Commerical: Seminar 1 Implied Statutory Terms

Front 1

Rowland v Divall[1923]

Back 1

The plaintiff bought a car from the defendant which subsequentlyturned out to be stolen prior to the defendant coming to possess it. Despite the fact that the seller had no right to the goodsto transfer in the first place, the buyer is allowed to recover the whole ofthe purchase money as for a total failure of consideration. NoteH & S note that this is controversial, since the buyeris able to refund all of the purchase money, and not damages? This means thatin the case of Butterworth v KingswayMotors [1954] a plaintiff was able to reclaim the full price even thoughhe’d only had the car (the stolen property) for a year. He should of got alesser sum. ��������ݩ��

Front 2

The plaintiff bought a car from the defendant which subsequentlyturned out to be stolen prior to the defendant coming to possess it. Despite the fact that the seller had no right to the goodsto transfer in the first place, the buyer is allowed to recover the whole ofthe purchase money as for a total failure of consideration. NoteH & S note that this is controversial, since the buyeris able to refund all of the purchase money, and not damages? This means thatin the case of Butterworth v KingswayMotors [1954] a plaintiff was able to reclaim the full price even thoughhe’d only had the car (the stolen property) for a year. He should of got alesser sum. ��������ݩ��

Back 2

Rowland v Divall[1923]~I

Front 3

Niblett Ltd vConfectioners’ Materials Co Ltd [1921]class=MbU

Back 3

The parties were in a contract for the sale of condensedmilk bearing the brand of ‘Nissly’. Later, nestle sued the seller saying that the name infringedtheir trademark. The plaintiffs wereable to recover the sale price on the basis that the seller did not have theright to sell the goodsE��r:��

Front 4

The parties were in a contract for the sale of condensedmilk bearing the brand of ‘Nissly’. Later, nestle sued the seller saying that the name infringedtheir trademark. The plaintiffs wereable to recover the sale price on the basis that the seller did not have theright to sell the goodsE��r:��

Back 4

Niblett Ltd vConfectioners’ Materials Co Ltd [1921]x"^h

Front 5

Barber v NWS Bank plc[1996] Zl

Back 5

The seller may be in breach of the section even if he isable to confer a good title on the buyerIn the case, the buyer could have acquired a good titleunder Part II of the Hire Purchase Act 1964, but the court decreed that hecould nevertheless rescind the transaction following Rowland v Divall. x��N6��

Front 6

The seller may be in breach of the section even if he isable to confer a good title on the buyer. In the case, the buyer could have acquired a good titleunder Part II of the Hire Purchase Act 1964, but the court decreed that hecould nevertheless rescind the transaction following Rowland v Divall. x��N6��

Back 6

Barber v NWS Bank plc[1996] Zl

Front 7

Microbeads AC vVinhurst Road Markings Ltd [1975]ml>Yo

Back 7

The case was similar to Niblett v Confectioners’ MaterialsLtd, in that it later turned out that a TP had a claim against the thing soldunder IP law. In this case, the patent was only infringed after the sale, sothe seller still had a right at the time of the sale. However, the court wasable to find tthat the remedy lay in 12(2)(b), because the plaintiffs didi notenjoy quiet and undisturbed possession. |��J:��

Front 8

The case was similar to Niblett v Confectioners’ MaterialsLtd, in that it later turned out that a TP had a claim against the thing soldunder IP law. In this case, the patent was only infringed after the sale, sothe seller still had a right at the time of the sale. However, the court wasable to find tthat the remedy lay in 12(2)(b), because the plaintiffs didi notenjoy quiet and undisturbed possession. |��J:��

Back 8

Microbeads AC vVinhurst Road Markings Ltd [1975]ml>Yo

Front 9

Re Moore & Co Ltdv Landauer & Co’s Arbitration [1921]v@)

Back 9

M contracts to sell canned fruits to L describe as beingpacked in cases containing 30 cans each. When it turned out that only half ofthe consignment was packed thus, the buyer rejected the goods without givingany reason.Held that the right to reject could be exercised in thiscontextm��[1�)

