Caselaw - Merchantable Quality PDF

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Stevenson v Rogers [1999] 1 All ER 613 Court of Appeal The defendant was a fisherman. He sold his fishing boat to the claimant. The claimant brought an action against the defendant based on breach of S.14 of the Sale of Goods Act as the boat was not of satisfactory quality. S.14 only applies to the sale of goods sold in the course of a business. The defendant argued that the sale of the boat was not in the course of his business. His business was catching fish and selling them, he was not in the business of buying and selling fishing boats. Held: The sale was in the course of the business and therefore the defendant did have to ensure the boat was of satisfactory quality. Geddling v Marsh o Mineral water was sold in bottles which were returnable to the manufacturer, who retained ownership of them throughout o A defective bottle burst and injured the plaintiff buyer o Held: the bottle was supplied under the contract of sale and so S14(2) applied to the bottle as well as the water

Priest v Last (1903) This case is demonstrates the principle if the buyer told the seller the particular purpose which he/she is purchasing the goods, then it is an implied condition that the goods are reasonable to for the purpose. From this case, the buyer who bought a hot-water bottle from the seller was a chemist. His wife uses the hot-water bottle and then after 5 times, the bottle burst and the wife was scalded. Evidence shows that, the bottle was not fit for use as a hot-water bottle. The buyer claimed for breach of section 14(3). The seller stated that, the buyer had not made known the purpose for the hot-water bottle would be used. However, this was rejected by the court. The court held that, the seller has entitled to recover the expenses in the treatment of the buyer’s wife injuries. It is because the buyer relied on the seller’s judgment and he had in fact used the hot-water bottle for the usual purpose.

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Aswan Engineering v Lupdine [1987] 1 All ER 135 Court of Appeal - The claimants purchased some liquid waterproofing from the defendant which was contained in some heavy duty plastic pails. The pails were described as being heavy duty and suitable for storage outside. The claimant stored the pails outside, but they were in Kuwait and the pails were left out in the sun in temperatures of up to 70%c. Consequently the pails melted and the liquid waterproofing was ruined. Held: The court applied the usability test as it was a business to business contract. This test asks if a reasonable user could have used the goods for the purposes for which they are commonly supplied. Consequently there was no breach of s.14 as it was the extreme conditions which caused the pails to melt. A reasonable user could have used the goods without incurring damage. James Elliot v Irish Asphalt Irish Asphalt supplied infill to Elliott Construction for use in building works. When defects appeared in the building, Elliott Construction brought proceedings against Irish Asphalt, claiming that the infill caused the defects. During the proceedings, an issue arose as to whose terms and conditions the parties had contracted on. Why did this matter? Irish Asphalt’s terms and conditions contained an exemption clause which significantly limited its liability for any loss arising from the supply of defective material. Its liability was limited to the cost of replacing the defective material. Irish Asphalt said that its terms and conditions, including the exemption clause, had been incorporated into the contract in at least one of a number of ways: » by signature: delivery dockets signed by Elliott Construction’s site foreman referred to its terms and conditions. » by actual notice: its terms and conditions were set out on three credit notes provided to Elliott Construction. » by reasonable notice: Elliott Construction’s site foreman had reasonable notice of its terms and conditions. » by a consistent course of dealing between the parties. » by reference to trade custom. On each ground, Irish Asphalt failed.

Mash and Murrell v Joseph Emmanuel - Seller in Cyprus sold potatoes - Although potatoes were sound when they left Cypurs, but had deteriorated by the time the ship reached Liverpool. Held: S had breached the merchantability requirement because the goods should have sen loaded in 'such a state that they could endure the journey and be in a merchantable condition on arrival' Rogers v. Parish (Scarborough) Ltd [1987] unreported R. bought a new Range Rover from P. The car suffered a number of small technical problems in the engine and bodywork which persisted. R. sought to reject for breach of merchantable quality under S. 14(2) Sale of Goods Act 1979. The court held that in assessing merchantable quality it was necessary to take into account standards of comfort, handling and appear. Appendix 221 222 Appendix ance related to the price paid and the plaintiff's reasonable expectations. On the facts the court found for R.

