Full Text of "Sale of Goods"

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AUSTRALIA
The Law Book Co. Ltd
Sydney : Melbourne : Brirbane
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N. M. Tripathi Private Ltd.

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Steimatzkyi Agency Ltd.

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PAKISTAN
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U.S.A. AND CANADA

The CarsweQ Company Ltd.
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SALE OF GOODS
G. H. L. FRIDMAN
M.AJiOxon.\ LLM.{Adeltdde)
Of (he Middle Temple, Barrister^t'Law

Reader in Law In the University of Sheffield
LONDON
SWEET & MAXWELL
1966
Vi THE SAME AITTHOE

The Modem Law of EmpIoymeDt (1963)
The Law of Agency (1960)
Published in 1966 by
Sweet <5 Maxwell Limited of
It Nfw Fetter Lane London
E.C.4 and
printed in Great Britain by

The EoMem Press Limned of
London and Reading
O. H. L. Fridman
1966
TO CANDIDA
preface '
In the hope of forestalUng foreseeable comments, I should say at the

outset that my reason for writing this book was my belief that,
although existing works had their merits, there was scope for a treat-
ment of the subject that perhaps could present it in a new light. My
experiences in lecturing on the subject of sale of goods convinced me
that at the present time there was lacking an adequate, straight-
forward, yet sufficiently detailed study, suitable for being read, rather
than being used for reference, by those studying this subject for
University and other similar examinations. With that end in mind,
I undertook the task of writing a book on the law of sale of goods.
I can only hope that my approach to the subject, the style I have
adopted, and the scope and content of the book, have achieved what
I have set out to do.
The reader should find that the narrative in the text provides a
sufficient account of the law. without his having to refer to the foot-
notes. However, should the reader desire to pursue his research into
the law and its problems further than the text carries him, the cases,
articles, and books which are cited in the footnotes, and the queries
and problems which are sometimes raised therein, will provide
further material and suggestions.
I have tried to present the law in a logical way. This has some-
times meant ignoring the strict order of the Sale of Goods Act, 1893,
a statute which, as the text reveals, is for from being above criticism.
Indeed, the theme of this work, if theme there be, is the need for a
thorough revision of that Act, and a complete rewriting of the law of
sale of goods. To that end I have attempted, at various points in the
narration, to compare the present English law with the way the same
problems are dealt with by the American Uniform Commercial Code,
in the hope that such comparison may lead the reader to consider
ways in which the existing English law may be improved. No doubt
other, equally useful comparisons could have been made with other
systems of law. But to have done so, I felt, would have involved
Overloading the book with material which in a strict sense was super-
fluous in a book designed for the undergraduate reader. Enough, I
hope, has been said in the book to enable those interested to grasp
essential failings in the present law and to appreciate how those
failings can be rectified.
viii
PREFACE
The law throughout is stated as it was on October I, 1965.
This has involved referring to such statutes as the Resale Prices

Act, 1964, and the Hire Purchase Act. 1965. In a book of this sort
and scope it has not been possible, nor indeed was it desirable, to do
more than mention some of the salient points dealt with by those
enactments (particularly the extent to which the law of hire-purchase
is still regulated by the earlier Acts). However, in the light of their
effects upon the contract of sale of goods, they could not be over-
looked or ignored, even if they could not be completely analysed
and discussed. Lack of space, unfortunately, rendered impossible a
full account of these matters and of such topics as c.i.f. and f.ob.
contracts, or assignment, though, in appropriate contexts, mention
has been made of the special problems arising therefrom.
I must record ray deep gratitude to my friend and colleague,

Mr. J. D. McGean, b.cx., mu^., Barrister*al-Law, Lecturer in Law,
Sheffield University. He has read the entire book in manuscript, and
Ws valuable and searching comments and criticism have enriched toy
knowledge of the subject, preserved me from making too many mistakes
of style and law, and purged (he book of many flaws. For those
which yet remain I take full responsibiffty. My gratitude to Mr. Paul
Johnson, B.A.. B.C.L.. Assistant Lecturer in Law, Sheffield University,
must also be recorded. He has helped me greatly in the preparation
of the Index. I must also thank Mrs. V. Royston and Miss M
Coppock for their invaluable assistance in typing the manuscript,
particularly the footnotes, thereby making it possible for the book
to be legible to those charged with (he task of putting it into prinl-
I would also like to thank my publishers for undertaking, inde^
encouraging, the publication of (his work and for their help in its
production. Finally, I should like to say that I am extremely grateful
to all my students who have frequently raised points of great interest,
which have made it necessary for me to thinfc- very deeply and hard
about the law of sale of goods and have often made it imperative to
rethink my original ideas. They, too. have saved me from falling too
often into error. *
Sheffield
United Nations Day, 1965
G. H. L. RUDMAN.
CONTENTS
Preface
Table of Cases
Table of Statutes ....
PART I
THE CONTRACT OF SALE
1. Teie Contoact of Sale op Goops 3
1. Scope and Sources of the Law .... 3
2. Definition of Contract of Sale .... 4

3. Absolute and Conditional Sales .... 15
4. Sales and Agreements to Sell .... 21
2. Creation of the Contract 24
3. Subject-Matter of the Coniract 33
1. Goods 33
2. The Different Categories 33
3. Perishing of Goods 43
4. Thb Effects of a Contract of Sale .... 51
1. Property and Contract 51
2. Property and Title 52
3. Classification of Contractual Obligations . . 56
Page
, vii
xi
. xxiii
PART n
PROPRIETARY EFFECTS OF THE CONTRACT
5. Tkb Transfer of Property ...... 63
1. Introductory 63
2. Specific Goods 64
3. Unascertained and Future Goods .... 83
4. The Right of Disposal 90
6. The Title of the Seller 94
1. The Statutory Obligations 94
2. Sales Without Title 106

3. Hie Innocent Purchaser 129
ix
arrENTS
PART in
CONTRACTUAL EFFECT OF THE

CONTRACT OF SALE OF GOODS
7. THB OiARACTER and QUAtITY OF THE GOODS
J. Express Undertakiogs as to the Character ana

Quality of Goods *
2. Implied Undertakings as to the Character and
Quality of Goods . . . *
3. Waiver and Exclusion of Undertakings as to tne
Character and Quality of Goods . . *
8. Performance of the Contract
1. The Duties of the Parties
2. Delivery
3. Acceptance
4. Payment '
5. Factors Affecting the Performance of the Contract .
135
135
14S
179
195
195
203
220
229
232
PART IV
REMEDIES
9 . Rictrrs of an Unpaid Seller Agajnst the Goods
1. 'Real Remedies
2. The Unpaid Seller's Lien , . .
3. Stoppage in Transitu
4. Resale by ihc Seller
10. The Seller's Personal Remedies for Breach of

Contract
1. The Effect of Breach of Duty by the Buyer .
2. Action for the Price
3. Damages for Non-Acceptance . .
4. Misrepresentation, etc.
U. Remedies or the Buyer Against the Seller
1. The Classification of Duties ond Remedies .
2. Title
3. Character and Quality ......
4. DcUsety ^ .
5. Additional and Alternative Remedies .

231
251
256
266
274
2S0
280
283
286
300
306
306
30S
313
323
331
tnJfx
335
TABLE OF CASES
AaukUN V. MowiCE (1849) 8 C.B. 499
Adanujtoi Shipping Co. Ltd, v. Anglo-Saxon Petroleum Co. Ltd. [I939J
122
35
5. 85
Andrews Bros. Ltd. v. Singer & Co. Ltd. (19M) 1 K.B 17 .
Angar v. Vwivier (1902) 18 TL.R. 596
Angel V. Jay [19111 1 K.D. 6Sf
Ardath Tobacco Co. Ltd, v.

Amitage v. Haigh & Son Lt
Aron (J.) & Co. v. Coraptoir
-+4,
. 156,
231
332
46
163
. 328
317
322
190
275
244
3IS
B. & P. WKOifSALB DiSTRiBirroRS V. Mamto I1953J CL.Y, 3266 223
Badischc Co Ltd, P' 43
Badishe AniLn und S , 217
Baldry y. Marshall [I , 165
Ballantine & Co. v. ( , 215
Bank of England v. 4
Banner, Ex p (1876) 2 Ch.D. 278 92

Bannerman v. VVliite (1861) 10 CB ^ s.) 84^ 137
Barrow, Lane & Ballard Ltd v. PbiUip
244
Bartlett v. Sidney Marcos Ltd. [1965] 1 W.1 171,
172
Beck V. Szymanowski ]1924) A.C. 43 152, 154, 186, 187, 209
Beckett V. Tower Assets Co [189II 1 QB. 1 8
Beecham Foods Ltd. v. North Supfdiers (Edmonton) Ltd. [1959] 2 All ER.
336 66
Beer v. Walker (1877) 46 LJ Q B 677 164, 239
Behnkc v. Bede Shipping Co. Ltd. [1927] I K.B. 49 330
Behrend & Co. Ltd. v. Produce Brokers Ltd. [1920] 3 K B. 530 210, 212
Bell V. Lever Bros. Ltd. [1932] A.C. 161 28
tadle of cases
gnato &qI. v b/oS" r? '
&? so.Tf
8, 12S, 330
13S
226
BcIhtuT ' *' Co- '<< IIM8I 1 K.B
B, shop & Baate, v. APElp.Eas,e S', ^ ^.B. 314 .. 321
Buhop,. ''' 2 " BR-

i!.a=k 6 ^<, T.;iv:-K;.VaV Llj'-imW'.-
Bornes * * : . * *
Borrow: ' ,
Bostocic & Co Im' ,.i4T'.t'V * 15
^ ,
* W) i K.B. 723 ..
IIWJ A.C. 597 ....
.. 315, 320, 321
-R- 12 .....F*;;
Briol T>aSS K.B. 917 202. 203. 213, 2W
BrlBsh r K:i:v 3 V.v-
BriOih OjI & 2S0 ^ *^**' Presjings
British^'^sCiaghojug Eleli.c*' 3? TX.^
Ufldergrouad
( 1925 ) 4 i'TL.R. ^ 7 ;
EIericRlys Co oM^ Manufaclurwg Co Ltd
JMS'S S%"lm'" a'c. En':"-

B"*s> <
^ 430 .
Brown i
Brown A
bXVv'I? W > ci'm <"*) 5 Tr' 4 r......;.: 113
s;i!=rVSTj-n y.' i 1 .
V ............li, m
2 TS^;g)
B"ct V. c;.., 5'" Bw. Aii er: 64':;;;;;;;;;;;;;;; H
l^sMa. STC.M Pan
Co. Ltd. (18991 1 QB

