SALE OF GOODS

TUTORIAL QUESTIONS

1. Do the following transactions come within the Sale of Goods Act

1957?

(a) Ma Nee sells to Wang Wang a one dollar coin for five dollars in
notes. The coin is current but has a greater curiosity value than its
denomination.
Yes. It does not matter if the coin has greater value. As long as there is
a sale of good, intention to transfer a property and a price

(b)Pak Cek sells to Samy a cheque of value five dollars signed by the
Prime Minister of Malaysia for hundred dollars. At the time of the
sale the cheque is still negotiable.
NO. there is no fixed price

(c) Semaun enters into an agreement with Pak Senik by which he

contracts to sell “my next year padi harvest” to Pak Senik for a
price to be determined in due course.
S. 9 of SOGA states that the price in a contract of sale may be fixed by
the contract or may be fixed by the party in the course of dealing

(d)Mat Saham and Datuk Merah make an agreement at Kuching by

which Mat Saham agrees to sell his entire shareholding in Public
Bank Berhad to Datuk Merah for a million dollars.
Yes. Because according to the section two. There is an intention to sell
the property and there is a price fixed

(e) Pak Seer contracts with Bah Too whereby he agrees to sell two
tons of sand from his land for one thousand dollars.
Yes. Because according to the section two. There is an intention to sell
the property and there is a price fixed. Sand is considered as goods
 since it is movable and is within the definition of attached or forms a
part of the land which are agreed to be severed before sale or under the
cos.

2. Discuss and distinguish a contract of sale of goods from

(i) a gift
(ii) a hire-purchase
(iii) a contract for skill and labour

May & Butcher v The King

FACTS : After the end of the First World War, the Government had a surplus of tents
which were no longer required by the army. As a result, the Government’s disposal’s board
was set up to sell these tents. They agreed to sell tents to May and Butcher Ltd who left
£1,000 as a security deposit for their purchases. According to the written agreement between
the disposals board and the company, the price for the tents, and the dates on which
payment was to be made were to be agreed between the parties, as and when the tents
became available. In 1923 a new disposal’s board took over and refused to sell the tents.
They stated that they no longer considered themselves bound by the contract. May and
Butcher sued but were unsuccessful.  They appealed to the House of Lords.

HELD : No contract existed since part of contract, the price was undetermined. An agreement
to enter into a contract is not a contract. S.8 of SOGA provides for a price to be fixed in the
future, but s.9 holds that if the price cannot be fixed by a third party, no agreement is
formed. Buckmaster holds that being unable to fix berween the parties and having a third a
party unable to fix the price are the same. The deposit paid was to ensure performance
under the contract and as no agreement formed this is not valid.

A term yet to be determined means that there is no contract it is an essential term. It is

simply an agreement to agree and is not enforceable.

Foley v Classique coaches, Ltd

FACTS : Foley owned some land and a petrol station. He sold part of the land
adjoining the station to Classique Coaches Ltd, a coach company. One of the
conditions of the agreement was that the company purchase all of their fuel for
the coaches from Foley’s filling station as long as it could be provided by him.
The agreement also contained an arbitration clause. It did not, however, provide
a price for the agreement. Classique complied with the terms of this agreement
for three years until one of their lawyers advised them that as a price had not
been indicated, it was unlikely in his opinion that there was a binding
agreement. After this, Classique stopped buying fuel from Foley, who sued
them for breach of contract.
HELD : The agreement was not void for uncertainty simply because the price
for the fuel had not been mentioned in the agreement. Classique had performed
their agreement for several years, and this obligation could not simply be
repudiated. Where the parties had acted as though an agreement had been
created and performed their obligations in this way, there was instead an
implied term that the price of the fuel to be purchased under the agreement was
to be reasonable. Furthermore, if agreement could not be reached on what was a
reasonable or fair price, the agreement contained an arbitration clause
specifically designed to resolve disputes of this nature. Classique coaches were
therefore in breach of contract by failing to purchase fuel from Foley, as
required by the agreement.