Sales Of Goods Act 1957 Malaysia
Auriville Cha
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We will be looking at this act in this essay. We will be emphasizing on the case analysis of how this law has helped judges come to decisions, in the Malaysian courts. We will be looking at two cases; a) Interdeals Automation (M) Sdn Bhd vs Hong Hong Documents Sdn Bhd and b) Wilson VS Rickety, Cocketell & Co Ltd. Both the cases look at the different ways in which this law was used in court rulings. We will proceed and give analysis and application of the law on these cases.
Section 16 of the sales of Goods Act 1957 refers to the standard of quality of goods. Goods must be reasonably fit for purposes for which the buyer wants them (section 16(1))Section 16(1) states that; In general, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale. This rule, however, has two exceptions provided by subsections (a) and (b).
However, if the buyer has examined the goods, there shall be no such implied condition as regards defects which ought to be revealed by the examination. This section means that goods must be as fit for the purpose for which they are commonly used as it is reasonable to expect, taking into account any description attached to them, their price and all the other circumstances. Thus, food must be fit to eat, clothes must be fit to wear, and cars must be fit to drive.
Subject to this Act for the time being in force, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows:
is an implied condition that the goods shall be reasonably fit for such purpose: Provided that, in the case of a contract for the sale of a specified article under its patent or other trade name there is no implied condition as to its fitness for any particular purpose.
(b) Where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not) there is an implied condition that the goods shall be of merchantable quality: Provided that if the buyer has examined the goods, there shall be no implied condition as regards defects which such examined ought to have revealed.
The plaintiff and the defendant entered into an agreement for the sale and purchase of a unit of machinery called a Kern Page Mailer 18000 at a purchase price of RM190, 000.00 of which the defendant refused to pay the plaintiff the amount due to for the machinery.
The defendant raised a number of defences. First, the machine was not reasonably fit for its purpose or was not of merchantable quality. Second, the plaintiff had misrepresented to merchantable quality. Second, the plaintiff had misrepresented to the defendant, about the performance of the machine.
The judge ruled in favor of the plaintiff on the first two defences taken. He held that the goods were of merchantable quality and that there had been no misrepresentation, therefore the defendant had to pay the plaintiff.
This case is unique, because section 16 dictates that there is an implied condition that the goods supplied will be reasonably fit for the purpose of which they are bought and that if the buyer has examined the goods, there shall be no such implied condition as regards defects which ought to be revealed by the examination. The ruling was in favor of the plaintiff even though the plaintiff had examined the contents on completion of the contract which is the constituent of section 16(b), because while the consignment was examined and was used for the purpose of which it was bought. There was a breach of contract because the whole consignment was not of merchantable quality and hence when it was used for the purpose of which it was bought, it failed to fulfill this purpose with extremely disastrous consequences. So once again the SOGA has provided legal protection for the consumer and has provided legal clarity where before there would have been ambiguity and the defendant who is the seller would have probably won the case.
The sale of goods act was made with a main reason to protect the consumer. So the objective was to make sure that the consumer in protected in terms of usability of the product, quality of the merchandise. In the above cases we see how the act still fulfils its primary requirement of giving a basis for legal clarity, when legal vagueness arises. We also see in the second case; a ruling that was in support of the plaintiff even though the plaintiff had checked the contents at close of the contract which is the constituent of section 16(b), We see how there was a violation of contract because the whole delivery was not of merchantable value and hence when it was used for the intention of which it was bought for, it was unsuccessful to accomplish this use with tremendously grievous effect. So we note once again how the SOGA has provided legal security for the consumer. Both these cases are showing that the importance of the section 16 Sales of Goods Act in the rule of law. We have managed to discuss in the previous cases how the SOGA actually helped in the reaching of such decisions.
The Malaysian court system is based on the UK legal system familiar to those from common law jurisdictions, but it also incorporates distinct characteristics in the form of Islamic religious courts and two separate High Courts for the Peninsula and for the Borneo states.
