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IMPLIED TERMS

Question 7 Zone A 2014

Cookum Bakery buys from Linman Ltd what is called in the sale contract ‘a conveyor
belt suitable for use in the manufacture of all types of food products’, having seen one of
these machines at a trade fair. After delivery it becomes clear to Cookum that the
machine is several years old. Cookum installs the conveyor belt to convey bread from its
ovens. Eight months after the installation of the conveyor belt there is a fire at
Cookum’s factory, which was caused by particles of bread becoming trapped in the
conveyor belt. The problem would not have arisen if Cookum had cleaned the
machinery regularly, but Linman had not given instructions that this was necessary.

It emerges that there had been reports of fires through similar causes in conveyor
belts used by other bread makers, and that many bakers avoided this by making simple
adjustments to prevent bread particles from falling into the machinery. As a result of
the fire Cookum’s factory is destroyed and the firm loses orders from supermarkets for
bread and an order to supply bread to a royal banquet, which would have brought
great publicity to the firm’s products.
Discuss.

Question 6 June 2013

Waterloo Ltd is a furniture dealer and wishes to buy some delivery vans from Pancras
Ltd, a dealer in such vehicles. Waterloo’s authorised buyer says to the Pancras
salesperson, “We want to keep our running costs down, so we only want vans that do
not use a lot of fuel.” The salesperson recommends the Vanno. Waterloo buys ten
Vannos.

After using the vans for a while, Waterloo discovers they are not suitable for carrying
furniture because only small items will fit in, and their consumption of fuel is above the
average for similar vans available from other dealers. Some of the vans are also found
to suffer from a defect in the gearbox which only becomes apparent after they have
covered
5,000 miles.

Discuss.

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June 2012 Zone A

6. Jackie saw an advertisement in a farming newspaper: “For sale, Blue-faced Leicester


sheep for breeding”. As a consequence, she visited Martin, who was selling the sheep.
She told him, “I have been a farmer for some years, but I have never had sheep. I now
intend to start breeding sheep.” After a brief examination of the sheep, Jackie agreed to
buy. It later emerged that at the time of the sale the sheep were suffering from a disease
that meant they would never be able to give birth. Martin was unaware that the disease
was present in the sheep and it could not be detected other than by an expensive test.

Discuss.

Introduction

 Jackie will want to repudiate contract, reject the goods and sue for damages in
this contract for sale of goods defined under S2(1) SGA 1979-why? Will Jackie
have lost his right to reject- S34 and S35 SGA
 How will Jackie achieve this- is there a breach of contract?
 Is Jackie as a consumer or non consumer- R&B Custom Brokers v UDT(1988)

Possible breach of S13 (1)- sale by description.

• COTTER v LUCKIE(1918)- “pure breed polled Angus bull”- physical


abnormalities preventing the bull from breeding

How will this be a contract for a sale by description?- see Beale v Taylor(1967)

Sections 13 Sale by description.


(1) Where there is a contract for sale by description, there is an implied [term] that
goods will correspond with the contract.

No-13 covers consumer and non- consumer sales where the seller is not necessarily selling
in the “course of business”. The Caveat Emptor rule!
Wallis v Russell(1902)-FitzGibbons LJ-If it is not a sale by description then the buyer must
beware.

Sale by description applying to - Sale of identifiable goods (specific good)- Grant v AKM
Ltd(1986), Beale v Taylor(1967.)

Description- not defined under S61(1)

1. “Description”- must be a term of the contract


• Distinguishing a term from a representation/mere puff
• The reasonablemans test- objective view of whether the maker intended to be bound
by the statement.
• The contractual cartography test-see L. Moulton in Heilbut, Symons &Co v
Buckleton(1913)
• Importance of the statement
• Degree of knowledge
• Reduce into writing
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• Time of statement being made

2. The description-must go to the identification/defining or essence of the contract.


• L. Moulton in Wallis v Pratt (1910)-condition-goes to the root of the contract.
Current test:
a) Term of the contract that goes to the identification of the subject matter of the contract,
not merely where it is to be found. [Rearden Smith v Hansen Tangen (1976) per L.
Wilberforce]
b) The test was redefined in Reardon Smith v Hansen Tangen(1976) by L. Wilberforce who
stated that… the description must be
• Essential to the defining of the goods
• Essential in the performance of the contract where regard must be had to
(i) Commercial purpose and background of the contract
(ii) Other relevant circumstances
(iii) Refer to the decisions of Arcos Ltd. V EARonaasan & Sons(1933) per L.Atkin and
ReMoore and Landauer and Co. Ltd(1921) CA per LJ Atkin where L. Wilberforce
indicated that these “decisions unduly restrictive and excessively technical..”

