1

INTRODUCTION

In common law legal systems, a contract is an agreement having a lawful object
entered into voluntarily by two or more parties, each of whom intends to create one or
more legal obligations between them. The elements of a contract are "offer" and
"acceptance" by "competent persons" having legal capacitywho exchange "consideration"
to create "mutuality of obligation.

It tells us what we can do and cannot do. This is true in our personal lives (eg
criminal law); and in our business lives (eg contract law). Therefore, it is important for a
business person to know the rules which apply to them.Proof of some or all of these
elements may be done in writing, though contracts may be made entirely orally or by
conduct. The remedy for breach of contract can be "damages" in the form of
compensation of money or specific performance enforced through an injunction. Both of
these remedies award the party at loss the "benefit of the bargain" or expectation
damages, which are greater than mere reliance damages, as in promissory estoppel. The
parties may be natural persons or juristic persons.The word promise can be used as a
legal synonym for contract, although care is required as a promise may not have the full
standing of a contract, as when it is an agreement without consideration.

We saw that contracts can arise in simple, everyday situations, such as buying a
newspaper or taking a bus. Modern society operates by people and companies
exchanging goods and services. The Law of Contracts helps to provide a structure to this.
The Law of Contracts is also part of Civil Law so it is also concerned with remedies. It
helps us if the other party to a contract does not keep to the agreement. A contract is a
legally enforceable promise or undertaking that something will or will not occur.
However, not every agreementbetween two parties is a legally binding contract.

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What is contract? Contract law varies greatly from one jurisdiction to another,
including differences in common law compared to civil law, the impact of received law,
particularly from England in common law countries, and of law codified in regional
legislation. Regarding Australian Contract Law for example, there are 40 relevant acts
which impact on the interpretation of contract at the Commonwealth (Federal / national)
level, and an additional 26 acts at the level of the state of NSW. In addition there are 6
international instruments or conventions which are applicable for international dealings,
such as the United Nations Convention on Contracts for the International Sale of Goods.

There are five basic requirements for making a valid contract. The basic
requirements are:-

I. Intention to create legal relations
It is generally presumed that in a commercial transaction, the contracting parties
must have the intention to create a legally binding contract. In other words, if the signed
a contract signed for business-related activities, then you will be able to sue the other
party if that party does not fulfil the contractual provisions, and vice versa.

This presumption can only be rejected if the parties expressly state that they do
not intend to make a legally binding contract. Sometimes you may see the words
"subject to contract" printed on a document. These words have the legal meaning that
the document is not a contract, and that all of the contents will be bound by a subsequent
contract (if the parties sign that contract). A party that is acting subject to contract can
withdraw from the negotiation at any time before the contract is concluded. In case of
dispute, the burden of proof that the intention was to create a binding contract rests on
the person who wishes to rely on the contract. Sometimes, we also may also come across
the words "without prejudice" and these two words are used to indicate that nothing that
is written in the relevant document is legally binding.



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II. Consideration
In contract law, consideration means a detriment to the person who made the
promise or a benefit conferred on the other party, both of which are measurable in
economic terms. Money, goods and services are the most common examples of
consideration. It should be taken note that consideration need not be adequate, which
means that if the seller or service provider is contracted to sell a product or service at a
price that is below the market price, then that seller or provider cannot subsequently go to
court to claim the shortfall.

A promise of a gift is not enforceable in law because of the lack of mutual
exchange of consideration (the recipient does not have to pay anything in return). An
exception to this rule is when a contract is executed in a specific form called a "deed", in
which case the recipient may not be required to give consideration to the other party.

III. Acceptance
There is no contract unless and until the offer is accepted by the person to whom
the offer is addressed (sometimes called "the offeree"). Acceptance is normally made
orally or in writing, but if the contract allows that the acceptance and performance of
contractual duties are to be carried out simultaneously, then acceptance can also be made
by conduct. For example, when a supplier receives the cheque, that supplier may
immediately deliver the goods to the customer without saying or writing anything.

