REGAL TOUCH LTD v. YASAKI INTERNATIONAL CO LTD

REGAL TOUCH LTD v. YASAKI INTERNATIONAL CO LTD

The court held that the parties validly agreed to rewash the jackets to a shade whiter than the approved stone‑wash sample but the majority of jackets had patchy blue staining making them not uniformly whiter and therefore unmerchantable — buyer entitled to reject; the second instalment ice‑blue jeans contained multiple distinct shades (at least 26%) inconsistent with the contractual colour swatch making those ice‑blue jeans unmerchantable and rejectable, but the contract as to stone‑washed jeans was severable so the non‑defective stone‑washed jeans had to be accepted and plaintiff awarded their contract price.

Citation
REGAL TOUCH LTD v. YASAKI INTERNATIONAL CO LTD
Parties
Plaintiff / Manufacturer: Regal Touch Ltd.; Defendant / Buyer / Wholesaler: Yasaki International Co. Ltd.
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
28 December 1987
Case Number
HCA7264/1986
Procedural Posture
Contract — Sale of Goods / Trial and Judgment (consolidated Actions; Judgment Delivered 28 Dec 1987)
Outcome
Judgment split: defendant entitled to reject boa‑lined jackets and ice‑blue jeans and awarded damages; plaintiff entitled to recover contract price for non‑defective stone washed jeans.
Legal Topics
Merchantable Quality, Sale by Sample, Contract Variation, Severability of Goods, Rejection and Acceptance, Loss of Profits, Measure of Damages
Source Language
EN
Contract Sale of Goods Commercial Law Merchantable Quality Sale by Sample Contract Variation Severability of Goods Rejection and Acceptance +2 more

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Parties

Regal Touch Ltd.

Plaintiff / Manufacturer

Yasaki International Co. Ltd.

Defendant / Buyer / Wholesaler

Procedural Posture

Contract — Sale of Goods / Trial and Judgment (consolidated Actions; Judgment Delivered 28 Dec 1987)

Legal Issues

  1. 1 Whether boa‑lined jackets and second instalment (ice blue) jeans were manufactured with defects
  2. 2 Whether the defects rendered the garments unmerchantable entitling buyer to reject
  3. 3 Whether the jeans contract was severable between ice blue and stone washed jeans

Ratio Decidendi

The court held that the parties validly agreed to rewash the jackets to a shade whiter than the approved stone‑wash sample but the majority of jackets had patchy blue staining making them not uniformly whiter and therefore unmerchantable — buyer entitled to reject; the second instalment ice‑blue jeans contained multiple distinct shades (at least 26%) inconsistent with the contractual colour swatch making those ice‑blue jeans unmerchantable and rejectable, but the contract as to stone‑washed jeans was severable so the non‑defective stone‑washed jeans had to be accepted and plaintiff awarded their contract price.

Court Disposition

Judgment split: defendant entitled to reject boa‑lined jackets and ice‑blue jeans and awarded damages; plaintiff entitled to recover contract price for non‑defective stone washed jeans.

Orders

  • Judgment for defendant in respect of jackets counterclaim: $56,603.32 (loss of profit on jackets $52,433.00; jacket storage charges $4,170.32).
  • Judgment for defendant in respect of ice blue jeans: loss of profit $27,000.00 (900 pairs at $30 each).