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SALE OF GOODS

THE LAW OF SALE OF GOODS


Introduction
The contract of sale of goods is governed by the

Sale of Goods Act 1957 (hereinafter refers as SOGA)


SOGA operates against the background of contract
law that are not inconsistent with its express
provisions.
Sale of Goods Act 1957 (SOGA)

- It applies to contract for the sale of all types of


goods, including second-hand goods.

Section 3 SOGA

The Contracts Act 1965, in so far


as they are not inconsistent
with the express provisions of
this Act shall continue to apply
to contracts of the sale of
goods

Contract of Sale
Sale and Agreement to Sell
S.4 (1) SOGA:
A contract of sale of goods
a contract whereby the seller transfer the
property in goods to the
buyer for a price...

Seller------Buyer---------Price
E.g: A agrees to transfer the ownership of

his car to B. B then pay RM10000 for a


price of the car.

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

of sale of goods:
There must be goods which are to

be transferred to the buyer


The seller transfers or agrees to
transfer the property in goods to
the buyer
There is a price for the said transfer

Continue.
Objectives

of the contract of

sale:
The transfer of ownership of the
goods to the buyer for money
consideration
Sale occurs when the ownership
or property in goods passes to the
buyer

Parties to the contract are known as :


buyer ; and
seller

Continue.
Section 4(3)

An agreement to sell is a contract under


which the transfer of the property in the goods
is to take place at a future time or subject
to some condition thereafter to be fulfilled
Section 4(4)

An agreement to sell becomes a sale when


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

Definition of goods
1.Goods :
Section 2 of SOGA
every kind of movable property

other than money


include stock and shares,

Continue
Growing crops, grass and things attached

to or forming part of the land which are


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

Continue.
The followings are EXCLUDED from being

goods under a sale of goods of contract:


Land (houses & building on the land are part of

the land)

Actionable claims (right to sue for debt/other

reasons)
Money ( current currency)

Continue.
Morgan v Russel
The vendor was the lessee of certain land which was
composed of slag and cinders.
He then sold the purchasers all the slag on his premises
so much as the purchasers should desire to remove.
It was held by the Court :
that the sale of cinders and slag was not a sale of
goods but a sale of an interest in the land. The
vendor did not sell any definite quantity of mineral,
which could be said to be a separate thing.

Mills v Stockman
There was a contract to sell a heap of slate which

have been left on the ground for many years by


a quarrying business.
The contract gave the buyer a right to enter
the land and to remove the heap of slate.
It was held that the contract was not for the
sale of goods.
The slate had been left in such circumstances that
they had become part of the land and further,
there was no term in the contract that they
be severed under the contract of sale.

Types/Categories of Goods
Section 6(1)
the goods which form the subject of a
contract of sale may be either existing
goods, owned or possessed by the
seller, or future goods
There are 5 categories of goods:
Existing goods (goods already owned by

the seller)

Continue.
Specific goods

Section 2 sale of goods Act


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

Continue.
Unascertained:

The goods exists but it is not


ascertained yet at that time of the
contract is made.
Goods to be manufactured @grown by
the seller
Generic goods e.g. 1000 tones of wheat
An unidentified part of a specific whole
Example: 100 kg of wheat out of 200 kg of
wheat

Continue.
Ascertained goods

Unascertained goods which have been


identified and appropriated to the contract
after the contract has been made
Example:
Upon selection of the 5 dress from the 10
boxes of dresses.

Continue
Future goods

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

Please Identify
Eon is now discussing the possibility

of manufacturing a new car called


Proton Wardina. Izham enters into an
agreement with EON to purchase
Proton Wardina. Proton Wardina
belongs
to
the
category
of
______________ goods?

future goods

Halim has signed an agreement with Ali

to sell his one and only car; a red Proton


Wira. Halims red Proton Wira belongs
to the category of ________ goods?

EXISTING GOODS

Siti wanted to buy 2 kg sugar from Pak

Mat. In the shop, she saw a sack full of


sugar which weighed about 5kg.
Therefore, Sitis 2kg sugar belonged to
the category of ____________ goods?

UNASCERTAINED
GOODS

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

transfers or agrees to transfer property in


goods.
Property in goods

Ownership
(Having legal title/rights
over the goods)

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

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

Continue.
ONLY THE OWNER WHO HAS THE
PROPERTY IN GOODS IS ENTITLED TO
SELL/TRANSFER THE TITLE TO THE
BUYER.
THE POSSESSOR WHO IS NOT THE
OWNER IS NOT ENTITLED
TO DO SO

PRICE
THE MONEY CONSIDERATION
FOR A SALE OF GOODS

CONTINUE..
s.9 (1)SOGA - It may: Be fixed by the contract.
Be left to be fixed in a manner
agreed in the contract.
Be determined by the course of
dealing between parties.

Section 9(2) Of SOGA

Where the price


is not
determined

The buyer
shall pay the
seller the
reasonable
price

Formation Of The Contract

continue.
1. CAPACITY
SECTION 11 Contract Act
SECTION 69 Contract Act

2. Formalities
A contract of sale may be made:
in writing,

by word of mouth/ Verbally,


both - partly in writing & partly by word of

mouth, or
may be implied from the conduct of the
parties
- (s 5 (2) SGA) -

Continue.
Section 5(1)
A contract of sale is made by an offer to buy or sell goods
for a price and the acceptance of such offer.
1. Immediate

Delivery
OR ofOR BOTH
goods

Delivery
of
payments

OR

2. Delivery
or
payments
by
Installment

Delivery or
payments
postponement

Continue.
3. TIME OF PAYMENT
Stipulation as to the time of payment

are not deemed to be the essence


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

TERMS OF THE
CONTRACT

A. CONDITIONS
A term which is essential to contract;

breach of it would allow the other party to


treat the contract as repudiated. (s.
12(2) SOGA)
If the condition is breached, the party

not in default entitled to repudiate


the contract because the contract can
be deemed to be VOID

B. WARRANTIES
Warranty a less vital term of a contract
(collateral to the main purpose) , breach of it
would give rise to a claim for damages, not a
right to discharge/reject the goods.
(s.12(3) SOGA)
If the warranty is breached, the party not in
default is not entitled to repudiate the
contract because
it is not voidable
HOWEVER
Party in default is entitled for damages

EXCEPTION.
Circumstances where contract cannot be
repudiated event though there is a
breach of condition:
Generally, Section 13(1):
Buyers may waive the condition or elect to
treat the breach of the condition as the
breach of warranty and do not want to
repudiate the contract

Continue..

