26 Questions
What is the exception to the principle of caveat emptor, and what are the conditions that need to be fulfilled for this exception to apply?
The exception is the implied condition as to fitness for particular purpose, and the conditions are: disclosure of purpose, reliance on seller's skill and judgment, goods supplied are the kind that the seller normally supply in his business, and the goods were not bought under patent or trade name.
What is the implied condition as to merchantable quality, and what is the exception to this condition?
The implied condition is that the goods must be of a quality suitable for its use, and the exception is if the buyer has examined the goods and the defects ought to have been revealed.
What is the implied condition in a sale by sample, and what must the goods correspond with?
The implied condition is that the goods bought in bulk must correspond with the sample, both physically and in quality.
What is the significance of the case of Griffiths v Peter Conway Ltd in the context of implied conditions?
It illustrates the importance of disclosure of purpose in the implied condition as to fitness for particular purpose.
What is the relevance of the case of Cammell Laird & Co v Manganese Bronze & Brass Co Ltd?
It illustrates the importance of reliance on the seller's skill and judgment in the implied condition as to fitness for particular purpose.
What is the exception to the implied condition as to fitness for particular purpose, in terms of the type of goods bought?
The exception is if the goods were bought under patent or trade name.
What is the significance of the case of Wilson v Ricket, Cockerell & Co Ltd in the context of implied conditions?
It illustrates that if goods are unmerchantable, the seller is liable for breach of implied condition even if goods were sold under patent or trade name.
What is the relevance of the case of Wren v Holt in the context of implied conditions?
It illustrates that even if examination/inspection is carried out but could not be discovered, implied condition as to merchantable quality applies.
What is the condition for the buyer to compare the bulk with the sample?
The buyer must be given a reasonable opportunity to compare the bulk with the sample.
What is the implied condition for goods to be free from latent defects?
The goods must be free from latent defects rendering them unmerchantable.
Who are bound by the implied conditions and warranties?
Only the contracting parties, i.e., the buyer and seller.
What is the rule that states no one can transfer a better title than they have themselves?
Nemo dat quod non habet.
What is the exception to the rule 'nemo dat quod non habet' where the owner makes a representation to the buyer?
Estoppel.
What is the exception to the rule 'nemo dat quod non habet' where a mercantile agent sells goods?
Sale by mercantile agent.
What is the exception to the rule 'nemo dat quod non habet' where one of the joint-owners sells goods?
Sale by one of the joint-owners.
What is the exception to the rule 'nemo dat quod non habet' where a seller sells goods under a voidable contract?
Sale under a voidable contract.
What is the exception to the rule 'nemo dat quod non habet' where a seller sells goods to a second buyer?
Sale by a seller in possession after sale.
What is the exception to the rule 'nemo dat quod non habet' where a buyer sells goods to a third party?
Sale by a buyer in possession after sale.
What is the main difference between a warranty and a condition in a sale of goods contract?
A warranty is a stipulation collateral to the main purpose of the contract, and breach of it can only lead to damages, whereas a condition is a fundamental term that goes to the root of the contract, and breach of it can lead to repudiation of the contract.
What is the implied term under section 14(a) of the Sale of Goods Act, and what is the consequence of a breach of this term?
The implied term is that the seller has the right to sell the goods, and the consequence of a breach is that the buyer can repudiate the contract.
What is meant by 'quiet possession' in the context of section 14(b) of the Sale of Goods Act, and what is the remedy for a breach of this warranty?
Quiet possession means the ability to enjoy the usage of the goods without interference from anyone, and the remedy for a breach is damages.
What is an encumbrance in the context of section 14(c) of the Sale of Goods Act, and what is the remedy for a breach of this warranty?
An encumbrance is a financial bar or restriction, such as a charge or outstanding debt, and the remedy for a breach is damages.
What is the implied condition under section 15 of the Sale of Goods Act, and what is the significance of a description being specific or general?
The implied condition is that the goods correspond with the description, and a specific description requires a higher level of accuracy, whereas a general description allows for some discrepancies.
What is the difference between a specific description and a general description in the context of section 15 of the Sale of Goods Act?
A specific description is given in detail, and a small discrepancy would amount to a breach, whereas a general description is more vague, and a considerable discrepancy is required to amount to a breach.
What is the significance of the case of Rowland v Divall in the context of implied terms in the Sale of Goods Act?
The case highlights the importance of the seller having the right to sell the goods, and the buyer's right to repudiate the contract if this condition is not met.
What is the significance of the case of Microbeads A.G v Vinhurst Road Markings Ltd in the context of implied warranties in the Sale of Goods Act?
The case highlights the importance of the implied warranty of quiet possession, and the buyer's right to damages if this warranty is breached.
