THE LAW RELATING TO SALE OF GOODS

DEFINITIONS

Presented By
Md. Mahbubul Alam
 1

IMPLIED CONDITIONS
WHAT IS IMPLIED CONDITIONS

 A CONDITION IN A CONTRACT THAT IS NOT

EXPRESSLY STATED OR WRITTEN.

 IT MAYBE IMPLIED BY FACT AND DEED

 OR IT MAY BE IMPLIED BY LAW

LIST OF IMPLIED CONDITIONS
1. CONDITION AS TO TITLE

According to the Sec.14(a) There is an implied condition on the

part of the seller that,

In the case of a sale, he has the right to sell the goods,
And in the case of an agreement to sell, he will have the right to
sell the goods at the time when the property is to pass.
CASE STUDY: ROWLAND v. DIVELL (1923)

Rowland bought a motor-car from Divell and used

it for four months. Divell had no title to the car,
SUMMARY OF FACT and consequently Rowland had to surrender it to
the true owner. Rowland sued to recover the total
purchase price he had paid to Divell.

1. Whether there is a breach of condition?

ISUUE 2. Whether the buyer is entitled to recover the
total purchase price?
CASE STUDY: ROWLAND v. DIVELL (1923)

It was held that there is a breach of implied

condition as to title by the seller and therefore the
DECISION buyer is entitled to recover the purchase price in
full, notwithstanding that he used the car for four
months.

Because of the breach of condition, the buyer can

repudiate the contract and reject the goods. Here
the car was already taken by the real owner. So,
REASONING
the buyer can repudiate the contract by taking
back the full purchase money. The consideration
had totally failed on the part of the seller.
LIST OF IMPLIED CONDITIONS
2. SALE BY DESCRIPTION

According to the Sec.15(a) if there is a contract for the sale of

goods by description,

There is an implied condition that the goods shall correspond with

the description.

Example: Sale of a particular motor car, the contract may contain

words of description or identification
CASE STUDY: RE MOORE & CO. VS LANDAUER & CO (1921)

Moore sold to Landauer 3,100 cases of Australian

canned fruits, the cases to contain 30 tins each. Moore
delivered the total quantity, but about half the cases
SUMMARY OF FACT contained 24 tins, and the remainder 30 tins. Landauer
rejected the goods. There was no difference in market
value between goods packed 24 tins and goods packed
30 tins to the case.

1. Whether there is a breach of condition?

ISUUE 2. Whether the buyer is entitled to recover the total
purchase price?
CASE STUDY: RE MOORE & CO. VS LANDAUER & CO (1921)

It was held that Landauer could reject the whole

goods as there was a breach of condition (goods to
DECISION
be packed 30 tins in a case was part of the
condition)

As the goods delivered did not correspond with the

description of those ordered, Landauer was
REASONING
entitled to repudiate the contract & reject the
whole consignment.
 LIST OF IMPLIED CONDITIONS
3. SALE BY SAMPLE

According to the Sec. 17 if goods are to be sold according to the sample

there are following conditions
The bulk shall correspond with the sample in quality.
The buyer shall have a reasonable opportunity of comparing the goods with
the sample.
The goods shall be free from any defect rendering them unmerchantable
Note: If 'the defect is easily discoverable on inspection and the buyer
takes delivery after inspection, he has no remedy.
CASE STUDY: DRUMMOND VS VAN INGEN (1887)

The seller submitted a sample of cloth which the buyer

approved. The seller knew that the buyer was
intending to re-sell the cloth to several tailors as
SUMMARY OF FACT
material for tailoring work. When the bulk of the
material was delivered, they were found to be
unmerchantable for tailoring purposes.

1. Whether there is a breach of condition?

ISUUE 2. Whether the buyer is entitled to recover the total
purchase price?
CASE STUDY: DRUMMOND VS VAN INGEN (1887)

The court held that the defects in the material

could not be discovered by the inspection of the
DECISION
sample and the buyer was not liable to pay for the
bulk.

The plaintiff was entitled to repudiate the contract

REASONING as the goods were not fit for its ordinary purpose
& it was unmerchantable.
 LIST OF IMPLIED CONDITIONS
4. SALE BY SAMPLE
AS WELL AS BY DESCRIPTION

According to the Sec. 15,

When goods are sold by sample as well as by description, the goods shall
correspond both with the sample and with the description.
CASE STUDY: NICHOL VS GODTS (1854)

Nichol agreed to sell to Godts some oil described as

“foreign refined rape oil, warranted only equal to
SUMMARY OF FACT
sample." Nichol delivered oil equal to the quality of the
samples, but which was not “foreign refined rape oil."

1. Whether there is a breach of condition?

ISUUE 2. Whether the buyer is entitled to repudiate the
contract?
CASE STUDY: NICHOL VS GODTS (1854)

It was held that breach of condition occurred and

DECISION
Godts could refuse to accept the goods.