(Section 13(2) ) (situations)

a. Where a contract of sale is not


severable and the buyer has accepted
the goods or part thereof;
b. The contract is a specific goods the
property in which has passed to the
buyer;

CONTINUE
SECTION 42

buyer has accepted the goods

The buyer told the seller that he had accepted

the goods
When the goods has been delivered to the
buyer and the buyer has done something
which against the ownership of the seller
After the expiry of a reasonable time, the
buyer keep the goods without informing
the seller that he rejected the goods

The breached of any condition to be

full filled by seller can only be treated


as a breach of warranty and not the
ground of rejecting the goods or
repudiate the contract
UNLESS THERE IS A TERM OF

THE CONTRACT
IMPLIED

EXPRESS

OR

Implied Terms
The SOGA implies a number of stipulations (implied

terms) in every contract for the sale of goods


The stipulations applicable only if the parties did not
exclude or modified the terms/stipulation
(s.62 SOGA)
where any right, duty, or liability would arise under a
contract of sale by implication of law, it may be
negatived or varied by express agreement or by the
course of dealing between parties, or by usage, if the
usage is such as to bind both parties to the contract.

cont...
1. implied warranty as to time
s.11 of SOGA
Time of payment are NOT deemed to

be of the essence.
Meaning that, if a buyer fails to pay by
an agreed time, the seller does not
automatically repudiate the contract.

But whether time is of essence of the

contract / not , it depends on intention of the


parties in the terms of the contract

e.g. : When time (for delivery)is the essence


of the contract which has been determined
& agreed by the parties, if the seller fails to
perform according to the term, it would
entitle the buyer to repudiate the contract.
e.g. :
commercial
transaction
involving
livestock
e.g. :if goods are to be shipped within
particular time.

Harrington v. Browne (1917) 23


CLR 297
Held:
in commercial transaction involving

livestock, time of delivery is the essence of


the contract.
If the goods are to be shipped within a
particular time then time of shipment is
important & should be strictly adhered to.

2. Implied
title:-

condition

as

to

S.14 (a) SOGA:

In the case of sale, the seller


must have a right to sell the
goods & in the case of
agreement to sell, he must
have a right to sell at the time
when the property is to pass

Continue.
Seller must be the owner of the

goods

Seller has the ownership/title over


the goods

Presumed to have a right to sell

Rowland v Divall [1923] 2 KB 500


P bought a car from the seller (D) & after using it

for several months, then he discovered that it was


stolen. He had to return it to true owner.

Court held:
Defendant had breach the implied condition as to
title.
Therefore, the P was allowed to rescind the
contract and claim for the return of the full
price of the car paid to the Defendant.

Sometimes, seller need not be the owner

of the goods (S. 14 (a) of SOGA BUT the


law requires at least able to create the
appropriate rights in the buyer. i.e.
causing third party to transfer
ownership directly to the buyer.
i.e. the car that still hired to the bank.
Thus, seller with no title to sell the goods at
the time of the agreement to sell but later
acquires title, can hold the buyer to the
bargain provided the title is acquired before
the buyer repudiates on discovery.

Butterworth v
Kingsway Motors Ltd
The D sold a car taken on hire-purchase and it was

resold a number of times before it was discovered


that the hirer had no right to sell while the car was
on the hire- purchase.
The P who was the last buyer rescind the contract
on being informed about the fact and demanded the
return of the purchase price from the defendant.
Court held: P was entitled to rescind the contract of
purchasing the car and could recover the money
paid from the D since the D had no right to sell the
car.

cont
3. Implied warranty as to quite
possession: S.14 (b) SOGA

In a cont. of sale, unless the


circumstances of the contract are
such as to show a different intention,
there is an implied warranty that
the buyer shall have & enjoy
quite possession of the goods.

This provision covers not only where


the title is defective but also a
subsequent future disturbance
of possession of the goods.

Example:
A sold his car to his friend Ali and

because Kassim like the car very much he


often persuaded Ali to lend him the car.
Kassim had a set of the car key and he
used the car whenever he liked regardless
of whether Ali needed the car or not.
Kassim
had breached the implied
warranty that Ali should have enjoy quiet
possession of the car.

Microbeads A.G v Vinhurst Road


Markings Ltd
In this case, a patentee (3rd party) had brought

an action against the buyer alleging the use of


certain road marking machines was in
breach of their patent, two years after the
sale of machines by the Plaintiff to the
Defendant.
It was held by the Court that there was a breach

of implied warranty as the buyer did not


enjoy the future quiet enjoyment of the
goods.

4. Implied warranty that the goods


are free from encumbrance :S 14 (c) SOGA: The goods must be free

from any charge (gadaian) or


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

Example:
Syarikat ABC sold a machine to

XYZ company. XYZ did not know


that syarikat ABC had charged the
machine to Bank X. syarikat ABC
had breach the warranty.

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

Defendant had to pay off the tax which was still


owing to the government.
The Plaintiff sought to recover the amount he has
paid for the tax from defendant/seller.
It was held by the Court that the Plaintiff was
entitled to recover the money as the
Defendant had breached the implied
warranty. The right of the government to levy a
tax on a vehicle coupled with a right to seize the
car to enforce collection was a charge or
encumbrances within the meaning of the provision.

5. Implied condition that the goods


must
correspond
with
the
description:Section 15
If the contract is for the sale of goods by description,
there is an implied condition that the goods must
correspond with the description

it is not sufficient that the bulk of goods


correspond with the sample if the goods do not
also correspond with the description
(bulk of goods shall correspondence with the sample and
description).

Continue....
Sale of goods by description covers all

cases where the buyer has not seen the


goods but is relying on the description
alone (the contract is made through
telephone, mail order or sale for
catalogue)

Nagurdas Purshotumdas v. Mitsui


Bussan Kaisha
Facts: Flour was ordered described as
the same as our previous contracts
whereby the flour had been sold in bags
bearing a well known trademark.
Flour identical to quality was delivered
but did not bear the same
well-known trade mark.
Held: It did not comply with the
description. D had breach the
condition as to description.

Buyer has seen the goods but the defect

may be concealed from the buyer.


Associated Metal Smelters Ltd v Tham
Cheow Toh
The D agreed to sell a metal melting furnace to
the P and had given the undertaking that the
furnace will have a temperature of at least
2600 degrees Fahrenheit.
However, the furnace supplied by the D
did not meet the requirement.

