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Sale Of Goods Act


Published: 1895-09-26

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Sale of Goods

1895-20

SALE OF GOODS ACT

Principal Act Act. No. 1895-20 Commencement 26.9.1895 Assent 26.9.1895

Amending enactments

Relevant current provisions

Commencement date

1971-19 - 1972-01 ss. 13(3) and 36 1975-34 ss. 2, 1, 15(2), 16, 55, 55A and 60(4) 1990-07 s.16A 13.12.1990

English source Sale of Goods Act 1893 (56 & 57 Vict. c 71) Supply of Goods (Implied Terms) Act 1973 (1973 c13).

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ARRANGEMENT OF SECTIONS

Section 1. Short title. 2. Interpretation.

PART I. INFORMATION 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 £10 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. 16A. Sale of Toys.

Sale of Sample. 17. Sale by sample.

PART II. EFFECTS OF THE CONTRACT.

Transfer of Property as between Seller and Buyer.

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18. Goods must be ascertained. 19. Property passes when intended to pass. 20. Rules for ascertaining intention. 21. Reservation of right of disposal. 22. Risk prima facie passes with property.

Transfer of Title. 23. Sale by person not the owner. 24. Sale under voidable title. 25. Repealed. 26. Seller or buyer in possession after sale. 27. Effects of writs of execution.

PART III. PERFORMANCE OF THE CONTRACT.

28. Duties of seller and buyer. 29. Payment and delivery are concurrent conditions. 30. Rules as to delivery. 31. Delivery of wrong quantity. 32. Instalment deliveries. 33. Delivery to carrier. 34. Risk where goods are delivered at distant place. 35. Buyer's right of examining the goods. 36. Acceptance. 37. Buyer not bound to return rejected goods. 38. Liability of buyer for neglecting or refusing delivery of goods.

PART IV. RIGHTS OF UNPAID SELLER AGAINST THE GOODS.

39. Unpaid seller defined. 40. Unpaid seller's rights.

Unpaid Seller's Lien. 41. Seller's lien. 42. Part delivery. 43. Termination of lien.

Stoppage in transitu. 44. Right of stoppage in transitu. 45. Duration of transit. 46. How stoppage in transitu is effected.

Re-sale by Buyer or Seller.

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47. Effect of sub-sale or pledge by buyer. 48. Sale not generally rescinded by lien or stoppage in transitu.

PART V. ACTIONS FOR BREACH OF THE CONTRACT.

Remedies of the Seller. 49. Action for price. 50. Damages for non-acceptance.

Remedies of the Buyer. 51. Damages for non-delivery. 52. Specific performance. 53. Remedy for breach of warranty. 54. Interest and special damages.

PART VI. SUPPLEMENTARY.

55. Exclusion of implied terms and conditions. 56. Reasonable time a question of fact. 57. Rights, etc., enforceable by action. 58. Auction sales. 59. Payment into court when breach of warranty alleged. 60. Savings.

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AN ACT FOR CODIFYING THE LAW RELATING TO THE SALE OF GOODS. Short title. 1. This Act may be cited as the Sale of Goods Act. Interpretation. 2.(1) In this Act, unless the context otherwise requires,-

“action” includes counterclaim and set-off; “business” includes a profession and the activities of any government

department, local authority or statutory undertaking; “buyer” means a person who buys or agrees to buy goods; “contract for the international sale of goods” means a contract of sale of

goods made by parties whose places of business (or, if they have none, habitual residences) are in the territories of different States (for this purpose Gibraltar is a different State from the United Kingdom) and in the case of which one of the following conditions is satisfied, that is to say–

(a) the contract involves the sale of goods which are at the time of

the conclusion of the contract in the course of carriage or will be carried from the territory of one State to the territory of another; or

(b) the acts constituting the offer and acceptance have been

effected in the territories of different States; or (c) delivery of the goods is to be made in the territory of a State

other than that within whose territory the acts constituting the offer and the acceptance have been effected;

“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; “fault” means wrongful act or default;

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“future goods” mean goods to be manufactured or acquired by the seller after the making of the contract of sale;

“goods” include all chattels personal other than things in action and

money the term includes emblements, 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. (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. (5) Goods of any kind are of merchantable quality within the meaning of this Act if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect having regard to any description applied to them, the price (I relevant) and all the other relevant circumstances; and any reference in this Act to unmerchantable goods shall be construed accordingly.

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PART I. FORMATION OF THE CONTRACT.

Contract of sale. Sale and agreement to sell. 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. 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. Capacity to buy and sell. 4. (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 a 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 minor or other person, and to his actual requirements at the time of the sale and delivery.

