Tag: Conditions and warranties

Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965]

Case Name: Dick Bentley Productions Ltd & Anor v Harold Smith (Motors) Ltd [1965]

  • Court: Court of Appeal (Civil Division)
  • Judges: Lord Denning MR, Danckwerts LJ, Salmon LJ
  • Date of Judgment: 3 March 1965
  • Citation: [1965] EWCA Civ 2; [1965] 1 WLR 623; [1965] 2 All ER 65
  • Areas of Law: Misrepresentation, Warranty, Pre-contractual statements

Facts: Dick Bentley Productions Ltd v Harold Smith

Mr. Bentley, associated with Dick Bentley Productions, purchased a Bentley car from Harold Smith (Motors) Ltd for £1,850. The dealer, Mr. Smith, claimed the car had only done 20,000 miles since being fitted with a new engine and gearbox. This representation was key to Mr. Bentley’s decision to purchase the car.

After purchase, the car developed multiple mechanical problems, and it was later discovered that the 20,000-mile claim was false — the car had likely done close to 100,000 miles.

Key Legal Issue

Was the dealer’s statement about the mileage a mere innocent misrepresentation or a contractual warranty?

Court’s Judgment (Dick Bentley Productions Ltd v Harold Smith)

The Court of Appeal held that the statement was a warranty, not just an innocent misrepresentation.

The court reasoned that the key test is whether a reasonable bystander would infer that the statement was intended as a binding promise.

Since the dealer was in a better position to know or verify the truth, and the statement was made to induce the contract, it amounted to a warranty.

The buyer relied on the statement; thus, there was a breach of warranty when it turned out to be false.

Damages of £400 were awarded.

Quotes from the Case

“Looking at the cases once more, as we have done so often, it seems to me that if a representation is made in the course of dealings for a contract for the very purpose of inducing the other party to act upon it, and actually inducing him to act upon it, by entering into the contract, that is prima facie ground for inferring that it was intended as a warranty.”

“Here we have a dealer, Mr. Smith, who was in a position to know, or at least to find out, the history of the car. He could get it by writing to the makers. He did not do so. Indeed, it was done later. When the history of this car was examined, his statement turned out to be quite wrong. He ought to have known better. There was no reasonable foundation for it.”

(By Lord Denning MR)

Significance

This case, alongside Oscar Chess Ltd v Williams, illustrates the distinction between representations and warranties and introduces an objective test for determining whether a pre-contractual statement becomes a contractual term.

You can refer to the full text of the case here:

https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWCA/Civ/1965/2.html

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Mendelssohn v Normand Ltd [1970]: Liability in Parking Lots

  • Mendelssohn v Normand Ltd [1970] 1 QB 177 (CA)
  • Court of Appeal (England & Wales)
  • Incorporation of terms, Exclusion clauses

Facts: Mendelssohn v Normand Ltd

Mr. Mendelssohn parked a Rolls-Royce (belonging to his friend) in the Cumberland Hotel garage, operated by Normand Ltd, before going to lunch. In the back seat was a suitcase with valuable jewellery, covered by a rug.

As he was about to lock the car, a garage attendant told him:

“You are not allowed to lock your car.”

Mr. Mendelssohn explained the suitcase was valuable and asked the attendant to lock the car after moving it, which the attendant agreed to do. He handed over the keys and went for lunch.

When Mr. Mendelssohn returned an hour later: The car had been moved.

The door was unlocked, the key was still in the ignition, and the suitcase was missing. He sued the garage company (Normand Ltd) for £200, claiming the theft happened while the car was in their care.

Issue

The main question was:

Was the garage company responsible, or were they protected by legal disclaimers (exclusion clauses)? A notice at the reception and a ticket both had terms saying the garage is not responsible for loss or damage.

Court of Appeal’s Judgment (Mendelssohn v Normand Ltd)

The Court held that the reception desk notice wasn’t valid. It wasn’t visible when dropping off the car, only later when paying. So, it wasn’t part of the contract.

The ticket was part of the contract. Mr. Mendelssohn had parked there many times and always received such tickets. Even if he hadn’t read the fine print, it was still considered a valid contract term.

However, there was an important exception. Mr. Mendelssohn had personally spoken to the attendant, who promised to lock the car. That oral promise contradicted the printed condition on the ticket.

Thus, the garage was liable for the loss of the suitcase.

