TERMS IMPLIED BY STATUTES

CONTENTS

1.0      Introduction

2.0      Objectives

• Main Content
• Terms Implied by Statute
• Time
• Title
• Description
• Fitness for Particular Purpose
• Merchantable Quality
• Sale by Sample

4.0      Conclusion

5.0      Summary

6.0      Tutor-Marked Assignment

7.0      References/Further Readings

 INTRODUCTION

Certain terms are implied by the Sale of Good Act into the contract  of sale of goods whether or not the parties make reference to such terms in the contract. Such terms relates to relevance of time of payment, right to sell, quiet possession, freedom from encumbrance, fitness for purpose, quality of good and compliance with sample. These terms are provided in section 10 t0 i5 of the Sale of Goods Act.

OBJECTIVE

At the end of this unit the learner is expected to be able to discuss such terms implied by statutes.

MAIN CONTENT

Terms implied by Statute

The statutory provision on implied terms are provided in sections 10 to 15 0f the Sale of Goods Act.

TIME

Generally, time of payment is not of essence in a contract of sale of goods. If parties wish to make time an important part of the contract they must state it. Section 10 of the Sale of Goods Act provides that unless a different intention appears from the term of contract, stipulation as to time of payment are not deemed to be of essence in  a contract of sale of goods. Though time of payment is not of the essence of the contract, time is of essence in other aspect of performance such as delivery, shipment, or opening of letter of  credit. In Amadi v. Thomas Aplin and Co, the court held  that failure of the ship to arrive as agreed was a breach of condition as to time.

TITLE

Section 12 of the Sale of Goods Act deals generally with implied condition as to title. The first part deals with condition as to title, the second and the third deal with warranty relating to quiet possession and freedom from encumbrances.

RIGHT TO SELL

Section 12(1) provides that there is an implied condition on the parr of the seller that in the case of sale that he has the right to sell and  in the case of agreement to sell, that he will have the right to sell at the time property is to pass. A person to whom property has not passed would not have a right to sell. Rowland v. Dival(1923) 2KB 500,  Akosile v. Ogidan, and Neblet v. Confectioners Materials  Co (1921)3 K.B 545.

QUIET POSSESSION

Section 12(2) provides an implied warranty that the buyer shall have and enjoy quiet possession of the goods. See Niblett v. Confectioners Material Co (supra).

FREEDOM FROM ENCUMBRANCE

Section 12(3) provides an implied warranty that the goods shall be free from any charge or encumbrance in favour of any third party,  not declared or known to the buyer before or at the time when the contract is made. See Lloyds v. Scottish Ltd Modern Cars & Caravans (1966)1QB, 764.

DESCRIPTION

Section 13 provides that where goods are sold by description, there 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 correspond with the sample if the goods do not correspond with the description. Description are words used to indicate or refer to the  quality  quantity or attribute of the goods. See Re Moore and Co Ltd v. Landauer and Co.(2 KSB 519), Varley v. Whipps (19000 1 Q.B 513. The buyer’s remedy for breach of this condition is either to claim damages or to reject the goods. The right of rejection is exercisable even when the goods are

This is mostly applicable where the buyer has not seen the goods offered to him and relied only on the description of the goods as was in the case of Varley v. Whipps. On the other hand, it applies where the buyer has seen the goods but relies on the seller’s assessment of the goods. See Grant v. Australia Knitting Mills Ltd (1936) AC 85 and Reardon smith Line Ltd v. Ynguar Hansen-Tangen (1976)1 WLR 989.

This section 13 also applies to the mode of packing of the goods as was in Re Moore and Co Ltd v. Landauer and Co.

FITNESS FOR PARTICULAR PURPOSE

Section 14 provides that there are no implied warranty or condition as to the quality or fitness for a particular purpose of goods supplied under a contract of sale, except as follows, where the buyer expressly or by implication makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description which is in the course of the seller’s business to supply. The requirements for the application of this condition are

1. The buyer must make known (expressly or by implication)to the seller, the particular purpose for which he wants the goods. See Khalil and Dibbo Mastrionikolis (1948) 12 WACA
2. 462. Where the goods is used for only one purpose, it will be deemed to have been impliedly made known to the seller. See Priest v. Last(1949) 12 WACA 462 where a hot water bottle which burst while in use was held to be unfit for the particular purpose for which it was bought. See Osemobor Niger Biscuit Co Ltd (1973)2 NCLR, 382
3. The buyer must have relied on the seller’s skill and judgement See Grant v. Australia Knitting Mills (supra) contrast with Ijomo v. Mid Motors Nigeria Ltd (Igweike Page 50)

MERCHANTABLE QUALITY

Section 14(2) provides that where goods are bought by description from a seller who deals in goods of that description, 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. The conditions to be fulfilled for this section to be applicable are:

1. The purchase must have been by description and this include a sale under trade name
2. The goods must be such that the seller deals in
3. Where the buyer examines the goods, his rights under section 14(2) are destroyed as regards defect which such examination ought to have Where there is opportunity for the buyer to examine , he will be deemed to have examined.

Goods are unmerchantable where they are not fit for purpose for which the goods would normally be used. See Plastic Manufacturing Co Ltd v. Toki of Nigeria Ltd(1976) 12 CCHCJ/2701

SALE BY SAMPLE

Section 15(2) provides that where there is a sale by sample, there is an implied condition that: the bulk shall correspond with the sample in quality. The buyer shall have a reasonable opportunity of comparing the bulk with the sample. The goods shall be free from  any defect rendering them unmerchantable which will not be apparent on reasonable examination of the sample

 CONCLUSION

Certain terms are implied by the statute notwithstanding whether or not the parties make reference to it in their contract.  The  implication is that such term will apply to all contracts of sale of goods whether or not parties remember to mention it in their contract. This makes it almost impossible for sellers to knowingly defraud an innocent purchaser.

SUMMARY

At the end of this unit, you were able to know such terms implied by the Sale of Goods Act as contained in section 10 to 15. The place of time in contract of sale of goods, implied conditions and warranties and effect of examination by buyer in a sale by description and sample.

TUTOR-MARKED ASSIGNMENT

Comparative analysis of terms implied by statute in contract of sale of goods.

REFERENCES/FURTHER READINGS

1893. Sale of Goods Act,

2. Rawlings, Commercial Law, University of London, (2007)
3. Igweike, Nigerian Commercial Law, Sale of Goods, Malthouse Law Books, (second edition) 2001
4. C. Okany, Nigerian Commercial Law, 1992.
5. A. M. Agbonika and J. A. A. Agbonika, Sale of Goods (Commercial Law), 2009, Ababa Press Ltd
6. J. Okoro (2013), Business Law for Professional Exams, MaltHouse Press Ltd.