Sale of goods Flashcards
(31 cards)
What is a sale of goods?
In a sale process there is necessarily an exchange (money in return for acquiring ownership of chattel).
Explain the general rule of s144 of CCLA (2017)
Deals with ascertained (specific) goods.
(1) Property passes when intended to pass.
(2) To ascertain this intention must regard: terms, conduct, and circumstances
Isaac v Unpaid Farmers
Ratio: Property passes when it is objectively intended to pass. Based on the real substance of the transaction, not legal fiction.
Facts: Freezing works (Isaac) goes into liquidation. Kill report (final stage) terms and conditions included a provision that property in the stock did not pass to the freezing works. Not consistent, property passed upon delivery.
What is a contract of sale (according to s120 CCLA)?
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 (the price).
What are the two types of contracts?
Conditional (agreements to sell) and unconditional (sales)
Explain s123(1) sales and what rights are obtained?
A contract of sale is a sale if, under the contract, the property in the goods is transferred from the seller to the buyer.
Buyer obtains contractual and property rights.
Explain s123(2) agreement to sell and what rights are obtained?
If the transfer of the property in the goods is to take place at a future time or subject to a condition or conditions to be fulfilled at a future time.
Buyer obtains only contractual rights.
Becomes a sale when the time for the transfer of the property to take place elapses or the conditions are fulfilled.
Explain when the rules of s145 of CCLA (2017) apply?
Rules apply unless a different intention appears
Rule one of s145 of CCLA (2017)
Under 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.
Immaterial (won’t be conditional) if payment or delivery is postponed.
Rule two of s145 of CCLA (2017)
If 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 the goods into a deliverable state, the property in the goods does not pass to the buyer until—
(a) the thing is done; and
(b) the buyer has notice that the thing is done.
Rule three of s145 of CCLA (2017)
If 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 in the goods does not pass to the buyer until—
(a) the act or thing is done; and
(b) the buyer has notice that the act or thing is done.
Rule four of s145 of CCLA (2017)
If 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 the buyer approves (through any act).
(b) if they retain without rejection notice (even without approval)
(b.i) if sufficient time elapses
Rule five of s145 of CCLA (2017)
The property in the goods passes to the buyer when goods of that description that are 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.
Applies if there is a contract of sale for unascertained or future goods by description.
Explain s148 of CCLA (Risk passing)
(1) Unless otherwise agreed - risk will pass with property (weather or not delivery has been made).
(2) HOWEVER if delivery is delayed by fault of buyer or seller, loss that would not have occurred but for this fault lays with party at fault.
(3) Does not affect duties of bailment.
Explain s127 of CCLA (Goods perishing)
127 Contract void if (specific) goods have perished without the seller’s knowledge, at time when contract is made (sale).
Explain s128 of CCLA (Goods perishing)
128 Contract void if goods perish before sale but after agreement to sell
(1) This section applies if there is an agreement to sell specific goods and, subsequently, the goods, without any fault on the part of the seller or the buyer, perish before the risk passes to the buyer.
(2) The agreement becomes void when the goods perish.
Oldfield Asphalts v Grovedale Coolstores
Ratio: Perishability is not limited to food cases - any case where the nature of the goods has been so altered as to cease having the qualities which led to the contract. Where goods could be repaired but it would be uneconomical/unpractical to do so, they will still be held to have perished.
How does nemo dat (s149) apply in CCLA?
Applies if goods are sold by a person who—
(a) is not the owner of the goods; and
(b) does not sell the goods under the authority or with the consent of the owner.
What can the buyer sue the seller in if they do not receive good title? and what about in a double sale?
Can sue in contract, may rely on s135 CCLA.
In a double sale the first buyer may have grounds to sue in conversion.
Explain the s153 exception (double sale) to nemo dat?
Applies if—
(a) a person (A) has sold goods to another person (B); and
(b) A continues or is in possession of the goods; and
(c) A … delivers or transfers the goods … under any sale … or other disposition to another person (C); and
(d) C receives the goods … in good faith and without notice of the previous sale to B.
(2) The delivery or transfer to C has the same effect as if the person making the delivery or transfer were expressly authorised by the owner of the goods to make the delivery or transfer.
Mitchell v Jones
Ratio: Seller in possession rule (s 153) does not apply where sale is final and delivery has been made, but the property returns to the seller.
Explain the s297 exception (unauthorised mercantile agent) to nemo dat?
(i) if a “mercantile agent” [agent with authority to sell in OCOB as agent] (A) is
(ii) in possession of the goods ….
(iii) with the consent of the owner of goods (B)
(iv) A sale made by A, in the ordinary course of business as a mercantile agent, is as valid as if A were expressly authorised by B to make the sale. AS LONG AS
v. the person who takes the goods (buyer)
(a) acts in good faith; and
(b) does not have notice of mercantile agent A’s lack of authority.
Ron McDonald v Jim Boyd
Ratio: No strict evidence of consent required for s 297 to apply (sale by seller’s agent) Bailment to a mercantile agent implies consent unless evidence to the contrary.
A&J sold car to Jim Boyd. Jim Boyd returned car to A&J for repairs. Car somehow returned to Ron McDonald. Ron McDonald sold car to Bedrock Motors. Jim Boyd claimed good title passed from A&J.
What are the three essentials for a gift? (Williams v Williams)
- Intention to gift (transfer legal title now)
- Donee’s assent (acceptance)
- Delivery (constructive or actual)
Without ALL elements property won’t pass (Williams v Williams).
