The Sale of Goods Act 1896 supplies default legal rules for contracts to buy and sell physical goods: who the parties are, when a sale forms, how property and risk pass, implied promises about title and quality, and remedies for breach.
It affects buyers, sellers, carriers, intermediaries and creditors by allocating loss, insurance and commercial remedies (liens, stoppage, resale), reducing negotiation costs through defaults while preserving freedom to contract and leaving many fact‑dependent questions to courts.
This Act sets out the statutory framework for contracts for the sale of goods and the rights and obligations that flow from those contracts. Mechanically it:
Defines the core parties and concepts used throughout the statute, including buyer, seller, goods, specific goods, future goods, property, delivery, document of title, warranty, and what is meant by "good faith", "deliverable state", and bankruptcy for the Act's purposes (s 3(1)-(4)). These definitions determine when particular rules apply and which remedies become available.
Establishes how a contract of sale is formed, including that it may be written, oral, partly written/partly oral, or implied by conduct (s 8), and that a sale differs from an agreement to sell according to when property is to transfer (s 6).
Imposes a formal hurdle for enforceability of certain sales by valuing contracts at $20 or more and requiring acceptance of part delivery, part payment, or a signed note or memorandum by the party to be charged (s 9(1)-(3)).
Differentiates existing goods, unascertained goods and future goods, and prescribes consequences where goods have perished before or after agreement (ss 10-12, 21).
Prescribes rules for ascertainment of price (s 13), valuation-based contracts (s 14), and when time stipulations are of the essence (s 15).
Creates a framework of implied terms about title, quiet possession and freedom from undisclosed encumbrances (s 17), correspondence with description or sample (ss 18-20), and implied conditions or warranties as to quality and fitness only in specified circumstances (s 19).
Sets rules for the passing of property and risk between parties, including detailed rules for ascertaining the parties’ intention and a set of presumptive rules where intention is not stated (ss 22-25, 23). It allows the seller to reserve the right of disposal and specifies how that reservation affects transfer of property (s 24).
Current sections
Direct links to the current provisions in Sale of Goods Act 1896.
This Act shall come into operation on the first day of January 1897.
3
Interpretation
3 Interpretation
(1) *[Section 3 Subsection (1) amended by 25 Geo. V No. 78 ]*In this Act, unless the contrary intention appears –
action includes counter-claim and set-off;
buyer means a person who buys or agrees to buy goods;
contract of sale includes an agreement to sell as well as a sale;
delivery means voluntary transfer of possession from one person to another;
document of title has the same meaning as it has in the Factors Act 1891 ;
fault means wrongful act or default;
future goods means goods to be manufactured or acquired by the seller after the making of the contract for sale;
goods includes all chattels personal other than things in action and money. The term includes emblements, industrial growing crops, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale;
plaintiff includes defendant counter-claiming;
property means the general property in goods and not merely a special property;
quality of goods includes their state or condition;
sale includes a bargain and sale as well as a sale and delivery;
seller means a person who sells or agrees to sell goods;
specific goods means goods identified and agreed upon at the time a contract of sale is made; and
warranty means an agreement with reference to goods which are the subject of a contract of sale but collateral to the main purpose of such contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated.
(2) A thing is deemed to be done in "good faith" within the meaning of this Act when it is in fact done honestly, whether it be done negligently or not.
(3) A person is deemed to be bankrupt within the meaning of this Act who either has ceased to pay his debts in the ordinary course of business or cannot pay his debts as they become due, whether he has committed an act of bankruptcy or not.
(4) Goods are in a "deliverable state" within the meaning of this Act when they are in such a state that the buyer would under the contract be bound to take delivery of them.
4.
4.
[Section 4 Repealed by 25 Geo. V No. 78 ]
5
Saving as to bankruptcy law, common law and law merchant, other Acts, and contracts of security
5 Saving as to bankruptcy law, common law and law merchant, other Acts, and contracts of security
(1) The rules in bankruptcy relating to contracts of sale shall continue to apply thereto notwithstanding anything in this Act contained.
(2) The rules of the common law, including the law merchant, save in so far as they are inconsistent with the express provisions of this Act, and in particular the rules relating to the law of principal and agent and the effect of fraud, misrepresentation, duress, or coercion, mistake, or other invalidating cause shall continue to apply to contracts for the sale of goods.
(3) Nothing in this Act, or in any repeal effected thereby, shall affect the enactments relating to bills of sale, or any enactment relating to the sale of goods which is not expressly repealed by this Act.
(4) The provisions of this Act relating to contracts of sale do not apply to any transaction in the form of a contract of sale which is intended to operate by way of mortgage, pledge, charge, or other security.
6
Sale and agreement to sell
6 Sale and agreement to sell
(1) 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. There may be a contract of sale between one part owner and another.
(2) A contract of sale may be absolute or conditional.
(3) 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.
(4) 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.
7
Capacity to buy and sell
7 Capacity to buy and sell
[Section 7 Amended by 25 Geo. V No. 78 ]
(1) 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.
(2) Necessaries in this section means 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.
8
Contract of sale: How made
8 Contract of sale: How made
*[Section 8 Amended by 25 Geo. V No. 78 ]*Subject to the provisions of this Act and of any Act in that behalf, a contract of sale may be made in writing (either with or without seal) or by word of mouth, or partly in writing and partly by word of mouth, or may be implied from the conduct of the parties: Provided that nothing in this section shall affect the law relating to corporations.
9
Contract for sale at $20 and upwards
9 Contract for sale at $20 and upwards
(1) *[Section 9 Subsection (1) amended by No. 55 of 1965, s. 5 ]*A contract for the sale of any goods of the value of $20 or upwards shall not be enforceable by action unless the buyer shall accept part of the goods so sold and actually receive the same or give something in earnest to bind the contract, or in part payment, or unless some note or memorandum in writing of the contract be made and signed by the party to be charged or his agent in that behalf.
(2) The provisions of this section apply to every such contract, notwithstanding that the goods may be intended to be delivered at some future time or may not at the time of such contract be actually made, procured, or provided or be fit or ready for delivery, or some act may be requisite for the making or completing thereof or rendering the same fit for delivery.
(3) There is an acceptance of goods within the meaning of this section when the buyer does any act in relation to the goods which recognizes a pre-existing contract of sale whether there be an acceptance in performance of the contract or not.
10
Existing or future goods
10 Existing or future goods
(1) 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, in this Act called "future goods".
(2) 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.
(3) 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.
11
Goods that have perished
11 Goods that have perished
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.
12
Goods perished before sale but after agreement to sell
12 Goods perished before sale but after agreement to sell
Where there is an agreement to sell specific goods, and subsequently 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.
13
Ascertainment of price
13 Ascertainment of price
(1) 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.
(2) Where the price is not determined in accordance with the foregoing provisions 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.
14
Agreement to sell by valuation
14 Agreement to sell by valuation
(1) 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 thereof have been delivered to and appropriated by the buyer he must pay a reasonable price therefor.
(2) Where such third party is prevented from making the valuation by the fault of the seller or buyer, the party not in fault may maintain an action for damages against the party in fault.
15
Stipulations as to time
15 Stipulations as to time
*[Section 15 Amended by 25 Geo. V No. 78 ]*Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not 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.
16
When condition to be treated as warranty
16 When condition to be treated as warranty
(1) 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.
(2) 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 to 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.
(3) Where a contract of sale is not severable and the buyer has accepted the goods or part thereof, 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 of the contract express or implied to that effect.
(4) Nothing in this section shall affect the case of any condition or warranty fulfilment of which is excused by law by reason of impossibility or otherwise.
17
Implied undertaking as to title, &c.
17 Implied undertaking as to title, &c.
In a contract of sale, unless the circumstances of the contract are such as to show a different intention, there is –
(a) 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;
(b) an implied warranty that the buyer shall have and enjoy quiet possession of the goods;
(c) an implied warranty that the goods shall be free from any charge or incumbrance in favour of any third party not declared or known to the buyer before or at the time when the contract is made.
18
Sale by description
18 Sale by description
Where 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.
19
When conditions as to quality or fitness to be implied
19 When conditions as to quality or fitness to be implied
*[Section 19 Amended by 25 Geo. V No. 78 ]*Subject to the provisions of this Act and of any Act in that behalf, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows:
(a) Where the buyer expressly or by implication makes known to the seller the particular purpose for which the goods are required so as to show that the buyer relies on the seller's skill or judgment, and the goods are of a description which it is in the course of the seller's business to supply (whether he be the manufacturer or not), there is an implied condition that the goods shall be reasonably fit for such purpose: Provided that in the case of a contract for the sale of a specified article under its patent or other trade name there is no implied condition as to its fitness for any particular purpose;
(b) Where goods are bought by description from a seller who deals in goods of that description (whether he be the manufacturer or not) there is an implied condition that the goods shall be of merchantable quality: Provided that, if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed;
(c) An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade;
(d) An express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith.
20
Sale by sample
20 Sale by sample
(1) A contract of sale is a contract for sale by sample where there is a term in the contract express or implied to that effect.
