SALE OF GOODS

1.

Secti
ons

Definition
- A contract whereby the seller transfers the property in goods to
the buyer for a price
- Sale = ownership or property in goods passes to the buyer
-Property = legal titles, rights etc
-Price =
Be fixed by the contract
be left to be fixed in a manner agreed in the contract
be determined by the course of dealing between parties
- Goods = movable property
Elements
- goods
- seller transfers or agrees to transfer property
- price

2.

3.

4.

5.
S12(2
)
S13(1)
S13(2)
S42

Categories of Goods
- Existing goods
- specific
- unascertained
- ascertained
- future
Formation
- capacity = S11 of CA
age of majority
sound mind
not disqualified from contracting
- formalities =
writing
verbal
partly in writing and verbal
implied from conduct
- time
Terms
- conditions
general rule = repudiation and damages
exception
1) buyer may waive condition or to elect it as warranty
2) buyer accepted goods
- The buyer told the seller that he had accepted the
goods
- When the goods has been delivered to the buyer and
the buyer has done something which against the
ownership of the seller

S12(3)
6.
S62

S14(a)
S15

S17(2)

-After the expiry of a reasonable time, the buyer keep

the goods without informing the seller that he rejected
the goods
3) After the expiry of a reasonable time, the buyer keeps
the goods without informing the seller that he rejected
the goods
- warranty = damages
Implied terms
- applicable subject to express agreement between parties, bind
the parties only
-conditions =
Title seller must be owner
Correspond with description
- cases where buyer has not seen goods
- buyer has seen the goods but the defect may be
concealed from the buyer
- goods is substantially what is required but there is some
small discrepancy from the contract particulars
- goods is substantially what is required but there is some
small discrepancy from the contract particulars
Fitness for particular purpose
- General rule = Caveat emptor liability of seller may be
negated
- Exception =
1)disclosure
- buyer discloses purposes of buying goods if goods have
many purpose
-buyer not necessary disclose if goods have one purpose
only, impliedly goods assumed to be fit
2) reliance on seller skill and judgment
3) The goods are of a description which it is in the course of
the sellers business to supply
4) The goods must not have been brought under patent or
trade name
Merchantable quality
- goods must meet the standard which a reasonable person
would regard as satisfactory
- goods sold must be fit for particular use for which they
were sold
- exception
if the buyer has examined the goods, there shall be NO
IMPLIED condition
- exception to exception
if defect could not be discovered
Sale by sample
-The bulk shall correspond with the sample in quality
-Buyer has reasonable opportunity of comparing the bulk

with the sample

-The goods shall be free from any defect which would not
be apparent on reasonable examination of the sample
-if bulk is correspondence with sample but has latent
defects
- warranty =
Time normally not an essence, however, depends on
intention of parties
Quiet possession protection against future disturbance of
possession of the goods
Goods free from encumbrance free from any charge or
encumbrance in favour of any third party not declared or
known to the buyer before or at the time when the contract
is made
Transfer of property

7.
S26

S19(2)
S20

S21

S22

S23

Once property passed, buyer bear risk.

- even though goods not yet delivered
Exception
-if delivery delayed due to sellers fault. Seller bear risk even if
property passed
When property is transferred?
Unascertained goods
- property not transferred unless ascertained by seller
Specific or ascertained goods
- transferred when parties intended to be transferred
- intention determined by conduct and circumstances
1. Specific goods in deliverable state
-property passes when contract made
-time of payment and delivery immaterial
2. Specific goods to be put in deliverable state
-The seller is bound to do something on the goods
for the purpose of putting them into deliverable
state, property not passed until this is done
3. Sale of Specific Goods In a Deliverable State;
but The Seller has to do Something in Order To
ascertain The Price
-The property does not pass to the buyer until such
thing is done by the seller (measure etc), and the
buyer has notice/knowledge
4. Sale of Unascertained @ Future Goods By
Description; and Appropriation
-either by seller with the assent of the buyer or by
buyer with the assent of the seller, the property in
the goods thereupon passes to the buyer.
5. Goods Sent on Approval @on Sale or Return
- When goods are delivered to the buyer on approval

S24

8.