Court held:

The failure on the part of the D to


supply the furnace which would
meet the required temperature
constituted a breach of condition
of the contract.

Cases of failure of goods to

correspondence with the


descriptions:
1) Where the goods is substantially
what is required but there is some
small discrepancy from the
contract particulars.

Arcos Ltd v E A
Ronaasen & Sons
Staves of inch thick were ordered. Only

15% conformed to the requirement.


Despite the fact that the goods were
reasonably fit for their purpose,
the Court held that the buyers were
entitled to reject them for failing to
correspond with the contract
description.

2) those involving goods described in

a more general sense in the


absence of detailed commercial
description.
( Because the description is more
general, a considerable discrepancy
must occur before it can constitute a
breach ).

Varley v Whipp
The seller agreed to sell a 2nd hand reaping machine

described as new the previous year. The buyer


did not look at the machine but relied on the
description. When the machine was delivered, it
was found the machine was very old machine
which had been repaired. The buyer sued the
seller for breach of implied condition.
The court held:
The seller has breached the implied conditions
as the goods supplied were not corresponding
with the description. The buyer is entitled to
rescind the contract and reject the machine.

6. Implied condition as to fitness


for particular purpose:GENERAL RULE :
The rule of common law applies; that is,
CAVEAT EMPTOR (let the buyer beware)
where the buyer must exercise due care in
making purchases.
If he does not, he must bear the
consequences

CAVEAT EMPTOR RULE IS

PRESERVED UNDER SECTION


16(1) SOGA
subject to this Act and any other law
for the time being in force, there is
no implied warranty or condition
as to the quality or fitness for
any particular purpose of goods
supplied under a contract of
sale

Exceptions to Caveat
Emptor Rule
1. s.16(1)(a)
Implied condition that the goods
must be reasonably fit for a
particular purpose of the buyer
IF GOODS NOT FIT

BUYER MAY SUE THE SELLER FOR


BREACH OF IMPLIED CONDITION

CONDITIONS TO BE
FULLFILLED
1. DISCLOSURE OF PURPOSE (s. 16 (1) (a) ).

EVEN THOUGH
THE GOODS IS NOT FIT

GRIFFITHS v PETER CONWAY LTD


HELD:
A woman with an unusual sensitive skin who
bought a Harris Tweed coat, without
disclosing her sensitivity to the seller, did not
succeed under this section

However, if the description of

the goods shows that it has


only one purpose, no
disclosure of that purpose is
required.
It is implied that the goods is

fit for that particular purpose.

Priest v Last
The P purchased a hot water bottle from the

D, a retail chemist. Some days later, the


bottle while in use by the Ps wife, burst.
A s a result, she was scalded & the P sued the
D.
It was held that if the description of the

goods by which they were sold pointed


to one particular purpose only, then the
requirement of disclosure of purpose is
deemed fulfilled.

CONTINUE..
2. RELIANCE ON THE SELLERS SKILL

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

The buyer must also established that


he had relied on the sellers skill and
judgment
before purchasing the goods

GRANT V AUSTRALIAN KNITTING


MILLS
The Court held that reliance usually

arises by implication from the


circumstances.
For instances, of a purchase from a
retailer, the reliance will be inferred
from the fact that a buyer goes to
the shop in the confidence that the
seller has selected his stock with
skills and judgment

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

The goods bought by the buyer must

be the kind which is in the course of


the sellers business to supply.

Spencer Trading Co. Ltd v Devon


The manufactured had previously supplied to

the Plaintiff on a special order, an adhesive


substance made from gum resin for
making flypapers.
The following year, the Plaintiff ordered a
further supply for the same purpose from the
manufacturer, who on this occasion used
synthetic raw materials in place of the
natural material previously used.
Consequently, the flypapers were
unsatisfactory for its purpose

Continue..
Held:
The goods are of a description which
it is in the course of the sellers
business to supply.
Therefore the manufacturer was liable
for breach of an implied condition
that the goods were fit for the
purpose for which they were
required.

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

patent or trade name. (proviso of S. 16 (1) (a)).

If brought under a patent or trade name it


gives the impression that he is not relying
on the sellers skill & judgment.

Therefore he cannot later complain that


the goods are not fit for the particular
purpose he required.

The implied condition DID NOT


applied.

However, if the goods were not

bought under the patent or trade


name,
or
if the buyer did buy under a trade
name but relies on the sellers skill
& judgment

The implied condition applied.

7. Implied condition as to
merchantable quality
2. (s.16(1)(b)SOGA:Where goods are bought by

description from a seller who deals


in goods of that description, there is
an implied condition that the goods
shall be of merchantable quality.

cont

Merchantable Quality of goods


means the goods must meet the

standard which a reasonable person


would regard as satisfactory .
Goods sold must be fit for particular use
for which they were sold
i.e. with reference to the expectations
of the average buyer.
E g: in a sale of a lorry, it is an implied
condition that the lorry will not overheat
easily.

v William Lilico & Sons


Ltd
Held:
If the description in the contract was so
limited that goods sold under it would
normally be used for only one purpose,
then the goods would be
UNMERCHANTABLE if they were of NO USE
for that purpose.
However, if the description was so general,
or used for several purposes, the goods
would be MERCHANTABLE if they were fit
for any one of the purpose.

Wilson v Ricket,
Cockerell & Co. Ltd
A lady ordered fuel by its trade name

Coalite from a fuel merchant. The


consignment included a piece of coal in
which a detonator was embedded and
resulting in an explosion in the fireplace.
Held:
The consignment as a whole was
UNMERCHANTABLE. It had defects
making it unfit for burning.

Exceptions
Proviso of S. 16 (1) (b)
Provided that if the buyer

has examined the goods, there


shall be NO IMPLIED condition as
regards defect which such
examination ought to have
revealed.

Proviso of S. 16 (1)( b) IMPLIED


CONDITION DOES NOT APPLY
Where the BUYER HAS EXAMINED the goods

and by such examination the BUYER WOULD


DISCOVER THE DEFECTS.
if there was an examination before or at the

time of contract, the buyer cannot later


complain of defects which a proper
examination would have revealed.

HOWEVER,
If the DEFECT COULD NOT BE

DISCOVERED, by any reasonable


examination;

IMPLIED CONDITION AS

MERCHANTABLE QUALITY WOULD


APPLY.

