The main issue brought forth in Gee v White Spot Ltd1 was- if a meal bought from a restaurant form a ‘contract of sale’ and if so, would the meal itself fall under the definition of ‘goods’ under the Sale of Goods Act, RSBC 1970, c 370 s 1.
Restaurants are presumed to be in the service industry, but essentially, the contract is formed to consume a meal-a finished product on a menu offered for a fixed price. Thus, modern-day restaurants were distinguished, not a 'contract for service'; "innkeeper rule" was rejected.
Under the Sale of Goods Act, RSBC 1970, c 370 s 18 a or 18b, liability for damages could be imposed if the implied terms are unfulfilled. These provisions are reflected in the Ontario Sale of Goods Act, RSO 1990, c S.1 under s 15(1)- fit for the particular purpose-in this case consumption or s 15(2)- is merchantable.
In cases of food poisoning, usually, the route taken is for negligence under Torts. But this case shows that it is also possible to establish a breach of contract under the Sale of Goods Act if the complainant (must be the buyer, not the end-user of the product) can prove the following:
1. They purchased and consumed the meal that the defendant's restaurant sold;
2. Injuries were suffered arising from poisoning, and the source of the poisoning is the meal consumed;
3. The defendant's course of business is to supply the public with the type of food included in the meal.
Section 15 of the Sale of Goods Act imposes strict liability. It stipulates that there is an implied warranty for the quality and fitness of the product purchased. These provisions apply to contracts of sale between a buyer and a seller.
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