Contracts for Sale of Goods (11:III) - Revision history

LSLAP at 19:21, 13 October 2025

2025-10-13T19:21:58Z

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	{{REVIEWED LSLAP \| date= ~~July 11, 2024~~}}		{{REVIEWED LSLAP \| date= 29 August 2025}}
	{{LSLAP Manual TOC\|expanded = consumer}}		{{LSLAP Manual TOC\|expanded = consumer}}

LSLAP: /* 1. Damages Generally */

2025-09-28T22:55:39Z

1. Damages Generally

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	At common law, to be awarded damages for breach of contract, those damages must be in the reasonable contemplation of both parties at the time the contract was formed. If the damages are too remote, they may not be recoverable under contract law. Both sides must be aware of the circumstances <u>at the time of formation</u> that would lead to damages if an obligation went unperformed or underperformed. This may encompass either implied circumstances, if reasonable, or special circumstances that were communicated at the time the contract was formed (''[https://www.bailii.org/ew/cases/EWHC/Exch/1854/J70.html Hadley & Anor v Baxendale & Ors]'' (1854), 156 ER 145 (Eng Ex Div)). Damages that were substantially likely and easily foreseeable at the time the contract was formed will be deemed to have been in the reasonable contemplation of the parties. Once the '''type''' of loss is found to have been foreseeable, the extent of damages can be recoverable even if the '''degree''' of damages is so extensive as to be unforeseeable.		At common law, to be awarded damages for breach of contract, those damages must be in the reasonable contemplation of both parties at the time the contract was formed. If the damages are too remote, they may not be recoverable under contract law. Both sides must be aware of the circumstances <u>at the time of formation</u> that would lead to damages if an obligation went unperformed or underperformed. This may encompass either implied circumstances, if reasonable, or special circumstances that were communicated at the time the contract was formed (''[https://www.bailii.org/ew/cases/EWHC/Exch/1854/J70.html Hadley & Anor v Baxendale & Ors]'' (1854), 156 ER 145 (Eng Ex Div)). Damages that were substantially likely and easily foreseeable at the time the contract was formed will be deemed to have been in the reasonable contemplation of the parties. Once the '''type''' of loss is found to have been foreseeable, the extent of damages can be recoverable even if the '''degree''' of damages is so extensive as to be unforeseeable.

	Parties have a common law '''duty to mitigate''' their damages from the date of the contractual breach. In a contract for the sale of goods, this means buying the goods elsewhere and suing the party who breached the contract for the additional amount paid for the goods over the contract price. In a contract for services, such as roof repair, this means hiring another party to do the repairs and suing the original party for the difference in price paid, if any. There is some jurisprudence that suggests when it is not feasible for a party to mitigate, they are excused from doing so. See [https://www.canlii.org/en/ca/scc/doc/2012/2012scc51/2012scc51.html?autocompleteStr=Southcott%20Estates%20v%20toronto%20&autocompletePos=1 ''Southcott Estates Inc v Toronto Catholic District School Board'', 2012 SCC 51].		Parties have a common law '''duty to mitigate''' their damages from the date of the contractual breach. In a contract for the sale of goods, this means buying the goods elsewhere and suing the party who breached the contract for the additional amount paid for the goods over the contract price. In a contract for services, such as roof repair, this means hiring another party to do the repairs and suing the original party for the difference in price paid, if any. There is some jurisprudence that suggests when it is not feasible for a party to mitigate, they are excused from doing so. See ''[https://www.canlii.org/en/ca/scc/doc/2012/2012scc51/2012scc51.html?autocompleteStr=Southcott%20Estates%20v%20toronto%20&autocompletePos=1 Southcott Estates Inc v Toronto Catholic District School Board]'', 2012 SCC 51.

