Sale of Goods jady hassim

Introduction Sale of Goods Act, 1957 s. 5(2) Civil Law Act, 1956 English Sale of Goods Act 1893 Unfair Contract Terms Act 1977 Conflict between Contract Act 950 vs. s.. 3 SOGA 1957 Sale of Goods v Other Contracts Barter System Tenancy Hire Purchase Salary Charge jady hassim

Goods s.. 2 SOGA: “goods” means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale; s.. 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. Sale and agreement to sell Definisi: s. 4(1) SOGA Sale: s. 4(3) - 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. Agreement to sell : s.. 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 is to be transferred. s.. 9. (1) 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. (penetapan harga mengikut kontrak/perjalanan urusan. jady hassim

Terms of the Contract Can be an express term or implied term Terms can be divided into: conditions and warranties s. 12(2) SOGA – conditions A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated. s. 12(3) SOGA – warranty A warranty is a stipulation collateral to the main purpose of the 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. s. 13(1) SOGA – When condition to be treated as warranty Where a contract of sale is subject to any condition to be fulfilled by the seller the buyer may waive the condition or elect to treat the breach of the condition as a breach of warranty and not as a ground for treating the contract as repudiated. Tham Cheow Toh v Ass. Metal Smelters (1971) It was agreed that the melting furnace would have a temperature of not lower than 2,600 degrees F. Held: Respondent treat it as a breach of warranty, therefore, a total sum of RM7,501.38 were awarded as damages for loss of profits. jady hassim

Implied Terms Effect: …as to TIME ..as to TITLE s. 11 SOGA - time is of the essence of the contract or not depends on the terms of the contract. ..as to TITLE s. 14(a) SOGA - 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. Implied warranty as to QUIET POSSESSION an implied warranty that the buyer shall have and enjoy quiet possession of the goods Effect: s. 12(2) SOGA – right to treat the contract as repudiated. jady hassim

s. 15 SOGA Implied conditions that the goods must be in accordance to the description. 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. Varley v Whipp [1900] – sale of goods by description must apply to all cases where the purchaser has not seen the goods but is relying on the description alone. jady hassim

Griffith v Peter Conway (1939) Implied conditions as to QUALITY and FITNESS The seller must ensure goods fulfilled the conditions. The buyer must know and aware: caveat emptor - s. 16(1) SOGA Exceptions 1 Where the buyer, expressly or by implication makes known to the seller the particular purpose for which the goods are required the buyer relies on the seller’s skill or judgment, 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 producer or not) there is an implied condition that the goods shall be reasonably fit for such purpose: 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. Griffith v Peter Conway (1939) The seller of the coat did not disclose to the buyer that the coat was suitable for a woman with abnormal skin sensitive. The buyer did not disclose to the seller that she wanted a coat, which is suitable for her. Held: the seller was not liable since the buyer did not disclose the purpose of buying the coat. jady hassim

Bristol Tramways v Fiat Motors (1910) Where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not) there is an implied condition that the goods shall be of merchantable quality: Exception 2: caveat emptor - If the buyer has examined the goods, there shall be no implied condition as regards defects which such examined ought to have revealed. Bristol Tramways v Fiat Motors (1910) Merchantable quality refers to such quality in such condition that a reasonable man acting reasonably would after full examination accept it under the circumstances of the case in performance of his offer to buy that goods. Seng Hit v Arathoon sons (1968) The tapioca flour delivered was claimed to be unfit for human consumption (there was a discoloration of a small portion but it was discovered did not contain any injurious ingredient. Plaintiff failed to prove that the flour was of unmerchantable quality under English law. jady hassim

Implied conditions that the goods must be in accordance to the SAMPLE. Issue whether there is a sale by sample or not. Drummond v Van Ingen (1887) Sample is to present to the eye the real meaning and intention of the parties with regard to the subject matter of the contract...it may be difficult or impossible to express in words. s. 17(2) SOGA - In the case of a contract for sale by sample there is an implied condition— that the bulk shall correspond with the sample in quality; that the buyer shall have a reasonable opportunity of comparing the bulk with the sample; that the goods shall be free from any defect rendering them unmerchantable which would not be apparent on reasonable examination of the sample. jady hassim

Goods must be ascertained Transfer of Property The title of property passes together with the property (ownership) When the goods sold to the buyer (via hire purchase), the titles remains with the seller (possession) Risk = ownership Goods must be ascertained s. 18 SOGA - 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. s. 19 SOGA - Property passes when intended to pass jady hassim

Specific goods in a deliverable state s. 20 SOGA – 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 of the price, or the time of delivery of the goods, or both, is postponed. Deliverable state – when it is in a physical state that the buyer can take delivery. s. 2 SOGA - “delivery” means voluntary transfer of possession from one person to another; goods are said to be in a “deliverable state” when they are in such state that the buyer would under the contract be bound to take delivery of them; Underwood Ltd v Burgh Castle Brick & Cement Syndicate (1922) Contract of sale - a certain heavy machine was securely fixed art a place and need to be separated from the concrete floor. Held: the machine was not at a delivery state at the time of the contract. Specific goods to be put into a deliverable state s. 21 - 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. jady hassim

