Topic 1

Question 1

Henry Stephens Engineering v Complete home enterprise

Answer 1

State sales of goods law takes precedence over SOGA subject to all inconsistencies with Soga

Question 2

Aldridge V Johnson

Answer 2

Principle: Trade-in is an exception to the requirements of a money consideration.

Fact: There was a contract for the exchange of 52 bullocks with one hundred quarters of barley. The difference in value was to be paid in cash. The court held that it was a contract of sale.

Question 3

Mary Ajayi v Elice

Answer 3

Principle: Specific good

Plaintiff sold jewellery worth £98 to the defendant who made a part payment. Defendant refused to pay the balance and demanded a refund of the part payment on the ground that the goods were not what was required by it’s(defendant’s) client. The magistrate court erred in law and held that the goods were unascertained and thus, property could not have passed.

The high court reversed this decision holding that the goods were specific in line with sec 62 of the SOGA and thus, property had passed and defendant was contractually bound to make full payment.

Question 4

Robinson v Graves

Answer 4

Principle: a contract for work is not a contract of sale of goods

Fact: An artist was commissioned to paint a portrait. The issue arose as to the application of the SGA and whether this was a contract of sale or for work and materials.

Held:
the test is whether the substance of the contract is the production of something to be sold (sale of goods), or the materials which pass to the customer are only ancillary to the substance, which is the skill and labour employed. Hence this was a contract for work and materials..

Question 5

May and Butcher v King

Answer 5

Principle: An agreement between two parties to enter into an agreement in which some critical part of the contract matter is left undetermined is no contract at all.

The parties had agreed that the appellants should purchase tentage that should become available for disposal at a price to be agreed by the parties themselves. It was also understood that all disputes with reference to or arising out of the agreement would be submitted to arbitration. There was no subsequent agreement as to price.
Held:
The agreement between the parties did not constitute an effective contract. The court further held that, the fact that the parties had reserved to themselves the power to decide upon the price did not warrant or permit the court to infer any attention that a reasonable price should be payable. Nor was the provision that “disputes should be referred to arbitration” of any assistance to the issue because reliance on the arbitration clause can be brought into play where a complete and binding contract has been concluded. It may be said that the decision in this case rested on the fact that there was no valid contract between the parties because of uncertainties with regard to the price, i.e. the parties had not reached a finalized or concluded contract.

Question 6

Foley v Classique Coaches Ltd., (1934) All ER 88

Answer 6

Principle: Unless all the material terms of the contract are agreed there is no binding obligation. An agreement to agree in the future is not a contract; nor is there a contract if a material term is neither settled nor implied by law and the document contains no machinery for ascertaining it.

As part of the agreement between the plaintiff and the defendants for sale of land, the defendants agreed to purchase the petrol they required from the plaintiff’s pump on the adjoining piece of land at a price to be agreed by the parties in writing and from time to time. It was agreed that in the event of dispute, the matter should be submitted to arbitration. This arrangement operated between the parties for 3 years until the defendants discovered that the plaintiff’s petrol was higher in price than that being sold else where, and the question arose whether the defendants could disregard the arrangement for the purchase of petrol from the plaintiff.

Held:
The defendants could not ignore the arrangement, for there was a binding contract between the parties which they had acted upon as a clear indication of their intentions. Their later disagreement as to the price was a matter for arbitration as provided for in their agreement. Consequently, the court held that, the dispute as to the price of petrol was a matter to be settled by arbitration. In other words, there was a binding contract because the parties had clearly evinced an intention to be bound.

Question 7

Bekeredemo v Colgate Palm Olive,

Answer 7

Principle: The general rule at common law is that time is of the essence so that a party who didn’t perform on time could not enforce the contract against the other party. Conversely, the ground rule in equity is that time is not of the essence unless: (i) there is an express provision in the contract stating that time is of the essence; (ii) notice has been given by either or both parties to the other in the course of performing the contract; (iii) the circumstances in which the contract was made or the subject matter of the contract warrants that time is of the essence.

A term of the contract provides that the goods shall strictly be for cash and thirty days shall be granted for credit after the delivery for the distributor to pay for the goods.

Held:
The time of payment was a condition clearly stipulated in the contract and so time is of the essence.

