LAW 299 GROUP

CASE 1

Issue

Whether Amir can take legal action toward Top Guy Boutique for breached the implied
condition as to fitness for particular purpose and as to merchantable quality.

Law

According to Section 4(1) of the Sale of Goods Act (1957) defines a contract of sale of
goods. After that, the act is referred known as SOGA. According to Section 4(1) of SOGA
states ‘a contract of sale of goods is a contract whereby the sellers transfers or agrees to
transfer the property in goods to the buyer for a price a money consideration’. Consequently,
there must be goods, money consideration (called the price) and transfer of property. These
three components must be present in the sales of goods contract. The elements include the
transfer of goods to the buyer, the transfer or agreement to transfer property in the goods to
the buyer by the seller, and the price of the transfer.

The contract of sale of goods must have this three elements. The elements are goods to be
transferred to buyer, seller transfers or agrees to transfer property in goods to buyer and
price for the said transfer. According to Section 2 of SOGA, goods refer to every kind of
movable property other than actionable claims and money, includes stock and shares,
growing crops, grass and things attached to or forming part of the land which are agreed to
be severed before the sale or under the contract of sale. Therefore, according to this
definition, land is not covered by the Sale of Goods Act. In other words, the term "goods" is
used widely and refers to all personal property other than money and objects in motion. This
usually only refers to tangible objects that can be moved not included are land or things
attached to land (though it does include timber and growing crops which are to be harvested
before sale or under the contract of sale choses in action or rights, e.g. debts, negotiable
instruments and patents, or
services, such as work and labour, or repair. In short, 'goods' includes tangible movable
properties. Goods that are the subject of a contract of sale can be divided into a number of
classifications under the sale of goods legislation existing, future, specific, unascertained, or
ascertained.

According to Section 6 of the Sale ofGoods Act of 1957, the goods that are the subject of a
contract of sale may either be existing goods or future goods. Existing goods are those that
the seller already owns or possesses, and they may be specified or not as part of the sale
agreement, as stated in Section 2 of the Sale of Goods Act of 1957. The seller must transfer
to the buyer at the time the contract was established for the sale of goods to be valid.Goods
specified and agreed upon at the moment a contract of sale is made are referred to as
specific or ascertained goods. Unascertained goods, on the other hand, are ones that are
only identified by description.

According to Section 16 of the Sales of Goods Act 1957 refers to the standard of quality of
goods. Goods must be reasonably fit for purposes for which the buyer wants them.
According to general rule under common law, the buyer is expected to exercise care in
making purchase. The rule is known as CAVEAT EMPTOR which means, the buyer must
beware. Here, it is for the buyer to satisfy himself as to the quality of the goods purchased. If
the buyer careless, the buyer must bear the consequences and the seller would not be
liable, if the goods is not fit or having no quality as required by the buyer. However there are
some exceptions under Section 16 (1)(a) where it shows that the implied terms as to fitness
for particular purpose can be applied. As a result of this section, there are the implied
conditions that buyers can use against the seller which are goods must be reasonably fit for
a particular purpose for which the buyer wants them under section 16(1)(a) and goods must
be of merchantable quality under section 16(1)(b). In Section 16(1) (a), there are four (4)
requirements there is an implied requirement that the items must be adequately fit for
purpose if all the conditions are satisfied which are the buyer must make known, either
expressly or impliedly, to the seller at or before the time when the contract is made, the
purpose for which the goods are required, The buyer is relying on the seller's skill or
judgment, The goods are of a description, which it is in the course of the seller's business to
Supply, If the goods are specific, they must not be bought under their patent or trade name.

