SALE OF GOODS
Prepared for:
LAW 251
Prepared by:
THE LAW OF SALE OF GOODS
 Introduction
 The contract of sale of goods is governed by
the Sale of Goods Act 1957 (hereinafter refers as
SOGA)
 SOGA operates against the background of
contract law that are not inconsistent with its
express provisions.
 Sale of Goods Act 1957 (SOGA)
- It applies to contract for the sale of all types of
goods, including second-hand goods.
 Section 3 SOGA
The Contracts Act 1965, in so far as
they are not inconsistent with the
express provisions of this Act shall
continue to apply to contracts of the
sale of goods
Contract of Sale
Sale and Agreement to Sell
 S.4 (1) SOGA:
 ‘A contract of sale of goods’
“a contract whereby the seller transfer the
property in goods to the
buyer for a price”...
 Seller------Buyer---------Price
 E.g: A agrees to transfer the ownership of
his car to B. B then pay RM10000 for a
price of the car.
Continue…..
 three (3) main elements in a contract of sale
of goods:
There must be goods which are to
be transferred to the buyer
The seller transfers or agrees to
transfer the property in goods to the
buyer
There is a price for the said transfer
Continue….
 Objectives of the contract of sale:
The transfer of ownership of the goods
to the buyer for money consideration
Sale occurs when the ownership or
property in goods passes to the buyer
 Parties to the contract are known as :
 buyer ; and
 seller
Continue….
 Section 4(3)
An agreement to sell is a contract under which the
transfer of the property in the goods is to take place at
a future time or subject to some condition
thereafter to be fulfilled
• Section 4(4)
An agreement to sell becomes a sale when the time
elapses or the conditions are fulfilled subject to
which the property in the goods to be transferred
Definition of goods
1.‘Goods’ :
Section 2 of SOGA
every kind of ‘movable property’ other
than money
include stock and shares,
Continue…
 Growing crops, grass and things attached to or
forming part of the land which are agreed to be
severed before the sale or under the contract
of sale
Continue….
 The followings are EXCLUDED from being goods
under a sale of goods of contract:
 Land (houses & building on the land are part of the
land)
 Actionable claims (right to sue for debt/other reasons)
 Money ( current currency)
Continue….
Morgan v Russel
The vendor was the lessee of certain land which was
composed of slag and cinders.
He then sold the purchasers all the slag on his premises
so much as the purchasers should desire to remove.
It was held by the Court :
that the sale of cinders and slag was not a sale of
goods but a sale of “an interest in the land”. The
vendor did not sell any definite quantity of mineral,
which could be said to be a separate thing.
Mills v Stockman
 There was a contract to sell a heap of slate which
have been left on the ground for many years by a
quarrying business.
 The contract gave the buyer a right to enter the
land and to remove the heap of slate.
 It was held that the contract was not for the sale
of goods.
 The slate had been left in such circumstances that
they had become part of the land and further,
there was no term in the contract that they be
severed under the contract of sale.
Types/Categories of Goods
Section 6(1)
the goods which form the subject of a
contract of sale may be either existing
goods, owned or possessed by the seller, or
future goods
 There are 5 categories of goods:
Existing goods (goods already owned by the
seller)
Continue….
 Specific goods
Section 2 sale of goods Act
Goods identified and agreed upon at that time a
contract of sale is made
(example: Khair sells his motorcycle bearing
registration number BCD 4994)
Continue….
Unascertained:
The goods exists but it is not ascertained yet at
that time of the contract is made.
 Goods to be manufactured @grown by the seller
Generic goods e.g. 1000 tones of wheat
An unidentified part of a specific whole
Example: 100 kg of wheat out of 200 kg of wheat
Continue….
 Ascertained goods
Unascertained goods which have been identified
and appropriated to the contract after the contract
has been made
Example:
Upon selection of the 5 dress from the 10 boxes of
dresses.
Continue…
 Future goods
Section 2
Goods to be manufactured or produced or
acquired by the seller after the making of the
contract of sale
Example:
Agreement to buy Mitsubishi Evolution yet to be
manufactured by the seller.
Please Identify
 Eon is now discussing the possibility of
manufacturing a new car called Proton
Wardina. Izham enters into an agreement
with EON to purchase Proton Wardina.
Proton Wardina belongs to the category of
______________ goods?
future goods
 Halim has signed an agreement with Ali to
sell his one and only car; a red Proton Wira.
Halim’s red Proton Wira belongs to the
category of ________ goods?
EXISTING GOODS
 Siti wanted to buy 2 kg sugar from Pak Mat.
In the shop, she saw a sack full of sugar
which weighed about 5kg. Therefore, Siti’s
2kg sugar belonged to the category of
____________ goods?
UNASCERTAINED
GOODS
Ownership/property in goods
 In a contract of sale of goods, the seller transfers
or agrees to transfer property in goods.
Property in goods
Ownership
(Having legal title/rights
over the goods)
Continue….
A person may be an owner of the goods although
not in the possession of the goods
BUT
A possessor of the goods may not be the owner
event though he has physical control over the
goods
Continue….
ONLY THE OWNER WHO HAS THE
PROPERTY IN GOODS IS ENTITLED TO
SELL/TRANSFER THE TITLE TO THE BUYER.
THE POSSESSOR WHO IS NOT THE OWNER
IS NOT ENTITLED
TO DO SO
PRICE
THE MONEY CONSIDERATION
FOR A SALE OF GOODS
CONTINUE…..
s.9 (1)SOGA - It may: Be fixed by the contract.
 Be left to be fixed in a manner agreed in
the contract.
 Be determined by the course of dealing
between parties.
Section 9(2) Of SOGA
Where the price is
not determined
The buyer shall
pay the seller the
reasonable price
Formation Of The Contract
FORMALITIES
CAPACITY
TIME OF
PAYMENT
continue….
1. CAPACITY
SECTION 11 Contract Act
SECTION 69 Contract Act
2. Formalities
A contract of sale may be made:
 in writing,
 by word of mouth/ Verbally,
 both - partly in writing & partly by word of mouth, or
 may be implied from the conduct of the parties
- (s 5 (2) SGA) -
Continue….
Section 5(1)
A contract of sale is made by an offer to buy or sell
goods for a price and the acceptance of such offer.
2. Delivery or
payments by
Installment
1. Immediate
Delivery of
goods
OR
Delivery of
payments
OR BOTH
OR
Delivery or payments
postponement
Continue….
3. TIME OF PAYMENT
Stipulation as to the time of payment are
not deemed to be the essence of a
contract of sale.
It is depend to the term of the contract
SECTION 11 SALE OF GOODS ACT
TERMS OF THE CONTRACT
CONDITION
WARRANTIES
A. CONDITIONS
A term which is essential to contract; breach of it
would allow the other party to treat the contract as
repudiated. (s. 12(2) SOGA)
If the condition is breached, the party not in
default entitled to repudiate the contract
because the contract can be deemed to be
VOID
B. WARRANTIES
‘Warranty’ – a less vital term of a contract
(collateral to the main purpose) , breach of it
would give rise to a claim for damages, not a right
to discharge/reject the goods.
