Description
Ownership of property may be private, collective, or common and the property may be objects, land/real estate, or intellectual property. Determining ownership in law involves determining who has certain rights and duties over the property.
Ownership and Quality of Goods: Cases
1
Ownership and Quality of Goods: Cases
2
Case: Contract of Sale
Contract 1: Arman contracts to give his washing machine to Manjari for her television.
3
Case: Contract of Sale
Contract 1: Arman contracts to give his washing machine to Manjari for her television. (Barter or Exchange)
4
Case: Contract of Sale
Contract 2: Arman contracts to give his washing machine to Manjari for a payment of Rs.10,000.
5
Case: Contract of Sale
Contract 2: Arman contracts to give his washing machine to Manjari for a payment of Rs.10,000. (Sale)
6
Case: Contract of Sale
Contract 3: Arman contracts to give his washing machine to Manjari for a payment of Rs.2,000. The machine has to be returned back after a year.
7
Case: Contract of Sale
Contract 3: Arman contracts to give his washing machine to Manjari for a payment of Rs.2,000. The machine has to be returned back after a year. (Hire)
8
Case: Contract of Sale
Contract machine Manjari. machine interest. 4: Arman contracts to give his washing to Manjari for a payment of Rs. 5, 000 by Manjari would return back the washing when Arman pays back Rs. 5, 000 with
9
Case: Contract of Sale
Contract machine Manjari. machine interest. (Pledge) 4: Arman contracts to give his washing to Manjari for a payment of Rs. 5, 000 by Manjari would return back the washing when Arman pays back Rs. 5, 000 with
10
Case: Sale without ownership
Akash buys a laptop computer from Ramesh in response to an advertisement. Ramesh is an assistant to Ravi, and has access to the laptop which belongs to Ravi. Akash has no idea that Ramesh is not the owner of the laptop.
Owner: Ravi Seller: Ramesh Buyer: Akash
Who should get the laptop?
11
Judgement: Bishopgate v. Brakes
In the development of our law, two principles have striven for mastery. The first is the protection of property. No one can give a better title than he himself possesses. The second is the protection of commercial transactions. The person who takes in good faith and for value without notice should get a good title. The first principle has held sway for a long time... (Lord Denning)
12
Judgement: Rowland v. Diwall
… there has been a total failure of consideration, that is to say that the buyer has not got any part of that for which he paid the purchase money. He paid the money in order that he might get the property, and he has not got it.
13
Case: Sale of a Stolen Car
Sold On 3 Feb, 1984 6 Feb, 83 Sold to Amount Car stolen from Miss Hopkin Autochoice (Bridgend) Ltd £2, 100 £2, 350 £2, 650
14 March 1983 Mid-Glamorgan Motors Ltd 18 March, 1983 6 Jan, 1984 Jones
Insurers ask for the car
14
Case: Sale of a Hired Car
Sold on Aug 1, 1951 Aug 11, 1951 Aug 11, 1951 Aug 30, 1951 Sold to Leonard Kennedy Mr. Hayton Kingsway Motors Ltd. Mr. Butterworth Amount (in Pounds) 1000 1015 1030 1275
15
Case: Hired Car: List of Events
Date (All in 1952) July 16 or 17 July 17 or 18 July 25 Aug 2 Event Butterworth gets to know the real owner Kingsway Motors asked to repudiate contract (By Butterworth) Miss Rudolf becomes the Owner of the car Butterworth insists (with reference to July 17 letter) to repudiate contract
16
Case: Condition and Warranty
A buyer contracts to buy a television set with its body in silver colour. The body of the television set which is delivered is black. Has the buyer got what was contracted for? Has the buyer not got what was contracted for?
17
Case: Internet Shop
Asim visited an e-shop and liked a shirt listed with a picture as „sky blue, pure cotton?. Asim put the shirt in his shopping cart and paid for it through his credit card. The shirt was delivered to him a week later. After opening the package, he noted a label on the shirt which read 'cotton 70% polyester 30%'. Asim wants to return back the shirt and get his money back.