Where there is a sale of goods by sample as well as

by description, the goods must correspond with the
REASONING description as well as sample. Here the goods
corresponded with the sample but not with the
description.
 LIST OF IMPLIED CONDITIONS
5. CONDITION AS TO FITNESS
OR QUALITY

There is an implied condition as to quality or fitness for the purpose of the

buyer under the following circumstances only:
(A) Buyer, expressly or by implication, makes known to the seller the
particular purpose for which the goods are required, to show that the buyer
relies on the seller’s skill, or judgment.
CASE STUDY: JACKSON VS WATSON & SONS (1909)

Jackson bought some tinned salmon from Watson. He

SUMMARY OF FACT gave it to his wife to eat and it poisoned her. Jackson
sued Watson for breach of contract.

1. Whether there is a breach of condition?

ISUUE 2. Whether the buyer is entitled to recover
compensation for damage?
CASE STUDY: JACKSON VS WATSON & SONS (1909)

The court held that there was breach of condition by the

grocer & damages were recoverable including a sum required
to compensate him for expenses incurred . The finding was
DECISION
because salmon, being a food material, the purpose is known
to the seller and the seller could reasonably assume the
consequences if it is contaminated by poison.

For instance, when an article of food is sold, the law implies a

condition in the contract of sale that it is fit for consumption.
If it is contaminated by poison the
REASONING seller would be liable for damages. The buyer is not even
required to prove that he relied on the seller's skill or
judgment. The mere disclosure of purpose may amount to
sufficient evidence of reliance
CASE STUDY: FROST VS AYLESBURY DAIRY CO LTD (1905)

Aylesbury, a milk dealer, supplied Frost with milk

which was consumed by Frost’s and his family. The
SUMMARY OF FACT
milk contained germs of typhoid fever and Frost's wife
was infected thereby and died.

1. Whether there is a breach of condition?

ISUUE 2. Whether the buyer is entitled to recover
compensation for damage?
CASE STUDY: FROST VS AYLESVURY DAIRY CO LTD (1905)

The court held that there was breach of condition by the

seller & damages were recoverable including a sum
required to compensate him for expenses incurred . Milk
DECISION
is a food material & seller knew the purpose and the
seller could reasonably assume the consequences if it is
contaminated by germ.

The Court held that the purpose for which the milk was
supplied was sufficiently made known to seller by its
description, and as the milk was not reasonably fit for
REASONING
human consumption, seller had committed a breach of
the condition of selling the milk and was therefore liable
in damages for the loss suffered by buyer.
CASE STUDY: MANCHESTER LINE VS REA LTD (1922)

There was a contract to supply 500 tons of coal for the

SUMMARY OF FACT SS "Manchester Importer". The coal supplied was
found to be unfit for this ship.

1. Whether there is a breach of condition?

ISUUE 2. Whether the buyer is entitled to recover the total
purchase price?
CASE STUDY: MANCHESTER LINE VS REA LTD (1922)

Ships differed in their types and requirements, and coal

merchants knew this, there was a breach of the implied
DECISION
condition. It was held that the buyer was entitled to get
damages.

In this case it was held that a buyer relies on the skill of

the seller when he makes known to him the purpose for
which the goods are required, and the circumstances are
such that any reasonable seller would take it that his
judgment is being relied upon.
REASONING
The order was expressed for the use of a particular
steamship, and it must, therefore, be assumed that the
respondents knew the nature of her furnaces and the
character of the coal she used, for it was this coal they
contracted to supply.
 LIST OF IMPLIED CONDITIONS
4. CONDITION AS TO FITNESS
OR QUALITY
 (B) An implied condition of fitness may be annexed to a contract of sale
by usage of trade or custom of the locality.
 (C) When goods are bought by description from a seller who deals in
goods of that description (whether he is the manufacturer or producer or
not) there is an implied condition that the goods are of merchantable
quality, that is, fit to sell.
Note: There is one exception to rule C.-If the buyer has examined the
goods, there shall be no implied condition as regards defects which
that examination ought to have revealed.
CASE STUDY: MORELLI V. FITCH & GIBBONS (1928)

Mr. Morelli bought from a dealer, Fitch & Gibbons, a

bottle of wine. While opening its cork in the normal
SUMMARY OF FACT
manner, the bottle broke off and injured Mr. Morelli’s
hands.

ISUUE 1. Was Mr. Morelli entitled to claim damages?

CASE STUDY: MORELLI V. FITCH & GIBBONS (1928)

Mr. Morelli was entitled to claim damages because the

DECISION
bottle was not of merchantable quality.

