SALE OF GOODS

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 APPLICABLE LAWS

• Sale of Goods Act 1957 (SOGA 1957) applies in

Peninsular Malaysia– Section 1 of the Sale of
Goods Act 1957 
• The application of SOGA in Penang and
Malacca-23 February 1990 through the Sale of
Goods (Amendment) Act 1990
• Sabah and Sarawak is governed by the English
Sale of Goods Act 1893

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• The provisions of the Contracts Act 1950
(Revised 1974) continues to apply to contracts
for the sale of goods unless they are
inconsistent with the express provisions of the
Sale of Goods Act – section 3 of the Sale of
Goods Act 1957

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 MEANING OF CONTRACT OF SALE (COS)

• COS is a contract whereby the

seller transfers or agrees to
transfer the property in goods to
the buyer for a price.

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• Section 4: (1) A contract of sale of goods is a
contract whereby the seller transfers or agrees
to transfer the property in goods to the buyer
for 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.

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• (3) Where under a contract of sale the property
in the goods is transferred from the seller to the
buyer, the contract is called a sale, but where
the transfer of the property in the goods is to
take place at a future time or subject to some
condition thereafter to be fulfilled, the contract
is called an agreement to sell.
• (4) An agreement to sell becomes a sale when
the time elapses or the conditions are fulfilled
subject to which the property in the goods is to
be transferred.
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• 4 elements under COS:
• 1) The goods as the subject matter of the
contract
• 2) The price as a consideration in the COS
• 3) Contract involved a seller and a buyer
• 4) Transferability of ownership of the goods
to the buyer

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• Price
• Section 2 - the money consideration for a sales
of the goods
• Section 9(1) and (2)-ascertainment of price:
• The price may be fixed by agreed parties in
the contract and if there is no fixed price in
the contract, the buyer shall pay the seller a
reasonable price

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 CONTRACT OF SALE DISTINGUISH FROM OTHER TRANSACTIONS

• The COS–transfer the ownership of the goods

to the buyer for a money as a consideration
• But if the consideration is goods alone and not
a money-it is not contract of sale under SOGA
• Difference a sale and agreement to sell:
• a. A sale is a contract whereby the seller
transfer the property in goods to the buyer
for a price

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• b. an agreement to sell is a contract under
which the transfer of the property in the goods
is to take place at the future or subject to
certain conditions that has to be fulfilled . See
section 6(3)
• c. an agreement to sells/executed COS
becomes a sell when at the time elapse or the
condition has been fulfilled in the COS-section
4(4)
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• d. when there is a breach to an agreement to sell by
a buyer, the seller may sue for unliquidated damages
only (the goods are still belong to the seller)
• e. if an agreement to sell is breached by the seller
the buyer cannot claim the goods belonging to the
seller but the buyer has a personal remedy for
damages against the seller
• f. when there is a breach in sale, if the buyer fails to
pay to the seller, the seller may sue for a price

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• Tractors Malaysia Sdn. Bhd v. Kumpulan
Pembinaan Malaysia Sdn. Bhd. (1979) 1 MLJ
129
• Harper Gilfillan (Malaysia) Sdn. Bhd v. Kean
Toh Amang Factory Sdn Bhd & Lee Kwee
Hong (Claimant) (1986) 1 MLJ 249

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 FORMATION OF COS

• There is no special formalities in formatting

the COS
• It can be made in writing, word or partly in
writing and partly in word
• It may also be implied form the conduct of the
parties. -word, in writing etc
• Section 5(1) and section 5(2) SOGA

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• The COS may provide :
• 1) immediate delivery of goods
• 2) intermediate payment of price
• 3) both

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• ??? who are the parties of COS
• -section 4
• -The buyer- the person who buys/ agree to
buy goods
• -The seller-the person sells the goods/ agree
to sell goods

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 WHAT IS GOOD
• Section 2- means every kind of movable
property other than actionable claims and
money; and includes stock and shares, growing
crops, grass and things attached to or forming
part of the land which are agreed to be severed
before sale or under the contract of sale
•  
• Example: sale of land is not sale of goods
• An actionable claim means a claim to any
unsecured debt
or a claim to any beneficial interest in movable
property, not in the possession of the claimant.
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• Things that not included as goods under
SOGA:
• a. all types of immovable property
• b. trees, minerals, soil and other which form
part of land
• (However, if they have been or will be severed
from the land – it can be considered as a
goods under SOGA)

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 Morgan v. Russel [1909] 1 KB 357

• The vendor was the lessee of certain land, which was

composed of lag and cinders (sisa bara). He then sold
to the purchasers all the slag on his premises so
much as the purchasers should desire to remove.
• It was held to be a sale of an interest in land and not
sale in the meaning of sales of goods as the vendor
did not sell any definite quantity of mineral.
• * slag- waste left after metal has been extracted from
ore

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• Types of goods- 
• The goods which form the subject of a
contract of sale may either be existing goods
or future goods – section 6 of SOGA 1957
• i. Existing goods
• ii. Specific Goods-section 2
• iii. Ascertain goods
• iv. Unascertained goods
• v. Future goods

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• Existing goods: goods already owned or
possessed by the seller, and may be either
specified or agreed upon at the time a
contract of sale is made
• Example: the goods on display in supermarket

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• Specific goods – goods identified and agreed
upon at the time a contract of sale is made
• Example: A agrees to sell to B his car
registered as ASD123- it is a specific goods
because the car is identified and agreed upon
at the contract is made

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• Ascertained goods – goods which, in a contract
for the sale of unascertained goods, have
become identified and appropriated to the
contract after it has been agreed by the parties
• (the good becomes ascertained after the
selection by the buyer/seller is made) 
• Example: Ali wants to buy a car at the car
consignment. There are so many cars. So he
decided to choose the car he wants to purchase.
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• Unascertained goods – goods are not identified
and agreed upon at the time the contract of sale is
made
• Example: Ali wants to buy a car at the car
consignment. There are so many cars. But during
the contract is made, he did not know which car
that he wants to buy.
• Example: at the fruit section, when a customer is
still in the process of selecting the fruits it
remain unascertained goods.
• This type of goods can be divided into 3 categories:

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• a. goods to be manufactured (future goods) or
grown by seller
• b. generic goods (umum/general) . Example:
1000 tons of wheat or 10 kg of rice
• c. an unidentified part of specific of the
whole. Example: 100 tons out of particular
load of 2000 tons of wheat
• (but once the customer has made his
selection the goods become an ascertained
goods)

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• future goods – goods to be manufactured or
produced or acquired by the seller after the
making of the contract of sale: section 2 of
SOGA 1957
•  
• Example: An agreement to sell a car of a specific
make and model yet to be manufactured by the
seller is a sale of future goods. It is also
unascertained goods.
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• Illustration:
• An agreement to sell a particular car which
both seller and buyer knows belongs to the 3rd
party at the time the contract but which the
seller intends to acquire it is a sale and
specific goods. The car is specific because it is
identified and agreed upon at the time of the
contract. But it is also future goods where the
car only can be acquired by the seller of the
contract of sale is made

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 TERMS OF THE CONTRACT OF SALES OF GOODS

• Term is a stipulation that gives valued to the

intention of the parties. The parties have to be
careful in putting terms in their contract because
once the terms are incorporated into the contract,
then it will bind the parties in the contract.
• The terms under the SOGA may be in condition or
warranty. Both these terms may be made either
expressly or impliedly from the conduct of the
parties or by operation of law, which provided under
section 14-17 of SOGA
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• Section 12.  Condition and warranty.
• (1) A stipulation in a contract of sale with
reference to goods which are the subject
thereof may be a condition or a warranty.
• (2) A condition is a stipulation essential to the
main purpose of the contract, the breach of
which gives rise to a right to treat the contract
as repudiated.

