Atiyah and Adams' Sale of Goods (Part II) PDF

THE DUTY TO SUPPLY GOODS OF THE RIGHT QUALITY 117 case purchased chili powder from the defendants. An express term of the contract required the powder...

THE DUTY TO SUPPLY GOODS OF THE RIGHT QUALITY 117 case purchased chili powder from the defendants. An express term of the contract required the powder to be free from ‘foreign and extraneous matter’, clearly important in the circum- stances. The powder supplied was contaminated with a small amount of industrial dye. The Food Standards Agency accordingly required food products manufactured using the powder to be recalled. The court held that the express term of the contract imposed an absolute obligation.20 It was also held that the chili was not of satisfactory quality as required by s. 14(2)21 or fit for its purpose as required by s. 14(3).22 On the other hand, the terms as to quality and fitness implied by the Act are all condi- tions in English law,23 breach of which under the Act, until it was modified by the 1994 Act, justified rejection of the goods, no matter how trivial the breach. The 1994 Act has modified the right of rejection, but it does not eliminate the distinction between condi- tions and warranties and innominate terms, so there will continue to be occasional diffi- culties over the need to distinguish between express and implied terms. The legal rules applicable to the two classes of terms will remain different. Although the restrictions on the buyer’s right to reject for slight defects bring the statutory implied terms closer to innominate express terms, it does not equate them. 2 Implied terms that the goods must correspond with their description Sections 13(1) and (2) are as follows: (1) Where there is a contract for the sale of goods by description, there is an implied term that the goods correspond with the description. (2) If the sale is by sample, as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description. The relationship between s. 13 and the common law distinction between representations and contractual terms The first question to be examined here is the effect of s. 13 on the traditional common law distinction between mere representations on the one hand and terms of the contract on the other hand.24 At first blush it might seem that s. 13 does away with this distinction in the case of a sale by description since the section states that ‘there is an implied term that Copyright © 2020. Pearson Education, Limited. All rights reserved. the goods shall correspond with the description’. If the section applied only to those parts of the description which amounted to contractual terms in any event, it would seem to be performing the somewhat odd (and redundant) function of declaring that it is an implied term that the seller must comply with express terms of the contract. However, despite this oddity, the section does not seem, in legal theory at least, to obliterate the distinction between mere representations and contractual terms. For instance, in T & J Harrison v Knowles and Foster,25 the sellers sold two ships to the buyers, each of 20 See Arcos Ltd v Ronaasen & Son AC 470 p. 126. 21 See p. 130 et seq. 22 See p. 165 et seq. 23 1994 Act, Sched. 2, para. 5 24 See p. 67 et seq. 25 1 KB 608. Twigg-Flesner, C., & Canavan, R. (2020). Atiyah and adams' sale of goods. Pearson Education, Limited. M07 Atiyah and Adams Sale of Goods 51028.indd 117 27/04/2020 17:18 Created from city on 2024-12-28 20:07:01.  118 THE DUTIES OF THE SELLER which had been stated in particulars supplied to the buyers to have a deadweight capacity of 460 tons, but no reference was made to this in the actual memorandum of sale. In fact, the capacity of each ship was only 360 tons. In one sense these ships had been sold by description and the description certainly referred to their capacity. But the Court of Appeal held that the statements about the capacity were merely representations.26 So also in a very careful judgment in the New Zealand case of Taylor v Combined Buyers Ltd27 – which seems to be the only case in which this question has been explicitly and fully considered – Salmond J held that the section does not affect the traditional distinction between mere representations and terms of the contract. Similarly, in the well-known case of Oscar Chess Ltd v Williams,28 where the seller sold a car which he described as a ‘1948 Morris’, contrary to the facts, it does not seem to have occurred to anybody that the state- ment could have been treated as part of the description of the car and an action brought under s. 13, unless the buyer could first establish that the statement was a term of the contract and not a mere representation. It could, no doubt, be argued that the sale in this case was not a sale by description but a sale of a specific chattel, but it would certainly be strange if this distinction were to lead to the same statement being held a representation in one case and a condition in another. In the case of Harlingdon & Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd,29 it was held that the sale of a painting as a ‘Gabriele Münter’ (a German expressionist painter) was not a sale by description. In this case, it was held that the fact that a description was applied to goods either in the negotiations leading up to a contract, or in the contract itself, did not necessarily make it a sale by description for the purposes of s. 13(1). For the sale to be by description, the description had to be influential in the sale so as to become an essential term or condition of the contract. It was possible for a description to become a term of the contract although it was not relied on, but the court had to be able to impute to the parties a common intention that it should be a term of the contract before the sale could be said to be ‘by description’, and in determin- ing what the intention of the parties was, the absence of reliance on the part of the buyer was a very relevant factor. The plaintiff dealers were specialists in German expressionist paintings, and the defendant dealers were not, and the plaintiffs had inspected the painting. Nourse LJ observed: For all practical purposes, I would say that there cannot be a contract for the sale of goods by description where it is not within the reasonable contemplation of the parties that the buyer is relying on the description.30 Copyright © 2020. Pearson Education, Limited. All rights reserved. On the other hand, in Beale v Taylor,31 the Court of Appeal appears to have come very close to disregarding the distinction between representations and contractual terms by giving a wide application to s. 13 of the Act. In this case, the defendant advertised his car for sale as a ‘Herald, convertible, white, 1961’ and it was bought by the plaintiff after examination. In fact, the car was made of two parts which had been welded 26 Cf. Howard Marine & Dredging Co v Ogden (Excavations) Ltd QB 574, where, on similar facts, damages were awarded under s. 2(1) of the Misrepresentation Act 1967. 