S26

9.
S27
S27

1
0.

S37

or on sale or return, the property in goods passes to

the buyer
a.
When buyer signifies approval or does act
adopting the transaction
b.
if does not signify approval but retains the
goods without notice of rejection, time fixed for the
return; property passes on the expiration the time
-If failed to return goods within specific / reasonable
time, deemed to have accepted the sale, the
property passes to the buyer.
Transfer of risks
-The risk whether delivery has been made or not, borne by buyer
-until risk passes, B may refuse to take delivery of goods
damaged in transit. Once passes, B liable for losses or damage
- Unless otherwise agreed.
- Risk lies with the party at fault for delays in delivery,
irrespective of where property lies.
- Property in goods passed to B, but goods were lost by the
negligent of the S (the bailee) while in his custody, S will be liable
for the lost.
Transfer of Title
General rule: No one can give what he has not got
Exception:
Estoppel - Unless the owner of the goods is by his conduct
precluded from denying the Ss authority to sell.
Sale by mercantile agent, with the consent of owner
agent must possess the goods, buyer must act in good
faith
One of several joint owners of goods has the sole
possession of the goods by permission / consent of
the co-owners buyer must act in good faith
The seller of goods has obtained possession thereof
under a contract voidable but must not be rescinded
yet,
Sale by seller in possession after sale second buyer
get title, first buyer can claim remedy
Sale by a BUYER in possession AFTER SALE
Performance of contract
Delivery- by seller
-non delivery = damages
-lesser quantity = buyer may reject or accept
-larger quantity = buyer may accept as in contract, or reject or
accept all
- mixed with goods of different description = buyer may accept as
in contract, or reject

1
1.

Acceptance and pay- buyer

Remedies
Breach by buyer
-failure to take delivery = liable for loss
-failure to pay, seller may sue for the price =
If property in goods passed to buyer
Time for payment specified but buyer fail to pay
-Failure to accept good = liable for damages
Breach by seller
Damages For Non-delivery of the Goods
Specific Performance
Buyers Action in Tort
Repudiation and damages for breach of condition
Damages for breach of warranty

CPA
1. Secti
ons

2
.

Eight basic rights

-redress
-choose
-basic needs
-be informed
-safety
- healthy environment
-consumer education
-express ideas
Definitions
-Consumer = person + goods or services + personal, domestic,
household use

Scope of CPA
3.

1. provide implied guarantees and remedy for

breach in supply of goods
Implied guarantees (supplier):
-as to title
-as to acceptable quality
-fitness for particular purpose
-goods comply with description
-goods comply with sample
-as to price
-as to repairs and spare parts
Implied guarantees (manufacturer):
-as to acceptable quality
-goods comply with description
-as to repairs and spare parts
Remedy (supplier):
> Remedial (choice on supplier)
-repair
-cure
-replace
-refund
> Substantial
-reject
-claim
Remedy (manufacturer):
> Remedial
> Award of damages
-reduction in value
-damages for any loss or damages resulting
from failure
2. provide implied guarantees and remedy for
breach in supply of services
Service = pure service only
Implied guarantees =
-as to reasonable care and skills
-fitness for particular purposes
-completion of work within reasonable time
-as to price
Liability
> remedial
-remedy
-claim cost or cancel contract
-consequential loss
> substantial
-cancel contract

-damages for reduction in value

-consequential loss

3. protection against unfair contract terms

judicial control
> notice incorporation
-exemption clause unenforceable if brought to
knowledge after contract is made
-must take sufficiently reasonable action to bring
notice to knowledge
-must be contractual document, not voucher and
receipt
-seller cannot rely on exemption clause if there is
misrepresentation
> rule of construction
-if words ambiguous, court rule in favour of buyer
> liability for negligence
-liable if caused damage negligently
statutory control
> apply to all contracts
> unfair terms:
-causes imbalance in rights and obligations of
parties to detriment of consumer
-unjust advantage to supplier or unjust
disadvantage to consumer
-harsh, oppressive, unconscionable
-excludes liability for negligence
-excludes liability for breach of contract without
justification
effect of unfair terms
-may be declared void, unenforceable by tribunal
-severable only, effect still given to remaining term
4. protection and liability for defective product
nature
-strict liability
-not excluded by contract term