Front 10

M contracts to sell canned fruits to L describe as beingpacked in cases containing 30 cans each. When it turned out that only half ofthe consignment was packed thus, the buyer rejected the goods without givingany reason.Held that the right to reject could be exercised in thiscontextm��[1�)

Back 10

Re Moore & Co Ltdv Landauer & Co’s Arbitration [1921]v@)

Front 11

Arcos Ltd v EARonaasen & Son [1933]ight `��V"�)

Back 11

Contract for the sale of Russian timer cut into staves forthe purpose of making cement barrels. The contract specified that they shouldbe ½ inch in thickness. The buyers claimed they had the right to reject thetimber because most of the staves were slightlythicker than half an inch. The court upheld the buyers right to reject. )Yo=)

Front 12

Contract for the sale of Russian timer cut into staves forthe purpose of making cement barrels. The contract specified that they shouldbe ½ inch in thickness. The buyers claimed they had the right to reject thetimber because most of the staves were slightlythicker than half an inch. The court upheld the buyers right to reject. )Yo=)

Back 12

Arcos Ltd v EARonaasen & Son [1933]ight `��V"�)

Front 13

What are the commercial justifications for the results in Arcos and Re Moore?

Back 13

1. Merchants love certainty- they know where theystand, and delay would be caused if every case had to go to court to ascertainwhether the requirements of the contract were being complied with to asufficient enough degree.

2. There could well be a long chain ofsubcontractors- therefore whether the goods are of a ‘merchantible’ quality forthe last buyer in the chain of contracts will not be possible for a court tofigure out in some cases.

3. The completion of these contracts is oftencarried out by agents- they might not know whether goods which do not fullycomply with the contract description will nevertheless be suitable.

Front 14

Reardon Smith LineLtd v Yngvar Hansen-Tangen [1976] HoLess. qG)

Back 14

Reardon Smith LineLtd v Yngvar Hansen-Tangen [1976] HoLInvolved ship building and chartering, and the mistaken hullnumber given to the vessel being built.Sanko, a Japanese shipbuilding co contracted to chart to YH-T a new tanker. They promised to declare the yard where the vessel was beingbuilt and the hull number. However, because of subcontracting the work to another subsidiary company who used a different hull number than the actual hullnumber given by Sanko, Reardon Smith Lind, who had entered in a sub-charteragreement -with Y H-T, wanted to reject the ship after the collapse in themarket for tankers.

The court held (Lord Wilberforce with leading judgement)that the description of the hull number and location was not to state(identify) an essential part of the description of the goods, but to providespecific indication (identification) of the goods so that he can find them andif he wishes subdispose of them.

- Held that it was only a point of identificationnot identity.

Front 15

Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] HoL Involved ship building and chartering, and the mistaken hull number given to the vessel being built. Sanko, a Japanese shipbuilding co contracted to chart to Y H-T a new tanker. They promised to declare the yard where the vessel was being built and the hull number. However, because of subcontracting the work to a nother subsidiary company who used a different hull number than the actual hull number given by Sanko, Reardon Smith Lind, who had entered in a sub-charter agreement -with Y H-T, wanted to reject the ship after the collapse in the market for tankers.

The court held (Lord Wilberforce with leading judgement) that the description of the hull number and location was not to state (identify) an essential part of the description of the goods, but to provide specific indication (identification) of the goods so that he can find them and if he wishes subdispose of them.

- Held that it was only a point of identification not identity.

