1.

SALE OF GOODS
- Governed by the Sale of Goods Act 1957
- s 3 SOGA: The provisions of the Contracts Act 1950 will continue to apply
- Sale of Goods Act 1957 is intended to offer additional protection to consumers

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1.1 Definition of goods 1.2 Categories of goods

s 2 SOGA: “Goods” means movable property, stock, shares s 6(1) SOGA
& things grown on land but does not include actionable
claims, money, land or services

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Movable Stock Things grown

Does not include:
Property & shares on land e.g.
- actionable
timber or crop
claims (suing
(but does not
another person
include the
for money)
land) - Money
- Land
- Services
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Existing Specific Unascertained Future

Goods Goods Goods Goods
Existing goods are Goods identified and Goods identified by Goods manufactured or
goods already owned agreed upon at the description only (E.g. produced or acquired by the
by Seller (E.g. Dealer time a contract of Buyer wants to buy Seller after the contract for
has existing BMW 5 sale is made (E.g. a BMW car) sale (E.g. new BMW 2018 yet
series year 2016) Buyer agrees to buy to be manufactured) (E.g.
Seller’s BMW car no Buyer wants to buy from
WWW1) Seller a BMW 5 series no
WWW1. But at the time the
contract was made, the
Seller has not yet bought the
car from the third party)

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2.1 Contract for sale
- s 4(1) SOGA: A contract
whereby Seller transfers or
agree to transfer the goods
to the Buyer for a price
- s 4(2) SOGA: Contract
for sale may be absolute
or conditional
2. CONTRACT FOR SALE
2.2 Agreement to sell 2.3 Capacity 2.4 Privity
to contract of contract
- s 4(3) SOGA: Contract for s 11 CA: A person Contract
sale is where property in goods is competent to binding only
is transferred from Seller to contract if he is of to parties to
Buyer. Agreement to sell is the age of majority a contract
the transfer is to take place or of sound mind
at a future date or subject to
conditions to be fulfilled
- s 4(4) SOGA: When time
elapse or condition fulfilled,
then the agreement will become
a sale
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Age of majority Sound mind
s 2 Age of Majority Act 1972: s 12(1) Contracts Act: Sound
18 years old mind if he can understand &
form a rational judgement
 3. FORMATION OF THE CONTRACT
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3.1 Formation 3.2 Formalities 3.3 Price

s 5(1) SOGA: s 5(2) SOGA: Price can be fixed in
A contract of sale is made by: A contract of sale may be made: the following
(a) Offer (a) In writing manner:
(b) Acceptance (b) By word of mouth
(c) Payment (c) Partly in writing or partly by word of mouth
(d) Delivery (d) Implied from conduct of parties

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Price is fixed by Price is left to Price to be If price is not fixed,

the contract be fixed in a determined then pay a
manner agreed by the course reasonable sum
in a contract of dealings
between parties
s 9(1) SOGA s 9(1) SOGA s 9(1) SOGA s 9(2) SOGA
Seller agree to sell Seller agree to sell Seller supply table If price is not
car to Buyer for car to Buyer. But to Buyer at RM300 determined, the
for RM10,000 price fixed by the for 1 year. After 1 Buyer must pay a
mechanic upon year, Seller continue reasonable sum
inspection to supply to Buyer at
RM300. Price not fixed
by contract but by course
of dealings
 4. TERMS OF THE CONTRACT

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4.1 Classification of terms 4.2 Express terms 4.3 Implied terms

s.12(1) SOGA: A stipulation in a contract of sale
of goods may be a condition or a warranty

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(a) Conditions (b) Warranty

s.12(2) SOGA: A condition is a stipulation
essential to the main purpose of the contract.
Breach of a condition allows the party to
terminate the contract.
s.12(3) SOGA: A warranty is a stipulation
collateral (not essential) to the main purpose
of the contract. Breach of a condition does not
allow a party to terminate but only claim
damages.
- Stipulation as to time
Stipulation as to time of payment is not
deemed to be of the essence of the contract
for sale. It depends on the terms of the
contract (e.g. if the buyer fail to pay by an
agreed date, the seller cannot terminate the
contract. It is for the court to decide).
 5. IMPLIED TERMS
 SOGA 1957 implies certain terms in a contract for sale of goods

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5.1 Title 5.2 Quiet possession 5.3 Unencumbered

- Implied condition as to title
- s14(a) SOGA: There is an implied
condition that seller has a right /
title / ownership to sell the goods.
- Breach of condition allows buyer
to terminate & claim for refund.
- Implied warranty that buyer
can enjoy quiet possession
- s14(b) SOGA: Buyer can
enjoy possession of the goods
undisturbed (no other people
can make a claim)
- Breach of warranty does not
allow buyer to terminate
- Implied warranty that
goods are unencumbered
- s14(c) SOGA: Good must
be free from charge or
encumbrances.