Formalities of the Contract. Contract of sale, how made. 5. Subject to the provisions of this Act and of any enactment 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:

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Provided that nothing in this section shall affect the law relating to corporations. Contract of sale for £10 and upwards. 6. (1) 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 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 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.

Subject Matter of Contract. Existing or future goods. 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. Goods which have perished. 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. Goods perishing before sale but after agreement to sell.

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9. 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.

The Price. Ascertainment of 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 foregoing going 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. Agreement to sell at valuation. 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: 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.

Conditions and Warranties. Stipulations as to time. 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. 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. When condition to be treated as warranty. 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.

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(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, 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, fulfiment of which is excused by law by reason of impossibility or otherwise. Implied undertaking as to title, etc. 14.(1) In every contract of sale, other than one to which subsection (2) applies, 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 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; and

(b) an implied warranty that the goods are free, and will remain free until the time when the property is to pass, from any charge or encumbrance not disclosed or known to the buyer before the contract is made and that the buyer will enjoy quiet possession of the goods except so far as it maybe disturbed by the owner or other person entitled to the benefit of any charge or encumbrance so disclosed or known.

(2) In a contract of sale, in the case of which there appears from the contract or is to be inferred from the circumstances of the contract an intention that the seller should transfer only such title as he or a third person may have, there is–

(a) an implied warranty that all charges or encumbrances known to the seller and not known to the buyer have been disclosed to the buyer before the contract is made; and

(b) an implied warranty that neither–

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(i) the seller; nor (ii) in a case where the parties to the contract intend that the

seller should transfer only such title as a third person may have, that person; nor

(iii) anyone claiming through or under the seller or that third

person otherwise than under a charge or encumbrance disclosed or known to the buyer before the contract is made, will disturb the buyer's quiet possession of the goods.

Sale by description. 15.(1) 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. (2) A sale of goods shall not be prevented from being a sale by description by reason only that, being exposed for sale or hire, they are selected by the buyer. Implied undertakings as to quality or fitness. 16.(1) Except as provided by this section, and section 17 and subject to the provisions of any other enactment, there is no implied condition or warranty as to the quality or fitness for any particular purpose of goods supplied under a contract of sale. (2) Where the seller sells goods in the course of a business, there is an implied condition that the goods supplied under the contract are of merchantable quality, except that there is no such condition–

(a) as regards defects specifically drawn to the buyer's attention before the contract is made; or

(b) if the buyer examines the goods before the contract is made, as

regards defects which that examination ought to reveal. (3) Where the seller sells goods in the course of a business and the buyer expressly or by implication, makes known to the seller any particular purpose for which the goods are being bought, there is an implied condition that the goods supplied under the contract are reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied, except where the circumstances show that the buyer

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does not rely, or that it is unreasonable for him to rely, on the seller's skill or judgment. (4) An implied condition or warranty as to quality or fitness for a particular purpose may be annexed to a contract of sale by usage. (5) The foregoing provisions of this section apply to a sale by a person who in the course of a business is acting as agent for another as they apply to a sale by a principal in the course of a business, except where that other is not selling in the course of a business and either the buyer knows that fact or reasonable steps are taken to bring it to the notice of the buyer before the contract is made. (6) In the application of subsection (3) to an agreement for the sale of goods under which the purchase price or part of it is payable by instalments any reference to the seller shall include a reference to the person by whom any antecedent negotiations are conducted. Sale of Toys. 16A.(1) It shall be an implied condition of the sale of goods which are defined as toys by virtue of Directive 88/378 of the European Economic Community as amended from time to time that—

(a) the goods shall not jeopardise the safety and health of users

when used in a reasonably foreseeable way; and (b) the goods shall have affixed to them or to their packaging or in

an accompanying leaflet the information in English described in subsection (3) of this section.

(2) There shall be a presumption that the requirement of subsection (1)(a) of this section is satisfied if the goods have been examined by a body approved for that purpose in a member State of the European Economic Community and as a result carry the symbol “CE” -affixed to them or, where this is not possible because of the size of the goods, to the packaging or on a label or accompanying leaflet. (3) The information required by subsection (1)(b) of this section is that specified by the Directive 88/378 as amended from time to time in relation to–

(a) the manufacturer or importer; and (b) the warning or indications of precautions appropriate to the

toy.

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(4) The text of the Directive shall be published by notice in the Gazette and amendments to the Directive which are so published shall take effect from the date of publication. 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–

(a) there is an implied condition that the bulk shall correspond with the sample in quality;

(b) there is an implied condition that the buyer shall have a

reasonable opportunity of comparing the bulk with the sample; (c) there is an implied condition that 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.

