Sale of Goods occurs when the seller can sue for the price of the goods where the property in the goods has passed to the buyer and he refuses to pay for them according to the contract.
If the buyer has agreed to pay for the goods on a certain day, irrespective of delivery, and he wrongfully refuses to pay for them, the seller has a right of action for the price of the goods against him.
It is immaterial that the goods have not been appropriated to the contract or that the property in them has not passed from the seller.
Where the buyer wrongfully neglects or refuses to accept any payment for the goods, the seller may maintain an action against him for damages for non-acceptance.
Remedies of the Seller for Breach of Contract
An unpaid seller who is still in possession of the goods may retain them until payment or tender of the price, where the goods have been sold on credit, but the term of credit has expired.
Where the goods have been sold without any stipulation as to credit or where the buyer becomes insolvent, an unpaid seller may retain the goods.
The lien will be lost if the unpaid seller delivers the goods to a carrier or other bailee for transport to the buyer without reserving the right of disposal of the goods.
Where a buyer becomes insolvent, the unpaid seller has a right to reclaim the goods and retain possession until payment of the price, provided they are still in transit and have not been handed over to the agent of the buyer.
The seller also has the right of resale if the buyer does not pay for the goods or tender their prices within the contract time or within a reasonable time.
Resale
This right of resale is allowed where the goods are perishable or where the unpaid seller gives notice to the buyer of his intention to resell. This right is also available where the seller expressly reserves a right of resale.
The unpaid seller in this case claims damages from the original buyer for the loss occasioned by his breach of contract. The unpaid seller’s right of lienor stoppage in transit is not affected by any sale or her disposition of goods which the buyer may have made unless the seller has assented there.
However, the unpaid seller’s right of stoppage in transit is lost if a document of title relating to the goods has been sent to the buyer and the buyer has endorsed it to another party who takes it in good faith and for value.
Rights and Remedies of the Buyer for Breach of Contract
If the buyer has paid for the goods he wants to buy, the seller is duty-bound to deliver the goods to him.
In any action for breach of contract to deliver specific or ascertained goods, the court may order or compel the seller to deliver the goods to the buyer without giving him the option of paying damages and keeping the goods.
The court will not order specific performance in respect of future goods. Neither will the court order specific performance of contracts dealing with personal service. Orders for specific performance are discretionary and will not be granted where the damages would provide adequate relief.
The Breach of Warranty
These orders are usually only made where the goods are unique or of some special value. He may set up against the seller the breach of warranty in diminution or extinction of the price. Alternatively, he may sue the seller for damages for the breach of warranty.
The buyer may reject goods delivered to him, which do not comply with the contract, or where the quality delivered is not the exact quantity contracted for. If the quantity is less than ordered.
The buyer may reject or he may retain the goods, paying the contract rate, therefore. If there is an excess in quantity, the buyer may reject the whole or only the excess, but whatever he accepts, he must pay for it at the contract rate.
Contract
The buyer may reject the goods he contracted to buy are mixed with goods of a different description. He may retain or reject the whole.
Where he retains goods of a different kind, he must pay a reasonable price thereof. If so agreed, failure to deliver or accept one or more instalments may amount to a renunciation of the whole contract.
However, where the contract is severable or divisible, failure to deliver or accept and pay for one or more instalments will not entitle the aggrieved party to treat the agreement as at an end.
Implied Conditions on Sale of Goods
Where there is only an agreement to sell, it is implied that the seller will have the right to sell the goods at the time when it is intended that the property in them should pass.
In this case, there is no implied condition as to the title. Where there is a contract for the sale of goods by description, there is an implied condition as to title.
The Contract for the Sale of Goods
Where there is a contract for the sale of goods by description, there is an implied condition that the goods will correspond with the description. If it is a sale both by sample and description, the goods must correspond to both the sample and the description.
In the case of goods bought by description, whether he be the manufacturer or not, there is an implied condition that the goods shall be of merchantable quality.
If the buyer is allowed to examine the goods, he will be deemed to have examined them even though he has not availed himself of the opportunity. The buyer may need the goods for a particular purpose.
The Seller’s Judgement
If he makes this known to the seller to show that he relies on the seller’s skill or judgment, and the goods are of a description that it is in the course of the seller’s business to supply, there is an implied condition that the goods would be fit for such purpose.
In the case of a contract for the sale of a specified article under its patent or other trade name, however, there is no implied condition as to its fitness for any particular purpose.
The implied condition of fitness is not excluded because of the mere fact that an article is sold under a trade name if the buyer makes it clear to the seller that he is relying on his skill and judgment. Articles sold under a trade name must, in any case, be merchantable.
A seller must warn a buyer of the dangerous nature of the goods sold. Unless the seller warns the buyer, he may be liable for the resulting damage.
Power to Exclude Implied Conditions and Warranties
The implied conditions and warranties discussed above may be expressly excluded by the parties. Where there has been a fundamental breach of the contract, an exemption clause, however comprehensive, may not afford any protection from liability.
If implied terms are excluded, this does not exclude any express terms. If warranties only are excluded, this is not sufficient to exclude conditions; but apart from the implied warranties and conditions, the old saying, ‘Let the buyer beware’, still holds goods.
It is up to the buyer to make certain that the goods are fit for any particular purpose before he accepts the contract. It must be noted that the warranties and conditions implied by law may be excluded by the express terms of the contract.
Classes of Goods
Unascertained or generic goods are goods defined by description alone. A sale of five cars is a case of unascertained or generic goods. Any five cars will suffice. Specific goods are identified and agreed upon at the time of the agreement for sale.
For instance, a sale of five cars in the garage is a sale of specific goods. There may be a sale of an unascertained portion of a larger ascertained quantity, e.g., ‘fifty bricks out of that stack of bricks’.
Where goods have to be separated from the bulk, no property therein can pass to the buyer until the separation has been effected, so that the portion sold becomes identified and appropriated.
Conclusion
Future goods consist of goods to be acquired by the seller after making the contract, or goods which the seller is to make or manufacture. If a contract of sale purports to effect a present sale of future goods, the contract operates as an agreement to sell the goods.
There can be no present assignment of property in future goods. It will require the act of appropriation to vest the ownership in the buyer when the future goods have become ascertained. You can read more similar posts on our business page of the site.
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