BUSINESS LAW HANDBOOK

Page 96

Chapter 5 : Sale of Goods

Donoghue v Stevenson [1932] Facts: A manufacturer of ginger beer had sold to a retailer ginger bear in a opaque bottle. The retailer resold it to Donoghue who treated her friend to its contents. The ginger beer bottle also contained the decomposed remains of a snail which had found its way into the bottle at the factory. Donoghue alleged that she became seriously ill in consequence and sued the manufacturer for negligence. Issue: Plaintiff was entitled to claim damages against the manufacturer in negligence. Any person who manufactures products in such a way that there is no reasonable possibility of intermediate examination before they reach the ultimate consumer, and who knows that the absence of reasonable care on their part will result in an injury to the customer’s life or property, owes a duty to the consumer to take reasonable care.

5.4.1 Doctrine of Caveat Emptor     

5.5

The doctrine of Caveat Emptor is an integral part of sale of goods. It translates to “let the buyer beware”. Caveat Emptor is the principle that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made. Buyers have only themselves to blame if they fail to make careful inspection of the goods before they purchase them. The buyer could not recover damages from the seller for defects on the property that rendered the property unfit for ordinary purposes. There are a few exceptions in the application of the Caveat Emptor: o When there is no reasonable opportunity for inspection; and o When the buyer has to rely on the special knowledge or expert judgement of the seller.

TRANSFER OF PROPERTY AND TITLE

 As general rule, when a person takes goods (e.g. a buyer), he or she gets only the same rights to the goods as the person from whom he or she took them (e.g. seller)  This rule is expressed in the Latin maxim nemo dat quod non habet. The rule is set out in Section 27 SOGA 1957.  This provision means that if goods are bought from a person who is not the owner, and who does not sell them under the owner’s authority, the buyer does not acquire any title.  Thus the rightful owner of goods is entitled to recover his or her goods from those who have no title to them.  But there are exceptions to the nemo dat quod non habet rule. They are as follows: 92


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5.7 Assessment Questions

5min
pages 102-105

5.6 Remedies for Breach of Contract

5min
pages 99-101

5.5 Transfer of Property and Title

6min
pages 96-98

5.4 Privity of Contract

1min
page 95

5.3 Terms of Contract

8min
pages 90-94

4.9 Assessment Questions

4min
pages 83-85

5.0 SALES OF GOODS

0
page 86

4.8 Termination of Agency

5min
pages 79-82

4.7 Duties and Rights of An Agent

4min
pages 76-78

4.5 Types of Agent By Authority

1min
page 74

4.6 Duties and Rights of A Principal

1min
page 75

4.3 Formation of Agency

9min
pages 67-72

4.4 Types of Agent

1min
page 73

4.0 AGENCY

0
page 65

3.3 Differences Between Sole Proprietorship, Partnership and Company

2min
pages 60-61

3.0 LEGAL ASPECTS OF BUSINESS ENTITIES

0
page 54

2.8 Assessment Questions

4min
pages 51-53

2.7 Remedies of Contract

7min
pages 47-50

2.5 Terms of Contract

3min
pages 43-44

2.4 Effects of Contract

7min
pages 39-42

2.6 Discharges of Contract

3min
pages 45-46

1.8 Malaysian Judicial System

11min
pages 14-21

1.9 Assessment Questions

1min
pages 22-23

2.0 LAW OF CONTRACT

0
page 24

1.4 Law, The State And The Constitution

1min
page 7

1.7 Sources of Malaysian Law

4min
pages 11-13
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