 The governing statute as to Peninsular Malaysia is the

Sales of Goods Act 1957. (SOGA)

 Sabah and Sarawak - still apply the English Sale of
Goods Act 1979
 Sec 3 of SOGA - provides for the application of
Contract Acts where relevant as long as it does not
contradict SOGA itself - in which case the latter would
prevail.
 Scope of SOGA -applies to all types of sale of goods but
is not comprehensive in covering all aspects of sale or
offer adequate protection to the parties involved.
 Sec 4 (1) - A contract of sale 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.

Transfer of property in goods

SELLER PRICE BUYER

Price - the money consideration for a sale of goods and
may be fixed by the contract, or by a third party or
determine in the course of dealing - Sec 9 (1).
Elements of the contract:
1. Parties to the contract.
 must fulfilled all the capacity as required under
CA.
2. Transfer of property in the goods sold.
 not only transfer of possession but also
ownership.
3. Price as consideration of the contract.
4. Subject matter is within the definition of ‘goods’

What is goods?
- every kind of movable property other than actionable
claims and money, and includes stocks and shares,
growing crops …and things attached..which are agreed
to be severed before sale
 Sale must be distinguished from Agreement To
Sell.
 Sec 4 (3) - 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, but
where the transfer of the property in the goods is
to take place at a future time or subject to some
agreement to be fulfilled, the contract is called an
agreement to sell.
 Sec 4 (4) - agreement to sell becomes a sale when
time elapses or condition fulfilled
 Difference btw SALE and ATS - in term of
remedies in case of breach.
1. TITLE
 Sec 14(a) - requires the seller to have the rights to sell
the goods
 Based on the rule - Nemo dat quod non habet - one
cannot gives what one does not have.
 Breach will entitled the buyer to repudiate the contract
and recover the price in full even though he has used
the goods - Rowland v. Divall

2. QUIET POSSESSION OF THE GOODS

 Sec 14 (b) - buyer shall have an enjoy quiet possession
of the goods.
 A warranty rather than a contract
 protect the buyer from unnecessary claims from any
third party or the seller himself.
3. FREE FROM ENCUMBRANCE
 Sec 14 ( c) - goods free from any encumbrance in favour
of any third party.
 In form of charge or mortgage - Steinke v. Edwards.

4. CORRESPOND WITH DESCRIPTION

 Sec 15 - implied condition.
 Absolute condition - latent defect not a defense
 Covers sale of unascertained goods and sale of specific
goods from catalogue or mail order
 Arcos Ltd v. E.A Ronaasen
 Beale v. Taylor
 Associated Metal Smelters v. Tham Cheow Toh
5. FIT FOR BUYER’S PURPOSE

 The common law rule is -caveat emptor or let the buyer beware.
 If the buyer does not exercise prudence - he have to bear the
consequence.
 Sec 16 - no implied warranty or condition as to the fitness of goods
supplied under the contract of sale.
 Exception [sec 16 (a)] :
 When there’s disclosure, express or implied of the purpose for
which the goods is bought.
 The buyer is relying on the seller’s skills or judgment.
 The goods are of a description which is in the course of the
seller’s business to supply
 If the goods are specific - not bought under their patent or trade
name
 Cases:
 Cammell Laird v. Manganese Bronz, Griffiths v. Peter Conway, Baldry v.
Marshall.
6. MERCHANTABLE QUALITY

 Sec 16 (b) - where goods are bought by description from a

seller who deals in such goods.
 What is merchantable quality?
 Generally means the goods sold are fit for the particular
use to which they were sold.
 To be applicable - buyer bought goods based on
description, the seller is a person who deals in such good
and the buyer has not been given the opportunity to
examine the goods.
 If buyer had given a chance to examine - the implied term no
longer applicable though the examination is superficial
- Thornett & Fehr v. Beers & Sons
 This implied term covers even goods sold under patent or
trade name. - Wilson v. Ricket, Cockerall & Co.
7. SALE BY SAMPLE
 Sec 17 - a contract of sale is a contract by sample where there
is a term in the contract express or implied to that effect.
 The implied conditions:
 The bulk shall correspond with the sample in quality
 The buyer have reasonable opportunity of comparing the bulk
with the sample.
 The goods are free form any defect which are not apparent on
reasonable examination that would make them unmerchantable
 The three conditions are independent of each other - breach
of any one entitled the buyer to reject the goods.
 However to apply the terms - parties must show intention to
contract a sale by sample.
 Cases:
 Drummond v. Van Ingenue, Godley v. Perry
 Passing of ownership not necessarily means passing of
possession vice versa.
 The time of transfer of property (ownership) have
important connotation in sale of goods as it relates with
who have to bear the risks on the goods
 Sec 26 - risk prima facie passes with property - owner
bear the risk regardless of whether he have possession
or not.
 Provided - if delivery delayed due to fault of either
party, party at fault bear any risk that might occur
because of the delay.
 Legal consequences as regards to transfer of
property, title and risk:
1. When there’s contract of sale, there must be
transfer of property - if not - failure of
consideration.
2. Consequence as regards to who bear the risk
3. Determine whether buyer who have not paid full
price can keep the goods
4. Problems in time of insolvency of seller or buyer
 As a general rule -title passes when the parties to the
contract intends it to be.
 Sec 18 - sale of uncertain goods.
 Sec 19 - sale of specific goods - subject to sec 4 (3)
 Sec 20 - sale of specific goods in a deliverable state.
 Sec 21 - sale of goods to be put in a deliverable state.
 Sec 22 - sale of goods in deliverable state that needs to
be weighed, measured etc to ascertain the price.
 Sec 23 - contract of sale of unascertained or future goods
 by description in a deliverable state.
 Sec 24 - sale of goods delivered to buyer on approval or
‘sale or return’
 Sec 27 requires that for a seller to be able to transfer
good title to the buyer, he must first have title over the
said goods - nemo dat quod non habet
 If a buyer bought some goods from a seller who is not
the owner nor have any authority to sell them - the
buyer does not acquire any title even if he has paid
value in good faith.
 Rationale - to protect the right of ownership
 Lim Chui Lai v. Zeno Ltd.
 Ng Ngat Siang v. Arab Malaysian Finance.
 EXCEPTION TO THE NEMO DAT RULE
1. ESTOPPEL
 Arises when the owner of the goods is by his conduct
precluded from denying the seller’s authority to sell.
 Estoppels can be by record, by deed or by conduct.