18
Summary
Quality of goods supplied must confirm with the description.
19
Case: Different Car Colour
An advertisement described a car: latest model, metal pearl.? „Maruti Zen,
Avinash examined the car, test drove it and bought it. Now he wants to return back the car as its colour is not metal pearl but white.
20
Summary
A buyer must get the described good.
If the buyer, however, examines the good, the description would be modified to the extent the examination brings out deviations from the description.
21
Case: Half the Advertised Car
Taylor advertised: “Herald convertible, white, 1961, twin carbs. 190. Telephone Welwyn Garden after 6.00 pm". Beale visited Taylor and was given a ride on the car. After buying the car, the garage diagnosed the car was welded out of two cars. The back portion was from a 1961 model but the front and the engine was an older model.
22
Summary
A contract is a bundle of terms. Not all terms are of central importance. Some terms constitute the core of the contract while others are subsidiary. The core terms are called condition and subsidiary terms warranty.
A contract can be repudiated for the violation of the condition. A contract cannot be repudiated for the violation of a warranty but damages will need to be paid.
23
Summary
On examination, the description is modified only to the extent of apparent deviations an ordinary examination would bring out.
24
Judgement: Varley v. Whipp
Varley sold a reaping machine to Whipp, which neither of the two had seen before the sale. The machine was described as new but it was an old machine. The court noted: The term „sale of goods by description? must apply to all cases where the purchaser has not seen the goods, but is relying on the description alone.
25
Judgement: Beale v Taylor
... if the buyer has not seen the goods, then in the ordinary way the contract would be one where the buyer relied on the description alone. Sale of goods by description may, however, apply where the buyer has seen the goods if the deviation of the goods from the description is not apparent …
26
Summary
1. If the buyer has not seen or examined the goods, the supplied goods must meet the description. 2. If the buyer has seen or examined the goods but the deviations from description would not be apparent on an ordinary examination, the goods must meet the description. 3. If the buyer has seen or examined the goods and the deviations from description would be apparent on an ordinary examination, the description would be modified to the extent of the deviations.
27
Legal Provision
15. Sale by description.- Where there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description…
28
Case: Sale by General name
Manan ordered 500 „electronic watches? from a shop in Mumbai for Rs. 80 a piece. On taking delivery, Manan realised that most of the watches were not working. The watches were of poor quality. Should he be allowed to return the watches and get back his money?
29
Case: Sale by General name
Manan ordered 500 „electronic watches? from a shop in Mumbai for Rs. 80 a piece. On taking delivery, Manan realised that most of the watches were not working. The watches were of poor quality. Should he be allowed to return the watches and get back his money? (For the goods supplied to be called „electronic watches?, the least these should do is keep time)
30
Summary
Goods must be fit for the purpose these are known to be. For example, radio must play, TV must show pictures, pen must write and car must move.
31
Case: Sale by General Name
Akshay asked for „mirrors? to be delivered. The mirrors are delivered. Akshay is unhappy with the quality of the mirrors as these have scratches and wants to return these back. While the seller claims that a few scratches are normal. Thus, the buyer and seller have a dispute over its quality. How do we settle on the degree of scratches on the mirrors for these to become unacceptable to the parties?
32
Judgement: Merchantable Quality
… the intention of both parties must be taken to be, that it shall be saleable in the market under the denomination mentioned in the contract between them. The purchaser cannot be supposed to buy goods to lay them on a dunghill.
It appears to us that, in every contract to supply goods of a specified description which the buyer has no opportunity to inspect, the goods must not only in fact answer the specific description, but must also be saleable or merchantable under that description.
33
Case: Photocopier Machine
Photocopier Machine - 100 pieces 16 Ppm(A4) Scan Resolution 1200 Dpi Speed 3 Sec Per Page at 33.6 Kbps
One of the supplied photocopiers would get overheated in just a few minutes and stop working.
34
Case: Use Described
A customer to a shopkeeper, “I want a glue which can stick ceramic.” The shopkeeper gives a tube to the customer and says, This would serve you needs very well.” The adhesive did not work. It was all right for sticking paper together but not adequate for ceramic.