93. 125. 272
TABtE OF CASES
CommeU Laird & Co, v. Mangaoese Brotoe & Brass Co. Ud. 11934] A..C
402 14, 159. 160, 161, 162, 171
Campbell Discount Co. Ltd. v. Gall |!W1| 1 Q.B 431 Ill
Campbell Mostyn (Provisions) Ltd. v. Barnett Trading Co. [1954] 1 Lloyds
Rep. 65
Canada Atlantic Grain Export Co v. Eilers (1929) 35 Comm Cas. 90 ... . 170
Capon. Re [1940] 2 All E R. 135 ^
Car & Universal Finance Co. Ltd, v. Caldwell [1965] 1 QB. 525 120, 121
Cassaboglou v. Gibb (1883) 11 QB.D. 797 6, 7. 252
Central London Property Trust Lid. v. High Trees House Ltd. [1947] KB.
130 18. ISO
Central Newbury Car Auctions Ltd. v. Unity Finance Ltd. [1957] 1 Q.B. 371
108. Ill
Chalmers, Ex p. (1873) L.R, 8 Ch App 289 258, 260
Champanhac & Co. Ltd. v. Waller & Co. Ltd. [1948] 2 All E R. 724 176. 186
Chanter v. Hopkins (1838) 4 M. & W. 339 152

Chapronifere v. Mason (1905) 21 T.L.R. 633 158, 159
Charrington & Co. Ltd. v. Wooder (I9I41 A.C. 71 291
Charter v. Sullivan [1957] 2 Q.B. 117 296. 298
Oarterhouse Credit Co. Ltd. v. ToHcy 189, 190
Cheelham & Co v. Thomham Spinning .... 66
Chess (Oscar) Ltd. v. Williams (19571 1 142. 144
Chinery v. Viall (i860) 5 H. & N. 288 275, 330. 334
City Fur Manufacturing Co. v. Fureenbond (Brokers) London Ltd. [1937]
1 AU ER. 799 122
aarko V. Hutchins (1811) 14 East 475 218
aay V. Yates (1856) 1 H. & N. 73 13
Qayton v. LeRoy [1911] 2 KB 1031 117
Qyde Bank Engineering & Shipbuilding Co. Ltd. v. Castaneda [1906] A C. 6 331
Oyde cycle Co. v. Hargreaves (1898) 78 L.T. 296 25
Cochrane v. Moore (1890) 25 Q.BD. 57 6
Cohen v. Roche [1927] 1 K.B. 169 252. 257, 329. 330
Comtat V. Myham [1913] 2 K.B. 220 322
Cole V. N, Western Bank (1875) L.R. 10 CP. 384 113
Colley V. Overseas Exporters [1921] 3 K3 302 20, 23, 202, 284
Colonul Insurance Co. of New Zealand v. Adelaide Marine Ins. Co. (1886)
I'*"-'"-'* 76, 86, 237
231
, 275, 278
245
Couchraan v. HiU [1947] K.B. 554 144, 145, 146, 153, 186, 192
Couturier V. Hastie (1856) 5 HLC 673 39, 44, 46
Cowem y. Nleld [1912] 2 KB. 419 24
Cragev. Ffy(1903) 67J.P. 246 322
Cross V. Gardner (1684) 1 Sh. 68 143
Crozicr Stephens & Co. v. Auerbach (190^ 2 K.B. "
Cullinar" . -
CummL
Cundy
Curtis '
Cutter 1
Demby Hamilton & Co. Ltd. v. Barden HSM9] I All E.R. 435 239
Dcnnant v, Skinner [1948] 2 K.B. 164 27, 65, 68
xiv
TABLE OF CASES
Denny V. Skelton (19JQ 86 LJ.K.B 2S0 .. . 86
1*261 1 K.B. 320
Dick I^mley Productions Ltd, v. Harold Smilh (Motors) Ltd. [1965J J \V.L.R.
r- , 303
Finance Cbrp. Ltd. fl939J 1 K.B. 724 232
237
1 AppCas 632 3
on & Steel Co. Ltd. 11909) A-C. 293 3

161
J22
^ Jardin v Eeadman Bros Ltd. 119521 2^
Dumwd & CO. V. Ruddm Ltd J19531 2 AU i-iv.
. ' ' ' ' * ') 9ai.D. 20 ...V.V.V.V.V.V..... 29L 2^
' ' ; rage* Motor CO, [1915] AC 79 287
East Co. iNa v, Cabmbl Eworters * Importers Lto. (IW2I
12^ 130
I, 19. 79
!. 95
65, 70. 149
. . , , R. 86 23
' ' .V.V.V.\V.V.'VV.' V.V.V.V.Vsi, 82
s * , ' ............ ..... . ......... 1*
. ' . ' 4 >11 119JII AC. 105 325
' V. V/0 Sovfracht
25 Ill
27
1 V..P ^ A Co. Ltd. n'WTl 1 Uoyd-J
ibros^SA. K Fairbaim Uwsoa ^'mbi ^rbiVrltdyilWy'i Kb! V2VVw3^ ,
roM V. Aylesbury Dairy Co. Ltd. [1903J I R B. k' 1 ! ! ; ! ; " ! " i iig' JW. 316
G*mam, A CiAVT Ltd. v, Bukk [Itni ^ tr n

Oak V. New [I9J71 4 All CR, 644 ' *
Gallarher p. Shdcoct [J9t91 2 K.B TM*

Career r. Gray (igtS) 4 Camp. m
GeddTuij *. Marsh (19201 j K.B. 669
. 207. 219
[ 71
*29.* 232. 277. 279
170
.... 157, 163. 316
TABLE OF CASES
XV
General & Finance Facilities Ltd. v. Cboks Ors (Romford) Ltd. (19631 2 AH
T>
Genn v.
Gtbaud t
Gibson '
Gillespie
Glyn Ml
Godley v. Perry (1960J 1 AU E.R. 36 153, 154, 160, 167, 178
ti po 'IQ 91
1 . ; , , . iX>, 628 269. 272
' ,1 : 301, 304
< 13
.. 153. 159, 163.166, 167, 171, 172.

173
Grebert-Borgnis v. Nugent (1885) 15 O.BD. 85 327
Green v. Arcos Ltd. (1931) 47 T.LR. 336 208
Grenfell v. Meyrowitz Ltd (19361 2 AD E.R. 1313 155
Griffiths V. Peter Conway Ltd. (1939} t AU EJt. 685 163, IM, 172
Groves V. Wild (1835) 5 B. & Ad. 105 11
Gunn V. Boickow, Vaughan & Co, (1875) L.R. 10 CbApp 491 252
HiDlEV V. BWCBNDAIB (1854) 9 Ex. 341 .. 288. 289, 290, 291, 315, 317, 318, 319, 3
326. 327. :
Hall Ltd. & Pirn Co 's Arbitration. Ret Hall Ltd v. Pim & Co. (1928) 139
L.T. 326, 327, i
Hamilton v ' ( , ' ' . 589 .
Hammer & . 227, i
Hammond *. * '
Hardwick C 1 .149, 161. 1
171, ]
Hardy & Co. v. Hillems & Fowler (I923I 2 K.B. 490 221. 225, 226, 227, :
Hargreavc v. Spink (1892] 1 Q.B. 25 1
Harlan^ .. ^ , ,
Harling . . 144. 145, 146, 1
Harris '
Harriso , . ]
Harrison & Jones Ltd v. Bunten & Lancasle ' , ' 1
Hartley V. Hymans [1920] 3 K.B. 475 .... , i
Hartog V. Colin & Shields (1939] 3 AU E.R. 566

Head v. TattersaU (ir*' t t> r--
Heilbut, Symons & Co v. Buckleton [19131 A.C. 30 139, 143. 144,
Heilbutt V. Hickson (1872) L R 7 CP. 438
Helby v. Matthews [1895] AC. 471 8, 9,
Henningson v. Bloomfield Motors Inc. (1959) 32 NJ 358
Hesfcell V. Continental Express I4d. |19^ 1 All E.R. 1033
Hewtson v. Ricketts (1894) 63 L3.QB 711 :
Hewlings v, Graham (1901) 70 LJ. Cb. 368
Heyman v. Flewker (1863) 13 C.B(n3) 519
Hickman v. Haynes (1875) L.R. 10 CJ. 598 :
143, 191
xvi
TABLE OF CASES
Hopkins v. Tanqueray (1854) 15 C.B. 130 -
Horn V. Minister of Food I1948J 2 AH ER. I0J6 47, 206. 238. 244
Houndsditch Warehouse Co. Ltd. v. Waltex l4d. [19441 K.B. 579; [1944] 2 All
ER.518 J8. 323
Household Machines Ltd v. Cosmos Exports Ltd, [I946I 2 All E.R. 622 .. 327, 3^
' ( : 39," 41*. 48, 49^ 243* 244^245
2)2
! . . . . .. , 45
. 126
htPEitiAL Ba.vk V LavDO.v & St. Kxtherwe's Docks Co (1876) 5 Ch.D. 195 .. 2
Impcnal Tobacco Co. of Great Britain Ltd. v. Parslay [19361 2 AU ER. 515 287
Inglis V. Stock (1885) 10 AppCas, 263 ^
Ingrain v. Little [1961] 1 Q B. 31 27. HI. 119, 127, 138
International Sponge Importers Lid. v. Walt & Son [I9IIJ A.C. 279 231
Ireland v. Livingston (1872) LR. 5 HL. 395
Isaacs V. Hardy (1884) Cab. A El 237 12
JacKSOv V. RoTA.t Motor A Cvcie Co. [19101 2 K.B. 937 172, 210, 214
y Watson A Sons (I909J 2 K.B. 193 158, 318
Jacobs V I^taa A General Piantations Trust Ltd. (1924J I Oi. 287 15
Jamal v. Moolta Dawood [19161 AC. 175 . . .. 294
Janeslch v. Attenborough A Sons (1910) 102 LT. 60S U;
Jenner v. Walker (1868) 19 L.T. 398 25
Jerome y. Bentley A Co. (19521 2 AU ER. 1*2
Jobhn V. Watkins A Roseveare (Motors) Ltd. (19491 1 All ER. 4? 10.
Jobson V. Oppeoheim A Co. (1905) 21 TJL R. 468
Johnson y. Taylor Bros, (19201 A.C 144 . 205
Johnstone y Marks (1887) 19 QDD, 309 25
Jones K Just (1868) L.R 3QB, 197 ....1!!. !.!..! 1^5
r. TankrrriUe (Earl oQ [19091 2 oi. 440*!*, ! !'! *! !*!!!!!! 529
Julia, The |I949J AC. 293 237, 238
A Co. y. Blyttie Ctrt.f A Co. II9J6J I K.D. 493
KarDet Ltd. y. ||933J 2 K.B 251
Karsaln (Harrow) Ltd. r Walhs (I9J1 i \v!lr ois ' 188. 189. 190
Kadff A Cohen y. SliTOUskl (I92I f K.R 31
V.em.n y. lUerxltnan [19061 2 KJL 604 .. ' ' I*
y. Talk (1882)7 App Cm. 573 260, 267, 272
- y limsy. Imrif Co. (1907) )0O L.T. 996 269
Kr-.-'tff r. B;aibr!oflS Ltd. (1923) UJ 79
KrriU y. Miri-HaJ: Slrtens A Co. flSt:
k.irr A Co y INTuuhesJ frcwi A Steel ( H
KUlKL-n y AfSr-.VjrotJt.h [1877) t t? D. ' '1
Kh'-a r. lleSon A Co (t^^) 72 L.T"2f6 . .... 12J
y LR. 3 QD (/A ' .... 26)
Knr./ , n-siJ: M lT. 74t 2
tl7j7| J| TLR.*2f2* 6
Ktfwn ttprrsuw* A Orîesor, |tJ [17271 ! K.B. 298 6^. 75
.rt 7K Oua *. Trsderi A SSrpm LU. (IWJ 2 OH 457 .. 203.
22J. 227. 317, JIL ^2*
TABLE OF CASES
Laiw i Son Lid. v. Darclay, Curle & Co. Ltd. II908J A C. 3S .
. 65. 76. 85
114, 118
6
.... 278
.... 85
9. 126,
... 13.
8) 64
327
38
117
127
I. 14
322
26
I td.
105. 129
109, 130
Lloydt Bank Ltd. v. Bonk of America National TYutt & Savings Assuaalton
11938] 2 KJJ. 147 114
Lockett V. A. & M, aarlcj Ltd. I1938J 4 All E R. 170 14. 174
Lomas & Co. v. Baril Ltd. (1901) 17 TLR 437 209
London Export Co. Ltd. v. JubUee Coffee Roasting Co. [1958] 1 W.L.R. 661 148
London JeweUers Ltd. v. Attenboroofih |I934| 2 K.O. 206 78. 80, 81, 126
London Plywood & Timber Co Ltd. v. Kaslc Oak Extract Factory & Steam
SaraiUs Co. Ltd. {1939} 2 K.B. 343 211. 323
Long V. Lloyd 11958] I W.L.R. 753 138, 185, 193, 332
Longbottom & Co. v. Bass. Walker & Co. Ltd. 11922] WN. 245 257. 260
Lords Trustee v. G. E. Railway [1908] 2 K B. 54 257
Love V. Norman Wright (Builders) Ud [1944] K.B. 484 14. 30
Love & Stewart Ltd. v. Instone & Co. (1917) 33 T-L.R. 475 29
Lowther v. Harris [1927] 1 K.B. 393 113
Luis de Bidder Ltd v. Andre & Cie S.A. [1941] 1 AU E R. 380 88
Lumley V. Ravenscroft [1895] 1 QB. 683 24
Lyons v. Hoffnung (1890) 15 AppCas 391 269