Transfer of Property as between Seller and Buyer. Goods must be ascertained. 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 be the goods are ascertained. Property passes when intended to pass. 19.(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. Rules for ascertaining intention. 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.

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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 ad or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such ad 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 the seller or

does any other ad adopting the transaction; (b) if he does not shim his approval or acceptance to me seller but

retains the goods without giving notice of rejection, men, if a time has been fixed for me return of me goods, on me 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.

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 express or implied, and may be given either before or after the appropriation is made.

(2) Where, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee (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. Reservation of right of disposal. 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

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goods until certain conditions are fulfilled. In such case, notwithstanding the delivery of the goods to the buyer, or to a curer or other bailee 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. Risk prima facie passes with property. 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: Provided that 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: Provided also that nothing in this section shall affect the duties or liabilities of either seller or buyer as a bailee of the goods of the other party.

Transfer of Title. Sale by person not the owner. 23. 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: Provided that nothing in this Act shall affect–

(a) the provisions 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;

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(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.

Sale under voidable title. 24. 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. 25. Repealed. Seller or buyer in possession after sale. 26.(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, “mercantile agent” has the same meaning as in the Factors Act. Effects of writs of execution. 27.(1) A writ of fieri facias 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 marshal to be executed; and, for the better manifestation of such time, it shall be the duty of the marshal 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 shall prejudice the title to such goods acquired by any person in good faith and for valuable consideration, unless such

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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 marshal. (2) In this section “marshal” includes any officer charged with the enforcement of a writ of execution.

PART III. PERFORMANCF OF THE CONTRACT.

Duties of seller and buyer. 28. 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. Payment and delivery are concurrent conditions. 29. 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. Rules as to delivery. 30.(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.

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(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. Delivery of wrong quantity. 31.(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. Installment deliveries. 32.(1) Unless otherwise agreed, the buyer of goods is not bound installment to accept delivery thereof by installments (2) Where there is a contract for the sale of goods to be delivered by stated installments, which are to be separately paid for, and the seller makes defective deliveries in respect of one or more installments, or the buyer neglects or refuses to take delivery of or pay for one or more installments, 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. Delivery to carrier. 33. (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 causer, 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.

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(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 omits 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. Risk where goods are delivered at distant place. 34. 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, nevertheless, unless otherwise agreed, take any risk of deterioration in the goods necessarily incident to the course of transit. Buyer’s right of examining the goods. 35.(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. Acceptance. 36. The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or (except where section 35 otherwise provides) 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. Buyer not bound to return rejected goods. 37. 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.

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Liability of buyer for neglecting or refusing delivery of goods. 38. 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: Provided that 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.

Unpaid seller defined. 39. (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, “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. Unpaid seller’s rights. 40.(1) Subject to the provisions of this Act, and of any enactment 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 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 transit after he has parted with the possession of them; (c) a right of re-sale as limited by this Act.

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(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 transit where the property has passed to the, buyer.

Unpaid Seller's Lien. Seller's lien. 41.(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 for the buyer. Part delivery. 42. Where an unpaid seller has made part delivery of the goods, he may exercise his right of lien on the remainder, unless such part delivery has been made under such circumstances as to show an agreement to waive the lien. Termination of lien. 43.(1) The unpaid seller of goods loses his lien thereon–

(a) when he delivers the goods to a carrier or other bailee 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 thereon, does not lose his lien by reason only that he has obtained judgment for the price of the goods.

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Right of stoppage in transitu. 44. 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. Duration of transit. 45.(1) Goods are deemed to be in course of transit from the time when they are delivered to a owner by land or water, or other bailee, for the purpose of transmission to the buyer, until the buyer, or his agent in that behalf, takes delivery of them from such owner or other bailee. (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 owner or other bailee acknowledges to the buyer, or his agent, that he holds the goods on his behalf and continues in possession of them as bailee 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 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 owner or other bailee 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. How stoppage in transitu is effected. 46.(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 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

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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 in possession of the goods, he must re- deliver the goods to, or according to the directions of, the seller. The expenses of such re-delivery must be borne by the seller.

Re-sale by Buyer or Seller. Effect of sub-sale or pledge by buyer. 47. Subject to the provisions of this Act, the unpaid seller's right of lien 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 stoppage in transitu is defeated, and if such last-mentioned transfer was made by way of pledge or other disposition for value, the unpaid seller's right of lien or stoppage in transitu can only be exercised subject to the rights of the transferee. Sale not generally rescinded by lien or stoppage in transitu. 48.(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 stoppage in transitu. (2) Where an unpaid seller who has exercised his right of lien 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.

