Sale of Goods Act 1978

rity on goods, whether in consideration of an original advance or of a further or continuing advance or of any pecuniary lia bility;

"property" means the general property in goods, and not merely a special property;

"quality of goods" includes their state or condition;

"sale" includes a bargain and sale as well as a sale and delivery;

"seller" means a person who sells or agrees to sell goods;

"specific goods" means goods identified and agreed upon at the time a contract of sale is made;

"warranty" means an agreement with reference to goods which are the subject of a contract of sale, but collateral to the main purpose of such contract, the breach of which gives rise to a claim for damages, but not to a right to reject the goods and treat the contract as repudiated.

(2) A thing is deemed to be done "in good faith" within the meaning of this Act when it is in fact done honestly, whether it be done negligently or not.

(3) A person is deemed to be insolvent within the meaning of this Act who either has ceased to pay his debts in the ordinary course of business, or cannot pay his debts as they become due, whether or not he has committed an act of bankruptcy.

(4) A person shall be deemed to be in possession of goods, or of the documents of title to goods, where the goods or documents are in his actual custody or are held by any other person subject to his control or for him or on his behalf.

(5) Goods are in a "deliverable state" within the meaning of this Act when they are in such a state that the buyer would under the con tract be bound to take delivery of them.

(6) Goods of any kind are of merchantable quality within the meaning of this Act if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to ex pect having regard to any description applied to them, the price (if rele vant) and all the other relevant circumstances; and any reference in this Act to unmerchantable goods shall be construed accordingly.

(7) Goods are shipped within the meaning of this Act when they are carried either by ship or aircraft.

PART II
FORMATION OF THE CONTRACT

Contract of Sale

Sale and agreement to sell

2 (1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price. There may be a contract of sale between one part-owner and another.

(2) A contract of sale may be absolute or conditional.

(3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer the contract is called a sale; but where the transfer of the property in the goods is to take place at a fu ture time or subject to some condition thereafter to be fulfilled the con tract is called an agreement to sell.

(4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.

Capacity to buy and sell

3 Capacity to buy and sell is regulated by the general law con cerning capacity to contract and to transfer and acquire property:

Provided that where necessaries are sold and delivered to a mi nor or to a person incapable, by reason of mental disorder within the meaning of the Mental Health Act 1968 [title 11 item 36], of managing and administering his property and affairs, or to a person who by reason of drunkenness is incompetent to contract, he must pay a reasonable price therefor.

Necessaries in this section mean goods suitable to the condition in life of such minor or other person, and to his actual requirements at the time of the sale and delivery.

Formalities of the Contract

Contract of sale, how made

4 Subject to the provisions of this or any other Act, a contract of sale may be made in writing (either with or without seal), or by word of mouth, or partly in writing and partly by word of mouth or may be im plied from the conduct of the parties:

Provided that nothing in this section shall affect the law relating to corporations.

Subject Matter of the Contract

Existing or future goods

5 (1) The goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or goods to be manufactured or acquired by the seller after the making of the contract of sale, in this Act called "future goods".

(2) There may be a contract for the sale of goods, the acquisi tion of which by the seller depends upon a contingency which may or may not happen.

(3) Where by a contract of sale the seller purports to effect a present sale of future goods, the contract operates as an agreement to sell the goods.

Goods which have perished

6 Where there is a contract for the sale of specific goods, and the goods without the knowledge of the seller have perished at the time when the contract is made, the contract is void.

Goods perishing before sale but after agreement to sell

7 Where there is an agreement to sell specific goods, and subse quently the goods, without any fault on the part of the seller or buyer, perish before the risk passes to the buyer, the agreement is thereby avoided.

The Price

Ascertainment of price

8 (1) The price in a contract of sale may be fixed by the contract, or may be left to be fixed in manner thereby agreed, or may be deter mined by the course of dealing between the parties.

(2) Where the price is not determined in accordance with sub section (1) the buyer must pay a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each par ticular case.

Agreement to sell at valuation

9 (1) Where there is an agreement to sell goods on the terms that the price is to be fixed by the valuation of a third party and such third party cannot or does not make such valuation, the agreement is avoided:

Provided that if the goods or any part thereof have been delivered to and appropriated by the buyer he must pay a reasonable price there for.

(2) Where such third party is prevented from making the valu ation by the fault of the seller or buyer, the party not in fault may main tain an action for damages against the party in fault.

Conditions and Warranties

Stipulations as to time

10 (1) Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not deemed to be of the essence of a contract of sale. Whether any other stipulation as to time is of the essence of the contract or not depends on the terms of the con tract.

(2) In a contract of sale "month" means prima facie calendar month.

When condition to be treated as warranty

11 (1) Where a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may waive the condition, or may elect to treat the breach of such condition as a breach of warranty, and not as a ground for treating the contract as repudiated.