3. Reliance on the sellers skill and judgment


(Harlingdon & Leinster Ltd. V Christopher Hull Fine Arts Ltd.(1991)

Conclusion.

Possible breach of S14(2) Satisfactory Quality

 S14(2) Where the seller sells goods in the course of business, there is an implied
term that the goods supplied under the contract are of satisfactory quality.

 Standard of a reasonableman-S14[2A] -Bramhill v Edwards(2004)Auld J- a


reasonable person must be one in the position of the buyer, with his knowledge and
will not be appropriate to consider a TP observer who is not acquainted to the
background of the transaction.

 and relevant factors to be taken into consideration..S14(2)(B)(a) fit for all common
purpose.

S14(2B)(c )freedom from minor defects


• Bernstein v Pampson Motors(1987) per Rougier J
• Roger v Parish(Scarborough) Ltd (1987) per Mustill LJ

DEFENCE FOR THE SELLER-S14(2)


• Refer to S14(2C)(b)…examination of goods by the buyer
• Nature of examination- “common law examination” and “actual examination”
Thorntonett &Fehr v Beer and Sons(1919) but today.. Based on the nature of
examination- “that examination”
• Wren v Holt(1903)- beer contaminated with arsenic.
• Godley v Perry(1960)- child's catapult
Conclusion.
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Alternatively a possible breach of S14(3) Fitness for purpose.

Sections 14(3) Fitness for purpose

When the seller sells goods in the course of business, it is an implied term that the goods
supplied under the contract be reasonably fit for the purpose for which the buyer has
purchased them…having expressly or impliedly brought to the sellers attention the purpose
for which the goods are being bought for.
• Sale in the “course of business”
• Purpose for which goods have been purchased
Common purpose/singular purpose-impliedly brought to sellers attention
• Wallis v Russell(1902)- Boiled crabs
• Priest v Last(1903)-Hot water bottle
• Frost v Aylesbury Diary Co(1905)- contaminated milk with typhoid germs

Are the goods reasonably fit for the purpose?


• Bristol Tramsway Carriage v Fiat Motors Ltd(1910)
• Henry Kendall v Willian Lillico(1969)

Defence for the seller-Reliance on the seller’s skill and judgement.


1. Extent of reliance on sellers judgement
• Ashington Piggeries v Christopher Hill- “herring meals”
• Cammell Laird v Magannese Bronz- Propeller of ship
2. Reasonability of reliance
• Teheran Europe v ST Belton
• Bristol Tramsway Carriage v Fiat Motors Ltd(1910)
Conclusion.

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Question 7 Zone A 2011

Ted owns an automobile museum specialising in Fantari sports cars. On 1st January, he
sees an advertisement in Moto magazine, which has been placed by Kwality Kars Ltd. It
states: “1936 Fantari Speedster, £200,000.” On 2nd January, he goes to Kwality Kars
Ltd and buys the car. He arranges for the car to be delivered on 10th January. In the
meantime, he enters into a contract with Film Props Co., promising to hire the car to
Film Props Co. for use in a film between 15th and 20th January.

The car is duly delivered on the date agreed and Ted signs a note which states, “Car
delivered as described and in good condition.” The following day he discovers the car’s
original engine was replaced recently with an engine from a 1930 Fantari Tourer which
had been modified to meet the specification of the engine originally supplied with the
1936 Fantari Speedster. He also discovers that the gearbox is defective in that only two
of the four gears operate correctly.

He does nothing because he wishes to fulfil his contract with Film Propos Co. However,
on 21st January, when Film Props Co. return the car, Ted immediately contacts
Kwality Kars Ltd, stating that he intends to reject the car and demanding return of the
money paid.

Discuss.

