Abstract

Posted: January 5th, 2023

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Abstract

The study shows the significance of adhering to the provisions of the Sale of Goods Act, which defines how sale of goods contracts ought to happen. The study describes the difference between expressed and implied conditions, and condition and warranty that are vital concepts in sale of goods contracts. It identifies seven primary categories that are applicable in sale of goods contracts, and shows how they apply in real life. The paper also includes a case study that helps to understand why it is essential to follow all the rules guiding sale of goods contracts.

Condition and Implied Condition

The Sale of Goods Act impacts on any contract where one party sells goods to another party. From a furniture to an electronic device, the good in such a case can be any type of personal property. The contract of sales and purchases do not have to be and are not usually in writing. The contract in most instances can be verbal or implied from the behavior (conduct) of the seller and buyer.[1] Such a contract could be implied by a deed or fact in the way the parties act, or may be implied by law, either statute or case law. Contracts often have terms and conditions, which could either be express, indicating that the parties into the deal have discussed and agreed upon the key issues, or implied suggesting that they are fitted automatically into the contract by directives of the law.[2] For purchasers, the most essential terms of a contract usually related to warranties guaranteeing to some length the quality and nature of the goods being purchased. However, in situations where the contract lacks a direct warranty, customers who have been offended by purchasing a good that turns out not to be what they anticipated or are defective can rely on the Sales of Goods Act for further directive. This is because the regulation outlines various implied conditions into the contract that buyers can rely on to get their money back or get another product.

Primary Differences between Condition and Warranty

Prior to knowing the major tenets of implied condition as used in sales of goods contract, it is essential to first know the variations between condition and warranty as used in such deals. A condition refers to a directive crucial to the primary objective of the contract, the violation of which results in a right to regard the deal as renounced. It is a vital component linked to the good or matter under transaction which is mentioned by the customer to the vendor and could either be implied or expressed.[3] The buyer is free to refuse to pay for the items delivered by the retailer if they do not meet the qualities or conditions highlighted by the supplier in the contract. If while entering into a deal, the customer mentions either in writing or words that the products are to be delivered before a particular date, the deadline is regarded as a condition to the deal since the purchaser expressed it.[4] Whereas, if a customer contracts to purchase a blue-laced shoe for an important meeting which is to be utilized on the specified date, then time serves as the implied condition for the agreement. Even where the buyer does not specify the delivery date, but has mentioned the day of the event, it is implied on the seller’s part that the footwear is to be submitted before the identified event. In such a context, the vendor is obliged to deliver the item before the date of the meeting as supplying the good after the occasion will be of less importance and the purchaser may choose to decline the delivery because the supplier or vendor has failed to honor the condition of the contract. A warranty, on the other hand, is a provision collateral to the primary goal of the contract, the violation of which could result in claim for compensation, but does not amount to rejecting the product and terming the contract as repudiated.[5] A warranty is the extra information provided with regard to the desired product or its condition. Nevertheless, a warranty is of secondary value to the contract and its fulfillment. Non-adherence of the vendor to the warranty of the contract does not adversely tamper with the contact and render it repudiated, and the purchaser cannot decline to purchase the product, but can only claim for damages from the seller.   

Key Components of the Implied Condition

Condition as to Title

Under the context of Sales of Goods Acts with regard to sales of goods, the condition as to title is one of the primary guidelines. In each contract of sale, unless the terms of the contract are such as to depict a dissimilar intention, an implied condition exists on the seller’s part stating that he has the right to dispose the goods through selling.[6] In case both parties agree that the selling should proceed, the seller will have the mandate to sell the said items at the time when the good is to pass. The term ‘right to sell’ implies not only that the seller holds a title that depicts him as a seller, but also that the seller has the power to pass over the product to the buyer.[7] Nevertheless, the buyer is highly likely to reject the goods should it turn out that they are defective.  

Condition in a Sale by Description

In a contract of sale by description, an implied condition exists that the items shall meet the description provided. The term ‘sale by description’ encompasses a number of conditions. One of these is where the purchaser has not seen the items and buys them depending on the description provided by the seller.[8] A suitable condition in this scenario is also where the purchaser has seen the items, but does not rely on what he or she sees, but from what the seller says. In this case, the buyer has the right to reject the goods if they do not meet the specifications outlined by the seller. Another possible condition in this scenario is that packaging of goods may sometimes be perceived as part of the descriptions. Where the items do not adhere to the technique of packing preferred by the seller or buyer while entering into the contract, the buyer has the right to reject the items.

