Sales of goods act – Conditions

Legal Environment of Business

 Prepared By
Manu Melwin Joy
Assistant Professor
Ilahia School of Management Studies
Kerala, India.
Phone – 9744551114
Mail – manu_melwinjoy@yahoo.com

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 Definition

• 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.
 BALDRY Vs MARSHALL CASE
• In this case, B consulted M, a motor car dealer, for a car
which is suitable for touring purpose. M suggested
“Buqatti” car and B accordingly purchased it. The car
turns out to be unfit for touring purpose. It was held that
suitability of a car for touring purpose is a condition. It
was so vital that, if it is not fulfilled, it would defeat the
very purpose of contract for which B bought the car. He
was therefore entitled to reject car and get his money
back from the dealer.
 Essential features of a condition
• It is essential to the main
purpose of the contract.
• The non fulfillment of
condition causes irreparable
damage to the aggrieved party
which would defeat the very
purpose for which the contract
is made.
• The breach of contract gives a
right to the aggrieved party to
rescind the contract and
recover the damages for
breach of condition.
 Implied conditions
• Conditions as to title of
goods sold – In every
contract of sale, there is
an implied condition that
the seller has got a right
to sell the goods.
 Example
• A purchased a motor car from B and
used it for four months and
subsequently it was found that it
belonged to C as it was stolen from B
from C. So A was forced to surrender
the motor car to C. A filed suit against B
for recovering the price amount. It was
held that A was entitled to recover the
full price even though he had used the
motor car for four months because of
the breach of implied conditions as to
title (Rowland Vs Diwali).
 Implied conditions
• Goods sold should
correspond to description
– Where there is a
contract of sale of goods
by description, there is an
implied condition that the
goods shall correspond
with that description.
 Example
• A wants to sell his cycle. He
represents B, an intending buyer
who has not seen the cycle that
it is a new cycle manufactured in
a particular company. B agrees
to purchase it and on delivery, B
finds that the cycle is old and
manufactured in a different
company. In this case, B can
repudiate the contract.
 Implied conditions
• Condition as to quality or
fitness – This is applicable if
– The goods are needed for a
particular purpose which the
buyer brings to the
knowledge of the seller,
either expressly or impliedly.
– The buyer relies on the
seller’s skills and judgment.
– It is seller’s duty to supply by
description.
 Example
• In one case, an order was placed for
six lorries to be used for heavy
traffic in a hilly country. Accordingly,
Lorries were supplied and it was
found that they were unfit for the
purpose. It was held that order was
for such lorries which would fit for a
particular purpose namely heavy
traffic in a hilly country and
therefore there was a breach of
condition as to fitness.
 Implied conditions
• Conditions as to
merchantability – Goods
are of mercantile quality if
– They are reasonable by the
description by which they
are known in the market.
– They are purchased for
personal use, they must be
reasonably fit for the
purpose for which they are
generally uses.
 Example
• In Grant Vs Australian Knitting Mills,
A purchased some woolen dress
from a company dealing in such
goods and after wearing them, A
contract a skin disease due to the
excessive presence of chemicals. It
was held that the article were not
merchantile as they could not be
worn next to the skin and that the
company was liable to pay damages.
 Implied conditions
• Condition as to
wholesomeness -
Wholesomeness means
physical health. The
provisions supplied must
not only correspond to
description and
merchantable but also
should promote physical
health.
 Example
• In Frest Vs Aylebury Diary Co., A
purchased milk from B, the Diary.
The milk contained typhoid germs,
as a result of which his wife
contracted typhoid fever and died.
Hence A had to incur medical
expenses and was put to loss of
services and incurred funeral
expenses. A filed a suit for damages
and the court held that the
company was liable to pay damages.
 Implied conditions
• Condition as to sample –
Whenever we want to
purchase goods, generally
we see some sample of
those goods which we want
to purchase. After seeing
the sample and satisfying
ourselves with the sample,
we will place order asking
the dealers to supply goods
which would correspond to
the sample.
 Example
• In Ruben Ltd Vs Fair Brosa & Co, A
agreed to supply B a particular
type of vulcanized rubber and the
sample was shown and it was flat
and soft. But the goods supplied
were crinkly and folded. Ina suit
by B, A was held liable on the
ground that the good were not in
accordance with the sample.