Does the buyer have a remedy?
35
Summary
If a buyer describes the use for which the goods are needed, and relies on the skill and judgement of the seller, the seller should supply goods fit for the purpose.
36
Case: Imitation Pearls
Ranjani bought synthetic pearls from a shop “Aesthetics: A woman?s Shop” thinking that they were natural pearls. The pearls were hung on stands with prices written on them. You could choose what you wanted. She wants to return back the pearls and claim her money back.
37
Case: Imitation Pearls
Let us do the following variations of the case:
• Ranjani says to the shopkeeper, “Authentic pearls, aren't they?”. The shopkeeper says, “Yes”
• The shop has a board outside: „Aesthetics: A woman?s Shop for authentic jewellery? • It is a law that imitation jewellery must bear a declaration that is is imitation.
38
Summary
Buyer beware. Ordinarily, buyer buys at his own risk.
39
Summary: Layering of principles
Buyer Beware is the original rule. Over a period of time, the following exceptions have got superimposed over it:
1. Goods should confirm with description.
2. Goods should be of merchantable quality. 3. Goods should be fit for the described purpose if the buyer Relies on the skill and judgement of the seller.
40
Legal Provision: Section 16
16. Implied conditions as to quality or fitness.…no implied warranty or condition as to the quality or fitness … (Buyer Beware) except as follows
1) Where the buyer … makes known to the seller the particular purpose for which the goods are required … relies on the seller's skill or judgment, and the goods are of a description which it is in the course of the seller's business to supply (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be reasonably fit for such purpose:
41
Legal Provision: Section 16
(2) Where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be of merchantable quality:
Provided that, if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed.
42
Legal Provision: Sec 15
15. Sale by description.- Where there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description; and, if the sale is by sample as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description.
43
Judgement: Drummond V. Ingen
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.
44
Legal Provision: Section 17
17. Sale by sample.- … the goods shall be free from any defect, rendering them unmerchantable which would not be apparent on reasonable examination of the sample.
45
doc_198447336.ppt
Ownership of property may be private, collective, or common and the property may be objects, land/real estate, or intellectual property. Determining ownership in law involves determining who has certain rights and duties over the property.
Ownership and Quality of Goods: Cases
1
Ownership and Quality of Goods: Cases
2
Case: Contract of Sale
Contract 1: Arman contracts to give his washing machine to Manjari for her television.
3
Case: Contract of Sale
Contract 1: Arman contracts to give his washing machine to Manjari for her television. (Barter or Exchange)
4
Case: Contract of Sale
Contract 2: Arman contracts to give his washing machine to Manjari for a payment of Rs.10,000.
5
Case: Contract of Sale
Contract 2: Arman contracts to give his washing machine to Manjari for a payment of Rs.10,000. (Sale)
6
Case: Contract of Sale
Contract 3: Arman contracts to give his washing machine to Manjari for a payment of Rs.2,000. The machine has to be returned back after a year.
7
Case: Contract of Sale
Contract 3: Arman contracts to give his washing machine to Manjari for a payment of Rs.2,000. The machine has to be returned back after a year. (Hire)
8
Case: Contract of Sale
Contract machine Manjari. machine interest. 4: Arman contracts to give his washing to Manjari for a payment of Rs. 5, 000 by Manjari would return back the washing when Arman pays back Rs. 5, 000 with
9
Case: Contract of Sale
Contract machine Manjari. machine interest. (Pledge) 4: Arman contracts to give his washing to Manjari for a payment of Rs. 5, 000 by Manjari would return back the washing when Arman pays back Rs. 5, 000 with
10
Case: Sale without ownership
Akash buys a laptop computer from Ramesh in response to an advertisement. Ramesh is an assistant to Ravi, and has access to the laptop which belongs to Ravi. Akash has no idea that Ramesh is not the owner of the laptop.
Owner: Ravi Seller: Ramesh Buyer: Akash
Who should get the laptop?
