Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
AUSTRALIA
The Law Book Co. Ltd
Sydney : Melbourne : Brirbane
INDIA
ISRAEL
NEW ZEALAND
Sweet & Maxwell (NX) Ltd.
Welliagtoo
PAKISTAN
Pakistan Law House
Kanchi
SALE OF GOODS
G. H. L. FRIDMAN
M.AJiOxon.\ LLM.{Adeltdde)
LONDON
SWEET & MAXWELL
1966
Published in 1966 by
Sweet <5 Maxwell Limited of
It Nfw Fetter Lane London
E.C.4 and
O. H. L. Fridman
1966
TO CANDIDA
preface '
I have tried to present the law in a logical way. This has some-
times meant ignoring the strict order of the Sale of Goods Act, 1893,
a statute which, as the text reveals, is for from being above criticism.
Indeed, the theme of this work, if theme there be, is the need for a
thorough revision of that Act, and a complete rewriting of the law of
sale of goods. To that end I have attempted, at various points in the
narration, to compare the present English law with the way the same
problems are dealt with by the American Uniform Commercial Code,
in the hope that such comparison may lead the reader to consider
ways in which the existing English law may be improved. No doubt
other, equally useful comparisons could have been made with other
systems of law. But to have done so, I felt, would have involved
Overloading the book with material which in a strict sense was super-
fluous in a book designed for the undergraduate reader. Enough, I
hope, has been said in the book to enable those interested to grasp
essential failings in the present law and to appreciate how those
failings can be rectified.
viii
PREFACE
Sheffield
G. H. L. RUDMAN.
CONTENTS
Preface
Table of Cases
PART I
THE CONTRACT OF SALE
1. Goods 33
3. Perishing of Goods 43
Page
, vii
xi
. xxiii
PART n
1. Introductory 63
2. Specific Goods 64
ix
arrENTS
PART in
Quality of Goods . . . *
2. Delivery
3. Acceptance
4. Payment '
135
135
14S
179
195
195
203
220
229
232
PART IV
REMEDIES
1. 'Real Remedies
3. Stoppage in Transitu
4. Misrepresentation, etc.
2. Title
4. DcUsety ^ .
251
256
266
274
2S0
280
283
286
300
306
306
30S
313
323
331
tnJfx
335
TABLE OF CASES
122
35
5. 85
-+4,
. 156,
231
332
46
163
. 328
317
322
190
275
244
3IS
Bank of England v. 4
244
172
Beecham Foods Ltd. v. North Supfdiers (Edmonton) Ltd. [1959] 2 All ER.
336 66
Behrend & Co. Ltd. v. Produce Brokers Ltd. [1920] 3 K B. 530 210, 212
tadle of cases
&? so.Tf
8, 12S, 330
13S
226
Bornes * * : . * *
Borrow: ' ,
^ ,
* W) i K.B. 723 ..
IIWJ A.C. 597 ....
-R- 12 .....F*;;
Ufldergrouad
( 1925 ) 4 i'TL.R. ^ 7 ;
^ 430 .
Brown i
Brown A
s;i!=rVSTj-n y.' i 1 .
V ............li, m
2 TS^;g)
TABtE OF CASES
CommeU Laird & Co, v. Mangaoese Brotoe & Brass Co. Ud. 11934] A..C
Rep. 65
Canada Atlantic Grain Export Co v. Eilers (1929) 35 Comm Cas. 90 ... . 170
Car & Universal Finance Co. Ltd, v. Caldwell [1965] 1 QB. 525 120, 121
Central London Property Trust Lid. v. High Trees House Ltd. [1947] KB.
Central Newbury Car Auctions Ltd. v. Unity Finance Ltd. [1957] 1 Q.B. 371
108. Ill
Champanhac & Co. Ltd. v. Waller & Co. Ltd. [1948] 2 All E R. 724 176. 186
Qyde Bank Engineering & Shipbuilding Co. Ltd. v. Castaneda [1906] A C. 6 331
Colonul Insurance Co. of New Zealand v. Adelaide Marine Ins. Co. (1886)
231
, 275, 278
245
Couchraan v. HiU [1947] K.B. 554 144, 145, 146, 153, 186, 192
Cullinar" . -
CummL
Cundy
Curtis '
Cutter 1
Demby Hamilton & Co. Ltd. v. Barden HSM9] I All E.R. 435 239
xiv
TABLE OF CASES
Dick I^mley Productions Ltd, v. Harold Smilh (Motors) Ltd. [1965J J \V.L.R.
r- , 303
237
1 AppCas 632 3
J22
12^ 130
I, 19. 79
!. 95
. . , , R. 86 23
25 Ill
27
roM V. Aylesbury Dairy Co. Ltd. [1903J I R B. k' 1 ! ! ; ! ; " ! " i iig' JW. 316
. 207. 219
[ 71
170
TABLE OF CASES
XV
General & Finance Facilities Ltd. v. Cboks Ors (Romford) Ltd. (19631 2 AH
T>
Genn v.
Gtbaud t
Gibson '
Gillespie
Glyn Ml
ti po 'IQ 91
< 13
Griffiths V. Peter Conway Ltd. (1939} t AU EJt. 685 163, IM, 172
Gunn V. Boickow, Vaughan & Co, (1875) L.R. 10 CbApp 491 252
HiDlEV V. BWCBNDAIB (1854) 9 Ex. 341 .. 288. 289, 290, 291, 315, 317, 318, 319, 3
326. 327. :
Hall Ltd. & Pirn Co 's Arbitration. Ret Hall Ltd v. Pim & Co. (1928) 139
L.T. 326, 327, i
Hammond *. * '
171, ]
Hardy & Co. v. Hillems & Fowler (I923I 2 K.B. 490 221. 225, 226, 227, :
Harlan^ .. ^ , ,
Harris '
Harriso , . ]
143, 191
xvi
TABLE OF CASES
Horn V. Minister of Food I1948J 2 AH ER. I0J6 47, 206. 238. 244
Houndsditch Warehouse Co. Ltd. v. Waltex l4d. [19441 K.B. 579; [1944] 2 All
Household Machines Ltd v. Cosmos Exports Ltd, [I946I 2 All E.R. 622 .. 327, 3^
2)2
! . . . . .. , 45
. 126
htPEitiAL Ba.vk V LavDO.v & St. Kxtherwe's Docks Co (1876) 5 Ch.D. 195 .. 2
Impcnal Tobacco Co. of Great Britain Ltd. v. Parslay [19361 2 AU ER. 515 287
International Sponge Importers Lid. v. Walt & Son [I9IIJ A.C. 279 231
JacKSOv V. RoTA.t Motor A Cvcie Co. [19101 2 K.B. 937 172, 210, 214
Karsaln (Harrow) Ltd. r Walhs (I9J1 i \v!lr ois ' 188. 189. 190
Kadff A Cohen y. SliTOUskl (I92I f K.R 31
tl7j7| J| TLR.*2f2* 6
TABLE OF CASES
. 65. 76. 85
114, 118
6
.... 278
.... 85
9. 126,
... 13.
8) 64
327
38
117
127
I. 14
322
26
I td.
105. 129
109, 130
Lloydt Bank Ltd. v. Bonk of America National TYutt & Savings Assuaalton
London Export Co. Ltd. v. JubUee Coffee Roasting Co. [1958] 1 W.L.R. 661 148
London JeweUers Ltd. v. Attenboroofih |I934| 2 K.O. 206 78. 80, 81, 126
London Plywood & Timber Co Ltd. v. Kaslc Oak Extract Factory & Steam
Longbottom & Co. v. Bass. Walker & Co. Ltd. 11922] WN. 245 257. 260
Love & Stewart Ltd. v. Instone & Co. (1917) 33 T-L.R. 475 29
McDougall V. Aeromarme of Emsworih Ud [1958] 3 All E.R. 431 . . 65. 76, 85. 200
Maepherson Train & Co. Ud. v. Ross & Co. Ltd. [1955] 1 W.L.R. 640 136, 153
McRae V. Commonwealth Disposals Commission (}95I) 84 C.LR 377 ., 39, 45, 185
Maine Spinning Co. v. Sutcliffe & Co. (1917) 87 LJ.K.B. 382 201, 234
xviii
TADLE OF CASES
, " 13.1*
' ....in
;;-g,,26
... 236
; .... 4;:
.. .jg
, V'.V.VilVs. 328
.. st;dC0.'il8n)"5O>. 2i,
! no, 111
130
270
;;;;;; 275
R. 499 %
93
224, 316
314
98
45. 2
29. 149
Miracnlcl* " **
MischeR
Mollins ' . , , .
Monfort .
Monklar ' s
Moore & Co. & Undauer &Co. Re (I921I 2 K.B. 519 59. 152, 155.
Mordaunt Bros, v British Oil & Cake MiDs Ltd. (1910] 2 K.B. 502 .
263
, 153. 167
.. 12
Mount (DF.) Lid v. Jay & Jay (ProviskHis) Co Ltd. [1960] 1 Q.B 265
78
25
66
TABl OF CASES
xix
Kffw Zealand Shipping Co. v, Socidtd des Ateliers et Cbantiers de France [1919]
A C. 1 20. 242
Nevrmafl v. Jc ... 86
Niblett Ltd. v. Confeaioners* Materials Cb. Ltd. (I921I 3 K.B. 387 .. 98. 99, 100,
' . . . 6, 93
. 20. 66. 93
; . . 143
^ 327
V. Ministry of
Payne & Routh v. UUico & Sons (1920) 36 T.LJl 569 210
Pennington v. '
^ L.J.K.B. 677 27
Pe
Ph
Pii
V'
Pl
25
286
119
XX
TABLE OF CASES
270
177
.. 8 . 10
82, 239
28
262. 263
29. 242
preist V. LasrrTw*31^2''lc n* *
. ' 85
6. 149
328
322
230
J .* 28
. ' 26
. , 153
F**!? tu-ViIV" 5%'^* S.S. Co Ltd. oVlVtsi V 't V t> * ' 270
76. 85
. 4 , 235
301
13
325
2 Q B. 450 1|
: .^???!^ Townsend & Co mo^ -y* t- gjg ../. .... .\ 29 i 299. 328
145
f*?'* [19481 2 KB 7t
Sander* 13
Sarpant s . , 2D
Scaturii
rr V <iw) 15 T.uR. 55
TABLE OF CASES
xxi
Shatiklin Pier Ltd. v. Dctel Products Ltd. |I95IJ 2 K.B. 854 146
Sharpe & Co. v. Nosawa & Co. 11917) 2 K-D. 814 328
Shipton, Anderson & Co. and Harrison Bros. A: Co., Re [1915] 3 K.B. 676 .. 43, 46,
198, 231
. 31
319
.... 28
.... 242
... 88, 89
N .... 286
.... 257
.... 15
. 158, 159
rv-t... 2(ri
i 318, 326
1 40, 329
I .. 217
I 296. 297
^ 173, 223
210, 244
1 ^ .... 18
I* . 298, 327
I , .... 153
Trebanog Working Mens Qub & Institute l4d v. Macdonald [1940J 1 K.B.
576
86
Tredegar Iron & Cbal Co. Ltd. v. Hawthorn Bros (1902) 18 T.L R. 716 ... . 86, 296
Tsakiroglou & Co. Ltd. v. Noblee Ihori Gjn.bH. (1962] A.C. 93 218, 245
TARLC or CASES
United pommions Tnuf Ltd v. Parkway Motor* Ltd, (1955) 1 \V.L.R. 719 .
. - 25. 26
: !. * *85d V.V.*.V.V.V.V.V.V..*
.... H6
109
3, 301.3M
1*315
.. 186,193
Wins & Son* V. Qinningham & Co. (19241 2 ici. 220 ..... 233, i
Wilson V. Rickett Cockerell A Co. Ltd (1954} l wV'.'/'lsV, 165, 166, 169, I
TABLE OF STATUTES
1677 Statute of Frauds (29 Car. 2, 1893
c. 3) 13
196, 265
1. 18 179
s. 4 208
^ Vict. c. 43) 9. 31
I. 3 179
I. 5 179
. 17 179
8.1(1) 113
(2) 123
125. 127
330. 332
8. 1 98. 106
xxiii
(3)
4. 6. 22. 43
(4)
s 2 ..
7. 24
s. 3 ...
8. 4 ...
8. 5 (1)
(2)
38, 45
(3)
34
8. 6 ..
(1)
29
(2)
30
s. 9 (1)
19. 30
(2)
30
$.10 ..
0)
.. 15, 19,200.231.282,
330
(2)
167. 1^
173. 174.
XXIV
TABLE OF STATUTES
(4) 157
(1) 175
(2) (a) 176
(b) 177
(c) 177
. 17 65. 71
(1) M
(2) 65
79. M. 126
Rule 1 . . 67, 70. 71. 72.
126.222
(b) 239
(2) 89
261
(2) 90. 91
(3) 92. 93
(2) 107
125
(W 128
122. 127
' 24 tl4
<2) 118
25 )18
(3) 122
- 29 (1)
( 2 ) .
207
,.30 57,2.2ftW.g
(3) . .. 155,211
* .... 212.
,5, 218
57, m. 275, g
S 207. 213
755
(lit i5V,75S;'257. ^
j 'Tsi' a. I
() (5) W s
:: 7
J if. 761. 7
. 44"' .V.V.V.V7V7,|
"(,v.'.-.;-.'.;"in:768.769
770
717
(4> 271
S) m"...' ^3
I 49 2^
ni 230. 283
TABLE OF STAWTES
XXV
1927
8. 50 (1)
(2)
Geo. 5. c. 12)
32
(3)
1934
8.51 ..
12
(1)
Geo. 5. c. 41)
285
(2)
8 . 3
285
(3)
1935
8. 52 ...
8. 53 ..
Act (25 & 26 Geo. 5.
0 )
c. 30) s 6
97
(2)
1943
(3) .
(4)
(c) .
318
315, 318
314
s- 56 208
a - 57 32
58 (1) (2) 27
(3) 31
(4) 27. 31
M (3) (4) 10
61 ( 1 ) 21
(3) (4) ,
23) 179
s. 2 179
8-10 30
i<vvT ^ 30
toil 118
5. c. 59) 83
54) 179
* 2 a) 179
11
30
30
31
8. 62 (1)
. 52.
1954
176,
252.
255, 264,
266
1955
(2)
265
1956
(3)
259
<4)
TO
Contracts) Act (6 7
(3) 247
(6) 247
*. 2 (4) 246
Geo. 6, c. 33)
2. c. 15)
ss 8. 9. 10
8. 25 30. 66
2, c 41) 9
EUz 2, c. 47) 32
fc 31) 179
S.27 126
TADLE OF STATUTES
1. 3
( 17
f. 20
18
183
(1) (2)
0)
68.
1S8,
^<onr.
307
.... 56
. 1 (11 (21.
.. 180
. 7 (2) ..
a. e(i> ....
/I\'
. 9 (2) . .
181
(2) ...
s. 12
Vie) .. 30
(1) ...
1 13 .. ..
11' ni^
(4) ..
...:.v 105
1. H
55. IW
. 15
, ,
(1) ...
158. 166
(2) ...
177
(5) ...
(6) ...
.5J. 164 jj
. 16 (j) ...
. n
s 19. rule 3
rule 5
(3) (6) ..
... m |
* .106
() ...
8.23
. 27, 32 .
238. 240
327
401
83
-r-f
' . 208
208
204, 208
.... 241
217
(a) (b) M .
* 219
241
241
... 241
(15) 241
* 2-103 241
IM 241
(1) (C)
607
314
' JJ
(1)
97
TABLE OF STATUTES
WVll
coni.
2-612(1)
212
(2) (3)
..... 214
256
703
. ... 255
(3)
(4)
276
(d) ....
276
(5) (6)
707 (1)
279
70S (1) a)
289
709
285
710
. 286, 289
Uniform Commercial
s. 2-711
Code
307
30/
712
. 307,
323
324
714 (1)
314
(2)
315
715
. 3 I 5 ,
324
316
717
322
723
. 289,
324
s. 7-104
205
501
105
502, 503
56
Part I
F3X}.-
Chapter 1
the question whether, since the phrase rules of the common law
is specifically used, equitable doctrines affecting contracts which might
have applied prior to 1893 may still be invoked by the courts to
amplify, gloss, or supplement the provisions of the Act. In so far as
such equitable doctrines conflict with the express provisions of the
Act it appears to have been held that they are inapplicable.* Where
there is no such conflict, then it may well be that the courts are free
to apply relevant equitable rules. So far as other statutes are con-
cerned, the problem is easier: they will only apply to the contract of
sale of goods where express reference or proper construction permit
or necessitate such application. .
Thus the Sale of Goods Act. 1893. subject to what has just been
said, provides what is virtually a code governing the contract of sale
of goods. It is described as such In the judgment of Atkin LJ. in
I s
Report* i
at pp. b, hk"
the Sah mm
e.g. *s.
. 1 ( 1 )
contained in the Act brings out the essential features of the contract
of sale of goods by way of contrast with other contracts to which it
may appear to bear some resemblance.
title on t he is the
passing of the entire interest of the seller to the buyer (whatever that
interest may include or comprehend). Since, however, as will be seen,
a seller may pass a good title to a buyer though the seller himself has
no ownership to dispose of,' it is difficult to conclude that, in all
cases, what is involved is a transfer of ownership. The problem is
complicated further by the provisions of the Act^ under which,
unless the circumstances of a contract of sale of goods are such as to
show a different intention, there is an implied condition in every such
contract that the seller has the right to sell the goods or will have such
right (in the case of an agreement to sell) at the time when under the
contract property is to pass. To what does this refer: title, owner-
ship, property, or something else? Is it a collateral obligation
designed to protect the buyer, or a fundamental obligation of a cori-
tract of sale by virtue of which there is a conveyance of title similar
to the eventual result of a contract of sale of land? These problems
will be discussed at large in due course. For the moment it suffices
.to state that the language of the Act which is quoted above indicates
ptu peny , ^
Die fact that these obligations may be cucluded would indicate that, though
properly must be transferred, there b ito obligation to make ilile: and the seller
can epde any Uability to make Utfc. In thii respect, at any rale, the English
I goods would then resemble the Roman law of sale, from which it
The whole question is complicated by the peculiar (and historically caused) failure
of English law to accept or acknowledge any absolute ownership of property
On particular, personal property, though the lame appLci to realty). Where the
must beconsidered to bring out the difference between sale and other
contracts.
(i) Purchase
tfan^r.'~'l . ^ . whlg jt
effectively ; ' .
A^distii . * . : .
V.
Gibb
Sec Ireland v r t, *
nOPD.79
(19201 A.C. )24. Lven where a manufacturer appointed someone sole selling
iigenu_ U wM held that the contract was one of sale not agency; Lamb v. GoAM
(ii) Property
97 U K.n. 561. ,
* 11893J A.C 471; Bebize Motor Supply Co. r. Cox fIII >
4J7; .
**CUUe* 1 . , , .
tl* hi a . Sort^
Cfnfrul I , - , flUSrt
Sufi J . , , , I , '
U--. AU EJL 473. But there may be equivalent implied conditions under the
ndustriai Trust
Act, 1957. as
(Ui) Goods ^
, 119511
See the cases deed to notes 34, 37, eupra. and Dntry v. Victor
11^1] 1 All E.R, 269,
*> See, e.g., the language of Lord Goddard CJ. in Polsky v. S. & A.
1 AU E.R, J5 at p. 188.
: , aCommera^Cooe.
- . . . be many
. . of produems
the Uiufonn
11
** But it win include even such ipedal things as ships, even though there may be
Pullar rules for the transfer of property in ships; see, Re Blyth Shipbuilding
s Dock Co. Ltd. {19261 Cb. 4M; McDougall y. Aeromarine Ltd. [19581 3
AH an V -1.*. 1. w. . .1,. hieh U
SOJV . . .
See *
[ 1964 ]
L III.
' Office
12
i lUnfamln on SaU fSlh ed.. 1950) t pp. 180, 186. whicli rich **
13
There has been some variation in the views expressed in the courts
as to the correct distinction between contracts of sale of goods and
contracts for labour and materials. Whereas in Clay v. Yates the
view was adopted that the test was whether the work or the material
was the essence of the contract, in Lee v. Griffin Blackburn J. said
that the true test was the value of the work as contrasted with the
value of the materials. In Robinson v. Graves** the Court of
Appeal, in deciding that a contract to paint a portrait was a contract
tor work and materials not one of sale of goods, did not entirely
approve of the language of Blackburn J. in Lee v. Griffin, but adopted
his idea that the substance of the contract must be regarded and a
decision made in accordance with the way a reasonable man would
describe the transaction. In coming to this conclusion the court
expressly stated that it had no intention of overruling the case of
Isaacs v. Hardy * in which it was held that a contract to paint a speci-
fic picture was a contract of sale of goods. It was said that there could
be cases In which the materials were the substance of the contract
and the work ancillary or vice versa.** Which was substance and
* ' ~ K B. 526.
i contract to print s
"'as held not to b a contract of sale of poods; cf. Grafton T. Armltag
tl845) 2 C.D. 336.
(1860 I B. A S. 272. Cf. the langusec of L(h 4 Reading CJ. In R, T. Wood Cretn
, Committee (1920) 89 LJX3 55 at p. 56.
11935) 1 K.B. 579, in wUdi It was that a contract to paint a portrait was a
^t^ct for work, since the substance of the contract was the skill and bbour to
Mcrdsed by the artist and the passing of property in the materials used was
14
(iv) Money
Nwman v. Llpman 119511 1 K.B 335 at p 336, per Lord Goddard CJ-
R. V. tVood Green Profiteering Commlilee, supra.
CammrfJ Uird & Co. v. Manganese Bronze & Brass Co. Ltd. [19341 AC.
Contrast Anglo-Egyptlan Navlgaiton Co, v. Rennie (1875) L.R. 10 CP. 271. Cfi
cuftamj; Love v. Norman Wrtght {Builders) Z.M.
n944J K.B. 484 at p. 487, per Lord Goddard CJ.
r Shipbuilding & Dry Dock Co. Ltd, supra.
twppcns when an owner of a car trades-in " his vehicle for a nf'*
uTo *f*** he
15
The parties being free, both at common law and under the Act, to
make whatever contract they choose, subject only to the limitations
of illegality and possibility, they can insert into a contract of sale
of goods such conditions as they think fit. In the absence of any
such express conditions or the possibility of implying into the contract
any conditions from the course of dealing of the parties, trade usage
or custom,* it might be thought that a contract of sale of goods
Would be absolute. In the sense that the parties themselves have
not appended any conditions to the contract, this is correct. However,
It is clear from the provisions of the Act itself, that, in the absence
of any such express or implied conditions, , there will be certain
7 E. & B. 885. But where the price is not based on such fixed sums, but is
determinable on some unknown fact or oent, the contract may be a wagen see
V. Short (1850) 3 E. & B. 904.
nder the Act, the price may be fixed by Uie contract or determined by certain
S.GA. s. 8; tnjra, pp. 29-30, It & also stated in the Act that,
,. *** ^ different intention appears from the terms of the contract, stipulations as to
01 i^ent arc not deemed to be of the essence of a contract of sale;
s. 10 (J): Infra, pp. 200-201. But note S.G A. s. 28: infra, pp 206, 230.
,K goods is a credit safe this will affect the obh'gation of
t r-7 unpaid seller: see infra, pp. 252. 258.
w. S.GA. s. 55.
16
THB CONTRACT OF SALE OF GOODS
Absolute sales
17
Caeftof Tea Co, (19231 A.C 48. t^sdsdon may also be implied from the conduct
Co 119191 Tannery
IS
Conditional sales **
The contrast that would appear to be drawn by the Act is
absolute contracts as described above and contracts which
intended to be binding on the parties (and to pass property la
goods which are sold) only on the occurrence of some stipula
1 See Betseler Waeehter Glover & Co. v. South Derwent Coat Co. Ltd. 11
11947] K.B. I30, and subsequent cases; on which see FriJman, '*
Caw of Contract, 22nd ed , pp. 354-401: Treitel, Law of Contract, pp. 429--' '
532-535,
Buerger 11915] I K B 3C . .
be a limited notion of *' . . ,
* Under the Hire-Purchase Act, 1965. ss. 1 (1), 20 there is a special category el
conditional sale agreements to which the Sale of Goods Act, J893. does no*
completely apply: Infra, p. 230.
19
aff the obligation of the seller to deliver the goods but does not
jf:-)' Q.B. 297; Atalas v. British Imtx Industries Ltd. 119581 1 All E.R.
20
and cases *) held that the contract was valid and binding .^l*
Unless the parties have (hereunUer stipulated for certain effects in the event of iti
non-fulfilment of a stated condition: e/. the cases ated Infra, notes 1, .
riWJI I A C 774. where li was said that the buver had the opdofl ot djvew^
[1921] I A C. 774, where It was said that the buyer had the option of djv
himself of title: at p. 783, per Lord Sumner.
* /n/ra, pp 64-74.
I "
ABSOLUTE AND CONDITIONAL SALES
21
the wntract t , .
wntract lapse, e
22
pass properly in the goods to the buyer. But the Act distinguishes
etween a sale (which Is the name now given to an executed eonuact
of sale) and an asreement to sell (which is the current name for the
former executory contract of sale). In view of the provision of the
ct that a sale passes property in the goods when the contract is
made, the Act further provides that the term sale includes a
oargam and sale as well as a sale and delivery. This means tot
dehvery of the goods is not essential for the passing of the property
thcrera (though the parties may make such delivery a condition to
the passing of property if they choose). The terms of their contract,
or the nature of the agreement, will determine whether their contract
rs a sale or an agreement to sell. Which it is will depend, as the Act
stipulates, on the provisions relating to the passing of property. Hie
contract may expressly reveal the intentions of the parties or it may
e necess^ to infer their intentions from the sutTOUnding circiim-
s ances.^ How this is to be done, and the way in which Ihc
assrsts in the determination of this question, are matters which wH
be considered in detail later. It is important here to point ml
Whether a contract of sale is a sale or an agreement to sell is
vital for various reasons.
. t,s.ajt.r.l(
23
ClUPTER 2
, M*
7A
CAPAQTY
25
It has been held that a racing bicycle was a necessary for an infant
only earning a small wage a week. So, too, have an engagement ring
and a wedding ring purchased by an infant for his fiancee. But
other jewellciy and articles of luxury which were of no utilitarian
value to the infant have been held to come outside the scope of the
term necessaries.*' The fact that an article of utility is luxurious will
not of itself make such an article into something which is not a
necessity. Whether this is so or not depends upon the condition of
life of the particular infant at the material time. An article of
utility may well not be a necessary if the infant is already well
provided with such goods at the material time, c.g., where an infant
bought an extravagant number of waistcoats.** Whether or not the
seller of the goods knows that the Infant has a sufficient number
of the articles concerned appears to be irrelevant. It is the situation
of the infant that is the test, not the knowledge of the person supplying
the goods,**
If the subject-matter of a contract of sale is necessaries, the
question arises whether an executory contract, i.e., one for the future
sale and delivery of such goods, vdll be valid and binding. On one
view, the 1893 Act, by making an infant liable to pay only a reason-
able price, has impliedly enacted that an executory contract of 5ale
of necessaries to an infant is of no effect: it has made the infants
liability quasi-contfactual. However, It might be argued that the
1893 Act simply substitutes a reasonable price for the contractual
the 1874 Act. If this is coirect, then such a contract will not be totally
*nlhout effect and therefore veud: ^ce under such a contract the infant may
ootam sufficient benefit from the use of the goods to deprive him of the right to
*h3t the consideration for his payment has totally failed: see Treitel, loe. dl.
. Atiyah, loc. cit. pp. 101-102.
M 1 1*^1 2 K.B. I,
Johwone V. Marks (1887) 19 Q B.D. 509, niis is true after the 1893 Act: and
wvoives the plaintiff in proving that the infant did not have an adequate supply
iiom other sources at the material rime: Rash v, Inman, supra.
26
then, even
if they have been delivered and^ paid for, the infant will be a
repudiate the contract and recover his money, as long as he
return the goods to the seller in their original condition, or, po
unless he has received any benefit from having the goods.**
gmwanx. All/ah, **7he Uabiirtx of Infonti'ln fraud and Rwiitution (IJ?) '
M.L.R. 273.
* S'* * alfftiM r. CanaJt, fufra; Frarce r. Brain, tuprf The dupute. h^* *
the rjorttion irbether conwetj within s. I of the 1^74 Act are ** vow ^ i jc
icBw. or merely voidable at she optioo of the infant: r/. tupm. notes N *
lOMrt be remembered. In this conteai, lhac there Is a distinciioR between total ra
of romlderatloO. for hkh money paid b recoverable by an infant, and
ot the aJraniafe beUeved lilely ro aecnw to the infant from the oontra'
Sifirtbrrg V. Sealj lUrJi) UJ. ||923| 2 Oi. 452, wuh which cootratf
t ..-.a..- r, . - i<j 3 Ch jyj.
rei.r*e*JVrrp rUeltkai 3
27
P^rty: held that there was no obligation to order any goods, but an
^^sation to supply goods as and when ordered, l-e., no binding contract until
* w *y one of the parties.
the bid below the withdrawn bid would stand, and would be capable
wiihdra^*^****^ by the auctioneer in the customary manner, unless itself
9^1 the New Zealand cate of Fowce/r r. Star Car Sales LtJ.
28
, ( fuie Cons'TOCiio'
** .. .
V. Lf>*r Bros., supra, at p 224. per Lord Aiktn. See. e/. Pope Feorsc"
. Buenos Ayres Sew Oas Co. tlW2) B T.L.R. 758,
29
|j/ (1889) 14 P.D. 64. See A. V. Pound A Co. v. M. IF. Hardy A CO.
>. Horst 119111 1 K.B. 934; Produce Brokers Co. Ltd. V. Oljmpfcr
C'o. Ud. (19161 I A.C. 314; Re an Arbitration Between L. Sutro A
II ri Symons A Co. (I9I7I 2KB 341.
*: t (')' JWPra. p. 14. For the law relating to deposits See Howe v.
(>884) 27 Ch D. 89. See also GoBagher v. Shilcoek [19491 2 K.B. 765. For
ri. ^'i'utahie doctrine of relief from forfeiture of a deposit, see Siockloser r.
II (nT" Q - '*76.
30
the 1956 Act has now been limited by the Act s'*
' ' . / .
Note also that some statutory price control of goods ifiU 'gfjo. Se*
b minimal in importance: see, et- Iron and Steel Act, 1933, ss.
liabbury's Laws oj EngUnJ, 3rd ed., Vol. 38, pp. 169-174. ., -
|19(M) 1 Qi, 334; AfeCrvrher t. T/reAer 119011 2 Ch. 306; DunJop v. '
(I9I3IAC 847. ,, ^ 1964.
* See Lever, The Law of Restrictive Praeriefs anJ Resale trice hialnteaancw.
Chap. 3, for a fuQ and detailed diicvtuon.
\VRmNO
31
119S4I fnn "5? Fifoot, op. eft., pp. 289-295, 309-319. See Maries v. Trant
possibility Of suing if the illegality need not be
a cause of action: ;yftigA t. Aft (1960] A C. 167 (see Fridman,
* SgJ . iWegal Transactions (1962) 112 Law 3. 299).
3a
* (1*^ f *
Chapter 3
Statafory definition
Categories of goods
* 5'ttpra, pp.
33
P.S o. 2
34
of the contract of sale. The latter are called by the Act, future
goods. * It is clear from this provision of the Act that a v^id
contract of sale of goods may be made in respect of goods which
the seller does not own or possess at the time of cODtractic|.
Generally speaking, of course, the seller will be the owner ot
possessor of goods he is selling. It is important to notice that it JS
not necessary for the seller to be absolute owner of such goods. As
already noted, a contract of sale of goods is concerned with
passing of property, not title *: and this means that, subject o
the implied statutory condition as to the right to sell the goods. ^
mere possession of goods will be enough for them to be ca
" existing goods. It will be seen, in the next section, that witluQ
the category of existing goods there is a further division which is
great importance. .
nothing strange about the idea of selling goods which the seller neit
owns nor possesses. Any person may sell or ofTcr for sale
price whatever goods of which he is not the o\vner but which
* S.GJV. *. 5 <1).
* Supra, p 3.
* pp. iA-93.
35
280 - 281 .
jhis aepends upon the complex question whether a duty of care exists not to make
inacnirate statements: see Hedley Byrrte . Wri/er [1964] A.C. 465. discussed in
detail In (1964) 27 M.LR, 121.
