THE RES PERIT DOMINO RULE AND THE POLICIES GOVERNING RULES

ON DELIVERY OF GOODS. BASIC VIEW ON THE FUNDAMENTALS THAT

GOVERN SALES OF GOODS LAW.

RES PERIT DOMINO RULE

INTRODUCTION

The literal meaning of the rule is that ‘the thing is lost to the owner’. This phrase is used
to express that when a thing is lost or destroyed it is lost to the person who was the owner of it
at the time.

For example, goods are sold by the seller of which he has perfected the title and the goods be
destroyed then the buyer is to bear the loss. On the other hand if something remains to be
done to those goods before title becomes vested in the buyer then the loss is on the seller. It
follows then that, when a person is bound to bear the accidental loss of or the damage to the
goods, they are said to be at his risk.

The legal meaning of the rule is ’when non-performance is due to the seller, the
resolution of the dispute due to the parties lies in contractual liability whereas non-
performance is not due to an act or fact of the seller, the theory of the risk rule considers that
the buyer still has duty to pay the price and nothing can be held against the seller.’ For
example, where person A imports a portrait from B but it sunk with the ship, the buyer will still
have to pay the price of the seller even though he hasn’t yet seen the portrait.

TRANSFER OF RES.

The general rule is that, risk follows property. Property is the quantity of interest or
rights that a person has over goods. In Sales of Goods, property belongs to the seller and is
passed to the buyer in the course of sale. Risk often falls on the owner of the goods. In section
3(1) property is transferred when the seller transfers the goods to the buyer or agrees to
transfer property to the buyer in accordance to what was agreed in the contract.

It is important to note that the right of possession is different from the right of property. The
right of possession may be in one and the right of property with another.

Transfer of risk(res) is provided for in section 22 , “ Unless otherwise agreed, the goods
remain at the seller’s risk until the property in them is transferred to the buyer, but when the
property in them is transferred to the buyer, the goods are at the buyers risk whether delivery
has been made or not. Provided that, where delivery has been delayed through the fault of
either buyer or seller, the goods are at the risk of the party at fault as regards any loss which
might not have occurred but by that fault.” This rule applies irrespective of who is in possession
of the goods.

This section generally provides for circumstances where the risk is beared by the seller and
where risk is beared by the buyer and exception to the rule where the bearer of the risk is
considered. Property can pass before delivery of the goods to the buyer or after. The risk is
burdened on the party who may not be insured against loss because they did not realize the
precise time at which he would be at risk. Also, according to this section, contractual terms
override the general prima facie rule.

There is no requirement for giving notice that property has passed to the buyer. Parties have
contractual freedom to determine when property and risk pass. In these circumstances the
court establishes the intention of the parties. To determine the intention of the parties, “regard
shall be had to the terms of the contract, the conduct of the parties and the circumstances of
the case.”

ALLOCATION OF RES.

Risk may be shifted wholly or partly by the fault of either party. The res perit domino rule is
subject to some conditions. Allocation of risk is provided for by both statute and common law.

When the court purposes to determine who bears risk, the court will;

a) Ask whether the contract has been made in consideration of the fundamental principles
governing contract. That is that the both parties voluntarily came into contract, that there is
agreement, there is a subject matter, there is a consideration.

b) Consider the terms and intentions of contracting parties in accordance to section 18, 19
and 20.

c) Goods in Transit

Goods in transit may be damaged or deteriorate and it will be important to obtain who bears
the risk of this loss/ damage. Rules are subject to any overriding contractual provision that is
terms of the contract.

d) Then where there is no provision included in the term of the contract, the court will
then assume that law will prevail. A few cases as stated include;

A) Where there is delay

In accordance to section 22(1) , “Where delivery has been delayed through the fault of either
buyer or seller the goods are at the risk of the party at fault as regards any loss which might not
have occurred but for that fault;” If the delivery is delayed, then the risk is passes to the
person/ party at fault. If he is disabled from recovering the price and at the same time is
exposed to an action for damages for non-delivery because he is at fault, he cannot claim that
the contract is frustrated.