	=== 2. Breach of Warranty ===		=== 2. Breach of Warranty ===

LSLAP: /* (3) Seller who Deals in Goods of that Description */

2025-09-28T22:53:14Z

(3) Seller who Deals in Goods of that Description

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	===== (3) Seller who Deals in Goods of that Description =====		===== (3) Seller who Deals in Goods of that Description =====
	In addition to requiring that the sale be by description, s 18(b) also requires that the seller must “deal in goods of that description.” In [https://www.canlii.org/en/bc/bcsc/doc/2011/2011bcsc927/2011bcsc927.html?autocompleteStr=hartmann%20v%20mc&autocompletePos=1 Hartmann v McKerness, 2011 BCSC 927], a seller sold a watch by description over eBay and was sued for violating the implied condition of merchantability in s 18(b). In paragraphs 43-47, the BC Supreme Court held that the seller was not one “who dealt in goods of that description” for the purpose of s 18(b), as he did not specialize in watches, but rather sold a large variety of goods.		In addition to requiring that the sale be by description, s 18(b) also requires that the seller must “deal in goods of that description.” In ''[https://www.canlii.org/en/bc/bcsc/doc/2011/2011bcsc927/2011bcsc927.html?autocompleteStr=hartmann%20v%20mc&autocompletePos=1 Hartmann v McKerness]'', 2011 BCSC 927, a seller sold a watch by description over eBay and was sued for violating the implied condition of merchantability in s 18(b). In paragraphs 43-47, the BC Supreme Court held that the seller was not one “who dealt in goods of that description” for the purpose of s 18(b), as he did not specialize in watches, but rather sold a large variety of goods.

	===== (4) Effect of Examination by the Buyer =====		===== (4) Effect of Examination by the Buyer =====

LSLAP: /* d) Implied Condition of Fitness for Buyer’s Purpose: s 18(a) */

2025-09-28T22:52:23Z

d) Implied Condition of Fitness for Buyer’s Purpose: s 18(a)

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	# The goods are of a description that is in the course of the seller’s business to supply.		# The goods are of a description that is in the course of the seller’s business to supply.

	Furthermore, the courts have held that the seller need not know the specific purpose for which the buyer wishes to use the goods; knowledge of a broad purpose is sufficient. For example, in [https://www.canlii.org/en/bc/bcpc/doc/2006/2006bcpc265/2006bcpc265.html?autocompleteStr=Sugiyama%20v%20Pilsen&autocompletePos=1 ''Sugiyama v Pilsen'', 2006 BCPC 265] at para 71, the court held that s 18(a) provides a warranty that a car is “a reliable vehicle for use in driving in safety on the roads” and a car being sold must be reasonably fit for such purpose. However, if the buyer wishes to use the goods for an unusual or peculiar purpose, this must be indicated to the seller.		Furthermore, the courts have held that the seller need not know the specific purpose for which the buyer wishes to use the goods; knowledge of a broad purpose is sufficient. For example, in ''[https://www.canlii.org/en/bc/bcpc/doc/2006/2006bcpc265/2006bcpc265.html?autocompleteStr=Sugiyama%20v%20Pilsen&autocompletePos=1 Sugiyama v Pilsen]'', 2006 BCPC 265 at para 71, the court held that s 18(a) provides a warranty that a car is “a reliable vehicle for use in driving in safety on the roads” and a car being sold must be reasonably fit for such purpose. However, if the buyer wishes to use the goods for an unusual or peculiar purpose, this must be indicated to the seller.

	The “Patent and Trade Name Exception” is of little effect since the courts have interpreted it narrowly. The issue remains one of reliance, and the trade names exception will apply only where the buyer’s use of the patent or trade name indicates a lack of reliance upon the seller. In other words, the exception only applies where a consumer decides to purchase goods solely because of the trade name of a product. See ''[https://www.canlii.org/en/bc/bcca/doc/2002/2002bcca78/2002bcca78.html#par38 Wharton v Tom Harris Chevrolet Oldsmobile Cadillac Ltd]'', 2002 BCCA 78 at paras 38-39.		The “Patent and Trade Name Exception” is of little effect since the courts have interpreted it narrowly. The issue remains one of reliance, and the trade names exception will apply only where the buyer’s use of the patent or trade name indicates a lack of reliance upon the seller. In other words, the exception only applies where a consumer decides to purchase goods solely because of the trade name of a product. See ''[https://www.canlii.org/en/bc/bcca/doc/2002/2002bcca78/2002bcca78.html#par38 Wharton v Tom Harris Chevrolet Oldsmobile Cadillac Ltd]'', 2002 BCCA 78 at paras 38-39.