It is recommended that both of the contracting parties clearly specify and agree to
the method of acceptance. If the method of acceptance is not specified by the offer or,
then the following rules may apply.

Postal Rule If it is reasonable to use the post for the offer and acceptance
process, then the contract is formed at the time of posting the letter of
acceptance, even if the letter is lost in the post.
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Receipt Rule When an acceptance is sent by fax, it is deemed to be valid
when the message is received, even if the offeror does not in fact read the
fax immediately.

Another important point to note is that a conditional (or partial)
acceptance is only a "counter-offer" and does not constitute a valid contract. In
other words, if the person to whom the offer is addressed only accepts some of the
terms or proposes some new terms, then that person is not accepting the offer but
is making a new offer to the other party. In the business world, there may be a
series of counter-offers before a final acceptance comes out.

IV. Offer

An offer is an expression of readiness to do something which, if followed by the
unconditional acceptance of another person results in a contract. For an example, if a
company tells that it will sell 100 boxes of red wine at the price of $100,000, that
company is making an offer.

If no time limit is specified, an offer is valid for a reasonable length of time before
the offer or (the person who makes the offer) can revoke or cancel it. To avoid potential
disputes, however, the offer or should specify the deadline for the acceptance of an offer.

It is also important to note that the offer or cannot take silence as a form of
acceptance. This means the offer or cannot say "If I do not hear from you within 10 days,
then I will assume that you have accepted my offer and will pay for the product".

An offer must be distinguished from an "invitation to treat", which merely invites
other people to make offers but is not in itself an offer. Examples of invitations to treat
include: invitations to tender, displaying goods on the shelves of a shop, and the
advertisement of goods or services in newspapers or on television (unless it is expressly
stated that the advertisement is an offer).
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V. Capacity

Persons under the age of 18 (called "minors") and lunatics (mentally disordered or
intoxicated persons) do not have the capacity to enter into contracts. Any contracts that
are made by persons who are lacking in legal capacity are voidable: that is, the party who
needs the protection can seek to avoid the contractual liability.

An exception to this rule arises when the parties enter into a contract for
"necessaries" (a legal term for "necessities", which means the goods or services that are
suitable to the condition of life of a minor and to that minors actual requirements at the
time of the sale and delivery, such as clothes or food). A minor who fails to pay for
"necessaries" can be sued by the seller.



















6

QUESTION 1


It depends on what being part of the offer and acceptance. There is no difficulty if
the customer actually knows of the limitation and accepts it. If not, then in effect, the
customer is relying on an estoppel. Below are several examples of cases that are have
some similarity and can be used to conclude the case of Mr. Barrack vs Wondernet.
These real cases can be associated to Exemption Clauses in terms of Contract.

The clause is contained in the ticket. It will be incorporated if the following
apply:-
i) It would be assumed by a reasonable person to be a contractual document

Case 1:
Fact:
In Causer v Browne (1952) (Vic), the plaintiffs husband (Causer) left her dress
with the defendant (Browne) for dry cleaning. The dress was damaged by the defendant,
who then sought to escape liability by relying on an exclusion clause printed on a docket
handed to the plaintiffs husband at the time of receipt.

Held:
The court held that the exclusion clause was ineffective because a reasonable
person would have assumed that the docket was an aid to identify the dress for collection
and not a contractual document.






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Case 2:
Chapleton v Barry UDC (1940) (CA)
In Chapleton v Barry UDC (1940) (CA), the plaintiff (Chapleton) went to the
beach, where he hired a deck chair from the defendant (Barry) council. At the point of
hire, there was a notice that set out the hire charge and a request for customers to retain
the ticket received for the purpose of inspection. The deck chair hired by the plaintiff was
defective and the plaintiff subsequently sued in tort for compensation for his injuries. By
way of defence, the defendant sought to rely on an exclusion clause contained on the
back of the ticket.

