LAW200.

27
Group Assignment

[SALE OF GOODS
Group-C


ACT’1930]
1.Name: Abid Ahashan Tarafder

2.Name:
ID#1110774030
Submitted to: Afrida Ashrafi
ID#1512520030
Professor Dr. Mohammad Nazmuzzaman Bhuian
3.Name:Rafiul
Department of Law Islam
ID#1620913030
North South University
4.Name:Shuvra Paul
ID#1320319030
5.Name:Salahuddin Badhan
ID#1620773630
  Questions
1. State briefly the implied conditions applicable to contract of sale of goods under
the Sale of Goods Act, 1930.
2. NSU organised a cricket tournament, but apart from the match itself, nothing was
in order due to the fault of the food, carpet and trophy suppliers. NSU entered
into a contract of sale of goods with a manufacturer of Trophy, to supply some
Trophies for the NSU Cup Cricket Tournament. Seller asked NSU to visit the
shop and examine the trophies before delivery, but NSU officials did not have
any time to do so. While distributing them to the participants, one trophy just
broke down on its own. It was quite embarrassing in front of the Chief Guest.
Identify the responsibilities of the seller of trophy and also NSU as the buyer in
accordance with the Sale of Goods Act 1930.

Answer to the question no. 1

The implied conditions applicable to contract of sale of goods under the Sale of Goods
Act, 1930:

 Conditions as to title
⇒ There is an implied condition on the part of the seller that

• In the case of sale, the seller has a right to sell the goods, and

• In the agreement to sell, the seller will have a right to sell the goods at the time of
passing of ownership in goods.

⇒ If the title of seller out to be defective, the buyer must return the goods to the true
owner and recover the price from the seller.

 Conditions as to description
⇒ Where the goods are sold by description, there is an implied condition that the goods
shall correspond to the description.

Examples: A machine was sold. The buyer has not seen the machine, but the seller
described it as a new one. However, it was found to be a very old one. Held, the machine
was not according to the description.

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  Sale by sample

⇒ Where the goods are sold by sample, the following are implied conditions.

• The bulk shall correspond to sample in quality.

• The buyer shall be given a reasonable opportunity to compare the goods with the
sample.

• The goods shall be free from any defect, rendering them un-merchantable. It is to be
noted that this implied condition applies only in the case of latent defects, i.e. those
defects which cannot be discovered by ordinary inspection. In fact, such defects are
discovered when the goods are put to use or by examination in laboratories. The seller is
not liable for apparent or visible defects which can be discovered by examination.

 Sale by description as well as sample

⇒If the sale is by sample as well as description, both conditions shall be satisfied. Goods
must correspond with sample as well as description.

Example: An agreed to sell to C some oil described as “Foreign refined oil” and
warranted only equal to sample. The goods supplied were equal to sample, but contained
a mixture to hemp oil. Held, C could reject the goods.

 Conditions as to quality and fitness for buyer’s purpose

⇒Where the buyer, expressly or impliedly, tells the seller the particular purpose for
which he needs the goods and relies on the skill or judgment of the seller, there is an
implied condition that the goods shall be reasonably fit for such purpose.

⇒When the article can be used only for one particular purpose, the buyer need not
inform the seller the purpose for which the goods are required.

Example: A purchased a hot water bottle from a chemist. While the bottle was being
used by A’s wife, it burst and injured A’s wife. Held, the seller was liable for damages as
the bottle was not fit for the purpose for which it was meant – Priest vs Last.

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  Exceptions to the implied condition as to quality or fitness

⇒ The condition as to quality or fitness’ well not apply, if the buyer is suffering from an
abnormality, which renders the goods unsuitable for a particular purpose and the buyer
does not inform the seller about that abnormally.

Examples: A purchased a coat. He had abnormally sensitive skin, by wearing the coat, he
got skin complaint. Held, there was no breach of condition, as he had not disclosed the
abnormally of his skin.

⇒Where the goods can be used for a number of purposes, the buyer should inform the
particular purpose for which such goods were required. If the does not disclose, there is
no such conditions of quality or fitness.

 Conditions as to merchantability

⇒Where goods are bought by description from a seller, who deals in goods of that
description, there is an implied conditions that the goods shall be of merchantable
quality.

⇒ ‘Merchantability’ means that there is no defect in the goods, which renders them unfit
for sale. Thus, a watch that will not keep time and a pen that will not write cannot be
regarded as merchantable.

Example: A radio set was sold to a layman. The set was defective. It did not work in
spite of repairs, Held, the buyer could return the set and claim refund.

 Condition as to wholesomeness

⇒ In the case of eatable and food – stuff, there is an implied condition that the goods
shall be wholesomeness, i.e., free from any defect which renders them unfit for human
consumption.

Example: A Purchased milk from B, a milk dealer. The milk contained typhoid germs.
A’s wife on taking the milk got infected and died. Held, A was entitled to get damages –
Frost vs Aylesbury Dairy Co. Ltd.