Disclosure of purpose is the buyer must make known either expressly or impliedly to the
seller at or before the time when the contract is made the particular purpose for which the
goods are required. But no further indication is required where the goods serve only one
purpose. Buyer must tell seller about the purpose of the purchase. If seller already provided
the information or condition about the goods seller will not be able and not be responsible if
buyer fail in buying those goods. This may be referred to the case Griffiths V Peter Conway
Ltd Women with a usually sensitive skin bought a Harris Tweed coat without disclosing that
fact to the seller. It turned out that the goods afflicted her health. So, the court held that the
women could not succeed under this section. as the coat would not harm a normal person.
She failed to claim for damages because she did not tell the seller that she has sensitive
skin. However, if the description of the good showed that it has only one purpose, no
disclosure is required. It is implied that the goods are fit for that particular purpose

In this case, the principle of law is If the goods are specific, they must not be bought under
their patent or trade name. In this prerequisite. The buyer cannot later complain if the goods
purchased are not for the purpose for which he needs them if he requests specific items
under a patent or trade name with the idea that he is not depending on the seller's ability or
judgement. However, it will be deemed that the customer is relying on the seller's expertise
and judgement if they buy the items under a trade name and do so while using their own
trade name. The case related with this requirement is Baldry vs Marshall. In this case. the
buyer had asked the dealer for a car suitable for touring and the dealer recommended a
Bugatti car. A contract for the sale of a Bugatti car was entered into and it was later found
that the car was unsuitable for touring. Hence, the court held that, the dealer is liable
because the buyer had relied on the dealer's judgment in the selection of a car suitable to
the buyer's stated purpose even though it was sold under a trade name. In light of this, it
follows that the goods sold under a contract for sale by sample must match the sample. If
the items are bought in bulk, the amount and the sample must match. The buyer has the
option to reject the entire bulk if only a portion of the item matches the sample but not the
remainder. If the bulk of the items have flaws that do not match those in the sample and
render them unusable for commercial purposes, the buyer has the right to reject the goods.
Another case is in Frost v. Aylesbury Dairy Co. Ltd (19051) The defendant in this case is a
milk dealer where he supplied milk contained germs of typhoid fever. Plaintiff's wife died due
to the infection. Court held that it was an implied condition that the milk must be reasonably
fit for consumption.

Therefore, based on the section 16(1)(b) implied condition as to merchantable quality Where
goods are bought by description from a seller who deals in goods of that description, 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 examination ought to reveal. As in the case of fitness for purpose, the implied condition
that goods must be o merchantable quality only applies where the sale is by description from
a dealer in goods of that description. The state or condition of a good is referred to as its
quality. This can be seen in the case Wilson v Ricket, Cockerall & Co Ltd [1954]. A lady
ordered fuel by its trade name 'Coalite' from a fuel merchant. The consignment included a
piece of coal in which a detonator was embedded, resulting in an explosion in the fireplace.
The consignment as a whole was unmerchantable. It had defects making it unfit for burning.
The court held that there is no need for the buyer to make known to the seller the purpose
for which the goods are required. 'Merchantable quality' has been taken to mean that they
must be reasonable for the purpose described. This requirement must be satisfied even
where the article is sold under its trade or patent name. Factors to be taken into account to
determine 'merchantability' include price the description applied to the goods whether the
purpose for the goods had been made known to the seller, and any other circumstances
relevant to the sale.
It is to be noted that if the description in the contract is so general that goods sold under it
can normally be used for several purposes, then goods would be merchantable under that
description if they were fit for any one of those purposes. The products would be
unmerchantable if they were useless for that purpose, however, if the description is so
limited that the items sold under the contract could only be utilized for one purpose. On the
same set of facts, there may occasionally be a violation of both the requirements for
merchantability and fitness for purpose.

CASE 2

ISSUE

Whether Rozita can take legal action toward Mr. Arumugam for breached the implied
condition in a sale by sample.

