Sale of Goods

Question 1

s2(1)

Answer 1

“A contract of sale of goods is a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price.”

Question 2

s61(1)

Answer 2

“contract of sale” includes an agreement to sell as well as a sale
“buyer” means a person who buys or agrees to buy goods;
“seller” means a person who sells or agrees to sell goods;
Dichotomy between contracting to sell and selling itself, but under the act both are considered contracts of sale

Question 3

Key concepts of passing prop under SGA

Answer 3

Identification

Intention

Question 4

Lord Blackburn, The Effect of the OCntract of Sale (1845)

Answer 4

“The first of [the rules] - that the parties must be agreed as to the specific goods on which the contract is to attach before there can be a bargain and sale - is one that is founded on the very nature of things. Till the parties are agreed on the specific individual goods, the contract can be no more than a contract to supply goods answering a particular description, and since the vendor would fulfil his part of the contract by furnishing any parcel of goods answering that description, and the purchaser could not object to them if they did answer the description, it is clear there can be no intention to transfer the property in any particular lot of goods more than another, till it is ascertained which are the very goods sold”

Question 5

Mirabita v Imperial Ottoman bank (1878) Cotton LJ

Answer 5

“Under a contract for sale of chattels not specific the property does not pass to the purchaser unless there is afterwards an appropriation of the specific chattels to pass under the contract, that is, unless both parties agree as to the specific chattels in which the property is to pass, and nothing remains to be done in order to pass it.”
Prop doesnt pass if non-sepcific
But my be appropriation of specific chattel
Duty arises in S to pass prop to you
By virtue of this duty, prop passes automatically o B
Similar to Equitytreating as done what ought to be done (but here it is SGA codifying CL position)

Question 6

s16

Answer 6

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.

Question 7

s17

Answer 7

(1) Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.
(2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case.

Question 8

Specific goods are:

Answer 8

(s 61(1)) “goods identified and agreed on at the time a contract of sale is made” and “includes an undivided share, specified as a fraction or percentage, of goods identified and agreed on as aforesaid”

Question 9

UAG are:

Answer 9

(s 61(1))–unidentified at the time of contracting and not appropriated

Question 10

What does “ascertained” mean?

Answer 10

Re Wait (1927), Atkin LJ:
ascertained “probably means identified in accordance with the agreement after the time a contract of sale is made” (considered “generally accepted definition”: see e.g. Astrazeneca v Albemarle [2011]

Question 11

Re Wait (1927)
re lack of ascertainment

Answer 11

Atkin LJ
“[n]o 500 tons of wheat [from a parcel of 1000 tons shipped on the Challenger] have ever been earmarked, identified or appropriated as the wheat to be delivered … under the contact. The buyers have never received any bill of lading, warrant or delivery order or any document of title representing the goods”

Question 12

Re Goldcorp Exchange (1995)

Answer 12

Mere promise or representation by S to hold the agreed goods for B is not enough to ascertain goods
Bulk wasn’t even identified
It was the entire stock that Bs were buying the gold bullions from
In re wait there was definition of the tonnes of wheat coming from ship
Here there wasn’t even that
Just any gold the seller has and sells from his stock
So sellers had even worse chance than those in re wait

Question 13

Re Staplyton fletcher (1994)

re lack of ascertainemnt

Answer 13

Movement of bottles into separate unit for storage suffices for ascertainment and A and Bs then intend that buyers become tenants in common of total stock of that particular wine held in storage
Judge Paul Baker Q: “A customer orders 20 cases of a particular wine. They are put in a stack which never contains less than 40 cases. Over the next five years the customer takes delivery of a case at a time. It seems absurd that the 20 cases the subject of his contract for sale should thus become ascertained one by one. The sale contract was that 20 cases should be delivered into the customers’ reserve. What happened to them thereafter is regulated by the storage contract, whether the terms of that were part of a single contract for sale and storage, or were in a separate contract.
It is the segregation of the stock from the company’s trading assets, whether done physically or by giving instructions to a bonded warehouse keeper, which causes the goods to be ascertained for the purpose of section 16…if a number of cases or bottles of identical wine are held, not mingled with the trading stock, in store for a group of customers, those cases or bottles will be ascertained for the purposes of section 16 even though they are not immediately appropriated to each individual customer.”

