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Difficulty: MediumSale of Goods Act: Provisions, Terms, Conditions, and Warranties

A commercial poultry farmer purchased a feed-milling machine from an equipment dealer after expressly making known to the seller that the machine must process at least 500 kg of grain per hour to sustain farm operations. Upon delivery, the machine could process only 100 kg per hour, rendering it completely unsuitable for the buyer's stated needs. Under the Sale of Goods Act, which legal remedy is available to the farmer?

  1. A
    Claim monetary damages only while retaining the machine, because fitness for a specific purpose is treated merely as an implied warranty.
  2. Repudiate the contract, reject the machine, and recover the purchase price because fitness for a specific purpose constitutes an implied condition.Answer
  3. C
    Absorb the financial loss without legal recourse under the strict doctrine of caveat emptor.
  4. D
    Seek a court injunction to compel the seller to upgrade the machine, as implied statutory terms grant no right of rejection.

Answer

The buyer is legally entitled to repudiate the contract, reject the feed-milling machine, and recover the full purchase price because fitness for a stated purpose is an implied condition under the Sale of Goods Act.
Under the Sale of Goods Act, where a buyer expressly or by implication makes known to the seller the particular purpose for which goods are required so as to show reliance on the seller's skill or judgment, there is an implied condition that the goods shall be reasonably fit for such purpose. Because this is a fundamental term (condition), breach of it allows the buyer to repudiate the agreement, reject the machine, and recover the purchase price.

Step-by-Step Solution

1
Analyze the facts of the transaction against statutory provisions
The buyer expressly communicated the specific requirement (processing capacity of 500 kg/hr) to the equipment dealer before the contract was formed.
Under the Sale of Goods Act, making known the specific purpose creates an exception to caveat emptor and establishes an implied condition of fitness for purpose.
2
Classify the nature of the breached term (Condition vs Warranty)
The failure of the machine to deliver the stated capacity goes to the root of the contract, making it a breach of an implied condition.
A condition is a fundamental term going to the root of the agreement, unlike a warranty which is a collateral term.
3
Determine the appropriate legal remedy for breach of condition
The innocent buyer has the legal right to treat the contract as repudiated, reject the goods, and demand restitution of the purchase price.
Breach of condition entitles the buyer to repudiation and rejection, whereas breach of warranty limits relief to damages only.

Key Concept

Implied Condition as to Fitness for Purpose (Sale of Goods Act)
Estimated Time:1m 0s
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Topics

Sale of Goods Act: Provisions, Terms, Conditions, and Warranties

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