Chapter Four Law of Sale of Goods

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2013 –– COMMERCIAL
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CHAPTER 4: LAW OF SALE
4: LAW OF SALE OF
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1.0 INTRODUCTION TO LAW OF SALE OF GOODS
The law relating to sale of goods in Malaysia is principally governed by the Sale of Goods Act
(SOGA), 1957. The general principles that relate to contracts e.g. offer, acceptance, consideration,
etc. apply to a contract of sale of goods and the parties are free to agree on the terms which will
govern their relationship.
1.1 What is contract for the sale of goods?
Section 4(1) of SOGA 1957

“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 price.”
Seller Buyer Price

Seller Buyer Price
“Price” means the money consideration for sale of the goods. “Price” is an integral part of a
contract of sale. If it is not fixed or is not capable of being fixed, the whole contract is
void ab-initio.
1.2 Essential of contract of sale
From the above definition, the following essentials of a contract of sale may be noted:
 There must be at least two parties

 Transfer or Agreement to transfer the ownership of goods.
 The subject matter of the contract must necessarily be 'goods'.
 The consideration is price.
 A Contract of sale may be absolute or conditional
 All other essentials of a valid contract must be present.
2.0 DEFINITION OF GOODS
Section 2 of SOGA 1957

“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;
Actionable claims and money are not included in the definition of goods. Thus, goods include
every kind of moveable property other than actionable claim or money.
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 Example : Goodwill, copyright, trademark, patents, water, gas, and electricity are all
goods and may be the subject matter of a contract of sale.
The test is if the property on shifting its situation does not lose its character, the said property shall
be movable and fall within the definition of “Goods”.
2.1 Types of Goods
Section 6(1) of SOGA 1957

“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.”
Classification of Goods Explanations
Existing goods Goods already owned by the seller at the time of the
contract.
E.g. : Goods on display in a supermarket
Future goods Goods to be manufactured or produced or acquired by the

seller after making the contract of sale.
E.g. : Goods that are ordered when no more stock
Specific goods Goods identified and agreed upon at a time the contract of
sale is made.
Unascertained goods Goods know by description only and not identified at the
time of the contract.
3.0 DISTINCTIONS BETWEEN CONTRACT OF SALE AND AGREEMENT TO SELL
3.1 Contract of Sale
It is a contract where the ownership in the goods is transferred by seller to the buyer
immediately at the conclusion contract. Thus, strictly speaking, sale takes place
when there is a transfer of property in goods from the seller to the buyer. It must
be noted here that the payment of price is immaterial to the transfer of property in
goods.
Example : Abu sells his Yamaha superbike to Budin for RM 15,000. It is a sale since the
ownership of the motorcycle has been transferred from Abu to Budin.
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3.2 Agreement to Sell
It is a contract of sale where the transfer of property in goods is to take place at a future
date or subject to some condition thereafter to be fulfilled.
Examples :
(i) A agreed to buy from B a certain quantity of nitrate of soda. The ship carrying the
nitrate of soda was yet to arrive. This is an “agreement to sell”. In this case, the
ownership of nitrate of soda is to be to transferred to A on the arrival of the ship
containing the specified goods (i.e. nitrate of soda).
(ii) On 1st March 2011, A agreed to sell his car to B for RM 80,000. It was agreed
between themselves that the ownership of the car will transfer to B on 31 st March
2011 when the car got registered in B`s name. It is an agreement to sell and it will become
sale on 31st March 2011 when the car is registered in the name of B.
** Other points of distinctions between a contract of sale and an agreement to sell are:
Contract of Sale Agreement to sell
1. An executed contract. 1. An executory contract.
2. In a contract of sale, since the property has 2. In an agreement to sell, in case of breach, the
passed to the buyer, the seller can sue the seller can only sue for damages, unless the
buyer for the price of the goods. price was payable at a stated date.
3. In case of loss of goods, the loss will fall on 3. The loss in this case shall be borne by the
the buyer, even though the goods are in the seller, even though the goods are in the pos-
possession of the seller. It is because 'Risk' is session of the buyer.
associated with ownership.
4. In these circumstances, the buyer cannot
4. In case buyer pays the price and the seller claim the goods but only a rateable dividend
thereafter becomes an insolvent, the buyer for the money paid.
can claim the goods from the Official
Receiver or Assignee. 5. In these circumstances, the seller can refuse
to deliver the goods to the Official Assignee
5. If the buyer becomes an insolvent without or Receiver.
paying the price, the ownership having
passed to the buyer, the seller shall have to
deliver the goods to the Official Assignee or
Receiver except where he has a lien over the
goods.
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4.0 TERMS OF CONTRACT
Conditions and Warranties

