We think you have liked this presentation. If you wish to download it, please recommend it to your friends in any social system. Share buttons are a little bit lower. Thank you!
Presentation is loading. Please wait.
Published byVaughn Lemons
Modified over 2 years ago
Copyright © 2004 McGraw-Hill Ryerson Limited 1 PART 5 – SPECIAL CONTRACTUAL RELATIONSHIPS Chapter 22 – The Sale of Goods Prepared by Douglas H. Peterson, University of Alberta
Copyright © 2004 McGraw-Hill Ryerson Limited 2 THE SALE OF GOODS Codification of the Law Nature of a Contract of Sale Contractual Duties of the Seller Caveat Emptor Contractual Duties of the Buyer Remedies of the Buyer Remedies of the Seller
Copyright © 2004 McGraw-Hill Ryerson Limited 3 CODIFICATION OF THE LAW Various common law provisions developed over several years 1893 Sales of Goods Act Adopted in Canada and other commonwealth countries Similar legislation in the United States
Copyright © 2004 McGraw-Hill Ryerson Limited 4 NATURE OF A CONTRACT OF SALE Statute embodies case law and complements normal rules of contract law Applies to all situations where goods are bought and sold Intended to fill the gaps in the terms of a contract Terms in contract prevail over provisions of Act
Copyright © 2004 McGraw-Hill Ryerson Limited 5 APPLICATION OF THE ACT Applies only to the sale of goods Not apply to land Not apply to buildings Form part of the land Not apply to money, intangible goods Shares, bonds, negotiable instruments, patents, trademarks Not apply to services Mixed contracts – look at what is the substantial portion of the contract
Copyright © 2004 McGraw-Hill Ryerson Limited 6 APPLICATION OF THE ACT Property must be transferred for monetary consideration Act does not apply to: Barter or exchange of goods Consignment No special form required Written, oral, under seal
Copyright © 2004 McGraw-Hill Ryerson Limited 7 APPLICATION OF THE ACT Statute of Frauds Written requirement when sale of goods valued at more than a particular amount Act can be satisfied by: Buyer accepts part of the goods Buyer makes a part payment Buyer gives something in earnest Each act must relate to the particular contract of sale
Copyright © 2004 McGraw-Hill Ryerson Limited 8 TRANSFER OF TITLE Sale of Goods Act represents an agreement to transfer property in the goods to the buyer Property in the goods Right of ownership in the goods Title One may part with possession, yet retain ownership Parties can determine when title passes Risk of loss generally follows title Person with title bears the loss
Copyright © 2004 McGraw-Hill Ryerson Limited 9 TRANSFER OF TITLE Five Rules Exist for the passing of property Significance: loss is with the one who has title Onus on one with title to ensure goods
Copyright © 2004 McGraw-Hill Ryerson Limited 10 PASSING OF PROPERTY – 5 RULES Rule 1 – Goods in Deliverable State Nature Unconditional sale Specific goods In deliverable state Time of Transfer When contract is made Irrelevant that price or delivery is postponed
Copyright © 2004 McGraw-Hill Ryerson Limited 11 PASSING OF PROPERTY – 5 RULES Rule 2 – Goods to be put in Deliverable State Nature Seller required to do something to put goods into deliverable state Time of Transfer Seller has done the required things Notice given to buyer
Copyright © 2004 McGraw-Hill Ryerson Limited 12 PASSING OF PROPERTY – 5 RULES Rule 3 – Goods to be weighed, measured, tested Nature Seller required to do some act to ascertain price of specific goods Time of Transfer Act or thing has been done Notice given to buyer
Copyright © 2004 McGraw-Hill Ryerson Limited 13 PASSING OF PROPERTY – 5 RULES Rule 4 – Future Goods sold by Description Nature Goods not yet produced Ordered by description Time of Transfer Produced and in a deliverable state Unconditionally appropriated to the contract By buyer with assent of seller; or By Seller with assent of buyer
Copyright © 2004 McGraw-Hill Ryerson Limited 14 PASSING OF PROPERTY – 5 RULES Rule 5 – Goods on Approval Nature Specific goods on approval or with return privileges Time of Transfer Buyer does something to signify acceptance or approval of goods or adopts the contract Lapsing of a reasonable period of time or a fixed period of time
Copyright © 2004 McGraw-Hill Ryerson Limited 15 Copyright © 2004 by McGraw-Hill Ryerson Limited. SALE OF GOODS PASSAGE OF TITLE (AND RISK) UNDER STATUTE SALE AGREEMENT CONDITION REQUIREMENT BEFORE TITLE PASSES TO BUYER SPECIFIC GOODS Deliverable Condition None: Title Passes When Contract Made Notice Given to Buyer That Work Done and Goods in Deliverable State Notice Given to Buyer That Seller Has Weighed, Measured, and Tested the Goods and Ascertained Price SPECIFIC GOODS Something to Be Done to Put in Deliverable State SPECIFIC GOODS Deliverable State Required Measurement, Testing, or Weighing to Ascertain Price SPECIFIC GOODS Sold on Approval, Sale, or Return (1) Buyer Signifies Approval or Does Anything to Adopt Transaction (2) Buyer Retains the Goods Without Giving Notice of Rejection Within Time Fixed, or if No Time Fixed, Beyond a Reasonable Time Contd
Copyright © 2004 McGraw-Hill Ryerson Limited 16 SALE OF GOODS PASSAGE OF TITLE (AND RISK) UNDER STATUTE, contd CONDITION REQUIREMENT BEFORE TITLE PASSES TO BUYER AGREEMENT TO SELL GOODS TO BE PRODUCED Sold by Description (1) Goods Produced and in a Deliverable State and Unconditionally Appropriated to the Contract (2) Goods Produced and Delivered to a Carrier or Other Bailee for Purpose of Delivery to Buyer Where Seller Does Not Reserve Right of Disposal Copyright © 2004 by McGraw-Hill Ryerson Limited.
