Classification of Terms

 Conditions: a stipulation going to the root of the contract; breach: right to

treat the contract as repudiated. (May be express or implied.)

 Warranties: part of the agreement, but collateral to its main purpose; breach
gives rise to a claim for damages but not a right to reject the goods and treat the
contract as repudiated.

 Innominate Terms: either a condition or a warranty; breach – the remedy can

only be determined afterwards; serious consequences = as condition; less serious
= as warranty.

The Statutory Implied Terms

Introduction
SoGA 1962, ss. 9-14 prescribe a set of 9 implied terms in favour of the Buyer:
1. Existence of specific goods s.9
2. Title s. 10(1)
3. Freedom from charges and encumbrances s. 10(2)
4. Quiet possession s. 10(2)
5. Correspondence with description s.11
6. Correspondence with sample s.12
7. Quality of Goods s. 13(1) (a)
8. Fitness for purpose s. 13(1) (b)
9. Quantity of goods s.14

Numbers 2, 3 and 4 are warranties, the rest are conditions: ss. 11, 12, 13 and 14– but
see below for exceptions.

Buyer’s Rights on Breach of Implied Terms

Normally, the Buyer can insist on perfect tender, and can reject for any non-
conformity (unless microscopic, see Goode p 317).

The duty on the Seller is strict: exercising reasonable care is not a defence to
goods, which do not conform (Goode p 308).

Where the implied term is a condition, on breach the buyer may either:

 Treat the contract as repudiated: The Buyer has to decide whether to

accept the breach, which generally requires a positive act. Mere silence or
inactivity is not enough: State Trading Corp of India v M Golodetz Ltd [1989]
2 Lloyd’s Rep 277, 286; or

 Reject the goods tendered, in which case the situation becomes one of
non-delivery, giving the Seller a chance (if unascertained goods) to
retender, although there may be a liability in damages. However, the Seller
can only retender if:
 There is still time within the contract terms to do so; and
The contract was not for specific goods, or
Waive the condition, and treat the breach as a breach of warranty, i.e. sue
for damages.

Correspondence with Description (s 11)

Section 11: Where there is a contract for the sale of goods by description, there is
an implied term that the goods will correspond with the description.

What Is a Sale by Description?

There is a contract for the sale of goods by description where:
Descriptive words are used for the purpose of describing and identifying the
goods;

Those words form a term of the contract, not merely a representation inducing
the buyer into the contract.

Meaning of ‘sale by description’

Varley v Whipp (1900) 1 QB 513 
per Lord Channel J
This phrase ‘must apply to all cases where the purchaser has not seen the goods
but is relying on the description alone’
 A sale must be by description if it is of future or unascertained goods
 The term applies in many cases even where the buyer has seen the goods

DOUBTS AS TO WHETHER AN ORDINARY SALE IN A SHOP COULD BE A SALE BY

DESCRIPTION WERE SET TO REST BY LORD WRIGHT IN GRANT V AUSTRALIAN
KNITTING MILLS LTD (1993) 50 CLR 387

‘It may also be pointed out that there is a sale by description even though the
buyer is buying something displayed before him on the counter: a thing is sold by
description, though it is specific, so long as it is sold not merely as the specific
thing but as a thing corresponding to a description, e.g., woolen under-garments,
a hot-water bottle, a second-hand reaping machine, to select a few obvious
illustrations’
Application of s 11
Section 11 applies even though the goods are sold by a person who does not sell
‘in the course of a business.
In Varley v Whipp
 D agreed to buy from the plaintiff a second-hand reaping machine, which
was stated to have been new the previous year and hardly used at all. This
 was a gross mis-description and the defendant declined to accept or pay
for it. The D could not rely on s 14 (which imposes requirements as to
quality and fitness for purpose) because the plaintiff was not a dealer in
agricultural machinery but as the goods did not correspond with the
description it was held there was a breach of s 11.

Description and Total Non-performance

Although s. 11 appears to be a term implied by law, it is also a factual and express
undertaking where the breach is not merely a breach of part of the contract but a
total non-performance of it. (Goode p 308 & 317).

Description and Unascertained and Specific Goods

i. Unascertained Goods
Sales of unascertained goods are always sales of description by a buyer: Wallis,
Son and Wells v Pratt and Haynes [1911] AC 394

ii. Specific Goods

There may be a sale by description of specific goods provided the item is not sold
merely as a specific thing, but also as a thing corresponding to a description, in
See Grant v Australian Knitting Mills.

