A Case Summary of Varley v Whipp [1900]

Case name & citation: Varley v Whipp [1900] 1 QB 513

Year of the case: 1900

Jurisdiction: England and Wales

Area of law: Sale by Description, Sale of Goods Act

What is the case about?

This is a famous case concerning the sale of goods by description. It speaks about how a contract of sale gets breached if the goods supplied do not correspond with the description.

Facts of the case (Varley v Whipp)

In the case of Varley v Whipp, there existed a contract for the sale of a second-hand reaping machine that the buyer had not seen. According to the seller (Varley), it had only been used to cut 50 to 60 acres of crop and was brand-new a year before. The buyer (Whipp) had not seen the machine. Upon it being delivered, the buyer discovered that the machine wasn’t what the seller had described. It was found to be an old machine.

He declined to pay the price and returned the machine. To recover the cost, the seller filed a lawsuit.

Issues raised in the case

Had the seller delivered what he promised?

Was he entitled to be paid the agreed-upon price?

The decision of the Court in Varley v Whipp

The Court ruled that a sale by description had taken place. The machine didn’t match the description at all. So, it was decided that the buyer had the right to reject the machine.

The essence of the case

When there is a contract for the sale of goods by description, there is an implied condition that the goods supplied will correspond with the description. As a result, the seller is responsible for ensuring that the goods exactly match the description. To put it in another way, the goods are recognized or identified as the seller had described them to be. If the goods do not match the description, there is a breach of the implied condition, and the buyer has the right to reject the goods.

For instance, if someone orders a “Philips Juicer made in Japan,” and instead receives a “Philips Juicer made in Hong Kong”, it will not be considered satisfactory compliance.

The description may include information on the type or class of the goods, such as First Quality Wheat, B-30 Sugar, or Long Staple Cotton, as well as information about the weight or measurements of the goods, the state in which the goods were sold, the type of packing, etc. It is not just sufficient that some description of the goods has been provided. Rather it is necessary that the description of the goods was of the essence of the contract in the sense that the buyer must have relied on it to determine the identity of the goods to be supplied by the seller.

Further, in the given case of Varley v Whipp, it was held that in all cases where a buyer has not seen the goods but relies on the description alone, it is a sale by description. And thus, the implied condition applies.

What if the buyer has seen the goods?

Sometimes it may so happen that even if the buyer has seen the goods, it may still be considered a sale by description if he buys them based on what was said to him rather than what he has seen.

To take an example, you may refer to Nicholson & Venn v Smith Marriott [(1947) 177 LT 189]. Here, a set of linen napkins and tablecloths were listed as “dating from the seventeenth century” in an auction sale. When the buyer, an antiquities dealer, saw it, he decided to buy it. However, he later discovered that it was actually an “eighteenth-century set”. It was held that because the buyer had relied on the description, he had the right to return the goods because they did not match the description.

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Baldry v Marshall [1925]: A Case Summary

Case name & citation: Baldry v Marshall [1925] 1 KB 260

  • Decided on: 1924 Nov. 20.
  • Court and jurisdiction: The Court of Appeal (King’s Bench Division)
  • The bench of judges: Bankes, Atkin and Sargant L.JJ.
  • Area of law: Condition as to Quality or Fitness, Sale of Goods Act

What is the case about?

This is a famous case concerning the implied condition as to the fitness or quality of goods sold to a buyer by a seller.

Facts of the case (Baldry v Marshall)

In this case, the plaintiff consulted the defendant, a car dealer, to find a motor car ideal for touring. The defendant recommended a “Bugatti” car, and the plaintiff followed his advice by purchasing it. The written contract disclaimed any “guarantee or warranty, statutory or otherwise” on the part of the defendant. The car proved to be unsuitable for touring. So, the plaintiff rejected it and sued to claim what he had paid.

Issues raised in the case

Was there a breach of an implied condition? If so, could the plaintiff recover the amount?

Did the written contract disclaim the defendant’s liability for breach of a condition?

The decision of the Court in “Baldry v Marshall”

It was decided that the requirement that the “car should be suited for touring purposes” was a condition of the contract. It was so crucial that failing to fulfill it would have destroyed the whole reason as to why the plaintiff had purchased the car. Therefore, he had the right to reject the car and seek a price refund.

