Origin of the Ugandan Law of Sale of Goods

-Sale of Goods Act of Uganda has its roots in English Law and was fashioned upon the English
Sale of Goods Act of 1893.
-1902 Order in Council introduced the Sale of Goods Act in Uganda to solve the problems in
trade relations in Uganda.
-Trade in the 19th Century was governed within different kingdoms each with their own rules
and later participated in international trade because of foreigners who visited.
-The absence of standard measures as to do with law led to a lot of warfare between such
tribes. -Therefore the first Sale of Goods Act remained on Uganda’s Books and was used for a
long time until 2015 when efforts were made by the parliament to amend it.
-In 2017, the bill tabled by the parliament was assented and passed as law and this was aimed
to eradicate the structural issues in the predecessor act and commenced on 8th January 2018.

Weaknesses in the Sale of Goods Act and how SOGSOS has addressed them.
1) The act was not comprehensive enough, Under S.55 of the Sale of Goods Act, the act
subjected its applicability to the terms agreed by the party to the contract or the course of
their dealings, however in the SOGSOS, under S.67 where it’s held that any right or duty which
would arise because of contract of sale, shall not be negatived or varied by express
agreement or course of dealing between the parties or by usage.
2) A lot of conjecture in the old act S.4 of the Sale of Goods Act a contract was allowed
to be in writing with or without a seal or by word of mouth or partly in writing or partly by word
of mouth or it could be implied by the conduct of the parties. However, S.5 of the new act
amends the definition of the contract by removing either with or without a seal and
introducing in the form of a data message which recognizes advancement in technology. (As
much as it’s still not so clear it enshrines the ever changing aspects of society by including
technology.
3) The old act had incorporated trade usage and common law as part of the law of sale
of goods under S.58, the problem is the parameters of the law were uncertain, this has been
deleted in the new law. But the new law goes further under S.73 to make it clear that the sale
of goods and supply of services act do not apply to transactions intended to operate as a
way of mortgage, pledge, charge or other security.
4) The fourth aspect relates to freedom of contract, Sale of Goods Act doesn’t dictate the
terms of the contract for sale of goods, parties are free to contract as they truly wish. S.54 of
the act parties are free to contract as they so desire and the act only regulates issues not
governed by the party’s freedom to contract.
-Further More, S.15 provides for implied terms in a contract but 15(d) states that they can be
excluded.
-Subsequently, the SOGSOS Act satisfies the aspect of codification by restricting the parties’
freedom of contract which was previously used to contract out of the act. This is because it
provides for the construction of the contracts, implied terms and also aspects to do with price
and delivery.

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CONSTRUCTION OF THE ACT.
1) Proper Method for Interpreting laid down by Lord Herschell in Bank of England v
Vagliano Brothers, the proper course is to examine the language of the statute and its natural
meaning un influenced by any considerations from the previous state of the law and see if
the words of the enactment will bear an interpretation in conformity with the current view.
2) However subsequent decisions haven’t strictly obliged to these decisions. In Re Watt,
Lord Atkin held that emphasis should be put on the plain language and don’t dwell on former
cases. 3)And further more in Ashington Piggeries v Christopher hill, Lord Diplock emphasized
the intention of the parties in the construction of the Act, he stated that the provisions in the
sections and sub sections shouldn’t be read so narrowly as to strike out what might have been
intended by the parties(Preaches freedoms of contract)

DEFINITION OF IMPORTANT TERMS

-Enshrined in S.1 of the Act,
1) GOODS; include all things and personal chattels, including specially manufactured goods,
which are movable at the time of identification to the contract of sale other than the money
representing the price, investment securities and things in action; -emblements, growing crops,
unborn young of animals and things attached to or forming part of the land which are agreed
to be severed before sale or under the contract ofsale; (c) Computer software; and Act
(d) Undivided share in goods held in common
2) SERVICES means any service or facility provided for gain or reward or otherwise than free of
charge, including services
Or facilities for-
(a) Banking, insurance, grants, loans, credit or financing;
(b) Amusement, cultural activities, entertainment, instruction, recreation or refreshment;
(c) Accommodation, transport, travel, parking or storage;
(d) The care of persons, animals or things;
(e) Membership in a club or organization or any service or facility provided by the club or
organization, and
(f) any rights, benefits, privileges, obligations or facilities that are or are to be provided,
granted or conferred in the course of services; but does not include services provided
under a contract of employment;
3) COMPUTER SOFTWARE;
(a)computer programs that comprise a series of instructions, rules, routines, or statements,
regardless of the media in which recorded, that allow or cause a computer to perform a
specific operation or series of operations; and
(b) recorded information comprising source code listings, design details, algorithms, processes,
flow charts, formulas, and related material that would enable the computer program to be
produced, created, or compiled;
MONEY AS a GOOD-Courts of law in Moss v Hancock regarded money as a good, there was
a 50 pound gold piece, coin of the realm that had been stolen and sold by the thief, and the
question was whether the defendant had received the coin as money or as a valuable item
making it a good? It was held that the coin was the subject of the sale, the same way a medal
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or ancient coin might be and was of more than its nominal value and it could be recovered
by the owner.

EMBLEMENTS, INDUSTRIAL CROPS, THINGS ATTACHED TO LAND.

-Emblements, Cover crops and vegetables produced by the Labor of man and bringing
profit to him can be considered as goods as opposed to things which grow on their own.
Rodwell v. Phillips: Where a contract is made for the tenancy or possession of land, together
with the growing crops left upon the land and the benefit of work, labor and materials
previously expended in tilling the land, though the crops and tillages may be agreed to be
paid for at a separate valuation, they are considered as forming part of the land, and the
contract Must be in writing:
-Things attached to the land. The general rule is that things forming part of the land can be
goods however where something becomes so attached to the land as to be deemed
immovable and essentially part of the land it will not be deemed a good. In Morgan v Russell,
plaintiff and defendants entered into an agreement to sell certain piece of slag to the plaintiff
and the right to enter and take as much slag as he wanted, the slag had been there a while
and become part of the soil and the plaintiff was stopped from taking more slag and some
point, and the issue was whether the slag could be defined as a good under the act so as for
the plaintiff to recover damages, it was determined that the slag was not a good as enshrined
in the act as it caters for things forming part of the land and not things that are part of the land
which the slag has become.
CLASSIFICATION OF GOODS
1) Future Goods: S.6 (1) Goods that are going to be manufactured after the making of a
contract of sale
-They are sometimes called unascertained goods (Goods not identified and agreed upon at
the contract of sale)
-Examples of future goods: Crops to be grown or something to be manufactured.
2) Specially Manufactured Goods: Goods which are manufactured according to a
contract or other agreement eg going to a tailor to measure and make a suit.
3) Specific Goods: S.1; they are sometimes called existing goods as defined under S.6 (1)
(Goods which are owned or possessed by the seller)
-The other term for specific goods is ascertained goods.(S.1, Goods which have become
identified subject to the finishing of the contract) Lord Atkin means goods which originally
unascertained become identified in accordance with the parties agreement after a contract
of sale is made.
4) Perishable Goods (Part of Specific Goods)
Under sec 7 S.O.G A, where there is a contract for the sale of specific goods and the goods
perish without the knowledge of the seller, the contract is void. Section 8 of the Act states that
where there is an agreement to sell specific goods and subsequently 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.
DIFFERENCE BETWEEN SALE OF GOODS AND OTHER CONTRACTS.

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1) Sale of Goods and Agreement to Sell
A) Transfer of Property (Ownership): -As confirmed by S.2 (4) which states that where the
property in goods has transferred from the seller to the buyer
-Under S.2(5) where transfer of property is to be done at a future time or upon fulfillment of
certain conditions then the contract is called an agreement to sale.
-Under S.2 (6) an agreement to sale can become a sale when the time elapses or if the
conditions are fulfilled for transferring property.
-In the case of Wamala Growers Cooperative Union v Attorney General, the plaintiff applied
and paid for 31 heifers but only 10 were delivered, the defendant argued that since the
goods were not in existence because they had to be imported by the time the contract was
made it was only an agreement to sell as stated by the act that purported sale of future
goods only amounts to an agreement, however since in such an instance money was paid
and the heifers selected out of 500 an express contract was created. B) Risk of Loss
-General rule is the risk passes with the property unless agreed otherwise. In the case of a sale
of goods, the buyer bears the risk even if the goods are still with the seller because the property
in the goods has already passed.
-However for an agreement to sell, even if the goods get destroyed in possession of the buyer,
the seller bears the risk because it is deemed that the property in the goods has not yet passed.
C) Consequences of Breach of Sale
-For a sale, if the buyer wrongfully neglects to pay the price for the goods, the seller can sue
for the price of the goods.
-However for an agreement to sell, the seller can only sue for damages because the property
in the goods hasn’t passed to the buyer and therefore can’t sue for the price.
D) Right of resale
-In a sale, since the property in the goods has passed to the buyer the seller no longer has the
right to resale.
-However for an agreement to sell, since the property hasn’t passed to the buyer the seller has
a right to resale (Buyer can only sue for breach of contract)
E) Insolvency of the Buyer or Seller
-Insolvency of the seller, for a sale, seller is still obligated to deliver the goods because property
in the goods rests with the buyer, for agreement seller may refuse to deliver the goods.
-Insolvency of the buyer, for a sale, seller is still obligated to deliver the goods to the buyer and
might therein sue for the price while for agreement seller might decline to deliver the goods
to the assignee.
2) PRICE/BARTER TRANSACTION
-Price is the money consideration for the sale of goods. There cannot be a valid sale without
price. -The mode of payment doesn’t matter but if goods are exchanged for other goods it is
barter of exchange and not a sale of goods.
-If the parties exchange the goods for partly other goods and money this constitutes a
contract for the sale of goods. In the case of Aldridge v Johnson, involved a contract for the
sale of 52 bullocks with 100 quarters of barley and the balance to be paid in cash it was held
that it was a contract for sale of goods.
2) Contract of Sale v Higher Purchase.
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-However under higher purchase, the property in the goods doesn’t pass to the buyer until all
the installments have been paid.
-The hirer is given possession of the goods for a specified period of time and property in the
goods is only passed when the hirer exercises their option to purchase the product and the
end of the period. -Paying the entire amount due in the installments doesn’t necessarily pass
the property in the goods to the buyer unless all the terms of the higher purchase agreement
are complied with.
-In Helby v Matthews, it was a hire purchase for a piano and the piano would only become
the hirer’s property after 36 monthly installments. The issue arose as to whether there was a
contract of sale and it was held that the hirer had not agreed to buy the piano but had an
option to buy it through the monthly installments therefore the piano owner was entitled to
recover the piano from the hirer. -Purpose of such under higher purchase is to give the seller
some security since goods are delivered before price is paid. In Matayo Musoke v Alibhai
George Limited, it was a higher purchase for a car and possession was given and the car log
book. S then defaulted in payment of the installments and sold it to the plaintiff and the
defendant seized the car in respect to the hire purchase agreement with S and plaintiff sued
for the return of the car. It was held that S hadn’t exercised his option to buy and therefore
there was no contract of sale and defendant had rightfully seized the property.
Differences between the two.
-In a sale property in the goods passes immediately, higher purchase passes on payment of
the last installment.
-In a sale, buyer owns the position of the owner while higher purchase, buyer is just a bailed
until last installment paid.
-In a sale, buyer cannot terminate the contract and has to pay the price of the goods while
in a higher purchase buyer can terminate and return the goods to the owner.
-In a sale, seller takes the risk of any loss attributing to insolvency of the buyer while for higher
purchase, the seller simply recovers the goods.
-In the case of a sale the buyer can pass a good title to a bonafide purchase while under
higher purchase there is no sell allowed even to a bonafide purchaser.
4) Contract of Sale and Bailment.
-A bailment is a transaction under which goods are delivered by one party (bailer) to another
party (Bailee) for a limited purpose on terms that identical goods will be returned.
-Bailment only requires the Bailee to hold the goods and ultimately Re deliver them to the
bailer or in accordance to the bailer’s directions. It is important to note the property in the
goods does not pass on delivery.
-Therefore the goods essentially remain the property of the bailer even if they have been
supplied to someone else because they are to be returned.
-In the case of Chapman Bros Vs Verco Bros, Farmers delivered bags of wheat to a company
of millers and wheat merchants the wheat was delivered and company was to pay for the
wheat at the request of the farmer and could file a request to return the exact amount of
wheat supplied but not necessarily the exact bags delivered. The issue was whether it was a
bailment or sale of goods, it was held that it was a sale of goods because the company was
not obligated to return the exact same bags and therefore property in the goods passed.
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5) Contract of Sale v A Gift.
-The distinction between the two is a contract of sale involves money consideration however
a gift doesn’t have monetary consideration instead a gift is made in consideration of natural
love and affection.
6) Contract of Sale v Supply of Services.
-S.3 (1) a contract for the supply of services means an agreement between a supplier and a
customer for the provision of a specified service. And this is the regardless of the nature of the
consideration of the service to be carried out.
-It is important to note that the contract for the supply of services doesn’t include the contract
of service or apprenticeship.
-The act also defines services under S.1.
-A contract of supply of services includes a contract for the supply of skills and Labour.
-To determine what type of contract it would be we look at the subject matter, it is for the
production of something for the purpose of selling it then it is a sale of goods. On the other
hand if the substance of the contract is skill/Labour and the production of the article is only
ancillary to that, even if some material passes, the subject is the skill and experience.
-Lee v Griffin, it was a set to make artificial teeth to fit the mouth of the customer. It was held
to be a contract for a sale of goods (artificial teeth) and not that of supply of services.
Crompton J said that, not every contract which involves some skill does amount to one of sell
of goods.
-Love v Norman, it was held that a contract for making and fixing curtains is one of a sale of
goods despite its involvement of some work and labor.
-Perlmutter v Beth David Hospital, plaintiff obtained a blood transfusion but the blood was
contaminated with jaundice which was undetectable, since the defendant had privately
paid for the blood he claimed it was a contract of sale however it was held to be one of supply
of services. -Robinson v Graves, it was held that commissioning someone to paint a portrait
was a contract for supply of services.
-In Sultan v Jb Morgan, plaintiff took his car for repair to the defendant’s garage and was
charged extra for various parts that will be needed in fixing the car, it was held that this was a
contract for supply of services and it was held for any defect in the supplies used it was
repairers liability due to poor workmanship.