Back 15

Reardon Smith LineLtd v Yngvar Hansen-Tangen [1976] HoLess. qG)

Front 16

Harlingdon &Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd [1991] hey tB)

Back 16

Thecase involved art dealers who sold a picture apparently worth £6000. It turnedout to be a forgery worth £50 to £100. The court of appeal held that the sellerhad used the words ‘by Munter’ in describing the painting, it had not been soldby that description- the buyer having relied on his own judgement in regard tothis question of attribution. ��ݨ��

Front 17

Thecase involved art dealers who sold a picture apparently worth £6000. It turnedout to be a forgery worth £50 to £100. The court of appeal held that the sellerhad used the words ‘by Munter’ in describing the painting, it had not been soldby that description- the buyer having relied on his own judgement in regard tothis question of attribution. ��ݨ��

Back 17

Harlingdon &Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd [1991] hey tB)

Front 18

There are some cases where the goods have deteriorated to such an extent that they are said not to correspond with their description. Can you name two contrasting cases in this area?

Back 18

In Pinnock Bros vLewis & Peat Ltd [1923]

Copra cake intended to be fed to livestock which had beenadulterated with castor beans and rendered poisonous was described by Roche Jas something ‘which could not properly be described as copra cake at all’.

But in AshingtonPiggeries Ltd v Christopher Hill Ltd [1972]

Herring meal mixed into a feeding compound for mink whichhad become toix through reaction to preservative was held still to answer thedescription ‘herring meal’: it was shown to be toxic to other animal, andremained suitable for other commercial purposes, such as fertiliser.�������

Front 19

Is there a general term implied into every contract of satisfactory quality?

Back 19

NO- CAVEAT EMPTOR is the general rule- although there are a number of exceptions.

Front 20

Apart from statute, a term about quality may be applied by ?

Back 20

usage (s 14(4))!

Front 21

usage (s 14(4))!

Back 21

Apart from statute, a term about quality may be applied by ?

Front 22

What is the statutory exception to the general rule of caveat emptor? name some examples of where it would not apply.

Back 22

Statutory exceptions: ‘where the seller sellsgoods in the course of business’

e.g. those who buy as consumers from a retailer ormanufacturer.

e.g. transactions between different merchants.

e.g. sale made by a person acting as an agentfor another

Front 23

Would a term relating to satisfactory quality be implied where a business sells something which they donot normally sell e.g. a solicitor sells of a surplus desk or computer?

Back 23

See the case of Stevensonv Rogers [1999]

Stevson was a fisherman for 20 years. He sold his boat andbought another as replacement. Even this was a one-off venture and was merelyincidental to the business which Stevenson carried on, it was held that thesale was made ‘in the course of’ that business so as to bring the transactionwithin the scope of s 14 and render the seller potentially liable under theterms as to quality and fitness implied by that section. ����<�R

But compare this to the case of R & B Customs Brokers Co Ltd v United Dominion Trust Ltd [1988], whichis a case which concerns the application of UCTA-iness s��ݿ �R

Front 24

In what other specific contexts is it the case that there is no noimplied condition of satisfactory quality?

Back 24

1. Defects specifically drawn to the buyer’sattention before the contract is made

2. If the buyer examines the goods before thecontract is made as regards defects which that examination ought to reveal, or

3. In the case of a sale by sample, in regard toany matter which would have been apparent on a reasonable examination of thesample (s 14(2C)).

Front 25

Before the use of the term satisfactory quality, the term 'merchantable quality' was used. What difficulties emerged from using this turn of phrase?

Back 25

There was dispute as to what merchantable meant-- Did it just mean saleable/resaleable- Would the ‘reasonable buyer’ accept inperformance of the contract the goods provided- Were the goods suitable for their usual ornormal purpose?

Front 26

What is the current meaning of the phrase 'satisfactory quality' under the SGA 1979?

Back 26

For the purposesof this Act, goods are of satisfactory quality if they meet the standard that areasonable person would regard assatisfactory, taking account of any description of the goods, the price (ifrelevant) and all the other relevant circumstances.(2B)For thepurposes of this Act, the quality of goods includes their state and conditionand the following (among others) are in appropriate cases aspects of thequality of goods— (a)fitness for all the purposes for which goods of the kind inquestion are commonly supplied, (b)appearance and finish, (c)freedom from minor defects, (d)safety, and (e)durability. 9��g�|

Front 27

Mash & Murrell Ltd v Joseph I Emanuel Ltd – Diplock J sitting on the QB'>

Back 27

Contractwas for the sale of potatoes, which were shipped from Cyprus. By the time theyarrived in Liverpool they were rotten and unfit for human consumption.- They should remain merchantable for a reasonable time, thetime reasonable in all circumstances, which means a time for the normal transitto the destination, Liverpool, and for disposal after. That warranty, in myview was broken.