Copyright © 2004 McGraw-Hill Ryerson Limited 17 CONTRACTUAL DUTIES OF THE SELLER Parties can contract out of sale of goods act Purpose of Sales of Goods Act is to imply reasonable terms when they are inadvertently left out Terms of a sales of goods contract are called conditions or warranties Some terms are conditions Some terms are warranties Significance is remedy available whether breach of condition or breach of warranty
Copyright © 2004 McGraw-Hill Ryerson Limited 18 CONDITIONS AND WARRANTIES Condition An essential or fundamental term in a contract Breach allows injured party to Ignore it and accept the goods Avoid the contract Consider themselves no longer bound to the contract
Copyright © 2004 McGraw-Hill Ryerson Limited 19 CONDITIONS AND WARRANTIES Warranty A minor term in a contract Breach allows injured party to: Damages but not rescission
Copyright © 2004 McGraw-Hill Ryerson Limited 20 CONTRACTUAL DUTIES OF THE SELLER Implied Terms Sellers Title Nature of the goods Payment and Delivery
Copyright © 2004 McGraw-Hill Ryerson Limited 21 SELLERS TITLE Condition that seller has title to sell Cannot sell that you do not own Implied warranty Goods are free from charges or encumbrances Buyer will have quiet possession of the property No one will challenge buyers title to goods
Copyright © 2004 McGraw-Hill Ryerson Limited 22 NATURE OF THE GOODS Description – goods sold by description must match the description Description refers to identity (not quality) of goods May be sale by description even if buyer picks item Is sold by catalogue must match description in catalogue
Copyright © 2004 McGraw-Hill Ryerson Limited 23 NATURE OF THE GOODS Sample – goods sold by sample must match the sample May be sold by sample and description Must match quality of sample Cannot be lower quality Buyer is allowed a reasonable opportunity to compare received goods with sample Buyer responsible for reasonably discoverable defects
Copyright © 2004 McGraw-Hill Ryerson Limited 24 CAVEAT EMPTOR Let the buyer beware Common law principle that buyer through examination of goods can determine the quality and fitness for purpose purchased Sales of Goods Act – imposes minimum obligations on the seller
Copyright © 2004 McGraw-Hill Ryerson Limited 25 FIT FOR INTENDED PURPOSE Condition - Goods must be fit for intended purpose Requirements Seller in the business of selling such goods Buyer makes purpose of purchase known to seller Buyer relies upon sellers skill and judgment Exception: buyer requests goods by patent or trade name
Copyright © 2004 McGraw-Hill Ryerson Limited 26 MERCHANTABLE QUALITY Condition - Goods must be of a merchantable quality Breach if reasonable buyer would not pay full price Merchantability also includes packaging and labeling Applicable only if seller normally deals in goods No liability for reasonably discoverable defects Buyer does not have to inspect but if they do seller not liable for reasonably discoverable defects
Copyright © 2004 McGraw-Hill Ryerson Limited 27 DELIVERY Time of delivery is a condition If specified Must be delivered on time If not specified Within a reasonable period of time Failure to deliver Buyer may reject them if delivery is late
Copyright © 2004 McGraw-Hill Ryerson Limited 28 DELIVERY Quantity Delivery of proper quantity is a condition Buyer may reject Buyer may accepts lesser amount and sue for damages on difference Pay for lesser amount at contract rate Buyer does not have to accept excess quantity If accept must pay for extra at contract rate
Copyright © 2004 McGraw-Hill Ryerson Limited 29 CONSUMER PROTECTION Some jurisdictions do not allow seller to exclude implied conditions and warranties of the act Verbal warranties and conditions expressed at time of sale not included in written agreement may also be binding on seller Cooling-off period – allows consumer to avoid contract by giving notice within certain period of time Door-to-door sales
Copyright © 2004 McGraw-Hill Ryerson Limited 30 DELIVERY Place Usually specified in contract If not specified, seller must have goods available and ready for delivery at its place of business If goods stored at place of storage