11
Judgement: Bishopgate v. Brakes
In the development of our law, two principles have striven for mastery. The first is the protection of property. No one can give a better title than he himself possesses. The second is the protection of commercial transactions. The person who takes in good faith and for value without notice should get a good title. The first principle has held sway for a long time... (Lord Denning)
12
Judgement: Rowland v. Diwall
… there has been a total failure of consideration, that is to say that the buyer has not got any part of that for which he paid the purchase money. He paid the money in order that he might get the property, and he has not got it.
13
Case: Sale of a Stolen Car
Sold On 3 Feb, 1984 6 Feb, 83 Sold to Amount Car stolen from Miss Hopkin Autochoice (Bridgend) Ltd £2, 100 £2, 350 £2, 650
14 March 1983 Mid-Glamorgan Motors Ltd 18 March, 1983 6 Jan, 1984 Jones
Insurers ask for the car
14
Case: Sale of a Hired Car
Sold on Aug 1, 1951 Aug 11, 1951 Aug 11, 1951 Aug 30, 1951 Sold to Leonard Kennedy Mr. Hayton Kingsway Motors Ltd. Mr. Butterworth Amount (in Pounds) 1000 1015 1030 1275
15
Case: Hired Car: List of Events
Date (All in 1952) July 16 or 17 July 17 or 18 July 25 Aug 2 Event Butterworth gets to know the real owner Kingsway Motors asked to repudiate contract (By Butterworth) Miss Rudolf becomes the Owner of the car Butterworth insists (with reference to July 17 letter) to repudiate contract
16
Case: Condition and Warranty
A buyer contracts to buy a television set with its body in silver colour. The body of the television set which is delivered is black. Has the buyer got what was contracted for? Has the buyer not got what was contracted for?
17
Case: Internet Shop
Asim visited an e-shop and liked a shirt listed with a picture as „sky blue, pure cotton?. Asim put the shirt in his shopping cart and paid for it through his credit card. The shirt was delivered to him a week later. After opening the package, he noted a label on the shirt which read 'cotton 70% polyester 30%'. Asim wants to return back the shirt and get his money back.
18
Summary
Quality of goods supplied must confirm with the description.
19
Case: Different Car Colour
An advertisement described a car: latest model, metal pearl.? „Maruti Zen,
Avinash examined the car, test drove it and bought it. Now he wants to return back the car as its colour is not metal pearl but white.
20
Summary
A buyer must get the described good.
If the buyer, however, examines the good, the description would be modified to the extent the examination brings out deviations from the description.
21
Case: Half the Advertised Car
Taylor advertised: “Herald convertible, white, 1961, twin carbs. 190. Telephone Welwyn Garden after 6.00 pm". Beale visited Taylor and was given a ride on the car. After buying the car, the garage diagnosed the car was welded out of two cars. The back portion was from a 1961 model but the front and the engine was an older model.
22
Summary
A contract is a bundle of terms. Not all terms are of central importance. Some terms constitute the core of the contract while others are subsidiary. The core terms are called condition and subsidiary terms warranty.
A contract can be repudiated for the violation of the condition. A contract cannot be repudiated for the violation of a warranty but damages will need to be paid.
23
Summary
On examination, the description is modified only to the extent of apparent deviations an ordinary examination would bring out.
24
Judgement: Varley v. Whipp
Varley sold a reaping machine to Whipp, which neither of the two had seen before the sale. The machine was described as new but it was an old machine. The court noted: The term „sale of goods by description? must apply to all cases where the purchaser has not seen the goods, but is relying on the description alone.
25
Judgement: Beale v Taylor
... if the buyer has not seen the goods, then in the ordinary way the contract would be one where the buyer relied on the description alone. Sale of goods by description may, however, apply where the buyer has seen the goods if the deviation of the goods from the description is not apparent …
26
Summary
1. If the buyer has not seen or examined the goods, the supplied goods must meet the description. 2. If the buyer has seen or examined the goods but the deviations from description would not be apparent on an ordinary examination, the goods must meet the description. 3. If the buyer has seen or examined the goods and the deviations from description would be apparent on an ordinary examination, the description would be modified to the extent of the deviations.
