class 3 Flashcards Preview

commercial law > class 3 > Flashcards

Flashcards in class 3 Deck (29)
Loading flashcards...

The implied term of corresponding with description is contained in s* of SOGA: the basic premise is that the buyer should get goods of that * for which he or she *. important issues are: what is actually * in the description; what is the description * from; and how do we decide whether the goods do or do not correspond with the description.

18; identity; bargained. Comprised of; derived;


s18   Sale by description
Where there is a contract for the sale of goods by description, there is an implied condition that *; and if the sale be by * as well as by description, it is not sufficient that * corresponds with the sample if the goods do not also correspond with the description.

the goods shall correspond with the description
the bulk of the goods


Australian Kinitting Mills v Grants (1933) 50 CLR 387 (HCA):
True or false:
A: Australian Knitting Mills is the manufatctuer of the underwear.
B: The trial judge did not find the retailer or the manufacturer breach of the implied term, which was reversed by the appallant court, which then was reversed by the HCA.
C. the plaintiff relies on s19(2) as exceptions.
D. Only specific or ascertained goods may be ‘brought by description’ within the meaning of this provision. [Dixon J HCA]

the trial judge: manufacturer negligent
Retailer breach of implied term- fitness for purpose
Majority of HCA: reversed both decision.
Privy Council: retailer breaches the contract;
(fitness for purpose; merchatable quality)
C.Correct, relying on s19(2)
Correct, it’s not limited to unascertained goods


19   Implied condition as to *(2)  Where goods are bought by description from a seller who deals in goods of that description (whether the seller be the * or not), there is an implied condition that the goods shall be of *:
Provided that if *there shall be no implied condition as regards defects which such examination ought to have revealed.

quality or fitness
merchantable quality
the buyer has examined the goods


In Australian Kinitting Mills v Grants (1933) 50 CLR 387 (HCA):
Dixon J said a distinction is between sales of things sought or chosen by the buyer because of * and of things of which *
In the former, the buyer primarily relies on their * OR POSSESSION OF *, even they are bought as specific goods * and * , the goods are bought by description.
When the sale is a sale by description, it’s subject to s19(2) exception.

Their descriptions;
Physical identity is important.


Elder Smith Goldsbrough Mort Ltd v McBride; Palmer (Third Party) [1976] 2 NSWLR 631 (Supreme Court of New South Wales)
Who are Elder Smith and McBride?

The buyer bought a bull for * purposes at *
The conditions of the sale were set out in the *
Condition 6: no warranty; inspection prior to the sale.; * are not responsible for any * or * in the descriptions, none of those (the same) shall invalidate the sale or made the subject of any claim for compensation.
The bull turns out *. at the time of sales, no inspection would have revealed such * defect.
Sheppard J said there are three contracts?
The contract between vendor and purchaser has no express term as to breeding bull and the title is not in question.
Sales by description may be divided into two kinds: (1)Sales of * or * goods, as being of a certain * or *, or to which otherwise a description in the contract is applied.
Second, of specific goods, brought by the buyer in reliance , at least in part, upon the *given, or to be tacitly inferred from the circumstances and which identifies the goods.
The contract in consideration is the contract between the vendor(third party) and the buyer (defendant)

the plaintiff and auctioneer employed by the vendors;
The buyer

Stud (breeding bulls) auction; auction catalogue; the auctioneers; errors; omissions;
permanently infertile.

Between the vendor and purchaser
Between the vendor and auctioneer
Between the actuioneer and the highest bidder.




True or false:
Elder Smith Goldsbrough Mort Ltd v McBride of specific goods will not usually be sale by description, where the buyer has had an opporutnity of inspecting the goods;
B.However, there are cases where, despite the availability of the article to be sold for inspection, there will nevertheless be a sale by description.
C.The experts were only able to reach their conclusions after a number of tests over a period of months, after substantial numbers of cows had beenput to the bull without result.
D.The catalog did not say it was a “breeding bull”
E.The descrition in the catalog “a breading bull” does not amount to a mere collateral warantty.
Cl6 makes no difference to the result.