Question 14

S20A (1)

Answer 14

(1) This section applies to a contract for the sale of a specified quantity of unascertained goods if the following conditions are met—
(a) the goods or some of them form part of a bulk which is identified either
• in the contract or
• by subsequent agreement between the parties; and
(b) the buyer has paid the price for some or all of the goods which are the subject of the contract and which form part of the bulk.

Question 15

s20A(2)

Answer 15

(2) Where this section applies, then (unless the parties agree otherwise), as soon as the conditions specified in paragraphs (a) and (b) of subsection (1) above are met or at such later time as the parties may agree—
(a) property in an undivided share in the bulk is transferred to the buyer, and
(b) the buyer becomes an owner in common of the bulk.

Question 16

S20A(3)

Answer 16

(3) Subject to subsection (4) below, for the purposes of this section,
the undivided share of a buyer in a bulk at any time shall be such share as the quantity of goods paid for and due to the buyer out of the bulk bears to the quantity of goods in the bulk at that time.

Question 17

S20A(4)

Answer 17

(4) Where the aggregate of the undivided shares of buyers in a bulk determined under subsection (3) above would at any time exceed the whole of the bulk at that time, the undivided share in the bulk of each buyer shall be reduced proportionately so that the aggregate of the undivided shares is equal to the whole bulk.

Question 18

S20A(5)

Answer 18

(5) Where a buyer has paid the price for only some of the goods due to him out of a bulk, any delivery to the buyer out of the bulk shall, for the purposes of this section, be ascribed in the first place to the goods in respect of which payment has been made.

Question 19

S20A(6)

Answer 19

(6) For the purposes of this section payment of part of the price for any goods shall be treated as payment for a corresponding part of the goods

Question 20

S20B(1)

Answer 20

(1) A person who has become an owner in common of a bulk by virtue of section 20A shall be deemed to have consented to —
(a) any delivery of goods out of the bulk to any other owner in common of the bulk, being goods which are due to him under his contract; or
(b) any dealing with or removal, delivery or disposal of goods in the bulk by any other person who is an owner in common of the bulk in so far as the goods fall within that co-owner’s undivided share in the bulk at the time of the dealing, removal, delivery or disposal.

Question 21

S20B(2)

Answer 21

(2) No cause of action shall accrue to anyone against a person by reason of that person having acted in accordance with paragraph (a) or (b) of subsection (1) in reliance on any consent deemed to have been given under that subsection.

Question 22

S18 rule 1

Answer 22

Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and
it is immaterial whether the time of payment or the time of delivery, or both, be postponed.

Question 23

Deliverable state?

Answer 23

s61(5)): goods are in such a state that the buyer would under the contract be bound to take delivery of them
e.g. Liford’s Case (1614): “Timber trees cannot be felled with a goose quill”

Question 24

Dennant v Skinner and Collom (1948)

Answer 24

Hallett J: “a contract of sale is concluded at an auction sale on the fall of the hammer… Accordingly [under s 18, rule 1], upon the fall of the hammer the property of this car passed to King unless that prima facie rule is excluded from applying because of a different intention appearing or because there was some condition in the contract which prevented the rule from applying. Passing of the property and right to possession are two different things: here Mr Dennant had a right to retain possession of goods until payment was made.
(cont’d)
If, when he was ready to deliver the goods, payment was not made, he could have sued for the price [see now s49 SGA 1979], or he could have exercised powers of re-sale, and he could have secured himself by way of lien on the goods for the price, but once he chose, for reasons, good, bad or indifferent as a result of statements fraudulent or honest, to part with the possession of the vehicle by giving delivery of it, he then lost his seller’s lien and no longer had a right to possession of the vehicle.”

