UNIVERSITY OF GHANA LAW JOURNAL

ROCKSON v. ARMAH1: A CASE OF CAVEAT EMPTOR, CAVEAT VENDITOR OR

NEITHER? [1978-81] VOL. XV UGLJ 168—175

MILLS J.E.A.

IN these days of galloping inflation, foreign exchange restrictions and a brisk trade in
second-hand cars, the Court of Appeal decision in the case of Rockson v. Armah must
be of great interest to a good number of Ghanaians, both inside and outside the legal
profession. The facts of this case were as follows: the appellant owned a Mercedes
Benz car which he sold to the respondent for ¢3,200. The respondent made cash
payments to the value of ¢2,200 and settled the balance of the purchase price
with two post-dated cheques of ¢500 each. When the car was delivered to the
respondent, it showed signs of recent involvement in an accident. There were
serious defects in the clutch and starter systems and extensive damage to the
mudguard and a head lamp. After some initial hesitation, the appellant admitted
to the accident, accepted responsibility for the defects and agreed to have them
repaired. The appellant found a wayside fitter who took in the car and completed
the repairs within a day. The car was subsequently sprayed and delivered to the
respondent, who accepted it without any complaints. However, after using the car
for a period of about two months, the respondent attempted to repudiate the sale
by stopping payment of his final post-dated cheque on the ground that he had
discovered some latent defects in the car. The issue for determination by the
court was whether in the circumstances the respondent had the right to repudiate
the contract. In the Circuit Court, the learned trial judge held that the respondent
was justified in repudiating the contract. On appeal, however, this decision was
unanimously reversed by the Court of Appeal.2

The main ground upon which their lordships based their decision was that the appellant
had broken no warranty or condition which could entitle the respondent to repudiate the
sale. In their lordships' opinion, since the car was second-hand and had been used for
two months, there could be no question of the car not being fit "for the purpose for which
a car is usually used."3

A second-hand car, Francois J.A., reading the judgment of the court observed, "must be
taken as it is and not elevated into a new car with all the expectation of factory
freshness."4  On the facts, therefore, their Lordships could not see "how any condition
relating to the merchantable quality of the car could have been written into the contract
(entered into by parties who were not car dealers)."5  Their lordships then went on to
state that even if the subsequent state of the car constituted a breach of a condition, the
respondent must be presumed to have waived his right of repudiation by retaining the
car for an unduly long period.

What is interesting about the present case is not so much the ruling of their lordships as
the reasons and principles upon which it was based. It is the view of the present
writer that even though their lordships probably arrived at the "correct" decision
they nevertheless applied the wrong rules and principles in the process.

In deciding the present case, their lordships, it is humbly suggested, committed two
errors. The first was their acceptances6 of the English Court of Appeal decision in the
case of Bartlett v. Sidney Marcus, Ltd.7 as being applicable under Ghana law. The
second was their adoption and subsequent application in the present case of the
following principles, governing the rights of the buyer to repudiate the sale of a second-
hand car on the ground of latent defects, enunciated by Lord Denning M.R. in that case:

"On a sale of a second-hand car it is merchantable if it is in usable condition, even

though not perfect . . . A second-hand car is 'reasonably fit for the purpose if' it is in a
roadworthy condition, fit to be driven along the road in safety, even though not as
perfect as a new car,... A buyer should realize that, when he buys a second-hand car,
defects may appear sooner or later; and, in the absence of an express warranty, he has
no redress."

The facts of the Bartlett case, which appears to have unduly influenced their lordships in
the present case, were as follows: prior to buying a second-hand car from the
defendants who were motor dealers, the plaintiff was informed that the clutch was
defective. The defendant offered either to put it right and sell the car at £975 or to leave
the plaintiff to put it right and sell for £950. The buyer chose the latter alternative. He
accepted the car, drove it for four weeks and travelled about three hundred miles
without trouble. The car was then taken to a garage for repair, where it was found that
the defect in the clutch was more serious than either the plaintiff or defendants had
imagined. The plaintiff then sued the defendants for the cost of repairing the clutch.
Applying the principles enunciated by Lord Denning, the English Court of Appeal had no
difficulty in holding that the car was not unmerchantable and therefore the defendants
were not liable.

