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References
Section 61(1). St. Albans City Council v. International Computers Ltd. [1996] 4 All E.R.481, C.A.; C purchased a computer software system from D for the purpose of managing the collection of the Community Charge (a local tax). The system failed and C claimed breach of the statutory implied under s. 14 (merchantable quality-now satisfactory quality). One of the questions was whether computer software was ‘goods’ within s.61. Although the case was decided on the effectiveness of the exemption of liability clause, the Court stated obiter that (i) computer disks were ‘goods’ but a computer program was not, and (ii) where disks were sold with software written on them such software would be part of the disk and hence ‘goods’.
See supra, p.85.
G.J. Dawson (Clapham) Ltd. v. H. & G. Dutfield [1936] 2 All E.R.232.
What is a reasonable price is a question of fact; s.8(3).
The effect of the Late Payment of Commercial Debts (Interest) Act 1998, must be borne in mind when it comes to late payment. Unless the contract provides for a substantial alternative remedy for late payment, there is a term implied to most commercial supply of goods or services contracts. The Act gives the right to claim statutory interest at 8% above the Bank of England dealing rate on all unpaid debts. Statutory interest may be claimed from the day after the agreed due date for payment, but if no date has been agreed, the Act imposes a credit period of 30 days after which the interest is payable. More complicated rules apply to advance payments. The Act gives effect to the European Council Directive 2000/35/EC, on combating late payment in commercial transactions, O.J.L 200,08/08/2000, p.35.
This term is a condition; s. 12(5A). Furthermore, the same section implies three warranties in subsections 12(2), 12(4), and 12(5). Louis Dreyfus Trading Ltd. v. Reliance Trading Ltd. [2004] 2 Lloyd’s Rep.243 (QBD (Comm.)).
Thus, in Rowland v. Divall [1923] 2 K.B. 500, C bought a car from D for £334 and used it for four months. It was later found that D had bought the car from someone who had stolen it and it had to be returned to the true owner. C sued D to recover the full purchase price that he had paid. It was held that D was in breach of section 12. C had paid £334 to become the owner of the car. Since he had not received what he had contracted for, there was a total failure of consideration entitling him to a full refund.
This term is a condition; s. 13(1 A).
Thus, in Beale v. Taylor [1967] 3 All E.R.253, D advertised a car for sale as a 1961 Triumph Herald. C inspected the car before he bought it He (C) later discovered that the vehicle consisted of a rear half of a 1961 Herald which had been welded to the front half of an earlier model. It was held that C was entitled to damages for breach of section 13 even though he had seen and inspected the car. He (C) had relied to some extent on the description contained in the advertisement. In Harlingdon & Leinster Enterprises v. Christopher Hull Fine Arts Ltd. [1990] 1 All E.R.737, C.A., both parties were art dealers. D stated to C that they had a painting by Munter for sale. D also made clear to C that they were not experts on the particular painter. C relying on their own judgment bought the painting. Subsequently, C discovered that the painting was a forgery and worth a great deal less. It was held, by a majority, that as the sellers, D, denied expert knowledge, the buyers, D, could not have relied upon the description given, thus not a sale by description. Therefore, reliance is an absolute requirement for a sale of goods to be considered as a sale by description. Cf. Ashington Piggeries v. Christopher Hill [1972] A.C.441, H.L., where the majority of their Lordships thought that the key to s.13 was identification rather than reliance. Indeed, the subsequent case of Reardon Smith Line v. Hansen Tangen [1976] 1 W.L.R.989, H.L., seems to reinforce and support this view, i.e. that words which identify an essential part of the description of the goods should be considered.
F.W. Moore & Co Ltd. v. Landauer & Co. [1921] 2 K.B.519, C.A.; where a contract for the sale of 3,000 tins of canned fruit stipulated that the consignment would be packed in cases, each containing 30 tins. In fact about half of the consignment was packed in cases, each containing 24 tins. The buyer rejected the whole consignment. It was held the stipulation as to the number of tins per case was part of the description. Arcos Ltd. v. Ronassen [1933] A.C.470, H.L.; a sale contract for wooden staves stipulated that the staves should be half an inch thick. Most of the staves exceeded this thickness, although they were suitable for the purpose they were purchased. It was held that the staves did not correspond with the contract description.