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• (3) A warranty is a stipulation collateral to the main
purpose of the contract, the breach of which gives
rise to a claim for damages but not to a right to
reject the of and treat the contract as repudiated.
• (4) Whether a stipulation in a contract of sale is a
condition or a warranty depends in each case on the
construction of the contract.
• The stipulation may be a condition, though called a
warranty in the contract.

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• Explanations:
• Section 12(2)-conditionsstipulation that is
very important and will goes to the root of the
contractif breach right to repudiate the
contract the contract is voidable
• Section 12(3)-warrantystipulation that
collateral to the contract (less important) if
breach right to claim damages only (no
repudiation) the contract is not voidable
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• Exceptions:
• The breach of condition sometimes cannot
give right to the innocent party to repudiate
the contract. Here the buyer should treat the
breach of ‘condition’ as a breach of ‘warranty’.
• It may happen in several situations:
• 1. Section 13(1)
• Where the buyer waives the condition or elect
to treat the breach of the condition as a
breach of warranty

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• 2. Section 13(2)
• Where a contract of sale is not severable and the buyer has
accepted the goods or part thereof,
• Example: This is when the buyer has told the seller that he
had accepted the goods, or the goods has been delivered to
the buyer and the buyer has done something to the goods
which against the ownership of the seller.
• Example: when after the expiry of the reasonable time, the
buyer keep the goods without informing that he rejected the
goods.
• * Severable contract -an agreement which is made up of
several separate contracts between the same parties, such as
series of sales, shipments, or different pieces of equipment

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• 3. Section 13(2)
• Where the contract is for specific goods and
the property has passed to the buyer.

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 IMPLIED TERMS
• Implied terms -warranties
• -conditions
• Refer section 12 (1),(2),(3)

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• 1) IMPLIED TERMS AS TO TIME
• Section 11
• Section 11.  Stipulations as to time.
• Unless a different intention appears from the terms of
the contract, stipulations as to time of payment are
not deemed to be of the essence of a contract of sale.
Whether any other stipulation as to time is of the
essence of the contract or not depends on the terms
of the contract.
• There is implied term as to the time where it is not
essence to the contract unless it is stated otherwise.
• Bunge Corp. v. Tradax (1981) 1 WLR 711
• Harrington v. Browne (1917) 23 CLR 293
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• 2) IMPLIED CONDITIONS AS TO TITLE
• Section 14(a)
• For the sale, it is implied condition that the
seller has a right to own the goods. Although
the law does not expressly state that the
goods is belonging to the seller and seller has
the right to sell the goods to other person, but
the law presumes that the seller has the right
of such things.

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• A breach of this condition entitles the buyer to
repudiate the contract.
• The rational is that the buyer of the goods pays the
price in order to enjoy ownership as well as to use
the goods.
• Example: Spongebob sold to Patrick a car and
Patrick paid Spongebob the purchase price. After
several years, Patrick discovered that the car
actually belonged to Mr Crab and that Spongebob
was actually looking after Mr Crab’s possessions
while Mr Crab was out of town. Here, Patrick can
recover the price in full even though Patrick had
used the car for several years.
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 Rowland v.Divall [1923] 2 KB 500

• The plaintiff bought a car from the defendant for £334

and resold it for £400 to a sub-buyer who used it for
four months. He then discovered that the car had
never belonged to the defendant, who had bought it in
good faith from someone without title. The car having
been claimed by the original owner, the plaintiff paid
off the sub-buyer by refunding him the £400 and
claimed to recover in turn the £334 which he had paid
the defendant.
• It was held by the CA that the buyer was entitled to
recover the whole purchase price and the seller was
not entitled to set off anything for the four months’
use of the car which the sub-buyer had enjoyed.
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Niblett v. Confection Materials (1921)3KB 387

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• 3) IMPLIED WARRANTY AS TO QUIET POSSESSION
• Section 14(b)
• This section states that in a contract of sale, unless the
circumstances of the contract shows different intention,
there is an implied warranty that the buyer shall have
an enjoy quite possession of the goods.
•  
• Here it should be noted that, this implied terms is
merely warranty and not a condition. Therefore the
innocent party is entitled for the damages only.
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• This implied warranty also covers the situations
where there is a wrongful interference by stranger
claiming a lawful right over the title of the goods or
the wrongful act of the seller himself.
• Example:
• Ali bought a car from Abu. Ali had paid the whole
payment of the car to Abu and because Abu liked
the car so mach, he often persuaded Ali to lend
him the car. Abu had set of the car keys, and he
used the car whenever he liked regardless of
whether Ali needed the car or not. Here, Abu has
breached the implied warranty and Ali can claim
Abu for damages.
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• 4) IMPLIED WARRANTY THAT THE GOODS ARE
UNENCUMBERED
• -section 14(c)
• Here, there is an implied warranty that the goods shall
be free from any charge or encumbrance in favour of
the 3rd party . If there is any charge or encumbrance
on the goods, such as the fact is not declared or made
known to the buyer, then the seller is liable for breach
of warranty end entitled the buyer for damages.
•  In other words, when the seller sells something to the
buyer, impliedly, he must ensure that there is no
encumbrances on the goods.

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• Example: charge, rent, borrowed goods, government
right to seize the goods in order to enforce the tax
collection etc.
•  
• Example: Ritma Sdn Bhd sold a machine to Ririn Sdn
Bhd. The latter did not know that Ritma Sdn Bhd had
charged the machine to Bank CIMB Bhd. Here, Ritma
Sdn. Bhd has breached the warranty. However, if
Ririn Sdn Bhd knew about the charge and still decided
to buy the machine, there would be no breach
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 Steinke v. Edwards

• Pf who had bought the car, had to pay of the

tax, which still owes from the government. Pf
sought to recover the amount he had paid for
the tax, from the df (seller)
• Held: pf was entitled for the damages because
the df had breached the implied warranty.

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• 5) IMPLIED CONDITION THAT GOODS CORRESPOND
WITH DESCRIPTION
• -section 15
• Here the goods must be same as the description. The
seller must follow the description and there will be no
reason or excuse for failing to do so. If the goods does
not correspond with the description, the buyer is
entitled to rescind the contract and reject the goods.
•  
• If the sale by sample as well as description (sample +
description), the bulk of the goods shall correspond
with the sample as well as description.