36
also annlipH ^fiJther logically nor legally true that the convcrs
equitv^^ftnid *!? ^ contract of which a court o!
37
Potential property
ibid, at p. 637.
BM/om/n on Sale {8th ed.. 193(9, at PP. 134-136; AUyab, Sate of Goods (2nd cd ,
38
Contingent sales
*9 The cases are coUecteU and discussed in Benjamin on Sale, pp. 136-13?:
Halsburys Laws of England, 3rd ed., Vol. 34, p. 64, note (o). Kote that ifl
V. Coupland (1874) L.R. 9 Q.B. 462. a contract of sale of 200 tons of
be grown on a specified field was a sale, though it was held subject to an iP
condition as to possibility of perfonnanee: Infra, pp 41-42.
9* Cf. Chalmers, Sale of Goods (14th ed., 1963), at p 33, note (o).
S O A. s. 5 (2).
*9 (1874) L.R. 9 QB. 462; (1876) 1 Q.BD 258. Contrast with this the case
Lebeaupln v. Crispin (1920] 2 K.B. 714
39
liable for failure to deliver the whole 200 tons, since the contract was
for the sale of specific goods and was subject to an implied condition
that delivery of 200 tons of potatoes grown on such land was possible.
However, that case, and similar ones, could be regarded in a different
light. For a sale involving a contingeiKy, e.g., the growth of a certain
crop, or the birth of certain young animals, or a catch of fish, could be
treated not as a contract dependent for its validity upon the occur-
rence of some contingency, but as a sale of a chance, emptio spei,*^
by virtue of which the buyer was bound to pay for whatever should
be forthcoming, even if it should turn out to be nothing at all. Such
a contract of sale must be distinguished from emptio rei speratae,^'
i.e., a conditional contract by which the parties are only bound if
something does come into existence. Ether type of contract may
be agreed between the parties : which has been will be a question of
fact, i.e., of construction of the contract. Thus where there is a sale
of something to be acquired by the seller in the future the exact
nature of the contractual obligations of the parties is dependent upon
whether the contract is for the sale of potential property or a con-
tingency (both of which would be examples of emptio rei speratae)
or is a sale of a mere expectation dependent on a chance {emptio
spei).*^
** 11115 h a term employed in Roman law: see Digest 18.1,8,1, and Digest 19,1,11,18.
pother explanation of cases like Ilcwelt . Coupta/id is that they arc uncon-
muonal sales in which the seller wanants that the crop or other subject inafter
(v.~- , , -r jjjjcg jj no crop, etc., the seller will
40
In Thames Sack & Bag Co. v. Knowles & Co.** Sankey J. rvL\ta
that the individuality of the goods must in some way be found
before the goods could be said to be ascertained. In that case Uie
was a sale of ten bales of Hessian bags according to a particular fo^
of contract, well known in the trade in question, by which the goods
had to be ready and available for delivery. An invoice was sent to
the buyers giving the specific marks nnd numbers of the bales to be
sent to them. According to a custom of the trade, this was appfO'
prialion of the goods to the contract. It was held that the goods were
not ascertained (they were not specific since they had not been
Identified and agreed upon at the lime the contract was made): hence
specific performance was denied to the buyer.
119211 1 oi. eo6 at p. CM: cf. Lori llamronh M.R. IbU. ai p. 622.
goods when some identification takes place, i.e., the Vauxhall Victor
car which I have put aside in a particular place in the showroom.
By contrast, unascertained goods are usually goods defined by refer-
ence to a genus, e,g., 100 tons of barley, a dozen copies of Salmond
on Torts. In addition, however, unascertained goods may be an
xmidentified part of a specified whole, e.g., as in Re Wait. 500 tons
out of the 1,000 tons which were being carried in a particular ship.
In that case it was held that the goods were not sufficiently identified
or ascertained to entitle the buyer to claim specific performance of
the contract. Goods to be manufactured or acquired by the seller
may also be unascertained, e.g.. ten of the cars produced next week
by my factory (though such goods can also be specific). From all
this, therefore, it would seem that the distinctions now under dis-
cussion cut across the distinction considered in the previous section
between existing and future goods. Existing goods may be specific,
ascertained or unascertained. So. loo. may future goods.
** Supra.
** See Infra.
42
Importance of distinction
This leads to a consideration of why the differentiation
categories is important. In the first place, property in specific
may pass as soon as the contract Is completed, and before anyth'''^
else is done. ^Vhcther or not this is so depends upon the
of certain sections of the Act. or upon the teims of the contract-
43
Property in unascertained goods will not pass until there has been
some identification and appropriation of the goods to the contract.**
Hence there may be a sale of specific goods but not of unascertained
goods. A contract relating to such goods will be an agreement to
sell,** Secondly the Sale of Goods Act permits a court to order
specific performance of a contract to deliver specific or ascertained
goods.* But it does not permit such a decree in respect of unascer-
tained goods, as the case of Re Watt * conclusively shows. Thirdly,
the provisions of sections 6 and 7 of the Act, to be examined below,
only apply to contracts dealing with specific goods. They have no
application to contracts of sale of unascertained goods, even where
the goods have been ascertained. Lastly, while there may be
frustration of a contract for the sale of specific goods, and possibly
of a contract where the goods have been ascertained, it would seem
to be a matter of some dispute whether the doctrine of frustration
applies to a contract of sale of unascertained goods. Judicial opinion
on this matter appears to be divided*^: and it may well be that the
application of this doctrine depends on the exact Lind of unascertained
goods involved.**
3. PiRiSHiNO OF Goods
Statutory provisions
S s 1 (3): iupra, pp 4. 22
5 O A. 8. 52.
** Supra,
*^ Cf. Russell J. in Re BadUehe Co. Ltd. [II1 2 Ch. 331 at pp. 381-383, and the
cited and discussed, with A^oith LJ. in Monkland v. Jack Barclay
j-ra. [1931] 2 K.B. 232 at p. 238. Contrast, also, the decision iaRe an Arbllrallon
oetweert Shlptart, Anderson d Co. and Barrtson Bros. & Co. [1915] 3 KB. 676
*Pific goods) with the laognage of Pickford LJ. in Blackburn Bobbin
2KB 467 at p. 469, dealing with goods
not spccinc.
44
d subsequently the goods, without any fault on the part of the scUct
perish before the risk passes to the buyer, the agreemeal
IS thereby avoided. ^
is a ''"''o of ha oasc.
*f>>SH-l-.C673, On . .
, v fl the Safe or
OitahW ^ nto... *
PERISHING OF GOODS
45
expression is used in section 6. It was once in existence, but had
ceased so to be at the material date. On the other hand, in the
Australian case of McRae v. Commonwealth Disposals Commission
the contract concerned a specific oil tanker alleged to have been ship-
wrecked on a specified reef. It emerged that neither the reef nor
the tanker existed. The High Court of Australia did not apply the
Australian provisions corresponding to section 6 of the En^ish Sale
of Goods Act, but dealt wth the case on different grounds.** This,
it is suggested, was justifiable since a tanker which never existed
could not be said to have " perished-*
46
at p. 35, is to the like eilect: sec Produce Brokers Co. v. Olympia Oil
ri9'71 } K.B 320.
PERISHINO OF GOODS
47
the same way as, e.g., burnt or sunken goods? To what other situations
can the decision in this case be extended or applied?^
^possibility
. s
* 11948) 2 ; . ^
** 7 0 ), 8 ( 2 ).
** tnfra, p. 50.
48
contract and the time when risk passes to the buyer. When risk
so passes is something which most be considered later.^^ In the
present context, it suffices to note that what the section seems to deal
with are situations in which, without any fault on the part of seller or
buyer, the contract becomes impossible to perform by reason of the
perishing of the goods. Hence the section has no application
where impossibility results from any other cause, e.g., the passing
of a statute making illegal the sale of the kind of goods involved,
or the intervention of a state of war making the buyer into an alien
enemy or making deliveiy of the goods impossible. In such cases,
therefore, as in the case of agreements to sell unascertained goods,
the common law doctrine of impossibility of performance or frustra-
tion applies. This means that the Law Reform (Frustrated Contracts)
Act, 1943, will regulate the rights and liabilities of the parties, so
that the contract will not entirely be without effect.^* In cases within
section 7, however, the contract is avoided, which means that neither
party wiU have any right to recover any expenses incurred in fulfilling
the contract. All that will happen will be that the seller will be
excused from liability for non-delivery while the buyer is excused
from the payment of the price.* It will be noticed, however, that the
same arguments are applicable to section 7 as to section 6, so that it
may well be that the apparently mandatory provision of section 7
can be excluded by appropriate express or implied terms retaining
the liability of either party even if the goods perish.
It has been queried whether this section would now apply to the
kind of situation which arose in Howell v. Coupland, in which the
then emergent doctrine of impossibility or frustration was applied. It
will be remembered that the contract there concerned a specific parcel
of goods to be grown by the seller. This was regarded as a sale of
specific goods, to which that doctrine could apply. Since then, how-
ever, the statutory definition of specific goods has been enacted, and.
as a result, it may be questioned whether the goods in that case could
now be described as specific so as to bring the case within section 7.
In view of the comments of Atkin LJ. in Re Wail,'^ to which refer-
ence has earlier been made,* it may well be that in contracts of this
kind the common law doctrine of impossibility or frustration is
Infra, pp 236-240.
Supra, p. 38.
PERISHING OF GOODS
49
From what has been said above, it will be apparent that the pro-
visions of sections 6 and 7 of the Act leave much to be desired as
regards clarity and certainty. Not only is it difficult to state with any
degree of assurance the precise situations to which these sections
apply, it is also far from clear what some of the expressions employed
in those sections mean and involve.
TT Oiatmers, op. cit., t p. 34, regards s. 6 as possibly being based on either mlstalLe
or impossibility.
48
contract and the time when risk passes to the buyer. When risk
so passes is something which must be considered later.^* In the
present context, it suffices to note that what the section seems to deal
with are situations in which, without any fault on the part of seller or
buyer, the contract becomes impossible to perform by reason of the
perishing of the goods. Hence the section has no application
where impossibility results from any other cause, e.g., the passing
of a statute making illegal the sale of the kind of goods involved,
or the intervention of a state of war making the buyer into an alien
enemy or making delivery of the goods impossible. In such cases,
therefore, as in the case of agreements to sell unascertained goods,
the common law doctrine of impossibility of performance or frustra-
tion applies. This means that the Law Reform (Frustrated Contracts)
Act, 1943, will regulate the rights and liabih'ties of the parties, ^
that the contract will not entirely be without effect. In cases within
section 7. however, the contract is avoided, which means that neither
party will have any right to recover any expenses incurred in fulfilling
the contract. All that will happen will be that the seller will be
excused from liability for non-delivery while the buyer is excused
from the payment of the price. It will be noticed, however, that the
same arguments are applicable to section 7 as to section 6, so tot
may well be that the apparently mandatoiy provision of section 7
can be excluded by appropriate express or implied terms retaining
the liability of cither party even if the goods perish.
It has been queried whether this section would now apply to the
kind of situation which arose in Howell v. Coupland, in which the
then emergent doctrine of impossibUity or frustration was applied* It
will be remembered that the contract there concerned a specific parcc
of goods to be grown by the seller. This was regarded as a sale of
specific goods, to which that doctrine could apply* Since then, how-
ever, the statutory definition of specific goods has been enacted, an ,
as a result, it may be questioned whether the goods in that case could
now be described as specific so as to bring the case within section 7.
In view of the comments of Atkin LJ. in Re IFo/V, to which refer-
ence has earlier been made, it may well be that in contracts of this
kind the common law doctrine of impossibility or frustration is
Tt Infra, pp. 236-240.
consideration.
Supra, p. 33.
PERISHING OF GOODS
49
From what has been said above, it will be apparent that the pro-
visions of sections 6 and 7 of (he Act leave much to be desired as
regards clarity and certainty. Not only is it difficult to state with any
degree of assurance the precise situations to which these sections
fippiy* it is also far from clear what some of the expressions employed
in those sections mean and involve.
Q>ilmer*. op. cit., at p. 34, regards s. C as posilbty being based on efoAer mistake
or Impossibility.
50
Section 7 (2)
Where the parties purport to sell specific goods, and the goods
without the knowledge of the seller have perished in part or have
wholly or in a material part so deteriorated in quality as to be
substantially changed in character, the buyer may at his option treat
the sale
( 0 ) as avoided, or
Section 8 (2)
( 0 ) as avoided, or
Chapter 4
himsell within the protection of ss. 21^ of the Sale of Goods Act (Infra,
pp. lOS . --. .. -r ., , , .
Lawson, Z. . , I ! . >
bayei can . . . . . .
delivered r ,
to ine buyer): Lawson, loc. clt says he may not because of the unpaid
seller s lien (on which see tnfra. pp. 25^21^
* Hence the statutory inclusion of the old bargain and sale as well as sale and
delivery within the scope of the definhion of sale: S GA. s. 62 (I).
51
52
law differs from Roman law which drew a sharp distinction between
the creation of a contractual relationship between seller and buyer
by the completion of the contract and the passing of property in goods
by their transfer by some appropriate legal method.*
General property
4 Which depended on the legal category of the goods in the period when
law distinguished between res manetpl and res nee mancipL See, genera^
Lawson, The Passing of Property and Risk in Sale of Goods a Comparative
Study (1949) 65 L Q JL 352.
a S.OA. a. J (1).
S.OA. 8. 62 0).
53
Thus, the idea of transfer of " property " from seller to buyer is
important only in so far as it affects the relationship inter se of the
* Lawson, loc. cll^ supra, note 3, at pp. 359, 360, suggests that, apart from
the rffects of the transfer of property are for the most part, if not entirely,
UJusofy, and are without any practical consequence. Ibe buyer is in no better
position, from the point of view of remedies, whether or not he has obtained
property.
54
may hare paned from aellcr to buyer, the buyer may he disentitled 1 e"" *5
the rrent of the ubse<jyenf bankrurtcy of the seDcr. by reason of the prorWonj w
the bankruptcy law rebtinf to fraudulent conreyances and reruled *T^
TJwe is also the ptmihillty that the tale may require rctistratlon under the BUJ
of Sale Acts, and, bcklng tudi rrfbtration, may be roid ajtainst the selW*
cred.tors. To such estent, therefore, the rroTisloni of the Sale of Goods An
as rerardi transfer of from seller to buyer may be to no ara3.
55
title. Next, under the heading of '* effects of the contract (which
is Part n of the Act) there is a sub-heading transfer of title under
which, in several sections, the Act a)nsiders the extent to which and
circumstances in which a person not an owner of goods can confer
a good title to the goods on a buyer from him. Section 12, therefore,
clearly contemplates that the object of a sale is to transfer title from
seller to buyer, not simply whatever " general property the seller
has over the goods. Sections 21 to 26 of the Act clearly contemplate
that there may be a transfer of title, not simply general property,
by a contract of sale of goods, even where the seller has no legitimate
title. Such transfer of title, as section 25 (I) shows,'* may even take
place where a seller has previously sold goods, i.e., transferred the
property in them, to an earlier buyer, with the result that the first
buyer is unable to claim the goods from the second buyer.
56
transfers of title which, by implication, nffect not only the seller and
buyer but also third parties.
In the United States, the Unifonn Sales Act maintains the distinc-
tion between property and title referred to and discussed above.*^
But the Uniform Commercial Code, more sensibly, it is suggested,
makes use of only one notion, ////c, when considering the definition
of " sale, when providing for the obligation of the seller correspond-
ing to the obligation contained in section 12 of the Sale of Goods
Act, and when dealing with transfers as between seller and buyer
and the position of third parties buying in good faith. Thus, this
Code does not seem to suffer from the ambivalence of the Sale of
Goods Act (and the Uniform Sales Act) in ibis respect.
IT Uniform Sa! Act. ss. I (1) (2). 12 O). 17-20. 2>-0. Note
Sales Act deals with negotiable doemnents of title to goods m a way not
hended in the Sale of Goods Act; ef. Lawson, toe. /.. i-f- m.
For negotiation of documents of title m Engluh law, see the Bills of Lading:
1855; SO. A. 8. 47 proviso; /n/rtf. pp, 264, 272. .
18 Unifonn Commercial Code. *s. 2-106 Ok 2-312 fl). 2-401, 402, 403; cf. also
ss. 7-502, 503.
57
The first is concerned with the actual definition and scope of the
contract itself, /.e., the terms of the contract agreed between the
parties. Under this head come the provisions of the Act relating to
conditions as to description, quality or fitness, sales by sample (and,
possibly, as to time *') and the provisions relating to the treatment
of a breach of condition as a breach of warranty.** These matters
are connected with the subject-matter of the contract, in other words,
the character and quality of the goods which are being sold.
n W 151-178
* 1 O extent to w1
u cp-t- * y* pp 181-184
u ** 27-33: Infra, pp. 203-220.
58
The provisions of the Act which lay down the obligations of the
parties so far as the performance of the contract is concerned are of
a different order from those which have been mentioned above.
Although the requirements of the Act in this respect may to some
extent be modified by agreement between the parties, by and large it
is true to say that what the Act stipulates is obligatory upon the
parties. In other words, where performance is concerned, the Act
does not merely provide a model which may or may not be copied or
accepted by the parties as they choose but states precisely and almost
unalterably what it is that seller and buyer are obliged to do once
they have validly contracted for the sale of goods.
A farther distinction
59
the goods which are being sold.** Such terms, therefore, supplement
the dhlincUon between specific and unascertained goods by adding
further distinctions which affect the identification of the goods to
be sold by reference to the quality of such goods, distinguishing goods
of a certain character, which were intended by the parties to be the
subject of the sale, from goods of a different character, which are
outside the scope of the contract. To put it another way, they are
pertinent to the definition and scope of the contract agreed between
the parties. In contrast, the obligations respecting performance of
the contract, so far as delivery of the gex^s, acceptance of the goods,
and payment of the price are concerned, belong to a different class
or category of contractual obligations, in that they regulate the
position of the parties once the terms of a binding contract of sale
have been agreed.* The obUgaUons relating to the character and
quality of the goods may therefore be called static : those relating
to performance may be called dynamic.
Part n
I. Introductory
First, the effect on the rights and obligations of the parties of the
total or partial loss, deterioration, damage or destruction of the goods
is dependent on the transfer of property, unless some express or
implied agreement (or custom) otherwise provides.* This may be
called the risk issue. By way of corollary to that, and by virtue
of the language of section 7 of the Act,* the effect of the goods perish-
mg, where the contract is an agreement to sell specific goods, also
depends on the transfer of property.
* Supra, pp 44~49
Since the effect of the perishing of the goods depends on the passing of risk to the
buyer, which, In turn, depends on the passing of property to him,
63
64
TRANSFER OP PROPERTY
of a right to reject the goods which he may enjoy because the goods
are not of the right quality, quantity, description, etc. This may be
called the rejection issue.**
Thirdly, once property has passed to the buyer, the seller loses
and the buyer acquires proprietary rights of action in respect of the
property, both as regards the seller himself and, subject to the defeat
of the buyers title by the operation of the sections of the Act to be
discussed later, as regards the outside world. A further consequence
of this is that the seller is then enabled to sue the buyer for the price
of the goods, and not merely for damages for breach of contract.
This may be called the property-price issue.
2. SPEcmc Goods
By section 17 (1) of the Act, where there is a contract for the sale
of specific or ascertained goods the property in them is transferred
to the buyer at such time as the parlies to the contract intend it to
be transferred. As Lord Watson said in McEntire v. Crossley Bros>
Ltdy : It does not in the least follow that, because there is an agree-
ment of sale and purchase, the property in the thing which is the
subject-matter of the contract has passed to the purchaser, Ibat is
a question which entirely depends upon the intention of the parties.
The law permits them to settle the point for themselves by an expres-
sion of their intention upon the point. Hence, in that case, a contract
by which the property in an engine sold by the respondents to X
was not to pass until all the instalments of the purchase price were
paid did not prevent the contract being one of sale and purchase,
Infra, pp 108-129.
SPECIFIC GOODS
65
Propetw <Ud not pass to X, Tvbo failed to pay alt the instalments; hence the
11 e assignees of X acquired no right to the property when X became bankrupt.
* t2). See the remarks of Greer LJ. in the peculiar case of Lord Eldon
t, 11533) 2 K.B. 1 at p. 16
^Reld V, Macbeth & Gray A.C 223; Lalng & Son Ltd. v. Barclay, Curie
* -o. trd. 11908] A.C. 35; Re Dlyih ShltAuUdlng A Dry Dock Co. Ltd. 11926]
Cn. 484; AfeDougafl v. Aeromarint oj Emr*'orlh 11958] 3 All E.R. 431. Set also
** ^*^**^- C"/* s regards the effect of a similar provision upon the power
, ,*"5 to pass title to an innocent third party, although the bu>'cr hid no
"' H. by virtue of the Factors Act, 18S9 (Infra, pp 123-I2S). AWWnj
V. millams [I94I 2 Alt E.R. 135 at p. 140. per Davies LJ
n inis ue, however, the sale was not by aueUon, and the learned judge said
mat such a ebuse was operative, but only as between seller and buyer.
rje-O. 3
66
TRANSFER OF PROPERTY
auction should not pass to the buyer until a cheque given by way of
payment should be cleared was not inserted into^the contract until
after the fall of the hammer at the auction, the result of which, as
already seen,** was that properly passed right away, making it too late
to postpone the passing of property by the inclusion of such a term
in the contract. No ouster of the relevant provisions of section 18
occurred.
Supra, p. 27.
11918] A C. 157 at p.. 168, pr Lord Parker. Cf, Uie opinion of Bankes and
LJr. as to the necessity for eoods to be put on the railway for delivery before
property passed in Underwood Ud. v. Burgh Castle Brick & Cement Syndicate
[1922] 1 K.D. 343 at pp. 345. 346.
** Supra, PP 40.41.
SPEaFIC GOODS
67
Unconditional sales
** SOA. s. 18. See Underwood Ltd. V. Burgh Caille Brick & Cement Syndicate
S.OA. $. 18, r. 1.
[1937] Ch. 1 at p. 9.
68
nUNSFER OF PROPERTY
* U.S.A. I. 19. r. 1.
spEanc GOODS
69
* Supra, pp 39-43.
la \lz., hen the contract is nude, if the goods exist and are {deniificd; if the
contract is for the ule of future goods, when they are shipped, marked or
otherwise des^nated by the seller as goods to which the contract refers (contrast
SGA. s. IS, rule 5, Infra, pp 8>4W)l ** certain stated times, in the caw of
the sale of crops or unborn young; U.CC. a. 2-501 (1) (a) (b) (c>. It should be
noted (I) that (he deli^'crable state of the goods is not part of identification;
(7) that identification may resemble ** app ro priation ** under the Uniform Sales
Aa and the Sale of Goods Act, except for the fact that only the tellers conduct
Is relevant under the Uniform Cornmerctal Code, whereas the other statutes
involve the buyer as well.
S.aj\. I. 62 (1).
70
TRANSFER OP PROPERTY
paid the first instalment of the price, the question arose whether the
money was recoverable, which raised the risk issue. It was held
by the Court of Appeal that the sale was not one within Section 18
of the Act, since the goods were not specific. It was not a contract
for all the trees in the forest: it was a contract for selected trees, v/t.
those suitable for the timber that was required by the purchaser.
Hence property did not pass under the contract and the risk of
was on the seller, not the purchaser.
*t S.OA- S. 62 (4>.
41 Ibli. at P. 34S.
[I93J] 2 KB. 1.
SPECIFIC fflXDDS
71
unmerchantable hay. But the Court of Appeal decided that the con-
tract was in such terms as to show that the parties intended that
property should pass to the buyer when the contract was made.
Hence section 17 of the Act ousted the otherwise applicable provisions
of section 18, rule 1. On the other hand, in Vigers Bros. v. Sanderson
Bros.*^ goods were sold and shipped under a contract by which the
property was deemed to pass when the goods were put on board.
Goods not of the specified length were shipped and were rejected by
the buyers. It was held that the terms of the contract did not
exclude the right of the buyer to reject goods which did not come
within the meaning of the contract (subject to the obligation under
the contract to refer the dispute to arbitration). Here the buyer was
not bound to take delivery of the goods : hence they were not in a
deliverable state and, apart from the terms of the contract, property
was not transferred by the contract itself.
72
TTUNSFER OF PROPERTY
of metal by private persons : and therefore the contract was not coin-
pleted until the metal was removed. It was held that property in
the metal did not pass to the purchaser until he actually removed
the spent shells from the range. Hence the plaintiff, who had formerly
enjoyed the concession, could not sue the next contractor for wa*
vemion of metal left on the range at the expiry of the plaintiff
agreement with the War Office. The property-price issue which
arose in this case was decided against the purchaser on the grouDO
that the contract was conditional. It would seem to be clear that,
the context of the facts of this case, the expression referred to a
condition precedent, i.e., a condition which must be fulfilled
the contract is to become effective, and not to a condition whic
affected the rights and duties of the parties under a valid, immediate y
effective contract. Writers are undivided in their opinion that.^^in the
light of (j) the use of the expression conditional contract else
where in the Act, (ii) the distinction between conditions precedent an
subsequent on the one hand and conditions which are
stipulations of a contract on the other, and (hi) the loss of th np
to reject for breach of condition which is provided for by
11 of the Act where property has passed in specific goods or goo
have been accepted within the meaning of the Act,** the expression
unconditional in section 18. rule 1, must refer to the absence o
any conditions precedent or subsequent in a contract for the sale o
specific goods in order that property shall pass when the contract s
made. Any opposing view would result in absurdity. The reasons
for this are as follows : (a) specific goods may not be rejected ^
breach of condition once property has passed in them, (b) prope^
passes where goods are specific and in a deliverable state, ff t e
contract is unconditional, once the contract is made, before any
delivery, and therefore before the buyer can see whether or not to
reject them for breach of condition, but (c) all, or nearly all contracts
of sale will be subject to implied statutory conditions. Therefore
(1) section 18, rule 1, can never apply; or (2) if it does apply
application deprives the buyer of his right to reject before he can
discover whether he ought to reject; or (3) if the goods are such as to
Srt jurrtx. pp. 63-64, Infra, pp. 1S2-IS4 for thli matter. ..
c See Smith. The Right to Rescind for Breach of Condition In a Sale of Spe^*
Good* under the Sale of Goods Act. 1893 fl957) 14 hf.L.R. *^',7^
96. IlaUhury. Laws of Batland. Jrd erf, Vol. 34 at p. 68, now (<r) regards
condinonsl as an unnecesurr word, having regard to the coverine
s 18. But muit not every word In an Act of Parliament be given meaning if
logtaD/ and grammaiicaOy possible to ito so7
SPECIFIC GOODS
73
74
transfer of PROPERIY
Conditional sales*
the buyer has received notice to this effect. The Act does not stipulate
SPECIFIC GOODS
75
whether such notice should come from the seller or may come from
outside sources, e.g., observation by the buyer or his servants or
agents. Nor docs it state whether such notice must be actual or con-
structive. In accordance with what has been said in commercial
cases not necessarily involving the safe of goods, it may be suggested
that notice to be effective in cases of this kind must be actual. That
still leaves open whether or not the notice must come from the
seller.
*s Benfambt on Sate at p. 307 Suggests that aa the Act does not state that the seller
must give notice, *' notice must therefore mean *' knowledge,"
76
TRANSFER OF PROPERTY
SPECIFIC GOODS
77
Where there is a contract for the sale of specific goods which are
already 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, then, by rule 3 of
section 18, property does not pass until such act or thing is done and
the buyer has notice that it has been done.
Here the problems connected with " notice which have been
mentioned in relation to rule 2, also arise. Under this rule, however,
there is no question of determining which goods are those which have
been sold (as is the case with rule 2): the goods are agreed and
identified, and ready for acceptance by the buyer : it is the price which
is still to be determined; and this depends on the quantity, quality,
amount or other variable which remains to be settled by the agreed
process. i.e., weighing, measuring, or whatever other method is
involved.** Under rule 2 something has to be done to the goods
to put them in a deliverable state. It is the goods themselves which
must be dealt with by the seller. Under rule 3 whatever the seller is
obliged to do must be done *' with reference to the goods. This would
suggest that the scope of rule 3 is wider, and that the test or other act
required of the seller need not physically concern the goods them-
selves. For example, it might be that the price of the goods is to be
dependent upon the price at which an equivalent quantity or type of
goods are sold to a third person.
78
TRANSrCR or PROPERTY
If the contract expressly stipulates that the sale is one '* on approval.
SPEQFIC GOODS
79
See Bndley Cohn Ltd. v. Ramsay 0911) 28 T.L.R. 12, 388, where a refusal to
sellers price was a suiScient rejection of the eoods.
80
THANSFER OF PROPERTY
employees) for rejecting the goods. What have given rise to difficuHy
have been cases in which it has been argued that property passed
either because the buyer has done some other act adopting the
transaction or because the buyer has retained the goods beyond the
fixed or a reasonable time. In a sense these two different modes o
effecting the transfer of property in cases of this type overlap, in that
the conduct of the buyer could be construed cither as an
the transaction or as necessarily involving him in retaining the goo^
beyond a fixed or reasonable lime. This is particularly so la
cases (of which there are several) in which the prospective buyer
has taken delivery of goods on approval or sale or return and^ as
subsequently sold or pawned them. It would seem from the decisions
that it does not matter whether the buyer had the intent to se or
pledge the goods when he obtained delivery of them from
or subsequently formed such intent. In both instances it is the sc
of the buyer in selling or pledging the goods which amounts to an
adoption of the original transaction.
Lopes LJ. said that if the recipient of the goods retains them c
an unreasonable lime he has done something inconsistent with t e
exercise of his option to return them and thereby adopts the trans-
action. ric instanced the sale or pledge of the goods as acts incon-
sistent with their return because by pledging goods (and presumaby
a fortiori by selling them) the buyer no longer has free coniro
over them 'so as to be in a position Co return them. It would sw*
from this language that what the court had in mind as determining
Unless s. 18, rule 4, does not apply for other reasons: see the cases ated in
TO. tupra.'Welner r. CBl, suprg, and Truman Ltd. t. Atttnbormigh (19W1 '
T.L.R. 607 here the buyers title was voidable because of his fraud. Contra*
J^nJon /rwttlfrt Lid. T. Attenberouth, supra,
tt U8T7I 1 QJJ. 201.
r tbU. at p.'203.
** IbU. at p. 2CM.
spraFic GOODS
81
the issue was that the act of selling or pledging the goods necessarily
involved keeping them beyond a reasonable time, rather than being
an adoption of the transaction. This would seem to be the reasoning
employed by the Court of Appeal in the case of Genn v. Winkel?'^
in which there were several transactions of this type, from A to B to
C, each of them involving a choice between adopting or rejecting
goods. The final purchaser could not return the goods because they
were lost. It was held that merely handing the goods over to a third
person on sale or return did not make the first purchaser on such
terras a buyer to whom property had passed: but the loss of the
goods by the final party in the string of purchasers on sale or return
made it impossible for the goods to be returned to the original seller
within a reasonable time: hence the original buyer had become the
owner of the goods.*^
^ But how is this consistent with the idea that the fact that goods delivered on
pproval or sale or return perish while in the hands of the buyer does not transfer
property as long as the loss was not the fault of the buyer end a reasonable time
elapsed: Eiphkk v. Bames (1880) 5 CP.D. 3217 (.Contra if a third
wrty, to whom the buyer delivered the goods, fraudulently misappropriated them:
Barker (1879) 4 ChD. 279.)
" ! ?* 2 K.B. 574 .e p 578.
82
TRAKSFHl OF PROPERTY
(ItST) 3 C.r.D. 321 : hot cf. ahar b uid surra, note SI, la rtUliort to U**
* 2 AD HR. 4?2.
IhU. ai jv 417.
