Question

BUSINESS LAW IN MALAYSIA

Discuss to what extend the right of lien as provided under the sale of goods Act 1957 protects the seller. support your answer with three decided cases.

Answer 1

Implied terms of sale of goods act 1957 main function are to protect the rights of every buyer and consumer. These statutory implied terms are covered in section 14-17 of the sales of the good act of 1957. These are also the implied terms in every contract of sale of goods.

Section 14 includes the following:

1. Seller has the right to sell the goods
2. The product has an implied warranty and buyer will enjoy quiet possession of the goods
3. The product has implied a warranty that the goods are free from encumbrance.

Section 15 states that the implied condition is that the goods are as per description and correspond to the sample shared.

Circumstances of failure to correspond to the description shared with the buyer as indicated with the following cases:

• Arcos ltd vs. EA Ronaasen & Sons: The thickness of starves does not tally with the order
• Moore & Co. and launderer and company: Packaging is not as per description
• Varley vs. whipp: The machine was very old.

Section 16 states that there is no implied condition or warranty regarding fitness or quality for a particular purpose unless a buyer requests for the goods be for that purpose or of the merchantable quality.

Section 17 states that the goods must be as per the sample shared and it is an implied condition.

The right of lien provides as follows:

The right of unpaid seller i.e. possession of goods even when rights have been passed because of the following reasons:

• Goods sold without the credit stipulations
• Sold on credit but credit terms have expired
• Buyer becomes insolvent

The actions taken by the seller can include the following:

1. The seller can also stop goods in transit if the seller becomes insolvent.
2. The seller can also resell the goods if the property has not been handed over to the original buyer
3. The seller had part delivered can hold balance goods till the terms of the contract are met.
4. The seller can inform buyer his intent to sell goods which are in transit and find another seller.
5. The seller can show his intent to resell if the buyer defaults on the terms.

Some examples are as follows:

Mills vs. Stockman :

The seller sold slate which was on the land. The court ruled the slate is an integral part of the land and cannot be sold.

NZ securities vs. Wright cars limited:

A sells the car to B against a cheque payment. The agreement was that the title of the car will not be passed on to B till the payment is cleared. B sold the car to C. the Cheque was dishonored A repossessed the car.