SALE OF GOODSPrepared for:

LAW 251

Prepared by:

THE LAW OF SALE OF GOODSIntroduction The contract of sale of goods is governed by the

Sale of Goods Act 1957 (hereinafter refers as SOGA) SOGA operates against the background of

contract law that are not inconsistent with its express provisions.

Sale of Goods Act 1957 (SOGA)- It applies to contract for the sale of all types of

goods, including second-hand goods.

Section 3 SOGA

The Contracts Act 1965, in so far as they are not

inconsistent with the express provisions of this Act shall

continue to apply to contracts of the sale of goods

Contract of SaleSale and Agreement to Sell

S.4 (1) SOGA: ‘A contract of sale of goods’

“a contract whereby the seller transfer the property in goods to the

buyer for a price”...

Seller------Buyer---------Price

E.g: A agrees to transfer the ownership of his car to B. B then pay RM10000 for a

price of the car.

Continue…..three (3) main elements in a contract

of sale of goods:

There must be goods which are to be transferred to the buyer

The seller transfers or agrees to transfer the property in goods to

the buyerThere is a price for the said transfer

Continue….Objectives of the contract of sale:The transfer of ownership of the goods to the buyer for money consideration

Sale occurs when the ownership or property in goods passes to the buyer

Parties to the contract are known as :

buyer ; and seller

Continue…. Section 4(3)

An agreement to sell is a contract under which the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled

• Section 4(4)An agreement to sell becomes a sale when

the time elapses or the conditions are fulfilled subject to which the property in the

goods to be transferred

Definition of goods1.‘Goods’ :Section 2 of SOGA

every kind of ‘movable property’ other than money

include stock and shares,

Continue…

Growing crops, grass and things attached to or forming part of the land which are

agreed to be severed before the sale or under the contract of sale

Continue….The followings are EXCLUDED from being

goods under a sale of goods of contract:Land (houses & building on the land are part of

the land)

Actionable claims (right to sue for debt/other reasons)

Money ( current currency)

Continue…. Morgan v Russel

The vendor was the lessee of certain land which was composed of slag and cinders.

He then sold the purchasers all the slag on his premises so much as the purchasers should desire to remove.

It was held by the Court :that the sale of cinders and slag was not a sale of

goods but a sale of “an interest in the land”. The vendor did not sell any definite quantity of mineral,

which could be said to be a separate thing.

Mills v StockmanThere was a contract to sell a heap of slate which

have been left on the ground for many years by a quarrying business.

The contract gave the buyer a right to enter the land and to remove the heap of slate.

It was held that the contract was not for the sale of goods.

The slate had been left in such circumstances that they had become part of the land and further, there was no term in the contract that they be severed under the contract of sale.

Types/Categories of GoodsSection 6(1)the goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or future goods

There are 5 categories of goods:Existing goods (goods already owned by

the seller)

Continue…. Specific goods

Section 2 sale of goods ActGoods identified and agreed upon at that time a contract of sale is made(example: Khair sells his motorcycle bearing registration number BCD 4994)

Continue….Unascertained:

The goods exists but it is not ascertained yet at that time of the contract is made. Goods to be manufactured @grown by

the sellerGeneric goods e.g. 1000 tones of wheatAn unidentified part of a specific wholeExample: 100 kg of wheat out of 200 kg of

wheat

Continue….Ascertained goods

Unascertained goods which have been identified and appropriated to the contract

after the contract has been madeExample:Upon selection of the 5 dress from the 10 boxes of dresses.

Continue…

Future goods Section 2Goods to be manufactured or produced or acquired by the seller after the making of the contract of saleExample:Agreement to buy Mitsubishi Evolution yet to be manufactured by the seller.

Please IdentifyEon is now discussing the possibility

of manufacturing a new car called Proton Wardina. Izham enters into an agreement with EON to purchase Proton Wardina. Proton Wardina belongs to the category of ______________ goods?

future goods

Halim has signed an agreement with Ali to sell his one and only car; a red Proton Wira. Halim’s red Proton Wira belongs to the category of ________ goods?

EXISTING GOODS

Siti wanted to buy 2 kg sugar from Pak Mat. In the shop, she saw a sack full of sugar which weighed about 5kg. Therefore, Siti’s 2kg sugar belonged to the category of ____________ goods?

UNASCERTAINED GOODS

Ownership/property in goodsIn a contract of sale of goods, the seller

transfers or agrees to transfer property in goods.

Property in goods

Ownership (Having legal title/rights

over the goods)

Continue….A person may be an owner of the goods although not in the possession of the

goods

A possessor of the goods may not be the owner event though he has physical

control over the goods

BUT

Continue….ONLY THE OWNER WHO HAS THE

PROPERTY IN GOODS IS ENTITLED TO SELL/TRANSFER THE TITLE TO THE

BUYER. THE POSSESSOR WHO IS NOT THE

OWNER IS NOT ENTITLED TO DO SO

PRICE

THE MONEY CONSIDERATION FOR A SALE OF GOODS

CONTINUE…..s.9 (1)SOGA - It may:-

Be fixed by the contract. Be left to be fixed in a manner

agreed in the contract. Be determined by the course of

dealing between parties.

Section 9(2) Of SOGA

Where the price is not determined

The buyer shall pay the

seller the reasonable

price

Formation Of The Contract

continue….1. CAPACITY

SECTION 11 Contract Act

SECTION 69 Contract Act

2. Formalities A contract of sale may be made:

in writing,

by word of mouth/ Verbally, both - partly in writing & partly by word of

mouth, ormay be implied from the conduct of the

parties- (s 5 (2) SGA) -

Continue….Section 5(1)

A contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer.

1. Immediate

OR OR BOTH OR

Delivery of goods

Delivery of

payments

2. Delivery or payments

by Installment

Delivery or payments

postponement

Continue….

3. TIME OF PAYMENT

Stipulation as to the time of payment are not deemed to be the essence

of a contract of sale.It is depend to the term of the contractSECTION 11 SALE OF GOODS ACT

TERMS OF THE CONTRACT

A. CONDITIONSA term which is essential to contract; breach of it would allow the other party to

treat the contract as repudiated. (s. 12(2) SOGA)

If the condition is breached, the party not in default entitled to repudiate the contract because the contract can be

deemed to be VOID

B. WARRANTIES ‘Warranty’ – a less vital term of a contract (collateral to the main purpose) , breach of it would give rise to a claim for damages, not a

right to discharge/reject the goods. (s.12(3) SOGA)

If the warranty is breached, the party not in default is not entitled to repudiate the

contract because it is not voidable

HOWEVERParty in default is entitled for damages

EXCEPTION….

