GOODS MUST BE OF MERCHANTABLE QUALITY

The idea of selling has been practiced by humans since humanity was starting to evolve. The
action of one selling an item in exchange for money. The idea of one willing to let go of an item
which was initially in his possession to acquire funds or money for his item that he wishes to
sell. We humans have pretty much grasped the idea of selling to an extent where selling can be
done in various ways. To attract customers, to maximize their sales and most importantly gain as
much profit as they can.

Of course, with such an effective way of acquiring money, the need of law enforcement is
needed. Hence why the Sale of Goods Act 1957 plays a crucial role in the business world in
Malaysia. The Sale of Goods Act 1957 not only benefits in ensuring that the benchmark of sellers
is aligned and customized to a proper legal framework, but also benefits the consumer in terms
of rights and the protection of the consumer.

In this subsection, we will discuss the Sale of Goods Act 1957, Section 16(b), the enforcement of
goods sold must be of merchantable quality.

Sellers that wish to sell an item are legally bound to the fact that they must ensure that the item
that he or she sells adheres to the concept of merchantable quality. What does merchantable
quality mean? Before any legislation on business was made, the act of selling was filled with
inconsistency throughout the years. Even in the current times the fact that there are sellers who
still approach or sell their items with devious tactics and trickery shows how much of an issue
this has been for the business world.

Merchantable quality is the definition of goods that fulfill the criteria needed to ensure the goods
are accepted to be exchanged. We can categorize it by four major points:1

1) Description

1
Hoyle, M. (2019, November 22). What is Merchantable Quality in a Sale of Goods?

Lawpath. https://lawpath.com.au/blog/what-is-merchantable-quality-in-a-sale-of-goods
Description means the details that are labeled on the item or goods that are being sold. As we are
aware, items in the market are usually labeled with a description for potential buyers to examine
the product. This feature not only gives information about the product, but indirectly adds
interest towards the buyer. Why does it happen? This is because when sellers give a detailed
description of their products, consumers are more likely to trust and feel safer to purchase the
item. The description that is labelled also must adhere to the formats or layout that the
government has complied with to do so.

For example, according to the National Pharmaceutical Regulatory Agency (NPRA), on the
guidelines on electronic labeling for pharmaceutical products in Malaysia, the accepted e-
labelling formats is that the item will be presented in a QR code which translates to NPRA
Quest3+ page.2 Which is a website that is used to submit Product License Holder, Manufacturer,
Importer, Re-packer, Reseller, and other related users to conduct online transactions.

2) Purpose

Goods that are sold in the market must have a purpose in their creation. Items or products sold in
the market are usually to adhere the customer wants or basic needs. The idea of selling goods can
be distinguished as sellers have identified the problem that consumers face which is the
unavailability of an item or many, which then causes the consumer to find options on the market.
Consumers, acknowledging that a group of sellers sell the item needed, will then proceed to
purchase the item.

It is important that these goods serve a purpose as if they do not, they are not in a merchantable
quality condition. For example, the purpose of selling a car is for consumers to have a much
easier way to reach their destination with ease and save more time. Purpose also means that the

2
Ministry of Health Malaysia, & National Pharmaceutical Regulatory Agency. (2023,

April). GUIDELINE ON ELECTRONIC LABELLING (E-LABELLING) FOR

PHARMACEUTICAL PRODUCTS IN MALAYSIA.

https://npra.gov.my/easyarticles/images/users/1047/Lampiran-A-Guideline-on-E-

Labelling-for-Pharmaceutical-Products-in-Malaysia.pdf
purpose must not go against the law. For example, the car sold must not be used to drive over
people. This will make the idea of selling be exploited against the law. Therefore, there must be a
definitive and beneficial purpose in the act of selling an item.

3) Condition

The selling condition means the item that is sold must be in a state where it is ready to be used
and complies with its description. For example, when you buy the Victorinox Swiss Army
I.N.O.X., the watch’s description says its water-resistance is up to 660 feet. That means if the
consumer dives and does not exceed the 660 feet limit, the watch should be able to maintain its
water-resistance feature.3 But if for some reason the watch was not in good condition, maybe
there was a defect or somebody had sabotaged it, then it does not adhere to the factor that goods
must be sold in a condition where it is ready and complies with its description.

4) Price

For a transaction of a buy and sell to be accepted, the existence of price is crucial as a component
for the goods to be of merchantable quality. Why? This is because the price not only plays a role
in determining that a transaction has been done but also as a sign of an item’s monetary value.
The price of an item can often be seen as it is labelled or tagged by the seller.

3
Victorinox AG. (n.d.). Check this out:I.N.O.X. Victorinox. Retrieved December 15,

2023, from https://www.victorinox.com/global/en/Products/Watches/Men%27s-

Watches/INOX/p/241682.1
LAW CASES THAT RELATE TO MERCHANTABLE QUALITY OF GOODS

1) Wilson v Ricket, Cockerall & Co Ltd (1954) AII ER 868

From this case we can identify that when a lady named Wilson wanted to purchase fuel from a
fuel merchant. What she was not informed is that the coal was used was for industrial use and not
for household use. This resulted in an explosion in the fireplace. This shows the importance for
sellers to first clarify their product description so that buyers can avoid such incidents from
happening.

This is because are not required to inform the seller of the purpose of their purchase. That is why
goods of merchantable quality must have a description to their product. It is crucial so that
buyers can identify the item that they wish to purchase has a known purpose.

2) David Jones Ltd v Willis (1934) 52 CLR 110

What happened in this case was, a woman named Willis went to a shoe store owned by David
Jones to purchase a new pair of heels. She had bought the heels after being recommended by the
saleswoman. As Willis was wearing the heels for only the third time, the heels broke off and her
legs were broken.

When the case was held, David was declared guilty as there was a breach of implied condition as
the heels were not of merchantable quality. In the previous section we discussed that the
condition of item sold be of merchantable quality. This can be applied where the saleswoman or
David Jones should ensure the shoes must be tested properly and ran the required tests before
selling them to the public.
Hoyle, M. (2019, November 22). What is Merchantable Quality in a Sale of Goods? Lawpath.

https://lawpath.com.au/blog/what-is-merchantable-quality-in-a-sale-of-goods

Ministry of Health Malaysia, & National Pharmaceutical Regulatory Agency. (2023, April).

GUIDELINE ON ELECTRONIC LABELLING (E-LABELLING) FOR

PHARMACEUTICAL PRODUCTS IN MALAYSIA.

https://npra.gov.my/easyarticles/images/users/1047/Lampiran-A-Guideline-on-E-

Labelling-for-Pharmaceutical-Products-in-Malaysia.pdf

Victorinox AG. (n.d.). Check this out:I.N.O.X. Victorinox. Retrieved December 15, 2023, from

https://www.victorinox.com/global/en/Products/Watches/Men%27s-Watches/INOX/p/

241682.1