LAWS OF MALAYSIAREPRINTAct 382SALE OF GOODS ACT 1957Incorporating all amendments up to 1 January 2006PUBLISHED BYTHE COMMISSIONER OF LAW REVISION, MALAYSIAUNDER THE AUTHORITY OF THE REVISION OF LAWS ACT 1968IN COLLABORATION WITHPERCETAKAN NASIONAL MALAYSIA BHD2006SALE OF GOODS ACT 1957First enacted ... ... ... ... ... ... 1957 (F.M. Ord. No. 1of 1957)Revised ... ... ... ... ... ... ... 1989 (Act 382 w.e.f.21 September 1989)PREVIOUS REPRINTFirst Reprint ... ... ... ... ... 200123LAWS OF MALAYSIAAct 382SALE OF GOODS ACT 1957ARRANGEMENT OF SECTIONSCHAPTER IPRELIMINARYSection1. Short title and application2. Interpretation3. Application of Contracts Act 1950CHAPTER IIFORMATION OF THE CONTRACTContract of sale4. Sale and agreement to sellFormalities of the contract5. Contract of how sale madeSubject Matter of Contract6. Existing or future goods7. Goods perishing before making of contract8. Goods perishing before sale but after agreement to sellThe price9. Ascertainment of price10. Agreement to sell at valuation4 Laws of Malaysia ACT 382Conditions and warrantiesSection11. Stipulations as to time12. Condition and warranty13. When condition to be treated as warranty14. Implied undertaking as to tittle, etc.15. Sale by description16. Implied condition as to quality or fitness17. Sale by sampleCHAPTER IIIEFFECTS OF THE CONTRACTTransfer of property as between seller and buyer18. Goods must be ascertained19. Property passes when intended to pass20. Specific goods in a deliverable state21. Specific goods to be put into a deliverable state22. Specific goods in a deliverable state when the seller has to do anythingthereto in order to ascertain price23. Sale of unascertained goods and appropriation24. Goods sent on approval or "on sale or return"25. Reservation of right of disposal26. Risk prima facie passes with property27. Sale by person not the owner28. Sale by one of joint owners29. Sale by person in possession under voidable contract30. Seller or buyer in possession after saleCHAPTER IVPERFORMANCE OF THE CONTRACT31. Duties of seller and buyer32. Payment and delivery are concurrent conditions33. DeliverySale of Goods 5Section34. Effect of part delivery35. Buyer to apply for delivery36. Rules as to delivery37. Delivery of wrong quantity38. Instalment deliveries39. Delivery to carrier or wharfinger40. Risk where goods are delivered at distant place41. Buyer's right of examining the goods42. Acceptance43. Buyer not bound to return rejected goods44. Liability of buyer for neglecting or refusing delivery of goodsCHAPTER VRIGHTS OF UNPAID SELLER AGAINST THE GOODS45. Unpaid seller defined46. Unpaid seller's rightsUnpaid seller's lien47. Seller's lien48. Part delivery49. Termination of lienStoppage in transit50. Right of stoppage in transit51. Duration of transit52. How stoppage in transit is effectedTransfer by buyer and seller53. Effect of sub-sale or pledge by buyer54. Sale not generally rescinded by lien stoppage in transit6 Laws of Malaysia ACT 382CHAPTER VISUITS FOR BREACH OF THE CONTRACTSection55. Suit for price56. Damages for non-acceptance57. Damages for non-delivery58. Specific performance59. Remedy for breach of warranty60. Repudiation of contract before due date61. Interest by way of damages and special damagesCHAPTER VIIMISCELLANEOUS62. Exclusion of implied terms and conditions63. Reasonable time a question of fact64. SavingsSale of Goods 7LAWS OF MALAYSIAAct 382SALE OF GOODS ACT 1957An Act relating to the sale of goods.[Federal Territory, Johore, Kedah, Kelantan, Negeri Sembilan,Pahang, Perak, Perlis, Selangor and Terengganu--23 April 1957,Malacca and Penang--23 February 1990]CHAPTER IPRELIMINARYShort title and application1. (1) This Act may be cited as the Sale of Goods Act 1957.(2) This Act shall apply to the States of *Penisular Malaysia.Interpretation2. In this Act, unless the context otherwise requires--"buyer" means a person who buys or agrees to buy goods;"delivery" meansvoluntary transfer of possession from oneperson to another; goods are said to be in a "deliverable state"when they are in suchstate that the buyer would under the contractbe bound to take delivery of them;"document of title to goods" includes a bill of lading, dockwarrant, warehouse keeper's certificate, wharfinger's certificate,railway receipt, warrant or order for delivery of goods and anyother document used in the ordinary course of business as proofof the possession or control of goods, or authorizing or purportingto authorize, either by endorsement or by delivery, the possessorof the document to transfer or receive goods thereby represented;*NOTE--All references to "West Malaysia" shall be construed asreference to "Peninsular Malaysia"see the Interpretation (Amendment) Act 1997 [Act A996], subsection 5(2).8 Laws of MalaysiaACT 382"fault" means wrongful act or default;"future goods" means