Dec 3, 2007

Business LAw Tutorial 8

1. For Sale of Goods Act, 1957 to apply, it must be a goods. Under Section 2 Sale of Goods Act, 1957, goods is defined as every kind of movable property other than auctionable claims and money, and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale. Land is excluded from Sale of Goods Act, 1957.

For Sale of Goods Act, 1957 to apply, it must be a contract of sale for a price. Contract of Sale is defined in Section 4(1) Sale of goods Act, 1957 as a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price.

(a) When Ahmad agrees to exchange his pen for Thomas’s watch, is there a goods? Here, Section 2 Sale of Goods Act, 1957 is satisfied because both pen and watch are movable properties. Is there any price? Here, there is no price because it is a barter agreement. Therefore, Section 4(1) Sale of goods Act, 1957 is not satisfied. Hence, Sale of Goods Act, 1957 cannot apply in this transaction.

(b) When Jenny agrees to sell her house to George for Rm200000, is there a goods? Here, Section 2 Sale of Goods Act, 1957 is not satisfied because house is not a movable property. Therefore, Sale of Goods Act, 1957 cannot apply in this transaction.

(c) When Frank agrees to buy shares in ABC Sdn Bhd from Sam for RM10000, is there a goods? Here, Section 2 Sale of Goods Act, 1957 is satisfied because shares is movable property. Is there a price? Here, there is a price of RM 10000, therefore Section 4(1) Sale of Goods Act, 1957 is satisfied. Hence, Sale of Goods Act, 1957 can apply in this transaction.

(d) When Tan wants to buy a TV set from Fella Design for RM2000 to be paid over a twelve months period by equal installments, is there a goods? Here, Section 2 of Sale of Goods Act, 1957 is satisfied because TV set is a movable property. Is there a price? Here, there is a price of RM2000, therefore Section 4(1) Sale of Goods Act, 1957 is satisfied. Hence, Sale of Goods Act, 1957 can apply.



2. [This question will not be asked in exam. Teacher only gives short answers.]
(a) Existing Goods if the 5 Kilo of wheat is weighted
(b) Existing Goods
(c) Future Goods



[Questions 345 are standard exam questions. So be prepared! For Sale of Goods Act, 1957 questions, Section 2 and Section 4(1) must be mentioned as introduction.]

3. For Sale of Goods Act, 1957 to apply, it must be a goods. Goods is defined in Section2 Sale of Goods Act, 1957 as every kind of movable property other than auctionable claims and money, includes stock and shares, growing crops, grass, things attached to or forming part of the land which are agreed to severed before sale or under contract of sale. Land is excluded from Sale of Goods Act, 1957. Here, woolen clothes are goods, therefore Sale of Goods Act, 1957 can apply.

For Sale of Goods Act, 1957 to apply, it must be contract of sale for a price. Contract of Sale is defined in Section 4(1) Sale of Goods Act, 1957 as a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. Here, there is a contract of sale as Vain purchased the woolen clothes from Carrie’s shop. Therefore Sale of Goods Act, 1957 applies.

Section 16(1)(a) Sale of Goods Act, 1957 provides an implied condition that goods are reasonably fit for a particular purpose. For this section to apply, there are 5conditions to be satisfied. Firstly, the sale must be in the ordinary course of business. Secondly, it must be fit for normal purpose or particular purpose. If the goods are for normal purpose, buyer need not to expressly inform the seller-Priest v. Last, but if the goods are for special purpose, buyer must expressly inform the seller-Griffith v. Peter Conway Ltd..Thirdly, the buyer must rely on the seller’s skill or judgement. Fourthly, the goods are of a description, which it is in the course of the seller’s business to supply. Lastly, if the goods are specific, they must not be bought under their patent or brand name.

Here, the sale in occurred in the ordinary course of business, because it took place in Carrie’s shop. Since Vain has sensitive skin against woolen material, she should have expressly informed Carrie but she did not, therefore she cannot sue Carrie under Section 16(1)(a) Sale of Goods Act, 1957.



