Sales of Goods Act PDF

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Description

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By virtue of section 4 (1) of the SOGA 1957, a contract of sale is defined as “a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price”

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By virtue of section 2 of SOGA 1957, “price” is defined as “the money consideration for a sale of goods”

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By virtue of section 4 (3) of SOGA 1957, when the ownership or property in goods is transferred to the buyer by the seller, the contract of sale is called a sale or executed contract of sale;

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The contract is called an agreement to sell if the transfer of the property in goods is to take place at a future time or subject to some condition to be fulfilled thereafter.

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In the case of Harper Gilfillan Sdn. Bhd. V Kean Toh Amang Factory Sdn. Bhd. & Lee Kwee Hong, the plaintiffs obtained judgment against Kean Toh Amang Factory Sdn. Bhd. in the sum of $48,507 unpaid. The plaintiffs caused a writ of seizure and sale to issue and the bailiff seized a number of movable goods at Amang factory. Later on Lee Kwee Hong filed an Order claiming all the goods seized as his own. He relied on a written sale and purchase agreement of an earlier date. According to their agreement, the defendant had agreed to sell the land and factory with movables to the claimant. The land could not be sold without the consent of Mentri Besar. The agreement provided in case the consent is not forthcoming, the agreement would be treated as null and void. The judgment creditor contended that on the date of seizure the Mentri Besar's consent had not been obtained, therefore property in the movables was still with the judgment debtor. He also contended that the sale was not bona fide as the two shareholders of the defendant company were the sister and sister's daughter of the claimant. The claimant told the court that he was not aware of any judgment debt against the defendants. The court agreed that the property did not pass to the claimant in an agreement to sell, only a jus in personam is created. The court held that the agreement between the claimant and the judgment debtor is merely an agreement to sale, which means that the ownership of the goods has yet to be transferred to the claimant.

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“Goods” is defined under section 2 of SOGA 1957 as every kind of movable property including stocks and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.

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By virtue of section 6 (1) of SOGA 1957, the goods in a contract of sale may be either existing goods or future goods. Existing goods refers to goods owned by the seller at the time when the contract of sale is made. Meanwhile, future goods refers to the goods to be produced or acquired by the seller after the contract of sale is made.

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Existing goods can be further divided into specific goods and unascertained goods. By virtue of section 2 of SOGA 1957. Specific goods is goods that are identified and agreed upon at the time when the contract of sale is made. Meanwhile unascertained goods refers to goods that are not identified and not agreed upon when the said contract is made.

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In the case of Nagurdas Purshotumdas & Co. v Mitsui Bussan Kaisha Ltd, the court held that the goods delivered did not comply with the description given, therefore the contract is invalid.

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By virtue of section 19 (1) of SOGA 1957, the goods of a contract of sale of specific goods is transferred to the buyer at the time when the parties of the contract intend it to be transferred.

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By virtue of section 18 of SOGA 1957, no goods in a contract of sale of unascertained goods can be transferred to the buyer until the goods ae identified and agreed upon.

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By virtue of section 23 (1) of SOGA 1957, 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, the goods can be passed to the buyer upon the consent, either express or implied, of both of the seller and buyer.

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Elements of contract of sale:

1. Section 5 (1) of SOGA 1957, a contract of sale is made by an offer to buy or sell goods for a price, as well as an acceptance of such offer. 2. Section 2 of SOGA 1957, a buyer is a person who buys or agrees to buy; a seller is a person who sells or agrees to sell. 3. section 4 (1) of the SOGA 1957, a contract of sale is defined as “a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price” 4. section 2 of SOGA 1957, “price” is defined as “the money consideration for a sale of goods” 5. The essence of a sale of goods is the transfer of goods from the seller to the buyer.

Nemo Dat Quod Non Habet -

Section 27 of SOGA 1957, if goods are sold by a person, who is not the owner and does not sell them under the authority or with the consent of the owner, the buyers acquires no better title to the goods that the seller had.

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Bishopsgate Motor Finance Corpn. Ltd v Transport Brakes Ltd, Lord Denning had laid down two principles. First, no one can give a better title than he himself possesses, which means only the true owner of a property can transfer the ownership to another party. This is to protect the property. Second, the person who takes in good faith and for value without notice should get a good title, which means that the seller or buyer who sells or buys in a good faith shall acquire the ownership of the property. This is to protect the commercial transactions.

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Exceptions

1. Estoppel. Section 27 of SOGA 1957, the Nemo Dat Quod Non Habet rule is not applicable if the owner by his conduct precluded from denying the seller’s authority to sell. Estoppel is a principle which precludes a person from asserting something contrary to what is implied by a previous action or statement of that person

2. Sale by mercantile agent. Proviso to section 27 of SOGA 1957. When a mercantile agent who is in possession of the goods, sell the goods with the consent of the owner, the title is effectively transferred.

3. Sale by one of joint owners. Section 28 of SOGA 1957, if one of the owners of goods has sole possession of goods by permission of the co-owners, the ownership of the goods is transferred to the buyer who buys them in good faith and has not notice that the seller has no authority to sell the goods when the contract is made.

