Week 9: Chapters 21, 27

Question 1

Definition of sale of goods under the act:

Answer 1

A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer goods to the buyer for money

Question 2

Sale vs Agreement to sell

Answer 2

Sale - immediate

Agreement to sell - in the future, goods may not exist/be available

Question 3

Sale of Goods Act Criteria: For Goods

Answer 3

The agreement must be for goods distinct from land or anything attached to land

Item must be tangible - not for financial instruments

Not for wages or labour

Question 4

Sale of Goods Act Criteria: Goods for money

Answer 4

To be under the act the goods must be transferred for monetary consideration

Excludes barter or consignment transactions

Question 5

Sale of Goods Act Criteria: In Writing

Answer 5

No particular form is required

Contracts over $50 must be evidenced by a written memorandum, signed by the party to be charged

Question 6

Sale of Goods Act Criteria: In writing - how to avoid putting it in writing

Answer 6

Parties can avoid putting the agreement in writing if at least one of the following occur:

i. Buyer accepts part of the goods sold

ii. Buyer makes part payment of contract price

iii. Buyer gives something in earnest (deposit) to bind the contract

Question 7

Sale of Goods Act Criteria: Transfer of title

Answer 7

There must be transfer of legal ownership/title of property to the buyer

Ownership usually goes with possession, but not always

Parties can give up possession and retain ownership

Title may pass at a different time than the transfer of possession

If title has not passed, risk of loss born by the seller

Question 8

Transfer of Title Rule #1 (Unconditional contract for sale of goods already in deliverable state)

Answer 8

If there is an unconditional contract for the sale of specific goods in a deliverable state then the title passes when the contract is made, and time of delivery and payment are irrelevant

Question 9

Transfer of Title Rule #2 (need to put specific goods in deliverable state)

Answer 9

Where the sale of specific goods requires something to be done to put in a deliverable state, then the title doesn’t pass until the thing is done and the buyer is notified

Question 10

Transfer of Title Rule #3 (requirement to measure specific goods for sale)

Answer 10

In a contract for the sale of specific goods that requires the seller to do something (measure, weigh, etc.) to determine the price then the title does not pass until the thing is done and the buyer is notified

Seller must be obligated to do the thing required

Question 11

Transfer of Title Rule #4 (goods delivered on approval)

Answer 11

When goods are delivered to the buyer on approval (option to return) the title transfer to the buyer when the buyer signifies acceptance or retains the goods without notice of rejection at the expiry of the specified time for approval.

Question 12

Transfer of Title Rule #5 (contract for unascertained goods)

Answer 12

The title transfers when the goods in a deliverable state are unconditionally appropriated to the contract with the buyer.

In pursuance of contract, seller delivers goods to buyer or carrier for the purpose of transmission to buyer, and does not reserve right of disposal

Question 13

Contractual Duties of the Seller under SGA

Answer 13

The SGA allows parties to include and terms and conditions they wish and the seller must adhere to them

Question 14

Condition + what happens when breached:

Answer 14

A term of contract that is essential/to the root of it

breach of a condition the other party to treat breach as discharge, meaning the innocent party is released from further performance

Question 15

Warranty + what happens when breached

Answer 15

A minor term in the contract

breach only entitles wronged party to sue for damages

The SGA determines whether terms are conditions or warranties

Question 16

Condition of Title under the SGA

Answer 16

An implied condition in the sale of goods that the seller has the right to sell the goods

Seller must have the right to sell at the time the title needs to be transferred

Question 17

Warranty of Title under the SGA

Answer 17

There’s a warranty that goods are free from encumbrance, unless seller has informed buyer of charge or encumbrance

Warranty for buyer to take “quiet possession”
- means no future claims to title by others

Question 18

Condition for when goods are sold by description

Answer 18

When goods are sold by description, there is a condition that they actually correspond to the description, if not, the buyer can reject

Question 19

Condition for when goods are sold by sample

Answer 19

Where goods are sold by sample alone there is a condition that the bulk of the goods will match the sample quality

Also a condition that they are free from any defect that would render them unmerchantable
- Applies unless the defect is such that inspection would reveal it and the buyer fails to notice

