Contracts for the supply of goods

The Law Reform Commission was established in January 1980. The Commission considers such reforms of the laws of Hong Kong as may be referred to it by the Secretary for Justice or the Chief Justice.

The Secretary of the Commission is Mr Stuart M I Stoker and its offices are at:

THE LAW REFORM COMMISSION
OF HONG KONG

REPORT

Chapter	*Page*

Note of Thanks by the Chairman of the Supply of Goods Sub-committee
Preface	1

Terms of reference	2
The consultation process	3
Layout of this Report	3
Acknowledgements	4

1. Existing statutory provisions regulating implied terms in contracts for the sale of goods and for the supply of goods, and the need for further legislation	5

Overview	5
Existing statutory provisions regulating implied terms in contracts for the sale of goods and contracts for the supply of goods	5
The need for further legislation on implied terms for supply of goods	7


2. What are contracts for the supply of goods	13

Overview	13
Introduction	13
Contracts for the transfer of property in goods	15
Contracts of hire of goods	23
Hire purchase agreements	26
What are "goods"	36
Computer software	37


3. Implied terms to be included in the Recommended Legislation – implied terms about title, etc	44

Overview	44
Undertakings as to title under Cap 26	45
Contracts for the transfer of property in goods	46
Contracts of hire	57
Hire purchase agreements	61


4. Implied terms to be included in the Recommended Legislation – correspondence with description	71

Overview	71
Correspondence with description under Cap 26	72
Contracts for the transfer of property in goods	72
Contracts of hire	76
Hire purchase agreements	79


5. Implied terms to be included in the Recommended Legislation - implied terms about quality or fitness	84

Overview	84
Implied undertakings as to quality or fitness under Cap 26	85
Contracts for the transfer of property in goods	88
Contracts of hire	111
Hire Purchase agreements	121


6. Implied terms to be included in the Recommended Legislation - supply by sample	129

Overview	129
Correspondence with sample under Cap 26	129
Contracts for the transfer of property in goods	130
Contracts of hire	136
Hire Purchase agreements	138


7. Remedies for breaches of the implied terms	141

Overview	141
Remedies for breaches of implied terms in contracts of sale of goods in Hong Kong	141
Australia	145
New Zealand	147
England and Wales	152
Conclusion	156


8. Exclusion of liability	176

Overview	176
Exclusion of liability in contracts of sale of goods and other contracts for the supply of goods in Hong Kong	176
Australia	180
New Zealand	182
England and Wales	183
Conclusion	186


9. Miscellaneous amendments concerning contracts for the sale of goods	191

Overview	191
Sale of goods forming part of a bulk	192
Rights of partial rejection	221
Statutory exception to the nemo dat rule: sale in market overt	229
Remedies for delivery of wrong quantity	235
Acceptance of goods	240
A reasonable opportunity of comparing the bulk with the sample	243
Concluding observations	244


10. Summary of recommendations	246


Annex 1

List of respondents to the Consultation Paper	257

Annex 2

Abbreviations for Legislation Frequently Referred to in this Report	258

Annex 3

Comparison Table of Statutory Implied Terms in Contracts for the Sale and Supply of Goods	259

Annex 4

(1) Complaint Statistics on Hire of Goods	260
(2) Complaint Statistics on Hire Purchase of Goods	261
(3) Complaint Statistics on Contracts for Work and Materials	262

Annex 5
Complaint Statistics on Computer Software	263

Hong Kong Law Reform Commission

THE LAW REFORM COMMISSION OF HONG KONG

REPORT

February 2002

THE LAW REFORM COMMISSION
OF HONG KONG

REPORT

CONTENTS

Chapter

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