Sale of Goods

Question 1

Commercial transactions

Answer 1

transactions between businesses or B2B

Question 2

Consumer Rights Act 2015

Answer 2

• purchases by consumers

Question 3

Contract of sale

Answer 3

SGA1979; involves the transfer of ownership of goods for a money consideration called the price.

Question 4

Contract of sale

Answer 4

s. 2 SGA1979 “ A contract by which the seller transfers or agrees to transfer the property (legal title or ownership) in goods to the buyer for a money consideration (cash, cheques and payment card), called price”; important terms about quality, description

Question 5

Supply of Goods and Services Act 1982

Answer 5

-swaps one good for another; transferor, tranferee; barter, trade-ins, the use of voucher of goods; services where with transfer of goods

Question 6

Goods

Answer 6

SGA 1979 “All corporeal moveables except money; and in particular ‘goods’ includes industrial growing crops and things attached to or forming part of the land, which are agreed to be severed before sale or under the contact of sale”; tangible things, or crops, - may be existing goods, owned or possessed by the seller. Property and land are not goods, money only if antique coin and banknot,

Question 7

Agreement to sell

Answer 7

Sell of future goods, not manufactured yet.

Question 8

Price

Answer 8

“A monetary consideration. It can be fixed by the contract, or in a agreed manner by third party, if no price agreed the buyer must pay ‘reasonable’ price”

Question 9

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013

Answer 9

Require that certain information must be given to the buyer; failure to do so can result in the contract being unenforceable.

Question 10

Specific goods

Answer 10

s. 61 SGA 1979 “good identified and agreed on at the time a contract of sale is made”

Question 11

Unascertained goods

Answer 11

not specified in SGA 1979; to be manufactured or grown, generic goods e.g. a ton of coal, unidentified part of a specific whole.

Question 12

s. 16 SGA 1979

Answer 12

until goods are ‘ascertained’ ownership cannot be transferred. Goods are unascertained until they are allocated to a particular contract. - exception to sales from part of identified bulk.

Question 13

s. 20A SGA 1979

Answer 13

“traders who have paid in advance for a specified quantity of goods which are part of bulk which has been identified acquire an undivided share in the bulk and become owners in common with the other buyers or with the seller”

Question 14

s. 17 SGA 1979

Answer 14

for ascertained goods or specified: that property in the goods passes when the buyer and seller intend it should pass, s.18 outlining a number of rules to assist with working out their intention

Question 15

s.18 SGA 1979

Answer 15

Rule 1:” an unconditional contract for specific goods in a deliverable state, property passes when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, be postponed.
Rule 2: in a contract for specific goods where the seller has to do sth to the goods before delivery ( put them in a deliverable state), property passes when that has been done and the buyer has been informed.
Rule 3 the sale of specific goods where they are in a deliverable state but the seller has to weigh, measure, test, etc. to find the price, property does not pass until that is done and the buyer is informed.
Rule 4: if goods are sent on approval or sale or return, property passes when buyers show their approval or acceptance or do sth inconsistent with so else’s ownership, or if buyers retain the goods and there is no fixed time for the return then property passes after a reasonable length of time.
Rule 5: a contract for the sale of unascertained or future goods by description, and goods of that description and in 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, the property in the goods thereupon passes to the buyer. Such assent may be expressed or implied, and may be given either before or after the appropriation is made.

Question 16

Dennant v Skinner [1948] 2 KB 164

Answer 16

Auction a bid was accepted, buyer was given a form saying that ownership would not pass until the buyer’s cheque cleared. Held this was not a term of contract s.18 rule 1 applied.

Question 17

Kirkham v Attenborough [1897] 1 QB 201

Answer 17

’ a manufacturer of jewellery sent some pieces on a sale or return basis to X who then pawned them to Attenborough and did not pay K. It was held under s.18 rule 4 that property had passed to X when he had pawn the jewellery because this was a way of showing that he was accepting the goods.

