Section 1.

- Introduction, UKBC-BENJAMI 459364666 (2021)

Section 1. - Introduction
Benjamin's Sale of Goods 11th Ed.

Consolidated Mainwork Incorporating First Supplement

Part 4 - Defective Goods

Chapter 10 - Classification of Statements as to Goods

Section 1. - Introduction

Types of statement
10-01 Express statements as to goods, made in connection with a contract of sale, may be divided initially into two groups:

oStatements involving no legal liability

In this category come mere puffs and certain statements of opinion or intention. 1

oStatements involving legal liability

2
In this category are misrepresentations inducing the contract (whether fraudulent, negligent or entirely innocent) ;
3
contractual promises separate from the main contract (collateral contracts) ; and contractual promises which are terms
of the main contract. 4 Within this last category it was formerly usual to subdivide further into warranties (less important
promises within the main contract) 5 and conditions (more important promises within the main contract) 6 ; but, as
will be later explained, 7 subsequent developments have either added a third category of intermediate or innominate
terms (promises which cannot be designated as conditions or warranties because the consequences of their breach may
substantially vary in importance) or possibly even called the whole division into question. Finally, it is possible for
misrepresentations that induce a contract to be incorporated into it when it is made, and so to attract the rules applicable
to contractual promises. 8

By whom statement made

10-02 Statements giving rise to dispute in a contract of sale are normally made by a seller and relate to the goods involved. But they
may sometimes be made by a buyer, 9 or even by a third party such as a manufacturer or a dealer “selling” on hire-purchase. 10
Indeed they do not always refer directly to the goods. Thus, in Riddiford v Warren, 11 it was represented by a buyer that he had
already been quoted a lower price for the goods by the seller’s agent. Discussion in this chapter is concentrated on statements
made by sellers relating to goods actually or prospectively the subject of sale: but the same or analogous principles may apply
to statements made by buyers and sometimes to those made by third parties. 12

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Classification of statements—fact or law?

10-03 The proper classification of statements is a matter of interpretation and therefore one of law. 13 But when disputes arise as
to exactly what was said and done, these are questions of fact; and when such cases were tried by jury the whole question
frequently had to be left to the jury. 14

Development of the law

10-04 The law in this area has been the subject of considerable change. Old cases demonstrate a reluctance to impose liability for
statements unless there was deceit, a tort which from 1889 onwards was narrowly defined, 15 or contractual liability was
clearly undertaken. Other categories of liability have, however, developed subsequently. Thus an equitable jurisdiction to
rescind contracts for non-fraudulent misrepresentation has evolved; separate or collateral contracts have been detected; and
liability for negligent statements has been established both in the common law of tort and by statute. Further, the categories in
which statements attract liability have been more broadly interpreted (though with some variation between law and equity) and
objective standards as to reliance on statements applied. All cases which are not comparatively recent should be read with these
developments in mind. Finally, the meanings to be attributed to the terms “warranty” and “condition”, much found in the old
cases and in the Sale of Goods Act, have changed considerably over the years. All this is explained below.

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 Section 5. - Warranties, UKBC-BENJAMI 459364669 (2021)

Section 5. - Warranties
Benjamin's Sale of Goods 11th Ed.

Consolidated Mainwork Incorporating First Supplement

Part 4 - Defective Goods

Chapter 10 - Classification of Statements as to Goods

Section 5. - Warranties

Contractual promises which are terms of the main contract (warranties)

10-05 Statements relating to goods sold may finally, of course, amount to contractual promises and as such will be terms of the main
contract. Such promises are usually referred to as warranties in the old cases and this term is often still used in considering
whether a statement is such that the maker is to be regarded as undertaking contractual liability on it. This usage arose because
before the development of assumpsit the statement gave rise to an action separate from those upon the main transaction. 99
Thus the development of the law as to contractual promises in sale is for a considerable period represented by the history of the
law as to warranties. The evolution of the law of warranty is complex. 100 The warranty was apparently originally conceived
of as sounding in tort. It retained this connotation for some time after the evolution of assumpsit (itself of tortious origin) and
was thought of in connection with the action of deceit. This led to difficulties in applying the idea of warranty to statements
as to the future performance of goods as opposed to those concerning their existing properties. 101 Once these difficulties were
overcome, however, there seems to have been a contrary tendency towards requiring a promise for all warranties, and thus not
regarding a statement of fact as a warranty at all. But as Chalmers said, 102 a representation may amount to a warranty, i.e. there
may be a statement of fact which is promised to be true, and this was in due course accepted. The course of development of the
law of warranty was different in the US, 103 for there the tortious background of warranty retained its prominence, and this led
to more ready inference of warranties from statements of fact inducing the contract. In England, however, the idea of warranty
has long been closely associated with that of contract, and it is clear that liability is only to be imposed where the person giving
the warranty can fairly be regarded as having made a contractual promise. 104

When is a statement a warranty?

10-06 The oldest cases were reluctant to hold statements to be warranties unless responsibility had been expressly undertaken. In
conformity with the tendency of developing law to rely on fixed ritualistic terms it seems that at one time the word “warrant”
had to be used. Thus, in Chandelor v Lopus, 105 it was held that a declaration that a goldsmith had affirmed a stone to be a
bezar was not sufficient to found a verdict for breach of warranty, for “the bare affirmation that it was a bezar stone without
warranting it to be so, is no cause of action.” Later cases took a somewhat broader view: in 1789 Buller J. said:

“… it was rightly held by Holt C.J. 106 … and has been uniformly adopted ever since, that an affirmation at the
time of a sale is a warranty, provided it appear on evidence to have been so intended.” 107

This statement is often cited and still provides the starting point of the modern English law. As already stated, a wider
interpretation of the idea of warranty, placing less reliance on intention and more on the simple fact of inducement to contract,
was adopted in the US; and some of the older English cases were also susceptible of such an interpretation. 108 Thus Benjamin
wrote:

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“In determining whether it was so intended, a decisive test is whether the vendor assumes to assert a fact of which
a buyer is ignorant or merely states an opinion or judgment upon a matter of which the vendor has no special
knowledge, and on which the buyer may be expected also to have an opinion and to exercise his judgment.” 109

This passage was adopted by the Court of Appeal in 1901, 110 but it was disapproved by the House of Lords in 1913 in Heilbut,
Symons & Co v Buckleton. 111 “It may well be” said Lord Moulton:

“… that the features thus referred to … may be criteria of value … but they cannot be said to furnish decisive
tests, because it cannot be said as a matter of law that the presence or absence of those features is conclusive of
the intention of the parties.” 112

Basis of the modern law

10-07 Although the modern English law therefore still starts from the dictum of Holt C.J. that “an affirmation at the time of a sale
is a warranty” provided it appears to have been intended as such, 113 the general tendency over the whole law of contract in
the 20th century to treat statements and acts objectively and to place emphasis on the impression they reasonably create 114 has
produced a clear movement towards the readier imposition of liability. 115 A well-known example of this trend is Dick Bentley
Productions Ltd v Harold Smith (Motors) Ltd, 116 where Lord Denning M.R. said:

“The question whether a warranty was intended depends on the conduct of the parties, on their words and
behaviour, rather than on their thoughts. If a representation is made in the course of dealings for a contract for the
very purpose of inducing the other party to act upon it, and actually inducing him to act on it, by entering into the
contract, that is prima facie ground for inferring that it was intended as a warranty. It is not necessary to speak of
it as being collateral. Suffice it to say that it was intended to be acted upon and was in fact acted on.” 117

In so far as it makes inducement the sole test of whether a statement is a contractual promise, however, this passage probably goes
too far. Salmon L.J. in the same case posed the more traditional test: “Was what [the defendant] said intended and understood
as a legally binding promise?”. The High Court of Australia has also reaffirmed the distinction between promissory and
representational statements, 118 and Lord Denning himself subsequently relied on the dictum of Holt C.J. in holding significant
statements not to be warranties. 119 It seems therefore that whether a statement is to be regarded as a warranty must be ascertained
objectively by asking whether the other party assumed, and a reasonable person in his position would have assumed, that the
representor was to be regarded as undertaking legal liability for his assertions. 120 Factors relevant to the ascertainment of
this are the importance of the statement, the relative knowledge and means of knowledge of the parties, and the possibility of
verification. There is also a tendency to look to the consequences of treating a statement as a warranty. These are prima facie
that the liability which the representor undertakes is strict and that he answers in damages on the basis that he must put the other
party in the same position as that in which he would have been if the statement had been true—viz., for the expectation loss. 121

Examples
10-08 In the Dick Bentley 122 case, a statement by a dealer as to the mileage of a second-hand car was held a warranty: on the other hand,
in Oscar Chess Ltd v Williams, 123 an innocent statement made by a private seller to a dealer that a car was a 1948 model (when

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in fact it was a 1939 model) was held not to be a warranty. In cases such as these, which were prior to the Misrepresentation Act
1967, the result may sometimes have been influenced by the tactics of the parties, in that buyers who wished to reject, but feared
that they had lost the right to do so for breach of condition by virtue of what is now the Sale of Goods Act 1979 s.11(4), might
seek to rescind as upon a misrepresentation rather than sue for damages for breach of warranty. 124 But there can be no doubt that
the relative standing of the parties is relevant to the question whether there is a warranty: private individuals, for example, may
less frequently be regarded as undertaking the strict liability of a warranty. 125 Thus the above two cases can be explained on the
basis that statements may be warranties when made by dealers, though they would not be warranties if made by private sellers;
for the dealer may be in possession of special knowledge, expertise and means of information not available to ordinary persons.

Obvious defects
10-09 As a matter of interpretation it seems reasonable that an express warranty should not normally be regarded as covering obvious
defects which the buyer must have noticed. 126 The same would be true of a defect that would be obvious on examination even
to a person possessed of no technical knowledge, provided that such examination was actually carried out. 127 But where a
warranty is found, in general the maker undertakes strict liability for what he asserts. Therefore, it does not seem right normally to
imply any diminution of a warranty made where there is an examination, and the defect is one which would only be discoverable
on careful or expert examination 128 ; still less is it right to imply such diminution on the basis that an examination could have
been carried out, but was not. Further, it seems on principle that a warranty may sometimes be so phrased as to cover even
obvious defects. 129 All matters such as these may, however, be relevant where a statement is sought to be construed as a
misrepresentation inducing the contract or as founding liability upon a collateral contract or in tort.

Time of warranty
10-10 There is no difficulty in principle about liability for a warranty made before the sale 130 :

“If, upon a treaty, about the buying of certain goods … the seller should warrant them, and then the buyer should
demand the price, and the seller should set the price, and then the buyer should take time to consider for two or
three days and then should come and give the seller his price; though the warranty here was before the sale, yet
this will be well, because the warranty is the ground of the treaty.” 131

But of course, the fact that a statement was made before the sale may well be relevant to the question whether it is deemed
to be incorporated in it. Thus, in Camac v Warriner, 132 there was a sale of a material called oropholithe. The seller’s agent
had described this to the buyer eight months earlier as being suitable for roofing, though the buyer had previously bought it
for flooring. It was held that the sale had not been “shown to have been made with any reference” to the representation and
that there was therefore no liability in respect of it. Nowadays, however, the further questions would arise as to whether the
representation induced the contract, 133 or could be treated as a collateral warranty. 134

Warranty of future events

10-11 As previously explained, 135 the old idea of warranty was associated with that of deceit, and the implication was that warranties
were affirmations of fact only. Since the amalgamation of warranty into the general law of contract, however, there is no difficulty

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as to warranties for the future: goods are frequently warranted for a year or some other period, and this is in effect a promise to
be answerable for any defect that may manifest itself within that period. 136 Such a warranty would, however, normally have
to be clearly proved, and would not easily be implied from a mere assertion of present condition. And sometimes warranties
in this form are to be interpreted as warranties of soundness at the time of buying only, liability for which is extinguished if
no complaint is made within the specified period. 137

Warranty as collateral
10-12 Many cases treat warranties as collateral, and indeed the Sale of Goods Act 1979 s.61(1) defines a warranty as “an agreement
with reference to goods which are the subject of a contract of sale, but collateral to the main purpose of such contract”. This,
however, is directly derived from the earlier notion that the warranty was separate from the sale, 138 and is a misleading usage at
the present day, for it makes the warranty which is a term of the contract easy to confuse with the warranty which is part, or the
subject, of a genuine collateral contract separate from the main contract, breach of which may not lead to the same consequences
as breach of the main contract. 139 Rather than use this confusing terminology in respect of terms of the contract, 140 it would
be better to concentrate on distinguishing between contractual promises which are terms of the main contract on the one hand,
and representations and contractual promises which are not, on the other.

Warranty as less important promise

10-13 It is explained in the following paragraphs that in the 19th century a special use of the word “condition” grew up, which treated
the word as meaning a promise (or warranty) any breach of which would, in accordance with the parties’ supposed intentions,
entitle the innocent party to treat the contract as discharged. 141 This led to a further and specialised use of the word “warranty”,
which became attributed to and reserved for the remaining, less important terms of a contract, breach of which did not give rise
to such a right: viz., the promises that were not conditions. Thus the Sale of Goods Act s.61(1) continues by indicating that a
breach of warranty “gives rise to a claim for damages, but not to a right to reject the goods and treat the contract as repudiated”.
This associates a further confusion with the word. However, as will be explained, 142 the law has developed towards a position
in which the significance of this dichotomy is much reduced.

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 Section 6. - Conditions, UKBC-BENJAMI 459364667 (2021)

Section 6. - Conditions
Benjamin's Sale of Goods 11th Ed.

Consolidated Mainwork Incorporating First Supplement

Part 4 - Defective Goods

Chapter 10 - Classification of Statements as to Goods

Section 6. - Conditions

Conditions: difficulty of term

10-14 The term “condition” is one that causes great difficulty in law. Among many uses and meanings, the way of defining a condition
most relevant to the law of contract is perhaps as an event upon which an obligation or obligations of one or the other party, or
of both parties, depend. 143 It is sometimes suggested that the term should also be used to refer to something upon which the
existence of the contract depends, but if the position really is that there are no binding obligations until the condition occurs,
i.e. either party can withdraw pendente condicione, there is no legal relationship at all until the condition occurs and little
significance for the concept. 144 This latter usage comes from the Roman law, where the position was slightly different and the
term consequently more appropriate. 145 It may be suggested therefore that the better use of the word “condition” is to refer
to an event qualifying the operation of a promise of the seller or of the buyer or of each. An example occurs where a seller
agrees to supply goods subject to availability, which latter he may not necessarily promise. 146 As regards the buyer, there may
be a condition (as with a sale on approval) that the goods meet certain requirements, which is not necessarily promised by the
seller. 147 The obligation of both parties is qualified where, for example, the goods must be valued or tested by a third party.

Promises with regard to conditions

10-15 Where promises are qualified in this way, the parties may make, or be regarded as making, various further promises about
the performance or fulfilment of any condition. A party may make no promise except not actually to prevent fulfilment of the
condition. 148 Again, he may promise to take certain steps towards providing facilities for the fulfilment of the condition, e.g.
make applications, or test machinery to see if it meets requirements. 149 Finally, he may promise that the condition will occur.
The idea of a promise is thus different from that of condition and the two should be kept separate: as Williston said:

“… the difference between conditions and promises is so radical in its consequences that there is no excuse for
a nomenclature which fails to recognise the distinction.” 150

Special meaning of “condition” in English law

10-16 In the 19th century, however, there became prominent a special use of the term “condition” in the law of contract, as meaning
a promise (or warranty) regarded as so vital to the contract that its complete performance by the party making it is a condition

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 Section 6. - Conditions, UKBC-BENJAMI 459364667 (2021)

of the liability of the other party to perform his part. If such a promise is not performed, the other party can therefore treat the
contract as discharged. For example, in a sale by description, the tendering by the seller of goods complying with the description
is normally a condition of the duty of the buyer to accept the goods and pay the price. 151 Although such promises must be
distinguished from promises the breach of which may sound in damages only, this particular term is a confusing one for the
purpose. 152 In the old law, the problem was solved by asking whether the covenant (promise) was dependent (on performance
by the other party) or independent. 153 But a usage grew up, or at any rate came to be regarded as having grown up, which
attributed the word “condition” to a dependent covenant, and this certainly was the use Chalmers intended in the final version
of the Sale of Goods Act 1893. 154

Conditions in the modern law

10-17 This usage was confirmed in the Act, and though there has, as will be explained below, 155 been a more recent movement
towards solving problems of discharge by breach by another and broader principle, the notion of breach of condition is still alive
here and elsewhere in commercial law. 156 In Photo Production Ltd v Securicor Transport Ltd, 157 Lord Diplock described this
type of discharge by breach as occurring:

“… where the contracting parties have agreed, whether by express words or by implication of law, that any failure
by one party to perform a particular obligation (‘condition’ in the nomenclature of the Sale of Goods Act 1893),
irrespective of the gravity of the event that has in fact resulted from the breach, shall entitle the other party to elect
to put an end to all primary obligations of both parties remaining unperformed.”

Whether a term is a condition in this sense or not is a matter of construction and is based, in the absence of statutory guidance,
on the court’s view as to the apparent intentions of the parties. The Sale of Goods Act 1979 s.11(3) reads:

“Whether a stipulation in a contract of sale is a condition, the breach of which may give rise to a right to treat the
contract as repudiated, or a warranty, the breach of which may give rise to a claim for damages but not to a right
to reject the goods and treat the contract as repudiated, depends in each case on the construction of the contract;
and a stipulation may be a condition, though called a warranty in the contract.” 158

A controlling dictum is that of Bowen L.J. in Bentsen v Taylor, Sons & Co 159 :

“There is no way of deciding that question except by looking at the contract in the light of the surrounding
circumstances, and then making up one’s mind whether the intention of the parties, as gathered from the instrument
itself, will best be carried out by treating the promise as a warranty sounding only in damages, or as a condition
precedent by the failure to perform which the other party is relieved of his liability.” 160

10-18 It should be noted that the wording of the Sale of Goods Act s.11(3) reproduced above does not state that a breach of condition
automatically gives rise to the right to treat the contract as repudiated, but rather that it may do so. It may, for example, be
possible for the seller to correct the misperformance, as by making a fresh tender of conforming goods within any relevant
time-limit. 161 In other situations, however, the seller may not be able to do this, as where he is out of time or by his defective
delivery has destroyed the confidence of the buyer in such a way as to amount to a repudiation.

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Dichotomy of condition and warranty not exhaustive

10-19 This sharp dichotomy between condition, breach of which permits rejection, and warranty, breach of which does not, so clearly
articulated by the Sale of Goods Act, tended for some decades to be treated as the principal key to the effects of breach of
contract in general, despite the existence of areas where other techniques were used. 162 Its advantage is that it enables parties
affected by breach of contract to know their rights, and in particular, in the context of sale, it permits the quick rejection of goods
(or, where appropriate, documents). It requires, however, that any term breach of which might in some circumstances justify
rejection should be classified as a condition so as to permit of this result always. 163 This has facilitated rejection of goods in
commercial contracts on purely technical grounds, motivated by movements in the market. Where the definition of the term
broken itself contains an element of flexibility (e.g. “satisfactory quality” 164 ) the problem is less serious: a court disposed not
to allow rejection can hold the deficiency not serious enough to constitute a breach. 165 Where however the term is or may be
strictly applied (as with the description of goods in commercial contracts 166 ) rejection may arguably become too easy.

10-20 A significant manifestation of this problem arose in the case of the stipulation as to seaworthiness in a charterparty, which can be
broken in many ways from the slightest to the most grave. In Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd, 167
it was argued that this term was a condition. But the Court of Appeal held that it was neither a condition nor a warranty, and
that whether or not its breach entitled the innocent party to treat the contract as discharged depended on the nature and effect
of the breach. A stringent test for this was laid down by Diplock L.J.:

“Does the occurrence of the event deprive the party who has further undertakings still to perform of substantially
the whole benefit which it was the intention of the parties as expressed in the contract that he should obtain as
the consideration for performing those undertakings?” 168

This test, derived in the main from cases on delay in performance of contracts for carriage of goods by sea 169 is the same as
that for frustration, which had at about the same time been said to be a “last ditch”. 170 It is plainly more hostile to rejection
as a remedy.

10-21 This latter approach was subsequently, in Cehave NV v Bremer Handelsgesellschaft mbH (The Hansa Nord),
171

applied to a contract of sale of goods. In that case goods shipped in performance of a c.i.f. contract were partly in defective
condition on shipment, but not sufficiently so to make the consignment unmerchantable. There was however also a stipulation
“shipment to be made in good condition”. It was argued that the wording of the Sale of Goods Act s.11(3)
172

required that all stipulations be classified as conditions or warranties and that this term was a condition, breach of which
of itself entitled the buyer to reject the goods. It was held however that the preservation of the common law rules by s.62(2)
of the Act
173

prevented the condition/warranty dichotomy from being exclusive; the term was not a condition, and the breach was in
the circumstances not sufficiently serious to justify rejection. Preference was subsequently expressed in the House of Lords
for this “more modern doctrine”.
174

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Role of conditions
10-22 After The Hansa Nord 175 there was some tendency to think that the more general approach manifested in that case and in the
Hongkong Fir 176 case provided the primary approach to problems of discharge of contract by breach. However, the pendulum
swung back somewhat in Bunge Corp v Tradax Export SA. 177 This concerned breach of a stipulation in an f.o.b. sale contract,
“Buyer shall give at least 15 days notice of readiness of vessels”. It was accepted that under the broader test the seller was
unable to establish that the nature and consequences of the breach were such as to entitle him to treat the contract as discharged
under the Hongkong Fir wording. 178 The House of Lords, however, held that the term was a condition, in the sense that any
breach of it entitled the innocent party to treat the contract as discharged; and reaffirmed the role of conditions as providing
certainty for the innocent party’s remedies in commercial contracts.

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 Section 7. - Intermediate Terms, UKBC-BENJAMI 459364655 (2021)

Section 7. - Intermediate Terms

Benjamin's Sale of Goods 11th Ed.

