STATUTORY IMPLIED TERMS
•S 12. Implied Condition as to title
•the Sale of Goods makes it clear the it is an implied condition that the seller must have a right to sell
•In Rowland v Divall [1923] the plaintiff was succeeded to rescind the contract and seek restitutio in integrum
•Section 6(1)(a) of UCTA 19777:The condition in 12(1) cannot be excluded by an exemption clause
•s12(2):freedom from encumbrances & quiet possession
•These are the only two statutory implied terms that are categorised as ‘warranties’
•possession is disturbed by the lawful act of a third person who asserts a superior title or a right which impairs the buyer’s title
•where there was a breach of 12(1) there will normally be a breach of 12(2)(b); however, the remedy may differ (Mason [1949])
•S 13- Goods sold by description
•Where there is a contract for the sale of goods by description, there is an implied [term] that the goods will correspond with the description.
•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.
•Cont.
•Is there a distinction between ‘generic’ and ‘specific’ goods?
•s.13(3): A sale of goods is not prevented from being a sale by description by reason only that, being exposed for sale or hire, they are selected by the buyer.
•It is thought that s. 13 has an important role to play in commodity markets…
•Cont.
•Arcos v EA Ronaasen [1933]! Strict approach to the requirement of conformity with the description
•Should the buyers real intention be considered? Bad faith?
•It is important to assess which terms in the contract used in reference to the goods being sold are part of their contract description?
•Cont.
•Despite the use of descriptive words, the court may conclude that the goods were not sold by that description (Reardon Smith Line [1976])
•Were the ‘descriptive words’ used relate to the identity of the goods or were they use in order to identify the goods? (Reardon)
•s.13:the description must be influential in the sale
•The description must be influential in the sale, not necessarily alone, but essential…
•The Act uses the words ‘by description’; without such influence a description cannot be said to be one by which the contract for the sale of the goods is made [Harlington [1991]
•There can be sale by description where the goods are inspected, if the description relates to something not apparent on inspection [Beale v Taylor (1967)] and [ Grant v Australian Knitting Mill (1936)]
•Cont.
•The sale by description was taken to mean: “the buyer has agreed to buy specific item exactly as it stands to the exclusion of all liabilities on the part of the seller; examples
•(1) sale of a second hand car
•(2) sale of pair of shoes
•(3) sale of most manufactured products
•s.14: Implied terms as to quality and fitness
•The general rule is that the seller does not warrant the quality and fitness of the goods s. 14(1)
•There is a statutory exception where the seller is acting in the capacity of a business
•No reliance on the seller need to be shown in contrast with 14(3).
•Satisfactory quality
•Satisfactory quality: The test which is used by the court is based on what is acceptable to a reasonable man
•2(B): the quality of goods are assessed against non-exhaustive cases listed in 2(B)
•S 14(2B) Fitness for purpose
•fitness for all the purposes for which goods of the kind in question are commonly supplied
•Thus fitness for purpose is an essential element for the purpose of 14(2)
•The term ‘commonly’ is very difficult to apply
•It is different than 14(3) because the act in this subsection requires a particular purpose which is made known to the seller..
•Cont.
•In Aswan Engineering v Lupdine [1987], the court said that 14(2) requires fitness for all the purposes for… as it was reasonable expect…
•In Henry Kendal v Lillico [1969], the HL said that it would be unreasonable to say that because the goods are unfit for one use, would make the goods unmerchantable (unsatisfactory), if it is fit for other common uses.
•S. 14(2B)- Freedom from minor defects
•Goods might have hidden defects, which are only dangerous because the defect is hidden for the buyer …Pharmaceutical products…
•These goods must be provided with the necessary information (instructions) otherwise might be deemed [very unlikely] unfit for the general purpose of its use (See Kendal)
•Freedom from non-functional aspects of quality
•Can the buyer complain that the goods are understandable merely because they suffered from minor non-functional defects?
•In Rogers v Parish [1987]the CA said that it is not enough that the goods be suitable for the main purpose (like a car be driven on the road), but also the non-functional aspects which the driver was entitled to expect (like interior and exterior of a car) [See also Bernstein v Pamson 1987]
•It is less likely that his logic to be applied to commodity products like vegetables… the concern is more for mass—produced manufactured consumer goods.