Lyons & Co. v. May & Baker Ltd. [l^J 1 K B. 685 221, 252
Maas v. Pfirraa [1905] A.C 102 8
McConnell v. Wright [1903] I Cb. 546 333
McCufeheon v. McBrayne [1964] I All EJ^. 430 29. 149
McDougall V. Aeromarme of Emsworih Ud [1958] 3 All E.R. 431 . . 65. 76, 85. 200
McEntire v. Oossley Bros. [1895] A.a 457 8. 64
Mackay v. Dick (1881) 6 A.C. 269 20
McGmther v. Pitcher [1904] 2 Ch. 306 30
McManus v. Fortcscue [19071 2 KB. ! 27
Maepherson Train & Co. Ud. v. Ross & Co. Ltd. [1955] 1 W.L.R. 640 136, 153
McRae V. Commonwealth Disposals Commission (}95I) 84 C.LR 377 ., 39, 45, 185
Afaddeine Vjonnet & Qe. v. Wills [19^ 1 K3. 72 286
Madell v. Tbomas & Cb. [1891] 1 Q3. 230 8
Maine Spinning Co. v. Sutcliffe & Co. (1917) 87 LJ.K.B. 382 201, 234
Mainprice v. Westley (1865) 6 B. & S. 420 32
xviii
TADLE OF CASES
Malas V. British Imcx Industries Lid. (1955] 1 AU E.R. 262
Mambre Saccharine Co. v. Com Product* {1919] 1 KB. 193 f(j
Manchester Liners Ltd. i-. Rea {19221 2 AC. 74 I. Iw.
Maple Flock. Co. Ltd. v. Universd Funuture Products (Wembley) Ltd
, " 13.1*
' ....in
..V.. 31. 322
Marsh v. Hughes-Hallctt (1900) 16 T.UR. 376 291
Marshall & Cb v. Nicoll & Son 19)9 S.C(H.L.) 4
;;-g,,26
... 236
; .... 4;:
.. .jg
33 Comm Cas. 19S *
, V'.V.VilVs. 328
.. st;dC0.'il8n)"5O>. 2i,
Mercantile Bank of Indu v. Central Bank of tadia 11^8] A.C. 287

Mercantile Credit Co. Ltd. v. Hamblin |1964) 3 AH E.R. 592; [1965} 2 Q^-
! no, 111
130
270
;;;;;; 275
.,B 369 2fg?
R. 499 %
93
224, 316
314
98
45. 2
29. 149
Mirabiui v. Imperial Ottoman Bank (1878) 3 x.D. 1^
Miracnlcl* " **
MischeR
Mollins ' . , , .
Monde! ' '
Monfort .
Monklar ' s
Moorcoe ' ' . , , , Vm ill
Moore & Co. & Undauer &Co. Re (I921I 2 K.B. 519 59. 152, 155.
Mordaunt Bros, v British Oil & Cake MiDs Ltd. (1910] 2 K.B. 502 .
Morelli v. Fitch & Gibbons 11925] 2 K3. 636
Morgan v RuiseU (1909] l KB 357
Morley v Attenborough (1849) 3 Ex. 500
Morns v. Baron & Co. [1918] A.C 1
Moss V. Hancock (1899] 2 Q B. ill .
263
, 153. 167
.. 12
Moss V. Hancock (1899] 2 QB. ill ..V
Mount (DF.) Lid v. Jay & Jay (ProviskHis) Co Ltd. [1960] 1 Q.B 265
Mowbray v. Merryweather (1595] 2 Q D. 640 .

MuUer. Maclean & Co. V. Lesbe Anderson (19211 WJ^. 235 .^c
Monro v. WiUmott [1949] 1 K D. 295
Munro A Co. v. Meyer (19301 2 K.B. 3(2 152. 155. 186.
MusVham Hnance Ltd v. Howard 11963] 1 Q B. 9CVI .
Nxvka Bkucc V. CowMOVwxALTH HiusT Lto (19261 A C. 77
Nash V. Inman 119031 2 K.B. I
Kadonal Coal Board v. Gamble (1958) 3 All E R 203
78
25
66
TABl OF CASES
xix
Kffw Zealand Shipping Co. v, Socidtd des Ateliers et Cbantiers de France [1919]
A C. 1 20. 242
Newbigging v. ... 303
Nevrmafl v. Jc ... 86
V. Ljpmao liviil 1 K.ti. 14
Newtons of Wembley Ltd. v. Williams [I964| 2 AU E.R. 135; (1965] 1 QB
560 65, 115, 120, 121, 125, 127
Niblett Ltd. v. Confeaioners* Materials Cb. Ltd. (I921I 3 K.B. 387 .. 98. 99, 100,
103, 168, 169. 170, 171. 176, 313

OctAN Tmfp TaWKeRs Cow*, v. V/0 Sovnuorr (The Eugenia) [1964] 2 Q B.
226; 11964] 1 AH E.R. I61 246
Ogg V. Shuter (1875) 1 CP.D. 47 91, 92
OUett V, Jordan (1918] 2 K.B. 41 73, 239
Oppenheimer v. Attenborough (1908] 1 K-B. 221 114, 115
V. Frazer & Wyatt (190^ 2 K..B 50 114, 115
p .. ... Bank Ltd. (1963] 1 QB. 794 .. Ill
< : , . ' . K.B. 531 205
. . . TX.R. 128 79, 82
' . . . 6, 93
' ' . . ' . . . . 125 140. 141, 142, 144
* ' .7 *, '' - . *-^*^:WL.R. 881 122
^ ' 473 .... 180, 234
. 20. 66. 93
; . . 143
^ 327
Paul Ltd. V. Pim & r- ^ r.. ,e
Pavia & Co. S.P.A. I s
Payne v. Elsden (190 ' ' . ' . .
V. Ministry of
V. Wilson 11895] 1 Q B, 653 114
Payne & Routh v. UUico & Sons (1920) 36 T.LJl 569 210
Payzu V. Saunders 11919] 2 K.B. 581 215. 323
Pearce v. Brair -i-;
Pearl Mill Co. . t

Pearson v. Ros . ,
Pennington v. '
Perdval Ltd v. LCC Asylums & Mental Deficiency Committee (1908) 87
^ L.J.K.B. 677 27
Perkins v.JJeU (1893] 1 Q.B 193 224
Pe
Ph
Pii
V'
Pl
Pletts V. Beattie (1896] I Q E

* V. CampbeU [1895] 2 Q
25
286
119
XX
TABLE OF CASES
P&chkt & Sons V. Allison Bros.
Ltd MOWl 9 Alt t
270
177
.. 8 . 10
82, 239
28
262. 263
29. 242
preist V. LasrrTw*31^2''lc n* *
Prince of Wales Dry iw? r? ^'W*'*-**.; >59. 160. I61, 163
Pnnz Adelbt, A C ^ "e^S
. ' 85
6. 149
328
322
vSof n?j'?lSn I Ail EJ!. S2I 54
230
J .* 28
. ' 26
. , 153
F**!? tu-ViIV" 5%'^* S.S. Co Ltd. oVlVtsi V 't V t> * ' 270
76. 85
. 4 , 235
301
13
325
2 Q B. 450 1|
: .^???!^ Townsend & Co mo^ -y* t- gjg ../. .... .\ 29 i 299. 328
145
. 3. lOJ. 102. 103. IW, 311. 312

' . 1 KB. 254 .. 153. 172, 176.
Rutter V. Palmer I1922J 2 K.B 87 226. 227. 228. 2
f*?'* [19481 2 KB 7t
Sander* 13
Sarpant s . , 2D
Scaturii
Scammell ANeohXlM'^-X*^-^^'*'T.LR 307 Mi
scho,snt rfl, Ao-.h"??" '.'.Sy A c. 251 ;;;;;;;; ^
Scott V, CouUon [19031 2 C 3 i 249 2 Chj^pp. 332 269 . 271
rr V <iw) 15 T.uR. 55
Silh V. Moor. (ISS6) Appci, 35o ^ M
' " <= i>*>5i I d,'. mv.v.v.'.v;;;:;; 302. m
TABLE OF CASES
xxi
Sethia (1W4) Ltd. v. ParubmuII Rameshwar II950J I AU E.R. 31 149
Shatiklin Pier Ltd. v. Dctel Products Ltd. |I95IJ 2 K.B. 854 146
Sharpe & Co. v. Nosawa & Co. 11917) 2 K-D. 814 328
Shaw &, Co. V. Symmons A Sons (1917) I K.B. 799 239
Shepherd v. Harrison (1871) L.R. 5 ILL. 116 92
Shiek Mohammed v. Bird (1921) 37 T.L.R. 405 325
Shipton, Anderson & Co. and Harrison Bros. A: Co., Re [1915] 3 K.B. 676 .. 43, 46,
66, 92, 245