The sale was one by description and since the bottle was
REASONING
unmerchantable, buyer was entitled to recover damages.
CASE STUDY: THORNETT & FEHR VS BEER & SONS (1919)

Beer wanted to purchase some glue. The seller showed

him the glue which was stored in his warehouse in
casks. Beer did not have the casks opened, which he
SUMMARY OF FACT could have done easily, but merely looked at the
outside of the casks. The glue was found to have defects
which would have been found out if Beer had inspected
the contents of the casks.

ISUUE 1. Was there any breach of condition?

CASE STUDY: THORNETT & FEHR VS BEER & SONS (1919)

Held, there was no implied condition as to merchantable

DECISION
quality.

Though the buyer has conducted a superficial look at the

REASONING outside of some of the barrels, there was no examination
& therefore the implied condition did not apply.
 2

THE DOCTRINE OF CAVEAT

EMPTOR
 THE DOCTRINE OF CAVEAT EMPTOR

The principle of “Caveat Emptor” says that the buyer alone is responsible for
checking the quality and suitability of goods before a purchase is made & the
seller is not entitled to reveal any unflattering truth regarding the product. If
buyer makes a bad choice, then he cannot blame the seller or recover
damages from him.
 EXCEPTIONS TO CAVEAT EMPTOR

There are exceptions to Caveat Emptor in the following cases:

Where the buyer relies upon the skill and judgment of the seller.
By custom there an implied condition of fitness annexed to a contract of
sale.
Where there is a sale of goods by description, there is an implied condition
that the goods are fit for sale.
Where the seller is guilty of fraud. if the consent of the buyer was obtained
by fraud, the seller is not protected by the doctrine of caveat emptor.
THE CASE OF PATENTED ARTICLCES
According to the Sec.16(1)
For an article under its patent
or other trade name, there is
no implied condition as to its
fitness for any particular
purpose.
Example: if a machine is patented as a "cotton
cleaning machine' and is sold as such in the market
there is no implied undertaking by the seller that the
machine would clean cotton. If a buyer writes to a
manufacturer, "send me one of your patented cotton
cleaning machines", he cannot claim damages if he
finds the machine useless. But if the buyer asks the
manufacturer to supply a machine which will clean
cotton, he relies on the judgment of the manufacturer
and if the machine supplied is found to be unsuitable,
he can claim damages.
CASE STUDY: BALDRY VS MARSHALL (1925)

Baldry consulted Marshall, a motor car dealer, for a

car which is suitable for touring purpose. Marshall
SUMMARY OF FACT suggested a car and Baldry accordingly purchased it.
The car turns out to be unfit for touring purpose.
Baldry sued Marshall for damage.

ISUUE 1. Was Baldry entitled to get damage?

CASE STUDY: BALDRY VS MARSHALL (1925)

It was held that Baldry had relied on the skill and

DECISION
judgment of the dealer and was entitled to get damages.

suitability of a car for touring purpose is a condition. It

was so vital that, if it is not fulfilled, it would defeat the
REASONING very purpose of contract for which Baldry bought the
car. He was therefore entitled to reject the car and get his
money back from the dealer.
 3

IMPLIED WARRANTIES
 IMPLIED WARRANTIES

Following warranties are implied in every contract of sale:

The buyer must get quiet possession: Disturbance to quiet possession is likely to
arise only where the vendor does not possess the right to transfer the goods.
The good must be free from encumbrance: According to the Sec.14(C) There is an
implied warranty that the goods shall be free from any charge or encumbrance in
favour of a third party not declared or known to the buyer before or at the time when
the contract is made.
Fitness of goods. required for a purpose, may be warranted by usage of trade: A
warranty as to fitness for a particular purpose may be annexed to a contract of sale by
a custom or usage of trade.
 4

LIABILITIES OF THE SELLER

APART FROM THE
CONTRACT OF THE SALE
 LIABILITIES OF THE SELLER APART FROM THE CONTRACT OF THE SALE

The seller may also be liable

to pay damages under the
law of torts if he causes
injury by a wrongful act.
Such damages may
sometimes be recovered by
a third party.
CASE STUDY: DONOGHUE VS STEVENSON (1932)

The plaintiff went to a restaurant with a friend and

ordered a bottle of ginger beer manufactured by the
defendant. She drank a part of the bottle. When the
SUMMARY OF FACT remainder was poured into the glass a decomposed
snail appeared with the liquid. For the resulting mental
and bodily shock, she filed a suit for damages against
the manufacturers.

ISUUE 1. Was she entitled to get damage?

CASE STUDY: DONOGHUE VS STEVENSON (1932)

The court held that she was entitled to damages for the
DECISION
mental suffering she had to bear.

The House of Lords held that a manufacturer of goods

intended for consumption, is under a duty to take
REASONING
reasonable care that the goods are free from defects
which render them noxious or dangerous.
THANK YOU!
ANY QUESTION?