FORMATION OF THE CONTRACT.

-As earlier indicated all factors that affect the validity of the contract and the law of contract
apply to a contract of sale of goods.
-S.4 of the SOGSOS confirms this by providing for the capacity of someone to contract as 1) a
person should be above 18, of sound mind and not disqualified by any law, 2) a person of 16
years also has the capacity to contact.3) When necessaries are delivered to a person without
capacity one has to pay a reasonable price for them 4) Necessaries are goods or services
suitable to the condition in life of a person.
-The reality is that during negotiations leading to execution of contracts each of the parties is
trying to take advantage of the other with the seller avoiding assurances so as to prevent
claims in the future and the buyer trying to get assurances from the seller that the goods which
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compromise the subject matter of the contract are in good condition, didn’t have any
encumbrances and that the seller has a good title to these goods among others.

Terms of the Contract.

-There may be two terms of a contract that is implied and express terms of a contract.
-Express terms of a contract are the provisions that are included in the contract of sale of
goods or supply of services.
-It’s important for us to know statements which form part of a contract and those which do
not. -This is because if a statement is a contractual term, breach of such a statement entitles
the innocent party to a remedy depending on whether or not it’s a condition or a warrant.
-On the other hand, there are certain statements made during negotiations for purposes of
inducing a party to enter into a contract. Such statements may not necessarily compromise
part of a contract.
Examples of such terms include mere puff, conditional terms and representations.
-In order to determine whether those terms were intended to compromise part of contract,
one must look at party’s intention and the question should be whether the parties intended to
act upon such statements. Lord Moulton in Heibutt v Buckleton stated that all the
circumstances of a case must be taken into account in order to find out the intention. And in
Oscar Chess v Williams, Lord Denning stated that the intention can be derived by looking at
the party’s conduct, words, behavior and not so much their thoughts. 1) Mere Puff
-It’s something said without intention that it will be acted upon or that it may give rise to any
legal effect or whatsoever.
-In Smith v Land and House Property Corporation, there was a statement that the tenant was
most desirable, on sending an agent he said that the tenant could hardly pay rent and should
pay not more than 5000 pounds, they agreed on 4700, the tenant went into liquidation and
defendant refused to continue, it was held that the statement wasn’t a mere puff and it was
an actual misrepresentation because the statement was not one of mere opinion but made
with actual knowledge of the tenant.
2) Conditional Precedent.
-Statements made during negotiations or prior thereof and which form the basis of the entire
contract. -Bannerman v White: The claimant, Bannerman contracted to purchase hops to use
to produce beer from the defendant. The claimant inquired if hops were treated with sulphur
and defendant expressly stated that they weren’t. The hops were indeed treated with sulphur
and henceforth unsuitable for beer production. It was held that the claimant stating that the
hops not being treated with sulphur was a contractual term and not a mere representation as
it was a condition of precedent, defendant was held liable.
3) REPRESENTATION.
-It’s a statement made by the parties during the time of making the contract but it doesn’t
form part of the contract.
-The maker has no intention of making it part of the contract.
-In Routledge v Mackay, the defendant stated that the motorcycle to be sold was a 1942
model but in the contract nothing was started of the sort, it was not a 1942 model and the
plaintiff sought redress where the court stated that the difference of a week within which it
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took the plaintiff to discover it wasn’t a 1942 model came into show that it wasn’t a contractual
term and just a mere representation.
-Harling v Eddy, The vendors of a heifer represented that there was nothing wrong with the
animal but in fact, but it had tuberculosis from which it died within three months of the sale. A
contributory factor leading to decide that the statement was indeed a term of the contract
was that the vendor’s were in a special position to know the heifer’s condition.
-Unless the misrepresentation is fraudulent, it gives no rise to damages or repudiation of the
contract.
CONTRACTUAL TERMS
-Contractual Terms are obligations created by a contract of sale of goods or services.
-These obligations may either be fundamental (Major) or ancillary (minor)
-The Major/ fundamentals are called conditions and the minor/ancillaries are called
warranties.
CONDITIONS
-A condition constitutes the major term of a contract and is the backbone of such a contract.
-Therefore in breach can lead to repudiation of a contract.
-A condition goes to the root of a contract if it involves purchase of goods, breach of condition
entitles the buyer to reject the goods and such buyer may also claim damages.
WARRANTIES
-A warranty is a minor term and its breach doesn’t entitle one to repudiate a contract. (But it
can provide a right to sue for damages in some instances)
-Passard v Spiers, The claimant (Passard) was an opera singer who was contracted to perform
for a duration of 3 months. The claimant fell sick just before the start of the opera and couldn’t
sing for the first 3 days. The defendant hired another singer as potential cover and the
substitute demanded to be hired for the whole show. The claimant recovered and demanded
to be back on show and paid. It was held that the failure to turn up did amount to breach of
a condition of the contract, as this went to its very root that Spiers was therefore free to rescind
the contract.
-Esso Petroleum v Phillip Mardon, the plaintiff while selling a petrol station to the defendant told
him that he would do about 200000 gallons a year, however he knew of the local council
decision that would block the petrol station from the main road and hence fewer customers,
it was held that this statement amounting to a warranty because it was made by an informed
individual with special knowledge and skill in forecasting and hence wasn’t a mere opinion.

INTERMEDIATE STIPULATION.
-It arises where a party can successfully argue that a certain term of the contract made the
contract lose commercial sense and using this argument, the court may be moved to vitiate
the contract. -In such cases, the term in issue doesn’t qualify to be a condition or warranty
but rather its breach makes the contract lose commercial sense.
-In Cehave v Bremmer, the defendant agreed to sell pellets of animal feeds to the plaintiff on
condition they were in good condition, some arrived bad but still in usable condition and the
plaintiff wanted to reject the goods and terminate contract. The court of appeal held that the
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good condition was not at the heart of the agreement but an intermediate term. It couldn’t
lead to a termination of the contract but merely a compensation of the difference in quality
ordered and quality delivered. Lord Denning held that for the cargo to be rejected the
condition would have to be a substantial one. Criteria followed to determine whether it is a
condition or warranty 1) Statute
-We look at S.12 of the SOGSOS,
12. When condition to be treated as warranty.
(l) Where a contract of sale or supply of a service is subject to any condition to be fulfilled by
the seller or supplier, the buyer may waive the condition, or may elect to treat the breach of
that 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 or supply of services is a condition, the breach of
which may give rise to a right to treat the contract as repudiated, or as a warranty, the breach
of which may give rise to a claim for damages but not to a right to reject the goods or services
and treat the contract as repudiated, depends in each case on the construction of the
contract.
(3) A stipulation may be a condition, whether or not it is called a warranty in the contract.
(4)Where a contract of sale or supply of services is-
(a) Not severable and the buyer has accepted the goods or part of the goods or services; or
(b) For specific goods, the property in which has passed to the buyer,
the breach of any condition to be fulfilled by the seller or supplier shall only be treated as a
breach of warranty and not as a ground for rejecting the goods or services and treating the
contract as repudiated, unless there is a term of the contract, express or implied, to the effect
that the goods or services may be rejected and the contract treated as repudiated.
(5) This section shall not affect any condition or warranty, the fulfilment of which is excused by
law by reason of impossibility or otherwise.
2) CASE LAW
-Where statutes cannot provide guidance the courts look at the intention of the
parties. Effect of Breach.
-S.12 (2) of SOGSOS Act.
-Condition breach- Repudiate Contract.
-Warranty Breach-Claim Damages.
In Hong Kong Fir Shipping v Kawasaki Kissen Keisha, a ship was chartered to the defendants
for a 2 year period with a stipulation in the agreement that the ship would be seaworthy
throughout the period of hire. Problems developed with the engine of the ship and the engine
crew were insufficient and incompetent. Consequently the ship was out of service for a 5 week
period and then a further 15 week period. The defendants treated this a breach of condition
and repudiated the contract. The claimants brought an action for wrongful repudiation
arguing that the term related to seaworthiness was not a condition of the contract. The court
introduced the innominate term approach. HELD; Rather than seeking to classify the term as
a condition or warranty, the court should look to the effect of the breach and ask if the breach
has substantially deprived the innocent party of the whole benefit of the contract. Only where
this is answered affirmatively is it to be a breach of a condition. That, 20 weeks out of a 2 year
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period did not substantially deprive the defendants of whole benefit and therefore they were
not entitled to repudiate the contract.
-It’s clear that where condition is rescinded by condition of a term, such term is a condition
but where party is entitled to damages, it’s a warranty.
-Law also under S.12(1) of the SOGSOS Act, law permits a waiver such that where a
seller/supplier is subject to a certain condition, the buyer or consumer may waive the condition
or treat the breach of that condition as a breach of warranty and where this happens such a
buyer cannot repudiate.
-Harling v Eddy: Tuberculosis, heifer died upon sale, court held seller liable as it was
misrepresentation and a superior position.
-S.12 (3) of the SOGSOS Act, states that a stipulation maybe a condition even if it’s a called a
warranty in the contract. (Usually done by lawyers)
-Read S.12 (4)

Circumstances under which a buyer is deemed to have accepted the goods.

