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THE SALE OF GOODS ACT of 1896

60 Vic. No.6 Amended by

Statute Law Revision Act of 1908, 8 Edw. 7 No. 18

191

An Act for Codifying the Law relating to the Sale of Goods [Assented to 7 September 1896]

PART I-PRELIMINARY

1. Short title. This Act may be cited as "The Sale of Goods Act of 1896."

2. Commencement. This Act shall come into operation on the first day of January, one thousand eight hundred and ninety-seven.

3. Interpretation of terms. 56 & 57 Vic. c. 71, s. 62. In this Act, unless the context or subject matter otherwise requires,-

"Action" includes counter-claim and set-off; "Buyer" means a person who buys or agrees to buy goods; "Contract of Sale" includes an agreement to sell as well as a sale; "Delivery" means voluntary transfer of possession from one person

to another; "Document of Title to Goods" has the same meaning as it has in

the Factors Act; "Factors Act" means "The Factors Act, 1892," and any enactment

amending or substituted for the same; "Fault" means wrongful act or default; The term "Future goods" means goods to be manufactured or

acquired by the seller after the making of the contract of sale; The term "Goods" includes all chattels personal other than things

in action and money: The term also includes emblements and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale;

"Plaintiff" includes a defendant counterclaiming; "Property" means the general property in goods and not merely a

special property; "Quality of goods" includes their state or condition; "Sale" includes a bargain and sale as well as a sale and delivery; "Seller" means a person who sells or agrees to sell goods; The term "Specific goods" means goods identified and agreed upon

at the time a contract of sale is made; "Warranty" means an agreement with reference to goods which

are the subject of a contract of sale but collateral to the main purpose of such contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated.

192 MERCANTILE LAW Vol. 12

(2) A thing is deemed to be done "in good faith" within the meaning of this Act when it is in fact done honestly, whether it is done negligently or not.

(3) A person is deemed to be insolvent within the meaning of this Act who either 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 insolvency or not.

(4) Goods are in a "deliverable state" within the meaning of this Act when they are in such a state that the buyer would under the contract be bound to take delivery of them.

Act referred to: Sale of Goods Act, 1893, 56 & 57 Vic, c. 71 (Imperial); see 22 Halsbury's

Statutes of England, 2nd ed., p. 985. The sections of this Act closely follow the provisions of that Act throughout. "Contract of Sale"-For further definition and the distinction between a sale

and an agreement to sell. see s. 4. "Document of Title to Goods"-See the Factors Act, 1892, s. 2, p. 89, ante. "Future goods"-Cf. s. 8 (I). "Goods"-This definition includes a ship, Behnke v. Bede ShippinR Co. Ltd.,

[1927] 1 K.B. 649; [1927] All E.R. Rep. 689. and has been held to include standing timber (Waimiha Sall'millinR Co. Ltd. v. Howe, [1920] N.Z.G.L.R. 47). As to whether electricity supplied for lighting purposes is "goods", see Draper v. Friend (1894), 15 A.L.T. 201. See also 39 English and Empire Digest, (Rp!.) p. 449.

See Waf/Rh v. Harper, [1937] SI. R. Od. 327; 31 O.J.P.R. 124 (sale of standing timber agreed to be severed).

For observations on the nature of "goods" within the meaning of this section, see O'Dea v. Merchants' Trade-Expansion Group Ltd. (1938), A.R.(N.S.W.) 410.

"Sale"-See also s. 4. "Seller"-As to meaning in Part V, see also s. 40 (2). "Warranty"-See notes to s. 14; 39 English and Empire Digest, (Rp!.) pp. 507,

512. Antecedent representations made by .the vendor as an inducement to the purchaser, but not forming part of the contract when concluded, are not warranties, Gihson v. Wilsoll (1915), 17 N.Z.G.L.R. 664.

As to treatment of conditions as warranties, see ss. 14, 54. Subsection (2).-There is no dishonesty on the part of a creditor who takes an

assignment of property from his debtor in order to defeat an execution by another creditor, Goodwin v. Ahhott (1909), 5 Tas. L.R. 63.

Subsection (3) .-For acts of bankruptcy, see the Bankruptcy Act. 19~4·1965, s. 52 (Commonwealth).

Generally, see loske's Sale of Goods and Hire Purchase, 2nd ed., pp. 53 et seq.

PART II-FORMATION OF THE CONTRACT

CONTRACT OF SALE

4. Sale and agreement to sell. 56 & 57 Vic. c. 71, s. 1. (1) A 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 money consideration, called the price. There may be a contract of sale between one part owner and another.

(2) A contract of sale may be absolute or conditional. (3) When 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 when 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 the contract is called an agreement to sell.

SALE OF GOODS ACT OF 1896 ss.3·5 193

(4) An agreement to sell becomes a sale when the time has elapsed or the conditions have been fulfilled subject to which the property in the goods is to be transferred.

Ac.t referred to: Sale of Goods Act, 56 & 57 Vic. c. 71 (Imperial); see 22 Halsbury's

Statutes of England, 2nd ed., p. 985. As to contracts to sell goods by weight or measure, see Weights and Measures

Acts, 1951 to 1966, Part V, title WEIGHTS AND MEASURES. For relevant definitions, see also ss. 3 (1), and 61 (3), (4). In determining whether a transaction is a sale or merely a hiring the substance

of .the transaction as a whole must be given effect to, Johnstone and Wilmot Pty. Ltd. v. Kaine (1928), 23 Tas. L.R. 43; Oates v. Kenna, [1923] St. R. Qd. 88; [1923] Q.w.N. 26; 17 Q.l.P.R. 122.

For the distinction between a contract to sell goods and a contract to supply labour, see Clay v. Yates (1856), I H. & N. 73; Harvey v. Macdonald, [1927] St. R. Qd. 50; [1927] Q.W.N. 14; Thomson v. Isis Central Sligar Mill Co. Ltd., [1913] St. R. Qd. 41; [1913] Q.W.N. 12; 6 Q.l.P.R. 165; Commissioner for Railways v. Richards, [1911] St. R. Qd. 51; [1911] Q.W.N. 16; 5 Q.J.P.R. 24; Crown Engineering Works Ltd. v. Personne, [1930] Q.W.N. 17; Brooks Robinson Pty. v. Rothfield, [1951] V.L.R. 405.

The price must be money either paid or agreed to be paid, but it is sufficient to constitute a sale if part only of the consideration is money, Sheldon v. Cox (1824), 3 B. & c. 420.

For an illustration of the formation of a contract of sale, and .the distinction between an "offer" and an "invitation to treat", see Pharmaceutical Society oj Great Britain v. Boots Cash Chemists (Southern) Ltd., [1953] 1 Q.B. 401; [1953] I All E.R. 482.

For observations on the nature of "sale" within the meaning of this section, see O'Dea v. Merchants' Trade-Expansion Group Ltd. (1938). A.R.(N.S.W.) 41~. See also Woods Radio Exchange v. Marriott, [1939] V.L.R. 309. and Mischel] v. Springelt. [19421 2 K.B. at pp. 335, 336; 58 T.L.R. 385, at pp. 386. 387; [1942] 2 All F. R. 349. at pp. 350-351, 352.

As to absolute and conditional contracts, see Wright v. Scott, [1920] N.Z.G.L.R. 272.

On sub ection (3), for an example of an agreement to sell containing clauses or conditions expressed to be conditions, but so vague and uncertain as to be incapable of any precise meaning. with the result that there was no enforceable agreement on which the plaintiff could rely. see British Electrical and Associated Industries (Cardiff) Ltd. v. Palley Pre.lsings Ltd., [1953] 1 All E.R. 94. On the other hand see Nicolene Ltd. v. Simmonds, [1953] 1 Q.B. 543; [1953] I All E.R. 822. where troe Court of Appeal held that acceptance of an offer subject to "the usual conditions" where trere were no "usual cOCiditions" between the parties did not impair the sense of the contra,:t as a whole.

See further 39 English and Empire Digest (Rpl.), p. 443; Joske's Sale of Goods and Hire Purchase, 2nd ed .. p. 53.

5. Capacity to buy and sell. 56 & 57 Vic. c. 71, s. 2. Capacity to buy and sell is regulated by the general law concerning capacity to contract, and to transfer and acquire property:

Provided that when necessaries are sold and delivered to an infant, or to a person who by reason of mental incapacity or drunkenness is incompetent to contract, he must pay a reasonable price therefor.

The term "Necessaries" in this section means goods suitable to the condition in life of such infant or other person, and to his actual requirements at the time of the sale and delivery.

J\ct referred to: SaJe of Goods Act. 1893,56 & 57 Vic. c. 71 (Imperi.al); see 22 Halsbury's

Statutes of England. 2nd ed .. p. 985. For the law relating to capacity to contract, see 8 Halsbury's Laws of England,

3rd ed., p. 65.


Mere luxuries are not considered as necessaries, but luxurious articles of utility may come under the definition of "necessaries" in the special circumstances of a particular case, Chapple v. Cooper (1844), 13 M. & W. 252, 258. The standard is always relative, Peters v. Fleming (1840),6 M. & W. 42, 47.

An infant about to marry may make himself liable for things reasonably required for the marriage or for the joint establishment after marriage as necessaries, Qlliggan Bros. v. Baker, [1906] V.L.R. 259.

See also 28 English and Empire Digest, (Rpl.) p. 510; Joske's Sale of Goods and Hire Purchase, 2nd ed., p. 61.

FORMALITIES OF THE CONTRACT

6. Contract of sale, how made. 56 & 57 Vic. c. 71, s. 3. Subject to the provisions of this Act and of any Statute in that behalf, a contract of sale may be made in writing (either with or without seal), or by word of mouth, or partly in writing and partly by word of mouth, or may be implied from the conduct of the parties:

This section docs not affect the law relating to corporations, Act referred to:

Sale of Goods Act, 1893,56 & 57 Vic. c. 71 (Imperial); see 22 Halsbury's Statutes of England, 2nd ed., p. 985.

As to what constitutes "writing", see Acts Interpretation Acts, 1954 to 1962, s. 32, title ACTS OF PARLIAMENT, Vol. I, p. 93.

The assent of the parties to a contract of sale need not, as a general rule, be express. There are some things so commonly known that without other evidence than the transaction a contract is inferred, Nelson (James) & SOilS Ltd. v. Nelson Line (Liverpool) Ltd., [1908] A.C. 108, at p. 115; as if a man goes into a shop and takes up an article and carries it away, and nothing is said on either side, the law implies a contract to pay for the article.

For an example of the sale of a chattel subject to a covenant by the purchaser not to resell it within a specified period without the consent of the vendor, see Briti.liz Motor Trade Association v. Gilbert, [1951] 2 All E.R. 641.

As to animus con/railendi, see Marks v. Hun/ Bros. (Sydney) Pty. Ltd., [1958] S.R.(N.S.w.) 380.

The assent, to constitute a binding contract, must be mutual and intended to bind both parties, and must co-exist at the same moment of time, 8 Halsbury's Laws of England, 3rd ed .. pp. 69, 72.

As to contracts of corporations, see Companies Acts, 1961 to 1964, s. 35, title COMPANIES, Vol. 2, p. 77: Local Government Acts, 1936 to 1963, s. 19, title l.OCAL AUTHORITIES; Clark v. Brishane Municipality, [1917] St. R. Qd. 322; 6 Q.L.J. 131; 9 Halsbury's Laws of England, 3rd ed., p. 72.

Generally, see loske's Sale of Goods and Hire Purchase, 2nd ed .• pp. 53, 65.

7. Contract of sale for twenty dollars and upwards. 56 & 57 Vic. c. 71, s. 4. ( 1) A contract for the sale of any goods of the value of twenty dollars or upwards is not enforceable by action unless the buyer accepts part of the goods so sold, and actually receives the same, or gives something in earnest to bind the contract, or in part payment, or unless some note or memorandum in writing of the contract is made and signed by the party to be charged or his agent in that behalf.

(2) The provisions of this section apply to every such contract, notwithstanding that the goods may be intended to be delivered at some future time, or may not at the time of such contract be actually made, procured, or provided, or fit or ready for delivery, or that some act may be requisite for the making or completing thereof or rendering the same fit for delivery.

SALE OF GOODS ACT OF 1896 ss.5-7 195

(3) There is an acceptance of goods within the meaning of this section when the buyer does any act in relation to the goods which recognises a pre-existing contract of sale, whether there is an acceptance in performance of the contract or not.

Decimal currency references substituted pursuant to section 7 of Decimal Currency Act of 1965.

Act referred to: Sale of Goods Act, 1893, 56 & 57 Vic. c. 71 (Imperial); see 22 Halsbury's

Statutes of England, 2nd ed., p. 985. This section replaces s. 8 of the Statute of Frauds and Limitations of 1867,

title FRAUDS, Vol. 6, p. 207 which replaced s. 17 of the Statute of Frauds, 1677 (29 Car. 2, c. 3) and s. 7 of the Statute of Frauds Amendment Act, 1828 (9 Geo. 4, c. 14).

A defence under this section must be pleaded, R.S.C. (1900), Order 22, rules 14, 20; District Courts Acts, 1958 to 1965, s. 75, title DISTRICT COURTS, Vol. 4, p. 485; Magistrates Courts Rules, 1960, rule 77, title MAGISTRATES COURTS, Vol. 11, p. 80.

Before raising a defence under this section a legal adviser should fully explain its meaning and effect to his client and point out its probable consequences in case the credibility of his client comes in question, Charlick v. Foley Bros. Ltd. (1916), 21 C.LR. 249.

The Crown was held to be bound by the provisions of a similar section, R. v. Hay, [1924) V.LR. 97.

For a case of enforcement of a collateral warranty not in writing, see Cataldo v. Clark, [1936) St. R. Qd. 283; 30 QJ.P.R. 174.

In Beak v. Kessell, [1921) St. R. Qd. 257; [1921) Q.W.N. 39, there was held to be one single contract with respect to several items and not several contracts.

An agreement in writing for sale of land and a hotel thereon was held not to include the furniture in the hotel and the sale of such furniture was held not enforceable for want of a memorandum, Strang v. Gordon, [1919) St. R. Qd. 64; [1919) Q.W.N. 15.

"Value of $20 or upwards"-A contract for the purchase of various ar.ticles at a separate price for each article, each article being under the value of $20, is, if the value of all the articles taken together exceeds $20, an entire contract for the sale of the whole of the articles, and accordingly a contract for the sale of goods of the value of $20 or upwards. Baldey v. Parker (1823). 2 B. & c. 37.

A contract for the sale of goods of the value of $20 and upwards is within subsection (1), notwithstanding that such contract embraces something to which the Act does not extend, Harman v. Ren'c (1856), 18 C.B. 587. Where an oral contract relates to a sale of goods but is not unenforceable for non-compliance with this ,ection, and also relates to a sale of an interest in land unenforceable by reason of the Statute of Frauds and Limitations of 1867. s. 5, title FRAUDS, Vol. 6, p. 208, the contract for the sale of goods cannot be enforced unless it is separable, Winstone v. Melwlf,v, [1917) N.Z.LR. 956.

Where a contract is in part a contract for the sale of goods of the value of $20 or upwards and in part a contract for something to which the Act does not apply, and so far as the sale of goods is concerned cannot be enforced for want of compliance with the Act, the part of the contract to which the Act does not apply may be recovered on quan/llm meruit, Harman v. Reeve (1856), 18 C.B. 587.

"Accepts part of the goods so sold, and actually receives the same"-These words denote an actual transfer from the seller and an actual taking possession by the buyer, Baldey v. Parker (1823), 2 B. & C. 37. There can be no receipt without delivery, Maher v. NZ. Loan & Mercantile Agency Co. Ltd. (1897), 16 N.Z.LR. 120.

ft must be shown that the acceptance or payment was made under the contract in question, Metropolitan Knillin!? & Ho.lie!'y Co. Ltd. v. Thos. Burnlev & Sons Ltd. (1924), 35 C.L.R. 232. -

Where goods are left in the physical possession of the vendor, but on such terms that the nature and character of his former possession is changed from that of owner to that of bailee for the purchaser, there is an acceptance and actual receipt of the goods, Gardner v. Belcher (1902), 22 N.Z.L.R. 27.

See also as to acceptance May v. Newman, [1923) N.Z.L.R. 1328 (recognition of pre-existing contract); Stone v. Blaney (1908), 10 W.A.L.R. I (railway authority held agent of buyer); Service v. Walker (1877). 3 V.L.R. (L.) 182 (receipt and


retention for a few days may be acceptance); Adams v. Brown (1863),2 W. & W. (L.) 176 (delivery of part of goods to purchaser's agent followed by rejection by purchaser; no acceptance); M'lver v. Duke Co. (1879),5 V.L.R. (L.) 449 (stoppage in transitu while being removed by buyer's carrier; no acceptance); Mitchell v. Watson (1880), 6 V.L.R. (L.) 493 (agent ordered goods to be delivered at wrong place; no acceptance); Martin v. Swan Aerated Water Co. (1913), 15 W.A.L.R. 112 (resale by buyer to third party, but no delivery to either; no acceptance); Gazzard Bros. v. Melbollrne Trustees, etc., Co. (1902), 8 A.L.R. 246 (approval of goods subject to alteration; no acceptance).

