Goods and Defect
Chapter Seventy-One
Syllabus topic 4.1, "Consumer: Definition; Defect in goods."
Pages 287 to 290 of 434
In one line
A defect is a fault, imperfection or shortcoming in the quality of goods measured against what the law, a contract or the trader's own claim required.
In the wording a student can write in an exam: section 2(10) of the Consumer Protection Act 2019 defines a defect as any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by or under any law for the time being in force, or under any contract express or implied, or as is claimed by the trader in any manner whatsoever in relation to any goods or product; the word "defective" is construed accordingly.
The three standards a defect is measured against
Read the definition slowly, because it contains three separate yardsticks and a problem question usually turns on which one applies.
1. What the law requires. A standard fixed by or under any law in force, for example a quality standard prescribed for a food product or a safety standard for a helmet.
2. What the contract requires. Express terms, and implied terms.
3. What the trader claimed. "As is claimed by the trader in any manner whatsoever" is the widest limb: an advertisement, a brochure, a label, a sales representation. A trader who claims more than the law requires is held to his claim.
The definition is about the goods, not about the seller's conduct. A defect exists or it does not, whether or not anybody was careless.
Goods, product, and the related definitions
Goods, in section 2(21), means every kind of movable property and includes food as defined in the food safety law.
Product, in section 2(33), means any article, goods, substance or raw material, or any extended cycle of it, which may be in gaseous, liquid or solid state, possessing intrinsic value, capable of delivery either as wholly assembled or as a component, and produced for introduction to trade or commerce; it excludes human tissues, blood, blood products and organs.
Spurious goods, in section 2(43), means goods which are falsely claimed to be genuine.
Product liability and its associated definitions carry the further scheme in Chapter VI, which chapter [Product Liability] works out.
How a defect is proved: sections 38 and 39
This is the part students omit, and it is the part that answers "what will the Commission actually do".
Section 38 governs the procedure on admission of a complaint. Where a complaint relates to goods, the Commission refers a sample of the goods to an appropriate laboratory for testing where it is necessary to determine whether they suffer from any defect; the complainant deposits the fees for the analysis; the report is sent to the parties, who may object to it; and the Commission decides the complaint after hearing the parties on the report. Where the defect can be determined without analysis, or the complaint relates to services, the Commission proceeds on the evidence brought by the parties.
Goods and Defect
Section 39 lists what a Commission may order where it is satisfied that the goods suffer from any defect, or that the services suffer from any deficiency. The reliefs include: to remove the defect; to replace the goods with new goods of similar description free from defect; to return the price or the charges paid, with such interest as may be decided; to pay compensation for loss or injury suffered by the consumer due to the negligence of the opposite party, the Commission having power under the proviso to grant punitive damages in such circumstances as it deems fit; to pay compensation in a product liability action under Chapter VI; to remove deficiencies in services; to discontinue an unfair or restrictive trade practice and not to repeat it; not to offer hazardous goods for sale; to withdraw hazardous goods from sale; to cease manufacture of hazardous goods; to pay a sum to a fund where the loss is suffered by a large number of consumers who are not identifiable conveniently; to issue corrective advertisement; to provide for adequate costs to parties.
The list is worth learning, because a question that asks "what relief may a consumer get" is answered from it and from nowhere else.
A worked example
Anil buys a pressure cooker whose label says it is made of stainless steel and carries a five-year guarantee. Within a month the base warps and it leaks.
Is it a defect? Yes, on all three limbs if the facts support them: the warping is a shortcoming in quality against the standard the contract implied, against the guarantee, and against what the label claimed.
How is it proved? The Commission may refer a sample to an appropriate laboratory under section 38 to determine the composition of the metal, Anil depositing the fee; the report goes to both sides, who may object; and the Commission then decides after hearing them.
What may the Commission order? Under section 39 it may direct the removal of the defect, replacement with a new cooker free from defect, or return of the price; compensation for any loss or injury caused by negligence, including the burn Anil suffered when it leaked; punitive damages if the circumstances warrant; a corrective advertisement if the label misled buyers generally; the withdrawal of the model from sale if it is hazardous; and costs.
And if the cooker were sold as a well-known brand and was not? That is spurious goods under section 2(43), and chapter [Offences and Penalties under the Consumer Law] carries the penal consequences.
Goods and Defect
What it does NOT mean
A defect is not the same as a deficiency. Defect is about goods; deficiency is about services, and chapter [Service and Deficiency] takes it.
It does not require proof of negligence. The definition compares the goods with a standard.
It is not limited to what the law prescribes. What the trader claimed is a yardstick in itself.
Testing is not always required. Section 38 provides for it only where it is necessary to determine the defect.
Quick revision
- Section 2(10): a defect is any fault, imperfection or shortcoming in quality, quantity, potency, purity or standard required by law, by contract, or as claimed by the trader.
- Three yardsticks: the law, the contract, the trader's own claim.
- Section 2(21) defines goods, section 2(33) product, and section 2(43) spurious goods.
- Section 38: the Commission may refer a sample to an appropriate laboratory; the complainant deposits the fee; the report goes to the parties, who may object; the Commission decides after hearing them.
- Section 39: the reliefs, including removal of the defect, replacement, refund with interest, compensation for loss or injury due to negligence, punitive damages under the proviso, compensation in a product liability action, removal of deficiencies in services, discontinuance of an unfair or restrictive trade practice, withdrawal or cessation of hazardous goods and services, a payment to a fund where the consumers are not conveniently identifiable, corrective advertisement and costs.
- A defect does not require proof of negligence.
Test yourself
1. Define defect and explain how it is determined. Section 2(10) of the Consumer Protection Act 2019 defines a defect as any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by or under any law for the time being in force, or under any contract express or implied, or as is claimed by the trader in any manner whatsoever in relation to any goods or product. There are therefore three yardsticks, and a complaint may rely on any of them: the standard the law prescribes, the standard the contract requires, and the standard the trader himself claimed in an advertisement, a label or a representation. The comparison is between the goods and the standard, so no negligence need be proved. Section 38 provides the machinery: where it is necessary to determine whether goods suffer from a defect, the Commission refers a sample to an appropriate laboratory, the complainant deposits the fee, the report is sent to the parties who may object to it, and the Commission decides after hearing them; where analysis is unnecessary the Commission proceeds on the evidence.
Goods and Defect
2. What reliefs may a Commission grant where goods are found defective? Section 39 sets them out. It may direct the removal of the defect; the replacement of the goods with new goods of similar description free from defect; the return to the complainant of the price or the charges paid; the payment of compensation for loss or injury suffered by the consumer due to the negligence of the opposite party; the payment of punitive damages in such circumstances as the Commission deems fit; the discontinuance of an unfair or restrictive trade practice and an undertaking not to repeat it; that hazardous goods not be offered for sale, be withdrawn from sale, or that their manufacture cease; the payment of a sum to a fund where the loss is suffered by a large number of consumers who cannot conveniently be identified; the issue of a corrective advertisement to neutralise a misleading one; and the payment of adequate costs. The width of the list is what makes the consumer forum more useful to a buyer than a civil court.
The rest of this subject
These notes are cut from the University's printed syllabus. Open the syllabus itself, or the past papers, for the same subject.