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CHAPTER II.

Subject-matter of the Contract of Sale-Contract for Sale of specific goods-The price-What a deposit in regard to Sale means— —Agreement to sell goods on terms—Conditions and Warranties-Representations made during Contract-Where Contract subject to any condition in England or Ireland-In Scotland-Where person wishes to waive stipulation-In what cases there is an implied. Contract of Sale-Contract of Sale by Description-What only necessary for buyer to show when seller warrantsContract for the Sale of Goods by description-When no implied warranty as to quality or fitness of particular goods-Bargain and sale of specific goods-No implied warranty in English law as to quality of goods-Seller therefore not liable for breach of implied warranty.

Subject-matter of Contract.-The goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or goods to be manufactured or acquired by the seller after the making of the contract of sale, and which in the Sale of Goods Act, 1893, are called "future goods ". Again, there may be a contract for the sale of goods, the acquisition of which, by the seller, depends upon a contingency which may or may not happen. Furthermore, where, by a contract of sale, the seller purports to effect a present sale of future goods, the contract operates as an agreement to sell the goods. A man cannot assign what has no existence.

Where there is a contract for the sale of specific goods, and the goods, without the knowledge of the seller, have perished at the time when the contract is made, the contract is void. But this has application only to specific goods. Where there is an agreement to sell specific goods, and the goods, without any fault on the part of the seller or buyer, perish before the risk passes to the buyer, the agreement is thereby avoided. “The rule applies to specifically described goods, whether in existence at the time the contract was made or not." (See post.)

The Price. The price in a contract of sale may be fixed by the contract, or may be left to be fixed in manner thereby agreed, or may be determined by the course of dealing between the parties; and where the price is not determined, the buyer must pay a reasonable price. What is a reasonable price is a question of fact, dependent on the circumstances of each particular case.

A deposit signifies that part of the price, prepaid by way of security, handed over at the time the contract is entered into; and the deposit is forfeited if the sale goes off through the fault of the buyer. “The deposit serves two purposes-if the purchase is carried out it goes against the purchase money; but its primary purpose is this, it is a guarantee that the purchaser means business.”

Where there is an agreement to sell goods on the terms that the price is to be fixed by the valuation of a third party, and such third party cannot, or does not make such valuation, the

agreement is avoided; provided, that if the goods. or any part of them have been delivered to, and appropriated by, the buyer, he must pay a reasonable price for them. Moreover, where such party is prevented from making the valuation by the fault of the seller or buyer, the party not in fault may maintain an action in damages against the party in fault.

Conditions and Warranties.-Unless a different intention appears from the terms of the contract, stipulations as to time of payment are to be deemed to be of the essence of a contract of sale. Whether any other stipulation as to time is of the essence of the contract or not depends on the terms of the contract. In a contract of sale the term "month" generally means calendar month.

Representations made during a contract of sale may be a mere expression of opinion, or the representation may amount to a warranty, or may constitute part of the description of the thing sold, or it may be a false and fraudulent representation, and in this last case the contract may be avoided, according to the rule fraus omnia vitiat (explained ante), or the representation may create an estoppel (i.e., a conclusive admission, which cannot be denied or questioned).

In England or Ireland, where a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may waive the condition, or 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. Whether a stipulation in a contract of sale is a condition, the breach of which may give rise to a right to treat the contract as repudiated, or a warranty, the breach of which may give rise to a claim for damages, but not a right to reject the goods and treat the contract as repudiated, depends in each case on the construction of the contract. A stipulation may be a condition, though called a warranty in the contract; and where a contract of sale is not severable, and the buyer has accepted the goods, or part of them, 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 in the contract express or implied to that effect.

In Scotland, failure by the seller to perform any material part of a contract of sale is a breach of contract, which entitles the buyer either within a reasonable time after delivery to reject the goods and treat the contract as repudiated, or to retain the goods and treat the failure to perform such material part as a breach which may give rise to a claim to compensation or damages. And nothing in sub-section (2) of Section II of the Sale of Goods Act, 1893, will affect the case of any condition or warranty, fulfilment of which is excused by law, by reason of impossibility, or otherwise.

If a person wishes to waive a stipulation, which is for his own benefit he may always do so; and where such a condition is prevented from being fulfilled by one party, by the other, such condition is waived.

In a contract of sale, unless the circumstances of the contract are such as to show a different intention, there is (1) an implied condition on the part of the seller that, in the case of a sale, he has a right to sell the goods, and that in the case of an agreement to sell he will have a right to sell the goods at the time when the property is to pass; (2) an implied warranty that the buyer shall have and enjoy quiet possession of the goods; and (3) an implied warranty that the goods shall be free from any charge or encumbrance in favour of any third party not declared or known to the buyer before or at the time when the contract is made. It may here be incidentally mentioned, that in Scotland the implied warranty of freedom from encumbrance is clearly recognised.

When there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description ; and if the sale be by sample as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description. "If you

contract to sell peas, you cannot oblige a party to take beans. If the description of the article is different in any respect, it is not the article bar

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