Chapter 14 - Ready for Study

Question 1

What does the Sale of Goods Act apply to?

Answer 1

> sales (and agreements to sell)
goods (not services, unless other legislation extends this protection)
all parties to the sale contract, including businesses, consumers, individuals, and corporations

Question 2

What does the sale of goods act not apply to?

Answer 2

BLCS

> exchanges of goods (barter) 
> bailments and leases
> consignments
> non-contractual transfers of property or goods
> sales of land or intangible property
> supply of services

Question 3

What is a contract of sale? an agreement to sell? consignment?

Answer 3

TRANSFER OF PROPERTY FOR MONEY CONSIDERATION

> a contract whereby the seller transfers of agrees to transfer the property in the goods to the buyer for a money consideration called the price

> an agreement to sell is a contract of sale in which the transfer of ownership in the goods is deferred to some future time.

> consignment is the transfer of only the possession of goods from one business to another for the purpose of offering for sale

Question 4

What are goods

Answer 4

Personal property, excluding both money and chooses in action. All chattels personal, other than things in action and money

Property can be real (interests in land) or personal (all other property)

Question 5

What is the difference between ownership and possession?

Answer 5

Ownership is legal title

Possession is physical control.

Question 6

Terms in a contract of sale: what is the difference between conditions and warranties?

Answer 6

condition: a major or essential term of the contract, the breach of which may relieve the injured party from further performance
warranty: a lesser or non-essential term that, when breached, does not relieve the injured party from performance.

Question 7

What are the implied terms in a contract for the sale of goods?

Answer 7

Subject to certain exceptions and qualifications, the sale of goods act implies the following contractual terms into contract for the sales of goods:

SBF CFMS

Seller has Right
Buyer will Enjoy Possession
Free of encumbrance
Conform to description
Fit for purpose
Merchantable
Sample Will Correspond. 

1. an implied condition that the seller has (or will have) a right to sell the goods
2. an implied warranty that the buyer will enjoy undisturbed possession of the goods
3. an implied warranty that the goods will be free from any lien, charge, or encumbrance unknown to the buyer before or at the time when the contract is made.
4. it is implied that goods sold by description will conform to the description
5. an implied condition that the goods will be reasobably fir for the purpose for which they are required if that purpose was made known to the seller
6. an implied condition that the goods will be of merchant-able quality
7. in the case of sample, that the bulk will correspond with the sample in quality

Question 8

What are the two exceptions when someone other than the owner may pass title of goods?

Answer 8

> effect of agency: the agent (consignee) has the appearance of ownership and may pass title

> Seller or buyer in possession: A seller could sell the same goods twice by mistake, or a buyer could resell goods before she actually owns them. The innocent buyer is protected.

Question 9

What are the rules for passing title?

Answer 9

UWPDU

When Unconditional When Made
When Seller has work When buyer notified
When Seller has price to sort When buyer notified
When delivered “sale or return” When signigfied
When unAscertained is Appropriated for another

1. where there is an unconditional contract for the sale of specific goods in a deliverable state, when the contract is made
2. where there is a contract for the sale of specific goods and the seller is bound to do something to the goods to put them into a deliverable state, when the buyer has received notice that this has been done
3. where there is a contract for the sale of specific goods in a deliverable state but the seller is bound to do something to ascertain their price, when the buyer has received notice that this has been done
4. where the goods are delivered to the buyer on approval or on “sale or return” when the buyer signifies his approval, or does some other act adopting the transaction, or where the buyer retains the goods beyond a reasonable time
5. where there is a contract for the sale of unascertained goods or future goods by description, when goods of that description and in a deliverable state are appropriated to the contract by one party with the assent of another