Gupta & Company v. Ecta (Kenya) Limited Civ. App. 3-A-69; Platt J.

Gupta & Company v. Ecta (Kenya) Limited Civ. App. 3-A-69; Platt J.

The appellant bought from respondent a truck manufactured by a German firm (M.A.N.) and fitted with Continental tyres. The tyres were found defective and were returned to the respondent. The respondent sued for the balance of the price of the truck and tyres. The trial magistrate found that Continental tyres had guaranteed their products to M.A.N.; that M. A. M’s rights against Continental tyres had been transferred to the respondent and that the respondent had transferred its rights to the appellant. It was also found that respondent had orally agreed to help the appellant were the tyres to be defective and had negotiated a 60% set off on a new tyre with Achelis the dealers in Continental tyres in East Africa. On appeal it was argued that (a) whether the assignment of guarantee on tyres from ‘Continentals’ to M.A.N. to ECTA (respondents) to Gupta & Co. (appellants) in seriatim could be valid without assignees’ knowledge of assignment and consent to the terms thereof and (b) what were the terms of the Oral contract between the appellant and respondent with respect to tyres.

            Held: (1) On the question of assignment – “It was stated by Gupta that the had never seen booklet put out by M. A. N. declaring what booklet did state clearly that M. A. N. would only guarantee parts of the truck manufactured by them not parts sub- supplied. (The sub-supplier Continental tyres by a contract guaranteed M.A.N. the tyres they supplied) … the contract was between Gupta (and Company) and Buck (representing ECTA) M. A. N. and Continental tyres had nothing to do with their contract. Achelis had not been spoken of. Privity of contract existed between the parties of this suit, and Gupta had not agreed to an assignment of ECTA’s rights against Acheli’s if any.” (2) There was no assignment, as the appellants did not in fact know the terms of the guarantees between Continental tyres and M.A.N. and had not agreed to an assignment. (3) The fact that respondent tried to help the appellant by negotiating a 60% reduction on the purchase of a new set of tyres does not prove an agreement for the assignment of respondent’s uncertain rights to the appellant. To assign a chose in action which is not definable, there must be clear evidence of such an agreement. The events were consistent with a conclusion that appellant was looking to respondent for some sort of satisfaction on the tyres being found defective. (4) On the question of tems of oral contract between the parties “It was an oral sale of specific goods of a trade name. Gupta had expressed misgivings of he tyres as being suitable for is purpose and Mr. Buck does not dispute that. Gupta really wanted Michelin tyres. He evidence was – ‘They told me not to worry about the tyres and that I will not get any trouble about them and that if I got trouble they will exchange them. On this assurance I agreed to keep the tyres on.’ …. The evidence as to the terms of the contract was disputed and the findings of fact somewhat of a compromise without much meaning”. (5) The exchange of the defective tyres on the basis of a 60% discount on the price of a new set of tyres was made without a view to further compensation for breach of agreement. The appellants could not now sue for breach of agreement after having relied on the exchange which was a reasonable offer in particular since the appellant “did not get it clear that he would expect compensation for his case say under s, 16 of the Sale of goods Ordinance.” (6) Appeal dismissed.

Editor’s Note: The case has been decided on the privity of contract, the court, it seems, was not invited to address itself on the issue of the tortuous liability of the manufacturer and his agent in East Africa.