Sale of Goods: the Passing of Property & Risk Primary Sources Flashcards
Sale of Goods Act 1979, s.17
*First apply this:
Property in specific/ascertained goods passes when intended to pass:
(1) What the contract intends
(2) To ascertain intention, regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case
Sale of Goods Act 1979, s.18
Where the parties fail to make clear their intentions as to when property in the goods will be transferred to the buyer, consider the rules in section 18 that ascertain the intention of the parties as to the time at which the property in the goods is to pass to the buyer (unless a different intention appears).
Sale of Goods Act 1979, s.18 Rule 1
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
Sale of Goods Act 1979, s.18 Rule 2
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.
Sale of Goods Act 1979, s.18 Rule 3
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.
Sale of Goods Act 1979, s.18 Rule 4
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.
Sale of Goods Act 1979, s.18 Rule 5(1)
(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, 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.
Sale of Goods Act 1979, s.18 Rule 5(2)
(2) 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.
Sale of Goods Act 1979, s.18 Rule 5(3)
(3) 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.
For ascertainment by exhaustion the following conditions must be transferred for property to transfer to the buyer:
- The goods must be in a deliverable state
- The sale must be of a specified quality of unascertained goods that form part of a bulk
- The bulk referred to must have been identified by the contract or alternatively by subsequent agreement between the parties
- The bulk must have been reduced to the amount of, or less than, the goods due to the buyer; and
- The buyer is the only buyer remaining who is entitled to the goods from the bulk.
Sale of Goods Act 1979, s.18 Rule 5(4)
(4) Paragraph (3) above 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.
Sale of Goods Act 1979, s.19
(1) The seller may, by contract terms or appropriation, reserve the right of disposal of the goods under certain conditions (if specified or subsequently appropriated to the contract goods). Property does not pass until condition satisfied.
(2) Where goods are shipped, and by the bill of lading the goods are deliverable to the order of the seller or his agent, the seller is prima facie to be taken to reserve the right of disposal.
(3) Buyer bound to return BoL if does not honour BoE; wrongful retention of BoL means that property does not pass to buyer
Companies Act 2006, s.859A
Charges must be registered
Companies Act 2006, s.859H
Unregistered charges are void
Sale of Goods Act 1979, s.49(1)
Unless otherwise agree, the seller may only sue the buyer for the price once property in the goods has passed
Sale of Goods Act 1979, s.20
Unless the parties have agreed otherwise, risk is borne by the owner of the goods (risk of theft/loss/damage etc. not risk of non-payment): s.20(1)
Where delivery has been delayed through the fault of either buyer or seller, the goods are at the risk of the party at fault as regards any loss which might not have occurred but for such fault: s.20(2)
Nothing in s.20 will affect the duties or liabilities or either seller or buyer who acts as a bailee or cushier of the goods of the other party s.20(3)
N.B. Delivery to a third party carried is prima facie delivery to the non-consumer buyer and risk will pass to them: s.32(1)-(3)
Sale of Goods Act 1979, s.16
In the case of a contract for the sale of unascertained goods, no property in them can be transferred to the buyer unless and until the goods are ascertained, this is the case even if the parties agree otherwise
In PQ, where goods are initially unascertained, apply this section, then section 17(1) which explains that once the goods become ascertained property will pass to the buyer when the parties to the contract intend it to pass, then (only if it the goods are ascertained AND it is not possible to determine whether parties intended ownership to pass) apply section 18 Rule 5
Cf section 20A
Sale of Goods Act 1979, s.20A
Section 16 is subject to section 20A, which is concerned with undivided shares in goods forming part of a bulk. It permits a buyer who has purchased a specified quantity of unascertained goods from an identified bulk to become co-owner of the bulk (together with other co-owners) provided that he has paid for some or all of the goods. In other words, such a buyer may obtain a share in the ownership of the bulk.
