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Presentation On Commercial Law

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Presentation of section in Sale of Goods Act

Ak P / Kuala Lumpur

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Qualification: Masters in Law

Teaches: English, Geography, History, Bahasa Melayu, Contract Law, Law, Malay

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  1. Commercial Law AK MY MENTOR CLASS 5 2022/2023 AK/ 2022-2023
  2. RECAP What did we study in the last class? AK MY MENTOR Section 11:-When condition to be treated as warranty. 2022/2023 Section 12:-lmplied terms about title
  3. Section 11 :-When condition to be treated as warranty. Types of Warranties. expressw r Express warranty: terms expre s Implied warranties : implied by law or custom; these shall prev i unless the parties agree o t e con rary. Can repudiate a contract for breach of a condition, however, buyer can treat it as a breach of warranty
  4. Section 12:- Implied terms about title Section 12 Of the Sale Of Goods Act 1979 provides the rules which govern a seller's title to the goods or his right to sell them. AK MY MENTOR Section 12(1): the seller must have the: right to sell the goods at the time of the actual sale or, if the contract i 2024/2023 he will have the right to sell the goods at the time when the property is to pass to the buyer. In the case Of Rowland v Divall (1923), plaintiff bought a car from defendant and used it for several months. It then realized that defendant has no title to this car and the plaintiff is bound to return it back to the true Owner. He sued defendant for recover back the purchase-money that he had paid as on a total failure Of consideration. The Court held that he is entitled to recover the whole Of it price because the consideration for the use Of car had totally failed.
  5. Section 12(1) might be construed as meaning that the seller must have the power to give ownership of the goods to the buyer, but if the goods can only be sold by infringing a trade mark, the seller has no right to sell for the purposes of s 12(1). The case of Niblett v Confecti n a firm who dealt in confecti n s sell condensed milk in tins and of a price including insurance and freight from New York to London. Payment was made in case on receipt of th and the defendants were paid the price. There were 1 ,OOO cans w the word 'Nissly' on them. This make Nestle Company notice about it and recommended that this was a breach of its registered trade mark. The defendants were required to remove the name and brand in order to be able to sell the goods without being sued by Nestle for infringement of trade mark. They could only sell them at a loss without any mark. Held by the court of appeal, that the seller were in breach of the implied condition set out in section 12(1) of the sales of good Act. A person who can sell goods only by infringing a trade mark has no right to sell, even though he may be the owner of the goods.
  6. Section 12(2)(a) also imposes : a duty on the seller that the goods will continue to remain free from any undisclosed encumbrances after the sale has taken place. d/W Yr emn ENu Encumbrances are anything th erty rights in the goods. Example: Plot of Land (A,B,C) WHERE the seller fails to disclose that he is only a part-owner of the goods and, that consequently, the •t d to apart-share in the goods. Section 12(2)(b) - The buyer has the right to enjoy quiet possession of the goods and any disturbance of this right by third parties will mean that a potential claim lies against the seller. Example: the trademark devices
  7. This point can be illustrates in the case Microbeads AG v Vinhurst Road Markings Ltd (1975). In this case, the court Of appeal held that they could include breach Of section 12(2) but not breach Of section 12(1). There had been no br Cho e tio of the sale so that A had not infringed that sub-session but s isturbed after sale, A was in breach of section 12(2). Section 12(3) : the seller can only give the t the goods; the seller is duty bound to In rm e uyer a e only enjoys limited rights; It is entirely the buyer's choice if he wishes to proceed with the sale. The main protection that Section 12 gives to a buyer is that the seller is promising that he has the right to sell the goods to the buyer.
  8. Section 13:-Sale by description (l )Where there is a contract for the sale of goods by sale by description, there is an implied condition that the goods will description correspond with the description. AKaslu (2)lfthe sale is by sample a ient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description. 2022/2023 (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. (4)Paragraph 4 of Schedule below applies in relation to a contract made before 18 May 1973.
  9. What can wee see from S. 13: • If the seller describes the contract goods in a certain way e.g. a black leather jacket, the buyer is entitled to receive goods which conform to this description IN'heYja/kåt TuQ, R • So, if the seller supplied a e would be in breach of her obligation under Section 13. 202242023 • It should be appreciated, of cour g wrong with a brown leather jacket (it is not defective in any way), but it is not what the buyer asked the seller to supply to him under the terms of their contract and, therefore, the seller has committed a material breach of the agreement. • Section 13 does not address the issue of damaged or defective goods or goods which are not fit for their purpose —such issues are properly treated as a breach of Section 14 of the Act of 1979.