SPEOFIC GOODS
83
Before leaving this part of section 18, it is worthy of note that the
American Uniform Sales Act and Uniform Commercial Code dis-
tinguish between a delivery of goods on sale or return and a delivery
of goods on approval or on trial or satisfaction. The distinction in
the Uniform Commercial Code is based on whether the goods are
delivered primarily for resale (sale or return) or for use (on
approval).*^ Under the U.C.C. the distinction is important so far as
regards the rights over such goods of the buyers creditors while the
goods are at the buyers place of business.** But under the Uniform
Sales Act* the importance of the distinction lies in the fact that
in the case of a delivery on sale or return property passes
immediately to the buyer but may revest in the seller if ie buyer
exercises his option to return the goods instead of paying the price,
by returning or tendering the goods within a reasonable time or
within the time fixed by the contract, if any. On the other hand, fn
sales on approval the position is the same as under the Sale of
Goods Act. i.e., property remaining in the seller until the buyer acts
in a way stated in the legislation. The American approach seems
to be based on a more realistic commercial differentiation, involving
the notion of credit as well as the transfer of property, and talcing
into account the special problems produced by the need to protect
creditors rights.*
Ascertainment
S O A. s. 1 6 : see, e^.. taurle hlerewood t. DudlA & Sons [1 926] 1 K.B. 223,
P^aDy at pp. 2M-235, per Scnitton U.
84
ttwnsitr of PROPERTJ'
Appropriation
85
refuse to accept them as part of the ship. But the mere intention to
use certain goods for the purpose of the ship was not enough to
transfer the property to the purchaser.* The word appropriated
was described by Sargant L J.' as ** a term of legal art, with a certain
definite meaning. For appropriation there had to be some definite
act, such as the affixing of the properly to the vessel itself in the case
in question, or some definite agreement between the parties which
amounted to an assent to the property in the materials passing from
one party, /.e., in the instant case, the builders, to the other, the
purchasers. This case and others * were concerned with the transfer
of property in goods to be manufactured by the seller for tbe buyer,
i.e., where the contract was for the sale of future goods. In such
cases, and in others of the like kind, e.g., where the seller has to
instal machinery in working order.* the transfer of property depends
upon the exact terms of the contract, what the seller has to do
before property passes, or. if there arc no express terms capable of
providiog an answer, upon the determination of the question when
appropriation, in the technical legal sense elaborated above, has
taken place. Thus in many instances what is involved is tbe con-
struction of a particular contract, not the interpretation and applica-
tion of a statutory term with a long history of explanation in the cases
behind it.
* Retd V. Macbeth &. Cray [1904] A.C. 223 (aPPlring Seaih t. hfoore (I8S6) 11
"fPCas. 350); Loing & Sons Lid. t. ffarelay. Curie A Co. Ltd. [1908] A.C. 35;
McDougan V. Aeromarlne of Emswarth Ltd. {1958J 3 AH E.R. 431.
^^tage T. Ralgh & Son Ltd. (1893) 9 TXJt 289; Pritchett v. Currie [1916]
^ Q*. 315.
(1859) 4 H. * R 402.
mANSFTR OF PROPERXy
goods sold, where the goods sold are part of a larger whole an
not yet been severed from the larger quantity so as to identify
as goods appropriated to the particular contract in question,
the other hand, in Denny v. Skelton '* where the wrong portion w
delivered to one buyer and the wrong portion to another .
was held that the delivery of the wrong portion, which was the
amount under the contract, was sufficient to constitute
appropriation and therefore to pass property.
10 Infra. ..
Pletts V. Campben (189512 QB. 229; PUtti Y. Seattle, supra-, SobUttf- nopt^
son (19051 2 K.D. 214.
IS .
. 0I 1 K-B 376.
^rie &
87
Carlos FederspM <t Co. S.A. v. ChiHfS Twigg & Co. Ltd. [1957] 1 Lloyds Rep
240 at pp. 255-256.
Hmce the suggestion in Oialmers, op. cit. at p. 77 that " delivery ought to be
substituted for " appropriation " as the lest of transference of property. But this
would seem to run counter to the whole idea of the law that property in goods and
possession of them are quite discinet.
t-or detailed discussion see Kennedy's CJJF. Contracts (3rd ed., 1959), Chap. 1.
88
TRANSFER OF PROPERTY
pass the property. The goods must still become ascertained and
property will pass when It was intended that it should. This, in turn,
depends upon the terms of the contract, the conduct of the parlies,
and the circumstances of the case, in the absence of any deary
expressed intention. The notice of appropriation will, therefore, no
be exclusively effective.** Indeed other clauses in the contract may
override whatever has been stated in the clause which deals^w
such notices.** However, it appears from Pignatoro v. Gilroy
where the appropriation of goods within section 18. rule 5, ta e
place and the seller sends a notice of their appropriation to
buyer, in the event of the buyer neglecting to reply to that no i
promptly it must be inferred that he assents to the appropriation, a
on the expiry of a reasonable time after receipt of the notice,
property must be deemed to haw passed. nal
i Smyth t Co. V. Solley A Co. ItSW) 3 AU ER. 60 at pp. 65-66, per Lord V.'risht-
a* Luis de Rldder Ltd. v, Andre et Cie S.A. JIWIJ 1 AH E R. 380.
89
Delivery
tuch laay depend, however, upon whether the goods to be delivered ore divisible
r not: see the cases cited in notes 7, 8, supra. If delivery to a particular place is
i^uired under the contract, no property is transferred until such dehvtry is wade;
w would seem to be a common law, not statutory, doctrine. Cf. the Uniform
Mies Act, s. 19, r. 5,
^ Co , supra.
! 337 at p 343.
90
TOANSFER OF PROPERTy
the cases which discuss the effect of a partial delivery on board ship
are not relevant to this rule, any more than the c.i.f. contract cases, ia
which some reservation of the right of disposal is almost invariably
involved. What the provisions of the Sale of Goods Act are on this
question must now be considered.
A conditional sale
It has already been seen that, under the terms of rules 2, 3 and 4
of section 18, there may be a conditional sale of goods, under which
property is not transferred until certain acts or events are performed
or take place. In addition to such examples of statutory conditional
sales, section 19 of the Act mentions one other, namely, where the
seller reserves what is called in the Act the right of disposal of the
goods until certain conditions are fulfilled. The seller may do this
where the contract is for the sale of specific goods or where the goods
are not specific but have been subsequently appropriated to th*
contract (so that, by virtue of rule 5 of section 18 property would
otherwise be transferred to the buyer). In such cases, notwithstanding
the delivery of the goods to the buyer, or to a carrier or other bull*
for the purpose of transmission to the buyer, the property in the goods
does not pass to the buyer until the conditions imposed by the seller
are fulfilled.
91
Basis and sYOtfcing o the rule
I! P- ^5.
92
TOANSFER OF PROPERTi
buyer. It was held that properly had not passed to the buyer because
the intention to refuse delivery of the oil without payment indicated a
reservation of the right of disposal. A somewhat similar situation
arose in the more recent case of Re an Arbitration between Shipton
Anderson &. Co. and Harrison Bros. &. Co.*' where, again, paynio^
was to be made by the buyer in cash within a specified time as agaimt
a transfer order.
But the form of the bill of lading is not the only test. For the ense
of The Parchim * shows that such matters as the agreement between
the parties as to which shall bear the risk of loss of the goods may
indicate that property was transferred, and that no right of dispose
had been reserved by the seller. It must, of course, be rememhete
that the Act only slates that in the ciremnstanees mentioned the se et
has only prinia facie reserved the right of disposal. The facts may
clearly show that no such reservation can correctly be inferred.
Bills of exchange
Cf. ShfphrrJ V. Ilanlton (1871) L.R, 5 IIX. II6 with Ex p. Danner (1876) 2 Cn.i'
278 and Kanlg . DranJi (I90l) W L.T. 743.
93
prize cases from the first world war illustrate the workings of this
rule, which it is unnecessary to discuss in great detail here.*^
* M to
It is clear that the seller of goods need not be their owner, or have
any general * property in them, either at the time of the sale or at
the time when, under an agreement to sell, property is to pass. He
may be the agent of the true owner. He may be acting under some
other legal power, invested in him by virtue of some other legal
relationship existing between him and the true owner. As long as he
has the right to sell, he will have fulfilled the condition implied by
the Act. Thus one who is not an owner of goods which are sold, and
is not the agent of the owner, nor is otherwise empowered to act in such
a way as to exercise the owners right to sell the goods, is in
breach of the statutory condition if be sells. This is so even though the
seller is innocent of the fact that he is not the owner and has no
right to sell, as happened in Rowland v. Divall, a case which has
caused much argument. There the defendant sold the plaintiff a motor
car which, it happened, was stolen. After the plaintiff had possessed
and used the car for only a few months, the fact that the car was
stolen, and therefore had not belonged to the defendant when he sold
it, became known to the police, who took possession of it from the
plaintiff. The plaintiff sued for the return of the purchase price, on
the ground of total failure of consideration. It was held by the Court
of Appeal that the defendant was in breach of the implied condition
set out in section 12 (I), and that therefore the plaintiff was entitled
to succeed. The court held irrelevant both the possession and use of
the car by the plaintiff for a few months, and the fact that, since the
car was in the possession o! the police, the plaintiff could not return it
to the defendant.
Property as consideration
* Infra, pp 30S-309.
f In the report of this case m [19231 All E R Rep. 270 at p. 273. Hus gives a
...j . 1 J T Reports.
1 K.a 463 .
s 2-508 (1) The warranty contiuned in s 2-312 (I) (a) is that the title conveyed
should be good, and its tr^sfer i^UfoL
97
Even when the buyer cannot retnni the goods because of the breach of which he
complains. Cf. Unifonn Sales Act, $ 69 (3); Uniform Commercial Code. s. 2-608
( 1 ).
Atlyah, Sale of Goods (2nd ed., 196^ pp 35-36. But see the argument of Treitel,
Law of Contract, pp. 637-638 as to the application of s. 6 of the Law Reform
(Married Women and Tortfeasors) Act, 1935, f.e apportionment
1* See also infra, pp. 102-103 on the application of s. 11 ( 1 ) (c) to the fact-situatio
n
in this case.
P.S.O
98
caused to two innocent parties, te.. an owner and a purchaser from the
thief, by the conduct of the thief.
tnfra. pr 110-112.
i 11921) 3 K-B- 357. diapprorinf tbc dedii'on of Lord RdikII L.CJ. In Monfons
99
various grounds. One of these was that, in selling them tins with
labels which infringed a third partys trade-mark, the sellers were in
breach of the condition implied by section 12 (1). There was no
doubt that the sellers owned the tins and the milk contained therein.
They could be said, however, not to own" or have the right to
sell, the labels on the tins in the form in which they were. To quote
Scrutton L.J.**; The [sellers] impliedly warranted that they had
then a right to sell them. In fact they could have been restrained by
injunction from selling them, because they were infringing the rights
of third pcRons. If a vendor can be stopped by process of law from
selling, he has not the right to sell. Atb'n L.J.** indicated that even
a right to pass property in goods would be insufficient to satisfy the
condition if there was a title superior to that of the seller so that the
possession of the buyer might be disturbed. If this case is correctly
decided, therefore, it appears that even to be entitled to dispose of the
property in goods is not enough if there is some legal obstruction to
the free disposition of the goods, when sold to him, on the part of the
buyer.
** Was there therefore a failure of consideration, which would entitle a buyer in such
(1), by including the name under which goods are sold as part of the goods.
Does this conflict with the defimtion of ** goods in s. 62 (1) which excludes
things in action ?
100
. . , . .ree named
II . , . . . . the result
at mjra, pp.
* I. 13 (4).
101
concerned, in the same way as many other passages in the Act are
vague and productive of uncertainty.
Express exclusion
Infra, pp 186-188.
* See the discussion by Hudson ** Hie Condftion as fo Hile in Sale of Goods (1957)
20 M.L.R. 236, and Reynolds, Wartanty, Condition and Fundamental Term
(1963) 79 1..Q R. 534 at pp. 541-542. As for sale of a chance see supra,
pp. 38-39.
102
What the court in that case did consider was whether the doctrine
contained in section II (I) (c) of the Act applied. Under this
provision, in certain circumstances, a breach of condition must be
treated by the buyer as a breach of warranty, permitting only of a
action for damages.*" The facts in Rowland v. Divall were such as to
allow this provision to apply. If it applied to a breach of the condition
as to right to sell. It appears from the judgment of Atkin L.J*
was the only member of the court to consider this question) that
section 1 1 (1) (c) is inapplicable to this particular condition, because
a seller cannot sell goods which arc not his property. ** But there
is no justification, in the Act or the co mm on law. for this proposition
(in the absence, of course, of any fraud or similar conduct). There
is no reason why a seller should not contract to sell goods which are
not his property if the buyer knows that they are not. The buyer
ST Infra, pp 186-193
* Reynolds, toe. cit., fupra, note 36.
. . . . . . .06
.. . ..las
no right to seU
103
The first of these is an implied warranty that the buyer shall have
and enjoy quiet possession of the goods.* What this exactly involves
is not very clear. In the Niblett case, the facts of which have been
given, it was held by Atkin LJ. (the other members of the court not
S.Gj\. . 12 (2)
IM
choosing to express any opinion) that the sellers had been guilty
of a breach of this implied warranty and were liable in damages
accordingly.* This was because the buyers were never allowed to
have quiet possession. They had to strip off the labels before they
could assume possession of the goods. Atkin LJ. went on to state
that probably this warranty resembled the covenant for quiet enjoy*
ment of real property (a resemblance which would seem to be
implicit in the language of Scnitton L.J.) and therefore purported
only to protect the buyer against the lawful acts of third persons,
breaches of the contract of sale, and tortious acts by the seller. How-
ever, in Mason v. Biirninghant ** it was held that the implied warranty
could be relied upon to entitle a buyer, who had been dispossessed
by the true owner of a typewriter purchased from the seller, to
recover from the seller, independently of damages recoverable
section 12 (1), additional damages representing the cost incurred
by the buyer in having the typewriter overhauled before the date
of the dispossession. Lord Greene stated that the seller could
defend himself from an action based on breach of this implied
warranty by pleading the eviction of the buyer by title paramount*
If this case is correctly decided, it means that a buyer who iuctjr*
expense in unsuccessfully defending an action brought against lum
by the true owner can recover such loss from the seller.* It ^1*
means that in cases such as Rowland v. Divall a possible remedy
the buyer might well be to sue for breach of this implied warranty,
when damages will be recoverable in accordance with the principle*
laid down in the Act. Such an approach to cases of this kind would
obviate the need to distinguish Rowland v. Divall or declare that it
was wrongly decided on the basis of failure of consideration. But it
Would mean that the buyer might recover Jess than the purchase
paid to the seller. Whether or not such an approach is acceptable, tt
follows from Mason v. Dumingham that this implied warranty w
quite distinct from the implied condition in section 12 (1).
enables a buyer to recover damages in respect of loss which would
not necessarily come within the scope of an action based on a breach
of that implied condition, and which does not result from any conduct
on the part of the seller-
*t ibU. at p. 39S.
4 ;wi. ai ^ 563. .
C/. IJofdi A Seviilik Flnaner ZjJ. . Modrm Con A Coravens (Klngsicn) Lto-
J1964I 2 AD LJl. 732. dbomed below.
105
106
107
Both at common law and under the Act there are situations in
which it is indubitable that a seller who has neither property nor
the right to dispose of property may nonetheless transfer property
to a buyer in such a way as to preclude any other person from
subsequently claiming such property from the buyer and either
dispossessing him or forcing him to pay compensation representing
the value of the goods. The Sale of Goods Act, in fact, expressly
recognises this, when it provides in section 21 (1) that, subject to the
provisions of the Act, where goods are sold by a person who is not
the owner thereof, and who docs not sell them under the authority
or with the consent of the owner, the buyer acquires no better title
to the goods than the seller had. The ensuing language of this
subsection, together with the words of section 21 (2) and sections 22-
26, clearly shows that, whereas the basic principle of the common law
and the Act is nemo dot quod non habet, i.e., no one can transfer to
another something which he has not got himself, viz., property in
goods, there are clear exceptions to this, by virtue of which a non-
owner can transfer not merely property in goods as between himself
and the buyer from him, but also title. It is significant that, by way
of sub-heading to the relevant provisions, the Act speaks of " Transfer
of Title, whereas in other places, as already pointed out,** it refers
constantly to property. This, as already indicated, shows that,
in this context, the Act is referring to something like an absolute,
indefeasible title to goods,*^ similar to the kind of title which can
exist in respect of realty.
Cf. the language of Lord Denning MJL in C.E.B Draptr & Son Ltd. v. Edward
Turner & Son Ltd. [1965] 1 QK 424 at p. 432: . . . the word sale
properly connotes the transfer of ateolute or general property in a thing for a price
in money.**
108
(i) Estoppel
Under the Hire-Purchase Act, 1964, Part HI (not repealed by the Hire-Pui't'^
Act, 1965), there is a further new exception to the nemo dot rule, ia the case ot
motor vehlctes sold under conditional sale agreements within that Act 1
S.tiA. S. 21 (1).
11957] 1 QB 371.
109
Ibid at p. 396, per Morris LJ. Contrast with this the facts and decision in Uoyds
& ScoUlsh Finance Ltd, v. tViillarruon 119&j 1 W.L.^ 4(M, where the seller was
held out as a prindpal.
; Pearson v.
' Credit Co.
110
TEIE nTLE OF THE SELIXR
Note that in such cases the Factors Act may also operate; but it is possible I***
common law estoppel could arise However, what the Factors Acts did was i
. . 1 prujopl
. has
, s by later
n [19381 A C. 2S7 at p. 302. In that case the Privy Council refused to apply estopljl
to the conduct of a bank which handed back to merchants a receipt
pledged to the bank, and thereby gave the merchants the opportunity to pledge tne
same goods frauduIenUy with another bank. Contrast the decision of the Pnty
Council in Commonwealth Trust v. Aketey {1926] A C. 72, not followed in the
later case.
111
119021 A C. 325.
^9 Ingram v. Little [19611 1 Q.B. 31, discussed supra, pp. 27-28. For the distinction
between void and voidable sales, see Infra, pp. 11^121.
** Orbit Mining and Trading Co. Ltd. v. IVestmlnsfer Bank Ltd, [1963] I Q B. 794.
** see Mercantile Credit Co. Ltd. T. Hamblin [1964] 3 All ER. 592 at pp.
112
The Sale of Goods Act does not affect the provisions of the Factors
Act, 1889.* Hence it is necessary to consider how far that statute
permits valid sales by a non-owner. By virtue of section 2 of that
Act (which is the important provision as regards this part of the
law), a mercantile agent, in possession of goods or of documents
of title to goods, with the consent of the owner, may sell, pledge or
otherwise dispose of such goods, while acting in the ordinary coiuse
of his business as a mercantile agent, so as to pass as good a title
to the other party as if he were expressly authorised by the owner
of the goods to do what he has done, provided that the person taking
under the disposition acted in good faith and without notice of the
mercantile agents lack of authority.
Various problems arise with respect to the interpretation of this
provision (some of the language of which is defined in other sections
of the Act). Thus it is necessary to determine when the person
selling goods to an innocent purchaser is a mercantile agent, when
he is in possession of the goods with the consent of the owner, whether
it is necessary for him to have such possession as a mercantile agent,
when the sale by him is in the ordinary course of his business as such
an agent, and whether the purchaser was in good faith and acted with*
out the requisite notice. In addition there may be a question whether
the goods sold are goods within the meaning of the Factors Act. and
whether the transaction with the innocent party was a sale, pledge
or other disposition within the Act.
if
to innocent purchasers
of Benjan ,
Act. 1855
dealings 1 '
1878 It ...
further.
car under the pretence that he knew someone who might buy it (no
such person being in existence) was not a mercantile agent at the
time of obtaining such possession, possibly on the ground that the
alleged buyer was fictitious. Whether in any individual instance
the seller was a mercantile agent when he obtained possession of the
goods is a question of fact, sometimes difficult to determine. It is
clear, however, that a business transaction must be involved : merely
obtaining possession of goods as a friend of the owner, even though
with the ostensible object of selling them, will not suffice. The Factors
Act is designed to deal with commercial transactions,* not trans-
actions between friends for the sake of convenience.
For this reason it would seem that the possession must be obtained
in the capacity of mercantile agent, ie., with one of the kinds of
authority specified in the provision of the Act set out above.* Hence
if the owner gives the person concerned possession of the goods to
display in a showroom,* to effect some repairs to them, to keep
in a warehouse,* or to obtain offers for the goods (but lacking some
essential feature such as the ignition key or registration book of a
car), the Factors Act will not apply. It is true that in Turner v.
Sampson * Channell J. said that whether possession had been
8T Factors Act, 1889, s 1 (1)
Stas Motor Guarantee Ltd. v. Br U'agon Co. Ltd. [1934] 2KB 305.
91 See Weiner v. Harris [1910] 1 K.B 285 where a person who obtained goods on sale
or return, the property in them remaining vested in the party surrendering posses-
sion, was held to be a mercantile agent.
9* Staffs Motor Guarantee Ltd. T. Br. Wagon Co. Ltd., supra at p. 313, per
MacKinnon J.
9* Brovn & Co v. Bedford Pantechnicon Co. Ltd. (1889) 5 T.L.R. 449.
9r Stadium Finance Ltd. V. Robbins 11962) 2 QB 664, at p 674, per Willmer L.J.
9S noin IV TT n inn i* ~ nr* .ur, s- .u,
114
* Lloyds Bartk Ltd. v. Bank of America Nation^ Trust &. S<rvtt\gs Association fl938]
2 K.B. 147.
Factors Act, 1889, i. 2 (4). As it was done in Stadium Finance Ltd. v. Robhins,
* Ibid. s. 2 (2) See also Ibid. s. 2 (3) as to possession of documents of title to goods.
borough & Son [1905] I K.B 221; Lake r. Simmons [1927] AC. 487; ftfoPji-
Motorists' Advisory Agency [1923] 1 K.B 577; Foikes v. King [1923] 1 K.B. 28^-
Infra, pp 118-121.
T Pearson v. Rose 4 Young Ltd, supta\ Stadium Finance Co. Ltd. v. Robbl^>
supra. Note that s. 24 of the Sale of Goods Act, which revests title in good*
stolen in the onginal owner. Infra, p. 117. may not apply in the case of dupos^i*
lions valid under the Factors Art, 1889. betause of the preservation of we
U189.
115
The person dealing with the mercantile agent must have acted
in good faith and without notice of the mercantile agents wrongful
usurpation of authority. In the Sale of Goods Act ** it is provided
that a thing is deemed to be done in good faith when it is in
fact done honestly, whether it be done negligently or not. There
seems no reason why this should not also apply to the Factors Act.
The onus of proving good faith and lack of notice, as well as the
consent of the owner to the mercantile agents possession of the goods,
seems to be on the person dealing with the mercantile agent.'* Where
the sale is to joint partners it would seem that bad faith or lack
of notice by one of them will deprive both of the protection of the
Act.'* Bad faith or constructive notice may be shown by the unusual
nature of the price paid for the goods," or the fact that, in the case
of a vehicle, the registration book was missing.'*
Oppenkelmer v. Attenborough <6 Son (I908J I K.B 221 at pp. 230-231, per
Buckley LJ.
i [1964J 2 AU E.R. 135; affirmed by the Coott of Appeal [19651 1 QB. 560.
14 S G.A. 8. 62 (2)
11 Janesleh v. Attenborough & Son (1910) 102 L.T. 605; Mehta v. Sutton (1913) 108
L.T. 214.
1* Pearson v. Rose & Young, supra, at p. 289, per Denning LJ. Contrast, on these
facts, the decision on this point in Stadium Finance Ltd. v. Robbins, supra
116
would bring the transaction within the Act in the case of JobVtn v.
Watkins & Boseveare (Motors) Ltd.'* Nor in another case was the
delivery of goods to an auctioneer for sale even though the auctioneer
made advances as against the selling price of the goods- Generally
speaking, however, the cases which give rise to problems under the
Factors Act involve either sales or pledges of goods.
gale Motor Finance Corp Lid. V. I^nsport Brakes Ltd. [1949] 1 K.B. 322 a
Devlin J.
117
** SGA- s. 22 (1). This does not apply to sale of horses. Ibid, s, 22 (2), or to
Scotland, ibid. s. 22 0>.
Lfe V Sayes A Robinson (1856) 18 CB. 599 at p. 601, per Jems CJ.
* JIargreave v. Spink [1892] I Q B. 25; Ardath Tobacco Co. Ltd, v. Ocker, supra
See Hargreave v. Spink, supra, at p 26, per WiUes J. Cf. the judgment of
Scrutton J. in Clayton v. LeRoy, supra.
t As to which sec I>enning LJ. in Blshopsgate Motor Finance Co. Ltd. V. Transport
Brakes Ltd. [1949] 1 K.B. 322 at p 338.
As to the meaning of owner see BuOer A Co. Ltd. v. Brooks Ltd. [19301 All
E.R.Rep. 534.
118
* S also Larceny Act, 1916, t. 45; CHminal Appeal Act, 1907, for funJ>w poin**
relating to the operation of this nile.
i S O A. s. 24 (2).
M SG.A. f. 23.
> Jnfra. ^ ^ ^ _
Folkes < ? , .
119
Supra, p 114.
120
IblJ. at p. 532.
tbU. at pp. 531-552, per Sners U.; p. 533, ptr Lord Upjohn.
121
the owners of the vehicle which had been obtained by false pretences
took various steps to trace the fraudulent person and the car, including
sending a stop notice to the Hire-Purchase Information Bureau.
It was held by Davies LJ. (and affirmed by the Court of Appeal)
that the owners had effectively avoided the contract of sale made by
them and had thereby brought the voidable title acquired by the
fraudulent buyer from them to an end. However, the case was
distinguished from the CaWn-e// case on the issue of good faith and
lack of notice of the defective title. In the Caldwell case it was held
by the Court of Appeal (reversing the decision of Lord Denning on
this point) that the first finance company which bought the vehicle
did not have notice of the defective title of the person who obtained
it from the owner by the false pretence as to his ability to pay for it.
This decision was not necessary for the determination of the case,
in view of the way the court approached the issue of avoidance of
title. In the Williams case, however, the fact that the title of the
fraudulent person was effectively avoided by the owners did not end
the matter, since various provisions of the Factors Act, 1889, applied
to render the eventual sale to an innocent purchaser valid so as to
bar the original owners title. Such provisions of the Factors Act did
not have any relevance b the situation in the Caldwell case.
Under sections 8 and 9 of the Factors Act, 1889 (which alter the
previous common law), and under the almost exactly similar pro-
visions of section 25 (1) (2) of the Sale of Goods Act. 1893, a seller or
buyer in possession of goods or documents of title to goods has
certain powers to pass good title to a stranger who receives such goods
from such seller or buyer (or from a mercantile agent acting for such
seller or buyer) under a sale, pledge or other disposition (or, by virtue
of the Factors Act, under any agreement for sale, pledge or other
I1965J 1 QB. 560.
s* Supra, p 115.
122
* 5G A. 5. 21 (2) lot. Note also that mercantje agent has the same meaning io
See Afirem Ltd. v. Ceorte Cohtn, Som A Co. Ltd. (1934) 50 T.L.R. 411. wnef
goods were in the possession of the selVr under a contract of manufacture.
* Contrast the position under *. 9 of the Factors Act and S C A. *- 25 (2), infra.
* il9WI 2 K.B. 305, a seller who obtained possession under a contract of hlf^
purchase srai said to hold as bailee, not leHcr. C/. Oore t. Dore [19531 The Timet.
November 18, discussed by Afiyah, Sale of Goodt, 2nd ed , pp. 137-138,
the teller, having sold goods, agreed to store them until the buyer
possession. Held: that the surute did not apply to validate a second sale by the
teller. This case would seem to be ipc or Ttct now. If the seller agrees to kcP
goods for the time being, whether to enforce payment or to accommodate the
buyer, s. 25 (t) of the Act is nonethclcsi applicable.
123
** 118951 2 Ch 415.
tnjra, pp 274-279.
124
and (b) if he deals with a third party who acts in good faith and
without notice of any lien or other right of the original seller in respect
of the goods. Such a conclusion is absurd, it is suggested, because a
buyer with property can dispose of title irrespective of possession of
the goods, he need not deal with pcRons who are in good faith, it is
not clear what good faith means in this context where the buyer
is owner as well as possessor, and, lastly, if the buyer has possession it is
hard to see what rights the seller will have with respect to the goods,
whether the seller is paid or unpaid. As will be seen. once the
buyer, who is also the owner, has possession of goods the seller will
cease to be able to exercise bis real remedies over and in respect of the
goods and will be forced to rely on his personal right of action for
price. Only if he recovers possession will his real remedies revive. If
so then the buyer will not ^ in a position to act under section 25 (2).
Therefore no problem would arise. Hence, it is suggested, the better
view of this provision is to treat it as expanding or enlarging the
power of a buyer without property in goods to transfer a title free
from any incumbrance existing in favour of the seller, not as restrict-
ing the rights of a buyer with property in goods.
Thus if the buyer has not yet acquired property he may transfer
title despite such lack, and if he has acquired property he may transfer
to someone who buys from him within section 25 (2), or section
9, a title which is free from any rights of lien, etc., which the original
seller may have in respect of the goods. .g., where he has not yet bwn
paid by the buyer, or is in possession of the goods, but has parted with
possession of the documents of title. It is necessary to mention here,
with respect to this last point, that a transfer of documents of title
may defeat an unpaid sellers right of lien, or stoppage in transitu.
under section 47 of the Sale of Goods Act, as well as under section
25 (2).*^ Indeed section 47 is wider in its effects, since section 25 (2)
only gives the same effect to a transfer by a buyer in possession as
would result from a delivery or transfer by a mercantile agent in
possession of the documents of title with the consent of the owner.
T S hire, pp 256-273, for thc rteMs and the content and effecu of *
125
This may well be more limited, in view of the restrictive way section 2
of the Factors Act has been interpreted by the courts,* than the effect
of a transfer under section 47. However, there is a distinction between
section 25 (2) and section 47 in this respect in that the documents of
title transferred under section 47 have to be the same documents
received by the buyer, whereas under section 25 (2) other documents,
relating to the same goods, may effectively pass title to the person
talcing from the buyer in possession.* Thus the advantages of
invoking one of these provisions as against the other may be denied
by facts which may make such a selection impossible.
8 Supra, pp 112-116.
So held in D. F. Mount ltd. v. Jay & Jay Co. Ltd. [I960) I K.B 159, Infra,
PP 264-265.
^0 Supra, p 114
126
acceptance or docs any other act adopting the transaction, or the time
for approval (or a reasonable time) has elapsed, within the meaning
of section 18, rule 4, of the Sale of Goods ActJ* Thus, a sale by such
a buyer on approval, etc., will at one and the same time amount to an
act adopting the transaction between him and the seller to him within
section 18, and to an effective transfer of title to the purchaser from
him within section 25 (2), as was held in London Jewellers Ltd. v.
Attenborough.* Before the buyer has done what is required by
section 18, rule 4. however, he will not be within section 25 (2).
Because of the requirement that the buyer must be in possession in
the capacity of one who has bought or agreed to buy goods, and not
therefore as the agent or bailee of the seller, it has been held that a
person who is buying goods on hire-purchase, Le., with only an
eventual option to buy. Is not a person who has agreed to buy goods
within this provision. Therefore a transfer by him to a third party
is not effective to bar the original owners rights and property*
However, in one case, where under the agreement of hire-purchase
the goods could not be returned to the original owmer, it was held that
the person buying on hire-purchase was a person who had agreed to
buy within this provision so that a disposition by him was valid. So.
too. where the agreement involved an obligation to buy, even if such
obligation w*as conditional.
T I>Ktltvx! rp ri9WJ 2
* *. SUf.hrT, |irl A.C 471; BAiv Motor Surttf Co. . Cot t'
I K n
I .
i^y
Justice Act, 1965. By this provision a writ of fieri facias or other writ
of execution against goods (or anything else of his that may lawfully be
seized in execution) binds the properly of the execution debtor as soon
as it is delivered to the sheriff (or a county court registrar in certain
circumstances) to be executed. But this does not affect the debtors
title to such goods, or his power to pass a good title to such goods
(free of the incumbrance of the judgment debt) to a purchaser acting in
good faith and for valuable consideration, and without notice that
such writ, or any other writ by virtue of which the goods of the execu*
tion debtor might be seized or attached, had been delivered to and
remained unexecuted in the hands of the sheriff.* Thus if an execu-
tion debtor sells goods in market overt, or to a purchaser for value
who buys in ignorance of the existence of a writ out against the
sellers goods, the buyer will acquire good tille.^ However, this will
only result where the goods of the execution debtor remain unseized.