Conditions and Warranties
Implied Terms
Express Terms
Section 12 (1) of SOGA 1957

“A stipulation in a contract of sale with reference to goods which are the subject thereof may
be a condition or warranty.”
4.1 Express Terms
4.1.1 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.”
In a contract of sale, parties make certain stipulations, i.e. agree to certain terms.
Some of them may be intended by the parties to be of a fundamental nature,
e.g. quality of the goods to be supplied. The stipulation essential to the
main purpose of the contract, the breach of which gives rise to a right
to treat the contract as repudiated. Such stipulations are known as
“conditions”.
4.1.2 Warranties

“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.”
In contrast, some may be intended by the parties to be binding, but of a subsidiary

or inferior character, e.g., time of payment. Thus, stipulation collateral to the
main purpose of the contract which the breach of which gives rise to a
right to claim for damages only, not to a right to reject the goods. Here
the stipulations are known as “warranties”.
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4.2 Distinction between Conditions and Warranties
Conditions Warranties
1. A condition is a stipulation (in a 1. A warranty is a stipulation, which is

contract), which is essential to the main only collateral or subsidiary to the main
purpose of the contract. purpose of the contract.
2. A breach of condition gives the 2. A breach of warranty gives only the

aggrieved party a right to sue for right to sue for damages. The contract
damages as well as the right to cannot be repudiated.
repudiate the contract.
3. A breach of warranty cannot be treated
3. A breach of condition may be treated as as a breach of condition.
a breach of warranty in certain
circumstances.
** Example : A man buys a particular horse, which is warranted quiet to ride and drive. If
the horse turns out to be vicious, the buyer's only remedy is to claim
damages.
But if instead of buying a particular horse, a man asks a dealer to supply him
with a quiet horse and the horse turns out to be vicious, the stipulation
is a condition and the buyer can reject the horse, or keep the
horse and claim damages.
4.3 When Condition is treated as Warranty?
Under the following circumstances a breach of condition is to be treated as a breach of

warranty, i.e., the right to repudiate the contract is deemed to have been lost:
(i) Section 13 (1) of SOGA 1957 - Waiver of Condition

(ii) Section 13 (2) of SOGA 1957 - Compulsory treatment of breach of condition as
breach of Warranty.
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4.4 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. (Section 62 of SOGA)
4.4.1 Implied Conditions
(a) Implied condition as to title
S.14 (a) SOGA 1957 - Seller must be the owner of the goods.
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.
Case : Rowland v. Divall

Facts : Ptf. bought a car & after using it for months discovered that it was
stolen. He had to return it to true owner. Defendant had breach the
condition as to title
(b) Implied condition that sale by description
S. 15 of SOGA 1957 - The goods must correspond with the description.
If the contract is for the sale of goods by description, there is an implied

condition that the goods must correspond with the description. 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).
Case : Beale v. Taylor

Facts : The seller of a car advertised it as a “Herald Convertible, White,
1961…”. The buyer viewed the car before agree to buy it. Later he
discovered that while the rear halve of the car was part of a 1961 Herald
Convertible, the front part was part of an earlier model.
Held : It was held that he could sue under Section 15 of Sale of Goods Act,
1957 because even though the buyer can try the good, defects may be
concealed from the buyer.
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(c) Implied condition that goods must be reasonably fit for the purpose it
is bought
S. 16 of SOGA 1957 - Fit for purpose.
S. 16 provide that an implied condition that goods are reasonably fit for a
particular purpose. For this section to apply, there are FIVE (5)
conditions need to be satisfied :
i. The sale must be in the ordinary course of business.

