First Principles of Business Law
Quiz: Statutory provisions affecting contracts for goods and services

Question 3

 

 

 

A, a news reporter, decides to sell the boat that he owns.  He advertises the boat for sale in the local newspaper as a ‘used Hartley 16 sailing boat’.  He agrees to sell it to B who offers a price of $5000.  After buying it, B complains that the boat leaks and that the sails are patched.  In the light of these facts, which one of the following statements is not correct? 

(a)  In these circumstances, the provisions of the Goods Act 1958 (Vic) require that the boat must be at least of merchantable quality and, if it is not, A will be in breach of contract.

(b)  In these circumstances, the provisions of the Goods Act 1958 (Vic) do not provide any particular guarantee of quality, so that even if the boat leaks and has patched sails A will not be in breach of contract.

(c)   In these circumstances, if B wanted the quality of the boat to be guaranteed, he would have had to negotiate an agreed term to that effect: otherwise the principle ‘caveat emptor’ applies.

 

 

 

 

 

 

 

 

  

 

 

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