Professional Documents
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SALE OF GOODS
S.2 SOGA 1957: "--.every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale Morgan V Russel Sale of minerals still attached to land not SOG
SALE OF GOODS
LAND
EXCLUDES
ACTIONABLE CLAIMS
MONEY
SALE OF GOODS
S.4(1) SOGA 1957: "A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price
INGREDIENTS OF SOG
SALE OF GOODS
S.2 SOGA 1961: Buyer: Person who agrees to buy goods Seller: Person who agrees to sell goods
SALE OF GOODS
FOR CONSIDERATION SALE: WHEN OWERNSHIP TRANSFERS
OBJECTIVE
SALE OF GOODS
S.4(3) SOGA 1961: An agreement to sell is a contract under which the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled.
SALE OF GOODS
S.4(4) SOGA 1961: An agreement to sell becomes a sale when {he time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.
SALE OF GOODS
INCLUDES :
FIXTURES ONLY IF UNATTACHED TO LAND SUBSEQUENTLY UNDER THE SALE THINGS LEFT ON LAND AND FORMS PART OF LAND (Mills V Stockman: Heap of slate left on land for many years) MONEY EXCLUDING COMMEMORATIVE COINS (Moss V Hancock)
SEVERED FROM THE LAND (Amco Enterprise Pty Ltd V Wade: recovery of gravel, sand and
EXCLUDES:
CATEGORY OF GOODS
EXISTING SPECIFIC UNASCERTAINED ASCERTAINED FUTURE
Already owned/ possessed Can be specific, ascertained or unascertained Identified and agreed upon at the time of creation of contract
Not identified or agreed at time of sale Unascertained goods which have been identieif Appropriated to contract after contract is made To be manufactured or produced after contract is made
TRANSFER OF OWNERSHIP
Ownership or property in goods : legal title/rights over the goods Can be owner even if not in possession Can be in physial possession/control but not owner Only owner entitled to sell / transfer title
PRICE
S.2 SOGA 1961: Money consideration for a sale of goods. MUST BE EXCHANGE FOR GOODS WITH MONEY EXCLUDES BARTER
PRICE
BY CONTRACT
REASONABLE PRICE
BY COURSE OF DEALING
FORMATION
FORMALITIES
TIME OF PAYMENT
TERMS: CONDITION OR WARRANTY? TRANSFER OF TITLE
FORMATION
TIME OF PAYMENT S.11: NOT OF ESSENCE UNLESS PROVIDED IN CONTRACT TERMS CONDITIONS & WARRANTIES DEPENDS ON CONSTRUCTION CAN BE EXPRESS OR IMPLIED (S.14 17) TRANSFER OF TITLE S.27: NO TITLE = NO TRANSFER = NO SALE NEMO DAT QUOD NON HABET
CONDITIONS
S.12(2) SOGA 1961: "a stipulation essential to the main purpose of the contract, the breach of which gives rise to right to treat the contract as repudiated ESSENTIAL TERM OF CONTRACT BREACH: NON-DEFAULTING PARTY CAN REPUDIATE
WARRANTIES
S.12(3) SOGA 1961: "a stipulation collateral to the main purpose of the contract, the breach of which gives rise to right to a claim for damages but not a right to reject the goods and treat the contract as repudiated
WARRANTIES
A LESS VITAL TERM, BREACH OF WHICH PARTY CAN CLAIM FOR DAMAGES WHERE:
BUYER WAIVES OR TREATS CONDITION AS WARRANTY OR BREACH THEREOF (S.13(1)
CONTRACT UNSEVERABLE & GOODS ACCEPTED IN TOTO OR IN PART (S.13(2) & s.42 (RE ACCEPTANCE) CONTRACT FOR SPECIFIC GOODS AND PROPERTY TRANSFERRED TO BUYER (S.13(2))
Buyer informs acceptance Goods delivered & buyer acts against ownership of seller Keeps going without rejection after expiry of time
IMPLIED TERMS
GOODS TO CORRESPOND WITH DESCRIPTION
TITLE - S.14(a)
CONDITION AS TO TITLE
S.14(a) implied condition of the seller of his right to sell or he will have the right to sell i.e. right of title or ownership Rationale: to pass or obtain good title breach of condition = seller can repudiate (terminate & recover money even if goods already used) ROWLAND V DIVALL purchase of stolen car : breach of implied condition BUTTERWORTH V KINGSWAY MOTORS LTD sale/purchase of hire purchase car
QUIET POSSESSION
S.14(b) "unless a different intention is shown, there is an implied warranty that the buyer shall have and enjoy quiet possession on the goods Includes situations of defective title & subsequent disturbance of possession Gives assurance against wrongful interference then and in the future Breach: entitled to damages but not repudiation Microbeads A.G. V Vinhurst Road Markings Ltd (patentee claim for breach of patent of road markings)
ENCUMBERANCES FREE
S.14(c): "an implied warranty that the goods shall be free from any charge or encumberances in favour of any third party not declarecl or known to the buyer before or at the time when the contract is made Seller must declare encumberance Breach: damages not repudiation Steinke V Edwards (car with undisclosed outstanding tax liabilities sold)
SALE BY SAMPLE
S.15 SOGA 1961: " Where there is a contract for the sale of goods by description there is an implied condition that the goods shall correspond with the description, and, if the sale is by sample as well as by description, it is not sufficient that the bulk of the goods correspond with the sample if the goods do not also correspond with the description
