BUSINESS LAW (Tutorial 8)

Suggested Answer:

1. For apply Sale of Goods Act, 1957, it must be a goods. According to Section 2
Sale of Goods Act, 1957, goods as meaning ‘every kind of movable property
other than actionable claims (suing another person for a debt or for any other
person) and money, and includes stock and shares, growing crops, grass, and
things attached to or forming part of the land which are agreed to be severed
before sale or under the contract of sale.’ Therefore, land is excluded from the
Sale of Goods Act, 1957.

For apply Sale of Goods Act, 1957, it must be a contract of sale. According to
Section 4(1) Sale of goods Act, 1957, contract of sale as a contract whereby the
seller transfers or agrees to transfer to property in goods to the buyer for a price.
Therefore, a sale occurs when the ownership or property in goods passes or its
transferred to the buyer.

(a) When Ahmad agrees to exchange his pen for Thomas’s watch, is it a goods? Here,
Section 2 Sale of Goods Act, 1957 applied because both pen and watch is a
movable property. However, Section 4(1) Sale of goods Act, 1957 does not
satisfied because barter agreement exchange something without price, that is
exchange the pen and watch without price. Therefore, Sale of Goods Act, 1957
cannot apply.

(b) When Jenny agrees to sell her house to George for RM 200000, is it a goods?
Here, Section 2 Sale of Goods Act, 1957 doesn’t applied because house is not a
movable property. Therefore, Sale of Goods Act, 1957 cannot apply.

(c) When Frank agrees to buy shares in ABC Sdn Bhd from Sam for RM10000, is it a
goods? Here, Section 2 Sale of Goods Act, 1957 is applied because shares is a
movable property. And Section 4(1) Sale of Goods Act, 1957 applied because t. e
price of shares is RM10000. Therefore, Sale of Goods Act, 1957 applied.

(d) When Tan wants to buy a TV set from Fella Design for RM2000 to be paid over a
twelve months period by equal installments, is it a goods? Here, Section 2 Sale of
Goods Act, 1957 applied because TV set is a movable property. And Section 4(1)
Sale of Goods Act, 1957 applied because the price of TV set is RM2000.
Therefore, Sale of Goods Act, 1957 applied.

3. For the Sale of Goods Act, 1957 to applied, it must be a goods. Goods is defined
in Section 2 Sale of Goods Act, 1957, as ‘every kind of movable property other
than actionable claims (suing another person for a debt or for any other person)
and money, and includes stock and shares, growing crops, grass, and things
attached to or forming part of the land which are agreed to be severed before sale
or under the contract of sale.’ Therefore, land is excluded from the Sale of Goods
Act, 1957. Here, woolen clothes is a movable property. Therefore, Sale of Goods
 Act, 1957 can applied.

For the Sale of Goods Act, 1957 to applied, it must be a contract of sale. Contract
of sale is defined in Section 4(1) Sale of goods Act, 1957 as a contract whereby
the seller transfers or agrees to transfer to property in goods to the buyer for a
price. Therefore, a sale occurs when the ownership or property in goods passes or
its transferred to the buyer. Is there a contract of sale there? There is a contract of
sale because Vain already purchased the woolen clothes from Carrie’s shop.
Therefore, Sale of Goods Act, 1957 can applied.

According to Section 16(1)(a) Sale of Goods Act, 1957, circumstances where

there is an implied condition that goods are reasonably fit for a particular purpose.
To applied this section, there must be satisfied 5 conditions. If any one of this
condition do not satisfied, cannot sue under this section. First, sale must be in the
ordinary course of business. Here, the sale occurred in the ordinary course of
business because Vain purchased the woolen clothes from Carrie’s shop which
specializes in the winter wear. Second, the buyer must expressly inform the seller
of the special purpose. If the buyer do not inform the seller, the buyer cannot sue
the seller. Here, Vain do not expressly inform Carrie she have sensitive skin.
Therefore, Vain cannot sue Carrie for any implied condition as to fitness for
particular purpose – Section 16(1)(a) Sale of Goods Act, 1957.

4. For the Sale of Goods Act, 1957 to applied, it must be a goods. Goods is defined
in Section 2 Sale of Goods Act, 1957, as ‘every kind of movable property other
than actionable claims (suing another person for a debt or for any other person)
and money, and includes stock and shares, growing crops, grass, and things
attached to or forming part of the land which are agreed to be severed before sale
or under the contract of sale.’ Therefore, land is excluded from the Sale of Goods
Act, 1957. Here, chicken feed is a movable property. Therefore, Sale of Goods
Act, 1957 can applied.

For the Sale of Goods Act, 1957 to applied, it must be a contract of sale. Contract
of sale is defined in Section 4(1) Sale of goods Act, 1957 as a contract whereby
the seller transfers or agrees to transfer to property in goods to the buyer for a
price. Therefore, a sale occurs when the ownership or property in goods passes or
its transferred to the buyer. Is there a contract of sale there? There is a contract of
sale? There a contract of sale because Ali ordered some chicken feed from Sam.
Therefore, Sale of Goods Act, 1957 can applied.

According to Section 15 Sale of Goods Act, 1957, implied condition that in a sale
of goods by description, the goods must correspond with the description. Here,
the chicken feed described as being free from antibiotics as ordered by Ali.
However, the chicken feed did not fit the description. Therefore, Ali can sue Sam
for his losses under this section.
 5. For the Sale of Goods Act, 1957 to applied, it must be a goods. Goods is defined
in Section 2 Sale of Goods Act, 1957, as ‘every kind of movable property other
than actionable claims (suing another person for a debt or for any other person)
and money, and includes stock and shares, growing crops, grass, and things
attached to or forming part of the land which are agreed to be severed before sale
or under the contract of sale.’ Therefore, land is excluded from the Sale of Goods
Act, 1957. Here, the machine is a movable goods. Therefore, Sale of Goods Act,
1957 can applied.

For the Sale of Goods Act, 1957 to applied, it must be a contract of sale. Contract
of sale is defined in Section 4(1) Sale of goods Act, 1957 as a contract whereby
the seller transfers or agrees to transfer to property in goods to the buyer for a
price. Therefore, a sale occurs when the ownership or property in goods passes or
its transferred to the buyer. Is there a contract of sale there? There is a contract of
sale? There a contract of sale because Kenny purchased the machine. Therefore,
Sale of Goods Act, 1957 can applied.

According to Section 16(1)(b) Sale of Goods Act, 1957, goods must be of

merchantable quality. Proviso to this section provides that the subsection does not
apply where the buyer has examined the goods as regards defects which such
examination ought to have revealed.

According to Section 32 Consumer Protection Act, 1999, where goods are

supplied to a consumer there shall be implied guarantee that the goods are of
acceptable quality.

According to Section 15 Sale of Goods Act, 1957, implied condition that in a sale
of goods by description, the goods must correspond with the description. Here,
Kenny purchased the machine by relying on the description in the brochure.
Although Kenny had already try it out the machine, he still cannot know whether
the machine correspond with the description or not.

According to Beale v. Taylor (1967), the seller of a car advertised it as a “Herald

Convertible, White, 1961”. The buyer viewed the car before agree to buy it. Later
he discovered that while the rear halve of the car was part of a 1961 Herald
Convertible, the front part was part of an earlier model. It was held that he could
sue under Section 15 of Sale of Goods Act, 1957 because even though the buyer
had seen the goods defeat may be concealed from the buyer.

In conclusion, Kenny cannot sue under Section 16(1)(b) Sale of Goods Act, 1957.
He can only sue under Section 15 Sale of Goods Act, 1957.

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***According to Miss Parimaladevi, question 2 would not be coming in exam.