Question 20

James Drummond & Sons v E.H. Van Ingen:

Answer 20

The buyer conducted a reasonable inspection but couldn’t detect a defect

The goods had a hidden defect that rendered them unmerchantable

Inspections are to be conducted with the care and due diligence of what someone with ordinary merchant knowledge would have

Question 21

Caveat Emptor Translation

Answer 21

Let the buyer beware

Question 22

Caveat Emptor and Fitness for Use Intended

Answer 22

As to the fitness of a good for a certain purpose, the buyer is subject to caveat emptor

Law assumes that upon examination the buyer is able to determine if the good is suitable for their needs

Question 23

Caveat Emptor condition for when seller supplies a specific kind of goods + the exemption

Answer 23

When the seller supplies particular kind of goods and the buyer relies on the skill and knowledge of seller there is an implied condition that the goods are reasonably fit for purpose intended

This doesn’t apply if the buyer asked for specific goods by name, since they didn’t rely on the seller to make the purchase

Question 24

Condition surrounding delivery of goods

Answer 24

The seller has the duty to deliver the goods in the right quantity, at the right place and time as specified in the contract

If seller fails to deliver on time the buyer can reject the goods since it’s a condition

Question 25

Conditions and proceedings regarding the quantity of goods

Answer 25

The quantity of goods delivered is a condition

If too little is delivered the buyer can reject. If they accept, they pay at the contract rate

If too much is delivered the buyer is not obliged to accept the excess or can reject entire amount
- if the buyer accepts entire quantity, must pay at contract rate

Question 26

Limitation of liability (by the seller)

Answer 26

In contracts between businesses the seller may include an express term that declines the implied terms and conditions of the SGA

If they do, seller’s obligations are strictly enforced and interpreted

Question 27

Consumer Protection Statuses for Door-Door Sales

Answer 27

There is a cooling off period for contracts made at a place other than the seller’s place of business

The buyer has a specified time to give notice of their intention to reject

This is to give consumers an out if door-door sellers are pressuring them

Question 28

Contractual duties of the buyer under the SGA

Answer 28

Examine goods, take delivery and pay

Payment of price and delivery of goods are generally concurrent obligations, unless contract provides otherwise

Payment is only a warranty, not a condition unless expressly stated
- meaning if breached the seller still has to deliver goods but then can sue later

Question 29

Buyers Remedies: Recission

Answer 29

If the seller’s breach is fundamental to the contract then the buyer has the right to repudiate the contract

They can refuse to pay, or recover what they have paid

Can also refuse the goods, go buy them elsewhere, and sue the seller for the price

Question 30

Buyers Remedies: Damages

Answer 30

For when the seller’s breach is only of a warranty

The buyer cannot repudiate the contract, only sue for damages

If the property has already been transferred but the seller breached a condition, the buyer can pursue the lesser remedy of damages

Question 31

Buyers Remedies: Specific Performance

Answer 31

For if the goods are very unique and cannot be obtained elsewhere

Monetary damages are inadequate in this scenario

Discretionary remedy

Question 32

Sellers Remedies: Lien

Answer 32

Sellers can’t normally repudiate a contract due to non-payment since it’s a warranty

Seller isn’t obliged to deliver goods until they get paid

The seller can claim a lien (hold) on the goods until they have received payment or confirmed credit

If they have already delivered the goods to the buyer they lose their lien rights

Question 33

Sellers Remedies: Action for the Price

Answer 33

When the seller has delivered the goods and the title has passed, but the buyer hasn’t paid, or they have unreasonably refused the goods

The seller can sue for the price

Question 34

Sellers Remedies: Damages

Answer 34

Seller can sue for damages relating to the acceptance of the goods

Seller can also resell the goods and then sue the buyer for the loss incurred

Goals is to return seller to original position

Question 35

Seller’s Remedies: Retention of Deposit

Answer 35

If the buyer refuses to perform the contract the seller can retain any deposits paid as damages

It must be in the contract that the deposit can be retained as liquidated damages

Deposit money retained by seller must reasonably cover the damages from the breach