In the case of Denby vs. Hamilton and Co. Ltd vs. Barden [1949], the buyer was late in taking
delivery of apple juice. The property had not passed because the seller had not appropriated
the juice to the buyer’s contract which could not be done until the buyer gave notice of the
delivery details to the seller. The buyer delayed in giving these instructions. The juice had gone
off by the time the juice had been collected. The buyer was held liable the risk had not passed.
The buyer was to bear loss. Here, the ‘res perit domino applies’ despite the property not having
passed. Seller J, while leaving aside the question on whom the burden falls the burden of
proving a delay caused, did not cause the loss, did assert that the innocent party was to behave
reasonably and avoid the loss if possible raising the difficulty that if such innocent person did
not behave reasonably in averting the loss at the casual link will be broken between the original
default and the loss.

B) Where one party acts as Bailee

In the situation where one party acts as the bailee, he bears risk for any loss or damage of the
goods due to lack of reasonable care. As a bailee, he has duty to take reasonable care of the
goods, compliance to the terms of bailment, bears the burden of prolonged he failed to take
reasonable care. The principles of vicarious also apply. Further, passing of risk of the property
does not affect the rights and liabilities of the bailee or custodian. Where property and risk has
passed to the buyer but the seller remains in possession of the goods for example in
circumstances where the seller is to deliver the goods, the seller is under a duty qua bailee. The
converse is also true where goods are supplied under retention of title cases. The buyer would
be under the duty of a bailee over where the risk has passed to him.

C) In Conditional sales in Hire Purchase

Where the title is retained by the owner until the goods are paid for the risk is always passed to
the debtor/ hirer at the beginning of the contract along the obligation often to insure the
goods.

D) Ascertained or specific goods

For ascertained goods, common law rules may apply and the contract is deemed frustrated at
common law. According to section 18 of the Sales of Goods Act, Cap 31, Laws of Kenya risk is
passed once unascertained goods are ascertained.

E) Where is Implied Intention?

In the case of Sterns vs. Vickers ltd [1923] , the seller sold 120,000 gallons of spirit owned by
him to the buyer. The spirit was in a storage tank under the control of a third party, a bailee.
The buyer was given a delivery order which was to be handed to the bailee. The buyer gave the
delivery order to the bailee. The buyer delayed and did not collect the spirit for several months
by which time the spirit had deteriorated. No property in the goods could pass to the buyer
until the spirit had been drawn from the bulk. (Section 19 in our Sales of Goods Act, Cap 31
Laws of Kenya, provides that no property may pass unless and until the goods are ascertained
and that the risk which passes with the property must be with the seller.) The Court of Appeal
found that the risk passed to the buyer when the buyer handed over the delivery order to the
bailee. The bailee had atoned and acknowledged that he now held the goods on behalf of the
buyer. The bailee held the spirit on behalf of both the seller and the buyer after receiving the
delivery order in proportion to their interest 80,000/120,000. Risk was therefore passed before
the property in this case on the basis of implied intention.

Further the House of Lords approved the principle in Comptoir D’Achat et de Vente du
Boerenbond Belge SA vs. Luis de Ridder Hinitada [1949] “The Julia” Lord Porter expressed the
view, “ It is difficult to see how a parcel is at the buyer’s risk when he has neither property nor
possession except in such cases as Ingis vs. Stock and Stern vs. Vickers where the buyer had an
interest in an individual part of the bulk parcel on board a ship or elsewhere obtained by
attornment of the bailee to him.

F) When dealing with quasi-ascertained or quasi-specific goods

For this circumstance, Section 18 of the Sales of Goods Act, Cap 31, Laws of Kenya provides,
“Where there is a contract for the sale of unascertained goods, no property in the goods is
transferred to the buyer unless and until the goods are ascertained. Property in specific or
ascertained goods passes when intended to pass.” In the case for quasi-ascertained goods, the
rules of res perit domino apply, because so long as the goods are in the seller’s control, then he
is responsible for them.

G) Wholly unascertained goods

In wholly unascertained goods, where the seller is unable to tender delivery because the stock
from which he intended to meet the order is destroyed or his anticipated source of supply
otherwise becomes unavailable, and then in the absence of fault be the buyer causing delay in
delivery, the loss will fall on the seller. The risk passes with the property and the property does
not pass until the goods have become ascertained by an unconditional appropriation in
accordance with the contract.

Ascertained goods are identified or agreed upon by the parties when the contract of sale is
made. Any other good is an unascertained good. In the sale of such unascertained goods, the
risk is passed when the goods become ascertained.