Legal Principle

An oral promise from an employee can override a conflicting exclusion clause. Even if a business has written terms to avoid liability, it cannot rely on them if it makes a different verbal promise to the customer. The verbal promise will take effect.

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J J Savage & Sons Pty Ltd v Blakney [1970]: Speed Estimate
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J J Savage & Sons Pty Ltd v Blakney [1970]: Speed Estimate

J J Savage & Sons Pty Ltd v Blakney [1970] HCA 6 is one of the leading cases in contract law. It concerns with examining the distinction between a representation and a collateral warranty.

Here are the details of the case:

Case Name: J J Savage & Sons Pty Ltd v Blakney
Citation: [1970] HCA 6; (1970) 119 CLR 435
Court: High Court of Australia
Date of Judgment: 18 March 1970
Judges: Barwick C.J., Kitto, Menzies, Owen, and Walsh JJ.
Areas of Law: Contract law – collateral warranty

Facts: J J Savage & Sons Pty Ltd v Blakney

Blakney entered into a contract with J J Savage & Sons Pty Ltd for the construction of a motor cruiser.

The boat was to be fitted with a single principal diesel engine.

Prior to the contract, the J J Savage provided a detailed letter comparing various engine options. It stated:

“Estimated speed 15 M.P.H.” for the 4/53 GM diesel engine.

Relying on this, Blakney chose that engine setup and entered into the contract. However, the formal written contract did not include any speed warranty.

The boat did not achieve the expected speed, and Blakney sued for breach of warranty, claiming the speed estimate was a collateral warranty.

Issue

Whether the statement about the “estimated speed” of the boat constituted a collateral warranty under law?

High Court’s Decision

The High Court held that a collateral warranty requires a clear promissory intent (not just a representation or opinion).

The phrase “estimated speed 15 M.P.H.” was not a promise, but an expression of opinion based on calculations.

The statement by the seller must have been intended to be a binding promise. The intention to be legally bound is essential for collateral warranties.

Even though the buyer relied on it, reliance alone is insufficient to transform an estimate into a binding promise.

Important excepts from the case that reflect the reasoning:

“The question is whether there was a promise by the appellant that the boat would in fact attain the stated speed if powered by the stipulated engine…”

“…the only conclusion which will support a collateral warranty, namely, that the statement so relied on was promissory and not merely representational.” (at p442)

“He could have required the attainment of the speed to be inserted in the specification as a condition of the contract; or he could have sought from the appellant a promise – however expressed, whether as an assurance, guarantee, promise or otherwise – that the boat would attain the speed as a prerequisite to his ordering the boat; or he could be content to form his own judgment as to the suitable power unit for the boat relying upon the opinion of the appellant of whose reputation and experience in the relevant field he had, as the trial judge found, a high regard. Only the second course would give rise to a collateral warranty.” (at p443)

Ratio Decidendi:

Not every pre-contractual statement, even if relied upon by the buyer, will amount to a collateral warranty unless it has clear promissory intent.

References:

https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/1970/6.html

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Ellul v Oakes (1972): Representations in a Property Deal

Ellul v Oakes (1972) deals with whether a statement made in the context of a real estate purchase amounts to a contractual term. The case clarifies the boundary between a mere representation and a contractual term in Australian law. Here is a summary:

Case Name: Ellul & Ellul v Oakes
Citation: (1972) 3 SASR 377
Court: Supreme Court of South Australia
Judges: Bray CJ, Zelling J, Wells J
Law Focus: Terms in a Contract; Misrepresentation, Warranty

What happened in Ellul v Oakes?

The Elluls contracted to purchase a house from Oakes, relying on a form completed by the seller’s real estate agent. This form included various property details and it marked “yes” next to “sewered.” The form was signed by Oakes.

After purchase, the home was found not to be sewered. The Elluls sued for breach of contract.

Issue

Was this pre-contractual statement a part of the contract for sale?

Decision (Ellul v Oakes)

The Full Court found in favour of the purchasers.

Applying the test from Oscar Chess Ltd v Williams and Dick Bentley Productions Ltd v Harold Smith, Zelling J explained that whether a statement is a warranty will be judged objectively by asking –

Would a reasonable person, in the context, believe the statement was intended to be a binding contractual promise?

It was found that a reasonable person, in the position of the parties, would have understood the form to mean that the seller was warranting that the property was sewered.

Therefore, the statement was a contractual term, not just a representation. It was made to induce the Elluls to enter into the contract and was indeed relied upon.

