Tutorial 9

QUESTION 1

Property in goods means title or ownership. Possession means physical possession. Buyer has title –
Seller has possession: Property in goods is not the same as possession. Although property in goods sold
may have passed to the buyer, but the seller may continue to be in possession of the goods. Buyer has
possession – owner has title: On the other hand, person may be in possession of goods but title or
ownership still remains with the owner, such as in hire-purchase of cars where the hirer has physical
possession of the goods but the title or ownership still remains with the finance company until the final
installment is discharged.

QUESTION 2

(a) Section 18 – Goods must be ascertained, where there is a contract for the sale of unascertained
goods which mean goods defined by description only and not identified until after the contract
is made, no property in the goods will be transferred to the buyer unless and until the goods are
ascertained or identified.
(b) Section 19 – Property passes when intended to pass, 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. The parties to a contract for the sale of
specific goods can expressly state when the property is to pass e.g. the parties can agree on a
date or upon some event happening that will cause the property to pass to the other party.
(c) Section 20 – Applies to specific goods already in a deliverable state, where there is a contract for
the sale of specific goods in a deliverable state, the property in the goods passes to the buyer at
the time when the contract is made, not when there is payment or delivery.
(d) Section 21 – Specific goods yet to be put into deliverable state, 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 the goods into a deliverable state, the property does not pass until such thing is done
and the buyer has notice of it.
(e) Section 22 – Specific goods in deliverable state when seller has to do something to ascertain
price, where there is a contract for the sale of specific goods in a deliverable state but the seller
has to weigh, measure, test or do something to the goods in order to fix the price, the property
does not pass until such act or thing is done and the buyer has noticed.
(f) Section 23 – Sale of unascertained goods & appropriation (future goods), where there is a
contract for the sale of unascertained or future goods by description, property does not pass to
the buyer until the goods of that description and in a deliverable state are unconditionally
appropriated to the contract by either the seller with the assent of the buyer or by the buyer
with assent of the seller, then only the property in the goods pass to the buyer. In this situation,
a contract for the sale of unascertained or future goods by description is not a sale but an
agreement to sell. The SOGA does not define ‘unascertained goods’ but ‘future goods’ is defined
as ‘goods to be manufactured or produced or acquired by the seller after the making of the
contract of sale’. Therefore, unascertained goods are goods which cannot be specifically
identified at the time of the contract of sale but are referred to by description.
(g) Unless a different intention appears, when the goods are delivered to the buyer on approval or
‘on sale or return’ the property in the goods passes to the buyer, when the buyer signifies his
 approval or acceptance to the seller or does any other act adopting the transaction; or if the
buyer 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 goods, on the expiration
of such time, and if no time has been fixed, then upon expiration of a reasonable time, the buyer
will be liable for the goods.

QUESTION 3

Section 26 state that risk prima facie passes with property. 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. The
general rule is that the party who has property (ownership) or title to the goods bears the risk and risk
passes when property in the goods passes irrespective of whether delivery has been made. Thus, if the
goods are damaged or destroyed, the person who has the title bears the risk which means he will be
responsible for the goods. Generally, goods remain at the seller’s (owner) risk until the property has
passed or is transferred to the buyer. Once the property is passed to the buyer, the goods are now at
the buyer’s risk, even if buyer does not have possession of the goods and whether or not delivery has
been made, because the buyer is now the new owner. The risk is now borne by the new owner.

QUESTION 4

The maxim ‘Nemo Dat Quod Non Habet’ means “No one can transfer a better title than he himself has".
Thus, a person cannot give what he does not have, including he cannot transfer title that he does not
have, such as no one can sell the goods and give a good title if he is not the owner. The first exception to
this rule is estoppel under Section 27, sale by Mercantile Agent under Section 27, sale by one of Joint
Owner under Section 28, sale under a voidable contract under Section 29, sale by seller in possession of
goods after sale under Section 30(1) and sale by Buyer in possession under Section 30(2).

QUESTION 5

The first remedy available to the buyer is damages for non-delivery of goods under Section 57. If the
seller fails to deliver, the buyer may sue the seller for damages for non-delivery. If buyer has already
paid for the price, he can recover the price plus other damages. The second remedy available to the
buyer is specific performance under Section 58. Buyer may bring an action for the specific performance
of the contract but only for specific or ascertained goods and it will be at the court’s discretion to order
specific performance. (Usually, the main remedy in the event of non-delivery is damages). The third
remedy available to the buyer is breach of warranty under Section 59. Section 59 allows the buyer to sue
the seller for damages for breach of warranty but cannot reject the goods.

QUESTION 6

The issues in this case are when property will pass to the buyer and which party who should bear the
loss.

The law relating to this case is under Section 20 of Sales of Goods Act 1957 defined those specific goods
already in a deliverable state. Where there is a contract for the sale of specific goods in a deliverable
state, the property in the goods passes to the buyer at the time when the contract is made, not when
there is payment or delivery.
Besides, under Section 26 of SOGA 1957 stated that the party who has property (ownership) or title to
the goods bears the risk and risk passes when property in the goods passes irrespective of whether
delivery has been made. Thus, if the goods are damaged or destroyed, the person who has the title
bears the risk.

When applying law to this case, Simon bought 10 Picasso paintings from Joe after spending hours
selecting the suitable paintings. Therefore, the 10 paintings are considered as ascertained goods. It
means that Simon is clearly know that which types of the 10 paintings he would receive . In addition,
even though the payment is not made in full as Simon is paid on installment basis, the property in the
paintings will pass immediately at the time of the contract regardless of when the payment is made.
Thus, the risk of destroyed paintings should be bear by the person who has the title of paintings whether
the delivery stage had been made or not.

As a conclusion, the property will pass to Simon when the paintings are in such state that Simon would
under the contract be bound to take delivery of them and the risk of loss should be bear by Simon
because he has the title of the paintings.