Once they have been seized, i.e., once the writ has been executed, then
even though the debtor remains in possession of the goods he cannot
pass good title, free from incumbrances, to a buyer from him, even if
such buyer acts in good faith and without notice.**
^Voodtand v. Fuller (1840) 11 Ad. & E. 859. But if such a purchaser buys with
of the writ, he takes subject to the charge of the execution creditor.
F.S.O. 5
J30
the person without title and the first innocent purchaicr is to deter*
mine the original owTier's title and convey a real title to the fini
innocent purchaser and to those buying or otherwise acquiring frora
him. In some instances, however, notably, as the jodgment refer^ to
makes clear, cases of estoppel, which is a doctrine that applies w
personam and not in rem, the first innocent purchaser can only raJ
an estoppel against the original owner whose conduct gave rise to -
estoppel, or against the privies of such person, viz., his successors la
title by inheritance, personal representatives, etc. It might app^*
therefore, that an innocent purchaser whose claim to title is
estoppel might not be able to assert and prove his title to goods
against some third party, not a privy of the original owner, who ha
possession of the goods under some claim of title and refused
them up to the innocent purchaser. The question that was raised lO
the Eastern Distributors case was whether the cjcccption to the nemo
dat rule that is found in section 21 (I) of the Sale of Goods Act Js ao
instance of common law estoppel, which creates a metaphorical, *
real, title, or of some other doctrine, e g., that of apparent autlionly* lO
which cases the innocent purchaser from someone who has the appat*
ent authority of an agent to sell does acquire a real title good ^
and not merely valid in personam against the original owner and ws
privies.** ^ ^
131
impliedly excluded any liability for a failure to make title) the seller
should be liable to the buyer for breach of contract. From this it
would follow that, in situations within sections 21-25 of the Act.
where title was acquired by an innocent purchaser, there would be no
breach of any condition or other term the seller who, at the time
of the sale, had no title or right to sell.
Part III
Qiapter 7
Secondly, the definition quoted above brings out the fact that a
representation may refer to any relevant issue, not only the character
or quality of the goods but also such other matters as the reliability
of the seller or the creditworthiness of the buyer. With representations
1 Sa!e, 8th ed , at p. 5S4.
135
136
not affecting the character and quality of the goods themselves the
present discussion is not concerned. Such representations may
the question whether the contract has come into existence
where the representation is as to the identity of a party and
a fundamental mistake which renders the contract void ah initio)-
They may have effect as conditions precedent or subsequent or w
ancillary or secondary contracts. In so far as they do, then they wtH
make a contract of sale conditional, in the sense in which that expres-
sion has been explained when dealing with the distinction betweei^
absolute and conditional contracts of sale,* or they will constitute
a separate contract binding the parties at the same time as t e
contract of sale they have made. The reason why represcnialions
as to the character and quality of the goods have been singled ou
for particular mention (and not referred to and discussed in relation
to conditional contracts of sale in an earlier chapter) is
Sale of Goods Act contains several provisions relating to imph
contractual terms of this kind (derived, as will be seen, from
common law developments before 1893). Hence such reprcsentati^
or undertakings may be separated from other representations
are subsidiary to the main issues in a contract of sale of 'jc'
the issues of property and quality (including the character of l
goods, since this may affect their quality or fitness). Whether W
goods are specific or are identified by some kind of descriptio
statements about the character or quality of the goods may ^ '
Supra, pp. 15-21; cf, Bfnjamio. ep. <*.. pp. 581-598, for U/usfratioiw of
condition precedent with a condition as lo description: see Fisher, Reeves <6 Co.
Ltd. V. Armour [19201 3 K.B 614. Whether any real difference results from treating
an express term of this kind as a condition relating to description or a condition
precedent may depend upon the subsequent conduct of the buyer, le., the effect
of waiver, the inclusion of an exception clause in the contract, and other factors.
(oth ed , 1964), pp. 225-253; Anson, Prtneiptes of the English Law of Contract
(22nd ed . 1964). pp. 207-242 ; TreiteL Law of Contract, 1962, pp. 206-254. See
iurther, infra, pp 306-305. 331-333.
138
* C/. Ingram v, Litih fl961I 1 QB. 31: tupra, pp. 27-28. #ndame<'*
i . , . . , . enn otf.
. .. o.
. . . . . ... . . 1 L.T.
> HeUbut, S}mons & Co. v, puckJtlon II9I3J A C. 30 at p. 48, per Lord ^fouIton;
flarrison v. KnowJet <5 Foster 11917] 2 K.B. 606 at p 608, per Baifliache J.
** C/. Stevens, Hedley Byrne v. KcUer;' Judicial Creativity and Doctrinal Possi-
Dility (1964) 21 M L.R, 121, espeewDy at pp. 155-160.
Qieshire and Fifoot, op. dl , pp 53-56; Anson, op. dr., pp. 117-118; Treitcl,
op. rt/, pp, 210-212; Weddertwm, Collateral Contracts (19591 CLJ. 58. It
^uid seem that the doctrine arose origuially in relation to contracts for the sale
^ ol land, but may have spread to contracts for the sale of goods.
-g.. where A induces B to contract with C by stating that the goods C Is selling
ol excellent quality: there wouM be a contract between A and B; see the
judgment of Edmund Davies J. in IPefli (Aferstham) Ltd. r. BudJand Sand &.
SiUca Co. Ud. (1964J I All E.R. 41: Infra, p. 146.
140
At this point something must be said about the two classes info
which contractual terms are said to be divided, viz., warranties and
conditions.
Prior to the Sale of Goods Act. the common law developed two
distinct concepts. On the one hand, stemming from the law of ton
rather than from the law of contract, there was the idea of warranty
(/.e.. guarantee), which (a) Involved some statement or representation
intended to be binding as betw'cen the person making It and the penon
to whom it was made, and (b) was regarded by the courts as heln^
ancillary to the main contract. It would seem that, in developing
concept, the courts were attempting to distinguish statements whi'?
could be construed as contractual promises (e.g., that a partJcmSf
horse, which the representor was selling, was sound) from others
were designed only to influence a purchaser towards buying, f-c., do'
contractual promises, or mere** representations (e.g., that there was a
ready market for articles of the sort that the seller was selling)-
case of Oscar Chess Ltd. v. WUUatns ** Denning LJ. ?
i> Reference should be made to the following [or historical discussion and tnodt^
analysis: Prosser, The Implied Warranty of Merchantable Quality (1943) z*
CB R. 466 at pp 447-451 ; Sfoljar. * Conditions. Warranties and Descriptions
Quality in Sale of Goods 0952) IS ML.R. 425; (1953) 16 MXJt
Reynolds, Warranty, Condition and Fundamental Term (1963) 79 L.O-F-
at pp. 534-540.
** S.GA. 1. 62 (1).
15 M.L.U, 425 at pp. 438-441. Any other failure, e.g., where the goods
were the right goods but faulty in ttuality, become a breach of M/OTrmty.
142
Ibid.
* IbU.
M SC A. s. 11 (I) (a).
* S OA. 1. II (I) (<). PP 181-185. for discussion of $. II.
U CT* P-
uong Kong Fir Co. U3. r. Kawasaki Risen Kedsha 11962] 2 Q.B. 26 at pp. 65-70,
8 ? mTolving a stipulation as to seaworthiness in a charterparty.
M PP-
* mu' A
144
that there was nothing wrong with a heifer was held to give nse
collateral contract, because the auctioneer said he would tase
heifer back if there were, and the exemption clause in the o
contract was held to be inapplicable. ' . . j
* fl95II 2 K.B 739. Contrast with the decision in this case the Iangu*S*
Baitbsche J. in flarrhon v. KnawUs 4t Foxter 11917] 2 KJl <506 at p 6i0
question of law, not fact, and depended upon the conduct of the
parties, their words and their 'behaviour, rather than on their thoughts.
If an intelligent bystander would reasonably infer that a warranty was
intended, that would suflSce. The test here, as with contract generally,
was objective, not subjective.^
11954] 1 AU aR. 855, where the representation was false but no allegations of
iraud were made.
146
the buyer could bring an action against V when the goods fell s o
of the quality indicated. The learned judge, however, went furi e
than cases of this kind when he stated ** that as between A
See B'ovn . sheen & Richmond Car Sates Ltd. [ITSOJ 1 AD E.R. M02; Sha^^
Pier Ltd. y. Petel Products Ltd. {I95l| 2 K.B. 854; Andrews y. Uepkiwn [IW'J
1 OB 229; Wrfjfrbtim, loc, eit.. npra. note 17, t pp. 66-69.
148
Under the Unifonn Sales Act s. 12. - anr affirmation of fact or any
the seller relating to the goods is an express warranty if the natural
such affirmation or promise is to induce the buyer to purchase the goods ^
huyw purchases the goods reiyug thereon.* But affirmations of th^yaw ,
would
ses and
as beeo
part
t21 cot
eed tfie
/bU. i i4 OX
** Anson, op cit^ p. 129.
only Upon the generality and certainty of the custom but also upon
whether such custom is reconcilable with the express written terms
of the contract.*
Broktrs Co. Ltd. v. Olympia Oi! & Cake Co. Ltd. [19161 1 A.C 314.
rtttoi * ^Pfa.
UWl I ah E.R. 430: see also HardwtOc Game Farm r. Ltd. 11964]
150
agreement by the seller, he was not liable to the buyer should the
goods lack the character or quality expected of them by the latter.
There was no guarantee of quality unless an express guarantee (i.e.,
warranty ) was given. As will be seen, despite the Act. it may still
occur that no such protection, liability or guarantee arises in respect
of a contract of sale of goods, because of the express exclusion of
the otherwise relevant and operative terms. Before considering how
far the statutory attempts to oust the doctrine of caveat emptor may
be nullified, it is necessaiy to see the extent to which that Act, as
interpreted by the courts, and other relevant statutes, have affected
the earlier. common law.
(a) Description
Sales by description
be c .....
TOchf
bold t
clause
152
Son
yigefs
. , j A Peal
Protection (1962, Onnd 178J). tntas. 45^59, that the condition a* to con^^^.
dence with description should he Irreroeably implied save as to auctio'
descriptions
IMPLIED UNDERTAKINGS AS TO
the date of arrival of a ship in which the contract goods were being
transported,* the length and width of rolls of rubber, the average
weight of carcases of frozen meat,* the weight of starch in bags,
the shipment of goods under the deck and not as deck-cargo. In
contrast a reference to boots as waders,** which would seem to he a
word of identification rather than character, was not pail of their
description.* On the other hand, it would seciUt from what was said
by Channcll J. in Varley v. Whipp?'* that even where specific goods
are being sold, the sale may be one by description, at least as long
as the buyer has never seen the goods in question. The most usual
application of the rule about sales by description was no doubt to the
case of unascertained goods (in respect of which the description
of the goods clearly operated for the purpose of their identification);
hut it also applied to cases involving specific goods, unseen by the
buyer, where there was no identification otherwise than hy descrip-
tion. This would suggest, unlike the cases referred to above,*^ that
description and identification are Interchangeable. But in Rapalli v.
K. I, Take Ltd.* it appears to have been suggested that there was no
diilereflce between breach of warranty of quality and departure from
description, U., that both were concerned with the character, not the
identity of the goods. Authority for this kind of approach may 'be
found in the judgment o! Lord Wright in Grant v. Australian Knitting
Wlh when* ft was said : there is a sale by description even though
the buyer is buying something displayed before him on the counter;
n thing is sold by description, though it is specific, so long as it is sold
not merely as the specific thing but as the thing corresponding to a
description, e.g.. woollen undergarments, a hot-water bottle, a second-
ed Ttapiog machine.* There are several cases * which suggest that
** Notes sS ^ ^ * condition.*'
154
a sale of specific goods over the counter, where the goods are on
such sales are not confined to sales of goods unseen by the buyer.
*1 flVJJl A.a 470: et. Beek . Szymanowski A Co. 11924] A.C. 43.
fact the article that has been delivered, they are entitled to reject it,
even though it is the commercial equivalent of that which they have
bought. Similarly, goods adulterated by mixture with some substance
which was not what the buyer wanted, and indeed rendered the
contract goods useless since signiGcantly different, were not goods
which corresponded with description, in Vigers Bros. v. Sanderson
Bros.'* They were goods which the buyer did not buy. However,
where what is mixed with the contract goods is sufficiently dis-
tinguishable to enable the buyer to separate his goods from the
different goods which arc not what he bought, then there will be no
breach of the condition as to correspondence with description. Hence
in Paul Ltd. v. Pirn & Co.} where the contract referred to the cargo
of maize shipped on a named vessel, the 58 tons of tobacco which had
been smuggled on board the ship and were not mentioned on the bills
of lading were not so mixed up with the cargo which the buyer had
contracted to buy to entitle the buyer lo reject. He was therefore
liable for wrongful rejection. ' >
On the other hand, in cases such as Re Moore & Co. & Londoner
Co.} goods of the right identity, but not possessed of the right
characteristics, were held to give the buyer the right to reject them
for breach of the implied statutory condition now under consideration.
In that case the contract provided for the sale of canned fruits in
cases containing 30 tins each. The seller delivered half of the cases
containing 24 tins each and the rest with 30 tins inside, though the
right total quantity of tins under the contract was delivered and there
was no difference in the market value of the goods as delivered from
at of the goods contracted for. It was held that the buyer was
entitled to reject since the goods were of a different description from
at stipulated in the contract It was stressed that possible sub-sales
*ght make the contents of each case a vital matter. In contrast,
w renfell v. E. B. Meyrowitz Ltd.* where the contract was for
y^ng goggles fitted with safety-glass lenses, it was held that
s ety.glass referred to a certain type of laminated glass. When one
pair of goggles broke and a splinter injured the eyes of the buyer it was
o P- 2*-
Ltd. T. Ronaastn A Son |I933I A.C 470 at p. 479, ptr Lord AiTm-
INJ. It p. 4S0, rrr Lord Aatn.
contract relating to the bottles was one of hire, yet, since delivery of
the bottles was ^scotial to the sale of , their contents, the sale of the
contents in the bottles and the hire of the bottles was the subject
of only one contract. Hence the bottles were supplied under a contract
of sale, even though they themselves were pot bought and sold under
such a conlraci. It would seem, therefore, that the net of section 14
^ may be very widely cast,
I section creates two implied conditions, applicable in two
UKOl I indica^ far die test, leave the portion to some doubt,
158
I* '* ^ 2 K-a m *
** Ow.-.'owt/.r * f ISTH, 21 ij ,
" c. UJ. ^ ^
0 the purchasers wife, it was held that there was a breach of the
implied condition set out in section 14 (I). Although nothing was
said about the purpose of the goods, there was knowledge of such
pur^se on the part of the seller. The reason for this is made clear
in the judgment of Collins where it is said that in the case of
just a ^hich the purchaser required the bun was to eat it,
Supra_
were required, i.e., that they should be suitable for the snipm
goods points to only one use, and that such use is weu
anyone normally selling such goods. re to be
Liners Ltd. 'f. Rea Ltd.^* Hence, as that case determines, the
* ri922I 2 A C. 74 .. 14 (U
* (1934J A.C. 402. TTjJs case has been called the high-water oi u
cases Mash & Murrrll Ltd. V. Emanuet [1961] 1 All E R-
Diplocfc J
* Ibid, at p. 90, ptr Lord Sumner. The crucial time is the time wn p^nui!
tract is made: IbiJ. la Oodlry v. Perry (I960] 1 All E.R. ^ P" J..toaiet **
Daries J. held that the inference readilf and prP*tly arises where the
of extremely tender years.
I Bin o be incorrect.
tt,*" '^"^i**** Gome Farm r, S.AJ'Jji. Ltd. n9MI 2 Lloyds Rep. 227.
tWUt of reliance was rehutted: see pp. 271-272, per Havers J.
' P-
196^ ^ Storage Co. Ltd. v. Sdlca Get. Corp. (1928) 33 Com Cas. 195 at
fn/m.
F.S.O. <
162
*8 [1938] 4 AU E.R 258. Cf. Stpnntr Ptrmain & Co V. Webb & Co. no
reliance on the seller and the goods may have been bought under t e
patent name.
* See, e.g, [1934] AC 402 at p. 422. per Lord Wright; at p. 419, P*'^ost
Macmillan. Note the suggestion of Lord Wnght at pp. 423-424 that xJJL^
be affirmatively shown, described as inacojrate and hefedcal by I/ughes, 22
484 at p. 489.
[1961] A C 336 at p. 351, per Lord Reid. This was a case where negotiatiotw
conducted on behalf of a coiporatioa by an agent
^8 TVie Camrrteil Z.alrd ease, supra.
" V. to,
^1 1 K.B. 260.
" P. 157.
164
THE CHARACTER AND QUALITY OF THE GOODS
>2 This would seem to assimilate strict liabibty under s I4 (1) and s 14 (2) mth
Lability for neeLgence, as recent cases on remoteness in connection with the tort
of ne^'gence show. Is such asrimilation reasonable, in view of the fact that
delivered. The goods, therefore, must not only be fit for the purpose
when chosen and sent: they must also be fit for the purpose in
question when they arrive at the buyers place of business, or wherever
he is taking possession of them under the contract of sale.
B8 Bristol Tramways i Carriage Co. Lid. t. Fiat Motors Ltd. [19101 2 K.B. 831 at
p. 839, per Farwell LJ.
Supra But only where the use of the Euods is not obvious: Hughes, 22 ML.R.
4S4 at p. 491. See, e.g, fVilson v. RIefce/r Cockerell & Co. Ltd.. Infra.
i Supra.
* Bristol Tramways v. Fiai Motors, supra at p 840, per Farwell LJ. The suggestion
was made by Lord Russell in Gdleside Bros t. Cheney Eggar & Co. [18961 2 Q B
59 at p. 64 that the proviso applies not to raw commodities or materials but to
the supply of manufactured articles. Bed quaere.
t K U <1) (2). __
TO me Umfonn Sales Act, here, as elsewhere, includes the seller who is the grower of
the goods: s 15 (1). Under the Uniform Conunercial Code, s 2-314 (1), the seller
must he a merchant with respect to goods of this kind.*
* iVren v. Holt 11903] 1 KB. 610; MoreUi^ Fitch & Gibbons [1928] 2 K.B 636;
Grant v. Australusn Kniitim Mitts Ltd. [1936] A C. 85 at p, 100, per Lord Wright,
r* s. 2-314 (1). o'
168
clear that it extends to both. However, the condition is not that the
goods should be merchantable. but that they should be of mer-
chantable quality, and that is more restricted, said Bankes LJ., in
Sumner Permain & Co. v. Webb &. Co.'* than it would have been if it
had required that the goods should be merchantable.
M [19221 I K.D. 55 at p 60
TT s GJi. . 62 (1).
Scrutton LJ. (who had not approached the bliblett case from the
standpoint of section 14 (2)) said that merchantable quality* meant
that the goods complied with the description in the contract, so that
to a purchaser buying goods of that description, the goods would be
good tender. In that case the sale was of tonic water which contained
such an excess of salicylic acid that it could not legally be sold in the
Argentine as the buyers intended. Previous consignments of such
tonic water bought by the buyers from the sellers were saleable in the
Argentine. Section 14 (1) was held not to apply because the previous
sales showed that the buyers were not relying on the seUers* skill or
judgment (and the proviso may also well have been applicable). It
was held that there was no breach of the implied condition as to
merchantable quality, because the goods could be sold elsewhere. In
the Niblett case the goods could not be sold by the buyers anywhere,
without involving the buyers in legal action for breach of the rights of
Nestles.* In the Niblett case the internal quality of the goods, i.e., the
milk, was beyond reproach. It was a collateral circumstance which
rendered the goods unmerchantable. Conversely, in Sumner Per-
main v. Webb, the internal quality of the goods was not beyond
reproach, yet the goods were not unmerchantable.
Supra at p. 63.
Which did not cover legal title to goods or the legal right to sell: tbld.
[19221 I K.B 55 at pp. 65-66, per AtUn LJ. comparing the tins in that with
tms that were blown or indented.
t^son V. Kleken Ccckerfll d Co. Lid 11954] 1 Q.D, 598 at p. 613, per Romer
170
Supra at p. 840.
Supra at p. 64.
Ibid, at p. 63
tbid. at p. 60.
Ibid, at p. 64.
particular use intended, when th^ would have to be fit for such
intended use. Thus in the Cammell Laird case^ Lord Wright said
that merchantable quality meant under section 14 (2) that the goods
in the form in which they were tendered were of no use for any purpose
for which such goods would normally be used and hence were not
saleable under that description. In Grant v. Australian Knitting
Mills'^ Lord Wright said that whatever else merchantable might
mean, it did mean that the article sold, if only meant for one particular
use in ordinary course, was fit for that use, Merchantable does not
mean that the thing is saleable in the market simply because it looks
all right; it is not merchantable in that event if it has defects unfitting
it for its only proper use but not apparent on ordinary examination.
In the Wilson case.** in which Coalite was mixed with material which
caused an explosion when lit. it was said that the presence of the
offending piece made the consignment of Coalite unfit for burning.
Qearly in that case the purchaser did not buy Coalite for resale, but
for use in a fire. If the meaning of merchantable quality was that
goods were saleable, the implied condition would not have applied.
In the case of Hardwick Game Farm v. Havers J. "in
On this basis the distinction between the Niblett case and Sumner
Permain v. Webb becomes clear. In the former, the milk could not be
sold or used for the purpose for which it was intended by the buyers,
a purpose which was known to the sellers. In the latter case, the
JI934] A.C. 402 at p. 430. la Bartlett v. Sdney Mareua Ltd., supra, at p. 1016.
Lord Denning M.R. thought that there was a considerable temtory which fell
between cases within this test and cases within the test propounded by Ixird
"Wnght in the Grant case. ** The article may be of some use thou^ not
entirely effident use for the purpose. It may not be in perfect condition but
yet it is in a usable condition. It ts then . . . merchantable.
Supra.
172
goods could be sold, though not in the Argentine: hence they could be
used for the purpose of resale, which was known to the sellers, though
not for resale in one particular country. The need for goods to be
" saleable only arises if the purpose for which they ore going to be
used is resale and such purpose is made knonn to the seller either
expressly by the buyer or by necessary and reasonable inference from
the sellers knowledge of the parties and the surrounding circum-
stances. As a result of this interpretation of " merchantable quality
therefore, as Lord Wright pointed out in the Grant case,* there may be
many cases, particularly where goods arc bought for use by the buyer
other than resale, where the implied conditions In section 14 (1) and
section 14 (2) overlap.*
s Supra at p. 100. _
* Hence, in a case such as GrlffUhs v. Peter Conway Ltd, [I939J 1 All E.R. 685,
(discussed jtipro. p 163) the implied conditicm as to merchantable quality could
not aid the buyer since thi ' *
a person susceptible to de
* Grant v, Australian Knitting Mills Lid. n936J A.C 85 at p. 100, per Lord Wnght
t (19611 1 AU E.R. 485; [19621 1 All E.R. 77. See Fridman. When Goods Must
be Fit for Use (1961) 111 LJ. 383. Cf. supra, p 164. Note the effect of the
provisions of S GA. s. 33 on the deterioration of goods in transit: Infra, p 239-
sold but also for a reasonable time, which includes time for arrival and
disposal on arrival by the buyer.
There is a similar restriction under the Uniform Commercial Code, s. 2-316 f3> fM
[19031 I K B. 610.
Supra
11 rt Tt ...
If
174
buyer had examined the goods and that examination would have
revealed the defect in question.
From what has been said in the preceding pages, it will be evident
that, whatever may have been the original intention of the draftsman,
the courts have interpreted these two subsections in such a way as to
result in their virtually covering the same ground, subject to the dif-
fering effect of the provisos. The way that purpose in subsection
(1) and merchantable quality in subsection (2) have been construed
as relating to the obvious use of goods or some specialised use if
made known to the seller expressly or by implication by the contract
or by some surrounding circumstances or prior negotiations, has led
to the conclusion that whatever be the nature of the goods or the kind
of sale involved there will be an implied condition relating to the
quality of the goods applicable, unless the contract has excluded the
Act. The chief difference between the subsections lies in the distinc-
tion between sales under a trade or patent name, and contracts where
the buyer has examined the goods. The former may result in the
exclusion of the implied condition under subsection (1), but not of
that in subsection (2): the latter may result in the exclusion of the
implied condition under subsection (2) but not of that in subsection (1).
See Fridman, "The QuaLty and Fitness of Goods (I960) 110 hJ. 2l7 Note
that some overlapping occurs with the provisions of S G.A. s. 15, which deals with
sales of goods by sample: tn/ra.
ss 8. 2-314. Note that the serving for value of food or drink to be consumed either
on the premises or elsewhere is s sale for the purpose of this section. Cf. tor
English law, the difEculties which enie^ed in Lockett v. A. & M. Charles Ltd-
J19381 4 All E.R. 170, where an unpHeci term was imported into such a contract but
only after some hesitation.
average quality within the description, (c) are fit for the ordinary pur-
poses for which such goods are used, (d) arc, within the variations
permitted by the agreement, of even kind, quality and quantity within
each unit and among all units involved, (e) are adequately contained,
packaged, and labelled as the agreement may require, (f) conform to
the promises or affirmations of fact made on the container or label if
any. All these requirements are cumulative, not alternative. This
provision attempts to incorporate what the cases have decided, with-
out involving any problem of determining the exact meaning of mer-
chantable. It is also to be noted that this provision does not make
any exception for goods which have been examined, whether the
alleged defect is patent or latent. All in all, therefore, it may be
argued that the time has come for some revision of section 14, in such
a way as to remove doubts and uncertainties as to the scope and mean-
ing of its provisions and unnecessary duplication of the protection it
purports to provide for buyers.**
176
In the case of a contract for sale by sample (apart from the implied
condition in section 13 where the sale is also by description), the Act
implies three conditions into the contract.
The first is that the bulk the rest) of the goods should cor-
respond with the sample in quality. Quality, under the Act, includes
the state or condition of the goods.** Hence, this would include the
labelling of the goods as well as their internal quality.** It is clear
from Ruben v. Faire Bros. & Co.** that even if the defect in quality,
which renders the bulk not the same as the sample, is easily remediable
by some act of the buyer, there will be a breach of this implied con-
*9 Supra, p. 151.
* Cf. Nibifti V. ConffctloTxers' Matrrials Ltd (1921] 3 K-B. 387: lupra, p 168.
* 11^9] 1 K.B 254.
dition. The Uniform Sales Act*' has a similar provision (except that
the term is described as an implied warranty). But under the Uniform
Commercial Code,** any sample or model which is made part of the
basis of the bargain creates an express warranty that the whole of the
goods shall conform to the sample or model, which would seem to
cover not only correspondence in identity but also in quality. Under the
Sale of Goods Act, it would appear, even if the contract expressly
provides that payment of the price is to be made against delivery of
shipping documents, before the arrival of the goods, there will ^ a
right to reject for breach of this implied condition if the goods in fact
do not correspond with the sample in quality, as happened in Polenghi
Bros. V. Dried Milk Co.
there was a sale by sample of worsted coatings, which the sellers knew
were to be resold to clothiers. Tbe bulk of the goods corresponded
with the sample, but were unmerchantable, and they were returned to
the buyers by their customers. There was a defect in the goods, viz.,
slipperiness, which made them give way under the strain of ordin-
ary wear when made up, and such defect was not discoverable by due
diligence or ordinary inspection of such goods. It was held that there
. 16 (a).
s. 2-313 (1) (c).
178
was an implied warranty that the goods were fit for use in the manner
in which goods of such quality and general character ordinarily would
be used. In view of the way unmerchantable has been construed
in the context of section 14 (2), it would seem that this implied war-
ranty at common law has now become the statutory implied condition
under section 15. As is obvious from the wording of the section, there
is no liability on the part of the seller for patent defects which a
reasonable buyer would have discovered for himself by examination of
the sample. The statute does not require here, however, as it does
under section 14 (2), that any examination should actually take place.
It suffices that an examination would have revealed the defect if an
examination of the sample had been undertaken. As Stable J. said
in Houndsditch Warehouse Co. Ltd. \. Waltex Ltd.*^ : if there is a
defect in the sample which renders the goods unmerchantable, and the
buyer, notwithstanding and with knowledge of that defect in the
sample, is content to take a delivery which corresponds with the
sample and gets such a delivery, he has no ground for complaint.
This would appear to be so where, even though the buyer has no actual
knowledge of the defect, he could have acquired such knowledge by
making a reasonable examination of the sample. The examination
that is involved is a reasonable examination, not a practicable "
one, as Edmund Davies J. pointed out in Godley v. Perry?* Hence, in
that case, where the buyer tested catapults by pulling at the elastic,
which showed no defect in the goods, though another kind of examina-
tion, also practicable, might have revealed that there was something
wrong with them, it was held that the defect was a latent one, not dis-
coverable by reasonable examination, since, with goods of the type
involved, the examination made by the buyer was all that could
reasonably be expected of him.
() Under other statutes
Under the Uniform Commercial Code, 9 ^316 (?) (b) there is no implied warranty
as respects defects which an examination ought to have revealed if the buyer has
examined the sample or model as fulh^ as he desired or has refused an examination
I1W4I 2 AH E.R. 518 at p 519.
kinds of goods and imply terms, usually warranties rather than condi-
tions, relating to the quality or fitness of the goods which come within
their scope. In a general work on the law of sale it is unnecessary to
do more than mention such legislation.
Thus, the Merchandise Marks Acts. 1887-1953,*^ deal with the use
of trade descriptions in connection with goods,* and provide for a
warranty, that a trade description is not a false trade description, to be
implied into a contract for the sale of goods to which a trade descrip-
tion has been applied.** Under the Fertiiisers and Feeding Stuffs Act,
1926,* there is an implied warranty in a sale for use as food for cattle
or poultry of certain specified articles that the article is suitable to be
used as such and does not, except as otherwise stated expressly in the
statutory statement, contain any ingredient that is set out in the Act.
This warranty applies notwithstanding any contract or notice to the
contrary. Other provisions which may be mentioned in this context,
are the Anchors and Chain Cables Act, 1899,** the Hop (Prevention
of Frauds) Act, 1866,** the Seeds Act, 1920. and the Food and Drugs
Act. 1955.
Agreement being the basis of the contract of sale, the parties have
the power to affect by their agreement the application or otherwise of
** For a dkcussion of the wording of these Acts s the Final Report of the Commit-
88 M ^sunier Protection 1962 (Qnnd. 1781), Part V.
** s. 18.
180
Supra, p 24. Note that this suU applies in the U.SA.; cf note 46, supra.
181
From waiver in the strict sense outlined above, and the making of
a new contract which relieves either party of some obligation under
the original agreement between them and may therefore be considered
to involve a new contractual relationship, must be distinguished the
prior agreement of the parties, in the original contract of sale, to
exclude the operation of terms relating to the character and qualify of
the goods. A contract of sale may stale expressly in some form or
other that the seller is to be exempt from performance of such terms
or from liability for breach of such terms. Such exemption or exclu-
sion clauses in a contract of sale raise difficult problems which will be
cx^ined later. At this juncture, however, it is only necessary to
point out that, juristically, the exclusion in advance and by agreement
of an otherwise operative term is different from the subsequent aban-
donment of a right arising under an original contract of sale, whether
such abandonment occurs unilaterally by waiver or bilaterally by
fresh agreement.
Waiver
The effect of the Act depends upon whether the term in question is
s condition or a warranty. The difference between these two cate-
gories of terms has already been considered, when the artificiality and
istorical origins of such distinction were discussed.** Whether a
stipulation in a contract of sale is a condition or a warranty depends.
payment than in relation to ibe character and quality of the goods: ef.
80 PP 201-203.
^ ttote 44.
182
THE CHARACTER AND QUALITY OF THE GOODS
That being the framework within which the provisions of the Act
operate, it must now be seen what the Act stipulates as to waiver. In
effect the Act. though only dealing with the position of the buyer, con-
tinues the common law in force, but adds a statutory free choice and,
as it were, a statutory compulsory choice. Thus, where a contract of
sale is subject to any condition to be fulfilled by the seller, the buyer
may waive the condition.* This leaves the common law rules to
govern the relations between the parties. However, under the Act,'
the buyer may elect to treat the breach of such condition as a breach
of warranty, and not as a ground for treating the contract as
repudiated. This means, therefore, .that the buyer can choose
whether to regard the contract as unperformed by the seller, as repu-
diated by him, and therefore as relieving the buyer from performance
of his obligations and giving him a right to sue for damages for non*
performance,* or as entitling him merely to sue for damages for
breach of warranty.* Thus if goods of the wrong description or
quality have been delivered by the seller, in breach of an express con-
dition or one of the implied statutory conditions, the buyer may reject
the goods and sue for breach of coolract, i.e.. non-performance, or may
keep the goods and sue for damages or set off the breach of warranty
in diminution or extinction of the price.**
All this applies where the Act leaves the buyer free to decide what
to do. However, in some instances the buyer is left with no such
B| S.GJA. s. II (1) W.
