Mooting S02 Mark, Jasper, Marcus, Samuel, GC and Alex Analysis of Sale of Goods ordinance (CAP 26) Section

15 The main idea of s.15 is whether the untruth of the description makes the goods delivered different from what were contracted for, which may resulted in a voidable contract. Subsection 1 Description Situation cases where the purchaser has not seen the goods but is relying on the description alone - Varley v Whipp a specific article which the buyer has inspected, but only if the description relates to something not apparent on inspection - Joseph Travers & Sons Ltd v Longel Ltd sale was a sale not merely of specific goods, but of goods corresponding with a description - Grant v Australian Knitting Mills Ltd a description which constitutes a substantial ingredient in the identity of the thing sold is a condition Couchman v Hill Medium A description of a goods can be given by or on behalf of the seller (refer to SOGO s.16) In other words, description of a goods can be delivered not only in written documents from the manufacturer, but also verbal description from retailer on behalf of the manufacturer. it can be any statement / picture which constitutes a substantial ingredient of the identity of the thing sold. Interpretation of words in description Christopher Hill Ltd v Ashington Piggeries Ltd For the purposes of this contract, herring meal as used in the formula must have a special meaning which it would not normally bear, viz, herring meal which is suitable for feeding to mink; it gains that special meaning because the parties knew that King Size was intended to be fed to mink. Yet how could the parties be deemed to have given that special meaning to the words herring meal when the whole basis of the contract was that the plaintiffs disclaimed, and the defendants asserted, knowledge of what was suitable for the feeding of mink? Words used in a contract, including words constituting a description of the goods sold, cannot be given a special or unusual meaning unless the context, or the surrounding circumstances, show that the parties must have intended them to bear that special meaning. We conclude that the defendants have failed to show that the goods delivered did not correspond with the contractual description. Application: In other words, the description of a goods, cannot be interpret in a special and unusual basis, UNLESS there are evidence to prove that sellers have intended to bear that special and unusual meaning.

Mooting S02 Mark, Jasper, Marcus, Samuel, GC and Alex

Manufacturer and seller on behalf of the manufacturer have to ensure description, should be corresponding to the goods, if it is not corresponding breach of s15, contract voidable ---------------------------------------------------------------------------------------------------------------------------------General: The correspondence between description and actuality must be exact. It is not sufficient that the goods are commercially within the description: Arcos Ltd v EA Ronaasen & Son In the event of breach, the purchaser is entitled to rescind the contract and recover the whole of the purchase price, with no allowance for his use of the goods in the interim - Rowland v Divall Subsection 2 doubts had been expressed whether there could be a sale by description in a selfservice store, where goods were displayed for selection by the purchaser (see UK Law Com No 24 paras 23-25). The effect of subsection (2) above is to make it clear that in a case which would otherwise be a sale by description, the self-service element will not remove the transaction from that category.

Mooting S02 Mark, Jasper, Marcus, Samuel, GC and Alex Analysis of section 16 1. Section 16(1) Introducing Section 16 It states that in any circumstances, there can be any implied condition or warranty in the contract of sale, that refers to the quality or fitness of the goods1. 2. Section 16(2) Placing the burden on the seller The effect of this subsection is to place the burden of discovering and informing the existence of the defect on the seller, displacing the rule of caveat emptor (buyer beware).2 The terms (a), (b) and (c) under subsection (2) outline the responsibilities of the seller before the seller can shift the burden to the buyer and be able to waive the implied condition. The terms are: (a) before the contract is made the buyer knows the defects, or (b) before the contract is made the buyer reveals the defects during inspection, or (c) if the contract is for sale by sample, then the buyer ought to reveal the defects during inspection. The words merchantable quality mean that goods of such quality and in such condition that a reasonable man, acting reasonably, would, after a full examination, accept the goods in the circumstances of the case in performance of his offer to buy them, whether he buys for his own or to sell again3. Regarding domestic animals in Wong Ng Kai Fung, Patsy v Yau Lai Chu (t/a New-Date Pet Trimming Salon)4, the court held that the buyer shall have had pointed out to the seller the particular defect of which the buyer later (after purchase) seeks to complain, then the seller would not be able to evade from liability by saying that before the purchase, the claimants (buyers) attention had already been drawn to the risk of possible latent disease and future veterinarian costs to a dog. A point in mind, if a defect cannot be revealed by reasonable examination, the buyer will not be deemed to have defeated the implied condition of merchantable quality. (Global Asia Ltd v Lucky Forest Ltd (trading as Delta Printing Company) [2001] HKCU 142.)5 3. Section 16(3) The buyer implying any particular purpose for the purchase It states that if the buyer implies to the seller that the buyer buys the goods for any particular purpose, there is an implied condition to it. It does not matter whether the particular purpose raised by the buyer fits the common purpose of
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Goods includes the container and packaging for the goods and any instructions supplied with them: see Wormwell v RHM Agriculture (East) Ltd [1986] 1 ALL ER 769. (Annotated Ordinances of Hong Kong) 2 Annotated Ordinances of Hong Kong 3 Tung Ga Linen & Cotton (HK) Ltd v Winnitex Investment Co Ltd [2006] HKCU 1234, para 44. 4 [2005] 4 HKC 42 (CFI) 5 Case fact: A defect of a printing machine could not have been revealed by the visual examination of the machine or of its printouts, the buyer was not deemed to have defeated the implied condition of merchantable quality.