Consolidated Mainwork Incorporating First Supplement

Part 4 - Defective Goods

Chapter 10 - Classification of Statements as to Goods

Section 7. - Intermediate Terms

Intermediate term?
10-23 The question then arose as to how the law on repudiatory breach should be formulated. One possibility was that the Hongkong
Fir case and The Hansa Nord 179 establish the existence of a third category of “intermediate” or “innominate” terms, breach
of which may or may not entitle the innocent party to treat the contract as discharged, in accordance with the nature and
consequences of the breach. This has undoubtedly been the prevailing formulation. On this basis, the first question the court
must ask in such a case is whether the term broken is a condition or a warranty. Any term not so classified will be an intermediate
or innominate term, and the rights arising on its breach will depend on the nature and consequences of that breach. But this
formulation, it is submitted, lacks flexibility in regard to the category of warranty, a category which in any case is of dubious
value and productive of confusion. 180 There may well be circumstances where a deliberate breach of a minor term, or an
aggregation of breaches of a minor term or terms, should be treated as repudiatory. To permit this, the prevailing formulation
requires a new readiness on the part of the court to classify terms as intermediate rather than as warranties. There is therefore
much to be said for a second viewpoint, for which there is also judicial authority, 181 that if a term is not classified as a condition
in accordance with the appropriate 182 criteria, the right of the innocent party should simply turn on the nature and consequences
of the breach. It would then be for consideration whether the remaining term should be called a “warranty” or not. This analysis
is certainly simpler, though it is admittedly difficult to reconcile with the definition in the Sale of Goods Act 1979, where a
warranty is defined as a term breach of which only gives rise to a right in damages. 183 It is noteworthy however that whereas
cases continue to discuss whether terms are conditions, no recent case appears to consider whether a term is such that no breach
of it can ever give rise to the right to reject; and it may therefore be questioned whether the notion of such a term is a necessary
one. The term is twice attributed to contract duties in the Sale of Goods Act 1979, but it has been held that a breach of warranty
with serious consequences may be repudiatory. 184

Differences of approach: commercial disputes

10-24 The cases just discussed are all commercial cases, and show a tension between two general approaches to the problem of
discharge by breach in such cases. One, achieved by the use of conditions, is, while recognising that commercial people
supposedly dislike rejection, 185 to pursue a policy of holding the parties strictly to the terms of the contract, and thus making it
fairly easy for the innocent party to treat the contract as discharged. An example of this approach, for which the English courts
must be well known in certain trades, is a dictum of Lord Atkin in 1933:

“If the seller wants a margin he must and in my experience does stipulate for it … In a falling market I find that
buyers are often as eager to insist on their legal rights as courts of law are ready to maintain them.” 186

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Such an approach is frequently justified by reference to the necessity for certainty in commercial transactions, 187 and works
best when the term is sharply defined so that either it is clearly broken or it is not—as in time stipulations, of which Bunge
Corp v Tradax Export SA is itself an example. Its application is also often justified on the basis that the breach may have been
especially prejudicial to the other party, and that the court is not entitled to speculate. The other approach, much more hostile
to rejection, is justified in a passage from the judgment of Roskill L.J. in The Hansa Nord:

“In principle contracts are made to be performed and not to be avoided according to the whims of market
fluctuation and where there is a free choice between two possible constructions I think the court should
tend to prefer that construction which will ensure performance and not encourage avoidance of contractual
obligations.” 188

10-25 The tension between these two approaches was acknowledged by Lord Wilberforce in Bunge Corp v Tradax Export SA, where,
commenting with approval on the dictum of Roskill L.J. quoted above, he said that the courts “should not be too ready to
interpret contractual clauses as conditions” 189 but went on to say that he did not doubt:

“… that in suitable cases the courts should not be reluctant, if the intentions of the parties as shown by the contract
so indicate, to hold that an obligation has the force of a condition.” 190

Which approach is more appropriate and when is a question on which the views of the commercial community would be of
interest; but it is certainly not clear that rejection is always economically the most efficient remedy in such cases. 191 There
must inevitably be some sort of compromise between the two techniques. Perhaps it is best to regard the second (seriousness of
breach) approach as the rule and the first (condition) as the exception, though one highly relevant in the commercial context.
192

Consumer transactions
10-26 The tension described is clearly seen in commercial disputes. For the consumer, rejection is usually the most efficacious, perhaps
the only efficacious remedy. 193 The Consumer Rights Act 2015 makes extensive use of rejection, whilst avoiding the language
of conditions, warranties and intermediate terms. 194

Examples of conditions
10-27 It may be asked what sort of term is likely to be treated as a condition. First, most of the statutory implied terms as to the seller’s
duties in sale of goods (as to title, conformity with description and quality 195 ) are designated as conditions. Secondly, the parties
may themselves designate terms as conditions, though the court will not be bound by the expressions they use and may hold that
notwithstanding the use of the word “condition” its full legal consequences were not intended. 196 Thirdly, the term in question
or a similar term may have been held to be a condition in another case: this will be a strong but not conclusive indication that
the term is a condition in the instant case. 197 Fourthly, in Bunge Corp v Tradax Export SA 198 Lord Roskill refers to a situation:

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“… in a mercantile contract, when a term has to be performed by one party as a condition precedent to the ability
of the other party to perform another term.” 199

Fifthly, in the same case Lord Wilberforce said in the passage quoted above 200 that the courts should usually interpret “time
clauses in mercantile contracts” as conditions 201 ; and Lord Lowry justified this as “a practical expedient founded on and dictated
by the experience of businessmen”. 202 Sixthly, there must also be a residual category of cases where the implementation of
the supposed intentions of the parties requires a term to be treated as one any breach of which gives rise to the right to treat the
contract as discharged 203 ; equally, the overall interpretation of the contract may lead to the conclusion that a term which on
isolated criteria might be a condition was not intended as such, 204 and the courts are alert to the risk of “trivial breaches having
disproportionate consequences destructive of a long-term contractual relationship”.
205

Most of the residual category of cases will concern large-scale commercial contracts; in this connection it has been said
that the court will accord special respect to the findings of commercial arbitrators 206 and reliance placed on the importance of
certainty. 207 But the reasoning can be used elsewhere. Thus, in Harling v Eddy 208 a statement by the seller of a heifer that
there was nothing wrong with the animal sold and that he would take it back if it turned out not to be as he said was held to
import a condition because of the undertaking to take back. Where on the other hand a term can be broken in a number of ways
involving results of different degrees of gravity, as in the Hongkong Fir case itself, 209 that is some indication that it should
not be classified as a condition. 210

Statutory modification of right to reject for breach of condition in

commercial sales
10-28 It must finally be noted that the right to reject for breach of the statutory implied conditions has for commercial contracts been
modified by statute, which reduces slightly their significance as such. This is dealt with elsewhere. 211

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Section 8. - Other Classifications

Benjamin's Sale of Goods 11th Ed.

Consolidated Mainwork Incorporating First Supplement

Part 4 - Defective Goods

Chapter 10 - Classification of Statements as to Goods

Section 8. - Other Classifications

Non-promissory conditions qualifying the liability of one of the parties

10-29 Sometimes a statement as to goods is made, but no promise is made as to its truth. A contract comes into operation, from
which neither party can withdraw, but if it turns out that the statement is not true, though the representor is not liable, the other
party need not proceed. This is an example of what is earlier submitted as being the better use of the term “condition”. 212 An
example is Mackay v Dick 213 where there was a contract for the sale of a digging machine if it fulfilled certain conditions: the
understanding was that if it did not, the buyer need not have it, but the seller would not be liable in damages. Where a contract
contains such conditions, there may also be related promises. Promises by buyer and seller not to prevent the fulfilment of
the condition will normally be implied. Sometimes there are further duties: thus, in Mackay v Dick the buyer did not give the
machine a proper trial and was held liable for the price. 214

Misrepresentations inducing the contract and subsequently incorporated

into it
10-30 Until the Misrepresentation Act 1967 it was not clear what happened when a misrepresentation was made prior to the time
of contracting in such circumstances that it would clearly rank as a misrepresentation external to the contract and not as a
contractual promise, and was subsequently repeated at the time of contracting so as to become part of the contract. 215 Did
it lose its earlier classification as a misrepresentation, and hence the remedies available for such, and become solely a term
in the contract and therefore subject to the rules as to breach of contract? The better view was probably that it did, for the
misrepresentation rules were only ancillary and came into existence to fill a lacuna in the law: indeed, their very application to
sale of goods was not beyond doubt. 216 However, the Misrepresentation Act 1967 s.1 provides that:

“… where a person has entered into a contract after a misrepresentation has been made to him, and … the
misrepresentation has become a term of the contract … then, if otherwise he would be entitled to rescind the
contract without alleging fraud, he shall be so entitled.”

The misrepresentation thus retains its status as such as well as forming the basis of a contract term. The problems as to remedies
created by this provision are described elsewhere.

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 Section 1. - Correspondence with Description, UKBC-BENJAMI 459364687 (2021)

Section 1. - Correspondence with Description

Benjamin's Sale of Goods 11th Ed.

Consolidated Mainwork Incorporating First Supplement

Part 4 - Defective Goods

Chapter 11 - Terms as to Description and Quality Implied by the Sale of Goods Act

Section 1. - Correspondence with Description

Sale of Goods Act 1979 s.13(1)

11-01 The Sale of Goods Act ss.13, 14 and 15 lay down implied terms as to the description and quality of goods supplied under a
contract of sale. 1 Originally, they were all in principle excludable by appropriate provisions, 2 but the power so to exclude
them is now considerably limited by statute. 3 The first implied term concerns the conformity of the goods with description.
Section 13(1) of the Act 4 reads:

“Where there is a contract for the sale of goods by description, there is an implied term that the goods will
correspond with the description.” 5

Section 13(1A) 6 makes the term implied by this subsection a condition, as regards England and Wales and Northern Ireland. 7
It should be noted that the subsection applies to all sales and is not restricted to sales in the course of a business. The case
law mixes commercial and consumer transactions with the former heavily predominating. It does not seem that any particular
conclusions can be drawn from differentiating between the two types of case, though the strictest applications of the provision
are usually to be found in commercial cases.

Historical background of this provision

11-02 Conceptually this is one of the most troublesome provisions of the Act.
8

As is explained later, the phrase “sale by description” has been interpreted to cover almost all sales. 9 Section 13(1) seems
therefore to do no more than state, for the vast majority of sales, as an implied term something central to the whole contract,
the duty to deliver the contract goods. This is really an express term, or the spelling out of an express term, 10 and to call it an
implied term is an inappropriate diminution of its status which can cause difficulty, for example where a clause provides for
exclusion of implied terms. It has therefore been suggested that:

“… those responsible for the statute … merely meant to say that the description is not a mere term or a mere
warranty but is a condition of the contract by implication of law.” 11

11-03 It seems, however, that the object of the draftsman of the 1893 Act was not simply to state a duty to deliver the contract goods.
The cases from which he sought to derive this rule were cases making an antithesis between sales of specific goods and sales by
description. 12 In the case of specific goods the rules as eventually settled were adverse to the buyer: there was no implied term

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as to quality, 13 and further, when property had passed—which would in the absence of a contrary intention be on the making
of the contract—there was no right to reject even for breach of an express term as to quality, but only a right to damages. 14 By
contrast, where the sale was by description the rules were more favourable to the buyer: the seller was regarded as promising that
the goods supplied conformed with their description, 15 and also that they were merchantable 16 (though these two requirements,
which now appear in the Act, 17 were sometimes run together 18 ). Further, in such cases the buyer might be entitled to reject
defective goods even though property had passed, unless they had been accepted. 19 It was the first of these rules for sales by
description that the draftsman sought to express here. But in fact, the antithesis between the two types of sale has been largely
forgotten, and the notion of sale by description extended—at least in part in order to increase the scope of the former provision
as to merchantable quality. 20 The result has been that s.13(1) is now taken as a proposition of almost general application. It has
even been suggested that, inasmuch as it simply states the duty central to most sales, it is superfluous. 21

Situations covered by s.13(1)

11-04 Taken as it stands, however, without reference to the confused evolution of doctrine which produced it, s.13(1) has been
interpreted to cover two types of breach which on their face appear to be of different magnitude. The first is failure to secure exact
conformity to the full contractual description of the goods where there is one. An example of this would be the supply of goods
which are in substance the goods stipulated for but which are not packaged in accordance with the contractual requirements. 22
The second type of breach is total failure to perform the contract, e.g. supplying a second-hand car instead of the new one
ordered, 23 where the duty broken, that to supply the contract goods, is so fundamental as hardly to need stating at all and
may seem of a quite different order from the earlier duty. The putting of the two together is, however, analytically correct,
for the reason why there can be rejection in the first case is that it is assimilated to the second. A buyer can refuse to receive
something which is not what he promised to buy. The description of goods may be strictly interpreted with the result that a
slight discrepancy may be treated as making the goods not what was stipulated for. Where goods are not what was stipulated
for, they can be rejected. 24

Exemption clauses
11-05 In connection with the common law rules regarding exemption clauses more serious difficulties arise, the solutions to which are
still not generally agreed. The problem is that whereas it is not difficult (though the courts have frequently been reluctant 25 ) to
interpret exemption clauses in a contract of sale so as to cut down the duty of absolute compliance, the first aspect of s.13(1)
referred to above, there is an understandable unwillingness to allow such a clause to cut down the second duty, that of performing
the main contractual obligation, unless of course the whole contract is cast in terms only entitling the buyer to something within
an extremely vague category. The matter is primarily considered elsewhere, and it is now clear that it has lost much of its
importance since the enactment of the Unfair Contract Terms Act 1977, which deals more directly with the problem. 26 It has,
however, been suggested that the influence of the exemption clause cases, in establishing minimal descriptions, liability for non-
compliance with which cannot be excluded, has led to cases suggesting an inappropriate reduction of the duty as to conformity
with description in general. 27

“Sale of goods by description”

11-06 The 19th-century cases were vague as to the exact meaning of the term “sale by description”, though some at least gave the
phrase a wide operation, probably with the unexpressed desire of avoiding the strict rules applicable to sales of specific goods. 28

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Although there are indications of a tightening up towards the end of the century, 29 the cases after the Sale of Goods Act 1893
certainly took a wide view: thus in the fifth edition of Benjamin’s Sale of Personal Property (1906) it was suggested 30 that:

“… a less rigid interpretation may perhaps be put upon the term ‘description’ as applicable to specific goods under
the Code than would have been placed on it at common law.”

No doubt this tendency was influenced by two factors. First, when the sale was not by description, a descriptive statement, if
held to be contractual at all, might well be found to be a warranty and so merely sound in damages. Secondly, prior to 1973
the condition as to merchantable quality (the general quality requirement applicable till 1995 31 ) only applied when goods were
bought by description. 32 Indeed, the majority of cases on the notion of “sale by description” actually relate to the applicability
of s.14(2), the merchantable quality provision. 33

The modern law 34

35
11-07 In Joseph Travers & Son Ltd v Longel Ltd, Sellers J. accepted the following passage from Benjamin’s Sale of Personal
Property 36 :

“Sales by description may … be divided into sales (1) of unascertained or future goods, as being of a certain
kind or class, or to which otherwise a ‘description’ in the contract is applied; (2) of specific goods, bought by
the buyer in reliance, at least in part, upon the description given, or to be tacitly inferred from the circumstances,
and which identifies the goods.”

11-08 It is clear, first, that all contracts for the sale of unascertained goods are sales by description. 37 Most sales of future goods will
likewise be sales by description, albeit not normally the sale of a specific article seen and requested by the buyer, which is owned
by a third party and would require to be obtained by the seller. 38 But the term is not restricted to unascertained and future goods
and has been extended (probably contrary to the intentions of the draftsman) to sales of specific goods 39 which have not been
seen at the time of contract: it has been said that the term “must apply to all cases where the purchaser has not seen the goods,
but is relying on the description alone”. 40 Thus in Varley v Whipp, 41 it was held that there was a sale by description where the
seller met the buyer at Huddersfield and sold him something described as a “second-hand self-binder reaping machine”, which
was at that time at another place. The term has however been extended even further:

“… it may also be pointed out that there is a sale by description even though the buyer is buying something
displayed before him on the counter: a thing is sold by description, though it is specific, so long as it is sold not
merely as the specific thing but as a thing corresponding to a description, e.g. woollen undergarments, a hot-water
bottle, a second-hand reaping machine, to select a few obvious illustrations.” 42

Reliance
11-09 It will be noted that both in Varley v Whipp 43 and the passage of Sellers J. quoted above 44 there is reference to reliance by the
buyer. A sale is not by description merely because descriptive words are used during the negotiations: for it to be by description
in respect of any of these words, the buyer must rely on them in making the contract, in such a way as to indicate that the
parties intended the descriptive words to be a term of the contract. 45 This notion of reliance is reflective of the idea that in
order for a statement or promise to be contractual, it must be such that the other party on entering into the contract was relying

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46
on its being made good, and bears similarities to the reliance on the seller’s skill and judgment that the goods are fit for
purpose under s.14(3). 47

Sale of Goods Act 1979 s.13(3): goods selected by buyer

11-10 Although the original Act was not specific on the point, it was long thought that a sale might rank as being by description though
the buyer had examined or tried the goods, 48 or himself selected them from stock without anything being said. 49 Thus it was
possible that even a sale of goods in a self-service shop was a sale by description, provided the goods were described in some
way on the shelf, outside packing or by a notice or label. 50 This was, however, put beyond all doubt by the Sale of Goods Act
s.13(3), which was inserted by the Supply of Goods (Implied Terms) Act 1973 and provides:

“A sale of goods is not prevented from being a sale by description by reason only that, being exposed for sale
or hire, they are selected by the buyer.”

Disputes could still occur as to whether the sale of an easily identifiable but undescribed article (e.g. a melon out of a pile in
a greengrocer’s shop, in relation to which there is nothing but a notice stating the price) is a sale by description, but in view
of the fact that the condition as to merchantable (now “satisfactory”) quality is no longer confined to sales by description, it is
difficult to see that there would be much practical significance in the question.

Sale not by description

11-11 It is clear therefore that sales other than by description are comparatively rare. The passage from Benjamin quoted above
continues:

“It follows that the only sales not by description are sales of specific goods as such. Specific goods may be sold
as such when they are sold without any description, express or implied; or where any statement made about them
is not essential to their identity; or where, though the goods are described, the description is not relied upon, 51
as where the buyer buys the goods such as they are.” 52

In one case a sale (by the receiver of a motorcycle distributor’s business) of “the stock situated at the premises 74–78 Wentworth
Avenue, Sydney” was held not to be a sale by description. 53 And sales of works of art may also be held not to be by description
where the seller does not guarantee the attribution of the work. In Harlingdon and Leinster Enterprises Ltd v Christopher Hull
Fine Art Ltd, for example, a sale of a picture between dealers was held not to be by description where it was clear that the buyer
relied on his own judgment and that the seller disclaimed knowledge as to the supposed artist, despite the fact that there were
attributions in early negotiations, in an old auction catalogue to which reference had been made, and in an invoice issued after
the sale. 54 Similarly, in Drake v Thomas Agnew & Sons Ltd,
55

it was held that an art dealer’s attribution of a painting to van Dyck was an expression of opinion that did not turn the
sale into one by description. According to Buckley J., the statutory implied term as to description does not come into effect
merely because “some descriptive words were used or written”, but only “if the proper conclusion from all the evidence is that
the parties intended the description to be a term of the contract”. 56

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What is a “description”? words of description and misrepresentations

11-12 Even where the sale is by description, however, not all descriptive words will necessarily constitute conditions. Such words
may, in principle, fall into any of the categories outlined in the previous chapter. It is perhaps unlikely that words which are
genuinely descriptive, as opposed to qualitative, will often be treated as mere puffs or the like, so as to ground no liability at
all. 57 But it is clear in principle that statements descriptive of goods may amount only to pre-contractual misrepresentations
inducing the contract, or as non-promissory conditions precedent. 58 Thus in Harrison v Knowles and Foster, 59 statements as
to the deadweight capacity of two ships were held mere representations, as were statements made by a private seller to a dealer
concerning the age of a car in Oscar Chess Ltd v Williams. 60

Words of description and warranties

11-13 When words of description are held to be incorporated into the contract, it may be asked whether they can be held to be
warranties, i.e. terms the breach of which may give rise to no more than the right to damages, 61 or whether they are always
by virtue of such incorporation part of the description so as to bring the right to reject for breach of condition into operation.
Here again the possibility of a warranty as to description was accepted in older cases on the Sale of Goods Act. In Harrison v
Knowles and Foster, already referred to, 62 Bailhache J. at first instance 63 suggested a rule that:

“… where the subject matter of a contract of sale is a specific existing chattel a statement as to some quality
possessed by or attaching to such chattel is a warranty, and not a condition, unless the absence of such quality
or the possession of it to a smaller extent makes the thing sold different in kind from the thing as described in
the contract.”

On this basis, he held that a statement as to the deadweight capacity of two ships was a warranty only and so covered by an
exemption clause. But one of the cases cited 64 is prior to the 1893 Act, and the second, of 1900, actually seems to be contrary 65 :
the analysis can also be criticised as unsound historically. 66 The Court of Appeal 67 indicated that if it had not affirmed the
decision on other grounds, it would have heard further argument on this point. It seems therefore that a more recent dictum
gives a better guide:

“… as a matter of law … every item in a description which constitutes a substantial ingredient in the ‘identity’
of the thing sold is a condition.” 68

On this basis, statements truly relating to contractual description will rarely be warranties, though again the possibility remains
open. 69 There may, however, clearly be warranties as to quality 70 ; and problems of the time at which a statement was made
or the fact that the contract was reduced to writing 71 may sometimes make it appropriate to regard descriptive statements as
collateral warranties. 72

Identification
11-14 The way in which descriptive words are to be understood is a matter of interpretation of contract and subject to the normal
objective principles governing that topic. 73 The following dictum of Lord Diplock relates to sales of unascertained goods only,
but seems relevant to all sales where this problem arises:

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“The ‘description’ by which unascertained goods are sold is, in my view, confined to those words in the contract
which were intended by the parties to identify the kind of goods which were to be supplied … Ultimately the
test is whether the buyer could fairly and reasonably refuse to accept the physical goods proffered to him on the
ground that their failure to correspond with that part of what was said about them in the contract makes them
goods of a different kind from those he had agreed to buy. The key to s.13 is identification.” 74

Descriptive words may identify the goods with varying degrees of preciseness. Thus in Reardon Smith Line Ltd v Yngvar
Hansen-Tangen (The Diana Prosperity), 75 there was a charter and sub-charter of a ship not yet built, which was described in
the sub-charter as “Japanese flag … New-building motor tank vessel called Yard No. 354 at Osaka Zosen … described as per
clause 24 hereof”. The vessel built had been subcontracted to an associated yard, Oshima, in whose books it was No.004. The
House of Lords held on the facts that the sub-charterers must take the vessel, Lord Wilberforce drawing a distinction between
words which identify in that “their purpose is to state (identify) an essential part of the description of the goods”, and words
which merely “provide one party with a specific indication (identification) of the goods so that he can find them and if he wishes
sub-dispose of them”. 76 Words identifying the goods in the second sense can be more liberally construed, so that not every
element in them need be given contractual force. Although this case was not one of sale of goods (and indeed Lord Wilberforce
expressly doubted the applicability of at least certain types of sale of goods cases to contracts such as that under dispute 77 ) it
would seem that this distinction too is general. 78

Form of contract
11-15 The form of any written contract is relevant, but not conclusive, to the establishment of the identity of the contract goods. Thus
where a clause referred to the contract goods as “Goods in bulk U.S.A. solvent extracted toasted soya bean meal—maximum
7.5 per cent fibre” and was followed by clauses headed “Quantity” and “Quality”, it was held that “7.5 per cent fibre” was
part of the description.
79

And in one case the fact that words appeared outside a formal specification was held relevant to establish that they did
not form part of the description.
80

But in another case an indication that goods must be of “fair average quality” was held not part of the description of goods
sold despite the fact that it appeared in a clause headed “Quantity and Description”.
81

Statements relating to quality

11-16 In principle, identity and quality are separate notions, and statements as to quality are not to be regarded as part of the description
of goods. Although the same set of facts can give rise to breaches both of s.13 and of the provisions as to quality contained
in the Sale of Goods Act 1979 s.14, 82 the two sections are to some extent mutually exclusive. Thus, stipulations may be said
not to form part of the description of goods because they relate to quality 83 ; and conversely may be said, especially in the
context of an exemption or non-rejection clause as to defects in quality, 84 to relate not to quality but rather to description. In
Arcos Ltd v E E Ronaasen & Son, discussed below, 85 it was held that goods did not correspond with their description though

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they were of merchantable quality and entirely fit for the purpose intended. But the line between the two is not easily drawn:
where a defect is as to composition or analysis it will frequently be regarded as relevant to the description of the goods, and
it is possible for goods to be of such poor quality that they cannot come within the contractual description at all. 86 And it is
certainly possible for words relating to quality to form part of the description of goods. 87 Thus in Toepfer v Continental Grain
Co 88 the Court of Appeal upheld the decision of commercial arbitrators that in a contract for “Hard Amber Durum Wheat”
the word “hard” related to quality (for the purpose of the finality of a certificate as to quality) but had no doubt that it could
also be a word of description. 89 In the circumstances the certification was final for these purposes also. 90 And in Toepfer v
Warinco AG, 91 it was held that in a sale of soya bean meal the word “fine-ground” was a word of description, with the result
that coarse-ground meal could be rejected.