4. Sale under a voidable contract. Section 29 of SOGA 1957. If the ownership of the goods was obtained by the seller under a voidable contract, but the contract has not been rescinded at the time of the sale, the buyer acquires the ownership of the goods. Provided that the buyer buys the goods in good faith and had not notice the seller’s defect of title. A voidable contract is a contact entered into caused by coercion, fraud, misrepresentation, or undue influence, laid down in section 19 and 20 of Contracts Act 1950.

5. Sale by seller in possession of goods. Section 30 (1) of SOGA 1957. A seller who has no longer have the title of the goods, but remains possession of the goods, can pass a good title to a bona fide buyer, if the seller were expressly authorized by the owner of the goods.

6. Sale by buyer in possession of goods. Section 30 (2) of SOGA 1957. A buyer who have bought the goods or agreed to buy the goods and have obtained possession of the goods with the consent of the seller, can pass a good title to an innocent buyer under any sale or disposition.

Discharge of contract 1. Discharge by performance i.

Section 31 of SOGA 1957. The seller has the duty to deliver the goods and the buyer has the duty to accept and pay for the goods.

ii.

Section 36 (1) of SOGA 1957. Goods sold are to be delivered at the place at which they are at the time of the sale; goods agreed to be sold are to be delivered at the place at which they are at the time of the agreement to sell; and future goods are to be sold at the place which they ae manufactured.

iii.

Section 37 (1) of SOGA 1957, if the quantity of goods delivered by the seller is lesser than the contracted quantity, the buyer may reject them. If the buyer accepts them, he shall pay for them at the contract rate.

iv.

Section 37 (2) of SOGA 1957, if the quantity of goods delivered by the seller is more than the contracted quantity, the buyer may accept the contracted quantity and reject the rest, or he may reject the whole. If the buyer accepts the whole, he shall pay for them at the contract rate.

v.

Section 37 (3) of SOGA 1957, if the goods delivered by the seller are mixed with other goods that are not included in the contract, the buyer can accept the goods which are listed in the contract and reject the rest, or he may reject the whole.

vi.

The buyer may be discharged from his duty under a contract of sale by paying the seller; accepting delivery of the goods from the seller; or take delivery of the goods from the seller.

2. Discharge by Breach i.

Section 55 (1) of SOGA 1957, if the goods has passed to the buyer but the buyer wrongfully neglects or refuses to pay, the seller may sue him for the price of the goods.

ii.

Section 46 (1) of SOGA 1957, the unpaid seller shall have the right to lien on the goods for the price while he is in possession of them; stop the goods in transit after he has parted with the possession of them in case of insolvency; and resale as limited by this act.

iii.

Section 44 of SOGA 1957, if the seller is ready and willing to deliver the goods and requests the buyer to take delivery, but the buyer does not take delivery of the goods within a reasonable time, the buyer is liable for the any loss suffered by the seller occasioned by his neglect or refusal.

iv.

Section 56 of SOGA 1957, the seller has the right to sue a buyer for damages for non-acceptance if the buyer wrongfully neglects or refuses to accept and pay for the goods.

v.

Section 57 of SOGA 1957, the buyer has the right to sue a seller for damages for non-delivery if the seller wrongfully neglects or refuses to deliver the goods to the buyer.

vi.

Section 58 of SOGA 1957, the buyer has the right to apply for specific performance if there is a breach of contract to deliver specific goods.

1. Arcos Ltd v E A Ronnasen & sons (description) respondents claimed that the staves delivered did not satisfy the measurement as described which to be of the thickness of half an inch. However, when received, they exceeded half an inch in thickness. Court held that there is a contract for sale of goods by description, there is an implied condition that the goods shall correspond with the description.

2. Moore & Co. v Landauer & Co. (description) the contract was of Austalian canned fruits stated as containing 30 tins each, payment to be per dozen tins. The sellers tendered the whole quantity ordered, but about onehalf of the cases contained 24 tins only. The buyers rejected the goods. Court held that it was a sale of goods by description. The goods were mixed with goods of a different description. The goods did not correspond with what have described.

3. Greenwood v Bennett (nemo dat quod non habet) In this case the original owner of a Jaguar car (Bennett) entrusted it to a man named Searle for repairs to be carried out. Searle then used the car for his own purposes, crashed it and caused extensive damage. Searle then sold the car to Harper, who owned a garage, for £75. Harper did not realise that Searle was not the owner of the car. Harper then spent £226 repairing the car and sold it on to a finance company. It was held by the court that the car belonged to Bennett as Searle did not have title and could therefore not transfer that title to Harper. For the same reason, Harper could not transfer title to the finance company. Bennett was therefore able to recover the car but had to compensate Harper for the work done to it.

4. Jerome v Bentley & Co (nemo dat quod non habet) the plaintiff had entrusted a diamond ring to a man named Tatham to sell for £550. Tatham was to keep anything in excess of £550 but was to return it if not sold within seven days. Tatham sold the ring after eleven days for £175 and represented himself to the defendants as the owner. The defendants then resold the ring. The defendants were held not to be able to rely on usual authority because Tatham belonged to no well-known class of agent but was merely an individual entrusted with the sale of the ring. Tatham’s authority had expired after seven days and the defendants were not entitled to assume that he had authority...