< IbU.i these were "very retnartaWc words" according to Lord Alverstone in
n'allls V. Pratt II9J1J A.G 394 at p, 397.
ss I19I1I A C. 394: see further on this case, Infra, p. 187.
r Ibid.
*8 From the definition of eondirien which may be extracted from fs. 11 (I) (b) (cj,
62 0) For the nature and effect of repudiation see Nienaber, "TTie Effect of
Anticipatory Repudiation " (1962) CLJ. 213; Montrose, ' Some Problems About
Fundamental Terms " (1964) GLJ. 60 at pp. 6^-75.
183
freedom. Under the Act *: ** Where a contract for sale is not severable
and the buyer has accepted the goods, or part thereof, or where the
contract is for specific goods, the property in which has passed to the
buyer, the breach of any condition to be fulfilled by the seller can only
be treated as a breach of warranty, and not as a ground for rejecting
the goods and treating the contract as repudiated, unless there be a
term of the contract, express or implied, to that effect. Thus, in
situations to which this provision is applicable, the buyer cannot claim
that the seller has broken a condition and therefore treat the contract
as repudiated, with consequent rights to sue for breach of contract : he
must sue only for damages for breach of warranty. This does not
mean that a condition becomes a warranty under this provision: it
means that a breach of condition is to be treated as a breach of war-
ranty. The term broken retains its status of condition, as the House
of Lords held in Wallis v. Pratt.*^
The real problems arising under this provision have been con-
cerned with determining when it is applicable, i.e., whether a contract
of sale is not severable and there has been acceptance of the goods,
whether the contract is for specific goods, property in which has passed
to the buyer. Whether a contract of sale is severable depends upon
whether it is an instalment contract and if so whether the instalments
^ to be regarded as separate deliveries of an indivisible parcel of
goods or separate contracts.** The nature of " acceptance of goods,
S GA. 1. 11 (1) (c). italics supplied. TTus does not apply to conditional sale agree-
njcnts rader Ihe Hire-Purdiase Act. 1965: see s. 20 (1) of that Act. A breach
pisy be treated as a breach of warranty if it would have been so
had it been contained or implied in a '* corresponding hire-purchase
M " * condition to be fuiailed by the owner; Ibid. s. 20 (2). As
85Q ccnt case of /. Rosenthal & Sons Ltd. v. Esmcdl [1965] 2 AU E.R.
context* f Lords had to craisidcr the meaning of severability in the
in the material respect. The material time was the time at which the
184
buyer had to decide how he was to treat the sellers breadi of condjli^.
Where the seller had the option to make the contract one transaction or divide
It into two or more transactions by his mode of performance, the fact that he
had such an option did not make the contract severable; it was necessary to
see how he had exercised bis option in tbe performance of the contract.
* See. eg.. Varley v. Whlpp [19001 1 QB 515 end tbe debate thereon: supra.
e> *. 11 (1).
185
English phrase) and applies where the party in question has pro-
mised that the condition should happen. /.e.. it affects conditions
which are not necessarily within the power of the party in question to
fulfil. Further, the Uniform Sales Act provides that where property
in the goods has not passed, the buyer may treat the fulfilment by the
seller of his obligation to furnish goods as described and as warranted
expressly or by implication in the contract to sell as a condition of the
obligation of the buyer to perform his promise to accept and pay for
the goods. This is slightly different from the provisions of the English
Act as to statutory election or modified waiver, and does not involve
the same difficulties as to severability and acceptance that have been
mentioned above. Also it gives the buyer an option; it does not make
his subsequent conduct os regards the breach compulsory. It is sug-
gested, therefore, that the current provisions of the Sale of Goods Act
(which have been applied by the Court of Appeal to cases of innocent
misrepresentation not involving a term of the contract or a collateral
agreement, so as to deprive the buyer of a right to reject goods for
such misrepresentation, even where knowledge of the misrepresenta-
tion was discovered very soon after delivery of the goods or such
knowledge could not have been discovered any earlier than it was
are in need of redrafting.
SGA 7 li ^ 331-332.
a coUat^Mt ' ' PP* 43-49. Note in connection with s. 6 the problem of
// p 84 C"-
186
That the contract of sale may exclude all or any terms relating to
the character and quality of the goods, whether such terms be implied
by common law, custom or statute, has already been established.
Only where some statute, e.g.t the Fertilisers and Feeding Stuffs Act,
1926, expressly precludes the parties from agreeing to the exclusion
of a statutory implied term, will such exclusion be legally impossible.
The question then arises, however, as to the effect in law of such an
exclusion. This is primarily a mailer of construction of the contract,
though, as will be seen, in recent years there has been some develop-
ment of judicial policy which seems to fake this issue out of the con-
fines of construction of contracts and put it into quite another
category of legal question.
The basic vital point at which must start any discussion of the
problems created by the parlies power to exclude undertakiags
relating to the character and quality of the goods is the doctrine that
exemption or exclusion clauses arc strictly construed against the party
in whose favour they are expressed, Le., in the context of sale of
goods, the seller. It must therefore be shown by clear, unambiguous
words in the contract that the seller has been relieved of any other-
wise arising consequences or liability as regards the character and
quality of the goods. Thus, in cases before and after the Act,
words in a contract which stated that the goods were bought with
ail faults and errors of description,^* with alJ faults and imper-
fections, with all faults and defects, * etc., have been
Clautes (1964) especiaUy at pp. 37-60. 104-] 16; Unger, 'nie Doetrioe of tne
Fundamental Term (1957) Business L.R. 30; MelwUc, "The Core of a ^n-
tract (1936) 19 M L.R. 26; GninfeM, ** Reform in the Law of Contract (1>>
24 M L.R. 62 at pp. 71-79; Reynolds, * Warranty, Condiuoa and Fundamenui
Term (1963) 79 LQR. 534; Montrose. "Some Problems about Fundamental
Tenns (1964) C.LJ. 60.
78 Supra, p. 179.
rr See. e.g . Beck v. Szymanowski A Co. [J923J 1 K.B. 457 at p 466, per SemUon
LJ.; [1924] A C. 43 st p 48, per Lord Buefcmaster. C^fCj op, pp.
, " sub*
, . . . would
r ' . ' . . ! ' s
T Ckampanhae & Co. LtS. v. IValler A Co. Ltd. (1948] 2 AH .R. 724; ef. Couch-
man V. Bill I1947J K.B. 554.
187
18S
One car which was delivered and accepted was an old Singer car.
When the buyers sued for breach of contract the sellers argued that
the implied condition as to correspondence with description under
section 13 of the Act was excluded by the contract. The 0)urt of
Appeal held, however, that the condition that the goods should corre-
spond with description was not implied by the Act but arose expressly
under the contract. Hence it was not excluded.* Finally, in
LEstrange v. Graucob on a sale of an automatic slot machine
the contract provided, in small print which the buyer did not read,
that any express or implied condition, statement or warranty, statutory
or otherwise, not stated in the document was thereby excluded. The
machine did not function and was not reasonably fit for the purpose
for which it was intended, nor was it of merchantable quality, as
required under section 14 (1) (2) of the Act. The Court of Appeal
held that the language of the exemption clause was wide enough to
exclude the sellers liability. As a result, therefore, it would seem
that use of the right language might have the effect of ousting
the operation of all undertakings as to character and quality of the
goods, whether express or implied.
*s In Karsalti (Harrow) Ltd. v. tVallis 1195^ 1 W,L.R. 936 at p. 943 Parker LJ, said
that the right way to view this ease was that what was delivered was not what
was contracted for," t.e , the exemption clause covered defects of quality but not
of Identity.
189
[1956] 1 W.L.R. 936 at pp. 940-941. Cf. the earlier statement of the principle by
Scrutton L J. in Gtbaud v. G WJly. 11921] 2KB 426 at p. 435 : GrtmfeM, op eit.,
supra, note 75, at pp. 67-68 ; CooCe, op. eit., pp. 99-103.
190
defects as to make the thing delivered not the thing bought by the
buyer, e.g., an engineless car which cannot be used as a car at all in
the ordinary way.*' Stating this reveals one practical difficulty of the
doctrine, namely, that of deciding when an article is so defective as
to be different, not merely lacking in the desired quality and character.
The cases show that the line that has to be drawn is a very fiae.
subtle one. But there is another difficulty, theoretical or juristic h
nature rather than practical. This is the problem of defining and
categorising the " fundamental term so as to ensure that it is not
within the scope of an otherwise suitably phrased exemption clause.
This involves the distinction between conditions and warranties which
is certainly basic and accepted in contracts of sale of goods, even
though it is not so necessarily involved in other contracts, despite
the apparent acceptance by the courts of this dichotomy in such other
contexts.
i> Pollock & Co. V. Macrae, 1922 SC(HL.) 192 at p. 200, per Lord Dunedin; cf.
Yeoman Credit Co. Ltd. v. Appj {19^1 2 Q3. 508.
Karsales {Harrow) Ltd. v. Wallis, supra. Yeoman Credit Co. Ltd. v. Apps, supra.
Cf., however. Charterhouse Credit Co. Ltd, y. Tolly, supra, where the car waj m
better condition yet there was breach of a fundamentjJ term. Contrast Astley
Industrial Trust Co, Ltd. v Grimley, supra, where no such breach occurred,
ea See supra, pp. 141-142.
* Smeaton Hanseomb v. Sassoon /, Se/ty II953J 2 All E.R. 1471 at p. 1473, ptr
Devlin J.
191
And to - --
mental '
Ilong K
the artic
* Ibid, at p. 547.
About Fiinda-
Q.B. 26. See
192
It has already been seen that outside, and distinct from, the main
contract there may be some collateral undertaking which binds the
seller, even where the main contract is itself unenforceable or provides
no remedy.* In two cases, Coachman v. Hill* and Marling y. Eddy*
such collateral undertakings have been utilised to provide a buyer
with a remedy with respect to defective goods where the contract
excluded the operation of express or implied conditions and war-
ranties. In the former case the sale was of an unserved heifer with al
faults, imperfections and errors of description. At the sale an oral
representation was given that the heifer was unserved. In fact it was
in calf and. after having been bought, it died. It was held that there
was a collateral warranty, for breach of which the seller was liable
despite the exemption clause in the contract of sale. In Marling^ v.
Eddy an oral statement that there was nothing wrong with the heifer
and that if there were the seller would take her back was held to
amount to a collateral condition (because of the promise to take the
goods back, i.e., to permit rejection of the goods). Hence it was
affected by an exemption clause excluding warranties in the printed
conditions of sale. The principle applicable In such cases was staled
by Denning L.J.^ to be that if a seller of goods by auction givs
an express oral warranty, he cannot escape from his responsibility
for it by saying that the catalogue contained an exempting clause.
It may he, therefore, that all these cases establish is that in auction
sales extrinsic representations may oust the operation of an otherwise
applicable exemption clause. If they are so restricted they will not
be of great value generally. If they are capable of greater generalisa*
tion, then another method will have been found of circumventing
the decisions on exemption clauses in appropriate situations.
(ill) Misrepresentation
There is the final possibility that an exemption clause will not avail
a seller who has inserted such a clause in the contract of sale where the
seller has been guilty of a fraudulent or innocent misrepresentation
* Supra, pp 143-147.
[1951] 2 K.B. 739, which seem* to repudiate the suggestions in the language o
Bailbache J. in Ilarrisort v. Kaowlei & Foster (1917] 2 K3. 606 at p. 610.
The Editor of the Uw Reports noted K B. 554 at p. 560) that the legahW
193
Thus it would seem that in this area of the law there is room
for much development and change. Critics of the present position
point to the rigidity of the condition'warranty dichotomy and the
absurd results to wWch it has led. They point also to the difficulty
of understanding and applying the doctrine of fundamental breach
or the fundamental term, whatever exactly it be. There can be little
doubt that some alteration of the law is overdue and needed. In the
United States the Uniform Conunercial Code seems to make
exclusion much more difficult and requires proper notification to the
buyer, particularly in relation to merchantability and implied war-
ranties of fitness. Moreover, it would seem that American courts are
SeeaL i. * ; . ...
1 Wl . . .
before
too la . .
involv . . . ._ .... . _
PP. 331-332. C/. also Harrison A Jones Ltd. t. Bunlen & Lancaster Ltd 119531
1 QB 646.
. 1 V , -10, supra.
F.S.O 7
194
It is the duty of the seller to deliver the goods, and of the buyer
to accept and pay for them, in accordance with the terms of the
contract of sale.' This provision of the Sale of Goods Act reveals that
the performance of a contract of sale of goods involves delivery of
the goods, acceptance of them, and payment of the price. These duties
arc concerned with the effectuation of the purpose of a contract of
sale of goods, which is the transfer of property in goods in return for
the payment of a sum of money.* The obligations considered in the
previous chapter, which were concerned with the identity and character
of the goods that were being sold, are of importance in relation to the
clarification of the terms of the contract between the parties. The
nature of those obligations, in general and in relation to any particular
transaction, is vital so far as the ancillary rights and liabilities of the
parties are concerned. But the primary duties imposed on the
parties at common law and under the Act are those which revolve
around the transfer of the goods and the payment of the price. It Is
true that terms relating >to the quality, description and fitness of the
goods may affect the question whether the contract has been per-
formed, in the sense of the delivery of the right goods as required by
the contract. But they do so from die point of view of the performance
of the contract in a particular instance. They do not go to the more
general question to be considered in this chapter, namely, what
duties arise from the making of a contract of sale of goods in
relation to the purpose and function of such a contract.
I S GA. s. 27.
* S G A. s. 1 (I) : supra, pp 4, 5.
It should be noted that this not nccnnite in respect of cl.f., fob. and other
such special contracts of sale of goods, inTOlmg the deliTery of documents not
necessarily goods: see Karberg & Co. t. Biythe Green & Co 11916J I K.B 495
195
196
not the same thing. A contract of sale of goods must involve the
transfer of property (or at least the intention to transfer property
or such rights over the goods as arc enjoyed by the seller)*; it need
not involve the giving of possession. In most instances, of course, the
parties contemplate and intend that possession of the goods should be
obtained by the buyer, as well as property in them. But such posses-
sion may only be notional, as where B instructs S to send the goods
directly to X who is in turn buying the goods from B. Such a
delivery of possession, to a sub-purchaser, is clearly within the scope
of the notion of delivery of the goods which the Act has in mind.
The same, it is suggested, is true where the seller remains in possession
of the goods, under the contract of sale or some other contract entered
into between seller and buyer. In such an instance, as in the former,
delivery of the goods bears a somewhat special meaning. But in
all these instances the common law and the Act make delivery an
intrinsic part of the performance of the contract, even though, by virtue
of statutory definition, sale involves the transfer of property rather
than the transfer of possession.
197
Conditions precedent
* Cf supra, pp 18--19.
198
i SGu\. S 2S. S further, Infra, pp. OT6. 230 Cf. also /Imos A Wood Ltd. n
Karro'n (IWS) 64 TL.R. 110: aKrerment Hut discount jiven if price paid
a stated period from delivery, full price if payment not made within such period,
r* See supra, pp. 182-183; SO.A, *. II (I) (c).
199
Infra, pp 246-243.
Possibly not without some ciTeCt if the fulfitinent of the condition precedent Is
prevented by the wrongful act of one party (if by a stranger to the contract the
tort of procuring a breach of contract may have been committed).
SOJV. s. 11 (3).
200
Time
* SOjV. s. 10 (1) What this means is that an action will only lie tor late per-
foimance where time is stipulated as bcin; * of the essence " For
time being of the essence see Charles Rickards trd. v. Oppenhelm [1950] 1KB
616; McDougall y, Aeromarlrte Ltd. [15*58] 3 AH E,R. 431.
201
which deals with the place or mode ot shipment of goods: for examples see
Benjamin on Sale, 8th ed., at pp 58I-5SW.
** [19211 3KB 435. C/, also Berg A Sons v. Landauer (1925) 42 T.L.R. 142 (dale
of bill of lading matenal therefore not excluded by E- & 0. ).
** (1877) 2 App Cas. 455, per Lord Cairos In fact the term in question was treated
as involving a condition precedent.
** see supra, p. 182. But if the condiUon is for the benefit of both
parties there can only be bilateral waiver; Maine Spinning Co. v. Sutdiffe A Co
(1917) 87 LJ.K.B. 382,
202
PERFORMANCE OF THE CONTRACT
under the contract, does the seller have to prove that his tender of
the goods was in accordance with the contract, or that he was ready
and willing to perform his part of the bargain? In the case of
Braithwaite v. Foreign Hardwood Co.^^ it was suggested that a
repudiation by the buyer, if wrongful, amounted to a waiver of
the performance of any conditions precedent which were to be fulfilled
by the seller, in 'this case the correspondence of the goods with
description and quality.* It is noteworthy that in this case the term
as to description should have been considered a condition precedent.
The decision in this case has caused some difficulty. Following this
case it has been said that if the performance of a condition precedent
by the plaintiff has been rendered impossible by the neglect or default
of the defendant it is equal to performance." It has been said that
the case decides that : *' If the buyer wrongfully repudiates his
contract and the seller does not tender performance on his part but
accepts the repudiation and claims damages, the buyer is not
relieved from liability by proving that if he had not repudiated the
contract but called for performance, the seller would have been unable
or unwilling to perform it." On the other hand, in British & Sen-
ningtons Ltd. v. N.W. Cachar Tea Co.,** where the House of Lords
held that, a buyer having wrongfully repudiated a contract, the seller
was cot bound to prove that he was ready and willing at the date of
such repudiation to deliver the goods at the contracted place of
operates to relieve the other party of (be necessity to perform conditions precedent
(if any) binding upon him. Such party may sue for breach of contract or may
attempt to secure performance by givuig effect to the contract on his side:
Whilt <S Carter (Councils') Ltd. r McGregor (1962] A.C. 413. On anticipatory
breach see Universal Cargo Carriers Corp. r. Cl/atl [1957] 2 Q B. W1 at
pp. 436-438.
** [1905] 2 K.B 543 The correctness of the decision and reasoning in this otse
was left open by the House of Lords in /. Rosenthil Sons Ltd. v. Esmail
{1965] 2 All EJL 860, at p. 870, per Lord Pearson.
Cf. with thu the statement by Lord flalsbuiy in Forrest A Son Ltd. v, Aramayo
(1900) 83 L.T. 335 at p, 338 that ** whenever (here are concurrent obligations the
party who seeks to recover against the other must show that he has always been
ready and willing to perform the obbgations upon him. ... In a contract for
the sale ... of a cluitel, the one party must be ready and willing to deliver,
and the other to accept deUvery."
*1 Taylor v. Oakes, Roncoronl & Co. (1922) 127 l^T. 267 at p. 269, per Greer J.
. .1 . j-. .. - t. > ....J
to perform it. As to an antldpatory bread) that Is not accepted, see tV/ilte &
Carter (CouneCs) Ltd. v. McGregor {19^] AC. 413; supra, note 27.
203
delivery (which in fact he could not do). Lord Sumner said. dis-
cussing the Braithwaite case, that it did not lay down that a buyer
who has repudiated a contract for a given reason which fails him has,
therefore, no other opportunity of defence as to the whole or as to
part, but must fail utterly.
2. Delivery
Meaning
* Cf. Devim J. in Universal Cargo Carriers Corp. v. Citall [1957] 2 Q.B. 401 at
p. 443; A rescission or repudiation, if ^veit for a wrong reason or for no reason
at ail, can be supported if there are at the time factors in existence whidi would
have provided a good reason. This is certainly true of the contract of employ-
ment Is it also true of the contract of sale of goods?
ss S GA. s. 62 (1)
88 Bidden Bros. v. Horst Co. 1 KB. 934 at p. 958, per Kennedy J.; Kwel
Tek Chao v. Br. Traders d Shippers ltd. 119541 2 Q.B. 459 at p. 486. per
tkslin J.
202
under the contract, does the seller have to prove that his tender of
the goods was in accordance with the contract, or that he was ready
and willing to perform his part of the bargain? In the case of
Braithwaite v. Foreign Hardwood Co.* it was suggested that a
repudiation by the buyer, if wrongful, amounted to a waiver of
the performance of any conditions precedent which were to be fulfilled
by the seller, in this case the correspondence of the goods with
description and quality.* It is noteworthy that in this case the term
as to description should have been considered a condition precedent.
The decision in this case has caused some difficulty. Following this
case it has been said * that if the performance of a condition precedent
by the plaintiff has been rendered impossible by the neglect or default
of the defendant it is equal to performance. It has been said that
the case decides that: If the buyer wrongfully repudiates his
contract and the seller does not tender performance on his part but
accepts the repudiation and claims damages, the buyer is not
relieved from liability by proving that if he had not repudiated the
contract but called for performance, the seller would have been unable
or unwilling to perform it. ** On the other hand, in British & Ben-
nlngtons Ltd, v, N.W. Cachar Tea Co.,** where the House of Lords
held that, a buyer having wrongfully repudiated a contract, the seller
was not bound to prove that he was ready and willing at the date of
such repudiation to deliver the goods at the contracted place of
operaces to relieve the other party of the necessity to perform conditions precedent
fif any) binding upon him Su^ party may sue for breach of contract nr may
attempt to secure performance by giving effect to the contract on his side:
White & Carter (Councih) Ltd Y AfeOregor J1962I A.C. 413 On anticipatory
breach see Universal Cargo Carriers Corp. t. Citatl [1957] Z QD. 401 at
pp 436^38.
** [19051 2 K.B. 543, The correctness of the decision and reasoning in this ca*
vras left open by the House of Lords in /. Rosenthed & Sons Ltd. v. Email
[1965] 2 All E R. 860, at p 870. per Lord Pearson.
* C/. with ihb the statement by Lord Malsbury in Forrest d Son Ltd. v. Aramaya
(1900) 83 L.T. 335 at p. 338 that ** whenever there are concurrent obligations the
party who seehs to recover against the other must show that he has always been
ready and willing to perform the obligatims upon him. ... In a contract for
the sale ... of a chattel, the one party must be ready and willing to deliver,
and the other to accept delivery.**
Is the Court of Appeal it was said {ohUer it Is suggested, since there was no such
203
delivery (which in fact he could not do). Lord Sumner said,** dis-
cussing the Bralthwaite case, that it did not lay down that a buyer
who has repudiated a contract /or a given reason which fails him has,
therefore, no other opportunity of defence as to the whole or as to
part, but must fail utterly.**
2, Delivery
Meaning
** Cf, Devlm J. in Universal Cargo Carriers Corp. v. Cltati 11957] 2 Q.B 401 at
p. 443 : A resdsston or repudiation. If given for a Wong reason or for no reason
at all, can be supported if there are at the time factors in existence which would
have provided a good reason." This is certainly true of the contract of employ-
ment. Is jt also true of the contract of sale of goods?
8 S GA s. 62 (1).
*8 Bidden Bros v. Horst Co. 11911] 1 KB, 934 at p. 958, per Kennedy J.; Kwel
Tek Chao v. Br. Traders & Shippers Ltd. 11954] 2 QB. 459 at p. 486. per
Devlin J,
204
eg, Levey & Co. v, Goldberg [1722] I KB. 688 where McCardie J. held
the seller did not have to tender delivery but need only have been ready and willins
to deliver: cf S GA a. 28, as to delivery and payment being concurrent conditions,
therefore the seller must be ready and wiUmg to give possession and the buyer
ready and willing to pay the price.
es Cf. SGA. s. 29 (3): but note that this does not affect the operation of the issue
Of transfer of documents of title to goods. Sec, generaDy, Publirt City Distillery
Ltd. V. Doherty [I9I4J A.C 823 at pp 845-848, per Lord Atkinson The problem
of possession is also relevant in relation to Uie sellers lien and right of stoppage
in transit: In/ra. pp 256-273 For the American rule see UCC s. 2-503 (4).
39 See, eg, If'rlghtson v. McArthur & RutchUora V919) Ltd. [192JJ 2 K.B 807.
The same is not true of fob. contract^ see Sassoon, F.OJB. Contracts (I960),
pp. 33-55, especially at p. 48 <f seq.
DEtlVERY
205
placed on the seller by the Act** The goods arc delivered, so far
as they are physically delivered, when they are put on board a ship
at the port of shipment. The documents are delivered when they are
tendered. This distinction in such contracts between the goods and
the documents relating to the goods. i.e., the bill of lading, invoice
and the policy of insurance,** has led to the proposition that there
is a right to reject the documents which is distinct from the right to
reject the goods, with consequent effects, as will be swn, upon the
provisions of the Act relating to acceptance and its results. What
is undoubted, however, is that in such contracts (and it would seem
in ex ship contracts) the duty of the seller is not to deliver the
goods but the appropriate documents. Indeed, delivery of the goods
will not sufBce if the documents are not in order. Whether, in other
kinds of contracts of sale of goods, delivery of documents which
permit the gaming of control of goods, such as delivery warrants
or orders, will sufBce as a performance of the duty to deliver, is an
open and difficult question.** The answer may depend upon whether
mercantile custom recognises such documents as effective to transfer
property in goods or the right to claim property in goods.
Bidden Bros. T. Horst Co, 11912) A.C 18. See Kennedy's CJ F, Contraels (3rd ed ,
1919), at pp. 1-3, 4-9, IOS-123. It must be noted that the delivery of the
documents does not mean that property in the goods passes; c/. S.GA. s 19,
discussed iiipra, pp. 90-93. See also Kennedy, <?p. c//., pp 133-151.
** fCwl Tek Chao V. Br. Traders &. Shippers Ltd., supra at p. 486, per Devlin 3
The bills of ladmg in law and fact represent the goods Possession of the bill
o( lading places the goods at the dispo^ of the buyer: Bidden Bros v. Horst &
Co. (19111 1 K-B. 934 at p. 956, per Kennedy LJ. Hence the importance and
negotiability of bills of lading.
The shipping documents: see Johnson v. Taylor Bros. [1920] A C. 144 at p. 155,
per Lord Atkinson.
Kwel Tek Chao v. Br. Traders & Shippers Lid , supra See Infra, pp. 221-229.
* Explained and discussed by Lord Sumner in Yangtsze Insurance Association v.
Lukmanfee (1918] AC 585.
206
But they may have different effects as regards the rights and liabilities
of the parties with respect to a breach of contract, or the question
of risk, or the rights of the seller over and in respect of the goods
should he remain unpaid by the buyer.**
Rules as to delivery
*9 S GA. 8. 28
*0 As to time of delivery being of the essence of the contract see supra, p 200 If
the contract stipulates a time and involves a period of months, the expression
month prima fade means caleodar ittonth: SGA. s. 10 (2) As to the
impbcations of terms by agreement or custom, see supra, pp 148-150.
207
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.** A failure to send
the goods within a reasonable time will be a breach of contract by
the seller, i.e., a breach of condition, which may be waived and
treated as a breach of warranty by the buyer in accordance with the
principles already examined. Should the contract stipulate that goods
arc to be delivered by the seller as required " by the buyer, the buyer
must make known his requirements within a reasonable time.*^ A
failure by the buyer to do so may be a breach of contract by him,
or it may show, if the lapse of time is inordinate, that the parties
have abandoned the contract so that neither is liable to the other.*
Pearl Mill Co. Ltd. v. Ivy Tannery Co Lid. n9191 1 K.B. 78 at p. 81, pur
Rowlatt J. Sec also Kler d Co. y. Whitehead frott d Steel Co. [1938] I All E.R.
208
S G A. . 29 (4). Cf. U.CC . 2-503 (I), which is fuller than the Engtish provision.
* Jbll.. document of title has the tame definition as in the Factors Act. 1889,
s. I (4): S.G.A. %. 62 (1) It should be nMed that such documents of title are
not bills of sale and do not require re^tration: Bills of Sale Act, IS7S, t. 4.
* Supra, pp 70-71.
SGJ^. s. 29 (5). In America the buyer nay have to furnish facflitiea for the
receipt of the goods, U CC. a. 2-503 (I) (b).
M Crren T. Arecs Ltd. (1931) 47 T.L.R. 336; WBentko r. FtnwUk & Co I193S]
3 AH HR. 429.
DEUVERY
209
Cf, Areas Lid, v. Raruiasen & San (1933] AC. 470 at p 479, per Lord Atkin: cf.
1 K.B. 574 a
quality penni , , i .
S GA. a. 30 (4).
l.e , the delivery of the wrong qnaotity operates as an offer of a new contract
wWch may be accepted by the buyer, thereby precluding him from suing for
brM^o^he original contract: Gabriel Wade d English v. Areas Lid. (1929) 34
to S.GA. s. 30 (1).
Ti IbU. s. 30 (2).
ts (1901) 84 L.T. 324: ef. Lomas d Co. r. Barff (1901) 17 TX.R. 437.
210
T See Jackson v. Rolax Motor A Cyde Co. {1910] 2 K.B. 937 at p 945, per
Cozens-Hardy M.R.
M For other examples see Behrcnd & Co. Ltd. t. Produce Brokers Co. Ltd. (1920]
3 K.B. 530; Payne & Routh v. UlUeo 0920) 36 T.L.R. 569; Re Thomett & Fehr
& YuBts Ltd. 11921] I K.B 219.
s* See the cases referred to in note 67, supra.
tr Cf. the cases referred to in note 65, supra.
211
Under the Sale of Goods Act. also, where the seller delivers goods
he contracted to sell mixed with ** goods of a different description
not included in the contract, the buyer may accept the goods which
are in accordance with the contract and reject the rest, or he may
reject the whole.'** It has been held that the expression mixed with "
does not refer to physical confusion but is equivalent to accompanied
by. Thus where the contract speciffes a quantity of peas and such
quantity is delivered but in sacks in which the peas are mixed in with
beans, it would seem that the buyers right to reject is based not
on this provision but on the provisions of section 13 of the Act.'
This provision is meant to deal with cases where the goods sold are
delivered together with, but separate and distinct from other goods,
e.g., where some cases contain 24 tins per case, others 30 tins per
case, and the contract stipulates that there should be 30 tins in each
case.* It would seem that, even though the goods answering the
contractual description have been accepted within the meaning of
the Act, it is still possible for the buyer to reject the whole consign-
ment if it includes non-contractual goods within the meaning of this
provision.* Similarly, if the goods are delivered in instalments and
the contract provides that each item is to be considered as a separate
interest, this would not deprive the buyer of his right to reject the
whole of the goods under the provision, even though it would deprive
him of his right to reject for failure to deliver goods of the right
quality.** This decision seems to underline the argument that the
obligation to deliver goods of the right description and quality is
distinct from the obligation to deliver the right quantity of goods.
It also leads to the question of instalment deliveries and their effect
ofl the obligations of the parties.
Instalment deliveries
Unless otherwise agreed, the Sale of Goods Act provides that the
buyer of goods is not bound to acwpt delivery of the goods by
s G.A. 8. 30 (3).
B* ^ndon Plywood Timber Co. Lid. v. Nasic Oak Extract Factory & Steam
Co. Ltd. 11939] 2 KB. 343 Hence there U another reason for
diHerentianng delivery of the right quantity of goods from delivery of the right
quality of goods: cf. supra, note 67.
212
Behrend & Co Ltd. r. Produce Broken Ltd. [1920] 3 KB. 530 at p. 538.
89 Supra
Cf. abo under 3 G.A. s. 23 which makes delivery of the goods (t e., all the goods)
aod payment of the pnee, prima fade concurreat conditions.
*1 S GJi. 8. 31 (2).
* See, eg, Howell v. Evans (1926) 42 T.LJt 310 where a contract to sell a let
of engravings '* to be sent to the buyer as pabhshed was an instalment contract.
Cf. where goods are to be sent Co the buyer " as required Pearl Mill Co. Ltd.