  10. The case of Beale v Taylor (1967) Facts: The defender advertised a second hand car for sale in a newspaper. The car was described as a 1961 Triumph Herald 1200 and the seller was acting in good faith when he applied this description to the o d vr he pursuer went to view the vehicle. During his examinatio on the rear of the car with the figures 1200. The pursuer eclded to go ahea and bu e car. However, it was later discovered that only rear of the car was 1961 Triumph Herald 1200. The front of the vehicle was actually a Triumph Herald 4 d the rear. The welding was unsatisfactory and, conseque pletely unroadworthy. 13 of the Sale of Goods Act 1979 Held: The pursuer's claim for damag was successful. The pursuer had reli •on contained in the advert and on the metal badge on the rear of the car. e sa e was one of description and it made no difference that the buyer had actually seen and examined the vehicle before entering the contract of sale with the seller.
  11. The case of Nichol v Godt (1854) Facts: The buyer had entered a written contract with the seller to purchase 33 tonnes of what was described by the seller as 'foreign refined rape oil'. The seller had permitted the buyer to examine a sample of the goods. After the bulk of the goods had been delivered, the buyer discovered that they were a mixture of rape and hemp oil. As it turned out, the sample which the seller had allowed the buyer to examine was also a mixture of rape and hemp oil. AK MY MENTOR Held: the seller had committed a breach of descri tion despite the fact that the buyer had examined the sample and, furthermh esponded to this sample. The seller had applied a description to the gou r d relied on. The buyer thought that he was purchasing foreign refined rape 01 not e mix ure of rape and hemp oil which had been delivered to him. The bulk goods were clearly an inferior product in all respects. It will be recalled that the buyer in Beale v Taylor [1967] (above) had also examined the goods, but this did not prevent the transaction from being a sale by description.
  12. An important point to note is that for the buyer to succeed in any claim under Section 13, she must be able to show that she relied on the seller's description of the goods. It will not be enough for the buyer to say that the seller uttered a misleading statement when describing the goods, this statement must influence the buyer. If the seller can prove that the by the description of the goods, then there is no breach of Section 13. 202242023 So, if the buyer decided to commissio v ify the authenticity of an antique to which the seller had applied a description. An example would be: "the vase is from the late Ming Dynasty period", as describe by the seller. The buyer has not relied upon or been influenced by the seller's description of the goods. If the expert (wrongly) states that the vase is from the late Ming Dynasty period and the buyer proceeds to purchase the item, it was not the seller's description which swayed him, but rather the appraisal of the expert appointed by him to verify the authenticity of the goods. The buyer should, therefore, pursue the expert for damages not the seller based on a contractual duty of care owed by the expert to the buyer.
  13. The case Harlingdon v Hull Fine Art Ltd [1 990] : Facts: Hull, an art dealer, was asked to sell two paintings described as being painted by Gabriele Münter, a German Expressionist artist. Hull was completely ignorant Of the work Of the German Expressionists and he contacted Harlingdon, also art dealers, who possessed expert knowledge Of this particu ar School. Hull stated to H rli paintings were by Münter, but he admitted to Harlingdon that he was not an expert in this field. Harlingdon sent one Of its expe s, a e ction Of the paintings. On the strength Of this examination, Runkel bought one Of the paintings on behalf Of Harlingdon paying for the privilege. It later emerged that thi r nd its actual value was probably only u for breach Of description in terms Of between E50 and El 00. Harlingdon raised Section 13. Held: by the English Court Of Appeal that the action against Hull should be dismissed. Harlingdon had not relied totally on Hull's description Of the painting. They had taken Steps to verify the authenticity of the painting by subjecting it to an expert examination (one Of their own experts no less) and his decision to purchase the goods was based very much on the strength Of his own judgement. The description had not, therefore, influenced Harlingdon to enter the contract with Hull for the painting.
  14. In other situations, the seller may make it perfectly clear to the buyer that he is not prepared to provide a description in connection with the goods which should be relied upon in anyway or should be used by the buyer as a basis for legal action under Section 13 at a later date. In Cavendish-Woodhouse v Manley (1 984), a seller was able to demonstrate that the buyer was not entitled to claim that the descripti n ntract Of sale. A seller will be entitled to claim that the duty in in phrases are applied to the goods, for example, 'sold as seen or bought as seen . 2Q2Ue2023 Such phrases, however, will not protect t reached the requirements Of fitness and satisfactory quality in terms Of Sect' Ods Act 1979 because these phrases do not operate as general exclusion clauses. The effect Of these phrases indicate is that they indicate to the buyer that the seller does not regard the transaction as a sale by description.
  15. It has been observed that Section 13 has turned out to be the most problematic provision of the entire Act because courts have interpreted Section 13 in diverse ways. The main problem has been that courts have found it very difficult to decide whether all descriptive words fall within scope of Section 13. Over the years, the courts have i cription' as compared to what would have been implied under t •A. Burrows, English Private Law (Oxfor 2022/2023 Challenges in looking into the concept of "description" under section 13.
  16. AK MY MENTOR Hope you enjoyed ur lesson

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