H) Future goods

Future goods are to be acquired or manufactured by the seller after the contract of sale has
been made. This is to mean that ownership does not change hand immediately so are the risk
there in. The risk will be on the buyer once delivery of the future goods is done.

Both common law and statutory law provide generally for situations where risk is specifically of
the seller or of the buyer. The purpose of this is to do away with redundancy. Risk may be of
the seller when the following circumstances.

a) In Free on board contracts

In free on board contracts, the risk remains to the seller until goods cross the ship’s rail. As seen
in the case of Colley vs. Overseas Exporters; it was held that property in goods does not pass to
the buyer until the goods cross the ship’s rail.

The seller should give notice to the buyer of the shipment so as to enable the buyer to insure
the goods. If the seller fails to do so, goods will be at his risk, if any loss or damage is to occur. If
he does so, the risk will now be in the hands of the buyer.

If therefore the seller is prevented from putting the board by failing to let the buyer to
nominate an effective ship, that is a ship able to carry the goods, the proper action of the seller
is an action for damages for non-acceptance and not an action for price.

b) In ex-ship contracts

In the case of Tangtze Insurance Association vs. Lukmanjee, it was held that the goods are at
the risk of the seller during the voyage and there is no obligation on the seller to affect an
insurance on the buyer’s behalf.

Generally, the seller has a duty to deliver the goods to the buyer. He holds the risk of the goods
until when property is transferred to the buyer. This is as stated in Section 22 of the Sales of
Goods Act . If the risk is with the seller, he will be unable to deliver the goods as ordered and
therefore will be liable in damages for non-delivery. Section 51(1) provides, “Where the seller
wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may maintain an
action against the seller for damages for non-delivery.”

c) Seller’s duty to deliver to a specific point.

If the contract requires that the seller to deliver the goods to a specific place, the delivery will
only be effected where the seller delivers to a place for him. The seller will, in the case where
risk is passes on delivery, bear the risk until the goods are so delivered.

d) Where there is contractual that the seller bears risk

Where the seller of goods agreed to deliver them at his own risk at the place other than where
they are sold, the buyer must nevertheless(unless otherwise agreed) take any risk of
deterioration in the goods necessarily incident to the course of transit. However, this is not
always the case, where goods which cannot stand vigorous ordinary transport are likely to be
held to be uncharitable.

Risk is placed on the buyer in the following circumstances;

a) Destruction or Deterioration of the Goods after the Contract has been made

It follows from the res perit rule and provision from section 28 , that where there is a contract
to sell specific goods and subsequently without any fault on either part, the goods perish after
the property has passed to the buyer, the buyer, in the absence of an agreement to the
contrary, must bear the loss and is liable on the contract notwithstanding that the goods have
perished.

b) In Retention of Title Cases

Section 22(1) provides that, “Where there is a contract for the sale of specific goods, or where
goods are subsequently appropriated to the contract, the seller may, by the terms of the
contract or appropriation, reserve the right of disposal of the goods until certain conditions are
fulfilled; and in that case, notwithstanding the delivery of the goods to a buyer, or to a carrier
or other bailee or custodier for the purpose of transmission to the buyer, the properly in the
goods does not pass to the buyer until the conditions imposed by the seller are fulfilled.” The
risk is invariably expressed to have passed to the buyer despite the fact that a title and
ownership retained in retention of title cases.

a) In a cost, insurance and freight contract.

During the voyage, the goods are at the risk of the buyer for whom the seller has insured the
goods in respect of the risk. However, if the goods are lost from a peril not covered by the
ordinary policy of insurances, the buyer must nevertheless pass the full price on delivery of the
documents. In the case of Groom Ltd. vs. Barber (1915), the defendant sold to the plaintiff 100
bales of clothes on CIF terms. He shipped the goods insuring them under a policy which did not
cover war risks as was customary. The ship was later sunk by a German warship. It was held
that the buyer was bound to pass the price on tender of the shipping documents,
notwithstanding that the policy did not cover the risk by which the goods were lost.

Statutory rules provide that, once the buyer has both legal possession and property of the
goods that are subject of a sale agreement, he is wholly responsible for them and bears the risk
of deterioration, damage or destruction. If the risk falls on the buyer, he cannot take the risk of
damage or loss, take delivery of the goods and pay for them.