27 NZLR 627. 28 1 WLR 370. 29 1 QB 564. 30 At p. 574. 31 1 WLR 1193. See also Fordy v Harwood, 30 March 1999 (unreported). Twigg-Flesner, C., & Canavan, R. (2020). Atiyah and adams' sale of goods. Pearson Education, Limited. M07 Atiyah and Adams Sale of Goods 51028.indd 118 27/04/2020 17:18 Created from city on 2024-12-28 20:07:01.  THE DUTY TO SUPPLY GOODS OF THE RIGHT QUALITY 119 together, only one of which was from a 1961 model. Although the facts bore some resemblance to those in T & J Harrison v Knowles and Foster (which was not cited), the Court of Appeal here held that the words ‘1961 Herald’ were part of the contractual description. If this case illustrates the modern trend, it seems to suggest that, whatever the legal theory of the matter may be, in practice s. 13 makes it easier for a buyer to argue that a descriptive statement by a seller is a contractual term and not a mere rep- resentation. The decision may well reflect a modern trend to hold that statements about the goods by sellers are to be treated as contractual terms rather than mere representa- tions, particularly where the buyer was reasonable in relying on the statement.32 After all, the seller in Beale v Taylor presumably obtained a price well above the fair value of the vehicle. In the Oscar Chess case, by way of contrast, the decisive fact may have been that the buyer, a car dealer, was not reasonable – or had no right – to rely on what the seller, a private person, had said.33 However, although this question remains tantalisingly undiscussed in the cases, it seems reasonably clear from some House of Lords decisions, and the case of Harlingdon & Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd,34 that s. 13 of the Act does not automatically convert any or all descriptive words into conditions, or even terms. Some descriptive words may be inserted in the contract without having any legal force at all. For example, in the Reardon Smith Lines case35 where the shipbuilders contracted to build a vessel to a certain specification at Yard No. 354 at Osaka Zosen, and the ship was in fact built at another yard, it was held that these words had no legal significance at all. They were of no substantial importance to the parties, who were not concerned with where the ship was built (though it might of course have been different if that particular yard had a particular reputation among shipowners and shipbuilders); the important descriptive words were in the specification, and that specification had to be complied with. Since the words in this case described the yard where the ship was to be built and there was no suggestion that the shipbuilders had not intended to build the ship there, these words could not even have amounted to a misrepresentation. In other cases, however, descriptive words which fail to amount to an implied condition under s. 13 may simply be a misrep- resentation, and may give the representee the usual remedies available for a misrepresentation. In the Reardon Smith Lines case (which did not involve a contract of sale)36 and again in Ashington Piggeries v Christopher Hill Ltd (which did),37 the House of Lords discussed Copyright © 2020. Pearson Education, Limited. All rights reserved. another question, closely related to the one above, namely whether compliance of the goods with all parts of a description is required by the implied term in s. 13, or whether parts of the description can be treated as giving rise to liability by way of a warranty or 32 See Fordy v Harwood, 30 March 1999 (unreported). 33 In previous editions it was suggested that this was contrary to the orthodox view which holds that a state- ment is a contractual term if this is the intention of the parties, and that Australian cases seem to follow this orthodoxy more frequently than English ones – see, e.g., J J Savage & Sons v Blakeney (1970) 119 CLR 435. This may be true of Australian cases, but so far as the English courts are concerned, Oscar Chess seems to be in line with orthodox thinking – see Harlingdon & Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd, n. 29 above. 34 See n. 29 above. 35 1 WLR 989, above, p. 85. 36 For the reasons given at p. 68. 37 AC 441. Twigg-Flesner, C., & Canavan, R. (2020). Atiyah and adams' sale of goods. Pearson Education, Limited. M07 Atiyah and Adams Sale of Goods 51028.indd 119 27/04/2020 17:18 Created from city on 2024-12-28 20:07:01.  