sale of goods
- 1. SALE OF GOODS (Sale of Goods Act 1957) Contract of Sale S4(1) – transfer of ownership/property in goods - money consideration (price) i) left to be fix by 3rd party ii) determine by the course of dealings iii) buyer pays reasonable price S4(2) – contract of sale – absolute/conditional (3) – sale – property in the goods transferred - agreement to sell – property in the goods transferred at future time. (4) – sale – time elapses/condition fulfill & ppty transferred *Agreement to sell – breach by buyer- seller may sue damages - breach by seller – buyer “ “ “ *Sale – breach by buyer – seller may sue for price.
- 2. Goods S2 – every kind of movable property (include stock, share exclude claim in action) existing goods – owned/possessed by seller either specific/unascertained goods. i)Specific goods – identified & agreed upon ii)Unascertained goods – x identified x agreed iii)Ascertained gds – identified & appropriated Future goods – goods to be manufactured /produced (involving agreement to sell) Formation Of Contract (x formalities) - offer to buy/sell - Price - acceptance May provide fol:- 1) Immediate delivery and price 2) Installment 3) Future date
- 3. *If no provision – delivery & payment concurrent Terms of Contract Condition: essential to ctt, if breach parties may repudiate Warranty: collateral to ctt, if breach, can claim damages only 1) Implied term as to time S11 – time of payment is x essence of contract. - with regards other terms, depends on contract. Whether time essence of contract, depends on intention of parties & circumstances of case. Bunge Corp. v Tradax Export SA – time of delivery essence 2) Implied term as to title S14(a) sale – has a right to sell goods. Agreement to sell – will have a right to sell goods. Butterworth v Kingsway Motors Ltd – vehicle on h/p 3) Implied warranty as to quiet possession S14(b) x only when title defective but also subsequent future disturbance of possession of goods.
- 4. Microbeads v Vinhurst Road Markings – 3rd party granted paten 4) Implied warranty that the gds are free from encumbrance S14(3)1 – free from any charge/encumbrances in favour of any 3rd party not declared. Steike v Edward – government levy tax on vehicle 5) Implied condition goods correspond with description S15 – sale of goods by description, shall correspond - sale of goods by sample as well as by description, both requirement must be fulfill. applies to -unascertained/future goods. -specific goods. Situation buyer rely on description; 1) buyer has x seen the goods, rely on catalogue(description) Varley v Whipp – 2nd hand self-binder reaping machine. 2) Goods have been seen (display of goods). Sold x merely as the specific thing but as a thing corresponding. 3) Goods selected & examined. Must correspond with
- 5. Circumstances of Failure to Correspond to description; i) Small discrepancy Arcos Ltd v EA Ronaasen & Sons- thickness of starves does x tele with order. Moore & Co. and Landaurer& Co – packaging does x tele ii) Goods described in more general sense, must exist considerable discrepancy. Varley v Whipp – very old machine 6) Implied condition as to Fitness for particular purpose. Caveat emptor applies. S16(1) – x implied warranty/condition as to the quality/fitness for any particular purpose. Exceptions: S16(1)(a) i)buyer must make known either expressly/impliedly. ii) buyer relies on seller’s skill/judgment. iii) Gds are of description which it is in the course of the seller’s bus to supply. iv) If the gds are specific, must not be
- 6. bought under their patent/trade name. ) Disclosure Of Purpose a) If only one purpose, no further indication (implied). b) X purpose indicated, ordered for normal purpose. c) Special purpose, should be clearly indicated, x breach if suitable for any purpose reasonably foreseeable. Griffiths v Peter Conway – with unusually sensitive skin *x need to be absolutely fit, only as reasonably fit. i) Reliance Reasonable inference from the circumstances of the case. Cammell Laird & Co v Manganese Bronze – propeller iii) Goods of description Sold by Seller The gds are of a kind that the seller business supply. Ashington Piggeries v Christopher Hill-feeding compound iv) Patent/Trade Name Buyer ask for specific gds under a patent/trade name & he gave an impression that he is x relying on the seller’s skill. Baldry v Marshall – asked for car suitable for touring.
- 7. 7) Implied Condition as to Merchantable Quality S16(1)(b) -If gds are bought by description from a seller who deals in goods of that description, implied condition, goods shall be of merchantable quality. Exception:- if examine, than x implied condition. *Different fr S16(1)(a) x need to inform seller the particular purpose. Requirement 1) bought by description. 2) bought from a seller who deals in goods of that description. Merchantable Quality Fit for the particular use to which they were sold. ) For only one purpose – unmerchantable if were of x use for that purpose. Several purpose – merchantable if fit for any one of these purpose. ii) Gds sold under patent/trade name – covered. Wilson v Ricket, Cockerall & Co.-fuel ‘Coalite’ contaminated.
- 8. Examination of goods & Latent defect Thornett & Fehr v Beers & Sons.- conducted a superficial look at the outside of some barrels of glue. *Fitness for a particular purpose & merchantable quality; custom, usage of trade i) reasonable ii) universally accepted iii) certain & x unlawful. 8) Sale by sample S17(1) there must be a term in the contract express/implied. Implied Condition; i) bulk shall correspond with the sample in quality. ii) reasonable opportunity to compare. iii) free from any defect rendering un- merchantable upon reasonable examination. Godley v Perry – process of reasonable examination “commonsense standards of everyday life” – catapult broke *S62- Exclusion Of The Implied Terms. Can be excluded by express agreement, by previous dealings/ usage.