27
Legal Provision
15. Sale by description.- Where there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description…
28
Case: Sale by General name
Manan ordered 500 „electronic watches? from a shop in Mumbai for Rs. 80 a piece. On taking delivery, Manan realised that most of the watches were not working. The watches were of poor quality. Should he be allowed to return the watches and get back his money?
29
Case: Sale by General name
Manan ordered 500 „electronic watches? from a shop in Mumbai for Rs. 80 a piece. On taking delivery, Manan realised that most of the watches were not working. The watches were of poor quality. Should he be allowed to return the watches and get back his money? (For the goods supplied to be called „electronic watches?, the least these should do is keep time)
30
Summary
Goods must be fit for the purpose these are known to be. For example, radio must play, TV must show pictures, pen must write and car must move.
31
Case: Sale by General Name
Akshay asked for „mirrors? to be delivered. The mirrors are delivered. Akshay is unhappy with the quality of the mirrors as these have scratches and wants to return these back. While the seller claims that a few scratches are normal. Thus, the buyer and seller have a dispute over its quality. How do we settle on the degree of scratches on the mirrors for these to become unacceptable to the parties?
32
Judgement: Merchantable Quality
… the intention of both parties must be taken to be, that it shall be saleable in the market under the denomination mentioned in the contract between them. The purchaser cannot be supposed to buy goods to lay them on a dunghill.
It appears to us that, in every contract to supply goods of a specified description which the buyer has no opportunity to inspect, the goods must not only in fact answer the specific description, but must also be saleable or merchantable under that description.
33
Case: Photocopier Machine
Photocopier Machine - 100 pieces 16 Ppm(A4) Scan Resolution 1200 Dpi Speed 3 Sec Per Page at 33.6 Kbps
One of the supplied photocopiers would get overheated in just a few minutes and stop working.
34
Case: Use Described
A customer to a shopkeeper, “I want a glue which can stick ceramic.” The shopkeeper gives a tube to the customer and says, This would serve you needs very well.” The adhesive did not work. It was all right for sticking paper together but not adequate for ceramic.
Does the buyer have a remedy?
35
Summary
If a buyer describes the use for which the goods are needed, and relies on the skill and judgement of the seller, the seller should supply goods fit for the purpose.
36
Case: Imitation Pearls
Ranjani bought synthetic pearls from a shop “Aesthetics: A woman?s Shop” thinking that they were natural pearls. The pearls were hung on stands with prices written on them. You could choose what you wanted. She wants to return back the pearls and claim her money back.
37
Case: Imitation Pearls
Let us do the following variations of the case:
• Ranjani says to the shopkeeper, “Authentic pearls, aren't they?”. The shopkeeper says, “Yes”
• The shop has a board outside: „Aesthetics: A woman?s Shop for authentic jewellery? • It is a law that imitation jewellery must bear a declaration that is is imitation.
38
Summary
Buyer beware. Ordinarily, buyer buys at his own risk.
39
Summary: Layering of principles
Buyer Beware is the original rule. Over a period of time, the following exceptions have got superimposed over it:
1. Goods should confirm with description.
2. Goods should be of merchantable quality. 3. Goods should be fit for the described purpose if the buyer Relies on the skill and judgement of the seller.
40
Legal Provision: Section 16
16. Implied conditions as to quality or fitness.…no implied warranty or condition as to the quality or fitness … (Buyer Beware) except as follows
1) Where the buyer … makes known to the seller the particular purpose for which the goods are required … relies on the seller's skill or judgment, and the goods are of a description which it is in the course of the seller's business to supply (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be reasonably fit for such purpose:41
Legal Provision: Section 16
(2) Where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be of merchantable quality:
Provided that, if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed.
42
Legal Provision: Sec 15
15. Sale by description.- Where there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description; and, if the sale is by sample as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description.
43
Judgement: Drummond V. Ingen
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.
44
Legal Provision: Section 17
17. Sale by sample.- … the goods shall be free from any defect, rendering them unmerchantable which would not be apparent on reasonable examination of the sample.
45
doc_198447336.ppt