SALE OF GOODS

 Commerce is defined as activities relating to the buying and

selling of goods and services
 Sale of Goods Act 1957 (SOGA) sets out the law relating to the sale
of goods. However, it does not replace the law of contract

INTRODUCTI  SOGA is only applicable in Peninsular Malaysia

ON  Sabah & Sarawak adopt principles of English law relating to the

sale of goods

 Section 3 of Contracts Act 1950 apply to contracts for sale of goods

unless they are inconsistent with SOGA

Sale of Goods 2
  Goods defined in Section 2:

 “Every kind of movable property other than actionable claims and

money 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”

GOODS
 Hence, goods does not include land

 How about fixtures? They are chattels / movable property that are
fixed and attached to land and become a part of land

Sale of Goods 3
  Example

 Air-conditioner unit at the shop is goods

GOODS  A massive air-conditioning plant housed in a special constructed

building to cool down the factory. This would be permanently
fixed to the ground. This is fixture and attached to the house and
land

 SOGA excludes “contract for work and materials”

Sale of Goods 4
  Section 5(1) - A contract of sale is made by buy or sell of goods for
a price

 The contract may provide for:

 immediate delivery of the goods;
FORMATION  immediate payment of the price; or both
OF  the delivery or payment by installments,
CONTRACT  the delivery or payment or both shall be postponed

 Contract may be oral or in writing or partly oral / partly written

Sale of Goods 5
  Section 4(1) - 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. There may be a contract of sale between one
part-owner and another

CONTRACT  Section 4(2) - a contract of sale may be absolute or conditional

OF SALE OF
GOODS

Sale of Goods 6
  Section 4(3) states:

 Where under a contract of sale the property in the goods is

transferred from the seller to the buyer, the contract is called a
sale
CONTRACT
OF SALE OF  Where the transfer of the property in the goods is to take place at
a future time or subject to some condition thereafter to be
GOODS fulfilled, the contract is called an agreement to sell

Sale of Goods 7
  Under a sale, the ownership is transferred right away

 Under an agreement to sell, the transfer of property either

executory or contingent upon a conditions being fulfilled

CONTRACT  Section 4(4) - An agreement to sell becomes a sale when the time
OF SALE OF elapses or the conditions are fulfilled subject to which the
property in the goods is to be transferred
GOODS

Sale of Goods 8
  The purpose of a contract of sale of goods is to transfer the
property in the goods from the seller to the buyer for a price

 Price is defined in Section 2 as “the money consideration for a sale

of goods”
CONTRACT
OF SALE OF  The act does not apply if the consideration is goods alone and not
monetary consideration. Hence, exchange of goods is not a sale of
GOODS goods

 However, if the consideration is partly the delivery of goods and

partly money, the contract may be one of sale. The essential
element is the application of a monetary value to the goods

Sale of Goods 9
  If an agreement to sell is breached by the buyer, the seller may sue
for damages. The goods still belong to the seller

 If an agreement to sell is breached by the seller, the buyer has only

a personal remedy for damages against the seller. The buyer
CONTRACT cannot claim the goods which are still belonging to the seller

OF SALE OF
GOODS

Sale of Goods 10
  A contract is void if the goods no longer exists / damaged at the
time of the contract

 Section 7 - Where there is a contract for the sale of specific goods,

the contract is void if the goods without the knowledge of the
FORMATION seller have, at the time when the contract was made, perished or
become so damaged as no longer to answer to their description in
OF the contract

CONTRACT
 This is a mutual mistake of the parties to such extent that the
goods no longer answer to the description

Sale of Goods 11
  Section 8 of SOGA - 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 or become so damaged as no longer to
answer to their description in the agreement, before the risk
passess to the buyer, the agreement is thereby avoided

FORMATION  Meaning, an agreement to sell is void if the perishing or damage

OF to the contracted goods occurs after the agreement has been
entered into but before the ownership of the goods is passed to
CONTRACT the buyer (normally until payment is fully paid)

Sale of Goods 12
  This implies that the seller is not liable for non-delivery and the
buyer is not liable to pay the price