(2) Whether a stipulation in a contract of sale is a condition, the breach of which may give rise to a right to treat the contract as repu diated, or a warranty, the breach of which may give rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated, depends in each case on the construction of the contract. A stipulation may be a condition, though called a warranty in the contract.

(3) Where a contract of sale is not severable, and the buyer has accepted the goods, or part thereof, the breach of any condition to be fulfilled by the seller can only be treated as a breach of warranty, and not as a ground for rejecting the goods and treating the contract as repudi ated, unless there be a term of the contract, express or implied, to that effect.

(4) Nothing in this section shall affect the case of any condition or warranty, fulfilment of which is excused by law by reason of impossi-
bility or otherwise.

Implied undertakings as to title, etc

12 (1) In every contract of sale, other than one to which subsec tion (2) applies, there is�

(a) an implied condition on the part of the seller that, in the case of a sale, he has a right to sell the goods and, in the case of an agreement to sell, he will have a right to sell the goods at the time when the property is to pass; and

(b) an implied warranty that the goods are free, and will re main free until the time when the property is to pass, from any charge or encumbrance not disclosed or known to the buyer before the contract is made and that the buyer will enjoy quiet possession of the goods except so far as it may be disturbed by the owner or other per son entitled to the benefit of any charge or encumbrance so disclosed or known.

(2) In a contract of sale, in the case of which there appears from the contract or is to be inferred from the circumstances of the con tract an intention that the seller should transfer only such title as he or a third person may have, there is�

(a) an implied warranty that all charges or encumbrances known to the seller and not known to the buyer have been disclosed to the buyer before the contract is made; and

(b) an implied warranty that neither �

(i) the seller; nor

(ii) in a case where the parties to the contract in tend that the seller should transfer only such ti tle as a third person may have, that person; nor

(iii) anyone claiming through or under the seller or that third person otherwise than under a charge or encumbrance disclosed or known to the buyer before the contract is made,

will disturb the buyer's quiet possession of the goods.

Sale by description

13 (1) Where there is a contract for the sale of goods by descrip tion, there is an implied condition that the goods shall correspond with the description; and if the sale be by sample, as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description.

(2) A sale of goods shall not be prevented from being a sale by description by reason only that, being exposed for sale or hire, they are selected by the buyer.

Implied undertakings as to quality or fitness

14 (1) Except as provided by this section and section 15, and subject to the provisions of any other Act, there is no implied condition or warranty as to the quality or fitness for any particular purpose of goods supplied under a contract of sale.

(2) Where the seller sells goods in the course of a business, there is an implied condition that the goods supplied under the contract are of merchantable quality, except that there is no such condition �

(a) as regards defects specifically drawn to the buyer's at tention before the contract is made; or

(b) if the buyer examines the goods before the contract is made, as regards defects which that examination ought to reveal.

(3) Where the seller sells goods in the course of a business and the buyer expressly or by implication makes known to the seller any particular purpose for which the goods are being bought, there is an im plied condition that the goods supplied under the contract are reason ably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied, except where the circumstances show that the buyer does not rely, or that it is unreasonable for him to rely, on the seller's skill or judgment.

(4) An implied condition or warranty as to quality or fitness for a particular purpose may be annexed to a contract of sale by usage.

(5) The foregoing provisions of this section apply to a sale by a person who in the course of a business is acting as agent for another as they apply to a sale by a principal in the course of a business, except where that other is not selling in the course of a business and either the buyer knows that fact or reasonable steps are taken to bring it to the no tice of the buyer before the contract is made.

(6) In the application of subsection (3) to an agreement for the
sale of goods any reference to the seller shall include a reference to the person by whom any antecedent negotiations are conducted.

(7) "Antecedent negotiations", means any negotiations or ar rangements with the buyer whereby he was induced to make the agree ment or which otherwise promoted the transaction to which the agree ment relates; and any reference in this Act to the person by whom any antecedent negotiations were conducted is a reference to the person by whom the negotiations or arrangements in question were conducted or made in the course of a business carried on by him.

(8) Any negotiations conducted, or arrangements or represen tations made, by a servant or agent, if conducted or made by him in the course of his employment or agency, shall be treated as conducted or made by his employer or principal; and anything received by a servant or agent, if received by him in the course of his employment or agency, shall be treated as received by his employer or principal.

In this section "representations" includes any statement or un dertaking, whether constituting a condition or a warranty or not, and references to making representations shall be construed accordingly.

Sale by sample

15 (1) A contract of sale is a contract for sale by sample where there is a term in the contract, express or implied, to that effect.

(2) In the case of a contract for sale by sample �

(a) there is an implied condition that the bulk shall corre spond with the sample in quality;

(b) there is an implied condition that the buyer shall have a reasonable opportunity of comparing the bulk with the sample;

(c) there is an implied condition that the goods shall be free from any defect, rendering them unmerchantable, which would not be apparent on reasonable examination of the sample.