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5.4 Description 5.5 Quality or fitness 5.3 Sample

- s15 SOGA: There is an implied
condition that goods must
correspond with description
- s16(1) SOGA: There is an - s17(1) SOGA: Every
implied condition as to quality contract of sale is a sale
or fitness where: - by sample
- s17(2) SOGA: There is an
implied condition that

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(a) s16(1) (a) (b) s16(1) (b)

Must be fit for purpose if the Goods must be of merchantable
seller’s goods is for a particular quality (but not applicable if the
purpose or the buyer relies on buyer examine the goods)
the seller’s skills

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The goods must correspond Buyer has reasonable Goods must be merchantable
with the sample in quality opportunity to compare quality and free from defects
the goods with the sample
 6. RISK
 Risk generally passes with property (ownership or title)
 s26 SOGA: Goods remain at the seller’s risk until the property is transferred to the buyer.
Once transferred, goods at buyer’s risk even though buyer has not yet have possession
 Where does property pass? s19(1) SOGA: Property transferred to the buyer at such time as
the parties intend it to be transferred

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6.1 Specific goods 6.2 Specific goods to be 6.3 Specific goods in a

in a deliverable state put in a deliverable state deliverable state but not
yet ascertain price
s20 SOGA: If it is a sale of specific s21 SOGA: If it is a sale of s22 SOGA: If it is a sale
goods in a deliverable state, the specific goods but not yet in of specific goods in a
property passes when the contract a deliverable state, property deliverable state but not yet
is made (not the time of payment or passes when seller puts the ascertain price, property
delivery) goods in a deliverable state will pass when seller weigh,
measure or test to ascertain
the price
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6.4 Unascertained goods & future goods 6.5 Goods sent on approval or “on sale or
return”
- s23(1) SOGA: For unascertained & future goods s24 SOGA: For goods sent on approval or “on
by description in a deliverable state, the property sale or return”, it will pass when –
will pass when the goods are unconditionally
appropriated (set aside and make one’s own)
to the buyer
- s23(2) SOGA: What is unconditionally appropriated?
Seller is deemed to be unconditionally appropriated
When seller delivers the goods to the buyer
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Buyer approves and Buyer does not approve and accept

accepts the goods but retains the goods without
returning it within the agreed time or
reasonable time
 7. NEMO DAT QUOD NON HABET
 No one can give what he doesn’t have (Sale by a person who is not the owner)
 s27 SOGA: If seller is not the owner, the buyer acquires no title
 Exceptions to the nemo dat rule
(Where seller who is not an owner can give good title to buyer)

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7.1 Estoppel 7.2 Mercantile agent 7.3 Joint owners

s27(1) SOGA: Owner by his own s27(1) SOGA: Owner appoints
s27(2) SOGA: One of the
conduct precluded from denying a mercantile agent to conduct
joint owners has possession
seller’s authority to sell a sale on his behalf of goods with permission of
the other joint owners
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7.4 Voidable contract 7.5 Possession after sale

s29 SOGA: Seller obtain possession under a voidable
contract (s19 / 20 CA) but contract not yet rescinded
or terminated
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Seller in possession after sale Buyer in possession after sale

s30(1) SOGA: Seller after
selling the goods and who
continues to be in possession,
then sells the goods to a new
buyer. The sale to the new
buyer is valid if the new buyer
buys in good faith (innocently)
s30(2) SOGA: Buyer agreed to
buy and already has possession
of goods, then sells goods to a new
buyer. The sale to the new buyer is
valid although the first sale is not
completed (not paid or not
transferred)
 8. DUTIES OF SELLER & BUYER
- s 31 SOGA: Duty of seller to deliver the goods; Duty of buyer to accept and pay
- s 32 SOGA: Payment and delivery are concurrent conditions

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8.1 Delivery 8.2 Acceptance

s. 2 SOGA: Delivery is the voluntary transfer
of possession

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Place of delivery Time of delivery Buyer’s right Acceptance

s. 36(1) SOGA: Place s. 36(2) SOGA: Follow to examine s. 42
of delivery is stated in the contract for sale. If the goods SOGA:
the contract. If not, the not, reasonable time. s. 41(1) SOGA Buyer says
delivery is at the place he accepts
where sale took place. goods or
____________________________ does any act
to show that
Delivery of wrong quantity Instalment deliveries he accepts
s. 37(1)(2)(3) SOGA: s. 38 (1) SOGA: Buyer or retains
Buyer can reject or accept. not bound to accept. the goods
for a
reasonable
time.
 9. REMEDIES

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9.1 Unpaid seller 9.2 Buyer

s. 45(1) SOGA: Unpaid seller
if the price has not been paid.

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Unpaid seller’s lien Stoppage in transit Resale

s. 47(1) SOGA: Unpaid
seller who has possession
of goods can retain possession
of them until payment has
been made.
s. 50 SOGA: Where
goods are in transit, seller
may resume possession of
the goods and may retain
them.
s. 54(2) SOGA: Where
goods are perishable nature,
seller can give notice to
resell.

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Damages for Specific performance Remedy for breach

non-delivery of warranty
s. 57 SOGA: s. 58 SOGA: s. 59(1) SOGA:
Buyer can sue seller Where goods
for damages for non- already accepted,
delivery. can sue for damages
for breach of
warranty.