Question 25

s18 rule 2

Answer 25

Where there is a contract for the sale of specific goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state,
the property does not pass until the thing is done and the buyer has notice that it has been done.

Question 26

Underwood Ltd v Burgh Castle Brick [1922] (Rowlatt J):

Answer 26

“The test is whether anything remained to be done to the engine by the sellers to put it in a deliverable state; and by that I understand a state in which the thing will be the article contracted for by the buyer; I do not mean deliverable in the sense that it is properly packed or anything of the kind (…)
The buyer’s intention was to buy an article which would be a loose chattel when the processes of detaching it and dismantling it were completed, and to convert it into a loose chattel these processes had first to be performed…it seems a safe rule to adopt that if a fixture has to be detached so as to make it a chattel again, the act of detaching has to be done before the chattel can be deliverable.”

Question 27

s18 rule 3

Answer 27

Where there is a contract for the sale of specific goods in a deliverable state but the seller is bound to weigh, measure, test, or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until the act or thing is done and the buyer has notice that it has been done.

Question 28

Nanka-Bruce v Commonwealth Trust [1926]:

Answer 28

Weighing (performed by sub-buyer) was required to determine price, but is not a condition precedent to property passing:
“To effect such suspension or impose such a condition [that property cannot pass without goods being weighed] would require a clear contract between vendor and vendee to that effect. In this case there was no contract whatsoever to carry into effect the weighing, which was simply a means to satisfy the purchaser that he had what he had bargained for and that the full price claimed per the contract was therefore due.”
Sale of cffee, agreement that S deliver to sub_B, who would weigh and determine price
Duty to weigh is on sub-B not S
Therefore not under default rule

Question 29

s18 rule 4

Answer 29

When goods are delivered to the buyer on approval or on sale or return or other similar terms, the property in the goods passes to the buyer —
(a) when he signifies his approval or acceptance to the seller or does any other act adopting the transaction;
(b) if he does not signify his approval or acceptance to the seller but retains the goods without giving notice of rejection, then,
• if a time has been fixed for the return of the goods, on the expiration of that time, and,
• if no time has been fixed, on the expiration of a reasonable time.

Question 30

Kirkham v Attenborough [1897]:

Answer 30

Silence doesn’t constitute acceptance in contract but will in SOG
K delivered on sale or return jewelry to the prospective buyer, who pledged it to A - K argued property did not pass, pledge invalid. Held, property passed.
Lopes LJ: “[the prospective buyer] has the option of becoming purchaser (…) in three different ways.
He may pay the price, or
He may retain the goods beyond reasonable time for their return, or
He may do an act inconsistent with his being other than the purchaser”
Cf Weiner v Gill [1906]: similar facts but contract showed intention property not to pass. Held, seller was able to claim from the pawnee.

Question 31

s18 rule 5(1)

Answer 31

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,
the property in the goods then passes to the buyer; and the assent may be express or implied, and may be given either before or after the appropriation is made.

Question 32

Carlos Federspiel & Co v Charles Twigg & Co [1957]

Answer 32

Pearson J “…under the contract it was to be expected that the ownership of the goods would pass to the buyers on shipment of the goods, or possibly at some later time”
“Goods to the quantity and proper description required had been manufactured. They were packed, and they were marked with these shipping marks [“CF & Co, San Jose, Costa Rica, Port Limon”]. The steps can be regarded, not as intended appropriation, but as being preparation for shipment”
“A mere setting apart or selection of the seller of the goods which he expects to use in performance of the contract is not enough. If that is all, he can change his mind and use those goods in performance of some other contract and use some other goods in performance of this contract. To constitute an appropriation of the goods to the contract, the parties must have had, or be reasonably supposed to have had, an intention to attach the contract irrevocably to those goods, so that those goods and no others are the subject of the sale and become the property of the buyer.
(…) it is by agreement of the parties that the appropriation, involving a change of ownership, is made, although in some cases the buyer’s assent to an appropriation by the seller is conferred in advance by the contract itself or otherwise.”

