University of Moratuwa
B.Sc in Transport & Logistic Management
Business Law – 5 (15th October 2021)
Law relating to Sale of Goods - II
Prof. Shanthi Segarajasingham
Department of Commercial Law
Faculty of Law, University of Colombo
S.Shanthi, Faculty of Law
Acceptance – s.35
• Buyer is deemed to have accepted when –
- he intimates to the seller that he has accepted
- after the lapse of reasonable time he retains the
goods without intimating the seller that he has
rejected them
- buyer does an act that is inconsistent with the
ownership of the seller (Ex: buyer sells them to a third
party)
Remedies
Remedies available to the
un-paid seller: Remedies available to the buyer:
• 1) Right of lien • 1) damages for non-delivery
• 2) Stoppage in transit • 2)Specific performance
• 3) Right of re-sale • 3) Remedy for breach of
• 4) Action for price warranty
• Damages for non-
acceptance
Lien & Stoppage in transit
• Lien means right to retain the goods until price is paid. Seller should
be in possession of the goods – s.42
• Stoppage in transit – s.43
If the goods are on the way to the buyer’s destination seller can
exercise this right, stop the goods & take possession if-
- the seller was not paid (buyer gives a cheque and if the cheque is
dishonoured) &
- Seller has parted with the possession of the goods
- good are in the course of transit
Right of re-sale – s.47
• An un-paid seller who has exercised the right of lien or stoppage in
transit can re-sell the goods.
• The subsequent buyer will acquire a good title as against the original
buyer
• Illustration: S sells the goods to B who did not pay, but S re-gained
possession of the goods by way of stopping the goods while in transit
to B’s warehouse. S re-sells the goods to C who will get good title.
• Action for price – s.48 -When the property in goods has passed to the
buyer in a contract for SoG and the buyer wrongfully neglects to pay
the price according to the accepted terms, the seller can exercise this
right
Damages for non-acceptance - s.49
• Where the buyer wrongfully neglects or refuses
to accept the goods, the seller may maintain this
action
• Measure of damages is estimated loss
• If there is ‘available market for the goods in
question, the measure of damages will be the
difference between the contract price and the
market price.
Damages for non-delivery – s.50
• Where the seller wrongfully neglects or refuses to deliver
the goods, the buyer may maintain this action
• Measure of damages is estimated loss
• Specific performance - If there is breach of contract on the
part of the seller to deliver specific goods, court may
order specific performance without giving him the option
to retain the goods for damages.
What is product liability or
Liability for Defective/Dangerous products?
• The responsibility of a manufacturer or vendor of goods to
compensate for injury caused by defective merchandise that it has
provided for sale.
• It is about damages an injured person (in most cases it is the
consumer) can claim for injuries sustained due to defective or
dangerous products
• It is a tort liability under common law for personal injuries and
damages to property caused by products
S.Shanthi, Faculty of Law
Illustrations
• Liebeck v. McDonald’s case of 1994
• In this case, Stella Liebeck accidentally
poured hot coffee, purchased from
McDonald’s, on her lower body and
suffered third degree burns on her
thighs, groin and buttocks. Liebeck’s
lawyers argued that the company
served coffee at a temperature of 180
to 190 degrees F while other
companies served coffee only at a
reasonable 140 degrees. Liebeck was
awarded a jury verdict of $2.7 million
in punitive damages and $160,000 for
medical expenses.
S.Shanthi, Faculty of Law
• Blitz was the largest producer of
portable gas cans in the US.
Headquartered in Miami, Oklahoma,
this company filed for bankruptcy in
mid-2012 because of a barrage of
product liability lawsuits against it.
Many consumers from different parts
of the country have filed cases against
the company because the cans would
explode when used to pour gas to
start a fire. Each of these claims cost
the company an average of $4 million
and more than 30 cases were filed in
2012 alone causing the company to
close its operations.