SALE BY SAMPLE
Goods must correspond with description or sample Absolute obligation i.e. doesnt matter if defect is insignificant GENERAL RULE: Applies where goods not yet seen and description relied on by the buyer e.g. sale by catalogue Nagurdas Purshotumdan & Co V Mitsui Russan Kaisha Ltd (flour sold not the same as previous contract)
SALE BY SAMPLE
In certain cases, general rule covers situation where buyer HAS seen the goods but defects hidden, concealed or undisclosed Associated Metal Smelters Ltd V Tham Cheow Toh (furnace ordered did not meet the purchasers requirements of 2600 F) In a sale by sample AND description, bulk of goods must correspond with the same If not buyer can reject goods and rescind contract
Arcos Ltd V EA Ronaasen & Sons only 15% of items corresponded with description. Even though fit for purpose, buyer can reject and rescind Moore & Co V Landauer & Co ( packaging of goods did not correspond with contractual description buyer can reject and rescind)
Varley V Whipp (new the previous year was not new but old second hand buyer can reject and rescind) Beale V Taylor description of car substantially different. Car was made of parts of 2 cars put together!.
EXCEPTIONS:
NOT BOUGHT UNDER PATENT OR TRADE NAME Patent or licence implies reliance on brand and not on the seller Even if patented or licensed but still relied on seller, then implied condition applies. Baldry V Marshall bugatti car sold but not fit for purpose of touring
BREACH
Breach of implied condition Applies even if sold under patent or trade name Wilson V Ricket, Cockernell & Co
EXCEPTIONS
Inspection or examination by buyer ought to reveal defects If undiscoverable exception not applicable Wren V Holt beer laced with arsenic undiscoverable Thornett & Fehr V Beers & Sons: superficial examination of the external barrels of glue is insufficient
PRIVITY OF CONTRACT
Donoghue V Stevenson snail in ginger beer
TRANSFER OF TITLE
GENERAL RULE: NEMO DAT QUOD NON HABET
ONE CANNOT GIVE WHAT HE DOES NOT HAVE
LIM CHU LAIN V ZENO LTD : CONTRACTOR SOLD GOODS BELONGING TO SUPPLIER TO A 3RD PARTY
COMMERCIAL & SAVINGS BANK OF SOMALIA V JOO SENG COMPANY : RICE SOLD AT 50% WITHOUT CONSENT OF OWNER
ESTOPPEL
ESTOPPEL
Owner estopped from denying the sellers authority if: (a) Representation of ownership by conduct (b) Representation of authority to sell (c) Buyer acts in reliance of the representation S.27: unless the owner of the goods is by conduct precluded from denying his sellers authority to sell = estoppel N Z Securities V Wrightcars Ltd only deposit paid for car. Before cheque for balance purchase priced was cleared, original owner confirmed the sale. The cheque bounced and no ownership passed to second seller.
S.27 SOGA 1961: where mercantile agent is, with the consent of the owner, in possession of the goods or of a document of title to the goods, any sale made by him when acting in the ordinary course of business of a mercantile agent shall be valid as if e were expressly authorized by the owner of the goods to make the same; provided that the buyer acts in good faith and has not at the time of the contract of sale notice that the seller has no authority to sell
REMEDIES
BREACH BY BUYER
RIGHT OF LIEN
Unpaid seller as seller, agent or bailee in possession of goods is entitled to retain Retention until payment or tender of the price s. 46 (1)(a) Exists even where property in the goods has passed to the buyer but delivery has not been made These rights arise in situations listed in section 47 (1): a) where the goods have been sold without any stipulation as to credit b) where the goods have been sold on credit but the term of credit has expired c) where the buyer becomes insolvent lien can be in part or in whole unless lien waived S.48 S.49(1), the unpaid seller loses his lien a) when he delivers the goods to a carrier or other bailee in order that the goods be transmitted to the buyer without reserving the right of disposal of the goods b) the buyer or his agent lawfully obtains possession of the goods c) when the seller waives his lien
STOPPAGE IN TRANSIT
Seller may resume possession of the goods as long as they are in the course of transit may retain them until payment This right exists only when : i. the buyer becomes insolvent ii. the goods are in control of a carrier (in transit) S.2: insolvent when he "has ceased to pay his debts in the ordinary course of business or cannot pay his debts as they become due, whether he has committed an act of bankruptcy or not' S. 51: duration of transit - from the time when they are delivered to a carrier or other to deliver to the buyer, until delivery taken by them. goods can still be stationary but treated as being in transit so long as they are still in the possession of the carrier