Circumstances where contract cannot be repudiated event though there is a breach of condition:

Generally, Section 13(1):Buyers may waive the condition or elect to

treat the breach of the condition as the breach of warranty and do not want to

repudiate the contract

Continue…..(Section 13(2) ) (situations)

a. Where a contract of sale is not severable and the buyer has accepted the goods or part thereof;

b. The contract is a specific goods the property in which has passed to the buyer;

CONTINUE…

“ “buyer has accepted the goods”

The buyer told the seller that he had accepted the goods

When the goods has been delivered to the buyer and the buyer has done something

which against the ownership of the sellerAfter the expiry of a reasonable time, the

buyer keep the goods without informing the seller that he rejected the goods

SECTION 42

The breached of any condition to be full filled by seller can only be treated as a breach of warranty and not the ground of rejecting the goods or repudiate the contract

UNLESS THERE IS A TERM OF THE CONTRACT EXPRESS OR IMPLIED

Implied TermsThe SOGA implies a number of stipulations (implied

terms) in every contract for the sale of goodsThe stipulations applicable only if the parties did not

exclude or modified the terms/stipulation

(s.62 SOGA)“ where any right, duty, or liability would arise under

a contract of sale by implication of law, it may be negatived or varied by express agreement or by the

course of dealing between parties, or by usage, if the usage is such as to bind both parties to the

contract”.

cont...1. implied warranty as to “time”

s.11 of SOGATime of payment are NOT deemed to

be of the essence. Meaning that, if a buyer fails to pay by

an agreed time, the seller does not automatically repudiate the contract.

But whether time is of essence of the contract / not , it depends on intention of the parties in the terms of the contract

e.g. : When time (for delivery)is the essence of the contract which has been determined & agreed by the parties, if the seller fails to perform according to the term, it would entitle the buyer to repudiate the contract.

e.g. : commercial transaction involving livestock

e.g. :if goods are to be shipped within particular time.

Harrington v. Browne (1917) 23 CLR 297

Held: in commercial transaction involving

livestock, time of delivery is the essence of the contract.

If the goods are to be shipped within a particular time then time of shipment is

important & should be strictly adhered to.

2. Implied condition as to “title”:-

• S.14 (a) SOGA: “In the case of sale, the seller

must have a right to sell the goods & in the case of

agreement to sell, he must have a right to sell at the time when the property is to pass”

Continue…. Seller must be the owner of the

goodsSeller has the ownership/title over

the goods

Presumed to have a right to sell

Rowland v Divall [1923] 2 KB 500

• P bought a car from the seller (D) & after using it for several months, then he discovered that it was

stolen. He had to return it to true owner. • Court held:

Defendant had breach the implied condition as to title.

• Therefore, the P was allowed to rescind the contract and claim for the return of the full

price of the car paid to the Defendant.

Sometimes, seller need not be the owner of the goods (S. 14 (a) of SOGA BUT

the law requires at least able to create the appropriate rights in the buyer. i.e.

causing third party to transfer ownership directly to the buyer.

i.e. the car that still hired to the bank. Thus, seller with no title to sell the goods

at the time of the agreement to sell but later acquires title, can hold the buyer to the bargain provided the title is acquired before the buyer repudiates on discovery.

Butterworth v Kingsway Motors Ltd

The D sold a car taken on hire-purchase and it was resold a number of times before it was discovered that the hirer had no right to sell while the car was

on the hire- purchase.The P who was the last buyer rescind the contract

on being informed about the fact and demanded the return of the purchase price from the

defendant.Court held: P was entitled to rescind the contract of purchasing the car and could recover the money paid from the D since the D had no right to sell the

car.

…cont3. Implied warranty as to “quite possession”:-

S.14 (b) SOGA“In a cont. 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 & enjoy quite possession of the goods”.

This provision covers not only where the title is defective but also

a subsequent future disturbance of possession of

the goods.

Example:A sold his car to his friend Ali and

because Kassim like the car very much he often persuaded Ali to lend him the car. Kassim had a set of the car key and he used the car whenever he liked regardless of whether Ali needed the car or not.

Kassim had breached the implied warranty that Ali should have enjoy quiet possession of the car.

Microbeads A.G v Vinhurst Road Markings Ltd

In this case, a patentee (3rd party) had brought an action against the buyer alleging the use of

certain road marking machines was in breach of their patent, two years after the

sale of machines by the Plaintiff to the Defendant.

It was held by the Court that there was a breach of implied warranty as the buyer did not enjoy the future quiet enjoyment of the

goods.

4. Implied warranty that the goods are free from “encumbrance” :-

S 14 (c) SOGA: The goods must be free from any charge (gadaian) or

encumbrance in favour of any third party not declared or known to the buyer before or at the time when the contract is

made.

Example:Syarikat ABC sold a machine to XYZ company. XYZ did not know that syarikat ABC had charged the machine to Bank X. syarikat ABC had breach the warranty.

Steinke v EdwardsFacts: The Plaintiff who had brought a car from the

Defendant had to pay off the tax which was still owing to the government.

The Plaintiff sought to recover the amount he has paid for the tax from defendant/seller.

It was held by the Court that the Plaintiff was entitled to recover the money as the

Defendant had breached the implied warranty. The right of the government to levy a tax on a vehicle coupled with a right to seize the car to

enforce collection was a charge or encumbrances within the meaning of the provision.

5. Implied condition that the goods must correspond with the “description”:-

Section 15If the contract is for the sale of goods by description,

there is an implied condition that the goods must correspond with the description

it is not sufficient that the bulk of goods correspond with the sample if the goods do not

also correspond with the description(bulk of goods shall correspondence with the sample

and description).

Continue....Sale of goods by description covers all cases where the buyer has not seen the goods but is relying on the description

alone (the contract is made through telephone, mail order or sale for

catalogue)

Nagurdas Purshotumdas v. Mitsui Bussan Kaisha

Facts: Flour was ordered described as ‘ the same as our previous contracts”

whereby the flour had been sold in bags bearing a well known trademark. • Flour identical to quality was

delivered but did not bear the same well-known trade mark.

Held: It did not comply with the description. D had breach the condition as to description.

Buyer has seen the goods but the defect may be concealed from the buyer.

Associated Metal Smelters Ltd v Tham Cheow Toh

The D agreed to sell a metal melting furnace to the P and had given the undertaking that

the furnace will have a temperature of at least 2600 degrees Fahrenheit.

