Sale of Goods Law

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Alison Ward in August 2018.

Legal problems involving the sale of goods typically involve weighing a variety of factors: the terms of the contract, the type of seller, and the nature and seriousness of the problem.

Client problems

• Client bought a consumer good that is not functioning properly. 

• Client bought a car from someone, and now someone else is claiming the car is theirs and the seller did not have the right to sell it.

• Client paid a deposit for goods, and the store went out of business without returning the deposit or providing the goods.

Summary of the law

Many common-law principles of contract (see the Contracts Overview) were developed in Britain during the 1800s. In some instances, those principles were codified into statute law by the British parliament. One important area of the common law of contract that was codified was the sale of goods law. BC’s present Sale of Goods Act was modelled after the British law.

The Sale of Goods Act covers the sale of chattels, which are personal, moveable possessions. Amendments to the Act extended its coverage to some leases as well. (In a lease, the “lessor” is the person who leases the goods to the consumer; the consumer is known as the “lessee”.) Portions of the Sale of Goods Act cover sales or leases between retailers and consumers (for example, when a consumer buys a car from a dealership), and some portions cover sales or leases between consumers themselves (for example, when a consumer buys a car from another consumer who is not in the business of selling cars). Sale of goods contracts do not have to be in writing to be protected by the Sale of Goods Act.

The Sale of Goods Act is an important law for consumers because it provides many rights and remedies. It does this in two main ways:

• The Act deems that many rights are part of a sale of goods contract, regardless of what the parties have (or have not) agreed on. These are called “implied terms”. These terms cover the quality of the goods sold and the seller’s right to sell the goods. Regardless of whether anything is said when a sale is made, or even if, in some instances, the seller specifically says that the Sale of Goods Act does not apply to the transaction, it is likely that the Act does apply.

• The Sale of Goods Act gives consumers certain remedies if the seller breaches the rights given under the Act. The Act talks of rights that are “conditions” and rights that are “warranties”. In very general terms, conditions are seen as the most important basic rights of the contract, while warranties are seen as less important collateral rights. The distinction can be important for the type of remedy (see the section on Contract Remedies) available to the buyer. In general, breaches of conditions may allow consumers to get out of the transaction altogether (that is, return the goods and get their money back), while breaches of warranties usually allow consumers only to recover damages (that is, get some compensation for the defect in the goods).


It is difficult to generalize about all the rights given by the Sale of Goods Act. Considerable case law has interpreted many sections of the Act and refined the meaning of those sections. The relevance of a section to a particular transaction often depends on the specific facts of the transaction. Also, there are differences in how or whether the Act’s protection applies to transactions. For example, some protections apply to both business-consumer transactions and consumer-consumer transactions, while other protections apply to only business-consumer transactions.

The following is a brief summary of some of the more important consumer-related provisions of the Sale of Goods Act. These implied conditions are part of every consumer contract.

The seller has title

Under section 16(a) of the Sale of Goods Act, an implied condition of the contract is that the seller (or lessor) has a right to sell the goods. Essentially, this means that the seller has title to the goods and has the right to sell them. If the seller (or lessor) does not have the right to sell the goods, and this is discovered within a reasonable time, the buyer is entitled to cancel the contract and have the full purchase price returned. This protection usually applies to consumer-consumer sales (or leases) for both new and used goods; this protection always applies to business-consumer sales (or leases) for both new and used goods (since, for retailers, this right cannot be waived; see section 20(3)).

The goods are free from encumbrance

Under section 16(c) of the Sale of Goods Act, an implied condition of the contract is that the seller (or lessor) promises there are no charges or encumbrances on the goods by any third party. Examples of charges or encumbrances include repairers’ liens and security agreements over the goods registered under the Personal Property Security Act. Again, this protection usually applies to consumer-consumer sales (or leases) for both new and used goods, and always applies to business-consumer sales (or leases) for both new and used goods (retail waivers being void under section 20(3)).

The goods are reasonably durable

Under section 18(c) of the Sale of Goods Act, an implied condition of the contract is that the goods will be durable for a reasonable period of time, considering both the normal use of the goods and all the surrounding circumstances of the sale or lease. This protection always applies to business-consumer sales (or leases) of new goods (retail waivers are void under section 20(2)). This protection will probably not apply to business-consumer sales (or leases) of used goods, since waivers are not void under the act in this case and the business may well have the consumer sign a waiver. This protection usually applies to consumer-consumer sales (or leases).

The goods are reasonably fit for the purpose

Under section 18(a) of the Sale of Goods Act, an implied condition of the contract is that the goods sold are reasonably fit for their intended purpose. This condition applies if the following three circumstances are all present: • The consumer tells the business the intended purpose for the goods.
 • The consumer shows that they are relying on the seller’s skill or judgment.
 • The seller sells the goods in the usual course of the seller’s business.
 There is considerable case law on the interpretation of when the three circumstances are present and what the standard is for reasonable fitness. This protection always applies to business-consumer sales and leases of new goods (retail waivers are void under section 20(2)). This protection probably does not apply to business-consumer sales or leases of used goods, since waivers are not void and the business may well ask the consumer to sign a waiver. This protection does not apply to consumer-consumer sales.

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