Commercial law

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  1. Description
    • There are often lack of clarity in the description of the goods, i.e 
    • - Mere puff (i.e. best chocolate bar in the world) 
    • - Misrepresentation 
    • - Negligent misstatement 
    • - Breach of contractual term
  2. Whether term shows intention of parties?
    • Heilbut Symons v Buckleton (rubber company, innocent misrepresentation
    • The test is objective - Oscar Chees v Williams - what will the reasonable personal mean 
    • Additional tests to test intention of parties 
    • (i) Importance of the statement and veracity 
    • - Bannerman v White 
    • (ii) Timing of the statement 
    • -Routledge v Mackay 
    • (iii) Whether the contract was reduced to writing and the statement included 
    • -Routledge v Mackay 
    • (iv) Relative knowledge of the parties 
    • - Oscar Chess v Williams
  3. Term as opposed representation
    • Even if the court is satisfied that representation is a term, what time is this term? 
    • - Warranty 
    • - Innominate term 
    • - Condition
    • - Sale by description (only descriptive words that are conditions can fall under s. 13, but not every statement that is a condition will be a sale by description)
  4. s 13 (1) SGA
    Where there is a contract for the sale of goods by description, there is an implied term that the goods will correspond with description

    - No requirement that this is a sale in the course of business (so this applies to private sale also) 

    This a condition, so other party may reject and sue for damages
  5. Sale by description
    • No statutory definition 
    • - includes unascertained goods 
    • - includes future goods 
    • - can include specific goods  - Varley v Whipp (sale of second hand ripping machine (but description was that it is new, so seller was in breach) 
    • - inspected goods (Beale v Taylor - sale of car which was advetrised as 1960 car, but the car was made of 2 different car, so seller was in breach of description)
    • - 13(3) SGA - a sale of goods is not prevented from being a sale by description by reason only that, being exposed for sale or hire, they are selected by the buyer
    • - Grant v Australian Knitting Mills - the sale of goods from shop which were displayed to the buyer with certain description. The only conditions when shop sale will be not sale by description is when :
    • (a) the goods were selected and handed over without any exchange of words, and
    • (b) goods are not labeled.
  6. s. 13 Reliance on description
    Need to identify which words from description form the description. 

    • Harlingdon and Leinster Enterprises Ltd v Christopher Hull Fine Art - sale of the painting by the Muntor. Buyer was the expert. Court ruled that this was not a sale by description. Aspect of description must be an essential element (term) of the contract, its condition. It has to be understanding of the parties that this is a sale by description.
    • Drake v Thomas Agnew & Sons - the statement that the person was of Van Dike, was just an opinion. Parties have to be intended that the description must be a condition.
  7. Which words are descriptive (s. 13 SGA)?
    • - What forms part of the description? 
    • Arcos Ltd v Ronaasen - if the written contract specifies conditions of weight measurement and and the like, these conditions must be complied with. If the seller wants to put a margin, he must stipulate it. 
    • in support - the 'doctrine of strict compliance' - Re Moore & Landauer - not compliance with number of pieces of goods in the each box was considered as breach of condition. - this approach promotes commercial certainty. 

    - Less strict approach - Reardon Smith Lines v Hansen Tangen - (SPA of vessel which had to be on particular shipyard, but was built on another) - need to ask whether description constituted a substantial ingredient of the identity of the things sold, and only if it does, then it will be treated as condition. 

    - Description must go to identity. Words as to quality may not form part of the description - Ashington Piggeries Ltd v Christopher Hull - (sale of herring meal which was described as average quality for the season (feed for pigs), but it was spoiled and poisoned the pigs. B argued that it was sale by description, but court did not agree. Court said that description is for identification of goods, but not for something else.

    HOWEVER descriptive words about the quality may be used to asses the quality according to s. 14 SGA (but s. 14 cannot be applied in private sale) - Varley v Whipp
Card Set
Commercial law
S. 13 SGA (Description)
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