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• Here there are two situations:
•  
• a. Sales of goods by description covers all cases
where the buyer has not seen the goods but is
relying on the description alone.
•  
• Example: when Aminah orders an Acer laptop
model EX1234 by phone and Bibin sells to her,
this is sale by description
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Nagurdas purshotumdas & Co. v. Mitsui Bussan Kaisha Ltd (1911) 12 SSLR 67

• Under previous contract between the parties

of the sale of flour, the flour had been sold
bearing a well-known trademark. Further flour
was order ‘the same as our previous
contracts’. Flour identically in quality was
delivered, but it did not bear the same well-
known trademark.
• Held: the goods did not comply with the
description
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 Re Moore & Co v. Landauer & Co (1921) 2KB 519

• The contract was for a sale of 3100 Australian

canned fruit, packed30 tins to a box. However, the
seller packed some of the boxes with only 24 tins.

• Held: even though the buyer still gets 3100 tins of

canned fruits, the seller had breached the implied
condition as to sale by description since he failed
to pack them as described by the buyer

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 Varley v. Whipp (1900] 1 Q.B. 513

• The seller agreed to sell a second hand reaping

machine described as ‘new the previous year’. The
buyer did not look at the machine but relied on the
description. When the machine was delivered, it was
found that the machine was a very old machine,
which had been repaired.
• Held: the seller had breached the implied
conditions. The goods supplied were not correspond
with the description. The buyer is entitled to rescind
the contract and reject the machine.
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• b. the sale of goods by description also cover
certain cases where the buyer has seen the
goods but the defect has been concealed from
the buyer.

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 Beale v. Taylor (1967) 1WLR 1193

• The seller of a car advertised it as ‘Herald

Convertible, white 1961…’. The buyer viewed
the car before agreeing to buy it. Later , he
discovered that while the rear half of the car
was part of a 1961 Herald Convertible, the
front part was part of an earlier model.
• Held: he was entitled to the damages for the
breach of condition.

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• Law Yaw Seng v. Cooperativa Ceramica
D’Imola (1991) 1 MLJ 393
•  

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• Grant v. Australian Knitting Mills Ltd (1936)
AC 85 at p100

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• 6) IMPLIED CONDITIONS AS TO FITNESS FOR
PARTICULAR PURPOSE

• General principle: no implied terms as to

fitness for particular purposes.

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• According to general rule under common law:
the buyer is expected to exercise care in making
the purchase. The rule is known as CAVEAT
EMPTOR which means, the buyer must beware.
• Here, it is for the buyer to satisfy himself as to
the quality of the goods purchased.
•  
• If the buyer careless; the buyer must bear the
consequences. The seller would not be liable, if
the goods is not fit or having no quality as
required by the buyer.
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• This rule can be seen in section 16 of SOGA 1957.
However there are some exceptions under this
section where it shows that the implied terms as to
fitness for particular purpose still can be applied.
Section 16(1)(a).
• Here, by virtue of this section, if the goods are not
fit for the particular purpose of the buyer, the
seller would be liable for a breach of this condition
and the buyer is entitled to damages or rescind the
contract.
• But there are some conditions that need to be
fulfilled.:
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• a. Disclosure of purpose
• Here, the buyer must let the seller knows the
particular purpose for which the goods are
required especially if the goods is bought for
certain special purpose. The buyer must make
known or disclosure to the seller the particular
purpose for which the goods are required.
• Otherwise, the kind of implied conditions as to
fitness for a particular purpose would not be
applied and therefore the seller would not be liable
for the breach event though the goods later are
not fit or suitable of the buyer’s particular purpose.
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Griffiths v. Peter Conway Ltd (1939) 1 AER 685

• The defendants are retail tailors, and in June 1937, the

plaintiff bought from them a Harris tweed coat, which was
specially made for her. Shortly after she began to wear the
coat, she developed dermatitis, and suffered from a very
severe and prolonged attack of that disease. This was an
abnormal reaction that would not affect most people. The
plaintiff actually, had abnormally sensitive skin and this
was not known to the seller.
• Held: the pf failed in her action as the coat would not
harm a normal person. Thus, she did not make known to
the df that she actually had abnormal sensitive skin.

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• See also: Sunrise Bhd & Anor v. L&M Agencies
Sdn Bhd

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• However, if the goods is sold for a sole
purpose or the purpose is so obvious, then the
goods MUST fit that sole purpose. In this
situation, the buyer under no duty to let the
seller know what is the purpose of his
purchase.

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 PRIEST V. LAST (1903) 2KB 148

• The pf had purchased a hot water bottle from

the df. A few days later, the bottle, while in use
by the pf’s wife burst and scalded her.
•  
• Held: the purpose of hot water bottle is
obviously to keep hot water and if it cannot
retain the heat, then it is not fit for its
purpose.

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• Note: Sometimes the good is sold for sole
purpose but the buyer requires the good for
the certain special purpose.
• In this situation, the buyer must expressly
notify the seller of his/her purpose and rely on
the seller to provide her/him with a suitable
article.

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• Example: Cassy wants to buy herbs for beauty
treatment of her face. She must tell the seller
about this so that the seller may recommend
the suitable herbs.
• If the seller is not told of specific purpose,
there is no breach or implied condition if the
seller sells Cassy herbs which are suitable for
cooking but unsuitable for beauty treatment.

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• b. Reliance on the seller’s skill and judgment
• The buyer must also establish that he had
relied on the seller’s skill and judgment before
purchasing the goods. The degree of reliance
is a matter of reasonable inference from the
circumstances of the case.

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Grant v. Australian Knitting Mills (1936) AC 85

• Fact: Dr Grant, the plaintiff, contracted dermatitis as a

result of wearing woolen underpants which had been
manufactured by the defendants (Australian Knitting Mills
Ltd). The garment in question contained an excess of
sulphite. At the time of the purchase, there was a label on
the side of an underpant stated that it was 100% cotton.
• Dr Grant who was allergic to the wool (which contain
sulphite) examined the goods and satisfied with what
stated in the label and therefore he bought the
underpants. Thus, upon purchase, he wore them for one
entire week without washing them beforehand.

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• The Privy Council held that the defendants
were liable to the plaintiff. The reliance usually
arise by implication from the circumstances.
For instance, of purchase from a retailer, the
reliance will be inferred from the fact that the
buyer goes to the shop in the confidence that
the seller has selected his stock with skill and
judgment.

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• See also Deutz Far East (Pte) Ltd v. Pacific
Navigation Co. Pte Ltd
• Cammel Laird & Co Ltd v. Manganese Bronze
& Brass Co Ltd

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• c. The goods supplied are of the description
which the seller’s business to supply

• Here, the buyers must have bought the goods

from the place which the seller has the expert
to sell the goods or which is in the course of
the seller’s business supply.

