JUDGMENT

Peh Swee Chin SCJ:

The appeal raises the question of the limits or scope of the statutory presumption under s. 183(a) of our Contracts Act 1950 (hereinafter the Act) which for convenience is set out below:

Section 183. In the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them.

Such a contract shall be presumed to exist in the following cases:

(a) where the contract is made by an agent for the sale or purchase of good for a merchant resident abroad; (b) ...................................................................... (c) ......................................................................

Both parties are locally-incorporated companies. The plaintiff has allegedly purchased certain machines from the defendant for the purpose of making plastic bottles. When the machines arrived from abroad, viz. Switzerland, the plaintiff complained that they were not fit for the purpose for which they were bought and were further defective or were not of merchantable quality. The plaintiff sued the defendant.

By its statement of claim as amended, the plaintiff ha