However, the furnace supplied by the D did not meet the requirement.

Court held:The failure on the part of the D to

supply the furnace which would meet the required temperature

constituted a breach of condition of the contract.

Cases of failure of goods to correspondence with the

descriptions:

1) Where the goods is substantially what is required but there is some

small discrepancy from the contract particulars.

Arcos Ltd v E A Ronaasen & Sons

Staves of ½ inch thick were ordered. Only 15% conformed to the requirement. Despite the fact that the goods were

reasonably fit for their purpose, the Court held that the buyers were

entitled to reject them for failing to correspond with the contract

description.

2) those involving goods described in a more general sense in the absence of detailed commercial description.

( Because the description is more general, a considerable discrepancy must occur before it can constitute a

breach ).

Varley v WhippThe seller agreed to sell a 2nd hand reaping

machine described as “ new the previous year”. The buyer did not look at the machine but relied on the description. When the machine was delivered, it was found the machine was very old machine which had been repaired. The buyer sued the seller for breach of implied condition.

The court held:The seller has breached the implied conditions

as the goods supplied were not corresponding with the description. The buyer is entitled to rescind the contract and reject the machine.

6. Implied condition as to “fitness for particular purpose”:-

GENERAL RULE : The rule of common law applies; that is,

“CAVEAT EMPTOR” (let the buyer beware) – where the buyer must exercise due care in

making purchases. If he does not, he must bear the

consequences

CAVEAT EMPTOR RULE IS PRESERVED UNDER SECTION

16(1) SOGA

“ subject to this Act and any other law for the time being in force, there is no implied warranty or condition as to the quality or fitness for any

particular purpose of goods supplied under a contract of

sale…”

Exceptions to Caveat Emptor Rule1. s.16(1)(a)

“…Implied condition that the goods must be reasonably fit for a

particular purpose of the buyer”

IF GOODS NOT FIT

BUYER MAY SUE THE SELLER FOR BREACH OF IMPLIED

CONDITION

CONDITIONS TO BE FULLFILLED

1. DISCLOSURE OF PURPOSE (s. 16 (1) (a) ).

EVEN THOUGH THE GOODS IS NOT FIT

GRIFFITHS v PETER CONWAY LTDHELD:

A woman with an unusual sensitive skin who bought a Harris Tweed coat, without

disclosing her sensitivity to the seller, did not succeed under this section

However, if the description of the goods shows that it has

only one purpose, no disclosure of that purpose is

required.

It is implied that the goods is fit for that particular purpose.

Priest v Last

The P purchased a hot water bottle from the D, a retail chemist. Some days later, the bottle while in use by the P’s wife, burst.

A s a result, she was scalded & the P sued the D.

It was held that if the description of the goods by which they were sold pointed to

one particular purpose only, then the requirement of disclosure of purpose is

deemed fulfilled.

CONTINUE…..2. RELIANCE ON THE SELLER’S SKILL

AND JUDGMENT (s. 16 (1) (a))

The buyer must also established that he had relied on the seller’s skill and

judgment before purchasing the goods

GRANT V AUSTRALIAN KNITTING MILLS

The Court held that reliance usually arises by implication from the

circumstances. For instances, of a purchase from a retailer, the reliance will be inferred

from the fact that a buyer goes to the shop in the confidence that the

seller has selected his stock with skills and judgment

Continue….

3. The goods are of a description which it is in the course of the seller’s business to supply. (S. 16 (a))

The goods bought by the buyer must be the kind which is in the course of

the seller’s business to supply.

Spencer Trading Co. Ltd v Devon

The manufactured had previously supplied to the Plaintiff on a special order, an adhesive

substance made from gum resin for making flypapers.

The following year, the Plaintiff ordered a further supply for the same purpose from the

manufacturer, who on this occasion used synthetic raw materials in place of the

natural material previously used. Consequently, the flypapers were

unsatisfactory for its purpose

Continue…..Held:

The goods are of a description which it is in the course of the sellers

business to supply. Therefore the manufacturer was liable

for breach of an implied condition that the goods were fit for the purpose for which they were

required.

Continue….4. The goods must not have been brought under

patent or trade name. (proviso of S. 16 (1) (a)). If brought under a patent or trade name it

gives the impression that he is not relying on the seller’s skill & judgment.

Therefore he cannot later complain that the goods are not fit for the particular purpose he required.

The implied condition DID NOT applied.

However, if the goods were not bought under the patent or trade

name, or

if the buyer did buy under a trade name but relies on the seller’s skill

& judgment

The implied condition applied.

7. Implied condition as to “merchantable quality”

2. (s.16(1)(b)SOGA:-

Where goods are bought by description from a seller who deals in goods of that description, there is an implied condition that the goods shall be of merchantable quality.

…contMerchantable Quality of goods

means the goods must meet the standard which a reasonable person

would regard as satisfactory .Goods sold must be fit for particular use

for which they were soldi.e. with reference to the expectations

of the average buyer.E g: in a sale of a lorry, it is an implied

condition that the lorry will not overheat easily.

Henry Kendall & Sons v William Lilico & Sons Ltd

Held:“If the description in the contract was so

limited that goods sold under it would normally be used for only one purpose, then the goods would be UNMERCHANTABLE if

they were of NO USE for that purpose. However, if the description was so general, or

used for several purposes, the goods would be MERCHANTABLE if they were fit for any

one of the purpose. “

Wilson v Ricket, Cockerell & Co. Ltd

A lady ordered fuel by its trade name “Coalite” from a fuel merchant. The

consignment included a piece of coal in which a detonator was embedded and

resulting in an explosion in the fireplace.Held:

The consignment as a whole was UNMERCHANTABLE. It had defects

making it unfit for burning.

Proviso of S. 16 (1) (b)“ …Provided that if the buyer has

examined the goods, there shall be NO IMPLIED condition as

regards defect which such examination ought to have

revealed”.

Exceptions

Proviso of S. 16 (1)( b) IMPLIED CONDITION DOES NOT APPLY

Where the BUYER HAS EXAMINED the goods and by such examination the BUYER WOULD

DISCOVER THE DEFECTS.

if there was an examination before or at the time of contract, the buyer cannot later

complain of defects which a proper examination would have revealed.

HOWEVER,If the DEFECT COULD NOT BE DISCOVERED, by any reasonable

examination;

IMPLIED CONDITION AS MERCHANTABLE QUALITY

WOULD APPLY.