Question 18

Philip Head and Sons Ltd v Shop Fronts [1970] 1 Lloyds Rep. 140

Answer 18

“PH had agreed to supply and lay a carpet. They arranged for delivery to the site but before they could lay it so stole it. whoever was the owner would have to bear a loss. Held PH was the owner (rule 5). Lying on site but not fitted it could not be said to be in a deliverable state.

Question 19

s. 19 SGA 1979

Answer 19

allows the seller to impose terms governing when property will pass under a contract and property will not pass until they are fulfilled.(This permits retention of title clauses which allow sellers to protect themselves against the danger of the buyer becoming insolvent before payment has been made.

Question 20

Armour v Thyssen Edelstahlwerke AG [1991] 2 AC 339

Answer 20

s.19 SGA 1979 This rule was established

Question 21

Right to sell

Answer 21

s12. — Implied terms about title, etc.
(1) In a contract of sale, other than one to which subsection (3) below applies, there is an implied [term]1 on the part of the seller that in the case of a sale he has a right to sell the goods, and in the case of an agreement to sell he will have such a right at the time when the property is to pass.
(2) In a contract of sale, other than one to which subsection (3) below applies, there is also an implied [term]1 that—
(a) the goods are free, and will remain free until the time when the property is to pass, from any charge or encumbrance not disclosed or known to the buyer before the contract is made, …

Question 22

McDonald v Provan (of Scotland Street) Ltd 1960 SLT 231

Answer 22

demonstrates the operation of s12 SGA 1979 Act, M bought a car from P, who in turn had bought it in good faith. 3 month later car taken by the police from M, - part of it stolen property. M sued for damages for breach of implied term about title s 12. held he was entitled to succeed if he could prove the assertions on which he relied.

Question 23

Nemo dat quod non habet

Answer 23

(you cannot give the title that you do not have’ s. 21 SGA 1979,no right to sell, ‘ those who transfer goods to others cannot confer a better title than they themselves have, there are number of exceptions

Question 24

Nemo dat quod non habet - exceptions

Answer 24

• Personal bar s.21 ‘denying seller’s authority

Question 25

Nemo dat quod non habet - exceptions

Answer 25

• Personal bar s.21 ‘denying seller’s authority
• Sale by a mercantile agent (s.2 (1) Factors Agent 1889 (shops, auctioneers, warehousemen)
• Sale under voidable title (valid until successfully changed - e.g. MacLeod v Kerr 1965 SC 253
• Sale by a seller in possession after a sale s. 24 SGA 1979 - original purchaser will have lost the goods to the new purchaser, he will have a right against the seller breach of contract
• Sale by a buyer in possession after a sale (converse of previous situation) s. 25 SGA 1979
• Sales of motor vehicles subject to hire purchase or conditional sale - not the owner until all the instalments have been paid. ss.27-29 of the Hire Purchase Act 1964 - only to motor vehicles

Question 26

Eastern Distributors Ltd v Goldring [1957] 2QB 600

Answer 26

Mr Murphy owner of the van, signed hire purchase forms in blank, so that a car dealer was able to arrange finance the purchase of a Chrysler car could sell it to a hire purchase company. It had been agreed between them that the dealer would only sell the van if the dealer was able to arrange finance for the purchase of the Chrysler from the hire purchase company. This did not prove to be possible but the dealer still sold the van to the hire purchase company, EDL, Meantime, Mr Murphy who still had possession of the van sold it to Mr Goldring. Who the owner? EDL were the true owner because they had bought in good faith the car dealer whom Mr Murphy had put in a position to sell his van.

Question 27

MacLeod v Kerr 1965 SC 253

Answer 27

K advertise car for sale in newspaper, sold to the man. He accepted the cheque, the man took car. Buyer false name and cheque from stolen cheque book. K on discovery informed the police. Rouge sold the car to Mr Gibson who new nothing of it. CS held that the rouge’s fraudulent misrepresentation resulted in him obtaining a voidable title.. Rouge still able to give ownership to G

Question 28

Archivent Sales & Development Ltd v Strathclyde Regional Council 1985 SLT 154

Answer 28

A deliver material for building a school for the regional council, clause reserving title in the materials to them until payment was made in full with contractor, contractor with council - when they delivered. Contractor became insolvent before A get paid. Council unaware of clause. Held council owned the goods . s. 25 SGA 1979

Question 29

When does the risk pass?