(s.12(3) SOGA)
If the warranty is breached, the party not in
default is not entitled to repudiate the
contract because
it is not voidable
HOWEVER
Party in default is entitled for damages
EXCEPTION….
Circumstances where contract cannot be repudiated
event though there is a breach of condition:
Generally, Section 13(1):
Buyers may waive the condition or elect to treat the
breach of the condition as the breach of warranty
and do not want to repudiate the contract
Continue…..
(Section 13(2) ) (situations)
a. Where a contract of sale is not severable
and the buyer has accepted the goods or
part thereof;
b. The contract is a specific goods the
property in which has passed to the buyer;
CONTINUE…
SECTION 42
“
“buyer has accepted the goods”
The buyer told the seller that he had accepted the
goods
When the goods has been delivered to the buyer
and the buyer has done something which against
the ownership of the seller
After the expiry of a reasonable time, the buyer
keep the goods without informing the seller that
he rejected the goods
The breached of any condition to be full
filled by seller can only be treated as a
breach of warranty and not the ground of
rejecting the goods or repudiate the
contract
 UNLESS THERE IS A TERM OF THE
CONTRACT EXPRESS OR IMPLIED
Implied Terms
 The SOGA implies a number of stipulations (implied
terms) in every contract for the sale of goods
 The stipulations applicable only if the parties did not
exclude or modified the terms/stipulation
 (s.62 SOGA)
“ where any right, duty, or liability would arise under a
contract of sale by implication of law, it may be
negatived or varied by express agreement or by the
course of dealing between parties, or by usage, if the
usage is such as to bind both parties to the contract”.
cont...
1. implied warranty as to “time”
s.11 of SOGA
Time of payment are NOT deemed to be of the
essence.
Meaning that, if a buyer fails to pay by an
agreed time, the seller does not automatically
repudiate the contract.
But whether time is of essence of the contract /
not , it depends on intention of the parties in the
terms of the contract
e.g. : When time (for delivery)is the essence of the
contract which has been determined & agreed by
the parties, if the seller fails to perform according
to the term, it would entitle the buyer to repudiate
the contract.
e.g. : commercial transaction involving livestock
e.g. :if goods are to be shipped within particular
time.
Harrington v. Browne (1917) 23 CLR 297
 Held:
 in commercial transaction involving livestock,
time of delivery is the essence of the contract.
 If the goods are to be shipped within a particular
time then time of shipment is important & should
be strictly adhered to.
2. Implied condition as to “title”:• S.14 (a) SOGA:
“In the case of sale, the seller must have
a right to sell the goods & in the case
of agreement to sell, he must have a
right to sell at the time when the
property is to pass”
Continue….
 Seller must be the owner of the goods
Seller has the ownership/title over
the goods
Presumed to have a right to sell
Rowland v Divall [1923] 2 KB 500
• P bought a car from the seller (D) & after using it
for several months, then he discovered that it was
stolen. He had to return it to true owner.
• Court held:
Defendant had breach the implied condition as to
title.
• Therefore, the P was allowed to rescind the
contract and claim for the return of the full
price of the car paid to the Defendant.
 Sometimes, seller need not be the owner of the
goods (S. 14 (a) of SOGA BUT the law requires
at least able to create the appropriate rights in
the buyer. i.e. causing third party to transfer
ownership directly to the buyer.
 i.e. the car that still hired to the bank.
 Thus, seller with no title to sell the goods at the
time of the agreement to sell but later acquires
title, can hold the buyer to the bargain provided
the title is acquired before the buyer repudiates on
discovery.
Butterworth v Kingsway
Motors Ltd
 The D sold a car taken on hire-purchase and it was
resold a number of times before it was discovered
that the hirer had no right to sell while the car was
on the hire- purchase.
 The P who was the last buyer rescind the contract
on being informed about the fact and demanded
the return of the purchase price from the
defendant.
 Court held: P was entitled to rescind the contract
of purchasing the car and could recover the money
paid from the D since the D had no right to sell the
car.
…cont
3. Implied warranty
possession”:-
as
to
“quite
 S.14 (b) SOGA
“In a cont. of sale, unless the circumstances
of the contract are such as to show a
different intention, there is an implied
warranty that the buyer shall have &
enjoy quite possession of the goods”.
This provision covers not only where the
title is defective but also a subsequent
future disturbance of possession of
the goods.
Example:
 A sold his car to his friend Ali and because
Kassim like the car very much he often
persuaded Ali to lend him the car. Kassim
had a set of the car key and he used the car
whenever he liked regardless of whether Ali
needed the car or not.
 Kassim had breached the implied warranty
that Ali should have enjoy quiet possession of
the car.
Microbeads A.G v Vinhurst Road
Markings Ltd
 In this case, a patentee (3rd party) had brought an
action against the buyer alleging the use of
certain road marking machines was in breach
of their patent, two years after the sale of
machines by the Plaintiff to the Defendant.
 It was held by the Court that there was a breach of
implied warranty as the buyer did not enjoy
the future quiet enjoyment of the goods.
4. Implied warranty that the goods are free
from “encumbrance” : S 14 (c) SOGA: The goods must be free from any
charge (gadaian) or encumbrance in favour of
any third party not declared or known to the
buyer before or at the time when the contract is
made.
Example:
 Syarikat ABC sold a machine to XYZ
company. XYZ did not know that
syarikat ABC had charged the machine
to Bank X. syarikat ABC had breach the
warranty.
Steinke v Edwards
 Facts: The Plaintiff who had brought a car from the
Defendant had to pay off the tax which was still owing
to the government.
The Plaintiff sought to recover the amount he has paid
for the tax from defendant/seller.
 It was held by the Court that the Plaintiff was
entitled to recover the money as the Defendant
had breached the implied warranty. The right of
the government to levy a tax on a vehicle coupled with
a right to seize the car to enforce collection was a
charge or encumbrances within the meaning of the
provision.
5. Implied condition that the goods must
correspond with the “description”:Section 15
If the contract is for the sale of goods by description,
there is an implied condition that the goods must
correspond with the description
it is not sufficient that the bulk of goods
correspond with the sample if the goods do not
also correspond with the description
(bulk of goods shall correspondence with the sample and
description).
Continue....
Sale of goods by description covers all
cases where the buyer has not seen the
goods but is relying on the description
alone (the contract is made through
telephone, mail order or sale for
catalogue)
Nagurdas Purshotumdas v. Mitsui
Bussan Kaisha
Facts: Flour was ordered described as ‘ the
same as our previous contracts” whereby the
flour had been sold in bags bearing a well
known trademark.
• Flour identical to quality was delivered but
did not bear the same
well-known trade mark.
Held: It did not comply with the
description. D had breach the condition
as to description.
Buyer has seen the goods but the defect may
be concealed from the buyer.