Wren v Holt
The P recovered damages for breach

of condition of merchantability of
beer which was contaminated by
arsenic.
The exception was not
applicable because the defect
was not discoverable on
reasonable examination.

Thornett & Fehr v


Beers & Sons
Though the buyer has conducted a

superficial look at the outside of


some barrels of glue, there was NO
examination and therefore, THE
IMPLIED CONDITION DID NOT APPLY.
A proper examination MUST BE
CONDUCTED such as opening the
barrel would revealed the defect.

8. Sale by Sample
Used in the sale of bulk of goods like

rice, wheat, flour, carpets, etc

Section 17(2):

In the case of contract for sale by

sample there is an implied condition that:


(a) The bulk shall correspond with the

sample in quality.

(a) Buyer has reasonable opportunity of

comparing the bulk with the sample.

(a) The goods shall be free from any

defect which would not be apparent


on reasonable examination of the
sample.

CONTINUE.
Breach of any one of the three

conditions,

the buyer is entitled to REJECT


the goods and treat the
contract as at end.

If the bulk correspondence with the

sample but there is a latent defect


rendering the goods unmarchantable

BUYER ENTITLED TO REJECT

THEM.

Drummond v Van
Ingen
The cloth supplied by the Seller was

equal to samples previously


examined but because of latent
defect not discoverable by a
reasonable examination.
Court held: the seller is liable of the
subsection.

S.17 (2) (C)


The seller LIABLE for all defects

Which a BUYER of ordinary EXPERINCE


and DILIGENCE not discover on
reasonable inspection of the sample.

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

catapult broke and he lost the sight of an


eye. The shopkeeper bought it from a
wholesaler by sample and tested it by pulling
back the elastic.
The shopkeeper was sued for the boys injury

and the court held that the catapult was not


fit for the purpose for which buyer wanted it
and it was of unmerchantable quality.

Then, the shopkeeper filed an action

against the wholesaler.


Although the shopkeeper made a
reasonable examination, the defect was
not one which was apparent on such
examination.
Thus, he succeeded in his action against
the wholesaler.

PRIVITY OF CONTRACT
The implied conditions and warranties bind

the contracting parties only

BUYE
R

SELLER

Continue.

3rd PARTY, if
suffer injury/
damages

CANNOT SUE
SELLER OR
MANUFACTURE
R

NO
CONTRACTUA
L
RELATIONSHI
P

Donoughue v

Stevenson
The Plaintiff became ill as a result of drinking a

bottle of ginger beer which contained a


decomposed snail in the bottle. The ginger beer
was purchased by the Plaintiffs friend.
Held:
The manufacturer of the drink was liable to pay

damages to the Plaintiff for negligence. The


P had to bring action under the law of tort and not
contract as there is no privity of contract between
the Plaintiff and the manufacturer.

Exclusion of Implied
terms. S. 62 of SOGA
where any right, duty, or liability would

arise under a contract of sale by


implication of law, it may be
negatived or varied by express
agreement or by the course of dealing
between parties, or by usage, if the
usage is such as to bind both parties to
the contract.

TRANSFER
OF
PROPERTY

TRANSFER OF PROPERTY

WHY IS THIS
IMPORTANT?

Introduction
Once property passes to the buyer, the buyer

would bear the risk.


E/Though, the goods HAS NOT BEEN
DELIVERED to the BUYER.
S. 26 of SOGA.

when the property is transferred to the


BUYER the goods are at the buyers risk
whether delivery has been made or not.

However,
if the delivery has been delayed due

to the fault of the seller,

then the seller has to bear the risk.

Even though the property has passed to


the buyer.
Proviso of S. 26 of SOGA.

If any party sought to claim any right over

the property from 3rd party,


only the person who has the property
in goods may claim.
the seller would entitle to claim for

the price,
if the property in goods has passed to
the buyer.

TIME

WHEN PROPERTY IN
GOODS PASSES TO THE
BUYER?

4. SALE OF
SPECIFIC GOODS
TO BE PUT IN A
DELIVERABLE
STATE
SECTION 21

1. SALE OF
UNASCERTAIN
GOODS
SECTION 18

6. SALE OF
UNASCERTAIN
ED@FUTURE
GOODS BY
DESCRIPTION
SECTION 23

2. SALE OF
SPECIFIC
@ASCERTAINED
GOODS
SECTION 19

WHEN THE
PROPERTIES
IN GOOD
TRANSFERR
ED TO
BUYER?

7. GOODS SENT
ON APPROVAL
SECTION 24

3.SALE OF
SPECIFIC
GOODS IN A
DELIVERABLE
STATE
SECTION 20

5. SALE OF SPECIFIC
GOODS TO BE PUT
IN A DELIVERABLE
STATE
BUT SELLER HAS TO
ASCERTAIN THE
PRICE
SECTION 22

1. SALE OF UNASCERTAINED
GOODS
SECTION 18
CONTRACT FOR THE SALE OF UNASCERTAIN GOODS
NO PROPERTY IN GOODS IS
TRANSFERRED TO THE BUYER

UNLESS
THE GOODS ARE ASCERTAINED

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

forms part of a larger consignment.


No property passes until the
seller ascertained the car to be
sold to A.

2. SALE OF SPECIFIC OR
ASCERTAINED GOODS
Section 19(1)
For the sale of SPECIFIC GOODS OR ASCERTAINED
GOODS,
the property in goods
is transferred to the buyer

WHEN
THE PARTIES INTENDED TO IT TO BE TRANSFERRED

Continue.
Section 19(2)
HOW TO DETERMINE THE
INTENTION OF THE PARTIES?

BY CONDUCT
BY CIRCUMSTANCES

a. SALE OF SPECIFIC GOODS


IN DELIVERABLE STATE
DELIVERABLE STATE:
Goods that in the state that the buyer

would under the contract BE BOUND to


take delivery of them

S.20 of SOGA

Section 20

CONTRACT FOR THE SALE OF SPECIFIC


GOODS IN DELIVERABLE STATE
THE PROPERTY PASSES to the BUYER ,
WHEN THE CONTRACT IS MADE

IMMATERIAL
THE TIME OF PAYMENT OF THE PRICE
THE TIME OF DELIVERY OF GOODS
OR BOTH are POSTPONED

Example:
A buyer agrees to buy a particular

book on credit.
The property in goods PASSES
immediately to the BUYER when the
contract of sale is made, even
though the payment is
postponed.