 The seller must bear the loss and if the buyer has paid the price in
FORMATION advance, he can recover the price paid for a total failure of
consideration
OF
CONTRACT

Sale of Goods 13
  Section 9(1) - the price may be set accordingly by the contract,
under agreed conditions or may be set pertaining to the dealings
between both the buyer and the seller

 Section 9(2) - if there is no price decided, a reasonable price might

be charged according to each individual case

PRICE

Sale of Goods 14
  It may be fixed by the contract. E.g. Andy agrees to sell his car to
Belle for RM100,0000

 It may be determined by the course of dealing between the

parties

PRICE  If none of the above methods is used, the buyer is bound to pay a
reasonable price, depending on the circumstances of each
particular case

Sale of Goods 15
  The price may also be left to be fixed in a manner agreed in the
contract. For example, fixed by the valuation of a 3rd party

 If the parties agrees, Section 10(1) provides that if such 3rd party
cannot or does not make such valuation, the agreement is thereby
avoided

PRICE
 If however the goods manage to be delivered and accepted, the
buyer is subjected to pay a reasonable price

Sale of Goods 16
 Goods

Existing Goods Future goods

TYPE OF
GOODS
Specific/Ascertained Specific/Ascertained
goods goods

Unascertained Unascertained
goods goods

Sale of Goods 17
  Section 6(1) - Existing goods are goods which are physically in
existence and are in the possession of the seller at the time of sale

 Section 6(2) - Future goods are goods to be manufactured or

produced or acquired by the seller after the making of the contract
of sale
TYPE OF
GOODS  Specific/ascertained goods are goods identified and agreed upon
at the time a contract of sale is made

 Unascertained goods are goods which cannot be specifically

identified at the time a contract of sale but are referred to
description

Sale of Goods 18
  The terms of a contract of sale of goods as per Section 12 of SOGA
are:

 Condition

CONDITIONS  Warranty
&
WARRANTIES

Sale of Goods 19
  Section 12(1) - Condition is the fundamental /essential term to the
main purpose of the contract

 Section 12(2) - Breach of condition gives rise to a right to treat the

contract as repudiated

Conditions

Sale of Goods 20
  Section 13 - the injured party can treat a breach of condition as a
breach of warranty

 This means that the injured party is entitled to claim for damages
but not reject the contract

Conditions  Associated Metal Smelters Ltd v. Tham Cheow Toh (1972) 1 MLJ
171: The Federal Court allowed the respondent (the buyer) to treat
breach of condition as breach of warranty, resulting in the buyer
being entitled to claim for damages within the scope of Section 13
of SOGA

Sale of Goods 21
  Section 12(3) - Warranties are the terms that are collateral to the
main purpose of the contract

 Section 12(4) - Breach of warranty gives rise to the claim for

damages but not the right to reject the goods and repudiate the
contract

Warranties

Sale of Goods 22
  Contractual terms may be:

 Express terms
 Specific terms expressed in contract of sale

TERMS OF  Implied terms

CONTRACT  Statutory implied terms provided in Section 14 - 17 SOGA

Sale of Goods 23
  Section 14(a) - Implied condition as to title
 Section 14(b) - Implied warranty as to quiet possession
 Section 14(c) - Implied warranty that the goods are free from any
charge or encumbrance in favour of any third party not declared to
the buyer
 Section 15 - Implied condition that goods shall correspond with
IMPLIED the description
TERMS  Section 16 refers to the standard of quality of goods:
 Section 16(a) - Implied condition as to reasonable fitness for the
purpose it is bought
 Section 16(b) - Implied condition as to merchantable quality

 Section 17 - Implied condition as to goods must correspond with

the sample

Sale of Goods 24
  Section 14(a) - Implied condition as to title

 “In a contract of sale, unless the circumstances of the contract are

such as to show a different intention, there is an implied condition
on the part of the seller, that in the case of a sale, he has a right to
sell the goods, and that in the case of an agreement to sell, he will
have a right to sell the goods at the time when the property is to
Title pass…”