LSLAP: /* d) Implied Condition of Fitness for Buyer’s Purpose: s 18(a) */

2025-09-28T22:51:07Z

d) Implied Condition of Fitness for Buyer’s Purpose: s 18(a)

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	Furthermore, the courts have held that the seller need not know the specific purpose for which the buyer wishes to use the goods; knowledge of a broad purpose is sufficient. For example, in [https://www.canlii.org/en/bc/bcpc/doc/2006/2006bcpc265/2006bcpc265.html?autocompleteStr=Sugiyama%20v%20Pilsen&autocompletePos=1 ''Sugiyama v Pilsen'', 2006 BCPC 265] at para 71, the court held that s 18(a) provides a warranty that a car is “a reliable vehicle for use in driving in safety on the roads” and a car being sold must be reasonably fit for such purpose. However, if the buyer wishes to use the goods for an unusual or peculiar purpose, this must be indicated to the seller.		Furthermore, the courts have held that the seller need not know the specific purpose for which the buyer wishes to use the goods; knowledge of a broad purpose is sufficient. For example, in [https://www.canlii.org/en/bc/bcpc/doc/2006/2006bcpc265/2006bcpc265.html?autocompleteStr=Sugiyama%20v%20Pilsen&autocompletePos=1 ''Sugiyama v Pilsen'', 2006 BCPC 265] at para 71, the court held that s 18(a) provides a warranty that a car is “a reliable vehicle for use in driving in safety on the roads” and a car being sold must be reasonably fit for such purpose. However, if the buyer wishes to use the goods for an unusual or peculiar purpose, this must be indicated to the seller.

	The “Patent and Trade Name Exception” is of little effect since the courts have interpreted it narrowly. The issue remains one of reliance, and the trade names exception will apply only where the buyer’s use of the patent or trade name indicates a lack of reliance upon the seller. In other words, the exception only applies where a consumer decides to purchase goods solely because of the trade name of a product. See [https://www.canlii.org/en/bc/bcca/doc/2002/2002bcca78/2002bcca78.html#par38 ''Wharton v Tom Harris Chevrolet Oldsmobile Cadillac Ltd'', 2002 BCCA 78] at paras 38-39.		The “Patent and Trade Name Exception” is of little effect since the courts have interpreted it narrowly. The issue remains one of reliance, and the trade names exception will apply only where the buyer’s use of the patent or trade name indicates a lack of reliance upon the seller. In other words, the exception only applies where a consumer decides to purchase goods solely because of the trade name of a product. See ''[https://www.canlii.org/en/bc/bcca/doc/2002/2002bcca78/2002bcca78.html#par38 Wharton v Tom Harris Chevrolet Oldsmobile Cadillac Ltd]'', 2002 BCCA 78 at paras 38-39.

	==== e) Implied Condition of Merchantable Quality: s 18(b) ====		==== e) Implied Condition of Merchantable Quality: s 18(b) ====

LSLAP: /* 2. Contract of Sale */

2025-09-28T22:49:53Z

2. Contract of Sale

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	=== 2. Contract of Sale ===		=== 2. Contract of Sale ===

	According to s 6(1), the ''SGA'' applies only where the purchaser agrees to buy goods with money as consideration. Hence gifts, barters, or exchanges are not subject to the ''SGA''’s implied conditions and warranties. However, a court may avoid this result by finding two separate contracts rather than a barter, as long as the consideration (which is the value being exchanged in the contract, whether money or goods) has its value measured in monetary terms: see ''[Messenger v Green]'', [1937] 2 DLR 26 (NSSC). Thus, if a total price is attached, there will be a sale, even if payment is in goods rather than money.		According to s 6(1), the ''SGA'' applies only where the purchaser agrees to buy goods with money as consideration. Hence gifts, barters, or exchanges are not subject to the ''SGA''’s implied conditions and warranties. However, a court may avoid this result by finding two separate contracts rather than a barter, as long as the consideration (which is the value being exchanged in the contract, whether money or goods) has its value measured in monetary terms: see ''Messenger v Green'', [1937] 2 DLR 26 (NSSC). Thus, if a total price is attached, there will be a sale, even if payment is in goods rather than money.