(2) *[Section 20 Subsection (2) amended by 25 Geo. V No. 78 ]*In the case of a contract for sale by sample there is an implied condition that –
(a) the bulk shall correspond with the sample in quality;
(b) the buyer shall have a reasonable opportunity of comparing the bulk with the sample; and
(c) the goods shall be free from any defect rendering them unmerchantable, which would not be apparent on reasonable examination of the sample.
Part II
Effects of the Contract
Part II Effects of the Contract
21
Goods must be ascertained
21 Goods must be ascertained
Where there is a contract for the sale of unascertained goods no property in the goods is transferred to the buyer unless and until the goods are ascertained.
22
Property passes at time intended to pass
22 Property passes at time intended to pass
(1) Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.
(2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties, and the circumstances of the case.
23
Rules for ascertaining intention
23 Rules for ascertaining intention
Unless a different intention appears, the following are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer –
| Rule 1—Where there is an unconditional contract for the sale of specific goods in a deliverable state the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery or both be postponed. |
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| Rule 2—Where there is a contract for the sale of specific goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state the property does not pass until such thing be done and the buyer has notice thereof. |
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| Rule 3—Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, measure, test, or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing be done and the buyer has notice thereof. |
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| Rule 4—When goods are delivered to the buyer on approval or on "sale or return" or other similar terms, the property therein passes to the buyer— |
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| (a) when he signifies his approval or acceptance to the seller or does any other act adopting the transaction; |
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| (b) if he does not signify his approval or acceptance to the seller, but retains the goods without giving notice of rejection, then if a time has been fixed for the return of the goods on the expiration of such time and if no time has been fixed on the expiration of a reasonable time. What is a reasonable time is a question of fact. |
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| Rule 5—(1) Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be expressed or implied, and may be given either before or after the appropriation is made. |
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| (2) Where in pursuance of the contract the seller delivers the goods to the buyer or to a carrier or other bailee or custodier (whether named by the buyer or not) for the purpose of transmission to the buyer and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract. |
24
Reservation of right of disposal
24 Reservation of right of disposal
(1) Where there is a contract for the sale of specific goods or where goods are subsequently appropriated to the contract, the seller may by the terms of the contract or appropriation reserve the right of the disposal of the goods until certain conditions are fulfilled. In such case, notwithstanding the delivery of the goods to the buyer or to a carrier or other bailee or custodier for the purpose of transmission to the buyer, the property in the goods does not pass to the buyer until the conditions imposed by the seller are fulfilled.
(2) Where goods are shipped, and by the bill of lading the goods are deliverable to the order of the seller or his agent, the seller is prima facie deemed to reserve the right of disposal.
(3) Where the seller of goods draws on the buyer for the price and transmits the bill of exchange and bill of lading to the buyer together to secure acceptance or payment of the bill of exchange, the buyer is bound to return the bill of lading if he does not honour the bill of exchange, and if he wrongfully retains the bill of lading the property in the goods does not pass to him.
25
Risk prima facie passes with property
25 Risk prima facie passes with property
Unless otherwise agreed, the goods remain at the seller's risk until the property therein is transferred to the buyer, but when the property therein is transferred to the buyer the goods are at the buyer's risk whether delivery has been made or not: Provided that, where delivery has been delayed throughthe fault of either buyer or seller the goods are at the risk of the party in fault as regards any loss which might not have occurred but for such fault: Provided also that nothing in this section shall affect the duties or liabilities of either seller or buyer as a bailee or custodier of the goods of the other party.
26
Sale by person not the owner
26 Sale by person not the owner
(1) Subject to the provisions of this Act, where goods are sold by a person who is not the owner thereof and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell.
(2) Provided also that nothing in this Act, unless specially so expressed, shall affect –
(a) the provisions of the Factors Act 1891 , or any enactment enabling the apparent owner of goods to dispose of them as if he were the true owner thereof;
(b) the validity of any contract of sale under any special common law or statutory power of sale, or under the order of a court of competent jurisdiction.
27
Market overt
27 Market overt
(1) Where goods are sold in market overt according to the usage of the market the buyer acquires a good title to the goods provided he buys them in good faith and without notice of any defect or want of title on the part of the seller.
(2) Nothing in this section shall affect the law relating to the sale of cattle.
28
Sale under voidable title
28 Sale under voidable title
When the seller of goods has a voidable title thereto but his title has not been avoided at the time of the sale, the buyer acquires a good title to the goods provided that he buys them in good faith and without notice of the seller's defect of title.
29
Revesting of property in stolen goods on conviction of offender
29 Revesting of property in stolen goods on conviction of offender
(1) Where goods have been stolen and the offender is prosecuted to conviction the property in the goods so stolen revests in the person who was the owner of the goods or his personal representative, notwithstanding any intermediate dealing with them, whether by sale in market overt or otherwise.
(2) *[Section 29 Subsection (2) amended by 25 Geo. V No. 78 ]*Notwithstanding any enactment to the contrary, where goods have been obtained by fraud or other wrongful means not amounting to stealing the property in such goods shall not revest in the person who was the owner of the goods or his personal representative by reason only of the conviction of the offender.
30
Seller or buyer in possession after sale
30 Seller or buyer in possession after sale
(1) Where a person having sold goods continues or is in possession of the goods or of the documents of title to the goods, the delivery or transfer by that person or by a mercantile agent acting for him of the goods or documents of title under any sale, pledge, or other disposition thereof to any person receiving the same in good faith and without notice of the previous sale, shall have the same effect as if the person making the delivery or transfer were expressly authorized by the owner of the goods to make the same.
(2) Where a person having bought or agreed to buy goods obtains, with the consent of the seller, possession of the goods or the documents of title to the goods, the delivery or transfer by that person or by a mercantile agent acting for him of the goods or documents of title under any sale, pledge, or other disposition thereof to any person receiving the same in good faith and without notice of any lien or other right of the original seller in respect of the goods, shall have the same effect as if the person making the delivery or transfer were a mercantile agent in possession of the goods or documents of title with the consent of the owner.
(3) In this section the term
mercantile agent means a mercantile agent having in the customary course of his business as such agent authority either to sell goods or to consign goods for the purpose of sale or to buy goods or to raise money on the security of goods.
31
Effect of writs of execution
31 Effect of writs of execution
(1) A writ of fieri facias or warrant or other writ of execution against goods shall bind the property in the goods of the execution debtor as from the time when the writ is delivered to the sheriff to be executed; and for the better manifestation of such time it shall be the duty of the sheriff, without fee, upon the receipt of any such writ, to endorse upon the back thereof the hour, day, month, and year when he received the same: Provided that no such writ and no writ of attachment against the goods of a debtor shall prejudice the title to such goods acquired by any person in good faith and for valuable consideration unless such person had at the time when he acquired his title notice that such writ or warrant, or any other writ by virtue of which the goods of the execution debtor might be seized or attached, had been delivered to and remained unexecuted in the hands of the sheriff.
(2) In this section the term
sheriff includes any officer charged with the enforcement of a writ of execution.
Part III
Performance of the contract
Part III Performance of the contract
32
Duties of seller and buyer
32 Duties of seller and buyer
It is the duty of the seller to deliver the goods and of the buyer to accept and pay for them in accordance with the terms of the contract of sale.
33
Payment and delivery are concurrent conditions
33 Payment and delivery are concurrent conditions
Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions; that is to say, the seller must be ready and willing to give possession of the goods to the buyer in exchange for the price, and the buyer must be ready and willing to pay the price in exchange for possession of the goods.
34
Rules as to delivery
34 Rules as to delivery
(1) Whether it is for the buyer to take possession of the goods, or for the seller to send them to the buyer, is a question depending in each case on the contract, express or implied, between the parties. Apart from any such contract express or implied, the place of delivery is the seller's place of business, if he have one, and if not, his residence: Provided that if the contract be for the sale of specific goods which to the knowledge of the parties when the contract is made are in some other place, then that place is the place of delivery.
(2) Where under the contract of sale the seller is bound to send the goods to the buyer, but no time for sending them is fixed, the seller is bound to send them within a reasonable time.
(3) Where the goods at the time of sale are in the possession of a third person there is no delivery by seller to buyer unless and until such third person acknowledges to the buyer that he holds the goods on his behalf: Provided that nothing in this section shall affect the operation of the issue or transfer of any document of title to goods.
(4) Demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour. What is a reasonable hour is a question of fact.
(5) Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state must be borne by the seller.
35
Delivery of wrong quantity
35 Delivery of wrong quantity
(1) Where the seller delivers to the buyer a quantity of goods less than he contracted to sell the buyer may reject them, but if the buyer accepts the goods so delivered he must pay for them at the contract rate.
(2) Where the seller delivers to the buyer a quantity of goods larger than he contracted to sell, the buyer may accept the goods included in the contract and reject the rest, or he may reject the whole. If the buyer accepts the whole of the goods so delivered he must pay for them at the contract rate.
(3) Where the seller delivers to the buyer the goods he contracted to sell mixed with goods of a different description not included in the contract, the buyer may accept the goods which are in accordance with the contract and reject the rest, or he may reject the whole.
(4) The provisions of this section are subject to any usage of trade, special agreement, or course of dealing between the parties.
36
Instalment deliveries
36 Instalment deliveries
(1) Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by instalments.