-S.42, where goods are delivered to the buyer, which he or she has not previously examined,
the buyer shall not be taken to have accepted them until he or she has had a reasonable
opportunity of examining them. 2) A seller has to offer the buyer a reasonable opportunity of
examining the goods. -S.43 a buyer is taken to have accepted the goods, when the buyer
intimates to the seller that he has accepted, when the goods have been delivered to the
buyer and the buyer does any act in relation to the goods which is inconsistent with the
ownership of the seller, when after the lapse of a reasonable time, the buyer retains the goods
without intimating to the seller that he or she has rejected them. -S.43 (2) reasonable time
relates to reasonable time in examining the goods, S.43(3) buyer shall not be deemed to have
accepted the goods merely because he asks or accepts some repair under an arrangement
or delivered to another person under sub sale or other disposition. S.43(4) where the contract
is for the sale of goods making one or more commercial Units of sale, a buyer accepting one
unit is taken as have accepted the whole unit.
-S.43 (5), commercial unit" means a unit, division of which would materially impair the value of
the goods or the character of the unit.
-Hardy and Co. V Hillerns and Fowler, by an agreement, wheat was shipped to certain buyers
who received them and dispatched part of the goods to the sub-buyers. When the buyers
later discovered that they did not conform with the terms of the contract; it was HELD; that,
the act of dispatching the goods to sub-buyers was inconsistent with the ownership of the
sellers and though the goods had not been examined by the buyer, he was deemed to have
lost his right of rejection because parting with possession means acceptance.
-S.44, unless otherwise agreed, where goods are delivered to the buyer, and the buyer refuses
to accept them, having the right to do so, the buyer is not bound to return them to the seller,
and it is sufficient if the buyer intimates to the seller that he or she refuses to accept them.
-Colour Print Ltd v Pre-Press Productions, the plaintiff attempted to recover the price of the
goods supplied to the defendant which the defendant claimed to be of substandard quality
and as a result the goods were rejected. It was held that the buyer had to intimate rejection
to the seller or else it would be deemed he had accepted the goods, and 2 months were
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enough to intimate that rejection it was stated thought that non-delivery of the goods back
to the seller doesn’t mean anything as long as buyer has intimated rejection.

FORMALITIES OF A CONTRACT OF SALE OF GOODS.

-We are interested in knowing; the form of the contract, Laws governing of the contract,
Subject Matter of the Contract, Payment of the Price 1) FORM OF THE CONTRACT.
-S.5(1) of the act, states that a contract of sale of goods or supply of services may be made in
writing or by word of mouth or partly in writing and partly by word of mouth or in the form of a
data message or it may be implied from the conduct of the parties.
-From this provision we realize that the objective of the SOGSOS Act is to protect commercial
transactions.
-Hillas v Arcos, in this case arcos agreed to supply Hillas with timber in a contract stating the
sale of 22,000 standards of softwood of fair specification. In the contract there was an option
to purchase additional 100,000 standards of timber the following year with a 5% reduction on
price. Arcos later refused to sell the 100,000 standards the following year. The issue was whether
you can make a contract to enter into another contract? HELD; there was a binding contract
to sell the 100,000 standards. Lord Wright concluded that, Courts must interpret contracts fairly
and broadly following the maxim that “words are to be so understood that the subject matter
maybe preserved rather than destroyed.” Both parties had experience in trade and had
completed similar bargains in the past thus each would have known each other’s intentions
at the time. Therefore the option to contract was valid. (Just because the specific
consideration was stated doesn’t make the contract invalid)
2) LAWS GOVERNING THE CONTRACT.
-Section 5(2), this section shall not affect a contract entered into under any other law requiring
a contract to be made in other manner.
3) Subject Matters of the Contract.
-As indicated earlier, if a contract is to be deemed one of sale of goods, the subject matter
must be either existing goods or future goods(Look at S.6 of the act)
-For services, the contract must to relate to provision of services as defined under the act. (Look
at
S.1)
-Nb: Generic goods are goods which are sold by description. (Although they are not expressly
stated in the act, eg if you’re buying rice and a particular type then that rice becomes
generic)
-And in such contracts, the seller undertakes to procure for the buyer the agreed quantity of
such goods, with such further characteristics of quality.

PERISHING OF GOODS. (This is still under subject matter of the goods)* -It
relates to goods that have been either stolen or partially destroyed.
-S.7 Goods which have perished.
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 entered into, the contract is void.
-S.8 Goods perishing after agreement to sell.
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Where there is an agreement to sell specific goods, and subsequently the goods, without any
fault on the part of the seller or buyer, perish before the risk passes to the buyer, the agreement
is void. -Turnbull v Rendell, The seller agreed to sell 75 tons of `table potatoes` from a specific
crop, some of which were still in the ground. At the time of the contract , the potatoes were
so badly affected with secondary growth that they no longer answered the description `table
potatoes`. A claim was brought that the goods didn’t match the description was brought
against the seller. Held – The buyers claim for damages was rejected, the potatoes had
`perished` within the meaning of s.7 and S.8 of the Act and the contract was void One result
is that goods have perished when they have ceased to be what was contracted for even,
though still useable.
-In the case of Barrow Lane and Ballard Ltd v Philip Phillips, the plaintiffs sold 700 bags of gnuts
to the defendants, the goods were believed to be stored in the warehouse, 109 bags had
been either stolen or irregularly delivered, and the plaintiffs were delivered 591 and the
contention was whether the contract of 700 bags was void despite the delivery of 591 bags?
The court held that the contract was for the 700 parcels and therefore held that it was void.
-But in order to appreciate this further, Couturier v. Hastie which tries to give different
interpretations;
1) There can be an implied condition precedent that the goods were existent, in which
case if the goods were not in existence then neither party would be bound.
2) The seller may have contracted or warranted that the goods were in existence in which
case such a seller would be liable for non-delivery but the buyer would not be liable for non-
acceptance. 3) The buyer might have taken the risk of the goods having perished in which
case he would be liable for the price even in the absence of delivery but the seller would not
be liable for non-delivery. (S.27 of the Act, Risk prima facie passes with property, however in
some cases buyer agrees to the risk on execution of the contract, regardless of delivery(if
goods have perished) buyer will still have to pay)

4) Payment of the Price (Under Formalities of the Contract)

-Under S.35, payment of the price and delivery of the goods are concurrent unless otherwise
agreed.
-That means that if the parties do not talk about these things then it’s expected to happen.
How is the price determined? The price is determined using S.9 (1), it may be fixed by the
contract or it may be determined in a manner in which the parties have agreed, course of
dealings between the parties.
-However, in situations where the price cannot be determined as provided under S.9(1) it can
be determined under S.9(2) which states a reasonable price to be paid, which is defined under
S.9(3) as a question of fact dependent on the circumstances of each case and it may include
a consideration of the prevailing market price.
-In other cases, the price can be determined under S.10 (1) whereof allows the parties to
permit a third party to value the goods and give a price.
-Valuation by third parties has rules that must be followed; if the third party is not in possession
to make the valuation, or simply doesn’t make the valuation the agreement is voidable.

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-But if at that point the buyer has already received and appropriated the goods, the buyer is
expected to pay a reasonable price for the appropriated goods.(S.10(1))
-But the same situation applies to services as provided under S.10 (2).
-It is important to note that if the inability of the third party to make the valuation is caused by
the fault of one of the parties to the contract, then the party who is at fault is liable to pay
damages to the innocent party.(S.10(3))
-In Campbell V Edwards, Lord Denning MR said that it is simply the law of contract that if two
persons agree that the price of property should be fixed by a valuer, on whom they agree
and when he gives that valuation honestly, they are bound by it (the price fixed by such
valuer). If there is fraud or collusion, of course it would be different.

Time of the Payment

-S.11 (1) unless contrary intention appears from the terms of the contract stipulation as to time
of the payment shall not be deemed important.
-S.11 (3) in cases where no time is fixed for payment it is expected to happen at the time of
delivery of the goods. (S.11, Stipulation as to payment is not fixed and it’s up to the parties)
-Under S.35, payment of the price and delivery of the goods are concurrent unless otherwise
agreed.
Medium of Payment
-When we go back to the definition of sale of goods, it talks about money consideration called
the price.
-Parties still have freedom of contract. And therefore payment can be effected not only in
cash, but partly cash and goods, bill of exchange and many others(It is not only limited to
cash)
-However, payment by cheque is a conditional payment, this means that it is a condition that
the cheque will be paid on presentation.
-That means when using cheques as a form of payment we need to weigh the options and
make sure that if it is cashed without your consent, you can’t go back to the buyer for another
consideration. -There are other form of payments eg Credit and Debit Cards which can also
be used to pay, online payment options. (Apple Pay, PayPal), Gift cards and Vouchers, Bitcoin
and digital currencies. -Law doesn’t restrict you as to the form of payment you’re going to use.

IMPLIED TERMS!!
A) Implied Term as to time
-S.11 (1) unless contrary intention appears from the terms of the contract stipulation as to time
of the payment shall not be deemed important.
-S.11 (2) whether any other stipulation as to time is of the essence of the contract depends on
the terms of the contract.
-S.11 (3) in cases where no time is fixed for payment it is expected to happen at the time of
delivery of the goods. (S.11, Stipulation as to payment is not fixed and it’s up to the parties, for
services, they are intended to be supplied within a reasonable time.
-S.68 where a reasonable time is stipulated it shall be determined as a matter of fact.

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-Time is of the essence when dealing with situations such as delivery, passing of property in
goods and acceptance.
-However in Hartley v Hyman, the seller requested an extension of the time in which to deliver
which the buyer accepted and then refused the goods on delivery claiming it was outside the
time frame, it was held that seller would recover damages because the buyer had waived
the right to insist on delivery at a particular time and couldn’t go back on it. (Therefore where
a right had been waived, buyer had to give notice to the seller making time of the essence)
Consequence of Breach of the time Clause:
-If it’s a condition it would lead to repudiation, but if it’s a warranty it would lead it attracts
damages.
-In Bowes v Shand, it was contract for shipment of rice which provided for “scheduled for
around March or April,” but the shipment was done in February and it was held that the
shipment period formed part of the contract and therefore the period was a breach in the
contract.
-Even if the contract doesn’t make time the essence of the contract, the parties to the
contract can change that position through their conduct. In Charles Rickards v Oppenheim,
a chassis for a Rolls Royce was ordered and the plaintiffs even agreed to build a body in six to
seven months, after the seven months it wasn’t finished and the defendant agreed to wait
another 3 months and it still wasn’t finished and he said he’d cancel if it wasn’t finished in 4
weeks and it wasn’t and he canceled and the court of appeal held That even if he had
waived the stipulation of time, he had made reasonable notice that time would be of the
essence.
-In terms of perishable goods, S.59 (3) Where goods are of a perishable nature, or where the
unpaid seller gives notice to the buyer of his or her intention to re-sell, 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 or her breach of
contract. B) Implied Condition As to Title.
-S.13 (1) provides for the right to sell, here is an implied condition on the part of the seller that
in the case of a sale he or she has a right to sell the goods, and that in the case of an
agreement to sell he or she will have a right to sell the goods at the time when the property is
to pass.
-S.13 (2) there is also an implied term that the goods are free and will remain free until the time
the property is to pass and the buyer will enjoy quiet possession of the goods except so far as
it may be disturbed by the owner or other person entitled to the benefit of any charge or
encumbrance so disclosed or known to the buyer.
-Therefore it must be shown that not only was the seller the owner of the goods but also had a
right to transfer, therefore an infringement of another’s trademark the seller will breach the
term. In the case of Niblett v Confectioner’s Material Co., the defendant an American Co, sold
3000 tins of preserved milk to the plaintiff for transport to the UK, 1000 were retained to have
infringed a common trademark in the Uk, forcing the plaintiff to remove the mark and incur
losses and sued the defendant, it was held that this was a breach of the implied term of the
title because the seller wasn’t entitled to sell.