A correct
B correct: where goods are described by the contract and the buyer contracts in reliance on the description, there is a sale by description even if the goods be specific...and it may apply even where the buyer has seen and selected the goods, if the deviation of the goods from the description is not apparent.
C correct.
D incorrect. the description being a “breeding bull”. the judge later concludes that the sales was of specific goods but it was still a sale by description.
E Correct- it’s implied condition (s18) not merely collateral warranty..
F the faults referred to are only faults which would be revealed by an inspection. Do not affect the rights and obligations of the parties, and the third parties at the time of the sale were in breach of the condition of the contract which requires them to sell to the defendants a breeding bull.


What did the judge think the case fall under?
Elder Smith Goldsbrough Mort Ltd v McBride
A.Actual implication of a condition into a contract
The ascertainment of a description of goods, not from express words but from surrounding circumstances --> express condition

A [controlled by s18]

The Heifer case fall under the second category. [the catalog only said “unserved”- = the answer amounted to an offer of a warranty overriding the conditions of sale, and that such offer was accepted by the plaintiff’s bid for the heifer] it was further held that the description amounted to a condition, on breach of which the plaintiff was entitled to treat it as a warranty and recover damages.


Elder Smith Goldsbrough Mort Ltd v McBride
The buyer retained the bull, its value for saluhtering purposes was 500. the buyer were liable to the actioneer for 21000, there was a verdict for the buyer against the vendors for ?



Harlingdon & Leinster Enterprises v Christopher Hull Fine Art [1990] 3 WLR 14; [1990] 1 ALL ER 737 (Court of Appeal)
Sale of a painting is sale by description?
CH (first dealer) sold --> L (second dealer)--> buyer
CH made it clear that he had no knowledge of the work of Munter.
L did not have any specized expertise in German expressionist art.
L’s inspection would not have revealed whether or not the work was by Munter.
Who is the plaintiff and the defenant?
At first instance, it was held that?
What about the appeal?
Does the catalog include the name of the artist Muller?

Plaintiff is the second dealer, the defendant is the first dealer.
Not sale by description

No breach of the implied term of the merchantable quality



True false:
Nourse LJ:
A.S18 most applies in unascertained goods but also where there’s no identifiation otherwise by description.
There was a lable on the back with stamp of the estate Gabriele Mannunter.
B.In order for s18 to apply, the description in question must be influential in the sale, not necessarily alone, but also as to become an essential term, ie condition, of the contract.
C.S18 always applies to contract for the sale of specific goods which have been seen by the buyer
D.One must look to the contract as a whole in order to identify what characteristics of the goods are intended to form part of the description by which they are sold.
On a view of their words and deeds as a whole, the parties could not reasonbly have contempleted that the defendants were relying on the plaintiff’s statement that the plainting was by Gabriele Munter.

C incorrect- only provided that their deviation from the description is not apparent on a reasonably examination [characteristics of the goods which would be apparent on reasonable examination of the sample are unlikely to have been intended by the parties to form part of the description by which the goods were sold; even though such characteristics are mentioned in references in the contract to the goods that are its subject matter- Lord Diplock in textbook 487]

D correct - if it’s reasonable contemplation of the parties that the buyer is relying on the description. Every item in a description which constitutes a substantial ingredient in the identity of the thing sold is a condition.

E correct.


The dissenting judge:
A:Do not agree that the concept of reliance can nicely fits into a sale by description.
B: Merely said he knew nothing of the painter and did not like her painting does not cancell or withdraw what he said previously in the catalog.
C: allows the appeal since the trial judge did not allow the evidence that between the deals it was the common practice that it was up to the purchaser to decide whether the plainting was genuine or not regardless of what the vendor said.
D the plaintiff made up his own mind and relied on his own judgement to the efffect that the painting was genuine.
E the plaintiff and the defendant came to decide whether the former should buy a painting described as Munter’s painting suggests that there’s no need for the plaintiff to decide whether the painting was Mr munter or not.

B it’s a condition, not representation. No need to consider whether the statement has been relied on or not.

D incorrect, to the contrary.

