The sale of goods Act NSW PDF

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TOPIC 1: TRANSFER OF PERSONAL PROPERTY

The Sales of Goods Act 1923 (NSW): If there is a consumer involved and the SOGA and ACL apply à use the ACL as it has more extensive remedies available and a broader scope of damages

1. INTRODUCTION TO SOGA: •

The actual intention of the parties as evidenced by the contract is supreme à set out in section 57 of the Act and supported by case law (VERY few situations where the Act overrides the intention of the parties)

•

Ashington Piggeries [1972] à parties have freedom to enter into & create terms of contracts à act is only there to fill in the gaps

Section 5: Definitions of “goods” § Section 5: Goods à all chattels personal other than things in action and money. Term includes emblements/ § §

things attached to or forming part of the land which are agreed to be severed before sale/under sales contract Section 5: Specific goods à goods identified and agreed UPON at the time a contract of sale is made (property will generally pass when contract for sale of goods is made) Section 5: Future goods à goods to be manufactured/acquired by seller AFTER making contract of sale (have contract for sale but no goods/ability to transfer the goods) – future/unascertained always sale by description

Section 6: Is it a sale of goods contract or an agreement to sell? • •

A contract of a sales of goods is a contract where the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration called the price à section 6(1) If property is to be transferred at a future time = agreement to sell NOT contract of sale à section 6(3)

Section 21: Goods must be ascertained to sell Section 21 à Subject to section 25A, where 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.

2. TITLE: Section 17: Implied undertakings as to title etc (must have the right/title in order to sell) Section 17 outlines that unless the circumstances of the contract are such as to show a different intention: • Rowland v Divall [1923] à there can be no sale of goods which the seller has no right to sell as the object of sale is to transfer property from one person to another (implied condition that seller has right to sell goods) • Implied warranty buyer shall have/enjoy quiet possession (with no conflicting possessory rights) of goods

Importance of knowing when title has passed • • •

Seller earns right to payment when title is passed Risk passes with the property and therefore party with property can sue for damages when title is passed Purchaser on-selling à buyer can pass title on to another party (even without delivery/actual possession)

Determining when title has passed Step one: when have the parties intended the property to pass? Section 22: Property passes when parties intend the property to pass: • A contract for sale for specific/ascertained goods à property is transferred to the buyer at such time as the parties to the contract intend it to be transferred

To ascertain the intention of the parties court will have regard to: terms of the contract, the conduct of the parties and the circumstances of the case If terms, conduct or circumstances cannot ascertain intent/aka absence of evidence as to intent à go to step 2 Step two: s 23 sets out 5 rules of presumption as to intent: Section 23: Rules for ascertaining intention: unless a different intention appears, the following rules are used to ascertain the intention of the parties: S23) ELEMENTS/SUMMARY OF THE RULE: Rule 1: 1) Where there is an unconditional contract, 2) For the sale of specific goods (goods identified and agreed upon at the time of sale), 3) Where the goods are in a deliverable state, Property passes when CONTRACT IS MADE (regardless if time of payment/delivery/both be postponed) Rule 2: 1) Where there is a contract for the sale of specific goods, and 2) The seller is bound to do something to the goods to put them in a deliverable state (the state that the buyer wants them), property does not pass until: 1) The seller does what they were bound to do the render the goods deliverable, and 2) The buyer has actual notice of this Rule 3: 1) Where there is a contract for the sale of specific goods in a deliverable state, BUT 2) Seller is bound to weigh, measure, test or do some similar act to the goods (to ascertain market price) The property does not pass until: such act or thing be done and the buyer has notice thereof § WON’T apply if act done merely to satisfy customer to quality à Nanka-Bruce v Cth Trust Ltd [1926] Rule 4: 1) When goods have been delivered on a sale or return/ approval basis (buyer given the goods with discretion to approve/disapprove) The property passes when: a) The buyer signifies approval/acceptance or does any act reflecting acceptance, or b) If buyer retains goods without given notice of rejection, when: expiration of fixed time to return goods OR if no fixed time expiration of a reasonable time (reasonable time is a question of fact) •

Rule 5:

§ On-selling goods = act of approval/acceptance à Poole v Smith’s Car Sales (Balham) Ltd [1962] 1) Where there is a sale of unascertained or future goods by description: Property won’t pass at the time the contract is made, property will pass WHEN: a) Goods are in a deliverable state, and b) Goods are unconditionally appropriated to contract by the seller or the buyer (relevant goods are set aside/clearly attached to relevant contract between the parties e.g. through delivery or shipping etc.) § This needs to be done with the others approval (which may be expressed or implied 2) Parties cannot be deemed to have unconditionally appropriated the contract until, for example, a delivery à more difficult when third party is involved

Section 24: Reservation of right of disposal (when conditions of contract not yet fulfilled) Section 24(1) à contract for sale of specific goods/where goods are subsequently appropriated to contract, if terms of contract or appropriation reserve the right of disposal of the goods until certain conditions are fulfilled, property does not pass to the buyer until the conditions imposed by the seller are fulfilled (sort of rule 2/3)

3. NEMO DAT QUID NON HABET: “NO ONE GIVES WHAT HE DOES NOT HAVE”: Section 26: Sale by person not the true owner Section 26 à In summary this section states that where: sale is done by person who is NOT the true owner/has no authority to sell/no consent by the owner to sell: § General presumption will be that buyer gains no better title than seller, unless there is estoppel à section 26(1) (estoppel exception is because with the application of this rule an innocent third party usually loses out) • Nothing in this act will affect the provisions of the Factors (Mercantile Agents) Act 1923 or of the PPSA

Exceptions to nemo dat quid non habet rule 1) Section 26: Estoppel: Section 26(1) à if owners conduct represents to the buyer that the person without title is authorised to sell expressly or by conduct OR IF the true owner has contributed to the wrongful sale through lack of care, wrongful conduct or other similar act, The buyer will still get good title and true owner will be estopped from ascertaining ownership (ownership transferred from true owner to innocent buyer). There are two ways estoppel arises: • •

1) Representation: true owner arms another party with the means of representing to an innocent purchaser that they have the authority to sell 2) Negligence: negligence by true owner can allow the seller to create the appearance of ownership

2) Section 27: Sale under voidable title: If 1) A sells to B with right to void, and 2) B sells to C before A voids, if 3) C was wholly unaware of any defect in B’s title à C gains good title • Car & Universal Finance Co Ltd v Caldwell [1965] à if communication of avoidance is made or constructed by the courts (constructed if party can demonstrate that they took all possible steps to void/regain the goods) à party would have avoided the contract and thus recovered title 3) Sale by mercantile agent: • Section 3 of SOGA à a mercantile agent is a person who sells or deals with goods on behalf of the owners • Section 67 of SOGA à gives mercantile agents the right to transfer of title on behalf of the owner Factors (Mercantile Agents) Act 1923: Section 5(1) à purchaser will obtain good title when: 1) The agent was entrusted with goods by an owner in their role as a mercantile agent 2) The agent sells those goods in the ordinary course of business 3) If the purchaser acts in good faith – i.e., honestly – and without notice of anything untoward. •

Oppenheimer v Attenborough & Son [1908] à ordinary course of business: “within business hours, at a proper place of business, and in other respects in the ordinary way in which a mercantile agent would act so that there is nothing to lead the pledgee to suppose that anything wrong is being done” o If one of the first two (within business hours, proper place of business) is met don’t talk about others

4) Section 28(1): Seller in possession: • 1) Where seller has sold to someone else but is still in possession of goods/documents of title to goods, and • 2) Seller then on-sells to someone else (third party) • 3) If the third party purchaser is acting in good faith/without notice of the previous sale à they will get title Title is achieved by delivery of the goods themselves or the documents of title à not by contractual arrangements •

If seller made 2 contracts à initial one then retained possession and made another à but hasn’t delivered the goods and this was discovered before delivery then they do not get the goods

5) Section 28(2): Buyer in possession: • 1) Where buyer of goods has possession of the goods/documents of title but DOES NOT yet have title, and • 2) The seller represents to another third party that they still have ownership as technically they have title • 3) The innocent third party purchaser obtains good title Limited contractual relationship when all that has passed is possession of the goods...