Associated Metal Smelters Ltd v Tham Cheow
Toh
The D agreed to sell a metal melting furnace to the P
and had given the undertaking that the furnace
will have a temperature of at least 2600 degrees
Fahrenheit.
However, the furnace supplied by the D did not
meet the requirement.
 Court held:
The failure on the part of the D to supply
the furnace which would meet the
required temperature constituted a
breach of condition of the contract.
 Cases of failure of goods to
correspondence with the descriptions:
1) Where the goods is substantially what is
required but there is some small
discrepancy from the contract
particulars.
Arcos Ltd v E A Ronaasen &
Sons
 Staves of ½ inch thick were ordered. Only 15%
conformed to the requirement. Despite the fact
that the goods were reasonably fit for their
purpose,
 the Court held that the buyers were entitled to
reject them for failing to correspond with the
contract description.
 2) those involving goods described in a
more general sense in the absence of
detailed commercial description.
( Because the description is more general, a
considerable discrepancy must occur
before it can constitute a breach ).
Varley v Whipp
 The seller agreed to sell a 2nd hand reaping machine
described as “ new the previous year”. The buyer did
not look at the machine but relied on the
description. When the machine was delivered, it was
found the machine was very old machine which
had been repaired. The buyer sued the seller for
breach of implied condition.
 The court held:
 The seller has breached the implied conditions as
the goods supplied were not corresponding with
the description. The buyer is entitled to rescind
the contract and reject the machine.
6. Implied condition as to “fitness for
particular purpose”:GENERAL RULE :
The rule of common law applies; that is,
“CAVEAT EMPTOR” (let the buyer beware)
– where the buyer must exercise due care in making
purchases.
 If he does not, he must bear the consequences
 CAVEAT EMPTOR RULE IS PRESERVED
UNDER SECTION 16(1) SOGA
“ subject to this Act and any other law for the
time being in force, there is no implied
warranty or condition as to the quality
or fitness for any particular purpose of
goods supplied under a contract of
sale…”
Exceptions to Caveat Emptor Rule
1. s.16(1)(a)
“…Implied condition that the goods
must be reasonably fit for a particular
purpose of the buyer”
IF GOODS NOT FIT
BUYER MAY SUE THE SELLER FOR
BREACH OF IMPLIED CONDITION
CONDITIONS TO BE FULLFILLED
1.
DISCLOSURE OF PURPOSE (s. 16 (1) (a) ).
EVEN THOUGH THE
GOODS IS NOT FIT
GRIFFITHS v PETER CONWAY LTD
HELD:
A woman with an unusual sensitive skin who
bought a Harris Tweed coat, without
disclosing her sensitivity to the seller, did not
succeed under this section
However, if the description of the
goods shows that it has only one
purpose, no disclosure of that
purpose is required.
It is implied that the goods is fit for
that particular purpose.
Priest v Last
 The P purchased a hot water bottle from the D, a
retail chemist. Some days later, the bottle while in
use by the P’s wife, burst.
 A s a result, she was scalded & the P sued the D.
 It was held that if the description of the goods
by which they were sold pointed to one
particular purpose only, then the requirement
of disclosure of purpose is deemed fulfilled.
CONTINUE…..
2. RELIANCE ON THE SELLER’S SKILL AND
JUDGMENT (s. 16 (1) (a))
 The buyer must also established that
he had relied on the seller’s skill and judgment
before purchasing the goods
GRANT V AUSTRALIAN KNITTING
MILLS
 The Court held that reliance usually
arises by implication from the
circumstances.
 For instances, of a purchase from a retailer,
the reliance will be inferred from the fact
that a buyer goes to the shop in the
confidence that the seller has selected
his stock with skills and judgment
Continue….
3. The goods are of a description which it is in
the course of the seller’s business to
supply. (S. 16 (a))
The goods bought by the buyer must be the
kind which is in the course of the seller’s
business to supply.
Spencer Trading Co. Ltd v Devon
The manufactured had previously supplied to
the Plaintiff on a special order, an adhesive
substance made from gum resin for making
flypapers.
The following year, the Plaintiff ordered a
further supply for the same purpose from the
manufacturer, who on this occasion used
synthetic raw materials in place of the
natural material previously used.
Consequently, the flypapers were
unsatisfactory for its purpose
Continue…..
Held:
The goods are of a description which it is
in the course of the sellers business to
supply.
Therefore the manufacturer was liable for
breach of an implied condition that the
goods were fit for the purpose for which
they were required.
Continue….
4. The goods must not have been brought under
patent or trade name. (proviso of S. 16 (1) (a)).

If brought under a patent or trade name it
gives the impression that he is not relying on
the seller’s skill & judgment.

Therefore he cannot later complain that
the goods are not fit for the particular
purpose he required.
The implied condition DID NOT
applied.
 However, if the goods were not bought
under the patent or trade name,
 or
 if the buyer did buy under a trade
name but relies on the seller’s skill &
judgment
 The implied condition applied.
7. Implied condition as to
“merchantable quality”
2. (s.16(1)(b)SOGA:Where goods are bought by description
from a seller who deals in goods of that
description, there is an implied condition
that the goods shall be of merchantable
quality.
…cont
Merchantable Quality of goods
means the goods must meet the standard which
a reasonable person would regard as
satisfactory .
Goods sold must be fit for particular use for
which they were sold
i.e. with reference to the expectations of the
average buyer.
 E g: in a sale of a lorry, it is an implied condition
that the lorry will not overheat easily.
Henry Kendall & Sons v
William Lilico & Sons Ltd
 Held:
“If the description in the contract was so limited
that goods sold under it would normally be
used for only one purpose, then the goods
would be UNMERCHANTABLE if they were of
NO USE for that purpose.
However, if the description was so general, or
used for several purposes, the goods would be
MERCHANTABLE if they were fit for any one of
the purpose. “
Wilson v Ricket, Cockerell &
Co. Ltd
 A lady ordered fuel by its trade name “Coalite”
from a fuel merchant. The consignment included a
piece of coal in which a detonator was embedded
and resulting in an explosion in the fireplace.
 Held:
 The consignment as a whole was
UNMERCHANTABLE. It had defects making it
unfit for burning.
Exceptions
 Proviso of S. 16 (1) (b)
 “ …Provided that if the buyer has
examined the goods, there shall be NO
IMPLIED condition as regards defect
which such examination ought to have
revealed”.
Proviso of S. 16 (1)( b) IMPLIED
CONDITION DOES NOT APPLY
 Where the BUYER HAS EXAMINED the goods
and by such examination the BUYER WOULD
DISCOVER THE DEFECTS.
 if there was an examination before or at the time of
contract, the buyer cannot later complain of
defects which a proper examination would have
revealed.
HOWEVER,
 If the DEFECT COULD NOT BE
DISCOVERED, by any reasonable
examination;
 IMPLIED CONDITION AS
MERCHANTABLE QUALITY WOULD
APPLY.
Wren v Holt
 The P recovered damages for breach of
condition of merchantability of beer which
was contaminated by arsenic.