Shipton. Anderson & Co. v. Weil Bros. {19121 1 K.B. 574 210
Sidney Bennett Ltd. v. Krceger (1925) 4| T.L.R. 609 320
Simmons v. Swift (1826) 5 B. A: C 857 77
c T.t.v . akes & Oilseeds Trading Co.
198, 231
. 31
318, 320. 325, 326
319
I.) Ltd. [1953] 2 All E.R.
ssm 189, 190
.... 28
.... 242
... 88, 89
N .... 286
.... 257
.... 15
. 158, 159
Taddy V. Stquous (19041 I Ch, 354 30
TaDby v. Official Receher (1888) 13 AppCas. 523 35
rv-t... 2(ri
i 318, 326
1 40, 329
I .. 217
I 296. 297
^ 173, 223
210, 244
1 ^ .... 18
I* . 298, 327
I , .... 153
Trebanog Working Mens Qub & Institute l4d v. Macdonald [1940J 1 K.B.
576
86
Tredegar Iron & Cbal Co. Ltd. v. Hawthorn Bros (1902) 18 T.L R. 716 ... . 86, 296
Truman Ltd. v. Attenborough (1910) 26 TXJl. 607 80
Tsakiroglou & Co. Ltd. v. Noblee Ihori Gjn.bH. (1962] A.C. 93 218, 245
Turner v Sampson (1911) 27 T.L.R. 200 113
TARLC or CASES
UixcMJAirL V. PANKinmST. WHiQirr & Co. (1923) 39 T.L.R. 628
Undenvoed Ltd. v. Burgh Cutl Brick A Cement Syndicate 11922J 1 K
343 66. 6'
Union Transport Finance Lid. v. Dallardie (1937] 1 K.B. 510
United pommions Tnuf Ltd v. Parkway Motor* Ltd, (1955) 1 \V.L.R. 719 .
. - 25. 26
: !. * *85d V.V.*.V.V.V.V.V.V..*
65. 71. 73. 75. 136. 152. 153. 184

Vigers Bros v. Sanderson BrosVilWlJ *71. 152. 155
.... H6
109
3, 301.3M
1*315
.. 186,193
Wertheimv Chicoutimi Pulp Co. (19111 A C. 301' ...V. 283.:
yÛ.E^p., reJicYiil (1871) LR. 6 OiApp. 397
. ' ' (I9621AC.413 ...202-^
. 163 96. 115, 118. 119. 1
I. (1933) 148 L.T. 263 .
Wi^ms Bros. v. Agius Ltd. (19141 A.C. 510 325. :
Wins & Son* V. Qinningham & Co. (19241 2 ici. 220 ..... 233, i
Wilson V. Rickett Cockerell A Co. Ltd (1954} l wV'.'/'lsV, 165, 166, 169, I
Wimble &. Sons A Co. v. Rosenberg A Sons (1913) 3 K.B. 743
Wood V. Baxter (1S83) 49 L.T, 45 .. .. 94, 1
Woodland v. Fuller (1840) 11 Ad A E. 839 .... 1
UnotA-vrEE (1918! A C. 585 205, 219
508 ... 189.190
Voung A Sons Ltd. v. llob^ A Partners (1949) 65 T.L R. 365 218
TABLE OF STATUTES
1677 Statute of Frauds (29 Car. 2, 1893
c. 3) 13
1855 Bdls of Lading Act (18 & 19
Viet. c. Ill) .... 56, 91, 112,
196, 265
1866 Hop (Prevention of Frauds)
Act (29 & 30 Vict. c 37) 179
1. 18 179
1874 Infants Relief Act (37 & 38
^ Vict. c. 38) 24. 25
1878 Bilfa of Act(4l'&42
Vict. c. 31) .. 9, 31. 34. 112
s. 4 208
1882 Bills of Sale Act (1878)
Amendment Act (45 & 46
^ Vict. c. 43) 9. 31
Bills of Exchange Act (45 &
1887 Merchandise Marks Act (50
& 51 Vict. c. 28) 179
I. 3 179
I. 5 179
. 17 179
1889 Factors Act (52 & 53 Vict.
C. 45) .. 65, 93. 107. 108. 110.
112, 113, 114. 115, 116.

118, 121, 122, 128. 130.
196, 262, 264. 265, 274
8.1(1) 113
(2) 123
(4) 205. 208. 264
8. 2 112, 121, 122. 123.
125. 127
(2) (3) (4) 114
s. 8 .... 112, 121. 122, 127,274

8. 9 .. 112, 121, 122, 123, 124.
262, 264, 265, 266. 272
8. 10 253, 264. 272
1893 Sale of Goods Act (56 & 57
Vict. c. 71) .. 3. 7-11. 25, 29.
31, 51, 52, 54-57. 63.
68. 69. 83. 86. 90. 91.
93. 96. 108. 143, 150,
169, 170. 177. 178, 184.
185, 190. 191. 195. 196.
212. 216. 219. 227, 231,
233, 237. 238, 242. 243.
253. 255-257, 265, 276.
277. 289, 290. 292, 300.
301. 307, 314, 315. 319,
330. 332
8. 1 98. 106
(1) 4. 6. 11. 22, 29. 52,
99. 101, 195. 237
xxiii
Sale of Goods Act cont.
(3)
4. 6. 22. 43
(4)
s 2 ..
7. 24
s. 3 ...
8. 4 ...
13, 24. 31, 180
8. 5 (1)
(2)
38, 45
(3)
34
8. 6 ..
17. 39. 44. 45, 46. 47,
49. 185, 244
8. 7 .. 17. 44. 47. 48.49. 51. 63.

185, 243, 244, 247, 248
(1)
29
(2)
30
s. 9 (1)
19. 30
(2)
30
$.10 ..
0)
.. 15, 19,200.231.282,
330
(2)
II .. 57. 63. 72, 142. 181,

208, 242
(1) (e) .. 142, 182, 201,

282. 309
(b) 142, 182, 282
(r) .. 73. 98, 102, 103,

142, 183, 187, 193,
201, 220. 222, 309,
310, 314
(3) 185, 199, 243

s 12 .. 4, 16. 55, 56. 97. 98,
100. 105, 306. 308
(1) .. 5, 34 54. 94. 95, 98,
99, 101, 102. 103. KM,

130
(2) 99. 102, 103. 106.
311, 312, 313
(3) .. 102. 105, 106, 312,
13 .. 16. 57, 151. 154, JX,

167. 176, m, m, 2tw.
211, yj6. 323
8- 14 .. 9. 16. 156. 157, 164, 175,
178
fO 153. 154, 137. 138.
159, IW. 161, 162, 163.

161. 165. 166, 167. 16^
172. 173. *4.
(2) 99. 154.
167. 1^
173. 174.
XXIV
TABLE OF STATUTES
1893 Sale of Goods Act con/.
s. 14(3) 148. 156
(4) 157
8. 15 .. 16. 57. 173. 174, 175.

176, 177, 178, 306, 323
(1) 175
(2) (a) 176
(b) 177
(c) 177
. 16 6. 16. 22, 39. 83
. 17 65. 71
(1) M
(2) 65
8. 18 .. 4, 65, 67, 70. 72. 74.
79. M. 126
Rule 1 . . 67, 70. 71. 72.
73. 184. 310

Rule 2 . , 74, 75, 76. 77,
90
Rule 3 ...... 77. 78. 90
Rule 4 . . 78, 79, 80. 90.
126.222
(b) 239
Rule 5 . . 69. 75. 76, 84,

86. 87. 88. 89. 90
(1) .. 43, 84. 254
(2) 89
19 .. 6. 16. 22. 39, 91. 305.
261
(1) 68. 217
(2) 90. 91
(3) 92. 93
I. 20 .... 22. 63. 237, 239, 240

. 21 5. 51. 55
(1) 107. 108. 130
(2) 107
(a) .. 112. 114, 122.
125
(W 128
f 22 (I) (2) (3) II7
8. 23 .. 114, 115, 118, I2a I2I.
122. 127
' 24 tl4
(1) 117. 125
<2) 118
25 )18
(1) .. 53, 121, 122. 123,
127, 253, 274
(2) 121, 122, 123. 124,

125, 126, 127. 262. 264.
265. 266. 272
(3) 122
26 5. 31. 55, 100
(I) 128. 129
s 27 .... 57. 195. 220, 229. 306
. 28 .. 15. 16. 37. 67, 68, 198

201. 206. 212. 214. 230.
258, 284. 312
- 29 (1)
( 2 ) .
207
1893 Sale of Goods Act-cant.
,.30 57,2.2ftW.g
{2) :::::: 209
(3) . .. 155,211
* .... 212.
(2) ....'fi:. 214. 216,
. 32 (!) .. 217, 228. 261. 268,
,5, 218
(3) :::.'22. 219. ^
57, m. 275, g
S 207. 213
755
(lit i5V,75S;'257. ^
j 'Tsi' a. I
() (5) W s
:: 7
J if. 761. 7
. 44"' .V.V.V.V7V7,|
*22 217, 268
"(,v.'.-.;-.'.;"in:768.769
770
717
(4> 271
S) m"...' ^3
(1) .... 266. 267.273.^8
(2) ....766, 773.
(3) .... 273. 275, 776, g
(4) .... 773.275,277,215
I 49 2^
ni 230. 283
(2) 23. 230. 284
TABLE OF STAWTES
XXV
Sale of Goods Act coni.
1927
Auctions (Bidding Agree-
8. 50 (1)
menls) Act (17 & 18
(2)
Geo. 5. c. 12)
32
(3)
1934
Law Reform (Miscellaneous
8.51 ..
12
Provisions) Act (24 & 25
(1)
Geo. 5. c. 41)
285
(2)
8 . 3
285
(3)
1935
Law Reform (Married
8. 52 ...
22. 40. 43. 3CM, 324
Women & Tortfeasors)
8. 53 ..
Act (25 & 26 Geo. 5.
0 )
c. 30) s 6
97
(2)
1943
Law Reform (Frustrated
(3) .
(4)
(c) .
318
315, 318
314
s. 54 98. 282. 289. 290, 307,
311, 313. 318. 324, 327
t 55 4. IS, 46. 148. 149, 180,
181. 253. 309, 315
s- 56 208
a - 57 32
58 (1) (2) 27
(3) 31
(4) 27. 31
M (3) (4) 10
61 ( 1 ) 21
(2) 3. 17. 200. 300
(3) (4) ,
J899 Anchors and Chain Cables