Question 8

Mazin Engineering v Tower Aluminium

Answer 8

Principle: Mere stipulation of time does not make time to be of essence in equity. It’s a question of whether the party meant performance to be at a reasonable time within the date mentioned. Thus, where the performance of the contractual duty can be performed within a reasonable time, time is not of the essence.

Question 9

Amadi v Thomas Aplin

Answer 9

The Court held that the buyer was entitled to repudiate as time was of the essence since the goods were to the knowledge of the seller meant for resale. The good in question are stock fish which are perishable.

Question 10

Bunge Corporation v Tradax, [1981] 1 WLR 711 House of Lords

Answer 10

By a contract for the sale of soya-bean meal, the buyers were obliged to provide a ship and give notice to the sellers by 13 June. This was one of a string of sales for the bean meal. In the event the buyers did not give notice until 17 June. The sellers treated this as a breach of a condition and terminated the contract. The buyers claimed that this was a breach only of an innominate term which was not serious enough to warrant termination. Held: the time stipulation was a condition. The House of Lords then offered some guidelines on the status of stipulations of time:, (i) consider if the contract is one of a string so that other commercial parties will be affected by delays;, (ii) a time stipulation can only be broken in one way;, (iii) consider if the performance of contractual duties by the innocent party depend upon the other party giving notice in time;, (iv) consider the difficulty of assessing damages if the term is not treated as a condition.

Question 11

Sunday & co v Keighley Maxted

Answer 11

The innocent party can still accept the performance of a contractual duty, though there is a breach of timely performance.

Question 12

Adenekan v Otuyalo

Answer 12

Principle: breach of implied condition as to title

Taylor CJ held that it is immaterial that the buyer had enjoyed the use of the good. He remains entitled to recover the full purchase price where consideration has completely failed.

Question 13

Rowland v Divall

Answer 13

Principle: Where the seller has no right to sell under s. 12(1) SGA but transfers the goods to the buyer, the buyer can recover the full amount he paid, upon discovery of lack of title, on the ground of total failure of consideration.

Fact: The plaintiff purchased a car from the defendant. Two months later it was discovered that the car was stolen property and the plaintiff had to give it up to the police. The car was stolen before it came to the defendant and both parties were innocent. Nonetheless, the defendant had no title to pass on and so the plaintiff sued the defendant for the whole of his money back. This was despite the fact that he had had two months use of the car.
Held:
the whole object of a sale of goods is to transfer the property from the seller to the buyer. No property had been transferred here; there was a total failure of consideration and the buyer was entitled to his money back.

Question 14

Akoshile v Ogidan

Answer 14

The plaintiff sold to the defendant a car which he said he bought from one European. The European was subsequently convicted of stealing the car.
Held: The defendant had no right to sell the stolen car, and that Section 12(1) of the Sale of Goods Acts, 1893, was applicable. Therefore, the plaintiff had the right to rescind the contract and claim a refund of the money paid. Since the defendant at the material time of the sale had no right to sell, he could not pass a good title.

Question 15

Niblett v Confectioners Material

Answer 15

A contract was made for the sale of 3,000 cases of condensed milk, to be shipped from New York to London. About 1,000 of the cases arrived in London bearing the labels “Nissly” brand. This infringed the trade mark of another company, Nestlé, and so the buyers had to strip the cans of their labels and sell them for the best price obtainable. They sued the sellers for breach of the condition implied by s 12(1). Held:
s 12 implies a condition that the seller has the right to sell the goods. Here the seller could have been restrained by an injunction from selling the goods for infringement of a trade mark. Clearly, he had no right to sell. (It was also Held: that the labels rendered the goods unmerchantable)

Question 16

Udekwu v Abosi

Answer 16

The plaintiff took the delivery of a car from the defendant dealer. He made part payment and defaulted. The defendant then seized the vehicle and detained it. While in the defendant’s possession, customs officials impounded it for failure to pay import duty. The plaintiff sought to rescind the contract of sale on the ground that the defendant had no right to sell it and had therefore broken and implied condition as to title

Held:
The failure to pay import duty in line with the Custom and Exercise Management Act does not negate the right of the seller to sell and there is no breach of condition as to title.

Question 17

Microbeads AG v Vinhurst Roadmarkings, (1975) 1 Lloyd’s Rep. 375

Answer 17

Principle: In a contract of sale, unless the circumstances of the contract are such as to show a different intention, there is—
S. 12(2)An implied warranty that the buyer shall have and enjoy quiet possession of the goods. Once there is a breach of this warranty, the buyer is entitled to damages.

