FORMATION OF THE CONTRACT. or agency in order to evade the revenue laws (a), or although their governing motive was that one party should have a right to the chattel as security for a loan (b). In goods. These are defined in s. 62 (1). The law specially applicable to such things as emblements, fixtures, &c., is discussed in the notes to s. 4, post, p. 23, with reference to the provisions of that section. "Goods" are further subdivided into "existing" and "future" (see s. 62 (1)) goods in s. 5. See also ss. 6 and 7. To the buyer, for a money consideration called the price."It must be money, paid or promised, accordingly as the agreement may be for a cash or a credit sale; but if any other consideration than money be given, it is not a sale. If goods be given in exchange for goods, it is a barter (c). So also goods may be given in consideration of work and labour done, or for rent, or for board and lodging (d), or any valuable consideration other than money; all of which are contracts for the transfer of the absolute and general property in the thing, but they are not sales of goods. The legal effects of such special contracts, as well as of barter, on the rights of the parties are generally, but not always, the same as in the case of sales (e). If no valuable consideration be given for the transfer, it is a gift, not a sale" (ƒ). But the consideration need not consist wholly of a price. If part of the consideration be money, it is a sale (g). The price may be fixed by the contract, or be ascertained afterwards. See ss. 8, 9, post, p. 61. Between one part owner and another.-This clause would more properly be included under the definition of capacity in s. 3. It applies to partners as well as part owners (h). Thus, one part owner of a ship can sell his share to another (i), and a firm (a) Hutton v. Lippert (1883), 6 Ap. Ca. 309. (b) McBain v. Wallace (1882), 6 Ap. Ca. 588; but see s. 61 (4), and note thereon. (c) Harrison v. Luke (1845), 14 M. & W. 139. The Act does not apply to contracts of exchange; cf. s. 5 of the Factors Act, 1889 (Appendix, post). (d) See an example in Keys v. Harwood (1846), 2 C. B. 905. (e) See Emmanuel v. Dane (1812), 3 Camp. 299 (warranty on barter); La Neuville v. Nourse (1813), 3 Camp. 351 (caveat emptor). (f) Benj. pp. 2, 3. A gift of chattels, not made by deed, does not pass the property without delivery; herein it differs from a sale. See Cochrane v. Moore (1890), 25 Q. B. D. 557; and cf. Kilpin v. Rattey, [1892] 1 Q. B. 582. (g) Sheldon v. Cox (1824), 3 B. & C. 120; Hands v. Burton (1809), 9 East, 349; Bull v. Parker (1843), 7 Jur. 282. (h) For the difference between the two, see Lindley on Partnership (ed. 1893), pp. 25 et seq. (i) Beed v. Blandford (1828), 2 Y. & J. 278. S. 1 (1). S. 1 (1). S. 1 (2). S. 1 (3). may exercise the rights of an unpaid seller under ss. 38 et seq. against the buyer, a member of the firm (k). "Abso A contract of sale may be absolute or conditional. lute" appears to be used in the sense of "unconditional," the "pure et simple" of the French Civil Code, s. 1584. "Conditions" are divided into suspensive or precedent, and resolutive or subsequent. In the former case "the liability to perform the promise does not arise till a certain thing has happened, or a certain time has elapsed." In the latter, "the liability is discharged by the non-fulfilment"(). The term "condition" appears to include two classes of conditions, whether precedent or subsequent : (1.) Conditions properly so called, or terms or representations of, or in the contract, express or implied: (2.) Contingencies or collateral events out of the control of either party. Instances of (1) are to be found in ss. 10-15 (implied conditions precedent of quality); ss. 16-19 (implied conditions precedent to vesting of property); s. 28 (implied concurrent conditions of delivery and payment); ss. 30, 31 (implied conditions precedent as to quantity); Beer v. Walker (m) (implied condition subsequent of merchantableness on arrival, under ss. 14 (2), 33); Colonial Insurance Co. of New Zealand v. Adelaide Marine Insurance Co. (n) (implied condition subsequent of noncompletion of delivery under s. 30 (1)); s. 34 (implied conditions precedent to acceptance); s. 48 (4) (express condition subsequent for re-sale on default). Instances of (2) are s. 5 (2) (express condition precedent of acquisition of goods by seller); s. 6 (implied condition precedent of existence of goods); s. 7 (implied condition subsequent of continued existence of goods); s. 9 (valuation an implied condition subsequent to sale). Cases falling under s. 6 should, however, more properly be considered cases of mutual mistake under s. 61 (2). "an Property... is transferred-Transfer. . . is to take place. These words respectively contemplate the distinction between what was called "a bargain and sale" at common law, and " executory agreement" or "an executory contract of sale." In the former case, the contract was itself also a conveyance of the (k) Ex parte Cooper (1879), 11 Ch. D. 68. (1) Anson on C. (5th ed.) p. 301. See the curious old case of Elliott v. Blake (1662), 1 Lev. 88. (m) (1877), 25 W. R. 880. On property, or (as the phrase ran) it was executed in the latter "A contract may be perfectly binding between the parties, so as to give either of them a remedy against the person and general estate of the other in case of default (p), but having no effect to transfer the property or right of possession in the goods themselves, and therefore giving to the proposed purchaser none of the rights, and subjecting him to none of the liabilities of an owner (g); and this is an 'Executory Agreement.' Or it may be a perfect sale, conveying the absolute general property in the thing sold to the purchaser, entitling him to the goods themselves (r), independently of any personal remedy against the vendor for breach of contract (s), and rendering him liable to the risk of loss in case of their destruction (t); and this is a 'Bargain and Sale of Goods."" And in another passage (u), he says: "In the one case, A. sells to B.: in the other he only promises to sell. In the one case, as B. becomes the owner of the goods themselves, as soon as the contract is completed by mutual consent; if they are lost or destroyed, he is the sufferer (t). In the other case, as he does not become the owner of the goods, he cannot claim them specifically (r); he is not the sufferer if they are lost (1), cannot maintain trover for them, and has at common law no other remedy for breach of the contract than an action for damages. Both these contracts being equally legal and valid, it is obvious that whenever a dispute arises as to the true character of an agreement, the question is one rather of fact than of law. The agreement is just what the parties intended to make it." The rules for ascertaining the intention of the parties as to the time when the property in the goods is to pass are given in s. 18, post. At a future time, or subject to some condition.-Instances of contracts of sale where the vesting of the property is postponed till a future period, are contracts of "sale or return,' approval," &c. (x). "on S. 1 (3). S. 1 (3). 8. 1 (4). With regard to conditions precedent to the vesting of the property, see notes to sub-s. 2, and cases in illustrations. Agreement to sell becomes a sale." The contract has been made in two successive stages, instead of being completed at one time; but it is none the less one contract, namely, a bargain and sale of goods. As was said by Holroyd, J., in Rohde v. Thwaites (y), 'the selection of the goods by the one party, and the adoption of that act by the other, converts that which before was a mere agreement to sell into an actual sale, and the property thereby passes'" (z). ILLUSTRATIONS. 1. A. contracts to sell B. certain goods on condition that, on delivery, certain outstanding bills against A. should be taken out of circulation. This is " an agreement to sell" till the bills are taken up, and then a Bishop v. Shillito (1819), 2 B. & A. 329 a. sale. 2. A. delivers to B. furniture on hire, which is to become the property of B. when he pays all the instalments of the price. This is an agreement to sell" until the price is fully paid, and then a sale. Ex parte Crawcour (1878), 9 Ch. D. 419. 66 3. A. contracts to sell B. goods on trial for two days. This is an agreement to sell, and becomes a sale when the two days elapse without disapproval by B. Humphries v. Carvalho (1812), 16 East, 45. 4. A. agrees to lend B. a musical box, on condition that B. pays for it if it is damaged in his possession. The box is damaged. The agreement becomes a sale when the box is damaged. Bianchi v. Nash (1836), 1 M. & W. 545 (a). 5. B. orders of A. a set of artificial teeth. A. takes a model of B.'s mouth and makes the teeth. This is a contract of sale and not for work and labour and materials, as the order was for a chattel to be delivered. Lee v. Griffin (1861), 1 B. & S. 272. 6. A. agrees to print for B. five hundred copies of a work, and find the paper therefor. This is a contract by A. to do work and to supply materials for B., as there is properly no chattel, the property in which is to be transferred from A. to B. Clay v. Yates (1856), 1 H. & N. 73 (b). 7. B. employs A., an engineer, to devise a place for curving metal tubing for the manufacture of a life buoy of which B. was the inventor. A. makes drawings of a machine, and makes a ring or mandrel and experiments with it for the purpose intended. This is a contract only for work and labour. Grafton v. Armitage (1845), 2 C. B. 336. (y) (1827), 6 B. & C. 388. This was the case of an agreement to sell unascertained goods (z) Benj. p. 318. (a) This and similar cases have a double aspect: (1) B.'s assent to the contract of sale is given conditionally; (2) the same condition also applies to the passing of the property. See Benj. p. 67. (b) It is pointed out by Mr. Justice Stephen and Sir Frederick Pollock, (L. Q. Review, vol. i. p. 10) that B.'s copyright in the book qualifies A.'s proprietary rights in the book when printed. B. therefore had an existing property in the chattel, and the case falls outside the rule stated on p. 4, ante. 2. Capacity to buy and sell is regulated by the general law concerning capacity to contract, and to transfer and acquire property. Provided that where necessaries are sold and delivered to an infant or minor or to a person who by reason of mental incapacity or drunkenness is incompetent to contract, he must pay a reasonable price therefor. "Necessaries" in this section mean goods suitable to the condition in life of such infant or minor or other person, and to his actual requirements at the time of the sale and delivery. Capacity to buy and sell-i.e., to enter into a contract of sale. The effect of the contract as regards the title transferred is regu lated in ss. 21-26. Persons as a general rule incompetent to contract are:— 2. Alien enemies, or subjects of a foreign state actually at 3. Married women (e), who are now, under the Married 4. Infants. 5. Minors in Scotland. 6. Lunatics. 7. Drunkards. It is proposed to consider the general law as to competency to contract for the sale of goods, whether necessaries or not, as applicable to: (1.) Infants. (2.) Minors (in Scotland). (3.) Lunatics. (4.) Drunkards. S. 2. Capacity to buy and sell. Firstly, as regards infants." Infants are protected by law Infants. from liability on purchases made by them, except for necessaries. (c) 33 & 34 Vict. c. 23, ss. 6, 8, 30. (d) See Poll. on C. (5th ed.) p. 94; Benj. p. 497. (e) Benj. pp. 34—41. |