(2) Where there is a contract for the sale of goods to be delivered by stated instalments which are to be separately paid for, and the seller makes defective deliveries in respect of one or more instalments, or the buyer neglects or refuses to take delivery of or pay for one or more instalments, it is a question in each case depending on the terms of the contract and the circumstances of the case whether the breach of contract is a repudiation of the whole contract, or whether it is a severable breach giving rise to a claim for compensation, but not to a right to treat the whole contract as repudiated.
37
Delivery to carrier
37 Delivery to carrier
(1) Where in pursuance of a contract of sale the seller is authorized or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer, is prima facie deemed to be a delivery of the goods to the buyer.
(2) Unless otherwise authorized by the buyer, the seller must make such contract with the carrier on behalf of the buyer as may be reasonable, having regard to the nature of the goods and the other circumstances of the case. If the seller omit so to do, and the goods are lost or damaged in course of transit, the buyer may decline to treat the delivery to the carrier as a delivery to himself or may hold the seller responsible in damages.
(3) Unless otherwise agreed, where goods are sent by the seller to the buyer by a route involving sea transit under circumstances in which it is usual to insure, the seller must give such notice to the buyer as may enable him to insure them during their sea transit, and if the seller fails to do so the goods shall be deemed to be at his risk during such sea transit.
38
Risk where goods are delivered at distant place
38 Risk where goods are delivered at distant place
When the seller of goods agrees to deliver them at his own risk at a place other thanthat where they are when sold, the buyer must nevertheless, unless otherwise agreed, take any risk of deterioration in the goods necessarily incident to the course of transit.
39
Buyer's right to examine goods
39 Buyer's right to examine goods
(1) Where goods are delivered to the buyer which he has not previously examined he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract.
(2) Unless otherwise agreed, when the seller tenders delivery of goods to the buyer he is bound on request to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract.
40
Acceptance
40 Acceptance
The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller, or when after the lapse of a reasonable time he retains the goods without intimating to the seller that he has rejected them.
41
Buyer not bound to return rejected goods
41 Buyer not bound to return rejected goods
Unless otherwise agreed, where goods are delivered to the buyer and he refuses to accept them, having the right so to do, he is not bound to return them to the seller, but it is sufficient if he intimates to the seller that he refuses to accept them.
42
Liability of buyer for neglecting or refusing delivery of goods
42 Liability of buyer for neglecting or refusing delivery of goods
When the seller is ready and willing to deliver the goods and requests the buyer to take delivery and the buyer does not within a reasonable time after such request take delivery of the goods, he is liable to the seller for any loss occasioned by his neglect or refusal to take delivery, and also for a reasonable charge for the care and custody of the goods. Nothing in this section shall affect the rights of the seller where the neglect or refusal of the buyer to take delivery amounts to a repudiation of the contract.
Part IV
Rights of Unpaid Seller Against the Goods
Part IV Rights of Unpaid Seller Against the Goods
43
Unpaid seller defined
43 Unpaid seller defined
(1) The seller of goods is deemed to be an "unpaid seller" within the meaning of this Act –
(a) when the whole of the price has not been paid or tendered;
(b) when a bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has not been fulfilled by reason of the dishonour of the instrument or otherwise.
(2) In this Part the term
seller includes any person who is in the position of a seller, as, for instance, an agent of the seller to whom the bill of lading has been endorsed or a consignor or agent who has himself paid or is directly responsible for the price.
44
Unpaid seller's rights
44 Unpaid seller's rights
(1) *[Section 44 Subsection (1) amended by 25 Geo. V No. 78 ]*Subject to the provisions of this Act and of any Act in that behalf, notwithstanding that the property in the goods may have passed to the buyer, the unpaid seller of goods as such has by implication of law –
(a) a lien on the goods or right to retain them for the price while he is in possession of them;
(b) in case of the insolvency of the buyer a right of stopping the goods in transitu after he has parted with the possession of them;
(c) a right of resale as limited by this Act.
(2) Where the property in goods has not passed to the buyer the unpaid seller has, in addition to his other remedies, a right of withholding delivery similar to and co-extensive with his rights of lien and stoppage in transitu where the property has passed to the buyer.
45
Unpaid seller's lien
45 Unpaid seller's lien
(1) Subject to the provisions of this Act the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases, namely:
(a) Where the goods have been sold without any stipulation as to credit;
(b) Where the goods have been sold on credit but the term of credit has expired;
(c) Where the buyer becomes insolvent.
(2) The seller may exercise his right of lien notwithstanding that he is in possession of the goods as agent or bailee or custodier for the buyer.
46
Part delivery
46 Part delivery
Where an unpaid seller has made part delivery of the goods he may exercise his right of lien or retention on the remainder unless such part delivery has been made under such circumstances as to show an agreement to waive the lien or right of retention.
47
Termination of lien
47 Termination of lien
(1) The unpaid seller of goods loses his lien or right of retention thereon –
(a) when he delivers the goods to a carrier or other bailee or custodier for the purpose of transmission to the buyer without reserving the right of disposal of the goods;
(b) when the buyer or his agent lawfully obtains possession of the goods; or
(c) by waiver thereof.
(2) The unpaid seller of goods having a lien or right of retention thereon does not lose his lien or right of retention by reason only that he has obtained judgment or decree for the price of the goods.
48
Right of stoppage in transitu
48 Right of stoppage in transitu
Subject to the provisions of this Act, when the buyer of goods becomes insolvent the unpaid seller who has parted with the possession of the goods has the right of stopping them in transitu; that is to say, he may resume possession of the goods as long as they are in course of transit and may retain them until payment or tender of the price.
49
Duration of transit
49 Duration of transit
(1) Goods are deemed to be in course of transit from the time when they are delivered to a carrier by land or water or other bailee or custodier for the purpose of transmission to the buyer until the buyer or his agent in that behalf takes delivery of them from such carrier or other bailee or custodier.
(2) If the buyer or his agent in that behalf obtains delivery of the goods before their arrival at the appointed destination, the transit is at an end.
(3) If after the arrival of the goods at the appointed destination the carrier or other bailee or custodier acknowledges to the buyer or his agent that he holds the goods on his behalf and continues in possession of them as bailee or custodier for the buyer or his agent, the transit is at an end, and it is immaterial that a further destination for the goods may have been indicated by the buyer.
(4) If the goods are rejected by the buyer, and the carrier or other bailee or custodier continues in possession of them, the transit is not deemed to be at an end, even if the seller has refused to receive them back.
(5) When goods are delivered to a ship chartered by the buyer, it is a question depending on the circumstances of the particular case whether they are in the possession of the master as a carrier or as agent to the buyer.
(6) Where the carrier or other bailee or custodier wrongfully refuses to deliver the goods to the buyer or his agent in that behalf, the transit is deemed to be at an end.
(7) Where part delivery of the goods has been made to the buyer or his agent in that behalf, the remainder of the goods may be stopped in transitu, unless such part delivery has been made under such circumstances as to show an agreement to give up possession of the whole of the goods.
50
How stoppage in transitu is effected
50 How stoppage in transitu is effected
(1) The unpaid seller may exercise his right of stoppage in transitu either by taking actual possession of the goods or by giving notice of his claim to the carrier or other bailee or custodier in whose possession the goods are. Such notice may be given either to the person in actual possession of the goods or to his principal. In the latter case the notice to be effectual must be given at such time and under such circumstances that the principal by the exercise of reasonable diligence may communicate it to his servant or agent in time to prevent a delivery to the buyer.
(2) When notice of stoppage in transitu is given by the seller to the carrier or other bailee or custodier in possession of the goods, he must redeliver the goods to or according to the directions of the seller. The expenses of such redelivery must be borne by the seller.
51
Effect of subsale or pledge by buyer
51 Effect of subsale or pledge by buyer
Subject to the provisions of this Act, the unpaid seller's right of lien or retention or stoppage in transitu is not affected by any sale or other disposition of the goods which the buyer may have made, unless the seller has assented thereto: Provided that where a document of title to goods has been lawfully transferred to any person as buyer or owner of the goods, and that person transfers the document to a person who takes the document in good faith and for valuable consideration, then if such last-mentioned transfer was by way of sale the unpaid seller's right of lien or retention or stoppage in transitu is defeated, and if such last-mentioned transfer was by way of pledge or other disposition for value the unpaid seller's right of lien or retention or stoppage in transitu can only be exercised subject to the rights of the transferee.
52
Sale not generally rescinded by lien or stoppage in transitu
52 Sale not generally rescinded by lien or stoppage in transitu
(1) Subject to the provisions of this section a contract of sale is not rescinded by the mere exercise by an unpaid seller of his right of lien or retention or stoppage in transitu.
(2) Where an unpaid seller who has exercised his right of lien or retention or stoppage in transitu resells the goods, the buyer acquires a good title thereto as against the original buyer.
(3) Where the goods are of a perishable nature or where the unpaid seller gives notice to the buyer of his intention to resell, and the buyer does not within a reasonable time pay or tender the price, the unpaid seller may resell the goods and recover from the original buyer damages for any loss occasioned by his breach of contract.
(4) Where the seller expressly reserves a right of resale in case the buyer should make default, and on the buyer making default resells the goods, the original contract of sale is thereby rescinded, but without prejudice to any claim the seller may have for damages.
