Delivery

‘Delivery’
o ‘delivery is defined under s 61(1) SGA and s59 (1) CRA 20151) as ‘ the
voluntary transfer of possession from one person to another’.(but
remember ss 20A and 20B). SGA 1979, s 61(1);

o Does not need to be physical delivery;

Main Modes of delivery

i) Actual or physical delivery ie handing the goods over themselves to the
buyer or to some person the buyer agrees to eg a carrier
ii) Symbolic delivery; handing over something which symbolises the goods or
is a document of title in particular a bill of lading relating to shipment of
goods or a statutory dock or warehouse warrant (made out to bearer or has
been endorsed over to the buyer) or a key to locked premises where the
goods are, so giving physical control
iii) Constructive delivery by way of attornment: this involves the seller, the
buyer and the third party who has possession of the goods. The seller
instructs the third party to hold the goods to the order of the buyer and the
third party must then acknowledge that to the buyer. Usually done by a
delivery order or a warrant if in a warehouse. The right of possession
formerly vested in the seller will then have been transferred or attorned to
the buyer-confirmed by s 29 (4)
iv) Buyer’s continuance of possession but in his own right eg where the buyer
was bailee of the goods before the contract and when the buyer becomes
entitles to possession in his own right there is a notional delivery

Introduction
o ss 27-37 set out some rules for the sellers’ and buyers’ duties/obligations
relating to delivery and to payment of the price see s 27 in particular
o delivery and payment of the price are concurrent conditions unless agreed
otherwise see s 28. Parties will usually agree otherwise
o there is a link to the implied terms (ss12-15) since to have delivery of the
contract goods they must meet the terms of the contract eg the goods must
meet the implied term of quality and fitness or indeed any express term
(implied terms will be examined in next week’s lecture)

The process of delivery

o A seller will ‘tender’ the goods to the buyer. Let us suppose that the goods are
unfit for purpose (is an implied term which is a condition but a condition only
 relevant to the buyer’s right to reject the tender). See below for rule that the
goods are not subject to the ‘perfect tender rule’

o The buyer then has a choice: he may exercise his right to reject the tender
because they are unfit for purpose since a condition has not been met (the
contract is voidable).The situation then is a case of non-delivery or he may
take delivery and do some act of rejection later

o If the goods are not specific goods then the seller may have the time to re-
tender goods which match the contract goods
OR

o The buyer may elect to accept a defective tender. The broken implied
condition sinks to a level of a warranty and the buyer can then only seek
damages for breach of contract

When the seller is ready and willing to tender delivery (s 37)

o If the seller is ready and requests the buyer to take delivery and within a
reasonable time of such request the buyer does not take delivery he is
liable for any loss to the seller to neglect or refuse to take delivery and to
pay a reasonable charge for the care and custody of the goods

Main presumption as to place of delivery (s 29)

o whether delivery is to be made by the seller to the buyer or the buyer is to

collect from the seller depends on agreement between the parties

o if contract makes no provision for the mode and place of delivery the
presumption is that this is to be at the seller’s place of business or if he
does not have one, at his residence; see s 29 (2 ) which has special
provision for a contract for specific goods

Delivery to a carrier
o See s 32(1) - delivery of goods to a carrier for delivery on to the buyer is
prima facie delivery of goods to the buyer.
NB is limited to a carrier so that delivery of goods to a packer and
dispatcher is not constructive delivery but may be effective as an act of
appropriation under s 18
 o Carrier can be problematic; a person is not a carrier unless he takes
responsibility as principal for at least some movement of the goods and is
only a carrier in respect of that movement
Note i) a mere depository and a bailee who receives goods for collection
only by the buyer are not carriers

Note ii) that an independent carrier will be the agent of the buyer
But if the person who transports the goods is an employee of the seller is
different
‘please supply us’ see Australian case means prima facie that there is a
requirement to deliver at the buyer’s premises-Wiskin v Terdich Bros Pty
Ltd (1928) 34 ALR 242

o S 32 (2) seller must make a contract with the carrier that is reasonable
having regard to the nature of the goods and other circumstances of the
case, failing which if loss occurs then the buyer can reject the delivery or
accept and claim damages from the seller

o special provisions of notice if goods are to be sent by sea (s 32 (3))

o Note that if seller reserves a right of disposal over the goods so sent to the
carrier that the presumption of delivery will be displaced