Fact: Road-marking machines were sold to the buyers, but later a third company obtained a patent over the machines, and so the machines infringed the patent. Held:
as at the time of the sale no patent had been published, there was no breach of s 12(1). However, there was an infringement of the warranty implied by s 12(2)(b) that the buyers shall enjoy quiet possession and they could recover damages from the sellers.

Question 18

Lloyds & Scottish Finance Ltd v Modern Cars and Caravans Ltd, [1966] 1 QB 764

Answer 18

A judgment debtor sold goods which had already been seized by the sheriff under a writ of fifa but which were not physically removed. He failed to inform the buyer of the sheriff’s superseding rights over the property.
Held:
Although he had a right to sell the goods, he was in breach of s 12 (3) of the Sale of Goods Act, by not informing the buyer of the encumbrance.

Question 19

Valley V Whipp

Answer 19

Principle: sale by description.

Fact: seller agreed to sell a second hand reaping machine which he described as new in the previous year. Turned out the machine was very old. The seller was held to be in breach of Section 13 of SOGA

Question 20

Nicholson and Venn v Smith Marriott

Answer 20

Principle: it is immaterial that the buyer had seen the goods before the contract of sale was reached. Where it is proofed that the buyer relied on the description of the goods, Section 13 of SOGA still applies.

Fact: Seller auctioned a set of linen napkins described to be from the seventeenth century. Turns out they were from the 18th century. Court held that the buyer who was a dealer of antiques relied on the description and not what was seen and thus, the seller was in breach of Section 13.

Question 21

Ashington Piggies v Christopher Hills

Answer 21

Principle: For there to have been a description in line with Section 13 of SOGA, the words used must not be merely generic, but must identify the commercial characteristics of the goods to be supplied.

Fact: Appellant contracted Respondent to supply mink feed using the formula it provided. It was part of the contractual term that part of the ingredients to be used include “Norwegian herring meal” which must be “fair, average quality of the season.”

Respondent purchased the herring meal from a Norwegian company which already included preservatives that were dangerous to the lives of the minks, therefore resulting in the death of appellants minks. The appellant refused to pay the purchase price and Respondent sued for the recovery of the price. Appellant however counter sued for the loss suffered.

The house of lord held that the goods supplied were not in violation of Section 13. The herring meal used were in line with the contractual term and the qualitative phrase of “fair, average quality of the season” were merely generic . The fact that the third party company had used preservative does not make the herring meal used by Respondent contrary to the description.

Question 22

Areas v Ronassen

Answer 22

Fact: Buyer contracted for half inch thick timber staves. Most of what was delivered by the seller was half and nine-sixteen inches thick. The court held that the seller was in breach of Section 13 and it’s immaterial that the goods supplied were fit for the purpose for which the buyer required them.

Question 23

Re Moore & Co. Ltd. v Landauer and Co., (1921) 12 KB 519

Answer 23

Principle: In a contract for the sale of goods if some of the goods do not correspond with the contract description then the buyer usually has the right to reject all the goods.

Fact: There was a contract to sell 3, 000 tins of Australian canned fruits in case, each case to contain 30 tins. On delivery, the purchaser discovered that although the total quantity of tins had been delivered, about half the cases contained only 24 tins.

Held:
This was a breach of Section 13, and the purchaser was entitled to reject the whole consignment, even though he suffered no actual damage from the breach, for the goods delivered differed in essential particulars from those described and ordered.

Question 24

Olajide Odumbo Stores and Sawmill Ltd v Omotayo Agencies, (Nig) Ltd, CCHCJ/4/78

Answer 24

Planks supplied did not correspond with the description of “seasoned wood grooved and finished.”

Held:
The court held that the buyers could have been entitled to reject the goods if not because they have accepted to pay a lesser sum for the goods.

Question 25

Grant v Australian Knitting Mills, (1936) AC 85

Answer 25

The claimant suffered a painful skin condition after wearing some new underpants. Tests showed that the fabric of the pants contained high residues of a chemical which was used in the manufacturing process, and that this had caused the problem. The claimant could not point to a specific defect in the manufacturing process, and the manufacturers argued that they had taken reasonable care to prevent the risk, by putting in place a quality control system which complied with industry standards.