Application of certain sections to hire purchase agreements

16 Sections 12 to 15, 64 and subsection (6) of section 70 shall apply to the purchase of goods by instalments and the hire purchase of goods regulated by the Purchase of Goods by Instalments Acts 1943 to 1952 [title 17 item 30] with such modifications as may be necessary to give ef fect to such application.

PART III
EFFECTS OF THE CONTRACT

Transfer of Property as between Seller and Buyer

The ascertainment of goods and when the property passes

17 (1) Where there is a contract for the sale of unascertained goods no property in the goods is transferred to the buyer unless and until the goods are ascertained.

(2) Where there is a contract for the sale of specific or ascer tained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.

(3) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the par ties, and the circumstances of the case.

Rules for ascertaining intention

18 Unless a different intention appears, the following are rules for ascertaining the intention of the parties as to the time at which the prop erty in the goods is to pass to the buyer:

Rule 1 Where there is an unconditional contract for the sale of specific goods, in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, be postponed.

Rule 2 Where there is a contract for the sale of specific goods and the seller is bound to do something to the goods, for the purpose of putting them into a deliverable state, the property does not pass until such thing be done, and the buyer has notice thereof.

Rule 3 Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, measure, test, or do some other act or thing with refer ence to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing be done, and the buyer has notice thereof.

Rule 4 When goods are delivered to the buyer on approval or "on sale or return" or other similar terms the property therein passes to the buyer:�

(a) when he signifies his approval or acceptance to the seller or does any other act adopting the transaction;

(b) if he does not signify his approval or acceptance to the seller but retains the goods without giving notice of rejection, then, if a time has been fixed for the return of the goods, on the expiration of such time, and, if no time has been fixed, on the expiration of a reasonable time. What is a rea sonable time is a question of fact.

Rule 5 (1) Where there is a contract for the sale of unascertained or future goods by description, and goods of that description and in a deliver able state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer, or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be ex pressed or implied, and may be given either be fore or after the appropriation is made.

(2) Where, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract.

Reservation of right of disposal

19 Where there is a contract for the sale of specific goods or where goods are subsequently appropriated to the contract, the seller may, by the terms of the contract or appropriation, reserve the right of disposal of the goods until certain conditions are fulfilled. In such case, notwith standing the delivery of the goods to the buyer, or to a carrier or other bailee for the purpose of transmission to the buyer, the property in the goods does not pass to the buyer until the conditions imposed by the seller are fulfilled.

Delivery of bill of lading

20 (1) Where goods are shipped, and by the bill of lading the goods are deliverable to the order of the seller or his agent, the seller is prima facie deemed to reserve the right of disposal,

(2) Where the seller of goods draws on the buyer for the price, and transmits the bill of exchange and bill of lading to the buyer together to secure acceptance or payment of the bill of exchange, the buyer is bound to return the bill of lading if he does not honour the bill of ex change, and if he wrongfully retains the bill of lading the property in the goods does not pass to him.

Risk prima facie passes with property

21 Unless otherwise agreed, the goods remain at the seller's risk until the property therein is transferred to the buyer, but when the prop erty therein is transferred to the buyer, the goods are at the buyer's risk whether delivery has been made or not:

Provided that where delivery has been delayed through the fault of either buyer or seller the goods are at the risk of the party in fault as regards any loss which might not have occurred but for such fault:

Provided also that nothing in this section shall affect the duties or liabilities of either seller or buyer as a bailee of the goods of the other party.

Transfer of Title

Sale by person not the owner

22 Subject to the provisions of this Act, where goods are sold by a person who is not the owner thereof, and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell:

Provided that nothing in this Act shall affect the validity of any contract of sale under any provision of law or statutory power of sale or under the order of a court of competent jurisdiction.

Sale under voidable title

23 When the seller of goods has a voidable title thereto, but his title has not been avoided at the time of the sale, the buyer acquires a good title to the goods, provided he buys them in good faith and without notice of the seller's defect of title.

Conviction for theft, etc. not to affect title

24 Notwithstanding any enactment to the contrary, where property has been stolen or obtained by fraud or other wrongful means, the title
to that or any other property shall not be affected by reason only of the conviction of the offender.

Seller or buyer in possession after sale

25 (1) Where a person having sold goods continues or is in pos session of the goods, or of the documents of title to the goods, the deliv ery or transfer by that person, or by a mercantile agent acting for him, of the goods or documents of title under any sale, pledge or other disposi tion thereof, or under any agreement for sale, pledge, or other disposition thereof, to any person receiving the same in good faith and without no tice of the previous sale, shall have the same effect as if the person making the delivery or transfer were expressly authorized by the owner of the goods to make the same.

(2) Where a person having bought or agreed to buy goods ob tains, with the consent of the seller, possession of the goods or the doc uments of title to the goods, the delivery or transfer by that person, or by a mercantile agent acting for him, of the goods or documents of title, un der any sale, pledge or other disposition thereof, to any person receiving the same in good faith and without notice of any lien or other right of the original seller in respect of the goods, shall have the same effect as if the person making the delivery or transfer were a mercantile agent in pos session of the goods or documents of title with the consent of the owner.

