The Short Title of this Act is the Sale of Goods Act 1908.
(2)
This Act is a consolidation of the enactments mentioned in the Schedule hereto.
(3)
All matters and proceedings commenced under the said enactments, and pending or in progress on the coming into operation of this Act, may be continued, completed, and enforced under this Act.
(4)
This Act is divided into Parts, as follows:
PART 1—Formation of the Contract. (Sections 3 to 17.)
PART 2—Effects of the Contract. (Sections 18 to 28.)
PART 3—Performance of the Contract. (Sections 29 to 39.)
PART 4—Rights of Unpaid Seller against the Goods. (Sections 40 to 49.)
PART 5—Actions for Breach of the Contract. (Sections 50 to 55.)
In this Act, if not inconsistent with the context,—
Action includes counterclaim and set-off
Buyer means a person who buys or agrees to buy goods
Contract of sale includes an agreement to sell as well as a sale
Delivery means voluntary transfer of possession from one person to another
Document of title to goods includes any bill of lading, dock warrant, warehouse keeper's certificate, and warrant or order for the delivery of goods, and any other document used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented
Fault means wrongful act or default
Future goods means goods to be manufactured or acquired by the seller after the making of the contract of sale
goods includes—
(a)
all chattels personal other than money or choses in action; and
(b)
emblements, growing crops, and things attached to or forming part of the land that are agreed to be severed before sale or under the contract of sale; and
(c)
to avoid doubt, computer software
goods: this definition was substituted, as from 8 July 2003, by section 3 Sale of Goods Amendment Act 2003 (2003 No 35).
Plaintiff includes defendant counterclaiming
Property means the general property in goods, and not merely a special property
Quality of goods includes their state or condition
Sale includes a bargain and sale, as well as a sale and delivery
Seller means a person who sells or agrees to sell goods
Specific goods means goods identified and agreed on at the time a contract of sale is made
Warranty means an agreement with reference to goods which are the subject of a contract of sale, but collateral to the main purpose of such contract, the breach of which gives rise to a claim for damages, but not to a right to reject the goods and treat the contract as repudiated
Writ of execution means any writ of sale, warrant of distress, or other writ or warrant of execution under which chattels of any kind may be seized or taken to satisfy process issued out of any Court.
(2)
A thing is deemed to be done in good faith within the meaning of this Act when it is in fact done honestly, whether it is done negligently or not.
(3)
A person is deemed to be insolvent, within the meaning of this Act, who either 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.
(4)
Goods are in a deliverable state within the meaning of this Act when they are in such a state that the buyer would under the contract be bound to take delivery of them.
A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in 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 transferred from the seller to the buyer the contract is called a sale; but where 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, the contract is called an agreement to sell.
(5)
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.
Compare: 1895 No 23 s 3
4-
Capacity to buy and sell
(1)
Capacity to buy and sell is regulated by the general law concerning capacity to contract, and to transfer and acquire property:
Provided that where necessaries are sold and delivered to a person who by reason of mental incapacity or drunkenness is incompetent to contract, he must pay a reasonable price therefor.
(2)
Necessaries in this section means goods suitable to the condition in life of the person, and to his actual requirements at the time of the sale and delivery.
Compare: 1895 No 23 s 4
Subsection (1) proviso was amended, as from 1 January 1970, by section 18 Minors' Contracts Act 1969 (1969 No 41) by omitting the words “an infant or minor, or to”.
Subsection (2) was amended, as from 1 January 1970, by section 18 Minors' Contracts Act 1969 (1969 No 41) by substituting the word “the” for the words “such infant or minor or other”.
Formalities of the contract
5-
Contract of sale, how made
Subject to the provisions of this Act and of any statute in that behalf, a contract of sale may be made in writing (either with or without seal), or by word of mouth, or partly in writing and partly by word of mouth, or may be implied from the conduct of the parties:
Provided that nothing in this section shall affect the law relating to corporations.
Section 6 was repealed, as from 19 October 1956, by section 4(1) Contracts Enforcement Act 1956 (1956 No 23).
Subject-matter of contract
7-
Existing or future goods
(1)
The goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or goods to be manufactured or acquired by the seller after the making of the contract of sale, in this Act called future goods.
(2)
There may be a contract for the sale of goods, the acquisition of which by the seller depends upon a contingency which may or may not happen.
(3)
Where by a contract of sale the seller purports to effect a present sale of future goods, the contract operates as an agreement to sell the goods.
Compare: 1895 No 23 s 7
8-
Goods which have perished
Where there is a contract for the sale of specific goods, and the goods without the knowledge of the seller have perished at the time when the contract is made, the contract is void.
Compare: 1895 No 23 s 8
9-
Goods perishing before sale but after agreement to sell
Where there is an agreement to sell specific goods, and subsequently the goods, without any fault on the part of the seller or buyer, perish before the risk passes to the buyer, the agreement is thereby avoided.
The price in a contract of sale may be fixed by the contract, or may be left to be fixed in manner thereby agreed, or may be determined by the course of dealing between the parties.
(2)
Where the price is not determined in accordance with the foregoing provisions the buyer must pay a reasonable price.
