Sale Of Goods Ordinance


Published: 1997-06-30

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Cap 26 - SALE OF GOODS ORDINANCE 1

Chapter: 26 SALE OF GOODS ORDINANCE Gazette Number Version Date

Long title 30/06/1997


To codify the law relating to the sale of goods.
[cf. 1893 c. 71 U.K.]


[1 August 1896]


(Originally 7 of 1896 (Cap 26, 1950))
______________________________________________________________________________
Note:
The following Imperial Statutes and parts thereof so far as they were applicable in Hong Kong were repealed
by this Ordinance-

1 James 1, c. 21. An Act against Brokers.
29 Car. 2, c. 3. The Statute of Frauds, sections 15 and 16.
9 Geo. 4, c. 14. The Statute of Frauds Amendment Act, 1828, section 7.


Section: 1 Short title 30/06/1997


This Ordinance may be cited as the Sale of Goods Ordinance.
(Amended 5 of 1924 s. 6)


Section: 2 Interpretation 37 of 1998 20/11/1998


Remarks:
Adaptation amendments retroactively made - see 66 of 2000 s. 3


(1) In this Ordinance, unless the context otherwise requires-
"action" (訴訟) includes suit, counterclaim, and set-off;
"business" (業務) includes a profession and the activities of a public body, a public authority, or a board, commission,

committee or other body appointed by the Chief Executive or Government; (Added 58 of 1977 s. 2. Amended
59 of 1989 s. 20; 66 of 2000 s. 3)

"buyer" (買方) means a person who buys or agrees to buy goods;
"contract of sale" (售賣合約) includes an agreement to sell as well as a sale;
"delivery" (交、交付) means voluntary transfer of possession from one person to another;
"document of title to goods" (貨品的所有權文件) includes any bill of lading, dock warrant, warehouse keeper's

certificate, and warrant or order for the delivery of goods, and any other document used in the ordinary course of
business as proof of the possession or control of goods, or authorizing or purporting to authorize, either by
indorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented;

"fault" (錯失) means wrongful act or default;
"future goods" (期貨) means goods to be manufactured or acquired by the seller after the making of the contract of

sale;
"goods" (貨、貨品) includes all chattels personal other than things in action and money. The term includes

emblements, industrial growing crops, and things attached to or forming part of the land which are agreed to be
severed before sale or under the contract of sale;

"plaintiff" (原告人) includes a defendant counterclaiming;
"property" (產權) means the general property in goods, and not merely a special property;
"quality of goods" (貨品品質) includes their state or condition;
"sale" (售賣) includes a bargain and sale as well as a sale and delivery;
"seller" (賣方) means a person who sells or agrees to sell goods;
"specific goods" (特定貨品) means goods identified and agreed upon at the time a contract of sale is made;



Cap 26 - SALE OF GOODS ORDINANCE 2

"warranty" (保證條款) 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.

(Amended 59 of 1989 s. 20)
(2) A thing is deemed to be done "in good faith" when it is in fact done honestly, whether it is done negligently

or not. (Amended 8 of 1912 s. 47)
(3) A person is deemed to be insolvent 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 been adjudged bankrupt or not. (Amended 8 of 1912 s.
47; 37 of 1998 s. 4)

(4) Goods are in a "deliverable state" when they are in such a state that the buyer would, under the contract, be
bound to take delivery of them. (Amended 8 of 1912 s. 47)

(5) Goods of any kind are of merchantable quality within the meaning of this Ordinance if they are-
(a) as fit for the purpose or purposes for which goods of that kind are commonly bought;
(b) of such standard of appearance and finish;
(c) as free from defects (including minor defects);
(d) as safe; and
(e) as durable,

as it is reasonable to expect having regard to any description applied to them, the price (if relevant) and all the other
relevant circumstances; and any reference in this Ordinance to unmerchantable goods shall be construed accordingly.
(Replaced 85 of 1994 s. 2)

Section: 2A "Dealing as consumer" 30/06/1997


(1) A party to a contract of sale "deals as consumer" in relation to another party if-
(a) he neither makes the contract in the course of a business nor holds himself out as doing so;
(b) the other party does make the contract in the course of a business; and
(c) the goods passing under or in pursuance of the contract are of a type ordinarily supplied for private use

or consumption.
(2) Notwithstanding subsection (1), on a sale by auction or by competitive tender the buyer is not in any

circumstances to be regarded as dealing as consumer.
(3) It is for the person claiming that a party does not deal as consumer to prove that he does not.