2. SALE BY MERCHANTILE AGENT

 Basic rule of agency is that an agent may pass a good title in
selling goods belonging to the principal provided he is acting
under the scope of his actual or apparent authority.
 Requirements to satisfy the provision:
 the agent is in possession of the goods at the time of sale.
 the possession is with consent of the owner.
 the sale was made when acting in the ordinary course of
business of a mercantile agent.
 buyer must act in good faith and have no notice of the agent's
lack of authority at the time of the sale.
3. SALE BY ONE OF JOINT OWNER
 Goods may be owned by one or more persons.
 Sale by one of the joint owner is valid notwithstanding
the absence of the other’s consent.
 Two conditions have to be satisfied:
 The seller have sole possession of the goods with consent from
the others.
 The buyer acts on good faith and have no notice of the lack of
authority at the time of the sale.

4. SALE UNDER A VOIDABLE TITLE

 When the seller acquires possession under a voidable
contract and the contract has not been rescinded at the
time of the sale, the buyer gets a good title provide he is
a BFPFVWN.
5. SALE BY A SELLER IN POSSESSION AFTER SALE
 A seller who have parted with the title of the goods but
remain in possession of the goods or the title document
can pass a good title to a BFPFVWN.
 The second buyer then gets a good title over the first
one but the latter can seek redress against the seller.

6. SALE BY A BUYER IN POSSESSION

 If a buyer, having bought or agree to buy goods,
obtained possession of the goods or the title document
with the consent of the seller, he can pass good title to a
subsequent buyer of good faith for value without
notice.
 The Sale of Goods Act also deals with performance of
the contract of sale under Chapter IV of the Act.
 Sec 31 to sec 44 laid down the duties of both parties
under the contract.

1. Delivery of the goods.

2. Place of delivery.
3. Time of delivery.
4. Delivery of wrong quantity.
5. Delivery by installment.
6. Delivery by carrier or wharfingers.
7. Acceptance.
1.DELIVERY
 Delivery means voluntary transfer of possession from one
person to another - need not involve physical delivery.

 Sec 31 - Duty of seller to deliver the goods.

 Sec 32 - Unless otherwise agreed - payment and delivery -

concurrent.

 Sec 36 (1) - whether seller has to send or buyer take possession -

depends on agreement.

 Sec 36 (5) - expense of putting the goods into deliverable state is

to be borne by seller.

 Sec 36 (2) - seller bound to deliver goods within reasonable time.

 Sec 37 (1) - if seller deliver wrong quantity (less) - buyer
may reject - if not, bound to pay at contract rate.

 If deliver larger quantity -buyer may accept only the

contracted amount, or reject all, or accept all and pay at
contract rate.

 Sec 38 (1) -unless agreed, buyer not bound to accept

delivery by installment.

 Sec 39 (1) - where seller is authorized or required to send

goods sold to buyer through carrier / wharfinger - such
delivery is prima facie deemed delivery to buyer.

 However - seller shall make such contract so as to secure

safe and speedy delivery on behalf of the buyer -if fail to
do so, may be responsible in event of damage.
2. ACCEPTANCE
 Where goods not previously examined - buyer
deemed not accept until and unless given
reasonable opportunity to examine the goods - see
whether conform to contract or not.

 Buyer deemed to accept if he told the seller to that

effect, or did anything to jeopardize the seller’s
ownership of the goods or after lapse of reasonable
time without any communication of acceptance.
A. REMEDIES OF THE BUYER
1. Right to damages for non- delivery of goods
 S
 ec 57 of SoGA as well as Sec 74 or Sec 75 of Contract Act to
determine quantum of damages to be paid.

2. Remedy for breach of warranty.

 Sec 59 - where buyer can elect to treat breach of condition as
breach of warranty.
 If treat as breach of warranty - cannot reject goods but
should claim damages.

3. Claim for specific performance.

 Sec 58 - granted on discretion of the courts if damages not
sufficient.
 Only for specific or ascertained goods.
B. REMEDIES OF THE SELLER

1. For failure of buyer to take delivery.

 Sec 44 - buyer will be liable to seller for any loss and charge.

2. Failure of buyer to accept goods.

 Sec 56 - seller entitled to damages.

3. Failure of buyer to pay for the goods.

 Sec 55 - seller may sue for the price.
 C. RIGHTS OF UNPAID SELLER AGAINST
GOODS
 Unpaid seller - to whom the whole price has not been paid or the
negotiable instrument serving as conditional payment has been
dishonored.
END OF LESSON