goods to be manufacture or produced oracquired by the seller after the making of the contract of sale;"goods"means every kind of movable property other thanactionable claims and money; and includes stock and shares, growingcrops, grassand things attached to or forming part of the landwhich are agreed to be severed before sale or under the contractof sale;a person is said to be "insolvent" who has ceased to pay hisdebts in the ordinary course of business, or cannot pay his debtsas they become due, whether he has committed an act of bankruptcyor not;"mercantile agent" means a mercantile agent having in thecustomary course of business as such agent authority either to sellgoods,or to consign goods for the purposes of sale, or to buygoods, or to raise money on the security of goods;"price" means the moneyconsideration for a sale of goods;"property" means the general property in goods, and not merelya special property;"quality of goods" includes their state or condition;"seller" means a person who sells or agrees to sell goods;"specific goods"means goods identified and agreed upon atthe time a contract of sale is made; and any expression usedbut not defined in thisAct which is defined in the ContractsAct 1950 [Act 136], shall have the meaning assigned to it inthat Act.Application of Contracts Act 19503. The Contracts Act 1950, in so far as they are not inconsistentwith the express provisions of this Act shall continue to applytocontracts for the sale of goods.Sale of Goods 9CHAPTER IIFORMATION OF THE CONTRACTContract of saleSale and agreement to sell4. (1) A contract of sale of goods is a contract whereby the sellertransfers or agrees to transfer the property in goods to thebuyerfor a price. There may be a contract of sale between one part-owner and another.(2) A contract of sale may be absolute or conditional.(3) Where under a contract of sale the property in the goodsis transferredfrom the seller to the buyer, the contract is calleda sale, but where the transfer of the property in the goods is totake placeat a future time or subject to some condition thereafterto be fulfilled, the contract is called an agreement to sell.(4) An agreementto sell becomes a sale when the time elapsesor the conditions are fulfilled subject to which the property in thegoods is to betransferred.Formalities of the contractContract of how sale made5. (1) A contract of sale is made by an offer to buy or sellgoods for a price and the acceptance of such offer. The contractmayprovide for the immediate delivery of the goods orimmediate payment of the price or both, for the delivery orpayment by instalments,or that the delivery or payment or bothshall be postponed.(2) Subject to any law for the time being in force, a contractof sale may be made writing or by word of mouth, or partly inwritingand partly by word of mouth or may be implied from theconduct of the parties.10 Laws of Malaysia ACT 382Subject matter of contractExisting or future goods6. (1) The goods which form the subject of a contract of sale maybe either existing goods, owned or possessed by the seller, orfuture goods.(2) There may be a contract for the sale of goods the acquisitionof which by the seller depends upon a contingency which may ormay not happen.(3) Where by a contract of sale the seller purports to effect apresent sale of future goods, the contract operates as an agreementto sell the goods.Goods perishing before making of contract7. Where there is a contract for the sale of specific goods, thecontract is void if the goods without the knowledge of the sellerhave, at the time when the contract was made, perished or becomeso damaged as no longer to answer to their description in thecontract.Goods perishing before sale but after agreement to sell8. Where is an agreement to sell specific goods, and subsequentlythe good, without any fault on the part of the seller or buyer,perish, or become so damaged as no longer to answer to theirdescription in the agreement, before the risk passes to the buyer,the agreement is thereby avoided.The priceAscertainment of price9. (1) The price in a contract of sale may be fixed by the contractor may be left to be fixed in manner thereby agreed or may bedetermined by the course of dealing between the parties.Sale of Goods 11(2) Where the price is not determined in accordance with theforegoing provisions, the buyer shall pay the seller a reasonableprice. What is a reasonable price is a question of fact dependenton the circumstances of each particular case.Agreement to sell at valuation10. (1) Where there is an agreement to sell goods on the termsthat the price is to be fixed by the valuation of a third party andsuch third party cannot or does not make such valuation, theagreement is thereby avoided:Provided that if the goods or any part thereof have been deliveredto, and appropriated by, the buyer, he shall pay a reasonablepricetherefor.