THE TRADER'S GUIDE

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THE LAW AFFECTING THE

SALE OF GOODS.

INTRODUCTION.

THE law relating to the Sale of Goods has been codified by the Sale of Goods Act, 1893, and according to its learned draughtsman (Mr. M. D. Chalmers), the object of this statute is "to lay down rules when the parties have either formed no intention, or failed to express it". Moreover, the Act seeks to set out in one consistent whole the entire mass of law relating to its subject matter; that is to say, it endeavours to combine common law (judicial decisions) and statute law. But though the law has been codified by this. enactment, yet the common law, as laid down by the judges, loses none of its force.

The primary object which the draughtsman had in view in framing the Sale of Goods Act, 1893, was to substantially reproduce, in statutory shape, the principles of the common law, and at the same

time to include the few enactments (e.g., the 17th Section of the Statute of Frauds), which deal with sales generally, but leaving untouched, though protected by saving clauses, such sections of the statutes as incidentally deal with the law of sale, or only with the sale of certain specified classes of goods.

The Factors Acts remain unchanged, as also do the old statutes 2 & 3 Phil. & Mary, cap. 7 and 31, Eliz., cap. 12, which relate to the sale of horses in market overt.

The Sale of Goods Bill, as originally drawn, only applied to England, but, during its passage through Parliament, Ireland was included, and afterwards special provisions were inserted which make it applicable to Scotland also.

The Sale of Goods Act, 1893, is retrospective.

CHAPTER I.

Contract of Sale-A consensual Contract-Formation of the

Contract-When " agreement to sell" becomes a Sale -What a Contract of Sale includes--Person divests himself of all proprietary rights when he sells goods— Agreement to sell a Contract pure and simple-QuasiContract of Sale-Capacity to Contract-Infants, married women, etc., incapable of contracting except for “necessaries" -Formalities of the Contract of Sale-Written offer to sell goods when accepted-Must be two parties, etc., to Contract-Contract to sell goods exceeding £10— When persons entitled to refuse to complete ContractWhen Contract for Sale of Goods valid.

THE Contract for the Sale of Goods is a consensual contract; that is to say, one of the parties must consent to sell the particular goods, and the other party must agree to buy them.

Formation of the Contract of Sale.-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 money consideration, called the price. This is the essence of the contract. There may be a contract of sale between one part owner and another, and such a contract may be an absolute or a conditional contract, and this includes both actual sales and agreements for sale.

Where under a contract of sale the property in the goods is transferred from the seller to the

buyer the contract is called a sale; but where the transfer of the property in the goods is to take place at a future time, or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell.

An agreement to sell becomes a sale when the time elapses, or the conditions are fulfilled, subject to which the property in the goods is to be transferred.

A "contract of sale" includes an agreement to sell as well as a sale, and the term "sale" includes a bargain and sale as well as a sale and delivery, and the expression "property " denotes the general property in goods, and not merely a special property. A man cannot purchase his own goods; however, one co-proprietor may sell his interest in the goods to another, and there are certain other exceptions, notably, in the case of a bankrupt, who may buy back his own goods from the trustee, but any person occupying a fiduciary position cannot, by the general policy of the law, become a purchaser.

When a person contracts to sell goods, he, by the contract, divests himself of all proprietary rights in them, and the goods become the property of the buyer.

An agreement to sell is a contract pure and simple, certain conditions having to be fulfilled before it is executed, but a sale, that is, an executed contract of sale, is a sale plus a conveyance. If a person buys goods, and makes default, the price may be sued for; on the other hand, if it is an

agreement to buy, the seller's remedy is an action for unliquidated damages. If an agreement to sell is broken by the seller, the buyer's remedy is only a personal one. As a general rule, where there is an agreement for sale and the goods are destroyed, the loss falls on the seller, but if there has been a sale, it is vice versa, notwithstanding the fact that the buyer has never had them in his control.

A quasi-contract of sale is a transaction to which apart from the will of the parties, the law adds consequences, analogous to those which result from a sale.

Capacity to Contract.-Capacity to buy and sell is regulated by the general law concerning capacity to contract, and to transfer and acquire property, but 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 for them. "Necessaries" within the meaning of Section 2 of the Sale of Goods Act, 1893, signify goods suitable to the condition in life of such infant (or minor) or other person, and to his actual requirements at the time of sale and delivery.

What is meant by capacity is this: that a person has power to bind himself; authority, on the other hand, signifies power to bind another.

Infants, married women, lunatics, drunkards, etc., cannot contract. However, by the Married Women Property Act, 1882, a married woman can contract in her own name, and bind herself to the extent of her separate estate; and where she