Answer 29

s.6 SGA 1979 “ where 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. s. 7 “ the destruction occurs, without any fault on the part of the seller or buyer, after the contract has been entered into but before risk passes to the buyer contract avoided.. s. 20 “ the risk of damage to, or destruction of, the goods is with the owner.

Question 30

Duties of the seller

Answer 30

• Delivery
• Duty to pass a good title
• Duty to provide goods of correct description
• Duty to provide goods of satisfactory quality (s.14 only in the course of business) - exemption: defects drawn to buyer’s attention and buyer examined goods
• Duty to provide goods to fit a particular purpose specified by the buyer s.14(3)
• Duty to provide goods matching sample s.15(2)
  (all from s.12 - 15)

Question 31

Delivery

Answer 31

s. 27 duty’s seller, s.29

Question 32

Hartley v Hymas [1920] 3 KB 475

Answer 32

time is prima facie of the essence of the contract, so failure to deliver on time will justify the buyer in rescinding the contract. s.30 - wrong quantity of goods

Question 33

Duty to provide goods of correct description

Answer 33

s.13 SGA 1979 - quality distinction and s.14

Question 34

Beale v Taylor [1967] 1 WLR 1193

Answer 34

Mr T placed an advertisement for a car in newspaper “Herald, convertible, white, 1961. After examining the car Mr B decided to buy it. In fact car was amalgamation of a 1961 herald, and different year and dangerous condition Held that words 1961 Herald formed part of the description which had not been complied with

Question 35

Border Harvesters Ltd v Edwards Engineering (Perth) Ltd 1985 SLT 128

Answer 35

buyers dissatisfied with the performance of a drying machine, try to use s.13 - failed, the judge pointing out that they got what they bargained for namely, a drying machine of certain type.

Question 36

Harlingdon and Leinster Enterprise Ltd v Christopher Hull Fine Art Ltd

Answer 36

sale of painting which the defendants had purchased some time earlier when it was describe as German artist Munter, expertise - different school of painting. CA held that it must be the intention of the parties that the description should be relied on. That could not be said to have occured.

Question 37

Stevenson v Rogers [1991] QB 1028

Answer 37

R commercial fisherman decided to sell his fishing boat and buy another. Buyer alleged there was a defect, R argued that the sale was not in the course of the business. Therefore s. 14 did not apply. Eng CA disagreed. (part of equipment as fisherman)

Question 38

Frost v Aylesbury Dairy [1905] 1 KB 608

Answer 38

Mr F had been supplied with the diary (milk typhoid germs) - caused death of his wife. dairy process extremely careful , germs only detected by prolonged investigation. held that there was an implied term that the milk would be reasonably fit for consumption. It was not relevant that the defect could not be detected at the time of sale.

Question 39

Wormell v RHM Agricultural (East) Ltd [1986] 1 All ER 769

Answer 39

Material that was not intended to be included with the goods can also render them unsatisfactory

Question 40

Satisfactory quality

Answer 40

s. 14 (2A) “ For purposes of this Act, goods are satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all the other relevant circumstances”
- s.14 (2B) : fitness for all the purposes for which goods of the kind in question are commonly supplied, appearance and finish, freedom from minor defects, safety, durability; withdraw when it was drawn to buyer attention or examine the sample s.14(2C)

Question 41

Jewson Ltd v Boyhan [2003] EWCA Civ 1030

Answer 41

from J purchased a number of electric central heating boilers, discovered poor energy ratings, fear of sale of flats- flats impossible to sell- abandon project. J sued for price of the boilers. CA, did not accept that this was one of the purposes for which goods of the kind in question are commonly supplied - ratings price of flats.