 The exception was not applicable
because the defect was not discoverable
on reasonable examination.
Thornett & Fehr v Beers &
Sons
 Though the buyer has conducted a
superficial look at the outside of some
barrels of glue, there was NO examination
and therefore, THE IMPLIED CONDITION
DID NOT APPLY.
 A proper examination MUST BE
CONDUCTED such as opening the barrel
would revealed the defect.
8. Sale by Sample
 Used in the sale of bulk of goods like rice,
wheat, flour, carpets, etc
 Section 17(2):
 In the case of contract for sale by sample there
is an implied condition that:
(a) The bulk shall correspond with the sample
in quality.
(a) Buyer has reasonable opportunity of
comparing the bulk with the sample.
(a) The goods shall be free from any defect
which would not be apparent on reasonable
examination of the sample.
CONTINUE….
Breach of any one of the three
conditions,
the buyer is entitled to REJECT the
goods and treat the contract as at end.
 If the bulk correspondence with the sample
but there is a latent defect rendering the
goods unmarchantable
 BUYER ENTITLED TO REJECT THEM.
Drummond v Van Ingen
 The cloth supplied by the Seller was equal to
samples previously examined but because of
latent defect not discoverable by a
reasonable examination.
 Court held: the seller is liable of the
subsection.
S.17 (2) (C)
 The seller LIABLE for all defects
Which a BUYER of ordinary EXPERINCE and
DILIGENCE not discover on reasonable
inspection of the sample.
Godley v Perry
 A boy bought a catapult. While using it, the
catapult broke and he lost the sight of an eye. The
shopkeeper bought it from a wholesaler by sample
and tested it by pulling back the elastic.
 The shopkeeper was sued for the boy’s injury and
the court held that the catapult was not fit for the
purpose for which buyer wanted it and it was of
unmerchantable quality.
 Then, the shopkeeper filed an action against the
wholesaler.
 Although the shopkeeper made a reasonable
examination, the defect was not one which was
apparent on such examination.
 Thus, he succeeded in his action against the
wholesaler.
PRIVITY OF CONTRACT
 The implied conditions and warranties bind the
contracting parties only
BUYER
SELLER
Continue….
3rd PARTY, if suffer
injury/ damages
CANNOT SUE
SELLER OR
MANUFACTURER
NO
CONTRACTUAL
RELATIONSHIP
3rd party – entitled to Remedy
May sue the seller under the
law of tort.
Entitled only if he can prove
there is negligence on Seller’s
part.
Donoughue v Stevenson
 The Plaintiff became ill as a result of drinking a bottle
of ginger beer which contained a decomposed snail in
the bottle. The ginger beer was purchased by the
Plaintiff’s friend.
 Held:
 The manufacturer of the drink was liable to pay
damages to the Plaintiff for negligence. The P had
to bring action under the law of tort and not contract
as there is no privity of contract between the Plaintiff
and the manufacturer.
Exclusion of Implied terms.
 S. 62 of SOGA
 where any right, duty, or liability would arise
under a contract of sale by implication of
law, it may be negatived or varied by
express agreement or by the course of
dealing between parties, or by usage, if the
usage is such as to bind both parties to the
contract”.
TRANSFER OF
PROPERTY
TRANSFER OF PROPERTY
WHY IS THIS
IMPORTANT?
Introduction
 Once property passes to the buyer, the buyer would
bear the risk.
 E/Though, the goods HAS NOT BEEN DELIVERED
to the BUYER.
 S. 26 of SOGA.
“…when the property is transferred to the BUYER
the goods are at the buyer’s risk whether delivery
has been made or not”.
 However,
 if the delivery has been delayed due to the
fault of the seller,
 then the seller has to bear the risk. Even though
the property has passed to the buyer.
 Proviso of S. 26 of SOGA.
 If any party sought to claim any right over the
property from 3rd party,
only the person who has the property in goods
may claim.
 the seller would entitle to claim for the price,
if the property in goods has passed to the buyer.
TIME
WHEN PROPERTY IN
GOODS PASSES TO THE
BUYER?
4. SALE OF
SPECIFIC GOODS
TO BE PUT IN A
DELIVERABLE
STATE
SECTION 21
1. SALE OF
UNASCERTAIN
GOODS
SECTION 18
6. SALE OF
UNASCERTAINED
@FUTURE
GOODS BY
DESCRIPTION
SECTION 23
2. SALE OF SPECIFIC
@ASCERTAINED
GOODS
SECTION 19
WHEN THE
PROPERTIES
IN GOOD
TRANSFERRE
D TO BUYER?
7. GOODS SENT
ON APPROVAL
SECTION 24
3.SALE OF
SPECIFIC GOODS
IN A
DELIVERABLE
STATE
SECTION 20
5. SALE OF SPECIFIC
GOODS TO BE PUT IN A
DELIVERABLE STATE
BUT SELLER HAS TO
ASCERTAIN THE PRICE
SECTION 22
1. SALE OF UNASCERTAINED GOODS
SECTION 18
CONTRACT FOR THE SALE OF UNASCERTAIN GOODS
NO PROPERTY IN GOODS IS
TRANSFERRED TO THE BUYER
UNLESS
THE GOODS ARE ASCERTAINED
 E.G.
 A contracts to buy a new car which forms
part of a larger consignment.
 No property passes until the seller
ascertained the car to be sold to A.
2. SALE OF SPECIFIC OR
ASCERTAINED GOODS
Section 19(1)
For the sale of SPECIFIC GOODS OR ASCERTAINED
GOODS,
the property in goods
is transferred to the buyer
WHEN
THE PARTIES INTENDED TO IT TO BE TRANSFERRED
Continue….
Section 19(2)
HOW TO DETERMINE THE
INTENTION OF THE PARTIES?
BY CONDUCT
BY CIRCUMSTANCES
a. SALE OF SPECIFIC GOODS
IN DELIVERABLE STATE
 DELIVERABLE STATE:
 Goods that in the state that the buyer would
under the contract BE BOUND to take delivery
of them
 S.20 of SOGA
 Section 20
CONTRACT FOR THE SALE OF SPECIFIC GOODS
IN DELIVERABLE STATE
THE PROPERTY PASSES to the BUYER , WHEN
THE CONTRACT IS MADE
IMMATERIAL
 THE TIME OF PAYMENT OF THE PRICE
 THE TIME OF DELIVERY OF GOODS
 OR BOTH are POSTPONED
 Example:
 A buyer agrees to buy a particular book on
credit.
 The property in goods PASSES immediately
to the BUYER when the contract of sale is
made, even though the payment is
postponed.
Underwood Ltd v Burgh Castle
Brick & Cement
 There was a contract for the sale of a
condensing engine to be delivered on rail in
London.
 At the time of contract, the engine was affixed
to the seller’s premise and it had to be separated
from the concrete floor and to be dismantled,
before it could be delivered on rail.
 While the main engine was being loaded on a
railway truck, it was partially broken by accident.