Wren v Holt

The P recovered damages for breach of condition of merchantability of beer which was contaminated by

arsenic. The exception was not applicable

because the defect was not discoverable on reasonable

examination.

Thornett & Fehr v Beers & Sons

Though the buyer has conducted a superficial look at the outside of some

barrels of glue, there was NO examination and therefore, THE IMPLIED CONDITION DID NOT

APPLY. A proper examination MUST BE CONDUCTED such as opening the barrel would revealed the defect.

8. Sale by Sample

Used in the sale of bulk of goods like rice, wheat, flour, carpets, etc

Section 17(2): In the case of contract for sale by sample

there is an implied condition that:

(a) The bulk shall correspond with the sample in quality.

(a) Buyer has reasonable opportunity of comparing the bulk with the sample.

(a) The goods shall be free from any defect which would not be apparent

on reasonable examination of the sample.

CONTINUE….

Breach of any one of the three conditions,

the buyer is entitled to REJECT the goods and treat the contract

as at end.

If the bulk correspondence with the sample but there is a latent defect

rendering the goods unmarchantable

BUYER ENTITLED TO REJECT THEM.

Drummond v Van Ingen The cloth supplied by the Seller was

equal to samples previously examined but because of latent

defect not discoverable by a reasonable examination.

Court held: the seller is liable of the subsection.

S.17 (2) (C)

The seller LIABLE for all defects

Which a BUYER of ordinary EXPERINCE and DILIGENCE not

discover on reasonable inspection of the sample.

Godley v PerryA boy bought a catapult. While using it, the

catapult broke and he lost the sight of an eye. The shopkeeper bought it from a wholesaler by sample and tested it by pulling back the elastic.

The shopkeeper was sued for the boy’s injury and the court held that the catapult was not fit for the purpose for which buyer wanted it and it was of unmerchantable quality.

Then, the shopkeeper filed an action against the wholesaler.

Although the shopkeeper made a reasonable examination, the defect was

not one which was apparent on such examination.

Thus, he succeeded in his action against the wholesaler.

PRIVITY OF CONTRACTThe implied conditions and warranties bind

the contracting parties only

BUYER SELLER

Continue….3rd PARTY, if suffer injury/

damages

CANNOT SUE SELLER OR

MANUFACTURER

NO CONTRACTUA

L RELATIONSH

IP

Donoughue v Stevenson The Plaintiff became ill as a result of drinking a

bottle of ginger beer which contained a decomposed snail in the bottle. The ginger beer

was purchased by the Plaintiff’s friend.

Held:The manufacturer of the drink was liable to pay damages to the Plaintiff for negligence. The P had to bring action under the law of tort and not

contract as there is no privity of contract between the Plaintiff and the manufacturer.

Exclusion of Implied terms. S. 62 of SOGA

where any right, duty, or liability would arise under a contract of sale

by implication of law, it may be negatived or varied by express

agreement or by the course of dealing between parties, or by usage, if the

usage is such as to bind both parties to the contract”.

TRANSFER OF PROPERTY

TRANSFER OF PROPERTY

WHY IS THIS IMPORTANT?

Introduction Once property passes to the buyer, the buyer

would bear the risk. E/Though, the goods HAS NOT BEEN

DELIVERED to the BUYER.

S. 26 of SOGA. “…when the property is transferred to the

BUYER the goods are at the buyer’s risk whether delivery has been made or not”.

However, if the delivery has been delayed due to

the fault of the seller,

then the seller has to bear the risk. Even though the property has passed to

the buyer.

Proviso of S. 26 of SOGA.

If any party sought to claim any right over the property from 3rd party,

only the person who has the property in goods may claim.

the seller would entitle to claim for the price,

if the property in goods has passed to the buyer.

WHEN PROPERTY IN GOODS PASSES TO

THE BUYER?

TIME

WHEN THE PROPERTIES IN GOOD TRANSFER

RED TO BUYER?

1. SALE OF UNASCERTAI

N GOODSSECTION 18

2. SALE OF SPECIFIC

@ASCERTAINED GOODS

SECTION 19

3.SALE OF SPECIFIC

GOODS IN A DELIVERABLE

STATESECTION 20

4. SALE OF SPECIFIC

GOODS TO BE PUT IN A

DELIVERABLE STATE

SECTION 21

5. SALE OF SPECIFIC GOODS TO BE PUT IN A DELIVERABLE

STATEBUT SELLER HAS

TO ASCERTAIN THE PRICE

SECTION 226. SALE OF

UNASCERTAINED@FUTURE

GOODS BY DESCRIPTIONSECTION 23

7. GOODS SENT ON

APPROVALSECTION 24

1. SALE OF UNASCERTAINED GOODS

SECTION 18CONTRACT FOR THE SALE OF UNASCERTAIN

GOODS

NO PROPERTY IN GOODS IS TRANSFERRED TO THE BUYER

UNLESSTHE GOODS ARE ASCERTAINED

E.G.A contracts to buy a new car which

forms part of a larger consignment.No property passes until the seller ascertained the car to be

sold to A.

2. SALE OF SPECIFIC OR ASCERTAINED GOODS

Section 19(1)For the sale of SPECIFIC GOODS OR

ASCERTAINED GOODS, the property in goods

is transferred to the buyer

WHENTHE PARTIES INTENDED TO IT TO BE

TRANSFERRED

Continue….Section 19(2)

HOW TO DETERMINE THE INTENTION OF THE PARTIES?

BY CONDUCT BY CIRCUMSTANCES

a. SALE OF SPECIFIC GOODS IN DELIVERABLE STATEDELIVERABLE STATE:

Goods that in the state that the buyer would under the contract BE BOUND

to take delivery of them

S.20 of SOGA

Section 20CONTRACT FOR THE SALE OF SPECIFIC

GOODS IN DELIVERABLE STATE THE PROPERTY PASSES to the BUYER ,

WHEN THE CONTRACT IS MADE

IMMATERIALTHE TIME OF PAYMENT OF THE PRICE

THE TIME OF DELIVERY OF GOODSOR BOTH are POSTPONED

Example:A buyer agrees to buy a particular

book on credit. The property in goods PASSES

immediately to the BUYER when the contract of sale is made, even

though the payment is postponed.

Underwood Ltd v Burgh Castle Brick & Cement

There was a contract for the sale of a condensing engine to be delivered on rail in London.

At the time of contract, the engine was affixed to the seller’s premise and it had to be separated from the concrete floor and to be dismantled, before it could be delivered on rail.