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-If the seller’s title turns out to be defective, the buyer is entitled to reject the goods and recover
the full price and buyer can’t treat this as a breach of warranty and accept the goods
because they have to be returned to the rightful owner, so the only option is to recover the
full price. Rowland v Divall, The defendant sold a car to the plaintiff which he used for three
months until he realized the defendant didn’t have a title to the car because it was stolen. The
plaintiff then sued to recover the money he had paid due to total failure of consideration. He
would succeed despite using it for 3 months due to implied term that there should be a title.
-Butterworths v Kingsway Motors, the defendant acquired the car by hire purchase but before
he finished the installments eventually sold it off to the plaintiff, who once realized the
defendant didn’t have title sought recovery of the price paid, and despite the defendant
finishing off the last of the installments, it was done after the request for the recovery of the
price and therefore his claim couldn’t succeed.
C) Warranty that Goods are free from encumbrances
-S.13 (2) there is also an implied term that the goods are free and will remain free until the time
the property is to pass from any charge or encumbrance not disclosed or known to the buyer
before the contract is made; and the buyer will enjoy quiet possession of the goods except so
far as it may be disturbed by the owner or other person entitled to the benefit of any charge
or encumbrance so disclosed or known to the buyer.
-The transfer of chattels act allows someone to use the goods as a security. This creates a
charge. This creates a charge. When this happens, the borrower creates a charge on the
goods in favour of the lender. The law states that if such a transaction occurs prior to the
execution of the contract of sale and the buyer is not aware of the same, there is an implied
warranty that there is no charge on the goods. (North Western Bank v. John Poynter, Son, &
MacDonalds) D) Warranty to Quiet Possession
-Insert S.13 (2) (b) in regards to quiet possession.
-Therefore this means that the quiet possession should continue even after the conclusion of
the agreement and if it is disturbed in anyway can seek redress from the seller.
-Mason v Birmingham, the plaintiff purchased a second hand typewriter from the defendant,
and unknown to her it was a stolen one and was compelled to return it to the owner after
doing repairs to it and all that, and she was entitled to recover from the seller both the price
paid and money on warranties.
-Microbeads v Vinhurst Road Markings, claimant purchased road marking machines but a
third party was granted patent rights to the machines and he couldn’t use them without a
license, this affect his quiet enjoyment of the machines and therefore a breach of warranty
was formed.(could sue for damages)
E) Implied Condition that Goods shall correspond with the description
-S.14 (1) where there is a contract for the sale of goods by description, there is an implied
condition that the goods shall correspond with the description.
-S.14 (2) where the sale is by sample, as well as by description, it is not sufficient that the bulk
of the goods correspond with the sample if the goods do not also correspond with the
description. -In the case of Bowes v Shand, Lord Blackburn, “If you contract to sell peas, you
cannot oblige a party to take beans. If the description of the article tendered is different in
any respect, it is not the article bargained for and the other party is not bound to take it”

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-Furthermore, the fact that the buyer has examined the goods on delivery will not affect his
right to reject the goods if the difference in the nature of the goods from the description is
such deviation that could not have been discovered by casual examination. In Beale v Tailor,
the defendant advertised his car as a convertible of 1961, and accepted it on inspection but
realized after it wasn’t one of 1961. The issue was whether there was an implied term as to
description, it was held that the words 1961 made part of the description, the seller was bound
to sell goods fitting the description.
The description also covers the quality and characteristics of the goods eg Trademark, Brand
name and Packaging. In the case of Lemy v Watson, Justice Darling had this to say; “If
anybody ordered for Bombay ducks and somebody supplied him with ducks from Bombay,
the contract to supply
Bombay ducks will not have been complied with”
-In Varley v Whipp, Varley agreed to sell to Whipp a second hand self-binder reaping machine
which would cut up to 50-60 acres when it arrived Whipp claimed it did not match the
description and court held on the sale of goods by description he would be liable to his claim.
-As to whether the goods correspond with their description will normally be a question of fact
and the duty is very strict on the seller because the buyer relies on his skill and knowledge.
-Arcos v. Ronaasen, the seller was required to supply staves of a certain description, the buyer
had relied on the description given by the seller which was slightly off and it was held in favor
of the buyer and the judge stated that 1/2 an inch is not about 1/2 an inch the same way 1/2
a ton is not about 1/2 a ton.
-However despite the strictness court relies on the principle of “Deminimis non curat lex” which
is literally the law pays no attention to trifles (Very small things)

F) Implied Condition that Goods are fit for a particular purpose

-The general rule as stated in section 15(1) is that 'there is no implied warranty or condition as
to the quality or fitness for any particular purpose of goods supplied under a contract of sale'.
-It invokes caveat emptor which is basically buyer beware. Madrama, J in Bakeine v Yuasa
Investments Ltd, explained the rationale of the doctrine noting that where, a buyer buys a
second hand car, and he should expect defects sooner or later. In the absence of express
warranty he has no redress. Even when he buys from a dealer the most that he can require is
that it should be reasonably fit for the purpose of being driven along the road'.
-However, the provisions of Section 15(2) of the Act lay down the exceptions to this general
rule. Section 15(2)(a) of the Act provides that an implied condition is deemed to exist on the
part of the seller that the goods supplied under a contract shall be reasonably fit for that
purpose where; “the seller sells goods of a description which it is in the course of the seller’s
business to supply”.
-This was applied in the case of Stevenson v Rogers where the fisherman defendant sold his
fishing boat to the claimant who later brought an action against him based on the breach of
Section 14 of the Sale of Goods Act, 1893 as the boat was not of satisfactory quality. The
defendant argued that his course of his business entailed catching and selling fish but not
buying and selling boats. It was held that the sale of the boat was in the course of the business
and the defendant had to ensure that the boat was of satisfactory quality.
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-It's essential to note that the law on implied terms as to fitness for purpose has evolved
considerably and is applied in order to protect buyers from unscrupulous sellers as well as
unnecessary liability seen through its application below. In Bakeine V YUASA Investments Ltd,
where the plaintiff purchased a motor vehicle with a sound mechanical condition for
transportation from the defendant. Upon receipt of car, the plaintiff's husband attempted to
drive the vehicle but it refused due to insufficient thrust power, the plaintiff carried out general
service on the vehicle but it was discovered that it needed an engine overhaul to be able to
work. The plaintiff sued. Court while ruling in the plaintiff's favor gave the restitutio in integrum
order and awarded general damages to the plaintiff as the defendant had breached an
implied term as to fitness for the purpose of transportation since the inoperable car was
supplied to the buyers by the sellers in the course of their dealings.
-Courts have clarified that where the buyer relies on the seller’s skill and judgement to obtain
goods for a particular purpose made known to the seller, even though the goods are
described by their trade name, the seller is liable for breach if they don't meet the purpose.
This can be shown in the
Ashington Piggeries Ltd case where it was held that the toxic ingredient in the food compound
was part of their description because their business involved making and putting compounds
together and therefore in breach of the failure to ensure a suitable quality. Â In such an
instance we do see the importance of the implied term as it ensures fairness towards the buyer
in instances of the seller’s responsibility.
-Further More under S.15(2)(b) This implied term is subject to two criteria which are firstly that
the buyer should have implied or expressly made known the particular purpose for which the
good is needed and secondly there should be reliance by the buyer on the seller’s skill &
judgment. Sugar Corporation of Uganda v Lawsam Chemical (U) Ltd, the principle expounded
in the case is that the omission to rely on the supplier’s skill or judgment shall not amount to
breach of the implied term of quality and fitness of the purpose. It was held that if the buyer
declines the expert help of a supplier they cannot recover.
-In Teheran-Europe Co Pty Ltd v ST Belton (Tractors) Ltd, it was held that the implied term of
reasonable quality can only be applied where the buyer makes known to the seller the
purpose of the commodity being purchased.
-If the buyer suffers from any abnormality such as an allergy and is affected in anyway after
concealing such information from the seller S.15 (2) won’t apply to them. Griffiths v Peter
Conway Ltd where the plaintiff who reacted to a coat they purchased due to abnormally
sensitive skin. While refusing to award the plaintiff damages for breach of contract, the court
reasoned that the coat could not have affected other people if they had worn it was thus
reasonably fit for its purpose for which it was made and bought.
-More so, one won’t recover in the aspect of caveat emptor, in the case of Ward v Hobbs,
noninspection of the sick pigs before purchase wouldn’t lead to recovery because of caveat
emptor, can also use the Bakeine case.
-The buyer need not specify the use of the commodity where it can only be used for one thing.
In Griffiths v Peter Conway Limited where it was held that “if the purpose of use of one good is
perfectly obvious, there is no need to make known the purpose in order for this sale to be

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bound to supply goods fit for the purpose. (The seller would be held liable in such an instance
when the buyer hasn’t specified expressly.

G Implied Condition that goods are of satisfactory quality

-S.15 (3) where the seller sells goods in the course of business, there is an implied condition that
the goods supplied under the contract are of satisfactory quality.
-S.15 (4) the above section doesn’t apply to any matter which makes the quality of goods
unsatisfactory which is a) specifically brought to the attention of the buyer before the contract
is made, b) where the buyer examines the products before the contract is made which
examination should reveal the quality c) or a sale by sample which would have been
apparent on reasonable examination of the sample.
-S.13 (5) Goods are of satisfactory quality if they meet the standards of a reasonable person
would regard as satisfactory
-S.13(6) Quality of goods includes their state, condition, appearance and finish, their fitness for
all the purposes for which goods of the kind in question are commonly supplied, safety and
durability. -Wilson v. Rickett Cockerell, the defendant a housewife bought a consignment of
coalite to be used as house fuel and on lighting it a detonate in the coalite exploded at first it
was held that it was the detonator and the coalite was of satisfactory quality, however on
appeal it was held that the explosives were contained in the bag of coalite purchased and
therefore the bag as a whole was of unsatisfactory quality.
-So that if the buyer should do something to the goods the fact of doing it incompetently will
not render them unmerchantable. Heil v Hedges, purchaser bought a pork chop which
caused tape worm infestation to him and claimed the pork was of unsatisfactory quality it was
held to be of satisfactory quality and just hadn’t been cooked well by the purchaser.
-However in Grant v Australian Knitting Mills, the claimant bought some woolen pants which
contained sulphite, when mixed with water they formed an acid and he sued, they were held
not to be of satisfactory quality merely because the acid would go off when washed and it
was not expected to be washed before wear.
The following case explains S.15(4) Bartlett v Sidney Marcus Ltd, the plaintiff bought a used car
and it was told to him to have problems with the clutch and he was given a discount to fix
then or pay the full price and the seller would fix them, he opted for the discount and fixing
the clutch was slightly more expensive than the discount and after driving for a month
attempted to reject the car and his claim was it was of unsatisfactory quality, it was held that
the claim would fail because the claimant knew of the defect prior to the contract and
therefore car wasn’t unsatisfactory merely because the defect was more serious and
expensive than expected.
-Goods are of a satisfactory quality if they are fit for a particular purpose for which goods of
those description are used for.(In case the buyer doesn’t expressly state their reason and is
served goods that don’t fit their particular purpose but fit the a purpose for goods of their
description, the buyer can’t recover on satisfactory quality)
-In the case of Brown v Craiks, the appellants ordered a quantity of cloth from the
defendant for making dresses but the respondents believed they were for industrial