T. Ivy Tannery Co. Ltd. [1919] I K B. 7S. C/, abo, /. Rosenthal & Sons Ltd.
T. EsmdB [1965] 2 All EJl. 860, where (be contract gave the seller the option
DEUVERY
213
contract does permit such delivery this does not merely make the
contract divisible. It can still be an entire contract, though perfor-
mance of it is divisible. The obligation on the seller is still to deliver
the entire contractual quantity, though he is not obliged to deliver
such quantity at one time. The problem then arises as to the effect
of a breach by either party of his obligations with respect to any one
instalment. The common law position was discussed by the House
of Lords in Mersey Steel & Iron Co. v. Naylor, Benzon & Co.'^ where
it was held, on the facts of that case, that payment for a previous
instalment was not a condition precedent to a right to claim that the
next instalment should be delivered. Hence the failure by the buyer
to pay for earlier instalments did not relieve the seller of his obliga-
tion to deliver subsequent instalments. The problem was to determine
whether the breach by the party in qu^tion, Lc., failure to deliver or
to deliver the right goods or goods of the right quality on the part of
the seller, failure to accept or to pay on the part of the buyer, was
such a material breach as to go to the root of the contract and amount
to such a repudiation by one party as would justify the other party
in considering himself relieved of bis contractual obligations. This
problem is part of the whole question of anticipatory breach, mention
of which has earlier been made.** It was said in this case that the
conduct of the parties must be investigated to see whether the party
in breach intended a renunciation of the contract.*
to deliver by instaloients or as one entire contract and it vras held that he had
elected to deliver the goods as one transaction.
KB 543 was discussed As seen in that context a breach by the buyer in respect
of one iwtalment may nonetheless inTolre the seller in proving his own readiness
and willingness to deliver in accordance with the terms of the contract; le., the
bujrer may be able to rely on a reason for refusing to perform his contract if
such reason is valid, even though he originally relied on an invalid or wrong reason.
(1884) 9App.Cas 434 at pp 438-439, per Lord Selbome.
214
9 But see Jackson v. Rotax Motor & Cycle Co, supra. It would seem that if there
*. . ' . ' i 4 substantial
. .r Wnght J.) by
. - . . If payment Is
a breach.
a And the need for concurrence of delivery and payment under s 25, it may be
added.
DELIVERY
215
The Act, as stated above, deals with the situation which arises
in certain particular (and perhaps most generally occurring) instances,
namely where delivery is defective or payment is not made. A
number of cases have discussed the question whether a particular
breach, coming within the scope of this subsection, has amounted
to a severable breach or a repudiation of the contract. In one such
case, Millar's Karri & Jarrah Co. v. Weddell Turner & Co.,* Bigham J.
expressed the applicable principles in these words:
In that case the buyer was held entitled to repudiate the contract on
the failure by the seller to deliver goods within the terms of the
contract in the fini instalment. Similarly, in Ballantine & Co. v.
Camp^ where the contract provided that each instalment had to
conform to the description in the contract, it was held that the buyer
could reject a particular shipment which varied in weight from the
contractual weight. On the other hand, failure to make punctual pay-
ment of the whole price of an instalment has been held not to amount
to a breach which justified refusal to deliver on the grounds of
repudiation by the buyer. In the same way failure to deliver has
also been held not to be a repudiating breach by the seller where
381 .
216
this was the result of a mistake by the seller, not a deliberate intention
not to deliver. An attempt to lay down some kind of principles to
apply to cases within section 31 (2) was made in Maple Flock Co. Ltd.
V. Universal Furniture Products {Wembley) Ltd.? where the seller
delivered too great a quantity of rag flock in one instalment. It was
held that this was not a breach which amounted to a repudiation
because it was unlikely to recur. Two factors were said to be relevant:
(b) the degree of probability that the breach would be repeated. But
the question for the court was always to determine on the merits
of the case what effect, if any, the breach or breaches should have on
the contract as a whole.^
Where the breach is severable then the injured party may recover
what the Act calls compensation, as opposed to cases of repudiation
where the injured party may treat the contract as completely broken
by the other party, permitting of appropriate remedies such as rejection
of goods, action for price, or action for damages. Compensation, how-
ever, covers more than just damages for breach of contract : it covers
also the price of an instalment.**
Delivery to a carrier
(1934) 1 KB 148.
11 Workmart, Clark <6 Co V. Lloyd Braztleao ff908I I K.B 965 at pp. 978-979,
pgr Farwell L J.
1 * S G.A s 33. ,. .
IS Infra, p 239 Note also that it is rclevaat in connection with the iitipuea
conditions a* to fitness for purpose and merchantability: supra, pp J64. 172.
DEUVERY
217
this conflict by not making delivery to a carrier delivery to the buyer: see
ss. 2-504, 2-705.
SGA. s 45 0).
218
DELIVERY
219
This obligation to notify the buyer so that the buyer may insure
the goods during their sea transit can only arise where the contract
itself does not expressly or impliedly provide for insurance to be
effected by the seller. Thus in c.i.f. and ex ship contracts, the obli-
gation to insure is on the seller. In the former because it is part of his
contractual duty to insure the goods and forward the policy of
insurance, together with the other shipping documents.** In the latter
because, until certain things are done by the seller, yiz., payment of
the freight, furnishing the buyer with an effectual direction to the ship
to deliver, the buyer is not bound to pay for the goods and has no
insurable interest in the goods, as opposed to the profits thereon,
which the seller, as seller, can insure for him.** Of course, even in a
c.ii. contract, there may be an obligation on the seller to notify
the buyer of the shipment, so as to permit the buyers effecting
insurance. But such obligation arises by virtue of the particular
contract between the parties, not because of the provisions of the
Sale of Goods Act. In such contracts, therefore, the above provision
does not apply unless voluntarily incorporated in the contract.
a requirement in all cases where the seller Is required or authorised to send the
goods to the buyer, as long as a particular destination is not involved. The same
provision, s. 2-501 (a) (b) requires a reasonable contract of carriage and tender
or delivery of documents necessary lor obtaining possession of the goods
** C'/. rupro. p. 205. Law & Bonar Ltd, v. Br, American Tobacco Co. Lid [19161
2 K.B. 605 See Kennedys C.f F. Contracts, 3rd ed., at pp 85-87.
220
However, it has been held, that this provision and the obligation
it imposes apply to f.o.b. contracts, where the duty of the seller is
to deliver goods on board ship at his own expense, the buyer being
responsible for freight charges (unlike the position in c.if. contracts
where payment of freight is pan of the duly of the seller) and the
goods being at his risk.** The obligation to notify the buyer will not
be unfulfilled, however, as long as the buyer has enough information
to enable him to obtain the necessary insurance cover.*
3. Acceptakcb
88 TVImble & Sorts & Co. v. Rosenberg <S Sons 11913] 3KB 743 (with the dissent of
Hamilton L J.); Northern Steel & Hardware Co. l-td. v. Batt & Co Ltd. (1917)
33 TLR 516.
#1 S GJi. s. 27.
AOIEPTANCE
221
reject the goods tendered by the seller. This problem may turn upon
an examination of the goods by the buyer. Hence the Act provides
for an opportunity for examination of goods, as will be seen below.
Should the buyer not be bound to accept the goods, and the goods
have been delivered to him, then, in the absence of any contrary
agreement, the buyer is not bound to return the goods to the seller.
It is sulBcient if he intimates to the seller that he refuses to accept
them. The buyer cannot retain possession of the goods, by way
of exercising any lien on them akin to an unpaid vendors lien of
goods, if the buyer has paid the price of the goods in advance.^ He
must make the goods available to the seller, even though he is not
himself obliged to return them.* But the buyer, as an involuntary
bailee of the goods in such circumstances, must exercise reasonable
care in respect of them, though, otherwise, any risk of loss or damage
is on the seller.
S OA. S. 36
Lfonj A Co. V. May A Bakrr Ltd. [1923] 1 KJ3 685: for the unpaid endor
>s Hardy A Co. v, mUrns A Foster [1923} 2 K.B. 490 at p 496, per Bankes LJ.
* S G A. s. 50 0): injto, pp. 285-300.
*0 S GA. s. 37.
222
rcRroRMANci: or Titr coymcr
22
may involve, it must mean that where the buyer acts as owner t
the goods he accepts them. Hence, in some situations, acceptance ca
be shown by conduct on the part of the buyer which takes th
form of dealing with goods as an owner would, i.e., exercising th
rights of an owner over them. However, it must be pointed out tbs
the transfer of property in goods does not always operate as a
acceptance, since the contract may provide for a right of rejectior
even though property has passed. Ibis may occur where goods at
sold under an express or implied resolutive condition subsequent.^
Hence, it is suggested, to talk of acceptance in terms of the intentio
to acquire ownership is misleading. Acceptance is concerned witl
possession of goods. As the judgment of Devlin J. in Kwei Tek Cha<
V. British Traders & Shippers shows, there may be a passing o
conditional property In goods to a buyer, but yet no acceptance o
the goods by him as long as he has not actively interfered with th
physical possession of the goods.
*SGA 8.54(1).
M SO A. 8. 34 (2).
224
In either of these two situations it is likely that the buyer will have
64 [1893] 1 QB 193
56 ScaJiarU v. Ofverbtrg & Co. (1921) 37 T.LJt. W7; Bokj & Co. v. Rayner & Co.
ACCEPTA^:E
225
Tie buyer must have got delivery before he do the act: Hardy A Co. Y. nuiemt
4 Fov.ter 11923] 2 K.B. 490 at p. 49S, f>er Atkin LJ. Hence the problem where
the buyer himself has Deter obtained i^ysical possession of the gi^s.
F.S.O. S
226
Ibid, at p 496.
e* (19241 A.C 514.
acceptance
227
Devlin J.,* dealing with a c.l.f. contract, held that the right to
reject the documents which were sent to the buyer under such a
contract was separate and distinct from the right to reject the goods,
when they arrived later than the documents. Hence, any intermediate
dealing with the documents did not amount to an acceptance of the
goods, within the Sale of Goods Act, so as to result in the buyers
loss of his right to reject the goods for non-conformity with the
contract. A distinction was also drawn between the conditional
property obtained by the buyer when the shipping documents were
delivered to him and the absolute property he obtained when the
goods themselves were delivered and accepted. The conditional
property reverted to the seller if the goods, upon examination, were
found to be not in accordance with the contract. Hence, dealings with
the documents are only dealings with the conditional property in the
goods, and not acting inconsistently with the sellers ownership
within the meaning of section 35. As long as the buyer is only
Taluable note by J. D.
Rosenitial & Sons Ltd.
228
s s. 32 (I)
#9 Jlofnmer & Barrow v. Coea^ola {19^1 N.Z,Lp.R. 723 at pp. 727729, rejecting an
attempt to distioguisb Ruben v, Faire, mpra, on this ground
TO See McClean, loe. cll., supra, note 65 at pp. 196-197.
230
T s G.A s. 28.
IT S G.A. s 1 (I)
T9 S G A s. 49 (2>.
80 S.G A. ss 38-48; Infra, pp. 252-779 If the sate is on credit, the period of credit
will still stand if the buyer refuses to do somethioS he is obliged to do by way o*
giving the seller security ; Robe v. Otto (1903) 89 L T. 562
t Hire-Purchase Act, 1965, ss 1 (I), 2. Credit sates do not include conditional safe
agreements : Hire-Purchase Act, 1965, $. 1 (I). For the definition of such agr^
ments see ibid
** For discussion see Goode, Hire^ur^iase Law and PracUee, 1962, Chap 29;
Supplement, 1964, Chap 12.
PAYMENT
231
It is the obligation of the debtor, i.e., the buyer, to seek out and
pay his creditor, i.e., the seller. Whether the conduct of the buyer
amounts to a proper discharge of his duty to pay depends upon the
circumstances. For example, where a buyer was accustomed to send-
ing cheques through the post to the seller, and had done so on
numerous previous occasions, this did not result in a finding that the
course of dealing between the parties had crystallised into payment in
this way. Therefore when, on one occasion, a cheque thus sent was
lost in the post, it was held that the buyer had not paid, and was liable
to the seller for the price of the goods. Whether payment to an
agent is a good discharge depends upon the authority of the agent.
1 e., whether he has express, implied or apparent authority to receive
payment, or his improper act in receiving payment has been ratified
by the seller, his principal. Thus the method, place and time of
PP-
M * P- 200.
Cf.lniernalhnal Sponge Importers Ltd. t. Watt & Son [1911] A.C 279; Bulwick
V. Urani [1924] 2 K.B. 483. Sec, goterally, Fridman, Law of Agency, pp. 148-149.
232
Modification of duties
any creditor, and therefore apply to the law of sale of goods, see Benjamin on
8lh cd., pp. 766-809.
SI Howe y. Smith (1884) T? ChD. 89; Afoyson v. aouet J19241 AC. 90;
British and International Mining S Finance Corp. Ltd. [1939] 1 K.B. 724. Cf. a**"
Gallagher v. Shneock [1949] 2 K.B. 765 (Infra, p. 278). , .
s* See, eg, Stockloser V. Johnson iI9MI 1 QJI 476; Cheshire and Hf*'
Conrraer. 6th ed., pp. 51J-514; Treiiel. Law of Contract, pp. 617-620; Fnat
Mendutg Bargains (1964) 114 LJ. 582.
233
234
Thus it is possible that the buyer may waive the obligation of the
seller to deliver at an agreed time or place, or that the seller may
waive the buyers obligation to accept or to pay at on agreed time
or place. One point roust be made clear. If the term which creates
the obligation is properly construed as being for the benefit of both
parties, not merely one or (he other, its due performance cannot
be waived by one party alone.* Thus in the Fibrosa case.* at first
instance. Tucker J. held that the sellers obligation to deliver the goods
at Gdynia could not be waived by the buyer alone. The seller had
the right to insist upon delivery at that port if he so desired. Subject
to this, however, it is clear law that a party may waive an obligation
imposed by the contract on the other party.* The doctrine which
Supra, pp 201~203.
8 FUher Ltd. v. Eastwoods Lid (I936J I AU E R. 421 ; cf. Pearl Mill Co. . W
Tannery Co. (19191 I K.B. 78.
See, egn LJartiey v. Hymans (19207 3 K.B 475; Partoutsos r. Eajmond Hadley
Corp. of N.Y. (1917] 2 KB 473; Charles Rickards Ltd. v. Oppenheim [t950J
1 K.B. 616: cf. supra, pp. 179-180.
235
* Supra, p. JgO.
Contrast
236
(i) Risk
T s G A. s. 37.
(1872) UR- 7 QB. 436.
237
did not acquire property in the goods because they were still unascer-
tained. Property and risk, therefore, while usually co-extensive,
were not necessarily so at common law.
Statutory provisions. Under the Act, the basic rule would seem to
be res pent domino. Unless otherwise agreed, the statute provides,
the goods remain at the sellers risk until the property therein is trans-
ferred to the buyer, but when the property therein is transferred to the
buyer, the goods are at the buyers risk whether delivery has been
made or not. Risk, therefore, is primarily an offshoot of property, not
possession. Hence, as already seen, many of the cases concerned with
the question of transfer of property raise that issue simply to decide
what has been called the " risk issue. The connection between risk
and property, however, while of the utmost importance, must also be
qualified, by virtue of the provisions of the Sale of Goods Act. Who
must bear the risk of accidental loss or deterioration may be deter-
mined by other considerations than whether property has been trans-
ferred. Thus, the Act provides for loss following a delay in or refusal
to take delivery for the situation where seller or buyer is a bailee of
the goods, for the situation where goods are sent by sea, or are
delivered at the sellers risk to a distant place. In addition, the Act
specifically permits the parties to make whatever agreement they
choose as to risk.
II f * provuo.
V, rl language of S GA. s, 2a
I A-C 293 at p. 319, per Lord Nonnafld ; </., e g., Rutter r. Palmer
119221 2 K.B. 87 (not a case of sale of goods).
238
II 11923] 1 K.B. 78
i Supra, pp 84-89.
i* 11949] A C. 293.
* Bidden Bros. V. Horst Cc. 119111 I K.B. 934 at p. 956, per Ktnnedy LJ.; II912J
A.C. 18. In fob. contracts risk passes upon dcLvery, even though the seller ha*
retained property, /.e., a jus dlsponeadlz Sassoon, F.OJS. Contracts, at pp 38-39.
239
by virtue of which property may revest in the seller upon the occur-
rence of a resolutive condition, this sort of situation could occur.**
Moreover, under section 32 (3) of the Sale of Goods Act, which
has already been considered,** the seller who fails to give adequate
notice to the buyer so as to enable him to insure goods being sent by
sea may be at risk. So, too, under section 33 of the Act, where the
seller has agreed to deliver goods at his own risk at a place other than
that where they are when sold, he will be liable for any extraordinary
deterioration of the goods. The buyer, however, unless otherwise
agreed, will bear the risk of deterioration in the goods necessarily
incident to the course of transit.** As already indicated, however,**
this provision must be read as being subject to the implied condition
that goods will be fit for the purpose for which they were intended, or
of merchantable quality, not only when shipped or otherwise dis-
patched to the buyer, but also when (hey arrive and for a reasonable
time thereafter to enable the buyer to see whether they are of the right
quality.** In these instances also, therefore, the seller may be at risk
although he has neither property nor possession of the goods.
** Supra, p. 219.
Supra, pp 164-165.
might have occurred even it the wrongful act had never been
240
The second exception is that the doctrine of risk does not affect the
liabilities of either seller or buyer as bailee of the goods of the other
party. If either seller or buyer is a bailee, therefore, he must take
reasonable care of the goods even if the seller has not delivered
because the buyer is late in taking delivery. However, in this respect
mention should be made of the provision in section 37 of the Act that
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, be is liable to the
seller for any loss occasioned by his neglect or refusal to take delivery
(as well as for reasonable storage charges). This may tend to relieve
the seller of some liability for loss or deterioration in such circuin*
stances.
s U.SA. s. 22 (ff)
241
** Britton & Hawktand, Cases and Material on Sale and Security (4th <
1962). at p. 246
s. 2-509.
242
(ii) Frustration*'
See, generally, Cheshire & Fifoot. Law of Contract {6th ed ) pp. 478-500; AnsoD,
rinf of Contract, 22nd <d , pp 4M-479; Trwtel, Law of Contract, pp 547-586.
Sargant & Sons v. Paterson & Co. (1923) 129 L.T. 471 at p 473, per Rowlatt J.
See New Zealand Shipping Co, v. SocUtf des Ateliers et Chantiers de France
[1919] AC. I.
<5 See, e.g , hfatsoukis v. Pnesiman & Co [1915} I K.B 681; Wills A Son v. Cw*-
ningham & Co [1924] 2 K.B. 220; Smyth t. Undsay [1953] 2 All E-R. 1064. Cf-
the situation sphere a licence has to be obtained to deal with certain goods: see
Found Co. V. Hardy & Co I1956J A.C 588.
Sargant & Sons v. Paterson A Co sufwa, note 43
** SGA. s. 11 (3).
< Supra, pp. 44-49.
** Note the tlifficulties as to the meaning of tWs word in this context restilting front
^ decision in Bonvll v. CouptanJ (1876) 1 Q.B.D. 258. as interpreted by AtVin
iJ. m Re iValt 119271 1 Ch. 606: sec jwrfa. pp. 38-39, 48-49.
** Supra, pp 46-47.
244
bears the same meaning as in section 6 of the Act, which suggests that
if even part of the goods has perished (which would include being
stolen) and the contract is not severable, the contract is frustrated.
This is not the only comparison with section 6 of the Act that has
been drawn. One learned writer ** suggests that, in the same way as
section 6, section 7 is only a prima facie rule of construction.* If
this is correct, then there are three possibilities: (a) that the contract
is frustrated if the goods perish; (b) that the seller contracts that they
will not perish, so that he is liable if they do; (c) that the buyer agrees
to accept the possibility that the goods will perish, so that he is still
liable if they do. This interpretation, as also the similar interpretation
of section 6. is debatable.
s* a. Tupra, p. 43.
S'" 11.
. fi9igj 2 K.B-
rf!
. TL.R. 769
I fy A
MonJkUU V. Jack RirHay Ijj. {i93f| 2 KJJ 252 at p 258, p<r Aaqulih hJ.
IT 119131 2 K.n 467 at p 469.
245
There remains the third type of frustration situation, i.e., where the
contract is still capable of being performed but its performance would
involve something different from what was originally promised, as a
result of some unforeseen circumstances. Apart from destruction or
perishing of the goods themselves, there may be other reasons why the
contract of sale cannot be physically performed as originally agreed.
In such instances the doctrine of vis major or act of God may be
applicable.* Thus, if the parties contemplated that the goods would
be loaded on and delivered by a particular ship, the stranding of such
ship, making loading of the goods thereon impossible, will discharge
the contract.*^ Whether the contract is in such terms that its perform-
ance in such a way is a condition precedent is a question of construc-
tion. Under the doctrine of frustration, it may be that the parties are
relieved of their respective obligations only if it is possible to imply
a term to such effect into the contract, i.e., that the contract is to be
discharged if a particular event, viz-, the one which actually occurs,
takes place.** V^ether such a term could be implied was indeed the
very question before the court in Howell v. Coupland.^^ in which, as
earlier seen, a contract to sell a specific quantity of potatoes to be
grown on the sellers field was frustrated when the crop was less than
had been contemplated as being likely to result. In other instances it
may be that whether the change in question frustrates the contract
depends upon the true basis of the doctrine of frustration and its
, where there is a sale of specific goods which are requisitioned by the Govera-
S'"*: Shipton, Anderson & Co. Harrison Bros. & Co. [19151 3 K.B. 676.
with the case cited in the previous note, Ashmore & Son v. Cot & Co
jlW] 1 QB. 436: Comptoir Cofttmerdtd Anversois v. Power, Son A Co. [1920]
l^K B. 868. C/. Tsakiroglou <6 Co. Ltd. v, Noblee Thorl G.m bJf, [1962] A C,
** Supra,
246
s Ocean Tramp Tankers Corp. r. V/O Sovfrachl [1964] 1 All E.R. 161 at p. 166
* Cf. note 64, supra.
Ibid. s. 2 (4).
247
is not severable, then a party who has partially performed his side of
the contract may recover from the other a just and reasonable amount
to cover such performed part of the contract,^'' despite the common
law doctrine of Cutter v. Powell that in entire contracts there must
be entire performance if any payment is to be due from the party for
whose benefit the contract was to be performed.
A.C. 32.
aSfe 2 <=* !
248
PERFORMANCE OF THE CONTRACT
Thus, not only is it difficult to see what, if anything, the last words
of this provision of the 1943 Act involve: it must also be said that the
effect of this provision is, as one writer has put it, capricious. If
goods are not specific (and, in the light of some cases, whether goods
are or are not specific is sometimes both debatable and dependent
upon fine distinctions), if they do not perish but are requisitioned, or
the contract becomes otherwise impossible to perform, then the 1943
Act will apply, despite the doctrine of risk which might otherwise
govern the position of the parties.
t >r. p. Its.
Part IV
REMEDIES
Chapter 9
Their nature
More than once the distinction has been drawn between property
in goods and possession of them. This distinction is of great import-
ance also in relation to the remedies available to a seller in certain
circumstances. Under the Sale of Goods Act,' which follows the
prior common law, a seller who is unpaid within the meaning of the
Act may retain or reacquire possession of the goods he has sold, even
though property in such goods has been transferred to the buyer by
the contract of sale. Where property has not been transferred to the
buyer under the contract, so that the buyer has no title but may only
insist Upon delivery in due performance of the contract, then, under
the Act, the seller is empowered to withhold delivery and retain pos-
session. In other words, in appropriate circumstances, a buyer will
not be entitled to possession of the goods by delivery whether or not
he has previously obtained property in the goods by contract.
251
252
It appears from the Act that in the context of the remedies now
being considered the term seller is not confined, as elsewhere,
to *' a person who sells or agrees to sell goods, * but includes " any
person who is in the position of a seller, as, for instance, an agent of
the seller to whom the bill of lading has been indorsed, or a consignor
or agent who has himself paid, or is directly responsible for, lh
price. Hence a commission agent, or a del credere agent,* or an
agent who has made himself personally liable on the contract of sale,
will be entitled to exercise these remedies for his protection.** But
it was decided in Lyons & Co. v. May & Baker ** that a buyer who
rejected goods, justifiably, after having paid the price, was not
entitled to exercise any lien thereon to ensure the repayment to hitn
of the price.
* S.OJ\. f. 38 (1) (a) (i). By -or otherwbe *' oold seem to be meant tbe
insotvency of the buyer, which b not ipecificaUy meotioned in the section: Cun^
V. Bolckow, Vaughan & Co. (1875) L.R. 10 OuApp. *91 at p. 501, per MeUish LJ-
* Cf. S GJi. I. 41 (I): Infra, see Benjamin on Saie, 8th ed. at p. 835.
I SGjA. t. 62 (1)
* S OJA. t. 33 (2).
1* IbU. p. 135 See, es^t Imperial Bank v. London A St. Katherine'i Doeki CO.
REAL REMEDIES
253
Their scope
Where the property in goods has not passed to the buyer, the
unpaid seller, in addition to his other remedies, has a right of with-
holding delivery similar to, and co*extensive with, his rights of lien
and stoppage in transitu where the property has passed to the buyer.*
This last provision, in particular, gives rise to theoretical, if not
practical, problems. But both provisions invite comment.
It has been pointed out * that the actual provisions of the Act
confuse the legal powers of an unpaid seller with his rights. Under
section 25 (1) of the Sale of Goods Act ** a seller has the power to
transfer title to a bona fide purchaser from him of goods which have
already been sold to someone else to whom property was transferred
under the original sale. That this normally would be a breach of
contract is undeniable. But it will not be a breach of contract if the
seller in question is unpaid within the meaning of the Act, since in
such circumstances he not only has the power but also the right to
resell the goods to someone else. Moreover, in the case of a contract
of sale under which property has not been transferred to the buyer,
the seller, whether paid or unpaid, has the right as well as the power
to sell the goods to someone else, so as effectively to transfer property
to that other person. The only circumstances in which such conduct
Would amount to a breach of contract on the part of the seller are
S Gj\. g. 39 (1)
iKfra, p. 263.
U *
254
What is more, the language of the Act, when dealing with the
rights of an unpaid seller who is still invested with property in the
goods, is so framed as to confuse situations in which the seller,
even without failure to pay on the part of the buyer, is entitled to
1* Supra, pp 84-88. .
has passed to the buyer, Is simply mitisatlng his damages, as be is obUged to oo;
see Infra, pp 298-300
real remedies
255
From what has been said above, therefore, it may be seen that,
although the law grants sellers a right of self*belp in circumstances
in which it may well be thought that prevention of loss to the
seller beforehand is preferable to limiting the seller to a possibly
nugatory remedy in damages against the buyer after the event, such
right of self-help is rigidly controlled by the law. That this is so
ts home out by an examination of the conditions which must be
satisfied before such self-help is available and the conditions which
must be fulfilled by a seller in availing himself of such self-help. Here,
as in other branches of the law, it may be said that the law recognises
the need for, but leans against, self-help as a remedy.
** Hence the
'eaion p ^
In the ^
Ue corre
exclusion
proTtsIoni . . . ,
>
256
and the Unifonn Sales Act and empower the selfcr to exercise real
remedies not only where the buyer "fails to make a payment due
on or before delivery but also where the buyer wrongfully rejects
or revokes acceptance of goods ... or repudiates with respect
to a part or the whole." In such instances, with respect to any goods
directly affected and, if the breach is of the whole contract (as
opposed to with respect to an instalment) " then also with respect to
the whole undeliverrf balance, the aggrieved seller may (a) withhold
delivery of such goods; (b) stop delivery by any bailee . . . (d) resell
and recover damages. . . Such a seller may also pursue other
remedies. In addition, where the buyer is insolvent, the seller may
refuse deliveiy except for cash, including payment for all goods
previously delivered under the contract, and stop delivery.** In some
instances a seller may even reclaim goods, subject to the rights of a
buyer in the ordinary course (/>., a bona 6de purchaser from the
insolvent buyer) or a 1/ea creditor.*
Its natore
From what was said in the previous section it is clear that a seller
who still retains property may exercise over goods in his possession
a nght of withholding delivery similar to and co-extensive with his
oght of lien where property has passed.** This " quasi-lien, as
enjamin on Sale calls it,* applies in the same circumstances and
not exercKable by . . . .
storekeeper. Sed . . . / . .
i*a * P 221.
: Lensbolum S Co.
SI t * A - , Atkin U
U' ^ra]i:252.
Moulton^* Ftetcher-
p.s,a. 9
256
and the Uniform Sales Act and empowers the seller to exercise real
remedies not only where the buyer " fails to make a payment due
on or before delivery but also where the buyer wrongfully rejects
or revokes acceptance of goods ... or repudiates with respect
to a part or the whole. In such instances, with respect to any goods
directly affected and, if the breach is of the whole contract (as
opposed to with respect to an instalment) then also with respect to
the whole imdelivered balance, the aggrieved seller may (a) withhold
delivery of such goods; (b) slop delivery by any bailee . . . (d) resell
and recover damages. . . . Such a seller may also pursue other
remedies. In addition, where the buyer is insolvent, the seller may
refuse delivery except for cash, including payment for all goods
previously delivered under the contract, and stop delivery.** In some
instances a seller may even reclaim goods, subject to the rights of a
buyer in the ordinary course (Le.. a bona fide purchaser from the
insolvent buyer) or a lien creditor.**
u U CC I. 2-702 (1).
257
From what was said in the previous section it is clear that a seller
who still retains property may exercise over goods in his possession
a right of withholding delivery similar to and co-extensive with his
right of lien where property has passed.** This quasi-lien. as
Benjamin on Sale calls it,** applies in the same circumstances and
particular?
so T> f... ..
Moulton LJ.
>* Nippon Yusen Kaisha t. Ramfiban Serovgee [19381 A C 429 at p. 445, per Lord
Wright.
*8 At p. 847.
F.S G. 9
258
When it arises
*0 See, e-g; Poulton <t Son y. AngltyAmeriettn Oil Co. Ltd. (1910) 27 T.L.R. 38, 21o,
Dublin City Distillery Ltd. y. Doherty 119141 A.C 823 at pp. 827-828. per Lord
Aikinsoa.
Supra, p. 252.
has been pointed out/* the agreement between the parties may be that
the buyer is allowed credit but is not entitled to immediate delivery,
i.e.t that the stipulation as to credit is designed to give the buyer time
to pay, not to allow him possession before payment. Even, therefore,
if there is a stipulation as to credit, this may not disentitle the seller
to retain possession until the price is paid. The second situation
envisaged by the Act is where the goods have been sold on credit,
but the term of credit has expired. Under this the seller may retain
goods which he has kept in his possession, whether or not the
agreement as to credit entitled him to keep the goods in his posses*
sion (though he may be liable to the buyer if he was not so entitled),
when the time for payment, which was postponed by agreement
between the parties, has expired. It must be noted therefore that,
whether or not the agreement stipulated for immediate delivery but
postponed payment, the seller will have his lien (or quasi-lien) if he
still has the goods. The third instance is where the buyer becomes
insolvent. A person is deemed to be insolvent within the meaning
of the Sale of Goods Act who either has ceased to pay his debts in
the ordinary course of business, or cannot pay his debts as they
become due, whether he has committed an act of bankruptcy or
not. The tight to retain goods where the buyer becomes insolvent
arises whether or not the sale was one with a stipulation as to credit.
Hence a seller who has sold goods on credit may still refuse to deliver
them. He cannot be compelled to deliver, with the result that he would
have to prove in the buyers bankruptcy for the unpaid price, a remedy
which may well turn out to be worthless or less valuable than dealing
with the goods themselves.
The above provisions apply in the normal case, i.e., where there
is an entire, indivisible contract of sale and the unpaid seller is in
possession as a seller at the material time. Two special situations
must be considered.
(a) Seller who is agent or bailee. Under the Act, the seller may
exercise his right of lien (and presumably also his quasi-lien) not-
withstanding that he is in possession of the goods as agent or bailee
for the buyer.** At common law it seems to have been held that once
the seller changed the character of his possession by attorning to the
buyer, becoming the buyers agent or bailee, the seller waived his lien.
That this may still be so is undeniable. It will depend upon the
S GA. $. 62 (3).
circumstances. But before the Act even a waived lien would revive
if the buyer became insolvent.^ It now appears that even if the
buyer is solvent the unpaid seller may exercise his lien where he is
the buyer's agent or bailee in the same situations as may an unpaid
seller who Is in possession as a seller.