 Issue: who has bear the risk of damages?
 Held:
 The property in goods HAD NOT PASSED
to the buyer at the time of accident. The
engine is still at the risk of the seller.
 S. 20 could not applied because the
engine was not in a deliverable state at
the time of contract.
B. SPECIFIC GOODS TO BE PUT IN
DELIVERABLE STATE
 Section 21
The seller is bound to do something on the goods
for the purpose of putting them into deliverable state
The property does not pass until such thing is done
and the buyer has notice
Example
 The seller agrees to sell a particular 2nd hand
motorcycle to the buyer, It is agreed that under the
contract that the seller would change the tyres
before the delivery to the buyer.
 The property in the motorcycle does not pass to
the buyer until the seller has changed the tyres.
 Once the tyres have been changed, then only the
property passes to the buyer.
C. Sale of Specific Goods In a Deliverable State; but
The Seller has to do Something in
Order To ascertain The Price
The goods are of specific and in a deliverable state.
Where the seller bound to weigh, measure, test or do
something for the purpose of
ascertaining the price of the goods
Section 22
The property does not pass to the buyer until such thing
is done by the seller, and the buyer has
notice/knowledge of it.
example:
 A agrees to sell all remaining sugar contained in a
particular bag for RM 2 per kg. The said property
does not passed to the buyer until the seller weighs
them and the buyer knows that they have been
weighed.
 Sale of specific goods which are ascertained in
quantity but the price cannot be calculated until
the quantity of the goods is ascertained by
weighing.
Please identify:
 If the seller is required to measure 10 kg from a bag
containing more than quantity to be sold?
 Not a sale of specific goods
 Unascertained goods
 Governed by s. 23 (1).
Sale of Unascertained @ Future Goods By Description;
and Appropriation
S. 23 (1)
“where there is a contract for the sale of unascertained or
future goods by description and goods of that
description and in a deliverable state are
unconditionally appropriated to the contract,
either by seller with the assent of the buyer or by buyer
with the assent of the seller, the
property in the goods thereupon passes
to the buyer”.
Unascertained goods by description means, goods
which cannot be specifically identified at the time
of the contract, but are referred to by description

1. Future goods by description means goods to
be manufactured or produced
or acquired by the seller according to certain
description
Continue…..
Section 23(1)
goods of that description;
and in a deliverable state’
appropriated to the contract
the property thereupon passes to the buyer
what is Unconditionally
appropriated?
any act showing an intention to identify goods
without any further condition.
example:
selection, separation, of weighing from a bulk
Continue….
Section 23(2)
If the contract involves delivery to a carrier,
once the seller delivers the goods to the buyer or
to the carrier for the purpose of transmission
(delivery) to the buyer.
The seller is deemed too have an
unconditionally appropriated the goods to the
contract.
 Therefore the property in goods
passes to the buyer at the moment
the goods are handed over to a
carrier
7. Goods Sent on Approval @on Sale or
Return
 S.24 of SOGA
 When goods are delivered to the buyer on approval or
on sale or return, the property in goods passes to
the buyer
a. When the buyer signifies his approval or does any
other act adopting the transaction
b.
if the buyers does not signify his approval but
retains the goods without giving notice of
rejection, then if the time has been fixed for the
return; the property passes on the expiration of a
reasonable time
This rule applied where the goods are : sent to the buyer for trial or
 giving the buyer option to purchase.
If the buyer chooses to buy goods:-
 He may signify his acceptance / approval to the
seller
 The buyer may also “ does any other act adopting
the transaction”.
 Implied from such act
i.e: buyer used the goods himself.
Kirkham v Attenborough
 The buyer received some jewelerry from the seller,
which was subject to “ on sale or return”. The buyer
then pledged the jewelerry to a 3rd party.
 Held:
 The buyer had adopted the transaction. The
property in the jewelerry has passed to the buyer.
 S.24 of SOGA
b.
if the buyers does not signify his approval but
retains the goods without giving notice of
rejection, then if the time has been fixed for
the return; the property passes on the
expiration of a reasonable time
 If the buyer failed to return the goods within specific /
reasonable time
 He is deemed to have accepted the sale
 The property passes to the buyer.
What is reasonable time?
 POOLE V SMITH’S CAR SALES (BALHAM) LTD
 A car dealer supplied 2 cars “ on sale or return” to
another dealer. 1 of the cars was sold, but the unsold
2nd car was returned about 3 months later in poor
condition. It was rejected by 1st dealer, who then
claimed for the price from 2nd dealer.
 Held:
“ a reasonable time “ had expired. Therefore, the
property in goods passed to the 2nd dealer. Thus, the
2nd dealer has to pay for the price of the car to 1st dealer.
 If the goods are LOST or destructed WITHOUT THE
DEFAULT of the BUYER
 BUYER is NOT LIABLE
 PROVIDED that it happen before the due date or
before the reasonable time lapses.
Transfer of Risk
General Rule: s.26 SOGA 1957
Application:
the risk of accidental loss/ damage to the
goods passes with property whether
delivery has been made or not.
*
The Buyer would have to pay for the goods
even though they had been destroyed.
…cont
Exceptions:
1. s.26 SOGA – “Unless otherwise agreed….”
 RISK will NOT PASS with property where there
is an express / implied provision in the agreement
to the contrary.
Example: The parties can state in the contract
who is to bear the risk.
…cont
2. proviso I of S. 26 of SOGA –
But where delivery has been delayed through the
fault of either B or S, the goods are at the risk of
the party at fault as regards any loss which might
not have occurred but for such fault.
Application: Risk lies with the party at fault for
delays in delivery, irrespective of where
property lies.
…cont
3. proviso II of s. 26 of SOGA – Nothing in this
section shall effect the duties or liabilities of either
S or B as a bailee of the goods of the other party.
Application: Risk lies with the bailee at fault.
E.g: Property in goods may have passed to the B, but
if the goods were lost thru’ the negligent of the S
(the bailee) while in his custody, S will be liable
for the lost.
The Passage of Risk
 Until risk passes, the B may refuse to take
delivery of goods which are damaged in
transit.
 BUT once risk has passed to the B, the S is
exempted of liability for loss / damage to the
goods (unless caused by the S’s negligent)
Perishing Goods
 S.7: where goods perishing before
making a contract, the contract is void
 S.8: where goods perishing before sale
but after agreement to sell, the
agreement is thereby avoided.
Transfer Of Title
Issues:
Buyer bought goods from a nonowner.
Whether Buyer has obtained a
good (valid) title?
 if not, whether Buyer can sue
under s.14(a) SOGA?
 GENERAL RULE:
 Rule- Latin Maxim:
 nemo dat quod non habet
 – “no one can give what he has not got”
or “no one can give a better title than he
has himself”.
Meaning:
A seller who does not own the goods, or who
sells them without the owner’s authority
CANNOT transfer ownership to the buyer.