S.Shanthi, Faculty of Law
A state court jury in Missouri had returned a verdict in
favor of J&J in the latest trial to arise out of many
lawsuits alleging the company’s talc-based products
can increase the risk of ovarian cancer. The jury sided
with J&J and talc supplier Imerys Talc in a lawsuit by
Tennessee resident Nora Daniels, who alleged that she
used J&J Baby Powder for 36 years and was diagnosed
with ovarian cancer in 2013.
The verdict came after 3 straight prior jury verdicts in
St. Louis against J&J awarding plaintiffs a combined
$195 million. More than 2,500 lawsuits are pending in
state court in St. Louis.
The jury’s decision is consistent with the research,
clinical evidence by medical experts around the world
that continue to support the safety of cosmetic talc,
J&J said in a statement.
Bylsma v. Burger King Corp [2013]
• Bylsma patronized a restaurant in Washington that was
franchised by Burger King Corporation. 2 employees
served Bylsma a hamburger that was apparently tainted
with saliva that was later traced back to one of the
employees. Bylsma sued Burger King in federal court for
product liability, claiming among other things emotional
distress as a result of the incident.
• The DC dismissed Bylsma’s action, reasoned that the
Washington Product Liability Act (WPLA) does not
permit relief for emotional distress in the absence of
physical injury caused by being served and touching, but
not consuming, a contaminated food product. On
appeal, the Washington SC determined, that the WPLA
does permit relief for emotional distress damages, in the
absence of physical injury, caused to the direct
purchaser by being served and touching, but not
consuming, a contaminated food product, bit only if the
emotional distress is a reasonable reaction and manifest
by objective symptomatology.
• The court of appeals reversed and remanded, holding
that Bylsma had to be allowed to amend his complaint
to conform to Washington law. The court directed that,
after Bylsma amended his complaint, the DC should
determine in the first instance whether Bylsma pleaded
the necessary facts to support his emotional damages
claim under the WPLA as interpreted by the Washington
SC
S.Shanthi, Faculty of Law
The grocery chain Aldi has recalled multiple varieties of apples that may have
been contaminated by listeria.
Chinta Devi v. Glacio Ltd [1985] 1 SLR 265
• Plaintiff-appellant filed this action based on tort and alternatively on contract
seeking to recover from the defendant Company a sum of Rs. 250,000 being
damages sustained by her for injuries suffered by her as a result of the explosion
of a refrigerator manufactured by it and purchased by her father for household
use. The plaintiff was completely deformed, disfigured and disabled by the
injuries sustained in the explosion.
• The plaintiff alleged that there was a failure on the part of the defendant to
take due care in the design and manufacture of the said refrigerator. The
plaintiff pleaded negligence by the defendant-company in fitting a burner
unsuitable and unsafe for a kerosene refrigerator.
• After the trial the DJ held there was negligence on the part of the defendant but
dismissed the action on the ground that plaintiffs claim based on tort was
prescribed in 2 years. The action on contract was not sustainable because the
refrigerator was sold to plaintiff 's father and there was no contract between
plaintiff and defendant. The plaintiff appealed from this judgment and the
defendant filed a cross-appeal against the finding of negligence against it.
• Held that in deciding on prescription, the time taken by proceedings before a
Conciliation Board should be deducted and therefore the action is filed before
the expiry of 2 years and not prescribed.
• There has been a breach of the duty to take care in the design and manufacture
of the refrigerator and the finding of the District Judge on negligence is
supported by the evidence. The damages claimed are not excessive.