Question 33

s18 rule 5(2)

Answer 33

Where, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee or custodier (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of disposal,
he is to be taken to have unconditionally appropriated the goods to the contract.

Question 34

Wardar’s (Import & Export) Co Ltd v W Norwood & Sons Ltd [1968]

Answer 34

Risk of loss (caused by defrosting of frozen ox kidneys) falls on Bs as property and risk had passed when driver arrived to pick up goods on B’s behalf.
Salmon LJ: “there was a clear, unconditional appropriation when the delivery order was handed over in respect of the goods which had been deposited on the pavement for loading.”

Question 35

s18 rule 5(3)

Answer 35

Where there is a contract for the sale of a specified quantity of unascertained goods in a deliverable state forming part of a bulk which is identified either in the contract or by subsequent agreement between the parties and the bulk is reduced to (or to less than) that quantity, then, if the buyer under that contract is the only buyer to whom goods are then due out of the bulk —

(a) the remaining goods are to be taken as appropriated to that contract at the time when the bulk is so reduced; and
(b) the property in those goods then passes to that buyer.

Question 36

Wait & James v Midland Bank (1926) Roche J:

Answer 36

“The matter has been dealt with automatically by the facts, and the facts have provided the method of ascertainment (…) through the delivery of the rest of the goods to other purchasers.”

Question 37

s18 rule 5(4)

Answer 37

Paragraph (3) applies also, with the necessary modifications, where a bulk is reduced to (or to less than) the aggregate of the quantities due to a single buyer under separate contracts relating to that bulk and he is the only buyer to whom goods are then due out of that bulk.

Question 38

Karlshamns Oljefabriker v Eastport Navigation (The Elafi) [1982] 1 All ER 208:

Answer 38

Four separate contracts for the sale of copra (total weight of 6,000 tons) which was shipped in bulk with other copra – other copra offloaded and so quantity corresponding to the 4 contracts left.
Held, Mustil J: quantities could be aggregated - goods ascertained through exhaustion so property can pass to B

Question 39

SGA 1979 invovles two different questions

WHAT ARE THEY?

Answer 39

1. Heading of ss 16-20: “Transfer of property as between seller and buyer”
   Has S’s property right been transferred to B?
2. Heading of ss 21-26: “Transfer of title”
   Can A assert A’s property right (which has priority to that of S) against B?

Question 40

Battersby & Preston, at 277:

Answer 40

“Sections 16-20 are concerned with the normal case where the effect of the sale is to transfer the seller’s property to the buyer; sections 21-26 are concerned with the exceptional cases where, although the seller does not have the property in the goods or his property is defective, he can nevertheless transfer the property or, as the case may be, transfer the property free from the defect, to a person who buys in good faith.”

Question 41

Cundy v Lindsay (1878) Lord Cairns LC:

Answer 41

“With regards to the title to personal property, the settled and well known rules of the law may, I take it, be thus expressed: by the law of our country the purchaser of a chattel takes the chattel as a general rule subject to what may turn out to be certain infirmities in the title.”

Question 42

s21

Answer 42

“Subject to this Act, where goods are sold by a person
• who is not their owner, and
• 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, unless the owner of the goods is by his conduct precluded from denying the seller’s authority to sell.”

Question 43

Farquharson Bros v King [1902]

Answer 43

One argument K used: “as between innocents, he shall suffer who by his indiscretion has enabled such a third person to commit the fraud”. Was it successful?
Lord Halsbury LC at 331: “nobody [suggests] that [King] acted upon the faith of Capon being invested with… authority from FB [because King knew of no Capon, only Brown]”
Lord Lindley at 343 “Capon simply stole the plaintiff’s goods and sold them to the defendants, and the defendants’ title is not improved by the circumstance that the theft was the result of an ingenious fraud on the plaintiffs and on the defendants alike. The defendants were not in any way misled by any act of the plaintiffs on which they placed reliance; and the plaintiffs are not, therefore, precluded from denying Capon’s authority to sell.”

