CAP. 261, SALE OF GOODS ACT BELIZE
SALE OF GOODS ACT
CHAPTER 261
REVISED EDITION 2000
SHOWING THE LAW AS AT 31ST DECEMBER, 2000
This is a revised edition of the law, prepared by the Law Revision Commissioner
under the authority of the Law Revision Act, Chapter 3 of the Laws of Belize,
Revised Edition 1980 - 1990.
This edition contains a consolidation of the following laws- Page
ARRANGEMENT OF SECTIONS 3
SALE OF GOODS ACT 8
Amendments in force as at 31st December, 2000.
BELIZE
SALE OF GOODS ACT
CHAPTER 261
REVISED EDITION 2000
SHOWING THE LAW AS AT 31ST DECEMBER, 2000
This is a revised edition of the law, prepared by the Law Revision Commissioner
under the authority of the Law Revision Act, Chapter 3 of the Laws of Belize,
Revised Edition 1980 - 1990.
This edition contains a consolidation of the following laws- Page
ARRANGEMENT OF SECTIONS 3
SALE OF GOODS ACT 8
Amendments in force as at 31st December, 2000.
THE SUBSTANTIVE LAWS OF BELIZE REVISED EDITION 2000
Printed by the Government Printer,
No. 1 Power Lane,
Belmopan, by the authority of
the Government of Belize.
Sale of Goods [CAP. 261
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CHAPTER 261
SALE OF GOODS
ARRANGEMENT OF SECTIONS
PART I
Preliminary
1. Short title.
2. Interpretation.
PART II
Formation of the Contract
Contract of Sale
3. Sale and agreement to sell.
4. Capacity to buy and sell.
Formalities of the Contract
5. Contract of sale, how made.
6. Contract of sale for one hundred dollars and upwards.
Subject Matter of Contract
7. Existing or future goods.
8. Goods which have perished.
9. Goods perishing before sale but after agreement to sell.
The Price
10. Ascertainment of price.
11. Agreement to sell at valuation.
Conditions and Warranties
12. Stipulations as to time.
13. When condition to be treated as warranty.
14. Implied undertaking as to title, etc.
15. Sale by description.
16. Implied conditions as to quality or fitness.
Sale by Sample
17. Sale by sample.
PART III
Effects of the Contract
Transfer of Property as Between Seller and Buyer
18. Goods must be ascertained.
19. Property passes when intended to pass.
20. Rules for ascertaining intention.
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21. Reservation of right of disposal.
22. Risk prima facie passes with property.
Transfer of Title
23. Sale by person not the owner.
24. Market overt.
25. Sale under voidable title.
26. Re-vesting of property in stolen goods on conviction of offender.
27. Seller or buyer in possession after sale.
28. Effect of writs of execution.
PART IV
Performance of the Contract
29. Duties of seller and buyer.
30. Payment and delivery are concurrent conditions.
31. Rules as to delivery.
32. Delivery of wrong quantity.
33. Delivery by instalments.
34. Delivery to carrier.
35. Risk where goods are delivered at distant place.
36. Buyer’s right of examining the goods.
37. Acceptance of goods.
38. Buyer not bound to return rejected goods.
39. Liability of buyer for neglecting or refusing delivery of goods.
PART V
Rights of Unpaid Seller Against the Goods
40. Definition of unpaid seller.
41. Unpaid seller’s rights.
Unpaid Seller’s Lien
42. Unpaid seller’s lien.
43. Part delivery.
44. Termination of lien.
Stoppage in transitu
45. Right of stoppage in transitu.
46. Duration of transit.
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47. How stoppage in transitu is effected.
