JUDGMENT

Lai Kew Chai J

The plaintiffs as buyers of some 314 metric tons of peanut kernels under a contract concluded just before Christmas 1980 are claiming the return of the purchase price of the goods together with the cost of insurance, landing charges, legal fees, survey charges and interest thereon. They claim the sum of US$535,244.08 or, alternatively, damages, interest and costs.

It is common ground that by two contracts in writing contained in telexes dated December 19 and 22, 1980 and entered into between the plaintiffs and the defendants, which were in all material respects reproduced in the defendants' form of contract, the defendants agreed to sell to the plaintiffs a maximum of 314 metric tons of peanut kernels of 60/70 pieces per ounce TBS (i.e. Thai Brown Skin) to be packed in new jute bags at the price of US$1,447 per metric ton C & F Auckland, New Zealand. It was further agreed that the peanut kernels shall be from the "1980 Thailand Crop." It is also common ground that payment was to be effected by a confirmed irrevocable letter of credit available if the draft and bill of lading were accompanied by (a) a Singapore Government issued Aflatoxin Free Certificate; (b) a Certificate of Crop 1980; and (c) a Certificate that the goods were packed in sound clean new bags not previously used for any purpose.

By paragraph 3 of the Re-re-amended Statement of Claim the plaintiffs aver that the sale of the goods was by description, namely "1980 Thailand Crop." Accordingly, the plaintiffs say that it was an implied condition or, alternatively, the defendants had warranted that the goods would correspond with the said description and would be merchantable under the said description.

Further the plaintiffs say that they had agreed to buy the goods from the defendants who sold the goods in the course of their (defendants') business and that, therefore, it was an implied term of the said contract that the goods should be of merchantable quality.

By paragraph 5 of the Statement of Claim the plaintiffs make the further and alternative averment that the sales were sales by samples which the defendants had supplied prior to the conclusion of the contract and on the basis of which the contract was concluded. The plaintiffs therefore say that it was an implied term of the contract that the bulk of the goods should correspond with the said samples, which were in fact supplied by the defendants, and that the goods should be free from any defect rendering the same unmerchantable and which would not be apparent on reasonable examination of the said samples. Finally, it is claimed that the plaintiffs as buyers should have a reasonable opportunity of comparing the bulk with the samples.

The defendants deny that the peanut kernels they had shipped were unmerchantable. They deny that they were not in accordance with description or sample and put the plaintiffs to strict proof of these allegations. By paragraph 7 of their defence, they say that the contract was a "C & F" contract and, accordingly, the risk and property in the goods passed to plaintiffs upon shipment. The defendants further aver that if the goods had deteriorated or were otherwise unmerchantable, which they deny, the deterioration or unmerchantability was in fact caused by the neglect of the plaintiffs. In response to a request for further and better particulars of the allegations of such neglect, the defendants filed the particulars in these terms:

"The said goods when shipped were merchantable and ought to have been merchantable upon arrival at destination. If when examined, the said goods had deteriorated or were otherwise unmerchantable, which is denied, then such deterioration or unmerchantability was occasioned either by some cause unknown to the defendant or by inference by the neglect or act of the plaintiffs."

In the event, in January and February 1981 the defendants shipped in 18 containers three consignments of peanut kernels to the order of plaintiffs. The plaintiffs had