Implied Term That the Goods Should Correspond With the Description

According to s.13, there is an implied term that the goods should correspond with the description if it is sale by description. [1]

In Arco v Ronassen, [2] where the thickness of staves in the sale was specified as half an inch; when the goods arrived, the buyer rejected them on grounds that they did not conform to the description in the contract in that they were not conform the thickness of half an inch. As Lord Atkin has pointed out that if the written contract specifies condition of measurement, those conditions must be complied with. [3] He continues to emphasize in that sense ‘a tone does not mean about a tone, or a yard about a yard’. [4]

Likewise, in Re Moore and Landauer, [5] a contract for the sale of tinned peaches which requires to be packed in case of 30 tins each, but the seller packed some 24 tins each. The court held that the seller breached s.13 although there was no difference in the market value of the goods whether they packed 24 tins in a case or 30 tins in a case. It is now clear if the specified description has not been complied with, then the obligation of conformity is undoubtedly breached.

Moreover, the case Christopher v Ashington Piggeries [6] could help us to distinguish the difference between conformity to description (s.13) and conformity to quality or fitness (s.14). It was concerning a firm of mink breeders who contracted with several sellers for the supply of animal feed stuff. The feed stuff caused thousands of mink died because one of the ingredients, Norwegian herring meal, contained a toxic chemical agent called DMNA. Although the defect (DMNA) in herring meal should be classified as a matter of quality, House of Lords have found that the contained and poisonous herring meal did not make itself erroneous to be described as herring meal, so there was no breach of s.13.

1.2 Under CISG

With respect to art.35(1), the seller must deliver goods which are of description required by the contract. Therefore, Arco v Ronassen and Re Moore are most likely held breaching the obligation of conformity in the same way under CISG since description is very objective just as mentioned above ‘half an inch is not about half an inch’ and ’24 tins in a case is obviously inconsistent with 30 tins in a case’. In other words, even if the staves with more than half an inch have exactly the same value and fitness for the purpose, they are still not corresponding to the description in the contract which could be treated as an explicit or implicit arrangement made by both parties.

Thus, it could be found there is hard to be any substantial difference between CISG and SGA on the conformity of description although the consequences of breach might have a big difference, namely under CISG only seller’s breach is fundamental the buyer could avoid the contract, while under SGA description is seemed as a condition thereby the buyer can terminate the contract whenever the description is not been complied with.

2. Quality or Fitness for Purpose

2.1 Under SGA 1979

Pursuant to s.14(2), there is an implied term that the goods supplied are of satisfactory quality in replacement of the original merchantable quality by the 1994 amendment. From s.14(2B)(a), it is not difficult to find the quality id the goods should fit for all their common purpose.

In Aswan Engineering Establishment, [7] the court held that the pails had been bought for the purpose of exporting the compound and were suitable for that purpose regardless of their collapse under extreme climate conditions. Lord Nicholls pointed out that to expect the pails could cope with the stress in all climate conditions and in all temperatures would be unreasonable. [8] By utilizing the new ‘satisfactory standard’, there would be no material divergent since hoping the pails fit for the purpose in such extreme climate conditions could be argued as an uncommon purpose.

In Christopher v Ashington Piggeries the House of Lords held the sellers were liable to the buyers for breaching s.14(1) since DMNA was deleterious to a wide variety of animals not only to mink; moreover, mink are more sensitive to DMNA than most other animals if not all. [9] Suppose if the food supplied only unsuitable for mink and the seller did not know such idiosyncrasy, then there might be a great possibility that the seller would not be held in breach. Just as Lord Wilberforce said that any general unsuitability would be seller’s responsibility. [10]

This also why in Slater v Finning [11] Lord Ordinary concluded that the cause of the failure of the camshafts was excited by external factors and the damage observed in them was not due to their unfitness to fulfil their purpose but was the result of those external factors. Therefore, it is safe to say that the seller were only obliged to supply a standard type of goods which fit for their common purpose unless it was made known to the seller that the buyer wanted something special (for example an indestructible camshaft in this case). In other words, if there is a special agreement like in the case Cammell v Manganese, [12] where the propeller should fit for one particular ship was made as an implied condition, the seller would be in breach of s.14(1) when such purpose whether common or uncommon had not been met.

2.2 Under CISG

There is a similar expression in art.35(2)(a) which requires the goods ‘should fit for the purpose for which goods of the same description would ordinarily be used.

The tribunal in Rijn Blend [13] decided that art.35(2)(a) should be interpreted according to the reasonable quality criterion, rather than the ‘merchantable quality’ or ‘average quality’. [14] The Rijn Blend did not meet reasonable quality by virtue of the price agreed upon would not be paid for condensate with increased levels of mercury. [15] Identical result would also be concluded under SGA since the goods are not of satisfactory quality with increased levels of mercury, no reasonable person would regard it as satisfactory.