Breach of the Implied Term as to Description

The Seller must deliver goods of the same “kind” as those set out in the
contractual description. Each case turns on its facts, e.g. the exact contract
description, commercial setting and what traders in that line of business will
tolerate.

SOME IMPORTANT CASES ON THE SALE OF GOODS BY DESCRIPTION

In Oscar Chess v Williams [1956] EWCA Civ 5
Facts: Mrs Williams purchased a second hand Morris car on the basis that it was a
1948 model. The registration document stated it was first registered in 1948. The
following year her son used the car as a trade in for a brand new Hillman Minx,
which he was purchasing from Oscar Chess.
The son stated the car was a 1948 model and on that basis the Oscar Chess
offered £290 off the purchase price of the Hillman. Without this discount Williams
would not have been able to go through with the purchase. 8 months later Oscar
Chess ltd found out that the car was in fact a 1939 model and worth much less
than thought. They brought an action for breach of contract arguing that the date
of the vehicle was a fundamental term of the contract thus giving grounds to
repudiate the contract and claim damages.

‘One final word… [the motor dealers only checked the log book] eight months later.
They are experts, and, not having made that check at the time, I do not think they
should now be allowed to recover against the innocent seller who produced to them
all the evidence he had, namely, the registration book... If the rogue can be traced,
he can be sued by whomsoever has suffered the loss: but if he cannot be traced, the
loss must lie where it falls. It should not be inflicted on innocent sellers, who sold the
car many months, perhaps many years before…’Per Denning LJ.
One of the judges dissented on grounds that the year in the logbook was meant
to be relied on by the parties as a warranty.

Ratio: The statement relating to the age of the car was not a term but a
representation. The representee, Oscar Chess ltd as a car dealer, had the greater
knowledge and would be in a better position to know the age of manufacture
than the defendant.

The court found that the defendant’s comments did not constitute a warranty.
More importantly, the court set out a number of considerations that should be
made when assessing whether a statement is a warranty.

a) Where an assumption is fundamental to a contract, it does not mean it is a

term of contract;
b) The term warranty means a binding promise as well as a subsidiary, non-
essential, term of a contract;
c) A warranty must be distinguished from an innocent misrepresentation;
d) Whether a warranty is intended must, be judged objectively, be based on
the parties’ words and behaviour;
e) Where one party makes a statement, which should be within his own
knowledge, but not the knowledge of the other, it is easy to infer a
warranty. If the party states that it is not within his knowledge and is
information passed from another, a warranty is less easily inferred;
f) An oral representation repeated in writing suggests a warranty, but the
issue is not conclusive.
As a surmise from the above, for a sale to be by description, the descriptive term
has to be influential in the sale so as to become an essential term or condition of
the contract and has to be relied on by the buyer as the common intention of the
parties.
There was no common intention between the parties in Oscar Chess. The seller
was not an expert in cars and presented only the log book registration as basis for
the year of manufacture.

Harlingdon & Leinster Ltd v. Christopher Hull Fine Art Ltd [1991] 1 QB 564:
Facts: The claimant purchased a painting from the defendant for £6,000. The
painting was described in an auction catalogue as being by German impressionist
artist Gabrielle Munter. Both the buyers (claimants) and the sellers (Defendants)
were London art dealers. The sellers were not experts on German paintings whilst
the buyers specialised in German paintings. The purchasers sent their experts to
inspect the painting before agreeing to purchase. After the sale the buyers
discovered that the painting was a fake and worth less than £100. They brought an
action based on s.13 English Sale of Goods Act in that the painting was not as
described.
Ratio: By sending their experts to inspect the painting this meant the sale was no
longer by description. S.13 only applies to goods sold by description where the
buyers do not see goods and therefore the buyers had no protection.

From the ratio in the preceding case, and for practical purposes that there cannot
be a contract for the sale of goods by description where it is not within the
reasonable contemplation of the parties that the buyer is relying on the
description. Further, since the buyer saw the goods through the experts
inspection, their reliance on the implied term of sale of goods by description was
lost.