	According to s 6(3) of the ''SGA'', a contract of sale may be absolute or conditional. If the contract is subject to some condition to be fulfilled later, it is called an agreement to sell.		According to s 6(3) of the ''SGA'', a contract of sale may be absolute or conditional. If the contract is subject to some condition to be fulfilled later, it is called an agreement to sell.

LSLAP: /* 2. Contract of Sale */

2025-09-28T22:49:34Z

2. Contract of Sale

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	=== 2. Contract of Sale ===		=== 2. Contract of Sale ===

	According to s 6(1), the ''SGA'' applies only where the purchaser agrees to buy goods with money as consideration. Hence gifts, barters, or exchanges are not subject to the ''SGA''’s implied conditions and warranties. However, a court may avoid this result by finding two separate contracts rather than a barter, as long as the consideration (which is the value being exchanged in the contract, whether money or goods) has its value measured in monetary terms: see ~~<u>~~''Messenger v Green'', [1937] 2 DLR 26 (NSSC)~~</u>~~. Thus, if a total price is attached, there will be a sale, even if payment is in goods rather than money.		According to s 6(1), the ''SGA'' applies only where the purchaser agrees to buy goods with money as consideration. Hence gifts, barters, or exchanges are not subject to the ''SGA''’s implied conditions and warranties. However, a court may avoid this result by finding two separate contracts rather than a barter, as long as the consideration (which is the value being exchanged in the contract, whether money or goods) has its value measured in monetary terms: see ''[Messenger v Green]'', [1937] 2 DLR 26 (NSSC). Thus, if a total price is attached, there will be a sale, even if payment is in goods rather than money.

	According to s 6(3) of the ''SGA'', a contract of sale may be absolute or conditional. If the contract is subject to some condition to be fulfilled later, it is called an agreement to sell.		According to s 6(3) of the ''SGA'', a contract of sale may be absolute or conditional. If the contract is subject to some condition to be fulfilled later, it is called an agreement to sell.

LSLAP: /* A. Identifying and Classifying the Terms of a Contract */

2025-09-28T22:48:39Z

A. Identifying and Classifying the Terms of a Contract

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	Whether a statement is a term, representation, or puff affects the remedy available to the consumer: damages (see [[{{PAGENAME}}#D. Remedies for Breach of Contract \| D. Remedies for Breach of Contract]] below), rescission (under a claim of misrepresentation; see [[Consumer Protection from Deceptive and Unconscionable Acts (11:IV)\|11:IV G. False or Misleading Advertising]]), or no remedy, respectively. For this Chapter, we are concerned with terms of a contract.		Whether a statement is a term, representation, or puff affects the remedy available to the consumer: damages (see [[{{PAGENAME}}#D. Remedies for Breach of Contract \| D. Remedies for Breach of Contract]] below), rescission (under a claim of misrepresentation; see [[Consumer Protection from Deceptive and Unconscionable Acts (11:IV)\|11:IV G. False or Misleading Advertising]]), or no remedy, respectively. For this Chapter, we are concerned with terms of a contract.

	If a statement is a term of the contract, it can be a condition, warranty, or innominate term. A well-drafted contract will characterize particular terms as conditions or warranties, though the wording used in the contract will not always be determinative (''[https://www.bailii.org/uk/cases/UKHL/1973/2.html L Schuler AG v Wickman Machine Tool Sales Ltd]'', [1973] UKHL 2, [1974] AC 235). The three types of terms are as follows ([https://www.bailii.org/ew/cases/EWCA/Civ/1961/7.html ''Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd'', [1962<nowiki>]</nowiki> 2 QB 26, [1962<nowiki>]</nowiki> 1 All ER 474] at para 49):		If a statement is a term of the contract, it can be a condition, warranty, or innominate term. A well-drafted contract will characterize particular terms as conditions or warranties, though the wording used in the contract will not always be determinative (''[https://www.bailii.org/uk/cases/UKHL/1973/2.html L Schuler AG v Wickman Machine Tool Sales Ltd]'', [1973] UKHL 2, [1974] AC 235). The three types of terms are as follows (''[https://www.bailii.org/ew/cases/EWCA/Civ/1961/7.html Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd]'', [1962<nowiki>]</nowiki> 2 QB 26, [1962<nowiki>]</nowiki> 1 All ER 474 at para 49):

