Stevenson v Rogers: What “In the Course of a Business” Means

Stevenson v Rogers [1999] QB 1028 decides a question the Sale of Goods Act leaves open on its face: whether the quality terms in section 14(2) apply to a business selling something outside its ordinary trade.

The answer is that they do. The phrase in the course of a business is read widely, so a business selling anything at all sells in the course of that business, whether or not selling that thing is what the business does.

The case matters because the same words appear elsewhere in commercial legislation and have been read narrowly there. Knowing that the phrase has two meanings, and which applies where, is the point of studying it.

The facts

The defendant was a fisherman. He had operated a fishing boat, the Jelle, for some years, and he sold it to the claimant in order to buy a replacement.

The claimant alleged the boat was not of merchantable quality and sued under section 14(2). The defendant's answer was that selling boats was not his business — catching fish was — and that this was therefore a one-off disposal of a capital asset falling outside the section.

The distinction was not fanciful. It had support in earlier authority, and if correct it would have left the buyer with no implied quality term at all.

The decision

The Court of Appeal held that section 14(2) applied. A fisherman selling his boat sells in the course of his business, because the words cover any sale made by a business, not only sales of the kind the business makes habitually.

Two strands of reasoning support it.

The legislative history. The phrase entered section 14 through the Supply of Goods (Implied Terms) Act 1973, and the Law Commission report that produced it made clear the intention: to draw the line between business sellers and private sellers, so that the implied quality terms attach to anyone selling in a business capacity. The distinction the defendant argued for — between habitual and incidental sales — was not the distinction Parliament was drawing.

The purpose of the section. Section 14(2) allocates the risk of latent defects to the party better placed to bear it. A business selling a used asset is better placed than a private buyer, and the frequency with which it sells such assets does not change that.

Why the same phrase means something different elsewhere

The interesting part of this case is the contrast with R&B Customs Brokers Co Ltd v United Dominions Trust Ltd [1988], which read the same words narrowly.

There, a company bought a car for the use of a director, partly for business purposes. The question was whether the company dealt as a consumer under the Unfair Contract Terms Act, which turned on whether the purchase was made in the course of a business. The Court of Appeal held that it was not: a transaction only falls within the course of a business if it is integral to the business or, where merely incidental, is carried on with sufficient regularity.

The two cases sit on the same words and reach opposite readings, and the reconciliation is not that one is wrong.

The explanation is purpose. In R&B Customs the phrase determined who receives protection, so a narrow reading of the business capacity widens the class of protected buyers. In Stevenson v Rogers the phrase determined who bears an obligation, so a wide reading widens the class of sellers carrying it. Both readings expand protection; they do so by moving in opposite directions because the phrase sits on opposite sides of the transaction.

The Court of Appeal in Stevenson v Rogers addressed R&B Customs directly and declined to follow it in this context, on the ground that the two provisions have different legislative histories and different purposes.

What follows in practice

For business sellers. Any disposal of an asset — a vehicle, machinery, surplus stock, office equipment — carries the implied terms as to satisfactory quality and fitness for purpose. A business cannot escape them by pointing out that it does not normally sell such things.

For exclusion. Because the terms apply, the question becomes whether they can be excluded. Against a non-consumer buyer, exclusion is permitted if reasonable under the Unfair Contract Terms Act; against a consumer it is not. A business selling a used asset to another business should therefore address quality expressly in the contract and not assume the section does not reach it.

For buyers. A buyer from a business acquires the quality terms regardless of what the seller's trade is, which matters most in second-hand markets where the seller is a company disposing of its own equipment.

The authority the case displaced

Understanding what Stevenson v Rogers changed requires knowing what preceded it, because the earlier position was not obviously wrong.

Before 1973 the implied condition applied where goods were bought by description from a seller who deals in goods of that description. That wording plainly required the seller to trade in the kind of goods sold, and a fisherman selling a boat would have been outside it.

The 1973 Act replaced that formula with in the course of a business, and the question Stevenson v Rogers answered was whether the change was substantive or merely tidying. The Court held it was substantive, relying on the Law Commission's stated intention to widen the class of sellers caught.

This matters for how the case should be cited. It is not an interpretation of ambiguous words reached by preference; it is a conclusion about what a deliberate legislative change was meant to achieve, supported by the report that produced it. An answer that presents it as a policy choice by the court understates the reasoning.

What the section does not reach

Three limits remain after the case, and confusing the decision for a general rule about business sellers is a common error.

The seller must still be a business. An individual selling privately is outside section 14 entirely, however valuable the item and however expert they are. Stevenson v Rogers widens what counts as the course of a business; it does not abolish the business requirement.

An agent selling for an undisclosed private principal. Where a business sells on behalf of a private seller, section 14(2) can apply unless the buyer knows the principal is not selling in the course of a business or reasonable steps were taken to bring it to their notice. The provision exists because the buyer's protection should follow what the buyer could reasonably know.

The defect must engage the quality standard. Applying the section is the start of the analysis and not the end. A used boat, machine or vehicle is judged against what a reasonable person would find satisfactory for goods of that age, price and description, so establishing that section 14(2) applies frequently settles less than it appears to.

Why it is decided the way it is

The underlying allocation is worth stating because it makes the outcome look less arbitrary.

Section 14(2) is a default rule about who bears the risk of a latent defect. It assigns that risk to the seller where the seller is a business, on the reasoning that a business is better placed to know the condition of what it sells, to insure against the risk, to price it into the transaction, and to absorb the loss if it materialises.

None of those advantages depends on how often the business sells goods of that type. A fisherman knows more about the boat he has operated for years than any buyer will learn from an inspection, and he knows it precisely because operating it was his business. The wide reading is the one that matches the reason for the rule.

How the case is examined

It appears wherever the facts involve a seller who is a business but is not in the business of selling the thing in question: a farmer selling a tractor, a restaurant selling a refrigeration unit, a haulier selling a lorry.

The sequence is short. Establish that the seller is a business. Apply Stevenson v Rogers to conclude that the sale is in the course of that business, whatever the seller's trade. Apply section 14(2) and the satisfactory quality test. Then consider exclusion, which is where the buyer's status becomes decisive.

The trap is to argue the narrow reading because it feels intuitive — a fisherman is not a boat dealer — and because R&B Customs appears to support it. An answer that raises R&B Customs and explains why it does not govern section 14 is doing considerably more than one that never mentions it, and considerably more than one that applies it wrongly.

The residual difficulty

The two readings coexist uncomfortably, and the Law Commission has observed as much. A single phrase carrying different meanings in adjacent statutes is awkward however well the purposive explanation works, and the consumer legislation has since moved away from the formula: the Consumer Rights Act 2015 defines trader and consumer positively instead of relying on whether a transaction was in the course of a business.

The result is that the phrase now does less work than it did. It remains decisive under the Sale of Goods Act for business-to-business sales, where Stevenson v Rogers governs, while consumer transactions are handled by definitions that do not use it. An answer that notes this narrowing is describing the law as it now stands rather than as the case reports leave it.