Condition in a Sale by Sample

A contract of sale qualifies to be a contract for sale by sample when there is a term to the deal, implied or express to the effect. Typically, a sale by sample applies when a sample is offered and the parties into the sale contract expect that the products should be of the same type and quality as the sample.[9] Furthermore, the following additional conditions are implied when goods are provided on the basis of a sample issued to the vendor; the bulk provided should reflect the sample in terms of quality, and the buyer should have enough time to compare and contrast the delivered goods with the sample. In addition, an implied condition when goods are offered by sample is that they should be free from any evident defects on proper evaluation by the purchaser.

Condition in a Sale as well as by Description

In many scenarios where samples are provided or shown to depict the condition of the other goods, the condition can be termed to be a sale by sample and description.[10] In a sales contract where both description and sample are applicable, the items provided must comply with both the provided description and sample.

Condition as to Fitness or Quality

Condition as to the quality implies that where the purchaser, by implication or expressly, makes known the retailer the specific objective for which items are required, so as to indicate that the buyer depends on the merchant’s judgement or skills of the products are of a elaboration, which it is in the retailer’s duty to supply whether in the capacity of a producer or manufacturer, an implied condition exists that the items shall be of acceptable quality or will be fit. In other circumstances.[11] The condition as to fitness would apply when the purchaser informs the seller the primary objective for which the products are needed, and when the purchaser depends on the skills and judgement the seller displays in the interaction. The condition also applies when the items are of a description which the retailer often provides or supplies in the course of their operations, and when the supplied goods do not meet the buyer’s needs or expectations.   

Condition as to Merchantability

Condition as to merchantability refers to a scenario where the items are purchased by description from a retailer, who often deals with items of that description whether in the position of a producer or manufacturer.[12] An implied condition exists in this case that the supplied or sold items will be of merchantable value or quality.

Conditions as to Wholesomeness

When dealing with perishable consumable products such as foodstuffs, the seller often offers an implied condition that the items will be wholesome. Thus, the supply of eatables must not only relate to their description, but must also show the qualities of wholesome and merchantable.[13] The term wholesomeness in this scenario implies that the goods are meant for human consumption. A suitable example that describes conditions as to wholesomeness is where A supplies B with freshly squeezed juice. The drink contains some harmful components and the customer’s child is diagnosed with a serious condition attributed to the juice. The doctor finds that the juice contained some harmful bacteria that are not suitable for consumption, especially for people with weak immune systems such as young children. Hence, there is a violation of condition as to the appropriateness of the supplies and A is obliged to pay necessary damages to B in this circumstance.

When Implied Conditions become Implied Warranties

Two primary factors may transform a condition into a warranty. One of the conditions that could transform a condition into a warranty is when the purchaser waives the conditions or chooses to treat the abuse of the condition as a breach of warranty.[14] A condition may also become a warranty when the purchaser accepts the items or a part of the goods, or does not have the power to reject the supplied products. In addition, it is imperative to know the variation between implied warranty of freedom from encumbrance and of quiet possession because they are equally essential when entering into contract of sales. Implied warranty of freedom from encumbrance refers to a scenario where the purchaser is entitled to an additional warranty that the items shall not be bound to any charge in favor of a third party not introduced to the buyer in prior or at the time when the deal is constructed. If the purchaser is needed to discharge the quantity of the encumbrance it will amount to a violation of the warranty and the customer shall be eligible for damages for the same products. Implied warranty of quiet possession, on the other hand, implies that in every deal of sale, unless there is a conflicting intent, an implied warranty exists that the purchaser shall enjoy ownership of the said products.[15] If the customer’s right to ownership and enjoyment of the items is in any way affected as a result of the seller’s faulty title, the customer may commence legal procedures against the retailer for damages for violation of the warranty.

Section 14 of the Sale of Goods Act provides more information about the concept of implied warranty. Section 14 (b), for example, describes how the buyer can enjoy possession of the purchased items.[16] The Section addresses an implied warranty that the customer shall assume and enjoy significant possession of the items bought as an implied warranty, which suggests that the purchaser after gaining the title of possession from the real owner should not be interfered with either by the retailer or any other individual claiming ownership of the products. In such a scenario, the customer is liable for damages and compensation from the vendor as a violation of implied warranty. Section 14 (c) further protects buyers from intrusion by third parties into the contract.[17] It stipulates that any encumbrance or charge in favor of third parties, which were not mentioned to the customer at the time of entering into the contract shall be deemed a violation of warranty, and the customer should receive compensation and get damages from the vendor.

