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Justin Santiago, BAppSc (Hons), MBA, LLB (Hons) comes from a journalism, market research, intellectual property and strategic communications consulting background. Now based in Melbourne he spends his time advising businesses on how to communicate to their customers as well as writing on various subjects of interest in this blog.

Tuesday, February 17, 2009

Decription and Satisfactory Quality

Description and satisfactory quality are ambiguous terms and need more clarity. - Justin Santiago

Knowledge of the distinction between description and satisfactory quality is essential in any sale of goods. The description is said to denote the essence of the goods whereas mere quality does not. The relevant case law is Ashington Piggeries Ltd v Christopher Hill Ltd – a term ought not to be regarded as part of the description unless it identifies the goods sold. Goods may comply with the description but be of unsatisfactory quality, or unfit for the purpose, unsafe, not durable, contain minor defects of have a defective appearance and finish. Alternatively, goods may be of satisfactory quality but fail to correspond to their description. Statements as to the quality are not normally descriptive but there may be an overlap, for instance. ‘A woollen suit’. If the suit is a mixture of wool and other fabrics it does not correspond to description. If the suit is not of a satisfactory quality then it is not of satisfactory quality.

The relevant law pertaining to description is found in SS13(1) and S13(1A) of the Sale of Goods Act 1979 there is an implied condition that the goods correspond with the description. If there is a breach of this implied condition the buyer has the right to reject the goods. The rule is very strict and a sale of goods is not prevented from being a sale by description solely because the buyer himself selects the goods S13(3), Grant v Australian Knitting Mills.

There are however difficulties in determining what amoungs to a description. In Harlingdon & Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd the description must have a sufficient influence in the sale to become an essential term of the contract. If the buyers did not rely on the description of the painting as one by Gabriele Munche but instead relied on their own assessment then it will not be considered a sale of goods by description. In Gill & Dufus SA v Berger & Co Inc one must look to the contract as a whole to identify the kind of goods that the seller was agreeing to sell and the buyer to buy.

Test to determine breach of S13 have traditionally been very strict. In Re Moore an Landauer it was held that a consignment of canned goods although were in the correct quantity were packed in the wrong configuration failed to match the description. However the modern view is more toleant and in Reardon Smith Line v Yngvar Hansen Tangen it was held that where the ship was constructed did not make a difference as long as a ship was delivered - they were words of identification not words of identity. Also the comparison between the goods as described and the goods as delivered is made according to the assessment of a business person or a reasonable consumer and not that of a scientist : Ashington Piggeries v Christopher Hill. However this raises uncertainty in the law where for example a designer bag made in China may be construed differently from one made in Italy although it is essentially the same bag - what exactly amounts to identity and identification is not clearly defined.

S15A has further limited the scope for parties to avoid the contract based on slight variations in the description. Unless the contract now declares that the description is a condition entitling the innocent party to avoid the contract it would now be up to the court to decide whether or not the breach is so slight that it would be unreasonable to reject the goods.

In the case of satisfactory quality there is no general rule that the seller undertakes to guarantee the quality of goods and fitness for a particular purpose.
S14(1) confirms traditional broad principle of caveat emptor with regard to quality and fitness for purpose and only lays down exceptions under S14(2) when a seller sells in the course of business albeit even if it is only incidental : Stevenson v Rogers.

Under S14(2A) – satisfactory quality would depend on the opinion of a reasonable person taking into account all relevant circumstances : Rogers v Parish. Also the question was not whether the reasonable person would find the goods acceptable but was an objective comparison of the state of goods with the standard which a reasonable person would find acceptable: Clegg v Olle Andersson.

S14(2B) lays down what is meant by quality and includes fitness for the purpose, appearance and finish, freedom from minor defects, safety and durability.

There will be no breach of S14(2) if the defect was brought to the buyer’s attention : S14(2)(C)(a) and where the buyer examined the goods before the contract was made which that examination ought to reveal S14(2)(C)(b)

Fitness for purpose is defined under S14(3)to mean goods will be fit for any particular purpose made known by the buyer to the seller.

2 questions to be asked : Bristol Tramways etc Carriage Co Ltd v Fiat Motors Ltd

1. Did the buyer make fully known the particular purpose for which the goods would be required or could it have been reasonably foreseen : Griffiths v Peter Conway
2. The seller has to show that that the buyer did not rely on his skill and judgement and that it was unreasonable for him to do so.

However even the strictness of S14(3) is diluted and the seller can be absolved of responsibilty under the following circumstances :-

1. The generality of the stated purpose : Aswan Engineering v Lupdine
2. The abnormal features or the idiosyncracies of the goods not made known to the seller : Slater v Finning
3. Abnormal sensitivity of the buyer : Griffiths v Peter Conway

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