If the property in the goods has passed (as will most often be the case, if the risk has passed),
the seller will be able to bring action against the buyer for the price when the buyer fails to pay
for the goods. This principle is evident in the case of Dennant vs. Skinner and Collom (1948) ,
Justice Roche J notes that the seller, who, while not having property, remains in possession of
the goods, has right against the buyer who fails to pay. Section 49(1) in the Kenyan Sales of
Goods Act provides that, “Where, under a contract of sale, the property in the goods has
passed to the buyer, and the buyer wrongfully neglects or refuses to pay for the goods
according to the terms of the contract, the seller may maintain an action against him for the
price of the goods.”

b) Where delivery is through a carrier

Where in pursuance to a cause, the seller is authorized and required to send the goods to the
buyer. Delivery of the goods to a carrier( whether named by the buyer or not) for the purposes
of transmission to the buyer is prima facie deemed to be delivery of the goods to the buyer. If
this section applies, in the absence of contrary provision, the carrier is the buyer’s agent and
the goods are at the buyer’s risk while in transit.

The idea is to precisely establish the delivery point. In a job contract while the buyer will bear
the risk once the goods are shipped, the goods will be at the seller’s risk until the goods are
shipped.
Exemptions on the rules of res perit domino rule.

The following principles act as exemptions to res perit domino rule;

A) Where loss is caused by the fault of one party.

In this case the party that is at fault bears risk regardless of whether he has property or not. As
is in the case of Debby Hamilton & Co. Ltd. vs. Barden (1949)

Where neither the seller nor the buyer is at fault

Statutory law under section 8 provides, “Where there is a contract for the sale of specific goods,
and the goods without the knowledge of the seller have perished at the time when the contract
is made, the contract is void.” If specific or ascertained are lost or damaged without fault on the
part of the seller, as provided for in the section then, in an instance where there is a contract
and the goods, unknown to the seller, have perished before the contract is made, then the
contract is void.”

‘Perish’ is not defined in the statute, but it is apprehended that the goods would have
‘perished’ not only if they were physically destroyed, but also if they had ceased to exist in a
commercial sense, that is if their merchantable character, as such had been lost, as dates
contaminated with sewage, and therefore unsalable as dates or cement which had lost through
moisture, its properties as such or a ship which is a mere congeries of carrying timber.

Further Section 9 provides, “Where there is an agreement to sell specific goods, and
subsequently the goods, without any fault on the part of the seller or buyer, perish before the
risk passes to the buyer, the agreement is thereby avoided.” Where the goods perish before
passage of the risk to the buyer, without default of either party, then the contract can be
avoided.

B) Goods considered fungible.

Fungible means returnable or negotiable in kind or by substitution. For instance, a quantity of

grain for an equal amount of the same kind of grain. It is the property of a goods or a
commodity whose individual units are capable of mutual substitution. For Example, crude oil
and wheat.

Fungibility has nothing to do with the ability to exchange one commodity for another different
one therefore it refers only to the ease of exchanging one unit of a commodity with another
unit of the same commodity. It is different form liquidity. A good liquid if it can be easily
exchanged for money or another different good. A good is fungible if one unit of the good is
substantially equivalent to another until the same goods of the same quantity at the same time
and place.

C) The parties decide otherwise and organize by contract, step by step, the moment ownership
Is transferred, the moment the risks arising out of such ownership are transferred. In this
instance then the risk will pass when the parties then agree on it. As is in the case of Head vs.
Tattersall (1871) .

D) Bailment

The person who takes the duty of bailee or custodian of the goods, he attaches risk to himself.
Sales of Goods generally provides that risk is attached to property but this is not so because
whoever, takes responsibility of the goods necessarily not having the property, is the
responsible for any loss.

FRUSTRATION

This doctrine is said to be merely an aspect of the general rule as to risk, but it is not entirely
true. The doctrine of frustration arises in sales of goods contract just like other contracts. A
contract, for example, may be deemed to have been frustrated in instances where there is
illegality or impossibility caused by some unforeseen circumstance.

If an executor contract is frustrated neither party is under liability to the other. On the
other hand, if the goods are at the seller’s risk and they perish or deteriorate, although the
buyer is not liable to the seller for the price, it by no means follows that the seller is not liable
to the buyer for non-delivery, if the buyer can prove that he suffered loss thereon.

Where there is an agreement to sell specific goods, and subsequently the goods without
any fault on the part of the seller or buyer, perish before the risk passes to the buyer, the
agreement is thereby avoided.