Indications of purpose
11-17 Again, a stipulation that goods are suitable for a specific purpose will usually be held not to be part of the description, for
otherwise there would be no need for the Sale of Goods Act s.14(3). 92 But the general purpose for which goods are to be used
may sometimes be an element in their description; thus it has been suggested that goods described as oysters, but which were
not fit for human consumption, might not conform with their description, 93 and it is submitted that goods described by such
terms as “baby food”, “cough mixture” or “cold cure” would not conform with description if they proved wholly unsuitable
to the purposes indicated by those words. 94

Failure of goods to “correspond with description”: first type of case

11-18 As previously stated, 95 goods have been held not to correspond with their description in two types of case. The first type
comprises cases where although the goods are substantially what is required, there is some small discrepancy from the contract
particulars. Most of the decisions involve commercial disputes relating to unascertained or future goods, and the discrepancy
may appear quite minor in such cases. Thus, in Arcos Ltd v E A Ronaasen & Son
96

there was a contract for staves of half an inch thickness. A mere 5 per cent of the staves that were delivered conformed
with this requirement, with the rest being thicker, but only about 15 per cent were more than nine-sixteenths of an inch thick, and
none were more than five-eighths of an inch thick. Despite a finding that the goods were commercially within, and merchantable
under, the contract specification, and that they were reasonably fit for their purpose (which was the making of cement barrels),
the buyers were held entitled to reject. Lord Atkin emphasised that the implied term as to correspondence with description was
additional to the fitness for purpose requirement, and, as regards compliance with the former, said that “if the seller wants a
margin he must, and in my experience does, stipulate for it”. 97 The packing of goods may also form part of their description.
Thus, in Re Moore & Co and Landauer & Co 98 there was a contract for 3,000 tins of Australian canned fruit packed in
cases of 30 tins. The seller supplied a substantial number in cases containing only 24 tins, though the total number of tins was
correct. It was held that the buyer could reject the whole consignment. Overseas sales where there are special stipulations as to
mode and date of shipment, etc. can be treated under this head also, on the grounds that the extra requirements are part of the
description. 99 An exception to the strict requirement of correspondence with description is made only in cases of “microscopic
deviation”. 100 In Reardon Smith Line Ltd v Yngvar Hansen-Tangen, 101 Lord Wilberforce thought some of the older cases
“excessively technical and due for fresh examination in [the House of Lords]”, and at best was prepared to accept them as
relating to “unascertained future goods (e.g. commodities) as to which each detail of the description must be assumed to be
vital”. 102 The famous decision in Bowes v Shand, 103 that goods can be rejected because shipment was not completed within
the specified period, has however been reaffirmed by the House of Lords in the leading case of Bunge Corp v Tradax Export

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SA 104 and is still clearly valid. 105 It should be noted that remedies for defects in quantity are more specific and separately dealt
with in s.30 of the Act. They do not normally, therefore, involve the application of s.13 unless only damages are claimed. 106

Second type of case

11-19 The second type comprises cases where in the absence of detailed commercial description the goods supplied are to be regarded
as not being the goods ordered in a much more general sense. Here the cases have stressed, and hence required, a more
considerable discrepancy; though it should be noted that their context is often that of holding an exemption clause inapplicable
where the goods supplied are of a different kind. 107 Thus a contract for common English sainfoin seed was not performed
by delivery of giant sainfoin 108 ; a contract for a new Singer car was not satisfied by delivery of a second-hand model 109 ; a
contract for a second-hand reaping machine new the previous year, and only used to cut 50 acres, was not performed by delivery
of a very old one which had been mended. 110 Consumer cases have in the past been more likely to figure in this group than in
the first. Thus it has been held that a contract for a “Herald, convertible, white, 1961, twin carbs.” was not performed by delivery
of a vehicle consisting of parts of two cars (one of which had been manufactured earlier than 1961), welded together. 111 In a
New Zealand case, it was held that a contract to sell a pure bred polled Angus bull could be treated as discharged for breach
when the bull (which had been inspected and bought at an auction) proved to be “a bull in name only and useful as such for
no purpose, though its carcase may be of value”. 112

Variations of composition
11-20 As regards substances which contain admixtures of other substances, lack ingredients, or have undergone deterioration, the
question is normally whether the admixture, lack or deterioration is sufficiently significant to make the basic substance lose its
identity from a commercial point of view. 113 Goods may be subject to a defect which is commercially significant in the sense
that it reduces their value in the market without suffering a change of description. 114 Often the test employed is quantitative. 115
But where the admixture makes the resultant substance toxic, quite a small amount of foreign matter may prevent the goods
from conforming with description. Toxicity is nevertheless to some extent a relative notion, for substances may be poisonous to
certain creatures and not to others, or in certain quantities and not in others. The extent to which a product should be regarded
as toxic may therefore depend on the description under which it is sold, its normal use and so forth. In Ashington Piggeries Ltd
v Christopher Hill Ltd, 116 herring meal was by a majority held to comply with its description as such though it had become
contaminated by a chemical reaction caused by a preservative added to it, in such a way as to make it toxic to mink and in some
degree to all animals. Had it been instantly poisonous to all creatures the result would surely have been otherwise. It can however
be argued that some of these cases, because of their context, have set too limited a standard for compliance with description. 117

Trade custom
11-21 Proof of trade custom and normal commercial understanding is admitted to explain or qualify the meaning of descriptions.
Thus, in Grenfell v E B Meyrowitz Ltd 118 an aviator who purchased in 1932 flying goggles described in a catalogue as fitted
with “safety-glass lenses” was held unable to recover for breach of s.13 where his eye was injured by a splinter from one of
the goggles in a flying accident, because the goggles were made from laminated glass and therefore complied with the meaning
of the term “safety-glass” as understood at the time. And in Steels & Busks Ltd v Bleecker Bik & Co Ltd, 119 the commercial
or market standard as to the meaning of “pale crepe rubber; quality as previously delivered” was applied, the court accepting
the finding of the arbitrator that the kind of chemical used in its preservation was not relevant to the contract description. This

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principle also applies to trade usage as to numbers and quantities: for example, evidence could be adduced as to the meaning of
a “baker’s dozen”. Thus, in one case evidence of usage as to permissible excess dimensions of sawn timber was accepted. 120

Sale of Goods Act 1979 s.13(2): sale by sample as well as by description

11-22 This reads:

“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.” 121

This provision raises problems as to the extent to which the sample itself provides elements of the description. They are discussed
in connection with sales by sample. 122 There may also be cases where the sample is given under circumstances which make it
the only description of the thing to be supplied: in such cases of course the buyer stipulates for no more than goods of the same
description as the sample. 123 And even where descriptive words are used they may form no more than a label for convenience
of reference to the subject matter. 124

Related contracts
11-23 Provisions similar to s.13 are implied into other contracts for the transfer of property in goods 125 (e.g. contracts of exchange
and for work and materials 126 ); hire-purchase agreements 127 ; and contracts of hire. 128

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 (a) - Nature of the Act’s Provisions, UKBC-BENJAMI 459364685 (2021)

(a) - Nature of the Act’s Provisions

Benjamin's Sale of Goods 11th Ed.

Consolidated Mainwork Incorporating First Supplement

Part 4 - Defective Goods

Chapter 11 - Terms as to Description and Quality Implied by the Sale of Goods Act

Section 2. - Quality and Fitness for Purpose

(a) - Nature of the Act’s Provisions

Basic rule: caveat emptor

11-24 The starting point as regards quality in sale of goods is caveat emptor 129 : except in so far as there are express contractual
stipulations 130 or the goods do not conform with their description 131 or sample, 132 the buyer buys goods as they are. The
Sale of Goods Act 1979 s.14(1) 133 reads:

“Except as provided by this section and section 15 below 134 and subject to any other enactment, 135 there is no
implied condition or warranty about the quality or fitness for any particular purpose of goods supplied under a
contract of sale.”

This subsection reproduces with minor amendments wording which in the 1893 Act originally appeared as a preamble to s.14
and not as a subsection. 136 The provisions which follow impose a condition that the goods must be of satisfactory quality 137
and a more specific additional condition, that they must in many circumstances be reasonably fit for their purpose. 138 These
provisions leave little of the maxim caveat emptor, although its modern encapsulation in s.14(1) continues to preclude the
implication of any other terms adding to the seller’s responsibilities in respect of the quality of the goods or their fitness for
a particular purpose. 139

History of s.14
11-25 The original Sale of Goods Act of 1893 set out these provisions in the reverse order: the condition as to fitness for purpose
appeared, as subs.(1), before that as to quality, the standard for which was “merchantable”, and followed in subs.(2). Further,
the latter provision was confined to cases where goods were bought by description. The reason was historical. As with s.13, the
case law which the draftsman sought to embody was to an effect different both from the purpose which a superficial scrutiny
might attribute to the section, and also from the effect which subsequent interpretation has given it. Prior to the 1893 Act, there
was in the case of sales by description a condition that the goods should correspond with the description, but there was also
a warranty as to merchantability, the two being frequently run together. 140 In the case of specific goods neither of these rules
applied. But there was another rule, apparently more general in its scope and therefore possibly applicable to specific goods as
well as to sales by description, that where the buyer made known to the seller the purpose for which goods were required so as
to show that he relied on the seller’s skill or judgment, there was a warranty that they were reasonably fit for that purpose. 141
This rule, being more general, was placed first: the merchantable quality rule, being confined to sales by description, was placed
second. It was this dichotomy, not (as might appear) one between special and general reliance, which the 1893 Act originally
sought to state; though it may have gone further than the cases, and Chalmers observed 142 that the section “probably narrows

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somewhat the already restricted rule of caveat emptor”. The section was however interpreted in a surprising way. Early doubts
as to whether goods were bought by description, 143 and as to the standards imported by the word “merchantable”, 144 led to
buyers invoking the subsection as to fitness for purpose more frequently than that as to merchantable quality. As a result, the
former subsection became very widely interpreted so as to apply to almost all sales. 145 To modern eyes the whole provision
appeared unscientifically drafted and not entirely satisfactory in operation. It was therefore amended by the Supply of Goods
(Implied Terms) Act 1973, which reversed the order of the two provisions. What had been subs.(1) became subs.(3), and the
former preamble was inserted as subs.(1). By this means the merchantable quality provision remained as subs.(2). The Act also
replaced the requirement of sale by description in the original s.14(2) by one that the seller sells in the course of a business, and
inserted this also into the reliance section, s.14(3). The other principal change was that it gave a definition of “merchantable
quality”, although this proved unsatisfactory and was replaced in the Sale and Supply of Goods Act 1994 by a completely new
provision, as is explained below. 146 The overall result is, contrary to the original arrangement of the Act, to provide first in
s.14(2) a general standard which goods are required to reach, and secondly in s.14(3) “to impose a particular obligation tailored
to the particular circumstances of the case”. 147

Footnotes

97 See Jones v Just (1868) L.R. 3 Q.B. 197.

98 Above, paras 10-015 et seq.
99 Above, paras 11-001 et seq.
100 Below, paras 11-073 et seq.
101 This subsection no longer applies to consumer sales: Consumer Rights Act 2015 Sch.1 para.13. The relevant provision
is now s.18 of the 2015 Act. See below, para.14-084.
102 Below, para.11-068.
103 As to other statutes, see Ch.14, below.
104 The present words date from the Supply of Goods (Implied Terms) Act 1973.
105 Below, paras 11-026 et seq. As to international sales, see below, paras 18-322, 20-043.
106 Below, paras 11-051 et seq.
107 National Foods Ltd v Pars Ram Brothers (Pte) Ltd [2007] SGCA 23; [2007] 2 S.L.R. 1048 at paras [42] et seq.; KG
Bominflot Bunkergesellschaft für Mineralöle mbH v Petroplus Marketing AG (The Mercini Lady) [2010] EWCA Civ
1145; [2011] 1 Lloyd’s Rep. 442 at [45].
108 Above, para.11-003.
109 See Jones v Bright (1829) 5 Bing. 533; Jones v Just (1868) L.R. 3 Q.B. 197; Randall v Newson (1877) 2 Q.B.D. 102;
Drummond v Van Ingen (1887) 12 App.Cas. 284 at 290. See also Wallis v Russell [1902] 2 I.R. 585 at 615 (“caveat
emptor does not mean—in law or Latin—that the buyer must ‘take chance,’ it means that he must take ‘care’”).
110 Sale of Goods, 2nd edn (1894), p.30.
111 As to which see above, paras 11-006 et seq.
112 Below, paras 11-031 et seq.
145 See Hughes, (1959) 22 M.L.R. 484; Davies, (1969) 85 L.Q.R. 75; Franzi, (1977) 51 A.L.J. 298; Mash & Murrell Ltd
v Joseph I Emanuel Ltd [1961] 1 W.L.R. 862 at 865. In Ashington Piggeries v Christopher Hill Ltd [1972] A.C. 441
at 496, Lord Wilberforce said that this tendency “reflects a reversion to the more general approach to questions of the
seller’s liability under implied warranty adopted by the common law, as contrasted with the compartmentalisation into
separate but inevitably overlapping provisions adopted by the Sale of Goods Act”.
146 See para.11-031.
147 Jewson v Boyhan [2003] EWCA Civ 1030; [2004] 1 Lloyd’s Rep. 505 at [46] and [47] per Clarke L.J.

End of Document © 2022 Sweet & Maxwell

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 (b) - Satisfactory Quality, UKBC-BENJAMI 459364675 (2021)

(b) - Satisfactory Quality

Benjamin's Sale of Goods 11th Ed.

Consolidated Mainwork Incorporating First Supplement

Part 4 - Defective Goods

Chapter 11 - Terms as to Description and Quality Implied by the Sale of Goods Act

Section 2. - Quality and Fitness for Purpose

(b) - Satisfactory Quality

Sale of Goods Act 1979 s.14(2)

11-26 This subsection 148 is the product of several changes. It is appropriate to start by setting out in full the version of the section now
operative. The commentary below follows, in general, the order of the words and provisions of the subsection. As amended by
the Sale and Supply of Goods Act 1994 s.1, it reads:

“(2)Where the seller sells goods in the course of a business, there is an implied term that the goods supplied
under the contract are of satisfactory quality.

(2A)For the purposes of this Act, goods are of satisfactory quality if they meet the standard that a reasonable
person would regard as satisfactory, taking account of any description of the goods, the price (if relevant)
and all the other relevant circumstances.

(2B)For the purposes of this Act, the quality of goods includes their state and condition and the following
(among others) are in appropriate cases aspects of the quality of goods—
(a) fitness for all the purposes for which goods of the kind in question are commonly supplied,

(b)appearance and finish,

(c)freedom from minor defects,

(d)safety, and
(e)durability.

(2C)The term implied by subsection (2) above does not extend to any matter making the quality of goods
unsatisfactory—
(a) which is specifically drawn to the buyer’s attention before the contract is made,

(b) where the buyer examines the goods before the contract is made, which that examination ought to
reveal, or

(c) in the case of a contract for sale by sample, which would have been apparent on a reasonable
examination of the sample.” 149

Section 14(6) makes clear that, as regards England and Wales and Northern Ireland, 150 the term implied by subs.(2) is a
condition. 151

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“Sells goods in the course of a business”

11-27 These words, which appeared first in the changes of 1973, superseded original reference to a seller who “deals in goods of that
description”. They are very similar to the words “in the course of a trade or business—(a) applies a false trade description … or
(b) supplies or offers to supply any goods …” in the Trade Descriptions Act 1968 s.1(1), 152 and to “makes the contract in the
course of a business” in the Unfair Contract Terms Act 1977 s.12. 153 It seems clear that they cover sales which are an integral
part of the business carried on, and sales which are incidental to that business but carried on with a degree of regularity 154 ;
and in this context a first-time seller must be covered. 155 They also cover sales in a one-off venture in the nature of trade
carried through with a view to profit. 156 It has been held in Scotland that the words cover a person who sells a farm by way of
deplenishing sale, including the items concerned (cattle). 157 Beyond this, difficulty has arisen in respect of the situation where
a person in a business not involving sales of this type, or not involving sales at all, makes a sale connected with that business,
as where a farmer sells off a surplus tractor, or a medical practitioner or local government department 158 disposing of surplus
equipment sells a used computer. Authority in connection with the other two statutory provisions referred to above requires
some degree of regularity in sales of the type concerned for them to rank as being in the course of a business. 159 The first
provision however involves criminal liability, and the words form a limit on it; and the second served to increase protection
of buyers by preventing their too easily being regarded as not consumers and so not protected by rules protecting consumers.
The two other provisions thus have different purposes. The present provision protects buyers by imposing duties on sellers,
and a strict interpretation of it might reduce those duties too easily. It has therefore been held, with the aid of reference to
parliamentary proceedings, that the present provision is not to be affected by the interpretation put on the others, and that the
legislative purpose was to exclude only purely private sales outside the confines of a business. Consequent on this, in Stevenson
v Rogers, 160 a fisherman who sold his only boat to procure a new one was held to be selling in the course of a business, though
he was not in the business of selling boats and had only done so once before.

Business
11-28 An interlocking problem concerns the meaning of the word “business” in connection with this and related provisions. 161 No
definition is given except that, as stated above, business includes “a profession and the activities of any government department
or local or public authority”, which suggests that the activity need not be conducted for profit. 162 It has been said that:

“… the word ‘business’ is an etymological chameleon; it suits its meaning to the context in which it is found.
It is not a term of legal art.” 163

No doubt the activities of a trading corporation or partnership will normally be regarded as a business. But in the case of non-
trading corporations, partnerships and private persons there will obviously be borderline situations where it is not clear whether
or not the activity concerned has assumed the status of a business. There are also organisations of a non-profitmaking nature such
as universities, colleges, schools, nursing homes and so forth which make sales: although the whole activity may not necessarily
be designated as a business, certain portions of it (e.g. a university bookshop or hospital cafeteria) may be. Borderline cases
must be solved with the aim of the legislation in mind; this seems to be the protection of consumers against those who sell with
some degree of professionalism and regularity. 164 The answer will turn on the circumstances of each case, and it is doubtful
whether any specific principles can be laid down. At present such authority as there is on the meaning of the word “business”
arises in other contexts, such as restrictive covenants, 165 landlord and tenant, 166 trade descriptions, 167 moneylending, 168
bankruptcy 169 and taxation. 170 Such authority is only of indirect relevance. 171 It does seem, however, that there is no need to
view the activities of the person or body as a whole: some particular activities may rank as business, some not.

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Sale through an agent

11-29 The Supply of Goods (Implied Terms) Act 1973 introduced a provision which had no counterpart at all in the original Sale of
Goods Act. This now appears as the Sale of Goods Act 1979 s.14(5) and reads:

“The preceding provisions of this section apply to a sale by a person who in the course of a business is acting as
agent for another as they apply to a sale by a principal in the course of a business, except where that other is not
selling in the course of a business and either the buyer knows that fact or reasonable steps are taken to bring it
to the notice of the buyer before the contract is made.”

The result of this provision is that the implied terms of both subss.(2) and (3) will operate whenever a sale is effected through
an agent who sells in the course of a business, unless the buyer has notice, or is taken as having notice, that the seller is selling
privately. This was not the case before the amendment of the 1893 Act: the sale was effected by the principal, and the question
was whether on the terminology then applicable he dealt in goods of that description or not. It was thought that this could be
prejudicial to purchasers who bought from professional agents (such as auctioneers) on whom they relied, and had no knowledge
of the principal’s position in this respect, but who should be entitled to assume in the absence of indication to the contrary that
the sale was a business sale. The law was thus changed to make the principal prima facie liable in such a case. It should be noted
that there are two ways of fixing the buyer with knowledge. If reasonable steps are taken (whether by the principal, the agent
or anyone else) to bring the fact to the buyer’s notice, this is sufficient even though the buyer never in fact understands that the
seller is selling privately. The seller may not however rely on an allegation that the buyer ought reasonably to have discovered
the fact from other sources: if he relies on information from such sources, he must prove actual knowledge in the buyer. Since
the question whether a sale is in the course of a business will not always be an easy one, the “fact” referred to will often not
be easy to establish. It has been held that this provision applies even when the principal is completely undisclosed, so that the
third party could not possibly know of him 172 ; in such a case the agent is also liable as a party to the contract.
173

“Goods supplied under the contract”

11-30 This wording did not appear in the original Act, which only referred to “the goods”. The present wording was first introduced
in 1973 to take into account case law under the old section which read the words “the goods” together with the words in the
preamble to the section, which stated that except as specified there was no implied condition or warranty as to quality or fitness
of “goods supplied under a contract of sale”. The cases, confirmed by the amended wording of the subsection, held that the duty
to supply merchantable (now, satisfactory) goods extended beyond the goods sold. Thus, it was held under the original wording
that the duty may extend to the container in which the goods are supplied, e.g. a bottle, 174 and in Geddling v Marsh, 175 s.14(3)
(at that time s.14(1)) 176 was held to apply to a defective bottle supplied on the sale of mineral waters even though the bottle was
for return when empty, remained the property of the seller and so was not the subject of any sale. There may, however, be cases
where packaging is something totally separate from the thing sold, so that the quality of the goods is not affected by a defect
in it: thus in an old case it was held on the sale of a cargo of oil that the subject-matter of that particular sale was merchantable
though the oil was delivered in unseasoned casks. 177 In Wilson v Rickett, Cockerell & Co Ltd, 178 a slightly different point
arose: on a sale of Coalite, a consignment, satisfactory in other respects, was delivered in which a piece of explosive had become
accidentally mixed, probably while the goods were in transit. There was an explosion while some of the Coalite was being
burned, and the seller was sued under s.14(2). The Court of Appeal refused to accept the argument that the Coalite was suitable

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for burning and that the explosive was not part of the goods, Denning L.J. saying: “In my opinion [goods] means the goods
delivered in purported pursuance of the contract”. 179

Satisfactory quality
11-31 The formulation of the general quality requirement set out in the Sale of Goods Act 1979 s.14(2A) is in substitution for the
original requirement of “merchantable” quality of the 1893 Act. This word was particularly appropriate to commercial sales,
and led to decisions that goods might be merchantable if, although they were unsuited to the purpose for which they had been
bought, they could be used or sold for some other purpose, 180 or if they were only unsuitable in a minor way, 181 or if only a
small proportion of a bulk was unmerchantable. 182 Merchants may be assumed to be able to deal with such scenarios, but a
consumer would be likely to have only one use for goods bought, and for consumer (and other not purely commercial) sales the
notion of merchantable quality was inappropriate. A definition inserted in 1973 183 stressed the notion of fitness for purpose
(despite this appearing also in s.14(3)), but could have been taken to require fitness for all purposes. In addition, by using
the words “as it is reasonable to expect”, this definition gave some scope for argument that, inter alia, manufactured products
were often somewhat defective, such that it would not be “reasonable to expect” them to be otherwise. The intention behind
the present formulation was to eschew fitness for purpose as a controlling notion, and also other general criteria that had been
suggested such as acceptability, and to supplement a very general definition with guidelines (including fitness for purpose).
The formulation eventually adopted was therefore somewhat anodyne, and also circular: “goods are of satisfactory quality
if they meet the standard that a reasonable person would regard as satisfactory”. 184 It requires the support of the guidelines
which follow, identifying matters which had caused difficulty in earlier disputes. Although these guidelines all relate to intrinsic
qualities, the word “satisfactory” extends to extraneous matters, for example that the goods are liable to be downgraded under EU
animal by-products regulations. 185 The reasonable person must be one who is in the position of the buyer, with his knowledge;
it would not be appropriate for the test to be based on a reasonable third party observer not acquainted with the transaction
and its background. 186

Matters to be taken into account

11-32 Two specific matters are mentioned in s.14(2A) 187 prior to the guidelines: any description of the goods and the price if relevant.
To take an extreme example of description, it is obvious that if goods are sold as scrap, they need not have the quality which
might have been expected when they were in working order; and the price may also be an indication of the standard to be
expected of second-hand goods. 188 It seems likely that the word “description” can cover other descriptive statements than
those which would be relevant under s.13. 189 As for the price, while this may be an indicator of expected quality, it cannot be
conclusive: the buyer might have agreed to pay too high a price. What he is entitled to is something reasonably in line with what
he paid: “if not to the value of his money, at least to a grade not entirely and hopelessly out of line with what he has paid”. 190
On the other hand, goods may be of unsatisfactory quality though the difference between their price and their actual sale value
is slight. 191 It should also be noted that the existence of a warranty under which defects can be put right is not relevant to the
question of whether the quality is itself satisfactory. 192

The guidelines: fitness for purpose, appearance and finish, minor defects
11-33 Section 14(2B) 193 seeks to solve other problems perceived as arising under the 1973 definition, by specifying non-exhaustive
guidelines. “Quality” is first stated to include the state and condition of the goods. This involves no more than a transfer to

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this place in the Act of words which previously appeared in the interpretation section. 194 Of the following guidelines, fitness
for purpose, which was prominent in the 1973 definition, is placed first: it is obviously the most relevant factor and the only
objection had been to it appearing to override other factors. It should be noted however that the fitness required is for “all the
purposes for which goods of the kind in question are commonly supplied”. This would seem to require the goods to be fit for
all normal purposes, but not for abnormal ones. As such it appears to go somewhat further than the previous law, and it was
intended to do so. However, the reference to the purpose for which such goods are commonly supplied may preserve some
flexibility for the courts. 195 There follows a new element: a specific reference to appearance and finish, intended to deal with
such defects as scratches on cars which could be said not to affect their fitness for their purpose. The subsequent reference to
freedom from minor defects (some of which would not affect fitness for purpose or safety) has the same objective. 196 It could
be argued that these provisions are unnecessary: in Rogers v Parish (Scarborough) Ltd, Mustill L.J. had sought to give guidance
on this very point as regards the 1973 definition. 197 But the guidelines should make it clear to all tribunals at every level that
such defects may render goods of unsatisfactory quality, without the need for guidance from appellate courts.

