Transfer of Property/Risk + ROT

Question 1

Section 17(1) SGA 1979

Answer 1

Property passes when the parties intend it to

Question 2

Section 18 (Rule 1) SGA 1979

Answer 2

Where contract is for specific goods in a deliverable state, property passes when contract is made (time of payment or delivery is irrelevant)

Question 3

Section 18 (Rule 2) SGA 1979

Answer 3

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

Question 4

Underwood Ltd v Burgh Castle Brick

Answer 4

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

Question 5

Section 18 (Rule 3) SGA 1979

Answer 5

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

Question 6

Nanka-Bruce v Commonwealth

Answer 6

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

Question 7

Section 18 (Rule 4) SGA 1979

Answer 7

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

Question 8

Kirkham v Attenborough

Answer 8

Rule 4
Customer pledged the jewellery to pawnbroker which amounted to adopting the transaction therefore property passes to customer

Question 9

Poole v Smith’s Car Sales

Answer 9

Rule 4
Property passed to buyer after reasonable time had passed

Question 10

When do goods become ascertained?

Answer 10

When they are identified as the goods to be used in performance of the contract - Re Wait

Question 11

Can property in unascertained goods be transferred to buyer?

Answer 11

No, goods must become ascertained for property to pass - s 16 SGA, Re Blyth Shipbuilding

Question 12

Section 18 (Rule 5(1)) SGA 1979

Answer 12

Property passes to buyer when goods are unconditionally appropriated to the contract + are in a deliverable state

Question 13

How are goods unconditionally appropriated to a contract?

Answer 13

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

Question 14

Section 18 (Rule 5(2)) SGA 1979

Answer 14

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

Question 15

Section 18 (Rule 5(3) + (4)) SGA 1979

Answer 15

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

Question 16

What are the conditions for Section 18 (Rule 5(3) + (4)) SGA 1979?

Answer 16

• 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

Question 17

Section 20A SGA 1979

Answer 17

Exception to s 16 SGA, buyer of a specified quantity of unascertained goods from an identified bulk can become co-owner of that bulk

Question 18

Section 20A(1) SGA 1979

Answer 18

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

Question 19

When does risk pass for B2B contract?

Answer 19

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

Question 20

Section 20(2) SGA 1979

Answer 20

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

Question 21

When does risk pass for B2C contracts?

Answer 21

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

Question 22

Section 19(1) SGA 1979

Answer 22

Where seller reserves the right of disposal until certain conditions are fulfilled, property does not pass to buyer until seller’s conditions are fulfilled

Question 23

Can a seller have property in the finished goods of mixed goods?

Answer 23

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

Question 24

Hendy Lennox

Answer 24

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