LAW

According to Section 4(1) of SOGA states a contract of sale of goods is a contract whereby
the sellers transfers or agrees to transfer the property in goods to the buyer for a price.
These three components must be present in the sales of goods contract. The elements
include the transfer of goods to the buyer, the transfer or agreement to transfer property in
the goods to the buyer by the seller, and the price of the transfer. A contract of sale may also
exist between two different owners, besides that. This establishes that the transfer or
agreement to transfer it indicatesstipulation as a sales contract at this point. Additionally, this
might be a sale or a contract to sell. Only once the transfer of ownership of the items from
the seller to the buyer has been completed does a sale take place. Additionally, the primary
objective of the contract of sale under this statute is to transfer ownership of the items to the
buyer for financial gain.

In addition, there is property in the transferred items, indicating that ownership has been
transferred to the buyer and creating a contract of sale. Consequently, this provision should
be added beside Section 2 of the Sale of Goods Act of 1957, which outlines goods refer to
every kind of movable property other than actionable claims and money, includes stock and
shares, growing crops, grass and things attached to or forming part of the land which are
agreed to be severed before the sale or under the contract of sale. The products being
bought or sold at this time must be mobile as long as the object can be removed and is not
in the claimant's possession. Regarding the price, money is a need in the sales contract
because it is seen as a justifiable form of trade. Therefore, the legislation of the sale of
goods does not apply to barter arrangements.
Furthermore, the contract's provisions may be explicitly stated or impliedly implicit. As a
result, there are contract provision that fall under the category of conditions and warranties in
a sale of goods contract. In addition, the criteria are essential to the agreement, and they
must be met in order for the other party to consider the agreement to be terminated.
According to Section 12(2) of the Sale of Goods Act of 1957, where the condition is a
prerequisite to the contract's main goal and is broken, the party who made the condition has
the right to treat the contract as repudiated. The buyer may choose to renounce the
agreement he entered into if the seller chooses to violate any of the implied terms.

Apart from that, as referred to the implied condition in sale by sample which has been
stipulated pursuant to section 17(1). According to section 17(1) stated that a contract of sale
is a contract for sale by sample where there is a term in the contract express or implied to
that effect”. Therefore, the contract will be referred to, and the court will decide whether or
not a sale by sample occurred after reading the contract. According to Section 17(2) under
the Sale of Goods Act 1957 defines "in the case of contract sale by sample, there is an
implied condition, there are three conditions implied in a sale by sample condition for a
contract of sale which are Section 17(2)(a) stated that bulk shall correspond with the sample
in quality, Section 17(2)(b) buyer shall have reasonable opportunity of comparing the bulk
with the sample, Section 17(2)(c) that the goods are free from any defect rendering them un-
merchantable which would not be apparent on reasonable examination of the sample. In
other words, the bulk of the goods must match the sample exactly. The buyer has the option
of rejecting all the items if the bulk is significantly inferior to the sample. The buyer can
choose to accept all of the items and seek damages for those that are inferior, or they can
choose to reject all of the goods and file a lawsuit for damages if the bulk is just somewhat
inferior to the sample. If the sale agreement is not severable, the buyer is not given the
option to take some of the bulk and reject the rest. The legality of a sale by sample must be
determined. If the parties have a disagreement over the products and the contract of sale is
in writing, the court will typically not stray from the stated agreement. There are three implied
conditions in contracts of sale by sample, in addition to the previously mentioned implied
condition that the sale is by sample as well as description (i.e., the bulk of the goods must
correspond with both sample and description): the bulk shall correspond with the sample in
quality; if the differences are only of a minor nature and the quality of the goods is still the
same, this condition will not be breached and the buyer shall have a reasonable opportunity
of comparing the bulk with the sample. A reasonable amount of time is given to the buyer to
compare the bulk to the sample. Acceptance is considered to have occurred once this is
completed. The buyer may still file a lawsuit for damages for breach of the warranty if the
bulk of the goods do not match the sample, but the right to reject the items is then forfeited.
Any flaw that would not be visible upon reasonable scrutiny of the sample must be absent
from the items. When a customer purchases items in bulk but only tests or examines a small
sample of those products, the seller is required to ensure that each item in the bulk is of the
same calibre as the sample that was tested or examined. Breach of any one of the
conditions, buyer can reject goods and treat contract as ending. In light of this, it follows that
the goods sold under a contract for sale by sample must match the sample. If the items are
bought in bulk, the amount and the sample must match. The buyer has the option to reject
the entire bulk if only a portion of the item matches the sample but not the remainder. If the
bulk of the items have flaws that do not match those in the sample and render them
unusable for commercial purposes, the buyer has the right to reject the goods.

