Definition

section 4 (1) of The Sale of Goods Act

• that a contract wherein the seller transfers or agrees
to transfer the property in goods to the buyer for a
price.
• There may be a contract of sale between one part
owner and another.
• In other words, a sale occurs when the ownership or
property in goods passes to the buyer. This means
that there must be goods, money consideration or can
be called as price and transfer of property.
Formation of
Contract
* In Bekalan Sains P&C Sdn Bhd v Bank Bumiputra
Malaysia Bhd, [2011] 5 MLJ 1, Abdul Malik Ishak
JCA stated the following key characteristics are
essential elements in the formation of any
contract which are
1. offer
2. acceptance
3. consideration
4. intention to be bound
5. mutuality
6. capacity
7. Legality
-as refer to Contract Act 1950
* section 5(1) a contract of sale is made by an
offer to buy or sell goods for a price and the
acceptance of such offer

* It is clear that the essence in the formation of

contract is the acceptance of the offer on
terms mutually agreed between the
contracting parties
Formalities of the
contract

*Section 5(2) of SOGA 1957

Subject to any law for the time being in
force, a contract of sale may be made in
writing or by word of mouth, or partly in
writing and partly by word of mouth or may
be implied from the conduct of the parties.
Subject-matter of the
Contract
* It may involve goods or service that are
presently available or goods that may be
available in the future
* Section 7 SOGA 1957
where there is a contract for the sale of specific
goods, the contract is void if the goods without
the knowledge of the seller have, at the time
when the contract was made, perished or
become so damaged as no longer to answer to
their description in the contract
• Section 8 SOGA 1957
where is an agreement to sell specific goods, and
subsequently the good, without any fault on the part of
the seller or buyer, perish, or become so damaged as no
longer to answer to their description in the agreement,
before the risk passes to the buyer, the agreement is
thereby avoided

An agreement will be voided if the goods are marred after

an agreement but before the sale the agreement
Price
* Definition- section 2 SOGA 1957
the money consideration for a sale of goods

* Section 9 SOGA 1957 ascertainment of price

(1)The price in a contract of sale may be fixed by the
contract or may be left to be fixed in manner thereby
agreed or may be determined by the course of dealing
between the parties.

(2)Where the price is not determined in accordance with

the foregoing provisions, the buyer shall pay the seller
a reasonable price.
What is a reasonable price is a question of fact dependent
on the circumstances of each particular case.
 Conditions and Warranties
* A stipulation in a contract of sale with reference to goods which
are the subject thereof maybe a condition or a warranty

* A condition is ‘a stipulation essential to the main purpose of

the contract, the breach of which gives rise to a right to treat
the contract as repudiated’ -section 12(2) of The Sales of Goods
Act 1957

* A warranty is ‘ a stipulation collateral to the main purpose of

the contract, the breach of which gives rise to a claim for
damages but not to a right to reject the goods and the contract
as repudiated’
-section 12 (3) of The Sales of Goods Act 1957
Implied Terms In
Conditions and Warranties

* The Sale of Goods Act 1957 implies a number of

stipulations in every contract of sale of goods.
* However, these implied terms apply only when
the parties to the contract of sale have not
excluded or modified them.
* These implied terms, laid down in sections 14 to
17 of the Sale of Goods Act 1957
Section 14 (a) Implied
Condition as to title
* the seller has the right to sell the goods in the case of a
sale and in the case of an agreement to sell, will have
the right to sell the goods when the time when the
property is to pass
* This condition is amount to a guarantee.
* The main purpose of a contract for the sale of goods is to
transfer ownership to the buyer.
* If the seller does not have title, then there has been a
total failure of consideration. A breach of this condition
entitles the buyer to repudiate the contract.
Case- Rowland vs Divall (1923) 2
KB 500

Fact ： Rowland bought a car from Divall and used it for four
months before discovering that it had been stolen. Rowland then
had to hand over the car to the true owner.

Issue : whether Rowland could recover the full amount he had

paid from Divall even though he had used the car for four
months.

Held : although Rowland had the use of the car for some time, he
was entitled to recover the full price he had paid because Divall
had no right to sell him the car in the light of the car was stolen.
Rowland had failed to get the property (title) in the car, so there
was total failure of consideration.
Section 14 (b) Implied Warranty that the
Buyer shall have and Enjoy Quiet Possession
of the Goods

* This assumes that a third party will not come and claim to
be the true owner or that they have a right in the goods
after the sale has taken place.

* in a contract of sale, unless the circumstances of the

contract are such as to show a different intention, there is
an implied warranty that the buyer shall have and enjoy
quiet possession of the goods.

* This implied stipulation is merely a warranty and not a

condition. Therefore, a breach of this stipulation will not
entitle the innocent party to repudiate the contract.
Section 14 (c) Implied Warranty that
the Goods are Unencumbered

* There is an implied warranty that the goods are free from

any charge in favour of a third party who is unknown to
the buyer

* For example, storage charges which have to paid before

the goods can be collected.
 Section 15 Sale by Description

* ‘Where there is a contract for the sale of goods by

description, there is an implied condition that the goods
shall correspond with the description, and if the sale is by
sample, as well as by description, it is not sufficient that
the bulk of the goods corresponds with the sample if the
goods do not also correspond with the description.’

