Question

Discuss the Remedies of the seller and the buyer in no more than two pages.

Both the seller and the buyer have fundamental obligations to fulfill under the contract for the sale of
goods, but where the other party fails to go our his obligations or he breaches his part of the contract,
the innocent party becomes entitled to remedies available to him under the law as compensation for
breach of the contract. In Ghanaian context, these remedies can be found under part V and part VI of
the Sale of Goods Act,1962 (Act 137). This essay seeks to discuss the Remedies of the seller and the
buyer under the Sales of Goods Act, 1962 (Act 137).

Part V of the Sale of Goods Act, 1962 (Act 137) deals with the Remedies of the seller. The seller has both
real rights and personal rights under Part V. The real rights of the seller is akind of security for payment
of the price of the goods he supplied. These rights are only available to the seller if he has not been paid
for the goods he delivered to the buyer. Section 34 of Act 137 defines who an unpaid seller is. It states
that an unpaid seller is one whose price of the goods has not been paid or tendered, who has received a
bill of exchange or other negotiable instrument as conditional payment and the condition on which it
has been received has not been fulfilled by reason of dishonour of the instrument or otherwise. 1
Subsection (2) also states that a seller in this context under section 34 is anyone who is in the position of
the seller for example, where the seller sells the goods to the agent and the agent himself has paid the
price to the seller, or made himself liable to pay, then the agent is entitled to exercise any of the rights
as an unpaid seller.2

Section 35 of Act 137 talks about the rights of the unpaid seller. It provides that whether or not the
property in the goods have passed to the buyer, the unpaid seller has the right of lien on the goods,
which only applies when the goods are in the possession of the seller, a right of stoppage in transit of
the goods before possession of the goods by the buyer where the buyer becomes insolvent, and a right
of resale of the goods. Where the goods are in the buyer's possession but property has not passed to
the buyer, the seller also has the right to recover possession of the goods. In relation to unascertained
goods, the law does not derogate from the powers of an unpaid seller where the contract is for the sale
of unascertained goods and the goods have not been appropriated to the contract. 3 Section 36 to 45 of
Act 137 further explains each of the rights stated above.

Personal rights of the seller is what the seller leans on the event of a breach of the buyer's fundamental
obligations. These come in two folds: (1) an action for price and (2) action for damages for the non-
acceptance of the goods by the buyer.

Under Section 46 of Act 137, the seller can sue for an action of price where the buyer wrongfully refuses
or neglects to pay for the goods according to the terms of the contract. Subsection (2) also provides that
when the price or part of it is to be paid on 'day certain' but the buyer wrongfully refuses or neglects to
pay when the time is due, the seller can maintain an action for the price or the part which is due. Where,
under a contract for the sale of goods, the seller delivers part only of the goods and the buyer accepts or
is bound to accept that part, the seller may maintain an action against the buyer for proportionate part
of the price without prejudice to a counterclaim by the buyer for damages in accordance with section 53

1
Sale of Goods Act, 1962 (Act 137), S.34(1)

2
Akapame & Ahlijah ' Commercial Law in Ghana ' Sourcebook ( Icon Publishing Ltd, 2021)

3
Ibid
of this Act. This provision does not apply any contract to which Part I of the Contract Act,1960 ( Act 25)
applies.4

Under Section 47(1), the seller can maintain an action for damages for non-acceptance where the buyer
wrongfully neglects or refuses to accept and pay for the goods according to the terms of the contract. In
a contract for sale of goods to be delivered by the installment if each installment is to be separately paid
for subsection (1) shall apply to each installment separately: Provided that where the buyer has by his
words or conduct shown an intention to repudiated the contract the seller may, if he accepts the
repudiation, maintain an action for damages for non-acceptance in respect of all the goods. 5 The
measure of damages is the loss which could reasonably have been foreseen by the buyer at the time the
contract was made as likely to arise from his breach of contract, but where there is n available market
for the goods, the measure of damages is pima facie to be ascertained by the difference between the
contract price and the market or current price.6

Part VI contains the Remedies for which a buyer has under the law. The main remedy for the buyer in
the event of a breach of contract of sale of goods is the rejection of the goods. In some instances, he can
repudiated the contract when there is a breach of a condition in the contract for sale of goods. Section
49(1) states that the buyer has the right to reject, refuse to pay or even recover the price if paid where
the seller breaches his fundamental obligations, breaches a condition in the contract or by reason of
false or innocent misrepresentation of the seller, entered into the contract of sale for the goods. It is
further provided in section 49(2) that where there is a contract for the sale of goods which are to be
delivered by instalments, then if each instalment is to be separately paid for, the provision in subsection
(1) shall apply to each instalment separately and provided that where there are persistent and grave
breaches by the seller in respect of two or more instalments the buyer may treat the whole contract as
repudiated.

When the goods have been delivered to the buyer but he rejects them, he is not under obligation to
return the good to the seller. It is sufficient if he intimates the seller of his rejection of the goods. After
the buyer has intimated to the seller of his rejection of the goods, the seller can have possession of the
goods. Where the buyer has already paid for the goods, he may keep them until the seller refunds him,
his money. Section 51 provides that the buyer cannot reject the goods once he accepts them but where
he accepts part of the goods he can still reject other parts provided that the contract is severable.

Just like the seller, the buyer also has personal rights or remedies against the seller.

Where the seller wrongfully neglects or refuses to deliver the goods to the buyer or the buyer rightfully
rejects the goods, he can claim damages for the breach of non-delivery against the seller (Section 53). In
assessing the damages for non-delivery, the Sale of Goods Act the loss which could reasonably have
been foreseen by the seller at the time the contract was made.7

4
Section 46(3) of Act 137

5
See section 47(2)of Act 137

6
See section 48 of Act 137
Section 54 states:

In the event of breach of fundamental obligations or of a condition or warranty by the seller, the buyer "
may maintain an action against the seller for the damages for the breach complained of or may set up a
claim to the damages in diminution or extinction of the price." This is stipulated in section 55 of Act 137.
In the assessment of damages in section 55, It is stated in section 56 that the measure of damages is the
loss which could have been reasonably foreseen by the seller at the time the contract was made as likely
to result from the breach of contract.

When it comes to forfeiture of sums paid by the buyer, section 57 stipulates as follows:

With regards to specific performance, section 58 provides as follows:

In conclusion, Part V and Part VI under Act 137 provides for the Remedies of both the seller and the
buyer in the event of a breach of the contract on either part of the parties. Some of the Remedies of the
seller includes the right of lien of the goods, the right of stoppage of goods in transits, the right of resale,
the right to recover possession of goods, the right to maintain an action for price and damages for non-
acceptance. Some of the Remedies of the buyer includes rejection of goods, repudiation of the contract,
damages for non-delivery, damages for breach of condition or warranty and specific performance.

7
Akapame & Ahlijah ' Commercial Law in Ghana' Sourcebook ( Icon Publishing Ltd. 2021) first edition p.105