- 9. Transfer of Title S27: Nemo Dat Quod Non Habet rule. To protect the right of ownership. Lim Chui Lai v Zeno Ltd; construction of culvert. Exceptions:- 1) Estoppel; owner by conduct precluded from denying the seller’s authority to sell. N.Z. Securities & Finance Ltd v Wrightcars Ltd; sell to 3rd party car before full payment. However 3rd party did query. Apparent/ostensible(presume) agent applies. 2) Sale by a Mercantile Agent; acting w/t scope of auth. In the customary course of bus such as broker, auctioneer, dealer of goods for commission. Requirement must fulfill; i) must be in possession of goods. ii) possession with consent of owner. iii) disposition acting in the ordinary course of business. iv) buyer acted in good faith. 3) Sale by Joint-owners; However 2 conditions must be met;
- 10. i) 1 of them have sole possession with permission. ii) Buyer acts in gd faith & x knowledge of the lack of auth. 4) Sale under Voidable contract; contract caused by coercion, fraud misrepresentation and undue influence. Seller may pass a good title to a bona fide purchaser if the contract has not been rescinded by true owner. 5) Sale by a Seller in Possession after Sale; seller has parted with title but remains in possession/document of title can pass good title to a bona fide buyer. 6) Sale by a buyer in Possession; buyer who bought goods/ agreed to buy goods, obtains possession/doc of title with consent of seller can pass a good title to an innocent 3rd party. Newtons of Wembley Ltd v Williams; a rogue bought car using worthless cheque & than sold the car to an innocent party at a market where dealers commonly sold cars.
- 11. Remedies of The Seller Rights of Seller Against Buyer a) Failure of buyer to take delivery. - Buyer liable for any loss occasioned by his neglect/refusal. - Liable for a reasonable charge for care & custody of gds. b) Failure of buyer to accept gds. - S55; where ppty have passed, may sue for price. - S56; w/t have passed/x, entitled to damages. c) Failure of buyer to pay for goods. 1) may sue for price; - S55(1); ppty in gds have passed, buyer neglects/ refuse to pay acc to ctt. - S55(2); ‘price is payable on a day certain irrespective of delivery’ & buyer neglects/refuse to pay. Applies w/t ppty has passed/x/ not appropriated. 2) S56 sue for damages. Rights Of Unpaid Seller Agst Gds. Considered as unpaid Seller if;
- 12. a) Whole of the price has x been paid/tendered. b) B.O.E/othr negotiable instruments received as conditional payment h/e not fulfilled b’cos dishonour/otherwise. Rights of the Unpaid Seller as in S46(1); 1) Right of a Lien. In possession of goods even when property has passed. Rights in the followings; a) Goods sold without stipulation as to credit. b) Sold on credit but term of credit has expired. c) Buyer becomes insolvent. Part delivered, exercise right on remainder but not on the part which have been paid. Loses right on lien; a) Delivers goods to carrier/bailee for transmission to buyer. b) Buyer/his agent lawfully obtains possession of goods. c) Seller waives his right (agreeing to a sub-sale by buyer)
- 13. 2) Right of stoppage in transit. a) Stopping the goods and resume possession as long as it is in the course of transit. b) Buyer become insolvent while the goods is in transit/ control of a carrier. c) Purpose; give priority over the general creditors. H/e if buyer not insolvent, must deliver goods & pays indemnity. d) Duration of transit from the time when delivered until buyer or his agent takes delivery. e) Transit ends; i) buyer/agent takes delivery from carrier/bailee. ii) “ “ obtains “ before their arrival. iii) After arrival, carrier/bailee acknowledges to buyer that he holds goods on his behalf. Immaterial if instructed to continue journey. iv) Carrier/bailee refuses to deliver goods. If buyer reject goods, transit does not end. v) If part delivered, stop remainder unless shows o/t/w.
- 14. e) Procedure; i) taking actual possession. ii) give notice of his claim to carrier/bailee. iii) Carrier/bailee duty to redeliver. H/e carrier lien for unpaid freight has priority. iv) Resell and recover damages for any loss. 3) Right of Seller to resell. Power of resale (transfer good title to 2nd buyer) under fol; a) Property has not passed to original buyer. b) Seller is in possession of gds. c) Exercising right of lien/stoppage in transit. Right of resale a) Goods are of perishable nature. b) Exercising lien/stoppage in transit gives notice to buyer intention to resell. c) In original contract, seller expressly reserved a right of resale if buyer default. Profit seller keep, loss claim buyer.
- 15. • Even if buyer sell/dispose, the right of lien/stoppage in transit continues except under fol circumstances; i) Unpaid seller assented to the sub-sale. ii)Doc of title issued/lawfully transferred to buyer. Remedies of The Buyer. 1) Damages for non-delivery of gds. a) Normally different between market price & contract price if there is available market. b) No available market, follow Hadley v Baxendale, loss of profit if foreseeable. c) Price have been prepaid, recover price + damages + int. 2) Specific performance. Only if it is a contract to deliver specific/ascertained gds. 3) Action in tort. Ppty has pass to buyer, wrongful interference, conversion. 4) Breach of Warranty & Condition Gds do not measure up to the implied description/standard. 5) Consumer Tribunal under Consumer Protection Act 1999