ii. It must be fit for normal purpose or particular purpose. If the goods
are for normal purpose, buyer needs not to expressly inform the seller.
iii. The buyer must rely on the seller’s skill or judgment.
iv. The goods are of a description, which it is in the course of the seller’s
business to supply.
v. If the goods are specific, they must not be bought under their patent or
brand name.
Case : Griffiths v. Peter Conway Ltd.
Facts : A woman bought a coat without implicating to the seller that she
has sensitive skin.
Held : She fails to claim damages after experience skin problems. The coat
is fit for purpose to a normal person only
(d) Implied condition that goods must be of merchantable quality
S. 16 (1) of SOGA 1957 - Merchantable quality.
There is an implied condition that the goods shall be of merchantable

quality. Merchantable quality means that the goods must meet the
standard which a reasonable person would regard as satisfactory i.e.
with reference to the expectations of the average buyer.
Exceptions : Where the buyer has examined the goods, there shall be no
implied condition as regards defects which such
examined ought to have revealed .
(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 reavealed).
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Case : Thornett & Fehr v. Beers & Sons.
Facts : In this case, the buyer is given the opportunity to check the goods
but he did not check. Later, when the defects are detected, he
cannot complain.
4.4.2 Implied Warranties
(a) Implied warranty as to “time”.
S. 11 of SOGA 1957
Time of payment is NOT deemed to be of the essence. But whether time is
of essence of the contract or not depend on the terms of the contract.
Example : 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.
Case : Harrington v. Browne
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.
(b) Implied warranty as to “quite possession”.
S.14 (b) of SOGA 1957
In a contract 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.
(c) Implied warranty that the goods are free from “encumbrances”.
S. 14 (c) of SOGA 1957

The goods must be free from any charge in favour of any third party.
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.
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4.5 Sale by Sample and Sale by Description
Sale by Sample (in bulk) Sale by Description
Section 17(2) of SOGA 1957 Section 15 of SOGA 1957
In the case of contract for sale by sample Where there is a contract for the sale of
there is an implied condition that: goods by description there is an implied
condition that the goods shall correspond
i. The bulk shall correspond with the with the description; and, if the sale is by
sample in quality. sample as well as by description, it is not
ii. Buyer has reasonable opportunity of sufficient that the bulk of the goods
comparing the bulk with the sample. corresponds with the sample if the goods
iii. The goods shall be free from any do not also correspond with the
defect which would not be apparent description.
on reasonable examination of the
sample.
* If the goods is inferior to the sample, the

buyer may elect to reject all the goods. If the
goods is partly inferior to the sample the
buyer may elect to accept the goods and for
damages.
5.0 TRANSFER OF POSSESSION AND OWNERSHIP
5.1 Transfer of Possession
The General Rule states that the property in goods passes when the parties to a contract of
sale intend that it should pass. Mere possession of goods does not mean the person
has the title.

 States that the property in goods passes when the unascertained goods are ascertained.

 States that the property in goods passes when the specific or ascertained goods is intended
to pass.
To find out the intention of the parties, you must look at the terms of the contract, the
conduct of the parties, and the circumstances of the case.
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 For contract of sale for specific goods in a deliverable state, the property in goods passes
when the contract is made.

 For contract of sale for specific goods and seller is bound to do something to put the goods
in deliverable state, the property in goods passes when the seller has done it and the buyer
has noticed of it.

 States that for contract of sale for specific goods in deliverable state, but the seller is bound
to weigh, measure, the property in goods passes when such act is done and the buyer has
noticed of it.

 Provides that for contract of sale for unascertained of future goods by description and in a
deliverable state, the property in goods passes when the contract is made.

 For goods are delivered to the buyer on approval or "sale on return", the property in goods
passes when the buyer signifies his acceptance or the retains the goods without giving
notice of rejection, on expiration of such fixed return time or reasonable time.