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purposes. The cloth was unsuitable for making dresses, however it was held to be of
satisfactory quality because it was still able to be sold to another person. H) Trade Usage.
-S.15 (7) a warranty or condition as to quality or fitness for a particular purpose may be implied
in a contract by the usage of trade or custom.
-Where a transaction is connected with a particular trade, the custom and usage of that trade
must be considered as part of the background against which the parties contracted.
-In Hutton v Warren it was stated that, it has been long stated that in commercial transactions
extrinsic evidence of custom and usage is admissible to annex incidents to written contracts
in matters with respect to which they are signed.
-In Peter Darlington v Gosho Co Ltd, there was a sale of canary seed and according to the
custom of the trade, the buyer was not entitled to reject the goods for impurities in the seeds
but was entitled to a reduction on the price proportionate to the percentage of the impurities.
Court held that the contract was governed by this trade custom.
I) Quality of materials used in a contract for the supply of services
-S.16, Where materials are used under a contract for the supply of services, there is an implied
term that the materials will be sound and reasonably fit for the purpose for which they are
required. In the case of Watson v Buckley, the hairdresser used a hair dye on the customer
that they had acquired from a third party and never went through the right precautions to
determine whether they were safe or not and it causes the plaintiff dermatitis, the hairdresser
was held to be liable because by using the dye she had implied that it was of sound quality
and reasonably fit.
-Where the contractor makes it direct of the plans to be used, someone subcontracted
cannot be held liable for the defects in the materials. in the case of Young and Marten Ltd v
McManus Child’s Ltd, a contract subcontracted the building of roofs and told the
subcontractors to get the tiles from a particular one manufacturer, the tiles begun to
disintegrate, and the contractor brought a claim for breach of the implied warranty that the
tiles would be fit for their intended purpose and it was held the claim wouldn’t succeed
because there was no reliance on the sub-contractor in selecting the materials.
-Where a direct plan is given to the defendant on how something is to be done and they go
through exact procedures they can’t be held liable. In the case of Lynch v Thorne, the
defendant was contracted to complete the building of a house with specific details by the
plaintiff, and it provided for 9 inch walls with no rendering and rain begun to penetrate the
house it was held that the defendant wouldn’t be held liable because making the house water
proof would go against the direction.
J) Sale by Sample
-S.17(1) A contract of sale is a sale by sample where there is a term in the contract express or
implied to the effect that the contract is a sale by sample.
-S.17(2) there is an implied condition that a)the quality of the bulk shall correspond with the
quality of the sample b)buyer shall have a reasonable opportunity of comparing bulk and
sample. C) The goods shall be free from any defect, rendering their quality unsatisfactory
which would not be apparent on reasonable examination of the sample.
-In relation to reasonable opportunity to examine the sample. Jafferali Abdul v Jan
Mohammed, it was a sale of 22 cases of plates by auction, the auctioneer raised a plate and

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said this was the sample and that intending purchaser could inspect, it was later discovered
a lot of the plates were broken, and it was held that this was a sale by sample and the
purchasers hadn’t been given adequate time to inspect the bulk.
-In relation to the goods shall be free from any defect which wouldn’t be apparent on
reasonable examination of the sample. Drummond and Sons v Van Ingen, some mixed
worsted coatings were sold by sample, the goods corresponded with the sample but owing
to a latent defect in the coats making them unsaleable and unwearable, and it couldn’t be
detected on reasonable examination.
Therefore ten buyer was entitled to reject the goods.
-An exclusion clause won’t protect the sellers, in the case of Wallis v Pratt, it was a sell by
sample of
seeds known as “Common English Sainfoin” and the contract including a term excluding all
warranties express or implied and the bulk was a lesser quality just known as English sainfoin, it
was held that there was a breach and the exclusion clause didn’t protect the sellers.

k) Care and skill in the supply of services

-S.18, in a contract for the supply of services where the supplier is acting in the course of
business, there is an implied term that the supplier will carry out the services with reasonable
care and skill. -In the case of Orient Bank v Gilflian Air Conditioning Ltd, Orient Bank
contracted with the defendant to supply and install air conditioners in their new branch in
Acacia Mall, but due to faulty installments their offices kept leaking causing a lot of damage
to property and they brought a suit for breach of the implied term as to care and skill in the
supply of services and it was held that there was breach of contract as the defendant failed
to supply its services with due care and skill.
-We can use Young v McManus above to show situations where it won’t be deemed a breach.
-For professionals in the supply of their services if it’s shown that a body of professionals in the
same field deem it to be an acceptable practice it won’t be a breach. In the case of Bolam
v Friern Hospital Management Committee, defendant was the body who employed the
doctor, and the claim was that he hadn’t used any relaxant or restrainment before giving
them electro convulsive therapy. The claimant suffered injuries due to the procedure. The issue
was whether this was the breach of the supply of services being of reasonable care and
quality, it was held that there was no breach of such because a body of medical professionals
held that it was an understandable process.

EXCLUSION OF SELLER’S LIABILITY

-The law imposes liability on a seller who doesn’t imply with any of the implied terms.
-S.67, Where any right, duty or liability would arise under a contract of sale or supply of services
by implication of law, it shall not be negatived or varied by express agreement or by the course
of dealing between the parties, or by usage.
-S.19 An express warranty or condition shall not replace a warranty or condition implied by this
Act. -These provisions are set forth to ensure that exclusion clauses don’t negate terms implied
by statute or warranty or conditions.

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-However in other cases exclusion clauses enables one of the parties to a contract to exclude
their liability.
Three ways a party looking to rely on an exemption clause can show it was incorporated into
the contract.
1) Incorporation by Signature.
-A party will be bound by a contractual document unless it was entered to by some
misrepresentation or fraud. In the case of L’Estrange v Graucob, the plaintiff signed the
agreement for an automatic vending machine but didn’t bother to read it thoroughly and it
was held that the plaintiff was bound by it and consequently to the exclusion clause in the
contract.
2) Incorporation by Notice.
A party to a contract may be bound by its terms provided reasonable notice of those terms
is brought to the party’s attention, despite the fact that the contractual document has not
been signed.
3) Incorporation by a previous course of dealing.
-The courts may infer notice of an exemption clause in a contract where there has been a
previous course of dealings between the parties in which exclusion clauses have been part of
a contract, either by virtue of the document being a signed document or by virtue of
reasonable notice of the clause being brought to the parties’ attention. In the case of Spurling
v Bradshaw, the two parties had contracted for years and the plaintiffs used to pay on delivery
as there was an exemption clause as to negligence and non-recovery on the defendant’s
part in case of non-delivery and it was held to be terms and conditions of the agreement due
to their previous dealings.

Limitations to exception clauses.

1) Rely on S.67 and S.19
2) Exemption clauses are to be construed contra proferentem; the rule here is that exemption
clauses are construed against the party relying on them. The result of this is that if the clause
fails to deal with a particular matter then it is deemed not to cover that matter. In the case
of Baldry v Marshall, the defendant car dealers were asked to supply a car suitable for
touring services and Bugatti was provided which was unsuitable. The plaintiff rejected the
car and claimed to recover the price, the defendants wanted to rely on an exclusion clause
of guarantees and warranties but it was held that it was a condition and therefore the
exclusion clause wouldn’t apply.
3) Exempting Liability for Fundamental Breach of Contract.
-The courts developed a substantive rule of law that exemption clauses that sought to exclude
liability for fundamental breach would be ineffective. An example of the first approach by the
courts can be seen in the case of; Karsales v Wallis, The defendant agrees to buy a car from
a vendor at high purchase is got. The vendor is got and the original car that was inspected is
not the one that is present for the deal. The car provided was to the extent that it couldn’t
start. The agreement contained an exclusion clause that no condition to the roadworthiness

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of the car is given. The issue was if there was a fundamental breach which was there and thus
a successful claim.
-However, this was rejected in Suisse Atlantique Socieity Vs. N.V Rotter Damishe , Viscount
Dilhorne stated: In my view, it is not right to say that the law prohibits and nullifies a clause
exempting or limiting liability for a fundamental breach or breach of a fundamental term. Such
a rule would involve a restriction on freedom of contract and in the older cases I can find no
trace of it. -In Photo Production v Securicor, the plaintiff employed the defendant to be
protection of their company in terms of security and there was clause stipulating that the
company wouldn’t be liable for any damage/injury caused by any employer, the security
guard lit a small fire inside the building which got out of hand and destroyed the plaintiff’s
premises. And court relied on the decision above to use the exclusion clause.

TRANSFER OF PROPERTY
-This is the process by which ownership of goods is transferred from the seller to the buyer.
-It is different from possession that is physical custody or control of the goods. It should be
noted that the buyer of goods would at the end of the day like to take possession and own
the goods, without this, the very object of sale would not be achieved -It is governed by
Sections 22 to 26 in the SOGSOS Act.
-Property is said to be transferred from
The seller to the buyer, when the latter acquires the proprietary rights of the goods and the
obligations linked thereto.
-The transfer of property in the goods from the buyer to the seller is the essence of a contract
of sale.
-Therefore it is important to determine when property passes because of the following
reasons; 1) Ownership: The moment the property on the goods passes, the seller ceases to
be their owner and the buyer acquired ownership.
-The buyer can therefore exercise proprietary rights over the goods eg the buyer may sue the
seller for non-delivery.
2) Risk Follows Ownership: The general rule is that risk follows ownership irrespective of
whether delivery has been made or not.
-If the goods are damaged or destroyed, the loss shall be borne by the person who was the
owner of the goods at the time of the damage or destruction.
3) Action against third parties: Where goods are in anyway damaged or destroyed by the
action of third parties. It is only the owner of the goods who can take action against them.
4) Suit for the Price: The seller can only sue the buyer for the price only after the goods have
become the property of the buyer.
5)Insolvency: In the event of insolvency of either seller or buyer, the question of whether the
goods can be taken over by the official receiver will depend on whether the property in the
goods is with the party that has become insolvent.
DETERMINING TRANSFER OF PROPERTY.
-Majorly determined by two factors;
Nature of the goods and Intention of parties.

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1) Nature of Goods
-For property to pass there is need to determine whether the goods are specific or
unascertained.
-S.22 of the Act provides that; property shall not pass until goods are ascertained. In Kursell v
Timber Operators and Contractors Ltd, the seller agreed to sell all merchantable timber
defined in the agreement, but the government passed a law prohibiting the sale and the
plaintiff sought to recover the price paid but had to prove that property had passed, it was
held that the timber had not been measured and subject to change over time and therefore
property in the goods hadn’t passed. -S.23 provides for a kind of special proprietary interest to
pass even before the goods have become ascertained.
-For the section to apply, the following conditions must be
satisfied; a) The contract must specify the quantity of the goods
to be sold
b) Goods most form part of an identified bulk.
c) The buyers must have pre-paid for the goods.
-S.24 modifies the legal consequences of owning goods in common so as to enable
trading in bulk goods to continue in the normal way.
-Those co-owners who take delivery out of the bulk aren’t liable to account to the other co
owning buyers who may receive short delivery.
INTENTION OF PARTIES (S.25)
-S.25 (1) provides that property in specific or ascertained goods passes when the party
intend it to pass.
-The intention of the parties is established under S.25 (2) which requires one to look at the terms
of the contract, the conduct of the parties and the circumstances of the case.
-In the case of Bwiriza v Osapil, The principle in this case is that the general rule as to the passing
of the property in goods can be modified by the intention and conduct of the parties. The
respondent sold the car he had acquired in installments to a third party, however he only had
a couple of the log book and the initial seller kept the other important certificates. It was shown
through this that it was the intention of the initial seller that the property in the goods shouldn’t
pass.
-In cases where parties have not expressed an intention as to when property should pass,
reliance is based upon the rules enshrined under S.26 (a)-(h)
Rules for establishing the time of passing the property
-S.26 (a), When goods are in a deliverable state; 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 as soon as the contract is made, and it is immaterial whether the
time of payment of the price or the time of delivery of the goods or both are postponed.
-This only applies where the contract is unconditional which means that the sale is not subject
to any conditions that need to be fulfilled before property can pass. Goods also have to be in
a deliverable
state. Tarling v Baxter, Contract was made on January 6th payment in February and delivery
in May, on February 20th haystack got burnt and the issue was whether since it hadn’t been