Further as regards the liability exclusion clause was concerned, the Court observed that since there was no exclusion for the breach of a condition, the defendant was liable.

The essence of the case

Many times, a seller of goods makes certain assertions concerning the goods he provides for sale. These claims may pertain to the quality, use, suitability, utility, and so on of such goods. These assurances may be a general statement of the seller’s opinion and may not form part of the contract. However, they may sometimes become part of the contract, and the customer purchases the goods on the basis of such assurances. In such a circumstance, they have a legal effect on the contract. When an assurance or stipulation constitutes the very foundation of the contract, it is called a “condition”.

As a result, a condition is a term that goes to the heart of the contract and so serves as its foundation. It is critical to the primary purpose of the contract. It is that requirement, if not met, could be considered a significant failure to perform the contract at all. As a result, if a condition is not met, the buyer has the right to cancel the contract and seek damages for breach of contract.

In the given case of Baldry v Marshall, there was an implied condition that the car shall be suitable for touring purposes. This condition constituted the very foundation of the contract based on which the buyer purchased the car. And since that condition was not met when the car was found unfit for use, the buyer was entitled to reject the car.

Here, another point is also important. One must know that when a buyer specifies a patent or other trade name when purchasing a product, there is no implied condition of the fitness of the goods for any particular purpose. Because the customer defines the products by providing the trade name, the seller’s only responsibility is to make sure that the goods are of the same trade name that the buyer has specified.

This provision applies when the buyer purchases by mentioning the trade name and does not rely on the expertise and judgement of the seller as to the appropriateness of the goods for any particular purpose. However, if the buyer specifies the trade name but still relies on the experience and judgement of the seller as to the suitability of the goods for any particular purpose, the implied condition of fitness applies in such a situation.

In Baldry v Marshall, the seller recommended their “Bugatti car” and the buyer ordered an “Eight-cylinder Bugatti car” which was then supplied. But on finding the car unfit for the desired purpose, he rejected the car and claimed to recover the money back.

It was determined that he was within his rights to do so because the plaintiff, despite ordering the car by its brand name, was still relying on the opinion of the seller regarding the fitness of the car for the specific purpose.

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A Summary of Rowland v Divall [1923] Case

Case name & citation: Rowland v Divall [1923] 2 KB 500 CA

  • Year of the case: 1923
  • Jurisdiction: The Court of Appeal, England and Wales
  • The bench of judges: Bankes, Scrutton and Atkin L.JJ.
  • Area of law: Implied condition as to title, Sale of Goods Act

Rowland v Divall is a case throwing light on the rights of a buyer in a contract of sale when the seller breaches an implied condition as to the title of the goods.

Facts of the case (Rowland v Divall)

The claimant in Rowland v Divall was a consumer who had bought an automobile from the defendant. After a few months of use by the claimant, it was discovered that the defendant had no legal right to sell the car, and its rightful owner sought to regain possession of it. It was, in fact, a stolen car and the true owner reclaimed the vehicle. The defendant did not know, at the time when he offered the car for sale to the claimant, that it had been stolen.

The claimant sued the defendant to recoup the money he had spent on the purchase, citing a total failure of consideration.

Issue raised

Was there a breach of condition?

Was the claimant entitled to recover the total purchase price?

Court’s decision in Rowland v Divall

With a claim based entirely on a lack of consideration, the claimant was successful in getting his money back. The receipt of good title to the car was the consideration for payment of the price, according to the Court of Appeal; since the claimant did not obtain a title, the consideration had completely failed. Therefore, according to this analysis, the claimant’s use of the car did not constitute a part of the consideration for payment and did not prevent the claim from being successful.

In other words, the use of the car that he had was not a part of the consideration that he had contracted for. The consideration was the property in and legitimate possession of the car. As opposed to this, what he had received was an unlawful possession that exposed him to a risk of legal action on the part of the true owner.

Hence, it was held that ownership remained with the true owner, and the claimant was entitled to recover the purchase price back from the defendant.

Ratio decidendi (the rationale for the decision)

In general, goods may be sold by the owner of the goods or the owner’s agent. If a person does not have title to goods or otherwise does not have the right to dispose of certain goods, the buyer of such goods has the right to reject them and claim the price back (even if he has used the goods, such as a car), as well as refuse to pay if the price has not been paid up to that point.