While the main engine was being loaded on a railway truck, it was partially broken by accident.

Issue: who has bear the risk of damages? Held:

The property in goods HAD NOT PASSED to the buyer at the time of accident. The

engine is still at the risk of the seller.S. 20 could not applied because the engine was not in a deliverable state

at the time of contract.

B. SPECIFIC GOODS TO BE PUT IN DELIVERABLE STATE

Section 21The seller is bound to do something on the goods for the purpose of putting them

into deliverable state

The property does not pass until such thing is done and the buyer has notice

Example The seller agrees to sell a particular 2nd

hand motorcycle to the buyer, It is agreed that under the contract that the seller would change the tyres before the delivery to the buyer.

The property in the motorcycle does not pass to the buyer until the seller has changed the tyres.

Once the tyres have been changed, then only the property passes to the buyer.

C. Sale of Specific Goods In a Deliverable State; but The Seller has to do Something in

Order To ascertain The Price

The goods are of specific and in a deliverable state.

Where the seller bound to weigh, measure, test or do something for the purpose of ascertaining the price of the goods

Section 22

The property does not pass to the buyer until such thing is done by the seller, and the

buyer has notice/knowledge of it.

example:A agrees to sell all remaining sugar contained

in a particular bag for RM 2 per kg. The said property does not passed to the buyer until the seller weighs them and the buyer knows that

they have been weighed.

Sale of specific goods which are ascertained in quantity but the price cannot be calculated

until the quantity of the goods is ascertained by weighing.

Please identify:If the seller is required to measure 10 kg

from a bag containing more than quantity to be sold?

Not a sale of specific goods

Unascertained goods

Governed by s. 23 (1).

Sale of Unascertained @ Future Goods By Description; and Appropriation

S. 23 (1)“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

seller with the assent of the buyer or by buyer with the assent of the seller, the

property in the goods thereupon passes to the buyer”.

Unascertained goods by description means, goods which cannot be specifically identified at the time of the contract, but are referred to by description

1. Future goods by description means goods to be manufactured or produced or acquired by the seller according to certain description

Continue…..Section 23(1)

goods of that description; and in a deliverable state’

appropriated to the contract

the property thereupon passes to the buyer

what is Unconditionally appropriated?

any act showing an intention to identify goods without any further condition.

example:selection, separation, of weighing from a

bulk

Continue….Section 23(2)

If the contract involves delivery to a carrier,

once the seller delivers the goods to the buyer or to the carrier for the purpose of

transmission (delivery) to the buyer.

The seller is deemed too have an unconditionally appropriated the goods to

the contract.

Therefore the property in goods passes to the buyer at the

moment the goods are handed over to a carrier

7. Goods Sent on Approval @on Sale or Return

S.24 of SOGA When goods are delivered to the buyer on

approval or on sale or return, the property in goods passes to the buyera. When the buyer signifies his approval or does any other act adopting the transaction

b. if the buyers does not signify his approval but retains the goods without giving notice of rejection, then if the time has been fixed for the return; the property passes on the expiration of a reasonable time

This rule applied where the goods are :-

sent to the buyer for trial or giving the buyer option to purchase.

If the buyer chooses to buy goods:-

He may signify his acceptance / approval to the seller

The buyer may also “ does any other act adopting the transaction”.

Implied from such acti.e: buyer used the goods himself.

Kirkham v Attenborough

The buyer received some jewelerry from the seller, which was subject to “ on sale or return”. The buyer then pledged the

jewelerry to a 3rd party.

Held:The buyer had adopted the transaction. The property in the jewelerry has passed

to the buyer.

S.24 of SOGA b. if the buyers does not signify his

approval but retains the goods without giving notice of rejection, then if the time

has been fixed for the return; the property passes on the

expiration of a reasonable time

If the buyer failed to return the goods within specific / reasonable time

He is deemed to have accepted the saleThe property passes to the buyer.

What is reasonable time?POOLE V SMITH’S CAR SALES (BALHAM) LTD

A car dealer supplied 2 cars “ on sale or return” to another dealer. 1 of the cars was sold, but the unsold

2nd car was returned about 3 months later in poor condition. It was rejected by 1st dealer, who then

claimed for the price from 2nd dealer. Held:

“ a reasonable time “ had expired. Therefore, the property in goods passed to the 2nd dealer. Thus, the

2nd dealer has to pay for the price of the car to 1st dealer.

If the goods are LOST or destructed WITHOUT THE DEFAULT of the BUYER

BUYER is NOT LIABLEPROVIDED that it happen before the due date or before the reasonable time lapses.

Transfer of RiskGeneral Rule: s.26 SOGA 1957

Application: the risk of accidental loss/ damage to the goods passes with property whether delivery has been made or not.

*The Buyer would have to pay for the

goods even though they had been destroyed.

…contExceptions:

1.s.26 SOGA – “Unless otherwise agreed….”

RISK will NOT PASS with property where there is an express / implied

provision in the agreement to the contrary.

Example: The parties can state in the contract who is to bear the risk.

…cont2. proviso I of S. 26 of SOGA –

But where delivery has been delayed through the fault of either B or S, the goods

are at the risk of the party at fault as regards any loss which might not have

occurred but for such fault.

Application: Risk lies with the party at fault for delays in delivery, irrespective

of where property lies.

…cont3. proviso II of s. 26 of SOGA – Nothing in this

section shall effect the duties or liabilities of either S or B as a bailee of the goods of the

other party.

Application: Risk lies with the bailee at fault.

E.g: Property in goods may have passed to the B, but if the goods were lost thru’ the negligent of the S (the bailee) while in his custody, S will be

liable for the lost.

The Passage of RiskUntil risk passes, the B may refuse

to take delivery of goods which are damaged in transit.

BUT once risk has passed to the B, the S is exempted of liability for

loss / damage to the goods (unless caused by the S’s negligent)

Perishing GoodsS.7: where goods perishing before making a contract, the

contract is voidS.8: where goods perishing before sale but after agreement to sell, the agreement is thereby

avoided.

Transfer Of TitleIssues:

Buyer bought goods from a non-owner.

Whether Buyer has obtained a good (valid) title?

if not, whether Buyer can sue under s.14(a) SOGA?

GENERAL RULE: Rule- Latin Maxim:

nemo dat quod non habet – “no one can give what he has not got” or “no one can

give a better title than he has himself”.

Meaning: A seller who does not own the goods, or who sells them without

the owner’s authority CANNOT transfer ownership to the buyer.