The maxim has been adopted into s.27 SOGA
 S. 27 SGA
‘…where goods are sold by a person who is not
the owner thereof, & who does not sell them
under the authority or with the consent of
the owner, the buyer acquires no better
title to the goods than the seller had..’
example
 A stole a car and sold it to B.
 In this situation, A does not have the title to
the car.
 Therefore, B also would not get a title to the
car even though he had paid for it.
Continue….
Application:
A person who has no title cannot pass
good/valid title to another.
[this is to protect the ownership so that if
goods are stolen & subsequently sold, the
right of the original owner is retained]
Continue….
Lim Chui Lai v Zeno Ltd 1964) 30 MLJ 314
Zeno Ltd had entered into agreement with
Ahmad (contractor) who had contract with PJ
Authority to construct culvert. Under the contract
between Zeno Ltd and Ahmad, Zeno was to
provide A with all material for the construction.
Then, Z delivered all the materials to the
construction site.
Unfortunately, A’s contract with PJ was cancelled; Z
thereupon informed PJ that the materials on site
belonged to them. When Z attempted to sell the
material, they discovered the materials had been
sold by A to Lim Chui Lai.
Continue….
Held:
A was merely the bailee & not the owner of
the goods at the time he sold them to the
Appellant.
Because A had no title to the goods /
authority to sell them, he could not pass any
title to Appellant.
Thus, Lim Chui Lai does not have the title
upon the materials bought from Ahmad
Continue….
 Rowland v Divall
Plaintiff bought a car from D, & after using it
for some 4 months, discovered that it was a
stolen car.
He had to return it to the true owner.
Held:
The D had breached the condition as to title
& allowed recovery by the P of full price on
the basis of a total failure of consideration.
Continue…..
The Buyer would have to return the goods
to its original owner
UNLESS
the Buyer can prove that he came within ONE
OF THE EXCEPTIONS to the Nemo date
rule contained in Section 27, proviso 27,
28, 29, 30(1) & 30(2)
exceptions
Estoppel
Sale by a
mercantile
agent
Sale by of joint
owners
Sale under a
voidable
contract
Sale by a seller
in possession
after sale
Sale by a buyer
in possession
after sale
Exceptions to
NEMO DAT QUOD NON HABET RULE:
1. Estoppel
(second limb of s.27 of SOGA)
“.. Unless the owner of the goods is by his
conduct precluded from denying the S’s
authority to sell”.
 Owner by his conduct makes it appear to
the buyer that the person who sells the
goods has his authority to do so & buyer
relies on that conduct,
 the buyer obtains a good title because the
owner is precluded by his conduct from
denying the seller’s authority to sell
Continue…..
*Application:
Owner is estopped (prevented) from denying the S’s
right to sell. The owner is estopped from asserting
his title.
Example:
Samy tells Ali in front of Muthu that Samy want to sell
Muthu's Books to Ali and Muthu keep on silent.
If Samy sells the books to Ali, Muthu cannot complain or
estopped from denying that Samy has sold his books
without his authority
N.Z Securities v Wrightcars Ltd
 A agreed to sell a car to B and B was given possession
of the car upon the tender of a cheque as payment. It
was agreed between them that the title to the car was
not to pass to B until the price had been received (i.e.
the cheque has been honoured/ cashed).
 B then sold the car to C. Before the sale to C was
finalised, C had contacted A’s office. In response to C’s
inquiry , C was informed by A’s employee that B had
paid for the car.
 Later the cheque which was given to A by B was
dishonoured. Therefore A repossessed the car from C.
 Held:
 C was successful in claiming that A was
precluded / estopped by his conduct from
denying B’s authority to sell.
 Therefore, the title has passed to C.
-
2. Sale by mercantile agent –
proviso of s.27 of SOGA
“…Sale by mercantile agent, with the consent
of owner, in possession of goods or of a
document of title to the goods, any sale
made by him when acting in the ordinary
course of business shall be valid as if he
were expressly authorized by the owner of
the goods to make the same…”
Definition ‘mercantile agent’ – s.2 of SOGA
Merchantile agent having in a customary course
of business as such agent authority either to sell
goods, or to consign goods for the purposes of
sale, or to buy goods or to raise money on the
security
Example:
Second-hand automobile dealer, a broker, or an
auctioneer
Elements:
 The possession must be with the consent of the
owner
 At the time of sale, the mercantile agent must be
in possession of the goods or the document of title
to the goods.
 the mercantile agent sells the goods in the
ordinary course of business as mercantile agent
 The buyer has acted in good faith and must not
have knowledge of the agent’s lack of authority to
sell
3. Sale by one of joint owners
Section 28
“ If one of several joint owners of goods has
the sole possession of the goods by
permission / consent of the co-owners,
the property in the goods is transferred to
any person who buys them from such joint
owner in good faith & has not at the time of
the contract of sale notice that the seller has
no authority to sell.”
Elements:
 1 of the owners has the sole possession of
the goods by permission of the co-owners.
 The buyer has acted in good faith and must
not have knowledge of the agent’s lack of
authority to sell
Continue…..
Example:
X,Y & Z jointly owned an oven. X was allowed to keep the
oven & to cook with it since Y & Z did not know how to
cook.
X, without Y & Z’s permission, sold the oven to A who
did not know about X’s lack of authority.
Held: A would acquire a good title to the oven.
4. Sale under a voidable title
s.29 of SOGA
“ The seller of goods has obtained possession
thereof under a contract voidable under s.19
or 20 of the Contracts Act 1950, but the
contract has NOT been rescinded at the
time of the sale…”
(i.e. his title has not been avoided at the time of the
sale), the buyer acquires a good title to the goods
provided he buys them in good faith.
Elements:
 The seller obtained possession of the goods
under a voidable contract.
 The said voidable contract has not been
rescinded
 The buyer has acted in good faith and
without knowledge of the fact that the seller
has NO good title to pass
Continue…..
Example:
 A obtains good from B by fraud & sells them to C
who buys them innocently.
 At the time C buys the goods, B has not rescinded
the contract made with A.
 C obtains good title to the goods. (e.g. of not
avoided).
5. Sale by SELLER in possession after sale
s.30(1) SOGA
“…if seller continues/is in possession of the goods
or of the document of title, the delivery/transfer
by that person or by mercantile agent acting for
him, of the goods or documents of title under any
sale, pledge or other disposition
… thereof to any person receiving the same in
good faith shall have the same effect as if the
person making the delivery/transfer were
expressly authorized by the owner of the
goods to make the same. “
 Happen when a seller has transferred the property
in goods to a buyer but he (the seller) remains in
the possession of the goods
 The seller then, sell the goods to another buyer
who buys in good faith
 2nd buyer will get a good title
 The 1st buyer losses his title and he HAS to
get his REMEDY against the seller.
Example:
If a seller resells to a 2nd buyer the goods sold by
him previously to the 1st buyer,
the 2nd buyer will obtain good title to the goods
if he has received the goods in good faith &
without notice of the previous sale.
The 1st buyer will lose the title but he can take legal
action against the seller who would be liable to
him.
