Law Pratice Question

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  • Topic: Contract, Sale of Goods Act 1979, Contractual term
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Answer to Tutorial Exercise

Semester 2, 2011

Question

An Lushan operates the Tang Empire restaurant in Hawthorn. He places his regular weekly order for $1000 worth of ‘Yellow Turban’ noodles with his supplier, Wu Zetian, who manufactures foodstuffs in Victoria. Unfortunately on one week the noodles are adulterated with a cleaning agent. Fortunately An Lushan realises that the noodles are unfit to eat before he serves them to his customers.

(a) Explain whether there is a breach by Wu Zetian of the implied term under s 19(a) of the Goods Act.

(b) Explain whether there is a breach by Wu Zetian of the implied term under s 19(b) of the Goods Act.

(c) What would the position be if the contract contained the following provision: ‘This agreement contains all the terms and conditions under which I agree to purchase the foodstuffs specified above and any express or implied condition, statement, warranty statutory or otherwise not stated herein is hereby excluded’.

Rubric on How Law Exams are marked

This is a guide to how law problems are assessed by examiners. Did you:
1.Identify the relevant issues
2.Identify the relevant law on each issue
3.Accurately explain the relevant law
4.Properly apply the law to the problem
5.Present your answer in an organised and logical manner

Students should note that most of the marks are for identification of the relevant issues and an accurate discussion of the relevant law with further marks for accurate application of the law to the problem. It is expected that a number of relevant cases will be discussed. Further it is not enough to simply cite the name of the precedent case, it is important to accurately state the principle of law (ratio decidendi) that it lays down. Students should explain the following precedent cases Chaproniere v Mason (1905)

Wren v Holt (1903)
Baldry v Marshall (1925)
Godley v Perry (1960)
L’Estrange v Graucob (1934)

Guide to the Question:

An Lushan operates the Tang Empire restaurant in Hawthorn. He places his regular weekly order for $1000 worth of ‘Yellow Turban’ noodles with his supplier, Wu Zetian, who manufactures foodstuffs in Victoria. Unfortunately on one week the noodles are adulterated with a cleaning agent. Fortunately An Lushan realises that the noodles are unfit to eat before he serves them to his customers.

(a) Explain whether there is a breach by Wu Zetian of the implied term under s 19(a) of the Goods Act.

Introduction: S 19(a) implies into contracts for the sale of goods a term that the goods be fit for their ‘particular purpose’. Is there a term in the contract of sale of Goods that the Noodles be fit to eat?

The courts have taken an approach favourable to the buyer of goods in the interpretation of s. 19(a). The section has been interpreted by the courts so as to keep the law up to date with the development of the commercial world through the twentieth century.

The first issue is what is meant by the phrase ‘particular purpose’? Does An Lushan have any ‘particular purpose’? His purpose is just to sell ‘Yellow Turban’ noodles to customers for their normal purpose being eaten. Is this a ‘particular purpose’? Section 19(a) does not only apply if the buyer had some ‘special’ or ‘unusual’ purpose. The courts have interpreted the phrase ‘particular purpose’ as simply the actual purpose of the buyer. An example is Chaproniere v Mason (1905) where there was a bun sold with a stone in it. The ‘particular purpose’ was the usual purpose – eating the bun.

The second issue is what is required for the buyer to ‘make known’ his or her particular purpose? In cases like Chaproniere v Mason the courts have not required the buyer to specifically state its purpose. The purpose for which the noodles are required is obvious. Therefore merely by ordering the noodles An Lushan has made his purpose known to Wu Zetian.

A third issue is what is required for the buyer to show that it ‘relies on the...
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