First Principles of Business Law

3. Terms implied by law into contracts for the sale of goods

3.6. Terms regarding the inspection of goods sold

Read the facts and the question and then choose the best answer.

A agrees to sell 100 tonnes of Grade 1 wheat to B at a price of $500 per tonne. When the wheat is delivered, B does not inspect it: he simply places it in his warehouse and begins using it. But two weeks later B discovers that not all the wheat delivered is up to Grade 1 standard. If he had inspected the wheat when it was delivered, B would have noticed the variation in quality.

B wants to reject the wheat and recover the price paid. A says that, by law, it is a term of a contract of sale that the goods must be inspected when they are delivered. Is A correct?

(a) Yes. The law makes it a term of a sales contract that a buyer will inspect the goods when they are delivered by the seller.

(b) No. The law gives a buyer a right to inspect the goods when they are delivered by the seller, but a buyer is not obliged to do so.