(h) Part delivery. The common law rule, set out in the speech
of Lord Blackburn in the leading pre-1893 case of Kemp v. Falk**
was that delivery of part of the goods was prima facie delivery of that
part, and only that part. Proof was necessary that it was a constructive
delivery of the whole of the goods so as to oust the application of the
unpaid sellers lien. Under the Act, the rule is that 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. Thus, if the contract is an instalment contract, the seller's
lien will not necessarily be lost because he has delivered part of the
goods. The seller may exercise his lien over the rest. It is a question
of construction of the contract in the light of all the surrouncling
circumstances. If the contract is severable, however, then different
considerations may apply. In such cases delivery of one instalment,
/.ft, the goods referable to one part of the contract, will result in the
loss of the sellers lien as regards that instalment. But the question
arises whether such delivery also destrojs the sellers lien In respect
of the rest of the goods, which have not yet left his possession-
Tbe answer would seem to be that the seller cannot exercise a lien
over undelivered instalments in respect of non*poyment of the
of a delivered instalment, since that would have the effect of making
the lien general, not particular.** But if the non-payment amounts
to n repudiation of the contract, the seller can retain possesdon of
the undeltvrred instalments, not on the ground of lien, hut because
he is no longer obliged to deliver. Likewise, non-delivery of sub-
sequent instalments is permitted if the buyer, after one Instalment
has Icen delivered, becomes insolvent.** However, even if the buyer
is ln*.ol\ent. the seller must delisTf goods for which he has received
* 7 51 F
SOA, * 41.
A* S- .-N pf
. r- e..ti tirniU'S
261
How it is lost
Under section 43 (1) the sellers lien is lost (a) when he delivers
the goods to a carrier or other bailee 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 waiver thereof.
S G.A. s, 43 (2).
Infra, pp 266-273.
262
At p. 849.
* Supra, p. J25. ^
* PouUon & Son v. Anglo-American OU Co. Ltd. (1910) 27 T.L.R. 38 at p. 39, p<
Chaonell J.
263
buyer has paid the purchase price or is otherwise not subjected to the
unpaid sellers lien. In such circumstances the seller cannot exercise
his right of lien as against the sub-purchaser.* This is exemplified
(but not, it is suggested, exhaustively defined) by the provisions of
section 47 of the Act by virtue of which the unpaid sellers right
of lien ... is not affected by any sale or other disposition of the goods
which the buyer may have made, unless the seller has assented
thereto. The difference between estoppel amounting to implied
waiver and the provisions of section 47 lies in the fact that estoppel
requires signification of the sellers assent to the sub-purchaser (or
pledgee, etc.), whereas, under section 47. it is assent to the original
buyer that is involved. It is necessary, therefore, to consider sepa-
rately, the meaning and effects of section 47, particularly in view of
the contents of the proviso to that section.
* See, e g., Knights v. Wiffen (I870> L.R. 5 Q B 660. But mere knowledge of a sub-
contract will not amount to an estoppel: Povlion Son v. Anglo-American Oil
Mordaunt Bros. v. British OR & Cake A/flZi Ltd. [J9101 2KB 502 at pp. 506, 507.
Mount Ltd. v. lay & Jay {Provblons) Co. Ltd. [1960] I Q B 159 at pp. 167-
264
Ti Factors Act, 1889, s. 1 (4). For a brief account of bills of lading, delivery orders,
warrants and certificates see Benjamin on Sale, pp. 857-S5S
T* Note that s. 9 of the Factors Act, 1889, is also reproduced In toto with some slight
modifications, in s. 25 (2) of the Sate of Goods Act, 1893: supra, pp. 12J-128
265
the transfer by the buyer to a bona fide purchaser from him shall
have the same effect as the transfer of a bill of lading.^ Under section
9 the possession of the document of title must have been obtained
with the consent of the seller: under section 47 it must have been
lawfully transferred, i.e., obtaining by larceny by a trick will not
sufBce, though the consent of the seller is irrelevant. Under section
9 of the 1889 Act the sub-purchaser must take without notice of any
lien over the goods; under the Sale of Goods Act, section 47, proviso,
notice is immaterial, since notice is not inconsistent with good faith.
A thing is deemed to be done in good faith, under the Sale of Goods
Act,^* when it is in fact done honestly, whether it be done negligently
or not.
Thus under the Sale of Goods Act and the Factors Act, buyers in
possession of documents of title (as well as buyers in possession of
goods as buyers, and buyers who are in the position of mercantile
agents apart from their treatment as such by the Factors Act where
they are in possession as buyers) have a power of transferring property
to innocent purchasers from them, free from any lien which may have
been exercisable over the goods. To determine whether a disposition
Is effective under the proviso to section 47, however, it must be decided
whether the document in question, if it is not within one of the speci-
fied categories, is a document of title to goods within the Sale of Goods
and Factors Acts, and whether the transfer fulfils the conditions laid
down in the relevant provisions. Thus, whereas delivery orders clearly
come within the Acts. delivery notes may not do so/* Even if the
document of title is one which Is created by the seller the original
owner) himself, as contrasted with a document created by someone
else by means of which property and possession are transferred,
the document will come within the Acts/* Under the proviso to
section 47, it would appear from the judgment of Salmon J. in the
Mount case ** that the very same document of title which the seller
creates or puts into circulation must be transferred by the buyer to
the sub-purchaser : but, where the sub-purchaser is relying on section
25 (2) of the Sale of Goods Act section 9 of the Factors Act),
the document of title need not be the same as was created or put
Which, by the Bills of Lading Act, 1855, means that property passes by negotiation
and endorsement.
S.GJi. I. 62 (2).
Laurie d Morewood v Dudin & Sons 11925] 2 K.B. 383 ! [1926] 1 K.B 223.
into the buyers hands by the seller. This ortlGcial result stems from
the rigorous language of section 47 which was plainly indicative
of such an approach. The language of section 25 (2) and section 9
was said to be less rigorous and to permit a more relaxed
interpretation.
Its effects
3. Stoppagb in TkANsrru
T9 s GA. s. 48 (1).
so S.GA. s. 48 a).
,.fi <r.A. * ^
STOPPAGE IN TRANSITU
267
since it entitles the unpaid seller to interfere not only with the posses-
sion of goods which are in the hands of someone who is not his servant
or agent but also with the property in goods vested in another. In
view of the importance of this right it is curious that various explana-
tions have been given for its origins and basis. This expansion of the
ordinary rights of a vendor has been said to be founded on " strict
justice, an equitable principle, and the custom of merchants,
later engrafted onto the common law and equity It has been said
to be based on the idea that one man's goods shall not be applied
to the payment of another man's debt, i.e., that a buyer who is
insolvent must not be allowed possession of goods he has bought
with the result that they will become part of his general property
available to meet the demands of all his creditors, not simply the
unpaid seller. Yet, particularly in the light of the comment that the
doctrine of stoppage in transitu is always construed favourably to
unpaid vendors,* it might be said that this right unduly favours
one creditor of a bankrupt or insolvent to the exclusion of others,
and is in sharp contrast to the general principles of bankruptcy law
which seek to prevent preference of one creditor beyond the rest.
It is not surprising therefore that Brett LJ. in Kendal v. Marshall
Stevens & Co.** denied that the doctrine was founded on an ethical
principle, any more than it was founded on contract between the
parties. In a sense it may be said to be an extremely unethical
principle. Perhaps as a consequence of what may be termed
its general commercial injustice, the right of stoppage in transitu
*8 Kendal y. Manhall Stevens & Co. (1883) 11 Q3 D. 356 at p 369, per Bowen LJ.
** . Carrulhers (1841) 8 M. & W. 321 at p. 331, per Gumey B.
Ibid, at p. 334, per Parke B.
K^dal v.^Marshall Stevens i Co., supra at pp. 364, per Brett LJ. ; 368, per
* 4 ' . '
268
has fallen somewhat into disuse, if not disfavour, and the growth of the
system of payment for goods by bankers confirmed credits has
rendered this doctrine more or less obsolete. Such a method of ensur-
ing payment for goods, before their delivery, makes it far less necessary
to protect an unpaid seller who has parted with possession of goods
only to discover that the buyer is insolvent.
jrra. rr IT?.
M (ISO) s M. A W. n at p. 333.
t pp.
STOPPAGE IN TRANSITU
269
agent in that behalf, takes delivery of them from such carrier or other
bailee. . . These provisions must be construed consistently.
Hence, it may be that, for the purpose of determining whether the
seller has fulBlIed his obligation to deliver the goods, section 32 (1)
applies, i.e., a constructive delivery suffices, whereas for the purposes
of deciding whether the seller can exercise his right of stoppage in
transitu, section 45 (1) applies, there must be an actual delivery.
If that is so, then the only question, in this context, is whether, as
Cairns LJ. put it in Schotsmans v. Lancs. & Yorks. the goods
are in the hands of a middleman. According to Brett L J. in Kendal v.
Marshall Stevens & Co.* goods appropriated to the contract by
the vendor and delivered by him to a carrier to be transmitted to the
buyer are in the constructive possession of the buyer, but they are
in the course of transit and the right of stoppage may be exercised.
This was denied by Bowen LJ. in the same case.' To Bowen LJ. the
transit was at an end only where the buyer took actual possession
of the goods or where someone took possession of the goods from
the carrier on the buyers behalf, which was an instance of con-
structive possession. The carriers possession, on the other hand, was
independent of both vendor and buyer.
The law prior to the 1893 Act is well stated and summarised
in two leading decisions in the Court of Appeal, Kendal v. Marshall
Stevens & Co.* and Bethell v. Clarke In the light of the provisions of
the Act it is perhaps unnecessaiy to do more than refer to these
cases, since the Act would now seem to give statutory effect to these
and other decisions.
It has been seen that, under the Act, while the goods are in the
hands of an independent carrier (not the agent of either party) they
are in the course of transit. The question often arises, therefore,
whether the goods are still in the carriers bands. The answer seems
to depend upon whether (a) the goods are still in the hands of some
carrier or depositary awaiting delivery to or receipt by the buyer or
his agent, even where there has been a change of intermediary or
direction,* as long as such change has not resulted from the interven-
tion of the buyer starting the goods on a ** different and new voyage, *
* Ibid, at p. 369.
* Supra.
* See Bethell v. Clark, supra; Lyons r. BoSmmz (1890) 15 App.Cas. 391 ; Kemp v.
tsmay, Imrte & Co. (1909) 100 L.T, 996.
* t-x p. Golding, DavU & Co. Ltd. (1880) 13 OiJJ. 628 at p. 637, per Cotton LJ.
270
or (b) the goods have reached a place where their further destinatioii
is to be determined by the buyer or his agents.
If goods are rejected by the buyer, and the carrier or other bailee
continues m possession of them, then, even if the seller has refused
to have them back (as occurred in Bolton v. Lancs. & Yorks.
according to the Act, the transit is not deemed to be at an end.
It has been suggested that this may conflict with the provisions of
section 45 (3), in that the carrier may have told the buyer that he
holds the goods on his behalf, so as to make section 45 (3) applicable,
before the buyer has rejected them, so as to make section 45 (4)
applicable. According to Willes J. in the Bolton case,* to divest the
(1914) SI LJJC.B 360: see also Flischkt Sc Sons v. Allison Bros. Ltd. U936] 2
E.R. 1009.
Supra. .
10 See also the ludements of Lord Esher MJL and Lopes LJ. in Befhell v. ClarK,
271
vendor of his right to slop the goods in transitu, the buyer must so
assent to the receipt of the goods in performance of the contract as to
show that he has taken actual or constructive possession of them; and
that cannot be so long as he repudiates them.
When it is lost
S GA. s. 45 (S:
SOA 4SC7).
Supra, pp. 26()-261.
272
STOPPAGE IN TOANSITU
273
LiA V ^ liability to pay the carriers expenses see Booth SS. Co.
kOA. I 48 (\)
ro'o> (O:
274
The distinction has earlier been drawn between the right to resell
the goods and the power to resell them.** The difference lies not in
the effect of such a resale as regards a third party buying from the
seller (since whether the seller is exercising his right or his power,
such a third party may acquire title in the goods to the exclusion of
the original buyer), but in the consequences as between the seller and
the original buyer. Where the seller has the right to resell, he may
commit no breach of contract by so doing : where he has only a power
of resale, then his conduct in reselling will always amount to a
breach of contract.*^
ir Liabilities in lort may also arfae, fcirspectiw of contract, if the seifer ha* psrtfa
with property and has no right under statute to resell, / e the buyer Is not in
default.
275
his contract of sale with the original buyer/ Such right may be
exercised by him whether or not he is unpaid, whether or not he has
exercised his quasi-lien or has stopped the goods in transitu (if he is
an unpaid seller), and whether or not he has possession of the goods.
An example of resale by a seller who has property but is out of
possession would be where the buyer, having received the goods, has
repudiated the contract. The seller would then be entitled to treat the
contract as at an end and resell the goods.**^ Indeed, if the repudiation
is wrongful, amounting to a breach of contract, the seller may be
obliged to resell the goods in order to mitigate the damages suffered
by him as a result of the buyers wroo^ul repudiation. However, it
must be clear that the buyer has repudiated the contract: as has been
seen earlier,** this is not always an easy issue to determine. Failure
to pay the price may not be repudiation particularly if only part
delivery has taken place and only part payment is involved. It must
be noted, however, that if the seller has delivered the goods, without
transferring property in them, and retakes the goods in order to resell
them, this will operate as a rescission of the contract by the seller.
As Swift J. said in Attorney-General v. Pritchard,** in the case of an
agreement for the sale of goods the owner cannot retake them and at
the same lime sue for their price.
Under the Sale of Goods Act the seller may resell the goods where
he has expressly reserved the right of resale in case the buyer should
make default.** The seller also has a right of resale *' where the goods
^ of a perishable nature, or where the unpaid seller gives notice to
the buyer of his intention to resell and the buyer does not within a
reasonable time pay or tender the price. *' In all these instances
under the Act the seller must be an unpaid seller as defined in the Act.
th below, different results follow depending upon whether
limits set out in the Act. and only where the unpaid
c Cl has transferred property to the buyer, can the seller exercise a
statutory right of resale.
The P--. V 7. . , ,
276
M Sachs r. htOdos ll>l 2 K.B- 23; hfunro r. Winmolt {19491 1 K.B. 295.
* t. 2-705.
** I. 2-706 (4).
and is selling goods which are in his possession without any legal right
to do so. Apart from such situations a seller may resell where he is
unpaid and is seeking to protect himself from loss by the buyers
default. The effects of such a resale may depend upon whether the
seller has or has not still got property in the goods.
The provisions of the Sale of Goods Act only apply where the
seller has transferred property to the buyer. If property has not passed,
not only can the seller effectively give title to the second buyer, he
will also have an action for damages arising from the buyers default,
f.e., his failure to pay the price on the agreed date, or his neglect or
refusal to take delivery, under section 37 of the Act,"* arising from his
inability to pay the price. Such a resale will not operate to rescind the
contract unless the prior refusal or neglect of the buyer could be said
to amount to a repudiation. But this docs not mean that the seller
can sue for the price: for. as he has resold, he cannot deliver the
goods, and if he is not ready, wiUing and able to deliver he cannot
recover the price. He can only sue for damages in respect of the loss
occasioned to him by his having to resell.
Where the unpaid seller has transferred property to the buyer, his
right to resell depends exclusively upon the Act. It has already been
seen under what conditions this right is exercisable. It remains to
consider what effect its exercise has upon the rights of the parties to
the original contract, as well as upon third parties.
** Supra, p 221.
* S.OA. 8 43 (4).
* [1949J 2 K.B. 765.
278
** In the New Zealand case of Commission Cor Sates (ITastlngs) Ltd. v. {iPST}
N^.L.R. 144 it was held that a deposit paid by a buyer was forfeited when he
repudiated the contract by returning the goods bought. But the seller, baYing
parted with possession, could not reseD as an unpaid teller.
0 S GA. . 43 (1).
X SGA. . 48 (2).
Hence, tays Atiyah. op. eti , pp 179-180, there b not only an unqualified right
resile, by the eterdse of which the tellef retains any profit he males : there b also
a qualified right of male, not pennitling the retention of profit. But thb b what
the Act expressly recognises when it talks of a right of sale as limited by tWs
Act "r S.Ow\. t. 39 0) (e).
279
the buyer. In that case the buyer did not claim the profit made by the
seller on the resale of the motor-boat originally ordered by the buyer
(property in which had passed to the buyer). Although profit had been
made by the seller, the buyer claimed only the return of the deposit
given by him to the seller at the time of making the contract. This it
was held he was entitled to recover.
*! H-9S* * f5).
tl ' 2-706 (6).
Chapter 10
Some of the rights of the seller where the buyer is in breach of his
duty to pay the price have been considered in the previous chapter.
There it was shown that such rights, which arise only where one
particular duly has been broken by the buyer or remains unfulfilled
through his neglect, involve the exercise of what have been called
real remedies, since they directly affect the goods themselves. It is
necessary now to point out that, apart from such remedies, the seller
also has rights of action against the buyer personally to recover sums
of money representing what he has lost. Such rights of action may
be termed personal remedies, since they can only be exercised
against and in respect of the buyer (or those who represent him,
his executors). No third party who is a stranger to the contract of
sale of goods can be sued in respect of the buyers wrongful conduct.*
This contrasts sharply with the sellers right to retain or regain
possession of the goods even where the buyer has resold them, though,
admittedly, such right is qualified by limitations which have been
examined and discussed.
The sellers personal remedies arise from the fact that the
conduct on the part of the buyer which gives rise to their exercise
is a breach of contract, which, at common law, apart from the Act,
entitles the seller to sue in respect of any damage suffered by liim as
a consequence. Such remedies are the normal corollary of a breach
of contract at common law: the sellers real remedies, though per-
mitted at common law before the Act, stem from the law merchant,
particularly the law relating to sale of goods, and not from the
general law of contract.
The real remedies of the seller can only be exercised when the
buyer has not paid the price of the goods, so that the seller is an
1 Unless the burden of & coatract of sale may be assigned Sec supra, p. 1-
note 92, as to assignment of contract) of sale.
280
281
unpaid seller within the meaning of the Act (or a person treated as
such for this purpose *). The personal remedies of the seller, however,
are not restricted in their exercise to situations in which the buyer
has been guilty of non-payment of the price. As will be seen, over
and above the actions for the price and for damages which the seller
may bring where there has been non-payment or non-acceptance
accompanied by non-payment and by virtue of the provisions of
section 37 of the Act,* if not under the general principles of the
common law, the seller has a right of action for damages for loss
occasioned by the buyers neglect or refusal to take delivery of the
pods. What is curious about this provision of the Act is not that it
is contained in the Act but that it comes in Part HI, i.e., under the
heading of Performance of the Contract rather than in Part V,
e., under the heading of Actions for Breach of the Contract.
Different duties
pa ,T^ buyer, i.e., to accept and pay for the goods, have
earner been considered.^ The duty to pay the price is remediable by
tn of this duty can also entitle the seller
the language of
by the'senerof'hof' bo oitorcise
282
Since lime can be made of the essence **; S G A. lO (1)5 supra, pp 2CO-20I.
* ie., by comract, not under any provisions of the Act: cf. supra, pp. I". 180, 2CU
, ... . by the
' . . . , . , . There
. . ^ . . . I . ' 'effer of
credit which may give rise to an action lof damages agauisi luui; joi 11*6
thus raised see Trans Trust SJJiJj. v. Danublan Trading Co. Ltd. 119521 2
Q B. 297.
283
First, he may sue for the price of the goods, under conditions laid
down in the Act. Secondly, again under conditions laid down in the
Act, and in accordance with the provisions of the Act as regards the
calculation of damages, he may sue for damages for non-acceptance.
When maintainable
284
i S.G.A. 5. 49 (2).
Supra, p. 23.
18 Ibid, at p. 437.
285
does not apply to contracts for the sale of goods. The seller cannot
perform the contract, regardless of the buyers conduct, and sue
for what he is entitled to under such contract. He must treat the
repudiation as a breach and claim damages.
Not only the price may be sought by the seller. By virtue of the
Law Reform (Miscellaneous Provisions) Act, 1934,** interest on the
price may be awarded to the seller. The basis for such a claim would
appear to be that the seller has been deprived of the use of a definite
of money on account of the buyers failure to pay the price.**
No other incidental damages may be claimed in such an action for
the price. As seen earlier, for other loss it may be necessary for the
Mller to bring an action for breach of contract, te., for damages at
alleging a breach of condition or a default under section 37 of
e Act. Under the Uniform Commercial Code,** the seller who sues
.or the price, where such an action can be brou^t, can also recover
incidental damages, including any commercially reasonable charges,
expenses or commissions incurred in stopping delivery, in the trans-
portation, care and custody of goods after the buyers breach, in
connection with return or irsale of the goods or otherwise resulting
** PP- ^231.
286
SELLERS PERSONAL REMEDIES FOR BREACH
from such breach. ** The situation under the Sale of Goods Act
may well be the same if the seller is suing after having resold the
goods under provisions discussed in the previous chapter. But if he
has not resold, because he could not resell, and is simply pursuing his
personal remedies against the buyer, then it may well be difficult for
the seller to recover more than the actual price, even where he has
incurred additional loss.
Foreign money
as See the cases and statutes cited in Oialmers, SaU o] Goods, l4th ed , p. 145,
(cHA). Payment by biU of exdiange, not curri^, depends upon the fenns oi
contract of sale : Chalmers, op pp. 145-146.
s VtUndaU v. Pankhurst, jyrtsht & Co. 0923) 39 T L.R 628; v. TyUkliyon
II924I 2 K.B. 166; Madthlne Vionwt A Cle v. Wills [1940] 1 K.B. 72: e/. Cum-
mings V, London Bullion Co. Ltd. [1952] I Q.B. 327. For the different effect ot
tender of payment by the debtor after Uie action was commenced sec SodHi oes
Hotels le Totnjuet Poris-Plages V. Cummings (1922] 1KB. 451. ^
*T East India Trading Co. Ine, v, Carmel Exporters & Importers Ltd. [1952] 2 Q "
439.
* S.OA, s. 50 (1). Where foreign currency b mvolved the same principles as to
rates of exchange apply as in the case of an action for the price. See the csxs
cited in note 26, supra.
287
Even where property has not passed and the buyer has neglected
or refused to accept and pay for the goods, an action for damages for
non-acceptance may not be maintainable. This depends upon whether
the parties have fixed in advance the damages which are payable to
the seller in such an eventuality. The difficulty is to differentiate
liquidated damages, i.e., a sum agreed between the parties as
representing the loss to the seller arising from the buyers default,
from a " penalty, j.c., a sum which is intended by the parties to
enforce fulfilment of the contract by the buyer. It is unnecessary in
the present context to consider in detail the general law relating to
penalties in relation to breach of contract.^* Suffice it to say that the
test is whether the amount stipulated in the contract as payable is a
genuine pre-estimate of damages suffered by the seller or a payment
w ich is designed to operate In terrorem. Nothing necessarily turns
the language used in the contract itself. If the contract speaks
0 liquidated damages it would still be possible to construe it as
volvmg a penalty: and vice versa. The value of the anlcle involved,
focf parties have been held to be irrelevant
ors. So, too, in t>iestal v. Stevenson*^ was the fact that two
rln!!!"* ^ contract were involved. In that case, where the
** Sttvan Jjj V r-
288
Measure of damages
For ^ne pr^cjplrt and their eapmiiion in the cases see Cheshire and nfoot.
T .A'**"- rP. 48S-503, Treiiel, cp. rf/., pp. 589-606.
fiS^2 ^
290
decisions.
Infra, pp 32W31.
In view of the Resale Prices Act. 1964 (fupra, p. 30), it may be that this is do longe
a source of difficulty.
292
Ltd.^* viz. ; A market for this purpose means more than a particular
place. It means also a particular level of trade.
The tendency has been, therefore, to give an extended rather than
a restrictive meaning to the expressions market and available
market. In Thompson v. Robinson (Gunmakers) Ltd.,^^ Upjohn I.,
who felt that the matter was not res integra, but in any event
arrived at his conclusion without having to apply the market test, said
obiter that an available market' merely means that the situation
in the particular trade in the particular area was such that the
particular goods could freely be sold and that there was a demand
sufficient to absorb readily all the goods that were thrust on it, so that
if a purchaser defaulted, the goods in question could readily be
disposed of. In the later case of Charier v. Sullivan, Jenkins LJ-
doubted if the definition given by James I..J. in the Dunkirk Colliery
case (by which Upjohn J. considered himself bound) should ^
literally applied as an exhaustive definition of an available market in
all cases. On the other hand be did not feel that the definition adopted
by Upjohn J., and quoted above, was entirely satisfactory. All that
he would say, however, was the somewhat negative proposition that
there was probably not an available market for particular goods ta
the sense relevant to the section of the Sale of Goods Act that was
involved in the case before the court, unless the goods are available
for sale in the market at the market or current price in the sense of
the price . . . fixed by reference to supply and demand as the price at
which a purchaser for the goods can be found, be it greater or less
than, or equal to, the contract price." Hence, where goods could only
be sold at a fixed retail price, the section in question could not
apply, since that section seemed to postulate that in the cases to
which it applies there will, or may be a difference between the
contract price and the market or current price. Sellers LJ.,^ who
had regarded the definition of Upjohn J. as very acceptable in an
earlier case at first instance, also refrained from attempting
personal definition in Charter v, Stdlivan, and said that a market could
exist in a variety of circumstances and apart, of necessity, from a
defined place. But, he went on to say, ** since its trading has to serve
as a factor in measuring the damages, it must nt least be a market m
which the seller could, if he wished, sell the goods left on his hands."
*T tbU. ai p 133-
In both these cases the prima facie rule contained in section 50 (3)
of Ac Act was not applied because it was held that there was no
available market. This was because in Thompson v. Robinson
(punmakers) Ltd?^ the supply of cars of the type involved exceeded
the demand for such cars, there being a fixed retail price for such cars,
i.e., the seller could not go to any market (however defined) and
dispose of the car not accepted by the buyer, while in Charter v.
Sullivan?^ where the buyer also refused to accept a vehicle, there was
an excess of demand over supply, but it was nonetheless held that
there was no available market since the cars were sold at a fixed retail
price. Jenkins LJ.* said in this respect that the relevant provision of
the Act " seems ... to postulate a market in which there is a market
or current price, he., a price fixed by supply or demand at which (be it
more or less than the contract price) a purchaser can be found. If the
only price at which a car can be sold is the fixed retail price and no
purchaser can be found at that price. I do not think that it can reason-
ably be said that there is a market or current price or that there is
an available market.
[1955] Ch. 177: see Charier v Sullivan 11957] 2 Q B. 117 at p 126. per Jenkins LJ.
294
sellers personal remedies for breach
It must be noted, in this connection, that the Act specifies that the
time for ascertaining the market price is the date of acceptance under
the contract, or, if no such date is fixed, the date of the buyers
default. In cases concerned with the similar language of the section
which governs the buyers action for damages for non-delivery on the
l-f.. S G.A. . 50 (2).
*s [J9541 1 Ll<3yd$ Rep. 65, following Jamci v. Moolla Dawood [1916] A C. WJ.
case of shares. . j
Note that resale by the seller is a relevant factor in assessing his damages,
resale, or projected resale, by the buyer may not be relevant to the
his damages: Infra, pp. 318, 326 Should the two parlies be treated ex
the same?
295
^ <. sc A
3 K.B. 535
693,
s. 51 (3): Infra, p. 328. See Miaett v. Van Ileek & Co. fl920]
: [1921] 2KB 369; MelaehHno v. Nlckoll & Knlghl (1920] 1 K.6.
MeJachrlno v. Nlckoll & Knight, supra. For the situation where delivery is post-
poned at the request of one of the parties and there is subsequent default by the
3 KB 0*73) LJl. 10 C.P. 598; Hanley v Hymans [1920]
296
From what has been said earlier, it is evident that there may be
cases in which the market test is inapplicable, because there is no
available market, within the meaning of that expression. It has also
been suggested, in Thompson v. Robinson iCimmakers) Lid.''* and
Charter v, SulUvanP that the market test is inapplicable where its
strict application would lead to injustice, because it would produce an
inaccurate assessment of the damages suffered by the seller. In such
instances, therefore, the court is thrown back on the general principle
stated in section 50 (2) of the Act, namely, ** the estimated loss directly
and naturally resulting in the ordtnaiy course of events, from the
buyers breach of contract. The court must therefore assess the
loss to the seller as best it can. Le.. on the basis of loss of profit.*
If the goods have in fact been resold, despite the absence of a market,
it may be that the resale price is taken as evidence of a notional
market price, provided that the terms of the resale are substantially
the same as those of the origioal contract.
The problem that has most exercised the courts, however, is how
to assess damages where there is no market, but the seller has resold
the goods in question, and seeks to argue that, but for the buyers
default he could have sold two lots of goods, one to the original buyer
and another to the buyer fo whom he sold the contract goods when
TP Tredegar Iron <5 CocI Co. Ud. . Hawthorn Bros. (1902) 18 TX.R. 716. ^
also Sudan Import Co, Ltd. 't. S G. de Compensation (I958J 1 Lloyd i Rep. jiy-
Ti (1895) 73 L.T. 628 at pp. 629-630.
fJ [19551 Oj. 177,
TI [19371 2 Q B. 117. .
,4 . .... . -
297
Ibid, at p 468.
298
Mitigation of damages
Supra.
*0 Supra. _ ^
See aUo Trans Trust L. t. Danublan Trading Co. Ltd, 11952] 2 0 B. 297,
where an action for non^cceptance would Iutc produced only nominal damage*.
of lo of profit, cf. Ian Stack Ltd. *r. Baker Bosley Ltd [1958] 2 Q.B 130. On the
grant of Indemnity c/. Infra, p. 327. io relation to action* by buyers.
299
Lord Haldane referred to the duty imposed on a plaintiff (in that case it
was the buyer but the principle is equally applicable to sellers) of
taking all reasonable steps to mitigate the loss consequent upon the
breach. This duty " debars him from claiming in respect of any
part of the damage which is due to his neglect to take such steps.
Even if he is under no duty to act, any action he has taken, as a
prudent man of business, which has diminished his loss will be taken
into account so far as concerns its effect in diminution of his loss.
But the subsequent transaction, if it is to be taken into account, must
be one arising out of the consequences of the breach, and in the
ordinary course of business.**
** Cf. Roth &. Co. V. Taysen, Townsend &. Co. (1895) 73 L.T. 628.
K.B. 5t0
300
4. Misrepresentation, etc.
Innocent misrepresentation
s See Cheshire and Fifoot, Lav / Contraet, 6th ed , pp. 187-224, 226-237, 24I-Z'3.
253-260; Anson, Principles of the Law of Contract, 22nd ed., pp. 207-216,
243-297; Treitel, Law of Contract, pp. 1S6-W. 255-263.
Ot fraud by the buyer see Benfamln on Sale, 8lh ed., pp. 432-451.
MISREPREStNTATION. ETC.
301
be entitled to rescind the contract and sue for an indemnity, but not
damages.
The better view** would seem to be (hat it has, although this has
been denied by a New Zealand court in Riddiford v. Warren.** In
cases concerning a buyer's right to rescind (which will be more fully
considered in the next chapter) it seems to have been accepted that
this equitable right still continues to be available, though, as will be
seen, there Is some doubt about the limits of its availability. More-
over. in Goldsmith v. Rodger** in 1962, the Court of Appeal seem
to be clearly of the opinion that a seller who had been induced to
contract to sell a motor fishing boat at a lower price because of the
buyers innocent misrepresentation as to defects in its keel was able
to claim rescission of the contract. Donovan LJ. said, at one point
in his j'udgment * ; The notice of appeal goes on to surest that an
innocent misrepresentation by a purchaser would not j'ustify rescission
On th- - '
Pr Atkin LJ.
pp 331-332. ,,
302
> But this does not mean that rescission b impossible if the goods have detenorated
before tbe truth is discovered,
s 11905] 1 C3i. 326
MISREPRESENTATION, ETC.
303
Infra, pp 331-332.
C/. the effect of acceptance by the buyer on his right to rescind: Infra, pp 309-310
304
N^ligent misrepresentafian
The discussion thus far has been concerned with the effects of
fraudulent or innocent misrepresentation. It is possible, however, for
a party to be neither fraudulent nor wholly innocent. A party may
negligently make a misrepresentation which induces a contract of sale
of goods, without such misrepresentation constituting a term in the
contract. Clearly such a misrepresentation could qualify as an
innocent misrepresentation, the effects of which have been considered
above. But, as seen, if it is to be treated as an innocent misrepre*
sentation it may be of limited effect, so far as compensation is
concerned, or of no effect at all if a claim for rescission is barred on
one of the grounds mentioned earlier. Hence the suggestion, following
the decision of the House of Lords in Medley Byrne & Co. Lid. v.