•Decisive test of satisfactory quality!
•The overriding test will be the test as laid in 14(2A), and the matters listed in 2B will be relevant in standing on the overriding test in 14(2A)
•Price
•The price at which the goods are sold is often relevant for the assessment of satisfactory quality
•This is enshrined in the act itself and runs contrary to the ‘adequacy of consideration’ principle
•For example the buyers expectation of a reasonably new, low mileage car, would be different from a high mileage car with a low price (Thain v Anniesland [1922])
•Cont.
•See Brown v Craiks [1970 HL] where the seller sold cloth which is intended for industrial purposes when the buyer needed it to a particular purpose for making dresses. The Court rejected the buyers claim because the cloth was still commercially saleable.
•In Grants [1930] the court said that the goods do not seize to be unsatisfactory where they were not commercially saleable at the contract price
•s.14: Buyer dealing as a consumer
•the relevant circumstances in subsection (2A) include any public statements on the specific characteristics of the goods made about them by the seller, the producer or his representative, particularly in advertising or on labelling
•The seller may escape liability subject to 14(2E)
•14(3) Implied condition as to fitness for purpose
•Will apply where the buyer needs the goods for a particular purpose, even where the goods are fit for all purposes for which the goods of that description are commonly used
•The key test is reliance- the seller should be aware that he was being relied upon to supply goods fit for the buyer’s particular purpose
•Cont.
•A presumption is raised where the particular purpose is made known to the seller, that the buyer will have relied on the seller to provide goods fit for that purpose
•One must place emphasis on ‘made known’ and not mere sufficient disclosure (Cammel [1934]
•Cont.
•Reliance can be inferred of ‘what is already know’
•Partial reliance will suffice-no need for exclusive reliance [Henry Kendall v William Lillico [1969]
•s 15 Sale by Sample
•(1) A contract of sale is a contract for sale by sample where there is an express or implied term to that effect in the contract.
•(2) In the case of a contract for sale by sample there is an implied [term]--
•(a) that the bulk will correspond with the sample in quality;
•(b) . . .
•(c) that the goods will be free from any defect, [making their quality unsatisfactory], which would not be apparent on reasonable examination of the sample.
•the Sale of Goods makes it clear the it is an implied condition that the seller must have a right to sell
•In Rowland v Divall [1923] the plaintiff was succeeded to rescind the contract and seek restitutio in integrum
•Section 6(1)(a) of UCTA 19777:The condition in 12(1) cannot be excluded by an exemption clause
•s12(2):freedom from encumbrances & quiet possession
•These are the only two statutory implied terms that are categorised as ‘warranties’
•possession is disturbed by the lawful act of a third person who asserts a superior title or a right which impairs the buyer’s title
•where there was a breach of 12(1) there will normally be a breach of 12(2)(b); however, the remedy may differ (Mason [1949])
•S 13- Goods sold by description
•Where there is a contract for the sale of goods by description, there is an implied [term] that the goods will correspond with the description.
•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.
•Cont.
•Is there a distinction between ‘generic’ and ‘specific’ goods?
•s.13(3): A sale of goods is not prevented from being a sale by description by reason only that, being exposed for sale or hire, they are selected by the buyer.
•It is thought that s. 13 has an important role to play in commodity markets…
•Cont.
•Arcos v EA Ronaasen [1933]! Strict approach to the requirement of conformity with the description
•Should the buyers real intention be considered? Bad faith?
•It is important to assess which terms in the contract used in reference to the goods being sold are part of their contract description?
•Cont.
•Despite the use of descriptive words, the court may conclude that the goods were not sold by that description (Reardon Smith Line [1976])
•Were the ‘descriptive words’ used relate to the identity of the goods or were they use in order to identify the goods? (Reardon)
•s.13:the description must be influential in the sale
•The description must be influential in the sale, not necessarily alone, but essential…
•The Act uses the words ‘by description’; without such influence a description cannot be said to be one by which the contract for the sale of the goods is made [Harlington [1991]
•There can be sale by description where the goods are inspected, if the description relates to something not apparent on inspection [Beale v Taylor (1967)] and [ Grant v Australian Knitting Mill (1936)]
•Cont.