Safety
11-34 Although safety is usually an important aspect of fitness for purpose, it was thought appropriate to add a specific reference to
this consideration. 198 In commercial contracts it can of course be the case that a buyer buys goods known to be unsafe, but
such cases are picked up by the general wording of subss.(2A) and (2B). It had been said before the reforms of 1994 (though in
a speech dissenting on the general point in connection with which the words were uttered) that a potentially dangerous article
might be unmerchantable if not accompanied by appropriate instructions as to use. 199 It may also be so if misdescribed on its
wrapper or in an accompanying document. 200 This seems correct, and indeed there can presumably be goods, not dangerous,
which are unusable, or not efficiently usable, without adequate instructions or warnings (for example, as to compatibility with
other equipment), and so not up to the present requirement of satisfactory quality, unless such instructions are supplied or
available. 201 The duty to warn may also be based on a separate implied term, 202 or on tortious negligence. 203 The supply of
unsafe goods may also be an offence, and may give rise to strict civil liability, under the Consumer Protection Act 1987. 204

Durability
11-35 Durability is an aspect of quality: goods are not of satisfactory quality unless they are capable of enduring for a period reasonable
in the circumstances, and the fact that they seriously deteriorate or (for example) break down during such a period is evidence
that they were not of satisfactory quality rather than a breach of itself. 205 This can be an important point in many consumer
disputes, and hence a specific reference to durability was included in the guidelines. 206 In sales involving extended transport
of the goods, it has been said that there is a special continuing duty, that the goods will not only be of the appropriate quality
at the time of shipment but will remain so during transit and for a reasonable time thereafter. 207 Doubt has however been cast
on the possibility of any such implied term, 208 and the better view is that the fact that in such a case the goods do not last the
period which might be expected is no more than an indication of their inappropriate quality, state or condition at the time of
shipment. 209 The extent of inherent durability to be expected depends on the circumstances of the sale, such as the description
applied to the goods, the price, 210 whether or not transport of the goods is contemplated, 211 and so forth. Most goods will be
subject to wear and tear over a period of use, but the degree and rate of this will reasonably be expected to vary widely across
different components and this must be taken into account when assessing whether the durability of the goods is acceptable. 212
Despite the specific reference to durability in subs.(2B), in many cases it will be difficult to prove that the lack of durability
resulted from a defect in the goods themselves rather than from the way in which they were transported, treated, used and
maintained. Furthermore, a specific provision as to durability such as this would ideally require a right to reject which persists

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for a longer time than the law normally allows, for in the case of goods which may be expected to last for a long period, any lack
of durability could take some time to manifest itself. Such an extended right to reject was indeed urged in the consumer interest,
213

but was not taken up in the modifications to the Act. 214

First exception: defects specifically drawn to the buyer’s attention

11-36 By subs.(2C):

“The term implied by subsection (2) above does not extend to any matters making the quality of the goods
unsatisfactory—(a) which is specifically drawn to the buyer’s attention before the contract is made.”

This exception did not appear in the 1893 Act: the present version is a reformulation of wording of 1973, but the change does
not appear significant in substance. Under the 1893 Act, the fact that defects had been pointed out might of course affect the
description under which the goods were sold and thus the standard of merchantable quality required, and this is now even more
likely in view of the statutory definition of satisfactory quality, which actually refers to the description applied to the goods. But
the fact that defects are pointed out is now stated as a specific factor relevant to the ascertainment of satisfactory quality. 215
Presumably, the burden is on a seller who seeks to rely on this exception to allege and prove facts bringing himself within it.
There is however no requirement that it must have been the seller who drew the buyer’s attention to the defect.

Second exception: examination of goods

11-37 Section 14(2C) contains a second exception which was, in a different form, the only exception in s.14(2) as it previously
stood. 216 By subs.(2C):

“The term implied by section 14(2) above does not extend to any matter making the quality of the goods
unsatisfactory—(b) where the buyer examines the goods before the contract is made, which that examination
ought to reveal.”

There are only minor differences in drafting between the present and original versions of this provision: the main change is
that the present version (as did that of 1973) specifically requires the examination to have taken place before the contract
was made. 217 Thus cases on the original provision may be relevant. Examples of defects which examination would not have
revealed are arsenic in beer 218 and defective manufacture of a plastic catapult. 219 But it was held under the 1893 provision that
if there had been an examination, the buyer would not be able to sue even though it was so hastily or inefficiently conducted that
the defect was not detected: in Thornett and Fehr v Beers & Son, 220 the proviso was applied where the buyer had examined
barrels of glue only from the outside because of shortage of time, though he had been offered further facilities. This surprising
decision seems to have been based on the fact that a full examination had been intended, and every facility for it provided by the
seller. 221 The 1893 provision referred to “defects which such examination ought to have revealed”, and the present wording
appears to have been intended to make clear that the examination referred to is that actually carried out. 222 It is in any case
clear that for the proviso to operate there must have been some examination, however incomplete: its wording does not cover
the situation where the buyer could have examined but did not, however unreasonable this may have been 223 ; though under
the law as it stood prior to 1893 the warranty of merchantable quality would not have applied in such circumstances. 224 On
the other hand, it is possible that in some cases a buyer may be estopped from saying that he has not examined the goods. 225
Again, the burden is presumably on the seller to allege and prove facts bringing himself within the exception.

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Extent of duty
11-38 The duty to supply satisfactory goods is and has always been strict; it is no defence that all possible care was taken, nor that
the seller had not seen the goods, 226 nor that they were available from one supplier only, 227 nor that the seller relied on an
undertaking given by his own supplier. 228

Examples
11-39 There are few reported cases, and fewer cases of significance, on the interpretation of the phrase “satisfactory quality” since it
came into operation in 1995. Perhaps this indicates that the definition has been successful, and that the earlier problems were
caused by the specific nature of the previous term “merchantable” and the failure of attempts, whether in judgments or statute,
to define it. Attention may be drawn to six cases. 229 In the first it was held that carbon dioxide supplied for use in soft drinks
which was contaminated with benzene, a known carcinogen, though in a quantity not injurious to health, was not of satisfactory
quality. 230 In the second, electric boilers which depended on peak-rate electricity, making them expensive to run, and thus
diminishing the home energy rating, were held of satisfactory quality. 231 In the third a mobile home that was two inches wider
than was permitted under statutory instrument was held of satisfactory quality when evidence had been given that the chances
of enforcement of the regulation were small and that this feature was not relevant as regards insurance. 232 In the fourth, bottles
of a “middle of the range blended whisky” sold for export with peeling or obviously misaligned front labels, or noticeable air
bubbles under their front labels, were held not of satisfactory quality, even though the cost of remedying these defects was
relatively small, whereas bottles of the same product with less noticeable such defects (or defects in back labels), or with very
minor dents or blemishes in their bottle tops, were held of satisfactory quality. 233 In the fifth case, contaminated hotel food that
caused serious gastroenteritis was held not of satisfactory quality. 234 And in the sixth case, a mobile elevated work platform
which toppled over was held not to be of satisfactory quality because it was supplied with unsuitable bearing plates. 235 Well-
established illustrations from earlier case law may also be looked to and are certainly still cited, though the difference between
the former notion of merchantable quality and the present formulation must always be borne in mind. Examples, other than
those already discussed, in which the term as to merchantable quality was held to have been broken include beer contaminated
with arsenic, 236 dented and scratched motor horns, 237 buses of weak construction, 238 a power boat which caught fire and
became a total loss within 27 hours of delivery, 239 a new car containing defects requiring the provision of a new crankshaft,
exhaust, radiator and clutch assembly, 240 underpants containing excess sulphite which irritated the skin, 241 a bottle which
broke when the cork was drawn, 242 and tins of preserved milk carrying labels which infringed an English trade mark in such a
way that their sale could have been restrained by injunction. 243 The last decision was distinguished in a case where tonic water
was sold for resale in Argentina, but owing to its containing salicylic acid was in fact unsaleable there by law; it could have
been sold anywhere else and so was merchantable, whereas a person buying the tins of milk anywhere in the world might be
buying a lawsuit. 244 It has been said that compliance with British Standards (BS) may be relevant to merchantable quality. 245
It was also held that goods were not unmerchantable merely because they might prove unsatisfactory if improperly treated or
used: thus a pork chop which proved poisonous when undercooked was not unmerchantable, because it would have caused no
ill effects had it been properly cooked. 246 On the other hand, goods were held unmerchantable though they could be made
merchantable for a trifling cost 247 ; and a consignment has been held unmerchantable where the proportion of the contents
which was unsatisfactory exceeded an amount which would fall under the de minimis rule. 248 It may be assumed that many of
these cases will (with caution) serve as examples of the present notion of “satisfactory quality”.

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Effect of subsequently acquired knowledge

11-40 The time at which goods must be of satisfactory quality seems prima facie to be the time of sale. 249 In order to ascertain whether
they were then of such quality, however, it is necessary to assume knowledge of the defect which had not then manifested itself
and ask whether (on the present wording) a reasonable person would regard the goods with that defect as satisfactory. But in
Henry Kendall & Sons v William Lillico & Sons Ltd, 250 a further problem arose. At the time of sale groundnuts would have been
regarded, had the defect been known, as poisonous and therefore would probably have been unsaleable at least at a comparable
price. Subsequently however it was discovered that they could be safely fed to some animals at a limited rate of inclusion. In
assessing whether they were merchantable at the time of sale, was the subsequent knowledge of the contamination to be read
in the light of the later knowledge of the effect of such contamination available at the time of the trial? Lord Reid thought so on
the grounds that “it would be very artificial to bring in some part of the later knowledge and exclude other parts”, 251 and Lord
Guest agreed on the grounds that to do otherwise would be “to approach the true situation with blinkers”. 252 It was therefore
held that there had been no breach of s.14(2).

11-41 But, though the general decision as to quality may be accepted, the actual decision as to subsequently acquired knowledge
is, it is submitted, more dubious. 253 There is much to be said for the dissenting view of Lord Pearce, 254 with which Lord
Wilberforce agreed, that:

“As it is a hypothetical exercise, one must create a hypothetical market. Nevertheless the hypothetical market
should be one that could have existed, not one which could not have existed at the date of delivery. Suppose
goods contained a hidden deadly poison to which there was discovered by scientists two years after delivery a
simple, easy, inexpensive antidote which could render the goods harmless. They would be unmarketable at the
date of delivery.”

It is submitted that this view is preferable, and that the same approach should be applied to the reverse situation, where goods
thought safe at the time of sale were subsequently discovered to be unsafe.
255

Goods made up for buyer

11-42 Where the seller makes up or compounds goods in exact accordance with instructions given by the buyer, it seems reasonable
that he should answer for the quality of the material or ingredients which he supplies, but not for the quality of the finished
product. It seems clear that his liability is so limited, but it is not clear exactly how this result is to be reached in connection
with s.14(2), as opposed to s.14(3). 256 One answer is to say that the condition as to quality of the actual goods is excluded by
implication, but that equally by implication it attaches to the materials or ingredients. 257 The use of the word “satisfactory”
instead of “merchantable” may assist in reaching appropriate solutions, if one assumes that the “reasonable person” is in the
position of the buyer. 258

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Second-hand goods
11-43 There is little authority as to second-hand goods. It was clear before the enactment of the present, and indeed the earlier, statutory
definition that a lesser standard is to be exacted than that applicable to new goods: thus a car sold with a reservation as to
the condition of the clutch was held merchantable though the actual state of the clutch proved to have been much worse than
believed with the result that complete replacement was required at substantial cost. 259 In the same case it was suggested that
a second-hand car was merchantable if it was “in a roadworthy condition, fit to be driven along the road in safety”, 260 but
while an unroadworthy car would certainly not be merchantable, at least if sold as a car, 261 the test was too limited. 262 So
in another case a car was held not to be reasonably fit for its purpose under s.14(3) 263 because the engine was “clapped out”,
though it did not fail completely for a further 2,300 miles. 264 More recently a Fiat sports car bought as an enthusiast’s car
was held unmerchantable because it had, unknown to the buyer, been submerged in water for 24 hours and written off by an
insurance company: though there had been only minor mechanical problems after the buyer took delivery. 265 The new statutory
definition 266 gives some guidance. The fact that goods are second-hand affects the description applied to them, their price and
may give rise to “other relevant circumstances”: and the exception as to examination will be more relevant in second-hand sales.
It may also affect their appearance and finish, freedom from minor defects and durability. 267 The result is that, while the exercise
of assessing satisfactory quality in the case of second-hand goods “may be a difficult one” it is “by no means impossible”. 268

Time element
11-44 It is not clear exactly at what time the goods must be of satisfactory quality. The same problem arises, subject to one slight
difference, 269 in connection with s.14(3) 270 and what follows applies in general to both provisions. Some authority (necessarily
on the “merchantable” standard) refers to the time of sale, 271 which should on the general principles of the Sale of Goods
Act be the time at which the property passes, 272 and hence the time at which risk also prima facie passes in a commercial
transaction. 273 And in commercial c.i.f., c. & f. and f.o.b. contracts, where property and risk are commonly separated, the
obligation normally bites at the time of shipment, which is generally when the risk passes in contracts of this type. 274 On the
other hand, there are also statements, doubtless correct on the facts of the cases involved, that the obligation bites at the time of
delivery. 275 In view of the connections between the duties under s.14 and the passing of risk, it seems reasonable to say that
the goods must be of the required quality under s.14 at the time of the passing of risk, 276 unless there are other indications. 277

Related contracts
11-45 Provisions similar to s.14(2) are implied into other contracts for the transfer of property in goods (e.g. contracts of exchange
and for work and materials 278 ); hire-purchase agreements 279 ; and contracts of hire. 280 The changes effected by the Sale and
Supply of Goods Act 1994 as to the word “condition” and “satisfactory quality” 281 were written into these also. 282 Questions
relating to computer software are more likely to arise in connection with s.14(3).

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 (c) - Fitness for Purpose, UKBC-BENJAMI 475725836 (2021)

(c) - Fitness for Purpose

Benjamin's Sale of Goods 11th Ed.

Consolidated Mainwork Incorporating First Supplement

Part 4 - Defective Goods

Chapter 11 - Terms as to Description and Quality Implied by the Sale of Goods Act

Section 2. - Quality and Fitness for Purpose

(c) - Fitness for Purpose

Sale of Goods Act 1979 s.14(3)

11-46 The Sale of Goods Act 1979 s.14(3), 284 which was substituted for the former s.14(1) by the Supply of Goods (Implied Terms)
Act 1973 and further amended by the Consumer Credit Act 1974, reads:

“Where the seller sells goods in the course of a business and the buyer, expressly or by implication, makes known
—

(a) to the seller, or

(b) where the purchase price or part of it is payable by instalments and the goods were previously sold by a
credit-broker to the seller, to that credit-broker,
any particular purpose for which the goods are being bought, there is an implied term that the goods supplied
under the contract are reasonably fit for that purpose, whether or not that is a purpose for which such goods are
commonly supplied, except where the circumstances show that the buyer does not rely, or that it is unreasonable
for him to rely, on the skill or judgment of the seller or credit-broker”. 285

Section 14(6) makes clear that, as regards England and Wales and Northern Ireland, 286 the term implied by subs.(2) is a
condition. 287 When cases on fitness for purpose decided before the 1973 Act are read, the fact that the relevant provision under
the original 1893 Act was designated s.14(1) should be borne in mind.

“Sells goods in the course of a business”

11-47 These words, first inserted by the Act of 1973, are the same as those in the present s.14(2) and are discussed under that head. 288

Sale through an agent

11-48

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Where the seller sells through an agent, the position is now regulated by the Sale of Goods Act 1979 s.14(5), first inserted in
1973. This provision applies equally to s.14(2) of the Act and is discussed in that connection. 289

“Goods supplied under the contract”

11-49 This phrase, also first introduced in 1973, appears also in s.14(2) and is discussed in that connection. 290

“Expressly or by implication makes known … to the seller … any

particular purpose for which the goods are being bought”
11-50 These words follow the wording of the 1893 provision with only minor amendments. Cases on the 1893 provision are therefore
certainly relevant. The obvious case to which the subsection is applicable is that where a buyer wishes to be supplied with
something suitable for a special purpose. In such a case the request may but need not be found within the express contractual
agreement: there may be notice of it from extrinsic communications, 291 from the purpose of the contract (e.g. where a propeller
is ordered for a specific ship under construction 292 ), or from the nature of the parties’ business, as where a dealer whose business
is resale buys from another who is well aware of this. 293 But, partly because of doubts prevalent at one time as to the scope
of s.14(2), 294 the former provision was interpreted to cover more situations than this. It was held, first, that “the particular
purpose” did not only mean a special purpose 295 : if no purpose was indicated, it would be taken that goods were ordered for
their normal purpose. 296 Where the description of the goods pointed to one purpose only, therefore, no further indication was
required. Thus, in Preist v Last, 297 a person who went into a shop and asked for “a hot-water bottle” was held to rely on the
seller’s skill or judgment, and to be able to sue under the subsection when the hot-water bottle, by bursting, proved unfit for
its purpose. The effect of these decisions, which improved the usefulness of the subsection in consumer situations, 298 was
expressly confirmed by the wording of the current provision, which includes the words “whether or not that is a purpose for
which such goods are commonly supplied”. 299 Where the goods are capable of use for a number or range of purposes, it seems
that the seller’s liability depends upon whether a special purpose within the range was indicated. If so, the suitability must be
for that purpose 300 ; otherwise, it must apparently (despite the words “that purpose” in the provision) be for any purpose that
is either known to the seller or reasonably foreseeable by him. Thus in Ashington Piggeries Ltd v Christopher Hill Ltd, 301
Norwegian suppliers sold herring meal for compounding into feeding stuffs, and it was held that since they could reasonably
have foreseen that it might be fed to mink it was required that it be reasonably fit for that purpose. 302 Similarly, in Henry
Kendall & Sons v William Lillico & Sons Ltd, 303 it was held that, where an importer seeking to introduce a commodity from
a new source (Brazilian groundnut extraction) knew that it was being bought by a wholesaler for resale in smaller quantities to
be compounded into food for cattle and poultry, the importer was liable when the extract proved poisonous to poultry, though
it could safely be compounded into cattle food.

Credit-broker
11-51 The references to the credit-broker were introduced by the Consumer Credit Act 1974 and came into force in 1985. The previous
wording referred only to the seller. The term credit-broker is defined in the Sale of Goods Act 1979 s.61(1) 304 as:

“… a person acting in the course of a business of credit brokerage carried on by him, that is a business of effecting
introductions of individuals desiring to obtain credit—

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(a) to persons carrying on any business so far as it relates to the provision of credit, or

(b)to other persons engaged in credit brokerage.”

The references cover the situation where a dealer sells goods to a finance house which then sells them to the dealer’s customer
on credit. The seller is liable as to fitness for purpose notwithstanding that the indication of reliance was given to the dealer
(creditbroker).