Act (62 & 63 Viet. c.
23) 179
s. 2 179
1901 Finance Act (1 Edw* i, c. 73
8-10 30
1902 Finance Act (2 Edw.
i<vvT ^ 30
Crimuval Appeal Act (7 Edw.
toil 118
*3 Fabnes (Misdescription) Act

nu t, * 4 Geo. 5, c. 17) 179
1^14 Bankruptcy Act (4 & 5 Geo.
5. c. 59) 83
19ifi I * 83* 112
Larceny Act (6 & 7 Geo. 5.
t-wn . > 50) 45 118
1920 Seeds Act (10 & 11 Geo. 5,
54) 179
Feruhsers and Foodstuffs Act

(16 & 17 Geo. 5, c. 45)
^ 179, 186
* 2 a) 179
11
30
30
31
8. 62 (1)
., 5. 10. 33. 39. 51
. 52.
1954
69. 99. 141. 168.
176,
182, 203. 205, 208,
252.
255, 264,
266
1955
(2)
265
1956
(3)
259
<4)
TO
Contracts) Act (6 7
Geo. 6. c. 40) .. 17. 21, 48

185. 199, 233, 236. 246
s. 1 (2) 246
(3) 247
(4) (5) 246, 247
(6) 247
*. 2 (4) 246
(5) (c) 247
1M8 Companies Act (11 & 12
Geo. 6, c. 33)
Finance Act. 1948 (II A 12

Geo 6. C.49). s. 24 .... 30
1953 Iron A Steel Act (1 & 2 Eliz.
2. c. 15)
ss 8. 9. 10
Merchandise Marks Act (1
& 2 EIiz. 2. c, 48) .... 179
1954 Law Reform (Enforcement of
Contracts) Act (2 & 3

Eliz. 2. c. 34) 13, 31
1955 Food and Drugs Act (4 & 5

Eliz. 2, c. 16) 179
1956 Restrictive Practices Act (4
& 5 Eliz. 2. c. 68) .... 30
8. 25 30. 66
1957 Advertisements (Hire-Pur-
chase) Act (5 A 6 Eliz.
2, c 41) 9
1960 Road Traffic Act (8 & 9
ELz. 2, c. 16) 179
Corporate Bodies Contracts

Act (8 & 9 EUz. 2,
c. 46) 31
1961 Consumer Protection Act (9
& 10 Eliz. 2. c. 40) .... 179

Mock Auctions Act (9 & 10
EUz 2, c. 47) 32
1963 Weights and Measures Act
fc 31) 179
1964 Hire Purchase Act (c. 53) .. 127
S.27 126
Part III 108
Resale Prices Act (c. 58) . . 30, 290
1965 Administration of Justice
Act (c. 2) s. 22 128
Hire-Purchase Act (c. 66) . . 9, 31

s. 1 (1) 18. 126, 150. 183, 230
s. 2 126. 150, 230

xxvj
TADLE OF STATUTES
1963 lllre-?urcha*e Acteonr,
1. 3
1963 HirC'Pwrthjie Act-J/.
( 17
f. 20
18
183
(1) (2)
0)
AMERICAN UNIFORM LEGISLATION

Uniform Sales Acl .. 10. 52, 36. Unifemi CbmmerdJl Code
68.
1S8,
69. 83. 103. 105.
166. 167. 177. 184.
183. 240. 233, 256
^<onr.
307
.... 56
. 1 (11 (21.
.. 180
. 7 (2) ..
a. e(i> ....
/I\'
. 9 (2) . .
181
(2) ...
s. 12
Vie) .. 30
(1) ...
1 13 .. ..
11' ni^
(4) ..
...:.v 105
1. H
55. IW
. 15
, ,
(1) ...
158. 166
(2) ...
177
(5) ...
(6) ...
.5J. 164 jj
. 16 (j) ...
. n
s 19. rule 3
<11 (2) .... 83
rule 5
(3) (6) ..
... m |
* .106
() ...
8.23
. 27, 32 .
238. 240
326 (1) (2) (3
327
401
83
-r-f
' . 208
208
Uniform Commercial Code .. JO.

(4)
204, 208
.... 241
96. 103. 105. 166, 167.
174. 177. 193. 212, 214,
217
(a) (b) M .
* 219
241
217. 229. 240, 24f. 255
256, 276. 279. 285, 323

. 1-201 256
241
... 241
(15) 241
601 183. m 314
* 2-103 241
IM 241
(1) (C)
607
314
' JJ
(1)
97
TABLE OF STATUTES
WVll
Uniform Commtrcial G)de
coni.
2-612(1)
212
(2) (3)
..... 214
702 (1) (2) (3) .
256
703
. ... 255
(3)
(4)
276
(d) ....
276
(5) (6)
707 (1)
279
70S (1) a)
289
709
285
710
. 286, 289
Uniform Commercial
s. 2-711
Code
307
(2) (a) ....
30/
712
. 307,
323
713 (1) (2) ....
324
714 (1)
314
(2)
315
715
. 3 I 5 ,
324
(1) (2) (b)
316
717
718, 719 ......
322
723
. 289,
324
s. 7-104
205
501
105
502, 503
56
Part I
THE CONTRACT OF S ATE
F3X}.-
Chapter 1
THE CONTRACT OF SALE OF GOODS
1. Scope and Sources of the Law
Sale is a species of contract . Although many of the rules of contract

are of general application to sale particular rules apply to sales of
particular types of property. Hence the law of sale of goods must be
carefully distinguished from the law dealing with the sale of land,
the assignment of leasehold interests, negotiability, and the assign-
ment of choses in action. It is important to do this since, on the one
hand, only the contract of sale of goods is subject to the provisions of
the Sale of Goods Act. 1893. and. on the other hand, rules of the
common law or equity, and special statutes applicable to special
kinds of contracts of sale, assignment, negotiability, and certain
other dispositions by owners of goods, may not apply to a contract
of sale of goods unless and until they have been specifically stated
to do so by some statute or judicial decision.
So far as the common law of contract is concerned, the Sale of

Ooc yisAcLitself provides that, unless inconsistent with express pro-
visions of^Âct. the rules of the common law (including the law
merânt) apply to contracts for the sale of goods.* This has raised
the question whether, since the phrase rules of the common law
is specifically used, equitable doctrines affecting contracts which might
have applied prior to 1893 may still be invoked by the courts to
amplify, gloss, or supplement the provisions of the Act. In so far as
such equitable doctrines conflict with the express provisions of the
Act it appears to have been held that they are inapplicable.* Where
there is no such conflict, then it may well be that the courts are free
to apply relevant equitable rules. So far as other statutes are con-
cerned, the problem is easier: they will only apply to the contract of
sale of goods where express reference or proper construction permit
or necessitate such application. .
Thus the Sale of Goods Act. 1893. subject to what has just been
said, provides what is virtually a code governing the contract of sale
of goods. It is described as such In the judgment of Atkin LJ. in
1 Sale of Goods Act, 1893 (referred to hereafter as S.G.A) s. 61 (2). Particular

reference is made to the rules rebting to the law of principal and agent, and the
eSect of fraud, misrepresentation, inistalce or other invalidating cause.
Re Wall [1927] 1 Ch. 606 at pp 635-636, per Atkin LJ.

3
niE CONTRACT OP SALE OF GOODS
Re Wait.* The question has been debated whether prc1893 decisions

may be referred to and utilised in interpreting and applying the Act.
It would appear that the better view is that older decisions arc not
authoritative, and that the language of the statute, not the prior case
law, is the true source of the applicable propositions. Possibly, how*
ever, in cases of doubt or ambiguity, reference to such case law may
be made.* It should also be noted that, by virtue of the general pro-
visions of section 55 of the Act, as well as the particular provisions of
other sections,* the parties can exclude much, if not all, of the opera-
tive effect of the Act. This may be done expressly, by a course of
dealing between the parties, or by usage, if the usage be such as to
bind both parties to the contract.
Bearing all this in mind, it can be said that, to establish clearly

which situations and legal relations come within the scope of the Act,
it is necessary to identify and, if possible, to define the contract of sale
of goods. For this purpose, reference must be made, in the first
instance, to the Act itself.
2. Definition of Contract of Sale

The Act states that a contract of sale of goods is a <y>ntract wberg bL>
jhe_seller transfers or agrees to transfer the property in goods toj^
^yg rfor a mojiey consideration. caHed the price .*"" Such a contract
may be made between part Owêrs^ iTxrwy be cither absolute or
conditional." Where under a conuact of sale jhe property in
I s
are fulfilled subject to which the property in the goods is to be

transfeired. ***
The effect of the distinctions between absolute and conditional sale*

and sales and agreements to sell will be considered in greater detail
later.'^ At this juncture h is important to see how the definition
* expression " Code used by ban according to the report in the lA*
Report* i
* Per Loi C. lOI
at pp. b, hk"
the Sah mm
e.g. *s.
S'o!^ I' { BingNC. 115.
* SG.A. . I (3): iuUcf tdded.
. 1 ( 1 )
DEFINITION OF CONTRACT OF SALE
contained in the Act brings out the essential features of the contract
of sale of goods by way of contrast with other contracts to which it
may appear to bear some resemblance.
T he primar y-purposftUif^cnntrflcts of sale of goods, as is evident

from the language of the Act quoted above, is the passing of^property
in goods irrevocably from _Q ne_pefSon to another. ** Property *
means the general property i n goods, and not merel y a special pro -
perty.^ * This statutory definition raises dilficuU questions, which will
be examined in due course.^* It is difficult, for cxampIe,_t o_scg_3dvat
is meant by '* * . ' , tvhen the
Act_a p pears_ and and
title on t he is the
passing of the entire interest of the seller to the buyer (whatever that
interest may include or comprehend). Since, however, as will be seen,
a seller may pass a good title to a buyer though the seller himself has
no ownership to dispose of,' it is difficult to conclude that, in all
cases, what is involved is a transfer of ownership. The problem is
complicated further by the provisions of the Act^ under which,
unless the circumstances of a contract of sale of goods are such as to
show a different intention, there is an implied condition in every such
contract that the seller has the right to sell the goods or will have such
right (in the case of an agreement to sell) at the time when under the
contract property is to pass. To what does this refer: title, owner-
ship, property, or something else? Is it a collateral obligation
designed to protect the buyer, or a fundamental obligation of a cori-
tract of sale by virtue of which there is a conveyance of title similar
to the eventual result of a contract of sale of land? These problems
will be discussed at large in due course. For the moment it suffices
.to state that the language of the Act which is quoted above indicates
îhat wliflt jo j . . r. . u , , : < ' , i
ptu peny , ^
C/ the hflguage ot Tucker 3. in hiheheff v. Sprtnjeff 13942] 2 K.B. 331 at p. 336.