The appeal succeeded: the statement was part of the contract. The Elluls were entitled to damages for the breach.

Significance

Under common law, remedies for breach of contract (e.g., damages) are generally stronger and more straightforward than those for misrepresentation. Therefore, determining whether a statement is a term or a mere representation is crucial.

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Oscar Chess Ltd v Williams [1957]: Innocent Misrepresentation

Oscar Chess Ltd v Williams [1957] 1 WLR 370 is a foundational case in English contract law. This case illustrates that not all statements made in the course of negotiations become contractual terms. It highlights the importance of relative expertise and intention when deciding whether a representation is a term.

  • Court: Court of Appeal (Civil Division), England and Wales
  • Judges: Denning LJ, Hodson LJ, Morris LJ
  • Date: 11 November 1956
  • Citation: [1956] EWCA Civ 5; [1957] 1 WLR 370; [1957] 1 All ER 325
  • Areas of Law: Misrepresentation; Warranty; Terms in a Contract (distinction between representations and warranties)

Facts: Oscar Chess Ltd v Williams

Mr. Williams traded in a second-hand Morris 10 car to Oscar Chess Ltd, a car dealer, as part-exchange for a new Hillman Minx. Mr. Williams stated the Morris was a 1948 model, based on the car’s registration book.

Oscar Chess Ltd allowed £290 for the Morris, assuming it was a 1948 car. Eight months later, Oscar Chess discovered it was actually a 1939 model, worth only £175.

The mistake originated from a forged registration book, though neither party was aware of the fraud at the time.

Oscar Chess sued Mr. Williams for the £115 difference, arguing that his statement was a contractual term.

Issue

Was Mr. Williams’ statement about the age of the car a term of the contract or merely an innocent misrepresentation?

Court’s Decision (Oscar Chess Ltd v Williams)

The majority (Denning LJ and Hodson LJ) held that Mr. Williams was not liable for the £115 difference in car value.

The representation was not a contractual term—instead it was held to be an innocent misrepresentation.

Lord Denning LJ applied an objective test: Would a reasonable bystander conclude Williams intended to warrant the car’s age? The answer was no, given his lack of expertise and transparent reliance on a log book.

Here, the buyer (car dealer) was in a better position to know the car’s age (they could have checked the chassis/engine number).

The seller was a private individual, relying on a fraudulent logbook. He did not intend to bind himself to the truth of the statement.

Morris LJ dissented, arguing that the statement was a term of the contract.

Quotes from the Case

“The question whether a warranty was intended depends on the conduct of the parties, on their words and behaviour, rather than on their thoughts. If an intelligent bystander would reasonably infer that a warranty was intended, that will suffice.”

“It must have been obvious to both that the seller had himself no personal knowledge of the year when the car was made. He only became owner after a great number of changes. He must have been relying on the registration book. It is unlikely that such a person would warrant the year of manufacture. The most he would do would be to state his belief, and then produce the registration book in verification of it. In these circumstances the intelligent bystander would, I suggest, say that the seller did not intend to bind himself so as to warrant that it was a 1948 model. If the seller was asked to pledge himself to it, he would at once have said “I cannot do that. I have only the log-book to go by, the same as you.”

(Denning LJ)

You can refer to the full text of the case here:

https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWCA/Civ/1956/5.html

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Reg Glass Pty Ltd v Rivers Locking Systems Pty Ltd (1968)

REG GLASS PTY LTD v RIVERS LOCKING SYSTEMS PTY LTD (1968) 120 CLR 516

  • Court: High Court of Australia
  • The bench: Barwick C.J., McTiernan, Menzies, Windeyer and Owen JJ.
  • Date of judgment: 17 October 1968
  • Area of law: Implied term; Breach of contract; Warranty of fitness for intended purpose

What is the case about?

The case revolves around a legal dispute involving a contract for installing a burglar-proof door in a retail shop.

Case background

The plaintiff, a men’s wear retailer, sought to install burglar-proof devices, including a door, at its new shop at 401 New South Head Road, Double Bay. The defendant, Rivers Locking Systems Pty. Ltd., was contracted to supply and fit the door according to a specific quotation. The plaintiff later sued the defendant for damages after thieves broke into the shop, claiming that the door installation was inadequate.

Trial Court Decision in Reg Glass Pty Ltd v Rivers Locking Systems Pty Ltd

The initial trial court ruled in favor of the plaintiff, awarding them $10,365.53 in damages.