The doctrine of risk however, simply comes into lay down that prima facie if the goods
perish before the property passes, the seller must bear the loss and cannot claim the price.
Again the doctrine of frustration is undermined in situations where either party agrees to bear
risk for any loss or damage caused.

RULES ON DELIVERY OF GOODS

INTRODUCTION

According to section 2(1) Delivery of goods is the physical “voluntary transfer of possession
from one person to another.” It does not necessarily mean transportation. This is the duty of
the seller to deliver the goods and the buyer to accept and pay for them.

Payment and delivery are concurrent conditions unless otherwise agreed. For Example if the
sale is on credit.

IMPORTANCE OF DELIVERY

Delivery is important because it affect the rights and duties of the parties in the contract of
Sales of Goods. For example, in Section 33(1) , Where, in pursuance of a contract of sale, the
seller is authorized or required to send the goods to the buyer, delivery of the goods to the
carrier, whether named by the buyer or not, for the purpose of transmission to the buyer is
prima facie deemed to be a delivery of the goods to the buyer.” As far as regards to transfer of
risk, the rules of delivery protect the interest of the Seller. The seller’s simple obligation is to
ensure that delivery is in accordance to contractual terms as well as to the terms accorded by
law. To this rule, delivery of the goods to the carrier, by the seller, is similar to direct delivery of
goods to the buyer. The buyer bears risk thereafter.

The rules of delivery protect the interest of both the seller and the buyer in the sense both are
equally liable for wrong delivery and both interest are protected in that the court ensures that
the damaged party is remedied.

MODES OF DELIVERY

Delivery may be in the following ways:

a) Physical or actual delivery.

Actual delivery is where there is a transfer of physical possession by the seller to the buyer or
his agent.

c) Constructive delivery

In this kind of delivery there is neither change of physical possession of goods, nor delivery of a
symbol, but there is only an acknowledgment by the person in possession that he holds them
on behalf of another. This type of delivery may be affected in the following ways;

d) Transfer of a Document or Title

Where the seller holds a document of title to the goods, the transfer of document to the buyer
gives legal control and thus is considered giving control.

e) Delivery of Object Giving Control or Symbolic delivery.

In this case, delivery is made by delivering some symbol that carries with it the real possession
or control over the goods, e.g., delivery of a railway receipt properly endorsed, or delivery of
the key of a warehouse to the warehouse where goods are stored.

f) Attornment.

This means the lawful acknowledgement that goods which he previously held for himself or
other are now held for the buyer. It mostly is related to identify goods. For Examples;

Where the buyer who is already in possession of goods as bailee of the seller, holds them as his
own, after the sale;

g) Buyer in continuous possession as the bailee.

Where the seller, who is in possession of goods, holds them as bailee of the buyer after the
sale; and

h) Buyer’s Continuance of possession in his Own Right.

Where goods were already in the hands of the buyer in his capacity as bailee, then he is entitled
to possession. He begins to hold them in his own right as the owner of the goods.

Delivery to Carrier

Section 33(1) states, “Where, in pursuance of a contract of sale, the seller is authorized or
required to send the goods to the buyer, delivery of the goods to the carrier, whether named
by the buyer or not, for the purpose of transmission to the buyer is prima facie deemed to be a
delivery of the goods to the buyer.” Where a third person, like a carrier or a warehouseman,
who holds the goods as bailee for the seller agrees and acknowledges holding them for the
buyer it will be deemed that delivery has been to the buyer.

Delivery of one of a Collection of Articles in the Name of the whole is a transfer of the whole.

Delivery of one of a collection of articles in the name of the whole is transfer of the whole.
Lord Blackburn, Kemp vs. Falk (1882). It has to be an intention of the contract.

RULES ON DELIVERY OF GOODS

Conditions of delivery are either expressed or implied in the contract. Section 30 provides for
the rules that govern proper delivery of goods. The rules of delivery are as follows;

a) Place of Delivery

Except where there is a provision in the contract, it is provided in section 30(1) the place of
delivery is the seller’s place of business or if not specified, it is the seller’s residence. Unless the
contract is for specific goods, which the knowledge of the parties is in some other place, in
which the other place is the place of delivery. The importance is that it affects the degree of
movement of the goods for which the seller is responsible.