“Reasonably fit for that purpose”

11-52 Where the subsection applies, the seller’s duty is to supply goods reasonably fit for the purpose. The 1893 provision used the
same phrase, except that it referred to “such purpose” rather than “that purpose”; cases on it are obviously therefore still valid. A
well-known example of its application is Bristol Tramways etc Carriage Co Ltd v Fiat Motors Ltd 305 where buses ordered were
known to be wanted for heavy passenger work in Bristol, a city containing steep hills, and proved unsuitable: the seller was held
liable. In Scotland, it has been said that material bought for manufacturing golf rainwear would be unfit for purpose if, though
capable of being made up satisfactorily, it broke down in subsequent use. 306 In the consumer field, examples are provided by a
hot-water bottle which burst, 307 a plastic catapult which broke injuring the user’s eye, 308 milk containing typhoid germs, 309
a new car which boiled every hundred miles or so, 310 underpants containing excess sulphite which irritated the skin 311 and
carbon dioxide contaminated with benzene, a known carcinogen, though in a quantity not harmful to health. 312 Many of these
involve a concurrent breach of s.14(2). 313 But the seller does not promise that the goods are absolutely suitable: a second-hand
car may be reasonably fit for its purpose though it is known to require repairs when bought. 314 Nor does he guarantee against the
results of misuse. 315 Still less does he promise suitability where because of an unstated peculiarity in the buyer’s position, only
goods of a special type are in fact suitable for his purpose. Thus, in Griffiths v Peter Conway Ltd, 316 the buyer of a Harris tweed
coat contracted dermatitis from it because, unknown to her, she had an unusually sensitive skin. It was held that, as the coat
would not have harmed a normal person, the seller was not liable. More recently, in Slater v Finning Ltd 317 a camshaft which
was unsuited to the engine of a ship because of features peculiar to that vessel unknown to either party at the time, but which later
worked satisfactorily in another ship, was held suitable for its purpose. The duty has sometimes been stated in very wide terms
as regards food for human consumption, but it is clear that the sale of food, whether for human consumption or for animals,
is no more than an ordinary application of the principle stated in the section. 318 Where potentially dangerous substances are
supplied, they may not be fit for their purpose unless accompanied by appropriate instructions, descriptions or warnings 319 ;
and it seems correct in principle to say that the absence of such instructions, warnings (for instance as to compatibility with other
equipment) or even descriptions, may also make other goods, not potentially dangerous, not reasonably fit for their purpose. 320
The duty to warn may also, however, be based on a separate implied term 321 or on tort. 322

Second-hand goods
11-53 Section 14(3) can apply though the goods are second-hand. 323 Where the buyer asks for second-hand goods or knows that
such goods are to be supplied, the same standard will obviously not be exacted as in a case where the goods should have been
new. 324 But where the buyer merely relies on the seller in general to supply something suitable for his purpose, the supply of
second-hand goods may of itself involve a breach of the subsection. The few English cases concerning secondhand cars mostly
involve pleas both of s.14(2) and of s.14(3) and are discussed under the former provision. 325

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Reliance need not be shown but may be rebutted

11-54 Section 14(3) assumes that where the buyer makes known any particular purpose for which the goods are being bought (these
words being widely interpreted as above indicated) there is reliance on the seller. An exception is, however, made where the seller
can establish indications to the contrary: “where the circumstances show that the buyer does not rely, or that it is unreasonable
for him to rely, on the seller’s skill or judgment”. It seems that it is not, therefore, necessary for the buyer to allege reliance
in his particulars of claim: it is for the seller to allege in defence and prove that there was no reliance, or that reliance was
unreasonable. 326 The reverse was the case under the original 1893 Act. 327 It follows that if it can be shown that the seller
made it clear to the buyer that he (the seller) did not purport to exercise skill or judgment, the subsection will normally be
excluded. 328 Other examples where the facts would negative reliance can be found in cases on the former wording. In Teheran-
Europe Co Ltd v S T Belton (Tractors) Ltd, 329 air compressors were sold in circumstances which gave the seller notice that
they were for resale in Iran. It was held that the buyers relied on their own skill and judgment as to the suitability of these
compressors for such resale in Iran. 330 The same may be true where the buyer selects goods from stock for himself, 331 states
no purpose at all or a very general purpose for goods that might have several uses, 332 or where, because the buyer knows that
the seller has only one commodity to supply, he must be regarded as taking what he buys as it is. 333 It is also possible that a
specification by the buyer of the level of quality required may indicate non-reliance on the seller. 334

Partial reliance: goods made up for buyer

11-55 Sometimes the circumstances show that there is no reliance as to particular matters, but reliance as to the rest of the contract. This
situation is commonly referred to as one of partial reliance, but the phrase is misleading: there is reliance in one area or respect
but not in another. Thus, a buyer may specify the materials or ingredients for a product and leave the seller to prepare it. In such a
case, there is no reliance as to the suitability of the end product, but the seller must use materials or ingredients reasonably fit for
their purpose. In Ashington Piggeries Ltd v Christopher Hill Ltd, 335 an expert in mink farming asked established compounders
of animal feeding stuffs to manufacture mink food to an agreed formula. It was held that there was reliance on the compounders
to use ingredients reasonably fit for feeding to animals, though not as regards the suitability of the compound specified for
mink in particular. Since one of the ingredients supplied was toxic in varying degrees to a number of species of animals, the
compounders were held liable under s.14(3) (then s.14(1)). Again, in Cammell Laird & Co Ltd v Manganese Bronze and Brass
Ltd, 336 a buyer ordered ship propellers and gave certain specifications. The propellers proved unsatisfactory because of matters
outside the specification which had been left to the sellers: the buyer succeeded against the sellers under the subsection. So, in
a more recent case, 337 a developer who ordered boilers for converted flats, but did not indicate any specific requirements as to
their effect on the home energy ratings of the flats, was held to rely on the supplier only to supply boilers of satisfactory quality.
But the reliance must nevertheless “be such as to constitute a substantial and effective inducement which leads the buyer to
agree to purchase the commodity”. 338

Dealers
11-56 Where dealers buy from each other, particularly in an established market, it may be held that they rely on their own judgment
even though it is known that they buy for resale. 339 But this is not always the case. 340 In Henry Kendall & Sons v William
Lillico & Sons Ltd, 341 a leading case on the law as it stood before 1973, the trial judge thought that in a commercial sale of
imported groundnuts reliance was excluded by the fact that the buyer and seller both belonged to the London Cattle Foods
Trade Association; in this he followed dicta in a previous case concerning members of the same Association, suggesting that

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they did not rely on each other’s skill or judgment. 342 But the majority of the House of Lords, with the majority of the Court of
Appeal, 343 held that though this was relevant it did not in the circumstances show that there was no reliance. To say otherwise
would be:

“… to convert a decision on fact into a rule of law and to ignore the fact that not all sales, even on a given market,
not to mention sales on different markets, bear the same character or involve the same incidents.” 344

Opportunity of examination
11-57 It seems that at common law, if the buyer had an opportunity to examine the goods, there would have been no implied
warranty. 345 But in view of the words of the Act, the fact that there was such an opportunity which was not taken would now
only be relevant to show lack of reliance; and there may be reliance though the goods will or may be tested or analysed by
the buyer on delivery. 346

Reliance by an agent
11-58 Where the reliance is alleged to be by an agent, difficult questions of fact may arise as to whether the buyer, through his agent,
relies on the seller’s skill or judgment, or whether he relies on the agent’s report to him and not on the seller at all. 347

Extent of duty
11-59 The duty of the seller is again strict: it is no defence that the seller could not examine the goods (as where they are in sealed
tins 348 ), nor that all possible care was taken. 349

Orders by patent or other trade name

11-60 Under the 1893 provision, the duty did not apply where there was a contract for the sale of a specified article under its trade
name, though, of course, the provisions of ss.13, 14(2) and 15 might apply. It was said that this proviso was intended to meet
the case, not of raw commodities or materials, but of manufactured articles. 350 Thus an order for “Cyfartha Merthyr coal”
would not be an order of an article under its trade name, 351 though it was said that to order Coalite was to order under a trade
name. 352 The cases, however, restricted the proviso to the point where it only applied if an article was ordered by its trade
name alone. 353 In Baldry v Marshall, 354 Bankes L.J. suggested 355 the following test for the operation of the proviso:

“Did the buyer specify it under its trade name in such a way as to indicate that he is satisfied, rightly or wrongly,
that it will answer his purpose, and that he is not relying on the skill or judgment of the seller, however great
that skill or judgment may be?”

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This test seemed to make the proviso almost superfluous, and it no longer appears. The fact that the buyer orders a specified
article under its trade name may, however, indicate more generally that he did not rely, or that it was unreasonable for him to
rely, on the seller’s skill or judgment.

Time element and durability

11-61 The problems here are in general the same as those arising in connection with s.14(2) and are discussed under that provision. 356

Deterioration in transit
11-62 There is, however, one question regarding durability specific to s.14(3). Where it is contemplated that the goods will be
transported, and some goods of the type referred to by the contract would bear transportation, and some, though otherwise fit
for their purpose, would not, it may be held that the buyer relies on the seller’s skill and judgment to select goods that will bear
transportation. 357 On the other hand, where all goods of the type referred to would necessarily deteriorate in transit or suffer a
high risk of doing so, the risk of such deterioration, unless there are other indications, will be on the buyer. 358

Express warranties or conditions

11-63 By s.55(2) (formerly s.14(5)) 359 : “An express condition or warranty does not negative a condition or warranty implied by this
Act unless inconsistent with it”. In an old case, 360 a contractor agreed to supply troop stores “guaranteed to pass survey of
the East India Company’s officers”. It was held that this did not exclude the implied warranty of fitness. More recently, it was
confirmed that the contractual specification of a product such as a chemical compound or a meat pie is not the sole benchmark
of satisfactory quality, so that the presence of a contaminant not mentioned in the specification could nevertheless constitute a
breach of s.14(2). 361 Difficult problems of construction can arise in this connection, as to which no guidance is given. 362 It
seems, however, that express conditions or warranties will normally be construed as additional to the implied terms. 363

Related contracts
11-64 Provisions similar to s.14(3) are implied into other contracts for the transfer of property in goods 364 (e.g. contracts of exchange
or work and materials) 365 ; hire-purchase agreements 366 ; and contracts of hire. 367 Problems relating to computer software
not suited to its purpose also raise the question of whether analogous terms apply. The initial approach is to ask whether
software counts as “goods”. 368 Hardware alone clearly does. A sale of a complete system of hardware and software was held in
Australia 369 to be a sale of goods, and the English Court of Appeal has said that the same could be true of software on a disk. 370
But nowadays software is frequently downloaded (i.e. transmitted electronically rather than transferred via a physical medium),

in which case it seems that it is not “goods”. 371 Disputes have tended to concern design and supply of systems for tasks for
which they have proved inadequate, and in such cases the tendency has been (subject to specific contract terms) to imply terms
similar to those of the Sale of Goods Act to what might be called the “product” which the contractor is to produce, and duties
of reasonable care to the service element. 372 It has however been argued that the strict liability of a seller is inappropriate in
computer software contracts and that any analogy with production and circulation of goods is not compelling.
373

As transmission of software by means of a physical medium becomes rarer, it in any case seems likely that a model of
software provision as a service will prevail and that any tendency to apply strict liability to it under the Sale of Goods Act or
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by analogy will weaken.

Relation between ss.14(2) and 14(3)

11-65 There was considerable overlap between ss.14(1) and 14(2), the precursors of the present subsections, and there were many
cases in which both were pleaded. 374 The amendments introduced by the Supply of Goods (Implied Terms) Act 1973 and
appearing in the 1979 Act actually increased this overlap by removing some of the minor points of difference and introducing
other points of similarity. Thus, the restriction to sales “in the course of a business” applies to both subsections, replacing
wording that differed between them; and the definition of “satisfactory quality”, principally relevant to s.14(2), refers, though
since the changes of 1994 only in a guideline, to fitness for purpose, the standard specifically set by (the present) s.14(3). The
limitation of s.14(2) to sales by description, and the trade name proviso of the former s.14(1) (now s.14(3)) were both eliminated.
However, two major practical differences between subss.(2) and (3) remain.

11-66 First, s.14(2) requires only that the goods be of satisfactory quality, whereas s.14(3) requires that they be reasonably fit for the
purpose expressly or by implication made known. In many sales these standards will coincide, because the purpose will be
that for which such goods are commonly supplied, with the result that a breach of s.14(2) will generally signify a breach of
s.14(3). 375 However, a higher standard can be exacted by a buyer who makes a more unusual or specific purpose known, for
the seller is then liable if the goods are not reasonably suitable for it, though more generally of satisfactory quality.

11-67 Secondly, s.14(3) is excluded where the circumstances show that the buyer did not rely on the seller’s skill or judgment, or
that it was unreasonable for him to do so: s.14(2) is not so limited, though it does not apply to defects drawn to the buyer’s
attention, nor, where the buyer examined the goods, to defects which that examination ought to have revealed. These differences
of formulation may occasionally lead to differences in result. Thus although by examining the goods, a buyer shows to some
extent that he is not relying on the seller’s skill or judgment, it is clear that he may still rely on it in part for the purposes of s.14(3);
but a claim under s.14(2) might in some cases be excluded by the wording of the proviso as to examination. 376 Conversely,
under s.14(2) examination only excludes liability for defects which that examination ought to reveal; but in appropriate cases
it may show that there was no reliance at all for the purposes of s.14(3). That a defect was specifically drawn to the buyer’s
attention will not only exclude s.14(2), but will also normally indicate that it is unreasonable for the buyer to rely on the seller
for the purposes of s.14(3); there could, however, be cases where the buyer relies on the seller as to the fact that the goods, even
with such a defect, will be suitable for their purpose.

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 Section 3. - Sale by Sample, UKBC-BENJAMI 475725837 (2021)

Section 3. - Sale by Sample

Benjamin's Sale of Goods 11th Ed.

Consolidated Mainwork Incorporating First Supplement

Part 4 - Defective Goods

Chapter 11 - Terms as to Description and Quality Implied by the Sale of Goods Act

Section 3. - Sale by Sample

Sale of Goods Act 1979 s.15

11-68 This section, 377 which, like s.13 (but unlike s.14), is not restricted to business sellers, reads:

“(1)A contract of sale is a contract for sale by sample where there is an express or implied term to that effect
in the contract.

(2)In the case of a contract for sale by sample there is an implied term 378 —
(a)that the bulk will correspond with the sample in quality;

[(b)repealed] 379 ;

(c)that the goods will be free from any defect, making their quality unsatisfactory, which would not be
apparent on reasonable examination of the sample.” 380

Section 15(3) makes clear that, as regards England and Wales and Northern Ireland, the term implied by s.15(2) is a condition. 381
Section 15 is in effect declaratory of the common law. 382

“Sale by sample”
11-69 The definition of a sale by sample in s.15(1) is not at all helpful. It seems that a sale by sample is a sale whereby the seller
expressly or impliedly promises “that the goods sold should answer the description of a small parcel exhibited at the time of
the sale” 383 :

“In truth, a sample is simply a way of describing the subject-matter of the bargain, and the principles which are
applicable to contracts to sell and sales by description are applicable here.” 384

In many cases, a provision as to sample will be express, e.g. “as per sample” 385 ; in others, the showing of a sample may (but
will not necessarily) make the sale a sale by sample, 386 and sometimes evidence that sales of the type involved are customarily
by sample may be introduced. 387

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Exhibition of sample does not necessarily make sale one by sample

11-70 The mere fact that a sample is exhibited during negotiation for a sale does not necessarily mean that the sale is by sample: it
is only such if the contract made is for goods in agreement with the sample. 388 Frequently samples are displayed to give no
more than some indication of the nature of the goods offered:

“Whether a seller who exhibits a sample does represent that the bulk is like the sample, or merely that the sample
was honestly and properly taken, and that the buyer must take his own risk as to the bulk, is a question of fact
in each case.” 389

In determining the function of the sample, it should be borne in mind that if the sale is by sample the rules as to satisfactory
quality are different from those in sales not by sample: the condition is that the goods shall be free from defects which would
not be apparent on reasonable examination of the sample, whether or not such examination was made. 390 The fact that this rule
is inappropriate (because an examination was not to be anticipated) would be a strong indication that a sale is not to be regarded
as one by sample. A sale may not be by sample because the seller declines to sell by sample but requires the buyer to examine;
or because the buyer refuses to buy by sample but requires an express warranty.

Written contract
11-71 A number of old cases indicated that where the contract was reduced to writing, and the writing made no mention of sample,
extrinsic evidence could not be introduced to show that a sale by sample was intended. 391 In such cases, however, such evidence
could be introduced to identify the goods by reference to a sample, 392 or to prove a collateral contract that the goods were
warranted to be equal to sample, 393 or to indicate trade usage that such sales are by sample. 394 But this was an application of
the parol evidence rule, which is now of much less importance than it was formerly. 395

Contract made before sample tendered

11-72 Sometimes the contract is made before the tender of a sample, and itself provides for such tender. This is not the paradigm sale
by sample which the Act seeks to regulate and various problems of interpretation may arise. There may first be a question of
whether the seller is bound to tender a sample at all, or whether he has an absolute choice as to whether he proceeds with the
contract or not. 396 Secondly, there may be a question as to whether the sample must comply with descriptive words contained
in the contract, 397 or whether such wording gives a general indication only 398 and, as in the paradigm sale by sample, the
description of the goods is in whole or in part to be inferred from the sample. 399 Thirdly, there may be a question as to whether
the buyer has an unfettered right to reject the sample 400 or whether he can only do so for good reason, such as non-compliance
with description. 401 These and similar matters 402 are questions of interpretation.

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“Bulk”
11-73 It is clear that a sale can be a sale by sample, not only where the goods are unascertained, 403 but also where they are specific. 404
In such cases “bulk” may sometimes even mean the goods delivered less the sample. But there can also be a sale by sample
though the goods are to be manufactured after contract 405 : in such a case bulk means no more than “the contract goods”. So
also, there can presumably be a sale by sample where the contract is simply to supply an article or a few articles identical with
the sample: in such a case again the word “bulk” is really inappropriate. Difficulty is caused by the definition of “bulk” given in
s.61(1), the interpretation section, of the Sale of Goods Act 1979. This definition was inserted by the Sale of Goods (Amendment)
Act 1995, which provides that where there is a sale of a specified quantity of unascertained goods which are part of an identified
bulk, a buyer who has paid the price may obtain property in an undivided share of that bulk. 406 The definition is that:

“… ‘bulk’ means a mass or collection of goods of the same type which—(a) is confined in a defined space or
area; and (b) is such that any goods in the bulk are interchangeable with any other goods therein of the same
number or quantity.” 407

It is plain that this definition is directed towards the purposes of the 1995 Act as above described. Despite the apparent generality
arising from its position in s.61(1) it is submitted that the definition has no relevance to the notion of “bulk” in connection with
the requirement that in sales by sample the bulk correspond with the sample. Although the reference to interchangeability is not
irrelevant to (though of little value for) the notion of bulk in connection with sales by sample, it is quite inappropriate to the
rules for such sales that the bulk which should correspond with the sample must be contained in a defined space or area.

“The bulk will correspond with the sample in quality”

11-74 The correspondence required extends beyond description to cover the quality of the goods. The condition is not complied with
where the goods do not correspond with sample but could be made to do so at trifling cost and trouble. 408 But correspondence
with sample is a notion requiring careful attention:

“The extent to which a sample may be held to ‘speak’ must depend on the contract and what is contemplated by
the parties in regard to it.” 409

Thus, in some cases mere visual comparison is intended: if therefore in such a case the bulk corresponds with the sample on such
comparison, there is no breach under this subsection even though there are other differences of a quite substantial nature. 410
There may in other circumstances be a test by touching, or by chemical analysis, or by microscopic examination. On the other
hand:

“… it is not open to a buyer to submit a sample to an analysis unusual in the trade so as to reveal in it certain
attributes or qualities hitherto unsuspected, and then to require, by virtue of the sample clause alone, that the bulk
should contain the same qualities.” 411

Evidence of trade usage and custom may be admitted as to what constitutes correspondence. 412 There may also be clauses
specifying the time in which testing is to be done or making certain types of certification or testing conclusive: these may in
whole or in part be exemption clauses and come under the rules for such clauses. 413 On the other hand there may be cases
where, by the express terms of the contract, the goods must correspond with sample and also with analysis: in such cases an
extra liability is placed on the seller. 414

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“Free from any defect, making their quality unsatisfactory, which would
not be apparent on reasonable examination of the sample”
11-75 At common law, on a sale by sample, no condition as to any particular quality was ordinarily implied, for:

“… the use of a sample, which to a person of ordinary diligence and experience would disclose the want of
that quality, negatives the implication, because it expresses to the buyer a different intention on the part of the
seller.” 415

There was, however, an implied condition that the goods be free from latent defects making them unmerchantable, and it is this
that the Act restates, now amended to use the new terminology of “satisfactory quality”. 416 The examination referred to need
only be a reasonable one in the circumstances, taking into account the practice of the trade and so forth:

“The office of a sample is to present to the eye the real meaning and intention of the parties with regard to the
subject-matter of the contract, which, owing to the imperfection of language, it may be difficult or impossible to
express in words. The sample speaks for itself. But it cannot be treated as saying more than such a sample would
tell a merchant of the class to which the buyer belongs, using due care and diligence, and appealing to it in the
ordinary way and with the knowledge possessed by merchants of that class at the time. No doubt the sample might
be made to say a great deal more. Pulled to pieces and examined by unusual tests which curiosity or suspicion
might suggest, it would doubtless reveal every secret of its construction. But that is not the way in which business
is done in this country.” 417

11-76 Thus, in one case, a retailer buying plastic catapults tested a sample by pulling back the elastic, with satisfactory results. This
was held reasonable examination and the seller was liable when one of the catapults nevertheless proved unmerchantable (under
the former term). 418 “The Act speaks, not of a ‘practicable’ but of a ‘reasonable’ examination”. 419 There may also be cases
where the sample is too small for the defect to be detected: the term as to quality will then equally apply. 420 The concept of
“satisfactory quality” in s.15(2)(c) must be interpreted in accordance with the statutory definition given in s.14(2A) and (2B). 421

Not confined to business sellers

11-77 It is perhaps surprising that at least this part of the section is not confined to business sellers, though it may well be that
few transactions which could be described as sales by sample are conducted other than by business sellers. 422 The lack of
explanation of the notion of “sale by sample” and the dicta regarding the criteria and methods of comparison certainly seem
to envisage merchants. 423

“Reasonable examination”
11-78

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But in one respect the liability of the seller under s.15(2)(c) is less stringent than that under s.14(2): although the condition
of satisfactory quality is excluded if the defect would be apparent on reasonable examination of the sample, 424 there is no
requirement that such an examination has actually been made. This is presumably because a sale by sample imports the
assumption that examination of the sample will be made, and that the sample is relied on to the extent that it reasonably furnishes
information. It is only beyond this that the provision as to satisfactory quality applies.

Time element
11-79 This is discussed in connection with s.14(2). 425

Relation with s.14(2) and s.14(3)

11-80 Section 14(2) of the Act, which lays down the duty to supply goods of satisfactory quality, 426 formerly applied only to sales
by description. There was then a difference between the effect of that provision, which does not require examination of the
goods but provides that where an examination is conducted there is no liability as to defects which that examination ought to
reveal, and s.15(2)(c), which excludes liability in respect of matters which would be apparent on reasonable examination of
the sample whether such examination took place or not. Since the removal of the restriction of s.14(2) to sales by description,
the claimant in a sale by sample who did not examine the sample could perhaps have put himself in a slightly more favourable
position by suing under s.14(2). The matter is settled by s.14(2C), inserted by the Sale and Supply of Goods Act 1994 s.1(1),
under which it is provided that:

“The term implied by subsection (2) above does not extend to any matter making the quality of the goods
unsatisfactory … (c) in the case of a contract for sale by sample, which would have been apparent on a reasonable
examination of the sample.” 427

As for the relationship between sale by sample and fitness for purpose, in some cases, there may be a sale by sample and a
reliance on the seller under s.14(3) over and above this. 428

Sale by sample and description

11-81 It is possible for the sample to amount to the sole description of the goods, or for any further description given to be no more than
a label for designation of the subject matter, 429 in which case the sale is by sample alone, and the duty is therefore comparatively
limited. But where, as is often the case, a sale is by description as well as by sample, then s.13(2) provides that:

Section 13
“… it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also
correspond with the description.”