Time of delivery (s 10)

o seller must tender delivery on the date specified in the contract. This will
either be agreed in the contract or s 29 (3) applies

o see s 10 (2) which states that whether time is of the essence depends on
the terms of the contract (apart from time of payment referred to in s 10
(1))

o in commercial contracts time of delivery is prima facie of the essence and

will be an implied term but the particular circumstances of the case must
be taken into account-the buyer can reject a late tender only if time was of
the essence under the contract

See Bunge Corp. v Tradax SA [1981] 2 All ER 513 per Lord Willberforce at
541-542
 Time may become of the essence by way of notice after the formation of the
contract or if more than a reasonable time has elapsed since the contractual
delivery date
o note demand or tender of delivery should be at a reasonable hour or may
be treated as ineffectual under s 29 (5). Is a matter of fact

Expenses of delivery
o not addressed in SGA but common law rule applies that unless otherwise
agreed the expenses of and incidental to the tender of delivery of goods must
be borne by the seller and the expenses of taking delivery are borne by the
buyer

Note: If goods need to be put into a deliverable state such expenses must be borne
by the seller unless otherwise agreed see s 29 (6)

Excuses for non-delivery

o even where there is an agreed delivery date, the duty to deliver may be
suspended pending satisfaction of any conditions to delivery
Eg where buyer is not yet ready and willing to pay the price see s 28 see Levey
& Co v Goldberg [1922] 1 KB 688
or
The seller may be discharged from duty to deliver where there is frustration of
the contract whether under ss 6 and 7 relating to specific goods or under the
common law if the goods are in other categories of goods

Tender of delivery (s 34)

o unless otherwise agreed, when delivery is tendered the seller is required to

give the buyer a reasonable opportunity to examine the goods to ensure
uniformity with the contract or sample

A buyer’s right to reject a delivery of wrong quantity (s 30)

o a seller may deliver a shortfall of goods or an excess

 o Unless a shortfall or excess is so slight that it would be unreasonable for a
buyer to reject goods (s 30 (2A)) see Shipton, Anderson & Co v Weil Bros &
Co [1912] 1 KB 574 where a cargo of nearly 3,000 tons of wheat was
overweight by 55 lbs;-

i) A buyer can reject the delivery of a quantity of goods that is less than he
contracted for but if accepts, must pay them at the contract rate (s 30 (1))

ii) If the quantity is larger the buyer can reject the whole or accept just the
quantity he has contracted for or accept the larger quantity and pay for them at the contract
rate

o The burden of proof that the shortfall or excess falls within s 30 (2A) above is
on the seller (2B)
o These provisions are subject to trade usage, agreement or course of dealing
between the parties (s 30 (5))

A buyer’s right to partial rejection (s 35A)

o Some of the goods in a delivery may not conform with the contract while
some may

o The buyer than has the right to reject all the goods but if he accepts just those
goods which conform with the contract then he does have the right to reject
the rest of the goods which do not conform

o The buyer is not bound to return the goods to the buyer, it suffices if he
informs the seller that he refuses to accept them (s 36)

Acceptance (s 35)

o There is acceptance if the buyer tells the seller so, or does an act in relation to
the delivered goods that is inconsistent with the seller’s ownership of the
goods or after a reasonable time after delivery he retains the goods without
telling the seller he has rejected them for acceptance see Kwei Tek Chao v
British Traders & Shippers Ltd [1954] 2 QB 459

o Note under s 35 (2) a reasonable time for examination by the buyer is required
re-stating s 34 but this is an absolute right and only applies where the buyer
has not previously examined the goods
A. Statutory exceptions to the nemo dat quod non habet rule (nemo dat rule)
Introduction
o The common law favoured preservation of proprietary rights for
example, the rights of owners who had parted with possession to agents,
but this became increasingly inconvenient to the expanding trade in the
19th century

o Factors Act 1823 began the statutory encroachment on the nemo dat rule

o The statutory exceptions include those that are now set out in ss 2, 8 and
9 of the Factors Act 1889. SS 8 and 9 are now enacted almost word for
word in ss 24 and s 25 (1) SGA but were developed piecemeal and do
not represent a cohesive set of rules