 A breach of this condition entitles the buyer to repudiate the

contract and recover the price paid in full regardless of whether he
has used the goods

Sale of Goods 25
  Example

 Andy sold a computer to Belle. A year later, Belle discovered that

the computer actually belonged to Peter. Andy was actually
looking after Peter’s possessions while he was overseas

Title  Here, Peter can recover the price in full even though Belle has used
the computer for one year

 Normally, the seller is the owner of the goods. However, a seller

may sell the owner’s goods if he has a right to sell it at the time the
property is to pass

Sale of Goods 26
  Section 14(b) - Implied warranty as to quiet possession

 “In a contract of sale, unless the circumstances of the contract are

such as to show a different intention, there is an implied warranty
that the buyer shall have and enjoy quiet possession of the goods”

Quiet  The buyer shall have and enjoy quiet possession of the goods
possession
 This warranty covers against unlawful seizure of goods sold which
have not been paid in full. Meaning, the buyer will be able to hold
on to the goods that he has bought without interference from
anyone

Sale of Goods 27
  Section 14(c) - Implied warranty that the goods are free from any
charge or encumbrance in favour of any third party not declared to
the buyer

 Meaning there must be nothing to affect buyer’s ownership

Free from any
charge or  If the seller fails to comply, the buyer is entitled to claim for
damages
encumbrance

Sale of Goods 28
  Section 15 - Implied condition that goods shall correspond with
the description

 Goods where the buyer have not seen such as from the internet

Correspond  If the sale is by description, it is not sufficient that the bulk of the
with the goods corresponds with the sample if the goods do not also
correspond with the description
description

Sale of Goods 29
  Purshotumdas and Co. v Mitsui Bussan Kaisha Ltd. (1911) 12 SSLR
67

 2 parties has been contracting for the sale of flour. The flour had
been sold in bags bearing a well-known trade mark. Further flour
Correspond was ordered – “the same name as our previous contracts”

with the
 Flour delivered was identical in quality was but it did not bear the
description same well-known trade mark. The court held that the goods did
not comply with the description

Sale of Goods 30
  Section 16(a) - Implied condition as to reasonable fitness for the
purpose it is bought

 Example
Reasonable  Andy told Belle, the sales person dealing with fertilizer, that he
wanted to buy fertilizer for his mango trees. Belle would be
fitness for the breached an implied condition if she sold flower fertilizers saying it
purpose it is would fit for mango trees

bought  However, if Andy told Belle that he wanted to buy Treble

Superphosphate (0-45-0) fertilizer, then there would be no implied
condition as to its fitness for any particular purpose

Sale of Goods 31
  Section 16(b) - Implied condition as to merchantable quality

 This refers to a basic level of quality and performance that is

expected in a product considering its price and description

Merchantable  Goods sold are fit for the particular use and not defective for the
purpose
quality
 For example, a pair of shoes whose heels came off on third
occasion was held unmerchantable in David Jones v Willis [1934]
52 CLR 110

Sale of Goods 32
  Section 17 - Implied condition as to goods must correspond with
the sample

 Section 17(1) – “A contract of sale is a contract for sale by sample

where there is a term in the contract express or implied to that
Correspond effect”

with the
 Samples are normally used in the sale of bulk goods e.g. rice, flour,
sample tiles, carpets

Sale of Goods 33
  The following conditions are implied in a sale by sample:

 Section 17(2)(a) - The bulk shall correspond with the sample in

quality

Correspond  Section 17(2)(b) - The buyer shall have a reasonable opportunity of

with the comparing the bulk with the sample

sample
 Section 17(2)(c) - The goods are free from any defect rendering
them unmerchantable which would not be apparent on
reasonable examination of the sample

Sale of Goods 34
  The three conditions are independent of one another. Meaning, a
breach of any one of the conditions entitles the buyer to reject the
goods and treat the contract as at an end

 Most sale by sample are also sale by description referred to in

Correspond Section 15

with the
sample

Sale of Goods 35
  It is important to determine the time when property in goods
transferred from the seller to the buyer