The maxim has been adopted into s.27 SOGA

S. 27 SGA ‘…where goods are sold by a person who is not the owner thereof, & who

does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had..’

exampleA stole a car and sold it to B.

In this situation, A does not have the title to the car.

Therefore, B also would not get a title to the car even though he had

paid for it.

Continue….Application:

A person who has no title cannot pass good/valid title to another.

[this is to protect the ownership so that if goods are stolen & subsequently sold, the right of the original owner is retained]

Continue…. Lim Chui Lai v Zeno Ltd 1964) 30 MLJ

314

Zeno Ltd had entered into agreement with Ahmad (contractor) who had contract with PJ Authority to construct culvert. Under the contract between Zeno Ltd and Ahmad, Zeno was to provide A with all material for the construction. Then, Z delivered all the materials to the construction site.

Unfortunately, A’s contract with PJ was cancelled; Z thereupon informed PJ that the materials on site belonged to them. When Z attempted to sell the material, they discovered the materials had been sold by A to Lim Chui Lai.

Continue….Held:

A was merely the bailee & not the owner of the goods at the time he sold them to

the Appellant. Because A had no title to the goods /

authority to sell them, he could not pass any title to Appellant.

Thus, Lim Chui Lai does not have the title upon the materials bought from Ahmad

Continue…. Rowland v Divall

Plaintiff bought a car from D, & after using it for some 4 months, discovered that it was a

stolen car.He had to return it to the true owner.

Held: The D had breached the condition as to title &

allowed recovery by the P of full price on the basis of a total failure of consideration.

Continue….. The Buyer would have to return the goods

to its original owner

UNLESS

the Buyer can prove that he came within ONE OF THE EXCEPTIONS to the Nemo date rule contained in Section 27, proviso 27, 28, 29, 30(1) & 30(2)

exceptions

Exceptions to NEMO DAT QUOD NON HABET RULE:

1. Estoppel

(second limb of s.27 of SOGA) “.. Unless the owner of the goods is by his conduct precluded from denying the S’s authority to sell”.

Owner by his conduct makes it appear to the buyer that the person who sells the goods has his authority to do so & buyer

relies on that conduct,

the buyer obtains a good title because the owner is precluded by his conduct from denying the seller’s authority to sell

Continue…..*Application:

Owner is estopped (prevented) from denying the S’s right to sell. The owner is estopped from asserting his title.

Example: Samy tells Ali in front of Muthu that Samy want to sell Muthu's Books to Ali and Muthu keep

on silent. If Samy sells the books to Ali, Muthu cannot complain or estopped from denying that Samy has

sold his books without his authority

N.Z Securities v Wrightcars LtdA agreed to sell a car to B and B was given

possession of the car upon the tender of a cheque as payment. It was agreed between

them that the title to the car was not to pass to B until the price had been received (i.e. the

cheque has been honoured/ cashed).B then sold the car to C. Before the sale to C

was finalised, C had contacted A’s office. In response to C’s inquiry , C was informed by A’s

employee that B had paid for the car.Later the cheque which was given to A by B was

dishonoured. Therefore A repossessed the car from C.

Held:C was successful in claiming that A

was precluded / estopped by his conduct from denying B’s authority

to sell.Therefore, the title has passed to C.

- 2. Sale by mercantile agent –

proviso of s.27 of SOGA“…Sale by mercantile agent, with the consent of owner, in possession of goods or of a document of title to the goods, any sale made by him when

acting in the ordinary course of business shall be valid as if he were expressly authorized by the owner of the goods to make the same…”

Definition ‘mercantile agent’ – s.2 of SOGA

Merchantile agent having in a customary course of business as such agent

authority either to sell goods, or to consign goods for the purposes of sale,

or to buy goods or to raise money on the security

Example:Second-hand automobile dealer, a broker,

or an auctioneer

Elements: The possession must be with the consent of

the owner At the time of sale, the mercantile agent must

be in possession of the goods or the document of title to the goods.

the mercantile agent sells the goods in the ordinary course of business as mercantile

agentThe buyer has acted in good faith and must not

have knowledge of the agent’s lack of authority to sell

3. Sale by one of joint owners

Section 28“ If one of several joint owners of goods has the sole possession of the goods by permission / consent of the co-owners,

the property in the goods is transferred to any person who buys them from such joint owner in good faith & has not at the time of the contract of sale notice that the seller has no authority to sell.”

Elements: 1 of the owners has the sole possession

of the goods by permission of the co-owners.

The buyer has acted in good faith and must not have knowledge of the agent’s

lack of authority to sell

Continue…..Example:

X,Y & Z jointly owned an oven. X was allowed to keep the oven & to cook with it since Y & Z

did not know how to cook. X, without Y & Z’s permission, sold the oven to

A who did not know about X’s lack of authority.

Held: A would acquire a good title to the oven.

4. Sale under a voidable title

s.29 of SOGA “ The seller of goods has obtained possession thereof under a contract voidable under s.19 or 20 of the Contracts Act 1950, but the contract has NOT been rescinded at the time of the sale…”

(i.e. his title has not been avoided at the time of the sale), the buyer acquires a good title to the goods provided he buys them in good faith.

Elements: The seller obtained possession of the

goods under a voidable contract. The said voidable contract has not

been rescindedThe buyer has acted in good faith and

without knowledge of the fact that the seller has NO good title to pass

Continue…..Example:

A obtains good from B by fraud & sells them to C who buys them innocently.

At the time C buys the goods, B has not rescinded the contract made with A.

C obtains good title to the goods. (e.g. of not avoided).

5. Sale by SELLER in possession after sale

s.30(1) SOGA “…if seller continues/is in possession of the

goods or of the document of title, the delivery/transfer by that person or by

mercantile agent acting for him, of the goods or documents of title under any sale, pledge

or other disposition … thereof to any person receiving the same in good faith shall have the same

effect as if the person making the delivery/transfer were expressly

authorized by the owner of the goods to make the same. “

Happen when a seller has transferred the property in goods to a buyer but he (the

seller) remains in the possession of the goodsThe seller then, sell the goods to another

buyer who buys in good faith

2nd buyer will get a good title The 1st buyer losses his title and he

HAS to get his REMEDY against the seller.

Example:If a seller resells to a 2nd buyer the goods sold by him previously to the 1st buyer,

the 2nd buyer will obtain good title to the goods if he has received the goods in good faith & without notice of the

previous sale.

The 1st buyer will lose the title but he can take legal action against the seller who

would be liable to him.

