Dáil Éireann debate -
Wednesday, 14 Nov 1979

Vol. 316 No. 10

Sale of Goods and Supply of Services Bill, 1978: Committee Stage (Resumed).

Question again proposed: "That section 17 stand part of the Bill."

Mr. Enright

This section deals with the liability of the seller under the guarantee. There is a problem here. The section states:

Where the seller of goods delivers a guarantee to the buyer, irrespective of when or how it is delivered, the seller shall be liable to the buyer for the observance of the terms of the guarantee as if he were the guarantor, unless he expressly indicates the contrary to the buyer at the time of delivery.

This could be used as a device for escaping responsibility under the section. The seller, by a number of devious ways, could try to get out of this. The term "expressly indicates" is used. This means that it will be both verbally expressed and in writing. If somebody is trying to sell some product through a well thought out form of words that person may pass on some item to an unsuspecting purchaser. I feel that the phrase "expressly indicates" can be used by a seller to try to escape liability. I would like the Minister to tell us whether she intends this to be verbal or written. Does she agree that there is a distinct possibility of some person evading his or her responsibility through some device?

I am sure the Minister is aware that, if matters of this nature go to court, a lot of verbal evidence will be given and there will be written evidence supplied as well. The court will construe a lot of what was discussed and will take into account things said at different times. A person who has widespread experience in selling may be able through this particular term to escape responsibility by some type of words and get around what the Minister wants to do in this Bill.

Minister of State at the Department of Industry, Commerce and Energy (Mrs. Geoghegan-Quinn)

The Deputy referred to the wording in the section "unless he expressly indicate the contrary to the buyer at the time of delivery" irrespective of when or how the guarantee was delivered. That would include either a written or an oral guarantee. There are specific provisions to ensure that the seller need not resort to devious means to exempt himself from responsibility for the guarantee but we are not providing that the manufacturer or the supplier can exempt himself from his responsibilities. It would be in the seller's interest to give the undertaking in writing because this would save arguments later when the onus is on the seller.

Mr. Enright

I do not think that the Minister gets the point. The phrase "expressly indicates" might mean that a person disposing of an item expressly indicated something but in a form of words that might be regarded, for instance, as slick salesmanship, thereby getting around what the Minister intends.

Mrs. Geoghegan-Quinn

It would be a matter for a seller to prove in a court of law that the responsibility did not rest with him. For too long the onus of proof was on the consumer but this new provision represents a much fairer way of doing business.

Mr. Enright

It seems to me that we are leaving a fairly wide avenue for the seller to evade his responsibilities. I am sure that the Minister is aware of many complaints to the Department from people who bought goods that were found not to be satisfactory. My concern is that experienced sales personnel would find a way of evading their responsibility to the consumer by using words which would not convey to the consumer what exactly was meant.

Mrs. Geoghegan-Quinn

If the seller declares expressly either in writing or orally that he will not be responsible for the manufacturer's guarantee, he will be acting within the provision of this section but that does not relieve the manufacturer or the supplier of his responsibility.

Mr. Enright

Could the Minister elaborate on the situation of a seller indicating that he would not be responsible for the manufacturer's guarantee? In such circumstances, if a buyer finds that there is a basic flaw in goods purchased, what action does he take? Does he incorporate the seller, who, in turn, incorporates the manufacturer?

Mrs. Geoghegan-Quinn

He would incorporate either the manufacturer or the supplier. We are not referring to the retailer in this context. We have disposed of his involvement by saying that the retailer may expressly indicate that he will not stand by any guarantee and in such circumstances the purchaser takes his case either to the manufacturer or to the supplier. If the product concerned were manufactured in this country it would be an easy matter to go to the manufacturer, but in the case of the goods being manufactured outside the country there would obviously be a supplier here who would have to honour the terms of the guarantee and who could be reached easily by the consumer.

Mr. Enright

Is it the position, then, that the purchaser would by-pass a seller in regard to a complaint?

Mrs. Geoghegan-Quinn

That would be the position if the seller had expressly indicated that he would not be responsible in regard to the terms of the guarantee.

Mr. Enright

Therefore, to clarify the situation, the seller need not express in writing that he will not be responsible for the guarantee.

Mrs. Geoghegan-Quinn

That is so, but it would be in his interest to put such a declaration in writing because in the event of subsequent court proceedings, the onus of proof would be on the seller.

Mr. Enright

Would it not be in the interest of both parties that the declaration be expressed in writing?

Mrs. Geoghegan-Quinn

No.

Mr. Enright

Is it the opinion of the Minister that the best course is to leave the wording of the section as it is?

Mrs. Geoghegan-Quinn

In this way the consumer is given more protection.

Mr. Enright

Regarding subsection (2) of section 17, is it the position that in respect of repairs there is reference back to the seller in the first instance?

Mrs. Geoghegan-Quinn

That would be only in the case of a seller having given a written undertaking regarding service.

Mr. Enright

So that the provision relates only to repairs carried out by the seller.

Mrs. Geoghegan-Quinn

That is so.

Mr. Enright

The buyer's rights in such a case would not be affected in any way.

Mrs. Geoghegan-Quinn

That is so.

Question put and agreed to.

SECTION 18

Question proposed: "That section 18 stand part of the Bill."

