Page 123 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes
Example: A certain skins of ‘fair average quality’ are sold. The inspection of the skin
even by specialist does not show any defects. But, when the skins are processed, certain defects
are found which are not visible in their dry condition. The implied condition of merchantability
is broken, as the defects were latent.
The implied condition as to merchantability must, however, be construed reasonably and the
seller will not be held liable if certain facts are concealed from him and the unsuitability arises
because of those facts.

Example: A woman, who has an abnormally sensitive skin, buys a Harris tweed coat and
gets rashes through wearing the coat. There is no breach of condition as she has failed to disclose
the fact of her skin being extra-sensitive.
As mentioned below, in case of food articles, there is an additional implied condition.
Implied condition as to wholesomeness. The condition of merchantability includes another
condition, namely, that of wholesomeness or soundness in the case of sale of provisions or
foodstuff. Thus, in the case of food articles, there is an implied condition that the article is fit for
human consumption.

Examples:
1. F bought a tin of condensed milk from A, the chemist. The milk contained typhoid
germs. F’s wife became infected and died. A was liable for damages, because the
milk was not fit for human consumption.
2. C bought a bun at M’s bakery and broke one of the teeth by biting on a stone in the
bun. Held, M was liable for damages to C.
Implied condition in the case of a sale by sample (s.17). A contract for sale by sample is one
where there is a term in the contract, express or implied, to that effect. Thus, it should not be
assumed to be a sale by sample in all cases where sample is shown. In cases where there are no
terms to that effect, it is assumed that the sample is not shown as a condition, but only to enable
the buyer to form a reasonable judgement of the goods. In a sale by sample, the implied conditions
are: (i) The bulk shall correspond with the sample in quality. This means that if you have
curtains made up for you, the quality of the material should match the sample that you examined
in the shop. (ii) The buyer shall have a reasonable opportunity of comparing the bulk with the
sample. (iii) The goods shall be free from any defects rendering them unmerchantable, which
would not be apparent on reasonable examination of the sample.

Examples:
1. Certain shoes are sold by sample. The shoes are found to contain paper not
discoverable by ordinary inspection. The buyer is entitled to the refund to the price
plus damages.

2. In a contract for the sale of brandy, by sample, the brandy that is supplied has been
coloured with a dye. The buyer is not bound by the contract, though the bulk
corresponds with sample, since the defect could not have been located on reasonable
examination of the sample.
Implied condition in the case of sale by description as well as sample [s.15]. In a sale by description
as well as sample, the goods must correspond both with the description as well as with the sample.

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