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Q7 June 2009 [Zone A]

Colour Co. (‘Colour’), a manufacturer of paint, orders a quantity of cans from Tinny Co.
(‘Tinny’) for a new brand of paint that Colour is planning to make and sell. Each can is
to have a capacity of 1 litre, and Tinny agrees to deliver them in packs of 100 tins. The
cans are delivered on 1 January. Some of the packs contain 120 cans and 10% of the cans
have a capacity of 1.1 litres. Colour does not realise that there are these discrepancies
until the cans are filled with paint on 10 January. On 17 January, Colour discovers that
a chemical reaction between the paint and the material from which the cans have been
made has caused the paint to deteriorate. Tinny knew that this reaction might happen as
the result of the chemicals used in some paints, but not all paints contain these chemicals.
Tinny was unaware that Colour’s paint contained the chemicals and did not
mention the chemical reaction to Colour at the time of the contract.

Advise Colour Co.

In advising Colour Co.

CC may want to repudiate the contract, reject the goods and sue for damages- why- but
in order to do so they must prove the breach is serious S15A- basis that both parties are
acting as non consumers.

But can Tinny Co argue that CC had accepted the goods and lost its right to reject them
under S35 SGA 1979?

Problem relating to the supply of paint tins:

 Ordered tins-with 1 litre capacity and delivered in packs of 100


But tins delivered were in packs of 120 cans and 10% were delivered with 1.1
capacity. This is discovered on 10/1

 17/1 chemical reaction with paint causes paint to deteriorate. TC was aware that
that this might happen to some paints but was unaware that CC paint contained
chemicals that would react but did not mention this to CC either.

The relationship between CC and TC is one for sale of goods-S2(1) SGA 1979.CC will argue
breach of implied terms under S13(1), S14(2) and S14(3) SGA 1979.

Possible breach of S 13(1) sale by description.

 Consider S13(1) SGA 1979


 Applying the common law interpretation of “sale by description”
1. term of the contract- contractual cartography test.
2. identifying or defining the subject matter of the contract- Wallis v Pratt(1910)

 Ashington Piggeries v Christopher Hill(1972) per L Diplock


 Reardon Smith v Hansen Tangen(1976)
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 ReMoore and Landauer(1921)


 Arcos Ltd v Ronaasan & Sons(1933)
Consider the commercial purpose and the background of the contract.

3. relying on the sellers skills and judgement- Harlingdon v Christopher Hull


Fine Arts Ltd (1991)

 Conclusion.

Possible breach of S 14(2) SGA 1979-

 Obligation of the seller under S14(2)-Stevenson v Rogers(1999)- selling in the


course of business.
 Based on the standards of a reasonable man-S14(2A)
 Standards of a reasonableman -Bramhill v Edwards(2004)Auld J- a reasonable
person must be one in the position of the buyer, with his knowledge and will not be
appropriate to consider a TP observer who is not acquainted to the background of the
transaction.
 Were the paint tins of satisfactory quality?
 Consideration under S14(2B)-were the paint tins being used for its common
purpose-S14(2B)(a)- what will the argument of the parties be and will the
knowledge of the seller be important? Must it be fit for all its common purpose-
Henry Kendall v William Lillico
 Is it possible that there was a latent defect in the constitution of the paint tin to
which neither party was aware of? The facts suggest that the seller was aware of
this. Consider S14(2)(d) safety – Henry Kendall v William Lillico/ Ashington
Piggeries v Christopher Hull
 Would durability of the tins be also a concern here- Mash & Murrell v Joseph
Emmanuel (1961)
 Consider the possibility of a breach of S14(2) SGA 1979?

Alternatively consider the possibility of a breach of S14(3) SGA 1979.

 Obligation of the seller under S14(3) SGA 1979.


 Impliedly bringing to the sellers attention-purpose of use-Frost v Aylesbury (1905)
and Wallis v Russell(1902)- what about the peculiarity of the paint? What the
knowledge of the parties
 Were the paint tins fit for its purpose? Bristol Tramsway Carriage v Fiat Motors
Ltd(1910) and Manchester Liner v Rae(1922)
 Was there reliance on the sellers skill and judgement and reasonability of such
reliance? [see Teheran Europe v ST Belton]
 Grant v AKM Ltd (1936)- L Wright – reliance on the sellers skills will normally
be inferred based on the buyers confidence in the retailer having knowledge
about the product.
 Conclusion.

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What is the possibility of the buyer having lost his right to reject?

S35 Acceptance

(1) the buyer is deemed to have accepted the goods [subject to (2)]
(a) When he intimates to the seller that he accepts them
(b) when the goods have been delivered to him and he does any act in relation to them
which is inconsistent with the ownership of the seller.

