Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982)

Case name & citation: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191; 42 ALR 1; 56 ALJR 715

  • High Court of Australia
  • Decision date: 11 August 1982
  • The bench of judges: Gibbs C.J., Mason, Murphy, Brennan JJ
  • Area of law: Trade Practices—Consumer protection—Misleading or deceptive conduct

The case Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) revolves around the application of Section 52(1) of the Trade Practices Act 1974 (Cth), which prohibits conduct that is misleading or deceptive, or likely to mislead or deceive.

Background of the case

Puxu Pty Ltd manufactured and sold “Post and Rail” furniture, specifically the “Contour” range of lounge suites, since 1976–1977. These products were well-advertised and had a distinctive design but were not protected under the Designs Act 1906.

Parkdale Custom Built Furniture Pty Ltd began manufacturing the “Rawhide” range of furniture in 1978. This range closely resembled Puxu’s “Contour” range in appearance and design but was of lower quality and price.

Claims by Puxu

Puxu alleged that Parkdale’s conduct in manufacturing and marketing the “Rawhide” range was misleading or deceptive under Section 52(1). It argued that the similarity in design could lead customers to believe the “Rawhide” products were part of Puxu’s “Contour” range, thereby damaging its reputation and market.

Evidence of Misleading Conduct

Instances were cited where customers mistook “Rawhide” furniture for Puxu’s “Contour” furniture. However, these incidents often involved retailers removing labels or providing misleading information, actions not directly attributable to Parkdale.

Court Decisions in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd

1. Trial Court: Found no evidence that Parkdale intentionally misled consumers or engaged in deceptive conduct. It held that labelling the “Rawhide” products adequately distinguished them from Puxu’s products.

2. Federal Court (Full Bench): Reversed the trial court’s decision, finding that the close resemblance between the products created an inherent potential for deception, regardless of labelling.

3. High Court of Australia (Final Appeal): Allowed Parkdale’s appeal, ruling that:

•            The mere resemblance in design does not constitute misleading or deceptive conduct if proper labelling distinguishes the products.

•            Parkdale’s labelling practice satisfied Section 52, as reasonable consumers were expected to examine labels when purchasing high-value items like furniture.

Given below are some excerpts from the judgment of Chief Justice Gibbs:

“An ordinary person who read the label could not possibly be deceived or misled.” (at p197)

“If the label is removed by some person for whose acts the defendant is not responsible, and in consequence the purchaser is misled, the misleading effect will have been produced, not by the conduct of the defendant, but by the conduct of the person who removed the label.” (at p200)

“To prove a breach of s. 52 it is not enough to establish that the conduct complained of was confusing or caused people to wonder whether two products may have come from the same source.” (at p199)

“The freedom to copy and sell any article on the market is a corollary of the policy of the law against monopolies.” (at p221)

Key Principles Established

Section 52(1): Does not create monopoly rights for manufacturers; its purpose is to prevent consumer deception.

Consumer Standard: The standard for deception considers ordinary, reasonable consumers, who are expected to exercise some care in their purchases.

Copying and Competition: Copying designs in itself does not violate Section 52 unless accompanied by misleading conduct.

Outcome (Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd)

The High Court ruled in favour of Parkdale, emphasizing that consumer protection under Section 52 must be balanced with the principles of free competition and the absence of statutory design protection.

References:

https://jade.io/article/67003


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Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60

Case name & citation: Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592; 79 ALJR 308; 212 ALR 357

  • Court: High Court of Australia
  • Date of Decision: 2 December 2004
  • Judges: Gleeson CJ, McHugh, Kirby, Hayne, and Heydon JJ

Case Overview

This case revolved around claims of misleading or deceptive conduct by Lachlan Elder Realty Pty Limited, a real estate agency, under Section 52 of the Trade Practices Act 1974 (Cth). The appellants, Jeffrey Gordon Butcher and Judith Kay Radford, alleged that they were misled by a brochure provided by the real estate agency during the purchase of a waterfront property. The brochure contained a survey diagram, which inaccurately showed the swimming pool as being entirely within the property’s freehold boundary.