(Added 85 of 1994 s. 3)

Part: I FORMATION OF THE CONTRACT 30/06/1997




Section: 3 Sale and agreement to sell 30/06/1997


Contract of sale


(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.

Section: 4 Capacity to buy and sell 30/06/1997


(1) Capacity to buy and sell is regulated by the general law concerning capacity to contract, and to transfer and
acquire property:



Cap 26 - SALE OF GOODS ORDINANCE 3

Provided that where necessaries are sold and delivered to an infant or minor, or to a person who, by reason of
mental incapacity or drunkenness, is incompetent to contract, he must pay a reasonable price therefor.

(2) In this section, "necessaries" (必需品) means goods suitable to the condition in life of such infant or minor
or other person, and to his actual requirements at the time of the sale and delivery.

Section: 5 Mode of making contract of sale 30/06/1997


Formalities of contract


Subject to the provisions of this Ordinance 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:

Provided that nothing in this section shall affect the law relating to corporations.

Section: 6 (Repealed 58 of 1977 s. 3) 30/06/1997




Section: 7 Existing or future goods 30/06/1997


Subject-matter of contract


(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
Ordinance 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.

Section: 8 Goods which have perished 30/06/1997


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.

Section: 9 Goods perishing before sale but after agreement to sell 30/06/1997


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.

Section: 10 Ascertainment of price 30/06/1997


Price


(1) The price in a contract of sale may be fixed by the contract, or may be left to be fixed in manner thereby
agreed, or may be determined by the course of dealing between the parties.

(2) Where the price is not determined in accordance with the foregoing provisions, the buyer must pay a
reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each particular
case.

Section: 11 Agreement to sell at valuation 30/06/1997


(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



Cap 26 - SALE OF GOODS ORDINANCE 4

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.

Section: 12 Stipulations as to time 30/06/1997


Conditions and warranties


(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" (月) means prima facie calendar month.

Section: 13 When condition to be treated as warranty 30/06/1997


(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 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 is a term of the contract, express or implied, to that
effect. (Amended 47 of 1969 s. 5)

(4) Nothing in this section shall affect the case of any condition or warranty, fulfilment of which is excused by
law by reason of impossibility or otherwise.

Section: 14 Implied undertaking as to title etc. 30/06/1997


(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 the 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 may be 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-
(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.

(Replaced 58 of 1977 s. 4)
[cf. 1973 c. 13 s. 1 U.K.]





Cap 26 - SALE OF GOODS ORDINANCE 5

Section: 15 Sale by description 30/06/1997


(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 is 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. (Added 58 of 1977 s. 5) [cf. 1973 c. 13 s. 2 U.K.]

Section: 16 Implied undertakings as to quality or fitness 30/06/1997


(1) This section provides for the circumstances in which, and the extent to which, there is any implied
condition or warranty as to the quality or fitness for any particular purpose of goods supplied under a contract of sale.
(Replaced 85 of 1994 s. 4)

(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; or (Amended 85 of 1994 s. 4)
(c) if the contract is a contract for sale by sample, as regards defects which would have been apparent on a

reasonable examination of the sample. (Added 85 of 1994 s. 4)
(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 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) Subsections (1), (2), (3) and (4) 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.

(7) In subsection (6) "antecedent negotiations" (事先商議) means any negotiations or arrangements with the
buyer whereby he was induced to make the agreement or which otherwise promoted the transaction to which the
agreement relates.

(8) 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. (Added 85 of 1994 s. 4)

(Replaced 58 of 1977 s. 6)
[cf. 1973 c. 13 s. 3 U.K.]


Section: 17 Sale by sample 30/06/1997


Sale by sample


(1) A contract of sale is a contract for sale by sample where there is a term in the contract, express or implied,
to that effect.

(2) 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



Cap 26 - SALE OF GOODS ORDINANCE 6

unmerchantable, which would not be apparent on reasonable examination of the sample.

Part: II EFFECTS OF THE CONTRACT 30/06/1997




Section: 18 Goods must be ascertained 30/06/1997


Transfer of property as between seller and buyer


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.

Section: 19 Property passes when intended to pass 30/06/1997


(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.