 This is because the risk of damage to, or loss or destruction of the

property vests in the owner, irrespective of whether delivery has
been made
TRANSFER OF
PROPERTY  Having title in goods is not the same with having its possession

 Transfer of possession of goods does not mean transfer of

property

Sale of Goods 36
  Example

 If goods are handed over to a transporter, “possession” is

transferred to the transporter but “property” remains with the
owner

TRANSFER OF  If the goods remain in the seller’s possession after a sale is

PROPERTY completed, “possession” is with the seller, but “property” is with
the buyer

Sale of Goods 37
  Section 26 - Risk prima facie passes with property

 Unless otherwise agreed, the goods remain at the seller’s risk until
the property is transferred to the buyer, but when the property
therein is transferred to the buyer, the goods are at the buyer’s
risk whether delivery has been made or not
TRANSFER OF
PROPERTY  Where the goods are delivered by fault of either the buyer or the
seller, the goods are at the risk of the party in fault as regards any
loss which might not have occurred for such fault

Sale of Goods 38
  Section 18 - Goods must be ascertained

 Section 19 - Property passes when intended to pass

RULES FOR
 Goods to be specific goods and in a deliverable state
TRANSFER  Section 20 - Specific goods in deliverable state
OF PROPERTY  Section 21 - Specific goods to be put into a deliverable state
 Section 22 - Specific goods in a deliverable state when seller has to
do anything thereto in order to ascertain price

Sale of Goods 39
  Section 18 - Goods must be ascertained

 Where there is a contract for sale of unascertained goods i.e.

goods defined by description only and not identified until after the
contract is made, no property may be transferred until the goods
are in possession of the buyer unless and until the goods are
Goods must be ascertained

ascertained

Sale of Goods 40
  Section 19 - Property passes when intended to pass

 Where there is a contract for sale of specific or ascertained goods,

the property is transferred to the buyer at such time as the parties
Property to the contract intend it to be transferred

passes when  Re Anchor Line (Henderson Brothers) Ltd

intended to  An electric crane was bought from Ocean ss Co Ltd. Annual
pass payments where to be made and Anchor Line was to have full
responsibility in the mean time. Payments were made regularly
but it went into liquidation. It was held that the property was still
under Ocean because all the payments had not been made

Sale of Goods 41
  Section 20 - Specific goods in a deliverable state

 Where there is an unconditional contract for sale of specific goods

in deliverable state, the property passes to the buyer when the
contract is made
Specific goods  It does not matter whether the time of payment or the time of
delivery, or both, be postponed
in deliverable
state  Generally, goods are said to be in “deliverable state” when the
seller does not have to do anything more to them to meet buyer’s
requirements, and the buyer would under the contract be bound
to take delivery of them

Sale of Goods 42
  Mohamed Mydin v Ramiaj (1965)

 A lorry was sold to the buyer, however a vehicle repairer had taken
delivery on behalf of the buyer

Specific goods  Although the registration of the lorry was not passed, it is not the
in deliverable document of title, so it was held that the vehicle was duly
delivered to the buyer
state

Sale of Goods 43
  Section 21 – Where there is a contract for sale of specific goods
and the seller is bound to do something to the goods, for the
purpose of putting them into a deliverable state, the property
does not pass until such thing is done and the buyer has
Specific goods knowledge of it

to be put into a
 E.g. A man purchase a suit. The trousers need shortening and the
deliverable seller agrees to attend to that. The property in the suit will not
state pass until alterations are complete

Sale of Goods 44
  Section 22 – Specific goods in a deliverable state when seller has
to do anything thereto in order to ascertain price

Seller has to
 Where there is a contract for sale of specific goods in a deliverable
do anything state, but the seller is bound to weight, measure, test or do some
other act or thing for the purpose of ascertaining the price, the
thereto in property does not pass until until such thing is done
order to
ascertain price  E.g. Purchase of rice contained in a sack at RM20 per kilo at
grocery shop. The property will not pass until the seller has
weighed the sack and told the purchase how much it will cost