Front 28

Contractwas for the sale of potatoes, which were shipped from Cyprus. By the time theyarrived in Liverpool they were rotten and unfit for human consumption.- They should remain merchantable for a reasonable time, thetime reasonable in all circumstances, which means a time for the normal transitto the destination, Liverpool, and for disposal after. That warranty, in myview was broken.

Back 28

Mash & Murrell Ltd v Joseph I Emanuel Ltd – Diplock J sitting on the QB'>

Front 29

Rogers v Parish (Scarborough) Ltd [1987]el��݁�|

Back 29

Therewas a difference of opinion between the trial judge and the C of A as towhether a car with leaking oil seals which was driven 5000 miles before being repaired(and repaired by the seller, and not the buyer) was merchantable- the c of Asaid it was not merchantable-sto��ݙ�|

Front 30

Therewas a difference of opinion between the trial judge and the C of A as towhether a car with leaking oil seals which was driven 5000 miles before being repaired(and repaired by the seller, and not the buyer) was merchantable- the c of Asaid it was not merchantable-sto��ݙ�|

Back 30

Rogers v Parish (Scarborough) Ltd [1987]el��݁�|

Front 31

M/S Aswan EngineeringEstablishment Co v Lupdine [1987] 1 WLR 1 t:o;��ݵ��|

Back 31

Are pails bought and which melted in the container they weretransported in fit for purpose?It was held in this circumstance under the idea that something is fitfor purpose when it is good at fulfilling it’s intended purpose that it was fitfor purpose. 5D%201%��݆݊|

Front 32

Are pails bought and which melted in the container they weretransported in fit for purpose?It was held in this circumstance under the idea that something is fitfor purpose when it is good at fulfilling it’s intended purpose that it was fitfor purpose. 5D%201%��݆݊|

Back 32

M/S Aswan EngineeringEstablishment Co v Lupdine [1987] 1 WLR 1 t:o;��ݵ��|

Front 33

NEWER CASE- Britvic Soft Drinks Ltd v Messer UK Ltd [2002]

Back 33

Carbondioxide supplied for the use in making sparkling drinks.It wascontaminated with benzene. The gas didn’t infringe any of the UK britishstandards, nor would it pose any threat to health. However, the fact that theplaintiff would suffer negative publicity as a result of the contaminationmeant that the it was not of satisfactory quality.

Front 34

Carbondioxide supplied for the use in making sparkling drinks.It wascontaminated with benzene. The gas didn’t infringe any of the UK britishstandards, nor would it pose any threat to health. However, the fact that theplaintiff would suffer negative publicity as a result of the contaminationmeant that the it was not of satisfactory quality.

Back 34

NEWER CASE- Britvic Soft Drinks Ltd v Messer UK Ltd [2002]

Front 35

Clegg v Andersson [2003]

Back 35

Anderssonsold Mr and Mrs Clegg a yacht for £236,000.Thekeel was overweight and required remedial work.Theyacht was held not to be a of satisfactory quality. In relation to ahigh-priced aulity product, ‘the customer may be entitled to expect that it isfree from even minor defects, in other words perfect or nearly so’.

Front 36

Anderssonsold Mr and Mrs Clegg a yacht for £236,000.Thekeel was overweight and required remedial work.Theyacht was held not to be a of satisfactory quality. In relation to ahigh-priced aulity product, ‘the customer may be entitled to expect that it isfree from even minor defects, in other words perfect or nearly so’.