** SO A. $. 62 (1) tnfra, pp. 52-36.
t* See SGA Part 11; Infra, pp. 52-56.
UriJn- SGA. ss. 21-26: Infra, pp. lOS-129.
SOA. . 12(1): Infra, pp. 94-103.
Die fact that these obligations may be cucluded would indicate that, though
properly must be transferred, there b ito obligation to make ilile: and the seller
can epde any Uability to make Utfc. In thii respect, at any rale, the English
I goods would then resemble the Roman law of sale, from which it
otnermsc would fundamentally diSer,
The whole question is complicated by the peculiar (and historically caused) failure
of English law to accept or acknowledge any absolute ownership of property
On particular, personal property, though the lame appLci to realty). Where the
TIIE CONTTIACT OF SALE OP GOODS
Further, the language of the Act shows that what is involved is

the purchase of property in goods for money. No other form of
consideration will suffice to make the contract one of sale of goods.
There arc thus four features of the contract of sale of goods which,
st and out and differentiate it from all othei ^ntra cts. Theo ^
ajni^ pe, thV^ssi^ of property, g oodslis the subfectmatter ofj ht
contrac^^d the payment of moneyTor such goodT Each of these
must beconsidered to bring out the difference between sale and other
contracts.
(i) Purchase
t Th e, contract of sale of goods tovolves a purchase of the goods

lhe-.cglloquJ al sense of tbeif feing bought and_s o!d.-g 5e
Jhe-seller._th e other the buyer. It is thus a bilateral transaction of a
particular type. Property may be transferred, however, by other
means, sometimes without there being a bilateral transaction. ^
such cases the event upon which property is transferred differs from
the event necessary for the transfer of property under a contract w
sale. Broadly sneaking, in contracts of sale it is the ^ ^^nfraet
yhi ch Faults in th epa sging of the Droperty. ^Tbou^ theterms and
nature of the contract nray differ in particuTar instances. Jn oth^
inst aj ices o* . , . . tn su ch,
tfan^r.'~'l . ^ . whlg jt
effectively ; ' .
A^distii . * . : .
'byjoe persQaito m another and a contract whereby one person a gr^

tp jtct as the agent of another Jp r. the sale of good s, even where the
agent is a del credere agent,* or a commission agent,** in which casos
the agent may be personally liable for the price of the goods, as an
ordinary agent would not be. Whetl^Rr a person is -a Jtuver orJ H
agent is sometimes difficult to determine.** Various t^ts were
Romans had a concept of dominium, Eoelisb law evolved only *n We* ft

to possession, considering as the owner, until someone with a belter sue
Ttht appeared, the person with the best right to possession of all the claimany
to cteltL s G.A s. I m O)-
See S G.A ss. I&-19: Infra, pp. 64-93,
See the leading case of Cochrane r. Moore (1890) 25 Q B D. 57.
V.
Gibb
Sec Ireland v r t, *
nOPD.79
* See a series t , Prim Adelber!
119171 AC.* , Z-TheOrterie
(19201 A.C. )24. Lven where a manufacturer appointed someone sole selling
iigenu_ U wM held that the contract was one of sale not agency; Lamb v. GoAM
BrUk Co. Ltd. (1932J I K.B 710.
THE CONTRACT OF SALE OP GOODS
It is imposed by the law, rather than resulting from agreement

between the parties.
(ii) Property
Contracts of sale must be distinguished from contracts in which only

possession is passed, e.g., hire,* or pledge; those in which the buyer
will only obtain property on the occurrence of some event,
purchase*; and those in which the ultimate intention of the parties^
that the property in the goods should return to the original
on the occurrence of some event, e.g., mortgages of goods. Tn
difficulties result from the fact there may be a conditional sale o
goods, which is a true sale, not to be confused with a contract unoet
which somebody obtains a mere option to buy the goods,** or a
contract of hire purchase,* and the fact that there may be an appear-
ance of a sale by one person to another (whether possession passes
to him or not) which in reality is only a method of creating
for a loan of money.** Contracts of sale of goods, therefore, mus|
differentiated from such contracts as hire and hire purchase, options
to buy, and mortgages of goods. In hire purchase, for example, the
ultimate intention of the parties Is that property should pass ftom tne
bailor to the bailee: but something more must be done.
the making of the comract, before this result is achieved. laowo'
this is so true that it may be said that a person who buys on hire
purchase !s not in law a buyer at all, but Is simply one who pays
the hire of goods plus an option to buy. He may never exercise nis
option to buy: there Is no legal compulsion upon him to do so. H **
not until such option has been exercised by him that he becomes a
buyer of the goods. In the meantime his legal position is not that o
a buyer of goods, the relationship between the parties is not that o
seller and buyer, the Sale of Goods Act does not apply, and the
common law and statute law relating to hire purchase provide the
legal framework within which the relationship of the parties operates.
t ûait Drookj T. Derns/elft J|9(I | K.D. 93 with AltAJtn. . Frilehard (1?^^
97 U K.n. 561. ,
* 11893J A.C 471; Bebize Motor Supply Co. r. Cox fIII >
In which ih foods mro returned when th debt is Httified: Deekttt v.
I 0 0. 1 ! P. 2J. per Cun J ; see. re. Re WattOH
H9111 If I 1 . ,, ' AC.
4J7; .
Se rj> 1 < I . , s 1. 4ie
**CUUe* 1 . , , .
tl* hi a . Sort^
Cfnfrul I , - , flUSrt
Sufi J . , , , I , '
DEFI^Î'ÔN OF aJraACT OF SALE
An important effect ot this is that a buyer on hire purchase cannot

pass title to third parties within the provisions of the Sale of Goods
Act. This was decided at the end of the nineteenth century.** Nor
can a buyer on hire purchase claim the benefit of the implied condi-
tions as to quality and fitness of goods which are created by the Act.**
' It is important, however, to distinguish a Contract of hire purchase

from a credit sale of goods. The latter is a genuine sale of goods,
with all the effects thereof, and within the provisions of the Sale of
Goods Act. The difference lies in the nature of the agreement between
the parties. If the buyer has in fact agreed to buy, payment being
delayed because credit has been extended to him, the contract is one
of Sale. If the buyer obtains merely an option to buy, the contract
is one of hire purchase. This will affect not only questions of title
and the conditions to be implied into the contract (both by statute and
common law), but also such matters as formalities of contract and
the extent of the buyers obligation to pay. Sales on credit
and contracts of hire purchase have been assimilated in some respects,
where the purchase price of goods is below 2,000, os o result of
legislation, in particular the Hire-Purchase Act, 1965, consolidating
earlier statutes. The details of the statutory protection given to
purchasers within this legislation cannot be examined here.** But
the general effect of the provisions is to ensure that buyers within
the Acu ate given adequate information, are permitted to resile
from the agreed contract within a certain statutory period, are
protected as regards quality and title, and cannot be dispossessed
without a court order. Under the 1965 Act there is also a new
category of conditional sale agreements, which are governed by
the Sale of Goods Act and the Hire-Purchase Act, 1965.
It is as important, and sometimes just as difficult, to distinguish

a conditional sale of goods from a mortgage of goods. Here the
importance lies in the fact that written mortgages of goods may well
require registration under the Bills of Sale Acts. 1878. 1882. There-
fore even if the true nature of the transaction between the parlies is
*s S Itelby V. Matlhe^-j, supra, with which contrast Lfe v. Butler, supra.
* See FeUton TUe Co. Ltd. v. IVinget Ltd.
U--. AU EJL 473. But there may be equivalent implied conditions under the
ndustriai Trust
** . ilce, 1962; and
Act, 1957. as
lUuciiuKj by the 19b4 Act, resarthns what most be included in adTcrtisements

of roods sold on credit.
The dilTerences between credil.sa)es, conditional tale agreements and contracts

ot n purâse he in the time when properly in the goods that are inrolved passes
to the purchaser. From this ddlerence in lime stem important consequences as
respects the eurckacer htmceir tkint -....-rtU*
10
TTIE CO^mlACT or SALE OF GOODS
given the appearance of n sale followcti by a hiring or a hire purchê,

it may well be that the contract is one within the Bills of Sale A^.
and is not in any respect a sale of goods (or a contract of wre
purchase). The Sale of Goods Act docs not affect the Bills of
Acts, nor docs it apply to any transaction in the form of sale whic
is intended to operate by way of mortgage, pledge, charge or ol^
security.^* There are, therefore, practical as well as thcore i
reasons for deciding in any case whether the transference of property
is designed to invest the transferee permanently with property or is
intended to operate only as security for the repayment of a loan,
this respect the fact that property will only vest permanently m t e
transferee on the occurrence of some event, /.e.. the fulfilmen o
some condition, will tend to make difBcoIt the elucidation of
nature of the contract involved, v/z., whether it is a conditional sa
or something else. Each case, of course, will depend on its own
but it is important to note that the courts ate eager to penetrate behin
the veil drawn over the transaction by the parties and approach the
reality that is beneath.
(Ui) Goods ^
Only sales of goods come within the Act, which defines 5^ .

as including all chattels personal other than things in action ^
money. The word also includes cmbleiaents, industrial gfOWiaS
crops, and things attached to or forming part of the land which a^
agreed to be severed before sale or under the contract of sale.
, 119511
See the cases deed to notes 34, 37, eupra. and Dntry v. Victor
11^1] 1 All E.R, 269,
S GA. s 60 (3) (4).
*> See, e.g., the language of Lord Goddard CJ. in Polsky v. S. & A.
1 AU E.R, J5 at p. 188.
S.GA. s. 62 (i) In the United States the Uniform Comtneraal Code, s. ~

defines ** goods " as meaning ' all things that are movable at the ^
h the price .oW
: , aCommera^Cooe.
- . . . be many
. . of produems
the Uiufonn
meroal Code, r* T**- *- ! very
in form and co ' , . ' ' .
\VTUiston; the 1 t * **7*5
tale of goo^ ' ' rroin
^ LngUsh statute and the earlier American draft, was prepared by

