untitled

Terms implied by statute 87

Example

Hannah visits a shop and buys a cake. Before buying the cake, Hannah asks the seller

whether or not the cake contains nuts, explaining that she is allergic to nuts. The seller says

that it does not. Relying on this, Hannah buys the cake and eats it. Hannah is made ill by the

cake, because it did contain nuts. Section 14(3) will have been breached even though there

was nothing wrong with the general quality of the cake.

If the purpose for which goods are to be used is perfectly obvious, then the buyer does not
need to state the purpose. The terms as to satisfactory quality and fitness for the buyer’s
purpose will both be implied.

The term in s. 14(3) will not protect a buyer who does not make known, expressly or
impliedly, the particular purpose for which the goods are bought.

When defective goods are bought for their usual purpose, it is common for the buyer to
sue under both s. 14(2) and s. 14(3), as Grant vAustralian Knitting Millsdemonstrates.
However, the terms are not implied in identical circumstances. Section 14(2) applies even if
the buyer did not make any purpose known to the seller or rely in any way on the seller’s
skill and judgment. However, s. 14(2) does not apply where the buyer examined the goods
and ought to have noticed a defect. Nor does it apply where the defect was specifically
pointed out to the buyer. Section 14(3) applies only where the buyer makes a particular
purpose known to the seller and relies on the skill and judgment of the seller (although both
of these matters can be done impliedly). It can apply even as regards defects which the
buyer noticed or which were specifically pointed out. (If, for example, the seller wrongly
said that the defect would cause the buyer no problems.)
Figure 3.7 shows how s. 14(3) operates.

Grant vAustralian Knitting Mills Ltd (1936) (Privy Council)

A customer who bought a pair of underpants from a shop contracted dermatitis because a

chemical used in the manufacture of the underpants had not been rinsed out properly. The

customer sued under s. 14(3), as well as under s. 14(2), because the purpose for which he

bought the underpants was perfectly obvious.

HeldThe buyer won under both sections.

Griffiths vPeter Conway Ltd (1939) (Court of Appeal)

A customer with abnormally sensitive skin contracted dermatitis from a tweed coat which

she bought from a shop. The coat would not have affected most people.

HeldThe shop were not liable under s. 14(2) because there was nothing wrong with the

coat. The shop were not liable under s. 14(3) because the customer had not made her

condition known.