Sale of Goods 45
  Section 23 – Where there is a contract for the sale of unascertained
or future goods by description, and goods of that description and
in a deliverable state are unconditionally appropriated to the
contract, either by the seller with the assent of the buyer or by the
buyer with the assent of the seller, the property in the goods
thereupon passes to the buyer

TRANSFER OF  Future goods are goods to be manufactured or produced or

PROPERTY acquired by the seller after the making of the contract of sale

 Unascertained goods are goods which cannot be specifically

identified at the time a contract of sale but are referred to
description

Sale of Goods 46
  Appropriation means selection and identification of the goods

 This may be done by the buyer or seller and may be express or

implied

TRANSFER OF  Once both parties agree in the appropriation of unascertained

goods to the contract, the goods become ascertained and
PROPERTY property in them passes

Sale of Goods 47
  Section 24 - Goods sent on approval or ‘on sale or return’

 Unless there is a different intention, when a good is delivered to a

buyer on approval, the property of the good passes on to the
buyer:

TRANSFER OF  if he signifies his acceptance of the goods or does any act to show
PROPERTY his approval

 if he does not signify his approval or acceptance to the seller but

retains the goods without giving notice of rejection, then, if a time
has been fixed for the return of goods, on the expiration of such
time, and if no time has been fixed, on the expiration of a
reasonable time

Sale of Goods 48
  This section covers goods sent on trial, giving the buyer the option
to purchase on the terms specified

 The person is a bailee of those goods and must take reasonable

care of them

TRANSFER OF  If the goods are lost or destroyed through his fault, he must pay
PROPERTY the price for them

Sale of Goods 49
  Section 27 – Where goods are sold by a person who is not the
owner thereof and who does not sell them under the authority or
with the consent of the owner, the buyer acquired no better title
than the seller had

TRANSFER OF  This section sets out the English rule “nemo dat quod non habet”
PROPERTY which means “no one can transfer a better title to the goods than
he himself has”
BY NON-
OWNERS

Sale of Goods 50
  If goods are purchased from a person who is not the owner and
who does not sell them under the owner’s authority, the buyer
does not acquire a title even if he has paid value in good faith

 Example: Andy sold the goods he acquired by theft, to Belle. Coco

TRANSFER OF who is the real owner of the goods, found out that the goods is in
PROPERTY BY Belle’s possession. Belle has no title to the goods as Andy was not
the owner and had no title to transfer to Belle. Belle must return
NON- the goods to Coco

OWNERS
 This rule seeks to protect the right of ownership, and therefore the
sellers’ interest

Sale of Goods 51
  SOGA recognized strict application of “nemo dat rule” could give
rise to injustice

 Exceptions provided:
 Section 27- Estoppel
 Section 27 - Sale by mercantile agent
EXCEPTIONS  Section 28 - Sale by one of joint owners
 Section 29 - Sale under a voidable title
 Section 30(1) - Sale by a seller in possession
 Section 30(2) - Sale by a buyer in possession

Sale of Goods 52
  Section 27 – Sale by person not the owner

 Where the owner of goods:

 By his conduct makes it appears to a buyer that the person who
sells the goods has authority to do so, and
EXCEPTIONS:
Estoppel  The buyer acts in reliance on it,

 The owner will be estopped from denying the seller’s authority.

The buyer who takes in good faith and for value will acquire good
title by estoppel

Sale of Goods 53
  Section 27 – Sale by person not the owner

 The owner’s conduct must amount to representation to the buyer

that the seller is entitled to sell the goods

EXCEPTIONS:  The estoppel is binding only against the true owner and those
party privy to the conduct on which the estoppel is based
Estoppel

Sale of Goods 54
  Section 27 – Sale by mercantile agent

 When the mercantile agent is, with the consent of the owner, in
possession of the goods or a document of title, any sale made by
EXCEPTIONS: him in the ordinary course of business shall be valid, provided that
the buyer acts in good faith
Sale by
mercantile  E.g. Second-hand car dealers are normally mercantile agents.
They have the possession of the car and the document of title.
agent Other examples are broker or an auctioneer working for
commission