Where .there has been an acceptance within the meaning of s. 37, there has been a compliance with the requirements of this section. The object of subsection (3) of this section is to provide that a contract may be enforceable if the requirements thereof are complied with, even though there may be no acceptance within the meaning of s. 37, Re a Dehtor (No. 38 of 1938), [1938] 4 All E.R. 308; 55 T.L.R. 107.

Part Payment-The part payment must take place either at or subsequent to the time when the bargain was made. An agreement tha.t moneys due to the buyer from the seller should be wiped off from the price. or that the goods should be taken in satisfaction of the moneys so due, might be equivalent to part payment, as an agreement to set off one item against another is equivalent to a payment of money, Walker v. NlIssey (1847), 16 M. & W. 302. Sending a cheque by post, even at the seller's request, is not a payment within this section if the seller refuses to accept and returns the cheque, Jones v. Chamherlain, [1918] N.Z.G.L.R. 263.

See also Metropolitan Knitting and Hosiery Co. Ltd. v. Thos. Bllrnley & Sons Ltd. (1924), 35 e.L.R. 232; 39 English and Empire Digest (Rp\.) p. 469.

Note or Memorandum in Writing-As to "writing", see note to s. 6. To constitute a memorandum of the agreement a document must have been

executed as containing the real bargain, Beak v. Ke.lSell, [1921] St. R. Qd. 257, at p. 262; [1921] Q.W.N. 39.

Where a contract is made in writing in the first place, it is not necessary to have a wbsequent ~morandum, Patterson v. Dolman, [1908] V.L.R. 361.

The memorandum to be valid should contain all the material terms of the contract, including the names of the contracting parties, or a description sufficient to identify them, 34 Halsbury's Laws of England, 3rd ed., p. 27; Wood Bros v. Kennedy (1907), 27 N.Z.G.L.R. 344; Clark v. Brishane Mllnicipality, [1917] St. R. Qd. 322 (P.e.); 6 Q.LJ. 131. It must contain a description of the goods, Smythe v. Woolhouse (1906), 8 W.A.L.R. 168. But it need not contain a representation which induced it, Johnstoll v. McRae (1906), 26 N.Z.L.R. 299; Gibson v. Wilson (1915), 17 N.Z.G.L.R. 664. As to statement of place of delivery, see Wiskin v. Terdich Bros. Pty. Ltd., [1928] V.L.R. 387. The rule of equity which allows a person to obtain specific performance by waiving a term of the contract not included in the writing, but made for his benefit, does not apply in an action for damages, Bastard v. McCallllm, [19241 V.L.R. 9.

On the sufficiency of the note or memorandum, see also Wilson & Sons v. Pike, [1949] 1 K.B. 176; [1948] 2 All E.R. 267 (sale by auction; successful bidder's name written in sale catalogue by auctioneer employed to conduct sale on behalf of plaintiff firm of auctioneers; claim from bidder). See also L. D. Turner Ltd. v. R. S. Hatton (Bradford) Ltd., [1952] I All E.R. 1286, in which Hallett, J., held .that, although the defendants had not signed a document containing the terms of the transaction tendered by the plaintiffs. a letter which they had signed and sent to the suppliers of the goods in which they referred to the transaction constituted a sufficient memorandum.

On enforceability, see Bessler, Waechter and Glover & Co. v. SOllth Derwent Coal Co., [1938] 1 K.B. 408; [1937] 4 All E.R. 552; 54 T.L.R. 140 (forbearance by parties for their mutual convenience, orally extending period of instalment deliveries, held not a variation of written contract).

For an illustration of the distinction between a contract for the sale of goods to a special order. on the one hand, and a contract for work and labour to be done and materials to be supplied, on the other hand. see J. Marcel (Furriers) Ltd. v. Tapper, [1953J 1 All E.R. 15, where Hilbery. J.. held that the contract was unenforceable because of the absence of a memorandum in writing signed by the defendant.

As to when a resolution in the minutes of a company may be a sufficient memorandum, see Jackson and Co. Ltd. v. Co-operative Freezing Co. of SOllth Canterhury Ltd., [1922] N.Z.L.R. 2. A memorandum signed by the appellant authorizing the respondent to fulfil his son's order, was held not to be a sufficient memorandum to satisfy this section, Lyons v. Hughes (1875), I V.L.R. (L) I.

SALE OF GOODS ACT OF 1896 ss. 7, 8 197

As to connected documents, see Matthews v. Dampney Bros. (1900), 19 N.Z.L.R. 557; Dalgetl' & Co. Ltd. v. Beardmore, [1919] N.Z.G.L.R. 51; Wilson, Balk and Co. Ltd. v. Wilson, [1921] N.Z.L.R. 397; Moxham v. Magrath (1934), 51 W.N.(N.S.W.) 207.

As to adaptation of a form and inclusion of inapplicable terms therein, see Gardner Bros. v. Schell (1909), II W.A.L.R. 225; Ackland v. Wigmore & Co. (1910), 12 W.A.L.R. 48.

As to the admissibility of parol evidence to alter the terms of .the note or memorandum, see Ln'el' & Co. v. Goldberg, [1922] I K.B. 688; Weill v. McCarthy (1903), 22 N.Z.L.R. 888; Le.I!{'/" v. Munro, [1924] N.Z.L.R. 1137; Boys v. Rice (1908), 27 N.Z.L.R. 1038.

Signature-It is not essential that the signature should be after, or at the end of, every part of a paper which it purports to cover, Gladstone v. Ball (1862), I W. & W. (Eq.) 277.

As to the sufficiency of a printed signature, see Wood Bros. v. Kennedy (1907), 27 N.Z.G.L.R. 344 (name printed on heading of notepaper); Cohell v. Roche, [1927] 1 K.B. 169.

As to what constitutes a sufficient signature to bind the purchaser at sales by auction. see Williams v. Ross (1863), 2 W. & W. (L.) 285; Moss v. Cohen (1872), 3 V.R. (L.) 205; Service v. Walker (1877), 3 V.L.R. (L.) 182; Pratt v. Rush (1879),5 V.L.R. (L.) 421; Hill v. Willis (1880), 6 V.L.R. (L.) 193.

With respec.t to signature by an agent. see Wood Bros. v. Kennedy, supra; Murray v. Hopkins, [1919] N.Z.L.R. 689.

A memorandum of a contract of a local authority is sufficient if signed by the chairman or two members acting by the direction and on behalf of the local authority. Local Government Acts, 1936 to 1966. s. 19 (1) (ii) (b), title LOCAL AUTHORITIES, Vol. 10, p. 364; Clark v. Brisbane Municipality, [1917] St. R. Qd. 322 (P.C.)' 6 Q.L.1. 131.

Where a verbal agreement is intended to be replaced by an agreement to be reduced into writing it may be a condition of the substitution that the new agreement should be signed. See Beak v. Kessell, [1921] SI. R. Qd. 257; [1921] Q.W.N. 39.

For further cases relating to s. 7, see 39 English and Empire Digest, (Rpl.) p. 454; 34 Halsbury"s Laws of England, 3rd ed., p. 25; Joske's Sale of Goods and Hire Purchase, 2nd ed., p. 65. See also the notes to the Statute of Frauds and Limitations of 1867, s. 5, title FRAUDS, Vol. 6, p. 208.

SUBJECT MATTER OF CONTRACT

8. Existing or future goods. 56 & 57 Vic. c. 71, s. 5. (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.

(2) There may be a contract for the sale of goods, the acquisition of which by the seller depends upon a contingency which mayor may not happen,

(3) When by a contract of sale the seller purports to effect a present sale of future goods, the contract operates as an agreement to sell the goods.

Act referred to: Sale of Goods Act, 1893,56 & 57 Vic. c. 71 (Imperial); see 22 Halsbury's

Statutes of England, 2nd ed., p. 985. "Future goods" is also defined by s. 3 (I). As to future goods, see Watts v. Friend (1830),10 B. & c. 446, in which case

the plaintiff had agreed to furnish the defendant with a certain quantity of turnip seed, which the defendant should sow on his own land, and sell and deliver the whole of the crop of seed produced therefrom to the plaintiff at so much a bushel, and the contract was held to be substantially a contract for goods and chattels. See also Hibblewhite v. M'Morine (1839). 5 M. & W. 462 (goods still to be acquired by seller).

As to goods to be acquired upon a contingeucy, see Hale v. Rawsoll (1858), 27 L.1.C.P. 189.

For the distinction between a sale and an agreement to sell, see s. 4. See also 39 English and Empire Digest, (Rpl.) p. 489; 34 Halsbury's Laws of

England, 3rd ed., p. 30; Joske's Sale of Goods and Hire Purchase, 2nd ed., p. 71. 7


9. Goods which have perished. 56 & 57 Vic. c. 71, s. 6. When there is a contract for the sale of specific goods, and the goods without the knowledge of the seller have perished at the time when the contract is made, the contract is void.


Statutes of England. 2nd ed., p. 985. As to "specific goods", see s. 3 (1); Guldshrollgh Mort & Cu. v. Carter (1914),

19 C.L.R. 429. See Rendell v. Turnbull & Co. (1908). 27 N.Z.L.R. 1067 (inner growth in

potatoes rendering them unfit for human food); Couturier v. Hastie (1856), 5 H.L. Cas. 673, and Williams v. Cohen (1871),25 L.T. 300, as to goods perishing before contract. The contract is void where part of the goods have perished at the time the contract is made, Barrow, Lane and Ballard Ltd. v. Phillip Phillips & Co., [1929] 1 K.B. 574; [1928] All E.R. Rep. 74.

See 34 Halsbury's Laws of England, 3rd ed., p. 36; Joske's Sale of Goods and Hire Purchase, 2nd ed., p. 71.

10. Goods perishing before sale, but after agreement to sell. 56 & 57 Vic. c. 71, s. 7. When there is an agreement to sell specific goods, and subsequently the goods, without any fault on the part of the seller or buyer, perish before the risk passes to the buyer, the agreement is avoided.

Act referred to: Sale of Goods Act, 1893, 56 & 57 Vic. c. 71 (imperial); see 22 Halsbury's

Statutes of England, 2nd ed .. p. 985. As to "specific goods", see s. 3 (I); Goldsbrollgh A10rt & Co. v. Carter (1914),

19 C.L.R. 429. "Fault" is defined by s. 3 (1). See 39 English and Empire Digest, (RpJ.); 34 Halsbury's Laws of England,

3rd ed., p. 37. See also laske's Sale of Goods and Hire Purchase, 2nd ed .. p. 72.

THE PRICE

11. Ascertainment of price. 56 & 57 Vic. c. 71, s. 8. (1) The price in a contract of sale may be fixed by the contract, or may be left to be fixed in manner thereby agreed, or may be determined by the course of dealing between the parties.

(2) When the price is not determined in accordance with the foregoing provisions the buyer must pay a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each particular case.


Statutes of England. 2nd ed., p. 985. A reasonable price means such a price as the jury shall. under all the circum

stances. decide to be reasonable. Ace/J"I v. Levy (1834), 10 Bing. 376. See 34 Halsbury's Laws of England. 3rd ed., p. 38; Joske's Sale of Goods and

Hire Purchase. 2nd ed., p. 78.

12. Agreement to sell at valuation. 56 & 57 Vic. c. 71, s. 9. (l) When there is an agreement to sell goods on the terms that the price is to be fixed by the valuation of a third party, and such third party cannot or does not make such valuation, the agreement is avoided; provided that if the goods or any part thereof have been delivered to and appropriated by the buyer he must pay a reasonable price for them.


(2) When such third party is prevented from making the valuation by the fault of the seller or buyer, the party not in fault may maintain an action for damages against the party in fault.

Act referred to: Sale of Goods Act, 1893, 56 & 57 Vic. c. 7 I (Imperial); see 22 Halsbury's

Statutes of England, 2nd ed., p. 985. "Fault" is defined by s. 3 (l). As to avoiding the agreement. see Tlllirnel! v. Ba/burnie (1837). 2 M. & W.

786; Vickers v. Vickers (1867), L.R. 4 Eq. 529. See further 39 English and Empire Digest, (Rp!.) p. 503; 34 Halsbury's Laws of England, 3rd ed., p. 40.

See also Joske's Sale of Goods and Hire Purchase, 2nd ed., p. 79.

CONDITIONS AND WARRANTIES

13. Stipulations as to time. 56 & 57 Vic. c. 71, s. 10. (1) Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not deemed to be of the essence of a contract of sale. Whether any other stipulation as to time is of the essence of the contract or not depends on the terms of the contract.

(2) In a contract of sale "month" means prima facie calendar month. Act referred to:

Sale of Goods Act, 1893, 56 & 57 Vic. c. 71 (Imperial); see 22 Halsbury's Statutes of England, 2nd ed., p. 985.

With respect to stipulations as to time in contracts generally, see Judicature Act (1876), s. 5 (7), title PRACTICE.

The fact that instalments of the purchase price were secured by promissory notes does not show that time is of the essence of the contract, Cairns v. Burgess (1904), 2 N. & S. 233.

In mercantile contracts a stipulation as to time other than the time of payment is an essential condition, Reuter v. Sala (1879). 4 C.P.D. 239. Thus a term in a contract for sale of live-stock that delivery will be taken on or before a specified date is of the essence of the contract unless there is something in the terms of the contract or the circumstances of the country to require a different construction, Harrington v. Browne (1917), 23 C.L.R. 297: Timmins v. Beardmore, [1925J Q.W.N. 19. As to delivery by instalments, see s. 33.

The English original of which this section is a reproduction was elucidated by Diplock, J., in McDougall v. Acromarinc of EmSlVortil Ltd., [1958] 3 All E.R. 431, which turned on a contract to build a yacht required for use in the 1957 yachting season. A specific date for delivery was fixed but not guaranteed. The court interpreted a clause in that form as a condition wh ich placed on the seller a duty to deliver within a reasonable time of the date so specified, and entitled the plaintiff to treat the contract as rescinded after such reasonable time had passed-the yachting season was nearly over-and to judgment for the considerable sum claimed as money paid for a consideration that had wholly failed.

See 34 Halsbury's Laws of England. 3rd ed .. p. 45.

See also Joske's Sale of Goods and Hire Purchase, 2nd ed., pp. 81, 84.

14. When condition to be treated as warranty. 56 & 57 Vic. c. 71, s. 11. ( 1) When a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may waive the condition, or may elect to treat the breach of such condition as a breach of warranty, and not as a ground for treating the contract as repudiated.

(2) Whether a stipulation in a contract of sale is a condition the breach of which may give rise to a right to treat the contract as repudiated, or a warranty the breach of which may give rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated, depends in each case on the construction of the contract: A stipUlation may be a condition, though called a warranty in the contract.


(3) When a contract of sale is not severable, and the buyer has accepted the goods, or part thereof, or when the contract is for specific goods the property in which has passed to the buyer, the breach of any condition to be fulfilled by the seller can only be treated as a breach of warranty and not as a ground for rejecting the goods and treating the contract as repudiated, unless there is a term of the contract, express or implied, to that effect.

(4) This section does not affect the case of any condition or warranty, the fulfilment of which is excused by law by reason of impossibility or otherwise.

Act referred to: Sale of Goods Act. 1893. 56 & 57 Vic. c. 71 (Imperial); see 22 Halsbury',

Statutes of England. 2nd cd .. p. 985. "Warranty". "specific goods" and "property" are defined by s. 3 (1). As to remedy for breach of a condition which is. or must be, treated as a

warranty, see s. 54. A warranty or condition may be express or implied. The doctrine that an

express provision excludes implication does not affect cases in which the express provision appears to have been superadded for the benefit of the buyer, l''Vlody v. Gregson (1868), L.R. 4 Exch. 49, 53.

Waiver of a condition may be express or implied. Mackay v. Dick (1881). 6 App. Cas. 251; Bentsell v. Taylor, Sons & Co., [1893] 2 O.B. 274; Worcester College v. Oxford Canal Navigation (1911). 105 L.T. 50 I.

Neither party can waive a condition of the contract not entirely for his benefit. without the consent of the other party. Maine Spinning Co. v. Sutcliffe & Co. (1917). 23 Com. Cas. 216; [1916-17] All E.R. Rep. 537.

See O'Demp.ley v. Hansen. [1939] O.W.N. 22; 33 O.J.P.R. 114 (sale of ewes; collateral verbal warranty).

For an example of a stipulation held to be a condition. entitling the buyer to reject. see Wilsoll V. Wright (1938), 82 S.J. 14 (potatoes to be shipped by next steamer). See also Harling v. Eddy, [1951) 2 T.L.R. 245; [1951] 2 All E.R. 212 (sale of heifer induced by oral statement made by defendant, a cattle-dealer, that there was nothing wrong with her; held by Court of Appeal that the statement was a condition overriding a condition set out in the conditions of sale by auction. which had proved abortive).

For an illustration of the nature of a warranty see Oscar Chess Ltd. v. Williams, [1957] 1 All E.R. 325, where warranty was distinguished from condition (sale of a second-hand motor car; innocent misrepresentation that it was a 1948 model. whereas it was a 1939 model. The trial judge had found for the plaintiff and awarded him £ liS damages. based on the difference between the values of models of those years. and refused leave to appeal to lhe House of Lords. The Court of Appeal, by a majority, allowed the appeal).