Beale v Taylor [1967] 3 All ER 253

Taylor published an advertisement to sell a car describing it as “white, 1961, herald
convertible….” Relying on that description Beale came to see the car. Since he did
not have a licence, he did not actually take a test drive, but just sat on the
passenger side. After the test run, he also saw a metallic disc on the rear of the
car with the figure 1200 on it. He bought the car believing it to be the 1961 model.
When he got the licence, he found the car unsatisfactory. On examination, the
mechanic told him that the car was made up of two cars welded together, the
front portion was one 948 model while the rear portion was the 1200 model.
Further the car was found not to be roadworthy and unsafe. Beale filed a suit
claiming damages.

The issue before the court was whether the transaction was a sale by description?
Plaintiff contended that it was entitled to damages (1) for breach of the condition
as implied by sec. 13[1](Car should correspond with its description) (2) as money
was paid on a consideration which had wholly failed (3) for breach of an implied
condition of roadworthiness.

Defendant on the other hand defended the claim that the transaction was not a
sale by description but sale of a particular car as seen, tried and approved, which
the buyer had ample opportunity to inspect and test the car.

The Trial Court held that the sale was not a sale by description as B had seen, tried
and approved the said car. However, this was over turned by the Court of Appeal
and held the following:

1. Both the parties are innocent because no one could see from an ordinary
examination that it was made of two cars welded together;
2. There is a sale by description even though the buyer saw the car before
purchasing it. A thing is sold by description as long as it is not sold merely
as a specific thing but as something corresponding to a particular
description. The buyer relied in part on that particular description in buying
the car.
 3. Ideally the buyer should have returned the car to the seller, but since this is
not the case, B is only entitled to the price difference (actual price-scrap
value).

Beale v Taylor is the test for description when the buyer sees and examines the
goods): There is a sale by description even though the buyer sees the car before
purchasing it. A thing is sold by description as long as it is not sold merely as a
specific thing but as something corresponding to a particular description. The
buyer relied in part on that particular description in buying the goods.

Commodities and Descriptions

Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441, per Lord Wilberforce
at 489:

The test of description, at least where commodities are concerned, is intended to

be a broader, more commonsense, test of mercantile character. The question
whether [the goods supplied are] what the buyer bargained for has to be
answered according to such tests as men in the market would apply, leaving
delicate questions of condition, or quality, to be determined under other clauses
of the contract or sections of the Act. In this case, herring-meal was contaminated
with an ingredient rendering it toxic was still herring-meal, so not a breach of this
implied term.

The Supreme Court in Andreas Bschor Gmbh & Co. Kg v Birim Wood Complex Ltd &
Birim Timbers Ltd (2016) unreported by Pwamang JSC referred to Lord
Wilberforce statement in Ashington Piggeries to explain section 11 Act 137 and the
issue of course of business. At page 494 of the report, the following statements
were made:
‘I would hold that (as to subsection (1)) it is in the course of the seller’s
business to supply goods if he agrees, either generally or in a particular
case, to supply the goods when ordered…… But, moreover, consideration
with the preceding common law shows that what the Act had in mind was
something quite simple and rational: to limit the implied conditions of
fitness or quality to persons in the way of business, as distinct from private
persons……I would have no difficulty in holding that a seller deals in goods
‘of that description’ if he accepts orders to supply them in the way of
business and this whether or not he has previously accepted orders for
goods of that description.’

From the above, it can be argued that Ashington Piggeries was followed by
Andreas Bschor, a Ghanaian case, suggesting that Ghana may have moved away
from the non-application of sale of goods by description by a seller either as a
one-off seller or one who does not sell in the course of his ordinary business
solely. In other words, Ghana now adopts three scenarios for the applicability of
sale of goods by description and these are:
a) Where the seller sells goods in an adventure of trade one-off transaction;
 b) Where the seller does not sell goods in the course of business; and
c) Where the seller sells goods in the course of business provided if he accepts
to supply them in the way of his business.

Following from the above common law case of Ashington Piggeries and Ghanaian
authority of Andreas Bschor, it could be concluded that Varley v Whipp may no
longer be good law.

The following have been held to breach the implied term:

Azemar v Casella (1867) 13 CBNS 447

Contract specified Long Staple Salem cotton, seller tendered Western Madras
cotton.

Robert A. Munro & Co Ltd v Meyer [1930] 2 KB 312

Contract specified meat and bone meal, seller tendered meat and bone meal with
5% cocoa husks.

Goode points out at p 324 that the fundamental nature of the contract description
of the goods sold means that, other than in extreme circumstances, exclusion of
s.11 will also negate the whole contract.