Bartlett v Sidney Marcus ltd [1965] 1 WLR 1013 Court of Appeal - The claimant purchased a second hand Jaguar car from the defendant car dealer. The defendant told the claimant that the clutch was defective and that this was a minor repair costing around £2-3. He gave the claimant the choice of either taking the car as it was and knocking £25 off the stated price or he would repair it and charge the full price. The buyer chose to take it with the fault and get the discount. It then transpired that the fault would cost £84 to repair. The buyer sought to bring a claim based on what is now s.14 of the Sale of Goods Act 1979. Held: - The seller had brought the defect to the attention of the buyer and therefore the buyer could not assert any rights under s.14 by virtue of s.142C. It matters not that he may have been misled. Shine v General Guarantee Corp [1988] 1 All ER 911 The claimant purchased a second hand sports car from a car dealer. The car gave him constant problems and he then discovered that the car had previously been in an accident and had been totally submerged in water. The claimant brought an action under s.14(2). Held: - Where the contract is a consumer sale the courts apply the acceptability test. This asks would a reasonable purchaser have accepted the goods at the stated price knowing of the fault. Clearly in this case a reasonable purchaser would not have accepted the goods and therefore the seller was in breach. Bernstein v Pamson Motors A car had been delivered to the buyer three weeks before the purported rejection. In the interval the purchaser had driven it 140 miles. Held: The nature of the particular defect, discovered ex post facto, and the speed with which it might have been discovered, are irrelevant to the concept of reasonable time in s35 which is directed solely to what is a reasonable practical interval in commercial terms between a buyer receiving the goods and his ability to send them back, taking into consideration from his point of view the nature of the goods and their function, and from the point of view of the seller the commercial desirability of being able to close his ledger reasonably soon after the transaction is complete. The complexity of the intended function of the goods is clearly

of prime consideration. What is a reasonable time in relation to a bicycle would hardly suffice for a nuclear submarine. Rougier J: ‘In my judgment, the nature of the particular defect, discovered ex post facto, and the speed with which it might have been discovered, are irrelevant to the concept of reasonable time in s 35 as drafted. That section seems to me to be directed solely to what is a reasonable practical interval in commercial terms between a buyer receiving the goods and his ability to send them back, taking into consideration from his point of view the nature of the goods and their function, and from the point of view of the seller the commercial desirability of being able to close his ledger reasonably soon after the transaction is complete. The complexity of the intended function of the goods is clearly of prime consideration here. What is a reasonable time in relation to a bicycle would hardly suffice for a nuclear submarine.’ Clegg v Olle Anderson The claimant agreed to purchase a yacht from the defendants with a keel to the manufacturer’s standard specifications. The keel actually installed was rather heavier. After correspondence, the claimant rejected the yacht and required the return of the the purchase price. The respondent said the exercise of a right of rejection was unreasonable, given that the manufacturer had offered to correct the defect. Held: Though a repair had been undertaken the right to reject had not been lost. The buyer had maintained his demand for information about the defect. Whether or not a buyer has had a reasonable time to inspect the goods is only one of the questions to be answered in ascertaining whether there has been acceptance in accordance with subsection (4). Subsection (6)(a) shows that time taken merely in requesting or agreeing to repairs for carrying them out, is not to be counted. The purchasers’ failure to mitigate their loss became irrelevant when the right of rejection was used. There is no requirement that the exercise of the right of rejection should be subject to any condition of reasonableness.