Underwood Ltd v
Burgh Castle Brick &
Cement
There was a contract for the sale of a

condensing engine to be delivered on rail


in London.
At the time of contract, the engine was
affixed to the sellers premise and it had to be
separated from the concrete floor and to be
dismantled, before it could be delivered on rail.
While the main engine was being loaded on a
railway truck, it was partially broken by
accident.

Issue: who has bear the risk of

damages?
Held:
The property in goods HAD NOT PASSED
to the buyer at the time of accident. The
engine is still at the risk of the seller.
S. 20 could not applied because the
engine was not in a deliverable state
at the time of contract.

B. SPECIFIC GOODS TO BE PUT


IN
DELIVERABLE STATE
Section 21

The seller is bound to do something on


the goods for the purpose of putting them
into deliverable state

The property does not pass until such


thing is done and the buyer has notice

Example
The seller agrees to sell a particular 2nd

hand motorcycle to the buyer, It is agreed


that under the contract that the seller
would change the tyres before the delivery
to the buyer.
The property in the motorcycle does not
pass to the buyer until the seller has
changed the tyres.
Once the tyres have been changed, then
only the property passes to the buyer.

C. Sale of Specific Goods In a


Deliverable State; but The Seller has
to do Something in
Order To ascertain The Price
The goods are of specific and in a deliverable state.
Where the seller bound to weigh, measure, test
or do something for the purpose of
ascertaining the price of the goods
Section 22

The property does not pass to the buyer until


such thing is done by the seller, and the
buyer has notice/knowledge of it.

example:
A agrees to sell all remaining sugar contained in

a particular bag for RM 2 per kg. The said


property does not passed to the buyer until the
seller weighs them and the buyer knows that
they have been weighed.

Sale of specific goods which are ascertained in

quantity but the price cannot be calculated until


the quantity of the goods is ascertained by
weighing.

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

from a bag containing more than quantity


to be sold?
Not a sale of specific goods
Unascertained goods
Governed by s. 23 (1).

Sale of Unascertained @ Future Goods


By Description; and Appropriation
S. 23 (1)
where there is a contract for the sale of
unascertained or future goods by description
and goods of that description and in a
deliverable state are unconditionally
appropriated to the contract, either by
seller with the assent of the buyer or by buyer
with the assent of the seller, the

property in the goods thereupon


passes to the buyer.

Unascertained goods by description means, goods which cannot be specifically


identified at the time of the contract, but are referred to by description

1. Future goods by description means goods to be manufactured or produced


or acquired by the seller according to certain description

Continue..
Section 23(1)
goods of that description;
and in a deliverable state
appropriated to the contract
the property thereupon passes to the
buyer

what is Unconditionally
appropriated?
any act showing an intention to identify
goods without any further condition.
example:
selection, separation, of weighing from a
bulk

Continue.
Section 23(2)
If the contract involves delivery to a carrier,
once the seller delivers the goods to the buyer
or to the carrier for the purpose of
transmission (delivery) to the buyer.
The seller is deemed too have an
unconditionally appropriated the goods to
the contract.

Therefore the property in goods

passes to the buyer at the


moment the goods are
handed over to a carrier

7. Goods Sent on Approval @on


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

approval or on sale or return, the property in


goods passes to the buyer
a. When the buyer signifies his approval or
does any
other act adopting the transaction
b. if the buyers does not signify his approval
but
retains the goods without giving notice
of rejection, then if the time has been fixed for
the
return; the property passes on the
expiration of a
reasonable time

This rule applied where the goods are :-

sent to the buyer for trial or


giving the buyer option to purchase.

If the buyer chooses to buy goods:-

He may signify his acceptance / approval to the seller

The buyer may also does any other act

adopting the transaction.


Implied from such act

i.e: buyer used the goods himself.

Kirkham v
Attenborough
The buyer received some jewelerry from

the seller, which was subject to on sale or


return. The buyer then pledged the
jewelerry to a 3rd party.
Held:
The buyer had adopted the transaction.

The property in the jewelerry has passed to


the buyer.

S.24 of SOGA

b. if the buyers does not signify his approval


but
retains the goods without giving notice
of rejection, then if the time has been fixed for
the
return; the property passes on the
expiration of a reasonable time

If the buyer failed to return the goods within

specific / reasonable time


He is deemed to have accepted the sale
The property passes to the buyer.

What is reasonable time?


POOLE V SMITHS CAR SALES (BALHAM) LTD
A car dealer supplied 2 cars on sale or return to

another dealer. 1 of the cars was sold, but the unsold


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

Held:
a reasonable time had expired. Therefore, the
property in goods passed to the 2nd dealer. Thus, the
2nd dealer has to pay for the price of the car to 1st
dealer.

If the goods are LOST or destructed WITHOUT

THE DEFAULT of the BUYER

BUYER is NOT LIABLE


PROVIDED that it happen before the due date

or before the reasonable time lapses.

Transfer of Risk
General Rule: s.26 SOGA 1957
Application:
the risk of accidental loss/ damage to
the goods passes with property
whether delivery has been made or
not.
*
The Buyer would have to pay for the
goods even though they had been
destroyed.

cont

Exceptions:

1.s.26 SOGA Unless otherwise

agreed.

RISK will NOT PASS with property where

there is an express / implied provision in


the agreement to the contrary.

Example: The parties can state in the


contract who is to bear the risk.

cont
2. proviso I of S. 26 of SOGA
But where delivery has been delayed
through the fault of either B or S, the goods
are at the risk of the party at fault as
regards any loss which might not have
occurred but for such fault.
Application: Risk lies with the party at
fault for delays in delivery, irrespective
of where property lies.

cont
3. proviso II of s. 26 of SOGA Nothing in this
section shall effect the duties or liabilities of
either S or B as a bailee of the goods of the
other party.
Application: Risk lies with the bailee at
fault.
E.g: Property in goods may have passed to the B,
but if the goods were lost thru the negligent of
the S (the bailee) while in his custody, S will be
liable for the lost.

The Passage of Risk


Until risk passes, the B may refuse to

take delivery of goods which are


damaged in transit.
BUT once risk has passed to the B,
the S is exempted of liability for loss /
damage to the goods (unless caused
by the Ss negligent)

Perishing Goods
S.7: where goods perishing

before making a contract, the


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

Transfer Of Title

Issues:
Buyer bought goods from a
non-owner.
Whether Buyer has obtained
a good (valid) title?
if not, whether Buyer can
sue under s.14(a) SOGA?

