Tuesday, June 24, 2008

SALES OF GOOD ACT (SOGA)

.The primary law covering the sales of goods is SOGA 1957 (Rev1989) – primary source of law
a) SOGA 1957
b) Common law

.Peninsular Malaysia uses Sales of Goods Ordinance 1957
.Penang & Malacca state apply Sales of Goods Act 1893 (an English Act)
.For Sabah and Sarawak is Sales of Goods Act 1893 (an English Act)
.In 1989 the ordinance upgraded to be an act and called SOGA 1987 which apply to Penang and Malacca, leaving Sabah & Sarawak.
.Purpose of SOGA to regulate the transaction between Buyer and Seller
.Condition: Breach of contract will entitle to terminate the contract, claim for damages. The act introduce of implied condition and warranty.
.There are 5 implied conditions imposed by the act (Section 14, 15, 16 & 17)
.Implied terms is an attempt to protect consumers
.The scheme of consumer protection: Look at implied condition in total is a scheme of protection.
.Whether or not agreed to include to the contract, the law will implied this condition in the contract.

Section 14
Implied condition is to title

Section 15
Implied condition dealing compliance description

Section 16
Two implied condition:
a) merchantable quality
b) fitness for purpose

Section 17
Implied condition compliance with sample

SECTION 14
The seller must have the goods title to the goods
If the contract of sales between buyer and seller review that the seller not has a title to a goods, then the seller has breach the contract
Case:
Rowland v Divall
- buyer bought car from seller
- after 3 months, discover that the car has no title
- Buyer terminates the contract because of implied condition to the title


SECTION 15
. Goods sold must conform to the description given
. Implied condition to description due to transaction based on description given by the seller, eg. Catalogs, tv, internet, brochure
. The good deliver do not correspond to the description, the buyer have power to terminate the contract

Case:
Beaie v Taylor
- Buyer advertise a car for sale
- Described the car as 1961 model
- Buyer belief heavily on the description
- Buyer bought the car and discovers that only half is 1961 model
- Seller breach the implied of description

SECTION 16
. Two implied condition – merchantable quality and fitness for purpose
a. Merchantable quality is very difficult to define. Quality is good enough to restrict
b. Fitness for purpose is implied condition. Actually sec 16 does not automatically impose and implied condition as the fitness for purpose under sec 16.
. There is NO implied condition as to fitness for purpose
. Unless the seller is in a business of selling goods of that nature and the buyer rely heavily on the skill and judgment of the seller.

Case:
Grant v Australian Knitting Mills
- Grant enter a department store looking for underwear
- The underwear choose by Grant is made by wooden
- He bought the action under section 15 and 16.
- Court decided under sec. 15, because did not answer the description, breach implied as to description
- Under sec. 16, the underwear is not fit for the purpose

Priest v Last (hot water bottle)
- A hot bottle sold to buyer
- Put in hot water, close it tightly, about to use it, the hot water bottle explode
- Buyer relied on the skill of the seller to choose the product
- This case implied condition of fitness of purpose

Frost v Alylesbury Dairy Company (fresh milk)
- Supplied fresh milk
- Frost family drink contaminated milk and died of typhoid
- The contaminated milk is not human for drink, fitness for purpose

Khong Seng v Ng Tiong Kiat Biscuit Factory
- Khong Seng supply shortenings (fatty acid) to biscuit company
- The shortenings was very low quality, infect that is not suitable for making biscuit
- Ng Tiong refuse to pay for the shortenings
- Fall under fitness for purpose

SECTION 17
. The goods sold must correspond to the sample

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