Sale of Goods 55
  Section 28 - Sale by one of joint owners

 “If one of several joint owners of goods has the sole possession of
them by permission of the co-owners, the property in the goods is
transferred to any person who buys them of such joint owner in
EXCEPTIONS: good faith and has not at the time of the contract of sale notice
that the seller has no authority to sell”
Sale by one of
joint owners

Sale of Goods 56
  Section 28 - Sale by one of joint owners

 Conditions to be fulfilled:

EXCEPTIONS:  Goods owned by more than one person

Sale by one of
 One of them has the sole possession of the goods with consent of
joint owners the other co-owners

 The buyer buys in good faith and has no notice at the time of
contract of sale, that the seller has no authority to sell

Sale of Goods 57
  Section 29 - Sale under a voidable title

 “Where the seller of goods has obtained possession thereof under

a contract voidable under section 19 or 20 (without free consent)
of the Contracts Act 1950, but the contract has not been rescinded
EXCEPTIONS: at the time of the sale, the buyer acquires a good title to the goods
provided he buys them in good faith and without notice of the
Sale under a seller’s defect of title”

voidable title

Sale of Goods 58
  Section 29 - Sale under a voidable title

 Conditions to be fulfilled:

EXCEPTIONS:  the seller of goods has obtained possession thereof under a

contract voidable under section 19 or 20 of the Contracts Act 1950
Sale under a (without free consent)

voidable title
 the contract is not been rescinded at the time of the sale

 the buyer buys in good faith and without notice of the seller’s
defect of title

Sale of Goods 59
  Section 30(1) - Sale by a seller in possession after sale

 “Where a person, having sold goods, continues or is in possession

of the goods or of the documents of title to the goods, the delivery
or transfer by that person or by a mercantile agent acting for him,
EXCEPTIONS: of the goods or documents of title under any sale, pledge or other
disposition thereof to any person receiving the same in good faith
Sale by a seller and without notice of the previous sale shall have the same effect
as if the person making the delivery or transfer were expressly
in possession authorized by the owner of the goods to make the same”

Sale of Goods 60
  Section 30(1) - Sale by a seller in possession after sale

 Conditions to be fulfilled:

EXCEPTIONS:  The seller after selling goods, continues or is in possession of the

goods or of the documents of title
Sale by a seller  The seller or mercantile agent acting for him, sells or transfers the
in possession goods or title to the buyer, and
 The buyer takes in good faith and without notice of the previous
sale

Sale of Goods 61
  Section 30(1) - Sale by a seller in possession after sale

 Example
 Andy sells goods to Belle but the goods is still with Andy. He, then
resell the same goods to Coco
EXCEPTIONS:
Sale by a seller  Coco obtains good title in good faith and without notice of the
in possession previous sale (Andy’s to Belle)

 Belle lose the title but he can take legal action against Andy

Sale of Goods 62
  Section 30(2) - Sale by a buyer in possession

 “Where a person, having bought or agreed to buy goods, obtains,

with the consent of the seller, possession of the goods or the
documents of title to the goods, the delivery or transfer by that
EXCEPTIONS: person or by a mercantile agent acting for him of the goods or
documents of title under any sale, pledge, or other disposition
Sale by a buyer thereof to any person receiving the same in good faith and
without notice of any lien or other right of the original seller in
in possession respect of the goods shall have effect as if such lien or right did not
exist”

 The new buyer obtains a good title

Sale of Goods 63
  Section 30(2) - Sale by a buyer in possession

 Conditions to be fulfilled:

EXCEPTIONS:  The buyer having bought or agreed to buy goods, obtains

possession of the goods or the documents of title with the consent
Sale by a buyer of the seller

in possession
 The buyer or mercantile agent acting for him, sells or transfers the
goods or title to a subsequent buyer, and

 The subsequent buyer buys in a good faith, and without notice of

the original seller’s right in respect of the goods

Sale of Goods 64
  Delivery
 Delivery of the goods
 Place of delivery
 Time of delivery
PERFORMAN  Delivery of wrong quantity or wrong mix of goods
 Delivery by installments
CE OF THE
 Delivery to carrier or wharfingers
CONTRACT
 Acceptance of the goods