120 THE DUTIES OF THE SELLER innominate term. In both cases, it seems to have been taken for granted that not all descriptive words automatically fall within s. 13; the discussion in the two cases centred round the proper test for determining which parts of the descriptive words fall within s. 13 and which do not. As regards any other words, it was stated explicitly (e.g. by Lord Diplock)38 that these might still give rise to a warranty (or, it can be added, an innominate or intermediate term). It thus seems established that s. 13 does not override the traditional distinctions which need to be drawn between (a) descriptive words which are words of contractual obligation and those which are mere representations, or even without any legal effect, and also between (b) descriptive words which are words giving rise to liability by way of condition, on the one hand, or by way of warranty or innominate or interme- diate term, on the other.39 The next question concerns the test by which it can be decided what words of descrip- tion do fall within s. 13 and thereby give rise to liability if the description is not complied with. In this connection, some of the case law has adopted a tendency to overlook the above distinctions and treat all descriptive words as though they must create liability under s. 13. For example, in Arcos Ltd v E A Ronaasen & Son,40 the buyers agreed to buy a quantity of staves which they required, as the sellers knew, for making cement barrels. The contract stated that the staves were to be half an inch thick. In fact, only about 5 per cent conformed to this requirement, but a large proportion was over half an inch, but not more than 9/10 of an inch; some were larger than this but less than 5/8 inch and a very small pro- portion were larger than that. It was found as a fact that the goods ‘were commercially within and merchantable under the contract specification’, and also that they were rea- sonably fit for the purpose for which they were sold. Despite these findings, it was held by the House of Lords that the buyers were entitled to reject the goods for breach of s. 13.41 Lord Atkin said:42 It was contended that in all commercial contracts the question was whether there was a ‘substan- tial’ compliance with the contract: there must always be some margin: and it is for the tribunal of fact to determine whether the margin is exceeded or not. I cannot agree. If the written contract specifies conditions of weight, measurement and the like, those conditions must be complied with. A ton does not mean about a ton, or a yard about a yard. Still less when you descend to minute measurements does 1/2 inch mean about 1/2 inch. If the seller wants a margin he must and in my experience does stipulate for it... No doubt there may be microscopic deviations which business men and therefore lawyers Copyright © 2020. Pearson Education, Limited. All rights reserved. will ignore... But apart from this consideration the right view is that the conditions of the contract must be strictly performed. If a condition is not performed the buyer has a right to reject.43 38 AC 441 at p. 503. 39 It is surprising that in the Reardon Smith Lines case the leading speech of Lord Wilberforce makes no refer- ence to the Ashington Piggeries case (which, indeed, seems not to have been cited, somewhat astonishingly) and his words are a trifle hesitant on this last point. But if his opinion is taken together with the speeches in the Ashington Piggeries case, it does seem clear that the proposition stated in the text has the support of the House of Lords. 40 AC 470. See also Rapalli v K L Take 2 Lloyd’s Rep 469, a very similar case. 41 The right to reject in such a case is now modified by s. 15A, inserted by the 1994 Act – see below, p. 469 et seq. 42 AC 470, 479–80. 43 See also Hazlewood Grocery Ltd v Lion Foods Ltd EWHC 1887 (QB), p. 122. Twigg-Flesner, C., & Canavan, R. (2020). Atiyah and adams' sale of goods. Pearson Education, Limited. M07 Atiyah and Adams Sale of Goods 51028.indd 120 27/04/2020 17:18 Created from city on 2024-12-28 20:07:01.  THE DUTY TO SUPPLY GOODS OF THE RIGHT QUALITY 121 Perhaps the most extreme case was Re Moore & Co Ltd and Landauer & Co Ltd44 where buyers agreed to buy 3,000 tins of Australian canned fruit packed in cases of 30 tins. When the goods were delivered it was found that about half the cases contained only 24 tins, although the correct total quantity was delivered altogether. The arbitrator found that there was no difference in value between tins packed 30 to a case and those packed 24 to a case, but despite this finding it was held by the Court of Appeal that the buyers were entitled to reject the whole consignment on the ground that there had been a breach of s. 13.45 In the Reardon Smith Lines case, Lord Wilberforce (speaking for a majority of the House of Lords) expressed serious doubts as to the correctness of this decision, which he found ‘excessively technical’.46 In the Ashington Piggeries case, and again in the Reardon Smith Lines case, the House of Lords seems to have accepted that the only descriptive words which are to be treated as the subject of s. 13 are words which identify the subject-matter of the contract. For example, in the Ashington Piggeries case, Lord Diplock said:47 The ‘description’ by which unascertained goods are sold is, in my view, confined to those words in the contract which were intended by the parties to identify the kind of goods which were to be supplied. It is open to the parties to use a description as broad or as narrow as they choose. But ultimately the test is whether the buyer could fairly and reasonably refuse to accept the physical goods proffered to him on the ground that their failure to correspond with what was said about them makes them goods of a different kind from those he had agreed to buy. The key to s. 13 is identification. The concept of words of identification is, however, more troublesome than seems to be implied. In the Reardon Smith Lines case, it was argued for the appellants that the words in the contract requiring the ship to be built at the particular yard specified were words of identification because it was only with the aid of these words that it was possible to iden- tify the vessel being built at a particular yard with the vessel contemplated under the contract. This argument was rejected by the House of Lords, and Lord Wilberforce pointed out that there are two different meanings to the idea of words of ‘identity’ or ‘identification’. It is only words whose purpose is to state or identify an essential part of the description of the goods which are words of identity in this special sense, and so attract the implied condition in s. 13. Words which merely identify the goods in the sense of pointing out where they can be found are not words of identity in this special sense. Lord Wilberforce also expressed dissatisfaction, as already noted, with the excessive technicality of some of the cases under s. 13 such as Re Moore and Co Ltd and Landauer,48 and indi- Copyright © 2020. Pearson Education, Limited. All rights reserved. cated that it would be better if s. 13 were confined to descriptive words which constitute a ‘substantial ingredient of the “identity” of the thing sold’, other words being left to give rise to liability for breach of warranty or of an intermediate or innominate term. He added, however, that a different view might still be taken of contracts for the sale of unas- certained future goods (e.g. commodities – and he probably had Arcos v E A Ronaasen particularly in mind) where each detail of the description must be assumed to be vital. 