Transfer of Property/Risk + ROT Flashcards
Section 17(1) SGA 1979
Property passes when the parties intend it to
Section 18 (Rule 1) SGA 1979
Where contract is for specific goods in a deliverable state, property passes when contract is made (time of payment or delivery is irrelevant)
Section 18 (Rule 2) SGA 1979
Where contract is for specific goods + seller is bound to do something to put them into a deliverable state, property passes when the thing has been done + buyer has notice
Underwood Ltd v Burgh Castle Brick
Rule 2
Goods had to be put in a deliverable state
C did not put the goods in a deliverable state therefore property did not pass to buyer
Section 18 (Rule 3) SGA 1979
Where contract is for specific goods in a deliverable state + seller is bound to weigh, measure or do something to ascertain the price, property passes when the thing is done + buyer has notice
Nanka-Bruce v Commonwealth
Rule 3
Buyer weighed the goods to ascertain price, property did not pass to buyer
Only seller may satisfy condition or Rule 3 does not apply
Section 18 (Rule 4) SGA 1979
Where goods are delivered on a sale or return basis, property passes when:
- buyer signifies approval or does any act adopting the transaction
- buyer retains the goods without giving notice of rejection for a reasonable time
Kirkham v Attenborough
Rule 4
Customer pledged the jewellery to pawnbroker which amounted to adopting the transaction therefore property passes to customer
Poole v Smith’s Car Sales
Rule 4
Property passed to buyer after reasonable time had passed
When do goods become ascertained?
When they are identified as the goods to be used in performance of the contract - Re Wait
Can property in unascertained goods be transferred to buyer?
No, goods must become ascertained for property to pass - s 16 SGA, Re Blyth Shipbuilding
Section 18 (Rule 5(1)) SGA 1979
Property passes to buyer when goods are unconditionally appropriated to the contract + are in a deliverable state
How are goods unconditionally appropriated to a contract?
When the parties intend to attach the contract irrevocably to those goods + no other goods
Re London Wine - impossible to determine who owned which specific wines, property did not pass to buyer
Re Stapylton - separation of wine from general trading stock was sufficient in showing it had been appropriated to the contract
Section 18 (Rule 5(2)) SGA 1979
Where seller delivers goods to buyer/carrier + does not reserve the right to disposal, seller has unconditionally appropriated the goods + property shall pass to buyer
Section 18 (Rule 5(3) + (4)) SGA 1979
Goods an be unconditionally appropriated by exhaustion
Karlshamns - cargo ship had made its deliveries in various places + were left with only enough to satisfy buyer’s contracts, property had passed to buyer
What are the conditions for Section 18 (Rule 5(3) + (4)) SGA 1979?
- Goods must be in a deliverable state
- Sale must be of a specified quantity of unascertained goods forming part of the bulk
- Bulk must be identified
- Bulk must have been reduced to (or less than) amount due to buyer
- Buyer must be the only one left
Section 20A SGA 1979
Exception to s 16 SGA, buyer of a specified quantity of unascertained goods from an identified bulk can become co-owner of that bulk
Section 20A(1) SGA 1979
Sets out conditions for s 20A to apply:
- must be specified quantity of unascertained goods
- goods must form part of an identified bulk
- buyer must have paid some or all of the price
When does risk pass for B2B contract?
Risk passes with property whether delivery has been made or not - s 20(1) SGA
Possession is irrelevant - Pignataro: risk passed with property, property was stolen but risk + property had passed to buyer
Section 20(2) SGA 1979
Where delivery is delayed, risk passes to the party at fault
Demby Hamilton - apple juice spoiled due to failure to give delivery instructions, risk passed to buyer
When does risk pass for B2C contracts?
Risk is on trader until goods come into consumer’s (or someone identified by consumer) possession - s 29 CRA
Section 29(3) CRA - if goods are delivered to carrier chosen by consumer, risk passes to consumer
Section 19(1) SGA 1979
Where seller reserves the right of disposal until certain conditions are fulfilled, property does not pass to buyer until seller’s conditions are fulfilled
Can a seller have property in the finished goods of mixed goods?
Only if parties have agreed to that
Re Peachdart - goods had been mixed, leather had changed identity into handbags so seller did not have ownership in finished goods
Hendy Lennox
If goods that have been mixed can be identified + dismantled into their original identity, buyer can reclaim original goods
Engine remained engine throughout manufacturing process + could easily be identified so engine could be reclaimed by seller