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 Spenser Trading Co Ltd v. Devon [1947] 1 All ER 284 291

• The manufacturer had previously supplied to the pf on a

special order, an adhesive substance made from gum resin for
making flypapers. The following year, the pf ordered a further
supply for the same purpose from the manufacturer, who on
this occasion used synthetic raw materials in place of the
natural material previously used. Consequently, the flypapers
were unsatisfactory for its purpose.
• Held: the goods are of the description which it is in the course
of the seller’s business to supply. Therefore the manufacturer
was liable for the breach of implied condition that the goods
must fit for the purpose for which they were required.

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Ashington Piggeries Ltd. Christoper Hill Ltd (1922) AC 441

• The seller was the manufacturer and a dealer in

animal feed. However, it had never made feed to
mink. This was made clear to the buyer, but the
seller agreed nevertheless, to make up such
compound form a formula provided by the buyer.
However, the compound produced does not fit for
the mink.
• Held: the product produced by the company is a
feeding compound. Although the seller had never
previously supplied that particular feeding
compound, but it was of the kind which it was the
seller’s business to supply.
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• d. Not bought under patent or trade name
• If a buyer bought the goods under a patent or
a trade name, it gives the impression that he is
not relying on the seller’s skill and judgment.
Therefore he cannot later complain that the
goods are not fit for the particular purpose he
required.
• Example: Jamilah went into a shop and wanted
to buy ‘Darlie’ toothpaste. There is no implied
condition as to its fitness for any particular
purpose.
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 Wilson v. Rickett Cockrell Co. Ltd (1954) 1ALL ER 868

• The claimant purchased a bag of coal, ( 1 ton of coalite

which is a household fuel) under the trade name of
“Coalite”. In bag of coal there were also some
detonators. When she put the coal on the fire there
was an explosion where it was due to a detonator
which contained in the coalite.
• Held: df is not liable for the breach of implied condition
as to fitness for particular purpose because it was
bought under the trade name of “Coalite”. (But in this
case the df was liable of the breach of implied terms
under merchantable quality)
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• Note: However if the goods are not bought
under the patent of trade name or if the
buyer did buy under a trade name but relies
on the seller’s skill and judgment, the implied
condition applies.

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 Baldry v. Marshall [1925] 1 KB 260

• The plaintiff asked the defendants, who were

motor dealers, to supply a car that would be
suitable for touring purposes. The defendants
recommended a Bugatti, which the plaintiff
bought. The written contract excluded the
defendant's liability for any "guarantee or
warranty, statutory or otherwise". The car
turned out to be unsuitable for the plaintiff's
purposes, so he rejected it and sued to
recover what he had paid.

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• The Court of Appeal held that the requirement
that the car be suitable for touring was a
condition. Since the clause did not exclude
liability for breach of a condition, the plaintiff
was not bound by it. Thus, the buyer had
relied on the dealer’s skill and judgment in the
selection of a car suitable to the buyer’s stated
purpose even though it was sold under trade
name.
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• Note: in some cases also the buyer would not
tell the seller the purpose of the goods in
obvious.
• Example: Kamil wants to buy bread, there is
an implied notice given to the bread-vendor
that the bread is for eating. There still would
be a breach of condition if the bread is mouldy
at the time it is bought.

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• 7) IMPLIED CONDITIONS AS TO MERCHANTABLE
QUALITY
Section 16(1)(b) provide another exception to the
caveat emptor rule. Goods is said to be of
merchantable quality if they are reasonably fit for
the purpose for which goods of that kind are
commonly bought, having regard to any
description applied to them, the price and other
relevant circumstances.

10/02/2022 77
• So here the goods must be fit for the particular use
to which they were sold. And if the goods are
defective for their purpose, they are
unmerchantable.
• Merchantable quality means that they must be
reasonable for the purpose described.
• If the goods are unmerchantable, the seller would be
liable for breach of implied condition, even though
they are sold under their patent or trade name.

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• Factors to be taken into account to determine
‘merchantability’ include:
• a. Price
• b. The description applied to the goods;
• c. Whether the purpose for the foods had
been made known to the seller; and
• d. Any other circumstances relevant to the
sale.

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• Example: if Muthu buys a pair of Levi jeans, it is
implied condition that he will not get rashes when
wearing it due to the chemicals which might have
been used during the manufacture of the jeans.
• See Wilson v. Ricket, Cockerall & Co Ltd
• Note: if the description in the contract is so
general that goods sold under it can normally be
used for several purposes, then goods would be
merchantable under that description if they were
fit for any one of those purposes.
• Henry Kendall & Sons v. William Lilico & Sons Ltd

10/02/2022 80
• However, if the description is so limited that
the goods sold under the contract only be
used for one purpose, the the goods would be
unmerchantable if were of no use of that
purpose.
• Wren v. Holt

10/02/2022 81
• Henry Kendall & Sons v. William Lilico & Sons Ltd
• Held: if the description is so limited for only one
purpose, then the goods would be liable
unmerchantable if they were no use of such
purpose. However if the description is so general
used for several purposes, then the goods would
be merchantable if they were fit for only one for
those purposes.
•  

10/02/2022 82
 Reveex International , S.A v. Maclaine Watson Trading Sdn. Bhd. (1991) 2 CLJ 1388

• The pf sold various pharmaceutical veterinary products to

the dfs. The dfs did not honour the bill of exchange used
to pay for the goods. Th pfs claimed as holders in due
course of the bill.
• The df counterclaimed against the dfs contending that the
goods were not reasonably fit for the purpose for which
they were intended and were not merchantable, therefore
breaching a condition of the contract of the contract as
statutorily implied by section 16 of SOGA 1957.
• Held: dfs succeeded in their counter-claim.

10/02/2022 83
• Noted: quality of goods refers to their state or
condition.
• Example: in a sale of lorry, it is implied
condition that the lorry would not overheat
easily.

10/02/2022 84
• Wilson v. Rickett Cockrell Co. Ltd (1954) 1ALL
ER 868
• Mrs. Wilson ordered one ton of fuel named
Coalite from Rickett Cockerell & Co. Ld., and it
was delivered and paid for. The Coalite was
supplied for domestic heating purposes, but
the sacks supplied included also small pieces
of explosive left over from the mining process.
(It contained a piece of coal in which a
detonator was embedded resulting in an
explosion in the fireplace.)
10/02/2022 85
• Held: There was nothing wrong with the
Coalite. However there was a defects which
making it unfit for burning. Therefore the pf
succeeded in his claim as the defects to the
goods was considered as unmerchantable.