The plaintiff had acquired on hire-purchase a second-hand car from the defendant, a dealer. who had warranted it to be in good condition and reasonably safe for use on the highway. On this warranty the plaintiff had acted, though the steering mechanism was dangerously worn. as would have been apparent on examination by a competent mechanic. He was held entitled to damages for negligence as the result of which the car was wrecked and he suffered serious physical injuries. See Andre,,'." v. Hopkinson. [1957] 1 O.B. 229; [1956] 3 All E.R. 422. McNair, 1.. who tried the action, preferred not to rest his judgment on the above statutory warranty.

Subsection (3) docs not apply where, under a contract for the sale of specific goods, it is intended that the property shall pass on the making of the contract. but it does not do so hecause the seller has no right to sell, Lucas v. Smith, [1926] V.L.R. 400.

As to when a contract for sale is severable. see Romherg v. Githert (1901). 11 O.LJ. 96; PlIrceil v. Bacon (1914). 19 C.L.R. 241. reversed on another ground, 22 C.L.R. 307: Jackson v. Rot{1X Motor and Cycle Co., [19101 2 K.B. 937; German Bay Co-operative Dairy Co. v. Scott (1901), 20 N.Z.L.R. 475; Batger v. Robertsoll Bros. (1914), 16 N.Z.G.L.R. 574.

SALE OF GOODS ACT OF 1896 ss. 14-16 201

Where a buyer voluntarily takes part of the goods under circums.tances in which he is not bound to take any of them, subsection (3) does not apply in respect of the remainder, Romberg v. Gilhert (1901). 11 Q.L.J. 96.

See 39 English and Empire Digest, (Rpl.); 34 Halsbury's Laws of England, 3rd ed., p. 507.

See also loske's Sale of Goods and Hire Purchase, 2nd ed., pp. 84 et seq.

15. Implied undertaking as to title, etc. 56 & 57 Vic. c. 71, s. 12. In a contract of sale, unless the circumstances of the contract are such as to show a different intention, there is-

( 1) 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 thc case of an agreement to sell he will have a right to sell the goods at the time when the property is to pass;

(2) An implied warranty that the buyer shall have and enjoy quiet possession of the goods;

(3) An implied warranty that the goods shall be free from any charge 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.


Statutes of England. 2nd ed., p. 985. As to variation of implied obligations by agreement, see s. 56. For the distinction between a sale and an agreement to sel1, see s. 4. As to "warranty". see s. 3 (1), and notes to s. 14. See Vaile v. Cleland (1939). 34 N.Z.M.C.R. 153 (claim for chattel found not

to be a fixture). For examples of breaches of subsections (1) and (2). see Mason Y. Burningham.

[1949] 2 K.B. 545. On exclusion of warranties, see Mull'ay v. Henry Berry & Co. Ply. Ltd. (1938),

38 S.R.(N.S.W.) 389. For an iIlustration of the di&tinction between a warranty and an innocent

misrepresentation. see Routledge v. McKay. [1954] 1 AI1 E.R. 855 (representation liS

to model of motor cycle previously bought by and sold to a succession of persons). For the effect of the warranty for quiet possession, see 34 Halsbury's Laws

of England, 3rd ed .. p. 46.

See also 39 English and Empire Digest, (Rp!.) p. 525; 34 Halsbury's Laws of England, 3rd ed., p. 46; loske's Sale of Goods and Hire Purchase, 2nd ed., p. 88.

16. Sale by description. 56 & 57 Vic. c. 71, s. 13. When there is a contract for the sale of goods by description there is an implied condition that the goods shall correspond with the description; and if the sale is by sample, as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description.

Act referred to: Sale of Goods Act. 1893, 56 & 57 Vic. c. 71 (Imperial); see 22 Halsbury's

Statutes of England. 2nd ed., p. 985. Contracts for sale by sample are further dealt with by s. 18. The expression "sale by description" applies to all cases where the buyer has

not seen the goods, by is relying on the description alone, Varley v. Whi..pp. [1900] 1 Q.B. 513; and see Bowes v. Shand (1877), 2 App. Cas. 455. There was held to be no sale by description where the sel1er described fat cows as prime cattle, and the buyer. a butcher, then went and inspected them prior to sale. A hel v. Brown (1920), 16 Tas. L.R. 6. But there may be a sale by description of a specific thing which the buyer has seen. See Grant v. A u.l'lralian Knitting Mills Ltd. [1936] A.C. 85; 54 C.L.R. 49; Boys v. Rice (1908), 27 N.Z.L.R. 1038.


For an example of sale by description, see Clarke v. McMahon, [1939J S.A.S.R. 64 (kelvinators); Sopers of Harrow Ltd. v. Johnston & SOil (London) Ltd., [1944] 2 All E.R. 586 (cordials).

As to what constitutes a sale by sample and renders oral evidence on that issue admissible, see L. G. Thorne & Co. Ply. Ltd. v. Thomas Borthwick & Sons (A/asia) Ltd., [1956] S.R.(N.S.w.) 81.

As to admissibility of evidence of the exhibition of a sample for the purpose of interpretation of a description contained in the contract, see Sharp v. ThomrpsoTl (1915),20 C.L.R. 137; Cameron & Co. v. Slllfzkin Pty. Ltd. (1923), 32 C.L.R. 81. See also Arcos Ltd. v. Ronaasen & SOil, [1933] A.C. 470; [1933] All E.R. Rep. 528; (test of correspondence with description); 39 English and Empire Digest, (Rp!.) p. 528.

loske's Sale of Goods and Hire Purchase, 2nd ed., pp. 89 et seq.

17. Implied conditions as to quality or fitness. 56 & 57 Vic. c. 71, s. 14. Subject to the provisions of this Act and of any statute in that behalf, 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, except as follows:-

(1) When the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller's skill or judgment, and the goods are of a description which it is in the course of the seller's business to supply (whether he is the manufacturer or not), there is an implied condition that the goods shall be reasonably fit for such purpose: Provided that in the case of a contract for the sale of a specified article under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose;

(2) When goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or not) there is an implied condition that the goods shall be of merchantable quality: Provided that if the buyer has examined the goods, there is no implied condition as regards defects which such examination ought to have revealed;

(3) An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade, if the usage is such as to bind both parties to the contract;

(4) An_express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith.


Statutes of England. 2nd ed., p. 985. For the right to negative or vary implied terms by agreement, see s. 56. As to the meaning and extent of the words "supplied under a contract of

sale", see Geddlillg v. Marsh, [1920] 1 K.B. 668; [1920] All E.R. Rep. 631. Where a notice is given by the seller to the buyer that no warranties are given

with goods sold by the seller, it seems doubtful whether such notice has the effect of excluding the implied warranty that an article sold for a particular purpose is fit for .that purpose, Clarke v. Army alld Navy Co-operative Society Ltd., [1903] 1 K.B. 155. But in Lloyds del Pacifico v. Board of Trade (1929), 168 L.T. Jo. 323, it was held that an express clause that a ship be taken "with all faults and errors of description without any allowance or abatement" negatived the assumption that the seller gave any warranty by implication under tbis section. See also the judgment of Lord Sumner in Medway Oil alld Storage Co. Ltd. v. Silica Gel. Corpll. (1928), 33 Com. Cas. 195; [1928] All E.R. Rep. 330.

SALE OF GOODS ACT OF 1896 SS. 16, 17 203

Paragraph (1) .-A purpase is nane the less a "particular purpase" within this sectian because it is the anly purpase for which anyane would ordinarily want the gaads, Grant v. Australian Knilling Mills Ltd., [1936J A.C. 85; 54 C.L.R. 49. See also. David Jones Ltd. v. Willis (1934), 52 C.L.R. 110. As to. "particular purpase", see also. Cammell, Laird & Co. v. Mangancse Bronze & Brass Co. Ltd., [1934] A.C. 402: [1934] All E.R. Rep. 1. The mere fact that the seller knows the purpase far which goads are required will nat raise the implicatian of the candition, Bowden Bros. & Co. Ltd. v. Lillic (1907),4 C.L.R. 1364, at p. 1393.

The question whether there was a reliance an the seller's skill ar judgment is ane af fact, Bowden Bros. & Co., Ltd. v. Little, supra.

Far an illustratian af making knawn .to the seller "the particular purpase far which the gaads are required," see Westminster Trading Co. Ltd. v. Pm'dale Trading Co. Ltd. (1949), 50 S.R.(N.S.W.) 44. See also. Abraham v. Vitosh (1951), 45 Q.l.P.R. 115 (purchase af timber suitable far making shelves negatiated by plaintiff at the defendant's timber yard with a man emplayed by the defendant to negotiate sales) .

The reliance an the seller's skill or judgment must be brought home to. the mind af the seller, either expressly or by implicatian, Grant v. Australian Knitting Mills Ltd., [1936] A.c. 85; 54 C.L.R. 49; Cammell Laird & Co. Ltd. v. Manganese Bronze & Brass Co. Ltd., supra. See also. David Joncs Ltd. v. Willis (1934), 52 C.L.R. 110; H. Beecham & Co. Pty. Ltd. v. Francis Howard & Co. Pty. Ltd., [1921J V.L.R. 428. It is nat necessary that there shauld be a reliance on the seller's skill and judgment in every particular; it is sufficient if such reliance was to a substantial extent, Cammell Laird & Co. Ltd. v. ManRanese Bronze & Brass Co. Ltd., supra. See also. Abel v. Brown (1920), 16 Tas. L.R. 6. There was held to. be no reliance an the seller's skill and judgment where cattle were baught by a butcher from cattle salesmen in the apen market after examination by a gavernment inspector, Powers, Rutherford & Co. v. GlendenninR (1897), 23 V.L.R. 144. As to the circumstances which shaw ,that the buyer relied an the seller's skill and judgment. see H. Bcccham & Co. Pty. Ltd. v. Francis Howard & Co. Pty. Ltd., [1921) V.L.R. 428; Denny v. Calthorp (1904). 6 W.A.L.R. 22; Lawrence v. Malloch Bros. (1930), 32 W.A.L.R. 108; Klosc v. Duncan & Frascr Ltd., [1928] S.A.S.R. 139; Raine v. Hllgal/, [1908] St. R. Qd. 120; [1 0 ')8] Q.W.N. 29.

Scmble, the selling of fat cattle is n..J! the business af a person who has only sold six af them in ten years. See Abel v. Brown (1920), 16 Tas. L.R. 6, at p. 8. Seed potatoes are not gaads af a description which i.t is the business of an ordinary small farmer to. supply, Knight v. Mason (1912), IS N.Z.G.L.R. 300. See also. Raine v. Hugail, supra.

As to "reasanably fit", see German Bay Co-operative Dairy Co. Ltd. v. Scott (1901), 20 N.Z.L.R. 475; Ford's Motors (Manawatu) Ltd. v. Loughnan, [1927] N.Z.G.L.R. 331; Thompson v. Sut Kee (1911),5 Q.l.P. 132 (Mag. Cas.).

As to the effect af acceptance without protest by the buyer, see Webster & Sons Ltd. v. Hydro-Electric Power and Metallurgical Co. Ltd. (1912), 8 Tas. L.R. 112.

The proviso. at the end of paragraph (1) assumes the absence af any express assurance by the seller, and deals anly with the case of express or implied infarmatian by the buyer af the purpase far which he requires the article, so framed as to shaw .that he relied an the seller's skill or judgment, but the seller is nat baund to. refrain fram carrying aut his order for a particular article, because it is ill-adapted for the purpo.se mentianed in the order, provided that the article has in fact a patent o.r trade name under which it can be ordered, Bristol Tramways, ctc., Carriagc Co. Ltd. v. Fiat Motors Ltd., [1910] 2 KB. 831; [1908-10] All E.R. Rep. 113. The fact that an article is described in the cantract by its patent or trade name daes nat necessarily make the can tract ane far sale af an article by its patent ar trade name, Johnstonc & Wilmot Pty. Ltd. v. Kainc (1928), 23 Tas. L.R. 43; Criss v. Alexander (No.. 2) (1928), 28 S.R.(N.S.W.) 587; Baldry v. Marshall Ltd., [1925] I KB. 260; [1924] All E.R. Rep. 155.

Paragraph (2).-The conditian implied by this paragraph applies to. all goods baught from a seller who deals in goads of that descriptian, whether they are said under a patent o.r trade name ar otherwise, MacEwan & Co. v. Aslzwin, [1916] N.Z.L.R. 1028; Burns v. John Chambers & Son Ltd., [1921] N.Z.L.R. 916; Bristol Tramways, etc., Co. Ltd. v. Fiat Motors Ltd., supra.


To constitute a sale by description, reliance on the description must be complete, not partial, Abel v. Brown (1920), 16 Tas. L.R. 6. But see H. Beecham & Co. Ptv. Ltd. v. Francis Howard & Co. Pty. Ltd., [1921] V.L.R. 428, at p. 434. A'specific thing is sold by description where it is sold not merely as .the specific thing, but as a thing corresponding to a description, Grant v. A IIsrtolian Knitting Mills Ltd., [1936] A.C. 85; 54 C.L.R. 49. See also Dovid Jones Ltd. v. Willis (1934), 52 C.L.R. 110; Kidman v. Fisken, Bunning & Co., [1907] S.A.L.R. 101; Morelli v. Fitch, [1928] 2 K.B. 636; [1928] All E.R. Rep. 610 Wren v. Holt, [1903] 1 K.B. 610.

As to "seller who deals in goods of that description", see Raine v. Hugo/!, [1908] SI. R. Qd. 120; [1908] Q.W.N. 29.

Merchantable quality means that the article is of such quality and in such condition that a reasonable man, acting reasonably, would, after full examination. accept it in performance of his offer to buy it, Bristol Tramways, etc., Co. v. Fiat Motors Ltd., [1910] 2 K.B. 831; [1908-10] All E.R. Rep. 113. And see s. 3 (1) ("quality of goods").

An article only meant for one particular use in ordinary COurse is not mechantable if it has defects unfitting it for that use. but not apparent on ordinary examination. Grant v. Allstralian Knitting Mills Ltd., [1936] A.C. 85; 54 C.L.R. 49. See also David Jones Ltd. v. Willis (1934), 52 C.L.R. 110.

Goods are "of a description which it is in the course of the seller's business to supply" if they fall within the general description of the goods supplied by the seller, although in a particular instance they take a special form or are designed for a special use, Spencer Trading Co. Ltd. v. Del'on (Fixol and Stickphost) Ltd., [1947] 1 AI! E.R. 284.

For an instance of goods held to be not of merchantable quality within the meaning of paragraph (2). see Wilson v. Rickett Cockerell & Co. Ltd., [1954] 1 All E.R. 868, applying Chaproniere v. Mason (1905), 21 T.L.R. 633; Grant v. Australian Knitting Mills, [1936] A.C. 85; and Niblett v. Confectioners' Materials Co. Ltd., [1921] 3 K.B. 387; [1921] All E.R. Rep. 459.

See also Frank v. Grosvenor Motor Auctions Pty. Ltd., [1960] V.R. 607.

On facta probonda under this paragraph see J. S. Rober/son (Allst.) Pty. Ltd. v. Martin (1955-1956),94 C.L.R. 30.

The term "merchantable" was considered and explained by the Full Court of New South Wales in George Wills & Co. Ltd. \'. Davids Pty. Ltd., [1956] S.R. (N.S.W.) 237, where, on appeal from a District Court. which had awarded £522 damages in an action for breach of contract for the sale of a quantity of canned beetroot, it was laid down (1) that it has come to mean that the goods are suitable for the purpose for which they are normally used; (2) that it was open to the judge to decide as a question of fact that, as understood in the world of commerce, the canned beetroot was to have a reasonable prospect of preservation commensurate with its known and ultimate destination and that the wholesale grocery trade would expect it (0 remain fit for consumption when in the normal course it should reach the consumer; (3) that whether the beetroot in question answered the description of merchantable quality or not fell to be decided as a question of fact by the trial judge. The appeal was dismissed with costs.

However, that was not the end of the litigation. The vendor company carried (he matter to the High Court, which, held that the contract was and was understood to be for the supply not simply of beetroot but of canned beetroot in vinegar. and that since when so canned beetroot has a tendency to deteriorate after a year the goods in question were not unmerchantable merely because they did so deteriorate and did not last as long as beetroot differently preserved. The trial judge had found, inter alia. that the fair life of tinned vegetables was three years, of beetroot canned in brine somewhat less. and of beetroot canned in vinegar one year, and that on examination fourteen to sixteen months after delivery some cans had developed hydrogen swells, some were blown, so that liquid escaped from them, George Wills & Co. Ltd. v. Davids Pty. Ltd. (1957),98 C.L.R. 77.

See also Ashford Shire Couneil v. Dependable Motors Pty. Ltd., [1961] A.L.R. 262.

As to examination of the goods, see Thornett v. Beers & 5011, [1919] 1 K.B. 486; Jorgensen v. Harris (1912), 14 W.A.LR. 180.

SALE OF GOODS ACT OF 1896 ss.17,18 205

Where there is an implied condition that goods shall be of merchantable quality, and part of the goods delivered is not of merchantable quality, the buyer is entitled to reject the whole. See s. 32 (3); Kirwan v. Farleigh Estates Sugar Co. Ltd., [1918] St. R. Qd. 133; 12 Q.J.P.R. 108.

For measure of damages for breach of warranty of quality, see s. 54 (3) Paragraph (3) .-As to trade usages and the circumstances under which they

are binding on parties to contracts, see 11 Halsbury's Laws of England, 3rd ed., pp. 202, 196 et seq.

