Page 149 - DCOM103_COMMERCIAL_LAW

Commercial Law

Notes Implied Conditions

Condition as to title [Sec. 14 (a)]. In a contract of sale, unless the circumstances of the contract are
such as to show a different intention, there ‘is an implied condition on the part of the seller that-
(a) In the case of a sale, he has a right to sell the goods, and
(b) In the case of an agreement to sell, he will have a right to sell the goods at the time when
the property is to pass.

Example: R bought a car from D and used it for four months. D had no title to the car
and consequently R had to hand it over to the true owner. Held, R could recover the price paid
[Rowland v. Divall, (1923) 2 K.B. 500].
If the goods delivered can only be sold by infringing a trade mark, the seller has broken the
condition that he has a right to sell the goods. The expression “right to sell” is wider than the
“right to property” .

Example: A bought 3,000 tins of condensed milk from the U.S.A. The tins were labelled
in such a way as to infringe the Nestle’s trade mark. As a result, they were detained by the
custom authorities. To get the clearance certificate from the custom authorities, A had to remove

the labels and sell the tins at a loss. Held, the seller had broken the condition that he had the right
to sell [Niblett Ltd. v. Confectioners’ Materials Co., (1921) 3 K.B. 387].
Where a seller having no title to the goods at the time of the sale, subsequently acquires a title, that
title feeds the defective titles of both the original buyer and the subsequent buyer [Butterworth v.
Kingsway Motors, (1954) 1 W.L.R. 1286].
Sale by description (Sec. 15). Where there is a contract for the sale of goods by description, there
is an implied condition that the goods shall correspond with the description. The rule of law
contained in Sec. 15 is summarised in the following maxim: “If you contract to sell peas, you
cannot oblige a party to take beans. If the description of the article tendered is different in any
respect, it is not the article bargained for and the other party is not bound to take it”. [Bowes v.
Shand, (1877) App. Cas. 455].
Goods are sold by description when they are described in the contract, as Farm wheat or Dehra
Dun Basmati, and the buyer contracts in reliance on that description.

Example: A ship was contracted to be sold as a ‘copper-fastened vessel’ to be taken with
all faults, without any allowance for any defects whatsoever. The ship turned out to be ‘partially
copper-fastened’. Held, the buyer was entitled to reject [Shepherd v. Kain, (1821) 5 B. & Ald. 240.]
‘Sale of goods by description’ may include the following situations:
(1) Where the buyer has not seen the goods and relies on their description given by the seller.

Example: W bought a reaping machine which he had never seen and which, V, the seller,
described “to have been new the previous year and used to cut only 50 or 60 acres”. W found the
machine to be extremely old. Held, W could return the machine as it did not correspond with the
description [Varley v. Whipp, (1900) Q.B. 513].
(2) Where the buyer has seen the goods but he relies not on what he has seen but what was stated
to him and the deviation of the goods from the description is not apparent.

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