Quality and Fitness for Purpose (s.13)

Section 13 (1): Subject to the provisions of this Act and subject to any other
enactment, there is no implied warranty or condition about the quality or fitness
for any particular purpose of goods supplied under a contract of sale except…
where defects which are not declared or known to the buyer before or at the time
when the contract is made.

According to Continental Plastics Engineering v IMC Industries Technik [2009]

SCGLR 298, section 13 (1) of the Sales of Goods Act can only avail a buyer who has
succeeded in establishing the existence of defects in goods bought at the time
the contract was concluded.

Quality of goods

Section 13(1) (a) Where the seller sells goods in the course of a business, there is
an implied term that the goods supplied are free from defects which are not
declared or known to the buyer before or at the time when the contract is made:

The term implied by subsection 13(1) above does not extend to any matter making
the quality of goods defective:
(a) which is specifically drawn to the buyer’s attention before the contract is made,
(b) where the buyer examines the goods before the contract is made, which that
examination ought to reveal, or
(c) in the case of a contract for sale by sample, which would have been apparent on a
reasonable examination of the sample;
(d) Where the goods are not sold by the seller in the ordinary course of his business,
in respect of defects of which the seller was not, and could not reasonably have
been aware. For example, where a friend who is not in a car business sells a car to
you.

Elements of s. 13(1)
 Seller must sell in the course of a business but per Andreas Bschor, a one-off sale
may apply even if course of business is in its narrowest sense;
 Applies also if a business seller operates through an agent;
 The goods must be of quality. Quality is subject to the finesse of the goods in
question.
o Applies to the goods sold; and
o Applies to any goods with which they are supplied, i.e., includes containers and
articles mixed with the goods sold; even by accident: e.g.

Does not extend to disclosed defects, or to defects, which the buyer ought to
have discovered.

In Wren v Holt [1903] 1 KB 610 the court laid down the principle that goods must
be of merchantable quality and that goods which are not of such quality if in the
state they were sold have defects which makes them unfit for the ordinary use or
their condition such that no one with knowledge of their true condition would
have accepted them.

Meaning of Defects

If a buyer inspects goods and becomes aware of the defects in the goods then
that buyer may reject the goods, but if that buyer (knowing of the defect or ought
to have known of the defect), proceeds to buy the goods nonetheless then that
buyer can not later say goods are not of quality due to the defective character of
the goods and as such now intends to reject them after a lapse of time when
those defects were made known and available to that buyer.

There is no implied condition of quality with regard to defects, which are visible or
ought to have been revealed through an examination of the buyer. If you see a
defect and still purchase the goods, then you cannot subsequently complain
about it.

Latent and/or hidden defects are an exception to this rule.

The protection of the buyer from the defects that are not known at the time of
the sale does not apply under the following circumstances:
Where the buyer examines goods that he/she is buying, the implied conditions
and warranties of quality and fitness do not apply in respect of defects, which
could not have been seen from reasonable examination. Thus, a buyer must
always beware of the inspection conducted on the goods in any contract of sale
transaction (CAVEAT EMPTOR).

It must be pointed out that caveat emptor rule applied in England and Wales is
totally different from the Ghanaian position. In England, it is a buyer’s duty to
inspect and examine the goods regardless of whether defects are declared or
made known to that buyer whereas in Ghana the true and proper meaning of
caveat emptor with regard to the Sale of Goods Act, 1962 is to the effect that when
a buyer examines goods and fails to detect defects which were obvious from a
reasonable examination thereof then a seller of goods shall not be liable under
section 13(1)(a) SGA 1962.

However, it is a seller’s duty to ensure that the goods sold are not defective and
that seller must either make it known to the buyer by declaring same at the time
the contract is made. In other words, in Ghana, the rule is caveat venditor, which
means seller must beware of the goods he sells either to be consumed or to be sold
to a business entity.

Thornett v Beers [1919] 1 KB 486 

Facts: 
P sued D for the balance of veg glue that was sold to D. D said it was sale by
sample and that the glue was not equal to the sample. In alternative D claims they
were not merchantable. D had a chance to see the goods, but only looked at the
outside container not the inside of the containers to look at the glue.

The issue was whether the glue of merchantable quality? What is meant by
inspection?

Principle (ratio): If you have plenty of time to inspect and you do not, you will be
held to have done a reasonable inspection and to have discovered the defects
that would have been discovered of a reasonable inspection.
If the buyer has examined the goods, there is no implied condition as regards to
defects. The buyer who conducts only a cursory inspection does so at his own
risk.