(3)
What is a reasonable price is a question of fact, dependent on the circumstances of each particular case.
Compare: 1895 No 23 s 10
11-
Agreement to sell at valuation
(1)
Where there is an agreement to sell goods on the terms that the price is to be fixed by the valuation of a third party, and such third party cannot or does not make such valuation, the agreement is avoided:
Provided that if the goods or any part thereof have been delivered to and appropriated by the buyer he must pay a reasonable price therefor.
(2)
Where such third party is prevented from making the valuation by the fault of the seller or buyer, the party not in fault may maintain an action for damages against the party in fault.
Compare: 1895 No 23 s 11
Conditions and warranties
12-
Stipulations as to time
(1)
Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not deemed to be of the essence of a contract of sale.
(2)
Whether any other stipulation as to time is of the essence of the contract or not depends on the terms of the contract.
(3)
In a contract of sale month means prima facie calendar month.
Where a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may waive the condition, or may elect to treat the breach of such condition as a breach of warranty, and not as a ground for treating the contract as repudiated.
(2)
Whether a stipulation in a contract of sale is a condition, the breach of which may give rise to a right to treat the contract as repudiated, or a warranty, the breach of which may give rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated, depends in each case on the construction of the contract. A stipulation may be a condition, though called a warranty in the contract.
(3)
Where a contract of sale is not severable, and the buyer has accepted the goods or part thereof, the breach of any condition to be fulfilled by the seller can only be treated as a breach of warranty, and not as a ground for rejecting the goods and treating the contract as repudiated, unless there is a term of the contract, express or implied, to that effect.
(4)
Nothing in this section shall affect the case of any condition or warranty fulfilment of which is excused by law by reason of impossibility or otherwise.
Compare: 1895 No 23 s 13
Subsection (3) was amended, as from 1 April 1980, by section 14(1)(a) Contractual Remedies Act 1979 (1979 No 11) by omitting the words “or where the contract is for specific goods the property in which has passed to the buyer”.
14-
Implied undertaking as to title, etc
In a contract of sale, unless the circumstances of the contract are such as to show a different intention, there is—
(a)
An implied condition on the part of the seller that in the case of a sale he has a right to sell the goods, and that in the case of an agreement to sell he will have a right to sell the goods at the time when the property is to pass:
(b)
An implied warranty that the buyer shall have and enjoy quiet possession of the goods:
(c)
An implied warranty that the goods are free from any charge 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.
Where there is a contract for the sale of goods by description there is an implied condition that the goods shall correspond with the description; and if the sale is by sample, as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description.
Compare: 1895 No 23 s 15
16-
Implied conditions as to quality or fitness
Subject to the provisions of this Act and of any statute in that behalf, 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, except as follows:
(a)
Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller's skill or judgment, and the goods are of a description which it is in the course of the seller's business to supply (whether he is the manufacturer or not), there is an implied condition that the goods shall be reasonably fit for such purpose:
Provided that in the case of a contract for the sale of a specified article under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose:
(b)
Where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or not), there is an implied condition that the goods shall be of merchantable quality:
Provided that if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed:
(c)
An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade:
(d)
An express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith.
Compare: 1895 No 23 s 16
Sale by sample
17-
Sale by sample
(1)
A contract of sale is a contract for sale by sample where there is a term in the contract, express or implied, to that effect.
(2)
In the case of a contract for sale by sample there is an implied condition—
(a)
That the bulk shall correspond with the sample in quality;
(b)
That the buyer shall have a reasonable opportunity of comparing the bulk with the sample; and
(c)
That the goods shall be free from any defect, rendering them unmerchantable, which would not be apparent on reasonable examination of the sample.
Where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained.
Compare: 1895 No 23 s 18
19-
Property passes when intended to pass
(1)
Where there is a contract for the sale of specific or ascertained goods, the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.
(2)
For the purpose of ascertaining the intention of the parties, regard shall be had to the terms of the contract, the conduct of the parties, and the circumstances of the case.
Compare: 1895 No 23 s 19
20-
Rules for ascertaining intention
Unless a different intention appears, the following are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer:
Rule 1.
Where there is 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, and it is immaterial whether the time of payment or the time of delivery, or both, is postponed.
Rule 2.
Where 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 them into a deliverable state, the property does not pass until such thing is done, and the buyer has notice thereof.
Rule 3.
Where 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 does not pass until such act or thing is done, and the buyer has notice thereof.
Rule 4.
Where goods are delivered to the buyer on approval, or on sale or return or other similar terms, the property therein passes to the buyer—
(a)
When he signifies his approval or acceptance to the seller, or does any other act adopting the transaction:
(b)
If he does not signify his approval or acceptance to the seller, but retains the goods without giving notice of rejection then, if a time has been fixed for the return of the goods, on the expiration of such time, and if no time has been fixed, on the expiration of a reasonable time. What is a reasonable time is a question of fact.
Rule 5.
(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 the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be expressed or implied, and may be given either before or after the appropriation is made.
(2)
Where, in pursuance of the contract, the seller delivers the goods to the buyer, or to a carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract.
