Section 48 sets out a scheme conferring

rights on the GUARANTEES IN SUPPLY OF

GOODS TO CONSUMERS
The consumer can proceed against the dealer
and the financier, who is treated as the
supplier.
There are three types of defects:
Manufacturing defect
Design defect
Marketing defect
 Where goods are supplied to a consumer, there is
implied in the contract that-
(a) the supplier has the right to sell the goods;
(b) the goods are free from any undisclosed
security; and
(c) the consumer has a right to quiet possession
of the goods, except:-
in so far as that right is varied by -
(i) a term of a hire-purchase agreement for supply of
goods;
(ii) a disclosed security; or
(iii) a term of the agreement for supply.2
 It refers to the right of possession of goods
free from interference.
Freedom from disturbance in the enjoyment
of property.
This warranty is broken not only if the seller
and those claiming through him interfere with
the buyers quiet possession but also if the
interference is by a third party lawfully
claiming by virtue of a better title to the
goods.
 Where goods are supplied to a consumer, there is
an implied guarantee that "the goods are
reasonably fit for any particular purpose that the
consumer makes known, expressly or by
implication, to the supplier as the purpose for
which the goods are being acquired".

But where the supplier represents that the goods

are fit for any particular purpose, the. goods
must also be reasonably fit for such purpose.

See Grant V Australian Knitting Mills Ltd

 If they are:-
fit for all the purposes for which goods of the type
in question are commonly supplied.
acceptable in appearance and finish;
free from minor defects;
safe;
durable; and
a reasonable consumer fully acquainted with the
state and condition of the goods, including any
hidden defects,
 would regard the goods as acceptable having
regard to
the nature of the goods;
the price;
any statement made about the goods on any
packaging or label on the goods;
any representation made about the goods by
the supplier or the manufacturer; and
all other relevant circumstances of the supply
of the good.
See Tan Chong & Sons Motor Co. Sdn Bhd. V Alan McKnight
 Where goods are supplied by description to a
consumer, there is an implied guarantee that
the goods will correspond with description.

Ashington Piggeries v Christopher Hill

 Where goods are supplied to a consumer by reference
to a sample or demonstration model, there is an
implied guarantee that:
the goods will correspond with the sample or
demonstration model in quality
the consumer will have a reasonable opportunity to
compare the goods with the sample or demonstration
model.
Where the goods are supplied by reference to a
sample or demonstration model as well as by
description,
there is an implied guarantee that the goods must
correspond both with the description and the sample
 Section 62 of the Sales of Goods Act 1957
allows the implied terms and conditions to be
excluded by express agreement or by
previous dealings or by usage.

The courts have always been hostile towards

parties relying on exemption clauses, and
have, wherever possible use the contra
proferentem rule, i.e. exclusion clause are
construed strictly against the party seeking to
rely on them.
 Contra proferentem also known as "doctrine of
contractual interpretation providing that, where term is
ambiguous, the preferred meaning should be the one
that works against the interests of the party who
provided the wording.

The doctrine is often applied to situations involving

standardized contracts or where the parties are of
unequal bargaining power.

The reasoning behind this rule is to encourage the

drafter of a contract to be as clear and explicit as
possible and to take into account as many foreseeable
situations.
 Prices for goods are normally agreed to between a seller
and buyer.
Agreement on price may occur expressly at the time of
sale or agreement to sell, left to be determined at a later
date

Where goods are supplied to a consumer and the price of

goods is not fixed in the manner described above, the
consumer is only bound to pay a reasonable price

What is a reasonable price is a question of fact, depending

on the circumstances of each particular case

but where the price has been fixed under any written law,
then the specified is to be followed.
 It often happens that goods may be rendered
practically useless if they break down and there is a
lack of parts or facilities for repair.

This new law is a significant development and may

dictate how manufacturer, importer or retailer
conducts their business.

The importer or the manufacturer and the supplier

must "take reasonable action to ensure that facilities
for the repair of the goods and the supply of spare
parts for the goods are reasonably available for a
reasonable period after the goods are so supplied.
 "Express guarantee" in relation to goods, "means an undertaking,
assertion or representation in relation to

the quality, performance or characteristics of the goods;

the provisions of services that are or may at any time be required
in respect of the goods;
the supply of parts that are or may at any time be required;
the future availability of identical goods, or of goods constituting
or forming part of a set of which the goods in relation to which
the undertaking, assertion or representation is given or made
form part of; or
the return of money or other consideration should the goods not
meet any undertaking by the guarantor,
 The term "express guarantee" means that the
manufacturer will be liable for statements made not
only in respect of goods, but also as to availability of
related services, parts or replacements

Importantly, the guarantee applies only to goods of a

kind which are primarily purchased, used or
consumed for personal, domestic or household
purposes

The express guarantee includes a document where

such document is given to a consumer with the actual
or apparent authority of the manufacturer
 manufacturer to remedy failure;

right of consumer to reject goods; or

right of consumer to damages in compensation

for reduction in value of goods.

Additionally, the consumer may obtain from the

supplier, damages for any loss or damage
suffered, other than loss of damage through a
reduction in value of the goods, which is proved
to be a consequence of the failure.
 Where the ownership in the goods has passed
to the consumer before the consumer
exercises the right of rejection, the ownership
in the goods is restored to the supplier upon
notification of rejection.

In practical terms, the parties are restored to

their original position so far as ownership in
the goods is concerned once rejection is
notified.
 The Loss of right to reject goods if one of the following occurs:

the right is not exercised within a reasonable time

the goods have been disposed of by the consumer

the goods have been lost or destroyed while in the possession of

a person other than the supplier

the goods were damaged after delivery to the consumer for

reasons not related to their state or condition at the time of
supply;

or the goods have been attached to or incorporated in any real or

personal property and the goods cannot be detached or isolated
without damaging them.
 Where goods supplied are rejected by the consumer in
exercise of the rights the following options are exercised

A refund of money paid or other consideration provided

or a replacement of similar goods where they reasonably
available to the supplier as part of the stock of the
supplier.
A refund must be in cash of the money paid or the value of
any other consideration provided, or both, as the case may
require.

The obligation to refund cannot be satisfied by permitting

the consumer to acquire other goods from the supplier
 In a hire purchase transaction, the consumer is a hirer until
he exercises the option to purchase when he or she
becomes the owner.

That usually occurs at the end of the period when all

instalments have been fully paid or earlier if the statutory
amount is paid to the owner, normally a finance company.

Assessment of damages in relation to the supply of goods

under a hire purchase agreement where the goods supplied
failed to comply with a guarantee under the Act.

The damages that a consumer may recover is assessed on

the basis that "the consumer will complete the purchase of
the goods or would have completed the purchase if the
goods had complied with the guarantee".

End...