Question 44

Battersby & Preston

re the nature of nemo dat defences

Answer 44

“Essentially, our point is that the concepts of ‘title’ and ‘owner’ do not necessarily mean ‘indefeasible title’ or ‘indefeasible owner’; the notion of relative title is relevant here, as in other places.”

“It is possible to generalise further, and say that the majority of the exceptions to the nemo dat rule are designed to operate not by conferring a perfect title on the ultimate purchaser, but only by overriding a prior transaction or interest.”

Question 45

Defence 1: A’s consent or authority

Answer 45

s21(1) SGA 1979
Subject to this Act, where goods are sold by a person who is not their owner, and 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, unless the owner of the goods is by his conduct precluded from denying the seller’s authority to sell.
Note this must also be true even if A is not “the owner” of the goods, because O in fact has a better right to the goods than A
So A’s consent gives B a defence against A’s pre-existing property right, but not against O’s pre-existing property right
Contrast where the agent (S) holds goods on trust for A and transfers without the authority from A (A only has equitable interest): Gray v Smith [2013]

Question 46

Defence 2: Estoppel

Answer 46

s21(1) SGA 1979
Subject to this Act, where goods are sold by a person who is not their owner, and 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, unless the owner of the goods is by his conduct precluded from denying the seller’s authority to sell.
A creates an appearance that
i. S is an agent with greater authority to act for A than A granted, or that
ii. S is an owner (no actual relationship of agency between A and S)
A, the true owner, is precluded from asserting A’s right against B
B acquires real title, not its “procedural simulacrum”
i. A cannot rely on the statement he made not having been true
See Eastern Distributors v Goldring [1957], overruled but not on this point

Question 47

Eastern Distributors v Goldring [1957]

Answer 47

per Devlin J: “for …. the reason of mercantile convenience, the courts of common law allowed a good title to a buyer who bought in good faith from a man who apparently had been given by the true owner the right to dispose of the goods. Such a buyer did not merely acquire a title by estoppel, based on the implied representation by the owner that there was a right of disposition and vulnerable at the suit of anyone who was not bound by that representation.”
“We doubt whether this principle, which is sometimes referred to – for example by Wright J in Lowther v Harris [1927] 1 KB 393 – as common law estoppel, ought really to be regarded as part of the law of estoppel. At any rate it differs from what is sometimes called ‘equitable estoppel’ in this vital respect, that the effect of its application is to transfer a real title and not merely a metaphorical title by estoppel.”

Question 48

Defence 3

Answer 48

Factors Act 1889, s2
If:
i. S, with A’s consent, has physical control of A’s goods/documents of title to A’s goods; and
ii. S is a factor
(i.e. a mercantile agent having in the ordinary course of his business as such agent authority either to sell goods or to consign goods for the purpose of sale, or to buy goods, or to raise money on the security of goods: see s.1(1) 1889 Act; and)
iii. S makes a sale, pledge or other disposition of the goods to B; and
iv. S does so in the ordinary course of S’s business; and
v. B acquires B’s right in good faith, without notice that S did not in fact have authority from A to give B a right free from A’s right; then
the sale, pledge or other disposition to B is valid as if S were expressly authorised by A to make that sale, pledge or other disposition.

Question 49

Folkes v King

Answer 49

A gives S, a mercantile agent, authority to sell A’s car for £575 or more – S sells to B for £340 – B is unaware of the limit on S’s authority
Factors Act s2 applies, B gets title w defence

Question 50

Defence 4:

Answer 50

Sale of Goods Act s 24 (also FA 1889, s8)
If:
i. S, despite having sold goods to A, is or continues to be in possession (physical control) of A’s goods/documents of title to A’s goods; and
ii. S makes a sale, pledge or other disposition of the goods to B or agrees to do so; and
iii. S delivers the goods/documents of title to B; and
iv. B receives the goods/documents of title in good faith, without notice of the previous sale to A; then
the sale, pledge or other disposition to B has the same effect as if S were expressly authorised by A to make that sale, pledge or other disposition.