Cf. Hughes v. Hall (Gillian) [1981] RT.R.430; Cavendish-Woodhouse Ltd. v. Manley (1984) 148 J.P. 299. It also seems that a seller may also exclude reliance on s. 13 by disclaiming expertise; Harlingdon & Leinster Enterprises v. Christopher Hull Fine Arts Ltd. [1990] 1 All E.R.737, C.A., described in footnote 527, supra.
Both these implied terms are classified as conditions; s. 14(6).
Section 1 of the Sale and Supply of goods Act 1994 inserted a news. 14(2) in the 1979 Act.
This implied term is classified as a condition; s. 14(6).
Bartlett v. Sidney Marcus Ltd. [1965] 2 All E.R.753; C bought a second-hand car from D who was a car dealer. C was warned that the clutch was defective and he agreed to a reduction in the price of the car to take account of this. The defect turned out to be more serious and, therefore, more costly to repair, than C expected. C claimed that D was in breach of s.14(2) (‘merchantable’ quality as it then was). It was held that in all the circumstances there was no breach of s.14(2), and the car met with the standard required by the section (‘merchantable’ quality).
In Cehave NV v. Bremer Handels GmbH (The Hansa Nord) [1975] 3 All E.R.739, it was held that citrus pulp pellets which had deteriorated in transit but which were still usable for the purpose for which such pellets were normally used, namely, for animal feed, were not contrary to the requirement of s. 14(2) (‘merchantable’ quality).
Section 14(2B).
Clegg v. Andersson [2003] 2 Lloyd’s Rep.32, C.A.
This implied term is classified as a condition; s. 14(6).
Thus, in Grant v. Australian Knitting Mills Ltd. [1936] A.C.85, C bought a pair of woollen underpants from a shop. The manufacturers neglected to remove properly a chemical which was used in the manufacturing process. Consequently C developed a skin rash which turned into dermatitis. It was held that the underpants were not, inter alia, reasonably fit for the purpose. Although C had not specifically stated the purpose for which he required the underpants, it was clear by implication that he intended to wear them.
Thus, in Griffiths v. Peter Conway Ltd. [1939] 1 All E.R.685, the buyer had a Harris tweed coat specially made for her by the seller. The coat caused her to contract dermatitis. It was held that since the coat would have caused no harm to normal skin and the seller could not have known of the buyer’s sensitivity, there was no breach of the implied condition of fitness of purpose. Otherwise, if the seller is unaware of any peculiar use for the goods, his obligation is no more than to supply goods which are fit for their normal purpose; Slater v. Finning [1996] 3 All E.R.398, ELL.
This implied term is classified as a condition; s. 15(3).
Thus, in Godley v. Perry [1960] 1 All E.R.36, C, a six-year old boy bought a plastic toy catapult from a newsagent’s shop run by Perry, the first defendant. The catapult broke while in use and C lost an eye. C sued Perry for breach of the implied conditions in s.14. Perry had bought the catapults by sample from a wholesaler. He (Perry) had tested the sample catapult by pulling back the elastic, but no defect had been revealed. Perry now brought the wholesaler into the action claiming a breach of the conditions in s. 15. The wholesaler had bought the catapults by sample from an importer who had obtained the catapults from Hong Kong. The wholesaler brought the importer into the action alleging a similar breach of s. 15. It was held, that C could recover damages from Perry, the first defendant, for breach of s.14, as the catapult was not, inter alia, fit for the purpose for which it had been bought. Furthermore, Perry, the first defendant, could recover damages from the wholesaler who in turn could recover damages from the importer, as in both cases because there had been a breach of s. 15 which was implied in the relevant contracts.
Irrespectively of whether delivery has been made to the buyer; Castle v. Playford (1872) 26 L.T.315, under a contract for the carriage of goods to the U.K., it was agreed that the buyer would take the risk upon receipt of the bills of lading, but payment was to be on delivery. The bill of lading was received but the ship was subsequently lost. It was held that the property passed upon receipt of the bills of lading. However, where there is a consumer sale, the Sale and Supply of Goods to Consumers Regulations 2002, (S.I.2002, No.3045), which implement Directive 1999/44/E.C. on Certain Aspects of the Sale of Consumer Goods and Associated Guarantees (O.J. L 171, 07/07/1999, p.12), add to s.20 of the Sale of Goods Act 1979, subsection (4) which states that risk of loss or damage does not pass to the consumer until actual delivery of goods takes place.