The principle in section 13 applies when a seller sells in the ordinary course of
business. The principle was first applied in mercantile transactions. Sec 13 (a) (3)
states that the principle applies to ordinary sale of goods; i.e. sale by merchants.
In Burnby v Bollet [1847] 11 JP 790, a farmer went to an open market to sell his
produce. While looking for a store, he passed by a butcher who had hanged a pig
for sale. He bought the pig and left it in the care of the butcher to pick it later. A
second farmer saw the pig and expressed to the butcher the interest to buy it,
who subsequently directed him to the first farmer. The second farmer bought it
from the first farmer and when he took it home, he detected that the pig was
rotten. He sued and claimed that:

“The Defendant publicly offered for the sale the carcass of a pig for the food of
man and thereby he falsely and fraudulently undertook and warranted that the
said carcass was in a sound and wholesome condition and fit for human
consumption whereby the plaintiff was induced to buy the said carcass at the sum
of £6.86 whereas in truth and in fact the said carcass was not fit for human
consumption but on the contrary thereof was unsound, unwholesome and unfit
for human consumption”.

The court held that the seller was a farmer but not a butcher and therefore the
sale was not in the ordinary sense of business. The law on quality and fitness
cannot be applied under the circumstances. The law under the principle applies
to a sale under ordinary course of business.

Section 13 (2) protects buyers from exclusion clauses. It states that, exclusion
clauses are only effective if they are brought to the attention of the buyer at the
time of the sale. If the buyer agrees when it is brought to his attention, then it is
binding on him. If that is not done, the buyer will not be bound by such clause. In
other words, section 13 (2) frowns on any provision, which seeks to negate the
conditions thereof under section 13 (1) (a) & (b) unless the buyer is made aware of
such a provision(s).

Section 13 (3) states an implied warranty or condition on quality or fitness may be

a further addition to the contract by usage of the trade (custom of parties).

Section 13 (4) states that, an express warranty does not negate any of the
warranties under the act. Thus, if there is an express warranty for a sale
transaction and there is an inconsistency between the implied and the express
warranty, the implied warranty/condition imposed by statute prevails over the
express warranty.

Sec 13 (5) states that, implied condition of quality and fitness applies not only to
the goods themselves but also to the packaging and the materials, which come
with the goods.
If buyer inspects goods and becomes aware of defect in the goods then they may
reject the goods, but if buyer (knowing of defect or ought to have known of
defect), proceeds to buy the goods nonetheless then they can’t later say goods
are unmerchantable due to the defect.

Gredding v Marsh [1920] 1 KB 668

In this case, it was held that packaging, which was bottling, was part of the
product (water), which exploded and injured the buyer when the buyer opened
the bottle containing the water.

'In this action the plaintiff claimed damages for injuries caused to her by the
bursting of a bottle in which mineral water was supplied to her by the
defendant. Her case is based upon a breach of the condition dealt with by s. 14
of the Sale of Goods Act, 1893. The plaintiff kept a small shop in which she sold,
among other articles, mineral waters. The defendant supplied her with the
mineral water in the usual way - namely, in bottles. The bottles were delivered in
cases and the course of business was that she was charged three pence for the
mineral water in each bottle and one penny in respect of the bottle itself. If the
plaintiff returned the bottle she got the penny back; if she did not return it owing
to it being lost or broken she did not receive back the penny; and on the county
court judge's findings we must take it that there was no sale of the bottles to the
plaintiff.

The judge found that the accident may have arisen from one or more of a
number of causes, one of these being either the improper manufacture of the
bottle or some flaw in it. I think we must take it - and it is consistent with the
judge's findings - that the accident arose not from any defect in the liquid
contained in the particular bottle but from some defect in the bottle itself. As I
have said the judge found that there was no sale of the bottle to the plaintiff,
but he considered that to be immaterial for this purpose, and the question is,
was he right in taking that view?
 
For the plaintiff it is said that it is immaterial whether in fact the property in the
bottle passed to the plaintiff or not, because, whether there was a sale or merely
a bailment of the bottle, the case falls within s. 14 of the Sale of Goods Act, 1893.
[His Lordship read the section and continued:] In this case there was only one
contract - namely, a contract between the plaintiff and the defendant that the
plaintiff should be supplied with mineral waters. Mineral waters could not be
supplied except in bottles, and therefore the plaintiff was asking to be supplied
with mineral waters in bottles.