The following conditions must be met:
- The contract must be for the sale of a specified quantity of unascertained goods, this must be expressed in units of quantity and not fractions or percentages
- The goods (or some of them) must form part of ab bulk which is identified either in the contract or by subsequent agreement between the parties and
- The buyer must have paid the price for some or all of the goods which are the subject of the contract and which form part of the bulk
Provided the above conditions have been satisfied then, unless the parties agree otherwise, s.20A(2) explains that:
- Property in an undivided share in the bulk is transferred to the buyer and
- The buyer becomes an owner in common of the bulk
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’: s.20A(3)
N.B. to calculate the extent of the buyer’s co-ownership at any time, you should divide the quantity of the goods paid for by the buyer and due to him by the quantity of goods in the bulk; applying this to Re Wait, the sub-purchaser would have become 50% co-owner of the goods, with the remaining 50% belonging to Wait’s trustee in bankruptcy; reduce proportionally if aggregate of undivided shares of buyers exceeds the whole bulk at that time: s.20A(4)
Re Wait [1927] 1 Ch 606
Case: W purchased 1,000 tons of wheat that was then loaded on a ship for delivery. The following day, he sold 500 tons of the bulk to a sub-purchaser (X) who paid W for the goods. By the date the ship docked, W had been declared bankrupt and his trustee in bankruptcy claimed the entire consignment of 1,000 tons.
Decision: The Court of Appeal held that W’s trustee in bankruptcy was entitled to succeed and that X was entitled to nothing (may prove for return of price as usual debtor) even though he had already paid W for his 500 tons of wheat. As X’s 500 tons were not specific or ascertained (i.e. separated from the 1,000 tons bulk and identified as the goods to be used in the performance of the contract), property did not pass to him. There was no appropriation or identification of, or any such obligation to delivery, a particular 500 tons, as to effect an equitable assignment giving the sub-purchasers a beneficial interest therein or a lien in respect thereof.
Rule:
- Goods are ascertained when they are identified as the goods to be used in the performance of the contract
- An agreement for the sale of goods does not import any agreement to transfer property other than in accordance with the terms of the SGA, which are ‘complete and exclusive statements of the legal relationships both in law and equity’
cf SGA s.20A
Re London Wine Co (Shippers) Ltd [1986] PCC 121
Case: Customers order and pay for wine and receive certificate of title; when receiver appointed with charge of company assets, customers claim that wine in possession of company is now owned by them, i.e. property has passed from S to B
Categories of customer:
1. Customer buys entire LWC stock of a certain wine
2. Several buyers exhaust LWC stock of a certain wine
3. LWC holding quantity of certain wine to buyer’s order
Decision: Property had not massed as no ascertainment of the goods, LWC was free to supply any bottles of wine corresponding to contract description; despite references to ‘beneficial interest’ in company documentation, LWC was not holding goods on trust for customers; in third case no estoppel due to warehousemen representations, who are not party to proceedings, but may claim damages against warehousemen
Distinct from Wait & James v Midland Bank, ascertainment by exhaustion as there was no way of obtaining more wheat, so the 850 stock were the only that could be available to fulfil the contract
Rule: No property can pass in unascertained goods
Cf Re Stapylton Feltcher Ltd
Re Goldcorp Exchange [1995] 1 AC 74 (PC)
Case:
- Company sold unascertained bullion to claimants for future delivery; each customer received an invoice or certificate verifying his ownership; the company’s employees also told customers that the company would maintain a separate and sufficient stock of each type of bullion to meet their demands (they failed to do so)
- Second respondent, having initially purchased specific gold maple coins from the company, agreed to buy a further 1,000 maples on a non-allocated basis and to store all the coins with the company; company subsequently acquired substantial quantity of maple coins but not expressly for him
- Third respondent represented a category of claimants who had bought bullion from W (business later taken over by company); there was sufficient ascertainment and appropriation of bullion by W to transfer title to each of them, and thereafter they had a shared interest in the pooled bullion stored separately on their behalf