Paragraph (4) .-A stipUlation in a contract for purchase of a motor-vehicle that it should be thoroughly overhauled before delivery is not inconsistent with the implication of a condition under paragraph (1), lohnstone & Wilmot Pty. Ltd. v. Kaine (1928), 23 Tas. L.R. 43.

Generally-For further cases on this section, see 39 English and Empire Digest (Rpl.) p. 539; Joske's Sale of Goods and Hire Purchase, 2nd ed., pp. 92 et seq.; 34 Halsbury's Laws of England, 3rd ed., p. 51.

A hire-purchase agreement which contains an option to return the goods is not an agreement to sell within this section, Klose v. Duncan & Fraser Ltd., [1928] S.A.S.R. 139, even where the right to return the goods cannot be exercised until after payment of the penultimate instalment of hire, ibid. As to whether conditions similar to those under this section are implied in a hire-purchase agreement. see Klose v. Duncan and Fraser Ltd., supra; Criss v. Alexander (1928), 28 S.R.(N.S.W.) 297.

A hire-purchase agreement is not a contract for the sale of goods within the meaning of this Act and consequently the conditions set out in this section are not implied in such an agreement; but where a chattel the subject matter of a hire-purchase agreement is ~upplied with the object of being used for an agreed or stated purpose, or for a purpose indicated by the nature of the chattel itself, there is implied in the agreement, unless otherwise provided or implied from the circumstances of the hiring, a condition that the chattel is reasonably fit for such use, Woods Radio Exchange v. Marriott, [1939] V.L.R. 309. Breach of any of these conditions resulting in the death of the buyer may give rise to an action under Lord Campbell's Act. See Crotty v. Woolworths Ltd. (1942), 59 W.N. (N.S.W.) 164.

See hereon Smart v. Preston, [1937] N.Z.L.R. 467 (sale of racehorse; latent defect not discoverable on inspection), Samuels v. Davis, [1943] 2 All E.R. 3 (set of false teeth; breach of implied condition as to fitness), Crotty v. Woolworths Ltd. (1942), 43 S.R.(N.S.W.) 133 (sale of electric-light bulb; death following use), Dodd v. Wilson, [1946] 2 All E.R. 691 (right of defendants to recourse against third party (vendor) and of third party against fourth party (manufacturer) on implied condition of fitness), Harrison & lanes Ltd. v. Bunten & Lancaster Ltd., [1953] 1 Q.B. 646; [1953] 1 All E.R. 903 (mutual ignorance concerning quality of goods sold by trade description and supplied; parties held bound by their contract, which could not be treated as a nullity on the ground of mutual mistake).

Generally, as to when terms will be implied in written contracts, see A rawa Dairy Co. Ltd., Ex parte Carter, [1938] N.Z.L.R. 411.

There was held to be evidence of an express warranty of fitness for a particular purpose in Cataldo v. Clark, [1936] St. R. Qd. 283; 30 Q.J.P.R. 174.

The words "in good order and condition" were held not to imply a warranty of the quality of flour, Raine v. Hugal!, [1908] st. R. Qd. 120; [1908] Q.W.N. 29.

For the liability in tort of a manufacturer to the ultimate purchaser where the goods are likely to cause injury to health, see Donoghue v. Stevenson, [1932] A.C. 562: Grant v. A ustralian Knitting Mills Ltd., [1936] A.C. 85; 54 C.L.R. 49; Clarke v. Army and Navy Co-operative Society, [1903] I K.B. 155; Ward ,'. Hobbs (1878), 4 App. Cas. 13; 39 English and Empire Digest, (Rpl.). p. 563.

On the duty owed by manufacturers to consumers, see Daniels and Daniels v. White & Sons Ltd. and Tarbard, [1938] I All E.R. 258, applying McAlister (or Donoghue) v. Stevenson, [1932] A.C. 562; [1932] All E.R. Rep.!.

SALE BY SAMPLE

18. Sale by sample. 56 & 57 Vic. c. 71, s. 15. (1) A contract of sale is a contract for sale by sample when there is a term in the contract, express or implied, to that effect.


(2) In the case of a contract for sale by sample-(a) There is an implied condition that the bulk shall correspond

with the sample in quality; (b) There is an implied condition that the buyer shall have a

reasonable opportunity of comparing the bulk with the sample; (c) There is an implied condition that the goods shall be free

from any defect, rendering them unmerchantable, which would not be apparent on reasonable examination of the sample.

Act referred to: Sale of Goods Act, 1893, 56 & 57 Vic. c. 71 (Imperial); see 22

Halsbury's Statutes of England, 2nd ed., p. 985. As to sales by sample and description, see s. 16. The office of a sample, like inspection of bulk, is to present to the eye the

intention of the parties, which it may be difficult or impossible to express in words. But a sample cannot be treated as conveying any greater information than would be given by express words, Drummond v. Van Ingen (1887), 12 App. Cas. 284, 297.

"Quality of goods" includes state or condition, s. 3 (1). With subsection (2) (b), d. s. 36 (2). The legal presumption is that the place for delivery is the place for comparing

the bulk with the sample. This presumption may be rebutted by the circumstances Or by a term express or implied in the contract, Perkins v. Bell, [1893] 1 Q.B. 193; [1891-4] All E.R. Rep. 884.

As to "merchantable", see notes to s. 17 (2). On a sale of goods in the absence of a sample, a warranty of merchantable

quality will be implied, but the selling by sample excludes that warranty to the extent of such matters as can be judged of by the sample, though no further, Mody v. Gregson (1868), L.R. 4 Exch. 49.

Where the sample shown to the buyer is taken from the wrong bulk by mistake of the seller, the contract is invalid, since the seller intends to sell one subject-matter and the purchaser to buy another, and there is, therefore, no consensus ad idem, Megaw v. Mol/oy (1878), 2 Ir. L.R. 530. See further, as to sale by sample, cases collected in 39 English and Empire Digest, (Rp\.) p. 556; 34 Halsbury's Laws of England, 3rd ed., p. 55. See also loske's Sale of Goods and Hire Purchase, 2nd ed., p. 98.

PART III-EFFECTS OF THE CONTRACT

TRANSFER OF PROPERTY AS BETWEEN SELLER AND BUYER

19. Goods must be ascertained. 56 & 57 Vic. c. 71, s. 16. When there is a contract for the sale of unascertained goods no property in the goods is transferred to the buyer unless and until the goods are ascertained.


Statutes of England, 2nd ed., p. 985. "Property" means the general property, and not merely a special property,

s. 3 (I). For the distinction between an agreement to sell and a sale, and as to the

conversion of the former into the latter, see s. 4. A contract to sell unascertained goods is not a complete sale, but a promise

to sell. There must be added to it some act which completes the sale, such as delivery or the appropriation of specific goods to the contract by the agent, express or implied, of both buyer and seller. Such appropriation will convert the executory agreement into a complete sale, Badische A nilin lind Soda Fabrik v. Hickson, [1906] A.C. 419, at p. 421.

For an example of the application of this section, see MischefJ v. Springett, [1942] 2 All E.R. 349; 58 T.L.R. 385.

See also 39 English and Empire Digest (Rp!.), p. 598; 34 Halsbury's Laws of England, 3rd ed., p. 61; King v. Greig, [1931] V.L.R. 413, at p. 431; Corry & Co. v. Harding (1905)' 26 N.Z.L.R. 361. See also Joske's Sale of Goods and Hire Purchase, 2nd ed., p. 103.


20. Property passes when intended to pass. 56 & 57 Vic. c. 71, s. 17. ( 1) When there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.

(2) For the purpose of ascertaining the intention of the parties regard is to be had to the terms of the contract, the conduct of the parties, and the circumstances of the case.


Statutes of England, 2nd ed., p. 985. "Specific goods" is defined by s. 3 (1). It is essential that the article should be specific and ascertained in a manner

binding on both parties, for unless that be so, the contract cannot be construed as a contract to pass the property in the article, Seath v. Moore (1886), 11 App. Cas. 350, at p. 370.

In general, if there are things remaining to be done by the seller to the article before it is in the state in which it is finally to be delivered to the purchaser, the contract will not be construed to be one to pass the property until those things are done, (ibid.).

It is competent to parties to agree for valuable consideration that a specific article shall be sold, and become the property of the purchaser as soon as it has attained a certain stage; though, if it is part of the bargain that more work shall be done on the article after it has reached that stage, it affords a strong prima facie presumption against its being the intention of the parties that the property should then pass, (ibid.).

If the words in one part of the agreement point in one direction, and the words in another part in another direction, the agreement must be looked at as a whole to see what its substantial effect is McEntire v. Crossley Bros., [1895] A.C. 457, at p. 463; [1895·9] All E.R. Rep. 829.

The question whether the property in goods has passed under a contract is a question of intention to be gathered from all the circumstances, the expressions made use of in ,the contract, and also the surrounding circumstances, Ogg v. Shuter (1875), L.R. 10 c.P. 159, at p. 162.

In determining the intention of the parties great weight must be given to a stipUlation in the contract, Cairns v. BurRess (1904), 2 N. & S. 233.

The circumstances of the case involve the surrounding circumstances in which the parties have bargained, Maine v. Lyons (1913), 15 C.L.R. 671, at p. 677. See also Bishop v. Shillito (1819),2 B. & Ald. 329.

For further cases relating to the passing of the property according to the intention of the parties, see Geraghty v. Queensland National Bank Ltd., [19331 St. R. Qd. 13; Knoblauch v. McInnes, [1935] St. R. Qd. 28; Re Gill (1898), 9 Q.L.J. 1; 39 English and Empire Digest, (Rp!.) p. 595; 34 Halsbury's Laws of England, 3rd ed., p. 60. See also Joske's Sale of Goods and Hire Purchase, 2nd ed .• p. 101.

21. Rules for ascertaining intention. 56 & 57 Vic. c. 71, s. 18. Unless a different intention appears, the following are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer:-

Rule 1.-When there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, is or are postponed.

Rule 2.-When there is a contract for the 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 notice thereof.


Rule 3.-When there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, measure, test, or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing is done and the buyer has notice thereof.

Rule 4.-When goods are delivered to the buyer on approval or "on sale or return" or other similar terms the property therein passes to the buyer-

(a) When he signifies his approval or acceptance to the seller, or does any other act adopting the transaction;

(b) 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 the goods, on the expiration of such time, and, if no time has been fixed, on the expiration of a reasonable time: What is a reasonable time is a question of fact.

Rule 5.-( I) When there is a contract for the sale of unascertained or future goods by description, and goods of that description and in a deliverable state arc 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. Such assent may be express or implied, and may be given either before or after the appropriation is made;

(2) When, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract.

Act referred to: Sale of Goods Act, 1893. 56 & 57 Vic. c. 71 (Imperial); see 22 Halsbury's

Statutes of England. 2nd ed .. p. 985. For definitions of terms useu. see ss. 3 (I). (4), 8 (I). Rule I-The distinction drawn by the word "unconditional'" is between contracts

of sale which are subject to conditions precedent. or, as they are sometimes called, "suspensive conditions". and contracts of sale not so subject, McPherson, Tholll, Kettle & Co. v. Delich Bros., [1921] V.L.R. 437.

As to "deliverahle state". see Corry & Co. v. Harding (1905), 26 N.l.L.R. 361; Re Morrisoll (1905). 25 N.l.L.R. 513; Cuff Bros. v. Smith (1906), 26 N.Z.L.R. 580; and McCorkilldale v. Wilsoll, [1920] N.l.L.R. 94.

Rule 2-The goods must be identified, Kllneli v. Timber Operators alld COil tractors Ltd., [19271 1 K.13. 298.

For an example of the application of rule 2 of this section, see Joseph Reid Ptv. Ltd. v. Schultz (1949),49 S.R.(N.S.W.) 231.

. Rule 3-lf an act remains .to be done by or on behalf of both parties before the goods are delivered. the property is n?t passed, Wal/ace v. Breeds (1811), 13 East 522. See also Mitchillson v. A talhape Farml'lS Meat alld Produce Co., [1920] N.Z.G.L.R. 45.

Rule 4-See Kirkham v. Attenborough, [1897] 1 Q.B. 201; [1895-9] All E.R. Rep. 450 (pledge by huyer held to be adoption of the transaction); GenII v. Werkel (1912), 107 L.T. 434; [1911-13] All E.R. Re~. 910, (delivery by buyer to third party also on sale or r~turn); Kempler v. Bravlngtolls. Ltd. (l9~5). 133 L.T. 680 (goods to remain sellers pr~perty till charged for by hIm); Arclllbaid v. Washer & Co., [1923] N .Z.L.R. 165; Pnce v. Fraser (1901). 4 N .l.G.L.R. 38.


Rule 5 (I)-The marking by the seller of goods at the place of delivery as the goods to be delivered and the notification of this marking to the seller, who said they would be all right, was held to be an appropriation, Tasmanian Producers' Selling Agency Ltd. v. Cumming ([9[4). 10 Tas. L.R. 25. See also Re Ryley ([896), 15 N.Z.L.R. 325: Donaghy's Rope & Twine Co. Ltd. v. Wright, Stephenson and Co. (1906), 25 N.Z.L.R. 641; Nell' Zealand Loan and Mercantile Agency Co. Ltd. v. Wright, Stephenson and Co. Ltd., [1930] N .z.L.R. 630.

For a case of unconditional appropriation by the seller with the assent of the buyer, see Rowe & SOli Ltd. v. Slade, [1924] St. R. Qd. [19; [1924] Q.W.N. 27.

As to "future goods", see Pyne Gould Guiness, Ltd. v. Meredith and Co., [[926] N.Z.L.R. 241.

Rule 5 (2)-See McKenzie v. Whittingham (1904),23 N.Z.L.R. 857; Mcllveney v. Whittingham ([905), 25 N.Z.L.R. 29.

Generally-With respect to the intention of the parties as to the passing of the property. see also Re Gill (1898), 9 Q.L.1. 1; Commissioners of Stamps v. Queensland Meat EXiport Co. Ltd., [1917] A.C. 624; Knoblauch v. Mcinnes, [1935] St. R. Qd. 28; 39 English and Empire Digest (RpL) p. 601; Joske's Sale of Goods and Hire Purchase, 2nd ed., p. 100; 34 Halsbury's Laws of England, 3rd ed., p. 60.

22. Reservation of right of disposal. 56 & 57 Vic. c. 71, s. 19. (1) When there is a contract for the sale of specific goods or when goods are subsequently appropriated to the contract, the seller may, by the terms of the contract or appropriation, reserve the right of disposal of the goods until certain conditions are fulfilled. In such case, notwithstanding the delivery of the goods to the buyer, or to a carrier or other bailee for the purpose of transmission to the buyer, the property in the goods does not pass to the buyer until the conditions imposed by the seller are fulfilled.

(2) When goods arc shipped, and by the bill of lading the goods are deliverable to the order of the seller or his agent, the seller is prima facie deemed to reserve the right of disposal.

(3) When the seller of goods draws on the buyer for the price, and transmits the bill of exchange and bill of lading to the buyer together to secure acceptance or payment of the bill of exchange, the buyer is bound to return the bill of lading if he does not honour the bill of exchange, and if he wrongfully retains the bill of lading the property in the goods does not pass to him.

Act referred to: Sale of Goods Act, 1893, 56 & 57 Vic. c. 7 [ (Imperial); see 22 Halsbury's

Statutes of England, 2nd ed., p. 985. "Specific goods" is defined by s. 3 (1). Where a buyer of goods under a contract "c.iJ.e. cash against documents"

refuses to pay the price and take up the documents when tendered, he may defend an action for non-acceptance by showing that though the documents were in order the goods actually shipped were not of the contract description, Massey v. A rlitz, [1923] V.L.R. [32. Where under such a contract the seller takes a bill of lading to his own order and forwards the documents to his agent at the port of destination, no property passes to a buyer who refuses to take up the documents, and consequently no action for the price of the goods will lie against him, (ibid.).

See also Nash v. George Doughty & Co. (1911), 30 N.Z.L.R. 1122: New Zealand Loan and Mercantile Agency Co. Ltd. v. Wright, Stephenson and Co. Ltd., [1930] N.Z.L.R. 630: Socony Proprietary Ltd. v. Begg, [1931] N.Z.LR. 567; Joske's Sale of Goods and Hire Purchase. 2nd ed., p. 110.

23. Risk prima facie passes with property. 56 & 57 Vic. c. 71, s. 20. Unless otherwise agreed, the goods remain at the seller's risk until the property therein 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:

Provided that when delivery has been delayed through the fault of either buyer or seller the goods are at the risk of the party in fault as regards any loss which might not have occurred but for such fault:

This section does not affect the duties or liabilities of either seller or buyer as a bailee of the goods of the other party.


Statutes of England, 2nd ed., p. 985. "Property" and "fault" are defined by s. 3 (1). Compare ss. 9, 10. The proviso applies to delay in delivery where the property does not pass

until delivery, as well as to cases where the property has already passed, Sharp v. Batt (1930),25 Tas. L.R. 33.

Where the risk has passed to the buyer and the goods remain in the seller's possession, the seller is still responsible for injury due to gross negligence on his part, Sharp v. Batt, supra.

See generally, as to incidence of risk and as to insurance. 39 English and Empire Digest. (RpL), p. 645; 34 Halsbury's Laws of England. 3rd ed., p. 76.