(4) …the buyer is also deemed to have accepted the goods when after a lapse of
reasonable time…he retains the goods without intimating to the seller that he is rejected
them.

What would amount to a reasonable time?

 Consider the decision of Judge jack QC in Truk (UK) Ltd v Tokmakidis GmbH
(2000)

 Lutton v Saville Contractors(1986)

Conclusion.

Q6 Zone A 2008

EITHER
(a) Gardens-‘N’-You Ltd (‘Gardens’) sells bags of ‘Compo’, an artificial compost. This
product is made up by Acme Ltd (‘Acme’), a manufacturer of chemical products,
according to a recipe provided by Gardens. This recipe stipulates the use of
particular constituent elements in the compost. The recipe also permits Acme to
use ‘a stabiliser’, but does not specify what this should be. The stabiliser used by
Acme is a chemical product known as Blixo. Unfortunately, Blixo, while harmless to
other garden flowers, is poisonous to roses when mixed with the other elements
specified in the formula by Gardens. Gardens is unaware that Blixo has been used.
Janet, a professional rose grower, buys some Compo and digs it into her rose beds.
As a result, she loses her crop of roses.

Discuss.

What difference might it have made to your answer if the bags of Compo have a
label stating they contain Blixo and the possible effect of Blixo when used in some
types of artificial compost has been mentioned in trade newspapers circulating
among those in the garden industry, but Janet has not seen these newspapers?

OR

(b) ‘The provisions on satisfactory quality in the Sale of Goods Act add nothing to the
rights that a buyer has under section 14(3).’

Discuss.

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Q6 June Zone A 2007

6. Hamlet Ltd, a firm of house builders, is constructing houses on an exposed sea


front site. Hamlet’s manager, Romeo, goes to Macbeth, a local building supplies
firm, to buy bricks. Romeo says that the bricks are required for external use, but
does not say where the houses are being constructed. Macbeth shows a range of
brick types to Romeo, who chooses one called the ‘Brightgate brick’. These are
delivered and Hamlet uses them in the construction of the houses.

‘Brightgate bricks’ are made not of clay, like other types of brick, but of
compressed paper. In respect of the bricks used on the front of the houses, which
face the sea, a chemical reaction caused by contact with significant amounts of sea
salt renders them porous so that damp enters the houses. The bricks used on the
walls at the rear and sides of the houses, which do not come into contact with
seawater, do not allow damp into the house.

As a result of the damage to the front walls, the houses are unfit for human
habitation and Hamlet has to demolish them.

Advise Hamlet.

In advising Hamlet Ltd

 To sue Macbeth(M) for breach of contract under S 13(1), S14(2) and S14(3) SGA
1979 on the basis that the “Brightgate bricks” were not suitable for use in the said
construction of the houses resulting in them having to be demolished.(no longer fit for
human habitation)
 Contract is defined under S2(1) SGA 1979 between HL and M.

Possible breach of S 13(1) SOGA 1979


 Sale by description- what amounts to a breach of S13(1) SGA 1979?
 Applying the common law interpretation of “sale by description”
1. term of the contract
2. identifying or defining the subject matter of the contract
3. relying on the sellers skills and judgement

 Ashington Piggeries v Christopher Hill(1972) per L Diplock


 Pinnock Bros. v Lewis Peat Ltd(1923)
 Conclusion.

Possible breach of S 14(2) SGA 1979


 Obligation of the seller under S14(2)-Stevenson v Rogers(1999)
 Standards of a reasonableman -Bramhill v Edwards(2004)Auld J- a reasonable
person must be one in the position of the buyer, with his knowledge and will not be
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appropriate to consider a TP observer who is not acquainted to the background of the


transaction.
 Were the bricks of satisfactory quality?
 Consideration under S14(2B)-were the bricks being used for its common purpose-
S14(2B)(a)- what will the argument of the parties be and will the knowledge of the
seller be important?
 Is it possible that there was a latent defect in the constitution of the brick to which
neither party was aware of?
 Consider the possibility of a breach of S14(2) SGA 1979?

Alternatively consider the possibility of a breach of S14(3) SGA 1979.

 Obligation of the seller under S14(3) SGA 1979.