Re-Sale by Buyer or Seller
48. Effect of sub-sale or pledge by buyer.
49. Sale not generally rescinded by lien or stoppage in transitu.
PART VI
Actions for Breach of the Contract
Remedies of the Seller
50. Action for price.
51. Damages for non-acceptance.
Remedies of the Buyer
52. Damages for non-delivery.
53. Specific performance.
54. Remedy for breach of warranty.
55. Interest and special damages.
PART VII
Supplementary
56. Exclusion of implied terms and conditions.
57. Reasonable time a question of fact.
58. Rights, etc., enforceable by action.
59. Auction sales.
60. Reservation of right to bid.
61. Savings.
CHAPTER 261
SALE OF GOODS
[12th December, 1923]
PART I
Preliminary
1. This Act may be cited as the Sale of Goods Act.
2.-(1) In this Act, unless the context otherwise requires:-
“action” includes counterclaim 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 to goods” has the same meaning as it has in the
Factors Act;
Ch. 207,
R.L. 1958.
CAP. 214,
R.E. 1980-1990.
Short title.
Interpretation.
CAP. 249.
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“fault” means wrongful act or defaults;
“future goods” means goods to be manufactured or acquired by the seller
after the making of the contract of sale;
“goods” includes all chattels personal other than things in action and money,
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 counterclaiming;
“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;
“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 insolvent 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, and whether he has become a notorious bankrupt 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.
PART II
Formation of the Contract
Contract of Sale
3.-(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.
(2) There may be a contract of sale between one part owner and
another.
(3) A contract of sale may be absolute or conditional.
(4) 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.
(5) 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.
4.-(1) Capacity to buy and sell is regulated by the general law concerning
capacity to contract, and to transfer and acquire property, however, where
Sale and
agreement to sell.
Capacity to buy
and sell.
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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 mean 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.
Formalities of the Contract
5.-(1) Subject to this Act, 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.
(2) Nothing in this section shall affect the law relating to corporations.
6.-(1) A contract for the sale of any goods of the value of one hundred
dollars or upwards shall not be enforceable by action unless the buyer
accepts part of the goods so sold, and actually receives the same, or gives
something in earnest to bind the contract, or in part payment, or unless some
note or memorandum in writing of the contract to be made and signed by the
party to be charged or his agent in that behalf.
(2) This section applies 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 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 recognises a pre-
existing contract of the sale whether there be an acceptance in performance
of the contract or not.
Contract of sale,
how made.
Contract of sale
for one hundred
dollars and
upwards.
Subject Matter of Contract
7.-(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.
8. 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.
9. Where there is an agreement to sell specific goods, and subse-
quently the goods, without any fault on the part of the seller or buyer, perish
before the risk passes to the buyer, the agreement is thereby avoided.
The Price
10.-(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 above
provisions, the buyer must pay a reasonable price, and what is a reasonable
price is a question of fact dependent on the circumstances of each particular
case.
Goods which
have perished.
Goods perishing
before sale but
after agreement to
sell.
Ascertainment of
price.
Existing or future
goods.
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11.-(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, however 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.
Conditions and Warranties
12.-(1) 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, and whether any other stipulation as to time is of the essence
of the contract or not depends on the terms of the contract.
(2) In a contract of sale “month” means prima facie calendar month.
13.-(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.
(3) A stipulation may be a condition, though called a warranty in the
contract.
Stipulations as
to time.
When condition
to be treated as
warranty.
Agreement to
sell at valuation.
(4) 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.
(5) 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.
14. 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 encumbrance in favour of any third party,
not declared or known to the buyer before or at the
time when the contract is made.
15. 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.
Implied under-
taking as to title,
etc.
Sale by descrip-
tion.
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16. Subject to this Act, 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; but 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 is the
manufacturer or not, there is an implied condition that
the goods shall be of merchantable quality, but 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.
Implied condi-
tions as to
quality or
fitness.
Sale by Sample
17.-(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) In the case of a contract for sale by sample, there is an implied
condition-
(a) that the bulk shall correspond with the sample in
quality;
(b) that the buyer shall have a reasonable opportunity of
comparing the bulk with the sample;
(c) that the goods shall be free from any defect, rendering
them unmerchantable, which would not be apparent on
reasonable examination of the sample.