Mooting S02 Mark, Jasper, Marcus, Samuel, GC and Alex the goods. If the buyer can be proved to be not relying on the sellers skill or judgment, then there is an exception. A purpose may be in wide terms or it may be circumscribed or narrow. The less circumscribed the purpose, the less circumscribed the range of goods will be to fit for such purpose (Henry Kendall & Sons v William Lillico & Sons Ltd6) The onus on the seller will be discharged when the buyer raises the purpose of resale in a foreign country, with which the seller is not familiar. (TeheranEurope Co Ltd v ST Belton (Tractors) Ltd7). It is not reasonable for the buyer to rely on the sellers skill or judgment if the buyer did not tell the seller enough information about the particular purpose of purchase. In Sure Woollen Yarns Co Ltd v Global Apparel Group Ltd8, but the seller did not know what type of garments, what market in which the goods would be sold or whether the goods would be high quality goods, and there was no quality sample approved before the purchase order. 4. Section 16(4) It shows that in certain sale contracts, the purpose for which the goods are purchased can possibly be implied from the nature/description of the goods or from the conduct of the parties. Under this circumstance, the parties enter into the contract with reference to those known usage. For example, if a buyer purchases a perambulator or a medicine, the purpose for which it is purchased is already implied from the good itself; the buyer needs not to reveal the purpose to the seller. 5. Section 16(5) It indicates that a buyer can be entitled to rely on subsection (1), (2), (3) and (4) only in the circumstance that a seller sells his good in the course of the business so the implied term applies to sales "in the course of a business" only. It clearly covers sales by those whose business involves the sale of the goods in question. It implies that even transactions by a seller who normally sells goods of a different type from those involved in the sale under scrutiny, for instance, a cloth merchant selling his own delivery car, or who normally does not sell any goods at all, like a doctor selling his office desk, are also sales in the course of a business. Yet, a buyer cannot rely on these subsections, if the transaction is not sale in the course of the business in fact or any reasonable steps have been already taken so that the buyer can reveal and know the defects right before actually purchasing that particular good.

6. Section 16(6)
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[1969] 2 AC 114, per Lord Pearce). [1968] 2 QB 545 8 [2005] HKCU 800.

Mooting S02 Mark, Jasper, Marcus, Samuel, GC and Alex It further concerns the situation mentioned in subsection (3), The person by whom antecedent negotiations were conducted actually include the credit provider or other people not employed by the seller, who arrange the contract for the supply of goods. The person should be entitled to receive statements from the buyer as to any purpose for which the goods are actually acquired, if the buyer makes known the purpose expressly or impliedly to that person. Seller can be liable under the implied condition if the goods are not fit for that purpose or it is possible that seller may pass even the liability on to the person who conducted the antecedent negotiation. 7. Section 16(7) It further clarifies the actual definition of antecedent negotiation. Such negotiation and arrangements conducted were trying to convince the buyer to make the agreement or to promote the transaction to which the agreement relates. 8. Section 16(8) It clarifies that an implied condition, which the goods supplied under a contract of sale should be fit for a particular purpose, does not exist except under the circumstances already mentioned in subsection 16, 17 and other provisions of enactment. Clearly this subsection tries to limit the scope of the liability of sellers to a certain extent.

Mooting S02 Mark, Jasper, Marcus, Samuel, GC and Alex Analysis of section 17 transaction constituting express guarantee that whole goods conform to the sample. Goods not exhibited must conform to the standard exhibited by the sample. Sample the office of a sample is to present to the eye the real meaning and intention of the parties with regard to the subject matter of the contract which, owing to the imperfection of language, it may be difficult or impossible to express in words. The sample speaks for itself. Drummond v Van Ingen In other words, each sample is representing a statement in non-verbal form about the subject matter of the contract. Scope Gardiner v. Gray In rejecting oral evidence of this sample (with which it was alleged the bulk did not correspond), Lord Ellenborough C.J. said: This was not a sale by sample. The sample was not produced as a warranty that the bulk corresponded with it, but to enable the purchaser to form a reasonable judgment of the commodity. In this case, a specimen of the goods was exhibited to the buyer at the time of the sale. There was a written contract which merely described the goods as of a particular denomination, and it was held that it was not a sale by sample because during the oral discussion, where the sample was shown, a written contract which made no reference to the sample therefore the sample did not form part of the contract. Drummond v. Van Zngen The sample speaks for itself. But it cannot be treated as saying more than such a sample would tell a merchant of the class to which the buyer belongs, using due care and diligence, and appealing to it in the ordinary way and with the knowledge possessed by merchants of that class at the time. In short, where the sample is intended to be examined by naked eyes, buyer is not entitled to reject goods because of discrepancies between sample and bulk which can only be detected under the microscope. Wood v. Michaud exhibited a can from the previous year.it is a matter of common knowledge, which both parties must have understood, that the quality of the crop for different years may vary somewhat and hence make some difference in the appearance and quality of the canned goods. Quality here is confined to such qualities as are apparent on an ordinary examination of the sample as usually carried out in the trade: see Hookway v Alfred Isaacs & Sons [1954]