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COMMERCIAL:SALE OF GOODS ACT > Statutory Implied Terms: s12 s13 > Flashcards

Statutory Implied Terms: s12 s13 Flashcards

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1
Q

Which sections of SGA 1979 imply terms into contracts?

A

s12
s13
s14
s15

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2
Q

Do all the implied terms apply all the time?

A

No

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3
Q

Which terms only apply sometimes?

A

s14(2)

s14(3)

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4
Q

When is it that s14 (2),(3) doesn’t apply?

A

When the seller is dealing outside of the course of business

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5
Q

The three different classifications of contractual terms?

A

1) Condition
2) Warranty
3) Innominate terms
(in that order of importance)

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6
Q

What type of terms are those implied by SGA?

A

Either condition or warranty, but only if s2(1) is satisfied

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7
Q

What does s12 deal with?

A

Implied terms as to title

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8
Q

How many terms are implied as to title under s12?

A

3

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9
Q

3 terms implied as to title under s12

A 
12(1) = condition S has the right to sell the goods
12(2)a = warranty that goods are free from charge/encumbrance
12(2)b = warranty that B will enjoy quiet quiet possession
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10
Q

Which is one of the most important terms in the whole SGA

A

s12(1)

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11
Q

Why is s12(1) so important?

A

It imposes a legal duty onto S to pass on good title of the goods

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12
Q

s12(1) in relation to a sale?

A

‘the right to sell the goods’

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13
Q

s12(1) in relation to an agreement to sell?

A

‘S will have the right to sell at time when property is to pass’

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14
Q

Eastport Navigation Corp 1982

A
  • s12(1) doesn’t require S to acquire title before transferring the goods, only at point to sale
  • Also not required to own goods, only have the right to sell them
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15
Q

Case for having title to sell need not be at time of transfer, only time of sale

A

Eastport Navigation Corp 1982

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16
Q

Most common situation where doubt arises to S’s title to sell?

A
  • > Where the goods have been found

- > S wants to sell them even though they don’t have absolute title over them

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17
Q

What kind of title does S acquire when they have found the goods?

A
  • > Possessory title

- > Strictly subject to owners title, who can reclaim goods at any time

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18
Q

Does S have to disclose they only have possessory title?

A

Yes, or they are in breach of s12(1)

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19
Q

If S does disclose the only possessory nature of title, how are they protected?

A

By s12(3) and s12(5)

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20
Q

What do s12(3) and s12(5) do?

A
  • > State that if it appears in contract/implied by circumstance that S only intended to transfer as much title as they have
  • > Implied warranty that S won’t disturb B’s quiet possession
  • > B will only be disturbed by someone acting on a charge/encumbrance that B was aware of before sale (real owner)
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21
Q

What happens if s12(1) is breached?

A
  • > Is a condition (important)

- > Innocent party may treat contract as finished

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22
Q

Is terminating a contract for breach of 12(1) subject to any other terms?

A

Yes

s11(4)

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23
Q

What is s11(4)?

A

If B has accepted the goods, then they cannot terminate contract, only sue for damages

24
Q

Rowland v Divall 1923

FACTS

A
  • Contract for purchase of a car
  • S unaware car was previously stolen = no right to sell
  • Entire purpose of contract for sale is to transfer ownership to B, but there could be no consideration
  • No consideration because B could never obtain title over something S had no right to sell, no title over
  • Can’t be acceptance without consideration
25
Q

Case for acceptance not always removing B’s right to terminate for breach of s12(1)

A

Rowland v Divall 1923

26
Q

Rowland v Divall 1923

JUDGMENT

A
  • B had used the car extensively when breach was discovered
  • Extensive use = acceptance
  • However, proper acceptance not possible as no consideration given by S
  • Still allowed to terminate contract under s11(4) as no acceptance possible
27
Q

Why has Rowland v Divall been criticised?

A
  • > Allows B to have use/enjoyment of something for free
  • > By using something it’s value is lessened
  • > Of particular issue when goods are perishable/finite
28
Q

Example used to highlight problems with Rowland v Divall 1923 decision

A

WINE

  • > A buys case of wine from B and drinks it
  • > Later discovered wine was stolen = no consideration = no contract
  • > A entitled to repayment of price paid
  • > Real owner can sue B for BOTH the value of the wine and the price A paid them
  • > A simply got free wine and B suffered = unjust?
29
Q

Niblett Ltd v Confectioners Materials Co 1921

A
  • S sold quantity of condensed milk, some of them labelled ‘nissly’
  • B were later informed by Nestle that it was an infringement of trademark
  • B brought action against S for breach of 12(1)
  • Even though S owned the goods, by unwittingly infringing on Nestle’s copyright = no right to sell
30
Q

s12(2) a

A

Warranty that goods are free from charge/encumbrance

31
Q

s12(2) b

A

B will enjoy quiet possession of the goods

32
Q

Case for s12(2) b

A

Microbeads AG v Uinhurst Road Markings 1975

33
Q

Microbeads AG v Uinhurst Road Markings 1975

FACTS

A
  • S sold some roadmarking machinery, shortly after sale unrelated company bought patent relating to the kind of machine sold
  • Third party brought claim against B to enforce their patent
  • B sued S for breach of s12(1) and s12(2) b
34
Q

Microbeads AG v Uinhurst Road Markings 1975

JUDGEMENT

A
  • No breach of 12(1) as condition of title is only needed at time of sale
  • Breach of 12(2) as ‘will enjoy’ quiet possession is in reference to the future enjoyment of the goods, not just at time of sale
  • Only a warranty = damages awarded
35
Q

s13 relates to?