Question 42

Clegg v Andersson [2003] 1 All ER (Comm) 721

Answer 42

a new ocean - going yacht, keel heavier than specification, render the rigging unsafe, Held yacht did not meet standards of satisfactory quality

Question 43

Thain v Anniesland Trade Centre 1997 SLT (Sh Ct) 102

Answer 43

M paid for second hand Renault 19 6 years old, miles,, 2 weeks after - problem with automatic gear box. Seller refused to replace, 10 weeks car unusable T rejected it . sheriff principal upheld sheriff’s decision that the car was of satisfactory quality

Question 44

Griffiths v Peter Conway Ltd [1939] 1 All ER 685

Answer 44

G dermatitis as a result of wearing a tweed coat from P. She did not informed the seller about it, they were not liable

Question 45

Seller’s remedies

Answer 45

-Action for the price s.49
- Damages for non-acceptance s.50
- Other remedies
( Right of lien over goods ss.39(1)(a) and 41; Stoppage in transit ss.44-46; Right of resale - ss. 39 (1)(c) and 48

Question 46

Buyer’s remedies

Answer 46

• Right to reject s 15B SGA 1979, 39
• s. 35A SGA partial rejection; s.30
• Damages s. 15B (mostly non material breach of an express terms), s.51, s.53A
• specific implement - order court to do sth (mainly unique goods)

Question 47

Hunter v Albancode Plc 1989 GWD 39-1843

Answer 47

H bought suite of furniture - proved to be defective - purported to reject it, A did not uplifted it, she was still using it. held continuing to use the goods amounted to an act inconsistent with the seller’s ownership the right to reject lost but ! Johnston v R & J Leather (Scotland) Ltd [2019] SAC (Civ) 1

Question 48

Supply of Goods and Services Act 1982 Part 1A

Answer 48

• Contracts for the transfer of goods (s.11A) eg (barter, contracts for work and materials, goods exchanged for tokens or coupons) - remedies-s11.F (s15B SGA 1979)
• Contracts of hire s.11G “ one person(supplier) hires or agrees to hire goods to another whether or not services are also to be provided whatever the nature of the consideration other than hire purchase contracts” - common law remedies

Question 49

Supply of Goods and Services Act 1982

Answer 49

governs rules of supply services between businesses; copies many rules from SOGA

Question 50

S.5 SOGA 1979

Answer 50

future goods can be sell (s.5(1)); this contract operates as an agreement to sell (s.5(3)); goods to be obtained or manufactured

Question 51

s.6 SOGA 1979

Answer 51

The goods which have already, perished you cannot sell; but if the goods perished without knowledge of the seller ‘at the time when the contract is made, the contract is void.

Question 52

s. 7 SOGA 1979

Answer 52

In the situation where ‘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’

Question 53

s.8 SOGA

Answer 53

The price fixed by contract of sale or may be left to be fixed in a manner agreed to contract, or may be determined by the course of dealing between the parties - reasonable price - determine by question of fact on each particular case.

Question 54

s.51 SOGA

Answer 54

buyer can claim damages for non-delivery

Question 55

s.52 SOGA

Answer 55

order court to preform their part of agreement

Question 56

in re

/ɪn ˈriː,ˈreɪ/

Answer 56

[Latin, In the matter of; in the case of.] A term of frequent use in designating judicial proceedings, in which there is only one party. Thus, “Re Vivian” signifies “In the matter of Vivian,” or “in Vivian’s Case.”

Question 57

freight

/freɪt/

Answer 57

goods transported in bulk by truck, train, ship, or aircraft.

Question 58

Absolute contract

Answer 58

Is a contract of sale, one where the property is transferred without anything needing to be done first (s.2(4) SOGA)

Question 59

Conditional contract

Answer 59

is where the transfer of the property is to take place after a condition has been fulfilled or after the period of time or once the goods have been ascertained - agreement to sell (s.2(5) SOGA)

Question 60

s.23

Answer 60

voidable title (fraud) MacLeod v Kerr; When the seller of goods has a voidable title to them, but 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 and without notice of the seller’s defect of title.