Thus, in Re Wait [1927] 1 Ch.606, was held that a contract to sell 500 tons of wheat out of a bulk of 1,000 tons was not a contract for the sale of specific goods.
Section 16(2).
Kwei Tek Chao v. British Traders and Shippers Ltd. [1954] 2 Q.B.459.
Thus, in Tarling v. Baxter (1827) 6 B. & C.360, a haystack was sold but before the buyer had taken it away, it was burned down. It was held that the buyer was still liable to pay the price because he became the owner of the haystack when the contract was made, and it was immaterial that no delivery of the goods had been made.
Underwood Ltd. v. Burgh Castle Brick & Cement Syndicate [1922] 1 K.B.123, C.A.; there was a sale contract of a 30 tonne engine. The engine had to be removed from its concrete bed, dismantled and loaded on rail. During loading the engine was damaged. It was held that Rule 1 of s.l8, was not applicable because when the contract was made the engine was not in a deliverable state. Therefore, the property in the goods did not pass at time of contract, and consequently, the sellers had not discharged all their obligations at the time the damage occurred.
Kirkham v. Attenborough [1897] 1 Q.B.201, C.A.; X took some jewellery from C on a sale or return basis. However, X pledged the jewellery to D. C claimed that the jewellery was still his property. It was held that pledging the goods was an ‘act adopting the transaction’ under Rule 4(a) of s. 18, and so property had passed to D.
Atari Corporation v. Electonic Boutique [1978] 1 All E.R.1010, C.A.
Elphick v. Barnes (1879–80) L.R. 5 C.P.D.321.
Section 18, Rule 5(3).
Section 16. Re Goldcorp Exchange Ltd. [1994] 1 All E.R.806; Goldcorp sold to buyers gold bullion on the basis that the gold will be stored and insured by Goldcorp. The buyers were issued with certificates representing their purchases. No gold was actually set aside, and Goldcorp became insolvent. It was held that property in the gold had not passed to the buyers because the gold had not been ascertained.
Carlos Federspiel v. Twigg [1957] 1 Lloyd’s Rep.240; D agreed to sell bicycles to C. After the bicycles were manufactured, packaged and labelled with C’s name, D became bankrupt. It was held that usually, but not necessarily, the appropriating act is the last act to be performed by the seller. The goods were not ‘unconditionally appropriated’ to C’s contract under Rule 5 of s.18. The acts of crating and labelling could be regarded merely as aspects of the internal administration of the seller’s business.
Hendy Lennox (Industrial Engines) Ltd. v. Grahame Puttick Ltd. [1984] 2 Lloyd’s Rep.422; where the seller sent an invoice to the buyer showing the serial number of engines to be delivered. It was held that the engines had been ‘unconditionally appropriated’ to buyer’s contract. Having sent the invoice identifying the particular items to be delivered to the buyer, the seller could no longer substitute them for other goods without the buyer’s consent.
Provided the buyer’s goods can be clearly identified; Healy v. Howlett & Sons [1917] 1 K.B.337, where C agreed to sell 20 boxes of fish to D. He despatched 190 boxes by rail for delivery to various customers but the boxes were not labelled for particular customers. Employees of the railway company were entrusted with the task of allocating the correct number of boxes to each destination. Due to a delay, the fish deteriorated before twenty boxes could be set aside for D. D refused to take delivery and C sued for the price. It was held that the property in the goods had not passed to C because C’s boxes had not been appropriated to the contract. Indeed, a way to look at this would be to suppose that only 20 boxes had become bad; would it be impossible to say which of the various buyers would have been bound to take the 20 bad boxes?
The Commission’s solution was to the effect that the buyer in such a situation should be able to become the owner, not of any particular goods, but of proportionate part of the bulk, and that the buyer’s share would correspond to the quantity bought and paid for. See’ sale of Goods Forming Part of a Bulk’-Law Commission No.215.
