Business Law

The plaintiffs sold various pharmaceutical products to the defendants based on the defendants express implication makes known to the plaintiff the particular purpose for which the goods are required. The defendants did not honour the bill of exchange used to pay for the goods. The plaintiffs claimed as holders in due course of the bill. The defendants counter-claimed against the plaintiffs contending that the goods were not reasonably for the purpose for which they were intended and were not merchantable, therefore breaching a condition of the contract as statutorily implied by section 16 of the Sale of Goods Act 1957. The defendants succeeded in their counter-claim.

Discuss the rationale of section 16 of the Sale of Goods Act 1957 in this scenario. Please explain with detail and examples.