Sale of Goods

The Sale of Goods Act 1957

 • Every kind of movable
Definition of
property other than
‘Goods’
actionable claims and
Section 2 of Sale of
money and includes stock
Goods Act 1957
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.
 Things Which are
attached to agreed to
Moveable Stock and Growing be severed
the land
property shares crops and before
and become
grass sale/under
a part of the
land the contract
of sale
 • Specific Goods
S6(1) Sales of • ‘goods identified and
Goods Act Existing
agreed at the time the
contract is made’
Goods • Unascertained
Subject matter of the ‘goods owned by goods
contract/ Types of the seller’ • ‘the goods exists but
it is not ascertained
goods yet at the time of the
contract is made

• ‘goods which are to

be made
Future Goods manufactured@
• produced @ acquired
S.2 • by the seller after the
making of the
contract
Defination of
Contracts of Sale There must be
of Goods goods available

S4(1) 2 of Sale of
Goods Act 1957 The seller
transfers @
‘..a contract whereby the agrees to transfer
seller transfers @ the property in
agrees to transfer the goods
property in goods to the
buyer for a price…’

There is a price
 How a contract of sale of goods can be made

There must be an offer to buy or sell goods

There must be an acceptance to the offer

May provide the types of payment agreed

between the seller and the buyer

May be made in writing or by word of mouth

or implied from the conduct of the parties

Capacity to buy & sell ( af the age of

majority, sound mind, not bankrupt)
 Time of Payment

Whether it is
important @
not depends
Stipulations as on the terms
to time of of the contract
payment are
not important
S11 Sales of
Goods act
 PRICING

Price is The price

Provides
defined as may be
that a
the money ascertained
S4(1) contract S2 consideration
S9
in a
of sale is
for a sale of number of
for ‘price’
goods ways
 Price (S 9 Sale of Goods Act)

Fixed by the contract itself

Fixed according to certain manner

agreed

Determined by the course of

dealing between the parties

Reasonable price
 Terms of the Contract of Sale of Good

Very
Need to be Classified
Can be an important
understood into 2:
express to
by parties, Condition
term or determine
the seller
implied the &
and the
term intention of Warranties
buyer
both parties
 Terms of the Contract
• The contracting parties are free to put any term in
S12 their contract of sale.
(1) • This depends on the construction of the contract

• This depends on the construction of the contract

S12
(4)

• May be made either in expressly in the contract or

S14 implied from the conduct of the parties or by
– operation of law
S17
 Terms of the Contract

S12(2) : Condition
As a stipulation essential to
the main purpose of the S12(3 ): Warranty
contract that may give the Is a stipulation collateral to the
right to repudiate the main purpose of the contract
contract that may give the right to claim
for damages but not the right to
reject or repudiate the contract
Exception (When breach of ’condition’ can be treated
as breach of warranty’)

• When the buyer waives the

S13(1) ‘condition’ or elects to treat the
breach

• Buyer has accepted the goods

• Where the contract is for
13(2) specific goods and the
property(ownership) of the
goods has transferred to the
buyer
 Implied Terms

14(b) Implied Warranty 14(c) Implied Warranty

S14(a) Implied
As To Quiet Free From
Condition As To Title
Possession Encumbrances

S15 Implied Condition S16 Implied Condition S16 Implied Condition

Must Correspond With As to Fitness For As To Merchantable
Description Particular Purpose Quality

S17 Implied Condition

In A Sale By Sample
 S14 Sale of Goods Act
S14(a) Implied Condition As To Title

The seller is Case:

The seller has presumed to Remedy:
Rowland v Divall
the have a right to rescission of the
ownership/title contract by the Butterworth v
sell
over the goods buyer Kingsway Motor
Ltd
 S14 Sale of Goods Act

14(b) Implied Warranty As To Quiet Possession

*The buyer shall have & enjoy quiet possession of the goods without
any wrongful interference by a stranger or 3rd party or even by the
seller himself, claiming a right.
*Entitled the buyer to damages
 S14(c) Sale of Goods Act

Such fact is not

declared or made
known to the
buyer The seller is liable
or encumbrance, for breach of
which is in favour warranty and
of any 3rd party entitled the buyer
to damages

