Description • Where goods are sold by description (i.e. where description is used to identify the goods to the buyer and the buyer has relied on it), there are implied conditions: • that the goods shall correspond with the description or sample and description CASE: Varley v Whipp [1900] CASE: Beale v Taylor [1967] • if the sale is by sample and description, the bulk of the goods must correspond with both sample and description
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Description • The condition is concerned with identity, not quality but it might be hard to make a distinction CASE: Ashington Piggeries Ltd v Christopher Hill Ltd [1972] • There are obligations imposed on the seller where the sale is in the course of business: • s 32H Fair Trading Act 1999 • s 18 Goods Act 1958 • s 70 Trade Practices Act 1974
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Description • For description to apply, need to ask:
• Is the contract for a sale of goods by
description?
• Have words of description been used?
• Do the goods comply with the description?
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Sale by sample • Where there is a sale by sample 3 further terms are implied: • that the bulk shall correspond with the sample in quality • that the buyer shall have a reasonable opportunity of comparing the bulk with the sample • that the goods must be free from any defect rendering them unmerchantable which would not be apparent on a reasonable examination of the sample CASE: Drummond v Van Ingen (1887) • There are obligations imposed on the seller for sales made in the course of business: • s 32HA Fair Trading Act 1999 • s 20 Goods Act 1958 • s 72 Trade Practices Act 1974
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Fitness for purpose • There is an implied condition on the seller to supply goods which are fit for their purpose • The buyer must expressly or by implication make known to the seller the particular purpose for which the goods are required CASE: Grant v Australian Knitting Mills [1936] unless the goods really have only one purpose • If the goods are required for a special purpose, this fact must be made known to the seller CASE: Griffiths v Peter Conway Ltd [1939]
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Fitness for purpose • The buyer must show that there is at least some reliance upon the judgment and skill of the seller CASE: Cammell Laird & Co Ltd v Manganese Bronze & Brass Co Ltd [1934] • There are obligations imposed on the seller for sales made in the course of business: • s 32IA Fair Trading Act 1999 • s 19(a) Goods Act 1958 • s 71(2) Trade Practices Act 1974
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Fitness for purpose • For this provision to apply, 3 conditions must be satisfied: • Has the buyer either expressly or by implication made known to the seller the particular purpose for which the goods are required?
• Has the buyer relied on the seller’s skill and judgment?
• Are the goods of a description which it is in the course
of the seller’s business to supply?
• (If the buyer ordered the goods under their patent or
trade name, this may mean the provision does not apply)
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Merchantable quality • There is an implied condition on the seller to supply goods which are of merchantable quality • For the provision to apply: • the goods must be bought by description • from a seller who deals in goods of that description (whether they are the manufacturer or not) in the course of a business CASE: David Jones Ltd v Willis (1934) • provided that the buyer has not had the opportunity to examine the goods CASE: Grant v Australian Knitting Mills (1933– 34)
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Merchantable quality
• If the goods can be used for one of
several purposes, then the goods would be of merchantable quality if they were fit for any one of those purposes CASE: Henry Kendall & Sons v William Lillico & Sons Ltd [1968] CASE: Wren v Holt [1903]
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Merchantable quality • Merchantable quality means reasonable for the purpose described. Look at the nature and purpose of the goods in relation to: • price • the description applied to the goods; • whether the purpose for the goods had been made known to the seller • any other circumstances relevant to the sale
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Merchantable quality • Note: There can be a breach of both fitness for purpose and merchantable quality on the same set of facts CASE: Grant v Australian Knitting Mills [1936] CASE: McWilliams Wines Ltd v Liaweena (NSW) Pty Ltd [1988] • There are obligations imposed on the seller for sales made in the course of business: • s 32I Fair Trading Act 1999 • s 19(b) Goods Act 1958 • s 71(1) Trade Practices Act 1974
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Merchantable quality • For this section to operate there are 4 conditions that must be satisfied: • Has there been a sale by description? • Have the goods been bought from a seller who deals in goods of that description? • Has the buyer examined the goods? Would a reasonable examination have revealed the defects (a question of fact)? • Do the goods have one purpose or several?
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Services • Note that ‘services’ are defined in very wide terms under s 4 of the Trade Practices Act 1974 • The Trade Practices Act 1974 (and equivalent legislation in Victoria) implies a warranty on the seller only in a contract for the supply of services: s 74 (discussed in seminar)
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Remedies of the parties for breach of contract
Seller’s remedies
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Seller’s remedies • Against the goods • An unpaid seller is any person who has not been paid the full price and their rights depend on whether or not property and/ or possession have passed: • if property and possession have passed to the buyer, the unpaid seller only has rights against the buyer personally; • an unpaid seller still in possession can exercise a lien, stop the goods in transit, or exercise a right of resale; • an unpaid seller with property and possession can resell the goods without being in breach.
• Against the buyer
• For the price of the goods or damages for non-acceptance.
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Remedies of the parties for breach of contract
Buyer’s remedies
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Buyer’s remedies
• The buyer’s remedies against the seller
depend on whether the goods have been delivered or not: • damages for non-delivery; • specific performance if damages are not an adequate remedy where the seller refuses to deliver the specific goods sought; • breach of warranty of quality; or • rescission if there is a breach of a condition.
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Remedies • The terms implied by Part V Division 2 of the Trade Practices Act 1974 and Part 2A Div 3 of the Fair Trading Act 1999 cannot be excluded or modified: • s 32L Fair Trading Act 1999 • s 68 Trade Practices Act 1974 • However, suppliers are allowed to limit their liability (in relation to contracts other than for goods or services acquired for PDH use or consumption) to the cost of replacement or repair of goods or the cost of having the services supplied again • s 32MA Fair Trading Act 1999 • s 68A Trade Practices Act 1974
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Remedies • Remedies available to the consumer in the event of breach by the supplier include: • damages • rescission, but the goods must be returned within a reasonable time • repair of goods • resupply of goods and services • resupply of equivalent goods • refund of money paid
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Trade Practices Act 1974 • The Trade Practices Act bases its validity on a number of constitutional powers, the main one being the corporations power: s 51(xx). • State Fair Trading Acts • Because of the constitutional limitations imposed upon the Trade Practices Act, the states and territories have passed mirroring legislation in the form of Fair Trading Acts to catch activity within their state. • Coverage of Acts • While the Trade Practices Act is principally concerned with corporations, the Fair Trading Acts of the states and territories are concerned with partnership and persons, thus giving blanket coverage for a consumer against unfair consumer practices.
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