In the case of Fermer vs. Buffalo Railroad Company Furniture, belonging to Fermer, was
delivered to the railroad company, directed to Fermer, at Dunkirk, New York. The furniture
arrived at Dunkirk during the afternoon of May 24th, and was unloaded and placed in a suitable
freight house of the company. During the latter part of the same afternoon, Austin, a teamster,
who was authorized by Fermer to obtain the furniture applied for it. The agent was busy, and it
was becoming late, so it was agreed that Austin should return for the furniture upon the
following day. During that night, without negligence on the part of the company, a fire
occurred, destroying the goods. This was an action by Fermer for the loss.

The railroad contended that its liability as common carrier had ceased when the goods were
stored; that it was then liable only as a warehouseman, and under an obligation to exercise due
care only, and since it was not shown that it failed to exercise due care, it should not be held for
the loss.

Justice Earle gave the decision and said, “From the drift of decisions in this state, I think we may
fairly infer the following rules as to delivery of goods at their place of destination by railroad
carrier; if the consignee is present upon the arrival of the goods, he must take them without
unreasonable delay. If he be not present, but lives at in the immediate vicinity of the place of
delivery, the carrier must notify him of the arrival of the goods, he must take them without
unreasonable delay. If he be not present, but lives at or in the immediate vicinity of the place of
delivery, the carrier must notify him of arrival of the goods, and then he has a reasonable time
to take and remove them. If he is absent, unknown or cannot be found, then the carrier can
place the goods in the freight house, and after keeping them a reasonable time, if the
consignee does not call for them, its liability as a carrier ceases. If after the arrival of the goods,
to=he consignee has a reasonable opportunity to remove them, and does not, he cannot hold
the carrier as an insurer.”

Under the circumstances of this case, the court was of the opinion that transit was at an end.
Consequently, judgment was given for the company, since no negligence on the part of the
company was shown.
This ruling is known as Michigan Rule. This case provides for the rules of delivery particularly on
place and time.

b) In section 30 (3) , “Where the goods at the time of sale are in the possession of a third
person, there is no delivery by seller to buyer unless and until the third person acknowledges to
the buyer that he holds the goods on his behalf. Provided that nothing in this section shall
affect the operation of the issue or transfer of any document of title to goods.” If the goods are
in possession of a third party there is no delivery until the third party acknowledges to the
buyer that he holds the goods on his behalf.

c) Time of Delivery

Time is indeed prima facie of the essence, with respect to delivery; however there is nothing to
stop the buyer waiving the condition. If he does so, the waiver will be binding on him whether
made with or without consideration. The buyer, after having waived the delivery date, is
entitled to give the seller reasonable notice that he will not accept delivery after a certain date.
In the case of Charles Rickards, Ltd vs. Oppenhaim [1950], the plaintiffs agreed to supply a Rolls
Royce Chassis for the defendants, to be ready at the latest on 20th March, 1948. It was not
ready on this day, but the defendant continued to press for delivery, thereby implied waiving
the condition as to the delivery date. By 29th June, the defendant had lost patience, and he
wrote to the plaintiffs informing them that he would not accept delivery after 25th July.

In fact the chassis was not ready until 18th October and the defendant refused to accept it.

The Court of Appeal held that the defendant was entitled to reject the chassis as he had given
the plaintiffs reasonable notice that delivery must be made by a certain date.

Section 30(2)of the Sales of Goods Act of Kenya states, “Where under the contract of sale the
seller is bound to send the goods to the buyer, but no lime for sending them is fixed, the seller
is bound to send them within a reasonable time.” The aim of this provision is that the seller
must deliver the goods in accordance to the time stipulated in contract.

If the goods are to be sent, the seller must send them within reasonable time, and demand or
tender of delivery must be made at a reasonable hour to be effected. This is provided for
Section 30 (4) .Failure to delivery in a reasonable time is a failure to the seller. According to the
case of, Heartly vs. Hymans (1920) the buyer can reject late tender if and only if the time is of
the essence in the contract though not originally of essence also in the case of Bowes vs. Shand
(1878). According to McDougall vs. Aero marine of Emsworth Ltd. (1958) , it is the buyer’s duty
to take delivery at the right time and failure of which, the seller has a right to sell the goods.

d) Expenses of Delivery
On expenses on delivery, section 30(5) provides, “Unless otherwise agreed, the expenses of and
incidental to putting the goods into a deliverable state must be borne by the seller.” The
expenses of delivering the goods are borne by the seller and expenses of taking the delivery are
bourne by the buyer.