44 2 KB 519. 45 See, however, below, p. 469 et seq. for changes effected by the 1994 Act on the right of rejection. 46 For a defence of these decisions see Sealy and Hooley, Commercial Law, Text, Cases and Materials (3rd edn, 2003, Butterworths), pp. 378–9. 47 AC at pp. 503–4. 48 1 KB 519. Twigg-Flesner, C., & Canavan, R. (2020). Atiyah and adams' sale of goods. Pearson Education, Limited. M07 Atiyah and Adams Sale of Goods 51028.indd 121 27/04/2020 17:18 Created from city on 2024-12-28 20:07:01.  122 THE DUTIES OF THE SELLER These words of Lord Wilberforce concerning the concept of words of identification are very important. Not only do they rule out the application of s. 13 to words which merely point out the goods being sold while not actually constituting a substantial ingredient of the goods, but they also help to explain why, even on a sale of specific goods, it is possible to hold that the sale is a sale by description and the descriptive words do fall within s. 13. As will be seen later, it is well established that prima facie the sale of manufactured goods should be treated as a sale by description if the goods are sold not as specific things, but as things answering a general description. For example, if a buyer purchases a consignment of pure cotton shirts from a seller, and the shirts are labelled ‘pure cotton’, it seems clear that this is a sale by description, and that the words on the label are part of the contractual description. If the shirts are not pure cotton, there will be a clear breach of s. 13 and the buyer will be entitled to reject the goods. Yet it will be seen that in such a case the words cannot be said to be words of identification in the sense that they are needed to point out which are the goods that are the subject-matter of the contract. In a sale of specific goods like this, there will be no need to identify the goods in that sense: the identity of the goods is clear. But the words on the label are still plainly enough words of identification in the other sense mentioned by Lord Wilberforce – they identify a substantial ingredient of the goods. They are, in short, words which identify, not which goods are being sold, but what the goods actually are (not just any suit – a wool suit). The actual decision in Beale v Taylor49 could also be supported in this manner, assuming that the words in that case were indeed contractual and not just representational. The words in the advertisement, ‘1961 Herald’, were not needed to identify which car was the subject of the sale, but they were identifying what the car was (a 1961 Herald, not just any Herald). There are, however, a few cases, pre-dating the Ashington Piggeries case and the Reardon Smith Lines case, in which s. 13 has been applied to words which, even if they could be called words of description at all, do not appear to be words which identify a substantial (or indeed any) ingredient of the goods sold. For example, it has been held that words about the way in which the goods are packed, or even marked, may be words of description under s. 13 of the Act.50 So also, it has been held that words describing where the goods are situ- ated (‘Afloat per SS Morton Bay, due London approximately June 8th’) are descriptive words within the protection of s. 13.51 Although this last case was cited without disapproval by Lord Guest in Ashington Piggeries, it is hard to reconcile it with Lord Wilberforce’s more subtle analysis of the concept of words of identification in Reardon Smith Lines. The Copyright © 2020. Pearson Education, Limited. All rights reserved. authority of decisions of this character is today somewhat doubtful. The result of all this is of some complexity but the position can be summarised as follows: 1 Descriptive words must first be analysed to see whether they are contractual, or merely amount to representations. If they are misrepresentations only, then the normal com- mon law and equitable rules apply, as modified by the Misrepresentation Act 1967. 2 If the words are held to be contractual, it must next be seen whether there is an express term requiring compliance with the words of description. Such a term may be a condition or a warranty, but is most likely to be an innominate term, as in the Cehave case. The buyer’s remedies for breach of such a term depend on the nature and consequences of the breach. 49 1 WLR 1193, above, p. 118. 50 Smith Brothers (Hull) Ltd v Gosta Jacobson & Co 2 Lloyd’s Rep 522. 51 Macpherson Train & Co v Howard Ross & Co 1 WLR 640. Twigg-Flesner, C., & Canavan, R. (2020). Atiyah and adams' sale of goods. Pearson Education, Limited. M07 Atiyah and Adams Sale of Goods 51028.indd 122 27/04/2020 17:18 Created from city on 2024-12-28 20:07:01.  THE DUTY TO SUPPLY GOODS OF THE RIGHT QUALITY 123 3 If there is nothing amounting to an express term, then the next stage is to see whether the description relates to unascertained future goods like commodities. In this event (as in the Arcos case), the term is a condition in English law, and strict compliance is required, though a buyer’s right to reject is modified by s. 15A. 4 If the contract is of a different character, it must next be inquired whether any item in the description of the goods amounts to a ‘substantial ingredient’ in the identity of the thing sold. If it does, compliance with the item will again be a condition. 