IMPLIED CONDITIONS AS TO TITLE

Section 14(a)
For the sale, it is implied condition that the
seller has a right to own the goods. Although
the law does not expressly state that the
goods is belonging to the seller and seller has
the right to sell the goods to other person, but
the law presumes that the seller has the right
of such things.

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 A breach of this condition entitles the buyer to
repudiate the contract.
The rational is that the buyer of the goods pays
the price in order to enjoy ownership as well as
to use the goods.
Example: Spongebob sold to Patrick a car and
Patrick paid Spongebob the purchase price.
After several years, Patrick discovered that the
car actually belonged to Mr Crab and that
Spongebob was actually looking after Mr Crabs
possessions while Mr Crab was out of town. Here,
Patrick can recover the price in full even though
Patrick had used the car for several years.
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 Rowland v.Divall [1923] 2 KB 500
The plaintiff bought a car from the defendant for 334
and resold it for 400 to a sub-buyer who used it for
four months. He then discovered that the car had
never belonged to the defendant, who had bought it in
good faith from someone without title. The car having
been claimed by the original owner, the plaintiff paid
off the sub-buyer by refunding him the 400 and
claimed to recover in turn the 334 which he had paid
the defendant.
It was held by the CA that the buyer was entitled to
recover the whole purchase price and the seller was
not entitled to set off anything for the four months
use of the car which the sub-buyer had enjoyed.

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 Niblett v. Confection Materials
(1921)3KB 387

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 IMPLIED WARRANTY AS TO QUIET POSSESSION
Section 14(b)
This section states that in a contract of sale, unless the
circumstances of the contract shows different
intention, there is an implied warranty that the buyer
shall have an enjoy quite possession of the goods.

Here it should be noted that, this implied terms is

merely warranty and not a condition. Therefore the
innocent party is entitled for the damages only.

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 This implied warranty also covers the situations
where there is a wrongful interference by
stranger claiming a lawful right over the title of
the goods or the wrongful act of the seller
himself.
Example:
Ali bought a car from Abu. Ali had paid the whole
payment of the car to Abu and because Abu liked
the car so much, he often persuaded Ali to lend
him the car. Abu had set of the car keys and he
used the car whenever he liked regardless of
whether Ali needed the car or not. Here, Abu has
breached the implied warranty and Ali can claim
Abu for damages.

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 IMPLIED WARRANTY THAT THE GOODS ARE
UNENCUMBERED
-section 14(c)
Here, there is an implied warranty that the goods
shall be free from any charge or encumbrance in
favour of the 3rd party . If there is any charge or
encumbrance on the goods, such as the fact is
not declared or made known to the buyer, then
the seller is liable for breach of warranty end
entitled the buyer for damages.
In other words, when the seller sells something
to the buyer, impliedly, he must to ensure that
there is no encumbrances on the goods.

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 Example: charge, rent, borrowed goods,
government right to seize the goods in order to
enforce the tax collection etc.

Example: Ritma Sdn Bhd sold a machine to Ririn

Sdn Bhd. The latter did not know that Ritma Sdn
Bhd had charged the machine to Bank CIMB Bhd.
Here, Ritma Sdn. Bhd has breached the
warranty. However if Ririn Sdn Bhhd knew about
the charge and still decided to buy the machine,
there would be no breach

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 Steinke v. Edwards

Pf who had bought the car, had to pay of the

tax, which stoll owes from the government. Pf
sought to recover the amount he had paid for
the tax, from the df (seller)
Held: pf was entitled for the damages because
the df had breached the implied warranty.

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 IMPLIED CONDITION THAT GOODS
CORRESPOND WITH DESCRIPTION
-section 15
Here the goods must be same as the description.
The seller must follow the description and there
will be no reason or excuse for failing to do so. If
the goods does not correspond with the
description, the buyer is entitled to rescind the
contract and reject the goods.

If the sale by sample as well as description

(sample + description), the bulk of the goods shall
correspond with the sample as well as
description.