Sale of Goods 65
  Section 31
 It is the duty of the seller to deliver the goods and the buyer to
accept and pay for them in accordance to the terms of contract of
sale

 Section 32
Physical  Unless otherwise agreed, delivery of the goods and payment of
performance the price are concurrent conditions i.e. the seller shall be ready
and willing to give possession of the goods to the buyer in
exchange for the price, and the buyer shall be ready and willing to
pay the price in exchange for the possession of the goods

Sale of Goods 66
  Unless otherwise agreed, goods sold are to be delivered at the
place at which they are at the time of the sale

 The seller may hand over the means of control of the goods e.g.
keys to the warehouse

Place of  The seller may also deliver to the buyer’s agent, which is deemed
delivery to be a delivery to the buyer himself

Sale of Goods 67
  If a time is specified for delivery, the seller must deliver the goods
to the buyer at that time

 If no specified time is fixed, the seller must deliver within a

reasonable time

Time of  The buyer is liable for any loss occasioned by his neglect or refusal
delivery to take delivery of the goods within a reasonable time after the
seller’s request, including reasonable charge for the care and
custody of the goods

Sale of Goods 68
  It is the duty of the seller to deliver the correct quantity of goods
and of the type specified without contamination of other goods

Delivery of
 If the seller delivers to the buyer a quantity of goods less than he
wrong contracted to sell, the buyer may reject them. But if the buyer
accepts them, he will have to pay for them at the contract rate
quantity or
wrong mix of
goods

Sale of Goods 69
  If the seller delivers to the buyer a quantity of goods more than he
contracted to sell, the buyer may accept the goods included in the
contract and reject the rest, or he may reject the whole

Delivery of  If the buyer accepts the whole of the goods so delivered, he will
wrong have to pay for them at the contract rate

quantity or
 If the seller delivers to the buyer goods that he contracted to sell
wrong mix of mixed with goods of different description not included in the
contract, the buyer may accept the goods which are in accordance
goods with the contract and reject the rest, or he may reject the whole

Sale of Goods 70
  Goods must be delivered in one lot and at the same time unless
otherwise agreed

 The buyer is not bound to accept delivery of goods by installments

unless otherwise agreed

Delivery by
installment

Sale of Goods 71
  Delivery of the goods to a carrier for the purpose of transmission
to the buyer or delivery of the goods to wharfingers for safe
custody, is prima facie deemed to be delivery of the goods to the
buyer

Delivery to  This constitutes performance by the seller of his obligation to

deliver the goods and implies that the buyer’s concurrent
carrier or obligation to pay the price becomes operative

wharfingers

Sale of Goods 72
  The buyer is bound to accept goods and to pay for them in
accordance with the terms of the contract

 Section 42 – “acceptance” is defined by any of the following

situations:
 When the buyer intimates to the seller his acceptance
Acceptance of  When the goods have been delivered to the buyer, he does any act
the goods which is inconsistent with the ownership of the seller (e.g.
reselling to a third party); or
 When after the lapse of a reasonable time, the buyer retains the
goods without intimating to the seller his rejection

Sale of Goods 73
  A buyer or a seller may breach a contract of sale. The other party
may claim damages for breach of warranty

 2 types of breach of contract:

 Breach by the buyer

REMEDIES
 Breach by the seller

Sale of Goods 74
  3 types for breach by the buyer:

 Failure of buyer to take delivery

 Failure of buyer to accept goods

BREACH BY
THE BUYER  Failure of buyer to pay for goods

Sale of Goods 75
  Section 44 - when the seller is ready and willing to deliver the
goods and requests the buyer to take delivery, and the buyer does
not, within a reasonable time after such request, take delivery of
the goods, he is liable to the seller for any loss occasioned by his
neglect or refusal to take delivery

Failure of  The buyer is also liable for a reasonable charge for the care and
buyer to take custody of the goods

delivery

Sale of Goods 76
  Section 56 - the seller is entitled to damages for non-acceptance
by the buyer.