S.Shanthi, Faculty of Law
Cassells (a minor) v. Marks and Spencers plc [2001] IESC
69 (Ireland)
• http://www.bailii.org/ie/cases/IESC/2001/69.html
• The plaintiff, Rebecca Cassells, was born in 1989. Prior to late 1994 the family lived in Brixton,
London. In September 1994 the plaintiff’s mother purchased a cotton day dress for the plaintiff at
the defendant’s retail store at Brixton. The dress had a full flared skirt. Because the plaintiff was
small for her age the skirt reached to within three to four inches of her ankles. At 5.30 p.m. on
24th May 1995 the plaintiff and her mother came home to their house. The plaintiff was wearing
the dress with a light cardigan and normal underclothes. She complained that she was cold. When
the plaintiff and her mother entered the living room Mrs Cassells lit the fire which was in a typical
open domestic fire place. There was no fire guard. The plaintiff went to turn on the television and
her mother left the room briefly to go upstairs. The learned trial judge accepts that she was out of
the room for at most three minutes. On her way downstairs she heard the plaintiff screaming. She
ran downstairs and found the child in the kitchen with the back of her dress in flames. Mrs Cassells
put her daughter into the kitchen sink and extinguished the flames by turning on the cold tap. The
child had suffered severe extensive burns involving the upper leg and buttock on the left side, the
back, the left arm pit and left upper arm. Barr J. was satisfied that Mrs Cassells reached the
plaintiff within ten seconds from hearing her cry out. Held that the defendant was not negligent.
S.Shanthi, Faculty of Law
Cassells (a minor) v. Marks and Spencers plc
continued ……
• The reason for holding that the defendant was not liable - The dress which the plaintiff
was wearing was made of 100% cotton material. This cotton material had not been treated
with a chemical fire retardant. Inside the dress there was a hanging label stitched at one
end into a seam. On one side of the label information as to the nature of the material was
given together with the customary washing instructions indicated by symbols. On the
other side the age range and size of the dress was given and in addition there was a
warning in red “KEEP AWAY FROM FIRE” in English and three other languages. This
label was a permanent part of the dress. The normal practice of the defendant was to
attach to the dress two sizeable cardboard tags which hung below the hem of the dress and
were intended to be removed after purchase. One of these tags which was approximately
one and a half inches wide by two inches long contained on one side a warning in large
red “IN THE INTEREST OF SAFETY IT IS ADVISABLE TO KEEP YOUR CHILD
AWAY FROM FIRE”. The same warning was repeated in smaller red capital letters on the
other side of the tag in English and three other languages. Mrs Cassells agreed in evidence
that she saw the permanent tag and was aware of the warning “KEEP AWAY FROM
FIRE”. She did not recall seeing the other cardboard tag but the learned trial judge
accepted that in all probability they would have been appended to the dress as described.
S.Shanthi, Faculty of Law
Liability under various laws
• RDL - Delict )
• Product liability, strict liability
• English Law – Tort )
• RDL & EL on the Law of contracts
• Breach of condition/warranty
• Exemption clause & unfair contract terms
• Misrepresentation
• Privity to Contract
S.Shanthi, Faculty of Law
Law of Sri Lanka
• Common law
• Applicable law
• Some important Statutes
• Sale of Goods Ord
• Consumer Affairs Authority Act No.9 of 2003
• Unfair Contract Terms Act 1997
• Food Act 1980
• Chinta Devi v. Glacio Ltd [1985] 1 SLR 265
S.Shanthi, Faculty of Law
Consumer Affairs Authority Act 2013 & Food Act
Consumer Affairs Authority Act Food Act 26 of 1980 & 20 of 1991
• Objectives- s. 7(a); • S.33 – definition for ‘food’; S.2 &
• Functions – s.8(d); 5-prohibition
• Issuing of directions – s.10(1)(b)(ii); • S.6 – warranty as to quality of
• Determining standards – s.12(1); food;
• Implied warranty – s.32(1)(d); • S.26 – presumption;
• Obtaining samples for ensuring • S.18 - offence
compliance – s.61; Definition of
‘goods’ – s.75
S.Shanthi, Faculty of Law
Electronic Transactions Act No. 19 of 2006
• S. 3. No data message, electronic document, electronic record or
other communication shall be denied legal recognition, effect, validity
or enforceability on the ground that it is in electronic form.
• s. 4. Notwithstanding the fact that the provisions of written laws for
the time being in force in Sri Lanka attach legal validity to certain
instruments, only if such instruments have been reduced to writing,
such requirement shall be deemed to be satisfied by a data message,
electronic document, electronic record or other communication in
electronic form if the information contained therein is accessible so as
to be usable for subsequent reference.
• Lesson on Sale of goods is over
• Please study.