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• Exception: However there are some exception
that section 16(1)(b) does not apply if the
buyer has examined the goods by which
through that examination, the buyer might
discover the defect.
• If the defect could not be discovered by any
reasonable examination, then the implied
condition as to merchantable quality apply.
Means that the goods are unmerchantable.
10/02/2022 87
• Wren v. Holt (1983) 1 KB 610
•  The pf tried to recover damages for the breach
of implied condition of merchantable quality of
beer which was contaminated by arsenic. As a
result of drinking it, Wren (pf) fell ill.
• Held: there was an implied condition that the
beer would be of ‘merchantable quality’. That is ,
that it would be fit to drink. Here, the exception
was not applicable because the defect was not
discoverable on reasonable examination. The pf
succeeded to recover damages
10/02/2022 88
• Note:
• Sometimes there can be a breach of both
conditions of fitness for purpose and
merchantable quality on the same set of facts.
This can be seen in Grant v. Australian
Knitting Mills.
• See also McWilliams Wines Ltd v. Liaweena
(NSW) Py Ltd

10/02/2022 89
• 8) IMPLIED CONDITION IN SALE BY SAMPLE
• section 17
• Conditions:
• a) If the goods are in the bulk, it must correspond with
the sample (sec 17(2)(a)
• b) The buyer must have reasonable opportunity to
compare the bulk of the goods with the sample. (sec
17(2)(b)
• c) The goods must be free from any defect that could
rendering them to unmerchantable (which would not
be discovered/apparent on reasonable examination of
the sample)(sec 17 2(C))
10/02/2022 90
• If the bulk is totally inferior to the sample, they
buyer may elect to reject all the goods.
• However if the bulk is only partly inferior to the
sample, the buyer may either elect to accept all the
goods and claim damages for those which are
inferior or reject all the goods and sue for damages.
• Means: if certain of the goods corresponds with
the sample but the other parts are not, the buyer
may reject or to accept the whole goods)

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• But if the contract of sale is not severable, the
buyer does not have the alternative to accept
part of the bulk and reject the rest.
• Severable contract-a contract that is actually
composed of several separate contracts
concluded between the same parties.
• If the bulk corresponds with the sample but
there is a latent defects which rendering the
goods unmerchantable, here, the buyer is
entitled to reject them.

10/02/2022 92
 Godley v. Perry (1960) 1 WLR 9

• A child bought a catapult snapping in use and

causing the boy to lose an eye. He sued the
retailer and won. The retailer sued the
wholesaler because before buying them, he
had tested sample by pulling back the elastic
and it hadn’t snapped.
• Held: Wholesaler was liable

10/02/2022 93
• See also Drummond v. Van Ingen
• Lau Yaw Seng v. Cooperativa Ceramica
D’Imola

10/02/2022 94
 Privity of Contract in SOGA
• In a contract, only parties to the contract will bind each
other in terms of implied condition and warranties.
• This also apply to the contract of sales of goods.
• It means the 3rd which uses the goods purchased by
the buyer and suffers injury/damages cannot sue the
seller or the manufacturer under the law of contract.
• However, the 3rd party may sue the seller or the
manufacturer under the law or tort which he must
prove the existence of the negligence on the seller/
manufacturer’s part.
• Donoghue v. Stevenson

10/02/2022 95
 PASSING PROPERTY IN GOODS/TRANSFER OF PROPERTY IN THE GOODS

• Transfer of property (ownership) --> transfer of

risk.
• The passing of property does not necessarily mean
that the possession will be passed with it and vice
versa.
• It is important to ascertain the time when property
in goods passes to the buyer because the general
rule –goods remains at the seller risk until the
property is transferred to the buyer (unless
otherwise agreed between the parties-section 26)
10/02/2022 96
• (When the goods/property passes to the
buyer, the goods are at the buyer’s risk
irrespective of whether the goods actually
delivered to the buyer or not)
• Once the property has passed to the buyer,
the title of the good can be given to the 3rd
party, even though the buyer may not have
paid the goods.

10/02/2022 97
• The general rule depends to the types of goods
involve:
• 1) UNASCERTAIN GOODS (SECTION 18)
• No property can be transferred to the buyer
unless and until the goods are ascertained
• Example: if there is a contract to buy a new car
from the earliest possible consignment of Wira
model manufactured by Proton, the property in
the car does not pass until the seller has sent
the car to Aminah (here, the goods become
ascertained)
10/02/2022 98
• 2) SPECIFIC/ASCERTAINED GOODS (SECTION
19)
• The property is transferred to the buyer at
such time as the parties to the contract intend
it to be transferred
• ??? How to determine the intention of the
parties in transferring the goods- SECTION
19(1)
• - The terms in the contract
• -Conduct of the parties
• - circumstances of the case.
10/02/2022 99
• Situations where the property can be passed to the
buyer (unless the it is determined by the parties):
• a. when there is unconditional contract of a specific
goods in a deliverable state (keadaan dimana barang
itu boleh dihantar) (section 20)
• Deliverable state: there is nothing else to be done by
the seller to the goods for the buyer and at this time
the goods is able to be delivered to the buyer.
• In this situation, the property in goods will be passed
to the buyer at the time the contract is made
• -it is immaterial here whether the price has been paid
or delivery made

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• Example: Kamila agrees to buy a bicycle from
Razak and Razak agreed that Kamila will pay
him next month. Here the bicycle/property
can be passed to the buyer although the
payment is not been made yet.
• Case: Underwood v. Burgh Castle Brick &
Cement Syndicate

10/02/2022 101
• b. where there is COS of specific goods and the
seller is bound to do something to the goods before
it can be put it in the deliverable state (section 21)
• the passing of the property to the buyer is
suspended until the goods are put in a deliverable
state or until the thing is done and the buyer has
notice it
• Example: Hussin agrees to buy Ali’s car on condition
that Ali gives a new coat of paint. In such case, the
property in the car passes only after the car
receives a new coat of paint and Hussin has been
notified of the same
10/02/2022 102
• c. where there is COS of specific good in
deliverable state but the seller need to weight,
measure, test or do something to ascertain
the price of the goods (section 22)
• -the property does not pass until the such act
is done and the buyer has notice it
• Example: Siti agrees to sell Rina all the sugar
in the warehouse for 3 dollars per kg. Thus,
property is only passing to Rina when Siti has
weight all the sugar and Rina knows about it.

10/02/2022 103
• d. when the future/unascertained goods in unascertained by
description and the goods of that description and in a deliverable
state are unconditionally appropriated to the contract
• In the contract involves delivery to a carrier, once the seller the
goods to the buyer (through the carrier) the seller is deemed to
have ‘unconditionally appropriated’ the goods to the contract.
• The property in the goods are thereupon passes to the buyer
(means: the property are passed to the buyer at the moment the
goods are handed over to a carrier)
• Example:
• Mimi ordered a book (title-Bawang Merah) through the post. But
then the said book was lost in the post. Mimi must bear the loss
as property in the goods passed to her when the parcel was
posted.