 Impliedly bringing to the sellers attention-purpose of use-Frost v Aylesbury (1905)
and Wallis v Russell(1902)
 Were the brick fit for its purpose? Bristol Tramsway Carriage v Fiat Motors
Ltd(1910) and Manchester Liner v Rae(1922)
 Was there reliance on the sellers skill and judgement and reasonability of such
reliance? [see Teheran Europe v ST Belton]

Conclusion- possible breach S14(2) and S14(3) SGA 1979- can the buyers repudiate the
contract, reject the goods and sue for damages?

 This will depend on the seriousness of the breach-S15A SGA 1979


 Can the sellers (M) argue that the buyers have lost their right to reject the goods-S34
and S35 SGA 1979?
 Reasonable lapse of time-up to the courts to decide depending on the nature of the
case and the extent of the defects itself.
 Lutton v Saville Tractors(Belfast) Ltd 1986
 Porter v General Guarantee Corp(1982)
 Truk (UK) Ltd v Tokmakidis Gmbh(2000) Judge Jack QC

Buyers right to reject will depend upon:


 The interest of the buyer and seller
 Reasonable time to reject cannot be less than the time taken to examine the goods.
 Reasonable time is normally longer than the time taken to examine the goods
 Reasonable time be extended by the parties by their dealings eg repairing of the
goods.
 Where goods are to be resold, it would be the amount of time taken to resell the goods
and the time reasonable for the sub buyer to examine the goods.
[ Mollings and Co. v Dean and Sons (1901)]

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Q5-2006(A)-Implied Terms

John is an accountant and wishes to do some of his work at home. He sees a notice in
the window of Charz Ltd, a furniture shop: ‘Tables ₤100. Suitable as dining table or
desk for the home office. Self assembly.’ On the notice is a photograph of a yellow
table. The table is much cheaper than equivalent tables sold in nearby shops. John
points to the notice and tells Yasmin, the sales assistant, ‘I will buy a desk.’ He then
adds, ‘I will also need a chair.’ He selects a chair from a photograph of a range of
chairs sold by Charz. It is agreed that the items will be delivered to John’s home.

The table and chair are delivered packed in sealed cardboard boxes. John is asked to
put his signature to a delivery note, which he does. The note includes a clause: ‘The
goods have been delivered to me in good condition and as ordered.’ When later he
unpacks and assembles the furniture he discovers that the table is blue. He had
particularly wanted yellow because that is the colour of the decoration in his home
office. The table has a scratch on the surface, which could be easily removed by the
use of a special polish. In addition, the table is too small for his home computer and
too low for the chair he bought from Charz.

Advise John.

Issue: whether John is able to repudiate the contract, reject the goods and sue for the price
paid.
 This is a contract for the sale of goods regulated under S2 SOGA 1979.
 The remedies is afforded pursuant to SOGA 1979 and via the common law (S62(2)
SOGA 79)

In order for John to establish liability, he must be successful in proving breaches of any
provision in relation to implied terms:
 In relation to the table, what was represented to him was that the table was suitable as
a dining table or a desk for home office.
 But the table that was actually delivered to him was too small for his home computer.
 Therefore, would this amount to a breach of S13 SOGA 1979?
 John must prove that the table does not correspond with the description on the notice
in the window of Charz Ltd.
 The description was: “…Suitable as dining table or desk for the home
office…” and the colour of the table was yellow in the photograph.
 To succeed, John must prove:
 Firstly, the description must be a term of the contract between the
parties.
 Contractual Cartography: Lord Moulton; Heilbut, Seymons v
Buckleton:
o Schawel v Reade: reliance on the seller’s statement.
o Routledge v Mackay: the intention has to be reduced
into writing.
o Bannerman v White: importance of the statement made
by the representor.
o Oscar Chess v Williams: the maker’s special knowledge
of the subject matter.