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 Here there are two situations:

a. Sales of goods by description covers all

cases where the buyer has not seen the goods
but is relying on the description alone.

Example: when Aminah orders a Acer laptop

model EX1234 by phone and Bibin sells to her,
this is sale by description
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 Nagurdas Purshotumdas & Co. v. Mitsui
Bussan Kaisha Ltd (1911) 12 SSLR 67
Under previous contract between the parties
of the sale of flour, the flour had been sold
bearing a well-known trademark. Further flour
was order the same as our previous
contracts. Flour identically in quality was
delivered, but it ddid not bear the same well-
known trade mark.
Held: the goods did not comply with the
description
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 Re Moore & Co v. Landauer & Co
(1921) 2KB 519
The contract was for a sale of 3100 Australian
canned fruit, packed30 tins to a box. However the
seller packed some of the boxes with only 24 tins.

Held: even thpugh the buyer still gets 3100 tins of

canned fruits, the seller had breached the implied
condition as to sale by description since he failed
to pack them as described by the buyer

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 Varley v. Whipp (1900] 1 Q.B. 513

The seller agreed to sell a second hand reaping

machine described as new the previous year.
The buyer did not look at the machine but relied
on the description. When the machine was
delivered, it was found that the machine was a
very old machine, which had been repaired.
Held: the seller had breached the implied
conditions. The goods supplied were not
correspond with the description. The buyer is
entitled to rescind the contract and reject the
machine.

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 b. the sale of goods by description also cover
certain cases where the buyer has seen the
goods but the defect has been concealed from
the buyer.

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 Beale v. Taylor (1967) 1WLR 1193

The seller of a car advertised it as Herald

Convertible, white 1961. The buyer viewed
the car before afgreeing to buy it. Later , he
discovered that while the rear half of the car
was part of a 1961 Herald Convertible, the
front part was part of an earlier model.
Held: he was entitled to the damages for the
breach of condition.

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 Law Yaw Seng v. Cooperativa Ceramica
DImola (1991) 1 MLJ 393

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 Grant v. Australian Knitting Mills Ltd (1936)
AC 85 at p100

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 IMPLIED CONDITIONS AS TO FITNESS FOR
PARTICULAR PURPOSE

General principle: no implied terms as to

fitness for particular purposes.

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 According to general rule under common law:
the buyer is expected to exercise care in
making the 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. The seller would not be liable,
if the goods is not fit or having no quality as
required by the buyer.
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 This rule can be seen in section 16 of SOGA 1957.
However there are some exceptions under this
section where it shows that the implied terms as
to fitness for particular purpose still can be
applied. Section 16(1)(a).
Here, by virtue of this section, if the goods are
not fit for the particular purpose of the buyer, the
seller would be liable for a breach of this
condition and the buyer is entitled to damages or
rescind the contract.
But there are some conditions that need to be
fulfilled.:

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 a. Disclosure of purpose
Here, the buyer must let the seller knows the
particular purpose for which the goods are
required especially if the goods is bought for
certain special purpose. The buyer must make
known or disclosure to the seller the particular
purpose for which the goods are required.
Otherwise, the kind of implied conditions as to
fitness for a particular purpose would not be
applied and therefore the seller would not be
liable for the breach event though the goods later
are not fit or suitable of the buyers particular
purpose.
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 Griffiths v. Peter Conway Ltd (1939) 1
AER 685
The defendants are retail tailors, and in June 1937, the
plaintiff bought from them a Harris tweed coat, which
was specially made for her. Shortly after she began to
wear the coat, she developed dermatitis, and suffered
from a very severe and prolonged attack of that
disease. This was an abnormal reaction that would not
affect most people. The plaintiff actually, had
abnormally sensitive skin and this was not known to
the seller.
Held: the pf failed in her action as the coat would not
harm a normal person. Thus, she did not make known
to the df that she actually had abnormal sensitive skin.