GENERAL RULE:

Rule- Latin Maxim:

nemo dat quod non habet


no one can give what he has not got or no one can
give a better title than he has himself.

Meaning:
A seller who does not own the goods, or who sells them without
the owners authority CANNOT transfer ownership to the
buyer.

The maxim has been adopted into


s.27 SOGA

S. 27 SGA

where goods are sold by a person


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

example
A stole a car and sold it to B.
In this situation, A does not have the

title to the car.


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

Continue.
Application:
A person who has no title cannot pass good/valid title to another.
[this is to protect the ownership so that if goods are stolen &
subsequently sold, the right of the original owner is retained]

Continue.
Lim Chui Lai v Zeno Ltd 1964) 30 MLJ
314

Zeno Ltd had entered into agreement with Ahmad


(contractor) who had contract with PJ Authority to
construct culvert. Under the contract between Zeno
Ltd and Ahmad, Zeno was to provide A with all
material for the construction. Then, Z delivered all
the materials to the construction site.
Unfortunately, As contract with PJ was cancelled; Z
thereupon informed PJ that the materials on site
belonged to them. When Z attempted to sell the
material, they discovered the materials had been
sold by A to Lim Chui Lai.

Continue.
Held:
A was merely the bailee & not the owner
of the goods at the time he sold them to
the Appellant.
Because A had no title to the goods /
authority to sell them, he could not pass
any title to Appellant.
Thus, Lim Chui Lai does not have the title
upon the materials bought from Ahmad

Continue.

Rowland v Divall

Plaintiff bought a car from D, & after using it


for some 4 months, discovered that it was a
stolen car.
He had to return it to the true owner.
Held:
The D had breached the condition as to title &
allowed recovery by the P of full price on the
basis of a total failure of consideration.

Continue..

The Buyer would have to return the goods


to its original owner

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

exceptions

Exceptions to
NEMO DAT QUOD NON HABET
RULE:
1.

Estoppel

(second limb of s.27 of SOGA)


.. Unless the owner of the goods is by his conduct precluded from denying the Ss authority to sell.

Owner by his conduct makes it appear to the buyer that the


person who sells the goods has his authority to do so & buyer
relies on that conduct,

the buyer obtains a good title because the owner is precluded by

his conduct from denying the sellers authority to sell

Continue..
*Application:

Owner is estopped (prevented) from denying the Ss right to sell. The owner is estopped
from asserting his title.
Example:
Samy tells Ali in front of Muthu that Samy want to sell Muthu's Books to Ali and Muthu keep on
silent.
If Samy sells the books to Ali, Muthu cannot complain or estopped from denying that Samy has
sold his books without his authority

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

possession of the car upon the tender of a


cheque as payment. It was agreed between
them that the title to the car was not to pass to
B until the price had been received (i.e. the
cheque has been honoured/ cashed).
B then sold the car to C. Before the sale to C
was finalised, C had contacted As office. In
response to Cs inquiry , C was informed by As
employee that B had paid for the car.
Later the cheque which was given to A by B was
dishonoured. Therefore A repossessed the car
from C.

Held:
C was successful in claiming that A

was precluded / estopped by his


conduct from denying Bs authority to
sell.
Therefore, the title has passed to C.

2. Sale by mercantile agent

proviso of s.27 of SOGA


Sale by mercantile agent, with the consent of owner, in possession of goods or of a document of title to the goods, any sale made by him when
acting in the ordinary course of business shall be valid as if he were expressly authorized by the owner of the goods to make the same

Definition mercantile agent s.2 of SOGA


Merchantile agent having in a customary
course of business as such agent
authority either to sell goods, or to
consign goods for the purposes of sale,
or to buy goods or to raise money on the
security
Example:
Second-hand automobile dealer, a broker, or
an auctioneer

Elements:
The possession must be with the consent of

the owner
At the time of sale, the mercantile agent must
be in possession of the goods or the document
of title to the goods.
the mercantile agent sells the goods in the
ordinary course of business as mercantile
agent
The buyer has acted in good faith and must not
have knowledge of the agents lack of authority
to sell

3. Sale by one of joint owners


Section 28
If one of several joint owners of goods has the sole possession of the goods by permission / consent of the co-owners,
the property in the goods is transferred to any person who buys them from such joint owner in good faith & has not at the time of the contract of sale notice that the
seller has no authority to sell.

Elements:
1 of the owners has the sole possession

of the goods by permission of the coowners.


The buyer has acted in good faith and

must not have knowledge of the agents


lack of authority to sell

Continue..
Example:
X,Y & Z jointly owned an oven. X was allowed to
keep the oven & to cook with it since Y & Z did
not know how to cook.
X, without Y & Zs permission, sold the oven to
A who did not know about Xs lack of
authority.
Held: A would acquire a good title to the oven.

4. Sale under a voidable title


s.29 of SOGA
The seller of goods has obtained possession thereof under a contract voidable under s.19 or 20 of the Contracts Act 1950, but the contract has NOT been rescinded at the time of the sale
(i.e. his title has not been avoided at the time of the sale), the buyer acquires a good title to the goods provided he buys them in good faith.

Elements:
The seller obtained possession of the

goods under a voidable contract.


The said voidable contract has not
been rescinded
The buyer has acted in good faith and
without knowledge of the fact that the
seller has NO good title to pass

Continue..
Example:
A obtains good from B by fraud & sells
them to C who buys them innocently.
At the time C buys the goods, B has not
rescinded the contract made with A.
C obtains good title to the goods. (e.g. of
not avoided).

5. Sale by SELLER in possession after sale


s.30(1) SOGA
if seller continues/is in possession of the
goods or of the document of title, the
delivery/transfer by that person or by
mercantile agent acting for him, of the goods
or documents of title under any sale, pledge
or other disposition
thereof to any person receiving the
same in good faith shall have the same
effect as if the person making the
delivery/transfer were expressly
authorized by the owner of the goods to
make the same.

Happen when a seller has transferred the

property in goods to a buyer but he (the


seller) remains in the possession of the goods
The seller then, sell the goods to another
buyer who buys in good faith

2nd buyer will get a good title


The 1st buyer losses his title and he HAS

to get his REMEDY against the seller.