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o Therefore, the description that states “suitable as dining


table or desk for the home office…” would amount to a
term of the contract.
 Secondly, the term must identify the subject matter of the contract.
 The term must go to the root of the contract:
o Wallis v Pratt:
 The term must be essential to the performance of
the contract and failure to perform by the seller
is non-performance of the contract.
o Ashington Piggeries v Christopher Hill:
 The fact that there are words in the contract
describing the goods to be supplied does not
necessarily mean that those words are part of the
description for the purposes of S13 SOGA 79.
 They will be part of that description if they help
to “identify” the goods.
 OTF: the description that the table is suitable for home office
clearly identifies the particular table that John purchased.
o Lord Wilberforce; Reardon Smith v Hansen Tangen:
 It is only words whose purpose is to state or
identify an essential part of the description of the
goods which are words of identity in this special
sense, and so attract the implied condition in
S13 SOGA 79.
 He went on to state that, it must be essential in
the performance of the contract by having regard
to :
 The commercial purpose and background
of the contract.
 Other relevant circumstances.
 Therefore, John would regard the importance of
the above said description which is relevant and
essential in identifying the goods concern.
 Thirdly, there must be clear reliance by John upon the description
stated:
 OTF: the table was described as suitable for home office and
besides that the photograph was a yellow table – therefore, the
because of the functionability and the colour represented, John
relied on the description.
 Harlingdon v Christopher Hull:
o If the buyer has placed no reliance upon the seller’s
description, then that description cannot provide the
basis for claims under S13 SOGA.
 Therefore, by telling the sales assistant, “I will buy a desk”,
clearly, John is placing reliance towards the description on the
notice on these particular facts.
 Therefore, there is a clear breach of S13 SOGA 79 – because the table was not
corresponding to its said description.

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S14 SOGA 1979:


Besides that, because the table was too low for the chair that he bought and the presence of
some scratches on the surface, can it be said that the table is not off satisfactory quality
pursuant to S14(2) SOGA 1979?
 Implies a condition that the goods will be of satisfactory quality when sold by
someone selling in the course of business.
o OTF: Charz Ltd is selling in the course of business.
 S14(2A) SOGA 79: were the goods of a standard that a reasonable person would
regard as satisfactory, taking into account of:
o The description:
 OTF: the table was suppose to be suitable for home office purposes but
it turn out to be too small for his home computer, and its too low for
the chair he bought and there was some presence of scratches on the
surface.
 Rogers v Parish:
 If an article sold as new, it should have the performance and
finish of an average new article of that sort.
 The courts would not compromise for any defects inherent in it.
o A new Range Rover car purchased by Rogers from the
defendant car dealers for ₤16,000 suffered many
defects.
o The buyer sued for the price – the defendants argued
that, as all the defects would be repaired under the
manufacturer’s warranty, the vehicle was merchantable.
o Held:
 The purposes for which goods of that kind are
commonly bought. This included an appropriate
degree of comfort, ease of handling, reliability
and pride in the vehicle’s appearance.
 The description: the car was new and it was a
Range Rover, which suggest a certain level of
performance, handling, comfort and resilience.
 The price: at ₤16,000 the car was at the higher
end of the market.
o Therefore, the car was merchantable.
 Bernstein v Pamson Motors:
 The courts were primarily concern with the question of the
useability and the non-performance aspect of the article.
 Here, John could rely on the provisions provided under S14(2B):
 S14(2B)(a): fitness for all the purposes for which goods of the
kind are commonly supplied.
 S14(2B)(b): appearance and finish.
 S14(2B)(c): freedom from minor defects.
o The price:
 Description and price may also be relevant to the purpose for which the
goods are commonly bought.
 In general, the wider the description applied to the goods, the
wider the range of purposes for which the goods would
commonly be bought; but the price may indirectly indicate the
intended purpose or determine the quality to be expected.
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o Beecham v Francis Howard (1921)