•The sale by description was taken to mean: “the buyer has agreed to buy specific item exactly as it stands to the exclusion of all liabilities on the part of the seller; examples
•(1) sale of a second hand car
•(2) sale of pair of shoes
•(3) sale of most manufactured products
•s.14: Implied terms as to quality and fitness
•The general rule is that the seller does not warrant the quality and fitness of the goods s. 14(1)
•There is a statutory exception where the seller is acting in the capacity of a business
•No reliance on the seller need to be shown in contrast with 14(3).
•Satisfactory quality
•Satisfactory quality: The test which is used by the court is based on what is acceptable to a reasonable man
•2(B): the quality of goods are assessed against non-exhaustive cases listed in 2(B)
•S 14(2B) Fitness for purpose
•fitness for all the purposes for which goods of the kind in question are commonly supplied
•Thus fitness for purpose is an essential element for the purpose of 14(2)
•The term ‘commonly’ is very difficult to apply
•It is different than 14(3) because the act in this subsection requires a particular purpose which is made known to the seller..
•Cont.
•In Aswan Engineering v Lupdine [1987], the court said that 14(2) requires fitness for all the purposes for… as it was reasonable expect…
•In Henry Kendal v Lillico [1969], the HL said that it would be unreasonable to say that because the goods are unfit for one use, would make the goods unmerchantable (unsatisfactory), if it is fit for other common uses.
•S. 14(2B)- Freedom from minor defects
•Goods might have hidden defects, which are only dangerous because the defect is hidden for the buyer …Pharmaceutical products…
•These goods must be provided with the necessary information (instructions) otherwise might be deemed [very unlikely] unfit for the general purpose of its use (See Kendal)
•Freedom from non-functional aspects of quality
•Can the buyer complain that the goods are understandable merely because they suffered from minor non-functional defects?
•In Rogers v Parish [1987]the CA said that it is not enough that the goods be suitable for the main purpose (like a car be driven on the road), but also the non-functional aspects which the driver was entitled to expect (like interior and exterior of a car) [See also Bernstein v Pamson 1987]
•It is less likely that his logic to be applied to commodity products like vegetables… the concern is more for mass—produced manufactured consumer goods.
•Decisive test of satisfactory quality!
•The overriding test will be the test as laid in 14(2A), and the matters listed in 2B will be relevant in standing on the overriding test in 14(2A)
•Price
•The price at which the goods are sold is often relevant for the assessment of satisfactory quality
•This is enshrined in the act itself and runs contrary to the ‘adequacy of consideration’ principle
•For example the buyers expectation of a reasonably new, low mileage car, would be different from a high mileage car with a low price (Thain v Anniesland [1922])
•Cont.
•See Brown v Craiks [1970 HL] where the seller sold cloth which is intended for industrial purposes when the buyer needed it to a particular purpose for making dresses. The Court rejected the buyers claim because the cloth was still commercially saleable.
•In Grants [1930] the court said that the goods do not seize to be unsatisfactory where they were not commercially saleable at the contract price
•s.14: Buyer dealing as a consumer
•the relevant circumstances in subsection (2A) include any public statements on the specific characteristics of the goods made about them by the seller, the producer or his representative, particularly in advertising or on labelling
•The seller may escape liability subject to 14(2E)
•14(3) Implied condition as to fitness for purpose
•Will apply where the buyer needs the goods for a particular purpose, even where the goods are fit for all purposes for which the goods of that description are commonly used
•The key test is reliance- the seller should be aware that he was being relied upon to supply goods fit for the buyer’s particular purpose
•Cont.
•A presumption is raised where the particular purpose is made known to the seller, that the buyer will have relied on the seller to provide goods fit for that purpose
•One must place emphasis on ‘made known’ and not mere sufficient disclosure (Cammel [1934]
•Cont.
•Reliance can be inferred of ‘what is already know’
•Partial reliance will suffice-no need for exclusive reliance [Henry Kendall v William Lillico [1969]
•s 15 Sale by Sample
•(1) A contract of sale is a contract for sale by sample where there is an express or implied term to that effect in the contract.
•(2) In the case of a contract for sale by sample there is an implied [term]--
•(a) that the bulk will correspond with the sample in quality;
•(b) . . .
•(c) that the goods will be free from any defect, [making their quality unsatisfactory], which would not be apparent on reasonable examination of the sample.
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