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Atiyah: Sale of Goods Note: Cases linked in the text on the right are either to BAILII reports (where available) or the Wikipedia reference. Contract Text Contents 5. Title and Passing of Property 8. Performance of the Contract 11. Articles on Sale of Goods and Contract issues 12. Drafting Sale Contracts and specimen sale contract
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Recent Case Law Cases on Sale of Goods and Contract 2009 - 2000
Statutes Sale and Supply of Goods Act 1994The Sale and Supply of Goods to Consumers Regulations 2002 Unfair Contract terms Act 1977 Part III Hire Purchase Act 1964: ss.27 - 29. Companion Volume
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The Contract of Sale 1.1 The Contract of Sale Reference to section numbers is to the Sale of Goods Act 1979 unless otherwise indicated. 1.1.1 Construction of the Sale of Goods Act 1893 Bank of England v Vagliano Bros. [1891] AC 107 The original Sale of Goods Act 1893 was a codification of the law relating to the sale of goods. The common law on certain matters of contract not detailed in the Act continues to apply. In so far as the Act sets out rules the Act must be followed and the earlier law displaced. A word of warning. The Act is not an exhaustive code. Where the Act is silent or ambiguous recourse may be had to pre-1894 caselaw. 1.1.2 Saving of common law rules The Sale of Goods Act 1979 codifies only those rules directly applicable to sale. The background of contract and the law of property have to be kept in mind. s.62(1). 1.1.3 The Sale of Goods Act 1979 and Equity While orthodox analyses set in the context of the Sale of Goods Act 19893 would indicate that rules of equity do not apply it would be difficult to sustain this view today. There has been a tacit assumption that equitable rules apply. F.E Rose Ltd v W.H. Pim & Co Ltd [1953] 2 KB 450 Equitable jurisdiction was unchallenged. Practice point: There is nothing to prevent the parties, in the design of the contract, from incorporating equitable rules by express provision. 1.1.4 Freedom of Contract Subject to statutory restriction contained in the Unfair Contract Terms Act 1977 which restricts the ability of the parties to contract out of the Implied Terms (ss.12 - 15), the parties are free to determine the terms of their contract. Practice point: Particular attention has to be paid to the wording of the sections in the Sale of Goods Act. "Unless otherwise agreed" arises on numerous occasions. As will be seen when we consider the drafting of Sale contracts later the design and structure of modern contracts takes into account the rather outmoded nature of certain Sale of Goods Act sections which are not convenient in the modern commercial context. 1.1.5 Contracting out The following provisions of the Sale of Goods Act present difficulty when it comes to contracting out: - UCTA 1977 restricts contracting out of the implied terms: ss.12 - 15 not applicable to international supply contracts nor to contracts where the choice of law clause specifies English law as governing the contract: ss.26 - 27 UCTA 1977. - s.16 specifies that no property can pass unless and until the goods are ascertained. - s.5(3) purported present sale of future goods can only operate as agreements to sell - Parties to a contract cannot vary the rights of third persons under the Nemo Dat exceptions - The perishing of goods provisions (ss.6 - 7) can probably be negatived by express agreement. The party may have taken 'a chance' - a spes. - The auction sales provision (s.57) can probably not be negatived entirely. 1.2 The Sale and Agreement to sell Section 2 Sale of Goods Act 1979 (1) A contract of sale of goods is a contract by which the seller transfers or agrees to transfer the property in the goods to the buyer for a money consideration called the price. (2) There may be a contract of sale between one part owner and another. (3) A contract of sale may be absolute or conditional. (4) Where under a contract of sale the property in the goods is to be transferred from seller to buyer the contract is called a sale. (5) Where under a contract of sale the transfer of property in the goods is to take place at a future time or subject to some condition later to be fulfilled the contract is called an agreement to sell. (6) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.
(a) Contract of sale distinguished from other contracts Gift Exchange Barter Trading stamps Agency Option to buy Conditional sale - Sale of Goods Act Section 25(2) Hire purchase Pledge Bailment Work and materials
(b) Meaning of 'goods' The definition of goods: 'all personal chattels other than things in action and money'. Ships and Aircraft: prima facie goods but governed by other provisions. Application of Sale of Goods Act simpliciter not possible. Practice point: No rights in dead bodies. Prima facie not 'goods' Blood products, human organs and tissue is the subject of development. Blood products can arguably be considered as falling within the definition of 'goods' Belle Bonfils Memorial Blood Bank v Hansen 579 P 2d 1158 (1978) - blood is goods (c) Classification of goods Specific goods Unascertained goods Existing goods Future goods Assignment of future property in equity Holroyd v Marshall (1862) 10 HL Cas. 191 Re Wait [1927] 1 Ch 606 The spes Part interests in goods Non-existent goods The bargain may not, however, be a nullity: Perishing of goods - ss.6-7 Barrow Lane & Ballard Ltd v Phillip Phillips & Co Ltd [1929] 1 KB 574 Coutourier v Hastie (1856) 5 HL Cas 673 McRae v Commonwealth Disposals Commission (1950) 84 CLR 377
1.3 The Price (a) The price must be in money Re Westminster Property Group plc [1984] 1 WLR 117 There may be a part exchange There may be a complete set off with two contracts of sale being created The price may be payable in any currency. (b) Fixing the price s.8 Sale of Goods Act 1979 The price may be agreed If no price fixed a reasonable price will have to be paid. Agreement to sell at a valuation s.9 Sale of Goods Act 1979
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