This s.19(1) highlights the importance of s.17(1), in the case of specific or ascertained goods, where property will pass when the parties intend it to pass. Where bills of lading are issued under an F.O.B. or F.A.S. contract, and are marked ‘to the order’ of the seller, the intention of the parties, in the absence of any other provisions, would be that no property would pass to the buyer/holder of the bill of lading until other conditions, such as payment, have been satisfied; Transpacific Eternity SA v. Kanematsu Corp. (The Antares III) [2002] 1 Lloyd’s Rep.233. Similarly, s.19(2) suggests that where the bill of lading makes the goods deliverable to the order of the seller or his agent, then the seller is assumed to have reserved the right of disposal; Mitsui & Co. Ltd. v. Flota Mercante Grancolombiana SA (The Ciudad de Pasto and The Ciudad de Neiva) [1989] 1 All E.R.951, C.A., cartons of prawns were sold on F.O.B. terms and shipped under bills of lading to the sellers’ order. By the terms of the sale contract 80% of the price was paid in advance. Before the balance was paid, the prawns were damaged. The issue in this case was whether the property had passed to the buyer. It was held that by virtue of s.19(2) SGA, property had not passed. This was because the seller prima facie had reserved the right of disposal where the goods were, by the bill of lading, deliverable to the sellers’ order. Thus, property could not pass until payment of the balance was made.
Clough Mill Ltd. v. Martin [1985] 1 W.L.R.111; C sold yarn to Heatherdale to make into fabrics. The contract included a’ simple clause’ which provided that property in the yarn remained with the seller until it was paid for or resold. C claimed to be entitled to the unused yarn at the time Heatherdale went into receivership. It was held that the plain words of the’ simple clause’ were effective and C was entitled to the unused yarn.
Aluminium Industrie Vaassen BV v. Romalpa Aluminium [1976] 1 Lloyd’s Rep.443; C, sold aluminium foil to D. A clause in the contract provided that (1) ownership of the foil would not pass to D until it was paid for, (2) if the foil became mixed with other items during a manufacturing process, C would become the owner of the finished product and property would not pass until D had paid for the foil; (3) unmixed foil and finished products should be stored separately; (4) D was authorised to sell the finished product on condition that C was entitled to the proceeds of the sale. D became insolvent and a receiver was appointed. The Court held that C was entitled to recover a quantity of unmixed foil and the proceeds of re-sale of some unmixed foil. Therefore, D was accountable to C for the foil and the proceeds of its sale and C could trace the proceeds into the hands of the receiver. It must be noted that as far as the tracing of the proceeds of sale is concerned, such proceeds were actually held in a separate account and so were identifiable. Furthermore, D conceded during the proceedings that a relationship of fiduciary nature between the parties existed.
Borden v. Timber Products Ltd. [1981] Ch.25; a seller supplied resin, and his title was extinguished when the resin was used to manufacture chipboard In Re Peachdart Ltd. [1984] Ch.131, a seller supplied leather to be made into handbags. The contract provided, inter alia, that the property in the leather and any handbags made with it would remain with the seller until the price for the leather was paid, and that a fiduciary relationship existed for the purposes of any proceeds of sale of the handbags. It was held that as this clause created a charge on the manufactured handbags it would be void due to lack of registration.
Hendy Lennox (Industrial Engines) Ltd. v. Grahame Puttick Ltd. [1984] 2 Lloyd’s Rep.422; where diesel engines were supplied by the seller on a 30 day credit The buyer went into receivership with three engines on their premises which were fitted to the generator sets. The seller was able to recover one of these engines which was unsold under a simple reservation of title clause.
Clough Mill Ltd. v. Martin [1985] 1 W.L.R.111.
Re Bond Worth Ltd. [1980] Ch.228; fibre was supplied to Bond Worth on terms that until the price was paid equitable and beneficial ownership of the fibre, any products made from the fibre and any proceeds of re-sale, would remain with the suppliers. It was held that these terms created a charge over the buyer’s assets and such a charge should be registered under the Companies Act. Hence the terms were void for want of registration.
Indian Oil Corp. Ltd. v. Greenstone Shipping Corp. [1988] Q.B.345.
In the Scottish case of Armour v. Thyssen [1990] 3 All E.R.481, it was held that a current account clause was effective, and therefore it seems that such a clause does not create a charge. Cf. Professor Diamond’s suggestions in A Review of Security Interests in Property, H.M.S.O., 1989, Ch.17.
It seems that if the manufacturing process is reversible and the goods can be detached from the manufactured product without any damage being caused, the seller can claim that he successfully retained title in them; Hendy Lennox (Industrial Engines) Ltd. v. Grahame Puttick Ltd. [1984] 2 Lloyd’s Rep.422, which involved the removal of engines.