The buyer may pursue a claim against the seller for breaching this implied condition or warranty if the seller sells goods that he has no legal right to sell (such as stolen goods) and a third party with superior title files a lawsuit against the buyer to recover those goods. Usually, the buyer may be entitled to reimbursement for both the purchase price and any additional costs (such as those related to the repair of the goods) that naturally arise in the normal course of things. But, not to mention, this depends on the judgement of the Court and the circumstances of each case.

Conclusion

In the given case of Rowland v Divall, there was a breach of implied condition as to the title of the goods. Despite having no title to the goods, the defendant sold the car to the claimant, and therefore, the claimant was entitled to recover the purchase price paid (as damages). This was regardless of the fact that several months had passed and the claimant had been using the car for quite some time.

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A Quick Summary of Beale v Taylor [1967]

Case name & citation: Beale v Taylor [1967] 1 WLR 1193; [1967] 3 All ER 253

Jurisdiction: England and Wales

Year of the case: 1967

Area of law: Sale by Description, Sale of Goods Act

What is the case about?

This is an English case law concerning the implied condition of “sale by description” in a contract of sale of goods.

Facts of the case (Beale v Taylor)

A 1961 Triumph Herald was advertised for sale by a private seller (Taylor). “White, 1961 Herald Convertible……” were the wordings of the advertisement. The car was inspected and examined by the claimant (Beale). A disc marked “1200” was also found on the rear of the car. The claimant believed the car was indeed a 1961 model and so he bought it.

It was eventually discovered that the car was an amalgamation of two Triumph Heralds, the front and back of which had been joined together. Only half of the car belonged to the 1961 model. The car was discovered to be made up of the rear half of a 1961 model, i.e., the Triumph Herald 1200 attached to the front half of an earlier model (Triumph Herald 948).

Additionally, it was discovered that the car was unsafe and unroadworthy.

Beale filed a lawsuit to claim damages for his loss.

Issue raised in the case

Could the seller be held accountable for failing to sell “as described”?

Judgement of the Court in Beale v Taylor

It was determined that the description in the advertisement was clearly relied upon when purchasing the car.

The Court decided that the vendor was liable because the vehicle did not correspond to the description.

Only the rear half was compliant with the seller’s description.

Hence, there was a breach of Section 13 of the Sale of Goods Act, 1979.

Governing rule behind the decision

Section 13(1) provides that, 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.

Is there a “sale by description” in the case of inspected goods?

The answer to this question is yes and may depend upon the circumstances of each case.

This is so because sometimes even though the buyer has seen and examined the goods, there may still be a sale by description.

In the given case of Beale v Taylor, despite the fact that the claimant had checked the car, it was determined that there had been a violation of Section 13 because he had relied on the description in the advertisement as well as the metal disc at the rear of the car.

Sometimes the discrepancy between the goods and the description is not immediately obvious.

Here in this case, the claimant relied on a description that was misleading, and the mismatch between the description and the actual attributes of the car could not be identified by a casual investigation.

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A Quick Summary of Geddling v Marsh (1920)

Case name & citation: Geddling v Marsh. (1920) 1 K.B. 668

The concerned Court: King’s Bench

Year of the case: 1920

Area of law: Implied condition as to the fitness of use

What is the case about?

This case of Geddling v Marsh (1920) illustrates the responsibility of a seller to ensure the quality and fitness of all goods supplied, even a bottle containing water. 

Facts of the case (Geddling v Marsh)

The defendants were manufacturers of mineral water and they supplied these products to the plaintiff (a purchaser). The water was delivered in glass bottles which were meant to be returned. One of the bottles was defective, it shattered and the purchaser got injured as a result. It was argued by the purchaser that the products supplied were not fit for purpose.

Issue that arose

Was there a breach of Section 14? Did the seller’s obligation extend to packaging?

Judgment of the Court in Geddling v Marsh

The Court held that even though the water bottles were returnable, they were supplied in connection with a contract of sale, hence, Section 14(3) of the Sale of Goods Act 1979 applied. That is to say, the manufacturers were still bound to the implied term that the products including the bottles are reasonably fit for the purpose for which they have been supplied. The duty of the seller extends to all goods supplied under the contract and they include packaging even if it remains the property of the seller.

