PART VI

SALE OF GOODS1

A CONTRACT of sale of goods is one by which the seller transfers or agrees to transfer the ownership of goods to the buyer in consideration of a payment in money. The money consideration is called the price. An agreement to transfer the ownership of goods in exchange for other goods is not sale but barter. The transfer of the ownership of goods without consideration is gift. The simple promise of a gift of goods not accompanied by delivery of the goods is not binding for want of consideration, and a mere intention to make a gift is ineffectual. A gift accompanied by physical delivery of the goods is effectual, p. 8. 9. and transfers the ownership; and a gift by deed without delivery is also effectual.

The price is usually fixed by the contract, but it may be left to be fixed by the valuation of a third party, or in some other agreed way. When the price is left to be fixed by a third party, and he fail to make any valuation, the agreement is made void; but if in these circumstances the buyer has actually received the goods he must pay a reasonable price for them. When there is no agreement as to price the buyer must pay a reasonable price for the 1 The law stated in this Part is almost entirely contained in the Sale of Goods Act, 1893, which forms a code of the law on the subject.

89

182

497.

The ownership of land or shares is only transferred by p9; a dard: but a contract to well a

buy may be made without

daed.

goods. It is always a question of fact depending on the circumstances of each case what is a reasonable price.

When by the agreement between them the ownership of the goods is immediately transferred from the seller to the buyer the contract is called a sale; but when the transfer of the ownership is to take place at a future time, or subject to some condition to be subsequently fulfilled, the contract is called an "agreement to sell." An agreement to sell becomes a sale when the time has elapsed, or when the condition has been fulfilled. The word "goods" means all tangible movable property except money. It includes growing crops, provided the crops are such as are planted and gathered in the year, as wheat or potatoes; and also things attached to the land, as trees, which are agreed to be severed before sale and under the contract of sale.1 Shares in a company are not goods; a share being merely an intangible right to participate in the profits of the company. If the goods are clearly identified and agreed upon at the time of the contract they are called "specific goods." If the seller has to manufacture the goods or to procure them, they are called "future goods."

If a contract be made for the sale of specific goods, and at the time, without the seller's knowledge, the goods have ceased to exist, the contract is void: And when there is an agreement to sell specific goods, and subsequently without any fault on the part of either buyer or seller the goods perish before the risk passes to the buyer, the agreement is void.

1 Growing trees are part of the land and are not goods. There. fore a contract to sell growing trees, which are not to be cut down under the terms of the contract, is not a contract for the sale of goods. See ante, p. 14.

X· Ownership

a the right of property in these fold. It implic (is the right of possession

(2)

using
∙selling.

leased house.

hired bicycle.
pawned watch.

3.

FORMATION OF CONTRACT

By the common law a contract of sale may be made by writing, 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. But it is provided by the Sale of Goods Act, 1893, that a contract for the sale of any goods of the value of £10 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 2. 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. The value is determined by the agreed price, and value and price for the purpose of this provision are the same. It will be seen that a contract for the sale of goods of the value of £10 or upwards differs from the five contracts dealt with by Section 4 of the Statute of Frauds 2 as to the conditions under which it is binding in an important respect. Those five contracts are not enforceable unless they are in writing; the first-mentioned contract is enforceable in three alternative sets of circumstances: (1) when the buyer accepts and receives the goods or some of them, (2) when the buyer makes any payment in respect of the purchase of the goods, or gives anything to the seller to bind the bargain, or (3) where a note or memorandum of the contract is made in writing, and signed by the party against whom it is desired to enforce the contract. There

1.

2.

3.

1 This sentence states the law in Scotland whatever be the value or price of the goods. Nothing else in this subsection applies to Scotland.

2 See ante, p. 9.

fore no written contract need be proved where either (1)
or (2) can be proved.

Acceptance and Receipt. The contract is binding in
the first place, whenever, having verbally made an agree-
ment to buy goods for £10 or upwards, the buyer accepts
and receives the goods or some of them. "Accept" here
has a peculiar meaning, and is used in a sense different
from that in which it is generally used in reference to the
sale of goods. There is an acceptance within that peculiar
meaning when the buyer does any act in relation to the
goods which recognizes a pre-existing contract of sale;
i. c. does any act in relation to the goods which he would
not do unless he recognized the fact that he had made a
contract to buy the goods. Thus, Abbott verbally agreed
with Wolsey to sell him twenty tons of hay according to
a sample, a barge with the hay to be alongside Wolsey's
wharf by 21st July. The barge was not alongside
Wolsey's wharf by the 21st, and on 4th August Abbott
sent a message to Wolsey asking whether he would.
accept the hay. Wolsey answered that he would if the
barge was alongside his wharf by 8th August. The barge.
was alongside that day, and Wolsey went on board,
took a sample of the hay, and after examining it said,
"The hay is not to my sample, and I shall not have it."
It was held that Wolsey's act in taking the sample to see
whether it corresponded with the other sample by which
he had agreed to buy, was an act which recognized a pre-
existing contract. Therefore there had been an accept-
ance" sufficient to enable Abbott to bring an action on
the contract, i. e. sufficient to make it unnecessary for
Abbott to produce a contract in writing signed by Wolsey.1
It must be noticed that in this case there was clearly no
acceptance in the ordinary sense of the word which

1 Abbott v. Wolsey (1895), 2 Q. B. 97.

-X・ Wolsey received the hay at his wharf; it was 'dalivered' there .

་པ་ཐོ

implies a consent to receive. The acceptance which prevents a buyer from asserting that a contract is not binding against him for want of writing does not in any way prevent him from asserting that the goods are not in accordance with his contract, and on that account rejecting them. Again, when a person having verbally agreed to buy goods for over £10, endeavoured to re-sell the goods, his act in trying to re-sell was an act which he would not have done unless he recognized that he had a right to sell them, or, in other words, that he had previously made a contract to buy them; therefore his act amounted to an acceptance sufficient to make it unnecessary for the seller to produce a writing signed by the buyer in order to have a right to bring an action against the buyer. It is to be noticed that acceptance of a portion of the goods. has the same effect as acceptance of the whole. Acceptance alone, however, is not sufficient; the buyer must also have actually received the goods. There is an actual receipt when the goods, or documents of title to the goods, are delivered to the buyer, or to any agent for him; or when the goods are delivered to a carrier for § transport to the buyer. Whenever the goods are placed at the disposal of the buyer, so that the seller has no longer a lien upon them for the price, they have been received by the buyer. Also when the seller has by agreement with the buyer become merely the bailee or custodian of the goods for the buyer, there has been a receipt, although (as will be seen later 2) the seller in such "<<"3 circumstances may still retain his lien. Provided there is both acceptance and actual receipt, the acceptance may take place before, after, or at the same time as the receipt. Both acceptance and receipt may be entirely constructive. This is so when the seller by agreement with the buyer retains possession of the goods on behalf of the buyer 2 See post, p. 113.

ဟာ

1

1 See post, p. 120.

see p 120.

155 pp. 96, 97

99.

over.

-X Delivery implies possession, not necessarily personal handing. Rejaction may follow axamination after dalwery. & unless the seller agrees to deliver at the buyer's house: but carriage-paid goods are not necessarily an agreement to deliver at the buyer's house.

see p. 109.