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 See also: Sunrise Bhd & Anor v. L&M Agencies
Sdn Bhd

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 However, if the goods is sold for a sole
purpose or the purpose is so obvious, then the
goods MUST fit that sole purpose. In this
situation, the buyer under no duty to let the
seller know what is the purpose of his
purchase.

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 PRIEST V. LAST (1903) 2KB 148

The pf had purchased a hot water bottle from

the df. A few days later, the bottle, while in
use by the pfs wife burst and scalded her.

Held: the purpose of hot water bottle is

obviously to keep hot water and if it cannot
retain the heat, then it is not fit for its
purpose.

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 Note: Sometimes the good is sold for sole
purpose but the buyer requires the good for
the certain special purpose. In this situation,
the buyer must expressly notify the seller of
his/her purpose and rely on the seller to
provide her/him with a suitable article.

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 Example: Cassy wants to buy herbs for beauty
treatment of her face. She must tell the seller
about this so that the seller may recommend
the suitable herbs. If the seller is not told of
specific purpose, there is no breach or implied
condition if the seller sells Cassy herbs which
are suitable for cooking but unsuitable for
beauty treatment.

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 b. Reliance on the sellers skill and judgment
The buyer must also establish that he had
relied on the sellers skill and judgment before
purchasing the goods. The degree of reliance
is a matter of reasonable inference from the
circumstances of the case.

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 Grant v. Australian Knitting Mills
(1936) AC 85
Fact: Dr Grant, the plaintiff, contracted dermatitis as a
result of wearing woolen underpants which had been
manufactured by the defendants (Australian Knitting
Mills Ltd). The garment in question contained an excess
of sulphite. At the time of the purchase, there was a
label on the side of an underpant stated that it was
100% cotton.
Dr Grant who was allergic to the wool (which contain
sulphite) examined the goods and satisfied with what
stated in the label and therefore he bought the
underpants. Thus upon purchase, he wore them for
one entire week without washing them beforehand.

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 Cont
The Privy Council held that the defendants
were liable to the plaintiff. The reliance usually
arise by implication from the circumstances.
For instance, of purchase from a retailer, the
reliance will be inferred from the fact that the
buyer goes to the shop in the confidence that
the seller has selected his stock with skill and
judgment.

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 See also Deutz Far East (Pte) Ltd v. Pacific
Navigation Co. Pte Ltd
Cammel Laird & Co Ltd v. Manganese Bronze
& Brass Co Ltd

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 c. The goods supplied are of the description
which the sellers business to supply

Here, the buyer must bought the goods from

the place which the seller has the expert to
sell the goods or which is in the course of the
sellers business supply.

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 Spenser Trading Co Ltd v. Devon
[1947] 1 All ER 284 291
The manufacturer had previously supplied to the pf on
a special order, an adhesive substance made from gum
resin for making flypapers. The following year, the pf
ordered a further supply for the same purpose from
the manufacturer, who on this occasion used synthetic
raw materials in place of the natural material
previously used. Consequently, the flypapers were
unsatisfactory for its purpose.
Held: the goods are of the description which it is in the
course of the sellers business to supply. Therefore the
manufacturer was liable for the breach of implied
condition that the goods must fit for the purpose for
which they were required.
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 Ashington Piggeries Ltd. Christoper
Hill Ltd (1922) AC 441
The seller was the manufacturer and a dealer in
animal feed. However, it had never made feed to
mink. This was made clear to the buyer, but the
seller agreed nevertheless, to make up such
compound form a formula provided by the buyer.
However, the compound produced does not fit
for the mink.
Held: the product produced by the company is a
feeding compound. Although the seller had never
previously supplied that particular feeding
compound, but it was of the kind which it was
the sellers business to supply.
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 d. Not bought under patent or trade name
If a buyer bought the goods under a patent or
a trade name, it gives the impression that he
is not relying on the sellers skill and
judgment. Therefore he cannot later complain
that the goods are not fit for the particular
purpose he required.
Example: Jamilah went into a shop and
wantoed to buy Darlie toothpaste. There is
no implied condition as to its fitness for any
particular purpose.