Relevance of the Topic to Contractors in Real Life

Many people and organizations enter into sale of goods contract each day, and following the key components of implied and expressed condition presents a better chance to achieve the most appropriate outcome. The analysis remind parties into a contract to recognize a condition as being much important than a warranty. Therefore, both parties into a sales of good contract should spend considerable time learning what conditions they must observe when entering into such transactions.[18] Business operators need to find out from various sources including print and media avenues what the Sale of Goods Act says, particularly with regard to expressed and implied condition. Large corporations that deliver goods to various customers should train their employees and equip them with the relevant information they need to stick to the terms of the contract. The training and empowerment initiatives will show suppliers why they must deliver the products that match the expected quality, and why they should act within the stipulated time to avoid cancellation of the order, especially in scenarios where the buyer implies that the product would only be useful when delivered within a given timeframe.[19] In addition, the training should familiarize trainees with all the possible options for delivering products in such a contract, and ensure that they know the possible merits and demerits of all methods, including their key characteristics. Firms and individual contractors who know the value of observing all the terms and conditions of the Sales of Goods Act spend considerable amount of money to undergo training in specialized facilities, but end up gaining valuable knowledge that they would use to make decisions that have long-term impacts on how they transact. Other than training employees and learning from various sources, a contractor or organization increases its changes of achieving the desired outcome by emulating firms that have recorded significant strides in observing the conditions set by buyers. The insight will help to act in a way that will not render the contract as repudiated.

The company or contractor would not want to record huge losses associated with rejection of the items for not observing the expressed and implied terms of a sales of goods contract. It is apparent that the customer will not accept the goods when they do not meet the specified measures, which could lead to huge losses, especially in scenarios the firm has already incurred huge losses. The analysis confirms that violation of contract results in termination of the deal, and that the affected party can decline to accept the products as well as claim compensation in case of going against the condition. Consequently, operators and individual contractors learn the importance of being keen while handling such practices to avoid the huge losses and the possibility of tarnishing the contractor or organization’s reputation. Such malpractice and failure to observe the expressed and implied conditions could deprive the firm the chance to handle such contracts in future because consumers may be dissatisfied with previous transaction, and this could affect how the firm generates revenue and competes in its sector.

Conclusion

The guidelines of implied condition and implied warranty are provided for in the Sale of Goods Act to safeguard the customer should there be a case of any deceit by the vendor aimed at taking advantage of the buyer. Nevertheless, it is the vendor’s obligation in the first instance to ensure that the goods are in good condition such as the buyer can trust them based on their description of the production, a provision of a sample, or both. Apart from supplying goods based on description of the production, a provision of a sample, and sample and description, implied condition allows for conditions as to wholesomeness, condition as to merchantability, condition as to fitness or quality, and condition as to title.The paper also provides considerable description on the concept of implied warranty that is provided for in Section 14 of the Sale of Goods Act. Implied warranty provides buyers with full ownership of the goods upon completing the purchase transaction, and also to claim for compensation if the items do not meet the specified or expected standards. In addition, Section 14 protects the buyer from inappropriate infringement by third parties who do not feature during the formation of the contract. The study shows how following the expressed and implied condition of the contract has significant impact on modern individual contractors and companies. It illustrates why it is essential to acquire more information on how to observe the directives, which may including undergoing vigorous training on what it takes to deliver what meets consumers’ expectations, and learning from how other abide by the regulations.

Case Study – Beale v. Taylor (1967)

Taylor (the seller) placed an advert to sell an automobile labelling it as a convertible herald manufactured in 1961, and white in color. Beale (the buyer) came buying the car while relying on the information on the advert. He did not perform a test drive because he had not taken a driver’s license at the time of purchasing the car.[20] So he just sat of the passenger seat and let Taylor perform the test. Beale also noted a metallic plate at the rare of the vehicle with the label 1200 on it soon after the test drive was complete. He proceeded to purchase the car believing that the model was produced in 1961. However, he learnt that the model was not developed in 1961 upon acquiring the license. On consulting a mechanic, he discovered that the automobile was formed using two separate cars attached together, the front part being a 948 model and the rear part being a 1200 model. In addition, the mechanic realized that the car was unsafe and unroadworthy.

Issue: The case sought determine whether the contract of sale of goods was a sale by description.

Arguments

Plaintiff

Beale claimed that he is entitled to compensation for three primary reasons. He claimed that the contract violated regulations on implied condition on sale by description as provided for in Section 13 (1) of the Sale of Goods Act, which outlines that the product should match the description.[21] The plaintiff argued that he was entitled to damages because he paid money to an item that did not rhyme with offered description, and thirdly because the deal violated the implied condition of being road worthy.  

Defendant

Taylor, on the other hand, claimed that the parties did not agree that the contract was sale by description, and was instead based on what the customer sees, whether he was satisfied with the test, and whether he approved the purchase. Taylor further contended that Beale had adequate time to scrutinize the car and test it until he becomes satisfied.

