Shoppers in Ghana are all too familiar with the ‘goods sold are not returnable’ phrase, which is commonly displayed in shops or included on receipts. The policy is often inflexible, and sellers are almost invariably unwilling to accept returns or issue refunds, much to the frustration of the customers.
Have you ever attempted to return a product you purchased, only to be denied? Were you turned away by the store’s customer service, on the basis that the store practiced a “no return or refund” policy?
It is not uncommon in today’s fast-paced commercial world to buy a product and later wish to return it with the expectation of a refund. This might be because the product is not suitable for its intended purpose, has defects, or you have found a new seller who would sell the same product at a lower price.
The general principle of law, is that in a sales contract, the seller’s fundamental obligation is to deliver the goods to the buyer. This is provided for under section 8 of the law on the Sale of Goods (Act 137), which is the primary legislation on contracts in Ghana.
After delivery, the contract is typically considered concluded, and neither party can generally bring a claim regarding the goods unless explicitly agreed upon or allowed by law. This principle is often summarized in the phrase “caveat emptor,” which means “let the buyer beware.” Subject to some exceptions as will be discussed shortly, this rule signifies that the buyer should exercise due diligence before making a purchase.
Consequently, the law would typically permit sellers to implement a “goods sold are not returnable” policy. The justification for this rule used to be that it is reasonable to assume the buyer, as the party parting with money, should bear the primary responsibility for ensuring the satisfaction of their purchase. Historically, markets were overt, and buyers had ample opportunity to examine and inspect goods for quality and fitness for purpose before making a purchase.
Recent developments in commerce, particularly the rise of e-commerce and related ‘Gen-Z’ trends, have necessitated a rethinking of the law. The traditional “buyer beware” principle is no longer sufficient to promote commercial convenience.
Act 137 generally recognizes the “buyer beware” rule as the general principle but introduces important exceptions to this general rule to protect customers. These exceptions mean that the seller’s “no return or refund” policy would not apply where a buyer’s case meets the criteria. In these cases, the buyer has the right to return the product and request a refund.
First, under section 13 (1)(a), where a product has defects that were not declared or known to the buyer before or at the time of purchase, the buyer can lawfully return the product and demand a refund of their purchase price. However, it is important to note that the law also requires the buyer to act reasonably.
In this regard, if the buyer had the opportunity to examine the goods for defects that should have been revealed by the examination, they cannot later reject the product and seek a refund. The law will not assist a buyer who fails to reasonably examine the goods to discover patent defects, for instance.
Secondly, section 13 (1)(b) provides that if the seller sold the products in the ordinary course of their business and the buyer explicitly or by implication informed the seller of the intended use of the goods, the “goods sold are not returnable” policy cannot prevent the buyer from returning the product and seeking a refund if the goods are not reasonably fit for that purpose.
For instance, if a buyer purchases a laptop from a laptop dealer and, prior to the purchase, expresses a requirement for the laptop to be capable of performing programming tasks, the seller cannot rely on a “no return or refund” policy if the buyer subsequently alleges that the laptop is unable to perform those tasks. The buyer would, however, bear the burden of proving to the seller that the laptop is indeed incapable of performing the specific programming tasks required.
It is undeniable that online sales are increasingly competing with physical markets. The unique characteristics of online transactions necessitate regulation to protect consumers and ensure fair trade practices.
The Electronic Transactions Act, a law passed in 2008, contains provisions that regulate aspects of online transactions. The Act mandates suppliers to provide accurate and detailed descriptions of goods offered online to enable consumers to make informed decisions. Where suppliers fail to comply with this requirement or provide substantially different goods, consumers can terminate the contract within 14 days of receipt. A ‘no-return policy’ would not exempt the seller from being held liable.
Conclusion
The law permits sellers and supermarkets to use the ‘goods sold are not returnable’ policy so as to protect their commercial interests. This policy is however subject to several abuses by the seller and creates harsh conditions for the buyer. In fact, if left unchecked, it is very possible to find a vendor attempting to sell cars that have no engines, or vehicles which have engines, but which will take one and a half hours to travel three miles.
To prevent these abuses, the law places a duty on sellers to ensure that the goods sold are free from defects and are reasonably fit for a declared purpose. Unless the products were in fact, examined by the buyer or where the seller did not sell the goods in the ordinary course of their business, the law will always protect the somewhat unwary buyer from the all-too-experienced seller.
Online transactions are surpassing physical market sales, with numerous sales contracts concluded in mere seconds. Although the Electronic Transactions Act attempts to regulate these transactions, it does not comprehensively address their complexities.
The legislation fails to fully outline the rights and duties of both parties in online sales contracts. It is hoped that lawmakers will consider enacting dedicated legislation to govern online transactions. In the meantime, sellers and buyers in both physical and online markets must ensure they are certain about the products being sold and purchased, and that goods are free from defects.
Alhassan Aboagye on behalf of OSD & Partners