4. For Sale of Goods Act, 1957 to apply, it must be a goods. Section 2 Sale of Goods Act, 1957 defined goods as every kind of movable property other than auctionable claims and money, includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale. Land is excluded from Sale of Goods Act, 1957. Here, the chicken feed is movable property, therefore Sale of Goods Act, 1957 can apply.

For Sale of Goods Act, 1957 to apply, it must be a contract of sale for a price. Contract of Sale is defined in Section 4(1) of Sale of Goods Act, 1957 as a contract whereby seller transfers or agrees to transfer the property in goods to the buyer for a price. Here, there is a contract of sale, because Ali ordered the chicken feed from Sam.

Section 16(1)(b) of Sale of Goods Act, 1957 provides an implied condition as to merchantable quality. The buyer need not make known the purpose as long as he bought by description and must be bought from a seller who deals in goods of that description.

The proviso in this section provides that if the buyer has the opportunity to check the goods, this section cannot be applied-Thornett & Fehr v. Beers & Sons. In this case, the buyer does not check the goods even though he has given the chance to check, and so later if there is any defect detected later, the buyer cannot complain.

Section 32 Consumer Protection Act, 1999 states that goods are supplied to a consumer shall be implied a guarantee that the goods are of acceptable quality. Here, even though the chicken feed supplied by Sam, a dealer of animal feed products, is not antibiotic-free, but it is still edible for the chickens. Therefore the chicken feed is of acceptable quality. Hence, Ali cannot sue Sam under Section 16(1)(b) Sale of Goods Act, 1957.

Under Section 15 of Sale of Goods Act, 1957, so long as the buyer relies on the description of the goods before he has decided to enter into a contract of sale, this implied term could be applied. In this case, Ali had entered into the contract of sale because the chicken feed is described as being free from antibiotics. Therefore Ali can sue under this section.



5. For Sale of Goods Act, 1957 to apply, it must be a goods. Goods is defined in Section 2 of Sale of Goods Act, 1957 as every kind of movable property other than auctionable claims and money, includes stock and shares, growing crops, grass and things attached to the or forming part of the land which are agreed to be severed before sale of under the contract of sale. Land is excluded from Sale of Goods Act, 1957. Here, Singer knitting machine is a goods, therefore Sale of Goods Act, 1957 can apply.

For Sale of Goods Act, 1957 to apply, it must be a contract of sale for a price. Contract of sale is defined in Section 4(1) of Sale of Goods Act, 1957 as a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. Here, there is a contract of sale because Kenny bought the knitting machine for RM550, therefore Section 4(1) of Sale of Goods Act, 1957 is satisfied.

Under Section 16(1)(b) of Sale of Goods Act, 1950, it provides an implied condition as to merchantable quality. The buyers need not to make known the purpose as long as they bought by description and they must be bought from a seller who deals in goods of that description.

Proviso under this section provides that if the buyer has the opportunity to check the goods, this section cannot be applied- Thornett & Fehr v. Beers & Sons. In this case, the buyer is given the opportunity to check the goods but he did not check. Later, when the defects are detected, he cannot complain.

Section 32 Consumer Protection Act, 1999 provides that goods which are supplied to a consumer shall be implied a guarantee that the goods are of acceptable quality.

Here, Section 16(1)(b) of Sale of Goods Act, 1957 cannot apply because proviso says so. When Kenny is allowed to check the knitting machine, this implied term couldn’t be applied.

Under Section 15 of Sale of Goods Act, 1957, so long as the buyer relies on the description of the goods before he has decided to enter into a contract of sale, this implied term could be applied. In this case, Kenny purchased the knitting machine by relying on the description in the brochure. Even though he had the try out, still he cannot know whether the description is true or not- Beale v. Taylor- the seller of a car advertised it as a “Herald Convertible, White, 1961…”. The buyer viewed the car before agree to buy it. Later he discovered that while the rear halve of the car was part of a 1961 Herald Convertible, the front part was part of an earlier model. It was held that he could sue under Section 15 of Sale of Goods Act, 1957 because even though the buyer can try the good, defects may be concealed from the buyer.

In conclusion, Kenny can sue under Section 15 of Sale of Goods Act, 1957.

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