FACULTY OF BUSINESS AND MANAGEMENT

UiTM CAWANGAN MELAKA KAMPUS ALOR GAJAH

GROUP REPORT

BUSINESS LAW

[LAW 299]

PREPARED BY:

No. Name Student’s ID Group

1. MUHAMMAD FAREEZ ISKANDAR BIN 2022606474 MBA111 4H

2. MUHAMMAD ILMAN HAKIM BIN 2022473034 MBA111 4H

3. MUHAMMAD ZAIRUL AKMAL BIN 2022860484 MBA111 4H

4. FAIZSYAZWAN BIN ZULKIFLI 2022663236 MBA111 4H

PREPARED FOR:
MADAM IDA RAHAYU MAHAT

SUBMISSION DATE:

21 JUNE 2024
QUESTION

Razak is a keen gardener and owned an orchard in his village. WowGrow Ltd is a manufacturer
of gardening requisites and has several retail outlets in the city. Razak visited on of the outlet to
buy fertiliser. In the past, he had always used a top brand but was hoping to find some cheaper
fertiliser. He looked at several types of fertiliser on display, noted the widely differing prices, and
read the promotional leaflets. He studied the chemical composition of each fertiliser, given in the
leaflets. Some fertilisers required application to the roots, others to leaves. He then sought the
advice of the only available sales assistant, Labu who did not seem to know much about the
products on sale. However, Razak insisted to continue with the purchase. He bought 50 kg of the
said fertiliser and discovered that all his plants went floppy and wilted. Razak was unhappy and
wishes to take legal action against WowGrow Ltd.

Advise Razak on his rights under the Sale of Goods Act 1957.

● Issues :

The issue is whether there is a valid contract between Razak and WowGrow Ltd.

The issue is whether Razak can take legal action against WowGrow Ltd for the breach of the

Sale of Goods Act 1957.

The issue is whether he has any rights under the Sale of Goods Act (SOGA) 1957 against

WowGrow Ltd for the damage caused to his plants by the fertilizer.
 ● Law

The law applicable to this issue is the Sale of Goods. The main law governing the sale of goods

in Malaysia is the Sale of Goods Act 1957 and it applies to all types of goods, including

second-hand goods and commercial/ private sales / wholesale/retail goods. SOGA provides that

this law shall be operative in all Malay States in Malaysia except for Penang, Melaka, Sabah,

Sarawak and where the English Sales of Goods Act 1893 shall be applicable. However, both

Acts are similar to each other. Section 4(1) of the Sale of Goods Act 1957 defines a contract of

sale of goods as “a contract whereby the seller transfers or agrees to transfer the property in

goods to the buyer for a price.” Hence, there are three main elements for a contract of the sale of

goods to exist which are goods to be transferred to the buyer, seller transfer or agree to transfer

property in goods to the buyer, and lastly price for the said transfer. SOGA provides for 7

implied terms (conditions and warranties) in a contract of sale. But, the implied terms applicable

for this issue are implied conditions as to fitness for a particular purpose- Section 16 (1)(a). As a

general rule, a buyer must be careful when purchasing as only he knows the purpose of the goods

he wants to purchase. The buyer is responsible for choosing quality goods which would fulfill his

purpose in purchasing the goods. He is expected not to be careless or he will suffer the

consequences of not being able to claim against the seller for the defects. “Caveat Emptor”

means buyer must beware. However, Section 16 (1) (a) provides some exceptions to the Caveat

Emptor general rule where the buyer may be able to sue the seller when certain requirements are

fulfilled. Section 16 (1) (a) also provides that there is an implied condition that the goods must be

reasonably fit for the particular purpose of the buyer. If the goods are not fit for the particular

purpose of the buyer, the seller would be liable for breach of this condition, and the buyer is
entitled to rescind the contract and/or claim for damages. If the buyer wants to sue the seller must

be fulfilled by the buyer on disclosure of purpose. The buyers must inform or disclose to the

seller the particular purpose he requires the goods. As some goods may have more than one

purpose or functions, the buyer must inform the seller his purpose of buying the goods. The

buyer has to take the risk and the seller would not be liable for breach of implied condition, even

though the goods are not fit or suitable for the buyer’s particular purpose. For instance, Sunrise

Bhd & Anor. v L & M Agencies Sdn. Bhd, the plaintiff purchased two new tower cranes from

the defendant for the construction of two condominium towers. The cranes frequently broke

down. The plaintiff contended that the tower cranes were not reasonably fit for the said purpose

nor were they of merchantable quality. The court held that there was a breach of implied

condition as the cranes were not fit for the particular purpose that they were purchased. The court

accepted the evidence of the plaintiff’s witnesses that they had at all times during the

construction of the condominium towers at the project. In addition, if the buyer want to sue the

seller, the buyer must establish that he had relied on the seller’s skill and judgment before he or

she submitted to purchase the goods. In other words, the buyer must have relied on the seller’s

recommendation as to which goods to buy. According to Cammell Laird & CO. v Manganese

Bronze & Brass CO. LTD case about reliance on the seller skill and judgment, there was a

contract by A to build a propeller for B. A need to follow the specification and design that was

given by B to fit a particular ship and its engine part. However, B relied on A skill and judgment

about the details as to thickness of the blades. After that, the propeller supplied by A complied

with the specification but it didn't suit the ship engine. In this case, the court held that A was

liable for breach of an implied condition because the buyer already informed the seller of the

purpose which he needed the propeller and relied on the seller’s skill and judgment to provide
them. Next, the buyer must fulfill is the goods supplied are of the description which the seller’s

business to supply. The goods bought by the buyer must be kind which is in the course of the

seller’s business to supply. For example, if the seller is in the business of selling electrical goods,

then the buyer must have bought electrical goods such as washing machine or television from the

seller relying on the seller’s skill and judgement. A relevant case on this point is Spencer Trading

Co. Ltd. v Devon30. The manufacturer had previously supplied to the plaintiff on a special order,

an adhesive substance made from gum resin for making flypapers. The following year, the

plaintiff ordered a further supply for the same purpose from the manufacturer, who on occasion

used synthetic raw materials instead of the natural material previously used. Consequently, the

flypapers were unsatisfactory for its purpose. It was held that the manufacturer was liable for the

breach of implied condition that the goods were fit for the purpose for which they were required.