* The term " sale of goods by description" must apply to all

cases where the purchaser has not seen the goods, but is
relying on the description alone.
 Case- Varley vs Whipp (1900) 1
QB 513

Fact :
The buyer purchased a second-hand reaping machine
without ever having seen it. The seller had described it
as new the previous year and used it to cut only 50 or 60
acres. In reality, the machine was very old.

Held :
This was sale by description, and since the machine did
not correspond to its description, the seller was in
breach.
Section 16 Quality and fitness

Section 16 (1)(b) Goods Must be of

Merchantable Quality

‘Where goods are bought by description form a seller who

deals in goods of that description there is an implied
condition that the goods shall be of merchantable quality
provided that if the buyer has examined the goods, there
shall be no implied condition as regards defects which such
examined ought to have revealed. ’
 Case-David Jones Ltd vs Wills
(1934) 52 CLR 110
Fact :
Wills went to the shoe department of David Jones Ltd and told the
saleswoman that she wanted a comfortable of walking shoes
because she had a bunion on her foot.
After trying on a number of pair, she bought a pair which was
recommended by the saleswoman.
The third time that she wore the shoes the heel broke off one of
them, causing her to fall and break her leg.
The evidence showed that the shoes were not well made and that
the heels had not been properly attached to the shoes.

Held :
The shoes had been bought by description, there had been a
breach of the implied condition or merchantable quality.
Section 16 (1)(a) Goods Must be Reasonably Fit
for Purposes for which the Buyer Wants Them

‘ Where the buyer expressly or by implication makes known to

the seller the particular purpose for which the goods are
required, so as to show that the buyer relies on the seller’s
skill or judgement, and the goods are of a description which it
is in the course of the seller’s business to supply, there is an
implied condition that the goods shall be reasonably fit for
such purpos ：

provided that ， in the case of contract of sale of a specified

article under its patent or other trade name, there is no
implied condition as to its fitness for any particular purpose.
Case- Priest v Last [1903] 2 KB 148
Fact ：
The buyer who bought a hot-water bottle from the seller was a
chemist.
His wife uses the hot-water bottle and then after 5 times, the
bottle burst and the wife was scalded.
Evidence shows that, the bottle was not fit for use as a hot-
water bottle. The buyer claimed for damages.
The seller stated that, the buyer had not made known the
purpose for the hot-water bottle would be used.

Held :
The seller has entitled to recover the expenses in the treatment
of the buyer’s wife injuries. It is because the buyer relied on
the seller’s judgment and he had in fact used the hot-water
bottle for the usual purpose.
Exception for section 16 (1)(a)

* However, if the goods are required for a special purpose,

the buyer must expressly notify the seller of that purpose
and rely on the seller to provide him with a suitable
article.
* Thus, if the goods are required for a special purpose, that
purpose must be made clear to the seller.
* If the consumer suffers from any relevant peculiarities
that the seller should be aware of, disclosure is required
or the right to recovery is lost.
* If the buyer do not expressly notify for special purpose,
he will not get the recovery although suffering from the
goods.
Case-Griffiths v Peter Conway
Ltd (1939) 1 ALL ER 685

Fact :
a woman with abnormally sensitive skin bought a coat without
telling the salesman that she had sensitive skin.
She subsequently contracted dermatitis from wearing the coat.
Then, she sued the company for breach of fitness for purpose.

Held :
She was unable to recover for breach of fitness for purpose
because there was nothing in the cloth that would have
affected the skin of a normal person.
She had failed to disclose that she suffered from skin problems.
Section 17 Sale by sample

* (1) ‘a contract of sale is a contract of sale by sample where

there is a term in the contract express or implied to that
effect’
* (2) In the case of a contract for sale by sample there is an
implied condition—
(a) that the bulk shall correspond with the sample in quality;
(b) that the buyer shall have a reasonable opportunity of
comparing the bulk with the sample;
(c) that the goods shall be free from any defect rendering
them unmerchantable which would not be apparent on
reasonable examination of the sample.
* The buyer has a reasonable time to compare the bulk
with the sample .
* Once this has been done, acceptance is deemed to
have taken place.
* The right to reject the goods is then lost, although
the buyer may still sue for damages for breach of
warranty if the bulk does not correspond with the
sample.
* The goods must be free from any defect which would
not be apparent on a reasonable examination of a
sample.
 Case-Drummond vs Van Ingen
(1887)12 App Cas 284
Fact :
A manufacturing firm submitted a sample of material to cloth
merchants
Subsequently an order was made for a quantity of material of a
weight and quality equal to sample.
It was discovered that the cloth, when made into garments by
tailors who were the customers of the cloth merchants, split at the
seams and was therefore unsuitable for the purpose for which it was
intended, though it was equal to sample.

Held:
While the cloth was equal to the sample, this did not protect the
manufacturer where the defect could not have been discovered by a
reasonable examination, and so purchaser was not bound to accept
the material.