That undoubtedly is a contract of sale, and I will assume that in that contract
there might be a condition that the bottles should not be bought by the plaintiff
but should be hired; but the question the county court judge had to consider
was whether the bottles were not "supplied under a contract of sale." This was a
contract of sale none the less because there was a special provision with regard
to the bottles. The section, in my opinion, extends not only to the goods actually
bought under the contract but to goods "supplied under the contract of sale."
This particular bottle was thus "supplied under a contract of sale," and it follows
that it should be reasonably fit for the purpose for which it was supplied. In fact
it was not reasonably fit and in consequence of that unfitness the plaintiff was
injured.'
 
LATENT DEFECTS

What is a latent manufacturer’s defect? (Georgia Hotel v Silver Star Auto,

J4/34/2012), unreported, 4th December, 2012 and Grant v Australian Knitting Mills
(see above)

According to Black’s Law Dictionary 8 th Edition relied on by the trial judge, a

hidden or latent or inherent defect is defined as ‘a product imperfection that is
not discoverable by reasonable inspection” A manufacturing defect is defined as
an “imperfection in a product that departs from its intended design.”

According to the High Court judgment (Georgia Hotel), the imperfection must
thus exist at the time of delivery of the goods.  The Court took into account the
implied fitness for which the vehicle was intended as well.  Thus, a new vehicle
should be free from defects at the time it is delivered from seller to buyer.

In order words, it means a defect is a manufacturing defect, which must exist at

the time of production and delivery of the product. Reasonable inspection of
goods and the acceptable period for claiming that a latent defect exists are also
factors to be weighed in determining the outcome of a case.

In the case of Continental Plastics Engineering Co Ltd v IMC Industries-

Technik  GMBH [2009] SCGLR 298 supra, Georgina Wood, CJ, said:

The legal position can therefore be summed up as follows: a seller of either first or
second hand goods is by an implied condition, liable for all defects in them. Based on
what we believe is pure common sense the seller is however not liable for defects
which he fully discloses or declares to the buyer at the time of the contract of sale.
When the buyer has examined the goods the seller cannot be held liable for defects,
which ought to have been discovered on examination, as for example, patent
defects. It does follow that if there were defects particularly latent defects which
are not discoverable on examination, and which are not disclosed to the buyer
before the conclusion of the contract, the seller cannot escape liability for the
breach of an essential condition of the contract”

Under the English legal system it was held that if goods are of unsatisfactory
quality, the consumer is entitled, within a reasonable time, to a repair or
replacement (s 11M, SGSA 1982), unless this would be disproportionate. This right
 stems from the 1999 Consumer Sales Directive (1999/44/EC) and the choice is the
consumer's.
However, the position in Ghana requires that a buyer be required to make the
defects known to the seller within a reasonable time to have the defects repaired
and/or maintained. However, failure to inform the latter, may lead to a loss of
right to reject the goods by unreasonable delay. Reasonable time is a question of
fact and might vary with the circumstances of a case (Rockson v Armah [1975] 2
GLR 116
 
Under Ghana law, as opposed to the English law under the Sale of Goods Act, 1979,
the issue for consideration is whether a buyer can repudiate the contract on the
ground of latent defects. The relevant portion of section 13 of the Sale of Goods
Act 1962 is the entire section 13.

What Is Meant by Quality? (Section 13 SGA 1979 and not in Act 137 but inferences
can be drawn from same to fill in the gaps of Act 137)

For the purposes of this Act, goods are of free from defects (quality) if they meet
the standard that a reasonable person would regard as satisfactory, taking
account of any description of the goods, the price (if relevant) and all the other
relevant circumstances.

For the purposes of this Act, the quality of goods includes their state and
condition and the following (among others) are in appropriate cases aspects of
the quality of goods—
(a) fitness for all the purposes for which goods of the kind in question are commonly
supplied,
(b) appearance and finish,
(c) freedom from minor defects,
(d) safety, and
(e) durability.

When the Terms of Quality and Fitness Must Be Satisfied

At the time of delivery with regard to section 13(1)(a) & (b).