Part V
Actions for Breach of Contract
Part V Actions for Breach of Contract
53
Action for price
53 Action for price
(1) Where under a contract of sale the property in the goods has passed to the buyer, and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may maintain an action against him for the price of the goods.
(2) Where under a contract of sale the price is payable on a day certain irrespective of delivery, and the buyer wrongfully neglects or refuses to pay such price, the seller may maintain an action for the price, although the property in the goods has not passed, and the goods have not been appropriated to the contract.
54
Damages for non-acceptance
54 Damages for non-acceptance
(1) Where the buyer wrongfully neglects or refuses to accept and pay for the goods the seller may maintain an action against him for damages for non-acceptance.
(2) The measure of damages is the estimated loss directly and naturally resulting in the ordinary course of events from the buyer's breach of contract.
(3) Where there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted, or if no time was fixed for acceptance, then at the time of the refusal to accept.
55
Damages for non-delivery
55 Damages for non-delivery
(1) Where the seller wrongfully neglects or refuses to deliver the goods to the buyer the buyer may maintain an action against the seller for damages for non-delivery.
(2) The measure of damages is the estimated loss directly and naturally resulting in the ordinary course of events from the seller's breach of contract.
(3) Where there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price of the goods at the time or times when they ought to have been delivered, or if no time was fixed, then at the time of the refusal to deliver.
56
Specific performance
56 Specific performance
In any action for breach of contract to deliver specific or ascertained goods, the court may, if it thinks fit, on the application of the plaintiff, by its judgment or decree direct that the contract shall be performed specifically without giving the defendant the option of retaining the goods on payment of damages. The judgment or decree may be unconditional or upon such terms and conditions as to damages, payment of the price, and otherwise as to the court may seem just; and the application by the plaintiff may be made at any time before judgment or decree.
57
Remedy for breach of warranty
57 Remedy for breach of warranty
(1) Where there is a breach of warranty by the seller, or where the buyer elects or is compelled to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer is not by reason only of such breach of warranty entitled to reject the goods; but he may –
(a) set up against the seller the breach of warranty in diminution or extinction of the price; or
(b) maintain an action against the seller for damages for the breach of warranty.
(2) The measure of damages for breach of warranty is the estimated loss directly and naturally resulting in the ordinary course of events from the breach of warranty.
(3) In the case of breach of warranty of quality such loss is prima facie the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had answered to the warranty.
(4) The fact that the buyer has set up the breach of warranty in diminution or extinction of the price does not prevent him from maintaining an action for the same breach of warranty if he has suffered further damage.
58
Interest and special damages
58 Interest and special damages
Nothing in this Act shall affect the right of the buyer or the seller to recover interest or special damages in any case where by law interest or special damages may be recoverable, or to recover money paid where the consideration for the payment of it has failed.
Part VI
Supplementary
Part VI Supplementary
59
Exclusion of implied terms and conditions
59 Exclusion of implied terms and conditions
Where any right, duty, or liability would arise under a contract of sale by implication of law it may be negatived or varied by express agreement or by the course of dealing between the parties, or by usage if the usage be such as to bind both parties to the contract.
60
Reasonable time
60 Reasonable time
Where by this Act any reference is made to a reasonable time the question what is a reasonable time is a question of fact.
61
Rights, &c., enforceable by action
61 Rights, &c., enforceable by action
Where any right, duty, or liability is declared by this Act it may, unless otherwise by this Act provided, be enforced by action.
62
Auction sales
62 Auction sales
*[Section 62 Amended by 25 Geo. V No. 78 ]*In the case of a sale by auction –
(a) where goods are put up for sale by auction in lots, each lot is prima facie deemed to be the subject of a separate contract of sale;
(b) a sale by auction is complete when the auctioneer announces its completion by the fall of the hammer or in other customary manner. Until such announcement is made any bidder may retract his bid;
(c) where a sale by auction is not notified to be subject to a right to bid on behalf of the seller it shall not be lawful for the seller to bid himself or to employ any person to bid at such sale or for the auctioneer knowingly to take any bid from the seller or any such person. Any sale contravening this rule may be treated as fraudulent by the buyer;
(d) a sale by auction may be notified to be subject to a reserved or upset price, and a right to bid may also be reserved expressly by or on behalf of the seller;
(e) where a right to bid is expressly reserved, but not otherwise, the seller or any one person on his behalf may bid at the auction.
63
Provision for draft allowance on sale of wool, potatoes, and sheepskins to be void
63 Provision for draft allowance on sale of wool, potatoes, and sheepskins to be void
[Section 63 Inserted by 25 Geo. V No. 78 ]**[Section 63 Inserted by 1 Geo. VI No. 31, s. 2 ]
(1) Any provision, express or implied, in any contract of sale of wool entered into after the thirtieth day of June 1938, providing for any deduction, as or in the nature of a draft allowance, from the weight of the wool which is the subject of such contract, shall be void and of no effect.
(2) *[Section 63 Subsection (2) inserted by 3 Geo. VI No. 27, s. 2 ]*Any provision, express or implied, in any contract of sale of potatoes entered into after the commencement of this subsection, providing for any deduction, as or in the nature of an allowance for tret, from the weight of the potatoes which are the subject of such contract, shall be void and of no effect.
(3) *[Section 63 Subsection (3) added by No. 77 of 1952, s. 2 ]*Any provision, express or implied, in any contract of sale of sheepskins entered into after the commencement of this subsection, providing for any deduction, as or in the nature of a draft allowance, from the weight of the skins that are the subject of the contract, shall be void and of no effect.
SCHEDULE 1
SCHEDULE 1
SCHEDULE 1 SCHEDULE 1
[Schedule Repealed by 25 Geo. V No. 78 ]
Source text: opening excerpt
Sourced from Tasmanian Legislation Online (legislation.tas.gov.au), CC BY 4.0.
Part I Formation of the Contract
Part I Formation of the Contract
1 Short title
1 Short title
This Act may be cited as the Sale of Goods Act 1896 .
2 Commencement
2 Commencement
This Act shall come into operation on the first day of January 1897.
3 Interpretation
3 Interpretation
(1) *[Section 3 Subsection (1) amended by 25 Geo. V No. 78 ]*In this Act, unless the contrary intention appears –
action includes counter-claim and set-off;
buyer means a person who buys or agrees to buy goods;
contract of sale includes an agreement to sell as well as a sale;
delivery means voluntary transfer of possession from one person to another;
document of title has the same meaning as it has in the Factors Act 1891 ;
fault means wrongful act or default;
future goods means goods to be manufactured or acquired by the seller after the making of the contract for sale;
goods includes all chattels personal other than things in action and money. The term includes emblements, industrial growing crops, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale;
plaintiff includes defendant counter-claiming;
property means the general property in goods and not merely a special property;
quality of goods includes their state or condition;
Sale of Goods Act 1896 (Tasmania) | Zoe
Specifies delivery rules, the buyer’s right to examine goods, what constitutes acceptance, and the consequences of delivery to a carrier (ss 34-41, 37-39).
Provides rights for the unpaid seller, including lien, stoppage in transitu and a limited right of resale, and when those rights arise or are terminated (ss 43-52).
Lists remedies for breach , actions for the price, damages for non-acceptance or non-delivery, specific performance, and damages for breach of warranty , and confirms that interest and special damages remain available (ss 53-58). Rights under the Act are enforceable by action (s 61).
Contains auction rules (s 62), and a small set of commodity-specific prohibitions on draft/tret allowances for wool, potatoes and sheepskins (s 63).
The Act is structured to convert many factual allocation problems into statutory rule-sets: who bears loss, when property passes, what implied terms are read into sale contracts, and what remedies are available. It leaves a number of questions to be resolved as matters of fact (for example, what is “reasonable” in price or time: s 13(2), s 60) and preserves common law and other statutory regimes where inconsistent provisions do not appear (s 5). Remedies are civil: the Act provides for actions, damages and equitable relief (s 56), and does not generally create criminal offences, though it preserves concepts of fraud (s 62(c)) and the consequences of criminal conviction for stolen goods (s 29).
Main concepts
The Act builds on a compact set of definitional and conceptual building blocks that determine its application.
Parties and goods: A "buyer" and "seller" are defined respectively as a person who buys or agrees to buy and a person who sells or agrees to sell goods (s 3(1)). "Goods" is defined widely as all chattels personal, excluding things in action and money, and expressly includes emblements, industrial growing crops and agreed-to severed fixtures (s 3(1)). "Specific goods" are goods identified and agreed upon at the time of the contract; "future goods" are those to be manufactured or acquired by the seller after the contract (s 3(1), s 10).
Contract types and property: A "contract of sale" encompasses both an immediate sale and an agreement to sell (s 6(1)). The distinction between a sale and an agreement to sell depends on when the property in the goods is to pass (s 6(3)-(4)). The Act repeatedly works with the notion of "property" as the general property in goods (s 3(1)).
Delivery and documents: "Delivery" is defined as the voluntary transfer of possession (s 3(1)). The Act uses the concept of a "document of title" (s 3(1)) and cross-references the Factors Act 1891 for that term (s 3(1) and s 26(2)(a)), so dealings in documents of title are treated as significant events that affect property and risk.
