Question

Business Law
Assignment 1 Question
Sarah is a physiotherapist who works from home. She saw a poster in the window of Cutprice Ltd, a furniture shop on 20 January.
The poster showed : "Massage tables HK$30,000. Suitable as an occasional bed or table for the outstanding masseuse. Self assembly."
On the notice was a photograph of a pink table. The table was much cheaper than equivalent tables sold in nearby shops.
Sarah pointed to the poster and told Kathy, the sales assistant, "I will buy a massage table.' She then added, "I will also need a side chair with price HK$2,000." This was selected from a photograph of a range of chairs sold by Cutprice Ltd. It was agreed that the items would be delivered to Sarah's home on 1 February.
On 1 February, the table and chair were delivered in sealed cardboard boxes. When she assembled the furniture that night, she discovered the table was green. She had particularly wanted pink because that is the colour of the decoration in the room she uses for her clients. In addition, two of the table's safety screws were missing, the table was not long enough to take anyone taller than five foot lying down, and the table was too high for the chair she bought from Cutprice Ltd. Besides, Sarah discovered that the side chair was stolen goods and not owned by Cutprice Ltd.
Advise Sarah as to her rights under the Sale of Goods Ordinance (Cap. 26).
Suggested Guidelines:
Law Level and Scope of Consideration
Appropriate explanation of the statutory implied terms from Sale of Goods Ordinance Sections 14 to 17 in sale of goods transaction.
Other issues you think relevant.
Facts analysis Level / Argumentative Level
Ascertain key facts to analyse the underlying legal implications of those key facts and analyse the identified legal issue(s).
Apply the relevant law to the essential facts.
Construct coherent, logical and persuasive arguments if necessary.
Conclusion / Comment Level
Present your succinct advices and conclusion for Sarah’s remedies.

Answer 1

Cutprice Ltd. has sold defective products to Sarah. So, she can exercise the following rights:

Goods of any kind are of merchantable quality within the meaning of this Ordinance if they are—

• as fit for the purpose or purposes for which goods of that kind are commonly bought;
• of such standard of appearance and finish;
• as free from defects (including minor defects);
• as safe; and
• as durable,

Sarah was delivered items that are not matching the product description. Here Sarah can exercise the

Product Misrepresentation i.e. (Sale by description)

1. Where a contract is entered into to sell goods by definition, there is an implied provision that the products shall be in line with the description; and if sale is made either by example or by description, the bulk of the goods shall not be adequate to conform to the specification, given that the goods are similarly in line with the description.
2. The selling of items by description can not be avoided simply for the purpose of being chosen by the buyer since they are available for sale or hire.

Implied undertakings as to quality or fitness:

Where the seller sells goods in the course of a business, there is an implied condition that the goods supplied under the contract are of merchantable quality, except that there is no such condition—

• For defects expressly brought before the contract is rendered to the notice of the buyer;
• for defects that the inspection would have been appropriate for the buyer to disclose; or for defects that were to be revealed by that test;
• for sample selling contracts which would have seemed to be defects that would have arisen during a fair sample analysis.

Side chair was stolen goods and not owned by Cutprice Ltd.

Sale by a person, not the owner since the chair was not owned by Cutprice Ltd.

Under this Ordinance, the consumer shall obtain no better title to the products than the seller has until, by its conduct, the owner of the goods is barred from refusing the seller's authority for selling if the objects are sold to an individual, not the owner and if the goods are not advertised, under the authority of or in consent of the owner.

Provided, also, that nothing in this Ordinance shall affect—

1. the provisions of the Factors Ordinance, or any enactment enabling the apparent owner of goods to dispose of them as if he was the true owner thereof; or
2. the validity of any contract of sale under any special common law or statutory power of sale or under the order of a court of competent jurisdiction.

Sarah can also exercise the Implied undertaking as to title where the purchaser is expressly bound by the provision that, in the event of a deal, he is entitled to sell the goods and, in the event of a selling arrangement, he is entitled to sell the products at the moment the property goes through;

So, Sarah here doesn't have the title of ownership here because she was purchasing the stolen items.

Here, Sarah can sue Cutprice Ltd. for breach of multiple contracts mentioned in the Sale of Goods Ordinance. Sarah can sue Cutprice Ltd. for:

• Not providing product matching description
• Not providing products deemed fit for use.
• Selling product that Cutprice doesn't have title of ownership or to pass the title of ownership.
• Selling stolen products.