By Luke Gibbons
It is unquestionable that commercial entities, would
not function without energy supply. Further,
as Bridge outlines, “there is no doubt that energy…[can be]
bought and sold”. (Benjamin’s Sale of Goods,9th.edn.2014). Thus,
the fact the judiciary and legislator have failed to clarify whether such
constitute “goods” under the Sale of Goods and Supply of Services Act
1980, and therefore, accrue heightened remedial availability than “services”, while providing no
definition of “services”, and as White states, no principled reason why
this protectionism to goods exists, is abhorrent.(White,Commercial Law,2nd.edn.2012).
It is regrettable that a definition requiring
tangibility, from a period when energy
was not paramount is stifling jurisprudential and legislative development, as “there are …difficulties attributing to
energy … legal qualities of… physical objects”.(n1) Consequently, a multijurisdictional solution has developed,
distinguishing “bottled” from “flowing” energy, as held in Bradshaw v Bothe’s Marine35.DLR.(3d)43,
with the former being deemed “goods”. Although
unfavourable in an already uncertainty area, it is submitted, such may be
necessary. This is contended as Part IV
of the 1980 Act only implies “terms” akin to “conditions” implied to sale contracts, if a contract is held to be
for supply of services, and following Carroll
v An Post National Lottery1I.R 433, a narrow view of such is proffered. Thus, one contends, if this
distinction was not held, there would arguably be no protection for commercial
entities who buy “bottled” energy, as
such may not be deemed a service, and also, not be subject to the proposed Consumer Rights Bill 2015.
Further, it is argued, the definition’s impact is
exacerbated, as energy is considered
a “good” in many Statutes such as, the
Consumer Protection Act 2007. In
spite of such, one must question, to remedy this arbitrary distinction, is it
feasible for energy in general to be
deemed a “good” under the 1980 Act, now that “services” are offered protections?
It is arguable, the dearth of cases may warrant
maintaining the status quo. Furthermore, it is contended, if energy constituted a “good”, s.35 may be invoked, deeming acceptance by “use”, being an act inconsistent with the seller’s ownership.
However, it is noted, as such is expressly subject to s.34(1) allowing for reasonable inspection, and as such allows operation,
subsequent to Benstein v Pamson Motors
Ltd2.All.ER.220, the “use”
of energy uncovering a “latent defect” for instance, may give
rise to more favourable remedies to “buyers”.
Nevertheless, a determination that energy is a “good” may arguably detrimentally effect remedial availability.
Currently, in energy being a “service”, implied terms are “innominate terms”, warranting damages or
termination depending on the breach’s seriousness, as denoted from Hongkong Fir Shipping v Kaawasaki Kisen Ltd2Q.B..26.
However, it is contended, if deemed a “good”,
claims would likely be made under s.11(3)
of the 1893 Act, arguing; if some energy was consumed prior to rejection,
a partial rejection occurred, and thus, implied conditions would be converted into
warranties, with damages being the only remedy. Further, although White requests allowance of partial
rejection as in the UK, it is argued, such would not assist as energy would likely be subject to the “commercial unit” exception. Thus, the
only solution to this quandary may be “freedom
of contract” in allowing such, although as monopolised energy suppliers are
often the dominant party, this seems unlikely.
Furthermore, retention of title clauses are hallmarks
of sales contracts, as such provide remedies for sellers, when “goods” are sold on credit. Although, White contends such are common where “goods” are consumed before credit
periods end, the recent case of PST
Energy v OW Bunker LtdUKSC23 held, in relation to fuel, one cannot
obtain title to something that no longer exists, so it cannot be a transaction
with such at its heart. Thus, it is argued, in undermining a key remedy when buyers
become insolvent, and a foundation of credit arrangements, this holding
encapsulates why deeming energy as “goods” is unworkable.
It is submitted, due to the difficulties outlined, the
Sales Law Review Group’s recommendation to hold implied terms for services as “conditions” in legislation should be
adopted. Although, it is noted, this may not fully remedy the remedial deficit
offered to “services”, such would
allow commercial users of differing energy forms, seek relatively equal remedies
bringing some homogeneity to the law.