e) Installment Deliveries

On Installment deliveries, section32 (1) of the Sales of Goods Act provide, “Unless otherwise
agreed the buyer of goods is not bound to accept delivery thereof by installments.” This rule
generally provides that the buyer is not bound to accept to the delivery in installments unless
otherwise agreed. In the case of Berhend & Co. Ltd. Vs. Produce Brokers & Co. Ltd [1920]. The
court held that where less than the contracted goods are tendered and the buyer accepts the
same, he is under no obligation to accept the tender for the remaining goods. Also in the case
of Cobec Brazillian Trading& Warehousing Corp. vs. Alfred C Toepfern [1983], the court found
that the mere fact that the goods are shipped under separate deals of leading for discharge
under different courts does not make the contract one for delivery under installments esp.
where the seller’s duty is simply to make a single tender of documents covering the entirety of
the goods.

Repudiation of Contract in Installment Deliveries

Section 32(2) provides , “Where there is a contract for the sale of goods to be delivered
by stated installments and to be separately paid for, and the seller makes defective deliveries in
respect of one or more installments, or the buyer neglects or refuses to take delivery of or pay
for one or more installments, it is a question in each case, depending on the terms of the
contract and the circumstances of the case, whether the breach of contract is a repudiation of
the whole contract or whether it is a severable breach giving rise to a claim for compensation
but not to a right to treat the whole contract as repudiated.” The tests to be used in applying
this section were laid down in the Maple Flock Co. vs. Universal furniture products [1934] as
follows;

i. Ratio quantitatively. This is where the breach bears to the contract as a whole end.

ii. Degree of probability that the breach will be repeated.

Severability of Installment Delivery

As for severability of installment deliver, as provided for in section 32(2) ,If the installments are
to be separately paid for the contract is more likely to be construed as severable. If an
installment contract is non- severable and the buyer accepts the first installment this will
prevent his rejection of later defective deliveries and will limit his remedy to damages for
breach of warranty.

When the contract is indivisible the following are consequences of indivisibility, that is;

i) The seller is not entitled to demand a part of the price against partial delivery unless the
buyer elects to accept that delivery which he will pay for

ii) The buyer’s improper rejection of an installment is repudiation of the entire contract.

iii) Accidental destruction of part of the goods before the risk has passed may frustrate the
whole contract

iv) Seller’s right to withhold delivery for non-payment extends to the whole of undelivered
goods and secure the whole of the price.

v) Where installments is too late of the buyer lawfully rejects defective installment, and it is too
late for the seller to make an effective retender, then the whole contract is made Lord.

f) Rules on incorrect Delivery

Wrong quantity.

Section 31(1) states, “Where the seller delivers to the buyer a quantity of goods less than he
contracted to sell, the buyer may reject them, but if the buyer accepts the goods so delivered
he must pay for them at the contract rate.” If the seller delivers a larger or smaller quantity of
goods than ordered or delivers contracted goods mixed with goods of different description then
the buyer reject the whole or accept the whole or accept the quantity ordered and reject the
rest. If he chooses to reject the whole or accept the whole, he must pay for the goods at the
contract rate. He cannot only be able to accept them if the seller first offers to sell them to him.

Wrong Description.

Under section 31(3), “Where the seller delivers to the buyer the goods he contracted to sell
mixml with goods of different description not included in the contract, the buyer may accept
the goods which are in accordance with the contract and reject the rest or he may reject the
whole.”

Delivery in regards to the buyer

Section 28 of the Sales of Goods Act of Kenya provides, “It is the duty of the seller to deliver the
goods, and of the buyer to accept and pay for them, in accordance with the terms of the
contract of sale.” In terms of delivery, unless otherwise agreed, the seller should be ready to
deliver the goods to the buyer in exchange for price and the buyer has a duty to accept the
goods and pay for them.

Acceptance.

The buyer has a duty to accept the goods but has no obligation. Section 35(1) , “Where goods
are delivered to the buyer which he has not previously examined, he is not deemed to have
accepted them unless and until he has had a reasonable opportunity of examining them for the
purpose of ascertaining whether they are in conformity with the contract.” The buyer has the
right to examine the goods before he agrees to own and possess them.