Effect of writ of execution

26 (1) A writ of execution against goods shall bind the property in the goods of the execution debtor as from the time when the writ is deliv ered to the bailiff to be executed; and, for the better manifestation of such time, it shall be the duty of the bailiff, without fee, upon the receipt of any such writ to indorse upon the back thereof the hour, day, month, and year when he received the same:

Provided that no such writ shall prejudice the title to such goods acquired by any person in good faith and for valuable consideration, un less such person had, at the time when he acquired his title, notice that such writ, or any other writ by virtue of which the goods of the execution debtor might be seized or attached, had been delivered to and remained unexecuted in the hands of the bailiff.

(2) In this section, "bailiff" includes any officer charged with the enforcement of a writ of execution.

PART IV
PERFORMANCE OF THE CONTRACT

Duties of seller and buyer

27 It is the duty of the seller to deliver the goods, and of the buyer to accept and pay for them, in accordance with the terms of the contract of sale.

Payment and delivery are concurrent conditions

28 Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller must be ready and willing to give possession of the goods to the buyer in ex change for the price, and the buyer must be ready and willing to pay the price in exchange for possession of the goods.

Rules as to delivery

29 (1) Whether it is for the buyer to take possession of the goods or for the seller to send them to the buyer is a question depending in each case on the contract, express or implied, between the parties. Apart from any such contract, express or implied, the place of delivery is the seller's place of business, if he has one, and if not, his residence:

Provided that, if the contract be for the sale of specific goods, which to the knowledge of the parties when the contract is made are in some other place, then that place is the place of delivery.

(2) Where under the contract of sale the seller is bound to send the goods to the buyer, but no time for sending them is fixed, the seller is bound to send them within a reasonable time.

(3) Where the goods at the time of sale are in the possession of a third person, there is no delivery by seller to buyer unless and until such third person acknowledges to the buyer that he holds the goods on his behalf:

Provided that nothing in this section shall affect the operation of the issue or transfer of any document of title to goods.

(4) Demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour. What is a reasonable hour is a ques tion of fact.

(5) Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state must be borne by the seller.

Delivery of wrong quantity

30 (1) Where the seller delivers to the buyer a quantity of goods less than he contracted to sell, the buyer may reject them, but if the buyer accepts the goods so delivered he must pay for them at the con tract rate.

(2) Where the seller delivers to the buyer a quantity of goods larger than he contracted to sell, the buyer may accept the goods in cluded in the contract and reject the rest, or he may reject the whole. If the buyer accepts the whole of the goods so delivered he must pay for them at the contract rate.

(3) Where the seller delivers to the buyer the goods he con tracted to sell mixed with goods of a different description not included in the contract, the buyer may accept the goods which are in accordance with the contract and reject the rest, or he may reject the whole.

(4) The provisions of this section are subject to any usage of trade, special agreement, or course of dealing between the parties.

Instalment deliveries

31 (1) Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by instalments.

(2) Where there is a contract for the sale of goods to be deliv ered by stated instalments, which are to be separately paid for, and the seller makes defective deliveries in respect of one or more instalments, or the buyer neglects or refuses to take delivery of or pay for one or more instalments, it is a question in each case depending on the terms of the contract and the circumstances of the case whether the breach of con tract is a repudiation of the whole contract or whether it is a severable breach giving rise to a claim for compensation but not to a right to treat the whole contract as repudiated.

Delivery to carrier

32 (1) Where, in pursuance of a contract of sale, the seller is au thorized or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer is prima facie deemed to be a delivery of the goods to the buyer.

(2) Unless otherwise authorized by the buyer, the seller must make such contract with the carrier on behalf of the buyer as may be reasonable having regard to the nature of the goods and the other cir cumstances of the case. If the seller omits so to do, and the goods are lost or damaged in course of transit, the buyer may decline to treat the delivery to the carrier as a delivery to himself, or may hold the seller re sponsible in damages.

(3) Unless otherwise agreed, where goods are sent by the seller to the buyer by a route, under circumstances in which it is usual to in sure, the seller must give such notice to the buyer as may enable him to insure them during their transit, and, if the seller fails to do so, the goods shall be deemed to be at his risk during such transit.

Risk where goods delivered at distant place

33 Where the seller of goods agrees to deliver them at his own risk at a place other than that where they are when sold, the buyer must, nevertheless, unless otherwise agreed, take any risk of deterioration in the goods necessarily incident to the course of transit.

Buyer's right of examining the goods

34 (1) Where goods are delivered to the buyer, which he has not previously examined, he is not deemed to have accepted them unless and until he has a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract.

(2) Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound, on request, to afford the buyer a rea sonable opportunity of examining the goods for the purpose of ascer taining whether they are in conformity with the contract.