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delivered who bears the risk. Held: the property to good passes when the contract is made. It
is immaterial whether the time of the payment or delivery was postponed.
-S.26 (b) when goods have to be put into a deliverable state:
Where there is a contract for the sale of specific goods and the seller has to do something
for the purpose of putting the goods in a deliverable state the property doesn’t pass until
such thing is done and the buyer has notice of it. In Underwood Ltd v Burgh Castle Brick, the
plaintiffs sold a condensing engine which was bolted to a floor, it needed to be uprooted
and was damaged by the sellers in the process and plaintiffs argued property passed when
contract is made, it was held that property didn’t pass because the goods hadn’t been put
in a deliverable state. -S.26(c) Specific goods in a deliverable state whose price has to be
ascertained.
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 reference to the goods for
the purpose of ascertaining the price, the property does not pass until such act or thing is done
and the buyer has notice thereof. In Zargury v Furnell, A sold 289 bales of goatskin each bale
containing 5 dozens and the price was for a certain sum per dozen. It was the duty of A to
count the goatskins in each bale and before he could do it the bales were destroyed, it was
held property hadn’t passed because the seller still had something to do to ascertain the price.
-S.26 (d) when goods are delivered on approval. (Sale or Return Bias)
The essence of a sale or return contract is that the person to whom the goods have been
delivered has a right for a period of time to retain them and he is given the option during the
period to purchase them either for themselves or on behalf of another.
-When the goods are delivered to the buyer under this arrangement, property passes to the
buyer under one of the following instances;
1) When the buyer signifies approval or acceptance
2) The buyer does an act adopting the transaction
3)Where the buyer retains the goods beyond the time fixed by the agreement without giving
notice of rejection or where no time is fixed where the buyer retains the good beyond a
reasonable time. -If an act indicates personal use by the buyer, which goes beyond what is
contemplated by the agreement, this might amount to an act adopting the transaction.
-Reasonable time is a question of fact which might depend on the agreement and the nature
of the goods
-In Poole v Smith’s Car Sales, The Plaintiff having no room for a car which he wished to sell
arranged in August for the defendants to keep the car at their premises on a sale or return
basis, to sell the car if they could, provided the plaintiff received a minimum sum of 325 pounds
for it. In October and November, the plaintiff repeatedly asked the defendant to return the
car and at the end of November it was returned in a badly damaged condition and the
plaintiff refused to accept it. It was held that the contract was one of delivery on sale or return
basis and accordingly since there was no rejection of property, it passed to the defendant
after a reasonable time and that in the circumstances a reasonable time had elapsed, so the
defendants were liable for 325 pounds.
-S.26 (e) Transfer of property in unascertained goods

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-It should be remembered that unless the goods have been ascertained, no property passes
from the seller to the buyer.
-Under S.26 (e), where there is a contract for the sale of unascertained or future goods by
description, and goods of that description, and in a deliverable 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 passes to the buyer and any such assent
may be express or implied and may be given before or after the appropriation is made; -The
assent may be given before or after the appropriation.
-The contract can specify the method to take.
-Appropriation is an irrevocable identification of the goods that are the object of the contract.
(If an act can still be revoked then it doesn’t amount to appropriation)
-The contract can specify what amounts to appropriation but often the identification and
assent will be by the seller physical giving the goods to the buyer and the buyer accepting
them or by the buyer going to the seller who hands over the goods.
-In Healey v Howlett, Howlett supplied fish to England through an agent, he sent 122 boxes to
the agent who sent 20 to England, the fish had stayed long with the agent and was bad on
arrival and the appellant refused to pay for the fish, the fish had gotten rotten before they
were ascertained and also there was no appropriation, buyer could reject the goods.
-In Re Blyth ShipBuilding Company, agreed to build a ship for B, the price paid in installments
as the work progressed, the contract stated that on payment of the first installment the vessel
and all materials and things appropriated for her should become and remain the property of
the purchaser. A went bankrupt before the ship was completed and there was semi-
fabricated materials lying about the yard that were to be used on the ship. It was held that it
was held that the incomplete ship and that which was affixed to the ship was appropriated
and property of the purchaser but that lying around was not sufficiently appropriated and was
not property of the ship buyers.

Ascertainment by Exhaustion (S.26 (g))

-S.26(g) introduces the doctrine of ascertainment by exhaustion, which refers to a situation
where the stock from which in which goods are to be drawn is depleted successfully by
withdrawals till all that is left will satisfy the contract in question.
-All that is necessary is that the goods should be ascertained and that the parties intend the
properties to pass.
-Where there is a contract for the sale of 200 tonnes of maize which is part of cargo of 500
tonnes aboard a truck from Mbale to Kampala and the rest bought by other purchasers and
delivered to other purchasers, property in the remaining 200 tonnes which is the subject matter
of the contract. -In the case of Wait and James v Midland Bank, buyers bought 1250 quarters
of wheat under 3 separate contracts, they took delivery of 400 quarters of the wheat and after
other delivery to other purchasers only 850 quarters of the original bulk remained it was held
that the wheat remaining had been ascertained by exhaustion and therefore property had
passed to the buyer.
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Nemo Dat Quod Non Habet (Transfer of Title by an owner)
-“Nemo Dat Quod Non Habet,” no one give what he had not got.
-Concerns situations in which someone who either has no property or their rights are defective
disposes goods in circumstances that enable the buyer to acquire rights through the exclusion
of the true owner.
-S 29Â General rule - where goods are sold by a person who's not their owner and who doesn't
sell them under the authority or with the consent of the owner, the buyer acquires no better
title than the seller had.
-Essentially to protect the property. In Cundy v Lindsay, claimant received an order of sale of
handkerchiefs from a person named Blenkarn who signed his name as Blenkiron and Co. which
was a reputable firm and claimant sent the goods and Blenkarn sold the goods to a third party,
the issue was whether the claimant had earned honest title to the goods and it was held the
intention was not to vest the goods to Blenkarn and therefore there was no transfer of title and
subsequently to the third party.
-The Nemo Dat rule creates two principles that are competing at law.
As observed by Lord Denning in Bishopsgate Motor Finance Corporation v Transport Brakes, in
the development of our law, two principles have striven for mastery;
1. For protection of property, no one can give a better title than he himself possesses
2. For the protection of commercial transactions, the person who buys in good faith and for
value without notice will get a good title (exceptions to the general rule arise under this)

Exceptions to the general rule.

1. Estoppel (either by words or by conduct or by negligence or by representation)
-A principle of justice and equity that leads to the effect when a man by his words or conduct
has led another to believe in a particular state of affairs, he'll not be allowed to go back on it
when it could be unjust or inequitable for him to do so.
-Question is whether the owner of the goods acted in a way that the person with the goods
appeared to be owning the goods prompting an innocent party to enter negotiations with
the person to whom the goods have been entrusted.
-The true owner of the goods cannot afterwards complain that there was no Authority to make
such a bargain.
-If by his conduct, the true owner leaves the buyer to believe that the person who makes the
sale owns the goods, the true owner is prevented from denying the seller's authority to sell.
-BY WORDS: Henderson and Co. v Williams, the owner of the goods lying at a warehouse were
induced by the fraud of F. to instruct warehouseman to transfer the goods to F who then sold
it to an innocent purchaser, who before paying obtained a statement from the
warehouseman that he held goods at the purchaser’s order and on discovering the fraud
attempted to not deliver. It was held that the warehouseman was estopped from refusing to
deliver because of the statement made.
-BY NEGLIGENCE; a person who negligently omits to inform another of certain facts may be
said to be representing that the facts calling for report do not exist. A person who omits to

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correct a misrepresentation made by a third party may in certain circumstances be treated
as responsible for that representation.
-Estoppel by negligence is available where the owner has been negligent in allowing the seller
to create an appearance of ownership of the goods.
-It is necessary for the buyer to show, first, that the true owner owed him a duty to be careful;
secondly, that in breach of that duty the owner was negligent; and, thirdly, that this
negligence was the proximate or real cause of the buyer being induced to buy the goods
and part with the price to the seller.
-The requirement of a duty of care is essential to this type of estoppel.
-In Mercantile Credit Co. Ltd V. Hamblin; the Court of Appeal held that there was a sufficient
relationship of proximity between the defendant (the owner) and the plaintiff (the buyer) to
give rise to a duty of care; however, the plaintiff failed to establish any breach of the duty or
that the defendant’s negligence was the effective cause of its loss.
-In the case of Central Newbury Car Auctions Ltd v Unity Finance Ltd and Another, it was held
that the were not estopped from denying the title of the third parties to sell the car to the first
defendants, and were entitled to recover damages for its conversion.
Per Morris LJ. It cannot be assumed that the person in possession of a car and its registration
book is the owner of the car. The absence of a registration book when a car is being sold will
naturally give rise to much inquiry. The existence of one in the hands of a seller does not
remove all occasion for inquiry and does not prove legal ownership. Appeal was allowed.
-BY CONDUCT; Eastern Distributors Ltd V. Goldring, In pursuance of a plan to deceive a finance
company, one M signed and delivered forms to C which enabled C to represent that he had
M’s authority to sell a car belonging to him, it was held by the court of Appeal that M was
estopped from setting up his title against the plaintiffs who had bought the car from C. It was
also held that the estoppel in fact operated to pass a good title to the plaintiffs not only against
M himself, but also against a buyer in good faith from M.(The fact of signing and delivering the
forms shows the conduct)

2) Sale under power of statute

S 29(2) (a) - provides for other laws to allow for sale by a person who's not the owner (there's
transfer of good title)
Chattels Transfer Act under which a person can pledge a chattel as security for money, the
lender is given powers of sale upon default by the borrower.

3) Sale under order by court

S 29(2) (b) - the general rule doesn't take away the validity of a sale under a court of
competent jurisdiction. Larner v Fawcett, The defendant owned a racehorse and made an
agreement with a Mr Davis under which it was agreed that Davis would train and race the filly
and receive half of any prize money she might win. Davis, unknown to the defendant, agreed
to let Larner have the animal to train. Larner did so, and when his charges had reached £125,
he discovered that Fawcett was the true owner. Larner, being unable to recover the cost of
training and feeding the filly from Davis, who had no funds, now applied to the court for an
order for sale. Fawcett was brought in as defendant. It was held that as much as the lien didn’t
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carry a power to sale the court had a right to order for a sale because the circumstances of
the case deemed so.