It is respectfully submitted that the similarity of the Bartlett case with the present case
notwithstanding, the decision in that case should not have been applied. This is
because the Bartlett case was decided under a section of the English Sale of Goods
Act, 1893,9 which, it is submitted, is, markedly different from the relevant section of the
Ghana Sale of Goods Act, 1962.10 In the Bartlett case, as Lord Denning11 explained in
his judgment, what the court had to decide was whether the car as delivered was
reasonably fit for use as a car on the road or was of merchantable quality. Even though
it has been suggested that "it is not possible to frame, except in the vaguest terms, a
definition of merchantable quality which can apply to every kind of case"12 it appears to
be settled under English law that the requirement that the goods should be of
"merchantable quality" does not mean that they should be free from defects. As one
commentator13 has observed, "the term unmerchantable does not necessarily connote
that the goods are of any specific grade or quality." Salmond J. gives an even fuller
explanation. He observes:

"The term 'merchantable' does not mean of good or fair, or average quality.
Goods may be of inferior or even bad quality but yet fulfill the legal requirement
of merchantable quality. For goods may be in the market in any grade, good, bad, or
indifferent, and yet all equally merchantable. On a sale of goods there is no implied
condition that they are of any particular grade or standard. If the buyer wishes to guard
himself in this respect he must expressly bargain for the particular grade or standard
that he requires. If he does not do so, caveat emptor,. and he must accept the goods,
however inferior in quality, so long as they conform to the description under which they
were sold and are of merchantable quality—the term `quality' including state or
condition."

Given the statutory provision under which the Bartlett case was decided and in the light
of the available authorities on the matter,15 the decision in the Bartlett case can be said
to be an accurate application of the English law. Indeed, Lord Denning's observation on
the right of a purchaser of second-hand goods to repudiate the sale, it is submitted, is
also a fair and accurate interpretation of the English legal position. Even the new
statutory definition16 of "merchantable" adopted under English law is basically nothing
more than a restatement of the existing common law position.

It is submitted, however, that under Ghana law, the decision in the Bartlett case, though
correct, has no significance and should therefore not have been applied in the present
case. Since the issue for consideration in the present case, as their lordships
themselves clearly recognized, was whether the respondent could repudiate the
same on the ground of latent defects, the Court of Appeal, it is humbly submitted,
should have applied section 13 of the Ghana Sale of Goods Act. In fairness to their
lordships it must be pointed out that they did refer to the section. Unfortunately,
however, they made no further attempt to interpret and apply it.

The relevant portion of section 13 of the Sale of Goods Act which has a direct bearing
on the present case provides as follows:

"13. (1) ... there is no implied warranty or condition as to the, quality or fitness for any
particular purpose of goods supplied under a contract of sale except as follows:

(a) There is an implied condition that the goods are free from defects which are not
declared or known to the buyer before or at the time when the contract is made:
Provided that there is no such implied condition

(i) Where the buyer has examined the goods, in respect of defects which should have
been revealed by the examination;
(ii) Where the goods are not sold by the seller in the ordinary course of his business, in
respect of defects of which the seller was not, and could not reasonably have been
aware."

The import of the foregoing provision may be summarized as follows: the general rule
under the Ghana Sale of Goods Act is that a seller of goods, whether new or
second-hand, is liable for all defects in them. This duty is an implied condition of the
contract of sale. The seller is, however, not liable for those defects which he declares or
makes known to the buyer before or at the time of the contract. Again, where the buyer
has examined the goods the seller is not liable for defects which should have been
revealed by the examination. It would appear then that where the defects complained of
were not declared or made known to the buyer before the contract and could not have
been revealed by the buyer's examination, if any, the seller is liable. But even so, where
the seller is not a dealer in the kind of goods sold and it is established that he did not
know or could not reasonably have been aware of the defects complained of, he
escapes liability.

It can be seen from the foregoing summary that the rules to be applied under Ghana
Law where a buyer complains of latent defects are completely different from those
existing under English law and under which the Bartlett case was decided. It is also
worth observing that under the Ghana provisions dealing with defects in goods, no
determination as to the merchantability of the goods is required. Indeed, nowhere in the
Ghana Sale of Goods Act is the term "merchantable quality" used.