The goods are free Implied

from any charge, Warranty Free Steinke v Edwards
which is in favour From
of any 3rd party Encumbrances
 S15 Implied Condition
Arise where the consumer selects goods on basis of description of the
goods or consumer agrees to buy goods to be made to their
specifications

Must Correspond With Description

The buyer is entitled to reject the goods and rescind the contract

Varley v Whipp
Beale v Taylor
Grant v Knitting Mills Ltd
 S16 Implied Condition As to Fitness For Particular
Purpose

Caveat Emptor which means, the buyer

must beware. It is for the buyer to satisfy Exception : S16(1)(a) provides four
himself as to the quality of the goods conditions, namely:
purchase.

The goods must be of a

description, which it is in the
The buyer must make known to course of the sellers’ business to
the seller particular purpose, supply
which the goods are required

Not bought under patent or trade

name

The buyer relied on the seller’s

Griffiths v Peter Conway
skill and judgment to supply
suitable goods Priest v Last
Grant v Australian Knitting Mills
 S16 Implied Condition As To Merchantable
Quality

Another exception to the caveat emptor.

The goods must have a merchantable quality

which means that the goods sold must fit the
particular use which they were sold.

If the goods are defective for their purpose,

they are not merchantable quality

To determine whether the goods is having

merchantable quality or not, it depends on
the description of the goods
 Exception

Does not apply if the However, if the defects

buyer has examined could not discovered by
the goods, by which any reasonable
Wilson v Ricket,
through that examination, then the
Cockerell & Co Ltd
examination, the buyer implied conditions as to
might discover the the Merchantable
defects Quality apply.
 S17 Implied Condition In A Sale By Sample

S17(1) S17(2)
• Sample is use to describe the goods • Implied condition for contract of sale
to buyer when:
• The court has to determine whether
there is asale by sample or not • a. The bulk shall correspond with
sample in quality

b.The buyer shall have reasonable

opportunity of comparing the bulk with
the sample
Godfrey v Perry
c. The goods are free from any defect
rendering them un merchantable, Drummond v Van Ngen
which would not apparent on
reasonable examination of the sample
 Transfer Of Property
It is important to
ascertain the time as
to when property in
goods passes to the If any party sought to
buyer because of : claim any right over
• S26:Once the the property from a
3rd party, only the In order to determine
property passes to person who has the when the property in
the buyer, the property in goods goods is transferred
buyer would bear may claim to the buyer it is
the risk even necessary to look at
though the goods • The seller would the types of goods
has been delivered only entitle to claim being sold.
to the buyer for the price if the
• However, if the property in goods
delivery has been has passed to the
delayed due to the buyer
fault of the seller,
then the seller has
to bear the risk,
even though the
property has
passed to the
buyer.
 S18 : Sale of Unascertained Goods

If the goods is unascertained goods,

the property in goods will not pass to
the buyer until it is ascertained

Once the goods has been

ascertained, then only the property in
goods passed to the buyer
 S19: Sale of Specific @ Ascertained Goods

For the sale of specified goods, the
property in goods is transferred to
the buyer at such time as the parties
to the contract intend it to be
transferred
To determined such intention, the
terms of the contract, the conduct of
the parties and the circumstances of
the case should be taken into
consideration
 S 20 : Unconditional Contract

Requires
that the
property in Underwood v
Burgh Castle
the goods Brick and
pass to the Cement
buyer when Syndicate.
the contract
is made.
 S 21 Contract of Specific Goods

• Provides that when the seller is bound to do something to the goods

• For the purpose of putting them in a delivery state in a

contract of specific goods

• The property does not pass until such thing is done and

• The buyer takes note on this matter

 S 22 Contract of Specific Goods

Where there is a contract for the sale of

specific goods in a deliverable state

But the seller is bound to weigh, measure,

test or do some other act or thing

With reference to the goods for the purpose

of ascertaining the price,

The property passes after such act or thing is

done and the buyer has notice of it
 S24: Goods sent on approval or ‘sale or return’