FA: “sale, pledge or other disposition or any agreement for sale, pledge or other disposition”

Note the capacity in which S retains possession is not crucial: Pacific Motor Auctions Pty Ltd v Motor Credits (Hire Finance) Ltd [1965] AC 867 (possession of S changed from possession as seller to that of bailee)

Question 51

Differences between s24 SGA and s2 FA 1889

Answer 51

S 2 FA 1889
A consented to S having physical control of A’s goods/documents
S = mercantile agent
S disposes in the ordinary course of S’s business
B is in good faith, without notice that S did not in fact have authority from A

S 24 SGA 1979
A bought goods/documents of title from S but left S in physical control
S need not be a mercantile agent; S – seller of goods/documents to A
S disposes to B; need not be in ordinary course of S’s business
B in good faith, without notice but does have to take possession of the goods/document of title.

Question 52

Defence 5:

Answer 52

Sale of Goods Act s 25(1) (also FA 1889 s 9)
If:
i. A sells or agrees to sell goods to S; and
ii. A allows S to take physical control of those goods/document of title before property passes to S; and
iii. S makes a sale, pledge or other disposition of the goods to B or agrees to do so; and
iv. S delivers the goods/documents of title to B; and
v. B receives the goods/documents of title in good faith, without notice of A’s right; then
the sale, pledge or other disposition to B has the same effect as if S were S were a mercantile agent in possession of the goods/documents of title with A’s consent.

FA: “sale, pledge or other disposition or any agreement for sale, pledge or other disposition”

Question 53

National Employers Mutual General Insurance Association v Jones [1990]

Answer 53

Thieves purported to sell H’s Ford Fiesta to L – a number of sales to place: L->T->A Ltd -> M Ltd -> Jones.

Lord Goff: “[s 25] must be read as providing that the delivery or transfer given by the intermediate transferor [S] shall have the same effect as if he was a mercantile agent in possession of the goods or documents of title with the consent of the owner who entrusted them to him (A).”

B not protected if the factor or agent had been entrusted with goods/documents by a thief or a purchaser from a thief (even in B in good faith)

Question 54

Defence 6:

Answer 54

Hire Purchase Act 1964, s 27
If
A and S concluded h-p agreement or a conditional sale of a motor vehicle A allows S to take possession before property vests in him
S disposes to B, who is
i. a private purchaser of the motor vehicle in good faith without notice* of the hire-purchase or conditional sale agreement, or
ii. a trade or finance purchaser who then sells to a private purchaser (C) in good faith without notice* of the hire-purchase or conditional sale agreement between A and S. Note C may be a hirer or conditional buyer that disposition shall have effect as if A’s (creditor’s) title to the vehicle has been vested in the debtor immediately before that disposition.
Then against that person the financier cannot assert his right and the private purchaser has a defence

Did not apply to Shogun Finance because there there was no HP agreement

*actual notice of e.g. registration in HPI check, Experian.

Question 55

Defence 7

Answer 55

Sale of Goods Act s 23 – Sale under voidable title
If:
i. A’s pre-existing right is a power to rescind a transfer to S and thus to regain title; and
ii. S sells to B before A has exercised that power to rescind; and
iii. B buys in good faith, without notice of the facts giving A a power to rescind; then
B acquires a good title to the goods=A cannot exercise the power to rescind against B.

Question 56

Car & Universal Finance Ltd v Caldwell [1965]

Answer 56

If A exercised power and so acquired a legal property right, B’s good faith purchase gives B no defence to A’s legal property right.
A’s car was stolen
A informs the police, in doing so exercising power to rescind
Didn’t communicate to S, but this didn’t matter
Just have to manifest your intention
So subsequent sale by S to B doesn’t give B defence against you, bc A exercised power to rescind, getting his legal property rights back

Question 57

Must A communicate election to rescind contract to S?

Answer 57

Car v Caldwell, Davies J
In most circumstances communication to S will be essential, but the question of whether eleciton to rescid has been validly exercised is one of fact and essential question is whether A did all in his power to make his eleciton to rescind unequvocally known
So may not require communication to S directly

Question 58

Contract void or voidabel?