5 In any other case, the requirement of compliance with descriptive words is not a condition, but a bare warranty or (more probably) an intermediate or innominate term. While the law may seem complex it does at least avoid putting the court into a straitjacket – the courts will in effect be able to arrive at whatever decision seems appro- priate in the circumstances. It will be noticed that s. 13 itself seems to have been largely forgotten in this discussion. It is almost impossible to reconcile the law as stated by Lord Wilberforce in the Reardon Smith Lines case with the precise words of the Act. It appears that s. 13 needs revision, if not outright repeal. Indeed, it is not clear that s. 13 actually does anything at all, since all it seems to say, as now interpreted, is that where the seller uses words of description which would otherwise amount to a condition, then it is an implied condition that the goods should comply with that description. This hardly seems worth saying, although, of course, in a true codification, propositions may be stated which are not designed in any sense to alter the law. It is perhaps unfortunate that s. 13 appears to have been outside the terms of reference of the Law Commissions’ inquiry which led to the 1994 Act, especially as the law in respect of business to business sales has not been properly reviewed since. Prior to the passing of the 1973 Act, it was important to consider the relation between s. 13 and the doctrine of the fundamental term or fundamental breach. This question is now of very little importance because the Unfair Contract Terms Act 1977 greatly restricts the power of a seller to contract out of their liability under s. 13 and the doctrine of the fundamental term and fundamental breach has essentially been killed off by Photo Production Ltd v Securicor Transport Ltd.52 Under ss. 6 and 20 of that Act, contracting out of s. 13 is only permissible to the extent that it is ‘fair and reasonable’. For example, the breach in Arcos Ltd v E A Ronaasen & Son53 would seem on the face of it to have been Copyright © 2020. Pearson Education, Limited. All rights reserved. one of trivial significance, and if the contract in that case had contained an exemption clause, it would have been most unreasonable to hold the seller liable for the breaches which occurred. Rules of construction, formerly widely applied to limit the operation of exemption clauses, will now be of much less importance, though doubtless they may still be used.54 For instance, in Robert A Munro & Co Ltd v Meyer,55 the defendant agreed to buy goods ‘with all faults’, but it was nonetheless held by Wright J that this clause did not shut out the overriding requirement that the goods should answer to their description, but 52 AC 827. The doctrine never applied in Scotland: see Alexander Stephen (Forth) Ltd v J J Riley (UK) Ltd 1976 SC 151. See now Unfair Contract Terms Act 1977, s. 22. 53 AC 470. 54 Though in Fastframe Ltd v Lohinski, 3 March 1993 (unreported), the Court of Appeal indicated that it was not prepared to countenance arguments based on the old (artificial) rules of construction – see Adams (1994) 57 MLR 960. 55 56 2 KB 312. Twigg-Flesner, C., & Canavan, R. (2020). Atiyah and adams' sale of goods. Pearson Education, Limited. M07 Atiyah and Adams Sale of Goods 51028.indd 123 27/04/2020 17:18 Created from city on 2024-12-28 20:07:01.  124 THE DUTIES OF THE SELLER only served to protect the sellers from the obligation to supply merchantable goods.56 But insofar as the requirements of satisfactory (or formerly merchantable57) quality overlap with those regarding the description of the goods, it seems that a clause which validly excludes the condition that goods be of satisfactory quality (merchantable) must also protect against non-conformity with description.58 Meaning of ‘sale by description’ The next question concerns the meaning of the phrase ‘sale by description’. It has been held that this phrase ‘must apply to all cases where the purchaser has not seen the goods but is relying on the description alone’.59 So it follows that a sale must be by description if it is of future or unascertained goods.60 But, in addition, the term applies in many cases even where the buyer has seen the goods. Early doubts as to whether an ordinary sale in a shop could be a sale by description were soon laid to rest.61 To quote from Lord Wright in Grant v Australian Knitting Mills Ltd: It may also be pointed out that there is a sale by description even though the buyer is buying something displayed before him on the counter: a thing is sold by description, though it is spe- cific, so long as it is sold not merely as the specific thing, but as a thing corresponding to a description, e.g. woollen undergarments, a hot-water bottle, a second-hand reaping machine, to select a few obvious illustrations.62 One could add to this list items on a restaurant menu,63 though this is perhaps a less obvious illustration. Moreover, s. 13(3), as it is now drafted, makes clear that the term ‘sale by description’ is wide enough to cover a sale even where the goods have been exposed for sale and selected by the buyer, as in a supermarket or department store: A sale of goods is not prevented from being a sale by description by reason only that, the goods being exposed for sale or hire, are selected by the buyer. Even prior to the 1973 Act amendments it had been held that a sale could be by descrip- tion though the buyer had examined the goods with care,64 or even where they had selected them from stock offered to them by the seller.65 But a sale is not by description where the buyer makes it clear that they are buying a particular thing because of its unique qualities, and that no other will do, or where there is no reliance by the buyer on the description.66 In fact, it is probably true to say that the only case of a sale not being by description occurs Copyright © 2020. Pearson Education, Limited. All rights reserved. 56 Cf. also Pinnock Bros v Lewis & Peat Ltd 1 KB 690; Vigers Bros v Sanderson Bros 1 KB 608. 57 In the case of contracts made before 3 January 1995. 58 Toepfer v Continental Grain Co Ltd 1 Lloyd’s Rep 11; Gill & Duffus SA v Berger & Co Inc 1 Lloyd’s Rep 622, reversed on different grounds AC 382. 