4) Agency
-General Rule is Agent can bind Principal.
-Principal from “he who acts through another acts himself”
-Agency arises either by express appointment or by the other party having apparent authority.
-For the agent to be able to pass title to the buyer, they should be in possession of the goods
with the consent of the owner.
-Once consent has been given, it continues despite of the owner terminating such consent
unless the buyer dealing with the agent has notice of that termination.
-Folkes v King, where Folkes owned a car and delivered it to a mercantile agent for sale at
not less than £ 575. The agent sold the car to King for £ 340. King bought it in good faith.
Folkes sued King to recover the car. The court held that for the purposes of sale, King had
acquired a good title. The purpose of this law is to protect third parties since in such sales, an
impression is created that the agent owns the subject matter of sale.
-Oppenheim v Fraser; in this case the plaintiff gave diamonds to an agent who was a diamond
broker. The agent agreed with the plaintiff to sell the diamonds to 2 firms. He however, instead
sold them to other people other than the agreed firms. It was held that the agent was guilty
of larceny by trick and hence had sold without the consent of the plaintiff and was as such
not a mercantile agent. (Therefore agent can’t be deemed to be agent where he clearly
violates the instructions of the owner) 5) S 30 - Sale under voidable title
The buyer who buys in good faith and without notice of any defect in the title of the seller will
acquire good title if the goods are bought from a seller whose title is voidable but at the time
of sale, it has not been voided. In Lewis v Averay, the plaintiff sold a car to a rogue who used
a cheque and misidentified as Richard Greene a famous actor and the plaintiff let him take
the car, and he sold it to a third party, the cheque was dishonored and he attempted to get
back the goods from the third party, it was held he couldn’t because the contract was only
voidable and he had voided it by the time the third party had acquired the contract and
therefore had acquired good title.
-Where the rogue renders it impossible to make contact and have the title voided, the true
owner need barely take such steps as a reasonable owner would take to recover the goods.
Eg reporting to a police station. Car and Universal Credit v Caldwell, Mr. Caldwell had sold his
jaguar car to Norris who used a cheque, and on attempting to cash in the cheque it was
fraudulent, he immediately reported to the police and also attempted to track the car and
Norris, he sold the car to a third party after this and the issue was whether the third party had
acquired good title, it was held that Mr. Caldwell’s actions had successfully rescinded the
contract and it had been voided therefore title was not good.
6) SALE BY SELLER IN CONTINUING POSSESSION
-S.32 (1) Where a seller after having sold the goods to a buyer continues to be in possession of
such goods or of the documents of title to them and again resells or pledges them either
himself or through a mercantile agent, he will convey a good title to the buyer or the pledgee
provided the buyer or the pledgee acts in good faith and without notice of the previous sale.
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For this exception to apply, it is essential that the possession of the seller must be as seller and
not as hirer or bailee.
-Possession includes where goods are not in the physical possession of the seller but are under
their control. For example goods held by a warehouse owner to the order of the seller.
-For a second buyer to acquire a good title, the seller must deliver possession of the goods or
documents of title. Merely contracting a second sale is not sufficient to give title to the second
buyer.
However, delivery could be constructive.
-In Pacific Motors Auctions Pty Ltd v Motor Credit (Hire Finance) Ltd, good were bought by a
finance company from motor car dealer for higher purchase agreements Motor Car Dealer
continued in possession of the goods and he sold to a third party, it was held that the third
party had acquired good title because the defendant had continued in possession even after
the sale.
-However In the case of Staffs Motor Guarantee Ltd v British Wagon Co. Ltd, Mr. Albert sold his
lorry to the defendants in form of a higher purchase they hired the lorry back to him and being
in possession fraudulently sold it to the plaintiffs and the issue was whether the plaintiffs had
claimed good title, it was held that the consent to possession was not given as owner but as
a hirer and therefore S.32 (1) didn’t apply to him.
7) SALE BY BUYER IN CONTINUING POSSESSION.
-S.32 (2) Where a buyer has bought or agreed to buy the goods and has obtained possession
of the same or the documents of title to them with the consent of the seller and he resells or
pledges the goods, he will convey a good title to the buyer or the pledgee provided the latter
acts in good faith without notice of any other right of the original seller in respect of the goods.
-Under this exception the person must have obtained possession of the goods under a sale or
an agreement to sell. Therefore, a void contract is insufficient as is acquisition as a bailee or
under a hire purchase contract or under a sale or return agreement.
-In the case of Newtons of Wembley Ltd v Williams, plaintiffs sold a motor car to A and
accepted the cheque and give him possession of the car and logbook, cheque bounced
they voided the contract but car wasn’t found, A had sold the car to B who resold it to the
defendant and it was found they had both acted in good faith without notice, and it was held
since the buyer was in continued possession and had sold it to a third party in good faith he
had good title.
8) Sale in a Market Overt.
-Where goods are sold in a market overt, a buyer acquires a good title to them provided he
buys them in good faith and without notice of any defect. In this case the buyer can acquire
a good title even though the seller has none at all.
-A market overt is defined by Jervis J in Lee v Bayes as an open, public and legally constituted
market.
-In the case of Bishopsgate Motor Finance Company v Transport Brakes Ltd, A let a motor care
out for higher purchase to B who sought to sell it a public auction but failed and sold it in the
same market by private treaty to C who sold it to D and A sought to recover from D, both C
and D had bought the car in good faith, and the contention of A was that it was not a market
overt because they had done it by private treaty and yet it needed to be put up for sale by
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a trader in the market. It was held that since goods were sold both by public auction and
private treaty in the market it also was one of market overt and defendant had acquired good
title.
-In Reid v Commissioner of Police of the Metropolis and another, it was held that that in order
to establish good title it must be shown that the goods were sold between sunrise and sunset.
The goods should be openly on sale at a time when those who stand or pass by can see them.
Thus it must be in the day time when all can see what is for sale; and not in the night time when
no one can be sure what is going on. Seeing that this sale was made before sunrise, Mr Cocks
did not get a good title. Mr Reid, the true owner, is entitled to have the pair of Adam
candelabra returned to him.

RISK AND FRUSTRATION.

THE PASSING OF RISK
-General Rule: Risk of accidental loss or damage falls on the owner of the goods. However
some special cases where owner wouldn’t be held culpable for accidental loss.
-S.27 (1) unless otherwise agreed, the goods remain at the seller's risk until the property in the
goods is transferred to the buyer.
-Risk Prima Facie passes with property.
-S.27 (2) Where the property in the goods is transferred to the buyer under subsection (1), the
goods are at the buyer's risk whether delivery has been made or not. In Tarling v Baxter, A
agreed to sell to B a stack of hay on 4th January for the price to be paid on 4th February, the
same to be allowed to stand on A’s premises until 1st May. B stipulated that the hay should not
be cut until it was paid for. The haystack was destroyed by fire. Held; this was a contract for
an immediate and not a future sale and that property in the hay had passed immediately to
the buyer and thus the loss fell on him. Where there is an immediate sale, property vests in the
buyer.
-S.27 (3) the risk of loss shall not pass from the seller to the buyer unless the seller has conformed
to all conditions imposed on him in the contract. In Head v Tattershell, B took a horse on the
notion that he could return it in case it wasn’t as described, it was not described and B was
entitled to his money back although it got injured in his care. It was held that when the horse
didn’t match the description property would vest back to the seller and since the injury was
the fault of nobody since he hadn’t conformed to all conditions it was the seller’s liability.
- S.27 (4) where a delivery has been delayed through the fault of the buyer or the seller, the
goods are at the risk of the party at fault as regards any loss, which might not have occurred,
but for that fault. In the case of Demby Hamilton & Co Ltd v Barden, the defendants bought
30 tons of apple juice to be delivered in weekly installments, the defendant took delivery of
20.5 tons but failed to give instructions for the rest and it begun to go bad. Issue was whether
the buyer had to bear liability for the goods, and it was held that as much as property had not
passed to the buyer he bore the liability for the delay in delivery instructions leading to the loss.
-S.27 (5) this section shall not affect the duties or liabilities of the seller or the buyer as a bailee
of the goods of the other party. In Wiehe v Dennis Bros, Buyers contracted to buy a Shetland
pony, delivery in a month. While the pony was in the sellers' possession it was taken to an event,
mishandled and injured. Held: Sellers were liable for failing to take reasonable care as bailees
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of the goods). That the general rule that risk follows property will not apply where one party is
the bailee of the goods and the loss occurs through their lack of reasonable care, in which
case the bailee will be liable.
FRUSTRATION
-Frustration: Event happens and the parties to the contract are relieved of their obligations.
-S.7 Goods which have perished.
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 entered into, the contract is void.
-In Asfar& Co. v Blundell, Dates were impregnated with River water and sewage when the
budge on which they were carried sunk, the insurance contract was to the effect that the
dates were only covered by the insurance only if they had perished, the insurers argued that
despite the contamination they were still dates and could still be used to distill alcohol. It was
held that good have perished if they became significantly altered. So that for commercial
purposes they can no longer be said to be the same goods that were contracted to and
therefore held to be perishable.
-If only part of the goods have perished the contract will still be said to be frustrated and void.
In the case of Barrow Lane and Ballard Ltd v Philip Phillips, the plaintiffs sold 700 bags of gnuts
to the defendants, the goods were believed to be stored in the warehouse, 109 bags had
been either stolen or irregularly delivered, and the plaintiffs were delivered 591 and the
contention was whether the contract of 700 bags was void despite the delivery of 591 bags?
The court held that the contract was for the 700 parcels and therefore held that it was void as
some goods had perished.
-S.8, Goods perishing after agreement to sell. Where there is an agreement to sell specific
goods, and subsequently the goods, without any fault on the part of the seller or buyer, perish
before the risk passes to the buyer, the agreement is void. In the case of Turnbull v Rendell, The
seller agreed to sell 75 tons of `table potatoes` from a specific crop, some of which were still
in the ground. At the time of the contract, the potatoes were so badly affected with
secondary growth that they no longer answered the description `table potatoes.
Held: The buyers claim for damages was rejected, the potatoes had `perished` within the
meaning of the Act and the contract was void. One result is that goods have perished when
they have ceased to be what was contracted for even, though still useable.
-Contract for Unascertained Goods? Can it be frustrated? Blackburn Bobbin v T.W Allen and
Sons, contract to do with delivery of timber from Finland before the World War, Unfortunately
World War broke out and intensified and delivery couldn’t take place, it became impossible
to obtain any timber, the defendants contended that the outbreak of the war had dissolved
the contract but court held in favor of the plaintiffs that the contract wasn’t dissolved and
seller held liable. McCardie J held that a bare and unqualified contract for the sale of
unascertained goods will not (unless most special facts compel an opposite implication) be
dissolved by the operation of [the doctrine of frustration. -S.7 and 8 do not apply to contracts
for the sale of unascertained goods. If unascertained goods are sold by description, seller
cannot excuse non delivery by showing goods of that description were not available at the
time of the delivery.
-The seller takes the risk of this eventuality and must take responsibility.
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-The parties may however include a Force Majere clause to excuse failure to deliver as a result
of certain events such as war.

DUTIES OF THE SELLER

-S.34 (1), it is the duty of the seller to deliver the goods, and of the buyer to accept and pay
for the goods, in accordance with the terms of the contract of sale.
-S.34 (2)) It is the duty of the supplier of a service to perform the service and of the buyer to
accept and pay for the service in accordance with the terms of the contract of supply of
services. (These apply for both the seller and the buyer)
Duties of the seller
1-Duty to pass good title
2-Duty to supply the goods at the right time
3-Duty to supply the goods in the right quantity
4-Duty to supply goods of the right quality. (These first 4 are dealt with in Implied Terms)
5-Duty to Deliver Goods: Delivery means voluntary transfer of possession from one person to
another and includes an appropriation of goods to the contract and results in property in the
goods being transferred to the buyer. (S.1) In Badische V Basle Chemicals Works; the buyer
requested that the goods be sent through the poster and it was held that the contract of sale
was completed by delivery to the post office.
Place of delivery:S.36 (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.
S. 36(2) Where there is no contract, express or implied, as to place of delivery the place of
delivery is the seller's place of business, if the seller has one, and if not, the seller's residence.
S.36 (3) where the contract is 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 shall be the place
of delivery. Time of delivery: S.11 provides that whether a stipulation as to time is of the essence
depends on the terms of the contract. In Hartley V Hyman, Lord Maccardic stated that in
ordinary commercial contracts of sale of goods, the rule clearly is that time is prima facie of
the essence with respect to delivery and therefore if time for delivery is fixed by the contract,
failure to deliver at that time will amount to a breach of condition, entitling the buyer to
exercise his right to reject the goods.
S.36 (4) provides that where 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 within a reasonable time, while S.36(6)
provides that delivery is ineffectual unless made at a reasonable hour. What is a reasonable
hour depends on the circumstances of the case.
Delivery by installments.
-S.39 (1), buyer is not bound to accept delivery of goods by installments.
-S.39(2) Where there is a contract for the sale of goods to be delivered by stated instalments
and to be separately paid 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 contract is a repudiation of the whole
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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.
-In the case of Maple Flock Co Ltd v Universal Furniture Products, P entered a contract with D
for 100 tons of rag to be sold in installments of 3 bunches of 1.5 tons per week. After 18 deliveries
all had been perfect apart from the 16th and P sought to repudiate the contract on basis of
the defective delivery. It was held by Lord Hewart CJ, there is a two part test in assessing a
breach of an installment which include whether the quantitative ratio of the breached
installment bears a large portion of the contract and degree of probability that such a breach
will be repeated and it was held that the 16th installment covered a small part of the contract
and the breach was not likely to be repeated and therefore not rescinded.