Risk prima facie passes with property (Pemindahan Risiko) s. 26 SOGA - Unless otherwise agreed, the goods remain at the seller’s risk until the property therein is transferred to the buyer, but when the property therein is transferred to the buyer, the goods are at the buyer’s risk whether delivery has been made or not: Exception 1: Provided that where delivery has been delayed through the fault of either buyer or seller, the goods are at the risk of the party in fault as regards any loss which might not have occurred but for such fault: Exception 2: Provided also that nothing in this section shall affect the duties or liabilities of either seller or buyer as a bailee of the goods of the other party. jady hassim

Lim Chui Lai v Zeno Ltd (1964) Transfer of Title Subject to this Act and of any other law for the time being in force, where goods are sold by a person who is not the owner thereof, and 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, unless the owner of the goods is by his conduct precluded from denying the seller’s authority to sell. Latin maxim: nemo dat quod non habet Exceptions: Estoppel Sale by a merchantile agent Sale by a joint owner Sale under a voidable contract Sale by a seller in possession after sale Sale by a buyer in possession. Lim Chui Lai v Zeno Ltd (1964) Construction of culvert. The resp bought the construction materials and made an agreement with Ahmad (contractor). In fact, Ahmad was merely a bailee and not the owner when he sold the goods to the appellant. Ahmad had no title to the chattels. jady hassim

Exception 1: Estoppel s. 27 SOGA - where a mercantile agent is, with the consent of the owner, in possession of the goods or of a document of title to the goods, any sale made by him when acting in the ordinary course of business of a mercantile agent shall be as valid as if he were expressly authorized by the owner of the goods to make the same; Exception 2: Sale by a mercantile agent S. 2 SOGA - “mercantile agent” means a mercantile agent having in the 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 of goods. jady hassim

Exception 4: Sale under a voidable contract Exception 3: Sale by a joint owner s. 28 SOGA - If one of several joint owners of goods has the sole possession of them by permission of the co-owners, the property in the goods is transferred to any person who buys them of such joint owner in good faith and has not at the time of the contract of sale notice that the seller has no authority to sell. Exception 4: Sale under a voidable contract s. 29 SOGA – Where the seller of goods has obtained possession thereof under a contract voidable under section 19 or 20 of the Contracts Act 1950, but the contract has not been rescinded at the time of the sale, the buyer acquires a good title to the goods provided he buys them in good faith and without notice of the seller’s defect of title. jady hassim

Exception 5: Sale by a seller in possession after sale s. 30(1) SOGA – Where a person, having sold goods, continues or is in possession of the goods or of the documents of title to the goods, the delivery or transfer by that person or by a 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 and without notice of the previous sale shall have the same effect as if the person making the delivery or transfer were expressly authorized by the owner of the goods to make the same. jady hassim

Exception 6: Sale by a buyer in possession. s. 30(2) SOGA - Where a person, having bought or agreed to buy goods, obtains, with the consent of the seller, possession of the goods or the documents of title to the goods, the delivery or transfer by that person or by a 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 and without notice of any lien or other right of the original seller in respect of the goods shall have effect as if such lien or right did not exist. jady hassim

Performance of the contract s. 31 SOGA – Duties of seller and buyer It is the duty of the seller to deliver the goods and of the buyer to accept and pay for them in accordance with the terms of the contract of sale. s. 32 SOGA – Payment and delivery are concurrent conditions Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller shall be ready and willing to give possession of the goods to the buyer in exchange for the price, and the buyer shall be ready and willing to pay the price in exchange for possession of the goods. s. 33 SOGA – Delivery s. 35 SOGA – Buyer to apply for delivery the seller of goods is not bound to deliver them until the buyer applies for delivery. jady hassim

Rules as to delivery s. 36(1) SOGA – Whether it is for the buyer to take possession of the goods or for the seller to send them to the buyer is a question depending in each case on the contract, express or implied, between the parties. Apart from any such contract, goods sold are to be delivered at the place at which they are at the time of the sale, and goods agreed to be sold are to be delivered at the place at which they are at the time of the agreement to sell, or, if not then in existence, at the place at which they are manufactured or produced. jady hassim

REMEDIES Damage Damage for non delivery Specific performance Remedy for breach of warranty Repudiation of contract due date Interest by way of damages and special damages jady hassim

s. 45(1) SOGA – Unpaid seller defined when the whole of the price has not been paid or tendered; when a bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has not been fulfilled by reason of the dishonour of the instrument or otherwise. s. 46 (1) SOGA - Unpaid seller’s rights a lien on the goods for the price while he is in possession of them; in case of the insolvency of the buyer a right of stopping the goods in transit after he has parted with the possession of them; a right of resale as limited by this Act. jady hassim

where the goods have been sold without any stipulation as to credit; Seller’s lien s. 47(1) SOGA – the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases, namely: where the goods have been sold without any stipulation as to credit; where the goods have been sold on credit, but the term of credit has expired; where the buyer becomes insolvent. jady hassim

S. 49 (1) - The unpaid seller of goods loses his lien thereon: when he delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without reserving the right of disposal of the goods; when the buyer or his agent lawfully obtains possession of the goods; by waiver thereof. jady hassim

Repudiation of contract before sale S. 60 SOGA - Where either party to a contract of sale repudiates the contract before the date of delivery, the other party may either treat the contract as subsisting and wait till the date of delivery, or he may treat the contract as rescinded and sue for damages for the breach. jady hassim

Thank you jady hassim