Copyright © 2004 McGraw-Hill Ryerson Limited 31 DELIVERY Delivery by installments One delivery on an installment basis is not usually grounds for repudiation of the contract unless: Amount of delivery was significant amount of the whole contract; and High degree of probability that next delivery would also be deficient
Copyright © 2004 McGraw-Hill Ryerson Limited 32 CONTRACTUAL DUTIES OF THE BUYER Take delivery Pay for goods Payment is a warranty Payment and delivery are concurrent conditions, unless the parties have agreed otherwise Buyer must pay price on delivery
Copyright © 2004 McGraw-Hill Ryerson Limited 33 REMEDIES OF THE BUYER Rescission Breach of condition Repudiate contract and reject the goods Right to refuse payment If payment made may sue for recovery Damages Breach of warranty Specific Performance If goods have unique or special attribute and cannot be readily obtained elsewhere
Copyright © 2004 McGraw-Hill Ryerson Limited 34 REMEDIES OF THE SELLER Rights may be exercised against Buyer personally Goods themselves Lien Not obliged to deliver goods unless payment has been made or credit terms granted Seller may claim lien on goods Cash sale or credit sale Buyer becomes insolvent
Copyright © 2004 McGraw-Hill Ryerson Limited 35 REMEDIES OF THE SELLER Action for the Price If goods delivered and title has passed may sue for price of goods If delivery is refused Damages For non-acceptance Resell goods and sue buyer for loss incurred Place seller in same position had buyer performed
Copyright © 2004 McGraw-Hill Ryerson Limited 36 REMEDIES OF THE SELLER Retention of Deposit Retain deposit as liquidated damages Also acts as evidence of contract and avoids the Statute of Frauds Deposit cannot be a penalty clause Stoppage in Transit Order carrier to stop delivery If buyer has become insolvent Seller has to be careful of wrongful stoppage
Copyright © 2004 McGraw-Hill Ryerson Limited 37 REMEDIES OF THE SELLER Recovery of Goods Bankruptcy Act Allows recovery of unsold goods in possession of bankrupt debtor Goods must: Unsold In possession of buyer Identifiable Same condition as when delivered Resale Stoppage in transit is a repossession Seller may resell goods
Copyright © 2004 McGraw-Hill Ryerson Limited 38 SUMMARY Law of contract applies to sales of goods Sales of Goods Act sets out special default rules Act applies to: Sale agreement – specific goods Agreement to sell – future goods
Copyright © 2004 McGraw-Hill Ryerson Limited 39 SUMMARY In absence of agreement, Act determines Passage of title 5 Rules Relevance of who bears risk of loss Implied Conditions Fit for purpose Merchantable quality Seller and Buyers Remedies
2-1 Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev This is the prescribed textbook.
Copyright © 2004 by Prentice-Hall. All rights reserved. PowerPoint Slides to Accompany BUSINESS LAW E-Commerce and Digital Law International Law and Ethics.
Sale of Goods Act santhi narayanan. Contd - Act Deals with goods Sec 4(1) – contract of sale – Contract of sale of goods is a contract whereby the.
Legal and Taxation Aspects of your Small Business; I.Birt © 2007 Pearson Education Australia Legal and Taxation Aspects of Your Small Business 3 rd Edition.
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright.
Chapter Four: The Sale of Goods 1. The Sale of Goods Act 1979 in Britain: Britain The Sale of Goods Act 1979 regulates contracts in which goods are sold.
The Sale of Goods Act A contract for sale of goods is a contract whereby the seller transfers or agrees to transfer the goods to the buyer for a.
LAW OF SALE OF GOODS A contract of sale of goods is a contract whereby the seller transfers (or agrees to transfer) the property in goods to the buyer.
Essentials Of Business Law Chapter 15 Sales McGraw-Hill/Irwin Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
TRANSFER OF OWNERSHIP. TIME WHEN PROPERTY PASSES TIME WHEN PROPERTY PASSES IN THE CASE OF UNASCERTAINED GOODS No property in the goods is transferred.