Study Notes
Cases on Description
- Nagurdas Purshotumdas vs. Mitsui Bussan Kaisha
- Tham Cheow Toh
Implied Condition as to Fitness for Particular Purpose - S.16(1)(a)
- Exception to caveat emptor
- Conditions to be fulfilled:
- Disclosure of purpose
- Reliance on seller's skill and judgment
- Goods supplied are the kind that the seller normally supplies in their business
- Goods were not bought under patent or trade name
- Cases:
- Griffiths v Peter Conway Ltd: Disclosure of purpose
- Sunrise Bhd & Anor v L&M Agencies Bhd: Disclosure of purpose
- Priest v Last: Disclosure of purpose
- Cammell Laird & Co v Manganese Bronze & Brass Co Ltd: Reliance on seller's skill and judgment
- Asington Piggeries Ltd v Cristopher Hill Ltd: Goods must be normally supplied by seller
- Baldry v Marshall: Not bought under patent or trade name
Implied Condition as to Merchantable Quality - S.16(1)(b)
- Merchantable quality: Goods must not be defective
- Goods must be of a quality suitable for its use
- Exception: If buyer has examined the goods and defects ought to have been revealed, buyer cannot claim that seller has breached the condition
- Cases:
- Wren v Holt: Examination/inspection carried out but defects could not be discovered
- Thornett & Fehr v Beers & Sons: Examination/inspection carried out but defects could not be discovered
- Wilson v Ricket, Cockerell & Co Ltd: Goods are unmerchantable, seller is liable for breach of implied condition even if goods were sold under patent/trade name
Implied Condition in a Sale by Sample - S.17(2)
- Goods bought in bulk must correspond with sample (physically and quality)
- Buyer must be given reasonable opportunity to compare the bulk with the sample
- The goods must be free from latent defect rendering them unmerchantable
- Cases:
- Drummond v Van Ingen
- Godley v Perry
Implied Conditions and Warranties
- Only binding on contracting parties (buyer and seller) due to privity of contract
- Those not privy to the contract may bring an action under tort if applicable
- Case: Donoghue v Stevenson
Nemo Dat Quod Non Habet Rule
- Section 27
- No one can transfer a better title than he has himself
- Cases:
- Lim Chu Lai v Zeno Ltd
- Commercial & Savings Bank of Somalia v Joo Seng Co
Exceptions to Nemo Dat Quod Non Habet Rule
- Exception 1: Estoppel
- Owner makes representation to the buyer
- Buyer buys from the seller
- Owner is estopped from denying seller's authority even though the owner did not authorize the seller
- Exception 2: Sale by Mercantile Agent
- Owner gives possession of goods and/or documents of title to the mercantile agent
- Mercantile agent sells in his ordinary course of business
- Buyer gets good title
- Exception 3: Sale by One of the Joint-Owners
- Joint owners own goods together
- One joint owner sells goods with the consent of the other joint owner
- Buyer gets good title
- Exception 4: Sale Under a Voidable Contract
- Contract of sale between A and B is a voidable contract
- B sells to C in good faith
- C gets good title
- Exception 5: Sale by a Seller in Possession After Sale
- Seller retains possession of goods and sells to a second buyer
- Second buyer gets good title
- Exception 6: Sale by a Buyer in Possession After Sale
- Buyer gets possession of goods but not title
- Buyer sells to another buyer in good faith
- Second buyer gets good title
Remedies for Seller
- Buyer breaches contract if:
- He does not take delivery of the goods
- He does not accept the goods
- He does not pay for the goods
- Seller becomes an 'unpaid seller' (Section 45)
- When buyer breaches the contract, the unpaid seller's normal remedy is to sue for damages or the price of the goods
Implied Term/Condition as to Title - Section 14 (a)
- Seller must have title/ownership/property in goods to transfer to buyer in a sale of goods contract
- If seller does not have title, seller is in breach and buyer can repudiate contract
- Case: Rowland v Divall
Implied Warranty as to Quiet Possession - Section 14 (b)
- Quiet possession: Ability to enjoy usage of goods without interference from anyone (seller or third party)
- If buyer's quiet possession is disturbed, it is a breach by seller
- Buyer can only get damages
- Case: Microbeads A.G v Vinhurst Road Markings Ltd
Implied Warranty that Goods are Free from Encumbrances - Section 14 (c)
- Encumbrances: Impediment/financial bar or restriction e.g. charge or an outstanding debt
- Buyer can only claim damages when seller breaches the warranty
- Case: Steinke v Edwards
Implied Condition that the Goods Correspond with Descriptions - Section 15
- Buyer has not seen the goods and is relying on description
- Description is given specifically or in detail
- A small discrepancy would amount to a breach of implied condition
QUIZ on Contract Law cases including Nagurdas Purshotumdas, Associated Metal Smelters, Arcos Ltd, and others. Also covers IMPLIED CONDITION AS TO FITNESS FOR PARTICULAR PURPOSE under Section 16(1)(a).
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