 The significance of determining the time when property in goods passes to the buyer
because the general rule says that the seller bears the risk. However, there is exception.
When the property in goods passes to the buyer, buyer bears the risk.
5.2 Transfer of Ownership : The “Nemo Dat Quod Non Habet” Rule
5.2.1 Definition
“No one can give a better title than he has himself”.
5.2.2 General Rule
According to Section 14(a) of SOGA 1957, there is an implied condition that the
seller must be the owner of the goods sold. Further, Section 27(1) of SOGA
1957 provides that, a seller who does not own the goods, or who sells them
without the owner’s authority CANNOT transfer ownership to the buyer. If the
seller sold the goods without the seller’s authority, then there will be a breach of
condition as to title or ownership. According to Section 12(2) of SOGA 1957, if
there was a breach of condition, the parties to the contract may terminate the
contract and as well as claim for damages.
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In Rowland v. Divall, ptf. had bought a car from def. and after using it for four
months, it was discovered that it was a stolen car. He had to return it to the
true owner.
It was held that the def. had breached the condition as to title & allowed
recovery by the ptf. of full price on the basis of a total failure of
consideration.
In Lim Chui Lai v. Zeno Ltd., Z had an agreement with A (contractor) who had
contract with PJ Authority to construct culvert. Z was to provide A with all
material for the construction. Z delivered all the materials to the construction
site. However, 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.
It was held that, 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 or authority to sell
them, he could not pass any title to Lim.
5.2.3 Exceptions to Nemo Dat Quod Non Habet rule
In a certain circumstances, the “Nemo dat quod non habet” does not apply. It is the
situation where the buyer still get the title of owner even seller was not the
ultimate owner or do not have authority at all to sell.
(a) Estoppel
According to Section 27 of SOGA 1957, where the owner conduct makes it

appear to the buyer that the person who sells the gods has his
authority to do and the 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.
Example : Sarah tells Linda in front of Dila that Sarah wants to sell
Dila’s car to her and Dila nods his head and keeps
quiet. If Sarah sells the books to Linda, Dila cannot
complain that Sarah has sold her car without her authority.
Refer to the case of N.Z Securities v. Wright Cars Ltd., where B was given a
dishonored cheque to the A for buying his car. A try to get back his
loses. The car was sold by B to C. Then, A repossessed the car and C sue A for
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conversion. It was held by the court that, C has successful in

claiming that A was precluded by his conduct from denying B’s
authority to sell. Therefore, the title has passed to C.
(b) Sale by Mercantile Agent
Section 27 of SOGA 1957 provides that where a mercantile agent is, with
the consent of the owner, in possession of the goods or of a
document of title of 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.
However, the buyer must have acted in good faith and at the time of the
contract of sale, had not received notice that the seller has no
authority to sell.
A ‘mercantile agent’ has been defined in Section 2 of SOGA1957 as a

mercantile agent having in the customary course of business as such
agent authority either to sell goods , or to consign goods for the purpose of
sale, or to buy goods, or raise money on the security of goods.
Examples of a mercantile agent would be a second-hand automobile dealer,

a broker, or an auctioneer.
In Commercial & Savings Bank of Somalia v. Joo Seng Company, the ptf.
were pledges of a cargo of rice on board the “mv Lynna”. The
charterers of the “mv Lynna” brought the rice to Singapore and sold part of
the cargo to the def. at half price. This was done without the permission
of both ptf. and the buyers of the rice. The ptf. sued the def. for
conversion and detinue. The def. claimed that they bought and acquired
good title to the rice without any notice of the ptf. title. The court held
that the seller’s of the rice were carriers and were not mercantile agents when
they sold the rice. Besides that, the def. was getting the rice on the cheap
price and the purchase was highly suspicious (Def. was not acted in a
good faith). The ptf. was therefore entitled to damages claimed.
(c) Sale by one of the joint owner
Goods may be owned by more than one person. In Section 28 of SOGA

1957, it provides that if one of several joint owners of goods has the
sole possession of the by permission of the co-workers, the property in
the goods is transferred to any person who buys them from such joint owner in
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good faith and has not at the time of the contract of sale notice that the
seller has no authority to sell.
(d) Sale under voidable title
According to Section 29 of SOGA 1957, it provides that where the seller of