Chapter 17 Title and Risk of Loss in Sales of Goods Title and Risk of Loss in Sales of Goods McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies,
Sale of Goods Act Contd - Act Deals with goods Act Deals with goods Sec 4(1) – contract of sale – Contract of sale of goods is a contract whereby.
CONDITIONSANDWARRANTIES. STIPULATION STIPULATION A stipulation in a contract of sale with reference to goods which are the subject thereof may be a condition.
CHAPTER Microsoft ® PowerPoint ® Presentation Prepared By Gail McKay, LLB, Thompson Rivers University © 2008 McGraw-Hill Ryerson Ltd., All Rights Reserved.
PERFORMANCE OF CONTRACT. DELIVERY: DELIVERY: Delivery of goods sold may be made by doing anything which the parties agree shall be treated as delivery.
Sales Contracts. Sale – Contract in which ownership of goods transfers immediately from the seller to the buyer Ownership – Collection of rights that.
Conditions and warranties. Introduction The law relating to sale and purchase of goods, prior to 1930 were dealt by the Indian Contract Act, In.
Chapter 16 Sale and Lease of Goods McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter 1: Legal Ethics 1. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use.
The Sale of Goods Act Sec 4(3) A contract of sale of goods is a contract, whereby the seller transfers or agrees to transfer the property in the.
Sale of Goods 2. Duties of the Seller Duty 3: In a contract for the sale of specific goods it is the duty of the seller to ensure that the goods are in.
CHAPTER PowerPoint ® Presentation Prepared By Susan McManus, Mount Royal College CHAPTER PowerPoint ® Presentation Prepared By Susan McManus, Mount Royal.
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. and the Legal Environment, 10 th edition by Richard.
SALE OF GOODS The law relating to the sale of movable goods is contained in the Sale of Goods Act (Act 111 of 1930). Buyer, Seller and Goods: Buyer; Seller;
The contract of Sale Commercial Law. Definition: The seller (vendor) promises to deliver a thing (merx) to another person known as the buyer(emptor)
Foundations of Australian Law Fourth Edition Copyright © 2013 Tilde Publishing and Distribution Chapter 11 Sale of goods.
19-1 Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin.
Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning Chapter 25 Product Liability: Warranties and Torts Twomey Jennings Anderson’s.
Business Law: Ch 14 Ownership and Risk of Loss in Sales.
Amity School of Business 1 Amity School of Business BBA (GEN), IMBA, M&S, F&A- III Semester Module-III Sale of Goods Act, 1930 Swati Mittal.
Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 9 Business Law in Canada, 7/e Chapter 9 Sales and Consumer Protection.
Objective Interpret sales contracts and warranties within the rights and law of consumers. LAW OF SALES.
Chapter 17. From chapter 17, we know that once the 5 essential elements are in place and the parties have agreed, a binding contract exists. But how.
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved Slides developed by Les Wiletzky PowerPoint Slides to Accompany ESSENTIALS OF BUSINESS AND.
Comprehensive Volume, 18 th Edition Chapter 27: Warranties and Other Product Liability Theories.
PSSA Preparation. Question 1(no calculator) D Question 2 (no calculator)
McGraw-Hill /Irwin© 2009 The McGraw-Hill Companies, Inc. INCOME MEASUREMENT AND PROFITABLITY ANALYSIS Chapter 5.
McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 15 Sales and Lease Contracts: Performance, Warranties,
Prentice Hall © PowerPoint Slides to accompany THE LEGAL ENVIRONMENT OF BUSINESS AND ONLINE COMMERCE 5E, by Henry R. Cheeseman Chapter 13 Sales and.
Essentials Of Business Law Chapter 16 Warranties McGraw-Hill/Irwin Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Copyright © 2004 McGraw-Hill Ryerson Limited 1 PART 5 – SPECIAL CONTRACTUAL RELATIONSHIPS Chapter 21 – The Law of Bailment Prepared by Douglas H. Peterson,
Sale of goods this act may be called the sale of goods act,1930. it extends to the whole of India except the state of jammu and kashmir. It shall come.
Ch. 7 Consumer Law and Contracts 7-1 Sales Contracts.
©2001 West Legal Studies in Business. All Rights Reserved. 1 Chapter 22: Remedies for Breach of Sales and Lease Agreements.
REMEDIAL MEASURES. UNPAID SELLER UNPAID SELLER [Section 45] The seller of goods is deemed to be an "unpaid seller" within the meaning of this Act.-
Consumer Protection Law. Uniform Commercial Code The UCC is a large set of business statutes which simplified, clarified, and modernized many laws relating.
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.
Business Law MAN-3 Bakiev Erlan, Ph. D. PERFORMANCE AND REMEDIES.
© 2017 SlidePlayer.com Inc. All rights reserved.