SALE OF GOODS ORDINANCE

Arrangement of Sections

1. Short title.

PART I

Formation of the Contract

Contract of Sale

2. Sale and agreement to sell.

3. Capacity to buy and sell.

Formalities of the Contract

4. Contract of sale how made.

5. No contract to be in force unless in writing and signed.

Subject-Matter of Contract

6. Existing or future goods.

7. Goods which have perished.

8. Goods perishing before sale, but after agreement to sell.

The Price

9. Ascertainment of price.

10. Agreement to sell at valuation.

Conditions and Warranties

11. Stipulations as to time of payment.

12. When condition to be treated as warranty.

13. Implied undertaking as to title.

14. Sale by description.

15. Implied conditions as to quality or fitness.

Sale by Sample

16. Sale by sample.

PART II

Effects of the Contract

Transfer of Property as Between Seller and Buyer

17. Goods must be ascertained.

18. Property passes when intended to pass.

19. Rules for ascertaining intention.

20. Reservation of right of disposal.

21. Risk prima facie passes with property.

Transfer of Title

22. Sale by person not the owner.

23. Sale under voidable title.

24. Re-vesting of property in stolen goods on conviction of offender.

25. Seller or buyer in possession after sale.

26. Effect of writs of execution.

PART III

Performance of the Contract

27. Duties of seller and buyer.

28. Payment and delivery are concurrent conditions.

29. Rules as to delivery.

30. Delivery of wrong quantity.

31. Installment deliveries.

32. Delivery to carrier.

33. Risk where goods are delivered at distant places.

34. Buyer's right of examining the goods.

35. Acceptance.

36. Buyer not bound to return rejected goods.

37. Liability of buyer for neglecting or refusing delivery of goods.

PART IV

Rights of Unpaid Seller against the Goods

38. Unpaid seller defined.

39. Unpaid seller's rights.

Unpaid Seller's Lien

40. Sellers lien.

41. Part delivery.

42. Termination of lien.

Stoppage in Transitu

43. Right of stoppage in transitu.

44. Duration of transit.

45. How stoppage in transitu is effected.

Re-Sale by Buyer or Seller

46. Effect of sub-sale or pledge by buyer.

47. Sale not generally rescinded by lien or stoppage in transitu.

PART V

Actions for Breach of the Contract

Remedies of the Seller

48. Action for price.

49. Damages for non-acceptance.

Remedies of the Buyer

50. Damages for non-delivery.

51. Specific performance.

52. Remedy for breach of warranty.

53. Interest and special damages.

PART VI

Supplementary

54. Exclusion of implied terms and conditions.

55. Reasonable time a question of fact.

56. Rights enforceable by action.

57. Auction sales.

58. Savings.

59. Interpretation.

11 of 1896.

AN ORDINANCE to amend and codify the law relating to the Sale of Goods.

[Date of Commencement: 1st January, 1897]

1. Short title.

This Ordinance may be cited as the Sale of Goods Ordinance.

PART I

Formation of the Contract

Contract of Sale

2. Sale and agreement to sell.

(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.

3. Capacity to buy and sell.

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.

"necessaries” in this section means 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

4. Contract of sale how made.

Subject to the provisions of this Ordinance and of any enactment in that behalf, a contract of sale may be made in writing, or by word of mouth, or partly in writing and partly by word of mouth, or may be implied from the conduct of the parties:

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

5. No contract to be in force unless in writing and signed.

(1) A contract for the sale of any goods shall not be enforceable by action unless the buyer shall accept part of the goods so sold, and actually receive the same, or pay the price or a part thereof, 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 sale, whether there be an acceptance in performance of the contract or not.

Subject-Matter of Contract

6. Existing or future goods.

(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.

7. Goods which have perished.

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.

8. Goods perishing before sale, but after agreement to sell.

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

9. Ascertainment of 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.

10. Agreement to sell at valuation.

(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

11. Stipulations as to time of payment.

(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.

12. When condition to be treated as warranty.

(1) Where a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may waive the condition, or may elect to treat the breach of such condition as a breach of warranty, and not as a ground for treating the contract as repudiated.

(2) Whether a stipulation in a contract of sale is a condition, the breach of which may give rise to a right to treat the contract as repudiated, or a warranty, the breach of which may give rise to a claim for damages, but not to a right to reject the goods and treat the contract as repudiated, depends in each case on the construction of the contract. 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, or where the contract is for specific goods, the property in which has passed to the buyer, the breach of any condition to be fulfilled by the seller can only be treated as a breach of warranty, and not as a ground for rejecting the goods and treating the contract as repudiated, unless there be a term of the contract, expressed or implied, to that effect.

(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.

13. Implied undertaking as to title.

In a contract of sale, unless the circumstances of the contract are such as to show a different intention, there is—

(a) an implied condition on the part of the seller that in the case of a sale he has a right to sell the goods, and that, in the case of an agreement to sell, he will have a right to sell the goods at the time when the property is to pass;

(b) an implied warranty that the buyer shall have and enjoy quiet possession of the goods;

(c) an implied warranty that the goods shall be free from any charge or encumbrance in favour of any third party, not declared or known to the buyer before or at the time when the contract is made.

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