Heller & Partners Ltd.^^ which has been discussed earlier,'* that,
in the light of the extension therein made to liability for negligence,
it may now be possible for an action for damages (as contrasted with
an indemnity) to be brought where a party to a contract of sale of
goods has induced the making of such contract by some negligent
misstatement, with consequent loss to the other party. If this
suggestion is correct, then it would seem possible for a seller, who has
suffered loss by reason of such a misstatement and the contract he has
been induced to make as a result, to sue the buyer for damages, not
merely for rescission and indemnity, even where an action for rescis-
sion would be untenable. The same, of course, would be true of a
buyer. If this is correct then the need to amend the law, in accordance
with the recommendations of the Law Reform Committee mentioned
above, has to some extent gone. However, if this is the present
5uprfl. pp I3S-J39
MISREPRESEOTATION, ETC.
305
State of the law, it is still not quite what the Committee thought
desirable. In the first place it would only apply to negligent
misrepresentations, not to innocent misrepresentations generally.
Secondly, where the Committee thought that the burden of disproving
negligence should be on the party making the representation, the
present law, if it is indeed the law, puls the burden of prowng that
the representation was negligently made upon the injured party,
alleging misrepresentation. Subject to these points, however, if the
Hedley Byrne case has effected a significant change in this part of the
law, it will have removed much of the difficulty and most of the
limitations of the previous law relating to non-fraudulent misrepre-
sentations.
OlAPTER II
Different remedies
1 Ilie buyer may also have remedies agaiast third parties (1) He may be able to
sue on a collateral warranty even for personal injury; supra, pp 14&-147.
(2) He may be able to sue anyone whose fraudulent or negligent tnisrepresentation
induced him to enter into a contract of sale with the seller: his remedy would
be an action in tort for deceit or negligence (tn the light of the decision in
Hedley Byrne v. Heller [1964] A C. 465) (3) He may be able to sue in trespass,
detinue or conversion if a stranger interferes with his rights of possession or bis
title. These tortious remedies need not be examined in detad here.
One point may be raised. Could not the remedy by way of collateral waaanty
be extended to cover Implied waaaoties so as to give consumers a remedy in
1 ... .i.r...,,',.. on the market?
a Supra, Chap. 6
8 Supra, Chap. 7.
305
307
* Cf. supra, pp. 300-305, in respect trf the seller's remedies where the buyer has
been guilty of such conduct. In English law the buyer has no remedy as regards
the goods themselves equivalent to the sellers remedies of hen, etc., on the
insolvency of the buyer. Under the Umform Commercial Code, s. 2-502, the
308
2. "nTLE
The nature of the duties
It has already been seen that under section 12 of the Act there
are implied into every contract of sale, unless expressly or impliedly
excluded, a condition as to the sellers right to sell and two warranties,
one relating to quiet possession, the other relating to the freedom of
the goods from any charge or encumbrance in favour of a third
party.^ Thus the seller may be guilty of a breach of condition or a
breach of warranty, or both, where he sells goods without any right to
do so arising from property in them or the right to dispose of the
property by virtue of any statutory or other power such as that of an
agent. The buyer has different remedies depending upon whether the
seller has committed a breach of condition or a breach of warranty.
But. as will be seen below, such remedies may not be exhaustive.
Breach of condition
T Supro. pp W-t06.
TTHi
309
decline to pay, or recover the price, and sue for damages for non-
delivery. Discussion of the lattm: remedy may usefully be postponed
until the whole question of non-delivery is considered. What must
be discussed here is the extent of the buyer's right to reject, a right
which arises in aU cases of breach of condition, though, as will be seen,
it may not be exercisable in all instances of such a breach.
310
TntJB
311
breach of wananty. Certainly the buyer may recover the price paid
for the goods where he has been deprived of them because they belong
to someone else. Whether he can claim any other, more consequential,
loss is a question of some difficulty. Probably the best and most
acceptable answer is that he cannot, unless there is knowledge on the
part of the seller of some special circumstances from which he can
reasonably infer that the buyer wU incur special loss should the
goods not become his.'
Failure of consideration
Should the right to reject for breach of condition with its ancillary
right to claim damages for breach of contract be lost by reason of
acceptance of or transfer of properly in the goods, it would still seem
possible, in the light of the decision in Rowland v. Dlvall*^ for the
buyer to reclaim his purchase price on the ground of total failure of
consideration. This case, and the problems to which it has given
rise! have been considered in detail in an earlier chapter. It is
unnecessary to reconsider these matters here. Suffice it to say that
this method of recovericg the purchase price, which is speciGcaUy
retained by section 54 of the Act, would seem to be available to a
"buyer who has paid the purchase price and has had to sunendcr
possession of the goods to the true owner, because he never acquired
title to them under any of the common law or statutory provisions
The point was raised by counsel in Mason t. Durningham 11949] 2 K.B. 545 at
P 557 and mentioned by Singleton LJ, IbU. at p. 560: but no answer was given,
amcc the issue did not properly arise on the facts and the pleadings.
312
This leads to a further point. It has been seen that a seller may
exclude the operation of conditions that might otherwise be expressly
or by implication at common law or under statute be made terms of
the contract. The effect of such exclusions has been seen to be
complete, as long as the exclusionary clause is properly worded.**
However, under the doctrine of fundamental breach or breach of a
fundamental term it may still be possible for a buyer to claim
rejection of the goods and damages.** In the context of the implied
condition as to the sellers right to sell, and in the light of Rowland
v. Divall, it may be argued that the obligation to transfer title
in the goods to the buyer is so fundamental that it can never be
excluded, except possibly where the contract clearly contemplates
that both parties realise that the seller has, or may not have, the right
to sell the goods and the buyer is taking a chance in this regard.
If no such construction can be placed upon the contract, then it would
seem that even though the implied condition as to the sellers right
to sell is expressly excluded by the contract, the buyer will still be
able to claim the return of the purchase price on the grounds of total
failure of consideration where the seller bad no right to sell and the
goods have been claimed from the buyer by their true owner.
Breach of warranty
TITLE
313
* Infra, pp 315-323.
314
** Supra, pp. 309-310 Note Uiai there must be total fe|eciion or total acceptance,
a buyer cannot reject part of Uie foods and keep the rest, Tbis may be M
2-6
T*
-/u.CC,
goods is
may be
1 aetjon
delive
rejecte
IS SGA
for * . .
as Bow. McLachan A Co. v. Ship " Camosun ** fl909] A C. 597 at pp. 610-6II, P"
Lord GoreU.
I S GA. f. 53 (4).
aiARACTER AND QUALITY
315
Measure of damages
** S GA. s. 55.
4A ^'<1 Wrenbury.
c(' Broi. V. Len/j & Peal Ltd. [1923] 1 K.B. 690 with Ayscough v.
PP- 286-289.
Baynes (1911) AC. 394, supra, pp. 183. 187. However, it would $e^
mat If a condition as to quabty is broken, but the buyer is confined to his remedy
m damages, this provision will apply. It would also appear to apply to breaiies
t Warranty (or condition treated as breaches of warranty) relating to description,
*^ple, etc.
* SGA. s. S3 (3).
316
It would seem from the cases that foreseeable results can cover
many different kinds of loss. Thus where the buyer was obliged to send
goods to America, as the seller was well aware, and was obliged to
pay for their return when they turned out to be unsuitable, it was held
in Molting v. Dean that the damages recoverable by the buyer
included such expenses, since they were within the contemplation of
the parties as a reasonable and natural consequence of the breach
by the seller. So, too, in Holden v. Bostock & Co. Ltd the buyer
recovered not only the cost of the beer which had to be destroyed
because the sugar bought from the sellers to be used in manufacturing
the beer contained arsenic, in breach of warranty, but also the costs
incurred in giving notice to the buyers customers of changes in the
materials to be used by the buyer in future manufacture. In Cullinane
V. British " Rema" Manufacturing Co. Ltd.,** it was held that the
damages recoverable by the buyer in an action for breach of an express
warranty were either the capital loss resulting to the buyer front
the breach of warranty, i.e., the difference in value of the goods or
the business loss reasonably within the contemplation of the parties
when the contract was made, as being the probable result of a breach,
i.e., the foreseeable results of the breach of warranty. Such loss was
foreseeable because the sellers knew that the buyer required the plant
sold by the sellers to perform a particular function. But the capital
and business loss could not both be recovered. In some instances of
breach of warranty, damages for personal injuries (including loss of
consortium where the buyers wife died as a result of eating defective
goods bought from the seller**) have been held to be recoverable
on the ground that the injuries were the direct and natural result of
the breach of warranty.
(1902) 18 T.L.R. 317: for later libgation aruug from this incident sec Bostock &
so See ej. Frost v A>lesburjr Dairy Co [19051 I KB. 608; Ceddllng v. Marsh
nopkinson (19571 > QB. 229. Cf. U.CC. s. 2-713 (2) (fc).
317
seW, ; T76 and /. Finlay 4 Co. v. Kmk Boo Tong IIM. (19291 1 K B. 400, the
Wisdescriptions in bihs of lading.
PurnncM '^^ble, flowered purple, and therefore much less useful for resale
orew damages were assessed on the bads of the resale value of a white
We flowered.
318
Sob-sales
S See, e Slater v, Hoyle & Smith Ltd. |!920I 2 K B. 11 where a resale price was
disregarded. C/. the cases on DosMteiiTeiT, tnfra, pp. 326-328.
s In Taylor & Sons Ltd, v. Bank of Athens (1922) 91 LJ.)C.B. 776 at p 778,
AfcCardic 3. said that the damages tmder a. 53 (3) may be muck more restricted
than those under subs. (2), for subs (3) provide* a somewhat ngSd and feed
standard. Hence, prcsunubly, claims aw founded on subs. (2).
319
liability may cause the buyer different kinds of loss, i.e., loss of
profit on the sub-sale, damages payable to the sub-purchaser for
breach of warranty by the buyer, as regards the goods sold by him,
to the sub-purchaser, costs incurred in defending an action for breach
of warranty brought against him by the sub-purchaser, or in paying
compensation to the sub-purchaser without disputing whether there
was a breach of warranty. There may also be loss incurred through
prosecution of the buyer as a result of the defective quality of goods
sold or otherwise used by him and obtained originally from the seller
who was in breach of warranty in selling them to the buyer. These
problems have been raised in several cases, and involve the question
whether such loss can be said to be a direct and natural result of
the breach of warranty.
The principles upon which such cases are decided are the two
rules in Hadley v. Baxendale, as contained in and applied by the
Sale of Goods Act. In each case the question must be answered
whether the loss complained of is a direct and natural result of the
breach of warranty, i.e., something that would be foreseen by a
reasonable seller as being a likely consequence, or is a result that is
foreseeable by him in the light of his special knowledge or his
of some special circumstances.
^us in several cases it has been held that damages paid by a buyer
0 his sub-purchaser because of the defective quality of the goods
supplied by the buyer (obtained originally from the seller) were
recoverable in an action for breach of warranty brought by the buyer
^S^inst the seller. The basis for such a decision has been that the seller
hnew the buyer wanted the goods in question for resale in their original
or some altered state the second rule in Hadley v. Baxendale),
3-s m Kasler &. Cohen v. Slavouski^^ Or that it was in the contempla-
tion of the parties, particularly the seller, as reasonable business men,
nt the goods would be used in one or another of two ways for
cattle food, as in Pinnock Bros, v, Lewis & Peat LidP Or that it
Was in the contemplation of the seller tlmt the probable consequences
a breach by him would be the failure by the buyer to fulfil his
contract to supply goods, as in Agios v. G. W. Colliery Co.* In
cases of this kind the buyer has recovered not only the damages
paid to his sub-purchaser but also the costs incurred in defending
4 11920] 2 K-B. n.
s Ibid, at p. 24.
e Infra, PP. 324-328.
t Bostock & Co. Ltd. . Nicholson &. Sora Ltd. [1901] 1 K.B. 725.
321
Oil & Cake Co. Ud. v. Durstali & Co** the difference between the
conditions or warranties invohed in the sale and the sub*rale were
sufEciently immaterial to permit the rccoverj of damages paid by the
buyer to his sub-purchaser. The seller had sold copra cake to the
buyer: the latter had sold copra cake to his sub-purchaser warranted
free from castor. Copra cake not free from castor was not copra cake
at all. Hence the failure to correspond with the description of copra
cake was the same thing as failure to fulfil the warranty free from
castor." But in Hostock d. Co. Ud. v. Nicholson & Sons Ltd.."'*
where the seller did not know the purpose for which the buyer required
the commercial sulphuric acid, it was held that the buyer could not
recover from the seller the damages he had paid to sub-purchasers of
brewers sugar made from the acid, although such damages were
payable because the acid contained arsenic and the sugar manufactured
from it was contaminated, and therefore rendered defective beer in
the manufacture of which it was used. Though the acid was
warranted free from arsenic, the brewers sugar was not warranted
in quite the same terms. Hence, as Bruce J. said, "no liability
is incurred in the ordinary case of a separate and distinct collateral
contract with a third party uncommunicated to the original contractor
or wrongdoer, although the non-performance of the contract may
in one sense have resulted from the original wrongful act or breach
of contract."
322
to the general principles stated by Devlin J., on the ground that the
settlement was an upper limit of damage and was reasonable.*'*
T* [1951] 2 K.B. 314. SomerveU LJ. at p. 317 said that the damages were to be
assessed on the basis of Lability to the sub-purdiaser subject, if necessaiy, to its
being shown, for example, that some different tenns had been introduced wto
the contract.
(1599) 15 TL.R 55 Cf. also, as to costs, Britannia Hygienic Laundry Co. tw- *
Thornycroft (1925) 41 T.LR. 667: reversed on the facts (1926) 42 T.L.R.
t Cf. Craze V. Fry (1903) 67 JJ*. 246 with Co/nrtf v. Uyham [1913] 2 K B. 220
Cf. also Payne v, MinUtry of Food (1953) 103 Lj. 141 with Proops v. ChapUn
(1920) 37 T.L.R. 112.
TT Leslie V. Reliable Adverilsinz Agency |19151 I K.B. 652; Askey v. Golden Wine
Co. [1948] 2 All E R. 35 ; Maries v. Tram (19541 1 Q B 29.
TS Supra, pp. 287-288. The Uniform Conunerdal Code, ss 2-718, 2-719, bas
complex provisions relating to the Iiqoidaiioa or limitation of damages, and the
modification or limitation of remedies by agreement.
i Supra, pp. 298-300
323
4. Delivery
^ far as the duty to deliver the goods is concerned, the seller may
be in breach in a variety of ways. Thus he may deliver the wrong
quantity or the wrong quality of goods; he may deliver the right
quality, and quantity of goods but at a lime later than that stipulated;
he may completely fail to deliver the goods. Delivery of the wrong
quantity or description of goods is in fact a special kind of breach
which is dealt with especially in section 30 of the Act.* In this
section of the chapter it is necessary to discuss non-delivery and
delayed delivery of the contract goods.
Non-delivery
11919] 2 K.B. 581 at p. 589, per Scruttoo L.J. Sec. e.g, Houndsdttch
unr^* y. Waltex Ltd. [1944] K.B. 579 where it Aat a buyer
abr
bel
Brc
the
to miti
See iu
not de.
quantit
V. Nos
disting
by ss.
inappli
** S.GA. ,
F.S.O. n*
324
buyer. Under the Act ** where there has been a failure to deliver speci-
fic or ascertained goods (the properly in which may not have passed
to the buyer), in an action for breach of contract the court, if it thinks
fit, on the application of the buyer, may direct by its judgment that the
contract shall be specifically performed, without giving the defendant
the option of retaining the goods on payment of damages. This may
be done conditionally as regards damages, payment of price, etc., or
unconditionally. It is a discretionary remedy and may be applied
for by a buyer at any time before judgment in an action for breach
of contract for failure to deliver. In what circumstances, and to what
extent this remedy is available will be considered below.** First,
however, it is necessary to discuss the more usual remedy of damages
for non-delivery. Here, as elsewhere, the real problem is how the
damages payable to the buyer arc to be measured.
Measure of damages
2 S G A. s 52.
*s Infra, pp 329-330.
84 SOA. s. 51 (2).
s SGA. s. 51 (3): ef. U.C.C, s 2-713 (I) onder which the time for ascertaining
the market price is when the buyer learned of the breach. For the p/a of the
market price, see U.C.C., a. 2-713 (2). See also s. 2-723. For the recoveiy ot
" incidental and consequential damages see U C.C 8. 2-715, which covert
expenses particularly foreseeable loss, and injuries to person or property proxi-
mately resulting from breach of warranty.
DELIVERY
325
* Swpra, pp 283-293.
M PP- 307-303.
|7?^>anacWv.A/6rn(l885)t8QBD.67. ,,,
County Natural Gas & Fuel Co. . ConoU II911] A.C 105 at pp. 117-118.
^ Lord Atkiftson. By contrast, therefore, if extra expense has been inoirrM in
lo acquire goods on the market that expense fa recoTcrablc: see fll/uie t.
<875) L.R. 10 QB. 265; Bfockbum Bobbin Co. r. Allen & Sara Ltd
326
profit from his resale because of the sellers default in delivery did
not reduce the damages payable by the seller. In other words extran-
eous contracts made by the buyer are excluded from consideration.
Only the value of the goods in the market is to be taken, 'as Scrutton
LJ. stated in Slater v. Hoyle & Smith Ltd.* where the doctrine of
Williams Bros. v. Agius was applied to an action for breach of
warranty.
By couosel In Finlay v. Kwik Hoo Tong |1929J I K.B. 400 at pp. 417-41o> **
quoted by Sankey LJ. .
t (1928) 139 L.T. 50 at p. 32, pr Lord Haldane, 53 per Lord Dunedin, 35 per Lord
Shaw. Note also that the seller must contemplate that the very same goods will
be resold: Kwel Tek Chao v. Br. Traders A Shippers Lid. [1954) 2 Q.B. 459
[I929I 1 K.B. 400. TTib case was not concerned with non-delivery but with a
, , , . i . i. . { in sucb
. , , - , of the
, , , tX.Br. Traders
DEUVERY
327
It must be noted that, where the Hall &. Pirn doctrine (if such it
may be called) does apply, the sub-contracts of which notice is taken
S.GA. 8. 54.
* tbld at p 538. If there is a market then loss of pro6t may still be wavered
(a) if the sale is of specific goods and the buyer has resold those goods; (>) if the
resale contract has the same delivery date as the contract of sale: ibid, at p. 341,
per Scrutton LJ.
MI9461 2 M E R. 622. w
* But see Trans Trust SlJi.L. v. DamAian Trading Co. [1952] 2 Q B. 297, where
it was said that damages should be awarded if the liability were meurreo ana a
declaration of indemnity should not be given in advance.
awing such
s, 12lh ed.
P.S.O. 1I*
328
Where the strict market price test is applicable the relevant date
is the date when the breach occurs, i.e., when the seller notifies the
buyer of his inability to perform the contract,^ when the shipping
documents should be delivered, in the case of a c.i.f. contract, not
when the goods themselves ought to have arrived.*^ Thus the date
when repudiation by the seller is acknowledged for the purposes of
assessing damages is the date when the contract ought to have been
performed by the delivery of the goods. An anticipatory repudiation
does not advance the date of performance, as it were, by enabling the
buyer to have the damages assessed in accordance with the market
price prevailing at the date of such repudiation.** Subject to the
necessity for the buyer to mitigate, the damages must still be assessed
with reference to the market price of the goods at the time when they
ought to have been delivered under the contract, as Bailhache J. said
in Metachrlno v. NickoH <6 Knight.^* The language of section 51 (3)
of the Act does not apply to anticipatory breach. It has already been
seen ** that this case, and the language of Bray J. and the Court of
Appeal in Millett v. Van Heek & Co.** make it difficult to know
whether a contract providing for delivery of goods within a reasonable
time, or within a reasonable time after a future date, is a contract for
delivery of the goods at a fixed time within the meaning of that sub-
section. It appears, however, according to the former decision, that
where a time for delivery is fixed by reference to the happening of an
event, there is a fixed time for delivery within section 51 (3).
Re Ilall Co.t Arbltratton (1928) 139 L.T. 50 at p 53, per Lord Dunedm
Supra.
t Sharpe A Co v. Nosawa A Co. [1917] 2 K.B. 814; c}. Produce Brokers Co. v.
>* (192QI 1 KB. 693: on mlci^tion in this respect see Rolh A Co. t. Taysen,
DELIVERY
329
Specific performance
Mention has earlier been made of the possibility that the buyer
may claim, and obtain, specific performance of the contract to deliver
goods. This is only possible, however, where the goods are specific or
ascertained. The meaning of these expressions has been clarified ear-
lier.^* Hence in Re Wait,^^ as already seen, the buyer could not claim
specific performance of the contract to sell the agreed number of tons
of wheat on board the ship in question, because the wheat was not
specific goods, nor had the contractual quantity of wheat become
ascertained by anything done since the making of the contract.
Even where the goods are specific or ascertained, the buyer will
not necessarily obtain specific performance. It is a matter for the
discretion of the court. Though this remedy may be granted whether
property in the goods has passed or not,*' this does not mean that it
will of necessity be granted where property has in fact been transferred.
If the goods are ordinary articles of commerce and of no special value
or interest, no grounds will exist for any special order for delivery.
In such cases damages will fully compensate the buyer.*^ Thus in
Cohen v. Roche ** specific performance of a contract to sell an
antique chair was refused. So, too, in Dominion Coal Co. Ltd. v.
Dominion Iron & Steel Co. Ltd.^^ where the contract was to supply all
Supra, pp 298-300.
Supra, pp 287-288.
Supra, pp 39-41,
(1927] 1 Ch. 606, supra, pp. 35-36 C/. also Thames Sack A. Bag Co. Ltd v.
330
Where property in the goods has passed to him, the buyer may
have an alternative claim for specific restitution in an action of
detinue. But such a claim is just as dependent on the discretion of the
court as a claim for specific performance. McCardie J. in Cohen v.
Roche pointed out that in the pre-1893 case of Chinery v. Viall^*
it had been decided that, as between buyer and seller, the buyer cannot
recover larger damages by suing in tort, i.e. for detinue or conversion,
instead of contract, i.e. for non-delivery. In the same way he cannot
be better off suing in detinue for specific restitution than if he merely
sued on the contract for specific performance. There was no absolute
right to compulsory delivery by suing in detinue.
Delayed delivery
5 It. * N. 2S3. For mare rrtwit cases on this point ef. Behize Motor
Co y. Cox 119141 1 K.B. 244; JVMMeyT. tiOt. supra; United Dominions Trust
Lid r. Parkway Motors Ltd. 119551 1 W.L.R. 719 where the ngbt of a
hire-purchase to assign was mrolvcd, thus leading to the question of damaS
for conversion against an assignee ot such a purchaser.
DEUVERY
331
Misrepresentation
[1949] 2 K-B. 528 at pp. 539-540. Note Oral the general principles "
332
both discussed. It was seen that the present scope of the law as
regards both remedies was uncertain. So far as rescission is concerned
it would seem from the decisions in Leaf v. International Galleries*'
and Long v. Lloyd that an innocent misrepresentation not forming
a term in the contract can ground an action for rescission. But such
an action will fail if it is brought after too long a delay or if the
goods have been accepted (within the meaning of that expression as
used and applied in cases of breach of condition under the Sale of
Goods Act). It is not clear whether transfer of properly in the goods
renders an action for rescission untenable. In neither case was this
point settled. If claims for rescission arc to be treated in the same way
as claims to reject goods for breach of condition which would seem
to be the approach of Denning LJ. in Leafs case then it would
appear valid to argue that a claim to rescind a contract of sale of
goods for innocent misrepresentation will be lost if property in the
goods has passed. This might be said to be applying the doctrine of
Seddon V. North Eastern Salt Co.** to such contracts, on the ground
that the buyer ought not be in a better position than if he were
claiming for breach of condition.** In any event, even if a claim for
rescission is still open to a buyer, from what has been said earlier it
is clear that his remedies are strictly limited. In particular he will be
unable to claim damages for any loss caused to him by the misrepre*
sentation. being confined only to an indemnity.** Only if there were
negligence on the part of the seller will he possibly be able to sue, m
tort, however, rather than In contract, as already seen. Changes
would follow from the recommendations of the Law Reform Com*
miticc referred to earlier. But at the present lime the coniracttu!
remedy for innocent misrepresentation is very uncertain in its avail*
ability and very limited in its scope if it is indeed available either in
general or in a particular instance. Tort liability for negligence by the
*' rr Kf-K'f
seller may be more helpful to a buyer, but this only arises, if it arises
at all, where there has been lack of reasonable care as regards the
making of the relevant statement.*
Tortious liability
Mention of this leads naturally to the point that, not only for
negligence, but on other groimds, a buyer may have an action in tort
against the seller in addition, or by way of an alternative to his
actions for breach of contract
Thus, although the position where the seller has been guilty of
an innocent or even a negligently made misrepresentation is in doubt,
there is no question but that the seller will be liable in deceit if he
has given a fraudulent warranty on the faith of which the buyer has
entered into the contract. This liability arises irrespective of whether
the warranty is or is not a term in the contract, and despite any
attempt by the seller to exclude applicable conditions and warranties
by the use of appropriate language in the contract. For this liability
is tortious, not contractual. Hence an exclusion clause will not be
construed as covering fraud of this kind. In an action for fraud the
measure of damages is the difference between the real value of the
goods at the time of their delivery and what the buyer paid for them.
Prima facie the highest limit of the buyers loss is the whole extent of
his loss, i.e., what was in the buyers pocket and is now in the seller s.
The price paid is therefore very relevant, by contrast with the situa-
tion in actions in contract for breach of warranty, where the measure
of loss is based on market values and represented values.^* Moreover,
it would seem to be clear that consequential loss which clearly results
from the fraud is recoverable, i.e., the extent to which the buyer is
out of pocket. But this will not 'include loss of profit if the goods had
been what they were represented to be and on the faith of this the
buyer contracted with a sub-purchaser to make a profit from such
resale.
304-305.
334
5 U. A N. Tk*
INDEX
Acceptance
ft seq,
S; '' >.
dislmgilished from. 6
Agent
^^^ission, 6
Acent conf.
293 et seq.
Bailee
336
INDEX
Biu. OF Exchange
dishonour of, 92
Biu. of Lading
Breach op Warranty
action for, 314
Buyer cant.
C.LF. Contracts
appropriation of goods to, 87-88
ri^t to reject, buyers, under, 227
sellers duty to insure, under, 219
Capacity
OtOSES
INDEX
337
Consideration
failure of, effect of, 311
money as, 6, 14, 29
03NSTRucnVE DELIVERY
mstances of, 204
CoNSTRtrcnvE Possession
examples of, 258
t^NTRACT OP Sale
abmlute and conditional, 15 et seq.
assignment of, 18
distinguished from novation, 18
bilateral, 6
conditional. 4, 18 el seq.
validity of. 31
included in sale, SI
Corporation
contracts by, 31
Credit
338
INDEX
Drimiiiir StiTt
rooJ in. 67. M. 70-71. 72. 7i-76
fneanint of. 70
DrirvtiY
'r tf miZrra
tn 271
**
.r 2?
nf r. on '-CJW/*
Deuvtay con/.
symbolic, 2W
DtSOtlPTlO*!
DmaioeipoN
Dorr-vr.vr or Tme
rvarl-p. 2M
Ibwf t
Ott; O-ITTS
h*n.S cf. rr-wtfv f-r.
detsrry. In reipv-l ef. 721
fV ki rnpr.s cf. rr^ies cf b-rrrr.
t wWfirss*!!
*- 1.1 r.s. y
bwere* fetr
l.t >1
INDEX
339
Equitable Doctbines
appLcation of, under Sale of Goods
Act. 3. 35-37
Ex Ship CoNnucr
sellers duty to insure goods, 219
Examination
Exchanob
ExausiON
FO.B. CONTEACTS
Failubb of Consideiution
effect of, 311
False Pretences
Frustration: Impossibility
conditions precedent, effect on, 245
doctrine of, scope of, 242
when apphcable, 243 et seq.
general effect of, 246 et seq.
Fundamental Ttaun
concept of, 188-189
exclusion of, 189 et seq
Future Goods
See Goods.
Generic Goods
meaning of, 83-84
property passing of, in, 85-87
Gift
INDEX
Goods cont.
defined, 10 el seq., 33
deliverable state, in, 67, 68, 70-71,
74-76
Hire
lUECALITY
effect of, 31-32
INDEX
341
IS'StJRANCB
Jus DlSPOVDrtJI
meaning of, 90
reservation of, 90-93
Land
Maxket
Market Overt
defined, 117
sale m, 116 et seq.
Market Price
MEASUtUNO
MtSRtTRESENTA-nON
Misrepresentation.
Mistake
Mortgage
registration of, 9
sale, distinguished from,
8. 9. 21. 31. 54
Necessaries
definition of. 24
342
IND^
Necessaries cont.
Offer
acceptance of, 27
OpnoN TO Buy
8 . 21
Ownership
acceptance, connection with, 222-223
apparent, seller with, 103, 109
seller, of, acts inconsistent with, 226
el seq
Part Owner
sale by one to another, 4
Parties
capacity of, 24
drunkards, 24
infant, 24 et seq
mental incompeteocy, 24
Passino op Property
See Transfer op Property.
Pawnbroker
powers of sale of, 128
Payment
ItolALTY
Performance
buyer, by, 195
content of, 58
duties as to, 195 et seq.
factors affecting, 232-233 ei seq
impossibility of, 242 et seq
rules of, modification of. 53
seller, by, 195
Perish
meaning of, 44
Perishable Goods
rc-saie of, on buyers default, 275
PERtsHiNO of Goods
effect of, 43 et seq
Place
Possession
deGvery by, 88
Price
action for, 64, 283 el seq.
INDEX
343
PiicE <(jnr.
reasonable, 29, 30
recovery of by buyer, 310-311
resale, on. agreement fixing, 30
reservation of property by seller until
payment of, 66
subs^uently to be settled, 29
third party, fixed by, 30
valuation, facd by third party, 30
EaiNapu. AND Agent
saving for hw of, 3
Property
potential, 37-38
price, consideration for, as, 4
ruk, connection srith, 53. 63, 236-237
prima fade goes with,
transferred with. 237
statutory exceptions, 239-240
sale, as essence of, 8-10
tide, contrasted with, 95, 97-98
transfer of, obligation as to, 98-99
acceptance of goods, effect on. 102-
103
QuAim
Quii-rnr of Goods
exclusion of undertakings as to. 186
tt seq.
express undertakings as to, 135 et seq
fitness for purpose, implied condition
as to. I5S-I62
contents of, 162-165
exclusion of, 165-166
Identity, distinguished from, 187-168
implied undertakings as to, 148 et seq.
meaning of, 168
merchantable, 166 et seq
sample, in sale by, 176-178
waiver of undertakings as to, 181
et seq.
QOAKjnY
Qoicr Possession
implied warranty s
REASONABU!
price. 7. 29-30
time, 78. 79-83
Reiect: Rejechon
approval or sale or return, on, 78, 79
buyer, by, 307, 314
buyers right to, exclusionary clause,
effect of on, 210
delivery of wrong quantity, on,
209-210
344
INDEX
REMEDtES COnf.
Risk
gift, 6 I
hire, 8
hire-purchase, 8, 9
mortgage, 6, 21, 31
option to buy, 8, 21
pledge, 8, 31
quasi-contracts of, 7
return, or, 74, 78 et seq
sample, by, meaning, 175-176
seller in possession, by, 122-123
seller wilhoui title, by, 106 et seq
transfer of property, as, 5
voidable title, under, 118 et seq
INDEX
345
178
Seal
contracts under, 31
Seller
102-103
1^01 f>y
defined. 39
Spccapic Performancb
non-delivery, in cases of. 329-330
remedy of, 22, 307
application of other, 3
Stolen Goods
Tender
Terms
346
INDEX
I^RMS eont.
Time
Transfer op TmE
Tuhstt
Unascertained Goods
ascertained goods, distinguished from,
40
agrecmen, , ^ ^
infract Parties l
INDCil
'^iv 347
307. 3,
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