Acceptance

35 The buyer is deemed to have accepted the goods when he inti mates to the seller that he has accepted them, or (except where section 34 otherwise provides) when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the owner ship of the seller, or when, after the lapse of a reasonable time, he re tains the goods without intimating to the seller that he has rejected them.

Buyer not bound to return rejected goods

36 Unless otherwise agreed, where goods are delivered to the buyer, and he refuses to accept them, having the right so to do, he is not bound to return them to the seller, but it is sufficient if he intimates to the seller that he refuses to accept them.

Liability of buyer for neglecting or refusing delivery of goods

37 When the seller is ready and willing to deliver the goods, and re-
quests the buyer to take delivery, and the buyer does not within a rea sonable time after such request take delivery of the goods, he is liable to the seller for any loss occasioned by his neglect or refusal to take deliv ery, and also for a reasonable charge for the care and custody of the goods:

Provided that nothing in this section shall affect the right of the seller where the neglect or refusal of the buyer to take delivery amounts to a repudiation of the contract.

PART V
RIGHTS OF UNPAID SELLER AGAINST THE GOODS

Unpaid seller defined

38 (1) The seller of goods is deemed to "unpaid seller" within the meaning of this Act �

(a) when the whole of the price has not been paid or ten dered;

(b) when a bill of exchange or other negotiable instrument has been received as conditional payment, and the con dition on which it was received has not been fulfilled by reason of the dishonour of the instrument or otherwise.

(2) In this Part the term "seller" includes any person who is in the position of a seller, as, for instance, an agent of the seller to whom the bill of lading has been indorsed, or a consignor or agent who has himself paid, or is directly responsible for, the price.

Unpaid seller's rights

39 (1) Subject to the provisions of this Act, and of any other Act, notwithstanding that the property in the goods may have passed to the buyer, the unpaid seller of goods, as such, has by implication of law �

(a) a lien on the goods or right to retain them for the price while he is in possession of them;

(b) in case of the insolvency of the buyer, a right of stopping the goods in transitu after he has parted with the pos session of them;

(2) Where the property in goods has not passed to the buyer, the unpaid seller has, in addition to his other remedies, a right of with holding delivery similar to and co-extensive with his rights of lien and stoppage in transitu where the property has passed to the buyer.

Unpaid Seller's Lien

Seller's lien

40 (1) Subject to the provisions of this Act, the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases, namely�

(a) where the goods have been sold without any stipulation as to credit;

(b) where the goods have been sold on credit, but the term of credit has expired;

(2) The seller may exercise his right of lien notwithstanding that he is in possession of the goods as agent or bailee for the buyer.

Part delivery

41 Where an unpaid seller has made part delivery of the goods, he may exercise his right of lien on the remainder, unless such part delivery has been made under such circumstances as to show an agreement to waive the lien.

Termination of lien

42 (1) The unpaid seller of goods loses his lien thereon �

(a) when he delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without re serving the right of disposal of the goods;

(b) when the buyer or his agent lawfully obtains possession of the goods;

(2) The unpaid seller of goods, having a lien thereon, does not lose his lien by reason only that he has obtained judgment or decree for the price of the goods.

Stoppage in Transitu

Right of stoppage in transitu

43 Subject to the provisions of this Act, when the buyer of goods becomes insolvent, the unpaid seller who has parted with the possession of the goods has the right of stopping them in transitu, that is to say, he may resume possession of the goods as long as they are in course of transit, and may retain them until payment or tender of the price.

Duration of transit

44 (1) Goods are deemed to be in course of transit from the time when they are delivered to a carrier or other bailee for the purpose of transmission to the buyer, until the buyer, or his agent in that behalf, takes delivery of them from such carrier or other bailee.

(2) If the buyer or his agent in that behalf obtains delivery of the goods before their arrival at the appointed destination, the transit is at an end.

(3) If, after the arrival of the goods at the appointed destination, the carrier or other bailee acknowledges to the buyer, or his agent, that he holds the goods on his behalf and continues in possession of them as bailee for the buyer, or his agent, the transit is at an end, and it is im material that a further destination for the goods may have been indicated by the buyer.

(4) If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of them, the transit is not deemed to be at an end, even if the seller has refused to receive them back.

(5) When goods are delivered to a ship or aircraft chartered by the buyer it is a question depending on the circumstances of the partic ular case whether they are in the possession of the person in charge of the ship or aircraft as a carrier, or as agent to the buyer.

(6) Where the carrier or other bailee wrongfully refuses to de liver the goods to the buyer, or his agent in that behalf, the transit is deemed to be at end.

(7) Where part delivery of the goods has been made to the buyer, or his agent in that behalf, the remainder of the goods may be stopped in transitu, unless such part delivery has been made under such circumstances as to show an agreement to give up possession of the whole of the goods.

