INTRODUCTION TO THE LAW OF SALE OF GOODS

1. Introduction

The Law of Sale of Goods governs the contract through which the ownership of movable goods
is transferred from the seller to the buyer. This law plays a vital role in regulating commercial
transactions and ensuring the smooth functioning of commerce. In Zambia the sale of goods is
governed by the Sale of Goods Act 1889.

The contract of sale is by the far the most common type of contract. People buy goods for
various reasons. The most obvious reason is, of course, to enjoy their ownership and use.
However, in commercial dealings traders are not interested in goods as such, only in the profit
that can be made, or the loss that can be avoided, by reselling them. In many cases therefore the
trader buys goods without ever intending to take physical delivery but to resell at a profit or to
hedge against the possibility of a loss.

2. Definition & Nature of the Contract of Sale

According to the Sale of Goods Act 1893 defines the contract of sale is defined as a contract
whereby the seller transfers or agrees to transfer the property in goods to the buyer for a money
consideration, called the price, to sell. A contract of sale may be absolute or conditional.

Six elements must be considered from the above definition, namely: Contract of Sale, Seller,
Buyer, Property, Goods, and Money Consideration or Price.

(i) Contract of Sale

Section 62 of the Sale of Goods Act 1893 defines a contract of sale as “includes an agreement to
sell as well as a sale”.

(ii) Seller

Section 62 of the Sale of Goods Act 1890 defines a seller as “a person who sells or agrees to sell
goods”.

(iii) Buyer

Section 62 of the Sale of Goods Act 1890 defines a buyer as “a person who buys or agrees to buy
goods”.
It follows from section 1(1) of the Sale of Goods Act 1893 that there must be both a seller and a
buyer, but a person can validly buy his own goods if, for example, he buys them from a sheriff
who has seized them under a writ of fifa.

(iv) Property

Section 62 of the Sale of Goods Act defines property as “the general property in goods, and not
merely a special property”.

(v) Goods

The term goods is defined in section 62 of the Sale of Goods 1893 as “including all chattels
personal other than things in action and money, except money. The term includes emblements,
industrial growing crops, and things attached to or forming part of the land which are agreed to
be severed before sale or under the contract of sale”.

(vi) Price or Money Consideration

The price is the consideration given by the buyer for the property in the goods. It therefore
follows that if the buyer fails to get the property, he can recover the price because the
consideration for it has wholly failed. It is worth noting that section 1(1) uses the expression
“money consideration”, so as to distinguish a contract of sale from a contract of exchange. The
price of the goods need not, however be wholly in money.

3. Defining a Sale

In the contract of sale the ownership of the goods is immediately transferred from a seller to a
buyer. The term sale is defined in section 1(3) of the Sale of Goods Act 1893, which reads as
under: “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”. The analysis of this provision reveals that where the
property in the goods, that is, the legal ownership of the goods, is immediately transferred to the
buyer, the contract is called a sale.
 4. Formation of the Contract of Sale

A contract of sale, like any other contract, depends on establishing an agreement between the
parties, which usually follows from the acceptance by one party of an offer made by the other.
No special rules apply to sales of goods, except perhaps in regard to the price. As already noted,
the consideration in a contract of sale must consist of money. It may happen that the parties have
reached agreement on all aspects of their contract except for fixing the price.

5. Subject Matter of Contract for Sale

The term ‘subject-matter’ means the things for which a contract of sale can be made. Only goods
can be the subject-matter of the contract of sale. The term ‘goods’ means every kind of movable
property, except money, which includes emblements, industrial growing crops, 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 may be of the following types:

(i) Existing Goods

These are goods actually in existence when the contract is made, that is, goods owned or
possessed by the seller. They may be either specific or unascertained in the sense they have yet
to be appropriated to the contract.

(ii) Future Goods

These are goods to be manufactured or acquired or grown by the seller after making the contract
of sale.

(iii) Specific Goods

These are goods identified and agreed upon at the time a contract of sale is made.

Section 62 of the Sale of Goods Act 1893 defines ‘specific goods’ as “Specific goods" means
goods identified and agreed upon at the time a contract of sale is made”.
 (iv) Ascertained goods

These are goods which are identified only after the formation of the contract of sale.

(v) Unascertained Goods

The expression ‘unascertained goods’ is not defined anywhere, but must by inference mean
goods not identified and agreed on at the time the contract of sale is made.

(vi) Contingent Goods

These are the goods which are also not in existence at the time of contract of sale. The contingent
goods are a type of future goods. In this case, the acquisition of the goods by the seller depends
upon the uncertain contingencies, that is, upon uncertain events which may or may not happen.
E.g. A agreed to sell to B certain goods which are to be arrived by a ship. In this case, the
contract is for the sale of contingent goods as availability of the goods depends upon arrival of
the ship.