Theories Under a Sale Of Goods Contract
A contract of sale is a legal contract – an exchange of goods, services or property to be exchanged from seller to buyer for an agreed upon value in money paid or promises to pay the same (sale of goods act: UK 1979). The rule promulgated by the definition is that once the customer has consented to the proposed product or service by making full or partial payment, the deal is closed and the passing of time takes place. But a distinction should be drawn between transfer of property as between the seller and buyer and transfer of title.
Professor Friedman establishes that property in a sale of goods contract that property in a sale of goods contract clearly binds the immediate parties to the transaction and thus the passing of property is not necessarily the absolute dominium or ownership of goods but the totality of rights enjoyed by the seller over the buyer. An examination of the rights of seller enjoys are replicated to the obligations he owes to the buyer, of which we are going to look into so as to establish the principles that a buyer is owed.
The seller owes a duty to the buyer to ensure the
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This provision can be linked to the implied condition in a sale agreement effecting that the seller should ensure that goods, are in a deliverable state (sec 28). A deliverable state is defined under (sec 2(4)) as a state in which goods were in when the buyer made an acceptance to buy them and take delivery of them. The above definition was however not agreed upon in the case of Underwood Ltd. V. Burgh Castle and Cement Syndicate 1922 1k13 342 when Lord Justice Bankes addressing the position of deliverable state stated that a deliverable state doesn’t depend upon a mere completeness of subject matter in all its parts.
It depends on the actual state of goods at the date of contract and the state in which they are to be delivered by the terms of the contract and the state in which they are to be delivered by the terms of the contract. This negates also the provisions ofsec 20 (a) which provides that where there is an unconditional contract for the sale of specific goods in a deliverable state the property in the goods passes to the buyer and its immaterial whether time of delivery or both are postponed.
There exists an implied condition to supply goods of the right quality. This duty is covered under the general rule of coveat emptor which when interpreted literary implies “let the buyer be ware” it implies that in absence of and express agreement, the buyer is not liable should the goods lack quality or character expected of them (Sec 10 Act). Following the industrial revolution in Europe, the doctrine of caveat emptor arose which emphasized the economic interest of factory owners and industrialized to secure their interests and those linking them to consumers by providing that anything that is to be produced is to be produced without any warranty to quality so as to realize the supply.
However, exception to this rule was created so as to protect the ultimate consumer and the middlemen who linked the manufacturers and ultimate consumer. Today, the Supply of Goods Implied Terms Act protects the foregoing interests by making provisions to the effect that implied conditions cannot be negatived by express agreement in the contract.
Exceptions to the coveat emptor rule give provisions to the effect of affording protection to consumers. Firstly, there is an implied condition on the part of the seller that the goods must correspond to description (Sec 13) the above was observed in the case of Varley V. Whipp (1900) IQ13 513. Where the purchaser had not seen the goods but was relying on the description alone.
To examine a situation to the situation at hand, the case of Australian Knitting Mill v. Grant (1930) 50 ALL ELR 387 the appellant contracted dermatitis – a skin inflammation as a result of wearing a woolen undergarment which when purchased from the retailer was in a defective condition owing to excessive presence of sulphate. Lord Wright stated in his own words that there was a sell by description even though the buyer was buying a good already displayed.
There is an implied condition also that the goods are fit for a particular purpose (sec 14) where the buyer makes known to the seller the particular purpose for which the goods are required, the buyer relies on the seller’s kill and judgment therefore the product sold should represent the same (Baldly v. Marshall 1923 1kb 260). In this connection therefore Sec. 20© provides that in a contract of sell of specific goods, which require to be weighed, tested or measured, for the purpose of ascertaining their quality, quantity and price the same should be done for goods to be said to be in a deliverable state.
The goods should also be merchantable. Sec. 14 gives provisions to the effect that where goods are bought by description; there exists an implied condition that the goods are of merchantable quality. However, if the buyer examines the conditions regarding the defect which such examination ought to have revealed claim in the event of defect after delivery shall be nullified Marsh and Mumel Ltd. V. Emanuel (1961) All E.L.R 485 where there exists a sale by sample, there is an implied condition that the sample should correspond to the bulk (sec. 15).
There is also an implied condition annexed by trade and usage under (sec. 16) which merely illustrates the general rule applying to all contracts that the intention of the parties must be ascertained from all surrounding circumstances and that where all the transaction is connected to a particular trade the custom and usage of that particular trade must be considered as part of the background against which the parties contracted. In connection to this principle the fundamental question is whether these exceptions are effective in the right of which parties may exclude implied terms and warranties. However the exception clauses are left upon the court to be interpreted as being or not being in fundamental breach of contracts.
The courts have thus been holding different views as to what may amount to unconditional contracts of sale of specific goods. Some have promulgated that the term unconditional contract implies a contract without conditions while others state that unconditional contracts imply a contract without conditions preceded or subsequent. In the case of Varley. V. Whipp 1900 IQB 513 Whipp was to sell to varley a second hand wiping machine.
Whipp represented the machine as being new and had only cut 50-60 acres. Whipp was to rail the machine to varley who had not seen it. The machine however did not live to the description. Whipp sued to recover the price when the machine was rejected. The court addressed itself to the question of the phrase unconditional contract and held that the contract was not unconditional because the machine did not satisfy the implied conditions as examined in the previous chapter.
The theory of restitution in observance of the particular case at hand would come in handy. Restitution like other forms of legal response can be triggered by a variety of causative events. Claims based on unjust enrichment always result in an obligation to make restitution. We shall therefore, look into the concept of unjust enrichment and examine whether it applies to the case at hand. If it done is the claimant entitled to restitution?
Unjust enrichment as observed earlier is a causative event in which one party is unjustly enriched at the expense of another and an obligation to make restitution arises, regardless of liability for wrongdoing. Unjust enrichment therefore always triggers an obligation to make restitution. When the court orders restitution it orders the defendant to give up his gains to claimant. A person claiming to be unjustly enriched should prove five key questions
- Was the defendant enriched?
- Was the enrichment at the expense of the claimant?
- Was the enrichment unjust?
- Does the defendant have a defense?
- What remedies are available?
Causative events can either be categorized into two: wrongs and unjust enrichment. Restitution as contrasted with compensation is the law of gains based recovery while the latter is the law of loss-based recovery. In observance of the situation at hand, RRR was unjustly enriched by Charles for the amount paid for the kettle which was not in good condition. It is evident that the retailer sold the kettle but of innocence without knowledge of the default thus the only claim can be that of restitution and damages.
Greenberg, Oral warranties and written disclaimers in consumer transition 23 IND.L. REV 199 (1990)
Redman L.N Law, rules, and interpretation of documents, 59 N.W. U.L REV. 751 (1964)
Robert Childers, Conditions in the law of contracts, 45 N.Y.O.L REV 33 (1970)
James J. Edelman, unjust enrichment, restitution and wrongs 79 TEX.L REV. 1879 2001
GAE of goods act (UK) 1979