10/02/2022 104
• e. Goods sold on approval sale or return basis (section
24)
• The property will be passing to the buyer when:
• 1) the buyer signifies his approval /acceptance/do any
other act adopting that transaction
• 2) if the buyer does not accept but retain the goods
without giving notice of rejection(within reasonable
of time), he must accept the goods (the title is passed
to the buyer)
•  Example: Memmo Book Sdn Bhd delivers books to
Katty ‘on approval’ and ‘to be returned within 10 days
without obligation if not satisfied’, and Katty does one
of the following act:
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• i. accepted the books
• ii. sells the book to Hassan ( Katty would have
done ‘any other act adopting the transaction’)
or
• iii. Katty does not return the books within 10
days
• Here, Katty would be liable to Memmo Books
Sdn Bhd for the prices of the books

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• If no period was fixed for return of the books,
and if Katty has kept the books for an
unreasonable period of time, then the property
of the goods would have passed to Katty and
she would be liable for the prices of books.
• See section 18-25
• Perishing of goods-section 7 & 8- the contract is
void when the goods has perishes or damage at
the time the contract is made
• Couturier v. Hastie (1856) SHC Cas 673
• Read also section 26
10/02/2022 107
• See also:
• Kirkham v. Attenborough
• Poole v. Smith’s Car Sales (Balham) Ltd
• Inter Dian Pte Ltd v. Diamond Centre Sdn Bhd

10/02/2022 108
 TRANSFER OF TITLE
• Wrongful disposition of the goods by non-owners, the
nemo dat rule and its exceptions.
•  
• No one [can] give what he does not have.
• This principle was originally from the maxim “nemo dat
quod non habet” (no one can give a better title than he
has himself
•  
• Here it means that a seller who does not own the goods,
cannot transfer the title of the goods to the buyer
• Section 27 SOGA

10/02/2022 109
• Section 27.  Sale by person not the owner.
• (1) Subject to this act and of any other law for
the time being in force, where goods are sold
by a person who is not the owner thereof, and
who does not sell them under the authority or
with the consent of the owner, the buyer
acquires no better title to the goods than the
seller had, unless the owner of the goods is by
his conduct precluded from denying the seller's
authority to sell:

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• Provided that where a mercantile agent is, with the
consent of the owner, in possession of the goods or
of a document of title to the goods, any sale made
by him when acting in the ordinary course of
business of a mercantile agent shall be as valid as if
he were expressly authorized by the owner of the
goods to make the same; provided that the buyer
acts in good faith and has not at the time of the
contract of sale notice that the seller has no
authority to sell.
10/02/2022 111
• Here if the purchased goods are from a person
who is not the owner and does not sell the
goods under owner’s authority, the buyer
does not acquire a title even if he has paid
valued in the good faith.

10/02/2022 112
 Lim Chu Lai v. Zeno Ltd (1964) 30 MLJ 314
• Ahmad had contracted with PJ authority for
construction of culverts. He later entered into
another contract with Zeno Ltd to buy materials for
the project. The materials were delivered to the
construction side. However, Ahmad’s contract with
PJ authority was cancelled. Upon the cancellation
of the contract, Zeno Ltd attempted to sell the
material to somebody else (because they owned
the materials). Unfortunately Ahmad had sold the
material to the Lim Chui Lai for RM14,000 of which
he had received RM7000 as part of the payment.
10/02/2022 113
• Held: Ahmad was not the owner of the goods
at the time he sold them to Lim Chui Lai. Since
Ahmad had no title to the goods or authority
to sell them, he could not pass any title to Lim
Chui Lai. Thus, Lim Chui Lai does not have the
title upon the materials from Ahmad.

10/02/2022 114
• Example; A stole a car and sold to M. A does
not has the title to the car and therefore M
also would not get title to the car even though
he had paid for it.
• Example: Babu sold a stolen bike to Gigi. But
the bike is actually owned by Sudin. If Sudin
wants his bike back, he has the right to do so.

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• Ng Ngat Siang v. Arab Malaysia Finance Berhad (1988)
3MLJ 319
• Bishopgate Motor Finance Corp. v. Transport brakes Ltd
(1949) 1KB 332
• Commercial & Savings Banks of Somalia v. Joo Seng
Company (1989) 2 MLJ 200
• Syarikat Batu Sinar Sdn Bhd & Ors v. UMBC Finance Bhd.
& Ors (1990) 3MLJ 468
• * a bailee, not being the owner of the chattel /goods at
time of sale , has no title/ no authority to sell the chattel
and therefore cannot give any title to the purchaser/buyer
• * a person who buy goods from the person who has no
authority/right to the goods does not acquire any title. The
remedy is only against the seller personally
10/02/2022 116
• The objective of this rule is to protect the right
of ownership so that if the property has been
passed without the consent of the original
owner, he has the right get his property back
and his right is retained.

10/02/2022 117
• Exceptions to this rule (nemo dat quod non habet)
• Under these exceptions, the non-owner can pass the
titles of the goods to the buyer
• 1) Doctrine of estoppels
• It occurs when someone with no authority, sells the
owner’s goods in his (owner) knowledge without his
objection. The ‘authority’ can be seen through the
owner’s conduct where he makes it appear to the
buyer that the person who sells the goods has his
authority to sell and the buyer relies on that conduct.
• Here, the buyer would obtain a good title as the
owner is estopped form denying the seller’s authority.

10/02/2022 118
• Example: Fifi tells Suzi in front of Rita that Fifi
wants to sell the book that belongs to Rita to
Suzi. Here, Rita just keep quit and does not
make any objection. Later, if Fifi sells the book
to Suzi, Rita cannot complain that Fifi has sold
her book without her authority.

10/02/2022 119
• Eastern Distributors v. Guldring (1957) 2 QB
600
• New Zealand Securities & Finance v.
Wrightcars Ltd (1925) NZLR 77
• Moorgate Mercantile v. Twitchings [1976] QB
225, (1977) AC 890
• Mercantile Bank of India v. Central Bank of
India (1938) AC 287

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• 2) Sale of Mercantile agent
• Section 2
• Mercantile agent is one who usually acts as an
agent in the course of business. His authority
is either to sell goods, consign goods for the
purpose for sale or to buy goods or to raise
money on the security of the goods.
• Example: second-hand car dealer, broker,
auctioneer

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• Section 27
• The requirements need to be fulfilled:
• a. at the time of the sale, the mercantile agent
must be in possession of the goods or the
document of title of the goods
• b. the possession must be with the consent of
the owner.
• c. the mercantile agent sells the goods in the
ordinary course of business
• d. Bona fide purchaser- no knowledge that the
agent lacks authority
10/02/2022 122
• Example: Mira hands over her car and
registration book to her boyfriend Musa, a
second-hand car dealer for safekeeping. Musa
sells Mira’s car to Pak Kasim who buts in good
faith, without the knowledge or notice of
Musa’s lack of authority. Here, Pak Kasim
obtain good title to the car

10/02/2022 123
• Oppenheimer v. Attenborough & son (1908)
1KB 221
• Joblin v. Watkins & Roseveare (Motors) Ltd
(1949) 1ALL ER 47

10/02/2022 124
• 3) Sale by one of joint owners
• Goods may be owned by more than one
person
• section 28
• Conditions to be fulfilled:
• a. one of the owner has the sole possession of
the goods by permission of the co-owners
• b. Bona fide purchaser
•  

10/02/2022 125
• Example: one laptop consists of 3 owners. So
one of the owners can transfer the title to the
buyer but he must solely possess the goods
and get permission by another owner and the
buyer is bona fide purchaser

10/02/2022 126
• Example: Rais, Amir and Steve jointly owned a
microwave oven. Steve was allowed to keep
the oven and cook with it since Rais and Amir
did not know how to cook. Steve without Rais
and Amir’ knowledge/permission, sold the
oven to Fatimah who is a bona fide purchaser
and did not know about Steve’s lack of
authority. Here Fatimah would acquire a good
title to the oven.

