Malik runs a restaurant at Taman Desa Kluang, Johor. He ordered from Ah Chong Mini Market 50 bags of Pakistani basmati rice at RM40 per bag and 200 packets of sugar at RM2.20 per packet. It was expressly agreed between the parties that Ah Chong must pack the sugar in boxes containing 20 packets each. However, when Ah Chong delivered the goods to Malik’s restaurant, it was found that the sugar was packed in boxes containing 30 packets each. The basmati rice that was supplied was found to be from India not Pakistan. Malik wishes to reject the goods. Advise Malik.
Whether Malik can take legal action against Ah Chong for breach of implied condition by description.
Principles of Law
Section 2 of SGA
“Every kind of movable property other than actionable claims and money, and includes stocks and shares, growing crops, grass and thing attached to or forming part of land which are agreed to be severed for sale or under the contract of sale”
Section 15 of SGA
If the contract is for the sales of goods by description, there is an implied condition that the goods must correspond with the description.
Case: Moore & Co v Launder
Facts: Contract for 3,100 cases of canned fruit packed 30 tins to a case. But half of the cases contained only 24 tins although the total quantity was met. Held: the goods not correspond with contractual description.The buyers entitled to reject the goods.
Case: Nagurdas Purshotumdas v Mitsui Bussan Kaisha
Previous contract- sale of flour which had been sold in bags bearing a well-known trade mark. Subsequent contract- flour ordered ‘the same as our previous contract’. Seller supplied flour of the same quality but did not bear the same well-known trade mark. Held: there was a breach of condition as the goods did not correspond with the description.
According to Section 2 of SGA, basmati rice and sugar are movable property. According to Section 15 of SGA, the basmati rice and sugar supplied by Ah Chong must correspond with the description stated by Malik. According to the case of Moore & Co v Launder, Malik ordered from Ah Chong to delivered 200 packets of sugar and pack the sugar in boxes containing 20 packets each but Ah Chong pack the sugar in boxes containing 30 packets each. According to the case of Nagurdas Purshotumdas v Mitsui Bussan Kaisha, Malik ordered Ah Chong to delivered basmati rice from Pakistan but Ah Chong supplied basmati rice from India not Pakistan.
Malik ordered from Ah Chong to delivered 200 packets of sugar and pack the sugar in boxes containing 20 packets each but Ah Chong pack the sugar in boxes containing 30 packets each. Malik also ordered Ah Chong to delivered basmati rice from Pakistan but Ah Chong supplied basmati rice from India not Pakistan.Therefore, Malik can take legal action against Ah Chong for breach of implied condition by description. Malik also can repudiate the contract or reject the goods.
Discuss the differences between conditions and warranties in a contract of sale of goods.
Section 12(2) of SGA-Definition of Condition
Condition is a stipulation essential to the main purpose of the contract.
Breach of Condition
Contract can be repudiated, goods can be rejected.
Exceptions (Situations where the innocent party cannot repudiate the contract) Section 13 of SGA
– Where the buyers waives the condition.
– Where the buyers elects to treat the breach of condition as a breach of warranty.
– Where the contract is NOT severable and the buyer has accepted the goods.
– Where the contract is specific goods the property in goods or ownership has passed to the buyer.
Section 12(3) of SGA-Definition of Warranty
Warranty is a stipulation collateral to the main purpose of the contract.
Breach of Warranty
Can only claim damages but cannot reject goods or repudiate the contract.