Key Facts of Butcher v Lachlan Elder Realty Pty Ltd

1. Property Purchase:

In 1997, the appellants purchased a waterfront property at 10 Rednal Street, Mona Vale, Sydney, for $1.36 million, intending to develop it. They relied on a promotional brochure provided by Lachlan Elder Realty.

2. Disputed Brochure:

The brochure featured a survey diagram and disclaimers. The diagram implied the swimming pool was entirely within the freehold land. In reality, the property boundary traversed the pool, and parts of the pool fell within a permissive occupancy area controlled by the Crown.

3. Reliance on Brochure:

The appellants, intending to renovate and potentially relocate the pool, claimed they relied on the brochure’s representation. They argued they would not have purchased the property if they had known the true boundary.

4. Legal Action:

The appellants sued the vendor and the real estate agent for misrepresentation and misleading conduct.

Claims against the vendor resulted in partial success, but the High Court case focused on the claims against the real estate agent.

Legal Issues

•            Did the real estate agent engage in misleading or deceptive conduct under Section 52 of the Trade Practices Act by distributing the brochure?

•            Did the disclaimers in the brochure protect the agent from liability?

Court Findings in Butcher v Lachlan Elder Realty Pty Ltd

1. Trial Court:

The agent did not engage in misleading or deceptive conduct. The brochure included disclaimers explicitly advising potential buyers to verify information independently. The agent was found to be merely passing on information provided by the vendor.

2. Court of Appeal:

Upheld the trial court’s decision, emphasizing the agent’s role as a conduit of information. The disclaimers were deemed effective in mitigating liability.

3. High Court Decision:

Majority (Gleeson CJ, Hayne, and Heydon JJ): Agreed with the lower courts. The disclaimers and the context of the transaction made it clear the agent was not representing the survey’s accuracy. The appellants were experienced and were purchasing a high-value property, had legal advice, and had ample opportunity to verify the information independently.

Dissent (McHugh J): Believed the agent’s conduct was misleading, as the survey diagram was part of a promotional brochure that implied accuracy.

The judges remarked as under:

“The agent did no more than communicate what the vendor was representing, without adopting it or endorsing it.”

“It would have been plain to a reasonable purchaser that the agent was not the source of the information which was said to be misleading. The agent did not purport to do anything more than pass on information supplied by another or others.”

Outcome

The High Court dismissed the appeal, upholding the findings that the real estate agent had not engaged in misleading or deceptive conduct. The appellants were ordered to pay the agent’s costs.

Key Takeaways

  • Disclaimers Matter: Clear and prominent disclaimers can shield agents from liability if they make it clear that the information is not independently verified and buyers should conduct their own inquiries.
  • Buyer Responsibility: Purchasers of high-value property are expected to conduct due diligence, particularly where professional advice is available.
  • Agent’s Role: Merely passing on third-party information with proper disclaimers does not constitute misleading or deceptive conduct.

References:

https://jade.io/article/68508


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Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17

Case name & citation: Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594; 64 ALJR 293; 92 ALR 193

  • Court: High Court of Australia
  • Judgment Date: 3 May 1990
  • Legal Issue: Scope of Section 52 of the Trade Practices Act 1974 (Cth) – Whether misleading or deceptive conduct occurred “in trade or commerce.”

Facts of Concrete Constructions (NSW) Pty Ltd v Nelson

1. The appellant, Concrete Constructions (NSW) Pty Ltd, was a company constructing a building in Sydney.

2. The respondent, Grant Nelson, was an employee working at the site. While removing a grate covering an air-conditioning shaft, he fell and suffered injuries.

3. Nelson alleged that his injuries were caused by misleading advice from his foreman, who incorrectly stated that the grates were securely bolted.

4. He brought a claim under Section 52 of the Trade Practices Act 1974 (Cth), asserting that the company’s conduct was misleading or deceptive.

