Definition Sale of Goods Act 1957 (SOGA)

The contract of sale of goods is governed by the Sale of Goods Act 1957 (hereinafter referred to as “SOGA”). The Act applies to contracts for the sale of all types of goods, including second-hand goods and makes no distinction between commercial sales. The SOGA applies to Peninsular Malaysia except Sabah and Sarawak. The law in these two states is governed by section 5 (c) of the Civil Law Act 1956. Under Section 4(1) of SOGA states a contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price.

From the above definition, there are 3 main ingredients in a contract of sale of goods. Firstly, there must be goods which are to be transferred to the buyer. Secondly, the seller transfers or agrees to transfer the property in goods to the buyer. Lastly, there is a price for the said transfer. The objective of the contract of sale of goods is the transfer of ownership of the goods to the buyer for money consideration. Sale occurs when the ownership or property in goods passes to the buyer. According to section 2 defines buyer is a person who buys or agrees to buy goods meanwhile; seller is a person who sells or agrees to sell goods.

According the general rule, reliance on the seller’s skill and judgment states the buyer must establish that he had relied on the seller’s skill and judgment before purchasing the goods. Besides, the degree of reliance is a matter of reasonable inference from the circumstances of each case. That which is far from clear is the question of how far disclosure of the purpose for which goods are required will raise a presumption that reliance is being placed upon the seller’s skills and judgment.

Besides, the goods must not have been bought under patent or trade name. The proviso to section 16 (1) (a) states that ‘in the case of a contract for the sale of a specified article under its patent  or other  trade name there is no implied condition as to its fitness for any particular  purpose’. This has been interpreted to mean that if a buyer asks for specific goods under a patent or trade name with the impression that he is not relying on the seller’s skill or judgment, then he cannot later complain if the goods bought are not fit for the purpose which he requires them.

Relevant Case: Grant V Australian Knitting Mills

In this case, Mr. Grant bought some underwear made by Australian Knitting Mills (AKM) from a store in Adelaide.  Mr. G suffered dermatitis as a result of wearing the underwear.  It was later discovered that the condition was caused by an excessive use of chemicals in the manufacturing of the underwear. The court held that reliance usually arises by implication from the circumstances. For instance, of a purchase from a retailer the reliance will be inferred from the fact that a buyer goes to the shop in the confidence that the seller has selected his stock with skill and judgment.

Relevant Case: Baldry and Marshall

In this case, the buyer had asked the dealer for a car suitable for touring. The dealer recommended a Bugatti car. A contract for the sale of a Bugatti car was made. It was later found that the car was not suitable for touring. The court held that the dealer was liable because the buyer had relied on the dealer’s skill and judgment in the selection of a car suitable for the buyer’s stated purpose even though it was sold under a trade name.