Held:
This was not only insufficient to prove reasonable care had been taken, but in fact could be taken as evidence of negligence “ in that if there was such a system in place, the problem could only have arisen if one of the company’s employees had been careless and prevented the quality control system from operating properly. The manufacturers were vicariously liable for the acts of their employees, and therefore the claimant won his case.

Question 26

Priest v Last, [1903] 2 KB 148

Answer 26

The plaintiff bought a hot water bottle from the defendant, a chemist, specifying it was for hot water use. After five uses, the bottle burst, causing injuries to the plaintiff’s wife. The plaintiff claimed a violation of Section 14(3) of the Sale of Goods Act 1979, arguing the bottle was unfit for its intended purpose. The defendant contended that the purpose wasn’t specified.

Held:
The court ruled in favor of the plaintiff, emphasizing that a hot water bottle has a clear and common purpose— keeping hot water. The buyer’s request implied the purpose, meeting the implied condition of fitness. The evidence supported the bottle’s unfitness for its obvious purpose. The seller was held liable for damages as the implied condition wasn’t met, and the buyer relied on the seller’s skill and judgment. The judgment reinforced that goods must reasonably fit their intended purpose, known either expressly or by implication, and reliance on the seller’s expertise establishes a breach of condition.

Question 27

Griffiths v Peter Conway Ltd, [1939] 1 All ER 685

Answer 27

The plaintiff bought a Harris Tweed, tailor-made coat from the defendants. Due to her abnormally sensitive skin, she contracted dermatitis from wearing the coat. Only someone who had a similar skin type would have suffered from this problem.

Held:
Plaintiff failed. The defendants did not know of the plaintiff’s sensitive skin and could not be expected to assume its existence. The coat was fit for most people. s14, (3) of the Sale of Goods Act did not apply.

Question 28

Khalil v Mastronikolis, (1949) 12 W.A.C.A 462

Answer 28

The engine oil which turned out to be unsuitable for use in internal combustion engines but there was evidence that the oil was sustainable for other purposes for which engine oil ordinarily use. Held:
Section 14 (1) did not apply because the particular purpose was not made known.

Question 29

Adetola V Henry Stephens

Answer 29

The flour was unsuitable for baking bread. The seller was however able to prove that it was suitable for baking biscuits and other flour foods. The court held that in the absence of an express communication of what the flour is required for, there cannot be an implied communication of the purpose for which the buyer required it for and thus, seller isn’t in breach of Section 14(1).

Question 30

Cammell Laird Ltd v Managanese Bronze Ltd, (1934) AC 402

Answer 30

X agreed with C and Co,.shipbuilders, to make two propellers for two specified ships in course of building in accordance with C and Co. s` plans and specifications, and to the satisfactions of Y, the ship owner. One of the propellers was noisy and unfit for use.

Held:
that C and Co,. had relied upon X’s skill judgement and could reject the unfit propeller;
that as Y had expressed dissatisfaction, X had not complied with the condition of the contract.

Question 31

Chaproniere V Mason

Answer 31

Foods were only fit for one purpose, consumption and thus, communication of the purpose for which a food is required is implied.

Question 32

Ijioma v Mid-Motors

Answer 32

The court erroneously held that the failure of the buyer to expressly communicate the purpose for which a minibus is required is not in compliance with Section 14, and thus a condition as to fitness of purpose cannot be implied.

A minibus is only fit for a particular purpose, transportation/traveling.

Question 33

Baldly V Marshal

Answer 33

A informed B, a car dealer that he needs a car which is comfortable and suitable for touring. B recommended a Bugatti 8 - Cylinder car. The court held that though parties have contracted in the patent and trade name of the goods purchased, the buyer still relied on the skill and knowledge of the seller and thus, the exception is not applicable.

Question 34

Plastic Manufacturing v Toki of Nigeria.

Answer 34

Principle: Merchantable quality has been defined to mean to be fit for the purpose the good is ordinary used for, and in church condition and quality a reasonable man acting reasonably would after full examination, accept them in performance of the contract.

Fact: the plaintiff supplied the defendant with certain plastic for the storage of the defendant’s hair products. The product was incompatible with the plastic and therefore, it changed in colour months later. The defendant refused to pay the purchase price claiming that the goods were in contradiction with section 14 sub 2 of the Sales of gradient. Record however elder the plastics were merchantable as the basic purpose of plastic is to store substances. Also, that the defendant failed to communicate to the plaintiff the particular purpose for which the plastics were required and in such circumstance it would have been a question of implied condition as to fitness of purpose under section 14 sub 1 of the Sales of goods act.