Answer 58

Cundy v Lindsay - no contract – no title could pass
Contrast Phillips v Brooks Ltd [1919] – contract voidable
See also Lewis v Averey - contract concluded – rogue acquired a voidable title on the sale
Rogue lied about identity so Lewis would sell him a car for a cheque
Rogue sold car to Averey
This was case of fraudulent misrepresentation
Know from shogun finance that for contract to be void, identity of the person must be fundamental
Here, it was not
Lewis was prepared to deal w person in front of them
So con is voidable not void
Lewis has power to rescind
But since S has in meantime sold to B, Lewis cannot acquire good title by exercising power to rescind
B will have a good defence

Question 59

Shhogun Finance v Hudson

Answer 59

“in a consumer credit transaction, the identity of the customer is fundamental to the whole transaction because it is essential to the checking of the credit rating of the applicant borrower. All this precedes the making of any contract at all.”
There was no consensus ad idem between the finance company and the rogue…the hire-purchase “agreement” to which Mr Hudson pins his argument was one purportedly made by the acceptance by the finance company, by signing the creditor’s box in the form, of a written offer by Mr Durlabh Patel to enter into the hire-purchase agreement. This faces Mr Hudson with a dilemma: either the contract created by that acceptance was a contract with Mr Durlabh Patel or there was no consensus ad idem, the rogue having no honest belief or contractual intent whatsoever and the finance company believing that it was accepting an offer by Mr Durlabh Patel.
Minority, Lord Nicholls “The legal principle applicable in these cases cannot sensibly differ according to whether the transaction is negotiated face-to-face, or by letter, or by fax, or by e-mail, or over the telephone or by video link or video telephone…if the law of contract is to be coherent and rescued from its present unsatisfactory and unprincipled state, the House has to make a choice: either to uphold the approach adopted in Cundy v Lindsay and overrule the decisions in Phillips v Brooks Ltd and Lewis v Averay, or to prefer these later decisions to Cundy v Lindsay.

Question 60

s20(1)

Answer 60

General rule of transfer of risk
Unless otherwise agreed, the goods remain at the seller’s risk until the property in them is transferred to the buyer, but when the property in them is transferred to the buyer, the goods are at the buyer’s risk whether delivery has been made or not.

Question 61

Healy v Howlett

Answer 61

“The whole question is whether the twenty boxes of mackerel became the property of the buyer, or, in other words, whether they were at the buyer’s risk when they were put on rail at Valentia. That depends on whether there was an appropriation of the twenty boxes at that time to [Howlett]”
It may be that goods are at B’s risk even if property has not passed (eg The Aliakmon)
It may be that the goods are at S’s risk even if property has passed to the buyer: eg Cleasby B in Head v Tattersall,:

Question 62

Cleasby B in Head v Tattersall

Answer 62

“as a time for returning the horse was expressly fixed by the contract, an accident occurring within the time from a cause beyond [B’s] control ought not to deprive him of his right, provided he can return the horse in some shape or other…As a general rule, damage from the depreciation of a chattel ought to fall on the person who is the owner of it. Now here the effect of the contract was to vest the property in [B] subject to a right of rescission in a particular event when it would revest in [S]. I think in such a case the person who is eventually entitled to the property in the chattel ought to bear any loss arising from any depreciation in its value caused by an accident for which nobody is in fault”

Question 63

Risk and perishing goods

Answer 63

s 6: 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: 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 64

Couturier v Hastie (1856):

Answer 64

S contracts to sell specific cargo of corn, on way to London, to B – but unknown to either party, the cargo had already been unloaded and sold in Tunis – S sues B for the price - Lord Cranworth LC: “The contract plainly imports that there was something which was to be sold at the time of the contract, and something to be purchased. No such thing existing…there must be judgment given by your Lordships for [B].”
Compare: McRae v Commonwealth Disposals Commission (1951), High Court of Australia