Procedural History

•            The Federal Court initially ruled in favour of Nelson, holding that his allegations fell within the scope of Section 52.

•            Concrete Constructions appealed to the High Court, arguing that the conduct did not occur “in trade or commerce” and was therefore outside the scope of Section 52.

Key Legal Issue

Does the misleading statement by the foreman to the employee constitute conduct “in trade or commerce” under Section 52 of the Trade Practices Act?

Decision in Concrete Constructions (NSW) Pty Ltd v Nelson

The High Court allowed the appeal, ruling in favour of Concrete Constructions.

Reasoning

1. Interpretation of “In Trade or Commerce”:

Section 52 prohibits misleading or deceptive conduct “in trade or commerce.” The Court held that this phrase limits the section’s scope to conduct with a trading or commercial character, particularly dealings between businesses and consumers or suppliers. Internal communications within a corporation, such as between an employer and an employee, do not satisfy this requirement.

2. Application to the Case:

The misleading statement was an internal workplace instruction unrelated to any commercial or trading activity. As such, the conduct was not “in trade or commerce” and fell outside the scope of Section 52.

3. Purpose of Section 52:

The Court emphasized that the section’s primary purpose is to protect consumers and regulate misleading conduct in commercial transactions, not to govern internal corporate practices.

Case Outcome

The High Court answered the preliminary question in the negative, ruling that the facts did not give rise to a cause of action under Section 52. The appeal was allowed, and Nelson’s claim under the Trade Practices Act was dismissed.

Significance

This case clarified the meaning of “in trade or commerce” under Section 52, limiting its application to external commercial dealings and excluding internal corporate conduct. It remains a key authority on the scope of misleading or deceptive conduct under Australian trade practices law.

References:

http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/1990/17.html


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Houghton v Arms [2006]: Trade Practices & Employee Liability

Houghton v Arms [2006] HCA 59; (2006) 225 CLR 553; 231 ALR 534

Court and Date

  • High Court of Australia
  • 13 December 2006
  • Trade Practices — Misleading or deceptive conduct in trade or commerce

Parties involved

  • Appellants: James Houghton and another employee of WSA Online Limited
  • Respondent: Simon Arms

Key Facts of Houghton v Arms

1. Simon Arms, trading as “Australian Cellar Door,” planned to set up a website for direct marketing of small wineries’ products, leveraging reduced sales tax and eliminating distributor margins.

2. Arms engaged WSA Online Limited for web design and related services.

3. James Houghton and another employee of WSA made representations about a payment processing facility, “ANZ e-Gate,” claiming it would meet Arms’ business needs.

4. These representations were misleading. The e-Gate system required additional steps (e.g., winery accreditation), which were not disclosed.

5. Arms’ business suffered losses because the undisclosed requirements made the initial business model unworkable.

Procedural History

1. Arms sued WSA Online, Houghton, and the other employee in the Federal Court of Australia.

2. The Federal Court:

  • Found WSA liable for misleading and deceptive conduct under Section 52 of the Trade Practices Act 1974 (Cth).
  • Dismissed claims against the individual employees.

3. On appeal, the Full Court reversed the decision, holding the employees personally liable under Section 9 of the Fair Trading Act 1999 (Vic), which applies to individuals.

4. Houghton and the other employee appealed to the High Court.

Legal Issues

1. Personal Liability of Employees: Can employees acting within the scope of their employment be personally liable under Section 9 of the Fair Trading Act for misleading or deceptive conduct?

2. Scope of “In Trade or Commerce”: Does the phrase encompass acts by employees performed on behalf of their employer?

High Court’s Findings in Houghton v Arms

1. Employees’ Liability:

Section 9 of the Fair Trading Act applies to “a person” engaging in misleading conduct in trade or commerce, which includes employees. Employment status does not shield individuals from liability for their own actions, even when performed within the scope of their employment. The misleading conduct of Houghton and his colleague fell within the scope of “trade or commerce.”