What is regarded as Satisfactory

The test to be applied under the Act is partly objective and partly subjective in
that the reasonable person must be attributed with knowledge of all of the
background facts. So the test is really whether a reasonable person with the
knowledge of the Buyer “would” regard the goods as being of unsatisfactory or
satisfactory quality.
 Egan v Motor Services (Bath) Ltd [2008] 1 WLR 1589: Buyer bought a new Audi TT
3.2 litre V6 car for £32,300.

The buyer rejected the car because he said it veered to the left. The expert
evidence was that it did have a tendency to veer to the left, but its handling was
normal for this type of car. While the car was sensitive to the camber of the road,
it was not defective. The car was accordingly of satisfactory quality, and the buyer
had not been entitled to reject it.

Description and Price

In deciding whether goods are of quality, the court must consider all relevant
circumstances. However, the two key factors are:

1. Contract Description: e.g.

 “Premium Quality Raw Cotton Fibre”; or
 “Industrial cotton”

2. Price: e.g.
 car sold for £25,000, or
 an older example of the same type sold for £4,000

The test requires an objective comparison of the state of the goods with the
standard, which a reasonable person would find acceptable. For a high-priced
article, the buyer may be entitled to expect it to be free from even minor defects
(i.e. perfect, or nearly so). Clegg v Olle Andersson [2003] 1 All ER (Comm) 721

Condition of the Goods: Robust Enough for Sea Transit

Mash & Murrell Ltd v Joseph I Emmanuel Ltd [1962] 1 WLR 16
Where goods (here potatoes) are sent to the buyer by sea, they must be in such
condition when they leave that they are likely to arrive in a sound condition.
 KG Bominflot Bunkergesellschaft fur Mineralole mbh & Co KG v Petroplus Marketing
AG [2009] 2 Lloyd’s Rep 679

 The implied term extends to being of satisfactory quality for a reasonable time
after delivery. Whether this period covers the whole of any sea voyage depends
on the circumstances of the contract, including whether the seller knew the
goods were to be transported by sea, and what the seller knew about what the
buyer intended to do with the goods.

 There is a related common law implied term that the goods will remain in
accordance with the contractual description for a reasonable time after delivery.
This is also a condition.

Packing for Goods to Be Carried (See Gredding v Marsh above)

It must be suitable for the contemplated carriage. This in part depends on the
nature of the goods.

Non-application of s. 13(1) (a) Factors

The particular features apply only “in appropriate cases”. The terms of the
contract may make this clear, one way or the other.

Balmoral Group Ltd v Borealis (UK) Ltd [2006] 2 Lloyd’s Rep 629

B bought borecene (a type of plastic) from S for use by B in manufacturing oil

tanks. The tanks suffered a high failure rate. B claimed £50m claiming the
borecene was not satisfactory (and not fit for purpose, see below).

Held: The goods were of satisfactory quality. Function of s 13(1)(a) was to

establish a general standard, which the goods in question are required to reach,
not to ensure they obtained some higher standard of fitness for a particular
purpose made known to S. For a commodity with a wide range of uses, and which
was used by a manufacturer for its particular purposes, it was not “appropriate”
to ask whether the goods were fit for all the purposes for which goods of the kind
were commonly supplied. Borecene comes in different grades. The actual
borecene supplied was not defective or incorrectly manufactured, and was
suitable for moulding purposes generally. So no breach of s.13 (1) (a)

REASONABLY FIT FOR THEIR PURPOSE, SOGA 1962, S. 13(1)(B)

Where the seller sells goods in the course of a business and the buyer, expressly
or by implication, makes known to the seller...any particular purpose for which
the goods are being bought, there is an implied term that the goods supplied
under the contract are reasonably fit for that purpose, whether or not that is a
purpose for which such goods are commonly supplied, 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 the seller....
 Requirements
 Seller acting in the course of a business
 Buyer must make known the particular purpose of goods to seller.
 Goods must be “reasonably fit” for that purpose
 Buyer relied on seller’s skill and judgment

See the Ghanaian cases of Bartholomew v Adu Gyamfi [1962] 2 GLR 62 and Andreas
Bschor.

Henry Kendall & Sons v William Lillico & Sons Ltd [1969] 2 AC 31
The required purpose must be expressed with sufficient particularity to show that
the buyer reasonably relied on the seller’s skill and judgment, per Lord Reid.

Where seller is a manufacturer, it may be nigh on impossible to rebut reliance on

the seller’s skill and judgment

Grant v Australian Knitting Mills above holds the view that some goods may have
only one purpose and that a buyer might not require making known its particular
purpose to a seller.