Implied terms vs express terms: The Act creates implied conditions and warranties, notably an implied condition of title and implied warranties as to quiet possession and freedom from undisclosed charges (s 17). It also creates implied terms about correspondence with description or sample (ss 18, 20) and sets out when implied conditions as to quality or fitness arise (s 19). Section 59 permits parties to negat e or vary implied rights or duties by express agreement, course of dealing or binding usage, subject to inconsistency rules in s 19(d).
Risk and intent: Risk follows property as a prima facie rule: goods are at the seller’s risk until property passes, and then at the buyer’s risk (s 25). The parties’ intention about when property passes is determinative (s 22(1)), and the Act supplies detailed rules (s 23) for typical situations where intention is not explicit.
Unpaid seller’s remedies: The unpaid seller is defined by non-payment or receipt of a dishonoured negotiable instrument (s 43). The unpaid seller retains statutory rights of lien, stoppage in transitu and a restricted right of resale (s 44), and the Act specifies when such rights arise and how they can be exercised (ss 45-52).
Remedies: The Act provides civil remedies, including an action for the price (s 53), damages for non-acceptance and non-delivery (ss 54-55), specific performance for delivery of specific or ascertained goods (s 56), and monetary damages for breach of warranty (s 57). Interest and special damages remain recoverable where law allows (s 58).
Several terms are left to factual determination. For example, what counts as acting "in good faith" is defined as honest action whether negligent or not (s 3(2)); "reasonable price" is a question of fact (s 13(2)); and "reasonable time" is also a question of fact (s 60). The Act therefore combines prescriptive statutory defaults with factual inquiries to be resolved in litigation or negotiation.
Who it affects
The Act affects a broad set of commercial and private actors who buy, sell, handle, insure or enforce rights in goods.
Sellers and buyers: All persons who sell or agree to sell goods and those who buy or agree to buy goods are the primary subjects of the Act (s 3(1); s 6). The Act treats both immediate sales and agreements to sell as contracts of sale (s 6(1), (3)).
Part-owners and agents: A sale may occur between one part owner and another (s 6(1)). The definition of "seller" in Part IV explicitly includes those in the position of a seller, such as an agent to whom a bill of lading has been endorsed, consignors who have paid the price, or agents directly responsible for the price (s 43(2)). The Act also defines "mercantile agent" for purposes of possession and transfer rules (s 30(3)).
Carriers, bailees and custodiers: The Act treats delivery to carriers and bailees as materially significant in passing property and risk, and as focal points for rights such as stoppage in transitu; carriers and bailees are therefore affected by rights and notices given by sellers and buyers (ss 23, 24, 37, 49-50).
Unpaid sellers and creditors: The Act creates statutory entitlements (lien, stoppage in transitu, resale) for unpaid sellers, and sets out their exercise and limits (ss 44-52). Creditors seeking to enforce judgments interact with property in goods through writs of execution and the sheriff (s 31).
Insolvent buyers and the criminally convicted: The buyer’s insolvency triggers unpaid seller protections such as lien and stoppage in transitu (ss 45(c), 48). Conviction for stealing affects title: if goods are stolen and the offender is convicted, property revests in the original owner notwithstanding intermediate dealings (s 29(1)); but a conviction for fraud or wrongful means not amounting to stealing does not by itself revest property (s 29(2)).
Persons dealing in market overt and auction participants: The Act preserves the traditional rule for market overt (s 27) and regulates auction practice, including how auctions are completed and the circumstances under which the seller or auctioneer may bid (s 62).
Minors and persons with limited capacity: Capacity to contract and to transfer/acquire property follows the general law of capacity, with the specific rule that necessaries supplied to an infant or person of unsound mind must be paid for at a reasonable price (s 7(1)-(2)). Bankruptcy law and the law merchant continue to apply to contracts of sale (s 5(1)-(2)).
Who pays and who decides: The Act allocates economic burdens and decision-making. Buyers pay the price and accept delivery under contract terms (s 32); sellers decide, in some circumstances, whether to reserve disposal rights (s 24) and whether to exercise liens or stoppage (ss 45, 48-51). Carriers must comply with valid notices of stoppage and with reasonable contracts of carriage that the seller must effect when authorised to send goods (s 37). Sheriffs are tasked with recording the receipt of writs (s 31(1)). Courts decide disputed issues and can order specific relief under the Act (ss 56, 61).
The Act also affects drafting and commercial practice: practitioners must consider whether goods are specific or unascertained (s 21), whether property has passed (ss 22-25), and whether implied conditions or warranties apply (ss 17-20), all of which determine who bears loss and which remedies are available.
Key duties and rights
The Act prescribes primary duties and reciprocal rights for both sellers and buyers, and supplementary rights for unpaid sellers and custodians.
Duties of seller and buyer
The primary reciprocal duty is set out simply: the seller must deliver the goods and the buyer must accept and pay in accordance with the contract (s 32). Delivery and payment are concurrent conditions unless agreed otherwise (s 33). The seller must be ready and willing to give possession for the price, and the buyer must be ready and willing to pay for possession (s 33).
Seller’s delivery obligations include the place and timing rules: unless the contract provides otherwise, delivery is at the seller’s place of business or residence if he has no business (s 34(1)), and the seller must send goods within a reasonable time if required to send and no time is fixed (s 34(2)). Expenses for putting goods into deliverable state are borne by the seller unless otherwise agreed (s 34(5)).
The seller must ensure the goods correspond with description and, where sale is by sample, with the sample (s 18; s 20(2)(a)-(c)). Implied undertakings include the seller’s right to sell (s 17(a)), warranty of quiet possession (s 17(b)), and freedom from undisclosed encumbrances (s 17(c)).
Conditions and warranties distinction: the buyer may elect to treat some breaches as warranty rather than condition per s 16(1). Whether a stipulation is a condition or warranty depends on construction (s 16(2)), except that where property has passed or the buyer accepted goods, breach of a seller's condition can in many cases be treated only as breach of warranty (s 16(3)).
Buyer’s rights and obligations
The buyer has a statutory right to examine goods prior to acceptance where they have not been previously examined; acceptance only occurs after reasonable opportunity to examine (s 39(1)-(2)). Acceptance occurs on intimation, acts inconsistent with seller’s ownership, or retention after reasonable time without rejection (s 40).
If goods are delivered in wrong quantity or mixed with other goods, the buyer has options to accept or reject or to pay for accepted goods (s 35).
When the buyer neglects or refuses to take delivery after seller readiness, the buyer is liable for loss caused and a reasonable charge for care and custody (s 42).
Unpaid seller’s rights
The unpaid seller (price unpaid or payment conditional on a negotiable instrument dishonoured) has a lien while in possession, right to stop goods in transit on buyer’s insolvency, and a right of resale as limited by the Act (s 44(1)). If property has not passed, the unpaid seller has the right to withhold delivery (s 44(2)).
Lien arises where goods are sold without stipulated credit, credit term expired, or buyer insolvent, and the seller may retain possession even as agent or bailee for the buyer (s 45(1)-(2)). Lien terminates on delivering goods to carrier without reserved right or waiver, or buyer obtaining lawful possession (s 47(1)).
Stoppage in transitu can be effected by retaking possession or by notice to carrier or custodian; where notice is given the carrier must redeliver as directed but expenses of redelivery fall on the seller (s 50(1)-(2)). Duration and end of transit are defined in s 49.
Remedies and enforcement
The seller may sue for the price if property has passed and buyer wrongfully refuses to pay (s 53(1)), and in certain cases may sue for price even if property has not passed (s 53(2)). Damages for non-acceptance and non-delivery are measured by ordinary loss directly and naturally resulting from breach, with market-price measures where an available market exists (ss 54-55).
The buyer may seek specific performance for delivery of specific or ascertained goods (s 56). For breach of warranty the buyer cannot reject goods but can claim diminution/extinction of price or damages (s 57).
Interest and special damages are preserved (s 58), and rights under the Act are enforceable by action (s 61). Courts retain discretion in equitable remedy (s 56).
Ancillary rights and duties
Auction rules prescribe when contracts conclude (s 62(b)) and limit seller or auctioneer conduct on bidding where no right to bid is notified (s 62(c)-(e)). The Act also voids certain weight-deduction clauses in contracts for specific commodities (s 63).
The Act leaves parties latitude to vary implied obligations by express agreement or usage (s 59) but sets default rules that will apply absent such variation. Several duties require factual determinations (reasonable time, reasonable price) so parties should explicitly allocate such uncertainties in contract drafting.
Penalties and enforcement
The Act frames enforcement in civil terms and provides remedies and procedural expectations rather than criminal sanctions, with a few statutory rules bearing on enforcement practice.
Civil remedies and enforcement mechanisms
The Act explicitly contemplates court enforcement of rights and remedies by action (s 61). Remedies include actions for the price (s 53), damages for non-acceptance (s 54) and non-delivery (s 55), specific performance (s 56), and damages for breach of warranty (s 57). Interest and special damages also remain recoverable where law permits (s 58).
Specific performance: courts have jurisdiction to direct specific performance in actions for breach to deliver specific or ascertained goods; the court may order unconditional performance or impose conditions (s 56). The plaintiff may apply at any time before judgment or decree (s 56).
