SALE OF GOODS AMENDMENT BILL 1999 Second Reading Speech

Northern Territory Second Reading Speeches

SALE OF GOODS AMENDMENT BILL 1999

(This an uncorrected proof of the daily report. It is made available under the condition that it is recognised as such.)

Mr Speaker, I move that the bill be now read a second time.

The purpose of this bill is to repeal Section 9 of the Sale of Goods Act so that the enforcibility of a contract for the sale of goods valued at $50 or more will be determined by the general law as is the case for other contracts.

A matter was recently brought to my attention involving a small business which commenced proceedings in the small claims jurisdiction of the Darwin Local Court to recover money owed to it by a former customer. The customer relied on section 9(1) of the Sale of Goods Act, namely that the contract cannot be enforced because it was not in writing. In that case there was a telephone order for goods to be manufactured and supplied at an agreed price. In accordance with its usual practice for relatively small orders, the business required no deposit and no written acknowledgment or memorandum of the order. After the goods had been made up and delivered to the business store, the customer was informed that they were available for collection. The customer subsequently purported to cancel the order and refused to make any payment for the goods. The business was left to dispose of the goods and bear the costs. Section 9 is based on section 4 of the United Kingdom Sale of Goods Act (1893) which re-enacted the provision of the Statute of Frauds Act (1677).

Following criticism of the rural body English Law Revision Committee in 1937, the section was repealed in 1954. It was also repealed in New Zealand in 1956 and has since been generally criticised and repealed in Queensland, South Australia, Victoria, the Australian Capital Territory and New South Wales. The Law Reform Commission of Western Australia, in its June 1998 report on the Sale of Goods Act (1895), recommended that it be repealed in that State. Section 9 of the Sale of Goods Act is an anachronism which serves no useful purpose and may hinder the conduct of trade and commerce in the Northern Territory. Once repealed, the enforceability of a contract for the sale of goods valued at $50 or more will be determined by the general law, as is the case for other contracts. It will also mean that contracts for the sale of goods are governed by the same legal requirements as contracts for the sale of services.

I commend the bill to honourable members.

Debate adjourned.

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