430

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In view of the fact that the sample itself in some respects indicates the description of the goods, a sale by sample and description
may raise problems of reconciliation between these two elements:

“The definition of the respective spheres of operation of the description and the sample is a question of construction
of the relevant contract, in the light of the relevant surrounding circumstances.” 431

In particular, where matters of quality go to description, 432 the exhibition of a sample from which quality can be assessed may
impliedly vary the description in this respect; and a certification as to quality may therefore in appropriate cases be conclusive
as to compliance with sample and hence with description. 433

Related contracts
11-82 Provisions similar to s.15 are implied into other contracts for the transfer of property in goods 434 (e.g. contracts of exchange
and for work and materials 435 ); hire-purchase agreements 436 ; and contracts of hire. 437

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Section 4. - Other Implied Terms

Benjamin's Sale of Goods 11th Ed.

Consolidated Mainwork Incorporating First Supplement

Part 4 - Defective Goods

Chapter 11 - Terms as to Description and Quality Implied by the Sale of Goods Act

Section 4. - Other Implied Terms

Terms implied by usage

11-83 By the Sale of Goods Act 1979 s.14(4) 438 : “An implied term about quality or fitness for a particular purpose may be annexed to
a contract of sale by usage”. 439 An old example is Jones v Bowden, 440 where evidence was admitted that at sales of pimento,
where the catalogue did not state that the goods were sea-water damaged, they were warranted free of such damage. The general
rules apply, that the usage or custom must be reasonable, universally accepted by the particular trade or profession or at the
particular place, certain, not unlawful and not inconsistent with the express or implied terms of the contract. 441

Other implied terms

11-84 Other terms may when appropriate be implied into a contract of sale, though this is comparatively rare in that the Sale of Goods
Act 1979 itself implies most of the terms that are relevant 442 and by virtue of the preliminary statement as to implied warranties
in s.14(1) 443 excludes others. Thus an implied term that goods shipped are capable of remaining within their contractual
specification till arrival and a reasonable time thereafter has been rejected, and the judgment casts doubt on the possibility of
other implied terms to similar effect. 444 But it has been held that where goods were ordered from a manufacturer who made such
goods, and was not in any other way a dealer in them, there was, in the absence of agreement or contrary usage, an implied term
that the goods should be of the manufacturer’s own make. 445 Where goods are sold as being of a particular brand, it has been
held that there was an undertaking that they would bear the normal label for that brand. 446 It has also been held that the order of
an article by its trade name is normally to be taken as meaning an article as it was manufactured at the date of the order, whatever
its composition at an earlier date. 447 But it is unwise to treat these isolated decisions on their facts as laying down rules of law.
The principles applicable to the implication of terms are the same as those which operate in the law of contract generally.

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Section 2. - Breach of Contractual Term

Benjamin's Sale of Goods 11th Ed.

Consolidated Mainwork Incorporating First Supplement

Part 4 - Defective Goods

Chapter 12 - Remedies in Respect of Defects

Section 2. - Breach of Contractual Term

Action for damages

12-01 All breaches of contract give rise, in the absence of special provisions, to actions for damages, whether the contract subsists or
is discharged. 90 The buyer’s claim to damages for breach of contract is dealt with in Ch.17.

Right to treat contract as discharged

12-02 Where the breach is serious enough the buyer may also be entitled to treat the contract as discharged, viz. refuse to perform his
own obligations and refuse to accept further performance. A leading dictum explains the position as follows 91 :

“The three sets of circumstances giving rise to a discharge of contract are tabulated by Anson as: (i) renunciation
by a party of his liabilities under it; (ii) impossibility created by his own act; and (iii) total or partial failure of
performance. In the case of the first two, the renunciation may occur or impossibility be created either before or at
the time for performance. In the case of the third it can occur only at the time or during the course of performance.
Moreover, if the third be partial, the failure must occur in a matter which goes to the root of the contract. All
these acts may be compendiously described as repudiation, though that expression is more particularly used of
renunciation before the time of performance has arrived.” 92

Renunciation by seller 93
12-03 Where the seller at the time fixed for performance expressly refuses to perform or declares his inability to perform in the way
required by the contract, the buyer may obviously treat the contract as discharged. He may also do so where the seller by his
conduct evinces an intention (objectively ascertained) not to perform. Nevertheless, communication is an essential ingredient
of renunciation. 94 The term renunciation, and also the term repudiation, are frequently used in connection with problems of
breach of instalment contracts, to designate the conduct by one party in respect of a particular instalment or instalments which
will amount to a refusal to perform and thus release the other party from his obligations. These problems, and the effects of the
buyer’s insisting on keeping the contract alive, are discussed elsewhere. 95 In many cases, there is an express refusal to perform
by one party because he is treating some act of the other party as a renunciation which discharges him; the problem then is as
to whether his view is correct, or whether it is incorrect so that he himself must be treated as the party repudiating. 96 A refusal,

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actual or implied from conduct, to perform a condition would be renunciatory: but it is now clear that refusal to perform other
terms might equally be so, 97 whether because of the likely consequences of the breach or because of its nature, e.g. (in some
cases) where it is deliberate. 98 But “repudiation of a contract is a serious matter not to be lightly found or inferred”. 99 Thus a
minor breach, though deliberate and persisted in, will by no means necessarily amount to a repudiation 100 : the party in breach
may, for example, honestly be doing the best he can to perform his obligations, or believe himself entitled to act as he does
(though this does not of itself prevent the breach from being repudiatory 101 ).

Impossibility of performance
12-04 Although this type of breach does not usually concern defective goods, for the sake of completeness it should be said that where
the seller at the time fixed for performance is unable to perform, the buyer may likewise treat the contract as discharged; and he
may do this even though he did not know of the impossibility and purported to do so for some insufficient reason (or without
giving any). 102 This could occur, for example, where the seller alters, consumes or destroys specific goods before delivery, or
where he sells and delivers them to someone other than the buyer. 103

Anticipatory breach
12-05 As the dictum quoted earlier 104 states, the above two forms of breach entitling the buyer to treat the contract as discharged can
occur before the time for performance is due. In such cases they are referred to as “anticipatory” breaches, and on principle the
buyer is entitled to “accept” such a breach and treat the contract as discharged immediately. 105 This normally requires some
sort of communication; but in some cases “failure to perform may signify to a repudiating party an election by the aggrieved
party to treat the contract as at an end”. 106 It has been said in the context of chartering that the words or conduct must not only
evince an intention not to perform but that the innocent party must subjectively believe this to be the case. 107 In a decision on
the withdrawal clause in a time charterparty, it was categorically stated by Lord Diplock that anticipatory breach depends on
repudiation only. 108 This involves the consequence that impossibility of performing a condition, commencing prior to the time
for performance, cannot amount to anticipatory breach of contract unless a repudiation can also be found on the facts. It will
often be possible to find such a repudiation, but not always. It is difficult to see the justification for this proposition: it was not
necessary to the decision, which turned on the interpretation of a particular contractual stipulation. 109 But until dissented from,
it must have some force. Where there is an anticipatory breach the buyer can also claim damages immediately, and these are in
principle to be assessed with reference to the market price at the time at which the contract ought to have been performed, 110
though this is subject to the buyer’s duty to mitigate damages. 111 Alternatively he can refuse to accept the repudiation and wait
until the time for performance arrives; though if the breach is continuing he may have further opportunities of accepting it. 112
If he does not do so, the seller may repent and tender performance, 113 or may acquire an excuse for non-performance, or may
even be discharged by frustration 114 or by the operation of the Sale of Goods Act s.7. 115 But, if the breach is not accepted,
no duty to mitigate damages will arise. 116

Failure of performance: breach of condition

12-06 The dictum quoted above 117 states that total or partial failure of performance, if accepted, discharges the contract; but goes on
to the effect that where the failure is partial it must be such as to go to the root of the contract. Another way of putting it is to

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say that a total failure of performance discharges the innocent party by implication of the common law; a partial failure does
so where upon the court’s, or upon a statutory, construction of the contract the parties are deemed to have regarded a term as so
important to the transaction that any breach of it is to be regarded as having the same effect, viz. as a condition. 118 Under this
second rubric the Sale of Goods Act specifies the terms any breach of which, however slight, may release the innocent party,
by designating them as conditions. 119 Thus for the purposes of this chapter “failure of performance” will cover the supply
of goods not conforming with description, 120 not of satisfactory quality, 121 not reasonably fit for their purpose, 122 or not
conforming with sample in quality. 123 It will also cover breaches of other, express, conditions 124 : whether or not a stipulation
is a condition depends in each case on the construction of the contract. 125 It should however be borne in mind that s.11(4) of
the Act does not state in so many words that breach of condition entitles the innocent party to treat the contract as repudiated:
it only says that it “may” do so. Thus, it seems that in some cases at least the innocent party may, if he comes in time, retender
conforming goods. 126

Failure of performance: other situations

12-07 For a considerable time after the original Sale of Goods Act of 1893, there was ground for thinking that where a stipulation in
a contract of sale was not a condition, it must by virtue of the wording of the Sale of Goods Act s.11(3), 127 necessarily be a
warranty, viz. a term no breach of which would entitle the innocent party to treat the contract as discharged. But in Hongkong
Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd, 128 it was held that the term as to seaworthiness in a charterparty could not
be designated as either a condition or a warranty, because the events resulting from its breach might be serious or trivial; it was
the seriousness of these events which determined whether the charterer could treat the contract as discharged. In Cehave NV
v Bremer Handelsgesellschaft mbH (The Hansa Nord), 129 this reasoning was extended to sale of goods: the Court of Appeal
held that the wording of the Sale of Goods Act did not exclude terms the breach of which might or might not entitle the innocent
party to treat the contract as discharged, depending on the nature and consequences of the breach. 130 The question whether this
created a third category of “intermediate” or “innominate” terms, or whether it effectively eliminated the category of warranty
as a term no breach of which will entitle discharge, is discussed elsewhere. 131 It is, however, clear that, in sale as in other
contracts, breaches of terms which cannot be classified as conditions, 132 and breaches which cannot be related to any single
identifiable term may still, if serious enough, be repudiatory. But, as has already been pointed out, 133 the Hongkong Fir case
requires a very serious breach and is hostile to discharge as a remedy: this is borne out by its facts, and the facts of The Hansa
Nord also, where rejection was held not justified. 134

Statutory restriction on right to treat contract as discharged for breach of

condition
12-08 The Sale and Supply of Goods Act 1994 s.4(1) introduced a new s.15A into the Sale of Goods Act 1979, which was intended
to limit the right to reject goods for breach of condition where the breach is slight and/or technical. 135 Similar restrictions are
also applicable in respect of related contracts. 136 It reads as follows:

Section 15a

“15A—

(1) Where in the case of a contract of sale—

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(a) the buyer would, apart from this subsection, have the right to reject goods by reason of a breach
on the part of the seller of a term implied by section 13, 14 or 15 above, but

(b) the breach is so slight that it would be unreasonable for him to reject them, the breach is not to
be treated as a breach of condition but may be treated as a breach of warranty.

(2) This section applies unless a contrary intention appears in, or is to be implied from, the contract.

(3) It is for the seller to show that a breach fell within subsection (1)(b) above.”

137

12-09 This section only applies to breaches of the implied terms as to description, quality, fitness for purpose and conformity with
sample laid down in ss.13, 14 and 15 of the Act. It does not apply to express terms, e.g. as to time; and it is furthermore excluded
by express or implied contrary intention. Secondly, it does not apply to other implied terms such as that as to title implied by
s.12(1); nor to duties of the buyer. 138 Where a term is not a condition or a warranty but an intermediate or innominate term 139
the test for treating the contract as discharged will remain the “nature and consequences” test, 140 which may bar doing so
though the breach is more than “slight”. Its main application is likely to be in connection with s.13, under which conformity with
description is an implied condition, thus engaging s.15A, and where cases lay down a strict duty regarding such conformity. 141
It could be thought to create uncertainties in the law, though the provision that the burden of proof is on the seller to establish
that the exception applies will help in resolving these. It may now be more relevant to consider the extent to which descriptive
provisions of a contract are part of the description of the goods referred to by the Act. An obvious example is the commercial
rule that the date of shipment of goods is likely to rank as part of their description. 142 The Law Commission Report 143 stated
that this rule was not intended to be affected by the new provision; though whether this is because the date does not come within
the implied term of s.13 as not being part of the description but a separate term, or because it is an express not an implied term,
or because s.15A is excluded expressly or by implication, is not clear. 144 Similar problems may arise elsewhere: for example,
if the rules as to the condition required of goods on shipment in international sales 145 are now subsumed into the new provision
on durability in s.14(2) of the Act, 146 they are now subject to s.15A. If they constitute a separate implied term, they are not.

12-10 The Law Commission Report which led to the enactment of s.15A sought to prevent what are completely technical rejections
in commercial contracts, which may be motivated by caprice or (more likely) adverse movements in the market which lead a
buyer to seek escape from a contract. It was, however, stated to be “not intended as a major alteration in the law”.
147

It is also stated that the buyer’s motives for rejection are not intended to be regarded as relevant, as “subjectivity” is
referred to as undesirable.
148

It appears therefore that the test of reasonableness is intended to be an objective one, though it still ought to be geared
to a person in the buyer’s position rather than an external observer.
149

It would appear that the section is of very limited effect and has made little difference in practice. There have been no
reported decisions on it since its enactment in 1994,
150

and the Singapore courts have taken a restrictive view of the equivalent provision in that jurisdiction.
151

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Nevertheless, uncertainties as to the section’s potential application, in particular as to when it is impliedly excluded, may
yet create difficulties.

Rights of buyer where contract discharged by breach

12-11 Where the buyer is entitled to treat the contract as discharged in accordance with the above criteria, on principle the contract only
comes to an end if he accepts the breach. This in general requires a positive act: it has been said that “mere silence or inactivity”
may not suffice. 152 Authority in the area of anticipatory breach by the buyer, 153 however, suggests that making another
contract, or simply failing to perform further, may sometimes constitute acceptance of the breach by conduct. 154 Nevertheless,
the buyer will usually reject, and the rejection will constitute a positive act. 155 Thus there will not generally be problems in this
connection unless it is sought to prevent a further tender on the basis that the false tender is repudiatory. 156 Thus if the buyer
already has the goods, he may notify the seller that he refuses to accept them, unless he is to be regarded as having waived the
breach or affirmed the contract at common law, 157 or unless he has impliedly affirmed the contract by accepting them in one
of the ways provided by the Sale of Goods Act s.35. 158 Rejection for an invalid reason may subsequently be justified by the
presence of a valid reason, if it was operative at the time of rejection. 159

Contractual clauses providing for breach

12-12 It is not uncommon for large scale or long-term contracts to make specific provision for the consequences of breach of contract,
and this may extend to clauses indicating when a right to reject or terminate the contract arises. There may also be clauses
concerning damages recoverable (some of which may be ineffective as providing for penalties). In general, the rights under
such clauses must be exercised according to their terms; but there is no reason why they should necessarily exclude or limit
the common law remedy of treating the contract as discharged and recovering damages for loss of bargain. 160 Sometimes it
may be difficult to know by which of the two means a contracting party has purported to terminate; and the issue may matter,
because if a party terminates under a contract term he may sometimes trigger off particular damages provisions, or be regarded
as causing his own loss and so under the general law have a limited right in damages only. This need not be so if it is under
the general law that he terminates. The problems turn on interpretation of particular contract terms, both as to termination and
damages. It is quite possible for the contract to define a breach entitling termination but also to create the result that the innocent
party is entitled to treat the contract as discharged at common law and take advantage of the common law rules as to damages
for loss of bargain. 161

Relation between treating contract as discharged and rejection

12-13 It is often assumed that the right to reject for breach of condition also carries with it the right to treat the contract as discharged.
Indeed, Devlin J. said that “A right to reject is, after all, only a particular form of the right to rescind the contract”. 162 Although
this is often so, it does not necessarily follow. First, in severable instalment contracts, 163 the right to reject applies to each
instalment, 164 but the right to treat the whole contract as discharged by reason of defects in instalments is a separate question
dealt with by the Sale of Goods Act s.31(2). 165 Secondly, where the breach by the seller involves a tender of a wrong quantity
of the correct goods, the buyer’s rights to reject are dealt with by s.30 of the Act, 166 which does not use the terminology of
condition at all but simply confers rights of rejection. The right to treat the contract as discharged in such cases must depend
on general principle. Finally, even where the term broken is a condition, it has to be noted that in s.11(3), which comes nearest

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to defining a condition for the purposes of the Act, 167 it is not stated that breach of a condition necessarily confers the right
to treat the contract as discharged: it merely says that it “may” do so. Hence there may in some cases be a right to retender
conforming goods. Consideration of the last two features follows.

Delivery of more or less than contract quantity

12-14 Although it might seem that the quantity of the contract goods is part of their description, the Sale of Goods Act s.30, following
older cases, lays down special rules for situations where the seller delivers more or less than the contract quantity. These rules
are based on the propositions that the obligation as to quantity is prima facie entire, so that short delivery equates to no delivery;
and that in the case of delivery of too much the seller cannot place upon the buyer the task of sorting out the correct quantity.
They produce much the same effect as that of breach of condition, with one exception. The definition of “condition” in s.11(3)
indicates that the breach of such a term may entitle the buyer to treat the contract as repudiated: there is a possibility that in
some cases he cannot, and that the seller can correct by a further conforming tender if he comes in time. 168 In the case of wrong
quantity, however, the only remedy indicated is that the buyer may reject the tender: there is no indication at all as to whether
he can treat the contract as repudiated, which must turn on general principles only. The possibility of further tenders seems
therefore slightly greater, subject to the rule that the buyer cannot be compelled to accept delivery by instalments. 169 The main
discussion of s.30 is to be found under the heading of Delivery, which is where it appears in the Act. 170

Exception for slight breaches in respect of quantity

12-15 By the Sale of Goods Act s.30(2A), a buyer may not reject under subss.(1) or (2) of s.30 where “the shortfall, or, as may be,
excess is so slight that it would be unreasonable for him to do so”. 171 This implements the policy introduced by the Sale and
Supply of Goods Act 1994, which seeks to restrain rejection for slight defects in commercial cases, to breaches in respect of
quantity. 172 Since rejection for a shortfall or excess which comes under the de minimis principle was already impermissible,
this provision must extend to variations beyond that level, and there is now therefore a further level of “slight” non-compliance
where rejection would be unreasonable. As with the main provision, it is for the seller to show that a breach comes within the
subsection and so does not justify rejection, and again this will help in the resolution of doubtful cases. It should be noted that
the restriction is on the right to reject the whole: where there is excess delivery, the right to reject the excess persists, however
slight the excess.

Seller’s right to retender 173

12-16 There is a certain amount of authority relating to commercial contracts containing specific time limits, and most of it concerned
with tender of documents, that a seller who has made a false tender can withdraw it and substitute a conforming tender before the
relevant date, subject to paying any special expenditure or loss incurred by the buyer in connection with examining and rejecting
the first tender. 174 On this basis it can be said that the common law gives in a sense some measure of a right to cure defects,
175

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a right which has sometimes elsewhere been introduced by statute or equivalent. 176 Thus in Borrowman, Phillips & Co
v Free and Hollis, 177 the seller of a cargo of maize tendered a cargo of the vessel C, which the buyer refused to accept on
the ground that the shipping documents were not tendered with it. The seller insisted on his tender, but the arbitrator decided
against him. He therefore tendered the cargo of the M, the bill of lading for which was also dated within the shipment period,
and it was held that the buyer was bound to take it. Presumably, however, there could be situations where a false tender could on
general principles be regarded as destroying the confidence of the buyer, and would entitle him to treat the contract as repudiated
immediately. 178 And in situations where no time limit was fixed, the scope for the application of this reasoning is more limited.
Just as a buyer cannot normally be compelled to accept delivery in instalments unless the contract contemplated this, 179 so
also, he cannot normally be expected to put up with several attempted deliveries of one consignment. Outside the particular
contexts referred to above, the argument as to loss of confidence would be more often relevant. It would seem therefore that
the right at common law to “cure” defects by retender is limited. 180

Retender after cure

12-17 In J & H Ritchie Ltd v Lloyd Ltd, 181 it was accepted that where a buyer has agreed to repair of the goods he may be obliged
to accept them where they have been repaired to the appropriate standard. On the facts, however, no such obligation arose
in the absence of information as to what was wrong with the goods, and it would seem that, even if such an explanation is
given, sometimes (as in this case) the indication of the nature of the repair would be enough to justify continued rejection. Any
obligation of the buyer to accept repaired goods cannot be based on a right to retender, and nor can the reasoning be that the
retender of goods so repaired of itself puts the seller in compliance under the main contract, for either reasoning would have
led to a different result (unless perhaps the view is taken that the returned goods would not have been of satisfactory quality
if not accompanied by an explanation). Rather, the explanation for the buyer’s obligation to accept is that the arrangement for
repair is a separate transaction suspending the right to reject, either by way of a separate contract, unilateral or even bilateral,
or by way of a conditional waiver; and that the implied terms of that arrangement may require the seller to state what had been
wrong, or even sometimes to specify this before commencing the repair.

What constitutes rejection

12-18 For there to be a valid rejection there must be “a clear notice that the goods are not accepted and at the risk of the vendor”. 182
An unequivocal rejection, being an act of election, prevents a subsequent acceptance of the goods (other than by the agreement
of the seller). 183 However:

“… an unequivocal rejection does not necessarily depend upon the terms of one communication alone. It is
necessary to consider the whole of the relevant communications and also the buyer’s conduct generally.” 184

Thus, where the buyer acts equivocally, as by proposing to resell, stating that he is reselling the goods for the account of any
interested party, or otherwise dealing with them after a purported rejection, it may be held that he has not in truth rejected. 185
Alternatively, however, this may be evidence of a new agreement between buyer and seller; or simply a conversion by a buyer
who has rejected and thus has no power to deal with the goods. 186 It has been suggested that if the seller refuses to accept a
clear rejection, a subsequent dealing with the goods by the buyer might amount to an affirmation. 187 However, conduct not
known to the seller cannot easily be regarded as an affirmation by the buyer, 188 though it might of course amount to conduct
inconsistent with the seller’s ownership, which constitutes acceptance regardless of the seller’s knowledge. 189

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Rejection on wrong grounds

12-19 A rejection on insufficient grounds may sometimes subsequently be justified on other grounds which would have been sufficient
at the time. The matter is discussed elsewhere in this work. 190

Waiver, election, estoppel and affirmation

12-20 The buyer may of course, in accordance with the general principle that a person may waive a stipulation in a contract inserted for
his benefit, waive his rights in respect of the defects. It is important to note that he may do this in two separate ways, with very
different consequences, to each of which the term waiver is not infrequently applied. 191 The first sense amounts to a complete
excusing of the breach: the buyer says he has no objection to the goods as they are and will not even seek damages. This will
be comparatively rare in the case of defective goods. 192 The second sense is a waiver of the right to reject: the buyer says that
he does not seek to reject and will be content with damages. 193 This is often called election, or affirmation of the contract. 194
The Sale of Goods Act 1979 distinguishes between these two senses of waiver in s.11(2), which provides:

“Where a contract of sale is subject to a condition to be fulfilled by the seller, the buyer may waive the condition,
or may elect to treat the breach of the condition as a breach of warranty and not as a ground for treating the
contract as repudiated.”