elements to prove
-damage/injury
-defect in product
-causal link
products
-goods
-component parts and raw materials
Persons liable
-producer
-own brander
-importer
-supplier
Defect
> based on consumer expectation test
-manner and purpose products marketed
-get-up
-mark used
-instructions or warnings
-what is expected to be done
-time product is supplied
5. protection and liability for unsafe product

minister may prescribe and adopt standard for

goods and services
Where no safety standard prescribed, the
person supplying or offering to supply the
goods or services shall adopt and observe a
reasonable standard of safety to be expected
by a reasonable consumer
No person shall supply, or offer to or advertise
for supply, any goods or services which do not
comply with the safety standards
Defence:
> the alleged failure is attributable to
compliance law
> compliance with CPA
during proceeding:
> he had no knowledge
> had no reasonable ground to believe the
service failed to comply with requirement
Prohibition against unsafe goods
-the Minister may declare any goods or any class of
goods to be prohibited if goods or goods of that

class have caused or are likely to cause injury to any

person or property or is otherwise unsafe.
6. protection against unfair trade practices
"false", "misleading" or "deceptive"
-nature, manufacturing process, characteristic,
suitability for purpose
-not in respect of quality
False or misleading representation prohibited
Cannot make false representation that:
(a) the goods are of a particular kind, standard,
quality, grade, quantity, composition, style or model;
(b) the goods have had a particular history or
particular previous use;
(c) the services are of a particular kind, standard,
quality or quantity;
(d) the services are supplied by any particular
person or by any person of a particular trade,
qualification or
skill;
(e) a particular person has agreed to acquire the
goods or services;
(f) the goods are new or reconditioned;
(g) the goods were manufactured, produced,
processed or reconditioned at a particular time;
(h) the goods or services have any sponsorship,
approval, endorsement, performance
characteristics,
accessories, uses or benefits;
(i) the person has any sponsorship, approval,
endorsement or affiliation;
(j) concerns the need for any goods or services;
(k) concerns the existence, exclusion or effect of any
condition, guarantee, right or remedy; or
(l) concerns the place of origin of the goods.
In land matters by estate agent
(a) falsely represent that any person has any
sponsorship, approval, endorsement or affiliation; or
(b) make a false or misleading representation
concerning any or all of the following:
(i) the nature of the interest in the land;
(ii) the price payable for the land;
11 of 50
(iii) the location of the land;

(iv) the characteristics of the land;

(v) the use to which the land is capable of being
put or may lawfully be put;
(vi) existence or availability of facilities associated
with the land.
Misleading indication as to price
-an indication which is misleading as to the price at
which any goods or services are available
-if he fails to take reasonable steps to prevent the
consumer from relying on the indication.
-also includes:
(a) that the price or method is not what in fact it is;
(b) that the applicability of the price or method
does not depend on facts or circumstances on
which it does in fact depend;
(c) that the price covers or the method takes into
account matters in respect of which an additional
charge is in fact made;
(d) that a person who in fact has no such
expectation, expects (i) the price to be increased or reduced, whether
or not at a particular time or by a particular
amount;
(ii) the price, or the price as increased or
reduced, as the case may be, to be maintained,
whether or not for a particular period;
(iii) the method to be altered, whether or not at a
particular time or in a particular respect; or 12 of
50
(iv) the method or the method as altered, as the
case may be, to remain unaltered, whether or not
for a particular period;
Bait advertising
Gifts, prizes , free offer without intention to
provide
Claim goods are limited
Demand or accept payment w/o intention to
supply
Future service contract
> If consumer cancels:
-charged 5%
-cost of any goods the consumer used or is

keeping
-portion of the full contract price representing
services received
> If consumer has paid the supplier more money
than the supplier is entitled to, the supplier
shall refund the extra payment or make a
refund available
Establishment of tribunal as redress mechanism
-claim must not exceed RM25k
Procedure
-lodge claim
-secretary tell details of appointment
-tribunal assist party to negotiate
-failure, tribunal determine dispute
-no legal representation
-length depends on complexity