Appeal Court Decision

The defendant appealed, and the Court of Appeal of the Supreme Court of New South Wales set aside the judgment in favor of the plaintiff and instead ruled in favor of the defendant.

The plaintiff then appealed to the higher court, seeking to have their original judgment of $10,365.53 restored.

Judgment of the High Court in Reg Glass Pty Ltd v Rivers Locking Systems Pty Ltd

The High Court focused on the nature of the contract and whether the defendant breached it by not providing adequate protection against burglary.

The Court found that while the defendant fulfilled the express terms of the contract by fitting the door according to the agreed-upon specifications, there was an implied term that the door should provide reasonable protection against burglary.

The trial judge’s finding that the door installation was inadequate and did not provide reasonable protection was upheld.

Thus, the High Court disagreed with the Court of Appeal and held that the defendant breached the implied term of the contract by failing to ensure that the door installation provided reasonable protection against burglary. The judgment in favor of the plaintiff was restored.

Quote from the case (Reg Glass Pty Ltd v Rivers Locking Systems Pty Ltd)

“Of course, the defendant did not undertake to provide a door which would defeat all endeavours of determined thieves to break in and steal, and its implied obligation was, of necessity, qualified. Nevertheless, we are not prepared to express that qualification more particularly than by using terms indicating reasonable fitness for the purpose for which the door was being installed; in particular, we are not prepared to state the qualification in terms of the time by which would-be breakers have been delayed by the door. Of course, the door as fitted would delay progress longer than would the hollow core wooden door which it replaced, but that, we think, is not enough. What the plaintiff contracted for was a door which when locked would be reasonably fit to keep would-be breakers out of the shop and the door as fitted and hung by the defendant was, as the learned trial judge found, not of that character.”

(Barwick C.J., McTiernan and Menzies JJ at p523)

Summary

In summary, the High Court emphasized the importance of implied contractual terms, particularly in situations where the express terms alone may not fully address the intended purpose of the contract, such as providing safety and security against burglary. It reinforces the expectation that contractors must not only fulfill specific contract terms but also meet reasonable standards of care and protection in their work.

References:

https://jade.io/article/66083

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A Case Summary of Couchman v Hill [1947]

Case name & citation: Couchman v Hill [1947] KB 554; [1947] 1 All ER 103

  • Court of Appeal, England and Wales
  • The bench of judges: Scott, Tucker and Bucknill L.JJ.
  • Area of law: Exclusion clauses; terms in a contract; conditions and warranties

In Couchman v Hill [1947] KB 554, the Court of Appeal addressed the issue of whether an oral statement made prior to a contract can be incorporated as a term of the contract despite written terms suggesting otherwise.

Facts (Couchman v Hill)

The defendant auctioned a heifer, described as “unserved” (i.e., not yet used for breeding) in the catalogue. The sale conditions included a clause that lots were sold “with all faults, imperfections and errors of description,” and that auctioneers were not liable for mistakes.

Before finalizing the purchase, the buyer asked both the auctioneer and seller to confirm that the heifer was unserved, and they both assured him that it was.

However, the heifer was later found to be pregnant and died from complications related to giving birth at too young an age.

Judgment taken

The Court of Appeal held that the oral assurances provided by the auctioneer and seller were deemed to be a term of the contract. The Court recognized that the representation about the heifer being unserved was crucial to the buyer’s decision to purchase.

Reasoning

Importance of Statement: The Court considered the significance of the oral statement to the buyer. The greater the reliance placed on a statement by one party, the more likely it is that such a statement will be treated as a term of the contract.

In other words, if a statement is crucial to one party’s decision to enter into the contract, it is more likely to be considered a term of the contract. In Couchman v Hill, the Court found that the oral assurance about the heifer being unserved was integral to the buyer’s decision to enter the contract. As a result, it was incorporated into the contract as a term. This was despite the written contract terms stating that the sale was “with all faults.”

Misrepresentation vs. Term: If a statement is so crucial that the party would not have entered the contract without it, the statement may be treated as a term rather than merely a misrepresentation.

Key Takeaway (Couchman v Hill)

A statement made during the pre-contractual negotiations can be deemed a term of the contract if it was so significant that the party would not have entered into the contract if he had known it to be untrue. This case illustrates that oral assurances can be considered terms of the contract if they are crucial to the party’s decision to contract.

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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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