Waiver
12-21 The distinction made in the previous paragraph is very relevant when the buyer seeks to retract a waiver. A waiver in the sense
of an indication by the buyer that he is satisfied with the defective performance can be regarded as a promise not to sue (or,
if promissory terminology is not thought appropriate, as at best an informal release). 195 As such it does not, upon orthodox
doctrine, bind for the future unless supported by consideration, 196 and if not so supported can be retracted at any time with
reasonable notice; though of course it is effective in the sense that any retraction cannot be retrospective, and it is not possible
to treat as broken a duty in respect of which rights have been waived and not resumed. 197 It has even been said that:

“… the only way of establishing [such a waiver] would be to show a separate agreement, binding on the buyer,
by which he had agreed to surrender the right to damages which automatically vested in him at the time of the
breach.” 198

This dictum seems however too emphatic, for under the principle of Hughes v Metropolitan Railway Co 199 the buyer cannot
retract where it would be inequitable to do so. This will often mean no more than that he must give notice to enable the seller to
resume his former position. Cases may arise where it is inequitable for the buyer ever to retract his waiver, because the seller is
not able to resume that position. 200 A clear example in a contract of sale could occur where the seller, in reliance on the buyer’s
assurances that there was no objection to the goods supplied, has so conducted himself as to prevent himself from making a
further, conforming tender, which he could originally have done 201 ; or where he for that reason loses an opportunity to tender
the goods elsewhere. 202 The exact circumstances in which the principle applies are not yet, however, fully formulated. 203

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The prevailing view seems to be that there must be a clear and unequivocal representation that strict legal rights will not be
relied on, 204 and:

“… some conduct induced by the representations, differing in some material manner from the way in which the
sellers would have conducted themselves if the supposed representation had not been made.” 205

It has been said that “No question arises of any particular knowledge on the part of the representor” 206 ; and the doctrine has
regularly been stated without any such requirement. 207 But if the representor is not aware, or at least has no obvious means
of knowledge, of the facts giving rise to his right to treat the contract as discharged, it may be difficult to establish that the
representation was unequivocal. 208

12-22 These requirements are not in any case free from doubt, and are sometimes articulated in weaker terms: these may or may not
include references to estoppel, though it seems that little turns on the use of this word. 209 Thus as to reliance, it seems clear that
failure to act could be sufficient to make the waiver binding. 210 Other cases also suggest that it is not necessary for the seller’s
action or inaction to be to his detriment, so long as relevant conduct is established. 211 This seems correct, for the detriment is
really to be found in the inequitable consequences that would be suffered if the buyer was able to retract his waiver 212 ; and
later formulations indeed speak only of it being “inequitable”, or “unfair or unjust” to allow the representor to go back on his
waiver. 213 As an exception to the requirement of consideration this seems about as far as the principle should go. Thus, in the
leading case of The Post Chaser, 214 it was held that where a buyer in a string of contracts accepted documents and later, when
they were rejected by the person who bought from him, sought himself to reject them, he was able to do so when the first seller
was not able to establish anything beyond an assumption that the buyer was accepting the documents. The alternative would be to
adopt a new approach whereby such waivers are effective without consideration, but other rules (e.g. as to intention and duress)
are developed to distinguish a true and intended waiver from a mere temporary concession. Such an approach was repeatedly
urged by Lord Denning M.R., 215 but is still contrary to the stream of authority. The burden of proof is upon the person seeking
to prevent retraction 216 ; and the question whether there has been an effective waiver is one of mixed law and fact. 217

Affirmation (election)
12-23 A waiver in the sense of an expression of an intention not to reject but to be content with damages, i.e. an affirmation of the
contract, is however an act of election and cannot be retracted without the consent of the other party. This seems to be based
on the rule that a person must elect or choose between inconsistent rights 218 ; though if the seller’s breach can be regarded as
continuing, as in an instalment contract, the buyer may be able to treat this as a fresh act or acts of repudiation, unless there
is some reliance on the affirmation making it inequitable to do so. 219 Similarly, a buyer who rejects cannot thereafter insist
on delivery. 220 Such a waiver may be express or implied 221 ; but it requires in principle knowledge of the breach waived. It
probably also requires that the buyer knows of the right to reject to which the breach gives rise.
222

But by statute acts or omissions may constitute “acceptance”, which will, as explained below, 223 bar rejection regardless
of the knowledge of the buyer. Thus, where a buyer unequivocally states that goods are accepted the law, regardless of his
knowledge of defects, “deems an election to have been made” 224 and he can no longer reject: the same result flows from
the lapse of a reasonable time. And in Panchaud Frères SA v Etablissements General Grain Co, 225 the Court of Appeal held
that buyers who rejected goods shipped under a c.i.f. contract on an inadmissible ground could not subsequently justify this
on admissible grounds which they could have detected, but did not detect, at the time, and which they only discovered three
years later. This decision, which has proved difficult to understand, was justified as based on estoppel by conduct, 226 or on “an

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inchoate doctrine stemming from the manifest convenience of consistency in pragmatic affairs, negativing any liberty to blow
hot and cold in commercial conduct”. 227 It has been explained on the basis of an extension of the reasoning behind the notion
of acceptance 228 and on the necessity for finality in commercial transactions. 229 As such it does not appear to require that the
representor had knowledge of the circumstances or of his rights. 230 One way of expressing it is as based on an estoppel as to
whether an election has been made. 231 If this is correct, some form of reliance by the representee would be required; on any
formulation it only applies where it is inequitable for the representee to change his mind. 232 The doctrine relates to waiver in
the second sense of the above meanings, viz. waiver of the right to reject, which was all that was strictly in issue. 233 Similar
reasoning has, however, sometimes been invoked in cases on waiver in the first sense, 234 and indeed in other contexts where
objection might be taken to various steps in commercial transactions and is not, 235 or where it might more generally be said
that a party to litigation is seeking to blow both hot and cold. 236 Some of these cases may merit reconsideration.

Statute: acceptance
12-24 The Sale of Goods Act 1979 provides that certain circumstances shall in effect constitute an implied affirmation, in the sense
that the buyer is deemed to have affirmed the contract and is thus restricted to a claim for damages, whether or not he has
discovered the defect. 237 These circumstances are comprised under the heading of acceptance; they operate in addition to the
more general rules discussed above. Section 11(4) provides:

“Subject to section 35A below, 238 where a contract of sale is not severable, and the buyer has accepted the goods
or part of them, the breach of a condition to be fulfilled by the seller can only be treated as a breach of warranty,
and not as a ground for rejecting the goods and treating the contract as repudiated, unless there is an express or
implied term of the contract to that effect.”

This provision no longer applies to consumer sales. 239 Before 1967 the right to reject was also lost in the case of specific goods
by the passing of property, which caused difficulties in that, since in many cases the property would pass on agreement by virtue
of s.18 r.1, 240 there would often in effect be no right to reject. Efforts were made to suggest evasion of this result on the lines
that, where the seller had committed a breach such as to entitle rejection, the contract was not unconditional, 241 or the goods
not in a deliverable state, 242 or that property would not pass in nonconforming goods. 243 This part of the subsection (then
s.11(1)(c)) was, however, removed by the Misrepresentation Act 1967 s.4(1), though it and the problems generated by it may
remain in some other common law jurisdictions. As a result, the loss of the right to reject, where there has been no express
affirmation, depends on whether the goods have been accepted in accordance with the terms of s.35.

Buyer’s right to examine goods

12-25 By the Sale of Goods Act 1979 s.34(1) 244 :

“Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound on request to afford
the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in
conformity with the contract and, in the case of a contract for sale by sample, of comparing the bulk with the
sample.” 245

It should be noted that the right of examination only arises on request, and may be excluded by contrary agreement, express or
implied. The right doubtless imposes an obligation on the seller for breach of which the buyer, if he could prove loss different

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from that consequent upon general failure to perform the contract, could claim damages. But it seems that the main significance
of the right of examination is to impose as a prima facie rule a condition precedent on the buyer’s duty to accept the goods. 246
Thus, if the seller refuses the buyer the opportunity to examine, the buyer is prima facie not in breach if he refuses to take
delivery. 247 Beyond this, the main significance of the provision is to reinforce the notion that the right to reject should not
normally be lost before the goods have been examined.

Testing and fitting

12-26 Where the nature and quality of goods cannot otherwise properly be determined, the right to examine must include the right
to test. Tests must be reasonable and normal ones. They may involve the use of the goods for a short time, or the using up of
a small portion of the goods.
248

But if a buyer goes beyond what is necessary he may find that he has accepted the goods, 249 unless the seller has
acquiesced in further trials. 250 Any cost incurred in fulfilment of the duty to afford the buyer a reasonable opportunity of
examination and testing should be the responsibility of the seller. But the cost of the examination and tests themselves should
be borne by the buyer, 251 though doubtless he could recover this in damages for breach of contract should the goods prove
unsatisfactory. These propositions must yield to the intention of the parties as expressed or implied. Similar reasoning should
be applied when the goods require to be fitted, even when this involves what would otherwise be damage to them (as in the
case of fitting carpets).

Time for examination and testing

12-27 Examination, testing and the like must be carried out within a reasonable time having regard to the nature of the goods and all
the circumstances of the case. 252 Failure to examine or test may be evidence of a waiver of the right to do so, and of acceptance
of the goods, for it could amount to retaining the goods for a reasonable time without intimation of rejection. 253 Where the
goods have not been delivered, it could amount to a waiver of the time for delivery. 254

Contrary agreement
12-28 An agreement that property shall vest in the buyer or payment be made without opportunity to examine or test may be express
or implied. The most obvious example occurs in c.i.f. sales, where it is of the nature of the transaction that the buyer must pay
against documents without any right to examine the goods; if the goods, when they arrive, prove to be unsatisfactory, he may
then, if he acts in time, reject them and recover the price paid. 255 So also in auction sales, examination is normally permitted
before sale, but not after, 256 except for the purpose of ascertaining whether the goods received are those bought. 257 Clauses 258
and customs 259 as to time for rejection and as to non-rejection may also be relied on.

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Place of examination
12-29 In many domestic sales, examination occurs at the seller’s place of business when the goods are sold, even though delivery
occurs later. But where the seller is authorised or required to send the goods to the buyer, the prima facie rule is that the place
of delivery is the place at which the goods are delivered to a carrier, 260 and this would normally be the place for examination.
A leading case is Perkins v Bell, 261 where barley was sold by sample to be delivered at a railway station near the seller’s farm,
and the station was held to be the place of examination. It has, however always been the case that there may be indications to the
contrary which show that the parties contemplated another place, though the fact that the buyer alone contemplated examination
elsewhere is not without more relevant. 262 Thus where the seller delivers to a carrier, in circumstances making this a delivery
to the buyer, but examination at the point of delivery is not reasonable or convenient, the place of examination contemplated
may be the buyer’s place of business. 263 Yet if the examination could conveniently be conducted at the delivery point, this
will normally be the place for it, especially if it was within the reasonable contemplation of the parties that the buyer might
wish from there to distribute the goods direct to sub-buyers, as was the case in Perkins v Bell. 264 Where, however, in such a
case, examination is not practicable by reason of the nature or packaging of the goods, it may be that the place of examination
contemplated is the place of business of the sub-buyer. 265 The normal place of examination may also be varied by agreement
between the parties or by the nature of the transaction. In Heilbutt v Hickson,
266

there was a sale to London merchants of a large quantity of shoes known to be intended for the French army. Some
consignments were examined and accepted by the merchants, but at a later stage certain doubts arose as to the quality of the
shoes which led to the seller’s agreeing to take them back if they were justifiably rejected by the French army. It was held that
this amounted to a variation of the place of examination by agreement between the parties, and that the shoes could be thrown
on the seller’s hands at Lille when later rejected by the French army at that place on the ground that the soles of many (which
had been broken open for examination) contained paper. Brett J. alone went further and was of the opinion 267 that, since the
first examination could not, by virtue of the nature of the defect, be a real examination, the place of examination was France
in any case. The best discussion as to place of examination is often to be found in cases of overseas sales; but these are subject
to special considerations and are treated separately. 268

Acceptance: meaning 269

12-30 Under the Sale of Goods Act s.35(1) 270 (as amended by the Sale and Supply of Goods Act 1994 271 ):

“The buyer is deemed to have accepted the goods subject to subsection (2) below 272 —

(a) when he intimates to the seller that he has accepted them, or

(b) when the goods have been delivered to him and he does any act in relation to them which is inconsistent
with the ownership of the seller.” 273

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Intimation of acceptance
12-31 It might seem at first glance that the draftsman intended the words “intimates to the seller that he has accepted them” to apply
to express affirmation of the contract, the reference to an “act inconsistent with the ownership of the seller” to cover implied
affirmation by conduct, and the “reasonable time” rule 274 to apply to implied affirmation by inactivity. This is not however so.
Although the case originally cited for the “intimation” rule 275 gives no indication as to what was intended, there is nothing to
confine the verb “intimate” to express indications of affirmation; and it will be seen below that the “inconsistent act” rule is not
explicable on the basis of affirmation by conduct. 276 But an intimation of acceptance, if it need not be express, must certainly
be clear. Thus in Varley v Whipp 277 the buyer of an unsatisfactory reaping machine wrote a grumbling letter ending “it will be
no use to me … but I shall be at Huddersfield this week … where I shall be pleased to see you”. It was assumed that this was
not an acceptance, though there was no express statement of intention to reject. There may clearly be express acceptance, as by
signing of a delivery note, despite the fact that there has been no reasonable opportunity of examination 278 ; or by indicating
acceptance of the contract quantity while rejecting excess delivery. 279 In such cases, an indication of acceptance amounts to
a waiver of the right of examination.

Act inconsistent with ownership of seller

12-32 The first problem arising in connection with this phrase is as to its meaning in cases where the property in the goods has
already passed to the buyer, so that the seller has in fact no ownership with which the buyer may act inconsistently. There
may clearly be cases where the property has so passed, but where the buyer may nevertheless reject the goods and revest the
property in the seller unless he has done something constituting acceptance: it might be argued that this mode of acceptance is
inapplicable in such cases. There are indeed old dicta that the notion of acceptance is irrelevant in situations where the property
has passed, but these are clearly obsolete. 280 It is also true that the notion that the property does not pass at all when the goods
are non-conforming was formerly more frequently resorted to. Thus it was said that under s.18 r.5(1), 281 which deals with
unascertained goods, the seller is not authorised to appropriate non-conforming goods. 282 And although the property in specific
goods normally passes on agreement, 283 the right to reject was formerly lost on the passing of property. 284 Thus the problem
was first articulately addressed in connection with documentary sales, where property often passes on transfer of the documents,
but the buyer undoubtedly retains a right to reject the goods on examination unless he has waived it in some way. 285 The
explanation of the phrase adopted in this context is that since by rejecting the goods the buyer has the power of revesting the
property in the seller, the property passed in the first place only conditionally.
286

Thus there is ownership left in the seller by way of reversionary interest, and “it is that reversionary interest with which the
buyer must not, save with the penalty of accepting the goods, commit an inconsistent act”. 287 The old view as to appropriation
of non-conforming goods is no longer so readily accepted, and the rule as to loss of the right to reject specific goods has been
removed by statute. 288 Hence this explanation must be adopted for all those cases, perhaps the majority, where the property
passes to the buyer before he has had an opportunity of examination.

Policy behind words

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As has been stated above, it might be thought that the words “does any act … inconsistent with the ownership of the seller” were
directed towards an implied election to affirm. On general principle an election would require a clear manifestation of intention
to affirm, made by a person who knew that he had the right to reject, and known to the seller. 289 In the context of statutory
affirmation, one might perhaps expect some form of estoppel reasoning: an indication that the buyer was affirming might bar
him from rejection against a seller who knew of and relied on it, even though the buyer was unaware that he had a right to
reject. 290 But in fact neither the words themselves nor the case law require that the seller knew of the buyer’s act at all, though
of course in some situations he may do so. The cases involve two distinct types of situation. The first type consists of cases
where the buyer cannot in practice return the goods because he has consumed them in whole or in part, 291 or used more of them
than was necessary for the purpose of fitting or testing, 292 or incorporated them into a structure from which they cannot readily
be extricated. 293 Such cases could be explained on a different ground, that of impossibility of restitutio in integrum. The second
type comprises cases where the buyer has more generally acted, whether or not the seller knew of this, in a way inconsistent
with any continuing or reversionary interest of the seller: the words carry some implication that the act would otherwise be a
conversion, and are more apposite to situations where no property has passed at all. 294 The only situation of this sort where the
loss of the right to reject was clear and articulately justified is the resale and forwarding of the goods to a sub-buyer. 295 The
justification given here was that “to hold otherwise would be to expose the vendor to unknown risks, impossible of calculation
when the contract was entered into”. 296 The assumption seems to have been that if the right to reject were not lost, the goods
would remain the seller’s property and at his risk and could be sent to and rejected at some place or places (if there were several
sub-sales) uncontemplated by the seller. Presumably a pledge with delivery of possession would have the same effect.

Opportunity of examination
12-34 From the buyer’s point of view the loss of the right to reject in such circumstances might seem unfair if when he forwarded the
goods on he had not had an opportunity to examine them. Older cases suggested that there was no acceptance unless inspection
was reasonably possible before such further delivery. 297 In Hardy & Co v Hillerns and Fowler, 298 however, it was held by
the Court of Appeal that the wording of the Sale of Goods Act prevented this interpretation: the requirement of acceptance was
not (at that time) stated by s.35 to be subject to a reasonable opportunity to examine under s.34(1) 299 and indeed could not be,
because the part of s.35 dealing with acceptance by intimation that the goods are accepted clearly need not be subject to such a
requirement. Thus, goods were held to have been accepted where they had in part been forwarded direct from the ship to a sub-
buyer, though it was in fact not possible to ascertain their overall quality till a larger amount had been unloaded, and the buyer
rejected as soon as he became aware of the breach. This decision was followed in E and S Ruben Ltd v Faire Bros & Co Ltd, 300
where goods were ordered by the buyer to be delivered direct to the sub-buyer: it was held that the buyer had taken constructive
delivery at the seller’s premises and by procuring redelivery thereafter had acted inconsistently with the seller’s ownership. It
seems, however, that in that case the shipment by the seller to the sub-buyer was undertaken as a matter of courtesy only, 301
and that it was this fact that may have led to the conclusion that it was at the seller’s premises that delivery took place.

12-35 It was also possible to argue that the rule did not apply where the place of examination contemplated was the sub-buyer’s
premises. The right of the seller is simply to have rejected goods made available to him at the place of examination. 302 Thus an
act could be said not to amount to an acceptance unless it actually prevented return of the goods at that place. This view could
be reconciled with Hardy & Co v Hillerns and Fowler 303 on the grounds that, in that case, the place of examination was clearly
the place where the goods were received from the ship: the only relevant finding was that, at the time of dispatch to the sub-
buyer, there had not been time for examination of the whole cargo. 304 A decision to this effect was reached in New Zealand. 305

Clarification of the statute

12-36

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The Sale of Goods Act was changed to deal with this problem. By the Misrepresentation Act 1967 306 s.35 was amended to
make clear that loss of the right to reject by act inconsistent with the seller’s ownership was subject to a reasonable opportunity
of the examination which s.34(1) then required. 307 By virtue of the Sale and Supply of Goods Act 1994 s.2 this now appears,
more logically, within s.35 itself, 308 as subs.(2), to which subs.(1) is made subject. 309 It reads:

“(2)Where goods are delivered to a buyer, and he has not previously examined them, he is not deemed to
have accepted them under subsection (1) above until he has had a reasonable opportunity of examining them
for the purpose—
(a)of ascertaining whether they are in conformity with the contract, and
(b)in the case of a sale by sample, of comparing the bulk with the sample.”

Ability to return goods to seller

12-37 It might then be argued that the real reason why delivery of goods to a sub-buyer may be an act inconsistent with the ownership
of the seller is that after this has been done the goods often cannot be returned to the seller at the place of examination, which
is where rejection should be effected. Therefore, if the goods have not been moved from that place, or if the buyer can recover
them intact from his sub-buyer (or pledgee) before he purports to reject, and transport them to the place of examination, a
rejection should be effective. Although this might seem reasonable as a matter of policy, the case law did not support it and
suggested that delivery from the place of inspection, at least, barred rejection of itself. 310 The law was therefore altered, or at
least clarified, by s.35(6)(b) of the Act (inserted by the Sale and Supply of Goods Act 1994), 311 which provides that “the buyer
is not … deemed to have accepted the goods merely because—(b) the goods are delivered to another under a sub-sale or other
disposition”. However, without much discussion of the principles involved, a group of older cases had held lesser acts to be
inconsistent with the seller’s ownership. If correct, they indicate a looser, less specifically reasoned bar on the right to reject,
which could be justified on the basis of estoppel if the seller knew of the acts in question, but which did not in fact require such
knowledge. Examples are the execution of a chattel mortgage over the goods, 312 attempting to sell them, 313 putting them up
for auction and, when a satisfactory bid was not received, buying them in, 314 or simply putting them up for auction, 315 and
registration of change of ownership of a car. 316 Acts which have not qualified have been unloading goods and stacking them
on a wharf, 317 re-bagging rejected corn, 318 repairing goods, sending an invoice for a part of them supplied by the buyer to the
seller, and attempting to resell the goods 319 and claiming on the insurance in respect of the consignment. 320 The correctness
of some of these cases must be open to question.

Dealings with documents

12-38 Special difficulties have occurred in documentary sales where the buyer has made dispositions of documents representing goods,
whether by way of pledge or sale, before their arrival. Before the Misrepresentation Act 1967 it was already clear that the buyer
in an overseas sale did not accept goods merely by making enquiries about their resale, 321 nor by making a contract for their
resale, before goods or documents had arrived, 322 for even if such acts could constitute acceptance, s.35 refers to a situation
“when the goods have been delivered to him”. Where, however, in an overseas sale there had been a dealing with the actual
bills of lading by way of pledge or sale before the arrival of the goods, which frequently occurs, there were difficulties in saying
that the goods had not been delivered, for the documents representing the goods had, and this would often amount to delivery
of the goods: further, the goods might be regarded as having been delivered by being entrusted to a carrier. 323 But in c.i.f. 324
and some f.o.b. 325 sales the buyer retains the right to reject the goods after examination on arrival. It is now clear that in such

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sales any disposition of the documents is only a disposition of the conditional property which the buyer has received, and that
a pledge or a sale of the documents, does not amount to an act inconsistent with the ownership of the seller within s.35. 326

Reasonable time: opportunity for examination

12-39 Section 35 of the Act originally simply mentioned the “lapse of a reasonable time” without intimation of rejection, as a third
factor which would bar rejection. This formulation was perceived as causing a slight difficulty in that the reasonable time was
not expressly made subject to the buyer’s right to examine, as the “inconsistent act” provision had specifically been. 327 This was
not serious, since the possibility of examination could obviously be taken into account in the assessment of the reasonableness
of the time. However, it was thought appropriate to clarify this by the amendments to the Sale of Goods Act introduced by the
Sale and Supply of Goods Act 1994. 328 Now s.35(4) separately provides that:

“The buyer is also deemed to have accepted the goods when after the lapse of a reasonable time he retains the
goods without intimating to the seller that he has rejected them.”

Section 35(5) then specifically states that the question whether the buyer has had a reasonable opportunity for examination is
relevant, inter alia, to the determination whether a reasonable time has elapsed.

