This assignment will discuss the implied terms under the Malaysian Sale of Goods Act 1957. The discussion will be applied to the ‘Cheese Chopper’ product as demonstrated in a clip from the television show ‘Shark Tank’. The analysis will be divided into two parts, first discussing the relevant implied terms of fitness for purpose, merchantable quality, and correspondence with description, and second, identifying and explaining a breach of one of these terms based on the events shown in the clip.
Question 1: Implied Terms (8 marks)
The Sale of Goods Act 1957 (SOGA 1957) implies certain terms into contracts for the sale of goods to provide protection for buyers. These terms ensure that goods meet a certain minimum standard. This section will analyse three of these implied terms in relation to the Cheese Chopper.
(a) Fitness for purpose
The legal principle for fitness for a particular purpose is found in section 16(1)(a) of the SOGA 1957. This section states that where a buyer, either expressly or by implication, makes known to the seller the particular purpose for which the goods are required, and the buyer relies on the seller’s skill or judgment, and the goods are of a description which it is in the course of the seller’s business to supply, there is an implied condition that the goods shall be reasonably fit for that purpose. For this condition to be implied, all these requirements must be met (Alsagoff, 2015). The purpose for which the goods are needed must be communicated to the seller. However, if the goods have only one ordinary use, it is assumed that the seller is aware of the purpose without it being expressly stated. This was the principle in cases like *Priest v Last* [1903] 2 KB 148, where a hot-water bottle was purchased and subsequently burst, with the court holding its purpose was self-evident. The buyer must also demonstrate reliance on the seller’s expertise.
In the context of the Cheese Chopper, the particular purpose is made clear both implicitly and explicitly. The name of the product itself, the ‘Cheese Chopper’, indicates its function is for processing cheese. The presenters, Tate and his father, explicitly state that it is designed to “slice, grate and store your cheese with just one tool”. As such, the purpose is clearly established. A consumer purchasing this product would be relying on the skill and judgment of the sellers, who have designed, manufactured, and are now marketing the product as a specialist kitchen utensil. The fact that they are pitching the item on ‘Shark Tank’ indicates that the goods are in the course of the sellers’ business to supply. Therefore, the implied condition under section 16(1)(a) would apply to any sale of the Cheese Chopper. A buyer would be entitled to expect the product to be reasonably fit for slicing, grating, and storing cheese effectively and without undue difficulty.
(b) Merchantable quality
The implied condition of merchantable quality is provided for in section 16(1)(b) of the SOGA 1957. This term is implied into a contract where goods are bought by description from a seller who deals in goods of that description. The term requires that the goods are fit for the ordinary purpose for which goods of that kind are commonly bought. The definition of ‘merchantable quality’ is not found in the Act itself, but guidance can be taken from case law. In *Wilson v Ricket, Cockerall & Co Ltd* [1954] 1 QB 598, it was held that goods were not merchantable if they had defects which made them unfit for their ordinary use. The quality expected is that which a reasonable person would accept for the price paid, considering the description and all other circumstances (Beatty and Samuelson, 2018). This includes factors like the appearance and finish of the goods, their safety, and their durability.
Applying this principle to the Cheese Chopper, a purchase of this item would be a sale by description from sellers who deal in such goods. The description is an “all-in-one cheese solution”. Therefore, the condition of merchantable quality is implied. A buyer would expect the Cheese Chopper to be of a standard that allows it to function properly as a kitchen utensil for its common purposes. This means it should be able to slice and grate a standard block of cheese without breaking or malfunctioning. The materials used, such as the plastic for the handle and body, should be durable enough to withstand the normal force required for such tasks. A reasonable person buying a cheese slicer would not expect it to be fragile or difficult to operate. The product as a whole must be of a quality that makes it commercially saleable under the description it is given.
(c) Correspondence with description
Section 15 of the SOGA 1957 provides for the implied condition that in a contract for the sale of goods by description, the goods must correspond with that description. A sale is by description where the buyer buys goods based on a description given by the seller, often without seeing the goods, or where the buyer has seen the goods but relies on the description given (Sinnadurai, 2011). This principle applies to specific goods as well as unascertained goods. The classic case of *Beale v Taylor* [1967] 1 WLR 1193 illustrates this, where a car advertised as a 1961 model was in fact two different models welded together, which amounted to a breach of the condition. In Malaysia, the case of *Nagurdas Purshotumdas & Co. v Mitsui Bussan Kaisha Ltd* (1911) 12 SSLR 67 confirmed that even a small discrepancy in description can lead to a breach. The description can include words used on packaging, in advertisements, or by the seller during negotiations.
In the clip, the Cheese Chopper is described in several ways. It is called the “Cheese Chopper” and an “all-in-one cheese solution” capable of slicing, grating, and storing cheese. Furthermore, the presenter, Tate, claims it is “simple to use”. All of these phrases form part of the product’s description. For the goods to correspond with this description, they must be capable of performing all three functions effectively and be simple to operate. If, for instance, the slicing mechanism is extremely difficult to use, or the grater attachment does not work properly, it could be argued that the product does not correspond with its description as a functional “all-in-one” solution that is “simple to use”. The term is not just about what the product is, but also about what it can do according to the seller’s claims. Therefore, a buyer would have a right to expect a product that matches this comprehensive description.
Question 2: Breach of Implied Terms (6 marks)
A clear situation in the clip where an implied term may have been breached occurs when one of the ‘Sharks’, Kevin O’Leary, attempts to use the Cheese Chopper to slice a block of cheese.
The implied term breached is the condition of **merchantable quality** under section 16(1)(b) of the SOGA 1957.
This situation amounts to a breach because the product failed to perform its basic function under normal conditions of use and proved to be not durable. Mr O’Leary applies force to the handle to push the cheese through the slicer, which is the intended method of operation. In doing so, the handle of the device audibly snaps and breaks off. A product is not of merchantable quality if it has a defect that prevents it from being used for its ordinary purpose. The ordinary purpose of a cheese slicer is to slice cheese, which often requires a reasonable amount of pressure, especially for harder cheeses. A kitchen utensil should be robust enough to withstand such force. The fact that the Cheese Chopper’s handle broke so easily under what appears to be normal, if firm, handling suggests a fundamental flaw in its design or the materials used. This is further supported by another Shark, Mark Cuban, who upon inspecting the broken piece comments on the thinness of the plastic. This latent defect rendered the product unusable and therefore not of merchantable quality. A reasonable consumer would not find a kitchen tool that breaks during its very first use to be of acceptable quality, regardless of its price. The product was not fit for its common purpose and was not durable, which are key components of merchantable quality.
References
Alsagoff, S.A. (2015) *Principles of the law of contract in Malaysia*. 4th edn. LexisNexis Malaysia.
Beatty, J. and Samuelson, S. (2018) *Business Law and the Legal Environment*. 8th edn. Cengage Learning.
Sinnadurai, V. (2011) *Law of contract*. 4th edn. LexisNexis Malaysia.
*Beale v Taylor* [1967] 1 WLR 1193.
*Nagurdas Purshotumdas & Co. v Mitsui Bussan Kaisha Ltd* (1911) 12 SSLR 67.
*Priest v Last* [1903] 2 KB 148.
Sale of Goods Act 1957 (Malaysia).
*Wilson v Ricket, Cockerall & Co Ltd* [1954] 1 QB 598.