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PART V

ACTIONS FOR BREACH OF THE CONTRACT. Remedies of the Seller.

Action for price. 49.(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. Damages for non-acceptance. 50.(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. Damages for non-delivery. 51.(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.

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(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. Specific performance. 52. 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 direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages. The judgment 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. Remedy for breach of warranty. 53. (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 one 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. Interest and special damages. 54. 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

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special damages may be recoverable, or to recover money paid where the consideration for the payment of it has failed.

PART VI. SUPPLEMENTARY.

Exclusion of implied terms and conditions. 55. (1) Where any right, duty or liability would arise under a contract of sale of goods 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 is such as to bind both parties to the contract, but the foregoing provision shall have effect subject to the following provisions of this section. (2) An express condition or warranty does not negative a condition or warranty implied by this Act unless inconsistent therewith. (3) In the case of a contract of sale of goods, any term of that or any other contract exempting from all or any of the provisions of section 14 shall be void. (4) In the case of a contract of sale of goods, any term of that or any other contract exempting from all or any of the provisions of section 15, 16 or 17 shall be void in the case of a consumer sale and shall, in any other case, not be enforceable to the extent that it is shown that it would not be fair or reasonable to allow reliance on the term. (5) In determining for the purposes of subsection (4) whether or not reliance on any such term would be fair or reasonable regard shall be had to all the circumstances of the case and in particular to the following matter–

(a) the strength of the bargaining positions of the seller and buyer relative to each other, taking into account, among other things, the availability of suitable alternative products and sources of supply;

(b) whether the buyer received an inducement to agree to the term

or in accepting it had an opportunity of buying the goods or suitable alternatives without it from any source of supply;

(c) whether the buyer knew or ought reasonably to have known of

the existence and extent of the term (having regard, among other things, to any custom of the trade and any previous course of dealing between the parties);

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(d) where the term exempts from all or any of the provisions of section 15, 16 or 17 if some condition is not complied with, whether it was reasonable at the time of the contract to expect that compliance with that condition would be practicable;

(e) whether the goods were manufactured, processed, or adapted to

the special order of the buyer. (6) Subsection (5) shall not prevent the court from holding in accordance with any rule of law, that a term which purports to exclude or restrict any of the provisions of section 15, 16 or 17 is not a term of the contract. (7) In this section “consumer sale” means a sale of goods (other than a sale by auction or by competitive tender) by a seller in the course of a business where the goods–

(a) are of a type ordinarly bought for private use or consumption; and

(b) are sold to a person who does not buy or hold himself out as

buying them in the course of a business. (8) The onus of proving that a sale falls to be treated for the purposes of this section as not being a consumer sale shall lie on the party so contending. (9) Any reference in this section to a term exempting from all or any of the provisions of any section of this Act is a reference to a term which purports to exclude or restrict, or has the effect of excluding or restricting the operation of all or any of the provisions of that section, or the exercise of a right conferred by any provision of that section, or any liability of the seller for breach of a condition or warranty implied by any provision of that section. (10) It is hereby declared that any reference in this section to a term of a contract includes a reference to a term which although not contained in a contract is incorporated in the contract by another term of the contract. (11) This section is subject to section 60(4). Conflict of laws. 55A. Where the proper law of a contract for the sale of goods would, apart from a term that it should be the law of some other country or a term to the like effect, be the law of Gibraltar, or whether any such contract contains a term which purports to substitute, or has the effect of substituting, provisions of the law of some other country for all or any of the provisions

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of sections 14 to 17 and 55 those sections shall, notwithstanding that term but subject to section 61(6), apply to the contract. Reasonable time a question of fact. 56. Where, by this Act, any reference is made to a reasonable time the question what is a reasonable time is a question of fact. Rights, etc., enforceable by action. 57. Where any right, duty or liability is declared by this Act, it may, unless otherwise by this Act provided, been forced by action. Auction sales. 58. 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 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.

Payment into court when breach of warranty alleged. 59. Where a buyer has elected to accept goods which he might have rejected, and to treat a breach of contract as only giving rise to a claim for damages, he may, in an action by the seller for the price, be required, in the discretion of the court before which the action depends, to consign or pay

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into court the price of the goods, or part thereof, or to give other reasonable security for the due payment thereof. Savings. 60. (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) 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. (4) Nothing in section 55 or 55A shall prevent the parties to a contract for the international sale of goods from negativing or varying any right, duty or liability which would otherwise arise by implication of law under sections 14 to 17.