FACULTY OF BUSINESS AND MANAGEMENT

LAW416 BUSINESS LAW

PREPARED BY
MOHAMMAD HUSMA ALIF BIN HUSIEN [2023861662]

PREPARED FOR
DR. RAFIZAH BINTI ABU HASSAN

The Sale of Good Act 1957

Submission Date: 19th of November 2023

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QUESTION 1
Kim Seon runs a restaurant at Taman Cha Cha Cha, Johor. He ordered from Shin Mina Mini
Market 50 bags of Pakistani basmati rice at RM40 per bag and 200 packets of sugar at
RM2.20 per packet. It was expressly agreed between the parties that Shin Mina must pack the
sugar in boxes containing 20 packets each. However, when Shin Mina delivered the goods to
Kim Seon's restaurant, it was found that the sugar was packed in boxes containing 30 packets
each. The basmati rice that was supplied was found to be from India and not Pakistan. Kim
Seon wishes to reject the goods.
Advise Kim Seon.

Issues
Based on this situation, Kim Seon, who owned the restaurant at Taman Cha Cha Cha, Johor
was having a problem that he did not get a right thing that he was ordered to supplier, Shin
Mina Mini Market. The agreement between both parties written that Shin Mina should supply
200 packets of sugar packed in boxes containing 20 packets each. Another deal between both
parties Shin Mina Mini Market should supply 50 bags of Pakistani basmati rice. However,
Kim Seon facing 2 problems. Firstly, Kim Seon received sugar that was packed in boxes
containing 30 packets each instead of 20 packets sugar packed in each boxes. Secondly, Kim
Seon received different items from supplier. He gets basmati rice made from India instead of
Pakistan. I had identify the issue faced by Kim Seon. He as client received wrong items for
basmati rice and his supplier did not fulfil his requirement in packaging product, supplier
packed excessive product in each boxes. Is it Kim Seon eligible to reject the goods?

Law
In Malaysia, we have the principal laws regulating contracts of sale of goods is the Sale of
commodities Act 1957 (SOGA). The law does safeguard clients in the case of a violation of
contract between the buyer and the seller under the terms of the sales contract. The Sale of
Goods Act 1957 had been enacted in 1957 and amendments were made in 1990 to cover the
states of Malacca and Penang. The older laws was significantly impacted by the United
Kingdom's Sale of Goods Act of 1893.The principal piece of legislation assisting customers
in gaining justice when their purchases 'go wrong' is the Sale of Goods Act 1957. Every
individual who sells products or services should be aware of the implications of the Act and
the responsibilities that come with it. This demonstrates how, by law, all descriptions,
whether spoken, written, indirect, or put in an artwork, must be exact and not inaccurate.
Incorrectly presenting items implies the customer may have a claim against the seller for
violating the contract, and the seller may be in violation of the law.

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Sec 4(1) - A contract of SOG
is a
contract
whereby the seller transfer or
agrees to
transfer the property in goods
to the
buyer for a price
Sec 4(1) - A contract of SOG
is a
contract
whereby the seller transfer or
agrees to
transfer the property in goods
to the
buyer for a price
According to Section 4(1) is a contract of SOGA is a contract whereby the seller transfer or
agrees to transfer the property in goods to the buyer for a price. the term contract of sale
includes both a sale and agreement to sell. When ownership or property in goods goes, a sale
is considered completed. It is a sale agreement in which the ownership of the products will be
transferred for a later date or provided certain requirements are met. Both a sale and an
agreement to sell are regarded as contracts of sale.

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The seller may file a lawsuit for unliquidated damages if the buyer violates the terms of the
sale agreement. The seller still owns the goods that are the subject of the contract. Similarity,
if the seller violates the terms of the sale, the buyer's only legal option is for damages. But,
since ownership has transferred to the buyer, the seller has the right to sue for the contract
price in the event that a sale occur and the buyer refuses to pay.

The subject-matter of a contract of sale is goods, for which the buyer pays a consideration
(price for the product) when the contract is completed. Based on their quality, goods may be
divided into few categories:
i. Existing goods are goods that are accepted to be the subject matter of the contract
by the parties and are in the seller's possession at the time the contract is formed.
These can be further classified into two groups:
 Ascertained or Specific Goods - The goods that are specifically a part of,
are identified and agreed upon at the time when a contract of sale is made
are ascertained goods. When a consumer chooses a specific
painting/artwork to buy from the seller at the time of contract formation,
the painting/artwork is a ascertained good' since the customer agreed to
acquire just that painting/artwork.

 Unascertained Goods - The goods that are not explicitly identified among
similar goods at the time of formation of the contract are unascertained
goods.

ii. Future Goods- The goods which must be manufactured or acquired by the seller
after the making of the contract of sale. For example, a contract to buy cakes
which the seller must then made.

Formation of the contract are no formalities, contract of sale can be in writing, by speaking
and by conduct of the parties. The contract may provide for the immediate delivery,
immediate payment of the price or the delivery, payment by instalments and delivery or
payment or both may even be made at a future date.

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In addition, according to Section 15 of the Sale of Goods Act 1957, there is an implied
condition that the goods shall correspond with the description; and, if the sale is by sample as
well as by description, it is not sufficient that the bulk of the goods correspond with the
sample if the goods do not also correspond with the description. Specific description and
completely description are the two types of descriptions. Specific description occurs when
items are described in detail, yet there is a minor disagreement, and the buyer has the option
to terminate the contract. Furthermore, general description refers to goods that are described
in a broader sense, and there must be a significant difference for the buyer to be able to
terminate the contract and sue the seller.