Question 36

Seller’s Remedies: Stoppage in Transitu

Answer 36

The right of the seller to stop the delivery of goods by the carrier if the buyer is insolvent

If the buyer isn’t actually insolvent and the seller stops delivery the buyer can take action for damages

Question 37

Seller’s Remedies: Resale

Answer 37

If the seller retains the goods since they didn’t receive payment from the buyer, and the buyer never tenders payment then the seller can resell the goods to a second purchaser

Question 38

Four Basic Kinds of Consumer Protection Legislation

Answer 38

1. Product Safety
2. Product quality and performance
3. Credit granting and reporting
4. Business practices generally

Question 39

5 Approaches to Consumer Protection Legislation

Answer 39

1. disclosure of information to the consumer
2. expanded legal rights
3. minimum standards for safety, quality, performance
4. registration and licensing of sellers etc.
5. prohibition of certain practices

Question 40

Consumer Packaging and Labelling Act

Answer 40

Prohibits misleading advertising claims,

penalties for violations, civil cause of action

At Commons Law Consumers have the right to damages

Question 41

Purpose of new Legislation for Product Quality and Performance Protection

Answer 41

Prohibits sellers from exempting sales of consumer goods from the implied terms and conditions of the SGA

New legislation is trying to balance the rights of all parties

Question 42

Motor Vehicle Arbitration Plan

Answer 42

If a new car is defective, the consumer must first give the manufacturer an opportunity to fix it

If their repairs are unsuccessful the issue is taken before an arbitrator who has the power to:
- Order repair
- Rescind contract;
- Dismiss the complaint;
- For new vehicles during warranty period, and for a
fixed time after: buy-back If owned more than 1 yr,
price discounted for use

Question 43

Saskatchewan Consumer Protection Act

Answer 43

provides penalties where product doesn’t meet advertising claims
- applies to all goods
- includes protection for those who acquire goods by gift
- action for breach of statutory warranty, statute precludes
privity of contract defence
- makes advertising claims express warranties, makes
breaches actionable for consumer
- provides for remedies, exemplary damages where
manufacturer willfully breaches

Question 44

Business Practices Act, R.S.O 1990

Answer 44

• General statute regarding business practices
• Prohibits false advertising including deceptions regarding performance, quality, that are designed to induce consumers to contract

Question 45

Consumer Protection from Door-Door Sellers

Answer 45

The dynamic of door-door sales makes the consumer vulnerable because they may feel under pressure to buy to get rid of the salesperson

There is a mandatory cooling-off period in which buyer can repudiate contract without penalty

If contract is over a certain value it needs to be in writing
- identify goods and itemized price
- full details of credit arrangements

Question 46

Motor Vehicle Repair Act - to reduce unfair business practices

Answer 46

Requires repair shops to provide written estimates to customer

Repair charge can’t exceed the estimate by 10%

Work must be guaranteed to last a certain mileage

Question 47

List of activities deemed to be unfair in the Consumer Protection Act

Answer 47

• false, misleading or deceptive representations
• unconscionable transactions that take advantage of vulnerable consumers.
• Misleading statements of opinion
• Use of undue pressure to induce a consumer to enter into a transaction
  -Take advantage of infirmity, language problems; or ignorance
• Price grossly exceeds market value
• Consumer has no prospect of paying price
• Includes one-sided, inequitable contracts as well

Question 48

Consequences for violating the Consumer Protection Act

Answer 48

Provides fines to business in violation + permit rescission or damages where rescission unavailable

Also punitive damages

Director has investigative powers, can issue cease and desist orders, cancel registration or licensing

Question 49

Restrictive Trade Practices + the Competition Act

Answer 49

Business practices that restrict trade to the detriment of the consumer or competitors

Competition Act prohibits false and misleading advertising, bait and switch advertising, monopolies and price fixing

Question 50

Collection Agencies

Answer 50

• Hired to collect debts
• By license or registration
• Not permitted to harass, cannot use forms that resemble “legal” forms
• Not permitted to collect debt from other family members, or harass persons other than the debtor to pressure debtor into payment
• Can only contact debtor’s employer to confirm employment