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The Sale of Goods Act

Related Laws in Malaysia

 Twostatutes of great significance in consumer

purchases are :
• the Contracts Act 1950 and
• the Sale of Goods Act 1957;
 both are part of private law
 The roots of both these statutes can be traced
to the English 19th century ideal of equal
bargaining power between contracting parties
and the maxim of freedom of contract.
Related Laws in Malaysia

 The Contracts Act 1950 codified the English

common law pertaining to contracts and
applies to all contracts including those
between producers and consumers.
 The Malaysian Sale of Goods Act is based on
the English Sale of Goods Act 1893.
 In the UK the Sale of Goods Act 1979 has
superseded the English Sale of Goods Act
• The latter Act has itself been amended on several
occasions and added protection thereby given to
Related Laws in Malaysia

 However, the enhanced rights conferred by the UK

Sale of Goods Act 1979 and subsequent
amendments to it in the Malaysian Sale of Goods
Act. have not yet been included
 Hence, for instance, in the Malaysian context, the
implied terms that the goods match the description,
be of merchantable quality, and be fit for their
purpose can be excluded by an express term of the
contract (section 62).
 This situation remained until the adoption of the
Consumer Protection Act 1999.
 governs the law with respect to the sale
of goods.
 It deals with such matters as :
• contracts for the sale of goods,
• the passing of ownership and
• the risk of goods sold, and
• the remedies of the buyers and sellers for
breaches by the other party.
 The Act shall have effect within the Malay
States only (defined in s.2 as ‘Johor, Kedah,
Kelantan, Negeri Sembilan, Pahang, Perak,
Perlis, Selangor and Trengganu.’
 does not extend to the states of East
Malaysia, i.e., to Sabah and Sarawak, as well
as Penang and Malacca:
• continue to be subject, to the UK Sale of Goods Act
• excluded from the ambit of the Sales of Goods Act by
Section 5 (2) of the Civil Law Act, 1956 [Revised
1972] and still adopt the principle of English law
relating to sales of goods
 The same as any other contracts
 The legal principles governing contracts
are also applicable i.e. Offer, acceptance,
capacity to contract, consideration etc.
• S.3 of SOGA – provisions of the Contracts Act
1950 [Revised 1974] continues to apply unless
they are inconsistent with the express provisions
of the SOGA.
 ‘every kind of movable property other
than actionable claims and money; and
includes stocks and shares, growing
crops, grass and things attached to or
forming part of the land which are
agreed to be severed before sale or
under the contract of sale.’
 by virtue of this definition, land is
excluded from SOGA
A contract of sale of goods is ‘a contract
whereby the seller transfers or agrees to
transfer the property in goods to the
buyer for a price.’
 Therefore a sale occurs when the
ownership or property in goods passes to
the buyer.
 Goods which form the subject matter of a
contract of sale may either be existing
goods or future goods, s.6 of SOGA.
(i) existing goods (already owned or
specified by the seller and may either be
specified or agreed upon at the time
contract of sale is made),
(ii) specific goods (identified and agreed upon
at time of contract of sale),
(iii) unascertained goods (identified by
description only) and
(iv) future goods (good to be manufactured or
produced or acquired by the seller AFTER
making the sale.
 S. 4(2) SOGA- A contract of sale may be
absolute or conditional
i) absolute sale - S.4(3): “…the property in the
goods (ownership) is transferred from the
seller to the buyer without any conditions;
ii) conditional sale (agreement to sell) – s.4(3):
“…where the transfer of the property in the
goods (consideration) is to take place at a
future time or subject to some condition
thereafter to be fulfilled.
 S.4(4) – “An agreement to sell becomes
a sale when the time elapses or the
conditions are fulfilled….”
1. Offer & acceptance, S.5(1) SOGA:
 an offer to buy or sell goods at a price and by the
acceptance of such an offer;
 The contract may provide for the immediate
delivery of the goods or immediate payment of the
price or both, for the delivery or payment by
installments, or that the delivery or payment or
both shall be postponed.
2. Formalities
S. 5(2) SOGA 1957- contract of sale may be
• in writing, or
• by word of mouth (verbal), or
• partly in writing and partly by word of mouth
• or may be implied from the conduct of parties.
money consideration for the sale of goods;
-price may be:
i) Fixed by the contract
ii) Left to be fixed in a manner agreed in the
contract e.g. by third party
iii)Determined by the course of dealing
between the parties
iv)Buyer to pay a ‘reasonable’ price where price
is not determined – what is reasonable is a
question of fact dependent on the
circumstances of each particular case, s.9
Regulated by the Contracts Act
The legal principles and the law
on contract governing capacity
in ordinary contract law apply to
contracts of sale
May either be:
(i) existing goods i.e. goods already owned or possessed by
seller, s.6(1);
(ii) future goods i.e., goods to be manufactured or acquired
by the seller AFTER making the contract, s.2

