The Sale of Goods Act creates an implied condition in sales contract that the products being purchased are reasonably fit for their purpose. Some courts have held that a product is reasonably fit if it meets the reasonable expectations of the buyer and the seller of the goods. The Sale of Goods Act lays down a small number of compulsory legal rules concerned with an array of presumptions and implied terms, which aim to reflect the commercial expectations in the most commonly agreed sales contracts. The Sale of Goods Act 1979 protects consumers if the seller sells in the course of a business as it restricts the use of caveat emptor rule, however this protection varies if the seller is a private seller as the rule may still apply.
Due to harmonisation of the VAT system in the EU, there has been a significant increase in cross-border trade. The harmonisation included the creation of cross-border trade which would ensure a significant level of trade in goods and services, thereby lessening the possibility of VAT fraud and abuse of law. The Commission has constantly highlighted the vulnerability of the VAT system and due to the complexity of the 28 jurisdictions engaged in cross-border trade, the EU legislator is faced with a constant challenge of preventing VAT as an environment for abuse or VAT fraud.
4.1.2 Vulnerability 2:
4.2 The fundamental distinction between abuse of law and abuse of rights
In the context of taxation, the CJEU has defined “abuse” as a form of tax minimisation, which through misuse of legal forms achieves a result which is not in compliance with system principles. This means that though tax abuse and tax avoidance are related, they do not coincide.
At this juncture, it is important to note that both abuse of rights and abuse of law are not necessarily the same. Generally speaking, abuse of law indicates abuse in Union law, whereas abuse of rights indicates abuse of Union law. The former may be defined as a situation where a person relies on a European legal right to circumvent or displace national law, while taking advantage of a right in European law, but in a manner running contrary to its spirit constitutes the latter.
In 2006, the CJEU extended the abuse of law principle in the Halifax to apply to the field of VAT. The abstract distinction between both abuse of law and abuse of rights is based on a dictum from Centros, where it was provided that abuse of law involves avoiding national provisions through claiming fundamental freedoms, whereas abuse of rights involves abusing rights directly provided by EU law. According to this dictum, a Member State:
“is entitled to take measures to prevent certain of its nationals from attempting, under cover of the rights created by the Treaty, improperly to circumvent their national legislation or to prevent individuals from improperly or fraudulently taking advantage of provisions of Community law”.
Thus, abuse of law is illegitimate from the instrument point of view. Here, a person improperly uses a legal tool (often a fundamental freedom) with the aim of avoiding national tax meas