	=== 1. Condition ===		=== 1. Condition ===

LSLAP: /* 6. Rules as to Transfer of Title and Risk */

2025-09-21T23:36:22Z

6. Rules as to Transfer of Title and Risk

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	The timing of transfer of title affects the consumer’s legal rights in ways including, but not limited to, the following:		The timing of transfer of title affects the consumer’s legal rights in ways including, but not limited to, the following:
	*If property was supposed to pass to the consumer by a specified time, but the seller does not deliver by that time, then this is a breach of contract. See [[{{PAGENAME}}#A. Identifying and Classifying the Terms of a Contract \| A. Identifying and Classifying the Terms of a Contract]] to determine whether this is a breach of condition or breach of warranty, which determines the remedies available to the buyer;		*If property was supposed to pass to the consumer by a specified time, but the seller does not deliver by that time, then this is a breach of contract. See [[{{PAGENAME}}#A. Identifying and Classifying the Terms of a Contract \| A. Identifying and Classifying the Terms of a Contract]] to determine whether this is a breach of condition or breach of warranty, which determines the remedies available to the buyer;
	*• Whichever party has property of the goods is presumptively the person who is responsible for the goods if something happens to the goods. See ''Kovacs v Holtom'', [1997] AJ 775 for an example where a convertible was destroyed while being restored at the defendants’ garage shop, and the defendant was liable to the consumer for damages as title (and thus risk) did not yet pass to the consumer under rule #2 (s 23(3)); and		*Whichever party has property of the goods is presumptively the person who is responsible for the goods if something happens to the goods. See ''Kovacs v Holtom'', [1997] AJ 775 for an example where a convertible was destroyed while being restored at the defendants’ garage shop, and the defendant was liable to the consumer for damages as title (and thus risk) did not yet pass to the consumer under rule #2 (s 23(3)); and
	*Whether the seller or the buyer has title to the goods may affect third party claims to the property (e.g. a creditor who has a security interest in the goods).		*Whether the seller or the buyer has title to the goods may affect third party claims to the property (e.g. a creditor who has a security interest in the goods).

LSLAP: /* (5) Implied Condition of Reasonable Durability */

2025-09-09T18:22:16Z

(5) Implied Condition of Reasonable Durability

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	===== (5) Implied Condition of Reasonable Durability =====		===== (5) Implied Condition of Reasonable Durability =====
	The goods must be durable for a reasonable period of time with regard to their normal use (s 18(c)).		The goods must be durable for a reasonable period of time with regard to their normal use (s 18(c)).

			A used vehicle that suffers a major breakdown shortly after purchase may be found not to have been reasonably fit for its purpose (s 18(a)), not of merchantable quality (s 18(b)), or not durable for a reasonable period of time (s 18(c)). See ''[https://canlii.ca/t/k9m9z#par42 Reddy v. Insurance Corporation of British Columbia]'', 2025 BCSC 280 at para 42. For example, in the case of ''[https://canlii.ca/t/hzxzz Sosa v. Reg Midgley Motors Ltd]'', 2019 BCCRT 487, the CRT granted the cost of repairs when a serious transmission issue arose just a few days after the sale. The decision was made because the car did not demonstrate durability for a reasonable period. Similarly, in the case of ''[https://canlii.ca/t/j060h Scoretz et al v KOLENBERG MOTERS LTD]'', 2019 BCCRT 549, the CRT ruled in favour of compensating the Claimant for engine repair expenses, as the engine failed within two months of the purchase. However, note that it must still be demonstrated that the defect was present in the vehicle as sold; in Reddy, the court ruled against a plaintiff whose car suffered a major fire shortly after purchase as they were unable to demonstrate the fire was caused by a defect present at sale.

			Where the buyer seeks recovery of the full purchase price based on the implied conditions under section 18, they should be cautioned that continued use of the goods in question seriously weakens the argument that the goods are not fit for a particular purpose or are not of merchantable quality; for example, see ''[https://canlii.ca/t/kbfsx Camara v Tri City Mitsubishi]'', 2025 BCPC 50 at paras 66-74.

	==== f) Implied Conditions in Sales by Sample: s 19 ====		==== f) Implied Conditions in Sales by Sample: s 19 ====