CASE:

Cherry owns a wholesale business of rice and sugar at Jitra. On 15 October 2021, Mariam
ordered 100 kilograms of sugar and 100 kilograms special rice from Cherry. Mariam
instructed that the sugar and rice being sent as soon as possible to her factory which is
situated 30 kilometers from Jitra. After a few hours the goods being delivered, Cherry tried
to call Mariam to ask for payment but failed. Later Cherry discovered that Mariam had been
declared bankrupt. Cherry worried about the payment.
On 20 October 2021, Sam bought 200 bags of “Sanati” rice from Cherry. Cherry told Sam
that the rice was imported from Thailand. The next two days, Cherry delivered 200 bags of
“Sanati” rice to Sam’s premise. Sam discovered that the rice delivered was imported from
Burma and not Thailand. Sam also found that the rice delivered was processed with chemical
substance which can cause bowel irritation. Sam intents to reject the entire consignment of
“Sanati” rice delivered by Cherry.
Based on the above problems, advise the parties under provisions of the Sales of Goods Act
1957. Support your answer with legal provision and decided cases (if any).

ANSWER
In this case, we can analyze two respective situations. As first, Cherry has a wholesale rice
and sugar company in Jitra. Mariam placed an order with Cherry for 100 kilos of sugar and
100 kilograms of special rice on October 15, 2021. Mariam directed that the sugar and rice be
delivered as quickly as possible to her plant, which is 30 kilometers away from Jitra. Cherry
attempted to phone Mariam to request payment after the products had been delivered for a
few hours but was unable to contact her. Cherry later learned that Mariam had been declared
insolvent. Cherry was concerned about the money. While on the second situation, Cherry sold
Sam 200 bags of "Sanati" rice. Cherry informed Sam that the rice had been shipped from
Thailand. Cherry then brought 200 bags of "Sanati" rice to Sam's office over the next two
days. Sam learned that the rice transported was from Burma and not from Thailand. Sam also
discovered that the rice provided had been treated with a chemical compound that might
cause bowel irritation . Sam intends to reject Cherry's full cargo of "Sanati" rice.

According to above situation, we had identified two different issues which is whether cherry
can claim payment for the goodssold to Mariam who has been declared bankrupt and
the second issue is is whether Sam is eligible to reject the consignment of rice after
finding that the goods are not up to the quality specifiedas he want .To solve this case in
further, there were several statutory provisions has been used to solve these issues which is
section 4(1) ,section 64(2), section 16(1)(b) of Sales of Goods Act 1957.
Situation 1- to use in application- terangkan application one by one and clear
Section 4(1) A contract of sale of goods is a contract whereby the seller transfers or agrees to
transfer the property in goods to the buyer for a price. There may be a contract of sale
between one part- owner and another.
section 64(2) The rules in bankruptcy relating to contracts for the sale of goods shall continue
to apply thereto notwithstanding anything contained in this Act.

Situation 2- 16(1)b Where goods are bought by description from a seller who deals in goods
of that description er he is the manufacturer or producer or not) there is an implied condition
that the goods shall be of merchantable quality: Provided that if the buyer has examined the
goods, there shall be no implied condition as regards defects which such examined ought to
have revealed.

Decision
Taking account of what Mariam had said to Cherry when ordering the window frames, s
19(1) of the Sale of Goods Act 1923 (NSW) implied a term in the contract that the goods
would be suitable for the buyer’s purpose. This required the windows to be weatherproof in
an exposed situation. This implied term had been breached by supplying windows that
leaked.

CASE
This case deals with the defendant David Jones Ltd versus Willis the plaintiff, on the appeal
from the supreme court of New South Wales. The case is related to The Sales of Goods Act
1923(C¡¦th). In the case the plaintiff purchased a pair of shoes from the defendant David
Jones, a retail distributor of footwear not manufactured by it. On the third occasion of
wearing the shoes the heel came off while the plaintiff was walking down the stairs. She fell
over and suffered injuries. She sued for damages. The court held that there was a breach of
the conditions of merchantable quality and fitness for purpose.

Analysis
The buyer went to the shoe department in a department store and said she wished to see some
shoes. She said she wanted comfortable walking shoes. She inspected two or three pairs, and
chose and bought one pair. The third time she wore them , the heel of one shoe fell off as she
was walking down steps. She fell and broke her leg. She sued the department store for
damages on the basis of breach of contractual warranty. The court held it was a term of the
contract that the shoes be of merchantable quality and that this term was breached. The buyer
was entitled to damages ( including her injuries)

Situation 1
The sub-section applies whether the goods are specific or unascertained. The statutory
condition is not to be implied unless the buyer has made known to the seller the particular
purpose for which he requires the goods. But, whenever that has been disclosed, the
presumption does not always follow that reliance by the buyer on the seller's skill or
judgment has become part of the contractual relationship. In Manchester Liners Ltd. v. Rea,
Ltd.[32] Lord Sumner, speaking of sec. 14 (1) of the English Sale of Goods Act, said: "The
words of sec. 14 (1) are so as to show, not and also shows;" and in Medway Oil and Storage
Co. v. Silica Gel Corporation[33]
For these reasons I think the appeal fails upon the ground that there was evidence of a cause
of action under the second sub-section. The question whether there is evidence of a cause of
action under the first sub-section in the present state of the authorities presents no difficulty
except as to one element. The goods (shoes) were of a description which it was in the course
of the seller's business to supply. It is decided that a particular purpose may be constituted by
the only purpose for which the goods are useful, or by the purpose for which in general they
are used (see, in particular, Preist v. Last[6]). 
Situation 2
Willis went to the shoe department in the David Jones store and said she wished to see some
shoes. She said she wanted comfortable walking shoes. She inspected two or three pairs, tried
on one pair and decided to buy them. The third time she wore them, the heel of one shoe
came off as she was walking down some steps. As a result of this, Willis fell and broke her
leg. Willis sued David Jones for damages (including her injuries) on the basis of breach of
contract
The action was brought to recover damages for personal injuries sustained by the plaintiff as
the result of the heel of a shoe which she bought from the defendant becoming detached
while she was walking. The cause of action was not framed in negligence but in breach of
warranty. The particulars of claim, which are not a pleading, did not state the elements of the
cause of action precisely, but it sufficiently appeared from them that the plaintiff was relying
on sec. 19 (1) of the Sale of Goods Act 1923 N.S.W. The appeal should be allowed, and the
case should, if the appellant so elects, go down for a new trial generally, and not be limited to
damages.

Decision
In the circumstances, it was a term of the contract that the shoes be of merchantable quality.
Whether or not the shoes supplied were merchantable was a question of fact for a jury to
decide. Here, the shoes were found to be not of merchantable quality