However, in Jones v Bright (1829) 130 ER 1167, it was held that…

If a man sells an article, he thereby warrants that it is merchantable that is fit for
some purpose. ... If he sells it for some particular purpose, he thereby warrants it
fit for that purpose.

Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441

Herring-meal was bought and made up into a compound for feeding to mink.
Sellers knew the herring-meal was required for animal food, but not that it was to
be fed to mink. Herring-meal was commonly fed to mink. Unfortunately, this
particular compounding resulted in food, which was toxic to mink.

Held: the Section was engaged by stating the herring-meal was to be used as
animal food. There was no need to go further and state it was to be used as mink
food. See Goode pp 346-347.

Hazlewood Grocery Ltd v Lion Foods Ltd [2007] EWHC 1887 (QB)
The sale of chilli powder contaminated with dye.

Held: Seller was also in breach of both s. 13(1)(a) and s.13 (1)(b)

Balmoral Group Ltd v Borealis (UK) Ltd [2006] 2 Lloyd’s Rep 629
See above.

The borecene was also fit for its purpose under s. 13(1)(b). Expert evidence
showed the tanks failed because of a design failure. A competent manufacturer
(here B) could have used the borecene to make tanks if the right thickness has
been used to avoid splitting (as B’s competitors had managed to do).

Exclusion of Quality or Fitness for Purpose

KG Bominflot Bunkergesellschaft fur Mineralole mbh & Co KG v Petroplus Marketing

AG [2009] 2 Lloyd’s Rep 679

Sale of gasoil, clause 18 of the contract provided:

There are no guarantees, warranties or representations, express or implied [of]

merchantability, fitness or suitability of the oil for any particular purpose or
otherwise, which extend beyond the description of the oil set forth in this
agreement.

Held: There is a great reluctance in finding a contract clause has excluded the
statutory implied terms. Clause 18 failed to exclude the s. 13 implied terms, which
are conditions whereas clause 18 referred to “warranties”.

Conclusive Inspection Clauses & Satisfactory Quality

When goods conform to specification on loading, but no longer conform on
discharge, is the seller in breach of its implied duty under the Sale of Goods Act
1962?

Not if the parties agreed to a conclusive inspection clause and that inspection
took place and showed that the goods were – at that time – conforming ones.

KG Bominflot Bunkergesellschaft für Mineraloele mbH & Co v Petroplus Marketing

AG (The “Mercini Lady”) [2010] EWCA Civ 1145

Title, Freedom from Encumbrances & Quiet Possession (s. 10)

Section 10(1) In a contract of sale, there is an implied term on the part of the seller
that in the case of a sale he has a right to sell the goods, and in the case of an
agreement to sell, he will have such a right at the time when the property is to
pass.

In s. 10(1) SoGA 1962 the term is that the seller “has a right to sell the goods”.
Surprisingly, the seller may have title to the goods, but still be in breach:

Niblett v Confectioners’ Materials Co Ltd [1921] 3 KB 387 [Goode p 284]

Sale of 1,000 cases of condensed milk with “Nissly Brand” labels. This infringed
the Nestlé trade mark. Although the sellers had title to the goods, there was a
breach of s. 10(1) because the goods could only be re-sold after stripping off the
offending labels. Atkin and Bankes LJJ also felt that the circumstances amounted
 to breach of the implied terms as to Quiet possession and Merchantable (now
satisfactory) quality, i.e. s. 14(2) and Ghana section 13(1) (a)

Correspondence with Sample (s. 12)

SoGA 1962, s. 12(1): Where there is a sale by sample… where there is an express or
implied term to that effect. (Sackey v Fattal)

In the case of a contract for sale by sample there is an implied term

(a) that the bulk will correspond with the sample in quality;
(b) that the goods will be free from any defect making their quality unsatisfactory
which would not be apparent on reasonable examination of the sample.
See Sackey v Fattal [1959] GLR 169

Breach of Correspondence with Sample

There will be a breach where the goods supplied differ from the sample in ways
which would be apparent from the usual sort of examination conducted by
traders in that line of business: James Drummond & Sons v EH Van Ingen & Co
(1887) 12 App Cas 284 [Goode p 325]

Note that in some commercial trades there are agreed rules for taking samples.
An example is the Grain and Feed Trade Association rules (GAFTA 100) and FCC.