The case that can be referred is Nagurdas Purshotumdas & Co. v Mitsui Bussan Kaisha
Ltd (1911). The fact of the case the flour was ordered described as “the same as our previous
contracts” whereby the flour had been sold in bags bearing a well-known trademark. Mitsui
Bussan take legal action against Purshotumdas for breach of implied condition by
description. The seller delivered flour identical in quality as the previous one but in a
different brand. The court held that the goods did not comply with the description.

Another case that can be referred is Re Moore & Co and Landauer & Co (1921). The
claimants agreed to provide 3,100 cases of Australian canned fruit packed 30 tins to case.
When delivered it was uncovered that half the cases contained only 24 tins although the total
number of tins was still 3,100. The defendants decided to reject the entire cargo, even though
the fact that the agreed upon quantity is the same. The court held that the defendant were
entitled to reject the entire consignment as it was not precisely which was agreed between
both parties. Supplier breach of Section 15 of the Sale of Goods Act 1957 (goods must
correspond with the description).

Furthermore, there are another case that can be referred is Harlingdon and Leinster
Enterprises Ltd v Christopher Hull Fine Art Ltd (1990). The claimant was sold an
artwork by the defendant that later turned out to be a fake. Because he had seen the picture
attributed to German Expressionist artist Gabriele Munter in an auction catalogue, the
defendant believed the painting to be by Munter. He acknowledged that the artwork was by
Munter when he made the sale and spoke with the claimant, but he made it clear that he was
not familiar with Munter's work and knew very little about German Expressionist art. Despite
lacking the required competence, the claimant examined the painting and concluded that it
was authentic. He made the decision to buy it. The £6,000 purchase price was paid. The
painting was identified as belonging to Munter in the defendant's invoice. The claimant filed
a lawsuit under Section 13(1) to recover his money for the purchase after realizing the
painting was a fake. In addition, the claimant asserted that the artwork did not meet the
standards of merchantable quality set out in Section 14 of the Sale of Goods Act of 1979. The
Court of Appeal concluded that the claimant should have used his own judgment and
knowledge because the defendant had made it clear that his attribution could not be trusted.
For all the seller's statements about the products, a contract will not be considered a sale by
description. The buyer has to prove that the description changed their mind about what to
buy. The claimant's suit was rejected since he was unable to provide evidence of this. About
the argument about Section 14, the Court further decided that the painting's quality remained
intact and thus could not be deemed unmerchantable due to the misattribution. According to
Section 13(1), there is an implied condition that the items will match the description in a

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contract for the sale of goods by description. It is obvious that there is a sale by description if
the customer made their purchase without seeing the products (for instance, through an online
or mail-order catalogue). However, in certain situations, if the buyer relied somewhat on the
seller's description, even after he has seen the items and may have even picked them up
himself, the transaction may still be considered one made by description. Furthermore, since
he has not depended on the description, the buyer may lose the protection of Section 13 if he
has forgotten about it by the time, he really purchases the things or if he doesn't trust what he
has been told and confirms the details for himself.

Application
Shin Mina Mini Market (the seller) has breached the implied condition because the goods
supplied were not corresponding with the description. This is because, according to the
Implied Terms, Sale of Good Act 1957 and under section 15. According to the case of
Nagurdas Purshotumdas & Co. v Mitsui Bussan Kaisha Ltd (1911), Re Moore & Co and
Landauer & Co (1921) and Harlingdon and Leinster Enterprises Ltd v Christopher Hull Fine
Art Ltd (1990), the goods must correspond with the description. The products that Kim Seon
ordered are sugar and Basmati rice, and Shin Mina Mini Market violated their agreement by
not adhering to the previously agreed-upon product description.

Firstly, Shin Mina Mini Market supply wrong items, She supposedly to deliver basmati rice
made from Pakistan, but she breached the agreement that she delivered product from India.
This clearly opposite of what Kim Seon wants and the product did not match the description
in the early agreement. This scenario was same as cases above that we can referred such as
Nagurdas Purshotumdas & Co. v Mitsui Bussan Kaisha Ltd (1911). Kim Seon and Shin Mina
Mini Market's contract is impliedly conditioned by description under Section 15 of the Sale
of items Act 1957, and Kim Seon is entitled to inspect the items before accepting them under
Section 41(1). Although Kim Seon has not seen the Basmati rice, he is relying entirely on
Shin Mina Mini Market's broad description. A major difference must be present for Kim
Seon to be able to reject the items and end the contract.

Secondly, Kim Seon received sugar that was packed in boxes containing 30 packets each
instead of 20 packets sugar packed in each box. Shin Mina Mini Market did not fulfil the
requirements from Kim Seon. This situation was same as cases above that we can referred
such as Re Moore & Co and Landauer & Co (1921). Kim Seon can reject the entire cargo
even though the quantity of the product was still the same because of the seller did not
correspond to description agreed previously. Shin Mina breach of Section 15 of the Sale of
Goods Act 1957 (goods must correspond with the description).

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Conclusion
As a conclusion, since the products clearly differ from the description, Kim Seon has the
right to reject both product; the basmati rice and sugar, he also can terminate the agreement
with Shin Mina Mini Market. The Sale of Good Act provides 8 implied terms in a contract of
sale. Those implied terms come in the form of implied condition that goods correspond with
description in Section 15 SOGA. If the seller breached any of those implied condition that
goods correspond with description, the seller is liable for breach of contract of sale under the
SOGA 1957.