How stoppage in transitu is effected

45 (1) The unpaid seller may exercise his right of stoppage in tran situ either by taking actual possession of the goods, or by giving notice of his claim to the carrier or other bailee in whose possession the goods are. Such notice may be given either to the person in actual possession of the goods or to his principal. In the latter case the notice, to be effec tual, must be given at such time and under such circumstances that the principal, by the exercise of reasonable diligence, may communicate it to his servant or agent in time to prevent a delivery to the buyer.

(2) When notice of stoppage in transitu is given by the seller to the carrier or other bailee in possession of the goods, he must re-deliver the goods to, or according to the directions of, the seller. The expenses of such re-delivery must be borne by the seller.

Re-sale by Buyer or Seller

Effect of sub-sale or pledge by buyer

46 Subject to the provisions of this Act, the unpaid seller's right of lien or stoppage in transitu is not affected by any sale or other disposition of the goods which the buyer may have made, unless the seller has as sented thereto:

Provided that where a document of title to goods has been law fully transferred to any person as buyer or owner of the goods, and that person transfers the document to a person who takes the document in good faith and for valuable consideration, then, if such last-mentioned transfer was by way of sale the unpaid seller's right of lien or stoppage in transitu is defeated, and if such last-mentioned transfer was made by way of pledge or other disposition for value, the unpaid seller's right of lien or retention or stoppage in transitu can only be exercised subject to the rights of the transferee.

Sale not rescinded by lien or stoppage in transitu

47 A contract of sale is not rescinded by the mere exercise by an unpaid seller of his right of lien or stoppage in transitu.

Re-sale by seller

48 (1) Where �

(a) an unpaid seller gives notice to the buyer of his intention to re-sell the goods; or

(b) the goods are of a perishable nature,

and the buyer does not within a reasonable time pay or tender the price, the unpaid seller may re-sell the goods and recover from the original buyer damages for any loss occasioned by his breach of contract.

(2) Where an unpaid seller who has exercised his right of lien or stoppage in transitu re-sells the goods, the buyer acquires a good title thereto as against the original buyer.

(3) Where the seller expressly reserves a right of re-sale in case the buyer should make default and, on the buyer making default, re-sells the goods, the original contract of sale is thereby rescinded, but without prejudice to any claim the seller may have for damages.

PART VI
ACTIONS FOR BREACH OF THE CONTRACT

Remedies of the Seller

Action for price

49 (1) Where, under a contract of sale, the property in the goods has passed to the buyer, and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may maintain an action against him for the price of the goods.

(2) Where, under a contract of sale, the price is payable on a day certain irrespective of delivery, and the buyer wrongfully neglects or refuses to pay such price, the seller may maintain an action for the price, although the property in the goods has not passed, and the goods have not been appropriated to the contract.

Damages for non-acceptance

50 (1) Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against him for damages for non-acceptance.

(2) The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the buyer's breach of contract.

(3) Where there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted or, if no time was fixed for acceptance, then at the time of the refusal to accept.

Remedies of the Buyer

Damages for non-delivery

51 (1) Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may maintain an action against the seller for damages for non-delivery.

(2) The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the seller's breach of contract.

(3) Where there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price of the goods at the time or times when they ought to have been delivered or, if no time was fixed, then at the time of the refusal to deliver.

Specific performance

52 In any action for breach of contract to deliver specific or ascer tained goods the court may, if it thinks fit, on the application of the plaintiff, by its judgment direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages. The judgment may be unconditional, or upon such terms and conditions as to damages, payment of the price, and otherwise, as to the court may seem just, and the application by the plaintiff may be made at any time before judgment.

Remedy for breach of warranty

53 (1) Where there is a breach of warranty by the seller, or where the buyer elects, or is compelled, to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer is not by reason only of such breach of warranty entitled to reject the goods, but he may�

(a) set up against the seller the breach of warranty in diminution or extinction of the price; or

(b) maintain an action against the seller for damages for the breach of warranty.

(2) The measure of damages for breach of warranty is the esti mated loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty.

(3) In the case of breach of warranty of quality such loss is prima facie the difference between the value of the goods at the time of
delivery to the buyer and the value they would have had if they had an swered to the warranty.

(4) The fact that the buyer has set up the breach of warranty in diminution or extinction of the price does not prevent him from main taining an action for the same breach of warranty if he has suffered fur ther damage.

Interest and special damages

54 Nothing in this Act shall affect the right of the buyer or the seller to recover interest or special damages in any case where by law interest or special damages may be recoverable, or to recover money paid where the consideration for the payment of it has failed.

PART VII
DISPOSITIONS BY MERCANTILE AGENTS

Powers respecting disposition of goods

55 (1) Where a mercantile agent is, with the consent of the owner, in possession of goods or of the documents of title to goods, any sale, pledge, or other disposition of the goods, made by him when acting in the ordinary course of business of a mercantile agent, shall, subject to the provisions of this Part of this Act, be as valid as if he were expressly au thorized by the owner of the goods to make the same:

Provided that the person taking under the disposition acts in good faith, and has not at the time of the disposition notice that the per son making the disposition has no authority to make the same.

