Contract; sale of goods; sale of goods by description; implied condition of fitness for purpose; whether seller dealing in goods of relevant description
Facts: Mr and Mrs Rider formed a partnership to build and sell boats. Only two boats were ever built, the second of which, when completed, was sold to Pix. By this time the Riders had given up the idea of building more boats. The boat sold to Pix proved defective, and Pix brought an action against the Riders for breach of an implied condition that the boat was of merchantable quality. The Riders argued that, when they sold the boat to Pix, they were not sellers who dealt in boats because they had decided to abandon the business. Accordingly, they argued, there was no implied term requiring the boat to be of merchantable quality.
Issue: At the time of the sale to Pix, were the Riders sellers who ‘dealt’ in boats?
Decision: The Riders were sellers who dealt in boats.
Reason: The relevant provision of the sale of goods legislation simply requires that the goods in question are sold in the course of a business, as opposed to a sale by a private individual. The Riders had formed their partnership as a business venture and paid the costs of building the boat. They had submitted Business Activity Statements to the tax office and the partnership was credited with the proceeds of the sale. On the basis of this objective evidence, the court inferred that the partnership was in the business of constructing boats for sale at a profit and the Riders were dealers in boats at the time of the sale. It was not relevant that the sale was the first and only sale carried out in the course of that business, nor that the Riders had decided not to build more boats.