Section: 20 Rules for ascertaining intention 30/06/1997


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 the seller or does any other act adopting the
transaction;

(b) if he does not signify his approval or acceptance to the seller but retains the goods without giving
notice of rejection, then, if a time has been fixed for the return of the goods, on the expiration of such
time, and if no time has been fixed, on the expiration of a reasonable time. What is a reasonable time is
a question of fact.

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.

Section: 21 Reservation of right of disposal 30/06/1997


(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. In such case, notwithstanding the delivery of the goods to the buyer, or to a carrier or
other bailee for the purpose of transmission to the buyer, the property in the goods does not pass to the buyer until the



Cap 26 - SALE OF GOODS ORDINANCE 7

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.

Section: 22 Risk prima facie passes with property 30/06/1997


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 seller or buyer, 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.

Section: 23 Sale by person not owner 30/06/1997


Transfer of title


(1) Subject to the provisions of this Ordinance, where goods are sold by a person who is not the owner thereof,
and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to
the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller's
authority to sell.

(2) Provided, also, that nothing in this Ordinance shall affect-
(a) the provisions of the Factors Ordinance (Cap 48), or any enactment enabling the apparent owner of

goods to dispose of them as if he were the true owner thereof; or (Amended 8 of 1912 s. 47)
(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.

Section: 24 Market overt 66 of 2000 01/07/1997


Remarks:
Adaptation amendments retroactively made - see 66 of 2000 s. 3


(1) Where goods are openly sold in a shop or market in Hong Kong, in the ordinary course of the business of
such shop or 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. (Amended 66 of 2000 s. 3)

(2) (Repealed 58 of 1977 s. 7)

Section: 25 Sale under voidable title 30/06/1997


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.

Section: 26 (Repealed 21 of 1970 s. 35) 30/06/1997




Section: 27 Seller or buyer in possession after sale 30/06/1997


(1) Where a person having sold goods continues or is in possession of the goods, or of the documents of title to



Cap 26 - SALE OF GOODS ORDINANCE 8

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" (商業代理人) has the same meaning as in the Factors Ordinance (Cap
48). (Amended 8 of 1912 s. 47; 5 of 1924 s. 13)

Section: 28 (Repealed 52 of 1987 s. 45) 30/06/1997




Part: III PERFORMANCE OF THE CONTRACT 30/06/1997




Section: 29 Duties of seller and buyer 30/06/1997


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.

Section: 30 Payment and delivery are concurrent conditions 30/06/1997


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.

Section: 31 Rules as to delivery 30/06/1997


(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 has one, and if not, his
residence:

Provided that, 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.

(2) Where under the contract of sale the seller is bound to send the goods to the buyer, but no time for sending
them is fixed, the seller is bound to send them within a reasonable time.

(3) Where the goods at the time of sale are in the possession of a third person, there is no delivery by seller to
buyer unless and until such third person acknowledges to the buyer that he holds the goods on his behalf:

Provided that nothing in this section shall affect the operation of the issue or transfer of any document of title to
goods.

(4) Demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour. What is a
reasonable hour is a question of fact.

(5) Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state must be
borne by the seller.

Section: 32 Delivery of wrong quantity 30/06/1997


(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



Cap 26 - SALE OF GOODS ORDINANCE 9

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.

Section: 33 Delivery by instalments 30/06/1997


(1) Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by instalments.
(2) Where there is a contract for the sale of goods to be delivered by stated instalments, which are to be

separately paid for, and the seller makes defective deliveries in respect of one or more instalments, or the buyer
neglects or refuses to take delivery of or pay for one or more instalments, it is a question in each case depending on
the terms of the contract and the circumstances of the case, whether the breach of contract is a repudiation of the
whole contract or whether it is a severable breach giving rise to a claim for compensation but not to a right to treat the
whole contract as repudiated.

Section: 34 Delivery to carrier 30/06/1997


(1) Where, in pursuance of a contract of sale, the seller is authorized or required to send the goods to the buyer,
delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer is
prima facie deemed to be a delivery of the goods to the buyer.

(2) Unless otherwise authorized by the buyer, the seller must make such contract with the carrier on behalf of
the buyer as may be reasonable having regard to the nature of the goods and the other circumstances of the case. If the
seller 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, in
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.

Section: 35 Risk where goods are delivered at distant place 30/06/1997


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.