Borden v. Timber Products Ltd. [1981] Ch.25. Perhaps another factor is whether the nature of the goods was fundamentally changed; Modelboard v. Outerbox Ltd. [1993] B.C.L.C.623, card used in the manufacture of cardboard boxes; Chaigley Farms Ltd. v. Crawford, Kay and Grayshire Ltd. [1996] B.C.C.957, animal carcasses skinned at an abattoir.
Which would be void unless registered; Re Bond Worth Ltd. [1980] Ch.228.
Indeed, this area of law has been characterised by Courts as ‘a maze if not a minefield’; per Staughton J., in Hendy Lennox (Industrial Engines) Ltd. v. Grahame Puttick Ltd. [1984] 2 Lloyd’s Rep.422, 428. See also the current difficulties with the practice of attempting to create a fixed charge on a company’s book debts in Re Brumark [2001] B.C.C.259. Cf. Re New Bullas Trading Ltd. [1994] B.C.C.36. It would now seem that for a fixed charge over book debts to be effective, the chargee must retain control not only of the debts but also of their proceeds.
Central Newbury Car Auctions Ltd. v. Unity Finance Ltd. [1957] 1 Q.B.371; X offered to buy a car on hire-purchase from C, a car-dealer. X filled in a proposal form and was able to get possession of the car and its registration document from C. The hire-purchase company refused to finance the transaction since X gave a false address. Eventually, X managed to sell the car to a car dealer who sold the car to a second hire-purchase company and the fraud was discovered. C claimed the car from the second hire-purchase company (under the nemo dat rule), and D claimed that C were estopped by their conduct from denying that X had authority to sell. Their conduct being giving X the car and its registration document It was held (by majority) that no estoppel arose since the giving of possession of the goods was not enough, and the car’s registration document was not a document of title. Moorgate Mercantile Co. v. Twitchings [1977] A.C.890, H.L.; X took a car on hire-purchase and C, the hire-purchase company, failed to register the agreement with Hire Purchase Information Ltd. (H.P.I.). This was a scheme whereby a register is kept and which hire-purchase companies use to check if a car actually belongs to another hire-purchase company and not the seller. Nearly all car dealers used this service. X offered the car to D, a car-dealer, who bought the car after checking the H.P.I. register. C sued D under the nemo dat rule (for conversion), and D claimed that C was estopped because C owed a duty of care to car-dealers to register all hire-purchase agreement and this had been breached (i.e. they were negligent). It was held (by majority) that as H.P.I. was a voluntary scheme no duty of care was owed by C.
Thus, in Eastern Distributers Ltd. v. Goldring [1957] 2 All E.R.525, C.A., X was the owner of a van. He wanted to buy a car form Y, a dealer, but he (X) could not raise enough money for a deposit. X and Y then devised a scheme to generate the necessary finance. Y would pretend that he owned the van; he would then sell the van and the car to a finance company, who would let both vehicles out on hire purchase to X. The proceeds of the sale of the van would raise sufficient money to finance the required hire purchased deposits. Unfortunately, the finance company accepted the proposal for the van but turned the car down. Unknown to X, Y proceeded to sell the van to the finance company. It was held that the finance company had become the owner of the van, because the original owner (X) by his conduct had allowed the buyers (the finance company) to believe that the seller (Y) had a right to sell the goods. Shaw v. Commissioner of Police of the Metropolis [1987] 1 W.L.R.1332, N was approached by X who told him that he had a buyer for N’s car. N gave X possession of the car, together with the signed car’s registration document, having also signed a disclaimer of legal responsibility for the car. X gave N a post-date cheque. C, a car-dealer, agreed to buy the car from X, and gave him a banker’s draft. X failed to cash the bankers’ draft and the fraud was discovered. C claimed that N was estopped by his conduct from denying that X had authority to sell the car, and N claimed ownership (under the nemo dot rule). It was held that N’s conduct amounted to a representation that X was the owner of the car. However, as in this case there was no’ sale’ (as provided by s.21) between X and C but only an agreement to sell, since the bankers’ draft was never cashed, no property in the car ever passed to C. For ostensible authority, see supra, p. 135.
Oppenheimer v. Attenborough & Son [1908] 1 K.B.221, C.A.; a diamond broker got possession of some diamonds by the claimant dealer, under the pretence of showing them to customers. Instead, the broker sold the diamonds, and the claimant claimed inter alia, that title could not have passed to the buyer under s.2 of the Factors Act 1889 because the buyer thought that he was dealing with the owner of the diamonds, not an agent, therefore the sale was not in the ‘ordinary course of business’ as required by s.2. It was held that ‘ordinary course of business’ meant ‘within business hours, at a proper place of business and in other respects in the ordinary way in which a mercantile agent would act’, therefore, title could pass to the buyer under s.2.