It is submitted that Ghana law imposes a heavier responsibility on sellers of

goods than is the case under English law. Moreover, the duty imposed by the
Ghana law is the same for sellers of both new goods and second-hand goods.
The following observation made by one commentator,17 it is further submitted,
accurately summarizes the Ghana Law.

"One would, in fact, not be far from wrong if one stated the law like this: in Ghana,
traders must declare defects in goods whether they know of them or not or face the
consequences, and non-traders sell at their peril unless they can show that they did not
know of the latent defects in the goods they sell... traders in Ghana sell at their peril...
We started with Caveat Emptor and have ended with Caveat Venditor in a novel, and
extreme form."

Their lordships' observation in the present case that "a second-hand car must be taken
as it is and not elevated into a new car with all the expectations of factory freshness"18
whilst in accord with the rules under which the Bartlett case was decided, does not, it is
respectfully submitted, accurately reflect section 13 of the Ghana Sale of Goods Act. 
But even assuming that this statement were correct, it would still leave certain important
questions unanswered.  First, how much less of factory freshness should one expect in
a second-hand car? Secondly, would the nature of defects to be expected be the same
for all second-hand cars, irrespective of age?
It is submitted that instead of determining whether or not the car was of merchantable
quality, their lordships should have posed and found answers to the following questions.
First, were the defects complained of by the respondent declared or known to him
before or at the time of the contract? Second, if they were not declared or known to him,
did he examine the goods and should the examination have revealed those defects?
Finally, was the appellant, a non-dealer in cars, aware or should he reasonably have
been aware of the defects complained of?

It is believed that if these questions had been posed, the Court of Appeal, as has
already been suggested, would still have found that the respondent had no right of
repudiation.  For one thing, it is doubtful that the respondent was unaware of the
defects before entering into the contract.  Even if he lacked actual knowledge of
the defects it can be argued that the high estimates for repairs presented by
Messrs. R. T. Briscoe, Ltd. should have suggested to the respondent that there
were serious defects in the car.  For another, even assuming that no knowledge of
the  defects could be imputed to the respondent, the seller, it is submitted, would still not
be liable.  This is because the seller, as a non-dealer in cars, could still have argued
that he was not aware and could not reasonably have been aware of those defects.  
This argument would seem to be supported by the facts of the case. The seller clearly
knew that the car had been involved in an accident, but there was no evidence that he
knew of the particular defects.  In any case, if it is argued that because the seller knew
of the accident, he therefore had constructive knowledge of the defects, then the same
argument could be used to establish the buyers knowledge of the defects since he also
knew of the accident.

In the present case then, the implied condition did not apply because of the defence
available to the seller under section 13(1)(a) of the Ghana Sale of Goods Act and not,
as their lordship suggested, because of "the class of goods and the status of the
persons contracting."19 It is also suggested that if the appropriate questions had been
posed by their lordships, not only would the case have been easier to decide but also
that portion of the judgment devoted to a discussion of the nature of conditions could
have been eliminated.20

Not much can be said about the alternative argument put forward by their Lordships in
support of their ruling.  Their Lordship observation that by keeping the car for an
unduly long period of time the respondent had lost his right of repudiation is
clearly supported by section 52(b) of the Ghana Sale of Goods Act.  Given the
facts of the present case, it can be argued that keeping that particular car for a period of
two months is tantamount to keeping it for an unreasonable period of time after delivery.

CONCLUDING REMARKS

It is pertinent to emphasize the need on the part of our courts to examine foreign
decisions critically before applying them.  This is crucial especially in cases where the
interpretation of statutory provisions is involved.  It is true that in the present case the
"correct" ruling, was made.  But, to a lawyer, the grounds upon which decisions are
based are much more important and relevant than the decisions themselves.  Section
13 of the Ghana Sale of Goods Act and must indeed be recognized as such by our
Courts.

Opinions on the desirability of Section 13 may differ. However, the present writer
believes that in the light of the prevailing economic conditions the buyer needs to be
protected against unscrupulous sellers. Any unsolicited assistance that such seller may
get from our courts can only help seal the doom of the unfortunate Ghanaian buyer.