Motor Credits (Hire Finance) Ltd v Pacific Motor Auction Pty Ltd

Motor Credits Ltd (MCL) who was a dealer in vehicles sold a number of vehicles to the Plaintiff under a display agreement, whereby Motor Credits remained in possession of the cars for display in their showrooms.

MCL were paid 90% of the price and were authorised to sell the vehicles as agent for the P.

MCL got into financial difficulties and the P revoked the MCL’s authority to sell the vehicles but MCL nevertheless had sold numbers of the cars to D who were bona fide purchasers for value.

Held:The D obtained a good title. MCL is

to be treated as continuing in possession and is able to pass a good

title under S. 30.

6. Sale by a BUYER in possession AFTER SALE

s30(2) SOGA

if a buyer, having bought/agreed to buy goods, obtains possession of the goods/the documents of title with the consent of the seller, he can pass a good title to a subsequent buyer acting in good faith, even if under the first transaction he has not obtained a good

title.

Buyer obtains possession with the consent of the seller

However, the property in goods is still subject to some rights or interest of the

seller.

The said buyer can pass a good title to another bona fide buyer who has NO knowledge about the rights or interest of

the original seller.

Newtons of Wembley Ltd v Williams

[1965] 1 QB 560

Plaintiff sold a car to A who paid by cheque. It was agreed that the title would not pass until the

cheque was honoured. A was given possession of the car but the , but later on, the cheque was

dishonoured. P then rescinded the contract with A.

However, A had sold the car to B who bought it without knowledge of the position. Furthermore, B had resold it to the defendant. Plaintiff tried to

recover the car from him.

Held:

A, the original buyer, was in possession with the consent of the owner. Hence, he could pass a good title to B, who in turn

transferred it to the defendant. Thus, the defendant had a good title to the

car and entitled to keep the car.

Delivery and acceptance of Goods

s.31 SOGA – It’s the duty of seller to deliver the

goods whilst the buyer’s duty is to accept & pay for them accordance

with the terms of the contract.

“Delivery” Means voluntary transfer of possession from

one person to another. Constructive delivery is sufficient.(need not include physical transfer)

:s.33 SGA

Non-delivery – buyer may sue the seller for damages for non delivery(s.57 SGA).

Place of delivery – whether the seller is required to send the goods to the buyer or the buyer has to take possession of the goods depends on what has been agreed upon between them ( s.36(1)

SGA

…cont’dUnless the parties agree otherwise, the

expenses of & incidental to putting the goods into a deliverable state shall be borne by the seller.

Time of DeliveryWhere under the contract of sale the

seller is bound to send the goods to the buyer, but NO TIME for sending them is fixed, the seller is bound to send them within a reasonable time (s.36(2) SGA)

Delivery of wrong quantity-S.37(1), (2),(3) &(4)

1. Seller delivers to the buyer a quantity of goods less than that which he contracted to sell:-

a) the buyer may reject all the goods so delivered, or

b) if the buyer accepts the goods so delivered, he is bound to pay for them at the contract rate.(s.37(1) SOGA)

Case: Harland & Wolff Ltd v J. Burstall & Co

A contract for 500 loads of timber. Held: that delivery of 470 loads would

have been non-performance of the contract entitling buyer to reject

…con’t Seller delivers to the buyer a larger

quantity of goods than that which he contracted to sell, the buyer may:-

a) Accept the goods included in the contract & reject the rest; or

b) Reject all the goodsc) Accept all the goods(if buyer accepts all the goods, he has to

pay for the goods at the contract rate) - s.37(2) SOGA

…con’t Seller delivers to the buyer the goods

he contracted to sell mixed with goods of a different description not included in the contract, the buyer may:-

1. Accept the goods which are in accordance with the contract & reject the rest; or

2. Reject the whole. – s.37(3) SOGA(s.37(4): SOGA are subjects to any usage of

trade, special agreement or course of dealing between the parties.)

BREACH BY THE BUYER

Continue…..1. Failure of Buyer to Take Delivery

Section 44

When the seller is ready to deliver the goods, and request the buyer to take delivery, the buyer must take delivery of the goods within the reasonable time after the request of the seller

If the Buyer refused or neglect to take delivery, the buyer would be liable for any loss due to his own refusal or negligence

the Buyer would also LIABLE for a reasonable charge for the care and custody of the goods by the seller.

Continue…..2. Failure of Buyer to Pay for the Goods

Section 55

If the buyer failed to pay for the price of the goods, the seller may sue the buyer for the price when:i. The property in goods (ownership) has passed to the buyer (S. 55(1) ); or

ii. The price is payable on a certain day but the buyer failed to pay on that day; irrespective of delivery, or the property in the goods has not passed to the buyer (S. 55(2) )

Continue…..3. Failure of Buyer to ACCEPT the Goods

Section 56

If the buyer WRONGFULLY neglects or refuses to accept and pay for the goods

The Seller may sue the buyer for damages for non-acceptance

Rights (Remedies) Of Unpaid Seller

Against The Goods

WHO IS HE?

UNPAID SELLER (S. 45

(1))

THE SELLER HAS NOT

BEEN PAID WITH THE

WHOLE PRICE

WHEN THE BILL OF EXCHANGE

OR OTHER NEGOTIABLE

INSTRUMENT, RECEIVED BY

THE SELLER AS A

CONDITIONAL PAYMENT IS

DISHONOURED

RIGHTS IN

PERSONAM

(personal)

RIGHTS IN REM

(property)

Common remedies that are available for the unpaid seller against the buyer

RIGHTS IN PERSONAM

Remedies of the unpaid seller :-

1.To sue the buyer for the price (S. 55);

2.To sue the buyer for damages for non-acceptance (S. 56).

Section 55

Where under a contract of sale, of property in the goods has passed to

the buyer and the buyer wrongfully neglect or refuses to pay for the goods according to the terms of the

contract,

the seller may sue him for the price of the goods.

Continue….Section 56

Where buyer wrongfully neglects or refuses to accept

and pay for the goods ;

the seller may sue him for the damages for non-acceptance.

In respect of the goods themselves:

RIGHT OF LIEN RIGHT OF STOPPAGE IN TRANSIT

RIGHT OF RESELL

RIGHTS IN REM

1. RIGHT OF LIENA legal lien is dependant on possession.

The unpaid seller who is in possession of the goods

Is entitled to retain possession until payment or tender of the price.