Cundv v. Lindsav (1878) 3 ADD.Case.459.
Lewis v. Averay [1972] 1 Q.B.232. But how can a seller avoid the contract after he has parted with his goods and the buyer cannot be found? In Car and Universal Finance Co. v. Caldwell [1965] 1 Q.B.525, C.A., a rogue purchased D’s car with a cheque, which was later dishonoured. As soon as the defendant discovered the fraud notified the police and the A.A. (Automobile Association), and attempted, unsuccessfully, to find the rogue. The car was subsequently sold by the rogue to a car-dealer and the car ended into the hands of the claimants. D claimed title to the car. It was held inter alia, that although the general rule is that an intention to rescind must be communicated to the other party, on the facts to the rogue, where that party deliberately makes it impossible to communicate an intention to rescind, it would be allowed for the innocent party to use other methods, such as giving notice of the fraud to the police and the A.A., thus effectively rescinding the contract.
Pacific Motor Auctions Pty Ltd. v. Motor Credits (Hire Finance) Ltd. [1965] 2 All E.R. 105.
National Employers Insurance Association Ltd. v. Jones [1988] 2 All E.R.425, H.L.; a stolen car was sold to X, who then re-sold it to Y, who re-sold it to D. C, the original owner’s insurers, claimed the car but D alleged that he had obtained title under s.9 of the Factors Act. This was based on the suggestion that s.9 provided that consent to the buyer in possession must be given by the seller, and not necessarily by original owner. Consequently, Y, who sold the car to D, obtained possession with the consent of X, the seller, and so the sale to D was protected by s.9 of the Factors Act 1889. This was rejected by the Court, which suggested that under s.2 of the Factors Act a mercantile agent can only divest the original owner of title to goods if he was entrusted with the goods by that owner. This was not the case here, since the original owner of the car did not entrust her car to the thief
In Newtons of Wembley Ltd. v. Williams [1965] 1 Q.B.560, C.A., C sold a car to a rogue, who paid for it by a cheque which was later dishonoured. C took immediate steps to rescind his contract with the rogue, by informing the police. Some time later, the rogue re-sold the car in a well-established street market in used cars. Y, the buyer then sold the car to another person D. It was held that D acquired a good title to the car. When the rogue sold the car at the market, he was a buyer in possession with the owner’s (C) consent and he acted in the same way as a mercantile agent would have done. He (the rogue) passed a good title to the purchaser (Y) who in turn passed title to D.
However, where the goods are specific goods and at the time of the contract the seller and buyer are aware of the goods’ location, then such location will be deemed to be the place of delivery; s.29(2).
Section 29(3).
Section 30(1).
Section 30(2). It must be noted however, that s.30(2A) further provides that in non-consumer contracts, where the quantity of goods delivered is either less or larger than that contracted for, the buyer may not reject the reject the goods if the shortfall or excess is so slight it would be unreasonable to do so.
Thus, in Shipton, Anderson & Co. Ltd. v. Weil Bros & Co. Ltd. [1912] 1 K.B.574, X agreed to deliver 4,950 tons of wheat. They in fact delivered 4,950 tons 551b. It was held that the difference was so trifling that it did not entitle the buyers to reject the whole consignment.
Section 31(1).
Depending on the particular circumstances, such breach may be severable; s.31(2).
Thus, in Maple Flock Co. Ltd. v. Universal Furniture Products (Wembley) Ltd. [1934] 1 K.B.148, C.A., the claimants agreed to sell and deliver 100 tons of flock by instalments. The first 15 instalments were satisfactory but the 16th was not up to the required standard. The defendants, buyers, then took delivery of 4 more satisfactory loads before refusing further deliveries. It was held that the defendants were not entitled to repudiate the contract. The defective flock constituted a small proportion of the total quantity delivered and there was little likelihood of the breach being repeated Thus, breach was severable and the contract as a whole stood. It also seems that in a severable contract involving a number of instalments, if the breaches occur at the beginning, i.e. the first instalments, then it is more likely that the breach will be repeated.