When goods are delivered to the buyer on approval

or ‘sale or return, the property in the goods passes
to the buyer:

When he signifies his approval or acceptance to

the seller or does any other act adopting that
transaction ;

If he does not signify his approval or acceptance

to the seller but retains the goods without giving
notice of rejection upon expiration of the time fixed
for the return of the goods

Where no time has been fixed for the return

of the goods, upon expiration of a reasonable
time
S27 – S30 Sale of Goods Act
TRANSFER OF TITLE
 He or she gets
only the same
As a general rule,
rights to the
when a person Nemo dat quad
goods as the
takes goods(a non habet
person from
buyer)
whom he or she
took them.
 Nemo Dat Quad Non Habet

Means that if
goods are
bought from a
person who is Lim Chui Lai v
not the owner, Zeno Ltd
and who does Ng Ngat
not sell them Siang v Arab-
under the Malaysian
owner’s Finance Bhd &
authority, the Anor
buyer does
not acquire
any title.
 Exception to the nemo dat quad non habet

1. Estoppel - S27
2. Sale by mercantile agent – S27
3. Sale by one of joint owner – S28
4. Sale under a voidable titles- S29
5. Sale by a seller in possession after sale- S30(1)
6. Sale by a buyer in possession - S30(2)
 Estoppel – S27

Where the owner by his conduct

Makes it appear to the buyer

that the person who sells the goods has his

authority to do so and

The buyer obtains a good title because the

owner

Syarikat Batu Sinar Sdn. Bhd & Ors v Umbc

Finance Bhd & Ors
 Sale by Mercantile Agent – S27

Where a mercantile agent is

In possession of the goods or a
With the consent of the owner
documents of title to the goods

Any sale made by him when acting in the ordinary course of business
of a mercantile agent By
shall
thebe valid of the goods to
owner
If he were expressly authorized
make the same

However the buyer must have acted in good faith

And at the time of the contract of Would have no notice that the
sale seller had not authority to sell
• A ‘mercantile agent’

• Define in section 2 of Sale of Goods Act 1957 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’.

• Folkes v King
 Sale by one of joint owner – S28

Goods may be owned by more than one

person

If one of several joint owners of goods has

the sole possession of the goods by
permission of the co-owners

The property in the goods is transferred to

any person who buys them

In good faith and

Has not at the time of the contract of sale

notice that the seller had no authority to sell
 Sale Under a Voidable Titles- S29

Where the seller of

goods has obtained But the contract has The buyer acquires a
possession under a been rescinded at the good title to the
contract voidable of time of the sale goods
Contract Act

Without notice of the Provided he buys

seller’s defect of title them in goods faith
 Sale by a seller in possession after sale- S30(1)

Section 30(1) provides that:

• if a seller 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 sale, pledge,
or other disposition
• thereof to any person receiving in good faith
• and without notice of previous sale
• shall have the same effect as if the person making the delivery or
transfer were expressly authorized by the owner of
goods to make the same
• Pacific Motors Auctions Pty Ltd V Motor Credit Ltd
 Sale by a buyer in possession- S30(2)

Provides that:
• if a buyer, 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 the documents of title under any sale,
• Pledge or disposition thereof to any person receiving the same in
goods 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.
• Newtons of Wembley Ltd v Williams
PERFORMANCE OF THE CONTRACT

DELIVERY AND ACCEPTANCE

 S31 : Duties of Seller and Buyer

• It is the duty of the • It is duty of the buyer

seller to deliver the to accept and pay for
goods them in accordance
with the terms of the
contract of sale

Means voluntary transfer of
possession from one
person to another
Delivery
Where the seller delivers to the
buyer a quantity of goods less
that that which he contracted to
sell, the buyer may reject all the
goods so delivered.
S37(1) Sale of Goods Act
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.
S36(2) Sale of Goods Act
If the seller delivers to the buyer a larger
quality of goods than which was
contracted, the buyer may:
1, Accept the goods included in the
contract and reject the rest or
2. Reject all the goods or
3.Accept all the goods(pay at the contract
rate)
S37(2) Sale of Goods Act
 Delivery

Where the seller is authorized

Where the seller delivers to
or required to send goods sold
the buyer the goods he
to the buyer and the goods
contracted to sell mixed with
are delivered to a carrier for
goods of different description
transmission to the buyer
not included in the contract S37(4)
S37(3)

The buyer may:

Accept the goods Such delivery to
which are in the carrier is prima
accordance with the
contract and reject the facie deemed to be
rest delivery of goods
to the buyer.