Held
The court held that such a defence must fail because a reasonable person would
have treated the ticket as a proof of hire, only to be presented for inspection upon request
by a council officer.


ii) reasonable steps are taken to give the class of persons to which the recipient
belongs notice of the existence of the clause

Case 3:
Degree of notice
At the time of the contract, reasonable steps should have been taken to bring the
exemption clause to the other party's notice. Parker v South Eastern Railway (1877) 2
CPD 416

Facts:
The plaintiff deposited luggage exceeding the value of f,10 in the cloakroom at
the defendant's railway station. He paid 2d and was issued a ticket on the back of which
was an exemption clause that stated the defendant would not be responsible for any
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package exceeding the value of fl0. The plaintiff knew that there was writing on the ticket
but did not read it as he did not know or believe that the writing contained conditions.
The luggage was lost and the plaintiff brought an action for damages. At final, the
questions left to the jury were '(i) Did the plaintiff read, or was he aware of the special
condition upon which the articles were deposited? (ii) Was the plaintiff, under the
circumstances, under any obligation? In the exercise of reasonable and proper caution to
read or make himself aware of the condition?'. The jury answered 'no' to both questions
and judgment was entered on behalf of the plaintiff. The defendant appealed claiming,
inter alia, than the jury had been misdirected.

Held:
For the exemption clause on the back of the ticket to form part of the agreement,
the defendant must have done what was reasonably sufficient to give the plaintiff notice
of the condition. The proper direction to-a jury in such a case would, accord to Mellish LJ
at 170, be that:

.. if the person receiving the ticket did not see or know that there was any
writing on the ticket, they are not bound by the conditions ; that if they knew there was
writing ,and knew or believed that the writing contained conditions ,then they are bound
by the conditions ; that if they knew there was a writing on the ticket , but did not know
or believe the writing contained conditions ,nevertheless they would be bound if the
delivering of the ticket to them in such manner they can see there was writing upon it ,
was, in the opinion of the jury , reasonable notice that the writing contained conditions.

As the question posed to the jury did not direct their attention to whether the
railway company did what was reasonably sufficient to give the plaintiff notice of the
condition a new trial was ordered.

iii) these steps are taken before or when the contract was made

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Case 4:
Thornton v Shoe Lane Parking Ltd (1971) All ER 686
Facts:
The plaintiff parked his car in an indoor car park facility owned by the defendant.
He drove up to the entrance and, with no one in attendance, was issued a ticket from a
machine .He parked his car and attended his appointment. While preparing to leave the
car park, the plaintiff was involved in an accident. The defendant sought to avoid any
liability for the accident, claiming they were protected by exempting conditions found
back of the ticket issued to the plaintiff by the machine. In small print on the ticket it
specified that it was issued subject to conditions as displayed on the premises. Had the
plaintiff read the ticket and walked around the garage he would have found a set of
conditions posted on a pillar by which an individual parking in those facilities would,
according to the defendant, have been bound. Among the conditions was a clause by
which the defendant sought to exempt itself from liability for injury to the customer
occurring when customers motor vehicle is in the parking building how so ever that loss,
miss-delivery, damage or injury shall be caused. The trial court found the defendant
liable for half the fault of the accident and awarded damages accordingly .The defendants
appealed.

Held:

Previous ticket cases were based on the theory that the ticket was an offer and if
the customer retained it without objection this was regarded as an acceptance of the offer.
However, where a ticket is issued by an automatic machine there is no opportunity for
any objection. In such circumstances, the customer is only bound by those terms and
conditions that are sufficiently brought to his attention beforehand.
The ticket is no more than a voucher or receipt for the money that has been paid, on terms
which have been offered and accepted before the ticket is issued. In the present case the
offer was contained in the notice at the entrance giving the charges for garaging and
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saying at owners risk The offer was accepted when the plaintiff drove to the entrance
and , by the movement of his car , turned the light from red to green , and the ticket was
thrust at him .The contract was then concluded , and it could be not altered by any words
printed on the ticket itself (per Denning MR at 689) .The customer is bound by
exempting condition if they knows the ticket is issued subject to it or, if the company did
what reasonably sufficient to give him notice of it (per Denning MR at 690).
The defendant had not met their burden of establishing that the exempting condition been
communicated to the defendant
From the scant facts available, the ticket was more than, for example, a mere
receipt and may reasonably be assumed to be a contractual document.The words See
back on the ticket may be sufficient notice, depending on their prominence.
However, the ticket is not obtained until after the contract is entered into, when
Mr Barrack pays for admission to the ride at the ticket booth.Nevertheless, the sign above
the ticket booth may be sufficient notice of the existence of the exemption clause on the
ticket. However, further evidence for example, the size and prominence of the sign may
be required.

In addition, there are some other cases that could be viewed before making the
conclusion of Mr Barracks case. A term may be incorporated where there is a previous,
consistent course of dealing.The party relying on the clause must show:
a) course of dealing - the previous occasions must be sufficiently
numerous and frequent:
b) the course of dealing must be consistent;
c) there must be a reasonable expectation that the same terms should be
included in the subsequent contract





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Case 5:
Hollier v. Rambler Motors ( AMC ) Ltd [1972] 2 QB 71 acts
Walter Hollier took his Rambler car for garage repairs. He had been to this garage
on three or four occasions in the past five years before, and he had usually signed an
invoice which said the

"company is not responsible for damage caused by fire to customers cars on the
premises."

He did not sign the form on this occasion. Unfortunately, some wiring in the
garage was faulty. Rambler Motors Ltd had negligently failed to inspect or maintain it. A
fire broke out and burnt down the garage, with Mr Hollier's car in it. Mr Hollier sued
Rambler Motors Ltd for the cost of his car.

Held:
Court of Appeal held that a previous course of dealing did not incorporate the
term, because there was neither a regular nor consistent course of dealings. It went on to
ask what would have happened were it incorporated, and held that the exclusion clause
would still not have been effective to save Rambler Motors Ltd for liability, because it
should be construed against the person relying on it (contra proferentum) and this clause
covered more than negligence. A reasonable person would think liability for other things
beyond the garage's own control would be excluded, but not the garage's own fault.
Salmon LJ observed the following.

No doubt merchants, tradesmen, garage proprietors and the like are a little shy
of writing in an exclusion clause quite so bluntly... Clearly it would not tend to attract
customers, and might even put many off in order for the clause to be effective the
language should be so plain that it clearly bears that meaning. I do not think that
defendants should be allowed to shelter behind language which might lull the customer
into a false sense of security
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He refers to Scrutton LJ in Rutter v Palmer [1922] 2 KB 87 saying a clear clause
excluding negligence liability "will more readily operate to exempt him." Also, in
Alderslade v. Hendon Laundary Ltd [1945] KB 189, Lord Greene MR was not seeking to
extend the law, and here was quite different, because the reasonable person would see a
number of other causes of fire. It would surprise an ordinary person if it applied to a fire
caused by the garages own negligence (rather than an external cause). If they wanted to
make exclusions for their own negligence they ought to have done so in far plainer
language


In addition, Wondernet is Barracks favourite theme park. If this means that he is
a frequent visitor, and a frequent passenger on the chair lift (further evidence of this is
required) this may be sufficient to constitute a course of dealing.