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 Wilson v. Rickett Cockrell Co. Ltd
(1954) 1ALL ER 868
The claimant purchased a bag of coal, ( 1 ton of
coalite which is a household fuel) under the trade
name of Coalite. In bag of coal there were also
some detonators. When she put the coal on the
fire there was an explosion where it was due to a
detonator which contained in the coalite.
Held: df is not liable for the breach of implied
condition as to fitness for particular prupose
because it was bought under the trade name of
Coalite. (But in this case the df was liable of the
breach of implied terms under merchantable
quality)
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 Note: However if the goods are not bought
under the patent of trade name or if the
buyer did buy under a trade name but relies
on the sellers skill and judgment, the implied
condition applies.

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 Baldry v. Marshall [1925] 1 KB 260
The plaintiff asked the defendants, who were
motor dealers, to supply a car that would be
suitable for touring purposes. The defendants
recommended a Bugatti, which the plaintiff
bought. The written contract excluded the
defendant's liability for any "guarantee or
warranty, statutory or otherwise". The car
turned out to be unsuitable for the plaintiff's
purposes, so he rejected it and sued to
recover what he had paid.

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 The Court of Appeal held that the requirement
that the car be suitable for touring was a
condition. Since the clause did not exclude
liability for breach of a condition, the plaintiff
was not bound by it. Thus, the buyer had
relied on the dealers skill and judgment in the
selection of a car suitable to the buyers stated
purpose even though it was sold under trade
name.
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 Note: in some cases also the buyer would not
tell the seller the purpose of the goods in
obvious.
Example: Kamil wants to buy bread, there is
an implied notice given to the bread-vendor
that the bread is for eating. There still would
be a breach of condition if the bread is
mouldy at the time it is bought.

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 IMPLIED CONDITIONS AS TO MERCHANTABLE
QUALITY
Section 16(1)(b) provide another exception to the
caveat emptor rule. Goods is said to be of
merchantable quality if they are reasonably fit for
the purpose for which goods of that kind are
commonly bought, having regard to any
description applied to them, the price and other
relevant circumstances.

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 So here the goods must be fit for the particular
use to which they were sold. And if the goods are
defective for their purpose, they are
unmerchantable.
Merchantable quality means that they must be
reasonable for the purpose described.
If the goods are unmerchantable, the seller
would be liable for breach of implied condition,
even though they are sold under their patent or
trade name.
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 Factors to be taken into account to determine
merchantability include:
a. Price
b. The description applied to the goods;
c. Whether the purpose for the foods had
been made known to the seller; and
d.Any other circumstances relevant to the
sale.

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 Example: if Muthu buys a pair of Levi jeans, it is
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.
See Wilson v. Ricket, Cockerall & Co Ltd
Note: 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.
Henry Kendall & Sons v. William Lilico & Sons Ltd

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 However, if the description is so limited that
the goods sold under the contract only be
used for one purpose, the the goods would be
unmerchantable if were of no use of that
purpose.
Wren v. Holt

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 Henry Kendall & Sons v. William Lilico & Sons Ltd
Held: if the description is so limited for only one
purpose, then the goods would be liable
unmerchantable if they were no use of such
purpose. However if the description is so general
used for several purposes, then the goods would
be merchantable if they were fit for only one for
those purposes.

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 Reveex International , S.A v. Maclaine
Watson Trading Sdn. Bhd. (1991) 2 CLJ
1388
The pf sold various pharmaceutical veterinary products
to the dfs. The dfs did not honour the bill of exchange
used to pay for the goods. Th pfs claimed as holders in
due course of the bill.
The df counterclaimed against the dfs contending that
the goods were not reasonably fit for the purpose for
which they were intended and were not merchantable,
therefore breaching a condition of the contract of the
contract as statutorily implied by section 16 of SOGA
1957.
Held: dfs succeeded in their counter-claim.