See also Joske's Sale of Goods and Hire Purchase, 2nd ed., pp. 110-111.

TRANSFER OF TITLE

24. Sale by person not the owner. 56 & 57 Vic. c. 71, s. 21. (1) Subject to the provisions of this Act, when 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 acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell.

(2) This Act does not affect-(a) The provisions of the Factors Act, or any enactment enabling

the apparent owner of goods to dispose of them as if he were the true owner thereof;

(b) The validity of any contract of sale under any special common law or statutory power of sale or under the order of a court of competent jurisdiction.


Statutes of England, 2nd ed., p. 985. Factors Act, 1892, p. 89, an/e. This section does not say that a purchaser is in certain cases to get a good

title. It is rather a negative provision, saying that a purchaser is not to get a title except in those cases, Geddes v. McDonnell (1896), 22 V.L.R. 330.

There is no implied warranty of title in a contract of sale of a personal chattel, and in the absence of fraud a vendor is not liable for a defect of title, unless there be an express warranty. or an equivalent to it by declaration or conduct, Morley v. Attenborough (1849), 3 Exch. 500.

It seems that although on the sale of a personal chattel there is no implied warranty of title, so that the vendor would not be liable to unliquidated damages for a breach of it, yet the purchaser may recover his money as on a consideration that has failed, if it was the understanding of both parties that the bargain should be put an end to if the purchaser should not have a good title, (ibid.).

If the vendor knows .that he has no title and conceals that fact, he is responsible to the purchaser as for a fraud, Morley v. Attenborough (1849), 3 Exch. 500, at p. 510.

At common law, a person in possession of goods could not confer on another, either by sale or by pledge, any better title to the goods than he himself had. To this general rule there was an exception of sales in market overt, and an apparent


exception where the person in possession had a title defeasible on account of fraud. If the owner of the goods had so acted as to clothe the seller or pledger with apparent authority to sell or pledge, he was at common law precluded, as against those who were induced bona fide to act on the faith of that apparent authority, from denying that he had given such an authority, and the result as to them was the same as if he had really given it. But there was no such preclusion as against those who had notice that the real authority was limited, Cole v. North Western Bank (1875), L.R. 10 c.P. 354, at p. 362. And see s. 27, and Factors Act, 1892, p. 89, allte.

For an illustration of the maxim nOllo dat quod nOll habet see Celltral Newbury Car Allctiolls Ltd. v. Unity Finance Ltd., Mercury Motors, Third Parties, [1957] 1 O.B. 371; [1956] 3 All E.R. 905, where the Court of Appeal considered Lickbarrow v. Mlison, (1787) 2 Term Rep. 63; 100 E.R. 35, and Farquharson Bros. & Co. v. King & Co., [1902] A.C. 325; [1900-3] All E.R. Rep. 120.

As to estoppel by conduct, see Pickard v. Sears (1837), 6 Ad. & El. 469; Freeman v. Cooke (1848). 2 Exch. 654; 18 L.J. Ex 114; Carr v. London and North-Western Ry. Co. (1875), L.R. 10 c.P. 307; Heap v. Motorists Advisory Agency Ltd., [1923] 1 K.B. 577; [1922] All E.R. Rep. 251; Galyer v. Massey-Harris Co. Ltd. (1914). 33 N.Z.L.R. 1392.

See also Joske's Sale of Goods and Hire Purchase, 2nd ed., p. 112; 34 Halsbury's Laws of England. 3rd ed., p. 79.

25. Sale under voidable title. 56 & 57 Vic. c. 71, s. 23. When the seller of goods has a voidable title thereto, but his title has not been avoided at the time of the sale, the buyer acquires a good title to the goods, if he buys them in good faith and without notice of the seller's defect of title.

Act referred to: Sale of Goods Act. 1893. 56 & 57 Vic. c. 71 (Imperial); see 22 Halsbury's

Statutes of England. 2nd ed., p. 985. As to good faith, see s. 3 (2). Where the contract is voidable on the ground of fraud. a purchaser buying

in good faith and without notice of the fraud before the contract is avoided can make a good title to a purchaser who at the date of re-sale had notice of the fraud. but had not been a party to it, Peirce v. London Horse and Carriage Repo.litory Ltd., r 1922] W.N. (Eng.) 170.

See further Joske's Sale of Goods and Hire Purchase, 2nd ed., p. 117; 34 Halsbury's Laws of England, 3rd ed .. p. 81.

26. Revesting of property in stolen goods on conviction of offender. 56 & 57 Vic. c. 71, s. 24. (I) When goods have been stolen and the offender is prosecuted to conviction, the property in the goods so stolen revests in the person who was the owner of the goods, or his personal representative, notwithstanding any intermediate dealing with them.

(2) Notwithstanding any enactment to the contrary, when goods have been obtained by fraud or other wrongful means not amounting to larceny, the property in such goods does not revest in the person who was the owner of the goods, or his personal representative, by reason only of the conviction of the offender.


Statutes of England, 2nd ed., p. 985. The operation of subsection (I) is affected by the Criminal Code, s. 670,

title CRIMINAL LAW. Vol. 3, p. 598. As to an order for restoration of property on conviction, see ibid., ss. 685, 670,

Vol. 3. pp. 615. 598. Stealing is defined by the Criminal Code, s. 391, Vol. 3, p. 403. As to the distinction between theft by a trick and obtaining by false pretences,

see Whitehorn Bros. v. Davison, [1911] 1 K.B. 463; [1908-10] All E.R. Rep. 885. In the case of theft by a trick, the contract is void; in the case of false pretences it is merely voidable. Bllller & Co. Ltd. v. T. J. Brooks Ltd. (1930), 46 T.L.R. 233; [1930] All E.R. Rep. 534.


This section does not have the effect of vesting stolen property in the thief; it relates 10 cases in which by reason of some dealing with stolen goods after they have been stolen and before the thief has been convicted, a third person has acquired some title to them, New Zealand and Australian Land Co. Ltd. v. Salisbury, [1920] St. R. Qd. 63; [1920] Q.w.N. 12; 14 Q.1.P.R. 52.

Since a court in its civil jurisdiction is not bound by a jury's finding convicting an offender of stealing, such theft and conviction must be proved by independent evidence before the civil tribunal in an action by the true owner for possession of the goods and damages for conversion. See Clouston v. Bragf'. [1949] N.Z.L.R. 1073, following Blilier & Co. Ltd. v. T. J. Brooks Ltd. (1930). 46 T.L.R. 233. and applying Hollington v. F. Hewthorn & Co. Ltd., [1943] K.B. 587; [1943] 2 All E.R. 35; 59 T.L.R. 321.

The principle of sale in market overt forms no part of the law of Queensland. See Sorley and Stirling v. Surawski, [1953] St. R. Qd. 110; 47 Q.J.P.R. 108.

See 34 Halsbury's Laws of England, 3rd ed., p. 84.

27. Seller or buyer in possession after sale. 56 & 57 Vic. c. 71, s. 25. ( 1) When 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, of the goods or documents of title under any sale, pledge, or other disposition thereof to any person receiving the same in good faith and without notice of the previous sale, has the same effect as if the person making the delivery or transfer were expressly authorised by the owner of the goods to make the same.

(2) When 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 person, or by a 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 and without notice of any lien or other right of the original seller in respect of the goods, has the same effect as if the person making the delivery or transfer were a mercantile agent in possession of the goods or documents of title with the consent of the owner.

(3) In this section the term "mercantile agent" has the same meaning as in the Factors Act.

Act referred to: Sale of Goods Act, 1893, 56 & 57 Vic. c. 71; see 22 Halsbury's

Statutes of England, 2nd ed., p. 985. As to "document of title" and "good faith," see s. 3 (1). (2). The Factors Act, 1892, ss. 9, 10. p. 92, ante, is in terms almost exactly

similar to this section. See cases cited under those sections and 39 English and Empire Digest. (Rp\. 1. p. 657.

For the effect of delivery or transfer by a mercantile agent, see Factors Act. 1892, s. 3, p. 90. ante. The term "mercantile agent" is defined by s. 2 of that Act.

Subsection (1) applies only in cases in which the relation of vendor and purchaser continues between the parties to the first sale. and not to cases in which. the first sale having been completed by delivery, a different relation is subsequently created between the parties to it under another contract. as where the goods are bailed or leased back to the vendor. Mitchell v. Jones (1905), 24 N.Z.L.R. 932. See also Moss v. Bohns, [1920] N.Z.G.L.R. 387 (sale of fixtures allowed to remain on the premises).

The words "or is" in subsection (1) are satisfied by holding them applicable to cases in which the goods, not being in the actual possession of the vendor at the time of sale. afterwards come into his possession but have not been delivered to the purchaser, Mitchell v. JOlles, supra.

See on subsection (11 City Fur Manllfactllring Co. v. Furenhond (Brokers) London Ltd., [1937] 1 All E.R. 799.

For an example of how subsection (1) may be affected by a hire-purchase agreement, see Eastern Distributors Ltd. v. Goldring. [1957] 2 All E.R. 525.


A person has "agreed to buy" goods only where he has become subject to a binding obligation to do so; an option to buy is not sufficien.t, Oates v. Kenna, [1923] St. R. Qd. 88; [1923] Q.W.N. 26; 17 Q.J.P.R. 122; Kaye & SOli v. Glassey (1896), 7 Q.L.J. 33; CUllningham V. Richardson, [1924] N.Z.L.R. 433. Where a binding agreement for sale and purchase on credit had been entered into, the subsequent signing of a hire-purchase agreement, which merely conferred an option to purchase and the right to return the goods, wa~ held not to abrogate the first agreement under which the buyer could convey a good title under this section, Schilling v. Till, [1931] S.A.S.R. 31. See also Victorian Producers Co-op. Co. Ltd. v. Leng (1918), 24 A.L.R. 35.

For further decisions on subs. (2), see Re Morrison (1905), 25 N.Z.L.R. 513 (purchaser in possession before sale; constructive delivery to purchaser); Archibald v. Washer and Co., [1923] N.Z.L.R. 165 (sale by person in possession under hirepurchase agreement); Reed v. Motors Ltd., [1926] S.A.S.R. 128; City Fur Manufacturing Co. Ltd. v. Fureenhond (Brokers) London Ltd., [1937] 1 All E.R. 799.

On subsection (2), see Du Jardin v. Beadman Bros. Ltd., [1952] 2 Q.B. 712; [1952] 2 All E.R. 160.

See further 34 Halsbury's Laws of England, 3rd ed., p. 84; laske's Sale of Goods and Hire Purchase, 2nd ed., p. 119.

28. Effect of writs of execution. 56 & 57 Vic. c. 71, s. 26. (1) A writ of fieri facias or other writ of execution against goods binds the property in the goods of the execution debtor as from the time when the writ is delivered to the sheriff to be executed; and, for the better manifestation of such time, it is the duty of the sheriff upon the receipt of any such writ to endorse upon the back thereof the hour, day, month, and year when he received it.

But the delivery of such a writ to the sheriff does not prejudice the title to such goods acquired by any person in good faith and for valuable consideration, unless such person had at the time when he acquired his title notice that such writ or any other writ by virtue of which the goods of the execution debtor might be seized or attached had been delivered to and remained unexecuted in the hands of the sheriff.

(2) In this sction the term "sheriff" includes any officer charged with the enforcement of a writ of execution.

Act referred to: Sale of Goods Act. 1893, 56 & 57 Vic. c. 71; see 22 Halsbury's

Statutes of England. 2nd ed., p. 985. As to "good faith", see s. 3 (2). Expectation that execution will be issued as the result of an action pending

against a debtor is not bad faith or notice of a writ of execution, Hayes v. McCulloch, [1902] Q.W.N. 73 (Mag. Cas.); Goodwin v. Ahhott (1909), 5 Tas. L.R. 63.

See also loske's Sale of Goods and Hire Purchase, 2nd ed., p. 123.

PART IV-PERFORMANCE OF THE CONTRACT

29. Duties of seJler and buyer. 56 & 57 Vic. c. 71, s. 27. It is the duty of the seller to deliver the goods, and of the buyer to accept and pay for them, in accordance with the terms of the contract of sale.


Statutes of England, 2nd cd., p. 985. A refusal by the buyer to accept part of the goods, but not a sufficient part

to amount to repudiation of the contract, does not absolve the seller from his obligation to deliver the remainder, Francis v. Lyon, (1907), 4 C.L.R. 1023.

For examples of refund of price on frustration, see Fibrosa Spolka Okcvjna v. Fairhairn Lawson Combe Barbour Ltd., [1942] 2 K.B. 12; [1942] 2 All E.R. 122; 58 T.L.R. 308; and Comploir d'Achal et de Vente du Boerenbond Belr;e (Societe Anonyme) v. Luis de Riddell Limilada, [1949] A.C. 293; 65 T.L.R. 126; [1949] 1 All E.R. 269.


Generally on frustration, see note under s. 52. For English cases, see 39 English and Empire Digest (Rpl.) p. 659; 34

Halsbury's Laws of England, 3rd ed., p. 89. See also Joske's Sale of Goods and Hire Purchase. 2nd ed., p. 124.

30. Payment and delivery are concurrent conditions. 56 & 57 Vic. c. 71, s. 28. Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller must be ready and willing to give possession of the goods to the buyer in exchange for the price, and the buyer must be ready and willing to pay the price in exchange for possession of the goods.


Statutes of England, 2nd ed., p. 985. Compare s. 42 (I) (a), post. Delivery may be either actual or constructive, and in the case of sea-horne goods,

the delivery of the bill of lading operates as a symbolical delivery of the goods (see the judgment of Kennedy, L.J .. in Biddell Bros. v. E. Clemens Horst Co., [1911] 1 K.B. 934, at p. 957). See also 39 English and Empire Digest, (Rpl.). p. 659.

Where in the contract no time is fixed at which the seller is entitled to tender the bill of lading, he may do so at any reasonable time. and he need not defer the tender of the bill of lading until the ship has arrived. or defer the tender of the hill of lading until after the goods have been landed. inspected and accepted; see E. Clemens Horst Co. v. Biddell Bros., [1912] A.C. 18; [1911-13] All E.R. Rep. 93. In such a case it is the duty of the purchaser to pay against the shipping documents, Biddell Bros. v. E. Clemens Horst Co., [1911] 1 K.B. 934, per Kennedy, L.J., at p. 958.

There was held to be evidence to support findings that the seller was ready and willing to give possession and that the buyer was not ready and wilIing to accept, in Rei.l· v. Carling, [1906] St. R. Qd. 38; [1906] Q.W.N. 9.

For what constitutes an agreement excluding this section. see Howes Bros. v. Queensland Milling Co. (1897), 8 Q.L.J. 83.

Compare Paria & Co. S.P.A. v. TIll/rmal1ll-Nicl.len, [1951 J 2 T.L.R. 802; [1951] 2 All E.R. 866; [1951] W.N. 533 (contract for sale of 3,000 metric tons of groundnuts to be shipped from Brazil to Genoa, payment to be by opening of a confirmed credit in favour of sellers and utilizable by them against delivery of certain documents; unreasonable delay in making credit available; buyers held to be in default and liable in damages).

See further. 34 Halsbury's Laws of England. 3rd ed .. p. 89; Joske's Sale of Goods and Hire Purchase. 2nd ed .. p. 125.

31. Rules as to delivery. 56 & 57 Vic. c. 71, s. 29. (l) Whether it is for the buyer to take possession of the goods or for the seller to send them to the buyer is a question depending in each case on the contract, express or implied, between the parties. Apart from any such contract, express or implied, the place of delivery is the seller's place of business, if he has one, and if not, his residence: Provided that, if the contract is for the sale of specific goods which to the knowledge of the parties when the contract is made are in some other place, then that place is the place of delivery.

(2) When 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.

(3) When the goods at the time of sale are in the possession of a third person, there is no delivery by the seller to the buyer unless and until such third person acknowledges to the buyer that he holds the goods on his behalf.

(4) Demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour. What is a reasonable hour is a question of fact.


(5) Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state must be borne by the seller.

(6) This section does not affect the operation of the issue or transfer of any document of title to goods.


Statutes of England, 2nd ed., p. 985. As to "specific goods" and "deliverable state", see s. 3 (1), (4). What is a reasonable time is a question of fact, s. 57. See 39 English and Empire Digest (Rp!.), p. 664; 34 Halsbury's Laws of

England, 3rd ed., pp, 93 et seq. See also Joske's Sale of Goods and Hire Purchase, 2nd ed., p. 126.

32. Delivery of wrong quantity. 56 & 57 Vic. c. 71, s. 30. (1) When the seller delivers to the buyer a quantity of goods less than he contracted to sell, the buyer may reject them, but if the buyer accepts the goods so delivered he must pay for them at the contract rate.

C 2) When the seller delivers to the buyer a quantity of goods larger 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. If the buyer accepts the whole of the goods so delivered he must pay for them at the contract rate.

C 3) When the seller delivers to the buyer the goods which he contracted to sell mixed with goods of a different description not included in the contract, the buyer may accept the goods which are in accordance with the contract and reject the rest, or he may reject the whole.

C 4) The provisions of this section are subject to any usage of trade special agreement, or course of dealing between the parties.