PART III
Effects of the Contract
Transfer of Property as Between Seller and Buyer
18. 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.
19.-(l) 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
Goods must be
ascertained.
Property passes
when intended to
pass.
Sale by sample.
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circumstances of the case.
20. 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.
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.
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.
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-
(a) when he signifies his approval or acceptance to
to the seller or does any other act adopting the
transaction;
(b) if he does not signify his approval or acceptance
Rules for
ascertaining
intention.
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, and what is a
reasonable time is a question of fact.
5. (a) 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, and such assent may be
express or implied, and may be given either before or
after the appropriation is made.
(b) Where, in pursuance of the contract, the seller delivers
the goods to the buyer or to a carrier or other bailee or
custodian, 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.
21.-(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 disposal of the
goods until certain conditions are fulfilled, and in such case, notwithstanding
the delivery of the goods to the buyer, or to a carrier or other bailee or
custodian 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.
Reservation of
right of disposal.
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(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.
22. 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, however-
(a) where delivery has been delayed through the 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;
(b) nothing in this section shall affect the duties or liabilities
of either seller or buyer as a bailee or custodian of the
goods of the other party.
Transfer of Title
23.(1) Subject to 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) Nothing in this Act shall affect-
Risk prima facie
passes with
property.
Sale by person
not the owner.
(a) the provision of the Factors Act 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.
24.-(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
horses.
25. 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 he buys them in good faith and without notice of the
seller’s defect of title.
26.-(1) Where goods have been stolen and the offender is prosecuted to
conviction, the property in the goods so stolen re-vests 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) Notwithstanding any enactment to the contrary, where goods
have been obtained by fraud or other wrongful means not amounting to
larceny, the property in such goods shall not re-vest in the person who was
the owner of the goods, or his personal representative, by reason only of the
conviction of the offender.
Market overt.
Sale under
voidable title.
Re-vesting of
property in stolen
goods on
conviction of
offender.
CAP. 249.
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27.-(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 them 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 authorised by the owner of the goods to make it.
(2) Where a person having bought or agreed to buy goods
obtains, with the consent of the seller, possession of the goods or the docu-
ments 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 them 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” has the same meaning
as in the Factors Act.
28.-(l) A 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
Registrar to be executed and, for the better manifestation of such time, it shall
be the duty of the Registrar without fee, upon the receipt of any such writ, to
endorse upon the back thereof the hour, day, month and year when he
received it, but no such writ 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 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 Registrar.
(2) In this section, the term “Registrar” includes any officer
Seller or buyer in
possession after
sale.
CAP. 249.
Effect of writs of
execution.
charged with the enforcement of a writ of execution.
PART IV
Performance of the Contract
29. 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.
30. 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.
31.-(l) 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.
(2) Apart from any such contract, express or implied, the place of
delivery is the seller’s place of business, if he has one, and if not, his
residence, but if the contract is 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.
(3) 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.
(4) 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.
Payment and
delivery are con-
current
conditions.
Rules as to
delivery.
Duties of seller
and buyer.
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(5) Nothing in this section shall affect the operation of the issue or
transfer of any document of title to goods.
(6) Demand or tender of delivery may be treated as ineffectual unless
made at a reasonable hour, and what is a reasonable hour is a question of
fact.
(7) Unless otherwise agreed, the expenses of and incidental to putting
the goods into a deliverable state must be borne by the seller.
32.-(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.
33.-(l) 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
Delivery of
wrong quantity.
Delivery by
instalments.
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.
34.-(l) Where, in pursuance of a contract of sale, the seller is authorised 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 authorised 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. lf the seller omits to do so, 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.
35. Where the seller of goods agrees to deliver them at his own risk at a
place other than that where they are when sold, the buyer must, neverthe-
less, unless otherwise agreed, take any risk of deterioration in the goods
necessarily incident to the course of transit.