E correct


Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441; [1971] 1 All ER 847
The contact is an ORAL CONTRACT?
CH, AP who is seller and who is buyer?
Did the buyer pay?
The formula provided by AP;
CH provides the ingredients and mix the compound?
CH knew nothing about mink and had never compounded foodstuffs for mink before.
CH entered into a contract with a third party, which supplied CH “fair average quality of the season” for the compound. The compound was contaminatedl with DMNA and therefore became toxic for the mink, which died after eating them.
AP in a cross action sues CH for what?
What does the trial judge? Court of appeal? On what basis for court of appeal?

CH is the seller,
AP is the buyer
No, that’s why the buyer is the defendant.

breach of contract not correspond with description. Not reasonably fit for purpose; not of merchantable quality.

Trial judge: not corresponds with description;
No breach of term
The compound was not toxic for other animals.


What the view of dissenting judge?
Draws distinction between what?
And what is his conclusion?

Difference in quality is different from difference in kind, and only the later would amount to a breach of the implied condition of sale by description.
Where the distinction is between poisonous and non-poisonous hering meal, more than a difference in quality. --> difference in kind.
Breach? Yes


Lord Wilberforce:
The question can be reduced to * did not correspond with the description because it contained DMNA.
The test of the description is intended to be a broader, more * test of a * character.
It focuses on identity, leaving the issue of quality and condition to other clauses of the contract or the SOGA.
The ingredients being supplied is herring meal and therefore no failure to correspond with description.

the herring meal ingredient


Lord Diplock:
In the then state of knowledge, no human skill or jdugement could have presented it. It was sheer bad luck.
What is the responsibility of the vendor?
(formula; quality)
What is the additional responsibility that the seller has not accepted ?

Is this a contract of unascertained goods?

What is the test for whether certain words should be include in the description bu which unascertained goods are sold.

The formula was commercial not chemical;
The ingredient described as herring meal did not cease to comply with that description because a preservative has been added which prevent them from deteriorating.
It affects the quality but not the identity.

To deliver feeding stuffs characterised by their being compounded in accordance with the formula provided by the appellants and composed of ingredients of the kinds specified and a quality suitable for use in compound feeding stuffs for domestic animals and poultry?
The compound should be suitable for feeding minks.
Yes: before property of the actual goods can be transferred can be physically identified and agreed on.

Should be confined to those words in the contract which were intended by the parties to identify the kinds of goods which were to be supplied. It’s open for the parties to use description broadly or narrowly.
Whether the buyer could fairly and reasonably refuse to accept the physical goods proffered to him on the ground that their failure to correspond with that part of what was said about them in the contract makes them goods of a different kind from those he had agreed to buy.


Lord Diplock on CH v Nordismel (the manufacturer): second appeal
What is the contract between these two parties different from the contract between cH and AP?
What is the description contained in the contract? What about “fair average quality of the season”?
Why did Diplock think N never agreed to assume the responsibility of the required herring meal being for minks?
Other three judges agree with this.

This is a written contract.
Norwegian Herring Meal:
fair average quality of the season. [not less protein, fat salt, ect.] is not description but standalone clause on quality.
Because CL never told N
And this is the first time such products were produced for minks in the country.
Given no opp to exercise skills or judgment in selecting herring meal suitable for minks.


Viscount Dilhorne (dissenting):
A reduction of price if the fat or salt content did not comply with the prescried standard.
“fair average quality of the season” part of description?
Whether or not there was a breach of s13 depends on whether the meal supplied could properly be described as Norwegian herring meal. Where there’s DMNA in sufficient quantities to kill mink, it’s harmful to other animals too.

No, only referring to quality.


Metal Roofing and Cladding Pty Ltd v Amcor Trading Pty Ltd [1999] QCA 472 (12 November 1999)
The relevant goods were described as PVC resin. The buyers contended that the PVC supplied did not satisfy its description because the level of contamination was higher than was generally expected in the market what did the majority hold?

The majority held that there was no uniform understanding or expectation of the tolerable level of non-PVC substances let alone of the level at which resin could no longer properly be described as PVC> no breach.