goods has obtained possession under a contact voidable under
section 19 and 20 of the contract Act 1950, the buyer requires a good
title to the goods provided he buys them in good faith and without
notice of the seller’s defect of title. A contact is voidable under section 19
and 20 of the contracts Act 1950 when consent of the original owner is
caused by coercion, fraud, misrepresentation and undue influence.
Example: Yatie obtains goods from Fika by coercion and sells them to
Najwa, who buys them innocently. At the time Najwa
buys the goods, Fika has not rescinded the contact by Yatie.
So, Najwa obtain good title of the goods.
(e) Sale by seller in possession after sale
Section 30(1) of SOGA 1957, provides that if a seller resells to a second

buyer the good sold by him previously to the first buyer, the second
buyer will obtain the good title to the good if he has received in a good faith
and without notice of the previous sale. The first buyer will lose the title
but he can take legal action against the seller who would be liable to him.
In Pacific Motor Auctions Pte Ltd. v. Motor Credits (Hire Finance) Ltd.,
where the plaintiffs became owners of several cars in the possession
of dealer and under a ‘floor plan agreement’, the dealer would retain
the cars and sell them in the same way as it sold other cars. Whenever
a car covered by the plan was sold, the dealer would account to the
plaintiffs for the money received. When the plaintiffs discovered that
the dealer was in financial difficulties, they revoked his authority to
sell. Nevertheless, the dealer went ahead and sold a number of vehicles. The
question was whether the buyer obtained a good title as the dealer had no
authority to sell. The court held that the situation feel under this exception
as the sellers was in continuous possession after the sale.
(f) Sale by buyer in possession
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Section 30(2) of SOGA 1957 provides that if a buyer, having a bought or

agreed to buy goods, obtain possession of the goods or the document
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.
In Newton of Wembley Ltd. v Williams, the plaintiffs sold a car to A, who

paid by cheque. Although he was given possession, it was agreed that
the property would not pass until the cheque was honoured. The cheque
was dishonoured but A has resold the car to B who bought it without
knowledge of the position. B resold it to the defendant. The plaintiffs
tried to recover the car from him. The court held that A, could pass a
good title to B, who in turn transferred it to the defendant. The defendant
was, therefore, entitled to keep the car.
6.0 PERFORMANCE OF CONTRACT

It’s the duty of seller to deliver the goods whilst the buyer’s duty is to accept and pay for them
accordance with the terms of the contract.
6.1 Duties of Buyer and Seller
Buyer Seller
a) Pay for the goods; a) To deliver the goods, in accordance

with the terms of the contract of sale.
b) Accept delivery; and
b) Delivery and payment of price are
c) Pay compensation to the seller in case concurrent conditions.
he wrongfully refuses to accept delivery.
c) The seller of goods has the duty of
giving delivery according to the terms
of the contract.
6.2 Delivery
Definition : Section 33 of SOGA 1957

A voluntary transfer of possession from one person to another.
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6.2.1 Rules for Delivery
S. 57 of SOGA 1957
 Non-delivery – Buyer may sue the seller for damages for non delivery
S. 36(1) of SOGA 1957

 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. Unless the parties agree otherwise, the expenses of and
incidental to putting the goods into a deliverable state shall be borne by the seller.
S. 36(2) of SOGA 1957

 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. 37(1), (2), (3) & (4) of SOGA 1957

 Delivery of wrong quantity – THREE (3) situations :
(i) Seller delivers to the buyer a quantity of goods less than 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) of SOGA 1957)
Case : Harland & Wolff Ltd v. J. Burstall & Co
Facts : 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
(ii) Seller delivers to the buyer a larger quantity of goods than that which he
contracted to sell, the buyer may:-
a) Accept the goods included in the contract & reject the rest; or
b) Reject all the goods
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c) Accept all the goods
(if buyer accepts all the goods, he has to pay for the goods at the contract
rate) - S.37(2) of SOGA 1957
(iii) 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:-
a) Accept the goods which are in accordance with the contract & reject
the rest; or
b) Reject the whole. (S. 37(3) of SOGA 1957)
7.0 REMEDIES FOR BREACH OF CONTRACT
7.1 Rights of Unpaid Seller Against the Goods
Types of Right Explanation