DUTIES OF THE BUYER

-The primary duties of the buyer are to take delivery of the goods when tendered and to pay
the price in accordance with the terms of the contract.
Payment of the Price
-S.35(1) Unless otherwise agreed, delivery of goods and payment of the price are concurrent
conditions, namely that, the seller must be ready and willing to give possession of the goods
to the buyer in exchange for the price, and the buyer must be ready and willing to pay the
price in exchange for possession of the goods.
(2) This section applies to sales by instalments in accordance with the agreement of the
parties.
(3) Unless otherwise agreed, supply of a service and payment of the price are concurrent
conditions. -S.9 provides that the price may be fixed by the contract, or may be left to be
fixed in a manner thereby agreed or it may be determined by the course of dealing
between the parties.
-Where the price is not determined in accordance with the foregoing provisions, then the
buyer must pay a reasonable price and what is reasonable depends on the circumstances of
a particular case. -Unless otherwise stipulated payment is to be in cash, however sometimes
such an instrument can be treated as an absolute payment where the contract between the
parties clearly states so or where the intention of the parties is very clear on the same. In the
case of W J Alan & Co Ltd v El Nasr Export & Import Co, it was a sale of coffee between a
Kenyans and Egyptian company to be paid in Kenyan shillings by way of an irrevocable letter
of credit, the appellants opted to pay in pound Sterling with consent of the sellers however
the pound Sterling lost value as goods were in transit and they sought more payment it was
held that the sellers had discharged the initial obligation in the contract by accepting the
pound Sterling and were didn’t need more cash.
The duty to take delivery
-S.45 (1) Where the seller is ready and willing to deliver the goods, and requests the buyer to
take delivery and the buyer does not take delivery within a reasonable time after the request
to take delivery of the goods, the buyer is liable to the seller for any loss occasioned by his or
her neglect or refusal to take delivery and also for a reasonable charge for the care and
custody of the goods. -If the buyer fails to take his goods, it does not give the seller a right to

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resell them to a second buyer unless by conduct or expressly the buyer seems to have run
out of the original contract.
-If the goods are of a perishable nature, it is the buyer’s duty to take them at the time agreed
and if he does not do so, the seller can resell them without notice.
-In Kampala General Agency v Moody’s, The plaintiffs had delivered the cotton to Aloi station
instead of the Soroti station and the defendants refused to accept the goods and their
defence was contract was broken when the delivery was got wrong, and it was held this was
a breach of warranty as opposed to condition and therefore respondents not entitled to reject
the goods.

REMEDIES
Remedies for the Seller
A) Real Remedies A) Unpaid Seller’s Rights and Powers over the Goods
-S.50, unpaid seller is one where the whole of the price has not been paid or tendered or when
there was conditional payment by a bill of exchange and it has been dishonored.
-S.51 (a) the seller has a right of lien on the goods or to retain them for the price while he or
she is in possession of the goods.
- (b) In the case of the insolvency of the buyer, a right of stopping the goods in transit after
he or she has parted with the possession of the goods; -(c) a right of re-sale as limited by this
Act.
-(2) Where the property in the goods has not passed to the buyer, the unpaid seller has, in
addition to his or her other remedies, a right of withholding delivery similar to and co-existent
with his or her rights of lien and stoppage in transit where the property has passed to the buyer.
-In Omer Saleh v Besse, it was held that a seller cannot repossess the goods and also sue for
the price so that where goods have passed to the buyer and he refuses to pay the price the
seller can sue for the price of the goods.
-Mubarak Batesaki v Mubarak Magala, the respondent sold a motor vehicle to the appellant
and received a deposit, he gave him the car but retained the logbook, when balance wasn’t
paid, he seized the car and sued to recover the balance of the unpaid price.
B) Unpaid Seller’s Lien
-S.52(l) Subject to this Act, the unpaid seller of goods who is in possession of them is entitled to
retain possession of the goods until payment or tender of the price where-
- (a) the goods have been sold without any stipulation as to credit
- (b) The goods have been sold on credit but the term of credit has expired or -(c) the buyer
becomes insolvent.
- (2) The seller may exercise his or her right of lien, notwithstanding that he or she is in possession
of the goods as agent or bailee for the buyer.
-Lien can be exercised for nonpayment of the price and not for any other charges. In Somes
v. British Empire Shipping Co, that where the price has been tendered, the seller cannot claim
to retain the goods further for the expenses incurred by him on storage during the period that
he was holding the goods in the exercise of his lien.
-Where a seller has delivered part of the goods he might exercise his lien on the remainder. In
Grice v Richardson, the sellers had delivered part of the three parcels of tea compromised in
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the sale, and held delivery of the other part until the price was paid and it was held to be
valid.
-Lien merely gives a right to retain the goods until the price is paid. It does not rescind the
contract or deprive the buyer of his ownership nor entitle the seller to resell the goods.
-Uganda Hire Purchase v Magamboni; concerned a contract for hire purchase of a vehicle
with option to buy. The plaintiff paid part of the purchase price and the car was delivered to
him. Later the defendants seized the car to effect payment. In an action for wrongful seizure,
it was held unpaid seller has lien or right to retain goods in his possession but once he loses
possession, he has no right to seize goods but the only remedy is to sue for price of goods.
Termination of a Lien
-S.54 Lien depends on physical possession of the goods. Therefore the unpaid seller loses his
lien or right of retention on the goods in the following circumstances;
i) When he delivers the goods to a carrier or other party for the purpose of transmission to the
buyer without reserving the right of disposal of the goods. In Valpy v Gibson, the goods were
given to the buyer’s shipping agent but taken back to the seller for repacking, he found the
buyer insolvent and attempted to retain the goods it was held that he had already delivered
and non-delivery was wrongful. (Only available thing is stoppage in transit, and doesn’t apply
when it’s taken in for any other reason that’s not the price)
ii. When the buyer or his agent lawfully obtains possession of the goods. Note possession has
to be lawful, therefore it doesn’t work with one who steals the goods. iii. By waiver of his lien
i.e. when the buyer waives his right to exercise the right of lien. Eg where unpaid seller agrees
to a sub-sell by the buyer. It should be noted that waiver is a question of fact. (Use the
Uganda Hire Purchase Case.)

C) Unpaid Seller’s Right of Stoppage in Transit.

-S.55 SOGSOS, 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 transit and resuming
possession of the goods as long as they are in the course of transit and may retain them until
payment or tender of the price.
-S.56, Goods are in transit if they have not yet reached the buyer.
-It ends where the buyer or agent gains delivery of goods, or when the buyer obtains position
before they reach the place of delivery.
-S.57, mode of stopping goods in transit. Two methods; seller takes full possession of the goods,
or gives information to the carrier not to deliver the good.
-In Bethel v Clerk Co., D purchased goods from the P, the goods were sent to the carrier to be
shipped, the seller learnt of the buyer’s insolvency and opted to claim the goods from the ship,
it was held that transit had not come to an end, and comes to an end when the goods reach
their destination which they hadn’t. (Also doesn’t matter whether it shifts from different carriers,
transit is not over) -Mount Ltd V Jay & Jay, if the seller allows the buyer to resale he cannot
exercise the unpaid’s seller stoppage to transit.
D) Unpaid Seller’s Right of Resale
-S.59 (2) provides that anybody who buys from an unpaid seller who has exercised his real
rights acquires a superior and real title as opposed to the original buyer.
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-The section also gives power to the unpaid seller to resale in two instances; where goods are
perishable and the buyer doesn’t pay within a reasonable time or tender the price and where
the buyer gives notice of his intention to sell the goods and the buyer doesn’t pay within a
reasonable time or tender the price.
-Callagher v Shilcock, it was purchase of boat, and was done on part payment, plaintiff paid
a deposit of 200 pounds to pay the remainder later on, a reasonable time elapsed and when
the plaintiff brought the money, the defendant had already sold and he sued the seller for
specific performance of the contract. The court held that by the time the seller had sold the
boat to someone else a reasonable time had elapsed and seller exercised his right to resale.
B) Personal Remedies Action
for the Price
-S.60(1) where under a contract for sale, property has passed to the buyer and buyer neglects
to pay for the goods according to the terms of the contract, the seller may bring an action
against the buyer for the price of the goods together with incidental damages.(Omer Saleh
v. Besse, refer to the case above)
-S. 60(2) where the goods are to be paid on an agreed date irrespective of delivery and
the buyer neglects to pay, An action for the price and damages can be brought although
property hasn’t passed and goods not appropriated.
-S.60 (3), same as S.60 (1) but instead of contract of sale put supply of services.
2) Action for damages for non-acceptance of goods by buyer
-S.61 (1) where the buyer wrongfully neglects or refuses to accept and pay for the goods, the
seller may bring an action against the buyer for damages for non-acceptance.
-S.61 (4) same as S.61 (1) just for supply of services.
-Devshi Samat Shah v. Budhram Mohanlal, the seller claimed damages for non-acceptance
under a contract for the sale of physic nuts. There was no market for the nuts, which were
worthless, and accordingly the seller was held entitled to receive the cost of the nuts to him
together with the profit he would have made on the sale to the buyer: "in other words, his
actual loss is, in the peculiar circumstances of this case, the same as the contract price."

REMEDIES OF THE BUYER

1) Rejection of the goods
-Where the seller is in breach of a condition the buyer can reject the goods subject to the
conditions laid down. In the case of Livio Carli v Salem and Mohammed Bashanfer, the plaintiff
and defendant entered a contract to supply a 200 tonnes of a specific brand of cement and
on delivery the cement didn’t match what was agreed and the defendant rejected the good,
it was held that there was no agreement to change the brand and therefore a breach in
condition and entitlement to reject the goods.
-A buyer can lose the right to reject if he does anything inconsistent with the rejection. In
Norman v Overseas Motor Transport, it was held that a buyer may lose his right to reject the
goods if he exercises rights of ownership inconsistent with such repudiation.
-In Hardy and Co v Hillerns and Fowler, it was held that the buyer couldn’t reject the goods
after already taking to sell them to a third party.

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2) Recovery of the Price
-If the buyer has paid the price and the goods are not delivered, he can maintain an action
for the recovery of the amount paid if consideration has failed entirely. (Eg. where there is no
title to pass or goods got messed at the seller’s risk)
-Rowland v Divall, The defendant sold a car to the plaintiff which he used for three months until
he realized the defendant didn’t have a title to the car because it was stolen. The plaintiff
then sued to recover the money he had paid due to total failure of consideration. He would
succeed despite using it for 3 months due to implied term that there should be a title.
3) Suit for the breach of warranty (Look keenly at warranties and conditions and option for
buyer to treat condition as warranty)
-S.64, where there is a breach of warranty by the seller, the buyer may a) set up against the
seller the breach of warranty in diminution or extinction of the price; or
(b) Bring an action against the seller for damages for the breach of warranty.
4) Action for Damages for Non-Delivery
-Section 62, entitles the buyer to maintain an action against the seller if he wrongfully neglects
or refuses to deliver the goods to the buyer. A seller can also be sued under this section when
he delivers goods that the buyer rejects.
-In Apollo Construction V Take Me Home it was held that damages must be specifically
pleaded for in the plaint. In this case the claimant could not recover damages as they were
no pleaded for in the plaint.
-In Wamala Growers v Attorney General the commissioner for veterinary services advertised
the sale of imported Germany Fresian Heifers. The plaintiff applied for 31 heifers, selected them
and paid 3.5 million. However, only 10 animals were delivered after a lot of pestering. Court
held that there was breach of contract and the plaintiff was entitled to damages for non-
delivery of the remaining heifers.
5) Specific Performance.
-S.63, allows the buyer to sue for Specific performance when the goods are specific or
ascertained. The remedy is discretionary and will only be granted if the goods are of special
value or unique in either nature or rare. I.e. under this remedy, the seller is ordered to deliver
the goods. In Isaac Bishari v Vitafoam, it was held that specific performance is for specific or
ascertained goods, and it was held that by Justice Oder that the goods which were mattresses
had be so well defined in the contract that they had become ascertained and indeed the
remedy of specific performance available. -However for specific performance to be awarded
it has to show the goods are of special value or unique. In the case of Fiat Kenya v Roble,
specific performance was awarded as much as the bus was unavailable, delivery of a similar
bus was ordered to be specifically performed, however in a dissenting judgement Spry, AG, P
held that evidence failed to show that any reason why damages would not be a sufficient
remedy. (Therefore if damages can be given, no specific performance)
6) Remedy in Tort
-The buyer has a remedy in tort; if the buyer knows that he is entitled to the goods he can sue
the
Seller for detinue or conversion of his goods. In the case of Worcester Works Finance v Coden
Engineering, the plaintiffs brought a suit for conversion against the defendants who had
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repossessed a motor vehicle on hire to Griffiths, their claim would fail because the defendants
were the original owner and the seller to the plaintiffs didn’t have a valid title to the goods
however we see that such a suit is possible.

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