10/02/2022 127
• 4) Sale under a voidable title/ voidable contract
• Section 29 SOGA
• Section 29 and 30 Contract Act
• Where the seller of goods has obtained
possession thereof under a contract voidable
under section 19 or section 20, but the contract
has not been rescinded at the time of the sale,
the buyer acquires a good title to the goods
provided he buys them in good faith and
without notice of the seller's defect of title.

10/02/2022 128
• Voidable contract: coercion, fraud, misrepresentation,
undue influence
• Conditions need to be fulfilled:
• a. the seller obtain possession under voidable contract
• b. the voidable contract has not been rescinded
• c. Bona fide purchaser
• Example: when Abu obtains goods from Anas by
undue influence and sells them to Momma who buys
them innocently. At the time Momma buys the goods,
Anas has not rescinded the contract made with Abu.
Here, Momma obtains good title to the goods

10/02/2022 129
• 5) Sale by a seller in possession after sale
• Section 30(1)
• This happens when a seller has transferred the
property in goods to a buyer but remains in
possession of the goods. The seller then resells
the goods to bona fide subsequent purchaser. In
this situation, the 2nd buyer/ subsequent
purchaser will get the title while the first
purchaser loses his title and has to get his remedy
against the seller who had resold the goods.

10/02/2022 130
• Pacific Motor Auctions Pty Ltd. V. Motor
Credits (Hire Finance) Ltd (1965) AC 867
• Worcester Works Finance Ltd v. Cooden
Engineering Co. Ltd (1972) 1QB 210

10/02/2022 131
• 6) Sale by a buyer in possession
• section 30(2)
• A buyer having bought the goods or agreed to buy
the goods obtains possession of the goods or
document of title with the consent of the owner can
pass a good title to a bona fide purchaser under
sale even though he has not obtained the title yet.
• Example: situation when there is a payment by
cheque

10/02/2022 132
 Newtons of Wembley Ltd v. Williams (1965) 1 QB 560

• In this case pf (true owner) sold the car to the first buyer
(A) who paid by cheque. Although he was given
possession, it was agreed that the title would only passed
when the cheque was honored. The cheque was
dishonoured but A had resold the car to B who bought it
without knowledge of the situation. B then resold the car
to the df. The pf tried to recover the car from the df who
is the bona fide purchaser.
• Held: A original buyer was in the possession with consent
of the owner could pass a good title to the second buyer
who in turn transferred the car to the df. Pf action failed.
He could only claim the price from the A (first buyer).
10/02/2022 133
 Rules relating to delivery of goods

• Performance of contract under SOGA

• Seller- needs to deliver the goods to the buyer
• Buyer-taking the delivery goods from the
seller/accepting the goods +pay the price of
the goods

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• Section 31 and 33
• Section 2- Delivery means a voluntary transfer of
possession from one person to another
• 1. Place of delivery-section 36(1) and (5)
• 2. Time of delivery-section 35(2) and (4)
• 3. Delivery of wrong quantity or wring mix of goods-
section 37 and 15
• 4. delivery by installments-section 38
• 5. Delivery to Carrier or Wharfingers-section 39
10/02/2022 135
• Acceptance to the goods-section 31,41 and 42
• Hardy & Co. v. Hillerns & Fowler (1923) 2 K.B.
490
• MG Sheth & Ors v. Lam Thye (1954) 20 MLJ
230
• Ganda Edible Oils (1988) 1MLJ 428

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 REMEDIES FOR BREACH OF COS
• A. Seller’s remedies
• i. Failure to take delivery -section 31, 44
• Section 31- It is the duty of the seller to deliver the goods
and of the buyer to accept and pay for them in
accordance with the terms of the contract of sale. 
• When the seller is ready to deliver the goods and request
the buyer to take delivery, the buyer must take delivery of
the goods within reasonable time after the request of the
seller. 
• If the buyer refused or neglect to take delivery, the buyer
would be liable for any loss due to his own refusal or
negligence. The buyer should also be liable for a
reasonable charge for the care and custody of the goods
by the seller.
10/02/2022 137
• ii. Failure of buyer to pay for the goods -section
55
• If the buyer failed to pay for the price of the goods
, the seller may sue for the price when:
•  
• a. the property in the goods (ownership) has
passed to the buyer (section 55(1), or
• b. the price is payable on a certain day but the
buyer failed to pay on that day, irrespective of
delivery, or the property in the goods has not
passed to the buyer (section 55(2)
10/02/2022 138
• iii Failure/Refusal of the buyer to accept the
goods-section 56
• If the buyer wrongfully neglect or refuses to
accept and pay for the goods, the seller may
sue the buyer for damages for non-
acceptance.

10/02/2022 139
• Rights of unpaid seller against the goods
•  Unpaid seller is a seller to whom:
• Section 45(1)
• a. the whole price of the price has not been
paid or tendered
• b. when the bill of exchange or other
negotiable instrument , which has been
received by the seller as a conditional
payment, is dishonored.

10/02/2022 140
• An unpaid seller has 2 kinds of
rights/remedies:
• a. right in personam (right against to a
particular ‘person’)
• b. right in rem (right against to the ‘goods’
themselves)

10/02/2022 141
• Right in personam
• It is the common remedies available for the
unpaid seller against the buyer
• There are several remedies under this right:
• i. right to sue the buyer for a price (section 55)
• ii. right to sue the buyer for damages for non-
acceptance (section 56)

10/02/2022 142
• Right in rem
• There are some rights/remedies under that
are provided under section 46(1):
•  i. Right of lien
• the unpaid seller who is in possession of the
goods is entitled o retain the possession until
the payment is made ore tender of the price.

10/02/2022 143
• This right exists even where the property in
goods has passed to the buyer but delivery
has not been made.
• If the property in goods has not passed to the
buyer, the seller may withhold delivery in
addition to his other remedies-section 46(2)

10/02/2022 144
• This right can be exercised in the situation
listed in section 47(1):
•  (a) where the goods have been sold without
any stipulation as to credit;
• (b) where the goods have been sold on credit,
but the term of credit has expired;
• (c) where the buyer becomes insolvent.
• 47(2) The seller may exercise his right of lien
notwithstanding that he is in possession of the
goods as agent or bailee for the buyer.

