A Contract of Sale of Goods - Case Study Example

Order 161386 Law of sale A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration called price1. In the prevailing case of Susan, she went to Paint plus to purchase a hardwearing masonry paint that would be suitable for use on a building that would be subjected to extreme weather conditions. She further wanted to buy paint for decorating the bathroom. Once in the hardware the sales assistant offered paint plus's own brand called Ever-last as the best paint. He did this on the basis of many customers buying and they have never come back to complain. Going through the facts of the case, we find that there is breach of implied condition on the part of the seller. According to the contract of sale, if there is a sale by sample as well as by description it is not sufficient that the bulk of goods correspond with the sample if the goods do not correspond with the description. That is to say, incase of sale by sample as well as description the goods must correspond not only with the sample, they must also correspond with the description given under the contract. In Arcos V. Ronaasen 9133 2, All ER 646, it was _________________ 1. Dr. S.K. Kapoor, sale of Goods Act 1999, Central law Agency. 2. www.com.vanuahouse.ac.ft Held that the buyers were entitled to demand goods answering the description in the contract, and were not bound to accept the goods tendered merely because they were merchantable under that description. Therefore Susan was being offered the product by the sales assistant by description which later failed to serve the purpose on which she had bought. According to the sale of goods Act 1979, a seller will be held liable "were the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the sellers skill or judgment and the goods are of a description which it is in the course of the seller's business to supply, there is an implied condition that the goods shall be reasonably fit for such purpose. Further 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" 3 This can further be illustrated Henry Kendall v. William Lillico 1968 2 All ER 444 4 where animal food was being made using groundnut extractions from Brazil. The Brazilian food was contaminated by a poison Aflutoxin. At the time there was no reason to suspect that any ground next extractions might contain poison. P, Hardwick game farm, raised pheasant and many of them died from the poison which was contained in food supplied by a local compounder, SAPPA. SAPPA settled but first brought in its suppliers, Grins dale and Lillico who in turn brought in their suppliers, Kendall and Holland. It was Held that on the findings of the judge there was a breach by third parties of the implied condition as to __________________ 3. Ibid 4. www.thomson.com.au fitness of purpose in their sale of the groundnut extractions to SAPPA, and since the extractions were not reasonably fit for use in compound food for poultry and it use in a compound food for pheasants was an ordinary and reasonable use. G. Ltd were liable to indemnity SAPPA in respect of the damage done to the plaintiffs pheasants 5 Therefore there is breach of condition on Susan's case because she had given description of the product she wanted, but the one that was offered for sale to her did not correspond to her description under the contract. Since Susan had already painted the outside of the cortege with the ever-last masonry paint that later peeled off and being the fact that she had already painted the outside cortege with paint, it means she cannot reject the paint, hence she will be entitled to recover damages. In C.F. Munro & Co. Ltd v. Meyer (1930) 2 KB 312 6 the buyer was held to be entitled to repudiate the whole contract for 1,500 tons of meat and bone meal, when more than half of the total quantity delivered was found to be seriously detective. Since the product sold to Susan did not correspond or serve the purpose in which it was intended to serve, she has a right to bring a claim for breach of contract against Paint plus. Since she has already used the product she will only claim damages arising out of Ever-last paint as well as for the loss she suffered while in hospital caused by clean easy on her skin. The seller will be held responsible since as he was selling the products to Susan he did not make it deer to her that although the instructions that were normally supplied with the paid were missing, it was important that the clean easy product should _________________ 5. Post, PP 9IE, 104C, 112 G - H 130B 6. www.spr-consilio.com not be used by any person suffering from skin complaints or sensitive skin. Therefore Susan is entitled to recover both damages as cased to her cottage and personal damages caused by clean easy paint while painting the bathroom. This is illustrated in the case of Kendall v. Lillico above were the plaintiff was paid damages for the loss suffered to his pheasants even thought he had expressed that the food was meant for poultry. 