Delays caused by attempts to cure defects

12-40 There was a fear, particularly among consumer interests, 329 that where buyers permitted sellers to attempt to rectify defects
over a period, as is not uncommon with cars and, perhaps less often, electrical goods, they might lose the right to reject, whether
because this was an implied indication of acceptance, or an act inconsistent with the seller’s ownership, or because the attempts
caused a reasonable time to elapse. Although a timely appellate decision could have provided useful guidance on this question,
it was feared that lower tribunals, perhaps taking the words of the Act strictly, might bar rejection where the equities of the
situation made this unfair. As with the guidelines in respect of satisfactory quality, therefore, it was thought best to make specific
provision against the difficulty. 330 Section 35(6) of the Act, inserted by the Sale and Supply of Goods Act 1994, 331 therefore
now provides that “The buyer is not … deemed to have accepted the goods merely because—(a) he asks for or agrees to their
repair by or under an agreement with the seller”. The word “merely” should be noted: these matters do not of themselves trigger
off a bar to rejection, but may nevertheless be relevant in considering whether a bar operates. 332 However, when deciding
whether a reasonable time has elapsed account should not be taken of any period during which repairs were carried out. 333

What is a reasonable time

12-41 What is a reasonable time is a question of fact. 334 Section 35 clearly bars rejection in some cases where the buyer did not know
of and even could not have ascertained the defect, for example where the defect is one that would only manifest itself after a
period of time. 335 It seems also that the policy behind the section is one of finality of transactions, 336 which, while it does
not prevent some weight being given to the discoverability of the defect, prescribes that the right to reject be lost fairly quickly
despite this factor. It is certainly clear that the notion of reasonable time prevents the existence of any long-term right to reject
in the case of items, such as washing machines, with defects of durability which by definition will not manifest themselves for
a considerable period: and proposals to alter the law to create such a long-term right were rejected. 337 However, within the
fairly short period which this policy seems to require, there is certainly scope for the discoverability of the defect to be taken

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into account in the ascertainment of reasonable time, as s.35(5) of the Act now requires. Subsections (2) 338 and (6) 339 now
make clear that a reasonable opportunity of examining the goods is relevant to the ascertainment of what is a reasonable time
and that the buyer’s asking or agreeing to repair does not of itself create acceptance.

Before these reforms, a case in which the right to reject a car was held lost in four weeks achieved much prominence in consumer
circles. 340 But since the reforms it has been held in the Court of Appeal that the right to reject a yacht was not lost over a period
of seven months while inquiries and negotiations about rectification of defects with Swedish suppliers were in progress. 341
This is, of course, rather a specialised type of consumer purchase. On the other hand, in a subsequent Court of Appeal case
regarding kitchen equipment delivered in May it was held that the right to reject had been lost by September, despite the judge
of first instance having found that at that time there were at least 20 unremedied breaches of contract. 342 The decision turns
largely on the assessment that the judge of first instance was justified in his overall decision that there had on the facts been
acceptance. But the practical message emerging from it is that buyers who think they may need to reject (whether or not they
know that they may have the right to do so) must be vigilant to assert or preserve their rights. 343

Examples
12-42 It has been said in a commercial context that:

“When one party to a contract becomes aware of a breach of a condition precedent by the other, he is entitled to
a reasonable time to consider what he will do, and failure to reject at once does not prejudice his right to reject if
he exercises it within a reasonable time … He is also entitled during that reasonable time to make enquiries as to
the commercial possibilities in order to decide what to do on learning for the first time of the breach of condition
which would entitle him to reject.” 344

As is to be expected, the resolution of the cases has varied with their facts. 345 Thus the retention of an instalment for 25 days,
during which time correspondence took place between the parties, has been held not to be acceptance, 346 but in another case
retention for three weeks was held to be acceptance. 347 It has been regarded as relevant that the goods were deteriorating, 348
or that expert opinion could have been obtained earlier, 349 or that the buyer acts as if he is relying on his right to damages,
as by negotiating for a reduction in price 350 or calling for adjustments to the goods, 351 or that undue delay may be unfair to
the seller. 352 Conversely, “some level of delay in rejection may be reasonable if the defect is not immediately apparent”. 353
Custom and usage as to rejection in the particular trade will also obviously be relevant. On the other hand, the buyer is entitled
to test the goods 354 or await their testing by others such as experts or sub-buyers 355 ; and the seller may acquiesce in or cause
the delay, as when he assures the buyer that the goods, in the hands of a sub-buyer, will be all right after adjustment, 356 or
attempts to cure defects 357 : in such cases his act may be held to delay acceptance. The buyer may also need, in some cases,
to keep the rejected goods until he can obtain replacements. 358

Rejection of damaged or destroyed goods

12-43 There is a surprising lack of authority as to whether a buyer can reject goods which have been accidentally damaged after
delivery, or, in the case of their destruction, proceed as upon a rejection (assuming in the case of damage that this was not caused
by reasonable and contemplated tests or modification, as in the case of fitting carpets). 359 One way of dealing with the question
is to utilise the requirement of resitutio in integrum, which applies to rescission for matters external to the contract such as
misrepresentation. 360 On this basis the buyer could not reject in such circumstances, at least unless the damage or destruction
arose from the seller’s breach of contract. It seems more likely, however, that the draftsman of the Sale of Goods Act envisaged

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the question as turning on the incidence of property. Risk prima facie follows property in commercial transactions. 361 Thus
where the property in goods has not passed, they are still prima facie at the seller’s risk, subject to the buyer’s duties as bailee.
This principle will certainly often appropriately apply to sales on approval, where the passing of property is normally subject to
a suspensive condition, 362 and where the buyer can be regarded as a mere bailee until he has approved the goods. It would also,
however, apply to other cases, where the seller reserves property for other purposes. Furthermore, it seems that the inference
that property did not pass in non-conforming goods was formerly more readily adopted: in a sale of unascertained goods it was
sometimes said that the buyer did not assent to the appropriation of non-conforming goods. 363 The effect of such reasoning
would therefore be in many cases to place the risk on the seller, subject to the buyer’s duties as bailee of the goods.

12-44 Modern law would more frequently assume that the property had passed to the buyer before the time for rejection. 364 In such
situations the same principle would put the risk on the buyer unless the damage or destruction arose from the seller’s breach
of contract. The position is not however clear. The leading (and almost the only) case is Head v Tattersall, 365 where a horse
was sold at auction, warranted to have hunted with the Bicester hounds. If it did not answer its description it was to be returned
before a certain time, “otherwise the purchaser shall be obliged to keep the lot with all faults”. The horse did not comply with
the description given, and the purchaser returned it within the specified time, by which time it had been injured without his
fault. It was held that he was entitled to do so. It seems that property had passed to him. Some dicta in the case suggest that the
contract gave an express liberty to return the horse, and indeed distinguish the situation where a buyer rejects under the general
law. 366 On the other hand, it can be said that there was not so much an express right of rejection as a time limit on the exercise
of the right to reject, which was therefore exercised under the general law 367 : some of the propositions in the judgments as to
risk are also general in form. 368 The decision was criticised by Williston on the grounds that risk should follow property. 369
12-45 It does not seem appropriate at the present day that the matter should turn on the incidence of property: a seller may reserve
property for various reasons, the most obvious of which is to retain security in the goods, quite unconnected with considerations
as to risk. The matter must therefore be looked at in principle. It might seem initially reasonable to say that it is the seller who
has supplied defective goods, and he must therefore bear the risk of damage or destruction prior to rejection unless this has
occurred through the fault of the buyer. But the difficulty with this formulation is that if the buyer is the owner of the goods,
as will be true in the majority of cases, it is difficult to see in what way he can be at fault in looking after them, however he
chooses to treat them. It seems better therefore to lay down a rule that in the absence of other indications the buyer can only
reject if he can return the goods in good order, damage caused by fair wear and tear, reasonable testing, fitting and the like in the
short period within which rejection is possible being excluded. The risk of accidental damage or destruction before rejection
is therefore on the buyer. 370 Where, however, the goods are not damaged or destroyed but have merely diminished in value
because of market movements, they may still be rejected. 371 This view can be supported by the argument that in many cases it
is the buyer who is in the best position to insure. 372 It seems likely that one reason why the law on this topic is not yet clearly
worked out is that in many cases a buyer who cannot return the goods as they were is, or may (rightly or wrongly) be regarded
as barred from rejection by the “inconsistent act” provision of s.35(1). 373

Acceptance of part
12-46 It seems clear that in the case of an instalment contract, i.e. one involving severable deliveries, the acceptance rules apply to
each instalment separately. 374 Beyond this, however, until the changes made to the Sale of Goods Act by the Sale and Supply
of Goods Act 1994 acceptance of part of the goods barred rejection of the remainder by virtue of s.11(4) of the Act as it then
stood. 375 There was one exception. Under s.30(4) where goods were delivered mixed with goods of a different description, the
buyer might accept the whole, or accept the conforming goods and reject the rest. This provision really represented a different
policy as to part rejection and sat very uneasily with the rest of s.30. The policy of the 1994 reforms 376 was to permit part
rejection, which is allowed in other sale of goods codes. The Act now therefore 377 makes s.11(4) subject to s.35A, 378 subs.
(1) of which provides:

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“If the buyer—

(a) has the right to reject the goods by reason of a breach on the part of the seller that affects some or all
of them, but
(b) accepts some of the goods, including, where there are any goods unaffected by the breach, all such goods,

he does not by accepting them lose the right to reject the rest. ” 379

The provision as to goods mixed with goods of a different description was repealed as superfluous. A full account of it was
given in earlier editions of this work. 380

It is provided that goods are “affected by a breach” for the purposes of this section if by reason of the breach they are not in
conformity with the contract. 381 Where the sale is by instalments, the provision applies to each instalment. 382 The section
applies unless a contrary intention appears in or is to be implied from the contract. 383

12-47 It should be noted that the buyer is permitted to choose how much of the non-conforming goods he rejects: he can reject some
and keep some. If, however, he accepts any conforming goods he must accept them all; though he can of course reject the whole
delivery. If the buyer rejects some of the goods, it might appear that in appropriate cases the seller might make a retender, if
he comes in time 384 ; but he may encounter a difficulty here in that the buyer may perhaps reject the retender on the ground
that he is not bound to accept delivery by instalments. 385

In so far as the buyer rejects some goods and has paid, he must on principle be able to recover back the price of the rejected
goods. 386 If he has not paid, he must presumably pay for the goods accepted.

The relationship between the right to reject part and the right to treat the contract as discharged may create other problems.
Under the previous law, the buyer could only treat the contract as discharged if he rejected the whole delivery. 387 Now that he
is entitled to reject part he may presumably still treat the contract as discharged as a result of that rejection. One may next ask
whether, when the breach is serious enough, it is the whole contract that he treats as discharged, or only the part of it to which
the rejection applies. The answer given to the question may have a practical result, for if he sues for loss of the profit to be made
on the contract, the calculation may be different depending on whether the loss is related only to the rejected goods, or to all the
goods which should have been supplied under the contract. It may be, for example, that the goods accepted are of no use for a
subcontract for which the main contract was to provide the source of supply, but can be used in some other way. It seems likely
that the discharge should be regarded as relating to the rejected goods only, for the buyer could if he wished have rejected the
whole consignment. Similar problems may arise if the seller seeks to retender. 388

Commercial units
12-48 It is, however, obvious that there must be some limit on the right to reject part: the mere fact that something is physically separate
does not mean that it is necessarily appropriate to reject it separately. For example, if of a pair of shoes one is defective it would
not be appropriate to permit rejection of one shoe: the pair should be rejected or none. The same might be true where a buyer
seeks to reject one volume of an encyclopedia comprising several volumes. 389 The Sale and Supply of Goods Act 1994 390
therefore introduced the notion of “commercial unit”, which comes from the United States Uniform Commercial Code. 391 This
feature of the change is (confusingly) introduced in s.35(7), which provides that:

“Where the contract is for the sale of goods making one or more commercial units, a buyer accepting any goods
included in a unit is deemed to have accepted all the goods making the unit.”

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It results from this formulation that the right to reject part only applies to “commercial units”. These are defined in the same
s.35(7), which runs on to say:

“… and in this subsection ‘commercial unit’ means a unit division of which would materially impair the value
of the goods or the character of the unit.”

Examples of the sort of situations intended to be dealt with have already been mentioned above.

Provision in contract as to rejection

12-49 The contract may itself stipulate what constitutes or does not constitute acceptance, 392 and in particular may provide that there
must be rejection, if at all, within a specified period. 393 There may be customs to the same effect. 394 Many commercial contracts
contain non-rejection clauses which prohibit rejection altogether. All these clauses are likely to be classified as exemption
clauses and their effect is discussed elsewhere. 395 The Sale of Goods Act 1979 s.11(4) 396 states that its provisions as to loss of
the right to reject do not apply where “there is an express or implied term of the contract to that effect”. It is however difficult
to envisage a provision that the right to reject is not to be lost on acceptance: an express acceptance would (subject to s.35(3),
above) be a waiver of any such provision, a retention within any time allowed would be reasonable and so not an acceptance at
all, and no act permitted by the contract would be inconsistent with the seller’s ownership. 397 The proviso seems to have been
inserted to deal with situations such as that in Head v Tattersall, 398 where the contract provided for rejection of a horse within
seven days though the property had (probably) passed. In view of the deletion, by the Misrepresentation Act 1967, of that part
of s.11(4) which deprived the buyer of the right to reject after the passing of property, 399 the proviso is of little importance:
save, perhaps, that it precludes argument that there has been acceptance when there is a time limit on rejection, and it is sought
to reject the goods within this limit but after what would normally be a reasonable time.

Effect of rejection on property

12-50 Where the goods have been delivered to the buyer, the property may or may not have passed to him. For example, appropriation
of goods not conforming with description would not pass property, 400 but the appropriation of goods not of satisfactory quality
might. Again, the seller may reserve property even after delivery. 401 If property has not passed, then when the buyer exercises
his right to reject he is simply indicating that he does not accept the goods and hence that it will never pass to him. Where,
however, the property has passed to the buyer, by rejecting the buyer revests it in the seller. 402 It is then said that the property
only passed conditionally in the first place. 403 As has already been explained, 404 this reasoning is convenient in explaining
why, for example, a pledge of the documents does not bar rejection of the goods: it is a pledge of the conditional interest only.
A wrongful rejection would have no effect on the property in the goods unless the seller accepted the repudiation.

Rights and duties of buyer and seller as to rejected goods

12-51 By the Sale of Goods Act 1979 s.36 405 :

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“Unless otherwise agreed, where goods are delivered to the buyer, and he refuses to accept them, having the right
to do so, he is not bound to return them to the seller, but it is sufficient if he intimates to the seller that he refuses
to accept them.”

Where the buyer rightly rejects, therefore, he may throw the goods on the seller’s hands at the place of examination 406 albeit that
the contract may provide that the buyer shall return rejected goods. 407 The goods therefore continue or become the property, 408
and as such become at the risk 409 and expense, of the seller. The buyer cannot exercise any lien over them in respect of
repayment of the price. 410 He is in principle no longer entitled to deal with them except by the express or implied authority of
the seller, 411 and in the rare cases where the doctrine of agency of necessity operates, if that is different.
412

He is, however, an involuntary, or at least a gratuitous bailee, and as such owes a duty of care in relation to the goods; this
may entitle him to reimbursement for expenses incurred. 413 Beyond this, however, the goods seem to be at the seller’s risk.

Tender of totally non-conforming goods

12-52 It has sometimes been suggested that where totally non-conforming goods are tendered under the contract, they cannot be treated
as the contract goods at all, so that an acceptance of such goods under s.35 cannot occur. 414 It seems, however, that a tender of
totally non-conforming goods, if made under the contract, is subject to the rules for acceptance, just as is a tender of defective
goods 415 ; though no doubt there could be circumstances where such a tender could not be related to the contract at all, but
would at best be an offer of a separate contract. 416

Restitution: recovery of money paid

12-53 A buyer who justifiably rejects goods may sue for damages 417 : any award will take into account, and may include, 418 any
part of the price paid. He may alternatively recover any money he has paid in restitution as upon total failure of consideration,
sometimes referred to as “failure of basis”. 419 This right is expressly preserved by the Sale of Goods Act 1979 s.54. Such a
claim may be simpler than a claim for damages in that the buyer need not prove loss nor mitigate: it may indeed yield more
than a claim for damages would, especially on a falling market, 420 though where other loss can be proved a claim for damages
may be preferable. In order to exercise the right to recover money paid, the buyer must terminate the contract, i.e. treat it as
discharged 421 :

“If goods have been properly rejected, and the price has already been paid in advance, the proper way of recovering
the money back is by action for money paid for a consideration which has totally failed, i.e. money had and
received; but that form of action is governed by exactly the same rules with regard to affirming or avoiding the
transaction as in any other case.” 422

Should the buyer affirm the transaction by accepting the goods, 423 he cannot then sue upon a total failure of consideration.
Thus, in Yeoman Credit Ltd v Apps 424 the defendant entered into an agreement for the hire-purchase of a second-hand car.
The car proved seriously defective to an extent which the court held would have entitled him to reject it, notwithstanding the
presence of an exemption clause in the contract. However, the defendant, while complaining as to its state, paid three monthly

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instalments and kept the car until it was repossessed by the owner after six months. It was held that he could not recover the
instalments, but was confined to a claim for damages.

Failure of consideration must be total

12-54 The buyer cannot sue upon a total failure of consideration unless he can return the goods as they were, except where his
inability to do so is attributable to loss or damage which is at the seller’s risk, 425 or is caused by the very breach of which
the buyer complains. 426 Old cases, mainly concerning land, took an even stricter view of the requirement that the failure of
consideration must be total, and there were decisions that, when the buyer had had any enjoyment of the subject-matter of the
contract at all, he could not recover. 427 These cases were connected with the notion that before a party could sue upon a total
failure of consideration he must not merely bring the contract to an end but rather wipe it out or avoid it ab initio; this was
not possible unless true restitutio in integrum could be made. This view of the requirements of the restitutionary claim was,
however, expressly discountenanced by the House of Lords in the Fibrosa case, 428 and these cases should probably nowadays
be taken as examples, albeit rather extreme examples, of cases where the contract was affirmed. 429 The mere fact that the buyer
has had some enjoyment of the subject-matter should not of itself bar a claim upon a total failure of consideration. 430 Such a
view is, however, only maintainable so long as the right to reject must (as at present) be fairly quickly exercised. Strong views
have been expressed that the requirement of total failure, on which there are notable difficult cases, 431 should be abandoned,
and restitution granted subject to allowances for benefits received 432 ; but only statute or the Supreme Court can achieve this.

Recovery of money paid in cases of short delivery

12-55 Where the seller delivers less than the contractual amount, the buyer may of course reject the whole tender. But he is allowed
alternatively to accept the goods delivered. 433 If he does so he must pay for them at the contract rate: this can usually be justified
on the basis that he is voluntarily accepting the offer made. He can also sue for damages, or, instead, recover in restitution any
excess of price paid over and above what is due for the goods delivered, 434 for the original contract has been discharged by
breach, and consideration in respect of which there is failure can be apportioned. 435 It would seem that the same must apply
when the buyer rejects part of the goods, as is now permitted. 436

Recovery in cases of instalment contracts

12-56 Likewise, where the buyer justifiably treats a severable instalment contract 437 as discharged, he can recover any money paid
in respect of goods which he is entitled to return or which he is now under no obligation to accept. Even if the contract subsists,
he can recover the price of instalments justifiably rejected. 438 But in general it seems that he can neither return instalments
previously accepted nor recover payment made in respect of them.

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 Section 4. - Tort Liability in Respect of Goods, UKBC-BENJAMI 475725846 (2021)

Section 4. - Tort Liability in Respect of Goods

Benjamin's Sale of Goods 11th Ed.

Consolidated Mainwork Incorporating First Supplement

Part 4 - Defective Goods

Chapter 12 - Remedies in Respect of Defects

Section 4. - Tort Liability in Respect of Goods

Tort action against seller 449

12-57 Where goods supplied cause personal injury or the destruction of or damage to other property, it is also possible for a dissatisfied
buyer to sue the seller in tort, 450 though by so doing he takes on the burden of proving negligence. An action in tort may in some
circumstances yield more damages 451 (e.g. if expectation of profit cannot be proved, 452 or if the loss claimed is consequential
453

); and the limitation period may run from a different time, viz. in the case of negligence actions the suffering of damage
rather than that of the supply of the defective goods. 454 The Law Reform (Contributory Negligence) Act 1945, which permits
apportionment, applies to tort claims, but its application to contract claims is not yet certain. 455 Circumstances may arise where
an exemption clause covers liability in contract but not in tort. 456 There are also differences in respect of jurisdiction, both
local and international, and in other respects such as the conflict of laws, which are beyond the scope of this work. It has been
said that there is not “anything to the advantage of the law’s development in searching for a liability in tort where the parties
are in a contractual relationship”. 457 Hence the differences between contract and tort as regards the standard of care required
of a seller are unlikely to be of substance. But a tort action may of course lie where there is no privity of contract: indeed, this is
its main utility in this context. Hence such an action may lie against a manufacturer or distributor: and also in favour of a non-
buyer, e.g. a person to whom the buyer gave the goods in question as a gift. 458

Manufacturer or distributor
12-76 Thus an action in tort may also lie and indeed primarily lies against a manufacturer or distributor who puts into circulation
goods which cause personal injury or the destruction of or damage to other property. 459

Care required
12-77 In respect of such forms of damage, where the manufacturer, distributor or seller knew or ought to have known that the goods
were likely to be used without further examination, he owes a duty to take reasonable care in respect of preparation, assembly,

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installation, packaging, labelling, warning, etc. in so far as these are applicable to him on the facts of the case, or as to any other
function he performs or should perform in relation to them.
460

It seems that sale “as seen with all its faults and without warranty” may provide sufficient warning to discharge the duty,
even to a third party 461 ; but it has been suggested that where the article is actually known to be dangerous more warning may
be needed than this, 462 and there is much to be said for such a view.

Duty to warn as to defects subsequently discovered

12-78 Where a seller becomes aware after the sale of a defect in the goods, he may come under a duty to warn the buyer of it, 463
though problems may arise as to whether or not the loss caused or likely to be caused is physical or purely economic. 464 A
manufacturer may be similarly liable. 465

Economic loss: goods which threaten damage or are otherwise

unsatisfactory
12-79 There was for a period authority suggesting that a builder was liable if he negligently erected a building containing latent defects
which merely threatened physical damage, not only to persons or other property but also, according to some authority, to the
structure itself.
466

Such reasoning could have led to applications in the sale of goods. Though explained by some as involving physical
damage, this last liability was in effect a liability in respect of pure economic loss,
467

and raised the possibility of a transmissible warranty against negligence causing economic loss given by a manufacturer
and possibly a distributor or seller.
468

These cases have now been overruled or disapproved in England,

469

and liability for such defects is confined to contract

470

; though authority in other jurisdictions is more liberal, at least in the defective premises context.
471

It is, however, possible that in some circumstances the manufacturer of a separate part of a structure or article may be
liable if it proves defective in such a way as to damage another part of the structure or article, on the footing that this constitutes
damage to “other property”, as opposed to pure economic loss.
472

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And there could be special circumstances where a duty of care in respect of economic loss arises out of an assumption of
responsibility by a manufacturer, distributor or seller towards a buyer, though this will not commonly be the case.

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