Contract law confirms that a buyer is bound by terms signed in a contract, even without reading them, and acceptance of goods indicates conformity with the contract description based on Section 15 of the Sale of Goods Act.

Low Hop Bing JCA:

Appeal

[1] Parties are referred to in their capacities in the High Court.

[2] The plaintiff's appeal is against:

(1) the dismissal of its claim for damages; and

(2) the granting of the defendant's counterclaim for RM31,338.41 as at 29 February 2000.

The Facts

[3] The trial has led to the following finding of facts by the learned judge.

[4] On 28 May 1996, the plaintiff and the defendant entered into an agreement for the sale and purchase of a used machine, an "Ingersoll-Rand CM351 Crawler Drill c/w VL140 Drifter Serial No. V93415" ("the machine") at RM130,000, subject to the terms and conditions contained in the purchase order No. BW 3755 signed and accepted by the plaintiff which, at the bottom left thereof, states "we have read and agreed to the Sales Conditions stated overleaf".

[5] In line with the defendant's industry practice, the defendant had through its employees conducted checks on all machines (new or used) including the machine so as to ensure that they corresponded with the description that was contracted for. Sam Siew Kooi, defendant's service manager (DW1) had personally inspected the machine and verified, by using the visual/finger test, that the drifter was a VL140 Drifter bearing serial number V93415 before it was delivered to the plaintiff. Yong Kin Hooi, defendant's inventory supervisor (DW4) had supervised the loading of the machine onto the lorry and confirmed that the serial number was V93415, as found on a plate and stamped/engraved on the body of the main frame.

[6] The machine was confirmed to be fitted with a VL140 drifter prior to delivery to the plaintiff. According to contemporaneous documents contained in the pre-delivery inspection Check List (Crawler Drill), the machine was the only second-hand machine for sale by the defendant.

[7] In 1996, the machine, which was manufactured in 1989, was approximately seven years old. It has a useful service life of 10-12 years, if well maintained.

[8] The machine was delivered to the plaintiff's representative, one Heng Wee Piao, at the plaintiff's Jambul Indah site (also known as the "IJM site") on 15 July 1996 when it was tested and started-up. Plaintiff's director Heng Wooi Hin (PW1), who holds a B.Sc Degree in Engineering, was also present at the time of delivery. He knew which part of the machine was called the drifter. He was aware that the defendant sold drifters of various sizes and had been given a photocopied manual for reference purposes. PW1 admitted that the plaintiff had used crawler drills before, as the plaintiff has been in the rock-blasting business for the past 26 years.

[9] The machine was used by the plaintiff for a period of 22 months from 15 July 1996 to May 1998, at the IJM site and then at another place known as the PPH site. No written complaint was ever issued by the plaintiff to the defendant within the agreed six-month warranty period.

[10] The email dated 24 April 1998 and the letter dated 7 May 1998 relied upon by the plaintiff were not sent to the defendant, but to another legal entity in USA, which responded as follows:

... I am certain there has been no intention to misrepresent the machine as some other model. The Ingersoll-Rand Rock Drill Division in Roanoke, Virginia is not involved in the sale of reconditioned units.

[11] PW1 was fully aware that he was purchasing a second-hand machine, and the drifter was the "workhorse" of the machine.

[12] On 14 July 1997, the plaintiff bought a new machine Ingersoll-Rand Crawlair Drill with a VL 140 drifter from the defendant for RM215,000. This new machine was shipped to the PPH site in August 1997.

[13] In 1996, the cost of a new machine fitted with a VL140 drifter was RM218,000. A new VL140 drifter by itself would cost RM68,000 only.

[14] On 8 April 1998, the machine was repaired due to drifter piston failure which could have resulted from various factors eg. lack of lubrication, side-rods not tightened or aligned properly, or someone unscrewing/tamperin