Are Goods Sold Really Not Returnable? by Vanessa Alabi

I entered a supermarket in my neighborhood one day and witnessed a scene in which a woman was shouting angrily at a sales manager. In an attempt to understand what was going on, I drew closer. I got to find out that the sales manager had refused to take back a faulty light bulb which the woman had bought earlier in the day. While the woman cursed angrily at the sales manager, all the sales manager did in return was to point to a notice on the wall that read “Goods sold are not returnable”. When the quarrel was beginning to attract attention, the sales manager shouted, “Take me to court and let’s see”. Take her to court and see?

Many people have gone through this situation and most people have given up their rights at the mere sight of such a notice. But does such a notice effectively bar any discussion on the rights and obligations of the parties involved? In this blog post, we explore the possibilities surrounding who will really “see” when this issue is taken to court. This will be done by examining the “Goods sold are not returnable” notice through the lens of a commercial law student. The Sale of Goods Act, 1962 (Act 137) and principles established in case law will guide this discussion.

“Goods sold are not returnable,” in simple terms means that once goods are sold, they are incapable of being sent back to the seller regardless of any defect in the goods. The law on the sale of goods makes no express provision as to whether or not goods sold are returnable.

It is worth noting that, there is still an ongoing debate in common law countries on where the responsibility to check the quality and suitability of goods lie in a sale of goods contract; the buyer (Caveat Emptor) or seller (Caveat Venditor). Act 137 in Ghana does a very good balancing act between the rights and responsibilities of parties in a sale of goods contract. But it is not wrong to say however that, in Ghana, there is a heavier burden on the part of the seller than the buyer.

This is true because, under the Sale of Goods Act, there is an implied condition that the goods which a seller sells are free from defects. But this obligation is limited to defects which are not declared or known to the buyer before or at the time when the contract is made. Yet again, the Act places some further conditions which could estop the buyer from bringing an action against the seller. These are:

(a) where the defect complained of is one which should have been revealed upon examination by the buyer;

(b) in the case where the goods are sold by sample, the defects complained of must be one which could have been discovered by the reasonable examination of the sample.

(c) where the defect complained of was one which the seller was not, and could not reasonably have been aware of by virtue of the fact that he does not ordinarily sell those goods. It follows therefore that, where it is not in the course of the seller’s business, the application of the responsibility to disclose will vary.

In resolving the dispute described earlier at the shop, a few factual issues have to be proven (1) whether or not the defect existed at the time of the sale; (2) whether or not the defect was disclosed to the buyer; (3) whether or not the defect was detectable by examination; (4) whether or not the sale was in the course of business of the seller, and (5) whether or not the woman made known to the sales manager the purpose for which she required the light bulb.

We should take it for granted that the defect was at the time of the sale because it appears that the bulb was bought earlier in the day and returned because it did not work. It stands to reason also that, no one will knowingly buy a defective bulb and complain about it, therefore we should grant again that, the defect was not disclosed. Again, given that the shop is a shop where such goods are routinely sold, we should grant that it was in the seller’s ordinary course of business. The purpose of a light bulb, as its name suggests, is to produce light. We may therefore assume that the seller knew that the woman required the light bulb for the purpose of lighting.

Now, does the notice “Goods sold are not returnable” sufficiently protect the seller from his responsibility to the buyer? It appears not, going by the deductions that we have made above.  The courts reasoned along this line in the cases of G.A. Sarpong v Silver Star Auto Towers (J4/43/2013)[2014] GHASC 121 and Continental Plastics Engineering Co Ltd v. IMC Industries – Technik Gmbh (2009) SCGLR.

In the case of Continental Plastics Engineering Co Ltd v. IMC Industries – Technik Gmbh (2009) SCGLR, the court mentioned that there should be a defect, latent or otherwise. It follows that if there are no defects at the time a party cannot take advantage of it. Per Chief Justice Georgina Wood (as she then was), a seller is by an implied condition, liable for all defects in goods. The seller is however not liable for defects which he fully discloses or declares to the buyer at the time of the Contract of Sale. There is an implied condition that goods sold are free from defects except in a situation where the defects are specifically drawn to the buyer’s attention by the seller before the contract or where the buyer examines the goods before the contract is made as regards defects which that examination ought to reveal.

Moreover, with reference to the issue of the goods being sold in the ordinary course of the seller’s business, in the case of Ashington Piggeries and another v. Christopher Hill [1971] 1 All ER 847, the court held that It does not matter that the seller does not possess the necessary skill or judgment, nor does it matter that in the then state of knowledge no one could by exercise of skill or judgment detect the particular characteristic of the goods which rendered them unfit for that purpose. Therefore, by holding himself out to the buyer as a manufacturer or dealer in goods of that kind, the seller leads the buyer reasonably to understand that he is capable of exercising sufficient skill or judgment to make or to select goods which will be fit for the particular purpose for which he knows the buyer wants them.

Under the Sale of Goods Act, the buyer may reject goods, when the seller is guilty of a breach, not being of a trivial nature, of a condition of a contract of sale. An important thing to note here is that this breach should not be of a trivial nature. In effect the defect which entitles the buyer to reject the goods must be of a serious, substantial or of a fundamental nature as laid down in the G.A.Sarpong case. It is important to note that, the buyer may not reject goods which the buyer has accepted. However, we should further note that, one of the ways in which the buyer may be deemed to have accepted the goods is when the buyer does not within a reasonable time after delivery of the goods inform the seller that the buyer rejects the goods. The right to reject must be exercised within a reasonable time. In the G.A.Sarpong case, a period of twelve months was held to be a reasonable time for the return of a car.

With all the principles laid out above, it would be right to say that, the breach in this particular situation was not of a trivial nature since the defect in the light bulb went to the extent of making the light bulb dysfunctional. Also, the woman had exercised her right to reject the goods when she returned the light bulb immediately upon the realization that the bulb was not functioning. Clearly, she had not accepted the light bulb and could therefore return it to the seller.

We can conclude at this point that as a general rule, goods sold are returnable and so, that piece of paper with the inscription “Goods sold are not returnable” does not necessarily mean what the seller thought it meant. Goods sold may be returnable when there are defects which could not have been detected upon reasonable examination of such goods. The rejection must be done within a reasonable time and failure to return the goods within a reasonable time signifies an acceptance of the goods, hence, preventing the buyer from rejecting the goods. It is therefore important that consumers know their right with regards to this matter in order to avoid situations where their rights are being infringed upon.