Case 6:
Eggleston v Marley Engineers Pty Ltd and B.K. & J.G. Mewett (1979) 21
SASR 51

Fact
This case involved the supply of a crane. The documentation signed on the
completion of the job required the hirer to agree to indemnify the supplier. On a
subsequent hiring from same supplier, injury resulted to the employee, by the negligence
of the driver and the hirer. The judge found that the hirer knew that the form contained
conditions but had not read them. Devlin in McCutcheon suggests that knowledge of the
actual terms must be actual, not constructive. House of Lords in Hardwick distinguished
McCutcheon on the basis that there had been a change in the last transaction from the
previous practice, whereas in Hardwick, the transaction was consistent with it. Both cases
considered in Hill and Co, where the form was signed after the carriage of the machinery.
The form was said to be an acknowledgment that the carriage was subject to various
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terms and conditions. There had been some ten previous deliveries, but no confirmation
of any actual knowledge.

Held:
Hill held that on the first occasion, the document clearly was not contractual, and
there was no reason to see why it should be different after that. The judge said that I
think that documents of this sort should be seen as contractual and that general
knowledge of conditions should be sufficient to incorporate. However I should follow the
full court of another state in Hill, "even though not fully convinced of its correctness" and
hold that due to the lack of knowledge of the contents, the term was not incorporated into
the contract of hire of the crane.
Other Cases that could also be considered before proceeding for the conclusion:

Case 7
Facts:
Thompson v LMS Railway (1930) 1 KB 41
The plaintiff who could not read gave her niece the money to buy an excursion
ticket. On the face of the ticket was printed Excursion, For Conditions see back; and on
the back, Issued subject to the conditions and regulations in the companys time-tables
and notices and excursion and other bills. The conditions provided that excursion ticket
holders should have no right of action against the company in respect of any injury,
however caused. The plaintiff stepped out of a train before it reached the platform and
was injured.

Held:-
The trial judge left to jury the jury the questions whether the defendants had taken
reasonable steps to bring the conditions to the notice of the plaintiff. The jury found that
they had not but the judge, nevertheless, entered judgment for the defendants. The Court
of Appeal held that the judge was right. The Court thought that the verdict of the jury was
probably based on the fact that the passenger had to make a considerable search to find
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the conditions; but that was no answer. Lord Hanworth MR said that anyone who took
the ticket was conscious that there were some conditions and it was obvious that the
company did not provide for the price of an excursion ticket what it provided for the
usual fare. Having regard to the condition of education in this country, it was irrelevant
that the plaintiff could not read.

Case 8
Sugar v London, Midland & Scottish Railway Co (1941) 1 All ER 172
Facts:-
The plaintiff purchased a railway ticket which contained on its face the words: For
conditions see back. However, these words were blotted out by a date stamp, which the
defendant railway had put on the ticket. While leaving the station at her destination, the
plaintiff walking along a poorly lit passage fell into a hole made by workmen making
repairs and sustained injuries, the plaintiff sued for damages. The defendant relied on the
exclusion on the back of the ticket, which supported to protect them against claims for
negligence.

Held:-
The obliteration of the words on the front of the ticket had denied the plaintiff the
reasonable sufficient notice necessary to make the words on the back part of the contract.
Had the words not been obliterated, the plaintiff would have been bound by the
conditions even though neither she nor her husband could read. If an exemption clause is
not visible because the ticket is folded, there is insufficient notice. Following the logic of
Sugar v London, Midland & Scottish Railway Co (1941), above, where the notice given
by way of the ticket is not readily visible, it is insufficient notice to make the exemption
clause part of the agreement.




15

Conclusion on Mr. Barrack vs Wondernet case.

After going through above cases and analyze how the cases started and contested
in the Court of Appeal and how the verdict was given and why it was granted in such a
way. The plaintiff Mr. Barrack , reasonable notice were given to him before the ticket
was purchased whereby there were a notice Look at your ticket, Conditions apply above
the ticket booth which he easily and visibly should have read it before purchasing the
ticket. After the ticket is purchased ,there are also words indicating See Back which
apparently gives the information that Wondernet is not eligible for any injuries or
damages for the visitors , anybody riding Wonder world chair lift does so entirely at his
or her own risk.

During the malfunction of the ride which Mr. Barrack joined, there was clear
announcement made to the passengers that due to difficulties restarting the ride, the fire
service department will be called and all of the passengers meantime were required to
stay calm and some refreshments will be supplied during this period.