Question 61

s.10

Answer 61

10. — Stipulations about time.
    (1) Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not of the essence of a contract of sale.
    (2) Whether any other stipulation as to time is or is not of the essence of the contract depends on the terms of the contract.
    (3) In a contract of sale “month” prima facie means calendar month.

Question 62

s. 61 ‘goods’

Answer 62

“goods” includes all personal chattels other than things in action and money, and in Scotland all corporeal moveables except money; and in particular “goods” includes 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;]

Question 63

appropriation

Answer 63

is the process of setting aside, selecting or otherwise identifying the goods for the buyer for his benefit

Question 64

Risk

Answer 64

is the term used to denote the exposure of the goods to the danger of loss or damage

Question 65

Bulk

Answer 65

s. 61(1) means a mass or collection of goods of the same kind which—
(a) is contained in a defined space or area; and
(b) is such that any goods in the bulk are interchangeable with any other goods therein of the same number or quantity;

Question 66

breach of contract

Answer 66

occurs where a term of the contract is broken by one of the parties to the contract

Question 67

Reject

Answer 67

to send the goods back to the seller without payment

Question 68

Repudiated

Answer 68

s.15B(1)(b); to refuse to recognise the continuing existence of the contract; so you will not preform the rest of your obligations on the basis of this contract.

Question 69

Damages

Answer 69

They put you back to the position you would have been had everything gone smoothly; it describes the amount the court may award to cover the difference in value between the value of the contract if it had taken place properly and what the actual value turned out to be

Question 70

Damages

Answer 70

They put you back to the position you would have been had everything gone smoothly; it describes the amount the court may award to cover the difference in value between the value of the contract if it had taken place properly and what the actual value turned out to be; Estimated loss to the buyer naturally and directly resulting in the ordinary course of events from the breach s.53A(1)

Question 71

Hadley v Baxendale (1854) 23 LJ Ex 179

Answer 71

main case about damages; Mill owner; mill shaft; important in old fashion mill; most mill owner - spare mill shaft H asked B to repair mill shaft, time. B did not know that he could not do any milling. draw the matter to seller attention and if not the seller would not normally be liable for any particular loss arising out of delay or fault or any other reason

Question 72

Implied terms

Answer 72

• seller right to sell the goods s.12(1)
• there is no charge or encumbrance over the goods, or if there is, it must be disclosed to the buyer s.12(2)(a)
• the buyer will enjoy quiet possession of the goods except so far as it may be disturbed by the owner or other person entitled to the benefit of any charge or encumbrance so disclosed or known. s.12(2)(b)
• person will only be liable to the extent of what he has not disclosed s.12(3),(4) and (5).

{any attempt to contract out of s.12 void under UCTA s.20(1)(a)

• stipulation about the time of payment the goods is not deemed to be “of the essence of the contract” unless the contract states differently s.10(1)
• goods sale by the description will correspond with their description s.13(1); the bulk of the goods should correspond with any sample of the goods, or with any description of the goods s.13(2); even if a buyer selects his goods, his purchase may still be a sale by description, if the buyer has relied on a description s.13(3)
• where goods are sold in the course of business there is an implied term that the goods supplied must be of ‘satisfactory quality’ s.14(2)
• where the buyer explains to the seller the purpose for which the goods are being bought, the goods must be reasonably fit for that purpose s.14(3) and s.14(5)
• s.15 sale by sample, bulk will correspond with the sample.
• if the term of the contract broken by the seller (damages, rejection and repiudation s.15B(1)(a) and 15B(1)(b)

Question 73

Rowland v Divall [1923] 2 KB 500

Answer 73

R bought a car from car dealer and he sold it to army officer, the police showed up took the car, it was stolen. Officer asked for money back. R gave it to him. R went to D to ask for his money, D refused.

Question 74

Niblett Ltd v Confectioners Materials Co [1921] 3 KB 387

Answer 74

British importer of condensed milk (American) to London; wrapping of the cans Nissly closely to Nestle name register trade mark in the UK - wrappers had to be removed

Question 75

s.3(2) incapax

Answer 75

drunkenness they must pay