Motor Credits (Hire Finance) Ltd v
Pacific Motor Auction Pty Ltd
 Motor Credits Ltd (MCL) who was a dealer in vehicles
sold a number of vehicles to the Plaintiff under a
display agreement, whereby Motor Credits remained
in possession of the cars for display in their
showrooms.
 MCL were paid 90% of the price and were authorised
to sell the vehicles as agent for the P.
 MCL got into financial difficulties and the P revoked
the MCL’s authority to sell the vehicles but MCL
nevertheless had sold numbers of the cars to D who
were bona fide purchasers for value.
 Held:
 The D obtained a good title. MCL is to be
treated as continuing in possession and is
able to pass a good title under S. 30.
6. Sale by a BUYER in possession AFTER
SALE
s30(2) SOGA
if a buyer, having bought/agreed to buy goods,
obtains possession of the goods/the documents
of title with the consent of the seller,
he can pass a good title to a subsequent buyer
acting in good faith, even if under the first
transaction he has not obtained a good title.
 Buyer obtains possession with the consent of the
seller
 However, the property in goods is still subject to
some rights or interest of the seller.
 The said buyer can pass a good title to
another bona fide buyer who has NO
knowledge about the rights or interest of the
original seller.
Newtons of Wembley Ltd v Williams
[1965] 1 QB 560
Plaintiff sold a car to A who paid by cheque. It was
agreed that the title would not pass until the
cheque was honoured. A was given possession of
the car but the , but later on, the cheque was
dishonoured. P then rescinded the contract with
A.
However, A had sold the car to B who bought it
without knowledge of the position. Furthermore,
B had resold it to the defendant. Plaintiff tried to
recover the car from him.
Held:
A, the original buyer, was in possession with the
consent of the owner. Hence, he could pass a good
title to B, who in turn transferred it to the
defendant.
Thus, the defendant had a good title to the car and
entitled to keep the car.
Delivery and acceptance of
Goods
 s.31 SOGA –
 It’s the duty of seller to deliver the
goods whilst the buyer’s duty is to
accept & pay for them accordance with
the terms of the contract.
“Delivery”
 Means voluntary transfer of possession from one
person to another. Constructive delivery is
sufficient.(need not include physical transfer)
 :s.33 SGA
 Non-delivery – buyer may sue the seller for
damages for non delivery(s.57 SGA).
 Place of delivery – whether the seller is
required to send the goods to the buyer or
the buyer has to take possession of the
goods depends on what has been agreed
upon between them ( s.36(1) SGA
…cont’d
 Unless the parties agree otherwise, the expenses of
& incidental to putting the goods into a
deliverable state shall be borne by the seller.
Time of Delivery
 Where under the contract of sale the seller is
bound to send the goods to the buyer, but NO
TIME for sending them is fixed, the seller is
bound to send them within a reasonable time
(s.36(2) SGA)
Delivery of wrong quantityS.37(1), (2),(3) &(4)
1. Seller delivers to the buyer a quantity of
goods less than that which he contracted to
sell:a) the buyer may reject all the goods so delivered,
or
b) if the buyer accepts the goods so delivered, he
is bound to pay for them at the contract
rate.(s.37(1) SOGA)
Case: Harland & Wolff Ltd v J. Burstall & Co
A contract for 500 loads of timber.
Held: that delivery of 470 loads would have been
non-performance of the contract entitling buyer
to reject
…con’t

a)
b)
c)
(if
Seller delivers to the buyer a larger quantity
of goods than that which he contracted to
sell, the buyer may:Accept the goods included in the contract &
reject the rest; or
Reject all the goods
Accept all the goods
buyer accepts all the goods, he has to pay for the
goods at the contract rate) - s.37(2) SOGA
…con’t

Seller delivers to the buyer the goods he
contracted to sell mixed with goods of a
different description not included in the
contract, the buyer may:1. Accept the goods which are in accordance with
the contract & reject the rest; or
2. Reject the whole. – s.37(3) SOGA
(s.37(4): SOGA are subjects to any usage of trade,
special agreement or course of dealing between
the parties.)
BREACH BY THE BUYER
1. Failure of the
Buyer to Take
Delivery
2. Failure of
Buyer to pay for
The Goods
3. Failure of
Buyer to Accept
the Goods
Continue…..
1. Failure of Buyer to Take Delivery
Section 44
When the seller is ready to deliver the goods,
and request the buyer to take delivery, the buyer
must take delivery of the goods within the
reasonable time after the request of the seller
If the Buyer refused or neglect to take delivery,
the buyer would be liable for any loss due to
his own refusal or negligence
the Buyer would also LIABLE for a reasonable
charge for the care and custody of the goods by
the seller.
Continue…..
2. Failure of Buyer to Pay for the Goods
Section 55
If the buyer failed to pay for the price of the
goods, the seller may sue the buyer for the price
when:
i. The property in goods (ownership) has passed
to the buyer (S. 55(1) ); or
ii. The price is payable on a certain day but the
buyer failed to pay on that day; irrespective
of delivery, or the property in the goods has
not passed to the buyer (S. 55(2) )
Continue…..
3. Failure of Buyer to ACCEPT the Goods
Section 56
If the buyer WRONGFULLY neglects or refuses
to accept and pay for the goods
The Seller may sue the buyer for damages for
non-acceptance
Rights (Remedies)
Of Unpaid Seller
Against The Goods
UNPAID SELLER
(S. 45 (1))
WHO IS HE?
THE SELLER
HAS NOT
BEEN PAID
WITH THE
WHOLE PRICE
WHEN THE BILL
OF EXCHANGE OR
OTHER
NEGOTIABLE
INSTRUMENT,
RECEIVED BY THE
SELLER AS A
CONDITIONAL
PAYMENT IS
DISHONOURED
RIGHTS IN
PERSONAM
(personal)
RIGHTS IN
REM
(property)
RIGHTS IN PERSONAM
Common remedies that are available for the
unpaid seller against the buyer
Remedies of the unpaid seller :1. To sue the buyer for the price (S. 55);
2. To sue the buyer for damages for nonacceptance (S. 56).
Section 55
Where under a contract of sale, of property in
the goods has passed to the buyer and the
buyer wrongfully neglect or refuses to
pay for the goods according to the terms of
the contract,
the seller may sue him for the price of the
goods.
Continue….
Section 56
Where buyer wrongfully neglects or
refuses to accept and pay for the
goods ;
the seller may sue him for the
damages for non-acceptance.
RIGHTS IN REM
In respect of the goods themselves:
RIGHT OF LIEN
RIGHT OF STOPPAGE IN TRANSIT
RIGHT OF RESELL
1. RIGHT OF LIEN
 A legal lien is dependant on possession.
 The unpaid seller who is in possession of the goods
 Is entitled to retain possession until payment
or tender of the price.
 The right still exist even where the property in
goods has passed to the buyer, but the delivery
has not been made. (s. 46 (1) (a))
Section 46(1)(a)
This rights exists even where the
property in the goods has passed to
the buyer but delivery has not been
made
Continue….