Section: 36 Buyer's right of examining goods 30/06/1997


(1) (Repealed 85 of 1994 s. 5)
(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.

Section: 37 Acceptance of goods 30/06/1997


(1) Subject to subsection (2), the buyer is deemed to have accepted the goods-
(a) when he intimates to the seller that he has accepted them; or
(b) 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.
(2) Where goods are delivered to the buyer, and he has not previously examined them, he is not deemed to have

accepted them under subsection (1) until he has had a reasonable opportunity of examining them for the purpose-
(a) of ascertaining whether they are in conformity with the contract; and



Cap 26 - SALE OF GOODS ORDINANCE 10

(b) in the case of a contract for sale by sample, of comparing the bulk with the sample.
(3) The buyer who deals as consumer cannot lose his right to rely on subsection (2) by agreement, waiver or

otherwise.
(4) The buyer is also deemed to have accepted the goods when after the lapse of a reasonable time he retains

the goods without intimating to the seller that he has rejected them.
(5) The questions that are material in determining for the purposes of subsection (4) whether a reasonable time

has elapsed include whether the buyer has had a reasonable opportunity of examining the goods for the purpose
mentioned in subsection (2).

(6) The buyer is not by virtue of this section deemed to have accepted the goods merely because the goods are
delivered to another under a sub-sale or other disposition.

(Replaced 85 of 1994 s. 6)

Section: 38 Buyer not bound to return rejected goods 30/06/1997


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.

Section: 39 Liability of buyer for neglecting or refusing to take

delivery of goods
30/06/1997



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 30/06/1997




Section: 40 Definition of unpaid seller 30/06/1997


(1) The seller of goods is deemed to be an unpaid seller within the meaning of this Ordinance-
(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" (賣方) 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. (Amended 5 of 1924 s. 13)

Section: 41 Unpaid seller's rights 30/06/1997


Subject to the provisions of this Ordinance 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 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 Ordinance.


Section: 42 Withholding delivery 30/06/1997


Where the property in goods has not passed to the buyer, the unpaid seller has, in addition to his other remedies,



Cap 26 - SALE OF GOODS ORDINANCE 11

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.

Section: 43 Unpaid seller's lien 30/06/1997


Unpaid seller's lien


(1) Subject to the provisions of this Ordinance, 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.

Section: 44 Part delivery 30/06/1997


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 in such circumstances as to show an agreement to waive the lien
or right of retention.

Section: 45 Termination of lien 30/06/1997


(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 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 for the price of the goods.

Section: 46 Right of stoppage in transitu 30/06/1997


Stoppage in transitu


Subject to the provisions of this Ordinance, 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.

Section: 47 Duration of transit 30/06/1997


(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 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.

(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 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



Cap 26 - SALE OF GOODS ORDINANCE 12

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 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 in such circumstances as to show an
agreement to give up possession of the whole of the goods.

Section: 48 How stoppage in transitu is effected 30/06/1997


(1) The unpaid seller may exercise his right of stopping 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 time and in 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.

Section: 49 Effect of sub-sale or pledge by buyer 30/06/1997


Re-sale by buyer or seller


Subject to the provisions of this Ordinance, the unpaid seller's right of lien or retention or stoppage in transitu is
not affected by any sale or other disposition of the goods which the buyer may have made, unless the seller has
assented thereto:

Provided that where a document of title to goods has been lawfully transferred to any person as buyer or owner
of the goods, and that person transfers the document to a person who takes the document in good faith and for
valuable consideration, then, if such last-mentioned transfer was by way of sale, the unpaid seller's right of lien or
retention or stoppage in transitu is defeated, and if such last mentioned transfer was by way of pledge or other
disposition for value, the unpaid seller's right of lien or retention or stoppage in transitu can only be exercised subject
to the rights of the transferee.

Section: 50 Sale not generally rescinded by lien or stoppage in transitu 30/06/1997


(1) Subject to the provisions of this section, a contract of sale is not rescinded by the mere exercise by an
unpaid seller of his right of lien or retention or stoppage in transitu.

(2) Where an unpaid seller who has exercised his right of lien or retention or stoppage in transitu 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: V ACTIONS FOR BREACH OF THE CONTRACT 30/06/1997




Section: 51 Action for price 30/06/1997


Remedies of seller


(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



Cap 26 - SALE OF GOODS ORDINANCE 13

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.

