UNIT 6 : COMMERCIAL LAW

GetRichQuickis a chemical engineering lecturer at Gully Coast University and he has a beautiful fruits and vegetable garden that he uses to earn extra cash with a large orchard. Haffigrow Ltd. is a manufacturer of gardening requisites and has a number of retail outlets from which they sell their own products and those of other manufacturers.

Last March GetRichQuick visited one of these outlets to buy fertiliser. In the past, he had always used a top brand but was hoping to find something cheaper. He looked at several types of fertilisers on display, noted the widely differing prices and read the promotional leaflets.

He studied the chemical composition of each fertiliser, given in the leaflets. Some fertilisers required application to the roots, others to leaves. He then sought the advice of the only available sales assistant, a youth who did not seem to know much about the products on sale. The sales assistant recommended that GetRichQuick buy Haffigrow Ltd's 'MelonGro Sweet 'which at $60, was considerably cheaper than all other brands in stock. He decided to buy a sack of 'Melon Gro Sweet' and was given a sales invoice to sign, which stated:

• Haffigrow Ltd. agrees to refund the purchase price paid for any goods which fail to conform with commercially recognised standards of quality or with any description applied to them. Any damages or compensation payable shall not exceed the purchase price of the goods sold.

• All claims against Haffigrow Ltd. must be made within 21 days of purchase.
• Haffigrow Ltd. does not give any undertaking as to the suitability or fitness of goods purchased for any particular purpose.

GetRichQuick was in a hurry, paid for the Melon Gro Sweet 'fertiliser and signed the invoice without reading it.

The instructions on the Melon Gro Sweet 'fertiliser stated: "Spray once on leaves and fruit during June or July in dry weather" and gave details of dosage rates. GetRichQuick duly sprayed his melon plants on a sunny day in July but that night there was a heavy rainstorm, which washed away some of the fertiliser before it took effect. GetRichQuick did not realize that rain could wash away the fertiliser and no specific statement to this effect was contained in the instructions. The fertilisers GetRichQuick had previously used were applied to the tree roots and were not affected by rain.

When the plant produced fruit, the melons were small and sour. Though GetRichQuick had previously sold most of his melon crop to a local greengrocer named Ginal and had won prizes for his melons at local horticultural shows, this crop could not be sold or entered for shows.

As a result, GetRichQuick became depressed, his lecturing work suffered and he was not even shortlisted for a promotion which most of his colleagues thought he would get.

GetRichQuick now wishes to sue Haffigrow Ltd. for all compensation possible, including the

purchase price of the fertiliser, loss of profit on sale of the melon crop, loss of prize money

from shows, stress and loss of the increase in salary he would have gotten on promotion.

Haffigrow Ltd. denied liability and argued that in any event, they are protected by the invoice terms from any liability beyond the purchase price paid by GetRichQuick.

a)REQUIRED

Advise GetRichQuick and Haffigrow Ltd. using the appropriate Case Law. (10 marks)

GetRichQuick had used a credit card borrowed from his friend without her knowledge and she reported GetRichQuick's transaction as fraudulent, hence the transaction was reversed by the bank and Haffigrow Ltd.did not get paid. Hence,GetRichQuick was in breach.

It is said that where the buyer is in breach of contract to the seller, the seller may exercise statutory rights against the goods, subject to certain conditions.

b)REQUIRED

Explain what those rights are, supported by Case Law. (5 marks)