Example:
If a seller resells to a 2nd buyer the goods
sold by him previously to the 1st buyer,
the 2nd buyer will obtain good title to
the goods if he has received the
goods in good faith & without notice
of the previous sale.
The 1st buyer will lose the title but he can
take legal action against the seller who
would be liable to him.

Motor Credits (Hire Finance)


Ltd v Pacific Motor Auction
Pty Ltd
Motor Credits Ltd (MCL)

who was a dealer in


vehicles sold a number of vehicles to the Plaintiff
under a display agreement, whereby Motor
Credits remained in possession of the cars for
display in their showrooms.
MCL were paid 90% of the price and were
authorised to sell the vehicles as agent for the P.
MCL got into financial difficulties and the P
revoked the MCLs authority to sell the vehicles
but MCL nevertheless had sold numbers of the
cars to D who were bona fide purchasers for
value.

Held:
The D obtained a good title. MCL is

to be treated as continuing in
possession and is able to pass a good
title under S. 30.

6. Sale by a BUYER in possession AFTER SALE


s30(2) SOGA
if a buyer, having bought/agreed to buy goods, obtains possession of the goods/the documents of title with the consent of the seller,
he can pass a good title to a subsequent buyer acting in good faith, even if under the first transaction he has not obtained a good
title.

Buyer obtains possession with the consent

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

The said buyer can pass a good title

to another bona fide buyer who has NO


knowledge about the rights or interest of
the original seller.

Newtons of Wembley Ltd v


Williams
[1965] 1 QB 560
Plaintiff sold a car to A who paid by cheque. It was
agreed that the title would not pass until the
cheque was honoured. A was given possession of
the car but the , but later on, the cheque was
dishonoured. P then rescinded the contract with
A.
However, A had sold the car to B who bought it
without knowledge of the position. Furthermore,
B had resold it to the defendant. Plaintiff tried to
recover the car from him.

Held:
A, the original buyer, was in possession with
the consent of the owner. Hence, he could
pass a good title to B, who in turn
transferred it to the defendant.
Thus, the defendant had a good title to the
car and entitled to keep the car.

Delivery and
acceptance of Goods
s.31 SOGA
Its the duty of seller to deliver the

goods whilst the buyers duty is to


accept & pay for them accordance
with the terms of the contract.

Delivery
Means voluntary transfer of possession from

one person to another. Constructive delivery is


sufficient.(need not include physical transfer)
:s.33 SGA

Non-delivery buyer may sue the seller

for damages for non delivery(s.57 SGA).


Place of delivery whether the seller is

required to send the goods to the buyer


or the buyer has to take possession of
the goods depends on what has been
agreed upon between them ( s.36(1)
SGA

contd
Unless the parties agree otherwise, the

expenses of & incidental to putting the


goods into a deliverable state shall be
borne by the seller.

Time of Delivery
Where under the contract of sale the seller
is bound to send the goods to the buyer,
but NO TIME for sending them is fixed, the
seller is bound to send them within a
reasonable time (s.36(2) SGA)

Delivery of wrong quantityS.37(1), (2),(3) &(4)


1. Seller delivers to the buyer a
quantity of goods less than that
which he contracted to sell:a) the buyer may reject all the goods so
delivered, or
b) if the buyer accepts the goods so
delivered, he is bound to pay for them
at the contract rate.(s.37(1) SOGA)

Case: Harland & Wolff Ltd v J. Burstall &


Co
A contract for 500 loads of timber.
Held: that delivery of 470 loads would have
been non-performance of the contract
entitling buyer to reject

cont
Seller delivers to the buyer a larger

a)
b)
c)

(if

quantity of goods than that which he


contracted to sell, the buyer may:Accept the goods included in the contract
& reject the rest; or
Reject all the goods
Accept all the goods
buyer accepts all the goods, he has to pay
for the goods at the contract rate) s.37(2) SOGA

cont
Seller delivers to the buyer the goods

he contracted to sell mixed with goods


of a different description not included
in the contract, the buyer may:1. Accept the goods which are in accordance
with the contract & reject the rest; or
2. Reject the whole. s.37(3) SOGA
(s.37(4): SOGA are subjects to any usage of
trade, special agreement or course of
dealing between the parties.)

BREACH BY THE
BUYER

Continue..

1. Failure of Buyer to Take Delivery


Section 44

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

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

the Buyer would also LIABLE for a

reasonable charge for the care and


custody of the goods by the seller.

Continue..

2. Failure of Buyer to Pay for the Goods


Section 55

If the buyer failed to pay for the price of the goods, the seller may sue the buyer for the price when:
The property in goods (ownership) has passed to the buyer (S. 55(1) ); or
ii. The price is payable on a certain day but the buyer failed to pay on that day; irrespective of delivery, or the property in the goods has not passed
to the buyer (S. 55(2) )
i.

Continue..

3. Failure of Buyer to ACCEPT the Goods


Section 56

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

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

Rights (Remedies)
Of Unpaid Seller
Against The
Goods

UNPAID
SELLER (S. 45
(1))
WHO IS HE?
THE SELLER
HAS NOT
BEEN PAID
WITH THE
WHOLE
PRICE

WHEN THE BILL


OF EXCHANGE OR
OTHER
NEGOTIABLE
INSTRUMENT,
RECEIVED BY THE
SELLER AS A
CONDITIONAL
PAYMENT IS
DISHONOURED

RIGHTS IN
PERSONA
M
(personal)

RIGHTS IN
REM
(property)

RIGHTS IN PERSONAM

Common remedies that are available


for the unpaid seller against the buyer

Remedies of the unpaid seller :1.To sue the buyer for the price (S.
55);
2.To sue the buyer for damages for
non-acceptance (S. 56).

Section 55
Where under a contract of sale, of
property in the goods has passed to
the buyer and the buyer
wrongfully neglect or refuses to
pay for the goods according to the
terms of the contract,
the seller may sue him for the
price of the goods.

Continue.

Section 56

Where buyer wrongfully


neglects or refuses to accept
and pay for the goods ;
the seller may sue him for the
damages for non-acceptance.

RIGHTS IN REM
In respect of the goods themselves:

RIGHT OF LIEN
RIGHT OF STOPPAGE IN TRANSIT
RIGHT OF RESELL

1. RIGHT OF LIEN
A legal lien is dependant on possession.
The unpaid seller who is in possession of the

goods
Is entitled to retain possession until

payment or tender of the price.