(i) Right of lien The unpaid seller who is in possession of the goods
is entitled to retain them until payment is made.
(ii) Right of stoppage in transit An unpaid seller who has parted with the possession
of the goods has a right of stopping them in transit
when the buyer of the goods becomes insolvent
(iii) Right of resale By regaining possession of the goods through
stoppage, the seller is preparing the grounds for
terminating the contract.
The unpaid seller who resell the goods can give a
good title to a second buyer as against the original
buyer
7.2 Right of the Seller to Sue for Breach of Contract
Seller can sue for the price of the goods where:
1. The property in the goods has passed to buyer and buyer wrongfully neglects or
refuses to pay for the goods
2. Section 55 (2) of SOGA 1957

It is contracted that the price be paid on a certain date irrespective of delivery & the
buyer wrongfully neglects or refuses to pay such price even though the
property in the goods has not passed & the goods have not been appropriate to
the contract.
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7.3 Right of Buyer to Bring an Action for Non-delivery

Where seller wrongfully neglects / refuses to deliver the goods to buyer, the buyer may sue
the seller for damages for non-delivery.
7.4 Right of Buyer to Bring an Action for Specific Performance

“Specific performance” – refers to court order to a party to carry out his obligations in a
contract. Buyer may bring an action for specific performance of the contract by the
delivery of specific or ascertained goods
Note: The remedy is available only at the discretion of the courts.

E.g. When goods are of a special or peculiar kind.
7.5 Buyer can sue the seller in tort by bringing an action in :
Action Explanation
(i) Detinue Means the wrongful detention of chattels belonging to the plaintiff
after their return has been demanded.
E.g. : Where the property in goods has passed to the buyer & seller
withholds the goods although the buyer demands for them
(ii) 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.
49

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LAW

1.0 INTRODUCTION TO LAW OF SALE OF GOODS

1.1 What is contract for the sale of goods?

Section 4(1) of SOGA 1957

Seller Buyer Price

1.2 Essential of contract of sale

 There must be at least two parties

2.0 DEFINITION OF GOODS

Section 2 of SOGA 1957

2.1 Types of Goods

Section 6(1) of SOGA 1957

Classification of Goods Explanations

E.g. : Goods on display in a supermarket

Future goods Goods to be manufactured or produced or acquired by the

E.g. : Goods that are ordered when no more stock

3.0 DISTINCTIONS BETWEEN CONTRACT OF SALE AND AGREEMENT TO SELL

3.1 Contract of Sale

3.2 Agreement to Sell

Contract of Sale Agreement to sell

1. An executed contract. 1. An executory contract.

4.0 TERMS OF CONTRACT

Conditions and Warranties

Section 12 (1) of SOGA 1957

4.1 Express Terms

Section 12 (2) of SOGA 1957

Section 12 (3) of SOGA 1957

In contrast, some may be intended by the parties to be binding, but of a subsidiary

4.2 Distinction between Conditions and Warranties

1. A condition is a stipulation (in a 1. A warranty is a stipulation, which is

2. A breach of condition gives the 2. A breach of warranty gives only the

4.3 When Condition is treated as Warranty?

Under the following circumstances a breach of condition is to be treated as a breach of

(i) Section 13 (1) of SOGA 1957 - Waiver of Condition

4.4 Implied Terms

4.4.1 Implied Conditions

(a) Implied condition as to title

Case : Rowland v. Divall

(b) Implied condition that sale by description

S. 15 of SOGA 1957 - The goods must correspond with the description.

If the contract is for the sale of goods by description, there is an implied

Case : Beale v. Taylor

S. 16 of SOGA 1957 - Fit for purpose.

i. The sale must be in the ordinary course of business.

Case : Griffiths v. Peter Conway Ltd.

(d) Implied condition that goods must be of merchantable quality

S. 16 (1) of SOGA 1957 - Merchantable quality.

There is an implied condition that the goods shall be of merchantable

Case : Thornett & Fehr v. Beers & Sons.

4.4.2 Implied Warranties

(a) Implied warranty as to “time”.

Case : Harrington v. Browne

Held : In commercial transaction involving livestock, time of delivery is

(b) Implied warranty as to “quite possession”.

S.14 (b) of SOGA 1957

In a contract of sale, unless the circumstances of the contract are such as to

S. 14 (c) of SOGA 1957

4.5 Sale by Sample and Sale by Description

Sale by Sample (in bulk) Sale by Description