As a result, the Court held the defendants liable for the injuries sustained by the buyer. They had to bear damages.

The governing rule behind the case

The implied terms in Section 14 concerning fitness and merchantable quality also apply to any additional things supplied with the products as part of a contract of sale, even though such things are returnable to the seller, for example, a glass bottle. Such things can include packaging, boxes, bottles, containers, batteries, tools, and instructions outlining the several uses of the product. All these items should meet the requirements of fitness and quality.

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Crowther v Shannon Motor Co [1975]: Summary

Case name & citation: Crowther v Shannon Motor Co [1975] 1 WLR 30; [1975] 1 All ER 139

  • Court and jurisdiction: Court of Appeal (Civil Division), England & Wales
  • Decided on: 07 October 1974
  • The bench of judges: Lord Denning M.R., Orr and Browne L.JJ.
  • Area of law: Implied term as to quality and fitness for purpose

What is the case about?

Crowther v Shannon Motor Co is a UK case concerning the sale of a second-hand motor car and the assessment of its durability.

Facts of the case (Crowther v Shannon Motor Co)

An eight-year-old Jaguar car having about 82,165 miles on the odometer, was bought for £390 from the defendants. After purchase, it was driven over 2,000 miles by the purchaser for a period of three weeks before the engine collapsed. The engine seized up and it had to be replaced competently. An action was brought by the purchaser for damages from the dealers.

The purchaser claimed that he had relied on the defendants’ skill and judgment when selecting the car for purchase. In addition, during evidence at the trial, from a previous owner of the vehicle, it appeared that the defendants were fully aware that the engine was in a bad condition and was unfit for its intended use.

Issue

Was the car not fit for purpose? Was the seller liable for a breach?

Judgment of the Court in Crowther v Shannon Motor Co

It was held by the Court that the defendants had committed a breach of Sections 14(2) and (3) of the Sale of Goods Act 1979 (or the corresponding sections of the Sale of Goods Act 1893). There was a breach of the condition of merchantable quality and the vehicle was not fit for its intended purpose. The Court was of the view that a car is expected to go for a reasonable period after the sale. Also, the purchaser had clearly relied on the defendants’ recommendations, and he had the right to assume that the defendants had selected items of their stock with the requisite degree of skill and care. It made no difference whether the items were new or used.

Second-hand goods and their merchantability

It is obviously unrealistic to expect buyers to assume that secondhand goods meet extremely high standards of quality or that they are fit for their intended purpose. However, merely because the goods are second-hand does not absolve the seller of liability for Section 14 violations relating to the issues of quality and fitness for purpose. The buyer will have the right to presume that the seller has demonstrated the necessary level of skill and care required by Section 14 of the Sale of Goods Act when it comes to selecting items of his stock.

In a nutshell, the implied terms of quality and fitness in Section 14 also apply to used items sold by the seller in the course of business.

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A Summary of Frost v Aylesbury Dairy Co [1905]

Case name & citation: Frost v Aylesbury Dairy Co [1905] 1 KB 608

Court and jurisdiction: Court of Appeal, England and Wales

Year of the case: 1905

Area of law: Implied Term as to fitness for a particular purpose

What is the case about?

Frost v Aylesbury Dairy Co is a UK case that showed that “goods in their natural state” must comply with the requirement of fitness for purpose in accordance with Section 14(3) of the Sale of Goods Act 1979.

Facts of the case (Frost v Aylesbury Dairy Co)

The plaintiff bought milk from a milk dealer for the consumption of his own family. As a result of the typhoid germs that were present in the milk, the plaintiff’s wife became sick and passed away.

An action was brought against the seller.

The decision of the Court in Frost v Aylesbury Dairy Co

In this situation, the purpose for which the milk was going to be used was, by implication, made known to the seller. As a result of the milk’s unsuitability for consumption by humans, the defendant was found to be in violation of an implied condition, which resulted in the defendant being held liable.

Despite the fact that the goods had not undergone a manufacturing process, the seller had a duty to select his stock with the necessary level of skill and care and it was not unreasonable for the buyer to rely on the skill or judgment of the seller. There was an implied term that the goods supplied were fit for their purpose as per Section 14(3).

