A common sales law breaks down barriers and maximises benefits for consumers and businesses.
LAHORE: Pakistan, India and Bangladesh should enact a common law governing the sale of goods to boost economic growth and mutual trade. This can be done by updating the Sale of Goods Act of 1930.
At the outset, it seems pertinent to discuss the origin of sales law in England and later adopted by its colonies. In 17th century England, one man bought from another a precious stone, for the then princely sum of 100 pounds. The stone’s value lay in its reputed healing powers. Immediately after the purchase, the purchaser found out that the stone had no powers whatsoever, let alone healing ones. Annoyed, he took the seller to court. Before the court, the seller objectively explained that although he had affirmed that the stone had healing powers, he had not guaranteed that it did. The court accepted this argument and the end result was that buyers had to be beware spending their hard-earned money on a precious item.
It was not until 1893, however, that Britain enacted a law safeguarding the rights of consumers, in the form of the Sale of Goods Act of 1893. This provided some respite to consumers since now a buyer could now examine goods supplied to him by the seller and reject these if they were not in line with the contract between them. In certain circumstances, the buyer could cancel the contract and in others, sue the seller for damages.
Britain’s colonies and dominions welcomed this law and adopted it without much variation. In 1930, the Government of India followed suit and enacted the Sale of Goods Act of 1930 (hence after SOGA 1930). Post-independence, Pakistan enacted the Federal Laws (Revision and Declaration) Act of 1951 under which it adopted a number of Indian laws. The Sale of Goods Act of 1930 was one of these. In 1979, Britain replaced its 1930 law with a more updated version, and in 1994, further changes were made to it.
Contracts are essential for running businesses and making sales to consumers. They formalise an agreement between parties and can cover a broad range of matters, including the sale of goods and associated services such as repairs and maintenance. If we look at India, Pakistan and Bangladesh, these countries still practise the Sale of Goods Act of 1930 incorporated by British India and this is now clearly outdated and needs to be amended as soon as possible.
No doubt, Pakistan, India and Bangladesh have their own legal systems based on common law principles leading to various contract laws. It can be argued that there is a case for a new optional consumer code to cover distance selling across three countries. The text of the Sales of Goods Act doesn’t cover this aspect, and it should be noted that distance selling needs its own clear rules, designed around automated processes. A common sales law should be based on more general contract law principles and it is fair to think that it would benefit from greater focus on distance sales. Traders in general and chambers of commerce in particular should demand that a common sales law be enacted. This kind of common system is increasingly in use around the world, the best example being the European Union. While each member state has its own sales law, the European Commission has published a proposal for a “Common European Sales Law”, which traders may choose to use to govern their cross-border contracts. It covers the sale of goods, the supply of digital content and related services.
A common sales law breaks down barriers and maximises benefits for consumers and businesses. For example, trading companies need not wrestle with the uncertainties that arise from having to deal with multiple national contract systems. Furthermore, small and medium-sized companies may appreciate a common sales law by expanding their business into new markets easily. Consumers, too, will prefer a common law since it will safeguard their rights across national boundaries.
A common sales law in Pakistan, Bangladesh and India will help break down trade barriers and give consumers more choice and a high level of protection, especially when buying online.
Sarmad Ali
Advocate High Court
Faculty member, Quaid-i-Azam Law College
Published in The Express Tribune, August 9th, 2013.
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