Decision:
1/2. Since the non-allocated claimants and the second respondent had contract to purchase unascertained generic goods, no property in any bullion passed to them in law or in equity immediately upon the making of the purchases by virtue of the contracts (see rule); it was not estopped from denying their title as no fixed/identified bulk in existence which could be created by deemed appropriation; since no separate and sufficient stock of bullion there was nothing which any proprietary interest could be related; that despite the company’s failure to fulfil its contractual obligations, since it was not required by any express or implied contractual term to set aside all the bullion which it had purchased for the fulfilment of unallocated sale contracts, it had not acted wrongfully in acquiring, maintaining and using its own stock of bullion; no quistclose trust as not express/implied agreement to trace money or that company fiduciary for purchase moneys or provision preventing company from spending purchase moneys
3. The bullion belonging to W claimants which was held by the company comprised bullion equal to the lowest balance thereof held by the company at any time; that in all the circumstances it would be inequitable to impose a lien in favour of those claimants on all the company’s assets at the date of receivership to enable them to recover the value of their bullion unlawful misappropriated by the company; remedies available as given by judge
Rule: A purchaser cannot acquire title until it was known to what goods that title related and collateral promises made by a seller do not constitute a declaration of trust in favour of a buyer
Quote: ‘As Lord Blackburn wrote in his treatise on The Effect of the Contract of Sale (1845) … a principal inspiration of the Sale of Goods Act 1893: “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.”’ per Lord Mustill
Re Stapylton Feltcher Ltd [1994] 1 WLR 1181
Case:
ESV and SFL were wine merchants who held stocks of wine for customers
1. When a customer purchased wine from ESV it was physically removed from the company’s trading stock and placed in the company’s reserve; it was then stored by type and master index which showed the names of customers and the number of wine allocated; the individual cases of wine were not however marked wit ha particular customer’s name
2. Some wines were also ordered for customers ‘en primeur’ directly from the producers and stored for them in bonded warehouses; individually allocated to customers and details in master index
3. By contrast, SFL made no attempt to allocate the wines either to specific customers or as between the company and its customers generally; a number of customers had ordered and paid for en primeur wine and were waiting for the French producers to dispatch their orders
Decision:
1. For goods forming part of a bulk, ascertainment for the purposes of s.16 SGA did not occur until those goods were separated from the bulk, usually immediately prior to delivery; however, the segregation of the stock from the company’s trading assets on purchase identified goods to be handed over for the performance of the contract, making the purchasers tenants in common of the entire stock in the proportion that his goods bore to the total in store for the time being; wines stored in a warehouse that had not been marked or by inventory were not ascertained
2/3. En primeur wines which had been ordered and paid for in full but had not left France at the time of the receivers’ appointment remained part of the generic stock of the vineyards, albeit subject to a contract for its sale to ESV or SFL, and no proprietary interest passed at all in law or equity
cf Re London Wine Co (Shippers) Ltd
The Elafi [1982] 1 All ER 208
Case: Buyers purchased, under 4 identical contract, a total of 6,000 metric tons of copra being shipped for the Philippines to Sweden; consignment was part of a cargo of 22,000 tons of copra, the balance of 16,000 tons being off-loaded at Hamburg and Rotterdam; after the vessel sailed from the Philippines it was discovered more copra had been loaded onto that for which BoL had been issued; no additional BoL issued for the quantity but a parcel of 500 tons of it was sold to an intermediary who resold it to the buyers; during the buyers’ consignment in Sweden 825 tons were damaged by water as a result of the shipowner’s negligence; the buyers accepted the total consignment, including the damaged copra, and then claimed from the shipowners in respect of the damage.