Since the milk was not fit for consumption, the English Court of Appeal held that the seller was in breach of Section 14(1) of the Sale of Goods Act 1893 [equivalent to Section 14(3) of the Sale of Goods Act 1979].

Strict liability

It is important to point out that the seller’s liability in this scenario was deemed to be strict. Taking into account the level of medical knowledge that existed at the time, the dairy company could not have identified these germs regardless of how much skill or care they had applied, but they were still held liable.

What is the general rule for “Goods in their natural state”?

If the sale involves goods that are still in their natural state and have not been subjected to any kind of manufacturing process, the buyer is still permitted to presume that the goods meet the requirement of satisfactory quality in relation to Section 14(2), and he is able to rely on the seller’s skill and expertise in selecting such items in terms of Section 14(3).

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Thain v Anniesland Trade Centre [1997]: A Case Summary

Case name & citation: Thain v Anniesland Trade Centre [1997] SLT (Sh Ct) 102

Court and jurisdiction: Sheriff Court, Scotland

Year of the case: 1997

Area of law: Implied condition as to Satisfactory Quality

What is the case about?

Thain v Anniesland Trade Centre is a Scottish case that considered whether or not a second-hand car that quickly developed a major fault could be turned down on the grounds that it was not of satisfactory quality.

Facts of the case (Thain v Anniesland Trade Centre)

Here, the car was a Renault 19 that was between five and six years old and had done 80,000 miles by the time it was purchased. It would have cost approximately £11,000 to purchase a brand-new car of this type. The claimant purchased the car from a dealer for the price of £2,995, but he did not take a warranty of three months.

About two weeks after the car was purchased, a differential bearing in the automatic gearbox started making a noise. The claimant continued to drive the car, and as the noise became increasingly noticeable, it became clear that the gearbox would need to be replaced soon. This would have been uneconomical for a vehicle of this age.

The claimant brought an action to reject the car alleging that it was not of satisfactory quality.

Issue

Was the car not of satisfactory quality?

Judgment of the Court in Thain v Anniesland Trade Centre

The Sheriff Principal of Glasgow held that the action failed. There was no breach of the satisfactory quality requirement.

The price paid is an important factor in determining whether a product is of satisfactory quality. Buying second-hand is less expensive, but the quality expectations are also lower. The court stated that if you purchase a second-hand car, the risk is on you because you cannot expect it to be fault-free.

The reasoning behind the decision

The claimant should have been aware that the problem with the gearbox was one that could occur at any point in time and was something that had to be expected. Before the purchase was made, a number of experienced drivers had examined the car, and none of them had found anything wrong with it. Because there had been no noise coming from the gearbox, it was reasonable to infer that there was no defect present at the time of the sale, which meant that the car had satisfied the standard that a reasonable buyer would consider as being satisfactory.

Further, as it was well known that the gearbox on a car like this could fail at any time, a reasonable person would accept that the risk of its failure and the need for an expensive repair could arise at any time. It was a matter of chance as to when this would occur. The claimant was unfortunate.

Under the circumstances, however, a reasonable person would not have demanded durability from this particular car. If the car had been new, it would have been reasonable to expect it to function without any significant component or system failure for at least the period covered by the warranty.

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Bartlett v Sidney Marcus Ltd [1965]: A Summary

It is possible for a buyer to lose his right to bring a claim under Section 14(2) in scenarios in which the seller has specifically drawn defects in the goods to the attention of the buyer. This can be seen in the following case of Bartlett v Sidney Marcus Ltd.

Case name:Bartlett v Sidney Marcus Ltd
Case citation:[1965] 2 All ER 753; [1965] 1 WLR 1013
Court:Court of Appeal
Jurisdiction:England & Wales
Date/year:13 April 1965
The bench of judges:Lord Denning MR, Lord Justice Danckwerts and Lord Justice Salmon
Area of law:Implied condition as to Satisfactory Quality

Facts of the case (Bartlett v Sidney Marcus Ltd)

The seller was a car dealer, and the buyer purchased a second-hand car from him. Before they finalized the contract of sale for the vehicle, the seller made sure that the buyer was informed that the car had a defective clutch. Because of the defective state of the car, the seller lowered the price that the buyer was required to pay in order to account for this.