(2) Where such third party is prevented from making the valuationby the fault of the seller or buyer, the party not in fault maymaintain a suit for damages against the party in fault.Conditions and warrantiesStipulations as to time11. Unless a different intention appears from the terms of thecontract, stipulations as to time of payment are not deemed to beof the essence of the contract of sale. Whether any other stipulationas to time is of the essence of the contract or not dependson theterms of the contract.Condition and warranty12. (1) A stipulation in a contract of sale with reference to goodswhich are the subject thereof may be a condition or warranty.(2) A condition is a stipulation essential to the main purposeof the contract, the breach of which gives rise to a right to treatthe contract as repudiated.(3) A warranty is a stipulation collateral to the main purposeof the contract, the breach of which gives rise to a claim fordamagesbut not to a right to reject the goods and treat the contractas repudiated.12 Laws of Malaysia ACT 382(4) Whether a stipulation in a contract of sale is a condition ora warranty depends in each case on the construction of the contract.The stipulation may be a condition, though called a warranty inthe contract.When condition to be treated as warranty13. (1) Where a contract of sale is subject to any condition to befulfilled by the seller the buyer may waive the condition or electto treat the breach of the condition as a breach of warranty andnot as a ground for treating the contract as repudiated.(2)Where a contract of sale is not severable and the buyer hasaccepted the goods or part thereof, or where the contract is forspecificgoods the property in which has passed to the buyer, thebreach of any condition to be fulfilled by the seller can only betreatedas a breach of warranty, and not as a ground for rejectingthe goods and treating the contract as repudiated, unless there isaterm of the contract express or implied to that effect.(3) Nothing in this section shall affect the case of any conditionor warrantythe fulfilment of which is excused by law by reasonof impossibility or otherwise.Implied undertaking as to title, etc.14. In a contract of sale, unless the circumstances of the contractare such as to show a different intention, there is--(a) animplied condition on the part of the seller, that, in thecase of a sale, he has a right to sell the goods, and that,in the caseof an agreement to sell, he will have a rightto sell the goods at the time when the property is to pass;(b) an implied warrantythat the buyer shall have and enjoyquiet possession of the goods;(c) an implied warranty that the goods shall be free from anycharge or encumbrance in favour of any third party notdeclared orknown to the buyer before or at the timewhen the contract is made.Sale of Goods 13Sale by description15. Where there is a contract for the sale of goods by descriptionthere is an implied condition that the goods shall correspondwiththe description; and, if the sale is by sample as well as by description,it is not sufficient that the bulk of the goodscorresponds with thesample if the goods do not also correspond with the description.Implied condition as to quality or fitness16. (1) Subject to this Act and of any other law for the time beingin force, there is no implied warranty or condition as to thequalityor fitness for any particular purpose of goods supplied under acontract of sale, except as follows:(a) Where the buyer, expressly or by implication makes knownto the seller the particular purpose for which the goodsare required,so as to show that the buyer relies on theseller's skill or judgment, and the goods are of a descriptionwhich it is in the courseof the seller's business to supply(whether he is the manufacturer or producer or not) thereis an implied condition that the goodsshall be reasonablyfit for such purpose:Provided that, in the case of a contract for the sale ofa specified article under its patent or other trade namethere is no impliedcondition as to its fitness for anyparticular purpose.(b) Where goods are bought by description from a seller whodeals in goods of that description (whether he is themanufactureror producer or not) there is an impliedcondition that the goods shall be of merchantable quality:Provided that if the buyer hasexamined the goods,there shall be no implied condition as regards defectswhich such examined ought to have revealed.(2) An implied warranty or condition as to quality or fitness fora particular purpose may be annexed by the usage of trade.(3)An express warranty or condition does not negative a warrantyor condition implied by this Act unless inconsistent therewith.14Laws of Malaysia ACT 382Sale by sample17. (1) A contract of sale is a contract for sale by sample wherethere is a term in the contract express or implied to that effect.