Reject the whole

ACCEPTANCE
 Meaning of acceptance
S42 Sale of Goods Act

• He intimates to the seller that he has accepted them

• When the goods have been delivered to him and he does any act in
relation to them which is inconsistent with the ownership of the
seller
• When after the lapse of reasonable time, he ratain the goods
withput intimating to the seller that he has rejected them
Buyer not bound to return rejected goods : S43

• Unless otherwise agreed, where goods are

delivered to the buyer and he refuses to accept
them, having the right to do so, he is not bound
to return them to the seller, but it is sufficient if
he intimates to the seller that he refuses to
accept them
 Liability of buyer for neglecting or refusing
delivery of goods: S44
• When the seller is ready and willing to deliver the goods
and requests the buyer to take delivery, and the buyer
does not, within a reasonable time after such request,
take delivery of the goods, he is liable to the seller for
any loss occasioned by his neglect or refusal to take
delivery, and also a reasonable charge for the care and
custody of the goods.
S45 Sale of Goods Act 1957

RIGHTS OF UNPAID SELLER AGAINST THE GOODS

 Unpaid seller defined : S45

a) When the whole of the price has not been paid

b) When a bill of exchange or other negotiable instrument
has been received as conditional payment, and the
condition on which it was has not been fulfilled
 Unpaid seller’s rights – S46

1. A lien on the goods for the price while he is in

possession of them
2. 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
3. A right of resale as limited by this Act
 Unpaid seller’s rights – S46

A lien on the goods

Stoppage in transit

A right of resale
 Unpaid Seller’s Lien : S47
• 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.
a) Where the goods have been sold without any stipulation
as to credit
b) Where the goods have been sold on credit, but the term
of credit has expired
c) Where the buyer becomes insolvent
 Part Delivery : S48

• Where an unpaid seller has made part delivery of the

goods, he may exercise his right of lien on the
remainder, unless such part delivery has been made
under such circumstances as to show an agreement to
waive the lien.
 Termination of lien – S49

a) When he delivers the goods to a carrier for

the purpose of transmission to the buyer
without reserving the right of disposal of the
goods
b) When the buyer or his agent lawfully obtains
possession of the goods
c) By the waiver thereof
S50 Sale of Goods Act
STOPPAGE IN TRANSIT
Stoppage in transit – S50 Sale of Goods

When the buyer of goods becomes

insolvent

He may resume possession of the

goods as long as they are in the
course of transit
 S51 : Duration of Transit

• Goods are deemed to be in course of transit from the

time when they are delivered to a carrier for the
purpose of transmission to the buyer, until the buyer
or his agent in that behalf takes delivery of them
from such carrier.
How stoppage in transit is effected – S52

Taking actual possession of the goods or

By giving notice whose possession the goods

are

When notice of stoppage in transit is given by

the seller to the carrier in possession of the
goods, he shall redeliver the goods to or
according to the direction of the seller
 Effect of subsale or pledge by buyer – S53

The unpaid seller’s right of lien or stoppage in

transit is not effected by any sale or other
disposition of goods if:

Where a document of title to goods has been

issued or lawfully transferred to any person as
buyer or owner of the goods

That person transfers the document to a

person who takes the document in good faith
Remedies available to a buyer when a seller is
in breach of a sale of goods contract

• Where the seller wrongfully neglect or

Damages for refuses to deliver the goods to the buyer ,
none - delivery the buyer may sue him for damages for- non
delivery

• The buyer may bring an action for specific

Action for specific performance by delivery of specific or
performance ascertained goods

• Where there is a breach of warranty by the

Remedies for breach of seller or where the buyer elects to treat any
warranty breach of a condition as breach of warranty,
the buyer is not entitled to reject the goods.