Back 36

Clegg v Andersson [2003]������

Front 37

Jewson Ltd v Boyhan [2003]

Back 37

Kellybought 13 electric boilers to install into a former school building beingconverted into flats. However the boilers gave the occupants a ‘low home energyrating’ under the now govt system. This meant it was more difficult for them toget a mortgage. The C of A held the boilers were of satisfactory quality.

Front 38

Kellybought 13 electric boilers to install into a former school building beingconverted into flats. However the boilers gave the occupants a ‘low home energyrating’ under the now govt system. This meant it was more difficult for them toget a mortgage. The C of A held the boilers were of satisfactory quality.

Back 38

Jewson Ltd v Boyhan [2003]

Front 39

Bramhill v Edwards [2004]

Back 39

A caseinvolving the purchase of a motorhome which as ‘too wide’ for the UK.However,it was held that it was of satisfactory quality because there were many othermotor homes of the same width, and the UK authorities turned a blind eye in thisarea.

Front 40

A caseinvolving the purchase of a motorhome which as ‘too wide’ for the UK.However,it was held that it was of satisfactory quality because there were many othermotor homes of the same width, and the UK authorities turned a blind eye in thisarea.

Back 40

Bramhill v Edwards [2004]

Front 41

Balmoral Group Ltd v Borealis (UK) Ltd [2006]

Back 41

Polyethylenewhich included a novel component was supplied for the manufacture of oil tanks,but many of the tanks became brittle and fractured.

Thecourt held that the test of satisfactory quality did not require that where amaterial had a very wide range of possible uses the ‘fit for all purposes’ testshould mean ‘fit for every conceivable purpose’.

Amanufacturer who switched to a new type of polyethylene could be expected toreview its processing operations so that the tanks which it produced were ofacceptable standard. -

Front 42

Polyethylenewhich included a novel component was supplied for the manufacture of oil tanks,but many of the tanks became brittle and fractured.

Thecourt held that the test of satisfactory quality did not require that where amaterial had a very wide range of possible uses the ‘fit for all purposes’ testshould mean ‘fit for every conceivable purpose’.

Amanufacturer who switched to a new type of polyethylene could be expected toreview its processing operations so that the tanks which it produced were ofacceptable standard. -

Back 42

Balmoral Group Ltd v Borealis (UK) Ltd [2006]

Front 43

What is section 14(3) concerned with?

Back 43

(3)Where the seller sellsgoods in the course of a business and the buyer, expressly or by implication, makes known—

(a)to theseller, or
(b)where the purchase priceor part of it is payable by instalments and the goods were previously sold by acredit-broker to the seller, to that credit-broker,


any particular purpose for which the goods are being bought, there isan implied [F11term] that the goods suppliedunder the contract are reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonlysupplied, except where the circumstances show that the buyer does not rely,or that it is unreasonable for him to rely, on the skill or judgment of theseller or credit-broker.

Front 44

Frostv Aylesbury Dairy Co [1905

Back 44

For certain goods which have one particular purpose,the court will take it for granted that this purpose was made known to theseller e.g. milk has the implied particular purpose of being drunk

Front 45

For certain goods which have one particular purpose,the court will take it for granted that this purpose was made known to theseller e.g. milk has the implied particular purpose of being drunk

Back 45

Frostv Aylesbury Dairy Co [1905

Front 46

Bristol Tramways etc Carriage Co Ltd v Fiat Motors Ltd [1910]

Back 46

The plaintiffssuccessfully sued the defendants after they were supplied with busses whichwere not suitable for the terrain of Bristol (it being so hilly, as you wellknow). They needed to be reconstructed. The defendants had known about Bristol,and so they were not fit for that particular purpose.

Front 47

The plaintiffssuccessfully sued the defendants after they were supplied with busses whichwere not suitable for the terrain of Bristol (it being so hilly, as you wellknow). They needed to be reconstructed. The defendants had known about Bristol,and so they were not fit for that particular purpose.