59 Varley v Whipp 1 QB 513, 516 per Channel J. 60 Joseph Travers & Sons Ltd v Longel Ltd (1947) TLR 150, 153 per Sellers J. 61 Morelli v Fitch & Gibbons 2 KB 636. 62 AC 85, 100. These are ‘obvious illustrations’ to a lawyer because they are drawn from decided cases; otherwise the selection may have, for the reader, a somewhat surreal quality. 63 Wren v Holt 1 KB 610. 64 Beale v Taylor 1 WLR 1193. 65 H Beecham & Co Pty Ltd v Francis Howard & Co Pty Ltd VLR 428. 66 Harlingdon & Leinster Ltd v Christopher Hull Fine Art Ltd 1 QB 564. Twigg-Flesner, C., & Canavan, R. (2020). Atiyah and adams' sale of goods. Pearson Education, Limited. M07 Atiyah and Adams Sale of Goods 51028.indd 124 27/04/2020 17:18 Created from city on 2024-12-28 20:07:01.  THE DUTY TO SUPPLY GOODS OF THE RIGHT QUALITY 125 where the buyer makes it clear that they are buying a particular thing because of its unique qualities, and that no other will do.67 For this reason, the sale of a manufactured item will nearly always be a sale by descrip- tion (except where it is second-hand) because items made to an identical design are not generally bought as unique goods but as goods corresponding to that design. So it has been held in Australia that the sale of an ordinary pair of ‘walking shoes’ was a sale by description, although the buyer had tried on and examined the shoes and might well have been thought to be buying the particular pair as specific goods.68 As we have seen, even the purchase of a used car which was fully examined by the buyer was held in Beale v Taylor69 to be a sale by description because the buyer had relied in part on a newspaper advertisement issued by the seller. These cases suggest that the real question at issue in deciding whether the sale should be classified as a sale by description is whether, on the true construction of the contract, the buyer has agreed to buy a specific item exactly as it is to the exclusion of all liability on the part of the seller. For example, the buyer may examine a used car and the seller may offer it for sale in terms which amount to saying: ‘There is the car; there is my offer; I guarantee nothing; take it or leave it.’ In this event it is thought the sale would be held to be a sale of a specific thing and not a sale by description. One of the consequences of the 1893 Act was that if the sale was held to be a sale by description there would often be an implied condition under s. 14 that the goods were mer- chantable. This consequence of holding a sale to be by description was so important that it seems that the courts in practice tended to interpret s. 13 with half an eye to s. 14. In other words, if the court thought that on the true construction of the contract the seller should be held to warrant the merchantability of the goods, it would tend to hold the sale to be a sale by description, but after the 1973 Act the condition of merchantability was not limited to sales by description, resulting in s. 13 being construed ever more narrowly, or having less and less practical relevance ever since, despite changes to the quality warranty in the 1994 legislation. The application of s. 13 Note that s. 13 (unlike s. 14) applies even though the goods are not sold by a person who sells ‘in the course of a business’. Thus in Varley v Whipp,70 the defendant agreed to buy Copyright © 2020. Pearson Education, Limited. All rights reserved. from the plaintiff a second-hand reaping machine, which was stated to have been new the previous year and hardly used at all. This was a gross misdescription, and the defendant declined to accept it or pay for it. The defendant could not rely on s. 14 (which imposes requirements as to quality and fitness for purpose) because the plaintiff was not a dealer in agricultural machinery, but as the goods did not correspond with the description it was held that there was a breach of s. 13. (Changes made by later legislation are immaterial to this point.) 67 Ibid. 68 David Jones Ltd v Willis (1934) 52 CLR 110. 69 Above, n. 31. 70 1 QB 513. Note also Beale v Taylor, above, p. 118 (private sale of second-hand car). Twigg-Flesner, C., & Canavan, R. (2020). Atiyah and adams' sale of goods. Pearson Education, Limited. M07 Atiyah and Adams Sale of Goods 51028.indd 125 27/04/2020 17:18 Created from city on 2024-12-28 20:07:01.  126 THE DUTIES OF THE SELLER The relationship between the description and the quality or fitness of the goods As we shall see later, s. 14 deals with implied conditions as to the quality and fitness of the goods for a particular purpose. Section 13 does not on the face of it deal with quality or fitness for purpose. As we have seen from Arcos Ltd v E A Ronaasen & Son,71 it is quite possible for goods to be of satisfactory (formerly merchantable) quality and fit for their purpose and yet not correspond with their description. Conversely, if the goods do correspond with their description, the fact that they are unsat- isfactory or not fit for the purpose for which they are sold will not enable the buyer to plead a breach of s. 13. In this event the buyer will frequently be able to rely on s. 14(2) or (3), but there are some circumstances in which they may wish to use s. 13 rather than s. 14 even though their complaint may in a broad sense be said to be one of quality. First, as seen above, s. 13 applies to a sale by a private seller while s. 14 only applies to a seller who sells in the course of a business. So a person who buys from a non-business seller can only complain about quality if they can bring their case under s. 13. This explains a case like Beale v Taylor72 where the buyer of the car obtained damages for breach of the condition implied by s. 13 – the car was wrongly described as a 1961 Herald. If the buyer had been buying from a business seller, he would probably have had a clear case for damages under s. 14 on the ground that the vehicle was not of merchantable quality (the relevant quality warranty at the time). But secondly, the buyer may wish to rely on s. 13 because the goods are in fact of sat- isfactory quality in a general sense, but still do not amount to the goods they thought they were buying. In