Last but not least, the buyers should ensure the goods must not have been bought under patent or

trade name. If a buyer violates regulations , it gives the impression that he is not relying on the

seller’s skill and judgment. He cannot later complain that the goods are not fit for the particular

purpose he required. In Panglima Aces Sdn Bhd v Highway Bricks Work (Serendah) Sdn

Bhd, the respondent initially brought the case against the appellant claiming the price of oil

supplied and delivered to them. The appellant appealed that the oil supplied was of low quality

and not merchantable. The judge referred to s.16 (1)(a) SOGA and mentioned that the appellant’s

contract with the respondent stated it was for “Petronas” oil and hence, the appellant had

contracted under a patent or trade name which disqualified them to invoke the section to

counterclaim against the respondent. Similarly, in Syarikat T D Sdn Bhd v Tradimas Sdn Bhd,

the appellant's claim for breach of implied condition as to fitness for particular purpose failed.

The appellant appealed against the respondent’s claim for the price of the product supplied by the
respondent. The appellant argued that the product was not fit for its particular purpose, causing

rejection by the Sarawak Government to proceed with the project concerned. The court decided

that the claim should fail since their contract document ordered the respondent to supply “the

specific Polyfelt TX65 Geotextiles” and no other specifications as to the quality of goods

required by the State Government. Plus, the appellant had made part payment which shows that

there was no breach of the implied condition under s.16 (10(a).

● Application

As we refer to the case of Razak, he already read and studied the chemical composition of each

fertilizer, given in the leaflets. This means that Razak already knows the required function and he

has asked Labu for advice even though Labu does not know much about the product. This

proved that Razak had disclosed to Labu about his particular purpose he required. We can apply

the decision of court in the case of Sunrise Bhd & Anor. v L&M Agencies Sdn Bhd. For the

purpose of building two condominium buildings, the plaintiff bought two brand-new tower

cranes from the defendant. The crane was prone to malfunctions. The complainant argued that

neither the tower cranes' reasonable fit nor their merchantable condition qualified them for the

stated use. The cranes were deemed unfit for the specific reasons for which they were purchased,

according to the court, which found that there had been an implicit condition breach.

Razak has also relied on the seller's skill and judgment before purchasing the goods. When

Razak was ready to purchase his fertilizer, he asked Labu's opinion. This suggests that Razak has

faith in both Labu's abilities as a salesperson. We can apply the decision of the court in the case

of Manchester Liners Ltd v Rea Ltd, it was held by the court that express disclosure of the

purpose for which the goods were required was evidence of reliance on the seller’s skill and
judgment. Another relevant case is Cammell Laird & Co. v Manganese Bronze & Brass Co Ltd.

in this case, the court held that the defendant was liable for breach of an implied condition

because the buyer had informed the seller of the purpose for which he needed the propeller and

relied on the seller skills and judgment to provide them.

The other condition that Razak needs to fulfill is the goods supplied are of the description which

the seller’s business to supply. Regarding the Razak case, he already mentioned that he visited

the outlet to buy fertilizer. As we know, WowGrow Ltd is a manufacturer of gardening

requisites. This means that the goods bought by Razak are the kind which is in the course of

WowGrow Ltd business to supply. We can apply the decision of the court in the case of Spencer

Trading Co. Ltd. v Devon. It was held that the manufacturer was liable for breach of implied

condition that the goods were fit for the purpose for which they were required. The court also

decided the same judgment in the second case, namely the case of Ashington Piggeries Ltd v

Christopher Hill Ltd. It was held that the supplier is responsible for the goods because the goods

was of the kind which it was the seller’s business to supply.

Lastly, the goods must not been bought under patent or trade name unconsciously apply by

Razak. According to the this situation , Razak had always used a top brand but was hoping to

find some cheaper fertiliser. He then sought the advice of the only available sales assistant, Labu

who did not seem to know much about the products on sale. In this statement its clearly stated

that Razak not been bought under patent or trade name. In some relevant case, we can see in the

case Syarikat T D Sdn Bhd v Tradimas Sdn Bhd. The court decided that the claim should fail

since their contract document ordered the respondent to supply “the specific Polyfelt TX65

Geotextiles” and no other specifications as to the quality of goods required by the State
Government. Plus, the appellant had made part payment which shows that there was no breach of

the implied condition under s.16 (10(a).

● Conclusion

Based on the Sale of Goods Act (SOGA) 1957 and relevant case law, there is a valid

contract between Razak and WowGrow Ltd. Razak has a strong case for taking legal

action against WowGrow Ltd for the damage caused to his plants by the fertilizer. He

discovered that all his plants went floppy and wilted. Razak can take legal action against

WowGrow Ltd for the breach of the Sale of Goods Act 1957.