However, the problem with the clutch turned out to be significantly more serious and required a significantly greater amount of money to repair than the buyer had originally anticipated it would. The buyer attempted to return the car on the grounds that it did not meet the quality standard he was entitled to expect.

Issue

Was there a breach of the implied term as to quality? Was the seller accountable?

Judgment of the Court in Bartlett v Sidney Marcus Ltd

The Court of Appeal decided that the car was of merchantable quality.

It was held that the buyer’s claim could not succeed because the seller made every effort to make it clear to the buyer that the clutch was defective.

Lord Denning MR stated that: ‘A buyer should realize that when he buys a second-hand car, defects may appear sooner or later.’

Governing section behind the decision

Section 14(2C) of the Sale of Goods Act 1979 enumerates a few instances in which the buyer will not be able to rely on the presumption that the goods supplied to him are of satisfactory quality. That is, he will lose the statutory protection contained in Section 14(2) in the following circumstances:

  • Defects that were brought to the buyer’s attention prior to the conclusion of the contract of sale.
  • When the buyer inspects the goods prior to entering into the contract and this examination ought to have revealed defects.
  • In a sale by sample, the buyer may lose the right to assert that the goods are not of satisfactory quality if a reasonable examination of the sample should have revealed any defects.

If the case of Bartlett v Sidney Marcus is seen, here because the buyer had been informed of the defect by the seller, the buyer could not claim any rights under Section 14 due to the application of Section 14(2C).

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A Summary of Bramhill v Edwards [2004] Case

Case name & citation: Bramhill v Edwards [2004] EWCA Civ 403; [2004] 2 Lloyd’s Rep 653

Court and jurisdiction: The Court of Appeal, England and Wales

Year of the case: 2004

Area of law: Implied condition as to Satisfactory Quality

What is the case about?

Bramhill v Edwards [2004] is a UK case concerning the Sale of Goods Act 1979. Here, the Court applied the test as to whether a reasonable person would regard the goods in question as being unsatisfactory.

Case facts (Bramhill v Edwards)

In this case, a second-hand ‘Dolphin’ motor home was sold by the seller (Mr and Mrs Edwards) to the buyer (Mr and Mrs Bramhill) for £61,000. Edwards had imported the motor home from the United States.

The evidence showed that the motor home was wider than the 100-inch maximum limit set by Regulation 8 of the Road Vehicles (Construction and Use) Regulations 1986. The motor home was 102 inches wide, which was found to be inappropriate. Bramhills had used the motor home for six or seven months when they measured its width and found this.

On finding this, Bramhills complained about the width to Edwards and also asked them to take the Dolphin back in part exchange for another vehicle. But the request was refused. Later, an action was brought against the seller for breach of Section 14(2A) on account of the vehicle being too wide. The buyer had also contacted the Vehicle Inspectors about the width of the vehicle and they cautioned him that continuing to use the Dolphin may result in prosecution as it did not comply with UK regulations.

Issue

Whether the vehicle was of satisfactory quality under Section 14(2A)?

Governing section

According to Section 14(2) of the Sale of Goods Act 1979, there is an implied term in a contract of sale of goods that the goods supplied must be of satisfactory quality. There are no universally applicable quality standards that each and every product must adhere to. However, the goods have to be up to the standards expected by a reasonable person or what he regards as satisfactory [Section 14(2A)].

Judgment of the Court in Bramhill v Edwards

It was held that the implied term of satisfactory quality was not breached.

The motor home was deemed to be of satisfactory quality by the Court of Appeal because a reasonable buyer would be aware that a significant number of vehicles of greater width than permitted were in use on the roads and that the authorities were turning a blind eye to that illegal use (to breaches of the width regulations). There was also evidence that the vehicle could be insured.

Furthermore, even if the vehicle had been in violation of Section 14(2A), Mr Edwards would have been able to use Section 14(2C) as a defense because the examination of the vehicle ought to have indicated that it was over-size. Section 14(2C) holds that a buyer may lose his right to complain where he decides to check the goods, but fails to spot an obvious defect. Although Bramhills had looked over the vehicle before buying it, they had not noticed the fact that its width was illegal.

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