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CONTRACT – SALE OF GOODS – IMPLIED TERM – SALE BY SAMPLE

Q: I was appointed by an owner of a house to carry out renovation works. We did the renovation. But now the owner sues us claiming we have not installed the materials based on the exact size of materials as per the sample we have earlier shown them. The sample earlier shown was sample of colour of the material. Not the size. The owner now claims for refund of his deposit and to terminate the contract. Can they do that?

A: Depends. For a sale contract to be a sale by sample, the term that it is a sale by sample must be expressly stated in the contract. Mere showing of the sample to the owner does not mean that the sale of the goods was a sale by sample. The details of the sample and that the sale is by sample must be stated in the contract. The quotation must also state the size of the goods to be supplied.

Q: Can the owner add new term into written contract?

A: Pursuant to ss91 and 92 of Evidence Act 1950, when the terms of the contract are reduced in writing, no new terms can be admitted as evidence.

Q: The owner is at first satisfied with the colour, size and quality of the sample we showed them. However, before I could deliver bulk of goods to them, they terminated the contract after hearing news that our goods are of low quality. Is that permissible? 

A: If the owner has not inspected the actual goods supplied under the contract before terminating the contract, it is impossible for a court to find that the goods do not correspond with the quality or the materials supplied were defective. It was factually and legally impossible for the court to determine whether the supplier is in breach of a term implied by s17 Sales of Goods Act 1957 (“SOGA 1957”) into the contract.

Q: How do we ascertain whether a sale is by sample?

A: The court has to look at the evidence and apply the objective test : whether a reasonable person with full background knowledge of the transactions would understand that the seller was making a binding promise that the goods would conform to the sample. Essentially, sale by sample has to be stated in the contract. eg, state in diameter, dimension, thickness, colour, quality etc.

Case in point: Fuyu International Sdn Bhd v Lai Fui Pin & Ors [2020] 9 MLJ 661. KL High Court no.WA-12BC-7-08 of 2018

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