Section: 52 Damages for non-acceptance 30/06/1997


(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 neglect or refusal to
accept.

Section: 53 Damages for non-delivery 30/06/1997


Remedies of buyer


(1) Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may maintain an
action against the seller for damages for non-delivery.

(2) The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of
events, from the seller's breach of contract.

(3) Where there is an available market for the goods in question, the measure of damages is prima facie to be
ascertained by the difference between the contract price and the market or current price of the goods at the time or
times when they ought to have been delivered, or, if no time was fixed for delivery, then at the time of the neglect or
refusal to deliver.

Section: 54 Specific performance 30/06/1997


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 on such
terms and conditions as to damages, payment of the price, and otherwise, as to the court may seem just. The
application by the plaintiff may be made at any time before judgment.

Section: 55 Remedies for breach of warranty 30/06/1997


(1) Where there is a breach of warranty by the seller, or where the buyer elects, or is compelled, to treat any
breach of a condition on the part of the seller as a breach of warranty, the buyer is not, by reason only of such breach
of warranty, entitled to reject the goods; but he may-

(a) set up against the seller the breach of warranty in diminution or extinction of the price; or
(b) maintain an action against the seller for damages for the breach of warranty.

(2) The measure of damages for breach of warranty is the estimated loss directly and naturally resulting, in the
ordinary course of events, from the breach of warranty.

(3) In the case of breach of warranty of quality, such loss is prima facie the difference between the value of the
goods at the time of delivery to the buyer and the value they would have had if they had answered to the warranty.

(4) The fact that the buyer has set up the breach of warranty in diminution or extinction of the price does not
prevent him from maintaining an action for the same breach of warranty if he has suffered further damage.

Section: 56 Interest and special damages 30/06/1997


Nothing in this Ordinance shall affect the right of the buyer or the seller to recover interest or special damages in



Cap 26 - SALE OF GOODS ORDINANCE 14

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

Part: VI SUPPLEMENTARY 30/06/1997




Section: 57 Exclusion of implied terms and conditions 30/06/1997


(1) Where any right, duty or liability would arise under a contract of sale of goods by implication of law, it may
(subject to the Control of Exemption Clauses Ordinance (Cap 71)) 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.
(Amended 59 of 1989 s. 20)

(2) An express condition or warranty does not negative a condition or warranty implied by this Ordinance
unless inconsistent therewith.

(3)-(11) (Repealed 59 of 1989 s. 20)
(Replaced 58 of 1977 s. 8)

[cf. 1973 c. 13 s. 4 U.K.]

Section: 57A (Repealed 59 of 1989 s. 20) 30/06/1997




Section: 58 Reasonable time a question of fact 30/06/1997


Where, by this Ordinance, any reference is made to a reasonable time, the question what is a reasonable time is a
question of fact.

Section: 59 Right, etc., enforceable by action 30/06/1997


Where any right, duty, or liability is declared by this Ordinance, it may, unless otherwise provided by this
Ordinance, be enforced by action.

Section: 60 Auction sale 30/06/1997


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 reserve or upset price, and a right to bid may also
be reserved expressly by or on behalf of the seller.


Section: 61 Reservation of right to bid 30/06/1997


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.

Section: 62 Saving 30/06/1997


(1) The rules in bankruptcy relating to contracts of sale shall continue to apply thereto, notwithstanding
anything in this Ordinance.



Cap 26 - SALE OF GOODS ORDINANCE 15

(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 Ordinance, and in particular the rules relating to the law of principal and agent, and the
effect of fraud, misrepresentation, duress or coercion, mistake, or other invalidating cause, shall continue to apply to
contracts for the sale of goods.

(3) Nothing in this Ordinance or in any repeal effected thereby shall affect the enactments relating to bills of
sale, or any enactment relating to the sale of goods which is not expressly repealed by this Ordinance.

(4) The provisions of this Ordinance 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.

(5) (Repealed 59 of 1989 s. 20)
(6) The amendments of this Ordinance made by the Sale of Goods (Amendment) Ordinance 1977 (58 of 1977)

shall not apply to contracts to which this Ordinance applies which were entered into prior to the date of
commencement of that Ordinance; and all such contracts shall continue to be governed by the provisions of this
Ordinance in operation immediately prior to the date of commencement of the Sale of Goods (Amendment) Ordinance
1977 (58 of 1977). (Added 58 of 1977 s. 10)

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