Damages measures: where a market exists, damages are prima facie measured by the difference between contract and market price at the relevant time (ss 54(3), 55(3)); otherwise, the general principle of estimated consequential loss applies (ss 54(2), 55(2)). For breach of warranty of quality, damages are prima facie the difference between the goods’ value at delivery and the value if they had matched the warranty (s 57(3)).
Non-criminal enforcement interactions
Writs of execution against goods bind the debtor’s property from the time the sheriff receives the writ; the sheriff must endorse the writ with time details without fee (s 31(1)). However, bona fide purchasers for valuable consideration may take title unaffected by such writs unless they had notice of an unexecuted writ (s 31(1) proviso).
Where goods are stolen and the offender convicted, the property revests in the original owner notwithstanding intermediate dealings (s 29(1)); but where goods obtained by fraud not amounting to stealing, conviction does not, by itself, revest property (s 29(2)).
Contractual and statutory enforcement controls
Parties may negate or vary implied terms by express agreement, course of dealing, or binding usage (s 59). That affects enforcement because it changes which statutory obligations are available to be enforced.
Auction misconduct: where a sale by auction contravenes s 62(c) , seller bidding without notification of right to bid , "any sale contravening this rule may be treated as fraudulent by the buyer" (s 62(c)). The Act does not prescribe criminal penalties; it confers on the buyer the right to treat the sale as fraudulent, which is an actionable civil position and may lead to rescission or damages in civil proceedings or to separate criminal proceedings where appropriate under other law.
Operational enforcement matters
Stoppage in transitu requires either retaking actual possession or giving timely notice to the carrier/bailee (s 50(1)). If notice is given, the carrier must redeliver according to the seller's directions, and costs of redelivery are for the seller (s 50(2)). Failure to effect stoppage in time may mean the unpaid seller cannot reclaim goods in transit.
The unpaid seller's lien is lost if the seller delivers goods to a carrier without reserving the right of disposal, or when the buyer obtains lawful possession (s 47(1)(a)-(b)). Thus procedural steps (reservation, notice, proper endorsement of bill of lading) are material to preserving remedies.
Limitations and discretion
The Act leaves significant discretion to courts in awarding specific performance and in interpreting what is "reasonable" for price and time (ss 56, 13(2), 60). It also leaves the parties space to alter rights by agreement (s 59), so enforceability depends on contract terms and the willingness of courts to enforce them as written.
The statute is primarily a civil code of remedial and allocative rules: enforcement is through civil litigation and court-ordered remedies; statutory steps (preserving lien, giving notice to carriers) must be followed to make statutory remedies effective; and certain statutory events (sheriff endorsement, criminal convictions) have strong consequences for property and title.
How it interacts with other laws
The Act directly preserves and interacts with several other legal regimes and cross-references statutory concepts.
Preservation of other laws and common law
Bankruptcy and law merchant: Section 5(1) explicitly preserves the rules in bankruptcy relating to contracts of sale notwithstanding the Act. Section 5(2) preserves the rules of the common law, including the law merchant, except insofar as inconsistent with the Act, and specifically preserves rules on principal and agent, fraud, misrepresentation, duress, coercion, mistake and other invalidating causes. Those common-law doctrines continue to determine contract validity and agency relationships where not superseded by the Act.
Bills of sale, Factors Act and other enactments: Section 5(3) confirms the Act does not affect enactments relating to bills of sale or other enactments relating to sale of goods not expressly repealed. Section 3(1) defines "document of title" with reference to the Factors Act 1891, and s 26(2)(a) explicitly preserves the Factors Act or any enactment enabling apparent owners to dispose of goods as if true owners. Section 26(2)(b) preserves the validity of contracts made under statutory or common-law powers of sale or court orders.
Criminal law and property revesting
The Act sets statutory consequences for criminal conviction for stealing: property in stolen goods revests in the original owner on conviction notwithstanding intermediate dealings (s 29(1)). However, for fraud or wrongful means not amounting to stealing, conviction alone does not revest property (s 29(2)). Those provisions interact with criminal prosecutions and civil recovery; a conviction has a statutory effect on title in the first case.
Execution and enforcement officers
Writs of execution and the sheriff's duties are addressed (s 31). A writ binds the debtor’s property from the time the writ is delivered to the sheriff and the sheriff must endorse time of receipt without fee. The protection for bona fide purchasers for value against unexecuted writs interacts with property-transfer and priority rules.
Equitable remedies and court discretion
Specific performance is provided by the Act (s 56). That provision interacts with equitable jurisdiction: courts can impose conditions and are not required to give the defendant the option of retaining goods on payment of damages, but they may structure relief as they see fit. The Act does not displace the court's equitable powers but supplies a statutory basis for compelling performance of contracts for specific or ascertained goods.
Negotiable instruments and payment
The definition of "unpaid seller" includes receipt of a bill of exchange or negotiable instrument as conditional payment where the instrument is dishonoured (s 43(1)(b)). That ties seller remedies to the law surrounding negotiable instruments and their dishonour.
Auction rules and other specific statutes
Auction sales are governed by s 62, which specifies how and when a sale by auction concludes and regulates seller and auctioneer bidding behaviour. This will interact with any other statutory consumer-protection or market-conduct regimes that apply to auctions.
Limitations of the Act's coverage
The Act explicitly excludes transactions in the form of contracts of sale intended to operate by way of mortgage, pledge, charge or other security (s 5(4)). That means secured transactions are governed by separate law rather than the sale-of-goods rules.
Practical effect
The Act is not a complete code excluding other sources of law; it sits alongside and interacts with bankruptcy law, the law of agency and agency statutes, negotiable-instrument law, property execution rules, criminal law impacts on title, the Factors Act and other local enactments. Practitioners must therefore read contractual allocation under the Act against this background; the Act itself reserves the operation of other statutory and common-law principles when not inconsistent (s 5(2)-(4)).
Amendment history
The text provided contains internal amendment notations indicating several later legislative interventions and repeals. The Act as presented therefore reflects its original 1896 text as modified by legislative amendments identified within the statute text. The source-provided amendment markers are the only authoritative amendment facts available here.
Noted amendments and insertions
Section 3(1) is marked as amended by "25 Geo. V No. 78". The bracketed note appears alongside s 3(1).
Section 4 has been repealed, noted as "Section 4 Repealed by 25 Geo. V No. 78".
Sections with amendments by the same instrument (25 Geo. V No. 78) include multiple provisions: s 7 (amended), s 8 (amended), s 16, s 20(2) (subsection (2) amended), s 44(1) (subsection amended), s 62 (amended), and the insertion of s 63. The exact textual changes effected by those amendments are not shown beyond the amendment notes inside the provided text.
Section 9(1) was amended by "No. 55 of 1965, s. 5" as indicated in the margin note.
Schedule 1 is marked as repealed by "25 Geo. V No. 78".
Section 63 shows a layered amendment history: it was inserted by "25 Geo. V No. 78" and by "1 Geo. VI No. 31, s. 2" (both noted), subsection (2) was inserted by "3 Geo. VI No. 27, s. 2", and subsection (3) was added by "No. 77 of 1952, s. 2". The text indicates s 63 was added in stages to cover different commodities and times.
Several other provisions are noted as amended by "25 Geo. V No. 78"; the text flags those amendments at the relevant sections (for instance s 3(1), s 16 and s 20).
Limitations on the amendment history in this note
The inserted marginal annotations specify which sections have been amended or inserted and the enacting instruments by short titles as included in the source (for example "25 Geo. V No. 78", "No. 55 of 1965, s. 5"). The provided text does not include the full amending statutes or the dates of royal assent or commencement beyond the marginal short references, nor does it include the pre-amendment textual versions. Therefore this note refrains from reconstructing the chronological content of every amendment beyond the amendment markers present.
Where a section is marked as repealed (for example s 4 and Schedule 1), this note records that repeal per the text annotation but does not attempt to restate the repealed content.
Implication for users
Practitioners should treat the internal annotations as signals that the statute has been modified and that some provisions were added to address commodity-specific practices (s 63) and to align other sections with later legislative policy (various s noted). For precise drafting history, amending texts and commencement details, users will need to consult the cited amending statutes or an updated consolidated statute database. This note only reports the amendment indicators present in the source provided.
Litigation history
The text provided contains no reported cases, judicial interpretations or litigation history references. The Act itself identifies areas likely to generate litigation because it leaves key questions to judicial fact-finding and construction.
Points of probable judicial contestation and litigation drivers
Reasonableness inquiries: The Act repeatedly leaves "reasonable price" (s 13(2)), "reasonable time" (s 60) and what constitutes a "reasonable opportunity" to examine goods (s 20(2)(b), s 39) to factual determination. These issues typically generate litigation where parties disagree about market norms, practices of examination, or customary delivery times.
Passing of property and risk: The statutory rules for ascertaining intention and the presumptive rules in s 23 will produce disputes about whether property and risk passed at a particular moment. Questions of appropriation (s 23 Rule 5), reservation of disposal (s 24), and the effect of delivery to carriers (s 37) are typical grounds for disagreement and litigation.