 Section 46(2)
Where the properties in goods has
not passed to the buyer,
the seller may with hold delivery in
addition to his other remedies
Continue….
 These rights may exercise
situations :-
in the following
Section 47(1):
(a) Where the goods have been sold without any
stipulation as to credit;
(b) Where the goods have been sold on credit but
the term of credit has expired;
( c) Where the buyers becomes insolvent.
Continue…..
Section 47(2)
The seller may exercise his right
of lien notwithstanding that he is
possession of the goods as agent or
bailee for the buyer
Continue….
Section 48
Where an unpaid seller has made part
delivery of the goods, he may exercise his
right of lien on the remainder, unless such
part delivery has been made under such
circumstances as to show an agreement
to waive the lien.
Continue…..
 Section 49
The unpaid seller losses his lien in the following
circumstances:
When he delivers the goods to the carrier or
other bailee in order that the goods be
transmitted to the buyer without reserving the
right of disposal of the goods
The buyer or his agent lawfully obtains
possession of the goods
When the seller waives his lien (s. 48)
2. RIGHT OF STOPPAGE IN
TRANSIT
Section 50
Subject to this Act when the buyer of goods
becomes insolvent;
the unpaid seller who has parted with the
possession of the goods has the right of
stopping them in transit, that is to say, he may
resume possession of the goods as long as they
are in the course in transit, and may in retain
them until payment or tender of the price.
This is a right of an unpaid seller to stop the
goods in transit, to resume possession of the
goods as long as they are in the course of transit
(lintasan barang-barang dagangan, pengangkutan
(barang, orang)
The seller may retain the goods until payment of
the price
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WHEN?
Buyer becomes insolvent
The goods are in control of a carrier
(in transit)
Who is insolvent?
A person who has ceased to pay his debts in the
ordinary course of business, or cannot pay his
debts as they become due, whether he has
committed an act of bankruptcy or not.
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Duration of transit
Section 51
Goods are deemed to be in the course of transit ;
from the time when they are delivered to a
carrier or other bailee for the purpose of
transmission to the buyer, or
until the buyer or his agent in that behalf takes
delivery of them from such carrier or other bailee.
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Transit is at the
circumstances:
end
in
the
following
When the buyer takes delivery from the carrier.
Section 51(1)
ii. When the Buyer obtains delivery of the goods before
their arrival at the appointed destination. Section
51(2)
iii. After the arrival, the carrier acknowledges to the
buyer that he holds the goods on the buyer’s behalf
and continues in possession.

It is immaterial/not important that a further
destination may have been indicated by the buyer.
Section 51(3)
i.
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 Transit cannot recommence merely because the
buyer has instructed that the goods be sent on a
further journey to another destination
iv. Where the carrier wrongfully refuses to deliver the
goods to the buyer. Section 51(6)
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 If part of the goods has been delivered to
the buyer, and the remainder of the goods
are still in transit,
 the unpaid seller has the right of stoppage
in transit for such remainder which are still
with the carrier.
 Section 51(7)
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Methods for effecting stoppage
The unpaid seller may exercise stoppage in
transit by the following ways:
by taking actual possession of the
goods as provided under section 52(1)
or;
Giving notice to the carrier or his
principal
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Giving notice to the carrier
The carrier shall redeliver the goods to the seller
or according to the seller’s directions.
The expenses of redelivery shall be borne by the
seller
3. RIGHT OF RESELL
Section 54 gives a right of resell to the unpaid
seller in the following circumstances:
1. Where the goods are perishable nature. (Section
54(2))
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2. Where the unpaid seller who had
exercised his right of lien or stoppage
in transit, and has given notice to the
buyer of his intention to resell,
but the buyer fails to pay for the price
within a reasonable time after
receiving such notice
(section 54(2))
THUS….
 The seller may also recover from the original
buyer, damages for any loss due to his breach
of contract;
 The buyer shall not be entitled to any profit,
which may occur out of that resale;
 However, if the seller failed to give such notice,
the seller shall not be entitled to recover such
damages,
 and the buyer shall be entitled to the profit out
of the resale, if any. Section 54(2)
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3. Where the seller expressly in the
contract, reserve the right of resale in
cases the buyer failed to pay for the
price.
Section 54(4)
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 The effect of such resale is that, the original
contract with such default buyer would
terminate
 Therefore, the original buyer is no longer
required to pay for the price, and the seller is
entitled to keep any profit out of that resale
 However the seller is still entitled for damages
from the original buyer for breach of contract
and for any loss suffered by the seller out of
that breach.
BREACH BY THE SELLER
1. DAMAGES FOR
NON DELIVERY OF
THE GOODS
2. SPECIFIC
PERFORMANCE
3. ACTION IN TORT
4. DAMAGEs FOR
BREACH OF
WARRANTY
1.Damages For Non-delivery of the Goods
 Where seller wrongfully neglects / refuses to
deliver the goods to buyer, the buyer may sue the
seller for damages for non-delivery
- (s.57 SGA)
The buyer may also be entitled for special
damages, which may be recoverable under the law
If the buyer is also entitled for interest as such rate
as the court thinks fit, on the amount of the price
paid, from the date on which the payment was
made. (Section 61(1))
2. Specific Performance
 In certain circumstances, which are subject to Chapter
II of the Specific Relief Act 1950,
 the buyer may apply to the Court to grant a decree,
 directing the seller to the perform the contract
specifically, without giving the seller the option of
retaining the goods by paying damages to the
buyer.
 Specific Performance is a discretionary decree by
Court.
 This remedy is available only if the contract is to
deliver specific goods or ascertained goods. (Re Wait5oo tons of wheat from a consignment@1000 tons).
3. Buyer’s Action in Tort
Buyer can sue the seller in tort for wrongful
interference with the goods inconsistent with
the ownership of the buyer.
1. Detinue; and
2. Conversion (s.56 SGA)
“Detinue” – wrongful detention of the goods
e.g: where the prop.in goods has passed to the buyer
& seller withholds the goods although the
buyer demands for them.
…con’t
 “conversion” – means the dealing with the goods in
a manner inconsistent with the ownership of the
buyer.
 E.g. if the seller wrongfully sells that goods to a
third party although the property in the goods has
passed to the buyer.
4. DAMAGES FOR BREACH OF WARRANTY
 Whenever there is a breach of warranty by the
seller,
 the buyer is not entitled to reject the goods.
 However the buyer is entitled to sue the seller
for damages because of breach of warranty
Section 59(1)(b)
GLOSARY
 Ascertained goods: Goods identified and upon
by the parties
 Unascertained goods: Goods that are defined by
descriptions only
 Nemo dat rule: A buyer getting the same rights to
the goods as the person they took it from (the
seller)
 Possession of goods: Control or custody of goods
 Property in goods: Ownership
 Sale of goods: The transfer of ownership from
seller to buyer at the time of contract
End of Topic