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Elements of The Contract of Sale of Goods

The document defines a contract of sale of goods under the Sale of Goods Act 1957 as a contract whereby the seller transfers or agrees to transfer ownership of goods to the buyer for a price. There are two main categories of contracts of sale - absolute sales, where ownership is transferred immediately, and conditional agreements to sell, where ownership will transfer at a future time or upon fulfillment of conditions. A contract requires the transfer or agreement to transfer ownership of goods, which must be movable property, in exchange for a monetary price.

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195 views16 pages

Elements of The Contract of Sale of Goods

The document defines a contract of sale of goods under the Sale of Goods Act 1957 as a contract whereby the seller transfers or agrees to transfer ownership of goods to the buyer for a price. There are two main categories of contracts of sale - absolute sales, where ownership is transferred immediately, and conditional agreements to sell, where ownership will transfer at a future time or upon fulfillment of conditions. A contract requires the transfer or agreement to transfer ownership of goods, which must be movable property, in exchange for a monetary price.

Uploaded by

Farah Lydia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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CONTRACT OF SALE OF GOODS

DEFINITION
 What is a contract of sale of goods
- s. 4 of Sale of Goods Act 1957 [SOGA 1957]
‘a contract whereby the seller transfers or agrees
to transfer the property in goods to the buyer for
a price’.

 What are the important elements in contract of sale


of goods under SOGA 1957?
- Transfer or agree to transfer the property in goods
- Goods
- Price
CATEGORY OF CONTRACT OF
SALE OF GOODS
 The contract of sale may be: Absolute and Conditional – Section 4
(2)

 The difference lies upon the ability to transfer the property in goods
either with/without condition.

 If the transfer of property in goods can be made upon the making of


contract, it is called Sale. – s. 4(3)

 If the transfer of property in goods is to happen in future time or


subject to some condition, it is called An Agreement to Sell. - s. 4
(3).
Cont.
 However the Agreement to Sell can become a
Sale when the time elapses or the conditions
are fulfilled. – s 4 (4).

 Contract of sale may be:


a) Absolute : Sale – s.4(3)
b) Conditional : Agreement to sell
– s.4(3 & 4)
TRANSFER/AGREE TO
TRANSFER
 The contract of sale of goods starts with a transfer or
agree to transfer property in goods.

 Transfer = Sale

 Agree to transfer = Agreement to Sell

 Property in Goods = ownership + Goods


PROPERTY IN GOODS
 What is transfer of property in goods?

 What is property in goods? = Ownership

 What is the different between ownership and


possession?

 Ownership & possession – not synonymous


SALE
 When the ownership or property in
goods transfers/passes to the buyer

 It is also known as executed contract of


sale = a contract + transfer of
ownership
AGREEMENT TO SELL
 The transfer of ownership or property in
goods is to take place at a future time or
subject to some conditions thereafter to be
fulfilled.

 It is also known as executory contract of sale.

 This type of contract is pure and simple

 The agreement to sell can becomes a sale.


Cont.
 Distinction between sale and agreement
to sell:

a) Harper Gilfillan Sdn Bhd v Kean Toh


Amang Factory Sdn Bhd & Lee Kwee
Hong

b) s.55(1)
GOODS
 S. 2 of SOGA

 Every kind of movable property other than actionable


claims and money includes stocks and shares,
growing crops, grass and things attached to or
forming part of the land which are agreed to be
severed before sale or under the contract of sale.

 Goods under the contract of sale: s.6(1)


a) Existing Goods
b) Future Goods
EXISTING & FUTURE GOODS
 EXISTING GOODS: owned and possessed by the seller

 FUTURE GOODS: to be manufactured or produced or acquired by the


seller after the making of the contract of sale – s.2 & s.6(3)

 The goods may be


a) specific : identified and agreed upon at the time the contract of sale
is made – s.2

b) Ascertained
- identified and agreed upon at the time the contract of sale is made

c) Unascertained
- not identified or agreed upon at the time the contract of sale is made
but will be so thereafter.
Cont.
 Examples:
a) An agreement to sell a car of a specific made
and model yet to be manufactured by the seller is
a contract of sale of future goods and/or an
unascertained goods.

b) An agreement to sell a particular car which


both seller and buyer know belongs to the third
party at the time the contract is made but which
the seller intends to acquire, is a contract of sale
of future but specific goods.
Cont.
EXISTING GOODS FUTURE GOODS

SPECIFIC SPECIFIC

ASCERTAINED GOODS ASCERTAINED GOODS

UNASCERTAINED GOODS UNASCERTAINED GOODS


PRICE
 It is a money consideration for a sale of goods –
s.2(1)

 It the consideration is goods alone and not money


then SOGA will not apply.

 If the consideration is partly goods and partly money,


there may be a contract of sale.

 Price may be ascertained in many ways: s.9


a) fixed by the contract
b) left to be fixed in an agreed manner
c) if none – the buyer must pay a reasonable price
Cont.
Cont.

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