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Need to amend sale of Goods Act.

Byline: Sarmad Ali

Pakistan, India and Bangladesh should enact a common law governing sale of goods to boost economic growth and get rid of financial complexities. There is a need to modernize Sale of Goods Act, 1930 to get rid of financial complexities and economic problems. The countries of subcontinent Pakistan, India and Bangladesh should enact a common law governing sale of goods to boost economic growth and mutual trade. At the outset, it seems pertinent to discuss the origin of sales law in England and later adopted by its colonies.

A man named Chandelor purchased from a man named Lopus a certain stone for the princely sum of one hundred pounds in 17th century in England. The stone was reputed to have magical healing powers. Immediately after the purchase, Chandelor found out that the purchased stone had no powers whatsoever, let alone magical healing ones. Annoyed, Chandelor took Lopus to court of law. Before the court, Lopus objectively explained that although he had affirmed that the stone had healing powers, he had not warranted that it did. The court of law accepted Lopus' argument. And while Lopus was allowed to keep hold of the money, Chandelor was left merely with a stern warning let the buyers beware! This warning resounded in the ears of consumers throughout Britain and the Empire until Britain enacted the Sale of Goods Act, 1893 (thereinafter SOGA 1893). This law provided some respite to consumers as a buyer could now examine goods supplied to him by the seller and reject these if they were not in line with the contract between them. In certain circumstances, the buyer could cancel the contract and in others sue the seller for damages.

Britain's colonies and dominions welcomed this law and adopted it without much variation. In 1930, the Government of India followed suit and enacted the Sale of Goods Act, 1930 (hence after SOGA 1930). Post-independence, Pakistan enacted the Federal Laws (Revision and Declaration) Act, 1951, under which it adopted a number of Indian laws. The Sale of Goods Act, 1930 was one of these. SOGA 1930 was the law concerning sale of goods in Britain as well; however Britain replaced 1930 SOGA with 1979 SOGA which is now in practice across England and Wales and few changes have been introduced by SOGA 1994.

Contracts are essential for running businesses and making sales to consumers. They formalize an agreement between parties and can cover a broad range of matters, including the sale of goods and associated services such as repairs and maintenance. If we look at India, Pakistan and Bangladesh these countries still practice Sale of Good Act, 1930 incorporated by British India which seems now outdated and too vague. It is fair to demand that there is a need to amend it as soon as possible as customs and practices concerning sale of goods have been changed over the period of more than 80 years. No doubt, Pakistan, India, and Bangladesh have their own legal systems based on common law principles leading to various contract laws. It is arguable there is a case for a new optional consumer code to cover distance selling across three countries. The current text of SOGA 1930 does not always strike the right balance. Distance selling needs it clear rules, designed around automated processes.

A common sales law should be based on more general contract law principles and it is fair to think that it would benefit from greater focus on distance sales. It may be said that Pakistan, Bangladesh and India should improve their diplomatic relationship; however, trading relationship among them may play a vital role. Traders and Chambers of Commerce should demand for enactment of a common sales law which may benefit the trading corporations and consumers. The countries around the globe are moving forward to counter financial and economic crisis which can only be possible by harmonizing sales law. For example, 27 European Union member states have their own sales laws. However, to counter uncertainties and promote an air of certainty for traders and consumers, the European Commission published a proposal for a "Common European Sales Law" (or CESL), which traders may choose to use to govern their cross-border contracts. It covers the sale of goods, the supply of digital content and some related services. If the consumer explicitly agreed, the law governing the contract would then be the CESL rather than a national system. The CESL would effectively be a separate legal regime which, if chosen, would take precedence over the mandatory rules of domestic law.

Arguably, the common Sales Law breaks down barriers and maximize benefits for consumers and businesses. For example, trading companies need not to wrestle with the uncertainties that arise from having to deal with multiple national contract systems. It is also arguable that Small and Medium Sized companies may appreciate the enactment of the common Sales Law to expand their business into new markets easily. From the perspective of consumers, providing the high level of consumer protection in three countries; consumers will be able to rely on the common Sales Law as a mark of quality.

It is fair to believe that the Common Sales Law in Pakistan, Bangladesh, and India will help break down the trade barriers and give consumers more choice and a high level of protection especially when buying online. It will offer a single set of rules for cross-border contracts within the countries. For example, Bangladesh and India, as far as trade is concerned, are more developed and frequent in trade contrary to Pakistan. If the sub-continental countries fail to agree on enactment of a common Sales Law then the trading corporations and the consumers will have to suffer.
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Publication:Frontier Post (Peshawar, Pakistan)
Geographic Code:9PAKI
Date:Dec 31, 2013
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