Statutes of England, 2nd ed., p. 985. If a contract is made for the purchase of a large quantity of any article,

and a part only is delivered, the vendee is not bound to pay for that part before the time fixed for the delivery of the whole. For if the seller fails to complete his contract, the purchaser may return the part delivered. Shipton v. Casson (1826). 5 B. & c. 378, at p. 382; and see Oxendale v. Wetherell (1829), 9 B. & C. at p. 387, and Colonial Insurance Co. of Nell' Zealand v. Adelaide Marine Insurance Co. (1886), 12 App. Cas. 128, at p. 138.

As to subsection (1), see also McGregor v. Nelson (1915), 34 N.Z.L.R. 375 (sale of partnership assets): Farley v. Loughnan, [1917] N.Z.L.R. 588; Romberg v. Gilbert (1901), II Q.L.J. 96.

See on subsection (I) Keith S. Hall (Distrihutors) Pty. Ltd. v. Smith, [1955] QW.N. 4; 49 Q.J.P.R. 53.

When the seller delivers a larger quantity of goods than was ordered, such delivery is in effect a proposal for a new contract, Hart v. Mills (1846), 15 M. & W. 85, at p. 87; and see Cunliffe v. Harrison (1851), 6 Exch. 903.

As to subsection (2), see also Dannevirke Cordial Factory v. Hall (1910), 12 N.Z.G.L.R. 697: BlItlers (London) Ltd. v. Roope & Co., [1922] N.Z.L.R. 549.

The words "mixed with" do not refer to physical confusion, but are equivalent to "accompanied by". See Moore & Co. v. Landauer & Co., [1921] I K.B. 73, at p. 76. affd., [1921] 2 K.B. 529; [1921] All E.R. Rep. 466.

Where there is a condition that goods shall be of merchantable quality, s. 17 (2), and part of the goods delivered are not of merchantable quality, the buyer is entitled to reject the whole under subsection (3). See Kirwan v. Farleiglz Estates Sligar Co. Ltd., [1918] St. R. Qd. 133; 12 Q.J.P.R. 108.

Subsection (3) was applied in Romherg v. Gilbert (1901), 11 Q.L.J. 96. On the buyer's rights under subsection (3) hereof, see London Plywood and

Timber Co. Ltd. v. Nasic Oak Extract Factory and Steam Sawmills Co. Ltd., [1939] 2 K.B. 343; 55 T.L.R. 826.

For further English cases, see 34 Halsbury's Laws of England, 3rd ed., p. 97. See also Joske's Sale of Goods and Hire Purchase, 2nd ed., p. 129.


33. Instalment deliveries. 56 & 57 Vic. c. 71, s. 31. (I) Unless otherwise agreed, the buyer of goods is not bound to accept delivery of them by instalments.

(2) When there is a contract for the sale of goods to be delivered by stated instalments, which are to be separately paid for, and the seller makes defective deliveries in respect of one or more instalments, or the buyer neglects or refuses to take delivery of or pay for one or more instalments, it is a question in each case depending on the terms of the contract and the circumstances of the case, whether the breach of contract is a repudiation of the whole contract or whether it is a severable breach giving rise to a claim for compensation but not to a right to treat the whole contract as repudiated.

Act referred to: Sale of Goods Act. 1893, 56 & 57 Vic. c. 71; see 22 Halsbury's

Statutes of England, 2nd ed., p. 985. The application of this section was held not to be excluded by agreement in

Howes Bros. v. Qlleensland Milling Co. (1897), 8 O.L.1. 83. An implication may arise from the circumstances of the contract that the

delivery is to be by instalments. See Colonial Insurance Co. v. A de/aide Marine insurance Co. (1886). 12 App. Cas. 128, at p. 138.

A buyer is not bound to accept delivery of an agreed instalment in parts, ROlllberg v. Gilbert (1901), 11 O.L.l. 96.

Failure by the buyer to give a bill of exchange for one instalment upon delivery was held not to avoid the contract. Pollock v. Mackenzie (1866), 1 S.C.R. 156.

The rule of law is that where there is a contract in which there are two parties. each side having to do something (it is so laid down in the notes to Pordage v. Cole (1669). 1 Wms. Saund. 548 (ed. 1871 ». if you see that the failure to perform one part of it goes to .the root of the contract. goes to the foundation of the whole, it is a good defence to say "1 am not going on to perform my part of it when that which is the root of the whole and the substantial consideration for my performance is defeated by your misconduct". Mersey Steel and iron Co. v. Naylor Benzon & Co. (1884), 9 App. Cas. 434, at p. 443; [1881-5] All E.R. Rep. 365.

As to cases. where the amount of the instalments is not specified in the contract. see Edi/sOfl V. Joyce, [1917] N.Z.L.R. 648: Coddington v. PlIieologo (1867), L.R. 2 Exch. 193. at p. 197.

On the effect of an oral extension of time, see Bessler, Wacchter and Glover & lo. v. SOllth DCl'll'en/ Coal Co., [1938J I K.B. 408: [1937] 4 All E.R. 552; 54 T.L.R. 140. noted under s. 7.

For a case in which the English subsection of which subsection (2) is a transcript was applied. see HafllZl!h Mal/ass and Sons v. British Imex indllstries Ltd., [1958] 2 O.B. 127.

See also loske's Sale of Goods and Hire Purchase, 2nd ed .. p. 131: 34 Halsbury's Laws of England. 3rd cd., pp. 101. 105.

34. Delivery to carrier. 56 & 57 Vic. c. 71, s. 32. ( 1) When, in pursuance of a contract of sale. the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer is prima facie deemed to be a delivery of the goods to the buyer.

(2) Unless otherwise authorised by the buyer, the seller must make such contract with the carrier on behalf of the buyer as may be reasonable having regard to the nature of the goods and the other circumstances of the case. If the seller omits so to do, and the goods are lost or damaged in course of transit, the buyer may decline to treat the delivery to the carrier as a delivery to himself, or may hold the seller responsible in damages.


(3) Unless otherwise agreed, when goods are sent by the seller to the buyer by a route involving sea transit, under circumstances in which it is usual to insure, the seller must give such notice to the buyer as may enable him to insure them during their sea transit, and if the seller fails to do so, the goods are deemed to be at his risk during such sea transit.


Statutes of England, 2nd ed., p. 985. For an example of the effect of delivery to a carrier on jurisdiction, see R. v.

Stipendiary Magistrate at Biloe/a and Kallis, Ex parte Sams, [1944] St. R. Qd. 68; 38 Q.J.P.R. 66.

See Hamzeh Mal/ass & SOIlS V. British lmex Industries Ltd., [1958] 2 Q.B. 127, noted under s. 33.

The vendor has an implied authority, and it is his duty to do whatever is necessary to secure the responsibility of the carriers for the safe delivery of the goods, and to put them into such a course of conveyance as that in case of a loss the vendee may have his indemnity against the carriers, Clarke v. Hutchins (1811), 14 East 475.

Subsection (3) applies to f.o.b. contracts. See Northern Steel & Hardware Co. v. Batt & Co. (1917), 33 T.L.R. 516.

There was held to be no agreement excluding the operation of subsection (3) in Webster & Co. Ltd. v. Forsyth (1920), 14 Q.J.P.R. 81.

As to the expression "usual to insure", see May v. Newman, [1923] N.Z.L.R. 1328.

See 39 English and Empire Digest (Rpl.), pp. 712, 637; 34 Halsbury's Laws of England, 3rd ed., p. 107.


35. Risk where goods are delivered at distant place. 56 & 57 Vic. c. 71, s. 33. When the seller of goods agrees to deliver them at his own risk at a place other than that where they are when sold, the buyer must, nevertheless, unless otherwise agreed, take any risk of deterioration in the goods necessarily incident to the course of transit.

Act referred to: Sale of Goods Act. 1893, 56 & 57 Vic. c. 71; see 22 Halsbllry's Statutes

of England, 2nd ed .. p. 985. See hereon E. & S. Ruben Ltd. v. Faire Bros. & Co. Ltd., [1949J I K.B. 254;

[1949J I All E.R. 215. Sce 39 English and Empire Digest. (Rpl.), p. 712; 34 Halsbllry's Laws of

England, 3rd ed .. p. 108. See also loske's Sale of Goods and Hire Purchase, 2nd ed., p. 145.

36. Buyer's right of examining the goods. 56 & 57 Vic. c. 71, s. 34. (I) When goods are delivered to the buyer, which he has not previously examined, he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract.

(2) Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound, on request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract.

Act referred to: Sale of Goods Act. 1893, 56 & 57 Vic. c. 71; see 22 Halsbury's Statutes of

England, 2nd cd .. p. 985. As to sales by sample. see also s. 18 (2) (b). As to reasonable opportunity, see Lorymer v. Smith (1822), 1 B. & C. 1;

Perkins v. Bell, [1893] 1 Q.B. 193; [1891-4] All E.R. Rep. 884; Heilbutt v. Hickson (1872), L.R. 7 c.P. 438; and Bra!:!: v. Villanova (1923), 40 T.L.R. 154.

See 39 English and Empire Digest (Rpl.), p. 716; 34 Halsbury's Laws of England. 3rd ed .. p. 110.



37. Acceptance. 56 & 57 Vic. c. 71, s. 35. The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him, and he does any act in relation to them which is inconsistent with the ownership of the seller, or when after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them.

Act referred to: Sale of Goods Act, 1893, 56 & 57 Vic. c. 71; see 22 Halsbury's Statutes of

England, 2nd ed., p. 985. What is a reasonable time is a question of fact, s. 57. Where the contract is entire, an acceptance of part of the goods is an

acceptance of all, s. 14 (3). But it is otherwise where the contract is severable as, for instance, where the goods are to be delivered by instalments, lackson v. Rotax Motor & Cycle Co., [1910] 2 K.B. 937.

As to acts inconsistent with ownership of the seller, see Scott v. McGreath alld Gresham (1899), 1 N.Z.G.L.R. 268: Horn v. Hodder and Tolley Ltd. (191O), 29 N.Z.L.R. 928; Benaim & Co. v. Debono, [1924] A.C. 514; [1924] All E.R. Rep. 103.

For an example of a constructive taking of delivery which constituted an act "inconsistent with the ownership of the seller," see E. & S. Ruben Ltd. v. Faire Bros. & Co., [1949] 1 K.B. 254: [1949] 1 All E.R. 215. For an illustration of the loss of the buyer's right to reject because of his acceptance of delivery or. at least, because of the lapse of a reasonable time thereafter. see Leaf v. International Galleries, [1950] 2 K.B. 86; [1950] 1 All E.R. 693; [19501 2 T.L.R. 1031 (purchase of picture innocently represented as a Constable; purported rescission on discovery five years later that it was not Constable's work held barred). For another instance of unreasonably belated rejection, see Arthur G. Washer Ltd. v. Riddella Toilet Parlours (1937), 32 N.Z.M.C.R. 59. See also Re a Debtor (No. 38 of 1938), [1938] 4 All E.R. 308; 55 T.L.R. 107, noted under s. 7.

For an additional example of the buyer's loss of the right to reject, the lapse of time being so great as to be conclusive evidence that he had elected to affirm the contract, see Kwei Tek Chao v. British Traders and Shi,ppcrs Ltd., [1954] 2 Q.B. 459.

See 39 English and Empire Digest (Rpl.) p. 724: 34 Halsbury's Laws of England, 3rd ed., p. 111.

See also Joske's Sale of Goods and Hire Purchase. 2nd ed., p. 146.

38. Buyer not bound to return rejected goods. 56 & 57 Vic. c. 71, s. 36. Unless otherwise agreed, when goods are delivered to the buyer and he refuses to accept them, having the right so to do, he is not bound to return them to the seller, but it is sufficient if he intimates to the seller that he refuses to accept them.

Act referred to: Sale of Goods Act, 1893. 56 & 57 Vic. c. 71; see 22 Halsbury's Statutes of

England. 2nd ed., p. 985. See Price v. Fraser (1901), 4 N.z.G.L.R. 38; 39 English and Empire Digest

(Rpl.), p. 718; 34 Halsbury's Laws of England. 3rd ed., p. 112.

39. Liability of buyer for neglecting or refusing delivery of goods. 56 & 57 Vic. c. 71, s. 37. 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, and also for a reasonable charge for the care and custody of the goods:

This section does not affect the rights of the seller if the neglect or refusal of the buyer to take delivery amounts to a repudiation of the contract.



England, 2nd ed., p. 985. In the circumstances referred to in the concluding stipulation of this section,

the right of the seller is to treat the buyer as having put an end to the contract, and if necessary to sue for damages, Mersey Steel and Iron Co. v. Nay/or, Benzon & Co. (1884),9 App. Cas. 434; [1881-5] All E.R. Rep. 365.

As to allowance of interest on the purchase price as damages, see Raymond and Co. v. Friedlander Bros. Ltd. (1904), 23 N.Z.L.R. 917.

See further 34 Halsbury's Laws of England, 3rd ed., p. 113.

PART V

RIGHTS OF UNPAID SELLER AGAINST THE GOODS

40. Unpaid seller defined. 56 & 57 Vic. c. 71, s. 38. (1) The seller of goods is deemed to be an "unpaid seller" within the meaning of this Act

(a) When the whole of the price has not been paid or tendered; (b) When a bill of exchange or other negotiable instrument has

been received as conditional payment, and the condition on which it was received has not been fulfilled by reason of the dishonour of the instrument or otherwise.

(2) In this part of this Act the term "seller" includes any person who is in the position of a seller, as, for instance, an agent of the seller to whom the bill of lading has been endorsed, or a consignor or agent who has himself paid, or is directly responsible for, the price.

Act referred to: Sale of Goods Act. 1893. 56 & 57 Vic. c. 71; see 22 Halsbury's Statutes of

England. 2nd ed., p. 985. For "seller", see s. 3 (1). The consignor's right of stopping goods in transitu is not taken away by the

consignee's having partly paid for the goods, Hodgson v. Loy (1797), 7 Term Rep. 440; see also Fei.l'e v. Wray (1802), 3 East 93.

"If the bill is dishonoured before delivery of .the goods has been made, then the vendor's lien revives, or. if the purchaser becomes openly insolvent before the delivery actually takes place, the law does not compel the vendor to deliver to an insolvent purchaser", Gunn v. Bolckow, Vaughan & Co. (1875), 10 Ch. App. 491, at p. 50 I. It is a question of fact whether a bill is given in absolute or conditional payment, Goldshede v. Cottrell (1836), 2 M. & W. 20.

See further 34 Halsbury's Laws of England, 3rd ed., p. 120. See also loske's Sale of Goods and Hire Purchase, 2nd ed., p. 148.

41. Unpaid seller's right. 56 & 57 Vic. c. 71, s. 39. (1) Subject to the provisions of this Act, and of any Statute in that behalf, notwithstanding that the property in the goods may have passed to the buyer, the unpaid seller of goods, as such, has by implication of law-

(a) A right to retain the goods for the price while he is in possession of them;

(b) In case of the insolvency of the buyer, a right of stopping the goods in transitu after he has parted with the possession of them;

(c) A right of re-sale as limited by this Act.

(2) When the property in goods has not passed to the buyer, the unpaid seller has, in addition to his other remedies, a right of withholding delivery similar to and co-extensive with his rights of retention and stoppage in transitu when the property has passed to the buyer.



England, 2nd ed., p. 985. As to when a person is deemed to be insolvent, see s. 3 (3). If a buyer pays for goods and then rejects them, he is not in the same position

as an unpaid vendor, and cannot retain the goods until the money is returned, Lyons (lL.) & Co. Ltd. v. May and Baker Ltd., [1923] 1 K.B. 685.

For further cases, see 39 English and Empire Digest, (Rp!.), p. 741; 34 Halsbury's Laws of England, 3rd ed., pp. 119, 137.

See also laske's Sale of Goods and Hire Purchase, 2nd ed., p. 148. Supply of in.toxicating liquor on credit is severely restricted by the Liquor Acts,

1912 to 1965, s. 65, title LIQUOR. VA!. 10, p. 93. As to supply of goods on credit to an assisted Aborigine or assisted Islander.

see Aborigines' and Torres Strait Islanders' Affairs Act of 1965, s. 32, 1965 Annual Volume, p. 306.

UNPAID SELLER'S RIGHT OF RETE~TlON

42. Seller's right of retention. 56 & 57 Vic. c. 71, s. 41. (1) Subject to the provisions of this Act, the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases, namely-

(a) When the goods have been sold without any stipulation as to credit;

(b) When the goods have been sold on credit, but the term of credit has expired;

(c) When the buyer becomes insolvent. (2) The seller may exercise his right of retention notwithstanding

that he is in possession of the goods as agent or bailee for the buyer. Act referred to:

Sale of Goods Act, 1893. 56 & 57 Vic. c. 71; see 22 Halsbury's Statutes of England. 2nd ed., p. 985.

With subsection (1) (a), cf. s. 30. For when a person is deemed to be insolvent, see s. 3 (3). The lien is for price only, and not for charges for keeping the goods; d.

British Empire Shipping Co. v. Somes (1859), 28 L.1.Q.B. 220. As to a sale on credit excluding the lien while the credit lasts, see Spartali v.

Benecke (1850). 10 C.B. 212, 223; Field v. Le/ean (1861),30 L.l. Ex. 168. As to the seller's lien on instalment contracts. see Re Edwards, Ex parte

Chalmers (1873), 8 Ch. App. 289, at p. 293. Mere insolvency of a party to a contract does not dissolve the contract, but an agreement to rescind is readily presumed. See Mess v. DufJus & Co. (1901), 6 Com. Cas. 165; Morgan v. Bain (1874). L.R. 10 c.P. 15.