True or false?
(1-)The basic premise of the s18 is that if a buyer has bought goods by description then the buyer should get what was described.
(2-) There cannot be a sale by description where specific goods have been seen.
(3-) in Harlingdon & Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd.: in determining what the intention of the parties was the presence or absence of reliance on the part of the buyer was a very relevant factor to be taken into account.
(4-) sales of unascertained goods are almost always by description.
(5-) sale of future goods does not always sale by description.
)The contract for the sale of future goods will never have the actual sale in it, it will always be an agreement to sell.

1 ) incorrect -
Eg. Grant v Australian Knitting Mills Ltd, Grant: there was a sale by description even though the buyer is buying something displayed before him on the counter, as the good did not meet the description.

(3-) seems all right.
(4-) correct, for otherwise there would be noting to determine the subject matter of the contract or the obligation of the vendor.
(5-) correct. The relevant goods are seen and requested by the buyer in the hands of a third party and then later obtained by the seller from the third party for sale to the buyer.
) future goods have been defined as the goods that will either be manufactured or produced or acquired by the seller at the time the contract of sale is made.


What are the important issues in determining whether the condition implied by s18 has been breached:
1.Was there a sale by description?
2.If so, *?
Do the goods correspond with the description?

What words comprises the description?


sales by description can be divided into two kinds: (1) unascertained or * as being of a certain kind or class, or to which otherwise a description in the contract is applied; (2) of *, bought by the buyer in reliance, at least in part, upon the description given, or to be tacitly inferred from the circumstances. And which identified the goods.

future goods
specific goods


There are 2 categories of cases of failing to correspond with the goods description:
The first category is those goods are substantially required but there is some small discrepancy from the contract.
The second category is those goods described in * in the absence of detailed *.

a more general sense
commercial description


In Australian Knitting Mills Ltd v Grant:

the buyer sues the retailer for breach of merchantability and fitness for purpose. Why did the plaintiff needs to prove a sale by description?
Why int hat case, the buyer had self-selected the underwear from the shelf, the court nonetheless held that there been a sale by description.
In the case, the goods are specific goods ascertained and identified, the goods are bought by description.

Breach the merchantability also requires a sale by description.

at least to the extent that the words on the box delineated the goods and indicated the kind of clothing agreed to be bought. Dixon J referred to the distinction between sales of things sought or chosen by the buyer because of their description and sales of things of which the physical identity is all important.
Correct, as per Dixon J.


Which of the following circumstances sale of goods is not likely to constitutes a sale by description?
A.Sales of specific goods when they are sold without any description, express or implied;
B. Sales of future/ unacertained goods
C. Where any statement made about them is not essential to their identity;
D. Where , though the goods are described, the description is not relied upon, as when the buyer buys the goods such as they are.

Sales of future/ unacertained goods


True or false?
(1-)Existing goods can be classified into ‘specific or unascertained.
(2-)it is a sale of unascertained goods because it is not known which bag is to be delivered. As soon as a particular bag is separated from the lot for delivery, it becomes ascertained or specific goods.
(3-) the distinction is important in determining issues related to ‘transfer of property’ from the seller to the buyer.
(4-)characteristics of goods which would be apparent on reasonable examination are likely to have been intended by the parties to form part of the description by which the goods were sold,

(4) incorrect, unlikely, even if those characteristics are mentioned in references in the contract to the goods that are its subject matter.
As per Lord Diplock, Gill & Duffus SA v Berger & Co Inc (No2)[1984]


Varley v Whipp- old/new machine case was discussed in AP v CH: the case was accepted as an example of where a * description of the goods may form part of the description for the purposes of the section.



s33   Delivery of wrong quantity or mixed goods does the section govern the buyer and seller always?

No, not always.
(4 ) are subject to any usage of trade, special agreement, or course of dealing between the parties.
So if the common practice between the parties was to deliver and accept an approximate amount of the relevant goods, then the buyer will not be entitled to rely on the provision.


AP v CH: the key question is whether the herring meal ingredient did not correspond with the description because it contained DMNA. Merely affect the quality or make it a different kind. Whether the phrase ‘fair average quality of the season’ is included in the description?