i) Sale by a person not the owner- s 21 SGA-estoppel

o S 21 enshrines the nemo dat rule which is relied on by sellers under
reservation of title clauses (which are valid under s 19 SGA) to retain
title until payment has been received for goods

o S 21 also preserves one of the principal main common law exceptions of

where the owner of the goods is by his conduct precluded ie estopped,
from denying the seller’s authority to sell see Commonwealth Trust v
Akotey [1926] AC 72, Privy Council and for where there was an estoppel
by representation see Eastern Distributers Ltd v Goldring [1957] 2 QB
600 Court of Appeal; for an example of where the representation was
that the ‘seller’ had the owner’s authority to sell the goods as his agent
see Henderson & Co v Williams [1895] 1 QB 521, Court of Appeal

o Is also subject to the Factors Act provisions enabling an apparent owner

of goods (the mercantile agent) to dispose of them as if he were the true
owner

ii) Sale by seller with a voidable title (s 23)

o A sale of goods contract may be voidable for eg misrepresentation, duress
or undue influence. This means the seller has a voidable title but if he
sells the goods after which his title is avoided, the buyer will get a good
title to the goods if he buys them in good faith and without notice of
seller’s defective title. For a typical example see see Lewis v Averay
[1972] 1 QB 198 CA
 o Rescission of contract and notification of recission by the owner is
therefore important. Evidence of rescission is usually by way of notice or
by retaking possession but see Car & Universal Finance Co Ltd v
Caldwell [1965] 1 QB 525 CA and Newtons of Wembley Ltd v Williams
[1965] 1 QB 560, Court of Appeal

o Note as long as someone bought goods in good faith without notice he

can claim protection of title under s 23

o Note if seller is a mercantile agent good title could still be passed under s
9 Factors Act

i) Disposition by a seller in possession after sale-s 24 SGA (formerly s 25 (1)

SGA) and see also s 8 Factors Act 1889

o Seller has sold the goods but still has possession of the goods or has the
documents of title to the goods, so appears to be the owner. The seller, or a
mercantile agent acting for him, then delivers the goods or transfers the
documents of title under a sale, pledge or disposition of them to a third
party. If the third party receiving the same acts in good faith and without
notice of the previous sale then he will still get title to the goods as the
delivery or transfer is then deemed to have been expressly authorised by
the owner of the goods (s 24)

o S 24 SGA and s 8 Factors Act slightly overlap. The explanation usually

made is that when the 1893 SGA was passed it was intended to repeal s 8
of the Factors Act but the sections were never repealed.

o S 8 FA only differs by inclusion of words ‘ or under any agreement for the

sale, pledge or other disposition thereof’ inserted before ‘any person’
making it slightly wider in scope

o See s 26 for definition of mercantile agent which mirrors that in the Factors
Act 1889

o In most cases where s 8 applies s 24 of the SGA also applies and all
textbooks use cases on both sections interchangeably
Specific Issues
a) Seller required to resell the goods AND deliver possession of goods or
documents of title to the second buyer
o Physical delivery alone not necessary, it includes constructive delivery see
Michael Gerson (Leasing) Ltd v Wilkinson [2001] QB 514, CA

b) ‘Continues’ to be in possession
o The capacity a person continues to have possession is not necessarily
always as a seller, it is the fact of possession which is the deciding factor
see Pacific Motor Auctions Pty Ltd v Motor Credits (Hire Finance) Ltd
[1965] AC 867 Privy Council, not legally binding as is a PC case

o This decision was followed in Worcester Works Finance Ltd v Cooden

Engineering Co Ltd [1972] 1 QB 210 in which surprisingly the repossession
was by the seller’s own vendor, with the seller’s consent, was held to be a
disposition within s 25 (1) (now s 24)

c) ‘Delivery or transfer….of documents of title’

o Is a misleading term as only a bill of lading is a document of title, but they
need to be documents which give, or evidence a person’s right to the
possession of the goods, so that whoever has the relevant document can
demand that they be delivered to him or to his order
o See s 61 (1) SGA for definition of ‘document of title to goods’ which is the
same as that in the Factors Act 1889

a) Sale, pledge or other disposition

If this section provides protection for someone who has a pledge (the pledgee)
then the first buyer still has title but is a title subject to the pledge

b) ‘good faith’ and lack of notice

Must exist at the date of delivery of the goods or transfer of documents as well
as at the date of the disposition

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