(2) Where a mercantile agent has, with the consent of the owner, been in possession of goods or of the documents of title to goods, any sale, pledge, or other disposition, which would have been valid if the consent had continued, shall be valid notwithstanding the determination of the consent:

Provided that the person taking under the disposition has not at the time thereof notice that the consent has been determined.

(3) Where a mercantile agent has obtained possession of any documents of title to goods by reason of his being or having been, with the consent of the owner, in possession of the goods represented thereby, or of any other documents of title to the goods, his possession of the first-mentioned documents shall, for the purposes of this Act, be deemed to be with the consent of the owner.

(4) For the purposes of this Part of this Act the consent of the owner shall be presumed in the absence of evidence to the contrary.

Pledge of documents

56 A pledge of the documents of title to goods shall be deemed to be a pledge of the goods.

Pledge for antecedent debt

57 Where a mercantile agent pledges goods as security for a debt or liability due from the pledger to the pledgee before the time of the pledge, the pledgee shall acquire no further right to the goods than could have been enforced by the pledger at the time of the pledge.

Exchange of goods or documents

58 The consideration necessary for the validity of a sale, pledge, or other disposition, of goods, in pursuance of this Part of this Act, may be either a payment in cash, or the delivery or transfer of other goods, or of a document of title to goods, or of a negotiable security, or any other valuable consideration; but where goods are pledged by a mercantile agent in consideration of the delivery or transfer of other goods, or of a document of title to goods, or of a negotiable security, the pledgee shall acquire no right or interest in the goods so pledged in excess of the value of the goods, documents, or security when so delivered or transferred in exchange.

Agreements through authorized persons

59 For the purposes of this Part of this Act an agreement made with a mercantile agent through a clerk or other person authorized in the or dinary course of business to make contracts of sale or pledge on his be half shall be deemed to be an agreement with the agent.

Consignors and consignees

60 (1) Where the owner of goods has given possession of the goods to another person for the purpose of consignment or sale, or has shipped the goods in his name to another person, and the consignee of the goods has not had notice that such person is not the owner of the goods, the consignee shall, in respect of advances made to or for the use of such person, have the same lien on the goods as if such person were the owner of the goods, and may transfer any such lien to another person.

(2) Nothing in this section shall limit or affect the validity of any sale, pledge, or disposition by a mercantile agent.

Saving for rights of true owner

61 (1) Nothing in this Part of this Act shall authorize an agent to exceed or depart from his authority as between himself and his principal, or exempt him from any liability, civil or criminal, for so doing.

(2) Nothing in this Part of this Act shall prevent the owner of goods from recovering the goods from an agent or his trustee in bankruptcy at any time before the sale or pledge thereof, or shall prevent the owner of goods pledged by an agent from having the same right to redeem the goods at any time before the sale thereof on satisfying the claim for which the goods were pledged, and paying to the agent, if by him required, any money in respect of which the agent would by law be entitled to retain the goods or the documents of title thereto, or any of them, by way of lien as against the owner, or from recovering from any person with whom the goods have been pledged any balance of money remaining in his hands as the produce of the sale of the goods after de ducting the amount of his lien.

(3) Nothing in this Part of this Act shall prevent the owner of goods sold by an agent from recovering from the buyer the price agreed to be paid for the same, or any part of that price, subject to any right of set-off on the part of the buyer against the agent.

Saving for common law powers of agent

62 The provisions of this Part of this Act shall be construed in am plification and not in derogation of the powers exercisable by an agent independently of this Part.

PART VIII
SUPPLEMENTARY

Mode of transferring documents

63 For the purposes of this Act, the transfer of a document may be by endorsement, or, where the document is by custom or by its express terms transferable by delivery, or makes the goods deliverable to the bearer, then by delivery.

Exclusion of implied terms and conditions

64 (1) Where any right, duty or liability would arise under a con tract of sale by implication of law it may be negatived or varied by ex press agreement or by the course of dealing between the parties, or by usage, if the usage be such as to bind both parties to the contract; but the foregoing provision shall have effect subject to the following provi sions of this section.

(2) An express condition or warranty does not negative a con dition or warranty implied by this Act unless inconsistent therewith.

(3) In the case of a contract of sale of goods, any term of that or any other contract exempting from all or any of the provisions of section 12 of this Act shall be void.

(4) In the case of a contract of sale of goods, any term of that or any other contract exempting from all or any of the provisions of section 13, 14 or 15 shall be void in the case of a consumer sale and shall, in any other case, not be enforceable to the extent that it is shown that it would not be fair or reasonable to allow reliance on the term.