UeweUyo. whether the Uniform Sales Act or the Uniform Conunercial Loo* ^
Uw or not depends upon whether m any of the states of the United State* :
or both drafts have been enacted into llie local legialation. Where they
toey have of law; elsi^lM^ they are of persuasive force p
Mmischlkotr. Highlights of the Umfonn Qwnmcrcial Code (I96<) 27 M t-R-
DEFINITION OF CONTRACT OF SALE
11
Goods, for the purposes of the Act must, therefore, be distin-

guished from: (a) things in action and money: (b) land, and things
regarded by law as part of land : (c) services.
(a) Choses in action such as debts, negotiable instruments, and

shares, do not come within the scope of the law of sale of goods.
Dealings involving the transfer of property in such things are governed
by other branches of the law. e.g^ the Jaw of assignment, the Bills
of Exchange Act, 1882, the Companies Act, 1948. Such things are
not tangible movables, but intangibles. The law of sale of goods
only comprehends such things as are tangible.^ Leaseholds are
excluded by the definition contained in the Sale of Goods Act,
because they are chattels real, and not chattels personal, i.e.. they
are not attendant on or annexable to the person of the owner. Money,
though a tangible and a movable, is not within the Act since the Act
specifies that the consideration for the purchase of the goods is
money hence it follows that there is an implicit contrast between
the goods which are the subject of the sale and the money that is
given as the'price of the goods. However, if money has ceased to be
in current use (or is bought as a curiosity, to be kept and not used
as currency, such as a 5 Jubilee gold piece*) it may be bought and
sold as goods. It would seem that the same may be true of foreign
money, even though currency in the country in question. Whether
trading stamps or similar articles can be regarded as goods would
appear to be a difficult question. As with stamps which are given
to employees under the holiday payments scheme (by which such
stamps are accumulated to enable transient employees to accumulate
benefits going with holidays with pay) difficult questions may arise
as to the true value of such stamps, /.e., whether it is the intrinsic
cost of the stamps or their exchange value.**
, (b) Things growing on land may be divided into two classes:
friicius naturales and fnictus industriales.*^ The latter, which include

such crops as wheat, barley and potatoes, comprehend both emble-
ments. which are crops produced annually as a result of agricultural
labour,* and what the Act calls "industrial growing crops, which
** But it win include even such ipedal things as ships, even though there may be
Pullar rules for the transfer of property in ships; see, Re Blyth Shipbuilding
s Dock Co. Ltd. {19261 Cb. 4M; McDougall y. Aeromarine Ltd. [19581 3
AH an V -1.*. 1. w. . .1,. hieh U
SOJV . . .
See *
[ 1964 ]
** See Rod%ra v. Phillips (1842) 9 M. & W. 501.

** Crovrj V. mu (1835) 5 B. & Ad. lOS.
L III.
' Office
12
THE CONTRACT OP SALE OF GOODS

would seem to be a wider expression in scope than emblements.
Under this head would come products of the soil which
annual or permanent.*^ But it is not clear, until judicial
clarifies the difficulty, how far this Scottish phrase in the Act (wluc
does not limit the application of (his phrase to Scotland) extends c
previous common law. It is clear, however, that fructus indiistna es
will always be goods within the meaning of the Act, whether they a
severed before or after the sale or under the contract of sale itse .
Fructus naturales, being a natural product of the land (cyw
originally sown by man),* will not be goods and therefore ww no
be capable of being sold under a contract of sale of goods unless t ^
are to be severed from the land at once. In other cês a contra
for the sale of such items will be a sale of land. This also app JC
to things attached to, or forming part of the land, such as fixtures, or
materials embedded in the soil, whether as a building or part o a
building or not. Such things can be the subject of a contract of sa
of goods only if severed from the soil before sale or under c
contract. In Morgan v. Russell,^* for example, the court
consider whether a contract for the sale of slag on premises of
the seller was a lessee was a contract of sale of goods. The se e
also had a licence to remove slag and other material from a
on adjoining land. The seller licensed the buyer to come onto
premises and on to the tip. The sellers lessor and licensor stop^
the removal of the slag, etc., after the buyer had taicn some.
buyer, therefore, sued the seller for default in delivery. It was he
that this was not the sale of a crop but a sale of part of the soH,
of something attached to the land: it was not a sale of goods but an
agreement to grant an interest in land. Therefore the buyer cou
not claim damages under the Sale of Goods Act,** for loss
bargain, i.e., his profit. Land itself, and buildings firmly attached to
the land, such as houses, garages, stables, etc., will not, of course,
come within the scope of the law of sale of goods. , .
(c) Contracts for the provision of services may include whhifl

their scope the transfer of goods from one person to another, where
the service involved is the making of something. Examples to be
found in the cases include contracts for building ships.** making
i lUnfamln on SaU fSlh ed.. 1950) t pp. 180, 186. whicli rich **
clover nod areUicisl friss.
1 KodntU V. rhCllps, ttipro,
|J<WJ t K-D. 337.
* i. 31. Infn. pp. 3J3-3M.

K* Bl/th Sfilpbunjlnf A Dry Dock Co. tirf. tl92) Ch. 494.
PEFINITION OF CmnUCT OF SALE
13
dentures,* painting portraits,' making a mink jacket.* In such

instances the question has been raised whether the contract is one of
sale of goods or for labour and materials. This was formerly of
great importance because of differences in pleading, the application
of the Statute of Frauds (later section 4 of the Sale of Goods Act *)
under which a note or memorandum in writing was required for a
contract, of sale of goods to be enforceable by action, the question
whether stamp duty was payable, and the relevance of implied con-
ditions as to fitness and quality of goods. At the present time, how-
ever, the only reasons why a differentiation is necessary are (a) stamp
duty is not payable on contracts of sale of goods, even if in writing,
whereas such duty is exigible on certain contracts of employment,
and (b) the statutory implied conditions as to fitness and quality do
not apply except to contracts of sale of goods.
There has been some variation in the views expressed in the courts
as to the correct distinction between contracts of sale of goods and
contracts for labour and materials. Whereas in Clay v. Yates the
view was adopted that the test was whether the work or the material
was the essence of the contract, in Lee v. Griffin Blackburn J. said
that the true test was the value of the work as contrasted with the
value of the materials. In Robinson v. Graves** the Court of
Appeal, in deciding that a contract to paint a portrait was a contract
tor work and materials not one of sale of goods, did not entirely
approve of the language of Blackburn J. in Lee v. Griffin, but adopted
his idea that the substance of the contract must be regarded and a
decision made in accordance with the way a reasonable man would
describe the transaction. In coming to this conclusion the court
expressly stated that it had no intention of overruling the case of
Isaacs v. Hardy * in which it was held that a contract to paint a speci-
fic picture was a contract of sale of goods. It was said that there could
be cases In which the materials were the substance of the contract
and the work ancillary or vice versa.** Which was substance and
* ' ~ K B. 526.
J , ^ 3 I1M5I I K.B. 579.
i contract to print s
"'as held not to b a contract of sale of poods; cf. Grafton T. Armltag
tl845) 2 C.D. 336.
(1860 I B. A S. 272. Cf. the langusec of L(h 4 Reading CJ. In R, T. Wood Cretn
, Committee (1920) 89 LJX3 55 at p. 56.
11935) 1 K.B. 579, in wUdi It was that a contract to paint a portrait was a
^t^ct for work, since the substance of the contract was the skill and bbour to
Mcrdsed by the artist and the passing of property in the materials used was
t * 0884) Cab. & EL 287.
* See (19351 1 K.B. 579 at p. 591, per Slesser U.
14
Tim CONTRACT OF SALE OF GOODS
which ancillary in any case was a question for individual detennina*

tion. Contracts to make dentures,** to take photographs in the street,*'
to make up medical prescriptions, to provide food in a restaurant,*
to make propellers for a ship according to a specification,** to buiM
a ship,* and to make a mink jacket, have all been held to be coB'
tracts for the sale of goods. In the latter case, the customer chose
skins of a preferred colour and selected a style for the jacket.
Hilbery J. applied the test in Lee v. Griffin and said that the article
was the important feature of the contract, not the skill in its makings
it was exactly the same as making an article for sale to a customer
on his special order. From these cases, therefore, it would seem that if
the primary object of the contract is the transference of property in
something which was not originally the property of the buyer, th
contract will be one of sale of goods: but if the primary purpose of
the parties is the performance of certain work, or the provision of
services, incidentally to which property in goods is to.pass from one
party to the other, the contract will not be one of sale of goods.
(iv) Money
The Act specifically mentions that the consideration for a contract

of sale of goods must be money. If the consideration is the giving
of other goods the contract is one of barter or exchange. Such
contracts closely resemble contracts of sale, at any rate as regards
the question of passing of property, But the specific provisions of
the Act cannot apply to a contract of barter or exchange. It must be
pointed out, however, that if the consideration for a sale of goods
is partly money and partly ocher goods,** the contract will probably
be one of sale of goods, not barter. This may depend on how much
s Lee V, Griffln, supra.
Nwman v. Llpman 119511 1 K.B 335 at p 336, per Lord Goddard CJ-
R. V. tVood Green Profiteering Commlilee, supra.
M ^clteil y. A. & M. Charle, Ud II938J 4 AU E.R. 170.
CammrfJ Uird & Co. v. Manganese Bronze & Brass Co. Ltd. [19341 AC.
Contrast Anglo-Egyptlan Navlgaiton Co, v. Rennie (1875) L.R. 10 CP. 271. Cfi
cuftamj; Love v. Norman Wrtght {Builders) Z.M.
n944J K.B. 484 at p. 487, per Lord Goddard CJ.
r Shipbuilding & Dry Dock Co. Ltd, supra.
J. Marcel {Furriers) Lid. y. Tapper, supra.
0812) 3 Camp 299; Pearce v. Brain [19291 2 K.B 310.
twppcns when an owner of a car trades-in " his vehicle for a nf'*
uTo *f*** he
any personal pr< , i .
that the price
payable in who , , ' , . . ' * . i i'
he is to transfer. ' . ' '
DEFINITION OF aWflUACT OF SALE
15
money was given. Thus in Aldridge v. Johnson''* bullocks at one

price were given in exchange for barley at a certain price per quarter,
and the difference in the value of the exchanged goods was agreed
to be made up in cash. It was held that the contract was one of sale
of goods. In another case,* the agreement was for the delivery of
com on terms that an equivalent amount of the like com or the
market price thereof was to be given on the day of demand. This,
too, was held to be a contract of sale of goods. It follows, therefore,
that if goods are agreed to be exchanged for other goods plus money,
and the buyer fails to deliver the goods as agreed, the sellers
remedy is an action for that part of the price which the undelivered
goods represent.*
As long as the consideration for the purchase of the goods is a

money price the amount of money to be paid and the time when
payment is to be made are not material to the question whether
the contract is one of sale. It will be seen in due course that the
determination of the price and time for payment are matters which
can be left to the agreement of the parties, in accordance with the
provisions of the Act."
3. Absolute and Conditional Sales
The parties being free, both at common law and under the Act, to
make whatever contract they choose, subject only to the limitations
of illegality and possibility, they can insert into a contract of sale
of goods such conditions as they think fit. In the absence of any
such express conditions or the possibility of implying into the contract
any conditions from the course of dealing of the parties, trade usage
or custom,* it might be thought that a contract of sale of goods
Would be absolute. In the sense that the parties themselves have
not appended any conditions to the contract, this is correct. However,
It is clear from the provisions of the Act itself, that, in the absence
of any such express or implied conditions, , there will be certain
7 E. & B. 885. But where the price is not based on such fixed sums, but is
determinable on some unknown fact or oent, the contract may be a wagen see
V. Short (1850) 3 E. & B. 904.
M o Insuranee Co. v. RandeU (186^ LR. 3 P.C 101.
TT ii J* iCiaphani) Ltd. v. H. & G. Outfield [19361 2 AU E.R. 232.
nder the Act, the price may be fixed by Uie contract or determined by certain
S.GA. s. 8; tnjra, pp. 29-30, It & also stated in the Act that,
,. *** ^ different intention appears from the terms of the contract, stipulations as to
01 iênt arc not deemed to be of the essence of a contract of sale;
s. 10 (J): Infra, pp. 200-201. But note S.G A. s. 28: infra, pp 206, 230.
,K goods is a credit safe this will affect the obh'gation of
t r-7 unpaid seller: see infra, pp. 252. 258.
w. S.GA. s. 55.
16
THB CONTRACT OF SALE OF GOODS
Conditions implied into the contract by virtue of the Act. Such