Court ruling – Trial Court

The Trial Court held that the sale was not classified as sale by description as the plaintiff had claimed because the latter had seen, tested, and verified the good.

Court Ruling – Court of Appeal

The Court of Appeal ruled that both sides are innocent because it was not easy to judge from ordinary inspection that the car comprised of two different versions fused together. The Supreme Court held that a sale by description exists though the purchaser saw the automobile before buying it.[22] The Court argued that a good is sold by description provided that it is not sold simply for a particular thing, but something related to the given description. The plaintiff in this case partly depended on the specific description in purchasing the vehicle. The Court ruled that typically the purchaser ought to have returned the good to the seller, but because he did not do that he is only entitled to damages worth the scrap value of the car.

Case Analysis and Relevance

It appears from the case that the Trial Court was wrong in its ruling and that the Sale of Goods Act is very strict in the application of sale by description. The description the seller gives plays essential roles in attracting the buyer, and this comes out in the ruling by the Supreme Court. The case passes vital lessons to both the buyer and seller that they can use to avoid such inconveniences such as those that occurred between Taylor and Beale. They learn that free consent is a vital component when entering into a deal, and the court is likely to consider this factor when determining a dispute.[23] Beale agrees to buy the car after going for a test drive and even conducts a physical examination of the car before proceeding with payment. Furthermore, buyers should be keen not to make blunders that would compel them to return the good or claim for damages once the transfer of ownership take place. The buyer in this scenario may have to go through a tiresome court process that may not only require much time, but also emotional pressure and financial resources. Thus, buyers learn the importance of verifying whatever they buy before proceeding with the transaction to avoid such problems that happen to the plaintiff and the defendant in the case study. It is advisable to take time to examine a good first if necessary because the process of compensation may not be easier when one gets the chance to view the product as it would be if the buyer had not seen the good. Sellers also learn the significance of being truthful in their description to avoid such legal battles. The case serves a vital purpose of reminding the parties into such contracts the need to adhere to all regulations set to achieve a transaction where all parties are contented with the outcome.

Bibliography

Bridge, Michael. The International Sale of Goods: Law and Practice. Oxford University Press, 2007.

Gabriel, Henry. Contracts for the Sale of Goods: A Comparison of U.S. and International Law. Oxford University Press, 2008.

Indian Case Law. “Beale v. Taylor.” Indian Case Law, 24 January, 2012, https://indiancaselaws.wordpress.com/2012/01/24/beale-vs-taylor/. Accessed 31 March 31, 2021.

Roland, Djieufack. “Sales and Conformity of Goods: A Legal Discourse.” Open Access Peer-Reviewed Chapter, 2020, doi: 10.5772/intechopen.93035

Stoljar, Jacob. “Conditions, Warranties and Descriptions of Quality in Sale of Goods.” The Modern Law Review, vol. 15, no. 1, 2008, pp. 425-445.

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[1] Gabriel, Henry. Contracts for the Sale of Goods: A Comparison of U.S. and International Law (Oxford University Press, 2008) 18.

[2] Ibid, 21

[3] Henry. Contracts for the Sale of Goods, 33

[4] Ibid, 35

[5] Ibid, 36

[6] Bridge, Michael. The International Sale of Goods: Law and Practice (Oxford University Press, 2007), 66

[7] Ibid, 73

[8] Ibid, 74

[9] Michael. The International Sale of Goods, 78

[10] Ibid, 78

[11] Michael. The International Sale of Goods, 80

[12] Ibid, 80

[13] Ibid, 83

[14] Stoljar, Jacob. “Conditions, Warranties and Descriptions of Quality in Sale of Goods.” The Modern Law Review, vol. 15, no. 1, 2008, pp. 427.

[15] Ibid, 430

[16] Jacob. “Conditions, Warranties and Descriptions of Quality in Sale of Goods.” 432

[17] Ibid, 432

[18] Roland, Djieufack. “Sales and Conformity of Goods: A Legal Discourse.” Open Access Peer-Reviewed Chapter, 2020, doi: 10.5772/intechopen.93035

[19] Djieufack. “Sales and Conformity of Goods: A Legal Discourse.” doi: 10.5772/intechopen.93035

[20] Indian Case Law. “Beale v. Taylor.” Indian Case Law, 24 January, 2012, https://indiancaselaws.wordpress.com/2012/01/24/beale-vs-taylor/. Accessed 31 March 31, 2021.

[21] Ibid

[22] Indian Case Law. “Beale v. Taylor.” Indian Case Law, 24 January, 2012, https://indiancaselaws.wordpress.com/2012/01/24/beale-vs-taylor/.

[23] Djieufack. “Sales and Conformity of Goods: A Legal Discourse.” 2020, doi: 10.5772/intechopen.93035