Moreover, this principle can be seen in the case of Godley v Perry (1960). In this case,
Godley, a 6-year-old kid, bought a plastic catapult. Godley used the catapult correctly, but as
he did so, it cracked in his hands, causing the youngster to lose an eye. He was victorious in
his lawsuit against the store owner who sold it to him. The child didn't need to explicitly state
the reason for his purchase because it was already clear from the context. According to the
ruling, the catapult was impliedly used, and because it was unfit for its intended use, Godley
was entitled to damages. The court held that the first defendant was in breach of section
14(2) and (3) as the goods was not fit for its purpose and was not if merchantable quality.
Besides that, the third and fourth parties were both in breach of section 15(2) (c) since the
defect of the goods could not be discovered by reasonable examination of the sample. The
second facet of merchantability is that the goods must not only match the sample but also be
of merchantable quality. The three conditions stand apart from one another. This indicates
that the buyer may be allowed to reject the goods and treat the contract as broken if even
one of them is broken. Another case Drummond v 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 material for tailoring work. When the bulk of the material
was delivered, they were found to be unmerchantable for tailoring purposes – although the
bulk was similar to an equal to the sample approved by the buyer. The court held that the
defects in the material could not be discovered by the inspection of the sample and the
buyer was not liable to pay for the bulk.
Therefore, if the defect were not latent then the buyer has the right to refuse to pay for the
goods.

APPLICATION
CASE 1

By applying the law above into this Amir case situation, the section 16(1)(a) which is implied
condition as to fitness for particular purpose, Amir has no right to take legal action against
Top Guy Boutique because it is the most well-known brand worldwide to claim for damages
his skin developed rashes and became itchy upon wearing it. This is because if the goods
are specific, they must not be bought under their patent or trade name. By applying to the
section 16(1)(a) and 16(1)(b), the case of Griffiths V Peter Conway Ltd and another case is
in Frost v. Aylesbury Dairy Co. Ltd (19051) and the implied condition as to fitness for a
particular purpose, where under the common law, the general rule is that the buyer is
expected to exercise care in making purchases. Therefore, based on the section 16(1)(b)
implied condition as to merchantable quality. There is an implied condition that goods bought
by description from a seller who deals in goods of that description should be of merchantable
quality. There is no implied condition as regards defects which such examination ought to
reveal, provided the buyer has examined the goods before buying them. This rule is known
as Caveat Emptor let the buyer beware. Buyer must exercise care in making purchases, if
he does not, he must bear the consequences. The seller will not be liable if the goods is not
fit or does not have the quality as required by the buyer. Based on this case, Amir bought a
pair of jeans from a Top Guy Boutique for casual wear since Top Guy is a popular brand in
the world which is the patent and trade name. Considering Amir situation where Amir not
relying on the seller’s skill of judgment and he bought a pair of jeans because he knows that
Top Guy is the brand name and he believe that the quality of the fabric is good and everyone
know the fabric feel when wearing it and not affect the skin or not have the issue when
wearing the fabric whether clothes or jeans. Amir also not asked or relying on the seller
because he had the knowledge about the brand and that the reason, he buys it for himself.
He also has no knowledge of information, get to know or read information about the jeans
purchased as a piece of fabric, what type of fabric is cotton, denim or a mixture of other
fabrics, are the jeans suitable for wearing for all skin types or only for normal skin and not for
sensitive skin. The information placed on the jeans is the thing that must be placed by the
seller to provide information about the fabric used to the consumer. In this case Amir did not
see the information and he bought it without asking the seller about the fabric because he
has sensitive skin which requires him to find out about the fabric used for him to buy clothes
or jeans. Based on section 16(1)(b) his implied condition as to merchantable quality applies
even where goods are sold under their patent or trade name. based on this case, if Amir
buys a pair of Top Guy jeans, it is an implied condition that he will not get rashes when
wearing it due to the chemicals which might have been used during the manufacture of the
jeans. Based on the case, Amir has no right to take action against Top Guy and he cannot
sue Top Guy because buyer must not be bought under the patent or trade name. Thus, he
cannot later claim if the goods bought are not fit for the purpose for which he requires them.