2. Concurrent Operation of Laws:

The Fair Trading Act complements the federal Trade Practices Act. Even though WSA was held liable under the federal act, the employees could still be liable under the state law.

3. Appeal Outcome:

The High Court dismissed the appeal. Houghton and his colleague remained personally liable for the damages of AUD 58,331 suffered by Arms.

Key Takeaway (Houghton v Arms)

Employees can be personally liable for misleading or deceptive conduct under consumer protection laws, even if acting within the scope of their employment. Misleading statements made in trade or commerce attract liability regardless of whether the person has an independent commercial interest.

Order made

Appeal dismissed with costs awarded to Simon Arms.

References:

https://jade.io/article/3476


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Yorke v Lucas (1985) 158 CLR 661: Case Summary

Case name & citation: Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661; 59 ALJR 776; 61 ALR 307

  • High Court of Australia
  • Judgment date: 3 October 1985
  • The bench of judges: Mason A.C.J., Wilson, Brennan, Deane and Dawson JJ.
  • Area of law: Trade practices; Misleading or deceptive conduct by corporation

The High Court of Australia decision in Yorke v Lucas (1985) 158 CLR 661 addresses important questions regarding liability for misleading or deceptive conduct under the Trade Practices Act 1974 (Cth), specifically sections 52, 75B, and 82.

Key Issues

Misleading or Deceptive Conduct: Section 52 prohibits corporations from engaging in conduct in trade or commerce that is misleading or deceptive or likely to mislead or deceive.

Liability for Involvement in Contravention: Section 75B defines persons “involved in a contravention” to include those who:

•            Aid, abet, counsel, or procure the contravention.

•            Induce the contravention.

•            Are knowingly concerned in or party to the contravention.

•            Conspire to effect the contravention.

Remedies: Section 82 provides for the recovery of damages for loss or damage caused by contraventions of the Act.

Case Facts

The appellants purchased a business from Treasureway Stores Pty. Ltd. The purchase was induced by false representations regarding the business’s average weekly turnover and gross profits. The appellants sued several parties, including Ross Melville Lucas, the managing director of Ross Lucas Pty. Ltd., for their involvement in the misleading conduct. Ross Lucas Pty. Ltd. acted as an agent for Treasureway Stores Pty. Ltd. in selling the business.

The trial judge found that:

1. Treasureway and its director, Kevin Mahoney, engaged in misleading conduct.

2. The Lucas company (as an agent) also contravened section 52, but its conduct was “unwitting.”

3. Lucas acted based on information provided by Mahoney, with no knowledge or reason to suspect the falsity of the information. He was found not liable.

High Court Decision in Yorke v Lucas

The High Court upheld the dismissal of the claim against Lucas, focusing on the interpretation of section 75B. Key points include:

1. Knowledge and Intent:

To be “involved in a contravention” under section 75B(a) (aiding, abetting, counseling, or procuring), intent is required. This intent arises from knowledge of the essential facts that constitute the contravention. Lucas did not have knowledge of the falsity of the representations and therefore lacked the necessary intent to be considered an aider or abettor.

2. Secondary Liability:

Under section 75B(c) (“knowingly concerned in”), liability similarly requires knowledge of the contravention’s essential facts. The Court held that Lucas did not meet this threshold.

3. Corporation’s Conduct:

The Lucas company was found to have contravened section 52 by passing on false information from Treasureway. However, as Lucas had no reason to suspect the falsity of the information, his personal liability was not established.

Implications (Yorke v Lucas)

The decision clarifies that individuals can only be held liable under section 75B for their involvement in a contravention if they possess knowledge of the relevant facts constituting the contravention. Merely passing on information, without knowing or suspecting its falsity, does not amount to aiding, abetting, or being knowingly concerned in misleading or deceptive conduct.

Conclusion

Lucas was found to have acted in good faith based on information provided by Mahoney, without knowledge of its falsity. This case emphasizes the importance of knowledge and intent in establishing liability for involvement in contraventions under the Trade Practices Act.

References:

https://jade.io/article/67232


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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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