Implied terms and their exclusion: Whether an express term is inconsistent with an implied condition or warranty such that it negates the implied term involves contractual construction (s 19(d) and s 59). Disputes over whether an exclusion clause is effective will characteristically be litigated.
Unpaid seller remedies: Determining when an unpaid seller may properly exercise lien, stoppage in transitu or resell goods under the Act involves fact-sensitive enquiries: whether goods were in transit (s 49), whether the seller gave timely notice to carriers (s 50), whether delivery occurred with reservation of disposal (s 24), and whether resale was permitted (s 52).
Remedies and measure of damages: Parties will litigate market-price differences (ss 54(3), 55(3)) and the proper measure of damages for breach of warranty (s 57(3)). The availability of specific performance (s 56) is discretionary and may be contested.
Procedural pathway indicated by the Act
The Act explicitly provides that rights, duties and liabilities declared by it may be enforced by action unless otherwise provided (s 61). Parties seeking remedies under the Act will therefore proceed to civil litigation for actions for price, damages, specific performance and declaratory relief. The interplay with writs of execution (s 31) also envisages enforcement actions against goods in judgment enforcement contexts.
Absence of case law in the source
Because the provided text contains no cases, no attempt is made here to synthesise judicial interpretations, doctrines developed by courts, or appellate treatment of particular provisions. Users researching litigation history must consult court reports, digests or an annotated statute database to obtain decisions construing the Act’s provisions.
In sum, while the Act creates a statutory regime for sale-of-goods disputes and prescribes measures for relief, the precise application of many provisions will depend on judicial construction and factual findings. Practitioners should expect litigation to centre on reasonableness determinations, allocation of property and risk, the scope and efficacy of implied term exclusions, and procedural steps required to preserve unpaid seller remedies.
Gotchas
Several provisions in the text create traps for unwary parties or drafting pitfalls that materially affect allocation of risk, title and remedies.
The $20 writing threshold
Section 9 requires contracts for sale of goods valued at $20 or upwards to be enforced only where part of the goods are accepted and received, something given in earnest or part payment, or a signed memorandum exists (s 9(1)-(3)). Practitioners must note that the statutory threshold is low by modern standards and that absence of the required formality can render the contract unenforceable despite substantial performance. The text does not provide an inflation-adjusted mechanism; the statutory figure stands as written.
Specific goods and perishing risk
If a contract purports to sell specific goods which have already perished without the seller’s knowledge at formation, the contract is void (s 11). If after an agreement to sell specific goods they perish without fault and before risk passes, the agreement is avoided (s 12). Parties supplying or contracting for specific goods need to monitor existence and condition at contract formation and at risk-shifting points.
Passing of property and risk surprises
Risk prima facie passes with property (s 25). The parties’ intention controls (s 22), but s 23 provides default rules that can lead to surprising allocations: for example, if specific goods in deliverable state are the subject of an unconditional contract, property passes on contract formation even if delivery or payment occurs later (s 23 Rule 1), shifting risk to the buyer earlier than parties might assume.
Reservation of right of disposal by the seller overrides usual delivery effects: delivery to carrier does not pass property if the seller reserved disposal (s 24(1)-(2)). Conversely, if seller transmits bill of lading deliverable to order of seller, he is prima facie deemed to reserve disposal (s 24(2)), which affects when property passes.
Delivery to carriers and insurance duties
A seller authorised to send goods must, unless otherwise authorised, make a reasonable contract with carrier for the buyer’s benefit; failing this, loss in transit may expose the seller to liability (s 37(2)). Where sea transit is involved and insurance is usual, the seller must notify the buyer as may enable the buyer to insure, or else the goods are at the seller’s risk during sea transit (s 37(3)). Sellers who dispatch goods and omit to provide standard notice risk having to bear transit losses.
Acceptance, examination and retention traps
The buyer is not deemed to have accepted goods until given a reasonable opportunity to examine them (s 39(1)). But acceptance also occurs when the buyer does any act inconsistent with seller’s ownership or retains the goods after a reasonable time without rejection (s 40). In practical terms, buyer conduct post-delivery (using goods, mixing them in stock) can convert a conditional or testimonial acceptance into a binding acceptance with loss of repudiatory rights.
Unpaid seller formalities
The unpaid seller’s rights depend on possession and on correct exercise of procedures. For stoppage in transitu, the seller must give notice to the carrier or take actual possession and, if giving notice to a principal, deliver it in time to communicate to the agent (s 50(1)). Expenses of redelivery fall to the seller (s 50(2)). Sellers who fail to reserve disposal when delivering to a carrier lose lien (s 47(1)(a)).
Where documents of title are lawfully transferred to a person who then passes them to a good-faith purchaser, the unpaid seller’s rights may be defeated (s 51). Careful handling of bills of lading and other documents of title is required.
Exclusion clauses and implied terms
Section 59 permits exclusion or variation of implied rights by express agreement or usage, but s 19(d) says an express warranty/condition does not negative an implied condition or warranty unless inconsistent. Drafting to exclude implied terms must therefore be clear and inconsistent with the implied obligation; mere label as "warranty" may not be determinative (s 16(2)). The patent or trade-name proviso in s 19(a) denies implied fitness for particular purpose in contracts for specified patented or trade-named articles , an often-overlooked limitation.
Auction and market rules
Auction sales are complete upon fall of the hammer or customary announcement (s 62(b)); until then bidders may retract. Sellers who fail to notify a reserved right of bid cannot lawfully bid or employ a person to bid, and any sale contravening this rule may be treated as fraudulent by the buyer (s 62(c)). Sellers must manifest reserve-bid rights in advance if intending to bid.
Commodity-specific prohibitions
Section 63 voids provisions providing for draft allowances (wool, sheepskins) and tret (potatoes) in contracts for sale entered after specified times, making such deductions unenforceable. Parties dealing in these commodities must not rely on weight deduction clauses that the statute declares void.
Formality mismatch and archaic figures
The Act contains formality thresholds and commodity-specific rules that may not align with current commercial practice (for example, the $20 threshold in s 9). Practitioners must adjust drafting and advice to these statutory requirements, even where they produce results that may seem out of step with modern commercial expectations.
In all these gotchas, the Act ties remedies and allocation of loss to specific factual conditions and procedural steps. Parties and advisers must pay attention to property-passing clauses, reservation of rights, carriage and document-of-title procedures, explicit exclusion clauses, and statutory formalities to avoid unintended loss of rights.
How to comply
Drafting and operational steps to align conduct with the Act follow directly from its provisions. The aim is to ensure parties preserve intended allocations of property, risk, remedies and avoid forfeiting statutory rights.
Draft clear contract terms on property, risk and delivery
Expressly state when property and risk pass. Because the parties’ intention controls (s 22(1)) and the Act supplies default rules (s 23), contracts should precisely specify whether property passes on making the contract, on delivery, on payment, on endorsement of documents of title, or on some other event. If parties intend an unconditional present sale of specific goods only when delivered, they must say so to avoid Rule 1 of s 23 applying.
Reserve or waive rights of disposal explicitly. If the seller wishes to reserve disposal when delivering to a carrier or transmitting bills of lading, the reservation must be made clear (s 24(1)-(3)). Failure to reserve the right of disposal can cause property to pass and a lien to be lost (s 47(1)(a)).
Manage carriage, insurance and carrier contracts
When the seller is to send goods, make a reasonable contract of carriage that protects the buyer’s interests if the buyer is the intended insurer or beneficiary; otherwise the seller may be liable for transit loss (s 37(2)). For sea transit where it is usual to insure, ensure the seller notifies the buyer so the buyer can insure, or expressly allocate responsibility for transit risk (s 37(3)).
Preserve stoppage-in-transitu options through timely notice to carriers and custodians and keep records of notices; the seller bears costs of redelivery under s 50(2).
Handle documents of title and bills of lading carefully
Because transfer of documents of title can affect the unpaid seller’s rights (s 51) and because reservation of disposal can be signified through bill of lading endorsements (s 24(2)), ensure documentation clearly indicates the intended party’s rights. Where the seller wishes to retain proprietary control until payment, bill-of-lading and endorsement practices should reflect that intention.
Draft warranties, disclaimers and exclusion clauses precisely
To exclude or vary implied terms under s 59, do so by clear express agreement or usage. Because an express warranty does not negate an implied warranty unless inconsistent (s 19(d)), draft exclusions to be plainly inconsistent with the statutory implied term if the aim is to negate it. For fitness or quality implied conditions under s 19, be mindful of the proviso excluding implied fitness for specified patented or trade-named articles (s 19(a)).
If relying on limitation or exclusion clauses, ensure they are brought to the other party’s attention, and consider whether statutory or common-law rules preserved by s 5(2) could limit their enforceability.
Preserve unpaid seller rights through possession and procedure
To retain liens, do not deliver goods to carriers without reserving the right of disposal, and maintain possession where necessary (s 45; s 47(1)(a)). In the event of buyer insolvency, exercise stoppage in transitu promptly and in accordance with s 50. Keep contemporaneous records showing the circumstances that give rise to lien (no credit stipulation, expiry of credit term, buyer insolvency; s 45).