Decision:
- S.16 SGA is to be interpreted broadly where there were parallel contracts between the parties encompassing the whole of a consignment of unascertained goods passing from a seller to a buyer of from different sellers to the buyer the goods where ‘ascertained’, enabling property to pass to the buyer; the goods were ascertained by a process of exhaustion (without necessity of goods to be physically allocated between separate contracts or for buyer to nominate which particular goods came from which particular source) after prior deliveries to others completed at Hamburg
- On the issue of appropriation, rule 5 (1) in section 18 of the 1893 Act did not make appropriation of the goods to the contract a precondition of the passing of property in the goods but merely created a presumption to that effect which was rebuttable if ‘a different intention appears’; since the parties had a different intention that property would pass on transfer of shipping documents during the voyage in accordance with usual practice relating to cif contracts, the intermediary intended that on completion of discharge at Hamburg the property in whatever surplus copra remained on board should then pass to the buyers; it followed that the buyers had title to the copra at the time it was damaged and were entitled to sue the shipowners in tort
Rule: This case was brought into statutory footing by Rules 5(3) and 5(4) that were a buyer agrees to buy goods out of a specified bulk they may be appropriated by exhaustion.
Phillip Head & Sons Ltd v Showfronts Ltd [1970] 1 Lloyd’s Rep 140
Case: S agrees to supply carpets for premises refurbished by P; one carpet intended for room (very large so several sections provided to be stitched together); carpet delivered and assembled by S and left on premises with work to be completed; carpet stolen
Decision: S should bear the risk as the goods are not in a deliverable state; there was a condition for the seller so not unconditionally appropriated to the contract
Rule: Deliverable state where they are in such a state the buyer would under the contract be bound to take delivery of them… ‘Things remain to be done’ (per Lord Blackburn in Seath & Co v Moore); test of common sense
Quote: ‘I think one is entitled to apply everyday common sense to the matter; a householder, for example, purchasing carpeting under a contract providing that it should be delivered and laid in his house would be very surprised to be told that carpeting, which was in bales which he could hardly move deposited by his contractor in his garage, was then in a deliverable state and his property.’ per Mocatta J
Carlos Federspiel & Co SA v Charles Twig & Co Ltd [1957] 1 Lloyd’s Rep 240
Concerned with unconditional appropriation: Rule 5
Case: CF agrees to buy bicycles from CT and pays the price; goods to be loaded on ship in Liverpool; CT manufactures the goods, which are then packed into crates with name of buyer; arrangements made to have goods sent to Liverpool; CT in receivership
Decision: Goods not appropriated to the contract; this was a contract for sale of unascertained goods by description – for the sale of future goods probably still to be manufactured; there must have been a common intention that these goods will be used, in this case the seller could have changed his mind (actual or constructive delivery, see: Aldridge v Johnson)
Rule: For goods to be unconditionally appropriated to the contract, they must be irrevocably earmarked as THE goods to be used to satisfy the contracts. Once those goods have been irrevocably appropriated to the contract then those goods, and no others, become the property of the buyer.
[Then discuss Rule 5(1), that either the buyer or seller may unconditionally appropriate goods but this must be with the other’s assent, express or implied, either before or after appropriation is made.]
Applying these principles:
• Firstly, intention was that the ownership should pass on shipment as emphasis is throughout on shipment as the decisive act to be done by the seller in performance of the contract
• Secondly, it is impossible to find in this correspondence an agreement to change of ownership before the time of shipment
• Thirdly, there is no actual or constructive delivery, no suggestion of the seller becoming bailee for the buyer
• Fourthly, there is no suggestion of the goods being at the buyer’s risk at any time before shipment
• Fifthly, the last two acts to be performed by the seller, namely, sending the goods to Liverpool and having the goods shipped on board, where no performed
Therefore, prima facie inference from the contract is that property was not to pass at any time before shipment – and this is not displaced by subsequent correspondence by the parties
Quotes:
- “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 the goods, so that those goods and no others are the subject of the sale and become the property of the buyer.” per Pearson J