Mr. Enright

This section deals with the exclusion of the buyer's rights under guarantee and these rights are defined as not in any way excluding or limiting the rights of the buyer at common law or pursuant to statute. It provides, too, that every provision in a guarantee which imposes obligations on the buyer additional to his obligations under the contract shall be void. We welcome this section because it helps to strengthen the law in this regard. Up to now there have been clauses in guarantees that have prevented claims being allowed in court. Line 45 refers to every provision in a guarantee which impose obligation on the buyer. I am wondering if there are ways whereby a vendor might shun his responsibilities in this connection. Can the Minister visualise this happening by the use of various forms of words, for instance? Let us take the case where a person expressly indicates something during the period of negotiation. What position would arise here? Can the vendor, by discussions or discounts or in some other way, avoid this section?

Mrs. Geoghegan-Quinn

No. The Deputy spoke about the type of exclusion clauses that might be used. The most common form of wording which purport to exclude a buyer's rights under the tort of negligence is: "This guarantee is in lieu of and expressly excludes all liability to compensate for loss or damage however caused." If those words formed part of the contract and if something went wrong causing loss or damage, the consumer had no come back. Now, under this section no exclusion clauses can be included as part of the contract to which a buyer becomes a party. It protects a buyer's right at common law as well.

Mr. Enright

In connection with subsection (1), in relation to provisions in a guarantee which impose obligations on a buyer, is there any way that the vendor can manage to incorporate an arrangement in a contract so that he could avoid his responsibility here?

Mrs. Geoghegan-Quinn

There is no way he can avoid his responsibilities.

Mr. Enright

In regard to subsection (2), who is the deciding person?

Mrs. Geoghegan-Quinn

The courts.

Mr. Enright

So, if a person is dissatisfied with something, he takes an action in the courts?

Mrs. Geoghegan-Quinn

Yes.

Mr. Enright

The Bill is helping to strengthen the procedures whereby the purchaser of goods is protected. The subsection is excellent but it places the responsibility on the person who wants to bring a claim to bring an action in court. Has the Director of Consumer Affairs any powers to get involved here so that a person can avoid the expense of having to go to court? Could the Director of Consumer Affairs, or some person acting through the Department, help in the first instance to safeguard the rights of the purchaser of goods? Would it be possible to include a further section which would enable people to avoid the expense of going to court?

Mrs. Geoghegan-Quinn

The Director of Consumer Affairs is not a public defender and therefore cannot become involved. Under this section the only course open to a person aggrieved would be to go to the courts. Initially in all such matters the person would try to have it worked out between himself and the seller, supplier or manufacturer. Going to court is something that a person thinks of as a last resort. It would not be the function of the Director of Consumer Affairs to become involved in a matter of this sort because this is a civil law measure and it is up to the consumer to make up his own mind about what he wants to do.

Mr. Enright

I accept the validity in practice of what the Minister is saying. In practical terms it appears to be the final answer. In her capacity as public representative over the years and, having dealt on many occasions with people who have purchased property and had problems, the Minister will appreciate my point. Let us take the person in poor circumstances who has spent a considerable amount of money in purchasing some property and is faced with the problem of taking court action. Even in regard to matters of this nature there are columns in some newspapers, and some radio programmes, which have far greater effect on the manufacturers, suppliers and sellers of goods. "Action Call" is an example. Some person who feels he has been badly done by in regard to repairs might communicate with the paper running that column and find that, through fear of being exposed for failing to provide a service, the firm will immediately have the repairs carried out or make a refund of money. This is only one example of pressures that can be applied and all it costs the person involved is the cost of writing to some newspaper with a column such as "Action Call". That gives a person a remedy which is in many cases very successful. The point I am making is that the Director of Consumer Affairs or somebody in the Department could help to have genuine complaints investigated. The Department should have powers whereby they would be able to communicate with the manufacturer or supplier in the first instance to see what type of remedy they can obtain for a person who has a grievance. The way this is worded in the Bill at the moment leaves the person with no alternative but to go to court. It allows people to evade their responsibilities. At the moment we do not have free legal aid to deal with the case where a person is sold defective goods. I should like to see this section widened in order to safeguard consumers.

The Department of Industry, Commerce and Energy have many resources at their disposal. They should be able to ensure that pressure is put on manufacturers and others to carry out repairs where they are necessary. A safeguard such as this should be incorporated in the Bill. The Minister knows there are many ways of highlighting matters of complaint. I have written to the Department on occasion and I know that the action of the Department in investigating complaints has rectified the matter in question. If the Director of Consumer Affairs were given the necessary powers it would be some safeguard for the consumers. Such a provision should be incorporated in the Bill. Many people write to newspapers when they wish to air a grievance or a complaint against a firm for failure to carry out repairs or for selling a sub-standard product. Because of the publicity created as a result of such exposure, very often the firm in question will carry out the necessary repairs. However, for the one person who will write to the newspapers there are many others who will not because they do not want the publicity. It should be possible for those people to have the Director of Consumer Affairs or some official from the Department act on their behalf and ensure that the matter is resolved satisfactorily.

Progress reported; Committee to sit again.

Business suspended at 1.30 p.m. and resumed at 2.30 p.m.