36.-(l) 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.
Risk where goods
are delivered at
distant place.
Buyer’s right of
examining the
goods.
Delivery to carrier.
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(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.
37. 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.
38. Unless otherwise agreed, where goods are delivered to the buyer,
and he refuses to accept them, having the right to do so, 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.
39.-(1) 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.
(2) 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 V
Rights of Unpaid Seller Against the Goods
40.-(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
Buyer not bound
to return rejected
goods.
Liability of buyer
for neglecting or
refusing delivery
of goods.
Definition of
unpaid seller.
Acceptance of
goods.
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, “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 indorsed, or a consignor or agent who has himself paid, or is directly
responsible for, the price.
41.-(1) Subject to this Act, 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 re-sale 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.
Unpaid Seller’s Lien
42.-(l) Subject to 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
Unpaid seller’s
rights.
Unpaid seller’s
lien.
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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 custodian for the buyer.
43. 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.
44.-(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 custodian 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;
(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.
Part delivery.
Termination of
lien.
Stoppage in transitu
45. Subject to 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.
46.-(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 custodian
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
custodian.
(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 custodian acknowledges to the buyer or his
agent that he holds the goods on his behalf and continues in possession of
them as bailee or custodian 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 custodian 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 custodian wrongfully refuses
Right of stoppage
in transitu.
Duration of
transit.
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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.
47.-(l) 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 custodian in whose possession the goods are.
(2) Such notice may be given either to the person in actual possession
of the goods or to his principal, and 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.
(3) When notice of stoppage in transitu is given by the seller to the
carrier, or other bailee or custodian in possession of the goods, he must re-
deliver the goods to, or according to the directions of, the seller, and the
expenses of such re-delivery must be borne by the seller.
Re-Sale by Buyer or Seller
48. Subject to 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
Effect of sub-
sale or pledge by
buyer.
How stoppage in
transitu is
effected.
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.
49.-(1) Subject to 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 re-sells 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 re-sell, and the buyer does
not within a reasonable time pay or tender the price, the unpaid seller may
re-sell 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 re-sale in case the
buyer should make default, and on the buyer making default, re-sells the
goods, the original contract of sale is thereby rescinded, but without
prejudice to any claim the seller may have for damages.
PART VI
Actions for Breach of the Contract
Remedies of the Seller
50.-(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.
Action for price.
Sale not generally
rescinded by lien
or stoppage in
transitu.
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(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.
51.-(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.
Remedies of the Buyer
52.-(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 natural-
ly 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
Damages for
non-delivery.
Damages for
non-acceptance.
fixed, then at the time of the refusal to deliver.
53.-(l) 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.
(2) 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.
54.-(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
Remedy for breach
of warranty.
Specific
performance.
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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.
55. 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 VII
Supplementary
56. 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.
57. Where, by this Act, any reference is made to a reasonable time, the
question of what is a reasonable time is a question of fact.
58. Where any right, duty or liability is declared by this Act, it may,
unless otherwise provided by this Act, be enforced by action.
59. 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, and until such announcement is
made, any bidder may retract his bid;
Exclusion of
implied terms
and conditions.
Reasonable time
a question of
fact.
Rights, etc.,
enforceable by
action.
Auction sales.
Interest and
special damages.
(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, and 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.
60. Where a right to bid is expressly reserved, but not otherwise, the
seller, or any one person on his behalf, may bid at an auction.
61.-(1) The rules in bankruptcy relating to contracts of sale shall continue to
apply thereto, notwithstanding anything contained in this Act.
(2) The rules of the common law, including the law merchant, except
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 invalidat-
ing cause, shall continue to apply to contracts for the sale of goods.
(3) Nothing in this Act shall affect the provisions of the Bills of Sale
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.
_________
CAP. 246.
Savings.
Reservation of
right to bid.