Question 35

Roger v Parish

Answer 35

Principle: to determine whether a good is merchantable is a question of whether or not the goods live up to the expectation of a reasonable buyer. This also is a question of fact and circumstances, e.g whether or not the goods are new or second hand.

Fact: the plaintiff purchased a new range rover from the defendant at the price of 16,000 naira. The car delivered wasn’t in good condition and was returned however the second car delivered was not in any better condition. The court held that since the good is a new car there is a high expectation as to the standard and quality of the car supplied, therefore the defendant was in breach of the provision of section 14 sub 2 of the Sales of good act.

Question 36

Shine v General Guaranty Corp

Answer 36

Principle: that a good was purchased as a second hand does not negate the requirement of merchantability.

Fact: purchase the second hand car which was not in a good condition. The court held that although the car was purchased as a second hand, there is still a requirement that it must be a merchantable.

Question 37

Bartlett v Sidney Marcus

Answer 37

Principle: Where a good is sold at a very low price search that it reflects its condition, the expended standard of merchantable quality diminishes.

Fact: A purchased a car at a very low price and was also told that the car was defective. Record all that they could bring a reasonable expectation of merchantability as to the car.

Question 38

British & Overseas Credit v Animashaun

Answer 38

Fact: the plaintiff imported 1,000 cases of tin tomato paste and stored them at the defendant’s premises. The authorities inspected the goods and condemned 300 cases as unfit for consumption. The defendant was aware of this fact, however still purchased the remaining 700 cases. Upon further inspection by the health authorities, 311 more cases were condemned and the defendant refused to pay the purchase price on the ground that the plaintiff had breached the condition of merchantable quality.

The court elder the defenders could not rely on the provision of section 14 sub 2 since he saw the goods, was put on inquiry and had the opportunity to inspect the product, and accepted them. He could as well be taken to have inspected the goods.

Question 39

Gardiner v Gray

Answer 39

For a contract of sale to be a contract for sale by sample, there must be a term to that effect and such a term may be expressed or implied. The main introduction of a sample material does not prima faci established that the contract of sale is a contract for sale by sample.

Question 40

West Africa import and export v Paul Jassair

Answer 40

Emphasising the provision of Section 15(1)a of SOGA.

Question 41

Godley V Perry

Answer 41

X sold a catapult to Y, a boy of six. X had bought two dozen of them from Z, a wholesaler, and had tested a sample by pulling back the elastic. While Y was using it, the catapult, which was made of low grade material broke, causing him to lose an eye.
Held:
X was liable to Y under Section 14(1) because the catapult was not reasonably fit for its purpose and Y had relied on X’s skill and judgement; X was also liable to Y under section 14(2) because the catapult was bought by description and it was not of merchantable quality.
Z was liable to X under Section 15(2)(c) because the catapult had a defect which rendered it unmerchanted and which was not apparent on a reasonable examination of the sample.
Edmund Davis, J., rejected the counsel’s argument that by holding the catapult down with one’s foot and pulling on the elastic, its safety could be tested rather the learned judge held what is required is reasonable examination `as that phrase would be understood by the common sense standards for everyday life and not practicable- examination. According to him, “not extreme ingenuity, but reasonableness is the statutory yardstick.”

Question 42

Bernad v Kellogs

Answer 42

for example, the plaintiff placed a con- signment of wool in the hands of agents for sale, insisting that any buyer should examine it for himself. The defendant, to whom a sample had been sent, examined four bales from the bulk and then, having declined the opportunity to examine the rest, agreed to buy the whole consignment. It was later discovered that some of the bales had, without the knowledge of the plaintiff, been fraudulently packed so as to conceal wool which was inferior to that contained in the sample. The United States Supreme Court held that the plaintiff could not be made liable for this discrepancy for, by his insistence that the buyer examine the bulk, he had made it clear that this was not a sale by sample.

Question 43

Carter v. Crick

Answer 43

There was a sale by sample of something which the seller described as “ seed barley ” although, as the buyer knew, the seller was not sure of its precise nature. Upon proof that “ seed barley ” had no special meaning within the trade, it was held that the buyer was entitled to no more than a bulk which corresponded with the sample shown to him.