- ‘Firstly, the intention was that the ownership should pass on shipment because the emphasis is throughout on shipment as the decisive act to be done by the seller in performance of the contract. Secondly, it is impossible to find in … correspondence [between the parties] an agreement to a change of ownership before the time of shipment. Thirdly, there is no actual or constructive delivery; no suggestion of the seller becoming a bailee for the buyer … Fourthly, there is no suggestion of the goods being at the buyer’s risk at any time before shipment … Fifthly, the last two acts to be performed by the seller, namely, sending the goods to Liverpool and having the goods shipped on board, were not performed. Therefore … the prima facie inference which one would have drawn from the contract … is in my view not displaced by the subsequent correspondence between the parties. It follows, therefore, that there was no appropriation of these goods … ’
Sterns Vickers Ltd [1923] 1 KB 78
Case: V owned 200,000 galloons of spirit and sold to S 120,000 gallons of white spirit, being part of a larger quantity then lying in a certain tank belonging to a storage company, and handed to S a delivery warrant, whereby the company undertook to delivery that quantity of the spirit to S; subsequently to S’s acceptance of that warrant and before the quantity purchased had been severed from the bulk, the spirit in the tank became deteriorated in quality
Held: Whether the property in the undivided portion of the larger bulk had passed or not, upon the acceptance of the delivery warrant the risk (in undivided share) passed to the buyers, and the loss must be borne by them
Scrutton LJ: At the material time there had been no severance of the quantity purchased for the large bulk; would not be an insurable interest without segregation (Inglis v Stock); where power of selection remains with the seller, property has not passed (Gillet v Hill)
N.B. Distinguished from Re Wait
The Aliakmon [1986] AC 785 (HL)
Case: L&S agreed to buy a quantity of steel coins from K to be shipped to Korea, contract on C&F terms, meaning that at the relevant time the goods where at the buyer’s risk; but the property had not passed to them as, under the contract, this was not to take place until payment of the price ‘ steel damaged on vessel
Decision: Since the goods were not the buyer’s property at the time when the damage was caused, their only claim was for economic loss, in respect of which the defendants owed them no duty of care
Rule: The buyer has only rights in personam against the seller: the seller can exercise proprietary rights in relation to the goods (e.g. sue a third party in tort if the goods are wrongly detained, stolen or damage), but the buyer cannot
Howell v Coupland (1876) 1 QBD 258
Frustration at common law [discuss if section 7 fails]:
Case: S only able to supply 80 tons of potatoes from a particular field, rather than agreed 200 tons, due to disease
Decision: S not liable for damages for 120 tons not delivered; there was an implied condition that the potatoes should be in existence at the time of performance but they were destroyed by causes over which the defendants had no control
Quote: “It was not an absolute contract of delivery under all circumstances, but a contract to deliver so many potatoes, of a particular kind, grown on a specific place, if deliverable from that place” per Lord Coleridge CJ
Rule: For quasi-specific goods, frustration of the contract is a much stronger possibility if the agreed source perishes
N.B. Not a case of common law frustration as only excused for 120 tons not delivered; legal basis is unsure on this case but considered the right decision
See also: HR & S Sainsbury Ltd v Street
Barrow Lane & Ballard Ltd v Phillip Phillips & Co Ltd [1929] 1 KB 574
Concerned with s.7 perishing goods
Case: Contract for specific goods - 700 bags of ground nuts; 109 bags stolen before contract made; P sued B for the price of all 700 bags
Decision: Section 6 applied - contract goods (parcel of 700 bags) had ‘perished’ prior to contract; contract for sale of 591 bags is different that contract for sale of 700
Rule: perished does not appear to be limited to situations where there is total destruction of the goods (not entirely clear but courts are happy to hold goods as perished without total destruction)
Sale of Goods Act 1979, s.2
Defines a contract for the sale of goods:
- Seller transfers or agrees to transfer property…
- … in goods…
- …for money consideration (the price)
- May be between one part owner and another
- May be absolute or conditional
Sale of Goods Act 1979, 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
Sale of Goods Act 1979, 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
Sale of Goods Act 1979, s.12
Implied terms about title:
- That seller has a right to sell the goods (in the case of agreement to sell, that seller will have such a right at the time when the property is to pass): s.12(1) - condition (s.12(5A)
- Unless is appears in the contract or inferred from its circumstances an intention that the seller should transfer only such title as he or a third party has (s.12(3)), there is also an implied term that the goods are free and will remain free until the time when the property is to pass and that the buyer will enjoy quiet possession: s.12(2) - warranty (s.12(5A))
- All charges or encumbrances known to the seller and not known to the buyer have been disclosed: s.12(4) - warranty (s.12(5A))
Sale of Goods Act 1979, s.13
Sale by description:
- Implied term (condition: s.13(1A)) that goods will correspond with the description: s.13(1)
- If sale by sample it is not sufficient that the bulk of the goods corresponds with the sample if do not also correspond with description: s.13(2)
Sale of Goods Act 1979, s.14
Implied terms about quality or fitness:
- Except provided in ss.14-15, there are no implied terms about quality/fitness: s.14(1)
- Implied term that of satisfactory quality: s.14(2) (condition)
- SQ is standard that a reasonable person would regard as satisfactory, taking account of any description, the price and other relevant circumstances: s.14(2A)
- S.14(2B) lists appropriate aspects of quality to consider
- S.14(2C) lists exclusions, including what would have been apparent on a reasonable examination (if has examined or by sample)
- Fitness for particular purpose: s.14(3) (condition)
Sale of Goods Act 1979, s.15
Sale by sample:
- A contract of sale is a contract for sale by sample where there is an express or implied term to that effect in the contract: s.15(1)
- Implied terms that will correspond with the sample in quality, be free from defect etc.
Sale of Goods Act 1979, s.20B
To overcome the issues with s.20A requiring all co-owners to be joined in order to transfer any part of the bulk, s.20B(1) states that ‘a person who has become an owner in common of a bulk by virtue of s.20A shall be deemed to have consented to 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’ i.e. a co-owner will not need the consent of the other co-owners in order to deal with his own share of the goods
Sale of Goods Act 1979, s.61
Definitions:
- ‘Property’ refers to ownership of the goods: ‘the general property in goods, and not merely a special property’: s.61(1)
- ‘Goods’ includes ‘all personal chattels other than things in action and 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’: s.61(1)
[Undivided share means can buy e.g. half star erin horse or specific lump of grain; see also s.2(2)]
- ‘Specific goods’ are ‘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’: s.61(1)
- ‘Future goods’ are ‘goods to be manufactured or acquired by the seller after the making of the contract of sale’: s.61(1)
- ‘Goods are in a deliverable state within the meaning of this Act when they are in such a state that the buyer would under the contract be bound to take delivery of them.’: s.61(5) [see Rule 1, 2 and 5]
Sale of Goods Act 1979, s.62
- The rules in bankruptcy relating to contracts of sale apply to those contracts, notwithstanding anything in this Act
- The rules of the common law, including the law merchant, except in so far as they are inconsistent with the provisions of legislation and in particular the rules relating to the law of principal and agent and the effect of fraud, misrepresentation, duress or coercion, mistake, or other invalidating cause, apply to contracts for the sale of goods
Sale of Goods Act 1979, s.15A
Modification of remedies for breach of condition:
- The buyer has right to rejects goods by reason of a breach on the part of the seller of a term implied by ss. 13-15 unless the breach is so slight that it would be unreasonable to reject them (therefore breach of warranty not condition): s.15A(1)
- This section applies unless a contrary intention appears, or is to be implied from, the contract: s.15A(2)
Fern Computer Consultancy Ltd v Intergraph Cadworx & Analysis Solutions Inc [2014] EWHC 2908, [2015] 1 Lloyds Rep 1
Rule: Software is not goods, however when supplied on CD, it likely is (downloading from interest is merely licence to use the software of which someone else has the copyright to)
Quote: ‘ … where software is supplied on CDs there is a real prospect of success in arguing that that is the supply of goods. Where that supply is accompanied by a physical dongle and documentation then the argument is even stronger. While there is an argument that what is really being supplied is software, which is not goods, that argument is not so strong as to make the contrary argument unsustainable.’ per Mann J
GJ Dawson (Clapham) Ltd v H&G Dutfield [1936] 2 All ER 232
Rule: Part-money, part-exchange is sufficient to bring within definition of money and the ambit of the Act