As to subsection (2). see Poulton & Son v. Anglo·American Oil Co. (1911), 27 T.L.R. 216; Gardner v. Belcher (1902). 22 N.Z.L.R. 27.

For further cases, see 39 English and Empire Digest, (Rpl.), p. 744; 34 Halsbury's Laws of England, 3rd ed., p. 122.

See also laske's Sale of Goods and Hire Purchase. 2nd ed., p. 149.

43. Part delivery. 56 & 57 Vic. c. 71, s. 42. When an unpaid seller has made part delivery of the goods, he may exercise his right of retention on the remainder, unless such part delivery has been made under such circumstances as to show an agreement to waive that right.


England, 2nd ed., p. 985. As to delivery of part amounting to delivery of the whole, see Dixon v.

Yates (1833). 5 B. & Ad. 313. at p. 341; and Kemp v. Falk (1882), 7 App. Cas. 573, at p. 586. See further 39 English and Empire Digest, (Rp!.) 745; 34 Halsbury's Laws of England, 3rd ed., p. 123.

See also loske's Sale of Goods and Hire Purchase, 2nd cd., p. 150.

SALE OF GOODS ACT OF 1896 55.41-46 221

44. Termination of right of retention. 56 & 57 Vic. c. 71, s. 43. ( 1 ) The unpaid seller of goods loses his right of retention-

(a) When he delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without reserving the right of disposal of the goods;

(b) When the buyer or his agent lawfully obtains possession of the goods;

(c) By waiver thereof.

(2) The unpaid seller of goods, having a right of retention thereof, does not lose that right by reason only that he has obtained judgment for the price of the goods.

Act referred to: Sale of Goods Act, 1893,56 & 57 Vic. c. 71; see 22 Halsbucy's Statutes of

England, 2nd ed., p. 985. When goods at the time of sale are in the possession of a third person,

there is no delivery to the buyer, and the seller's lien therefore is not divested until such third person attorns to the buyer; a delivery order alone does not change the possession, see M'E\\'an v. Smith (1849),2 H.L. Cas. 309.

For further cases, see 39 English and Empire Digest, (Rp!.) p. 745; 34 Halsbury's Laws of England, 3rd ed., p. 124.

See also Josh's Sale of Goods and Hire Purchase, 2nd ed., p. 150.

STOPPAGE IN TRANSITU

45. Right of stoppage in transitu. 56 & 57 Vic. c. 71, s. 44. Subject to the provisions of 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 transitu, that is to say, he may resume possession of the goods as long as they are in course of transit, and may retain them until payment or tender of the price.


England, 2nd ed., p. 985. For when a buyer is deemed to be insolvent, see s. 3 (3). 'The doctrine of stoppage in transitu has always been construed favourably

to the vendor", Bethell v, Clark (1888),20 Q.B.D. 615, at p. 617; and part payment does not take away his right, Hodgson v. Loy (1797), 7 Term Rep. 440; and Feise v. Wray (1802), 3 East 93.

'"The essence of stoppage in transitu is that the goods should be in the possession of a middleman," ScllOtsmans v. Lancashire and Yorkshire Ry. (1867), 2 Ch. App, 332, at p. 338. See also Kendal v. Marshall, Stel'ens & Co. (1883), 11 Q.B.D. 356, at p. 364; Kemp v. Falk (1882), 7 App. Cas., at p. 587.

Stoppage in transilll does not rescind the contract between the carrier and the purchaser, nor does it vest the property in the goods in the unpaid vendor, Booth S.S. Co. Ltd. v. Cargo Fleet Iron Co. Ltd., [1916] 2 K.B. 570; [1916-17] All E.R. Rep. 938.

See further 39 English and Empire Digest, (Rp!.) p. 748; 34 Halsbury's Laws of England, 3rd ed., p. 127.

46. Duration of transit. 56 & 57 Vic. c. 71, s. 45. (1) Goods are deemed to be in course of transit from the time when they are delivered to a carrier by land or water, or other bailee, for the purpose of transmission to the buyer, until the buyer, or his agent in that behalf, takes delivery of them from such carrier or other bailee.

(2) If the buyer or his agent in that behalf obtains delivery of the goods before their arrival at the appointed destination, the transit is at an end.


(3) If, after the arrival of the goods at the appointed destination, the carrier or other bailee acknowledges to the buyer, or his agent, that he holds the goods on his behalf and continues in possession of them as bailee for the buyer or his agent, the transit is at an end, and it is immaterial that a further destination for the goods may have been indicated by the buyer.

( 4) If the goods are rejected by the buyer and the carrier or other bailee continues in possession of them, the transit is not deemed to be at an end, even if the seller has refused to receive them back.

(5) When goods are delivered to a ship chartered by the buyer it is a question depending on the circumstances of the particular case, whether they are in the possession of the master as a carrier or as agent to the buyer.

(6) When the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or his agent in that behalf, the transit is deemed to be at an end.

(7) When part delivery of the goods has been made to the buyer, or his agent in that behalf, the remainder of the goods may be stopped in transitu, unless such part delivery has been made under such circumstances as to show an agreement to give up possession of the whole of the goods.

Act referred to: Sale of Goods Act, 1893,56 & 57 Vic. c. 71; see 22 Halsbury's Statutes of

England, 2nd ed., p. 985. Sending goods "to their destination" means sending the goods to a particular

place to a particular person who is to receive them, and not sending them to a particular place without saying to whom, Re isaacs, Ex parte Miles (1885), 15 Q.B.D. 39, 43; and see Kemp v. Falk (1882), 7 App. Cas. 573, 588.

As to "termination of transit", see Bethell v. Clark (1887), 19 Q.B.D. 553, at p. 561.

For further cases, see 39 English and Empire Digest. (Rpl.) p. 751; 34 Halsbury's Laws of England, 3rd ed., p. 128.

47. How stoppage in transitu is effected. 56 & 57 Vic. c. 71, s. 46. (1) The unpaid seller may exercise his right of stoppage in transitu either by taking actual possession of the goods, or by giving notice of his claim to the carrier or other bailee in whose possession the goods are. Such notice may be given either to the person in actual possession of the goods or to his principal. In the latter case the notice, to be effectual, must be given at such time and under such circumstances that the principal, by the exercise of reasonable diligence, may communicate it to his servant or agent in time to prevent a delivery to the buyer.

(2) When notIce at stoppage in transitu is given by the seller to the carrier, or other bailee in possession of the goods, he must re-deliver the goods to, or according to the directions of, the seller. The expenses of such re-delivery must be borne by the seller.


England, 2nd ed., p. 985. The carrier is bound to act upon the notice by delivering the goods to, or

according to the directions of, the vendor, and if he fails to do so he is liable to an action by the vendor for wrongful conversion, Booth S.S. Co. Ltd. v. Cargo Fleet Iron Co. Ltd., [1916] 2 K.B. 570; [1916-17] All E.R. Rep. 938.


Where goods are stopped in transit while in the hands of the carrier, the carrier has a lien for the charge of carrying those particular goods, but he has no general lien for money due from the consignee, United States Steel Products Co. v. Great Western Ry. Co., [1916] 1 A.C. 189, 196.

See also 39 English and Empire Digest (Rp!.) pp. 748, 765; 34 Halsbury's Laws of England, 3rd ed .. p. 134; loske's Sale of Goods and Hire Purchase, 2nd ed., p. 151.

RE-SALE BY BUYER OR SELLER

48. Effect of sub-sale or pledge by buyer. 56 & 57 Vic. c. 71, s. 47. Subject to the provisions of this Act, the unpaid seller's right of retention or stoppage in transitu is not affected by any sale or other disposition of the goods which the buyer may have made, unless the seller has assented thereto.

Provided that where a document of title to goods has been lawfully transferred to any person as buyer or owner of the goods, and that person transfers the document to a person who takes the document in good faith and for valuable consideration, then, if such last-mentioned transfer was by way of sale the unpaid seller's right of retention or stoppage in transitu is defeated, and if such last-mentioned transfer was by way of pledge or other disposition for value, the unpaid seller's right of retention or stoppage in transitu can only be exercised subject to the rights of the transferee.

Act referred to: Sale of Goods Act. 1893, 56 & 57 Vic. c. 71; see 22 Halsbury's Statutes

of England, 2nd ed., p. 985. "Good faith" is defined by s. 3 (2). The proviso to this section substantially reproduces s. 11 of .the Factors Act,

1892, p. 93, ante. See the notes to that section, and 39 English and Empire Digest, (Rp!.), p. 768; 34 Halsbury's Laws of England, 3rd ed., p. 137.


49. Sale not generally rescinded by lien or stoppage in transitu. 56 & 57 Vic. c. 71, s. 48. (1) Subject to the provisions of this section, a contract of sale is not rescinded by the mere exercise by an unpaid seller of his right of retention or stoppage in transitu.

(2) When an unpaid seller who has exercised his right of retention or stoppage in transitu re-sells the goods, the buyer acquires a good title to them as against the original buyer.

(3) When the goods are of a perishable nature, or when the unpaid seller gives notice to the buyer of his intention to re-sell, and the buyer does not within a reasonable time pay or tender the price, the unpaid seller may re-sell the goods and recover from the original buyer damages for any loss occasioned by his breach of contract.

( 4) When the seller expressly reserves a right of re-sale in case the buyer should make default, and on the buyer making default, re-sells the goods, the original contract of sale is thereby rescinded, but without prejudice to any claim that the seller may have for damages.

Act referred to: Sale of Goods Act. 1893. 56 & 57 Vic. c. 71; see 22 Halsbury's Statutes

of England, 2nd ed.,· p. 985. What is a reasonable time is a question of fact. s. 57. Perishable includes commercially perishable, for example, deteriorating in

market value. Maclean v. Dillin (1828),4 Bing. 722, 728. On the construction of subsection (3), see Gallagher v. Shilcock [1949] 2 K.B.

765; 65 T.L.R. 496; [1949] 1 All E.R. 921, applying Howe v. Smith (1884), 27 Ch. D. 89; [1881-5] All E.R. Rep. 201.

See 39 English and Empire Digest (Rp!.) p. 773; 34 Halsbury's Laws of England, 3rd ed., p. 141.


PART VI-ACTIONS FOR BREACH OF THE CONTRACT

REMEDIES OF THE SELLER

50. Action for price. 56 & 57 Vic. c. 71, s. 49. (I) When, under a contract of sale, the property in the goods has passed to the buyer, and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may maintain an action against him for the price of the goods.

(2) When, under a contract of sale, the price is payable on a day certain irrespective of delivery, and the buyer wrongfully neglects or refuses to pay such price, the seller may maintain an action for the price, although the property in the goods has not passed, and the goods have not been appropriated to the contract.

Act referred to: Sale of Goods Act, 1893. 56 & 57 Vic. c. 71; see 22 Halsbury's Statutes

of England, 2nd ed., p. 985. The passing of the property is governed hy ss. 19-22. "Action" includes counter-claim and set off, s. 3 (I). For forms of endorsement on the writ in an action for the price of goods

sold. see R.S.C. (1900), Schedule 1. Forms 14,59, title SUPREME COURT. As to defence, see R.S.C (1900). Order 25. Rule 3; Schedule 1, Form 125. As a general rule a party cannot recover the full value of a chattel. unless

under circumstances which import .that the property has passed to the defendant. as in the case of goods sold and delivered, where they have been absolutely parted with and cannot be sold again, Laird v. Pim (1841).7 M. & W. 474. An exception to this rule, however, is provided in the circumstances referred to in subsection (2) of this section, where it is not necessary that the property in the goods should have passed. See Stein, Forhes & Co. v. COllnty Tailoring Co. (1916), 86 L.l.K.B. 448.

A seller cannot sue for the price where the buyer agreed to give a bill of exchange for it, but has not done so, and the date when such bill would have become payable has not arrived. Pollock v. Macken~ie (1866). I S.CR. 156.

As to whether the seller can be entitled to sue for the price in any case other than those described by this section. see Martin v. HORan (1917), 24 CL.R. 234.

A bargain and sale of specific goods is sufficient consideration for a cheque given in payment; the consideration does not fail because there has been no delivery of the goods. Laver v. Smith. [1930] St. R. Qd. 199; 24 Q.J.P.R. 104. Where the buyer complains of non-delivery his remedy is to counter-claim for detention of the goods, or possibly for damages for non-delivery. (ibid.).

See further 39 English and Empire Digest, (Rp!.) p. 781; 34 Halsbury's Laws of England. 3rd ed., p. 144.

See also Joske's Sale of Goods and Hire Purchase. 2nd ed., p. 156.

51. Damages for non-acceptance. 56 & 57 Vic. c. 71, s. 50. (1) When the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against him for damages for nonacceptance.

(2) The measure of damages is the estimated loss directly and naturally resulting in the ordinary course of events, from the buyer's breach of contract.

(3) When there is an available market for the goods in question, the measurc of damages is prima facie to be ascertained by the difference between thc contract price and the market or current price at the time or times when the goods ought to have been accepted, or, if no time was fixed for acceptance, then at the time of the refusal to accept.

Act referred to: Sale of Goods Act, 1893. 56 & 57 Vic. c. 71: see 22 Halsbury's Statutes

of England, 2nd cd., p. 985.


For form of endorsement on the writ, see R.S.C. (1900), Schedule 1, Form 32. title SUPREME COURT.

Where the property in the goods has passed to the buyer, the seller may either sue for the price or for damages for non-acceptance. If, however, the seller has re-sold, he can only sue for damages. See Lamond v. Damll (1847). 9 Q.B. 1030.

Suhsection (2)-For an example, see Trans Trust S.P.R.L. v. Danubian Trading Co. Ltd., [1952] 2 Q.B. 297; [1952] 1 All E.R. 970 (loss of profits).

For an example of the application of subsection (2). to the exclusion of subsection (3). see Charter v. Sullivan, [1957] 2 Q.B. 117; [1957] 1 All E.R. 809, where the Court of Appeal, allowing an appeal from the trial judge and distinguishing Thompson (W.L.) Ltd. v. Robinson (Gunmakers), Ltd. [1955] Ch. 177; [1955] 1 All E.R. 154, held that the plaintiff (who had resold a repudiated motor-car, the subject matter of the action) had not suffered any "loss directly and naturally resulting" from the defendant's breach of contract and was entitled to only nominal damages. For a case in which subsection (2) was applied, to the exclusion of suhsection (3) (in which the meaning of "available market" was considered), see Charter v. Sul/imll, [1957] 2 Q.B. 117; [1957] 1 All E.R. 809.

Where the seller brings an action for the non-acceptance of goods, the price of which has risen since the contract was made, the judge is bound to tell the jury only to give nominal damages, Prehn v. Royal Bank of Lil'erpool (1870), L.R. 5 Exch. 92.

As to "available market" and "market price", see MontRomery v. Cunninghalll (1910). 12 N.Z.G.L.R. 555 (re-sale of racehorse); Edilson v. Joyce, [1917] N.Z.L.R. 648 (sale of fruit), Cameron v. Camp hell and Worthington Ltd., [19301 S.A.S.R. 402: Francis v. Lyon (1907). 4 C.L.R. 1023, cited under s. 52.

See 39 English and Empire Digest, (Rpl.), p. 791; 34 Halsbury's Laws of England, 3rd ed., p. 145.


REMEDIES OF THE BUYER

52. Damages for non-delivery. 56 & 57 Vic. c. 71, s. 51. (1) When the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may maintain an action against the seller for damages for nondelivery.

(2) The measure of damages IS the estimated loss directly and naturally resulting, in the ordinary course of events, from the seller's breach of contract.

(3) When there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price of the goods at the time or times when they ought to have been delivered, or, if no time was fixed, then at the time of the refusal to deliver.

Act referred to: Sale of Goods Act. 1893. 56 & 57 Vic. c. 71; see 22 Halsbury's Statutes

of England, 2nd cd .. ' p. 985. For form of endorsement on the writ, see R.S.C. (1900), Schedule 1, Form 32.

title SUPREME COURT. For form of statement of claim. see ibid., Schedule 1. Form 124. For form of defence. see ibid., Schedule 1, Form 124.

It was held that there had been no repudiation of the contract by a seller who had made an attempt to introduce new terms into the contract in Lennon v. Scarlett & Co. (1921), 29 C.L.R. 499.

Available market means that the circumstances, including conditions of place and time, are such that a purchaser can, then and there, buy other goods of the S3me quality. Francis v. Lyon (1907),4 C.L.R. 1023, at p. 1036. See also Corry & Co. v. Liddell (1913),16 N.Z.G.L.R. 122 and cases noted to s. 51.

Where there is no available market the measure of damages is the difference between the contract price and the value of the goods at the time and in the place where they should have been delivered and having regard to all the circumstances, Francis v. LYall, supra.


In Handelsonderneming v. S. Pental & Sons Ltd., [1954] 2 Lloyd L.R. 108, where the seller had committed a breach of contract by short delivery, Denning, L.l., held that, notwithstanding such breach, as there was an available market for such goods with no change of price, the plaintiff was entitled only to damages for disbursements incurred and not for loss of profit.

