The Sale of Goods by Description - A Return to Caveat Emptor?

Abstract

Few decisions are reported on the provisions of Section 13 of the Sale of Goods Act 1979, so any such case which is reported should rouse some interest. The Court of Appeal decision in Harlingdon & Leinster Enterprises Limited v Christopher Hull Fine Art Limited ' is all the more important in that it sets out to deE1ne a 'sale of goods by description. 9 The ramifications of the decision may prove to be far reaching, especially as it appears to undermine the very spirit of the Sale of Goods Act and, in respect of Section 13, indicate a return to caveat emptor. The facts of Harlingdon are these. The Defendants were London art dealers. They specialised in young contemporary British artists, but had come into possession of two oil paintings by Gabriele Munter, an artist of the German expressionst school. The paintings were taken to Christie's, who agreed to handle the sale. The Defendants then contacted the PlaintiffsS stating that they had two paintings by Munter for sale. The Plaintiffs had a special interest in the German expressionist school. It was found that the Defendants expressly stated that they knew very little about the paintings, and that they were not experts in them. Negotiations on price for one of the paintings then commenced but the Defendants would not accept less than the £6,000 originally set down. Agreement was reached and the Defendants drew up an invoice for £6,000, and which expressly referred to the purported artist, namely 'Munter.' The painting was later discovered to be a forgery, and the Plaintiffs sought repayment of the £6,000 claiming, inter alia, that the contract had been for the sale of goods by description within Section 13(1) of the Sale of Goods Act 1979. Breach of Section 13(1) would entitle the Plaintiffs to repudiate the contract and to claim damages for loss of bargain. The decision turned on the meaning in Section 13(1 ) of the phrase 'sale of goods by description.' It was held (Stuart-Smith LJ dissenting) that, for there to be a sale by description, it must be established that the parties shared a common intention that the description should be a term of the contract. In seeking to establish whether or not there was such a common intention between the parties, the Court could look at whether or not the buyer placed any reliance on the descriptive words used by the seller. Nourse LJ said2 that there cannot be a sale of goods by description unless 'it is . . . within the reasonable contemplation of the parties that the buyer is relying on the description.' Slade LJ concurred. He stated that: