Head 11: Transfer of Corporeal Moveables Flashcards
Is there a requirement of writing for the transfer of corporeal moveables?
No requirement of writing.
The structure of the law is much simpler too because there are only a limited number [There are no servitudes, no real burdens, no leases.] of subordinate real rights which can affect moveable property.
What is the first question one must about about the transfer of corporeal moveables? Why?
‘What is the reason for the transfer?’
If it is:
⁃ Contract of Sale = SOGA 1979
⁃ Not sale (e.g. Barter, donation, exchange) = common law rules
What are the two requirements to transfer property by donation or exchange at common law?
Two main non sale transfers: donation and exchange.
In order to transfer at common law, the two requirements are:
⁃ 1) Delivery (traditio) (no delivery, no transfer)
⁃ 2) Mutual intention
[The reason intention is required is that people often transfer things without intending to transfer ownership. So for example, A might lend a book to B - delivery has happened but if there is no intention to transfer ownership then ownership is not transferred.]
What is the form of delivery required for a donation or exchange?
The form delivery must take depends on who is in possession of the goods:
⁃ 1) If transferor A is in natural possession he must hand over the goods to transferee B (or his agent). [actual delivery [Known as actual delivery because the goods physically move.]].
⁃ 2) If A is in civil possession[ The classic example here is goods being stored in a warehouse for A. If A wants to transfer ownership to B, A must contact the warehouse to tell them that they are now to hold the property for B. In this example the property does not physically move.
Alternatively A tells the detonator to actually delivery the property to B.] either the detentor makes actual delivery to B or [constructive delivery] he is instructed by A to hold for the benefit of B.
⁃ 3) If the goods are in transit by ship, A hands over to B the bill of lading. [symbolical delivery].
How is a sale of goods regulated?
Sale is regulated by the SOGA 1979.
What are ‘goods’ in Scots Law?
“Goods” in Scotland are ““all corporeal moveables except money[ Money is transferred under the common law (by delivery)]; and in particular ‘goods’ include emblements, industrial growing crops and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale and includes an undivided share in goods” (s 61(1)).
[Classic example is trees - trees when growing in land are actually heritable property (they are regarded as part of the land). However the sale of goods act applies to trees being sold because under the contract they will be severed before or under the contract of sale.It would also apply to the sale of a building if the building was to be dismantled and re-erected somewhere else (e.g. monster moves)]
What is the difference between existing and future goods?
“Existing goods” are those that the seller already has, while “future” goods are those “to be manufactured or acquired by him after the making of the contract of sale”.
What are specific goods?
“Specific goods” = goods ascertained and agreed upon at the time the contract is made — e.g. They are identifiable at the time of the contract — including an individual share, specified as a fraction or percentage, of goods identified and agreed on (s 61(1))
What are unascertained goods?
“Unascertained goods [Often in commercial contracts the goods are not specifically identified - you are rather buying quantities (e.g. 500 nails).
NB unascertained goods may later be ascertained, but goods unascertained at the time the contract is made can never be specific goods.]” = goods not identified and agreed upon at the time the contract is made (no statutory definition) (e.g. Sale for 1,000 tonnes of wheat, the seller may have 3,000 tonnes and no particular grains can be identified as being those sold.) Unascertained goods, on becoming identifiable are called “ascertained”.
Note: unascertained goods may later be ascertained, but goods unascertained at the time the contract is made can never be specific goods and ownership cannot pass — this is the specificity principle.
Is corporeal moveable property required to be registered?
Corporeal moveable property is unregistered.
There are three areas of qualification: motor vehicles (DVLA), ships (Ship Register) and aircrafts (only the mortgage over an aircraft has to be registered).
These registers are nothing to do with property rights - they are simply administrative registers. Registration is irrelevant for ownership
What is the basic rule of transfer of goods?
The basic rule of transfer is given by SOGA, s. 17: assuming the goods are ascertained or specific, “the property in them is transferred to the buyer at such time as the parties…intend it to be transferred”. No external act as such (delivery) is needed. So parties are free to say that ownership passes at delivery, before delivery or after delivery.
What is specificity principle?
The general rule is that ownership of goods cannot be transferred until the goods are ascertained[ So where it is a contract for the sale of unascertained goods, there cannot be any transfer until the goods have been ascertained.] - s 16. This is the specificity principle.
When are ascertained goods transferred?
Specific or ascertained goods are transferred at such time as the parties intend[ SOGA does not require delivery, merely intention, but there must be a contract of sale.]: s 17. In other words, only mutual intention is required (no delivery). The parties can make whatever arrangement they want, including retention of title until payment of the price or any sums owed under other contracts.
Which section of the 1979 Act applies where the intention to transfer goods cannot be ascertained?
In written contracts, it is usual to have a provision saying when ownership is to pass. But in oral contracts it is usual for there to be nothing. Accordingly there is an additional section (s 18) which applies where the intention cannot otherwise be ascertained. This sets out 6 rules.
What are the 6 rules set out in s 18?
Rule 1: where there is an unconditional contract for the sale of specific goods in a deliverable state, ownership passes when the contract is made and it is immaterial whether the time of payment or the time of delivery, or both, be postponed.
[This rule is most often applied in practice. It creates a risk for the seller: ownership passes immediately the parties then shake hands on the deal, without payment. Where the buyer becomes insolvent, s. 41 says that the seller, on losing the real right of ownership, acquires a subordinate real right, called the seller’s lien - but this lien is lost as and when the goods are delivered. Hence sellers who wish to be protected even after delivery will opt for retention of title].
Rules 2 and 3 : where, in relation to specific goods, seller has (a) to put the goods in a deliverable state, or (b) to weigh, measure or carry out some other act with respect to the goods in order to fix the price, ownership does not pass until that is done and the buyer informed.
Rule 4: relates to goods delivered to the buyer on approval or on sale or return.
Rule 5[ Essentially the opposite of rule 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 the seller with the assent of the buyer or by the buyer with the assent of the seller, then ownership passes to the buyer, and the assent may be expressed or implied and may be given either before or after the appropriation is made. The most common example of unconditional appropriation is delivery of the goods: rule 5(2).
Rule 6: SOGA s19 - “if the contract contains a reservation of a right of disposal, unless certain conditions are satisfied, then the parties are presumed to intend ownership not to pass until those conditions have been satisfied.