The right still exist even where the
property in goods has passed to the
buyer, but the delivery has not been
made. (s. 46 (1) (a))

Section 46(1)(a)
This rights exists even where the
property in the goods has
passed to the buyer but
delivery has not been made

Continue.
Section 46(2)

Where the properties in goods


has not passed to the buyer,
the seller may with hold
delivery in addition to his other
remedies

Continue.
These rights may exercise in the following situations :-

Section 47(1):
(a) Where the goods have been sold without any stipulation as to credit;
(b) Where the goods have been sold on credit but the term of credit has expired;
( c) Where the buyers becomes insolvent.

Continue..
Section 47(2)
The seller may exercise his
right of lien notwithstanding
that he is possession of the
goods as agent or bailee for
the buyer

Continue.
Section 48
Where an unpaid seller has made part
delivery of the goods, he may
exercise his right of lien on the
remainder, unless such part
delivery has been made under such
circumstances as to show an
agreement to waive the lien.

Continue..
Section 49
The unpaid seller losses his lien in the following
circumstances:

When he delivers the goods to the carrier or

other bailee in order that the goods be


transmitted to the buyer without reserving
the right of disposal of the goods
The buyer or his agent lawfully obtains
possession of the goods
When the seller waives his lien (s. 48)

2. RIGHT OF STOPPAGE IN
TRANSIT
Section 50
Subject to this Act when the buyer of
goods becomes insolvent;
the unpaid seller who has parted with the
possession of the goods has the right
of stopping them in transit, that is to
say, he may resume possession of the
goods as long as they are in the course in
transit, and may in retain them until
payment or tender of the price.

This is a right of an unpaid seller to stop

the goods in transit, to resume


possession of the goods as long as they
are in the course of transit (lintasan
barang-barang dagangan, pengangkutan
(barang, orang)
The seller may retain the goods until
payment of the price

Continue
WHEN?

Buyer becomes insolvent


The goods are in control of a

carrier (in transit)

Who is insolvent?
A person who has ceased to pay his debts in
the ordinary course of business, or cannot
pay his debts as they become due, whether
he has committed an act of bankruptcy or
not.

Continue.
Duration of transit
Section 51
Goods are deemed to be in the course of
transit ;
from the time when they are delivered to a
carrier or other bailee for the purpose of
transmission to the buyer, or
until the buyer or his agent in that behalf takes
delivery of them from such carrier or other
bailee.

Continue.
Transit is at the end in the following circumstances:
i. When the buyer takes delivery from the carrier. Section 51(1)
ii. When the Buyer obtains delivery of the goods before their arrival at the appointed destination. Section 51(2)
iii.After the arrival, the carrier acknowledges to the buyer that he holds the goods on the buyers behalf and continues in possession.

It is immaterial/not important that a further destination may have been indicated by the buyer. Section 51(3)

Continue.
Transit cannot recommence merely because

the buyer has instructed that the goods be


sent on a further journey to another
destination
iv. Where the carrier wrongfully refuses to
deliver the goods to the buyer. Section 51(6)

Continue.
If part of the goods has been

delivered to the buyer, and the


remainder of the goods are still in
transit,
the unpaid seller has the right of

stoppage in transit for such remainder


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

Continue
Methods for effecting stoppage
The unpaid seller may exercise stoppage in transit by the following ways:

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

Continue..
Giving notice to the carrier

The carrier shall redeliver the goods to the


seller or according to the sellers
directions.
The expenses of redelivery shall be borne by
the seller

3. RIGHT OF RESELL
Section 54 gives a right of resell to the unpaid seller in the following circumstances:
1. Where the goods are perishable nature. (Section 54(2))

Continue..
2. Where the unpaid seller who had exercised his right of lien or
stoppage in transit, and has given notice to the buyer of his
intention to resell,
but the buyer fails to pay for the price within a reasonable time
after receiving such notice
(section 54(2))

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

loss due to his breach of contract;


The buyer shall not be entitled to any profit, which may occur out of that
resale;
However, if the seller failed to give such notice, the seller shall not be

entitled to recover such damages,


and the buyer shall be entitled to the profit out of the resale, if any.

Section 54(2)

Continue
3. Where the seller expressly in the
contract, reserve the right of
resale in cases the buyer failed to
pay for the price.
Section 54(4)

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

contract with such default buyer would


terminate
Therefore, the original buyer is no longer
required to pay for the price, and the seller
is entitled to keep any profit out of that
resale
However the seller is still entitled for
damages from the original buyer for breach
of contract and for any loss suffered by the
seller out of that breach.

BREACH BY THE SELLER

1.Damages For Non-delivery of the


Goods

Where seller wrongfully neglects / refuses to deliver the goods to buyer, the buyer may sue

the seller for damages for non-delivery


- (s.57 SGA)

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

2. Specific Performance
In certain circumstances, which are subject to

Chapter II of the Specific Relief Act 1950,


the buyer may apply to the Court to grant a

decree,
directing the seller to the perform the

contract specifically, without giving the


seller the option of retaining the goods
by paying damages to the buyer.

Specific Performance is a discretionary decree

by Court.
This remedy is available only if the contract is

to deliver specific goods or ascertained goods.


(Re Wait-5oo tons of wheat from a
consignment@1000 tons).

3. Buyers Action in
Tort
Buyer can sue the seller in tort for wrongful
interference with the goods inconsistent
with the ownership of the buyer.
1. Detinue; and
2. Conversion (s.56 SGA)
Detinue wrongful detention of the goods
e.g: where the prop.in goods has passed to the
buyer & seller withholds the goods
although the buyer demands for them.

cont
conversion means the dealing with the

goods in a manner inconsistent with the


ownership of the buyer.
E.g. if the seller wrongfully sells that goods

to a third party although the property in


the goods has passed to the buyer.

4. DAMAGES FOR BREACH OF


WARRANTY
Whenever there is a breach of warranty by

the seller,
the buyer is not entitled to reject the goods.
However the buyer is entitled to sue the

seller for damages because of breach of


warranty
Section 59(1)(b)

GLOSARY
Ascertained goods: Goods identified and

upon by the parties


Unascertained goods: Goods that are
defined by descriptions only
Nemo dat rule: A buyer getting the same
rights to the goods as the person they took it
from (the seller)
Possession of goods: Control or custody of
goods
Property in goods: Ownership
Sale of goods: The transfer of ownership
from seller to buyer at the time of contract