In this sense, the terms ‘ordinarily be used’ under CISG and ‘commonly supplied’ under SGA are substantially same. Neither CISG nor SGA would expect an unreasonable or uncommon purpose to be served as an implied standard.

Furthermore, with respect to those expressed particular purpose, art.35(2)(b) of CISG, like s.14(3) of SGA, states that particular purpose should be complied with unless the buyer does not rely on the skill and judgement of the seller. Such as in the Mussels Case, [16] the Swiss seller delivered to the German buyer mussels containing a cadmium concentration exceeding the limit recommended by German health authority. The court held that the cadmium constituted no lack of conformity since the mussels were still eatable. [17] And the Supreme Court held that arts.35(2)(a) and (b) do not place an obligation on the seller to supply goods which conform to all statutory or other public provisions in force in the import State unless the same provisions exist in the export State as well or the buyer informed the seller about such provisions relying on the seller’s expert knowledge of the provisions owing to special circumstances. [18]

It is in line with the decision in Sumner Permain [19] where the mere fact that goods are unsalable in the country in which they are intended to because of such sale is prohibited by that country could not constitute a breach of the implied terms of s.14 of SGA.

3. Termination

3.1 Under SGA 1979

In English Law, breach of condition could give rise to a right to treat the contract as repudiated according to s.11(3). Apart from the statutory conditions like s.13(1) and ss.14(2)(3), the usual way to distinguish conditions from warranties mainly depends on intentions at the time of contracting. It could be found as long as a condition is breached, no matter how slight or insignificant it is even if no actual loss occurs, the buyer can terminate the contract. Despite the umpire found that there was no difference in the market value of the goods whether they were packed 24 tins in a case or 30 tins in Re Moore, or in Arco v Ronassen the staves which are not of the thickness of half an inch were reasonably fit for the purpose for which they were bought, the court still allowed the buyer to terminate the contract.

3.2 Under CISG

In contrast to SGA, under CISG the buyer is not allowed to terminate the contract unless the breach is fundamental, i.e. as such detriment to the non-breaching party substantially to deprive him of what he is entitled to expect under the contract. Obviously, the above two cases would not be allowed to reject the contract under CISG since no substantial harm caused by the breach. Therefore, while the seller in Re Moore and in Arco v Ronassen could be held breach the obligation of conformity as analysed above, the buyer would never be allowed to terminate the contract simply because of the non-conformity without any substantial harm.

The Cobalt Sulfate Case [20] could clearly show the position of CISG on the right of termination. The cobalt sulphate sold was agreed to be of British origin and with certificates of origin and quality. But the goods were made in South Africa and the certificate of origin was wrong, so the buyer wanted to terminate the contract. However, the German Supreme Court found that there was no fundamental breach of the contract because the buyer could not show it was impossible to sell the South African cobalt sulphate in Germany or aboard. [21] In other word, the buyer failed to prove he was substantially deprived of what he was entitled to expect under the contract according to art.25. Meanwhile, the court held the delivery of wrong certificates of origin and quality did not amount to fundamental breach on the ground that the buyer could still obtain correct documents from other sources. [22] Thus, the buyer was not allowed to avoid the contract and bound to pay under CISG.

It is known under SGA, the facts whether the buyer is able to obtain certificates or sell goods in other markets; whether the seller knew of buyer’s market or certificate was false are al irrelevant. The judges need only know whether the condition is breached in order to make the judgment.

3.3 Innomminate Terms

In Hongkong Fir

3.4 Reasonable Termination—Section 15A

With the judicial and legislative developments, s.15A, as a modification of the classic position of SGA, specifies if the breach might be merely treated as a breach of warranty if it is very slight.

Just as Takahashi pointed out, in cases such as Vargas Pena Apezteguia, Tradax and Re Moore, the breach could be deemed as slight and the difference between the performance promised and the performance tendered is insignificant. [23] Then there is a possibility that the breach is not enough to amount to the right of termination under the new amendment. Schlechtriem even argues the doctrine of fundamental breach reflects the English doctrine of conditions. [24] Apparently, especially with s.15A, the slight breach might not amount to reject the contract but it is uncertain on the degree of ‘substantial deprivation’ to what extent similar to the ‘slight breach’. Furthermore, the burden of proving the ‘slightness’ is on the seller according to s.15A(3) while under CISG it is the non-breaching party(i.e. buyer) who assumes the responsibility to show ‘fundamental breach’. It indeed reflects the tendency in English Law does not favour to use such ‘slight breach’ by adding more burdens on the breaching party (i.e. seller).

More importantly, s.15A is rarely utilized in practice because parties usually will contract out the provision by the subsection (2). [25] Therefore, realistically, the effect of the innominate terms is much less than that of in theory, s.15A makes no big difference.