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Questions and Answers
Who bears the loss if the goods are in the possession of the buyer but the seller becomes insolvent?
Who bears the loss if the goods are in the possession of the buyer but the seller becomes insolvent?
- The Official Receiver
- The buyer (correct)
- Both the buyer and seller
- The seller
What happens if the buyer pays the price but the seller becomes insolvent afterwards?
What happens if the buyer pays the price but the seller becomes insolvent afterwards?
- The buyer can claim a rateable dividend for the money paid. (correct)
- The buyer can claim the goods immediately.
- The seller must deliver the goods to the buyer.
- The buyer has no rights over the goods.
In which case does the seller have to deliver the goods to the Official Receiver?
In which case does the seller have to deliver the goods to the Official Receiver?
- If the buyer does not pay the purchase price.
- If the buyer claims the goods at any point.
- Whenever the buyer becomes insolvent. (correct)
- When the buyer pays the price and the seller becomes insolvent.
What defines a 'condition' in a contract of sale?
What defines a 'condition' in a contract of sale?
How is a 'warranty' defined in the context of a contract of sale?
How is a 'warranty' defined in the context of a contract of sale?
What is the consequence of breaching a condition in a sales contract?
What is the consequence of breaching a condition in a sales contract?
What type of stipulation is considered to be of a 'fundamental nature' in a contract?
What type of stipulation is considered to be of a 'fundamental nature' in a contract?
If a buyer becomes insolvent without payment having been made, what is the seller allowed to do?
If a buyer becomes insolvent without payment having been made, what is the seller allowed to do?
What characterizes a condition in a contract?
What characterizes a condition in a contract?
What is the primary remedy available for a breach of warranty?
What is the primary remedy available for a breach of warranty?
Under what circumstances can a breach of condition be treated as a breach of warranty?
Under what circumstances can a breach of condition be treated as a breach of warranty?
What does Section 14(a) of SOGA 1957 require from the seller?
What does Section 14(a) of SOGA 1957 require from the seller?
How does a breach of condition affect the aggrieved party's options?
How does a breach of condition affect the aggrieved party's options?
What distinguishes a warranty from a condition in a contract?
What distinguishes a warranty from a condition in a contract?
What occurs if parties modify or exclude terms related to implied conditions?
What occurs if parties modify or exclude terms related to implied conditions?
Which of the following is an implication of a breach of warranty?
Which of the following is an implication of a breach of warranty?
When does the property in specific goods pass to the buyer under Section 22 of SOGA 1957?
When does the property in specific goods pass to the buyer under Section 22 of SOGA 1957?
According to Section 24 of SOGA 1957, when does the property in goods pass for 'sale on return'?
According to Section 24 of SOGA 1957, when does the property in goods pass for 'sale on return'?
What does the general rule regarding the passing of property state under SOGA 1957?
What does the general rule regarding the passing of property state under SOGA 1957?
What does the maxim 'NEMO DAT QUOD NON HABET' imply?
What does the maxim 'NEMO DAT QUOD NON HABET' imply?
Under Section 27(1) of SOGA 1957, what happens if a seller sells goods without the owner's authority?
Under Section 27(1) of SOGA 1957, what happens if a seller sells goods without the owner's authority?
What can parties do if there is a breach of condition regarding ownership as stated in Section 12(2) of SOGA 1957?
What can parties do if there is a breach of condition regarding ownership as stated in Section 12(2) of SOGA 1957?
In the case of Lim Chui Lai v. Zeno Ltd, what issue arose regarding the materials delivered?
In the case of Lim Chui Lai v. Zeno Ltd, what issue arose regarding the materials delivered?
When does property in unascertained or future goods pass to the buyer, as outlined in Section 23 of SOGA 1957?
When does property in unascertained or future goods pass to the buyer, as outlined in Section 23 of SOGA 1957?
What is the right of lien for an unpaid seller?
What is the right of lien for an unpaid seller?
What can an unpaid seller do if the buyer becomes insolvent after the goods have been dispatched?
What can an unpaid seller do if the buyer becomes insolvent after the goods have been dispatched?
Under what condition can a seller sue for the price of goods?
Under what condition can a seller sue for the price of goods?
What does the right of resale allow an unpaid seller to do?
What does the right of resale allow an unpaid seller to do?
What rights does an unpaid seller have concerning the custody of the goods?
What rights does an unpaid seller have concerning the custody of the goods?
What is a significant aspect of section 56, SOGA 1957 regarding non-acceptance?