The right still exist even where the property in goods has passed to the buyer, but the delivery has not been

made. (s. 46 (1) (a))

Section 46(1)(a)This rights exists even where the

property in the goods has passed to the buyer but

delivery has not been made

Continue….Section 46(2)

Where the properties in goods has not passed to the buyer,

the seller may with hold delivery in addition to his other

remedies

Continue….These rights may exercise in the following situations :-Section 47(1):

(a) Where the goods have been sold without any stipulation as to credit;(b) Where the goods have been sold on credit but the term of credit has expired;( c) Where the buyers becomes insolvent.

Continue…..Section 47(2)

The seller may exercise his right of lien notwithstanding

that he is possession of the goods as agent or bailee for

the buyer

Continue…. Section 48

Where an unpaid seller has made part delivery of the goods, he may exercise his right of lien on the remainder, unless such part

delivery has been made under such circumstances as to show an agreement to waive the lien.

Continue….. Section 49

The unpaid seller losses his lien in the following circumstances:

When he delivers the goods to the carrier or other bailee in order that the goods be

transmitted to the buyer without reserving the right of disposal of the goods

The buyer or his agent lawfully obtains possession of the goods

When the seller waives his lien (s. 48)

2. RIGHT OF STOPPAGE IN TRANSITSection 50

Subject to this Act when the buyer of goods becomes insolvent;

the unpaid seller who has parted with the

possession of the goods has the right of stopping them in transit, that is to say, he may resume possession of the

goods as long as they are in the course in transit, and may in retain them until

payment or tender of the price.

This is a right of an unpaid seller to stop the goods in transit, to resume

possession of the goods as long as they are in the course of transit (lintasan

barang-barang dagangan, pengangkutan (barang, orang)

The seller may retain the goods until payment of the price

Continue…

Buyer becomes insolventThe goods are in control of a

carrier (in transit)

WHEN?

Who is insolvent?A person who has ceased to pay his debts in

the ordinary course of business, or cannot pay his debts as they become due, whether he has committed an act of bankruptcy or

not.

Continue….Duration of transit

Section 51Goods are deemed to be in the course of transit

;

from the time when they are delivered to a carrier or other bailee for the purpose of

transmission to the buyer, or until the buyer or his agent in that behalf

takes delivery of them from such carrier or other bailee.

Continue….Transit is at the end in the following circumstances:i. When the buyer takes delivery from the carrier. Section 51(1)ii.When the Buyer obtains delivery of the goods before their arrival at the appointed destination . Section 51(2)iii.After the arrival, the carrier acknowledges to the buyer that he holds the goods on the buyer’s behalf and continues in possession. It is immaterial/not important that a further destination may have been indicated by the buyer. Section 51(3)

Continue….Transit cannot recommence merely

because the buyer has instructed that the goods be sent on a further journey to another destination

iv. Where the carrier wrongfully refuses to deliver the goods to the buyer. Section 51(6)

Continue….If part of the goods has been delivered to the buyer, and the remainder of the goods are still in

transit,

the unpaid seller has the right of stoppage in transit for such remainder

which are still with the carrier. Section 51(7)

Continue…Methods for effecting stoppage

The unpaid seller may exercise stoppage in transit by the following ways:

by taking actual possession of the goods as provided under section 52(1) or; Giving notice to the carrier or his principal

Continue…..Giving notice to the carrier

The carrier shall redeliver the goods to the seller or according to the seller’s

directions. The expenses of redelivery shall be borne by

the seller

3. RIGHT OF RESELLSection 54 gives a right of resell to the unpaid seller in the following circumstances:

1. Where the goods are perishable nature. (Section 54(2))

Continue…..2. Where the unpaid seller who had exercised his right of lien or

stoppage in transit, and has given notice to the buyer of his intention to resell,

but the buyer fails to pay for the price within a reasonable time after receiving such notice

(section 54(2))

THUS….The seller may also recover from the original buyer, damages for any loss

due to his breach of contract;The buyer shall not be entitled to any profit, which may occur out of that

resale;

However, if the seller failed to give such notice, the seller shall not be entitled to recover such damages,

and the buyer shall be entitled to the profit out of the resale, if any. Section 54(2)

Continue…

3. Where the seller expressly in the contract, reserve the right of

resale in cases the buyer failed to pay for the price.

Section 54(4)

Continue….The effect of such resale is that, the original

contract with such default buyer would terminate

Therefore, the original buyer is no longer required to pay for the price, and the seller is entitled to keep any profit out of that resale

However the seller is still entitled for damages from the original buyer for breach of contract and for any loss suffered by the seller out of that breach.

BREACH BY THE SELLER

1.Damages For Non-delivery of the Goods Where seller wrongfully neglects / refuses to deliver the goods to buyer, the buyer may sue

the seller for damages for non-delivery- (s.57 SGA)

The buyer may also be entitled for special damages, which may be recoverable under the law

If the buyer is also entitled for interest as such rate as the court thinks fit, on the amount of the price paid, from the date on which the payment was made. (Section 61(1))

2. Specific PerformanceIn certain circumstances, which are subject

to Chapter II of the Specific Relief Act 1950,

the buyer may apply to the Court to grant a decree,

directing the seller to the perform the contract specifically, without giving the seller the option of retaining the goods

by paying damages to the buyer.

Specific Performance is a discretionary decree by Court.

This remedy is available only if the contract is to deliver specific goods or ascertained goods. (Re Wait-5oo tons of wheat from a consignment@1000 tons).

3. Buyer’s Action in TortBuyer can sue the seller in tort for wrongful interference with the goods inconsistent with the ownership of the buyer.

1. Detinue; and2. Conversion (s.56 SGA)

“Detinue” – wrongful detention of the goodse.g: where the prop.in goods has passed to the

buyer & seller withholds the goods although the buyer demands for them.

…con’t“conversion” – means the dealing with the

goods in a manner inconsistent with the ownership of the buyer.

E.g. if the seller wrongfully sells that goods to a third party although the property in the goods has passed to the buyer.

4. DAMAGES FOR BREACH OF WARRANTY

Whenever there is a breach of warranty by the seller,

the buyer is not entitled to reject the goods.

However the buyer is entitled to sue the seller for damages because of breach of

warrantySection 59(1)(b)

GLOSARYAscertained goods: Goods identified and

upon by the partiesUnascertained goods: Goods that are

defined by descriptions onlyNemo dat rule: A buyer getting the same

rights to the goods as the person they took it from (the seller)

Possession of goods: Control or custody of goods

Property in goods: OwnershipSale of goods: The transfer of ownership

from seller to buyer at the time of contract