(2) In the case of a contract for sale by sample there is animplied condition--(a) that the bulk shall correspond with the sample in quality;(b) that the buyer shall have a reasonable opportunity ofcomparingthe bulk with the sample;(c) that the goods shall be free from any defect renderingthem unmerchantable which would not be apparent onreasonable examinationof the sample.CHAPTER IIIEFFECTS OF THE CONTRACTTransfer of property as between seller and buyerGoods must be ascertained18. Where there is a contract for the sale of unascertained goods,no property in the goods is transferred to the buyer unless anduntilthe goods are ascertained.Property passes when intended to pass19. (1) Where there is a contract for the sale of specific or ascertainedgoods the property in them is transferred to the buyerat such timeas the parties to the contract intend it to be transferred.(2) For the purpose of ascertaining the intention of thepartiesregard shall be had to the terms of the contract, the conduct of theparties and the circumstances of the case.(3) Unless a different intention appears the rules contained insections 20 to 24 are rules for ascertaining the intention of theparties as to the time at which the property in the goods is to passto the buyer.Sale of Goods 15Specific goods in a deliverable state20. Where there is an unconditional contract for the sale of specificgoods in a deliverable state the property in the goods passesto thebuyer when the contract is made, and it is immaterial whether thetime of payment of the price, or the time of deliveryof the goods,or both, is postponed.Specific goods to be put into a deliverable state21. Where there is a contract for the sale of specific goods andthe seller is bound to do something to the goods for the purposeof putting them into a deliverable state, the property does not passuntil such thing is done and the buyer has notice thereof.Specific goods in a deliverable state when the seller has to doanything thereto in order to ascertain price22. Where there is a contract for the sale of specific goods in adeliverable state, but the seller is bound to weigh, measure, test,or do some other act or thing with reference to the goods for thepurpose of ascertaining the price, the property does not passuntilsuch act or thing is done and the buyer has notice thereof.Sale of unascertained goods and appropriation23. (1) Where there is a contract for the sale of unascertained orfuture goods by description and goods of that description andina deliverable state are unconditionally appropriated to the contract,either by the seller with the assent of the buyer or bythe buyerwith the assent of the seller, the property in the goods thereuponpasses to the buyer.Such assent may be express or implied, and may be given eitherbefore or after the appropriation is made.Delivery to carrier(2) Where, in pursuance of the contract, the seller delivers thegoods to the buyer or to a carrier or other bailee (whether namedby the buyer or not) for the purpose of transmission to the buyer,and does not reserve the right of disposal, he is deemed tohaveunconditionally appropriated the goods to the contract.16 Laws of Malaysia ACT 382Goods sent on approval or "on sale or return"24. When goods are delivered to the buyer on approval or "onsale or return", or other similar terms, the property therein passesto the buyer--(a) when he signifies his approval or acceptance to the selleror does any other act adopting the transaction;(b) if he does not signify his approval or acceptance to theseller but retains the goods without giving notice ofrejection, then,if a time has been fixed for the return ofgoods, on the expiration of such time, and if no time hasbeen fixed, on the expirationof a reasonable time.Reservation of right of disposal25. (1) Where there is a contract for the sale of specific goodsor where goods are subsequently appropriated to the contract theseller may by the terms of the contract or appropriation reservethe right of disposal of the goods until certain conditions arefulfilled. In such case, notwithstanding the delivery of the goodsto the buyer or to a carrier or other bailee for the purposeoftransmission to the buyer, the property in the goods does not passto the buyer until the conditions imposed by the seller arefulfilled.(2) Where goods are shipped and by the bill of lading thegoods are deliverable to the order of the seller or his agent,theseller is prima facie deemed to reserve the right of disposal.