MLL215 Study Guide - Final Guide: Executory Contract, Breach (Security Exploit), Fide
24 May 2018
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3 Sale of Goods Law
1. CONTRACT OF SALE OF GOODS
SOG = Sale of goods,
SOGA = sale of goods Act:
Rule 1: Where there is a contract for the sale of specific goods in a deliverable state,
the property in the goods passes to B when the contract is made. It is immaterial
whether the time of payment or the time of delivery, or both, are postponed.
Rule 2: Where there is a contract for the sale of specific goods, and S has to do
something to the goods for the purpose of putting them in a deliverable state, the
property does not pass until such a thing is done and B has notice of it.
Rule 3: Where there is a contract for the sale of specific goods in a deliverable state,
but S is meant to weigh, measure, test or do some other actor thing with reference
to the goods for the purpose of ascertaining the price, the property does not pass
until such act or thing is done and B has notice of it.
Rule 4:
(a) Where there is a contract for the sale of unascertained goods by
description, and goods of that description and in a deliverable state are
unconditionally appropriated to the contract either by S with assent of B or B
with assent from S, the property passes to B. Asset may be express or
implied.
(b) Where S delivers the goods to B, or carrier, or other bailer, for the
purpose of transmission to B and does not reserve the right of disposal, the
goods are deemed unconditionally appropriated to the contract.
Rule 5: Where the contract covers unascertained goods by description, the property
does not pass to B until goods answering that description and in a deliverable state
are unconditionally appropriated to the contract by one party with the assent of the
other.
A common form of appropriation is where S delivers goods to a carrier for
the purpose of transmission to B.
25A SOGA: Contract for the sale of a specified quantity of unascertained goods of
which some or all form part of a single bulk quantity of goods.
Bulk must be identified.
B must have paid for some or all of the goods forming a part of the bulk.
Property in an undivided share in the bulk is transferred to B. B becomes an
owner in common of the bulk.
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SOGA applies to contract for SOG between two companies worth thousands of
dollars and to sale of necessities to consumers.
If there is overlap between SOGA and ACL (consumer guarantees), ACL prevails.
Victoria – Goods Act 1958.
DOES NOT COVER WORK OR LABOUR
CONTRACT:
Executed contract.
Executory contract.
Sale = ownership transferred.
Agreement to sell = ownership transferred at a future time. Includes contract to sell
unascertained goods (needs an act to complete the sale, such as delivery or
appropriation of specific goods).
RIGHTS UNDER A SALE:
S – right to sue B for price of goods.
B – right to sue S for damages (delivery).
Risk of loss after sale is with B, as ownership has passed.
RIGHTS UNDER AGREEMENT TO SALE:
S – can sue B for event of default.
B – can sue S for damages (non-delivery).
Risk of loss is with S, as ownership has not passed.
CLASSIFICATION OF GOODS:
Existing goods – owned or possessed by S at the time of the contract.
Future goods – manufactured or acquired by S after making the contract of sale.
1. Specific/identified – earmarked (e.g. Oscar the champion Kangaroo).
2. Unascertained/unidentified – generic goods (e.g. an adult male kangaroo)
Ascertained goods – property passes when the parties intend according the contract
or circumstances. Contract is void if goods have perished without the knowledge of S
at the time the contract is made.
Unascertained goods – property does not pass until the goods are ascertained and
being in a deliverable state are appropriated to the contract.
PRICE:
The contract may be complete and binding even though no price is stated. B must
pay a reasonable price.
The price of the goods must be paid upon delivery, unless agreed otherwise.
FORMALITIES:
No formalities required to be enforceable
ACCEPTANCE:
‘elatiel short period to aept
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2. TERMS OF THE CONTRACT
CONDITION – BREACH PERMITS B TO EITHER:
Rescind and recover damages, or;
Accept and recover damages.
Conditions as to title – S has right to sell goods. If S has no title to the
goods, there is no consideration.
If Bs title is oided eause “ has o title, B is etitled to a refud.
Rowland v Divall (1923)).
WARRANTY – BREACH PERMITS DAMAGES.
No right to rescind or repudiate.
Implied conditions and warranties exist under SOGA.
Goods are free from any charge or encumbrance in favour of any TP not
declared. B will have and enjoy quiet possession of the goods.
WHEN A CONDITION IS TO BE TREATED AS A WARRANTY
B may treat a breach of condition as a breach of warranty eg. Sold by description.
CONTRACTUAL CONSTRUCTION DETERMINES WHETHER A TERM IS A CONDITION OR A
WARRANTY.
Parties can include express conditions and warranties.
Contract for SOG by description – implied condition that goods will
correspond with the description.
Applies where B has not seen the goods and relies on the description (Varley
v Whipp (1900)).
B can reject the goods or sue for damages.
Applies to goods sold by a dealer and private sales.
ELDER SMITHS GOLDSBROUGH MORT LTD V MCBRIDE [1976]
B bought a bull for stud purposes.
Paid $21k.
Worth $500.
Sale by description – breach of implied condition. B could recover from S the value of
the bull minus the price for slaughtering purposes.
MERCHANTABLE QUALITY:
Fit for a purpose for which goods of that description are normally used (HENRY
KENDALL & SONS V WILLIAM LILICO (1969)).
Where B makes known to S the particular purpose for which the goods are
required, there is an implied condition that the goods are reasonably fit for
such purposes.
If B examines the goods before the contract is made, the condition is not implied as
regard such defects which such examination ought to have revealed (THORNETT &
FEHRS V BEERS & SON (1990).
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
3 sale of goods law: contract of sale of goods. Rule 1: where there is a contract for the sale of specific goods in a deliverable state, the property in the goods passes to b when the contract is made. It is immaterial whether the time of payment or the time of delivery, or both, are postponed. A common form of appropriation is where s delivers goods to a carrier for the purpose of transmission to b. 25a soga: contract for the sale of a specified quantity of unascertained goods of which some or all form part of a single bulk quantity of goods. B must have paid for some or all of the goods forming a part of the bulk. Property in an undivided share in the bulk is transferred to b. B becomes an owner in common of the bulk.
