract is broken! The innocent party can reject the goods and demand a full refund.
• Warranties: These are minor, less important terms. If a warranty is broken, the contract is still valid, but the innocent party can sue for damages (money compensation) for the loss they suffered.

Here’s a simple way to remember it:

Is the promise broken?
        |
        +-----> Was it a MAJOR term (a Condition)?
        |              |
        |              +-----> YES! You can:
        |                      1. Repudiate (end) the contract.
        |                      2. Reject the goods.
        |                      3. Claim a refund & sue for damages.
        |
        +-----> Was it a MINOR term (a Warranty)?
                       |
                       +-----> YES! You can:
                               1. NOT reject the goods.
                               2. Keep the goods and sue for damages.

Key Implied Terms You MUST Know:

1. Implied Condition as to Title: The seller must have the legal right to sell the goods. You can't sell what you don't own!

   Example: Kamau buys a smartphone for KSh 10,000 from a street vendor. A week later, the police track the phone to Kamau, as it was reported stolen. The real owner claims it back. Kamau has lost his phone and his money. The seller breached the implied condition as to title. Kamau has the right to sue the seller for a full refund of KSh 10,000.

2. Implied Condition of Correspondence with Description: If you buy goods based on a description, the goods you receive must match that description.

   Example: Wanjiku orders a "Pure Wool" blanket online for the cold Limuru weather. When it arrives, the label says "10% Wool, 90% Polyester". The blanket does not match the description. Wanjiku can reject the blanket and claim a full refund.

3. Implied Condition of Fitness for Purpose: If you tell the seller the specific reason you are buying the goods, they must provide you with goods that are fit for that purpose.

   Example: Ochieng, a farmer, goes to a hardware store and tells the shopkeeper, "I need strong, waterproof gumboots for working in my muddy shamba." The shopkeeper sells him a pair. After two days, the boots leak and fall apart. They were not fit for the purpose Ochieng specified. He can return them for a refund.

4. Implied Condition of Merchantable Quality: The goods must be of a quality that a reasonable person would accept, considering the price and description. They shouldn't have hidden defects.

   Example: Amina buys a sealed packet of ugali flour from the supermarket. When she gets home and opens it, it's full of weevils. The flour is not of merchantable quality. She is entitled to take it back for a replacement or a refund.

Image Suggestion: [A split-panel image. On the left, a frustrated person is looking at a leaky gumboot with a hole in it. On the right, the same person is confidently returning the faulty boot to a helpful shopkeeper over a counter, implying a successful resolution.]

When Things Go Wrong: Calculating Damages

Sometimes, a refund isn't enough. If a seller's breach causes you to lose more money, you can sue for "damages". The goal is to put you in the financial position you would have been in if the contract had been performed correctly.

Let's look at a common scenario: Failure to deliver.

Scenario: Jane runs a small hotel. She agrees to buy 10 sacks of potatoes from a farmer, Peter, for KSh 2,000 per sack. The total is KSh 20,000. Peter fails to deliver them on the agreed day. Jane urgently needs the potatoes for her business, so she is forced to buy them from another supplier at the market price, which is now KSh 2,500 per sack.

How do we calculate the damages Jane can claim from Peter?

Step 1: Find the Contract Price
Contract Price per sack = KSh 2,000

Step 2: Find the Market Price at the time of breach
Market Price per sack = KSh 2,500

Step 3: Calculate the difference per unit
Difference = Market Price - Contract Price
Difference = 2,500 - 2,000 = KSh 500 per sack

Step 4: Calculate the Total Damages
Total Damages = Difference per sack * Number of sacks
Total Damages = 500 * 10 = KSh 5,000

Result: Jane can sue Peter for KSh 5,000 in damages.

Wrapping Up: You are Now an Empowered Consumer!

And there you have it! The Sale of Goods Act is not just some dusty old law; it is a practical tool for everyday life in Kenya. It ensures fairness in the marketplace and protects you from bad deals. It gives you power as a buyer and sets clear responsibilities for sellers.

So, the next time you go shopping, remember these unspoken promises. Check your goods, ask questions, and don't be afraid to stand up for your rights. You are not just a customer; you are a party to a contract, protected by the law. Sawa?

Great work today, class. Go forth and be smart, confident consumers!