Back 47

Bristol Tramways etc Carriage Co Ltd v Fiat Motors Ltd [1910]

Front 48

Cammell Laird & Co Ltd v Manganese Bronze & Brass Co Ltd[1934]

Back 48

The plaintiff was buildingtwo ships for another company, and they hired the M B&B to make specialpropellers for those ships.It was held that s14(3)applied because a particular purpose for the propellers was made clear, and itwas shown that C relied on the seller’s skill and judgement, (as was proved bythe fact that it took M B&B two attempts before building a correctlyworking propeller)!

Front 49

The plaintiff was buildingtwo ships for another company, and they hired the M B&B to make specialpropellers for those ships.It was held that s14(3)applied because a particular purpose for the propellers was made clear, and itwas shown that C relied on the seller’s skill and judgement, (as was proved bythe fact that it took M B&B two attempts before building a correctlyworking propeller)!

Back 49

Cammell Laird & Co Ltd v Manganese Bronze & Brass Co Ltd[1934]

Front 50

Ashington Piggeries Ltd v Christopher Hill Ltd [1972]

Back 50

Questions arose inrelation to a feeding compound, mixed by the seller to the buyers’ formula,which contained herring meal that was contaminated with toxic preservative andproved fatal when fed to the buyers’ mink. The herring meal had beenbought from Norwegian suppliers who had no knowledge of the precise use towhich it was to be put, but knew that the herring meal was to be used incompounding animal foodstuffs, and it was held that they ought reasonably thatit might be fed to mink. The toxin affected different species of animals invarying degrees, but was particularly harmful to mink- They were liable because they had been relied on to supply goodswhich were reasonably fit for feeding to animals generally (not limitedspecifically to mink). e

Front 51

Questions arose inrelation to a feeding compound, mixed by the seller to the buyers’ formula,which contained herring meal that was contaminated with toxic preservative andproved fatal when fed to the buyers’ mink. The herring meal had beenbought from Norwegian suppliers who had no knowledge of the precise use towhich it was to be put, but knew that the herring meal was to be used incompounding animal foodstuffs, and it was held that they ought reasonably thatit might be fed to mink. The toxin affected different species of animals invarying degrees, but was particularly harmful to mink- They were liable because they had been relied on to supply goodswhich were reasonably fit for feeding to animals generally (not limitedspecifically to mink). e

Back 51

Ashington Piggeries Ltd v Christopher Hill Ltd [1972]

Front 52

Aswan Engineering Establishment Co v Lupdine Ltd [1987]

Back 52

Plastic pails case. Thepails were wanted ‘for export’.Lloyd LJ said that ‘forexport’ was a purpose that ‘could hardly be wider’ and that the wider thepurpose, the greater would be the dilution of the sellers’ responsibility unders 14(3)- but it was found there was no reliance.

Front 53

Plastic pails case. Thepails were wanted ‘for export’.Lloyd LJ said that ‘forexport’ was a purpose that ‘could hardly be wider’ and that the wider thepurpose, the greater would be the dilution of the sellers’ responsibility unders 14(3)- but it was found there was no reliance.

Back 53

Aswan Engineering Establishment Co v Lupdine Ltd [1987]

Front 54

Slater v Finning Ltd [1997]

Back 54

A camshaft was fitted to amarine diesel engine owned by Slater. the camshaft worked well for otherengines but when fitted to Slater’s engine caused abnormal wear and tear. Butthis was probably because of external factors- the design of the boat mostnotably.The claim failed- there isno breach of implied condition of fitness where the failure of the goods tomeet the intended purpose arises from an abnormal feature not made known to the seller by the buyer.

Front 55

A camshaft was fitted to amarine diesel engine owned by Slater. the camshaft worked well for otherengines but when fitted to Slater’s engine caused abnormal wear and tear. Butthis was probably because of external factors- the design of the boat mostnotably.The claim failed- there isno breach of implied condition of fitness where the failure of the goods tomeet the intended purpose arises from an abnormal feature not made known to the seller by the buyer.

Back 55

Slater v Finning Ltd [1997]