A

Sales by description

36
Q

What is implied by s13(1)?

A

If contract is for sales off gods by description, implied that goods will correspond to description

37
Q

What is the definition of a sale by description?

A
  • > Not in statute
  • > The ordinary meaning of the words is applied
  • > Easy with future/unascertained goods as they can only be sold by description
38
Q

Are specific goods saleable by description?

A

Yes, but the description must be very specific

39
Q

s13(3)

A

No prevention of goods on display being chosen by B amounting to a sale by description

40
Q

2 contrasting cases on sales of cars by description?

A

Beale v Taylor 1991

Brewer v Mann 2012

41
Q

Beale v Taylor 1991

FACTS

A
  • S advertised his car for sale, in the honest belief it was a 1961 triumph herald
  • Advert read: Herald, convertible, white, 1961
  • On buying the car B soon realised that the front half was an early model that had been welding onto the back half which was a 1961 Herald
  • Badge displayed on car was that of a 1961 model
    QUESTION
  • Even though B had inspected the car before buying it, was he relying on the description in any way that would influence his purchase?
42
Q

Beale v Taylor 1991

JUDGEMENT

A
  • Can still be a sale by description, even after B’s inspection
  • Must be that the chattel was being sold not as the specific thing B inspected, but that it was the same specific thing described and B is relying on the description in some way
  • B only bought it due to the description and badge displayed = relied on part in descrpition
  • Even though innocently, goods did not correspond = breach of s13(1) = liable for damages
43
Q

Brewer v Mann 2012

FACTS

A
  • S advertised his ‘1930 Bentley Speed Six’
  • B obtained car on hire-purchase agreement. Later argued car did not conform to description
  • Engine was not an original, a different Bentley engine that had been modified to meet specs
  • Further argued that the body work had also been altered to fit specs

QUESTION
By altering parts to fit specification of description, is the chattel still matching description?

44
Q

Brewer v Mann 2012

JUDGEMENT

A
  • Advert did not say the car was an original, so any alterations to make it fit specs were not a breach of s13(1)
  • Identity of car was to be decided according to normal customs of particular industry
  • 2 experts confirmed it met specs for a 1930 Bentley Speed Six
45
Q

Point made in Beale v Taylor 1991

A

Even after inspection, if B is relying on description given in any way, the goods must correspond exactly

46
Q

Point made in Brewer v Mann 2012

A
  • If there is question, identity of goods is decided according to normal trade customs
  • If goods aren’t stated to be original, and have been altered to match description = not a breach
47
Q

When does having a description of the goods amount to it being a sale by description?

A

It must amount to a term in the contract

48
Q

When will the courts hold a sale to be a sale by description?

A
  • > Where they can find that parties had a common intention

- > They intended that the goods will correspond with description term of the contract

49
Q

Case for parties having to intend that it be a sale by description?

A

Christopher Hill Fine Art 1991

50
Q

Under previous SGA 1893 was easier or harder to reject goods for breach of s13?

A

Easier, shown in Re Moore and Landauer 1921

51
Q

Re Moore and Landauer 1921

A
  • S contracted to sell tinned fruit packaged in cases of 30
  • The correct quantity were delivered, but some were packed in cases of 24
  • Held that the fact it would be in cases of 30 was part of description = B entitled to reject entire consignment
52
Q

In Hansen-Tangen 1976, what did Lord Wilberforce say about Re Moore and Landauer 1921?

A

The decision was ‘excessively techincal’

53
Q

In order to breach s13(1), how important must the wrong descriptive detail be?

A

Must be a ‘substantial ingredient of the identity of the thing sold’

54
Q

Which case stated a breach of s13 must be a ‘substantial ingredient to the identity of the thing sold?

A

Hansen-Tangen 1976

55
Q

Hansen-Tangen 1976

A
  • Concerned a ship that the contract stated would be built in shipyard ‘Osaka 354’
  • Due to size was actually built in ‘Oshina 004’
  • When vessel finally finished, market had collapsed and B sought to escape payment relying on breach of description under s13
  • Held that particular of a description must be ‘substantial ingredient to identity of thing sold’
  • Shipyard number is not important = no breach
56
Q

When does B’s reliance on description not amount to breach of s13?

A
  • > When it is unreasonable or inappropriate to rely on it

- > It was not within reasonable contemplation of the parties that B would be relying on it

57
Q

Case for unreasonable to think B was relying on description = not liable under s13?

A

Christopher Hull Fine Art 1991

COMMERCIAL:SALE OF GOODS ACT (9 decks)

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