If resale will be necessary, follow the notice and resale procedures suggested by s 52 to ensure the buyer’s title is defeated and seller’s resale gives buyer-of-resale good title.
Comply with commodity-specific and auction rules
For contracts in wool, potatoes and sheepskins, avoid including draft allowances or tret deductions that the Act declares void (s 63). Where sale by auction is used, observe the completion rule (s 62(b)) and ensure any right to bid reserved by the seller is properly notified if intended (s 62(d)-(e)).
Confirm contract formalities where value thresholds apply
For contracts at $20 or more, obtain the required part-acceptance, part payment, or a signed memorandum by the party to be charged, to avoid unenforceability under s 9. Where practicable, include written confirmation of the contract signed by both parties to remove uncertainty.
Preserve evidence and prepare for disputes
Because many questions under the Act are fact-driven (what is reasonable, when assent occurred, appropriation to contract), keep contemporaneous evidence: delivery receipts, notices to carriers, inspection invitations and responses, bills of lading, endorsements, and correspondence demonstrating the parties’ intentions about property and risk.
Where a party intends to rely on the unpaid seller remedies, ensure proper recording of possession and timely communications with carriers and bailees to ensure stoppage in transitu rights are not lost (ss 49-50).
Seek judicial relief where statutory remedies inadequate
If goods are specific/ascertained and monetary damages will not suffice, apply to court for specific performance under s 56 and be prepared to meet equitable considerations. Use s 61 to enforce rights by action.
Practical checklist for contracts of sale under the Act
Identify whether goods are specific, ascertained or future (s 10; s 21).
State expressly when property and risk pass (s 22; s 23).
Decide who bears carriage and insurance risk and document the allocation (s 37).
Draft clear exclusion clauses and check consistency with statutory implied terms (s 19, s 59).
Preserve lien and stoppage rights through possession, reservation of disposal, and timely notices (ss 45-50).
Secure written confirmation for contracts of $20 and up per s 9 where appropriate.
Avoid prohibited weight-deduction clauses for commodities listed in s 63.
Following these steps aligns contractual practice with the Act’s mechanics and reduces the risk that statutory defaults will produce unintended outcomes.
sale includes a bargain and sale as well as a sale and delivery;
seller means a person who sells or agrees to sell goods;
specific goods means goods identified and agreed upon at the time a contract of sale is made; and
warranty means an agreement with reference to goods which are the subject of a contract of sale but collateral to the main purpose of such contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated.
(2) A thing is deemed to be done in "good faith" within the meaning of this Act when it is in fact done honestly, whether it be done negligently or not.
(3) A person is deemed to be bankrupt within the meaning of this Act who either has ceased to pay his debts in the ordinary course of business or cannot pay his debts as they become due, whether he has committed an act of bankruptcy or not.
(4) Goods are in a "deliverable state" within the meaning of this Act when they are in such a state that the buyer would under the contract be bound to take delivery of them.
4.
[Section 4 Repealed by 25 Geo. V No. 78 ]
5 Saving as to bankruptcy law, common law and law merchant, other Acts, and contracts of security
5 Saving as to bankruptcy law, common law and law merchant, other Acts, and contracts of security
(1) The rules in bankruptcy relating to contracts of sale shall continue to apply thereto notwithstanding anything in this Act contained.
(2) The rules of the common law, including the law merchant, save in so far as they are inconsistent with the express provisions of this Act, and in particular the rules relating to the law of principal and agent and the effect of fraud, misrepresentation, duress, or coercion, mistake, or other invalidating cause shall continue to apply to contracts for the sale of goods.
(3) Nothing in this Act, or in any repeal effected thereby, shall affect the enactments relating to bills of sale, or any enactment relating to the sale of goods which is not expressly repealed by this Act.
(4) The provisions of this Act relating to contracts of sale do not apply to any transaction in the form of a contract of sale which is intended to operate by way of mortgage, pledge, charge, or other security.
6 Sale and agreement to sell
6 Sale and agreement to sell
(1) 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. There may be a contract of sale between one part owner and another.
(2) A contract of sale may be absolute or conditional.
(3) 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.
(4) 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.
7 Capacity to buy and sell
7 Capacity to buy and sell
[Section 7 Amended by 25 Geo. V No. 78 ]
(1) 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.
(2) Necessaries in this section means 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.
8 Contract of sale: How made
8 Contract of sale: How made
*[Section 8 Amended by 25 Geo. V No. 78 ]*Subject to the provisions of this Act and of any Act in that behalf, a contract of sale may be made in writing (either with or without seal) or by word of mouth, or partly in writing and partly by word of mouth, or may be implied from the conduct of the parties: Provided that nothing in this section shall affect the law relating to corporations.
9 Contract for sale at $20 and upwards
9 Contract for sale at $20 and upwards
(1) *[Section 9 Subsection (1) amended by No. 55 of 1965, s. 5 ]*A contract for the sale of any goods of the value of $20 or upwards shall not be enforceable by action unless the buyer shall accept part of the goods so sold and actually receive the same or give something in earnest to bind the contract, or in part payment, or unless some note or memorandum in writing of the contract be made and signed by the party to be charged or his agent in that behalf.
(2) The provisions of this section apply to every such contract, notwithstanding that the goods may be intended to be delivered at some future time or may not at the time of such contract be actually made, procured, or provided or be fit or ready for delivery, or some act may be requisite for the making or completing thereof or rendering the same fit for delivery.
(3) There is an acceptance of goods within the meaning of this section when the buyer does any act in relation to the goods which recognizes a pre-existing contract of sale whether there be an acceptance in performance of the contract or not.
10 Existing or future goods
10 Existing or future goods
(1) 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, in this Act called "future goods".
(2) 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.
(3) 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.
11 Goods that have perished
11 Goods that have perished
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.
12 Goods perished before sale but after agreement to sell
12 Goods perished before sale but after agreement to sell
Where there is an agreement to sell specific goods, and subsequently 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.
13 Ascertainment of price
13 Ascertainment of price
(1) 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.
(2) Where the price is not determined in accordance with the foregoing provisions 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.
14 Agreement to sell by valuation
14 Agreement to sell by valuation
(1) 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 thereof have been delivered to and appropriated by the buyer he must pay a reasonable price therefor.
(2) Where such third party is prevented from making the valuation by the fault of the seller or buyer, the party not in fault may maintain an action for damages against the party in fault.
15 Stipulations as to time
15 Stipulations as to time
*[Section 15 Amended by 25 Geo. V No. 78 ]*Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not 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.
16 When condition to be treated as warranty
16 When condition to be treated as warranty
(1) 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.
(2) 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 to 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.
(3) Where a contract of sale is not severable and the buyer has accepted the goods or part thereof, 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 of the contract express or implied to that effect.
(4) Nothing in this section shall affect the case of any condition or warranty fulfilment of which is excused by law by reason of impossibility or otherwise.
17 Implied undertaking as to title, &c.
17 Implied undertaking as to title, &c.
In a contract of sale, unless the circumstances of the contract are such as to show a different intention, there is –
(a) 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;
(b) an implied warranty that the buyer shall have and enjoy quiet possession of the goods;
(c) an implied warranty that the goods shall be free from any charge or incumbrance in favour of any third party not declared or known to the buyer before or at the time when the contract is made.
18 Sale by description
18 Sale by description
Where 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.
19 When conditions as to quality or fitness to be implied
19 When conditions as to quality or fitness to be implied
*[Section 19 Amended by 25 Geo. V No. 78 ]*Subject to the provisions of this Act and of any Act in that behalf, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows:
(a) Where the buyer expressly or by implication makes known to the seller the particular purpose for which the goods are required so as to show that the buyer relies on the seller's skill or judgment, and the goods are of a description which it is in the course of the seller's business to supply (whether he be the manufacturer or not), there is an implied condition that the goods shall be reasonably fit for such purpose: Provided that in the case of a contract for the sale of a specified article under its patent or other trade name there is no implied condition as to its fitness for any particular purpose;
(b) Where goods are bought by description from a seller who deals in goods of that description (whether he be the manufacturer or not) there is an implied condition that the goods shall be of merchantable quality: Provided that, if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed;
(c) An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade;
(d) An express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith.
20 Sale by sample
20 Sale by sample
(1) A contract of sale is a contract for sale by sample where there is a term in the contract express or implied to that effect.
(2) *[Section 20 Subsection (2) amended by 25 Geo. V No. 78 ]*In the case of a contract for sale by sample there is an implied condition that –
(a) the bulk shall correspond with the sample in quality;
(b) the buyer shall have a reasonable opportunity of comparing the bulk with the sample; and
(c) the goods shall be free from any defect rendering them unmerchantable, which would not be apparent on reasonable examination of the sample.
Part II Effects of the Contract
Part II Effects of the Contract
21 Goods must be ascertained
21 Goods must be ascertained
Where there is a contract for the sale of unascertained goods no property in the goods is transferred to the buyer unless and until the goods are ascertained.
22 Property passes at time intended to pass
22 Property passes at time intended to pass
(1) Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.
(2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties, and the circumstances of the case.
23 Rules for ascertaining intention
23 Rules for ascertaining intention
Unless a different intention appears, the following are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer –
| Rule 1—Where there is an unconditional contract for the sale of specific
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