2 In the prevailing case of Susan and Paint plus, whether or not Paint plus will be held responsible for the breach will depend upon the facts of the case. In their statements printed on the back of the receipt, paint plus can rely on point number 4 which excludes then from liability for advice given by their employees. This can be illustrated in the case of Photo productions v. Securicor 1980 All E 556 7. In this case a security guard was responsible for the destruction in a five of photo production premises. The Lords uphold a clause excluding Securicor's liability. Therefore for the exclusion liability clause to stand operational before the law, the courts have to ascertain whether the clause is reasonable or not. If it is reasonable then the exclusion clause will apply. If the clause is unreasonable then the courts will not allow it as a defence on the part of the defendant. This is evident from the case of George Mitchell V. Finney lock seeds Ltd. (1983) 2 all ER 737 8) where the plaintiff farmer bought cabbage seeds ____________________ 7. www.perseus.herts.ac.uk 8. www.lawteacher.net from the defendant national seed company. The plaintiff planted the seed but the seed was defective and the crop was a total failure. The plaintiff claimed over 60,000 damages for breach of contract, based on the loss of the crop. The defendants attempted to rely on a clause in the contract which purposed to limit their liability to the cost of the seeds at 201 - 60. The house of Lords held that although the clause was part of the agreement and covered this event, were that that normal practice of the seller was not to rely on the limitation clause, but to negotiate settlements of reasonable claims, the breach was due to the seller's negligence and the seller could have insured against the loss without materially raising his charges. Therefore the courts will look at the facts which constitute an exclusion clause and if they are satisfied that the clause is reasonable in the sense that it does not exploit the plaintiff then it will be allowed/ where the clause is intended to create room for negotiation for the negligent act of the defendant then it is unreasonable. In the case of Overland shoes v. Shenkers Times Feb 26, 1998 9, the clause contained was not unreasonable. The clause read "The customer shall pay to the company in cash or as otherwise agreed all sums immediately when due, without reduction or deferment on account of any claim, counterclaim or set off". In this case it was held that the clause satisfied the requirement of reasonableness. The clause was in common use and well known in the trade following comprehensive __________________ 9. www.swarls.co.uk discussions between reputable and representative bodies mindful of the considerations involved. It reflects a general view as to what is reasonable in the trade concerned". Therefore paint plus can rely on the point or fact the person who offered advice to Susan is an employee of the company whose liability action does not hold the company responsible. However, this will be subject to the reasonableness of the clause. That is to say the intention of the clause whether intended to exploit the consumers or not as well as the duration in which the clause has been operational. 3. If the claim for Susan goes through she will be entitled to be paid damages and special damages. The damages will cover the loss she has suffered due to the paint on his collage and special damages will cover the loss incurred to her due to the injury she suffered arising from the droplets of Clean-easy paint special damages will cover hospital and medical bills. In this case Susan suffered loss arising out of the paint. The Paint peeled off as well as damaged the render underneath which needed to be placed. As a result she had to employ a builder to knock the render and paint off the cortege, re-render and re-paint. In this regard there is extra costs that she has incurred which were brought about by the paint from paint plus. Therefore Susan being paid damages and special damages from the loss incurred is ideal. Had it not been for clean easy droplets that caused allergic reaction to her skins, she could not have missed the lucrative painting and decorating tender. Therefore the court should award her special damages to cover for the time lost and the work she will miss all the time while nursing the reaction. In the contract of sale, the seller will be held liable for the breach of contract arising from such sale. Even it the loss to the buyer is mental but as long as it is proved that there is breach of contract the seller will be entitled to pay damages to the buyer. In Jarvis v. Swan Tours (1973)10 it was held that the statements in the brochure were contractual undertakings which had not been fulfilled, so there was a breach of contract; Mr. Jarvis was awarded 125 pounds twice the cost of the holiday. Although in general in breach of contract no damages can be recovered for mental damages, where the purpose of the contract is to give pleasure or alleviate distress, damages may be awarded for the failure of the contract to achieve its purpose. There was a deviation in Alexander v. Rolls Royce motor cars Ltd. (1995), 11where the plaintiff had suffered emotional anguish due to the delay by the garage repairing his long ambition car. The court of appeal accepted the breach of contract but could not award damages. For the plaintiff to recover damages he/she show that he really suffered irreparable damage arising out of such transaction. Therefore Susan has to be compensated for negligence arising out of paint plus for the breach of contract. She was been advised that Ever-last paint was much cheaper and suitable. On this basis she relied on the paint only to cause harm both to the person and harm. She is therefore entitled for general damages and special damages for loss suffered both in person and property. ________________ 10. www.slcc.strath.ac.uk 11. www.lawteacher.net/Contract Bibliography 1. Dr. S.K. Kapoor, sale of Goods Act 1999, Central law Agency 2. www.com.vanuahouse.ac.ft 3. www.thomson.com.au 4. www.thomson.com.au. 5. www.lawteacher.net/Contract 6. K. Abbott, K. Wardman, Business Law, 7th edition, 2001, Oxford University press. Read More