Goods may be either specified (goods identified and agreed

upon during sale of contract, s.2) or unascertained (not
identified and agreed upon) at the time contract is made
 A stipulation in a contract of sale with
reference to goods which are the
subject thereof may be a condition or
warranty, s.12(1).
 Whether a stipulation is a condition or
warranty depends in each case on the
construction of the contract. May be a
condition though called a warranty in
the contract, s.12 (4).
1. Condition
s.12(2) - a stipulation essential to the main purpose
of the contract, the breach of which gives rise to a
right to treat the contract as repudiated;
2. Warranty
S.12(3)-a stipulation collateral to the main purpose of
contract, the breach of which gives rise to a claim for
damages but not to a right to reject the goods and
treat the contract as repudiated.
 Stipulation as to time of payment are not
deemed to be of the essence with
respect to the contract of sale i.e. time is
NOT of the essence UNLESS a different
intention appears from the terms of the
 Any other stipulation as to time is of the
essence of the contract or not (e.g. time
of delivery) depends on the terms of the
 Himatsing & Co. v. P.R. Joitaram [1970] 2
M.L.J. 246: the court held that as the case
in question was an ordinary commercial
contract for the sale of goods, whether
the stipulated time of delivery is of the
essence of the contract or not depended
on the evidence, in particular
documentary evidence.
express terms
-clearly stated in the contract, which entitle the
parties to easily claim their rights

Implied terms
-can be understood from the parties’ conduct,
circumstances and prevailing practices (customs).
 Duty
discharged or brought to an end by
proper performance of the parties:
 Chapter IV of SOGA deals with the physical
performance of the contract which according
to s. 31 SOGA includes:
1. Delivery : duty of the seller to deliver the goods.
(delivery means the voluntary transfer of possession
from one person to another; need not involve
physical transfer)
2. Acceptance: duty of buyer to accept and pay for
them in accordance with the terms of the contract of
 S.32 SOGA: unless otherwise agreed, delivery
of the goods and payment of the price are
concurrent conditions
 S.33 SOGA: on what constitutes delivery of
• doing anything which parties agree to be treated as
delivery; has the effect of putting goods in the
possession of buyer or person authorized to hold them
on his behalf.
 S.57 SOGA, If the seller wrongfully neglects or
refuses to deliver the goods to the buyer, the
buyer may sue the seller for damages for non-
 Place of delivery: whether the seller is
required to send the goods to the buyer or
the buyer has to take possession of the
goods depends on what has been agreed
upon between them, s.36(1) SOGA;
 Apart from such agreement, the general
rule according to s.36(1) SOGA is that
• goods sold are to be delivered at the place at which
they are at the time of the sale.
• Goods agreed to be sold are to be delivered at the
place at which they at the time of the agreement to
sell, or in the case of goods which are still non-
existent, at the place of manufacture or production.
 S.36(5) SOGA: unless parties agree otherwise, the
expenses of and incidental to putting the goods in a
deliverable state shall be borne by the seller.
 S.40 SOGA: when the seller agrees to deliver the
goods at his own risk at a place other than that where
they are sold, the buyer shall, unless otherwise
agreed, take any risk of deterioration in the goods
necessarily incident to the course of transit.
 Various forms of delivery:
• by physical transfer,
• by means of control to the goods (e.g. giving key to the
warehouse or store);
• by delivery of documents of title;
• by constructive delivery where the buyer has already
possession of the goods as a bailee like in a hire purchase
 S. 36(2)
SOGA; if the time of the delivery is
not fixed it must take place within a
reasonable period of time. What is deemed
‘reasonable’ is a question of fact:
• If perishable goods – reasonable time for delivery
can be quite immediate (same day or by the next
• If non-perishable goods as such as furniture or motor
vehicle, delivery may take place the next day.
 Demand or tender of delivery may be
treated as ineffectual unless made at a
reasonable hour.
 Where the seller delivers to the buyer a quantity of goods less
than that which he has contracted to sell,
1. the buyer may reject all the goods so delivered.
2. If the buyer accepts the goods so delivered, he is bound to pay for
them at the contract rate, s.37(1).

 If the seller delivers to the buyer a larger quantity of goods

than that which was contracted, the buyer may:
1. Accept the goods included in the contract and reject the rest; or
2. Reject all the goods; or
3. Accept all the goods and pay the goods at the contract rate, s.37(2).

 Where the seller delivers to the buyer the goods he

contracted to sell mixed with goods of a different description
not included in the contract, the buyer may:
1. Accept the goods which are in accordance with the contract and
reject the rest; OR
2. Reject the whole, s.37(3).
 Unless agreed by the parties, the buyer is not
bound to accept delivery by installments, s.38(1)
 Where there is a contract of sale of goods to be
delivered by installments which are to be
separately paid for, and the seller makes no
delivery or defective delivery in respect of one
or more installments,
• it is a question of fact in each case depending on the
terms of the contract and the circumstances of the case,
whether the breach of contract is a repudiation of the
whole contract, or whether it is a severable breach giving
rise to claim of compensation but not the right to treat the
whole contract as repudiated, s. 38(2) SOGA.
 Where goods which he has not previously
examined are delivered to the buyer, he is not
deemed to have accepted them unless and until
he has had a reasonable opportunity of
examining them for the purpose of ascertaining
whether they conform to the contract.
 Unless otherwise agreed, when the seller
delivers the goods to the buyer, the seller is
bound when requested by the buyer to allow the
buyer a reasonable opportunity of examining the
goods in order to ascertain whether they
conform to the contract, s.41(2) SOGA.
 The
buyer is deemed to have accepted the
goods in the following circumstances:
• When he estimates to the seller that he has accepted
them, s.42 SOGA;
• When the goods have been delivered to him and he
does any act in relation to them that is inconsistent
with the ownership of the goods by the seller (e.g. if
the buyer sells or destroys the goods), s.41(2) SOGA;
• When, after the lapse of a reasonable time, he retains
the goods without intimating to the seller that he has
rejected them, s.42 SOGA