CONCLUSION

In conclusion, Amir has no right to take legal action against Top Guy under the law of sale of
good since there is no valid contract between Amir and Top Guy. Hence, Amir cannot take
legal action Top Guy for breach the contract by made his skin developed rashes and
became itchy upon wearing it. As a result, Amir had to seek medical treatment to treat his
condition. This is because Amir can’t sue Top Guy because he failed to meet the
requirements in section 16(1)(a) and 16(b) of the sale of goods act of 1957.

Case2

By applying the law above into this Rozita case situation, the section 17(1) which is implied
condition in sale by sample, Rozita has right to take legal action against Mr Arumugam
because breach the condition in sale by sample. Pursuant to section 2 of the sale of goods
act of 1957, Rozita is the buyer and Mr Arumugam is the seller. In accordance to section
4(1) of the sale of good act 1957, there was a formation of the sale of goods this is because
Mr Arumugam had entered into a contract to transfer the property in goods to Rozita for a
price. Therefore, Mr Arumugam is bound by the contract for the sale of goods with Rozita.
Moreover, Rozita has ordered 100 packets of spices to use it for her business after a sample
was shown to her by Mr Arumugam. However, when Rozita received the spices, the half of
the spices were not in a good condition and the spices were destroyed and smelly.
Therefore, the Mr Arumugam 's spices did not correspond with the condition implied in a sale
by sample as referred under section 17(1) of the Sale of Goods Act 1957. This is because it
different in terms of sample quality when she tastes and see before this with sample
according to section 17 (2). The differences in quality and taste indicate that the spices are
not the same as the sample. So, if the goods do not match the sample, Rozita clearly has
the right to reject them and cancel the contract because Mr Arumugam as the seller, is liable
for the breach of conditions in sale by sample. On top of that, Rozita as the buyer has
implied conditions as to fitness for particular purpose and also condition in sample by
sample. In accordance with the principle of caveat emptor in Section 16 (1) of the Sale of
Goods Act 1957, Rozita is aware that she received the goods that is not accordance with the
sample given. At this point, we can see that Rozita has exercise care in making purchases.
Thus, Mr Arumugam as the seller is liable for the breach of conditions in sale by sample and
Rozita may rescind the contract and claim for damages. In addition, this can be seen in the
case of of Godley v Perry (1960) and another case Drummond v Van Ingen (1887). If Rozita
prepares the curry with the requested spices, it may cause food poisoning in the client, for
which the client may file a lawsuit against Rozita. This is because the spices were to be used
in the preparation of food for her Curry World Cafe in Seremban, Rozita can refuse delivery
of the goods and renounce the contract or, under Section 58, she can ask for the specific
performance of the contract, which would result in a significant loss for her. Damage
amounts are uncertain because using other spices could lower her reputation as a chef.
Additionally, the lack of spices could cause her business to fail.

CONCLUSION:
In conclusion, Rozita has the right to take legal action against Mr Arumugam under the law
of sale of goods since there is a valid contract between Rozita and Mr Arumugam. Hence,
Rozita can take legal action against Mr Arumugam by requesting the wrong ordered for
sample as she has received the spices were not in a good condition and the spices were
destroyed and smelly and it was not according to the one, she had ordered when placing her
purchase.