Thornett v Beers & Son In Thornett v Beers & Son , B went to T’s warehouse to buy some glue. The glue was stored in barrels and every facility was given to B for its inspection. B did not have any of the barrels opened, but only looked at the outside. He then purchase the glue but later found that the glue was defective. The court held that B could not complain of the defect or breach of merchantable quality because he had all the time and opportunity to inspect and test the glue but had chosen not to do so. In such a case, the buyer cannot later complain that the goods were bad and not what he wanted. Wren v Holt In the case of Wren v Holt, a customer went to a restaurant and ordered some beer to drink. The beer given to him had been contaminated with arsenic and because of this the customer fell ill. He sued the owner of the restaurant for having supplied goods (beer) that was not ‘fit for the purpose’ and was also ‘not merchantable’. The court agreed and awarded him damages Ashington Piggeries v Christopher Hill

The facts of the case as follows whereby U who seems to be an expert in mink nutrition approached the defendants on the claimants behalf asking them to compound a food which was expressly made known that it was for mink which was to be made up with U’s formula. It was later found, after heavy losses of mink, that the hearing meal used by the defendants contained highly toxic to the mink. This was unknown to the parties. The defendants had customary supplied food for animals but not for mink before. The herring meal had been taken from a third party, who had stipulated that the food were to be taken” with all faults and defects, damaged or inferior, if any, to be arranged mutually or by arbitration”. The Queen’s Bench Division held inter alia that the mink food in its contaminated form did not comply with the description that the direct, foreseeable and natural consequences of the breach of contract was the death of the mink. Therefore, the claimant will be liable to the defendant for damages. The main question of the contamination changing the description of the product shows that the quantity and quality of the contaminating substance could be relevant considerations. The sellers of the product to the claimant could be held liable as they were aware that the product was substantially used by mink farmers and had not delivered an ingredient of “fair average quality” as contracted, was in breach of their contract.They are liable to the claimants for substantial damage. Milmo LJ added that the wording Section 14(1) of the Sale of Goods Act 1893 means “definite” and not the opposite of “general” and that the use of a substance for inclusion in animal food compounds is a “particular purpose” within Section 14(1) of the Sale of Goods Act 1893. He also went on to say that where animal foodstuff is sold as such without reservation as to the species of animal to which it is to be fed then the vendor impliedly warrants and that it will be fit for any reasonable purpose to which it might be put. [3] The Court of Appeal held that the herring meal which was contaminated can still be described as a herring meal. There was no implied obligation to supply a feeding stuff which was suitable for mink as distinct from a feeding stuff compounded to a specified formula. The feeding stuff did “correspond with the description” under Section 13 of the Sale of Good Act 1893. The defendants did not rely on the skill and judgement of the claimants as to the suitability for mink of the herring meal. The compounded feeding stuff for the mink was not of a description which was in the course of the claimants business supply. This means that although the feeding stuff was bought by description but it was not bought from a seller who deals with goods of that description. Therefore, there was no condition of merchantable quality could be implied in such a contract under Section 14(2) of the Sale of Good Act 1893. The claimants succeed in their claim from the Court of Appeal. [4] The appeal went to the House of Lords. Lord Diplock’s dissenting judgement where his lordship states that the word “description” by which unascertained goods are sold confined to those words in the contract which were intended by the parties to identify the kind of goods that were meant to be supplied. The test whether the buyer could fairly and reasonably reject the physical goods that were offered to him on the ground that the failure to correspond with that part of what was said about them in the contract makes them goods of a different kind from those he had agreed to buy. The key to Section 13 of the Sale of Goods Act 1893 is identification. Griffiths v Peter Conway Ltd Facts: P has abnormally sensitive skin. She bought a coat without telling the salesman her condition. She subsequently contracted dermatitis from wearing the coat.

Held: P had failed to disclose her condition. Thus unable to recover for breach of fitness for purpose because there was nothing in the cloth that would have affected the skin of a normal person.

Slater v Finning [1996] 3 All ER 398, HL(S) A camshaft was supplied by the defendant for use in the claimant’s fishing boat, which failed because of excessive torsion resistance, caused by some unknown external factor. The claimant sued under s.14(3) of the Sale of Goods Act 1979. The claimant’s argued that since they had specified that the camshafts were to be installed in that particular vessel, the defendants were obliged to supply goods fit for use in that vessel with all its peculiarities. The House of Lords agreed with the Court of Session in dismissing the claim: they said since the defendant had not been made aware of the vessel’s peculiarities, they could not exercise the necessary care and skill to deal with them. There was no breach of the implied condition of fitness for purpose....