According to Section 36, “The buyer is deemed to have accepted the goods when he intimates
to the seller that he has accepted them or when the goods have been delivered to him, and he
does any act in relation to them which is inconsistent with the ownership of the seller, or when,
after the lapse of a reasonable time, he retains the goods without intimating to the seller that
he has rejected them.” In review of this statutory provision, the buyer is deemed to accepted
the goods when;

i) There is intimation by the buyer to the seller that he (buyer) has accepted the goods. The
case for this is Kirkham v7 Attenborough.

ii) There is action in relation to the goods which inconsistent with the ownership of the seller.
For example, if he modifies the goods for his own personal purposes.

iii) There is lapse of time in which the buyer has no communicated to the seller that he plans to
reject the goods. The case for this is Berstein vs. Pamsons Motors.(1896)P bought a new car
from D.A defect caused the engine to seize up to 3weeks after purchase, the car having only
covered 140miles, P sought rescission. It was held that the car was neither of merchantable
quality nor reasonably fit 4 its purpose. However, Ps claim was rejected because he was
deemed to have accepted the car. He was therefore limited to damages for breach of warranty.

ii) Rejection of non-conforming goods

On rejection to non-conforming goods, the buyer may reject the goods as long as he does so in
the right manner and within reasonable time. Further, under statutory law, the buyer is not
bound to return the goods after rejection. This is as provided for in Section 37 which states,
“Unless otherwise agreed, where goods are delivered to the buyer, and he refuses to accept
them, having the right so to do, he is not bound to return them to the seller, but it is sufficient if
he intimates to the seller that he refuses to accept them.”

The buyer can reject goods in the following circumstances;

a) He can reject if expressly allowed to do so by contract

b) He can reject goods in accordance to implied terms.

c) If a conditions included in the contract of sales has been breached by seller

d) If the seller has made an equivocal intention to repudiate the contract or breached the
contract according to section 37 which provides, “Unless otherwise agreed, where goods are
delivered to the buyer, and he refuses to accept them, having the right so to do, he is not
bound to return them to the seller, but it is sufficient if he intimates to the seller that he refuses
to accept them.” It is important to note that according to this rule the buyer is not bound to
return the rejected goods.

e) According to Section 38 , when the seller is ready to deliver the goods and requests the buyer
to take deliver, and the buyer does not take delivery of the goods within reasonable time, the
buyer is liable to the seller for any loss arising on account of refusing to take delivery.

f) Right to partial rejection. Section 35 stipulates that if the seller supplies some goods which
are unaffected by the breach, the buyer has a right to accept those unaffected by the breach
without losing the right to reject the rest

If the buyer, examines the goods and does not, for whatever reason accept them, he is under
Section 37”……bound to return them to the seller” within reasonable time and in the right
manner. He esteemed to have properly rejected the goods when he, again under section 37, “…
but it is sufficient if he intimates to the seller that he refuses to accept them.” Under statute,
both acceptance and rejection should be within reasonable time. Section 56 defines what
reasonable time is. But when dealing with rejection it is important to note that time is of the
essence. The consequences for improper delivery is provided for in Section 50(1) , “Where the
buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain
an action against him for damages for non-acceptance” This section protects the interest of the
Seller in regards to the compensation for losses incurred to delivery and refusal of payment by
the buyer.

BIBLIOGRAPHY

This work was derived from ideologies and philosophies as well as direct notes from the
following sources:

1. SALES OF GOODS ACT, CAP 31, LAWS OF KENYA

2. GROUP WORK DISCUSSIONS, WHERE EACH MEMBER CONTRIBUTED THEIR PERSON
ABSTRACTS PERTAINING TO THE SALES OF GOODS UNIT.

3. NOTES FROM LECTURER KEN MBURU

4. SECTIONS FROM “AMERICAN COMMERCIAL LAW SERIES” BY ALFRED W. BAYS

5. VOLUMES FROM THE LAW OF CONTRACTS.

6. SECTIONS FROM THE BOOK “BUSINESS LAW- CASE METHOD” BY WILLIAM KIXMILLER,
WILLIAM H SPENCER. (Especially of the Michigan Rule.)

7. MERCANTILE LAW, S. S. GULSHAN.

8. COMMERCIAL LAW, ASHIQ HASSAN.

9. KENYA LAW RESOURSE CENTER.

10. ATIYAH P.S., J ADAMS AND H. MCQUEEN, “SALES OF GOODS” (LONDON: LONGMANS, 2005)