Even Wondernet had made clear their terms and conditions of the safety
measurements are not covered if any injuries or damages occurred during the ride, and
given enough alarm to the passengers stay calm while they are re-moved safely during
the malfunction of the ride , Mr. Barrack took the risk and made his own attempt to get
out from his or her seat which accidentally causing injuries to him or her.

Held:-
The plaintiff has been informed to read the ticket for terms before purchasing it
and there are also signs requesting to read at the back upon purchasing the ticket , there
are also clear announcement made during the malfunction to the passengers to stay put at
their sit till removed safely , despite all this Mr. Barrack took his own decision which
finally ending up getting injured ,he surely will lose this case in the Court of Appeal.

16

QUESTION 2

Mr. Aiyoo bought a bag of charcoal from Super Sdn. Bhd , so that he and his
friends could enjoy themselves sitting around the fire-place outside their chalet in
Frasers Hill. However, the bag of charcoal contained an explosive device which
exploded when Mr. Aiyoo lit the fire. Mr. Aiyoo was badly injured .Advise Mr. Aiyoo as
to whether he can bring any legal action against Super Sdn. Bhd under the Sale of Goods
Act 1957.

There are few examples of cases that can be discussed before any conclusion can
be made for the case of Mr. Aiyoo whereby he could take legal action against Super Sdn.
Bhd.

Case 1
Thornett and Fehr v Beers & Sons (1919) 1 KB 486
To have the benefit of the condition of merchantable quality implied by section
16(1)(b) , the seller must satisfy the following conditions:
-the goods must be bought by description
-the goods must be bought from seller who deals in goods of that description
(whether he is the manufacturer or producer or not).
But if the buyer has examined the goods , there is no implied conditions as
regards defects which such examination ought to have revealed : Thornett and Fehr v
Beers & Sons (1919) 1 KB 486.

Facts:-
A buyer of barrels of glue inspected the outside of the barrels .Had he looked
inside the barrels he would have seen there was a defect in the glue.

Held:-
Because of the examination, the seller was under no responsibility for the defect.
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Section 16(1)(b) goes beyond merely requiring the seller to take reasonable care
that the goods he sells are merchantable .It imposes an absolute liability on the seller
whether or not he is fault and also holds him absolutely liable for the manufacturers or
producers defects. Thus, where the implied condition is activated, the fact that seller
could not have, by exercise or reasonable care, identified and eliminated the defect is not
a defense.

Case 2:
Wilson v Ricket, Cockerall& Co. Ltd [1954
Facts:
In June, 1951, Mrs. Wilson ordered one ton of Coalite from Rickett Cockerell &
Co. Ld., and it was delivered and paid for. In November, 1951, she took from the bin
some of the material which they had delivered to her and which she thought was Coalite.
She made up the fire with it on November 26 at about 7.30 p.m., because she and her
husband wanted to listen to an item on the wireless which lasted from 7.30 p.m. until 8
p.m. Shortly before eight o'clock there was an explosion in the grate. A thick cloud of
black smoke came out, the whole basket which held the Coalite was shot forward, the
heavy curb was pushed forward, and most of the Coalite was scattered about the room,
some of it falling on to Mrs. Wilson's dress. Bits of Coalite were found sticking to the
wallpaper. The damage was considerable and it cost 117 4s. 1d to put right. Fortunately,
the plaintiffs were themselves uninjured. They now claim from Messrs. Rickett Cockerell
& Co. Ld. for the damage done to the room and the furniture.