 That section reads:

 Where the buyer wrongfully neglects or refuses to accept and pay
Failure of for the goods, the seller may sue him for damages for non-
acceptance
buyer to
accept goods

Sale of Goods 77
  The seller may sue the buyer for the price

 Where the property in the goods have passed to the buyer and the
buyer wrongfully neglects or refuses to pay for the goods
according to the terms of the contract
Failure of
buyer to pay  Where the price is payable on a day certain irrespective of delivery
and the buyer wrongfully neglects or refuses to pay such price
for goods

Sale of Goods 78
  Section 31 - It is a duty of the buyer to accept and pay for the
goods in accordance to the terms of the contract of sale

 Section 45 – the seller is an “unpaid seller” when the buyer has not
been paid or the payment is by cheque that is subsequently
dishonoured
Remedies for
unpaid seller

Sale of Goods 79
  On the goods
 Lien
 Stoppage in transit
 Resale of goods

Remedies for  Personal remedies

unpaid seller  Sue buyer for the price
 Claim for damages

Sale of Goods 80
  It is a right dependent on possession

 Even when the property has passed to the buyer, the seller has the
right to retain the property as security for the payment for goods

 Section 46 - If the property has not passed to the buyer, the seller
Lien may withhold delivery

 Example: a car workshop might have a lien over a car being

repaired and not yet paid

Sale of Goods 81
  Section 50 - The seller has the right to retake possession of goods
in transit when the buyer is insolvent or has been declared
bankrupt

 Section 52 - This can be done by taking actual possession of goods

Stoppage in in transit or by giving notice of his claim to the carrier or other
transit bailee in possession

Sale of Goods 82
  Section 54 - The seller can resell the goods to recover the price
after he has exercised his right of lien or stoppage in transit

 He can give a good title to a 2nd buyer as against the original

buyer even though property in the goods may have passed to the
original buyer
Resale of
goods

Sale of Goods 83
  The seller can sue the buyer for the price of the goods

 The seller must have performed all obligations under the contract

 If the property in the goods has passed to the buyer and the buyer
Sue buyer for wrongfully neglects or refuses to pay for the goods

the price
 If however, the buyer has agreed to pay on a certain date, the
seller cannot sue for the price until the ownership of the goods has
been transferred

Sale of Goods 84
  The seller may claim for damages if the buyer wrongfully refuse to
accept and pay for the goods

 If the seller is left with the goods to dispose of, the damages is the
difference between the contract price and the market price should
the buyer have taken delivery
Claim for
damages

Sale of Goods 85
  2 types for breach by the seller:

 Seller fails to deliver the goods

 Breach of contractual warranty

BREACH BY
THE SELLER

Sale of Goods 86
  The rights of the buyer when the seller is in breach of contract of
sale:

 Damages for non-delivery of goods

Remedies for  Specific performance

the Buyer
 Action in tort

 Breach of warranty

Sale of Goods 87
  Section 57 - where the seller wrongfully neglects or refuses to
deliver goods to the buyer, the buyer may sue the seller for
damages for non-delivery

Damages for  The assessment of damages is the same as that for non-
acceptance
non-delivery of
goods  How about delayed delivery?

Sale of Goods 88
  Section 58 – Buyer may bring action by the delivery of specific or
ascertained goods, at the discretion of court

 This remedy is not available where damages would provide

adequate compensation

Specific  So, the goods must be unusually special, unique and peculiar kind
performance

Sale of Goods 89
  If the property in goods has passed to the buyer and he is entitled
to delivery which is being withheld, he may bring an action in tort
for wrongful interference with the goods

 This is called conversion under tresspass to goods. It means the

seller wrongfully detains the goods

Action in tort

Sale of Goods 90
  Section 59 - the buyer is not entitled to reject the goods but he
may:

 Set up against the seller the breach of warranty in diminution or

extinction of the price

Breach of  The buyer may sue the seller for damages for breach of warranty
warranty
 Example goods with warranty - computers, watch, electric
appliances

Sale of Goods 91