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Implied Terms in the Contact of Sale

Updated February 9, 2021
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Implied Terms in the Contact of Sale essay

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Implied terms is are words or provisions that a court assumes were intended to be included in a contract. This means that the terms are cannot expressly stated in the contract. This terms that work on the presumed intention of the parties to give effect to the business of the contract. In section 14(3) of the SOGA 1979, implied terms of the contracts of sale a condition that the goods supplied under the contract will be reasonably fit for any purpose which is the buyer expressly or impliedly made known to the seller. This situation it can be when a buyer asks a seller for advice or information on the product being purchased it is considered reasonable for the buyer in that situation to rely on the skill of the seller.

The implied condition under section is related to cases in which the seller sells in the course of his business and the buyer must have relied on the sales advice. The facts indicate that Ahmad asked Ah Long from farmworkers directly whether the tractor TX design is appropriate for ploughing all soil types. The description made by Ah Long stated that the tractor which suggested that was versatile had been bought by small farmers.

In addition Ahmad found that information on the weight of the tractor which Ah Long had specifically pointed out the size of the tyres which distributed the weight of the tractor so that it would not be too heavy. It is also important that Ah Long know Ahmad in a personal capacity that would suggest he know the specific use that Ahmad had purchased for the tractor. In order for Ahmad to establish a breach of section he should show prove that he communicated the specific purpose of the tractor either in express or implied that rely on Ah Long advice in making the purchase. Therefore Ahmad case will turn in two key issues, firstly whether Ah Long sufficiently communicated to Ahmad either expressly or impliedly and second is whether Ah Long relied upon the response making the purchase.

In summary if Ahmad can show that he communicated the particular purpose he required the TX tractor for and reasonably relied upon the information provided he will be able to rely in section of the SOGA 1979. The remedies may be entitled to claim are the right of rejection of the goods, damages for non-delivery and damages for breach of warranty.

In terms of the contact of sale, it is important to determine the intention of both parties. Hence, indicates the duty of the seller to pass a good title to the buyer. There are seven types of implied terms.

a) Implied condition as a title in the goods section 

Under section 14, in implied condition as a title which is an implied condition on the part of the seller, that in the case of a sale, he has a right to sell the goods in the case and in that of an agreement to sell, there will have a right to sell the goods when the time comes for the buyer to become the owner meaning that by the time property is to pass.

This situation amounts to a guarantee. The main of this situation of a contract of sale of goods in to transfer ownership to the buyer. If the seller do not have a title there has been a failure of consideration. A breach of condition will give the right to the buyer to repudiate the contract and recover the price in full even though he has used the goods. According to the case, Rowland v Divall (1923) the buyer got the full price without deducting the period he use the car. For an example, Kamal sells his stolen motorcycle from Ahmad. Ahmad sold the stolen motorcycle to Ady. Kamal is not the real owner of the motorcycle until Kamal violated the terms of the title. The title still stands with Ahmad as the legal owner.

The case can related with this cases Lian Lee Motor Sdn Bhd v Azizuddin Bin Khairuddin 1 MLJ 5 334. The defendant sells a car which is a Toyota Camry that registered with the JPJ Perlis to the Plaintiff. Police later seized the said Toyota. It was found to be a stolen car, and it has forged its registration card. The Plaintiff sued the Defendant for the refund, as the money that has been Defendant received in consideration of Toyota.

The court held that the defendant have a right to sell the Toyota when he sold it to the Plaintiff. This is under an implied condition in section of SOGA. However it was an invalid contract because of the total failure consideration by the Plaintiff as he did not get the car after he had the purchase price. The Defendant did not have the right of ownership over the car nor could he sell the car to the Plaintiff. Furthermore, the Plaintiff as an innocent party had the right to sue for the purchase price.

b) Implied warranty as to the enjoyment of quiet possession of the goods sec

In section, SOGA states that in a contract of sale, unless the circumstances of the contract are such as to show a different intention, there is an implied warranty that the buyer shall have and enjoy quiet possession of the goods. It should be that this implied stipulation is merely a warranty and not a condition. Then, this section were implied warranty that the buyer shall have and enjoy quiet possession of the goods and this assumes if a third party do not come and claim to be the true owner or they have the right in the goods after the sale has taken the place.

For an example the situation is Kamal buy a hand phone from Siti. Ati which is a third party, she cannot interfere in Kamal quiet possession of the hand phone by claiming to have a better title. This case where the title is defective at the time of sale or there is a subsequent future disturbance of possession of the goods and not limited to physical disturbance. The contract as the case which is Heng Long Motor Trading Co. V Osman Bin Abdullah 2 Mlj 456.

Heng Long Motor Trading Co. V Osman Bin Abdullah 2 Mlj 456 is the third party interfered in the buyer quit possession, where the buyer had to bear the cost of repurchasing the van, which amounted to RM400 and also suffered loss since the van was seized by the third party. It was obvious that there had been a breach of the implied warranty of quite possession of the van by appellant. The implied warranty of quite enjoyment protect the buyer not only against all acts of the seller but also the lawful acts of third party. If a buyer full possession of goods is disturbed by a third party acting within his or others right and the buyer is entitled to hold the seller liable and to be indemnified by the seller.

c) Implied warranty that the goods sold are free from any charge or encumbrance sec

In section which is an implied warranty that the goods shall be free from any charge or encumbrance in favor of any third party not declared or known to the buyer before or at the time when the contract is made. There is no breach of contract if the encumbrance is disclosed to the buyer before the contract is entered. For the situation is a lady sold a piece of land to a boy without disclosing the fact that the land has been charged to Bank Muamalat. A lady has breached the warranty which entitles a boy to claim for damages. However if a boy still decided to proceed with the sale despite knowing about the charge, it would not amount to breach on the part of a lady.

The case of section is Steinke v Edwards which the right of the government to levy a tax on a vehicle coupled with a right to seized the care to enforce collection was a charge or encumbrance within the meaning of the provision. The buyer who had bought the car paid off the tax owed and sought to recover it from the seller as there was a breach of the implied warranty.

References

  1. SOGA Notes – EXPLANATION ON LAW OF SALE OF GOODS – Law – StuDocu. (n.d.). Retrieved November 4, 2019, from https://www.studocu.com/en/document/universiti-teknologi-mara/law/lecture-notes/soga-notes-explanation-on-law-of-sale-of-goods/3829538/view
  2. Sale of Goods Act Case Study – Business law FGLUL2023 – UUM – StuDocu. (n.d.). Retrieved November 4, 2019, from https://www.studocu.com/en/document/universiti-utara-malaysia/business-law/mandatory-assignments/sale-of-goods-act-case-study/2792628/view
  3. Implied Terms in Contract of Sale. (n.d.). Retrieved November 4, 2019, from https://www.lawteacher.net/free-law-essays/commercial-law/implied-terms-in-contract-of-sale-commercial-law-essay.php
  4. Sale of Goods Law in Malaysia. (n.d.). Retrieved November 4, 2019, from https://www.lawteacher.net/free-law-essays/commercial-law/sale-of-goods-law-in-malaysia-commercial-law-essay.php
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Implied Terms in the Contact of Sale. (2020, Nov 11). Retrieved from https://samploon.com/implied-terms-in-the-contact-of-sale/