Question

Fiona owns and operates 'Fiona's Futons' (an importer of bedroom furniture and accessories located in Fremantle, Western Australia). Fiona ordered 20,000 queen size futon mattresses from Jaki, a sole trader and exporter of mattresses located in Yokohama, Japan. The mattresses were to be delivered to Fiona's business premises in two instalment shipments of 10.000 mattresses each: The first instalment on board The Pacifica in July (the July shipment) and the second on board The Oceania in November (the November shipment). The parties have incorporated a clause into their contract that the law of Australia (or Western Australia, as applicable) shall be the governing law should a dispute arise.

The following issues arose:

5: The July shipment contained 5,000 queen size mattresses and 5,000 single bed mattresses.

In relation to the 5,000 single bed mattresses, discuss the seller's breach of an implied term (under the terms of the Sale of Goods Act 1895 (WA)) and likely remedies.

Answer 1

As per Sale of Goods Act 1895, where the seller delivers to the buyer the goods he contracted tosell mixed with goods of a different description not included inthe contract, the buyer may accept the goods which are inaccordance with the contract, and reject the rest, or he may reject the whole. In the given scenario, buyer has a right to reject the balance 5000 single bed mattresses.

Remedies of the Seller

a. Action for price - Where, under a contract of sale, the property in the goods haspassed to the buyer, and the buyer wrongfully neglects orrefuses to pay for the goods according to the terms of thecontract, the seller may maintain an action against him for theprice of the goods.

b. Damages for non - acceptance - Where the buyer wrongfully neglects or refuses to accept andpay for the goods, the seller may maintain an action against himfor damages for non-acceptance The measure of damages is the estimated loss directly andnaturally resulting, in the ordinary course of events, from thebuyer’s breach of contract

Where there is an available market for the goods in question the measure of damages is, prima facie, to be ascertained by the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted, or, if no time was fixed for acceptance, then at thetime of the refusal to accept