Legal Issues

Sales of Goods Act
Under the sales of goods act, Coast Hotel has the right to refuse the usage of Royal Doulton’s product upon delivery, due to miss-description of the product. The goods were purchased by description and sample, what was delivered did not match the description, and the sales of good act implies conditions into the contract that permit the purchaser to refuse delivery. Sale of description not only covers situations where one item is being purchased from a catalogue or an advertisement but it also applies to mass produced items. Since all items will be the same during mass production, you rely heavily on the description of the product when you are making the purchase and the good must match the description or pictures you are given.

Breach of Contracts
One of the legal issues that arose from this case is whether or not a contract has been established. The dispute in this regard is that Royal Doulton does not agree that there was a single contract that was created between them and Coast Hotels. There were no commitments as to price or quantity. There was no obligation of Coast Hotels to purchase exclusively from Royal Doulton. Royal Doulton arguments were that there was a lack of consideration; therefore, there is no contract between the two parties. Instead, Royal Doulton states that this is a standing offer to sell the product at the offered discount. The lack of a contractual agreement means that there is no case for breach of contract.

However, once an order is issued against the Standing Offer Agreement, it becomes a buyer/seller contract and the rules under the Sales of Goods Act apply. Therefore, Coast Hotel attempted to sue for damages under Breach of Implied Condition. The implied condition in this case is that the goods ordered will correspond with the description. Royal Doulton’s failure to deliver goods matching the required description means Coast Hotels is entitled to damages. However, because Coast Hotels didn’t notice the change in the product, they accepted the goods. Under breach of contracts, a change in product gives Coast Hotels the right to reject the goods. The fact that they didn’t exercise their right to reject the goods means they can only sure under Breach of