10/02/2022 145
• The unpaid seller loses his lien on the following
circumstances:
• a. when he deliver the goods to a carrier or
other bailee in order that the goods be
transmitted to the buyer without reserving the
right of disposal of the goods
• b. the buyer or his agent lawfully obtains
possession of the goods
• c. when the seller waives his lien
10/02/2022 146
• ii. Right of stoppage in transit
• This is right of unpaid seller to stop the
goods in transit, to resume possession of
the goods as long as they are in the
course of transit.
• Example: the goods that are still with the
carrier. The seller may retain the goods
until payment of the price.

10/02/2022 147
• The unpaid seller may exercised this right only
when:
• a. The buyer become insolvent (not able to
pay the debt)
• b. The goods are in the control of a carrier (in
transit)
•  Duration of transit-section 51:
•  The duration stars from the time when the
goods are delivered to a carrier for the
purpose of transmission to the buyer.
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• The duration ends when:
• a. the buyer or his agent takes delivery of the
goods from the carrier
• b. when the buyer obtain delivery of the goods
before their arrival at the appointed destination.
• c. when after the arrival , the carrier holds the
goods on behalf of the buyer (act as agent-but
with knowledge of the buyer)
• d. where the carrier wrongfully refuses to deliver
the goods to the buyer.
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• If the part of the goods has been delivered to
the buyer and the remainder of the goods are
still in transit, the unpaid seller has the right of
stoppage in transit for such remainder which
are still with the carrier (section 51(7))
• Method of effecting stoppage: Section 52
• Here the unpaid seller may exercise stoppage
in transit by:-
• a. taking actual possession of the goods or
• b. giving notice to the carrier or his principal
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• Here, when the notice is given to the carrier,
the carrier shall redeliver the goods to the
seller or according to the seller’s direction. All
of the expenses of the delivery will be borne
by the seller (section 52(2)

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• iii. Right of resell
• Section 54(1) provides that a contract of sale
is not rescinded by the mere exercises by an
unpaid seller of his right of lien or stoppage in
transit. Here it means that the goods cannot
be resold as the contract is not rescinded.
•  However there are some situation where the
seller has authority to resell the goods where:
• (section 54(2))

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• a. where the goods are of a perishable nature
• b. where the unpaid seller who has exercised
his right of lien or stoppage in transit gives
notice to the buyer of his intention to resell,
but the buyer does not within a reasonable
time pay or tender the price after receiving
the notice

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• In this situation the unpaid seller also may
recover from the original buyer damages for
any loss occasioned by his breach of contract
• Thus, the buyer shall not be entitled to any
profit which may occur on the resale.
• However if such notice is not given, the unpaid
seller shall not be entitled to recover such
damages and the buyer shall be entitled to the
profit on the resale.
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• c. where the seller expressly in the contract
reserve a right of resale in case the buyer
failed to pay for the price.
• Here, the contract between the seller and
buyer will be terminated and the buyer is no
longer required to pay for the price. The seller
on the other hand, is entitled to keep any
profit out of that resale.

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• Thus, the seller also is entitled to claim for
damages from the buyer for a breach of
contract and for any loss suffered by the seller
out of that breach 9section 54(4)
• When resell has been take place, the 2nd buyer
would get the title of the goods even though
the seller did not give any notice of resale to
the original buyer. (section 54(3)

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• B. Buyer’s Remedies
• When the seller is in breach of the contract of sale of
goods, the buyer is entitled to some remedies under
the law.
• 1) Damages for non-delivery of the goods
• section 12(2), 57,61(2)(b)
• Section 57- the buyer is entitled to damages if the seller
neglects or refuses to deliver the goods to the buyer.
• The buyer may also be entitled for special damages,
which may be recoverable under the law-SECTION 61(1)
• If the buyer has paid for the price- the buyer is entitled
to recover for the money paid

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• The buyer also is entitled for the interest at
such rate as the courts thinks fit, on the
amount of the price paid, from the date on
which the payment was made (section 61(2)
(b)
• See also section 74 Contract Act- compare
with section 51 SOGA UK 1979
• Hadley v. Baxendale Court of Exchequer,
1854. 9 Exch. 341

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• 2) Specific performance
• Section 58- provides that the buyer may bring
an action for the specific performance of the
contract by the delivery of specific or
ascertained goods. But this remedy is available
only at the discretion of the courts.
• Example: the goods are valuable or priceless
antique
• If the goods are not specific or unascertained
goods, SP cannot be granted
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• Re Wait (1927) 1 Ch 606
• Held: a contract of sale for 500 tons of wheat
from a consignment of 1000 tons did not
entitle the buyer to seek a decree of SP, on the
ground that the goods were neither specific
nor later ascertained.

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 Mensa Mercantile (Far East) Pte Ltd v.
Eikobina (M) Sdn. Bhd (1989) 2MLJ 170
• This case is between Eikobina (M) Sdn Bhd, the
vendor and Mensa Merchantile (Far East) Pte
Ltd., the buyer. The appellant,(the vendor) agreed
to sell the respondent (the buyer) 24units of
heavy construction equipment.
• After the agreement was entered into but before
the delivery of the goods, the buyer resold 15
units to sub-buyers, leaving nine units unsold.

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• On the date of delivery of the goods, the
vendor failed to deliver the goods.
•  The buyer sued for specific performance of
the agreement, general damages for
the breach of contract and damages for loss of
agency to sell other units of similar goods that
is other units unsold for the vendor.

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• Issue: whether the specific performance was
the proper remedy and whether the damages
was adequate remedy.
• Held: pf must so that the machine were not
easily available in the market. Since the goods
can be located in the market, the SP was not
granted.

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• See also: Bahnke v. Bede Shipping Co Ltd.

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• 3. Action in tort
• Sue the seller in tort in detinue and conversion
• Detinue is the wrongful detention of chattels
belonging to the pf after their return has been
demanded whereas conversion is the dealing
with the goods in a manner inconsistent with
the ownership of the buyer
• Example of detinue: the property has been
passed to the buyer and the seller still holds the
property although the buyer demands for them

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• Example of conversion: if the seller wrongfully
sells the goods to the 3rd party although the
property has passed to the buyer.

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• 4. Breach or warranty -can claim damages
only
• Section 13 -17SOGA and section 59
• Wherenever there is a breach of warranty by
the seller, the buyer is not entitled to reject
the goods.
• However the buyer still can sue for damages
against the seller for the breach of warranty-
section 59(1)(b)

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• Breach of warranty refers to:
• a. any breach by the seller of a stipulation
which is collateral to the main purpose of the
contract ;or
• b. where the buyer elects or is compelled to
treat any breach of conditions as breach of
warranty
• c. any breach of implied warranty by the seller
under section 14(b) and (c)

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• Pn. Zuramaznum Bt. Sainan (UiTM Johor)
• Pn. Nasreen Miza Hilmy Binti Nasrijal (UiTM Melaka)
• Internet
• Contract Law in Malaysia, Krishnan Arjunan, Abdul
Majid Bin Nabi Baksh
• Law For Business, Sweet & Maxwell
• General Principles of Malaysian Law, Lee Mei Pheng
• Dr. Haswira Nor Mohd Hashim (FUU)
• The Commercial Law of Malaysia, Longman
• etc
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