the hypothetical example given earlier, a person who buys an item of clothing described as ‘pure wool’ may very well want to return it if they discover that it is not, even though it may be perfectly satisfactory, and of good quality. But they can only do that under s. 13 because there would be no breach of s. 14 on these facts. A third type of case in which a buyer might wish to rely upon s. 13, even though their complaint is in a broad sense about quality, occurs where the contract contains a clause excluding liability for matters of quality, but not for matters of description – something which could happen despite the Unfair Contract Terms Act. Particular problems often arise where goods are described in general terms, but are adulterated or contaminated so that the goods themselves are not greatly changed but their utility is affected. The point is illustrated by the decision of the House of Lords in Copyright © 2020. Pearson Education, Limited. All rights reserved. Ashington Piggeries Ltd v Christopher Hill Ltd73 where herring meal contaminated with a substance which made it unsuitable for feeding to mink was sold to the buyers for use as mink food. It was held that there was no breach of s. 13 because the goods were still properly described as ‘herring meal’,74 and it was pointed out that not every statement about the quality or fitness of the goods can be treated as a part of the ‘description’. On the other hand, in Pinnock Bros v Lewis and Peat Ltd75 the contract was for the sale of copra cake but the goods delivered were in fact a mixture of copra cake and castor 71 AC 470. 72 Above, n. 31. 73 AC 441. 74 Lord Dilhorne dissented on this point – see ibid., pp. 484–5. 75 1 KB 690. Twigg-Flesner, C., & Canavan, R. (2020). Atiyah and adams' sale of goods. Pearson Education, Limited. M07 Atiyah and Adams Sale of Goods 51028.indd 126 27/04/2020 17:18 Created from city on 2024-12-28 20:07:01.  THE DUTY TO SUPPLY GOODS OF THE RIGHT QUALITY 127 beans; it was held that the goods did not correspond with their description. As Lord Wilberforce pointed out in Ashington Piggeries, the question of whether a substance which has added to it a contaminant or unwanted material remains in substance what it always was, though with the addition or contamination, or whether it really becomes a different substance altogether, ‘may, if pressed to analysis, be a question of an Aristotelian charac- ter’. But he went on to say that the Sale of Goods Act was not intended to provoke meta- physical discussions as to the nature of what was delivered as compared with what was sold. The question of whether the goods correspond with their description is intended to be a broader, more common sense test of a mercantile character. The question of whether that is what the buyer bargained for has to be answered using the tests buyers in the market would apply, leaving more delicate questions of condition, or quality, to be determined under other clauses of the contract or sections of the Act.76 So where there was a contract for the sale of 500 tons of Argentina Bolita beans but the goods delivered contained a small proportion of other beans, the court referred the case back to arbitrators to find whether the goods as a whole would still be called by someone in the trade ‘Argentina Bolita beans’.77 In some cases, the description may carry with it an implication of quality of a certain kind. For instance, in the New Zealand case of Cotter v Luckie78 the buyer bought a bull described as ‘a pure bred polled Angus bull’ from the seller. The bull had been wanted, as the seller knew, for breeding purposes, but it turned out to have a physical abnormality which prevented it from breeding. The court held that the sale was a sale by description and that the description implied that the bull was capable of breeding. The court said: The question... for decision is whether this was or was not a sale by a description having the effect of describing the animal as a stud bull. Both parties are farmers. The respondent could have no use for the animal save for the purpose of serving his cows, and it is to be observed that it was sold not as a bull merely, but as a pure-bred polled Angus bull. The descriptive words appear to me to be meaningless unless intended to convey the impression that the animal might be used to get this class of stock.79 There is another type of case which may involve the relation between s. 13 and the quality or fitness of the goods. If the contract calls for goods of a certain quality, this quality may itself become part of the contract description, but it seems that statements as to quality will not usually be treated as part of the contract description.80 On the other hand, there are some cases in which quality and description significantly overlap. To take Copyright © 2020. Pearson Education, Limited. All rights reserved. an example once given by Lord Denning, if the goods being sold are said to be ‘new-laid eggs’ this goes both to quality and description.81 However, for most purposes such cases 76 AC 441, 489. 77 Gill & Duffus v Berger & Co Inc 2 Lloyd’s Rep 233, and, after the resubmission 1 Lloyd’s Rep 622, reversed on different grounds AC 382. 78 NZLR 811. 79 At p. 813. See also some of the examples discussed by the CA in Ashington Piggeries 3 All ER 1496, 1512, such as the description of goods as ‘oysters’ which may carry the implication that they are fit for human consumption. 80 See the Ashington Piggeries case AC 441 and Border Harvesters Ltd v Edwards Engineering (Perth) Ltd 1985 SLT 128. 81 Toepfer v Continental Grain Co Ltd 1 Lloyd’s Rep 11, 13. Today, the common description ‘free range eggs’ might be a more pertinent example. Twigg-Flesner, C., & Canavan, R. (2020). Atiyah and adams' sale of goods. Pearson Education, Limited. M07 Atiyah and Adams Sale of Goods 51028.indd 127 27/04/2020 17:18 Created from city on 2024-12-28 20:07:01.  