Held:-

The judge has found that the explosion was due to something in the consignment
which the defendants delivered. It was not a piece of Coalite itself, but something that
came with it, such as a piece of coal, in which was embedded an explosive. The
offending piece had not come from the manufacturers of the Coalite, but it had got mixed
with it in the course of transit, such as in a coal truck or in a lorry. It was certainly in the
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consignment before it was delivered to the plaintiffs. The judge has found that neither of
the coalmen employed by the defendants was negligent, nor were the plaintiffs negligent,
in not detecting it; but, nevertheless, it did the damage, and the question is whether the
plaintiffs can recover their loss from the coal merchants.

The judge for himself would have held that the plaintiffs could have recovered,
but he felt that he ought to follow a decision of the Court of Session in Scotland, Duke v.
Jackson. In that case a bag of household coal purchased from a coal merchant contained a
detonator which exploded while the coal was being burned in the kitchen fire. The
householder lost his eye, but the Court of Session held that, on the facts alleged in the
pleadings, there was no breach of the condition implied under section 14 (1) of the Sale
of Goods Act, 1894. The reasoning of the Court of Session was after this wise: the coal,
as coal, was all right; it was fit for its purpose; the trouble was that there was something
in it which the householder did not purchase, namely, a detonator; and as he did not
purchase it, he could not complain of it as a breach of contract under section 14 (1); but
only for negligence, if there was any.











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Case 3
Godley v Perry (Burton & Sons (Bermondsey) Ltd, Third Party, Graham .
Fourth Party (1960) 1 All ER 36

By section 17(2)(c) there is an implied condition in a sale by sample that the
goods shall be free from any defect rendering them unmerchantable which would not be
apparent on reasonable examination of the sample. Godley v Perry (Burton & Sons
(Bermondsey) Ltd, Third Party, Graham . Fourth Party (1960) 1 All ER 36.

Facts:-
A retailer purchased from wholesaler a quantity of toy catapults, the sale being by
sample .One of them was sold to a small boy who injured his eye when it broke because
of its faulty construction . The retailer was held liable for damages to the boy and claimed
an indemnity from the wholesaler. The defect in the catapult would not have been
apparent on a reasonable examination of the sample, and had not been discovered when
the retailer pulled back the elastic of the catapult.

Held:-
(By the Queens Bench Division) .The wholesaler was liable for the breach of
section 15(2) (c ) of the UK Sale of Goods Act 1893 (the equivalent of section 17(2) (c)
of the SOGA). The test made by pulling back the elastic was all that could reasonably be
expected of a potential purchaser.It should be noted that most sales by example are also
sales by description to which section 15 applies.







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Case 4:
Frost v Aylesbury Dairy Co Ltd2
Facts:-
Milk was supplied by the defendants who were dealers in milk. A breach of the
implied condition of fitness for purpose was established by proof that the milk contained
typhoid fever germs. The sellers said that they had taken special precautions to ensure
that only pure milk would be supplied. The milk was obtained for the purpose of human
consumption and in the circumstances it was clear that the buyer had relied on the sellers'
skill or judgment. There was no doubt that it was in the course of the sellers' business to
supply goods described as 'milk'. The case also illustrates that liability of sellers is strict
in relation to purpose (and quality) since the defect in the goods was latent

Held:-
Asking for milk was sufficient to make its purpose known to the seller. The seller
was, therefore, liable even though the defect was not discoverable at the time of sale.

Conclusion of Mr.Aiyoo whether to proceed sues Super Sdn. Bhd.

Mr.Aiyoo should proceed to sue Super Sdn.Bhd because they are surely the
retailer and need to be responsible to inspect the goods sold to Mr.Aiyoo . as explained in
Case 3 above , Super Sdn. Bhd have all right to claim an indemnity from the wholesaler
this charcoal was bought because it is the wholesaler responsibility in making sure the
charcoal that are packed inside the packaging are safe to use at any point and will not
cause any harm to the end user side purchasing this charcoals from their respective
retailers.The retailers would have done their part in making sure the charcoals
description is within requirement from outside the packaging but they are not to be
blamed for the safety.



21

REFERENCES

1. Question 1- Slide 29 to 49
2. Question 2- Slide 12 to 23.