(5) In determining for the purposes of subsection (4) whether or not reliance on any such term would be fair or reasonable regard shall be had to all the circumstances of the case and in particular to the following matters �

(a) the strength of the bargaining positions of the seller and buyer relative to each other, taking into account, among other things, the availability of suitable alternative prod ucts and sources of supply;

(b) whether the buyer received an inducement to agree to the term or in accepting it had an opportunity of buying the goods or suitable alternatives without it from any source of supply;

(c) whether the buyer knew or ought reasonably to have known of the existence and extent of the term (having regard, among other things, to any custom of the trade and any previous course of dealing between the parties);

(d) where the term exempts from all or any of the provisions of section 13, 14 or 15 if some condition is not complied with, whether it was reasonable at the time of the con tract to expect that compliance with that condition would be practicable;

(e) whether the goods were manufactured, processed or adapted to the special order of the buyer.

(6) Subsection (5) shall not prevent the court from holding, in accordance with any rule of law, that a term which purports to exclude or restrict any of the provisions of section 13, 14 or 15 is not a term of the contract.

(7) In this section "consumer sale" means a sale of goods
(other than a sale by auction or by competitive tender) by a seller in the course of a business where the goods �

(a) are of a type ordinarily bought for private use or con sumption; and

(b) are sold to a person who does not buy or hold himself out as buying them in the course of a business.

(8) The onus of proving that a sale falls to be treated for the purposes of this section as not being a consumer sale shall lie on the party so contending.

(9) Any reference in this section to a term exempting from all or any of the provisions of any section of this Act is a reference to a term which purports to exclude or restrict, or has the effect of excluding or re stricting, the operation of all or any of the provisions of that section, or the exercise of a right conferred by any provision of that section, or any liability of the seller for breach of a condition or warranty implied by any provision of that section.

(10) It is hereby declared that any reference in this section to a term of a contract includes a reference to a term which although not contained in a contract is incorporated in the contract by another term of the contract.

(11) This section is subject to subsection (6) of section 70.

Reasonable time a question of fact

65 Where, by this Act, any reference is made to a reasonable time the question what is a reasonable time is a question of fact.

Rights, etc., enforceable by action

66 Where any right, duty or liability is declared by this Act, it may, unless otherwise by this Act provided, be enforced by action.

Auction sales

67 In the case of a sale by auction �

(a) where goods are put up for sale by auction in lots, each lot is prima facie deemed to be the subject of a separate contract of sale;

(b) a sale by auction is complete when the auctioneer an nounces its completion by the fall of the hammer, or in other customary manner. Until such announcement is made any bidder may retract his bid;

(c) where a sale by auction is not notified to be subject to a right to bid on behalf of the seller, it shall not be lawful for the seller to bid himself or to employ any person to bid at such sale, or for the auctioneer knowingly to take any bid from the seller or any such person. Any sale contravening this rule may be treated as fraudulent by the buyer;

(d) a sale by auction may be notified to be subject to a re served price, and a right to bid may also be reserved ex pressly by or on behalf of the seller;

(e) where a right to bid is expressly reserved, but not other wise, the seller, or any one person on his behalf, may bid at the auction.

Payment into court when breach of warranty alleged

68 Where a buyer has elected to accept goods which he might have rejected and to treat a breach of contract as only giving rise to a claim for damages, he may, in an action by the seller for the price, be required in the discretion of the court to pay into court the price of the goods, or part thereof, or to give other reasonable security for the payment thereof.

Conflict of law

69 Where the proper law of a contract for the sale of goods would, apart from a term that it should be the law of some other country or a term to the like effect, be the law of Bermuda, or where any such con tract contains a term which purports to substitute, or has the effect of substituting, provisions of the law of some other country for all or any of the provisions of sections 12 to 15 and 64, those sections shall, notwith standing that term but subject to subsection (6) of section 70, apply to the contract.

Savings

70 (1) Subject to section 16 nothing in this Act shall affect or derogate from the Purchase of Goods by Instalments Acts 1943 to 1952 [title 17 item 30].

(2) The rules in bankruptcy relating to contracts of sale shall continue to apply thereto, notwithstanding anything in this Act con tained.

(3) The rules of the common law, including the law merchant,
save in so far as they are inconsistent with the express provisions of this Act, and in particular the rules relating to the law of principal and agent and the effect of fraud, misrepresentation, duress or coercion, mistake or other invalidating cause, shall continue to apply to contracts for the sale of goods.

(4) Nothing in this Act or in any repeal effected thereby shall affect any statutory provision relating to the sale of goods which is not expressly repealed by this Act.

(5) The provisions of this Act relating to contracts of sale do not apply to any transaction in the form of a contract of sale which is in tended to operate by way of mortgage, pledge, charge, or other security.

(6) Nothing in section 64 or 69 shall prevent the parties to a contract for the international sale of goods from negating or varying any right, duty or liability which would otherwise arise by implication of law under sections 12 to 15.

Repeal

71 [omitted]

Commencement

72 [omitted]

[this Act was brought into operation on 1 August 1978]

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Bermuda Consolidated Legislation

Sale of Goods Act 1978