For the meaning of "available market" in subsection (3) qua vendor, see Eclipse Motors Pty. Ltd. v. Nixon, [1940] V.L.R. 49; [1939] A.L.R. 468.

As to when the market price at the place for delivery and when the market price at the place where defendants carryon business is to be taken see Reis v. Carling, [1906] St. R. Qd. 38; [1906] Q.W.N. 9.

In Murray, Arnold and Co. v. Pulley (1901), 4 N.Z.G.L.R. 166, an action for failure to deliver timber. the purchaser was allowed extra expense in obtaining timber elsewhere and interest on capital locked up owing to the delay.

A buyer is entitled to his expenses of travelling to the place at which delivery should have been, but was not, given, Pollock v. Mackenzie (1866), 1 S.C.R. 156.

For measure of damages on resale of a motor car where contract of sale has been repudiated by purchaser, see Eclipse Motors Pty. Ltd. v. Nixon, supra.

On the doctrine of frustration and the onus of proof, see Joseph Constantine Steamship Line Ltd. v. Imperial Smelting Corpn. Ltd., [1941] 2 All E.R. 165. See also J. Leavey & Co. Ltd. v. George H. Hirst & Co. Ltd., [1943] 2 All E.R. 581.

In Household Machines Ltd. v. Cosmos Exporters Ltd., supra, an action brought by a purchaser who, to the knowledge of the seller, had bought goods with a view to re-sale and contracted to re-sell the goods to a third person, but was prevented by non-delivery from doing so, Lewis. 1.. granted a declaration that the seller was bound to indemnify the purchaser fOr anything which could be adjudged by a court of law to be due from him to the third person and could be handed on to the seller.

For circumstances in which it was held that damages were not assessable under this section, but were assessable according to the rule in Hadley v. Baxendale (1854), 9 Exch. 341, see Pascoe & Co. Ltd. v. Holden's Motor Body Builders Ltd., [1931] S.A.S.R. 180.

On damages, see Gardiner v. Grigg (1938), 38 S.R.(N.S.W.) 524 (sale of ewes represented as dry), Australian Fruit and Produce Co. Ltd. v. Terry Pty. Ltd. (1938), 29 Tas. L.R. 102 (non-delivery or resale), J. Leavey & Co. Ltd. v. George H. Hirst & Co. Ltd., [1943] 2 All E.R. 581 and Household Machines Ltd. v. Cosmos Exporters Ltd. (1946), 62 T.L.R. 757; [1946] 2 All E.R. 622 (measure; no available market for purchase of substitute goods; buyer's right to recover loss of profit), Victoria Laundry (Windsor) Ltd. v. Newman Industries Ltd., [1949] 2 K.B. 529; 65 T.L.R. 274; [1949] I All E.R. 997 (claim for loss of profits resulting to purchaser from long delay in delivery of expensive boiler; ample means of knowledge on the defendant's part that business loss of some sort would be likely to result; order for assessment of damages). See also Munro v. Wiiimoll, [1949] I K.B. 295; 64 T.L.R. 627; [1948] 2 All E.R. 983.

Repudiation of a contract for the sale of goods. in order to be of any avail, must be accepted by the other party, Household Machines Ltd. v. Cosmos Exporters Ltd .. supra.

See 39 English and Empire Digest (Rp!.) p. 799; 34 Halsbury's Laws of England, 3rd ed., p. 148.


53. Specific performance. 56 & 57 Vic. c. 71, s. 52. In an action for breach of contract to deliver specific or ascertained goods the court may, if it thinks fit, on the application of the plaintiff, by its judgment direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages. The judgment may be unconditional, or upon such terms and conditions as to damages, payment of the price, and otherwise, as to the court may seem just, and the application by the plaintiff may be made at any time before judgment.


See also the Common Law Practice Acts, 1867 to 1964, ss. 16, 17, title PRACTICE.

For what are specific goods, see s. 3 (1). For examples of an order for specific performance, see Wellington Radio Ltd.

v. Blue, [1937) N.Z.G.L.R. 52 (demonstrated radio sets with plans, specifications, etc.), and Ley v. Dougan, [1947) S.R.(N.S.W.) 1 (taxi-cab duly registered and licensed) .

As to the necessity for the goods being ascertained, see Thames Sack and Bag Co. v. Knowles & Co. Ltd. (1918), 88 L.J.K.B. 585. "Ascertained goods" means goods iden.tified in accordance with the agreement after the time a contract of sale is made Re Wait, [1927) I Ch. 606; [1926) All E.R. Rep. 433. See also as to when specific performance will be granted, Dominion Coal Co. Ltd. v. Dominion Iron and Steel Co. Ltd., [1909) A.C. 293, and the cases collected in 39 English and Empire Digest, (Rpl.); 34 Halsbury's Laws of England, 3rd ed., p. 820.


54. Remedy for breach of warranty. 56 & 57 Vic. c. 71, s. 53. (1) When there is a breach of warranty by the seller, or when the buyer elects, or is compelled, to treat a breach of a condition on the part of the seller as a breach of warranty, the buyer is not by reason only of such breach of warranty entitled to reject the goods; but he may-

(a) Set up against the seller the breach of warranty in diminution or extinction of the price; or

(b) Maintain an action against the seller for damages for the breach of warranty.

(2) The measure of damages for breach of warranty is the estimated loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty.

(3) In the case of breach of warranty of quality such loss is prima facie the difference between the value of the goods at the time of delivery to the buyer and the value which they would have had if they had answered to the warranty.

( 4) The fact that the buyer has set up the breach of warranty in diminution or extinction of the price does not prevent him from maintaining an action for the same breach of warranty if he has suffered further damage.

Act referred to: Sale of Goods Act, 1893, 56 & 57 Vic. c. 71; see 22 Halsbury's Statutes

of England, 2nd ed., p. 985. As to "warranty", see s. 3 (1). For cases in which a condition may be treated, qnd cases where it must be

treated, as a warranty, see s. 14. For form of endorsement on the writ, see R.S.C. (1900), Schedule 1, Form 32,

title SUPREME COURT. For form of a defence, see ibid., Schedule 1, Form 125. Subsection (1 )-As to the right of a buyer to reject goods, and further

to claim compensation, see Elbinger Actien GesellschafJt v. Armstron/? (1874), L.R. 9 Q.B. 473. As to buyer retaining goods delivered in excess of quantity contracted for, and subsequently claiming damages, see s. 32, and Gabriel, Wade and English Ltd. v. Arcos Ltd. (1929), 168 L.T. Jo. 30.

As to the right to set up a breach of warranty in diminution of the price irrespective of duty to examine the goods, see Canterbury Farmers' Co-operative Assoc. v. Robertson Bros .. [1918) N.Z.G.L.R. 314.

On cause of action, see Brown v. Sheen alld Richmond Car Sales Ltd., [1950] 1 All E.R. 1102 (motor car warranted by defendant company to be in perfect condition; plaintiff thereby induced to enter into a hire-purchase agreement with a finance company; condition of car unroadworthy and dangerous; consequent repairs, the necessity of which was held to constitute a breach, though there was no contract of sale; judgment for plain.tiff), distinguishing Drury v. Victor Buckland Ltd., [1941] 1 All E.R. 269.


An enforceable warranty can arise as between parties other than parties to the main contract for the sale of the goods in question. See, for example, Shanklin Pier Ltd. v. Detel Products Ltd., [1951] 2 All E.R. 471, where Drury v. Victor Buckland Ltd., supra, was again distinguished.

Generally on evidence necessary to establish a breach of warranty by the seller, see Turner v. Anqlletil, [1953] N.Z.L.R. 952 (sale of a pianoforte; representation made in newspaper advertisement; SUbjective intention of seller not to give warranty irrelevant).

Subsection (2)-Where a grocer sold tinned salmon to A., which was unfit for food, and A.'s wife was poisoned and died, it was held that A. might recover a reasonable sum for the loss of his wife's services, Jackson v. Watson & SOilS, [1909] 2 K.B. 193.

For measure of damages on a sale of sheep the bulk of which did not correspond with the description, see Smith Brothers v. Madden Brothers, [19451 Q.W.N. 3. For measure of damages on sale of a typewriter which proved to have been stolen and required overhauling before purchaser's discovery of the theft, see Mason v. Burningham, [1949] 2 K.B. 545; 65 T.L.R. 466; [1949] 2 All E.R. 134 (C.A.).

Where the seller gave an incorrect date on a bill of lading, the buyer was given damages at the rate of the difference between the market price and contract price of the goods. The buyers need not enforce contracts with sub-purchasers in order to minimise the damages, as it might injure their commercial reputation, Finlay (James) & Co. v. Kwik Hoo Tong, [1929] 1 K.B. 400; [1928] All E.R. Rep. 110.

As to remoteness of damage, see Gull v. Saunders (1913), 17 C.L.R. 82. As .to measure of damages for breach of an implied warranty, see McKenny

v. Drummond (1927), 29 W.A.L.R. 6. On measure of damages, see also Kwei Tek Chao v. British Traders and

Shippers Ltd., [1954] 2 Q.B. 459; [1954] I All E.R. 779. See also Martin v. A. E. Taylor & Co., [1953] 2 Lloyd L.R. 589.

Subsection (4)-See Creaven v. Miller (1899). 18 N.Z.L.R. 65. See also 39 English and Empire Digest (Rpl.) p. 578; 34 Halsbury's Laws of

England, 3rd ed., p. 156; Joske's Sale of Goods and Hire Purchase, 2nd ed., p. 170.

55. Interest and special damages. 56 & 57 Vic. c. 71, s. 54. This Act does not affect the right of a buyer or a seller to recover interest or special damages in any case in which by law interest or special damages are recoverable, or to recover money paid when the consideration for the payment of it has failed.

Act referred to: Sale of Goods Act, 1893. 56 & 57 Vic. c. 71; see 22 Halsbury's Statutes

of England. 2nd ed., p. 985. As a general rule, interest is not recoverable in an action for goods sold

and delivered, to be paid for at a certain day, Gordon v. Swan (1810), 12 East 419. Interest is, however, payable when there is an express agreement to pay or where the debt was to be paid by a negotiable instrument, Farr v. Ward (1837), 6 Dow!. 163. An agreement to pay interest may be implied from course of dealing, Re Anglesey (Marquis), Willmot v. Gardner, [1901] 2 Ch. 548.

"Special damage, when contrasted with general damage, means the particular damages beyond the general damage which results from the particular circumstances of the case, and of the injured party's claim to be compensated, and of which he ought to give notice in his pleadings, so that there may be no surprise at the trial", Ratcliffe v. Evans, [1892] 2 Q.B. 524, at p. 528; [1891-4] All E.R. Rep. 699.

Where the breach of a contract has occasioned a special loss which was in contemplation of the parties at the time of entering into the contract, that special loss happening subsequently to the breach must be taken into account, Hydraulic Engineering Co. v. McHaffie (1878), 4 O.B.D. 670. at p. 677, i.e .. when a contract is made under special circumstances to the knowledge of both parties, the special damages are those which naturally arise from a breach of the contract.

Money paid on a consideration that has failed can be recovered as a general rule, as money had and received. See Devaux v. Conolly (1849), 8 C.B. 640 (partial failure of consideration. short delivery), and the cases cited in 39 English and Empire Digest, (Rpl.) p. 824.


For form of endorsement on the writ in an action 10 recover money paid for a consideration which has failed, see R.S.C. (1900), Schedule 1, Form 17, title SUPREME COURT.

See further 34 Halsbury's Laws of England, 3rd ed., pp. 119, 146, 150, as to interes.t and special damages.


PART VII-SUPPLEMENTARY

56. Exclusion of implied terms and conditions. 56 & 57 Vic. c. 71, s. 55. When 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 the parties, or by usage, if the usage is such as to bind both parties to the contract.


of England, 2nd ed., p. 985. This section does not refer to substantive legal principles such as the right

of action and nature of the remedy, Martin v. Hogan (1917), 24 C.L.R. 234, at p. 269.

To exclude a term implied by law, the express agreement must be inconsistent with it. See Bigge v. Parkinson (1862), 7 H. & N. 955.

The implication of the condition of reasonable fitness for the purpose for which goods were required, s. 17 (1), was held not to be excluded in Dachs v. Neptune Oil Co. Ltd., [1927] Q.W.N. 50.

As to the admissibility of conversations prior to the signing of a written agreement containing a term excluding a statutory warranty, see Criss v. Alexander (1928), 28 S.R.(N.S.w.) 297.

On usage, see Meyer v. Aline (1939), 55 T.L.R. 876. See also 39 English and Empire Digest (Rpl.) p. 572; 34 Halsbury's Laws of

England, 3rd ed., p. 57.

57. Reasonable time a question of fact. 56 & 57 Vic. c. 71, s. 56. Whenever, in this Act, reference is made to a reasonable time, the question what is a reasonable time is a question of fact.


of England, 2nd ed., p. 985. "There is, of course, no such thing as a reasonable .time in the abstract.

It must always depend upon circumstances", Hick v. Raymond and Reid, [1893] A.C. 22, at p. 29; [1891-4] All E.R. Rep. 491.

58. Rights, etc., enforceable by action. 56 & 57 Vic. c. 71, s. 57. When any right, duty, or liability is declared by this Act, it may, unless by this Act otherwise provided, be enforced by action.


of England, 2nd ed., p. 985. "Action" includes counter-claim and set-off, s. 3 (1). See 34 Halsbury's Laws of England, 3rd ed., p. 11.

59. Auction sales. 56 & 57 Vic. c. 71, s. 58. In the case of a sale by auction-

8

( 1) When goods are put up for sale by auction in lots, each lot is prima facie deemed to be the subject of a separate contract for sale;

(2) A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer, or in other customary manner: Until such announcement is made any bidder may retract his bid;


(3) When a sale by auction is not notified to be subject to a right to bid on behalf of the seller, it is not lawful for the seller to bid himself or to employ any person to bid at such sale, or for the auctioneer knowingly to take any bid from the seller or any such person: Any sale contravening this rule may be treated as fraudulent by the buyer;

( 4) A sale by auction may be notified to be subject to a reserved price, and a right to bid may also be reserved expressly by or on behalf of the seller.

When a right to bid is expressly reserved, but not otherwise, the seller, or anyone person on his behalf, may bid at the auction.


of England, 2nd ed., p. 985. On a sale by auction the bid constitutes the offer and the fall of the hammer

the acceptance. So it has been held that if a sale is advertised and the lots are afterwards withdrawn, an intending bidder has no right of action for loss of time, see Harris v. Nickerson (1873), L.R. 8 Q.B. 286. The seller may withdraw the goods before completion has been announced, just as the bidder may withdraw his bid, see Fenwick v. Macdonald, Fraser & Co. (1904), 6 F. (Ct. of Sess.) 850. If the vendor bids without having reserved the right to do so, he cannot maintain an action against the auctioneer for damages sustained through the auctioneer neglecting to make a memorandum in writing of the sale of the goods to another bidder, Christie v. Quai!e (1906), 26 N.Z.L.R. 495.

See also 3 English and Empire Digest (Rpl.) title AUCTION, 34 Halsbury's Laws of England, 3rd ed., p. 11; Joske's Sale of Goods and Hire Purchase, 2nd ed., p. 177.

60. (Repealed.) Repealed by Statute Law Revision Act of 1908, s. 2.

61. Savings. 56 & 57 Vic. c. 71, s. 61. ( 1) The Rules in Insolvency relating to contracts of sale continue to apply thereto, notwithstanding anything in this Act contained.

(2) The rules of the common law, including the law merchant, save in so far as they are inconsistent with the express provisions of this Act, and in particular the rules relating to the law of principal and agent and the effect of fraud, misrepresentation, duress or coercion, mistake, or other invalidating cause, continue to apply to contracts for the sale of goods.

(3) Nothing in this Act or in any repeal effected by it affects the enactments relating to bills of sale, or any enactment relating to the sale of goods which is not expressly repealed by this Act.

( 4) The provisions of this Act relating to contracts of sale do not apply to any transaction in the form of a contract of sale which is intended to operate by way of mortgage, pledge, charge, or other security.


of England, 2nd ed., p. 985. For the rules in bankruptcy, see the Bankruptcy Act 1924-1965, particularly

ss. 95, 96, 104, 105 (Commonwealth). Subsection (2) operates to continue the common law rule that innocent

misrepresentation is not a ground for rescission of the contract for the sale of goods unless there is such a complete difference in subject-matter between the thing bargained for and that obtained as to amount to a failure of consideration, Watt v. Westhaven, [1933] V.L.R. 458.

Subsection (2)-See Sorley and Stirling v. Surawski, [1953] St. R. Qd. 110; 47 Q.J.P.R. 108.


The effec.t of this Act on the creation of equitable interests in goods was considered in King v. Greig, [1931] V.L.R. 413, at p. 431.

With respect to the law merchant, see 11 Halsbury's Laws of England, 3rd ed., p. 189. For the law of principal and agent, see ibid., Vol. 1, title AGENCY. As to fraud and misrepresentation, see ibid., Vol. 26, title MISREPRESENTATION AND FRAUD. With respect to duress and coercion, see ibid., Vol. 7, p. 84. With regard to mistake, see ibid., Vol. 26, title MISTAKE.

As to bills of sale, see Bills of Sale and Other Instruments Act of 1955, p. 23, ante.

SCHEDULE [Repealed. See note to s. 60. ante.l

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