Sale of Goods - Business Law - Lecture Slides, Slides of Commercial Law

Download Sale of Goods - Business Law - Lecture Slides and more Slides Commercial Law in PDF only on Docsity! Sale of Goods I – Formation and Implied Terms Docsity.com Interplay between legislation • Sale of goods is regulated at three levels: – by Pt V Div 2 and 2A of the Trade Practices Act 1974 (Cth) involving corporations, or other persons in certain limited circumstances; – consumer transactions involving the sale of goods legislation of the States and territories involving persons or partnerships; – non-consumer transactions. Docsity.com Sale of goods or work and materials? Only contracts for the sale of goods are caught by the sale of goods legislation. If the main part of the agreement is:  the skill and experience of one of the parties and the use of materials is ancillary to the main purpose of the contract, it is a contract for work and materials (Robinson v. Graves [1935]); but  the main purpose of the contract is the transfer of title to goods, the contract is a contract for the sale of goods (Toby Construction Products Pty Ltd v. Computer Bar Sales Pty Ltd [1983]). Docsity.com Sale or agreement to sell? • A sale of goods involves transfer of ownership (property) and risk from the seller to the buyer at the time of contract. • An agreement to sell arises where the property in the goods (and risk) is to be transferred at some later date, or when some condition has to be fulfilled. Docsity.com Implied Terms The distinction between conditions and warranties under the law of contract is preserved by the legislation. Where the buyer has accepted the goods and property has passed, any breach of condition by the seller must be treated as a breach of warranty. Under the sale of goods legislation, it is possible for the seller to exclude the implied conditions and warranties but the States and Territories Fair Trading legislation offsets this disadvantage. Docsity.com Description • Where goods are sold by description, there are implied conditions: – that the goods shall correspond with the description or sample and description (Varley v. Whipp [1900]; Beale v. Talyor [1967]); – if the sale is by sample and description, the bulk of the goods must correspond with both sample and description. • The section is concerned with identity, not quality (Ashington Piggeries Ltd v. Christopher Hill Ltd [1972]). • Under the Trade Practices Act there are obligations imposed on both the seller (s. 70) and the manufacturer (s. 74C) where the sale is in the course of a business. Docsity.com Description • For description to apply: – Is the contract for a sale of goods by description? – Have words of description been used? – Do the goods comply with the description? Docsity.com 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 (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 (Griffiths v. Peter Conway Ltd [1939]). The buyer must show that there is at least some reliance upon the judgement and skill of the seller (Cammell Laird & Co Ltd v. Manganese Bronze & Brass Co Ltd [1934]). Under the Trade Practices Act there are obligations imposed on both the seller (s. 71(2)) and the manufacturer (s. 74B) where the sale is in the course of a business. Docsity.com 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. There can be a breach of both fitness for purpose and merchantable quality on the same set of facts (e.g., Grant v. Australian Knitting Mills [1936]; McWilliams Wines Ltd v. Liaweena (NSW) Pty Ltd [1988]) Trade Practices Act:  There are obligations imposed on both the seller (ss. 71(1), 72(c)) and the manufacturer (s. 74D) that make sales in the course of a business. Docsity.com Merchantable quality For this section to operate there are four 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? Docsity.com Sale by sample Where there is a sale by sample there is an implied condition:  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 which would not be apparent on a reasonable examination of the sample (Drummond v. Van Ingen (1887)). Trade Practices Act:  There are obligations imposed on both the seller (s. 72) and the manufacturer (s. 74E) that make sales in the course of a business. Docsity.com