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Answer to the question no. 2
 Responsibilities of the Buyer (NSU)
 To accept the delivery of goods, when the seller is willing to make the delivery as
per the contract (Sec. 31)
 To pay the price in exchange for possession of the goods
 To apply for delivery of the goods. (Sec. 35)
 To demand delivery of the goods at a reasonable hour [Sec 36 (4)]
 To accept delivery of the goods in instalments and pay for them, in accordance
with the contract. [(Sec. 38 (2)]
 To bear the risk of deterioration in the course of transit, when the goods are to be
delivered at a place other than where they are sold (Sec 40)
 To inform the seller in case the buyer refuses to accept or rejects the goods (Sec
43)
 To take the delivery of the goods within a reasonable time after the seller tenders
the delivery (Sec. 44)
 To pay the price, where the property in the goods are passed to the buyer, in
accordance with the terms of the contract (Sec 55)
 To pay damages for non-acceptance of goods (Sec 56)

 Responsibilities of the Seller

 To make the arrangement for transfer of property in the goods to the buyer.
 To ascertain and appropriate the goods to the contract of sale
 To pass an absolute and effective title to the goods, to the buyer.
 To deliver the goods in accordance with the terms of the contract (Sec 31)
 To ensure that the goods supplied conform to the implied / express conditions and
warranties.
 To put the goods in a deliverable state and to deliver the goods as and when
applied for by the buyer (Sec 35)
 To deliver the goods within the time specified in the contract or within a
reasonable time and a reasonable hour. [Sec 36 (2) and (4)]
 To bear all expenses of and incidental to making a delivery (i.e. up to the stage of
putting the goods into a deliverable sate [Sec 36 (5)]
 To deliver the goods in the agreed quantity. (Sec. 37 (1)]
 To deliver the goods in instalments only when so desired by the buyer. [Sec 38
(1)]
 To arrange for insurance of the goods while they are in transmission or custody
of the carrier. [Sec. 39 (2)]
 To arrange for insurance of the goods while they are in transmission or custody
of the carrier. [Sec. 39 (2)]

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  The given case
NSU organised a cricket tournament, but apart from the match itself, nothing was in
order due to the fault of the food, carpet and trophy suppliers. NSU entered into a
contract of sale of goods with a manufacturer of Trophy, to supply some Trophies for the
NSU Cup Cricket Tournament. Seller asked NSU to visit the shop and examine the
trophies before delivery, but NSU officials did not have any time to do so. While
distributing them to the participants, one trophy just broke down on its own. It was quite
embarrassing in front of the Chief Guest.

To give a solution to this matter, first we have to discuss the following things:

 Merchantable quality of goods sold

The goods sold must be of a “merchantable quality”. Goods are not of merchantable
quality if in the state in which they are sold, they have defects unfitting them for their
ordinary use or their condition is such that no one, with knowledge of their true
condition, would have taken them but rather rejected them.

Example: In such cases they are not merchantable. In the case of Wren v Holt, a
customer went to a restaurant and ordered some beer to drink. The beer given to him had
been contaminated with arsenic and because of this the customer fell ill. He sued the
owner of the restaurant for having supplied goods (beer) that was not ‘fit for the purpose’
and was also ‘not merchantable’. The court agreed and awarded him damages.

Exception: It must be noted that if the buyer had examined the goods or had been given
the opportunity to inspect the goods, then no condition is implied as regard defects which
such inspection would have revealed. In Thornett v Beers & Son, B went to T’s
warehouse to buy some glue. The glue was stored in barrels and every facility was given
to B for its inspection. B did not have any of the barrels opened, but only looked at the
outside. He then purchase the glue but later found that the glue was defective. The court
held that B could not complain of the defect or breach of merchantable quality because
he had all the time and opportunity to inspect and test the glue but had chosen not to do
so. In such a case, the buyer cannot later complain that the goods were bad and not what
he wanted.

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 Solution
Now we can see that the given case of North South University is like the exceptional
case of Thornett v Beers & Son. In this case, NSU entered into a contract of sale of
goods with a manufacturer of Trophy to supply some Trophies for the NSU Cup Cricket
Tournament. The seller asked NSU to visit the shop and examine the trophies before
delivery. But NSU officials did not have any time to do so. So, they didn’t examine the
trophies before delivery. While distributing them to the participants, one trophy just
broke down on its own. According to sales good act, NSU officials could not complain
of the defect or breach of merchantable quality because they had opportunity to inspect
and test the trophies. But they had chosen not to do so. NSU officials could send one of
their agent to inspect and test the trophies also. But they didn’t send someone. In such a
case, the NSU cannot later complain that the goods were bad and not what they wanted.

So, the problem raised for not examining the trophy by NSU before accepting them.
Under Sale of Goods Act 1930, Buyer's right of examining the goods are described in
section 41, sub section 1 & 2, which is-

Buyer's right of examining the goods

41. (1) where goods are delivered to the buyer which he has not previously examined, he
is not deemed to have accepted them unless and until he has had a reasonable
opportunity of examining them for the purpose of ascertaining whether they are in
conformity with the contract.

(2) Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is
bound, on request, to afford the buyer a reasonable opportunity of examining the goods
for the purpose of ascertaining whether they are in conformity with the contract.

So, according to this Act, NSU, as a buyer, should have examined the trophies before
accepting them. As the officials of NSU didn’t have time, they could have asked for
more time and be more concerned about examining the trophies before accepting those.

As a seller, they have asked NSU to visit the shop and examine the trophies before
delivery, but they also didn’t give this matter any major priority. They should have
requested and given more time to NSU before the acceptance.

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 References

1. https://blog.ipleaders.in/implied-conditions-and-warranties-under-the-sale-of-
goods-act/
2. http://rizvilaw.blogspot.com/2009/01/rights-and-duties-of-buyer-and-seller.html
3. Study Note – 2: The Sale of Goods Act, 1930 by MS EDUCONZ PVT. LTD.
4. Commercial Law including company law and Industrial law (Business Law) by
Arun Kumar SEN & Jitendra Kumar MITRA

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