128 THE DUTIES OF THE SELLER give rise to no special problems. Breach by the seller will normally involve liability under ss. 13 and 14, and the overlap is of no particular importance. It would only be of impor- tance where the implied condition under s. 14 is not applicable for some reason (e.g. where the seller is not a dealer) and the buyer has to rely exclusively on s. 13. They may then wish to argue that the term ‘new-laid eggs’ implies not merely that the eggs are literally new-laid, but that they are of good quality because that is the natural implication of the term. Conversely, if the buyer cannot complain about the quality (e.g. because of a valid exclusion clause) they are not entitled to raise the same complaint under the guise of a failure to conform to description.82 Compliance with s. 13 Whether goods correspond with their description will normally be a simple question of fact, but it must be stressed that the duty of the seller is very strict indeed. We have already referred to Arcos Ltd v E A Ronaasen & Son as an example of the severity of the duties which the section can place on the seller. Although some of these older cases are (as we have seen) questionable insofar as they hold trivial breaches to be breaches of conditions, that does not affect their authority as to what is a breach. It is still quite clear that any non-conformity with the contract description (so long as it is a part of the description which constitutes a term of the contract)83 is a breach of contract, subject only to the de minimis principle. Reference has already been made to the fact that ‘microscopic’ deviations may be dis- regarded in relation to the quantity of goods delivered, in accordance with the maxim de minimis, and there seems no reason to doubt that the same is true of compliance with the contract description.84 However, in Moralice (London) Ltd v E D & F Man,85 McNair J held that where the price is payable by means of a documentary credit against shipping documents, the maxim de minimis has no application as between the seller and the bank: the shipping documents must comply strictly with the requirements of the letter of credit.86 McNair J went on to suggest that in this situation it is probably a necessary inference that the de minimis maxim is also excluded even in the contract of sale as between buyer and seller. In a number of more recent cases, Arcos Ltd v E A Ronaasen & Son has been distinguished by the courts. Where goods have been sold in some such terms as ‘fair average quality’ or the Copyright © 2020. Pearson Education, Limited. All rights reserved. like, it has been held that this phrase must be construed as commercial people would construe it and as referring only to such qualities as are normally observable by ordinary visual exam- ination. Therefore, goods contaminated by some undetectable substance could still be of ‘fair average quality’. Similarly, in Steel & Busks Ltd v Bleecker Bik &Co Ltd87 82 Toepfer v Continental Grain Co Ltd 1 Lloyd’s Rep 11, 13. 83 See the discussion of this point, above, p. 124 et seq. 84 Arcos Ltd v E A Ronaasen & Son AC 470, see above; Margaronis Navigation Agency Ltd v Henry W Peabody & Co Ltd QB 300; Tradax International SA v Goldschmidt SA 2 Lloyd’s Rep 604. 85 2 Lloyd’s Rep 526; see also Soproma SpA v Marine & Animal By-Products Corpn 1 Lloyd’s Rep 367, 390. 86 But in practice this kind of problem would in most cases now fall under the Uniform Customs and Practice for Documentary Credits, which has a built-in version of de minimis, less strict than the common law version – see below, p. 347. 87 1 Lloyd’s Rep 228; F E Hookway & Co Ltd v Alfred Isaacs & Sons Ltd 1 Lloyd’s Rep 491. Twigg-Flesner, C., & Canavan, R. (2020). Atiyah and adams' sale of goods. Pearson Education, Limited. M07 Atiyah and Adams Sale of Goods 51028.indd 128 27/04/2020 17:18 Created from city on 2024-12-28 20:07:01.  THE DUTY TO SUPPLY GOODS OF THE RIGHT QUALITY 129 it was held that goods accorded with their description – which was ‘quality as previously delivered’ – despite the presence of some new chemical, not present in the original deliveries, which rendered the goods unfit for the buyers’ purposes. Sellers J found that ‘by the standard applied and accepted in the trade they complied with the description and were of the quality called for by the contract, quality not being affected by the chemical’. This decision was approved by the House of Lords in the Ashington Piggeries88 case on the ground that state- ments of this kind are not intended to be treated as part of the contract description of the goods. They are intended to indicate the quality desired, but not to identify the goods which the contract calls for. But this does not mean that the buyer is without remedy, for they may be able to claim damages under s. 14(2) or (3). But if the statement is part of the contract description it must be strictly complied with, though it does not follow that a description must always be taken literally. If goods have acquired a trade description they may correspond to their description even if they are not what a literal reading of the trade description suggests they are. As Darling J said in Lemy v Watson,89 ‘If anybody ordered Bombay ducks and somebody supplied him with ducks from Bombay the contract to supply Bombay ducks would not be fulfilled.’90 Usually this approach would be adopted to protect a buyer but it may sometimes protect the seller. In Grenfell v E B Meyrowitz Ltd,91 the defendants were held not to be in breach of s. 13 when they supplied goggles of ‘safety-glass’ to the plaintiff, which subsequently splintered in an accident, as it was proved that ‘safety-glass’ had acquired a technical trade meaning and the goggles in fact conformed to the normal design.92 Similarly, in Peter Darlington Partners Ltd v Gosho Co Ltd,93 there was a contract for the sale of 50 tons of canary seed on a ‘pure basis’. It was shown that there was no such thing in the trade as 100 per cent pure seed, and that the highest standard of purity was 98 per cent; it was therefore held that the buyers were in breach in refusing to accept 98 per cent pure seed. Knowledge by the buyer and contracting-out It is, perhaps, slightly odd that s. 13 says nothing about the possibility that the buyer may examine the goods and come to realise that the description is not entirely accurate, or