An Act to provide for the formation, effect, obligations and performance of contracts for the sale of goods and supply of services; to provide for remedies of the parties under those contracts; to provide for consumer protection; and for related matters.

Sale of Goods and Supply of Services Act

<p>The Sale of Goods and Supply of Services Act (Cap. 292) governs contracts for buying and selling goods and services in Uganda. It applies to everyone – individuals, businesses, and organizations – who enter into such contracts. The Act defines your key rights, such as receiving goods that match their description, and your duties, like paying a reasonable price if none is agreed. Understanding this Act helps you know what to expect and how to protect yourself when making purchases or providing services.</p>

<h3>Key Definitions</h3>
<p>The Act uses special terms that affect your rights. A <strong>condition</strong> is a vital term you can reject goods for breaching, while a <strong>warranty</strong> only lets you claim damages. <strong>Goods</strong> include physical items, computer software, and unborn animal young. <strong>Services</strong> cover banking, transport, entertainment, and club memberships, but not employment contracts. <strong>Good faith</strong> simply means acting honestly, even if carelessly. <strong>Insolvency</strong> is defined by another law, and <strong>deliverable state</strong> means goods are ready for you to take as agreed.</p>

<h3>Scope and Application</h3>
<p>The Act covers:</p>
<ul>
  <li><strong>Sale of goods</strong>: immediate transfer (sale) or future transfer (agreement to sell) of ownership for a price.</li>
  <li><strong>Supply of services</strong>: any service provided for payment, except employment or apprenticeship contracts.</li>
  <li><strong>Future goods</strong>: goods not yet made or acquired by the seller – contracts for future goods are treated as agreements to sell.</li>
</ul>
<p>A contract can be made in writing, orally, partly both, via data message (e.g., email), or by conduct – unless another law requires a specific form.</p>

<h3>Capacity to Contract</h3>
<p>You have full legal capacity to buy or sell goods or services if you are at least 18 years old, of sound mind, and not disqualified by law. People aged 16 or older may have capacity as allowed by the Constitution. If you sell <strong>necessaries</strong> (basic goods or services suitable to a person's needs) to a minor or someone mentally incapacitated or drunk, that person must pay a reasonable price.</p>

<h3>Price and Valuation</h3>
<p>You have the right to agree on a price in your contract. The price can be fixed, determined by a method (like market rate), or based on your past dealings. If no price is set, you must pay a <strong>reasonable price</strong> based on the facts, including current market price. If you agree to let a third party set the price and they fail, you can cancel the agreement. If you already kept goods or received partial service, you owe a reasonable amount.</p>

<h3>Time and Conditions</h3>
<p>Unless the contract says otherwise, time of payment is not essential – you don't automatically have to pay exactly on time. Other time requirements (like delivery) depend on the contract. For services, if no deadline is set, the service must be completed within a <strong>reasonable time</strong>. A breach of a <strong>condition</strong> allows you to reject goods, but you can choose to treat it as a warranty (damages only). After you accept goods, a breach of condition usually only gives you the right to damages.</p>

<h3>Implied Terms on Title and Description</h3>
<p>When you buy goods, the seller automatically has the right to sell them. Goods must be free from hidden debts or charges not disclosed to you. You have the right to peaceful possession without interference. Goods must match their description – even if you pick them out yourself, the sale is by description. If bought by sample and description, goods must match both.</p>

<h3>When Contracts Become Void</h3>
<p>The contract is void if specific goods have already perished before the contract was made, without the seller knowing. Similarly, if goods perish after agreement but before risk passes, and neither party is at fault, the contract becomes void automatically. This means you are not obligated to pay or deliver.</p>

<p>This Act empowers you as a buyer or seller. Always read your contract carefully and seek legal advice if you are unsure about your rights or duties.</p>

If you sign a contract that looks like a sale but is really a mortgage, pledge, charge, or other security arrangement, the rules of this Act do not apply. This means the legal protections and obligations for buyers and sellers under this law will not cover that transaction. Instead, the transaction is governed by the law that deals with security interests. You cannot rely on this Act to enforce rights or remedies in such disguised security deals.

Section 72 explains that the Sale of Goods Act does not apply to transactions meant as mortgages, pledges, charges, or other security.

Section 72: Non-application of sale rules to security deals

The provisions of this Act relating to contracts of sale do not apply to any transaction in the form of a contract of sale which is intended to operate by way of mortgage, pledge, charge or other security.

Section 72: Non-application of sale rules to security deals

72.Non-application

Plain English Summary