Sale of Goods (Implied Terms (Section 12: Title: A seller can pass no…
Sale of Goods
Section 12: Title: A seller can pass no better title than what he has. Section 12 (1) of SOGA provides that 'there is an implied condition that the seller has a right to sell the goods, and in the case of an agreement to sell the goods, and in the case of an agreement to sell he will have such a right at the time when the property is to pass.'
Section 13: Sale by Description: A 'sale by description' occurs when the buyer enters into a contract of sale in reliance on the description of the goods given by the seller.
When there is a contract for the sale of goods by description, there is an implied condition that the goods will correspond with the description.
Section 14: Satisfactory Quality & Fitness for Purpose: a) that the Goods are of Satisfactory Quality (s.14(3)) Satisfactory quality means that the goods meet the standard that a reasonable person would regard as satisfactory, taking into account any description applied to them, the price and all the relevant circumstances. The goods must, be satisfactory at the time of sale ie. when the property passes.
Caveat emptor - let the buyer beware. If the buyer wishes the goods to be of a certain quality, or to use the goods for a particular purpose, he should specify this explicitly in this contract of sale, or take the risk of getting goods which are of a lower quality or unsuitable for his intended purpose.
Under Section 14(2B), the quality of goods includes their state, condition and:
- fitness for all purposes for which the goods are commonly supplied;
- appearance and finish;
- freedom from minor defects;
- safety; and
b) Fitness for purpose s.14(3):
provides that there is a condition that the goods are fit for the particular purpose that the buyer purchased them for:
- the seller sells the goods in the course of business; and
- the buyer makes known to the seller the particular purpose for which the goods are being bought; and
- the buyer reasonably relies on the seller's skill and judgment.
Section 15: Sale by Sample::
When there is a contract for sale of goods by description, there is an implied term that the goods will correspond to the description.
Contract of sale by sample where there is either an express term to that effect, or an implied term to that effect.
Where there is a sale by sample, the following conditions are implied:
- that the bulks will correspond with the sample in quality;
- that the goods will be free from any defect, which defect would not be apparent on reasonable examination of the sample.
Sale - where the property in the goods is transferred from the seller to the buyer (s.2(4)SOGA).
Agreement to sell - where the transfer of the property in goods is to take place at a future time or subject to some condition later to be fulfilled. When the requisite time passes or the conditions have been fulfilled, the agreement to sell then becomes a sale.
Sales of Goods Act (SOGA)(Cap.393). States the law on issues such as when ownership of goods passes to the buyer; the implied quality of goods sold; what happens when actual gods are different from the samples show; and many other issues that can arise when a sale of goods taken place.
A contract for the sale of goods is defined as a 'contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration called the price.
Meaning of 'goods' found in s.61(1) SOGA. it includes:
- all personal chattels other than things in action.
- things attached to or forming part of the land which are agreed to be severed before sale.
'Goods' does not include:
- debts - shares
- intangible property (ie. goodwill)
- money (except where coins are sold as collectibles)
Existing good ie. goods owned or posessed by seller
Future goods ie. goods to be manufactured or acquired by the seller after the contract of sale has been made (s.61(1)SOGA)
Specific goods - these are 'goods identified and agreed on at the time a contract of sale is made' (s.61(1)SOGA).
Unascertained goods - these are not defined in SOGA but it is clear that these are goods that are not identified and agreed on at the time the contract was made. It is possible for unascertained goods become ascertained at a later time.
Section 8(1) SOGA provides that 'the price in a contract of sale may be fixed by the contract, or may be left to be fixed in a manner agreed by the contract, or may be determined by the course of dealing between the parties.
- Fixed by the contract
- Fixed in manner agreed by the contract
- Determined by course of dealing between the parties