Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia This is the prescribed textbook for your course. Available NOW at your campus bookstore!
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Sale of goods Chapter 12
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia 12-2 Sale of goods Sale of goods is a contract
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia 12-3 Sale of goods Relevant legislation: relevant State Acts Requirements of legislation Contracts must include consideration to be covered by legislation. Ownership of goods must pass to the buyer. Only covers contracts for sale of goods, not for work done or materials supplied, otherwise the provisions of the Sale of Goods Act cannot be relied upon. Must be evidenced in writing.
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia 12-4 Types of goods Determine point in time at which ownership will pass to the buyer, along with the “risk” associated with those goods - Specific goods »in existence »identifiable at time of contract - Unascertained goods »described »not identifiable at time of contract - Future goods »to be acquired by the seller »manufactured by seller after contract made
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia 12-5 Definitions Sale - Property or title in the goods passes to the buyer at the time the contract is made. Agreement to sell - Title or property in goods is to pass at some point in time after the contract is made.
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia 12-6 Sale of goods Covers Goods - the delivery of the goods is the main substance of the agreement not Work done or materials supplied - involves skill and effort with goods resulting from the effort
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia 12-7 Property or possession? Property in goods - Ownership or title to goods, i.e. risk of goods Possession in goods - Custody or control of goods
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia 12-8 When property (and risk) in goods passes, ownership passes Type of goods - indicates when property or title in goods passes to buyer. Specific/ascertained - At time parties intend it to pass, considering: - terms of contract - conduct of parties - circumstances. Unascertained/future - At time goods become identifiable and buyer has been notified, or when the parties to the contract of sale intend that it should pass.
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia 12-9 Specific rules for determining when property in goods passes
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia Romalpa clauses Retention of title clauses - Buyer cannot claim title before full payment has been received.
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia Nemo dat rule The seller of goods cannot pass better title than they actually have.
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia Seller without title Estoppel Mercantile agent Sale by a seller still in possession Sale by a buyer in possession (without title) Statutory and common law power of sale Sale in the market overt Sale under voidable title
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia Estoppel If the owner creates an impression by word or conduct that another party has the authority to sell the goods, and a purchaser buys those goods in good faith without knowledge of the deficit in title, for value, the purchaser will gain good title.
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia Rules regarding delivery Duty of seller to deliver - place of delivery - time - timing - third person in possession - expenses - carrier - delivery by sea - quantity - instalment deliveries
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia Shipping contracts CIF (Cost Insurance Freight) Price includes –cost of the goods –insurance (seller organises) –freight (seller organises) FOB (Free On Board) Price includes –cost of the goods –delivery on board ship –insurance (buyer organises) –freight (buyer organises)
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia Rules regarding acceptance Seller notified Reasonable time Conduct of buyer Rejection
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia Rules regarding payment Pay correct amount on delivery - contracted price or - reasonable price
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia Implied conditions Breach will terminate contract and allow damages to be claimed. As to title: -seller has rights to sell the goods. Cannot be excluded for consumer As to correspondence with description: - goods correspond with the description where goods have been sold by description. As to merchantable quality: - fit for a purpose for which goods of that description are normally used, unless an examination by the buyer should have revealed any defect. As to fitness for purpose: - where the buyer buys goods in reliance upon the seller’s skill, after purpose of good known. As to sale by example: - bulk corresponds with the sample supplied - reasonable opportunity to compare bulk of goods to the sample - goods will not be defective.
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia Implied warranties Breach will enable the innocent party to claim damages: the buyer shall have quiet possession the goods shall be free of any undisclosed encumbrances
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia Remedies for breach of contract for sale of goods Rights of the unpaid seller Against the goods: - Right to withhold delivery - Right to a lien (possessory) - Right to stop goods in transit - Right to resell the goods Against the buyer (breach of contract): - Sue for damages - Sue for the price
Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher. Slides prepared by Kay Fanning. Copyright © 2000 McGraw-Hill Australia Remedies for breach of contract for sale of goods Rights of the buyer Damages for non-delivery of goods Breach of warranty of quality Specific performance Rescission of contract