What is a significant aspect of section 56, SOGA 1957 regarding non-acceptance?
What happens if the buyer wrongfully neglects to pay for goods that have not been appropriated to the contract?
What happens if the buyer wrongfully neglects to pay for goods that have not been appropriated to the contract?
What is not a right of an unpaid seller in the context of sales contracts?
What is not a right of an unpaid seller in the context of sales contracts?
Under Section 30(2) of SOGA 1957, what is required for a buyer to pass a good title to a subsequent buyer?
Under Section 30(2) of SOGA 1957, what is required for a buyer to pass a good title to a subsequent buyer?
In Newton of Wembley Ltd. v. Williams, what key factor allowed A to pass a good title to B despite the dishonoured cheque?
In Newton of Wembley Ltd. v. Williams, what key factor allowed A to pass a good title to B despite the dishonoured cheque?
What are the concurrent conditions of delivery and payment as per Section 31 of SOGA 1957?
What are the concurrent conditions of delivery and payment as per Section 31 of SOGA 1957?
What is the outcome for a subsequent buyer if a car is sold by a dealer who lacks authority?
What is the outcome for a subsequent buyer if a car is sold by a dealer who lacks authority?
According to the content, what is the main duty of the seller in a sales contract?
According to the content, what is the main duty of the seller in a sales contract?
What must buyers do in case they refuse to accept delivery wrongfully?
What must buyers do in case they refuse to accept delivery wrongfully?
What legal concept is illustrated by the principle of continuous possession after sale?
What legal concept is illustrated by the principle of continuous possession after sale?
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Study Notes
Risk of Loss in Sales Contracts
- The buyer bears the risk of loss even if the seller possesses the goods.
- The seller bears the risk of loss if the buyer possesses the goods.
Insolvency and Possession
- If the buyer pays the price and the seller becomes insolvent, the buyer can claim the goods from the seller's official receiver or assignee.
- If the buyer becomes insolvent without paying the price, the seller must deliver the goods to the buyer's official receiver or assignee unless the seller has a lien over the goods.
Conditions and Warranties in a Contract of Sale
- Conditions are stipulations essential to the main purpose of the contract. A breach of condition gives the buyer the right to repudiate the contract and claim damages.
- Warranties are stipulations collateral to the main purpose of the contract. A breach of warranty only grants the buyer the right to claim damages.
Treating a Condition as a Warranty
- A breach of condition can be treated as a breach of warranty under certain circumstances, effectively eliminating the buyer's right to repudiate the contract.
- This can occur through waiver or compulsory treatment as specified under the SOGA 1957.
Implied Conditions in Contracts of Sale
- The SOGA 1957 implies several terms in every contract for the sale of goods unless the parties explicitly exclude or modify them:
- Implied condition as to title: The seller must be the owner of the goods sold.
- Implied condition as to description: If the sale is by description, the goods must correspond with the description.
Transfer of Ownership: Nemo Dat Quod Non Habet (No one can give a better title than he has himself)
- A seller who doesn't own the goods or sells without the owner's authority cannot transfer ownership to the buyer.
- This is referred to as a breach of condition as to title or ownership, allowing the buyer to terminate the contract and claim damages.
- This principle is subject to several exceptions, including:
- Sale by Mercantile Agent: If a person in possession of goods with the owner's consent sells them, they can transfer a good title to a subsequent buyer acting in good faith.
- Sale by Buyer in Possession After Sale: If a buyer obtains possession of goods with the seller's consent, they can transfer good title to a subsequent buyer acting in good faith even if they didn't obtain good title in the first transaction.
Performance of Contract: Duties of Buyer and Seller
- Seller's Duties:
- Deliver the goods in accordance with the contract terms.
- Deliver and payment of price are concurrent conditions.
- Buyer's Duties:
- Pay for the goods.
- Accept delivery.
- Pay compensation to the seller for wrongful refusal of delivery.
Remedies for Breach of Contract: Rights of the Unpaid Seller
- The unpaid seller has several rights:
- Right of lien: The seller can retain possession of the goods until payment is made.
- Right of stoppage in transit: The seller can stop the goods in transit if the buyer becomes insolvent.
- Right of resale: The seller can resell the goods to a new buyer and give good title, regardless of the original buyer.
Rights of the Seller to Sue for Breach of Contract
- The seller can sue for the price of the goods if:
- The buyer wrongfully neglects or refuses to pay for the goods when ownership has passed to the buyer.
- The contract stipulates a payment date irrespective of delivery, and the buyer fails to pay on that date.
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