o Brown v Craik Ltd (1970)
 Grant v Australian Knitting Mill; Dixon CJ:
o If the price demanded of the article is high, the quality
demanded would be equally high.
o This would be the expectation of the buyer who is
willing to pay a premium for the goods.
 Note: it must be made known that, just because a discount was
given to the sale of the particular article, it does not mean that
the quality demanded should be compromised.
o This is because OTF, it was stated that the table was
much cheaper than equivalent tables sold in nearby
shops.
o Therefore, this should not allow for the seller to argue
that the quality expected to be any lower.
o Other relevant circumstances.
 Therefore, a reasonable person taking into account all these aspects within the
definition of S14(2A) would regard the table to be not of SQ provided that the
provision under S14(2C) is excluded:
o Sub(a): defects was specifically drawn to the buyer’s attention before the
contract was made.
o Sub(b): where the buyer examine the goods and that examination ought to
reveal the defects of the goods.
 What is the effect of John signing the delivery note?
o The clause here seems to suggest that, the moment the order form is signed, it
implies that the customers acknowledge that they have inspected the goods,
which are entirely suitable for their purpose – Q: is the exclusion clause valid
or not?
o S14(2C)(b): the examination of the goods must be actual.
o S34 SOGA: when the seller tenders delivery of goods to the buyer, he is
bound on request to afford the buyer a reasonable opportunity of examining
the goods.
o S35 SOGA: the buyer is not deemed to have accepted the goods provided he
has been afforded a reasonable time to examine the goods for the purposes of
ascertaining whether they are in conformity with the contract.
 Bernstein v Pamson Motors:
 A reasonable time in S35 was not related to the opportunity to
discover any particular defect.
 It related, in commercial terms, to the nature and function of
the goods from the buyer’s point of view and the desirability of
the seller to close his ledger.
o Therefore, the clause claiming for such an effect would be invalid.
 Therefore, since John did not subject the table to any uncommon purpose, S14(2)
does apply and John therefore has a rightful claim.

S14(3) SOGA 1979


 The goods supplied must be reasonably fit for its purpose.
o OTF: there is a clear reliance over the seller’s skill and judgment of the table
advertised.
 Since we can determine that John has subjected the table to its common purpose;
# prepared by reuben de rozario for the Commercial Law Department. This is only a guide produced to
facilitate the learning process. IMPLIED TERMS (BAC 2017)
15 | P a g e

o Priest v Last: it is impliedly brought to the seller’s attention of the purpose for
use.
o However, it is important to note whether all tables for home office would
easily fit a computer.
o This is because, if the usage of a home office table does not necessary imply
the fitting of a computer, then it is the duty on the part of John to inform or
enquire whether the table is suitable to fit a computer – which would oust the
rule in Priest v Last.
 Q: was the table reasonably fit for its purpose?
o OTF: the table was not able to fit a computer and furthermore it was too low
for the chair.
o Bristol Tramsway Carriage v Fiat Motors (1910) & Kendall v William Lilico
(1969):
 States that the goods must be reasonably fit for the purpose for which it
was bought.
 In Bristol: the plaintiff ordered 7 buses for burdensome passenger work
in heavy traffic in Bristol, a hilly district.
 The buses proved not to be robust enough and had to be
reconstructed.
 Held: the buses were not fit for the particular purposes stated
by the plaintiffs.
o OTF: John did not subject the table to any peculiar use but has subjected it to
its common purpose and therefore, Charz Ltd is liable for the defective article.
o Consideration of reliance on the seller’s skill and judgment and the
reasonability of such reliance can be determine from a consideration of the
following cases:
 Teheran Europe v ST Belton (1968):
 The buyer bought a consignment of portable air compressor;
they made it known to Belton, the sellers that they were for
resale in Persia.
 However, the compressor proved unsuitable for sale in Persia
and the buyers sued claiming that the goods were not fit for the
stated purposes.
 Held: the buyers did no more than make the purpose known.
 To come within S14(3) they must do more: they must know
reliance on the skill and judgment of the sellers.
 Here the sellers knew nothing of the conditions in Persia;
however the buyers did.
 The buyers relied upon their own skill and judgments.
 Bristol Carriage Tramsway v Fiat Motors (1910)
 Ashington Piggeries v Christopher Hill (1972)

Whether John is dealing as a consumer or non-consumer?


 OTF: John is an Accountant – but he only wishes to do some of his work at home.
o R&B Customs Brokers Co Ltd v United Dominion Trust:
 The buyer only makes a contract ‘in the course of business’ within the
meaning of this section, either if the contract is one of a regular kind of
contract made by the buyer, or if the purchase was an ‘integral part of
the business’.

# prepared by reuben de rozario for the Commercial Law Department. This is only a guide produced to
facilitate the learning process. IMPLIED TERMS (BAC 2017)
16 | P a g e

 Where a transaction was only incidental to a business activity a degree


of regularity was required before a transaction could be said to be an
integral part of the business, and so entered into in the course of
business.
 Therefore the application of S15A SOGA will be ousted.
 Therefore, John could just repudiate the contract, reject the goods and sue for
damages.

# prepared by reuben de rozario for the Commercial Law Department. This is only a guide produced to
facilitate the learning process. IMPLIED TERMS (BAC 2017)