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 Noted: quality of goods refers to their state or
condition.
Example: in a sale of lorry, it is implied
condition that the lorry would not overheat
easily.

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 Wilson v. Rickett Cockrell Co. Ltd (1954) 1ALL
ER 868
Mrs. Wilson ordered one ton of fuel named
Coalite from Rickett Cockerell & Co. Ld., and it
was delivered and paid for. The Coalite was
supplied for domestic heating purposes, but
the sacks supplied included also small pieces
of explosive left over from the mining process.
(It contained a piece of coal in which a
detonator was embedded resulting in an
explosion in the fireplace.)

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 Held: There was nothing wrong with the
Coalite. However there was a defects which
making it unfit for burning. Therefore the pf
succeeded in his claim as the defects to the
goods was considered as unmerchantable.

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 Exception: However there are some
exception that section 16(1)(b) does not
apply if the buyer has examined the
goods by which through that
examination, the buyer might discover
the defect.
If the defect could not be discovered by
any reasonable examination, then the
implied condition as to merchantable
quality apply. Means that the goods are
unmerchantable.
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 Wren v. Holt (1983) 1 KB 610
The pf tried to recover damages for the breach of
implied condition of merchantable quality of beer
which was contaminated by arsenic. As a result of
drinking it, Wren (pf) fell ill.
Held: there was an implied condition that the
beer would be of merchantable quality. That is ,
that it would be fit to drink. Here, the exception
was not applicable because the defect was not
discoverable on reasonable examination. The pf
succeeded to recover damages

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 Note:
Sometimes there can be a breach of both
conditions of fitness for purpose and
merchantable quality on the same set of facts.
This can be seen in Grant v. Australian
Knitting Mills.
See also McWilliams Wines Ltd v. Liaweena
(NSW) Py Ltd

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 IMPLIED CONDITION IN SALE BY SAMPLE
-section 17
-conditions:
a) If the goods are in the bulk, it must
correspond with the sample (sec 17(2)(a)
b) The buyer must have reasonable opportunity
to compare the bulk of the goods with the
sample. (sec 17(2)(b)
c) The goods must be free from any defect that
could rendering them to unmerchantable (which
would not be discovered/apparent on reasonable
examination of the sample)(sec 17 2(C))
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 If the bulk is totally inferior to the sample,
they buyer may elect to reject all the goods.
However if the bulk is only partly inferior to
the sample, the buyer may either elect to
accept all the goods and claim damages for
those which are inferior or reject all the goods
and sue for damages.
Means: if the certain of the goods
corresponds with the sample but the other
parts are not, the buyer may reject or to
accept the whole goods)
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 But if the contract of sale is not severable, the
buyer does not have the alternative to accept
part of the bulk and reject the rest.
Severable contract-a contract that is actually
composed of several separate contracts
concluded between the same parties.
If the bulk corresponds with the sample but
there is a latent defects which rendering the
goods unmerchantable, here, the buyer is
entitled to reject them.

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 Godley v. Perry (1960) 1 WLR 9

A child bought a catapult snapping in use and

causing the boy to lose an eye. He sued the
retailer and won. The retailer sued the
wholesaler because before buying them, he
had tested sample by pulling back the elastic
and it hadnt snapped.
Held: Wholesaler was liable

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 See also Drummond v. Van Ingen
Lau Yaw Seng v. Cooperativa Ceramica
DImola

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 Privity of Contract in SOGA
In a contract, only parties to the contract will bind
each other in terms of implied condition and
warranties.
This also apply to the contract of sales of goods.
It means the 3rd which uses the goods purchased
by the buyer and suffers injury/damages cannot
sue the seller or the manufacturer under the law
of contract.
However, the 3rd party may sue the seller or the
manufacturer under the law or tort which he
must prove the existence of the negligence on
the seller/ manufacturers part.
Donoghue v. Stevenson
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