Fortman Holdings Ltd. v. Modem Holdings Ltd. [2001] EWCA Civ. 1235; purchase of company shares by instalment payments.
Section 27.
Section 36.
It would seem that under both available remedies interest may be claimed, s.54; see the effect of the Late Payment of Commercial Debts (Interest) Act 1998, supra, footnote 523.
The buyer cannot sue for the price under this section, even where the failure of property to pass was the fault of the buyer; Stein, Forbes & Co. v. County Tailoring (1916) 115 L.T.215.
Payment against documents upon the arrival of the ship carrying the goods would not be give the right for the seller to sue under this part, since the date of payment is not specified; Stein, Forbes & Co. v. County Tailoring (1916) 115 L.T.215.
Section 50(2).
The notion of available market is not as clear as it first appears. Section 50(3) provides only a prima facie rule, and it does not apply where it is unjust to do so; Thompson W.L. Ltd. v. Robinson (Gunmakers) Ltd. [1955] 1 All E.R.154, D ordered a new Vanguard car from C, a car dealer, but then D refused to accept it. C argued that he was only liable to pay nominal damages, since the contract price and the market price were the same. It was held that there was no ‘available market’ for Vanguard cars because supply exceeded demand and, therefore, s.50(3) did not apply. There would not be an available market unless the price of goods is fixed by supply and demand; Charter v. Sullivan [1957] 1 All E.R.809, D refused to accept a new Hillman Minx car which he had ordered from a dealer. In contrast to the previous case, the demand for this kind of cars exceeded supply and the dealer would have no difficulty in finding another buyer. It was held that the dealer was entitled to nominal damages only. D’s breach would not affect the total number of cars that he (the dealer) would sell over a period of time. Furthermore, there would not be an available market where the goods involved are unique; Lazenbury Garages Ltd. v. Wright [1976] 2 All E.R.770, C.A., the Court held, inter alia, that a second hand car was unique, and therefore there was no available market.
Section 50(3).
Hadley v. Baxendale (1854) 9 Exch.341.
Section 50(2).
By way of special damages; s.54. The section also provides for the recovery of interest; infra, footnote 523.
The Sale and Supply of Goods to Consumers Regulations 2002, (S.I.2002, No. 3045), which implement Directive 1999/44/E.C. on Certain Aspects of the Sale of Consumer Goods and Associated Guarantees (O.J. L 171, 07/07/1999, p.12), by Regulation 5 inserts ‘Part 5A-Additional Rights of Buyer in Consumer Cases’ in the Sale of Goods Act 1979. Part 5A contains new sections (48A-F) which apply to consumer sales, and add a considerable array of remedies. For example, any breach of the implied or express terms of the sale contract would entitle the consumer/buyer to require the seller to repair or replace the goods (s.48B(1)), or if these remedies are refused, then the consumer/buyer can request a price reduction or return the goods (s.48C(1)). Furthermore, the seller should respond to a consumer/buyer’s repair or replace request within reasonable time (s.48B(2)(a)). Presumably, if the seller does not respond within reasonable time, then this could be taken as constructive refusal, and the consumer/buyer should be able to use s.48C(1), i.e. reduce the price, or return the goods. Goods returned within six months of delivery are presumed defective (s.48A(3)).
Section 54, Sale of Goods Act 1979 (as amended); see the effect of the Late Payment of Commercial Debts (Interest) Act 1998, supra, footnote 523.
Bence Graphics Ltd. v. Fasson U.K. Ltd. [1997] 1 All E.R.979, C.A.; over a number of years D, the buyers, purchased vinyl film to make into special labels used in cargo containers. C, the sellers were aware that D would be selling the signs on to their customers. It was a term of the contract that the film would survive in good condition for five years. D, the buyers, used the film to make those signs which they sold, however, it turned out that the film would not last very long because of a latent defect which caused the signs to fade in sunlight and become unreadable. However, D, the buyers, had received no complaints from any sub-buyers. D claimed damages for breach of warranty. It was held that s.53(3) provided a prima facie rule only. The loss could have been greater than the purchase price, e.g. if all sub-buyers had sued the buyers, or nil, e.g. if all sub-buyers had suffered no loss. In this case D, the buyers, were awarded damages only for the remainder of the film which they could not use.
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(2006). The Law of Sale of Goods. In: Principles of Law Relating to International Trade. Springer, Boston, MA. https://doi.org/10.1007/0-387-30699-4_6
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