(3) Where the seller of goods draws on the buyer for the priceand transmits the bill of exchange and bill of lading to the buyertogether, to secure acceptance or payment of the bill of exchange,the buyer is bound to return the bill of lading if he does not honourthe bill of exchange, and if he wrongfully retains the billof ladingthe property in the goods does not pass to him.Risk prima facie passes with property26. Unless otherwise agreed, the goods remain at the seller's riskuntil the property therein is transferred to the buyer, but whentheproperty therein is transferred to the buyer, the goods are at thebuyer's risk whether delivery has been made or not:Providedthat where delivery has been delayed through the faultof either buyer or seller, the goods are at the risk of the party infaultas regards any loss which might not have occurred but forsuch fault:Sale of Goods 17Provided also that nothing in this section shall affect the dutiesor liabilities of either seller or buyer as a bailee of the goodsofthe other party.Sale by person not the owner27. (1) Subject to this Act and of any other law for the timebeing in force, where goods are sold by a person who is not theownerthereof, and who does not sell them under the authorityor with the consent of the owner, the buyer acquires no bettertitle tothe goods than the seller had, unless the owner of thegoods is by his conduct precluded from denying the seller's authoritytosell:Provided that where a mercantile agent is, with the consent ofthe owner, in possession of the goods or of a document of title tothe goods, any sale made by him when acting in the ordinarycourse of business of a mercantile agent shall be as valid as if hewere expressly authorized by the owner of the goods to make thesame; provided that the buyer acts in good faith and has not atthetime of the contract of sale notice that the seller has no authorityto sell.Sale by one of joint owners28. If one of several joint owners of goods has the sole possessionof them by permission of the co-owners, the property in the goodsis transferred to any person who buys them of such joint ownerin good faith and has not at the time of the contract of sale noticethat the seller has no authority to sell.Sale by person in possession under voidable contract29. Where the seller of goods has obtained possession thereofunder a contract voidable under section 19 or 20 of the ContractsAct 1950, but the contract has not been rescinded at the time ofthe sale, the buyer acquires a good title to the goods providedhebuys them in good faith and without notice of the seller's defectof title.Seller or buyer in possession after sale30. (1) Where a person, having sold goods, continues or is inpossession of the goods or of the documents of title to the goods,the delivery or transfer by that person or by a mercantile agentacting for him, of the goods or documents of title under any sale,18 Laws of Malaysia ACT 382pledge or other disposition thereof to any person receiving thesame in good faith and without notice of the previous sale shallhave the same effect as if the person making the delivery ortransfer were expressly authorized by the owner of the goods tomakethe same.(2) Where a person, having bought or agreed to buy goods,obtains, with the consent of the seller, possession of the goods orthedocuments of title to the goods, the delivery or transfer by thatperson or by a mercantile agent acting for him of the goods ordocuments of title under any sale, pledge, or other dispositionthereof to any person receiving the same in good faith and withoutnotice of any lien or other right of the original seller in respectof the goods shall have effect as if such lien or right didnot exist.CHAPTER IVPERFORMANCE OF THE CONTRACTDuties of seller and buyer31. It is the duty of the seller to deliver the goods and of thebuyer to accept and pay for them in accordance with the terms ofthe contract of sale.Payment and delivery are concurrent conditions32. Unless otherwise agreed, delivery of the goods and paymentof the price are concurrent conditions, that is to say, the sellershallbe ready and willing to give possession of the goods to the buyerin exchange for the price, and the buyer shall be readyand willingto pay the price in exchange for possession of the goods.Delivery33. Delivery of goods sold may be made by doing anythingwhich the parties agree shall be treated as delivery or which hasthe effectof putting the goods in the possession of the buyer orof any person authorized to hold them on his behalf.Sale of Goods 19Effect of part delivery34. A delivery of part of goods, in progress of the delivery ofthe whole, has the same effect for the purpose of passing thepropertyin such goods, as a delivery of the whole; but a deliveryof part of the goods with an intention of severing it from the wholedoes not operate as a delivery of the remainder.Buyer to apply for delivery35. Apart from any express contract, the seller of goods is notbound to deliver them until the buyer applies for delivery.Rulesas to delivery36. (1) Whether it is for the buyer to take pos