statutory conditions are concerned ttith the passing of property in
goods, i.e.. the lime or event at or upon Which this occurs/* the quah^
of fitness of the goods,*'* the dottespondence of the
description or sample,** the right of the seller to sell the goo^,
time for payment of the price.** All these matters will be diwusse
at more appropriate places in the present book. Here it is o ;
necessary to point out that, unless the parties have expressly W y
implication excluded all such conditions as the Act would i^py
into a contract of sale of goods (as often happens *0 without the
selves adding or substituting any similar or other conditions, the
can never be an absolute contract of sale of goods.** ^
However, It should be noted that the expression Condiuoa J

ambiguous. It may be that what the Act is contemplating
states that a Contract of sate may be absolute or conditional is ^
difference between a contract of sale which is intended by the
to be absolutely binding Upon the parties at the time when ,
and one which is intended to be binding only in the event of the '
filment of a certain condition or certain conditions, expressed
contract or implied from the surrounding circumstances, inclu 18
customs and usages of the trade. In this respect it becomes
to consider the nature of such absolute contracts of sale of
and the kinds and effect of conditions which may affect the bind 8
quality of such contracts.
Absolute sales
Such sales, in the sense in which, as explained above, it is possible

to speak of an absolute contract of sale of goods, will be
as from the time they arc made, though such terms as relate to
passing of property in the goods sold or the time for payment 0
the price may not take effect until the time or event fixed by t
contract. What is meant, therefore, by saying that a contract of
is absolute is that the parties are bound thereby and
resile therefrom without committing a breach of contract. Eac
party will be obliged to perform his particular obligations under t c
contract, whether such obligations arise from the cooinict it*'
or the Act.
S CA. 11 . lfr-19: Infra. j>p. M-9y.
S OA. t. Hs Infra, nt* 1J6*I?5

SOA. It. IJ. 15: Infra, pr 131-175
* SOA. I. 12: Infra, pp 94>ro<v
M SOA. 1 . 23: Infra, pp ms. 230

C7. PPL rtX-ISs, Infra.
Cf. lot eianpte. HrUbutt a. /Ik-ksoH (ISTT) UR. 7 CP. 43S.
ABSOLUTE AND CmOITIONAL SALES
17
Nevertheless, there are drcumstances under which even an

absolute contract of sale will not be binding as between the parties
thereto. Thus, if the contract, though purporting to be absolute, is
in fact invalid, through fraud or mistake, or can be avoided on the
grounds of innocent misrepresentation or incapacity of one of the
parlies, it is clear that it will not necessarily be binding, but will be
either void or voidable at the option of one party, depending upon
the nature of the invalidity alleged.** Furthermore, by virtue of
sections 6 and 7 of the Act certain contracts of sale, although
apparently binding, may be void ab initio or become avoided because
of some existing or eventuating situation, viz., the perishing of the
goods which are the Subject-matter of the contract at the time when the
contract was made or subsequently. Certain difficulties surround the
interpretation and application of these sections, as will be made
clear later but. if applicable, their effect will be to render an
otherwise absolute contract of sale a nullity. Another way in which
an absolute contract of sale may turn out to be of no effect is by the
application of the doctrine of frustration. If a contract of sê of
goods Is frustrated, then the parties will be relieved of their obligations
under it (though, in some contracts of sale of goods, as will be seen
later, there may be some liability on one or other or both of the
parties by virtue of the provisions of the Law Reform (Frustrated
Contracts) Act. 1943).*
Over and above these ways in which an absolute contract of sale

is rendered ineffective, it is always possible that the parties will
rescind the contract subsequently upon its being made by a later
Agreement terminating it completely. Such later contract may be
m any form (as may the original contract) : it may expressly rescind
the earlier contract or it may do so by necessary implication.* It is
important to keep clear the distinction between complete rescission
of a contract of sale and mere variation of its terms by a subsequent
agreement.*" It is also important to distinguish between a variation
See Infra. PP. 24, 27, 31. TTie Act specifically provides that the common law rules
relating to the effect of fraud, mlsrepreseatation, duress or coercion, mistake, or
other invalidating cause will continue to ap^y to contracts for the sale of goods:
5 OA. s. 61 ( 2 ).
Infra, pp. 43-50.
See infra, pp, 24A-248.
* Baron A Co. 1I918J AC. 1; BrliUh & Bertlngtons Ltd. V. N.tV.
Caeftof Tea Co, (19231 A.C 48. t^sdsdon may also be implied from the conduct
Co 119191 Tannery
** ^ , supra This was formerly of greater importance because
ot me provisions of s. 4 of the Act as (o a note or memorandum in writing. A

subsequent agreement to rescind did not Come within s, 4: but a mere rariafion
10 come within that section. It may stin be important to distinguish rescission
IS
niC CONTTIACT OF SALE OF GOODS
of a contract of sale by a later contract and a waiver by one parV

of the performance of a term in the original contract which is in
favour and for his benefit. Such waiver does not affect the ongia
contract or the term which is the subject of the waiver: all it does
is to affect the liability of the other party for non-performance o
the obligation which is being waived. . .
Lastly, there may be an assignment of a contract of sale wmc

will affect the responsibility of the party who has assigned
benefit or burden of such contract, in so far as any such assignmen
is permitted by the law. The Act itself says nothing about assj^-
ment: hence it is the general law of contract which will detcnni
whether, and if so how. and to what extent, either party may
an assignment. Assignment must be distinguished from nova i
which is the substitution of a new contract, with new parties,
the previously existing one. This, unlike assignment, requires
consent of all the original parties.
Conditional sales **
The contrast that would appear to be drawn by the Act is
absolute contracts as described above and contracts which
intended to be binding on the parties (and to pass property la
goods which are sold) only on the occurrence of some stipula
from variation from ih poin* of view of corulderofhn: a mutual

reseiflA an *art!<>p enntran v/{II h* vnli.f sinPn th* conxideratlOQ H ulS
t earlier contract will be vaL4. inee the consideration I* t

ovuiuu>.uient of rights and li^bibties under the original contract: but i
of a term may require fresh consideratiOD. It is otherwise if ^
is only a waiver: see next note. . ^ . ..oiet 1
1 See Betseler Waeehter Glover & Co. v. South Derwent Coat Co. Ltd. 11
K.B 408; Rickards v. Oppenheim [I950J 1 K.B. 616. If a party
a waiver of a stipulation, it is not necessary to prove any
promise not to enforce such stipulation. As long as there was reliance on .
promise by the irty now arguing in favour of waiver, to the detnniMt ot ^
party, the party insisting on strict performance of the original stipulation
estopped: cf. Central London Property Trust Ltd. v. IltgH Trees
11947] K.B. I30, and subsequent cases; on which see FriJman, '*
Estoppel ' (1957) 35 Can.B R. 279. The sitoaUon is different if variation

not waiver is alleged: cf, preceding note.
** See, generally, Cheshire & Fifoot, Law of Contract, 6ih ed , pP ^^3-452;
Caw of Contract, 22nd ed , pp. 354-401: Treitel, Law of Contract, pp. 429--' '
532-535,
As regards the assignment of rights under a contract of sale of

Tolhurst V. Associated Portland Cement 119031 A.C. 414; Kemp v, Saerseimo
1190612K.B. 604; Coope-1 .r- V." **-*-
under such a contract a
Buerger 11915] I K B 3C . .
be a limited notion of *' . . ,
V* Cf. Re United Railways
at pp. 84-85, per Jenkins LJ. .
* Under the Hire-Purchase Act, 1965. ss. 1 (1), 20 there is a special category el
conditional sale agreements to which the Sale of Goods Act, J893. does no*
completely apply: Infra, p. 230.
ABSOLUTE AND CONDITIONAL SALES
19
event or circumstances. The Act does not distinguish between the

conditions which may be attached to a contract of sale (though in
some sections it provides for the implications of certain specified
conditions). At common law, however, there are two different
kinds of conditions which may affect the binding quality of a contract
of sale (as opposed to conditions which affect the content of such a
contract). Such conditions may be conditions precedent or conditions
subsequent.
Conditions precedent are conditions by virtue of which the

contract is not to take effect and become binding unless and until a
certain event or occurrence takes place, c.g., the opening of a bankers
confirmed credit in favour of the seller, the payment of the price
of the goods before a certain time.** Another example is provided
by the case of Bianchi v. Nash ** In which a snuff box was given to
the defendant on the terms that if it were damaged the defendant was
to have it and pay for it. When the box was damaged the plaintiff
sued and was able to recover the agreed value of the snuff box. The
contract between the parties was held by Lord Abinger to be a
wn'ditional sale which became absolute when the condition was
performed. Conditions of this type may be called precedent, since
their performance must precede the effectiveness of the contract, or
sus^nsive, since the effectiveness of the contract is suspended
until the condition is fulfilled. This does not necessarily mean that
the agreement between the parties will be devoid of any effect.
Whether any obligations or liabilities arise from such agreement, in
the event of the condition precedent remaining unfulfilled, depends
Upon the precise terms of such agreement and the correct inter-
station to be placed thereon, or the conduct of the parties while
me condiUon is unfulfilled.
Conditions subsequent, in contrast, are conditions which are of

such a kind that a contract will be valid and binding unless and until
t e event or occurrence stipulated happens. If the stipulated event or
of * condmon may either be a condition precedent or an essential term

rt.AU between seller and buyer, in which event failure to provide the
aff the obligation of the seller to deliver the goods but does not
f contract: see Tram Trust v. Danublan Trading Co,
jf:-)' Q.B. 297; Atalas v. British Imtx Industries Ltd. 119581 1 All E.R.
* pj j Bosley Ud, (19581 2 Q.B. 130.
to^n (1910) 26 T.L.R. 545. Cf. also the effect of an agreement
t Ofii. valuation, where no valuation takes place: SGA.
e-rl' further typical conditions of this kind see Beniamin
be of , 1 ^ ^*^'598. Note m particular, the possibility that time may
^ Ju * ^0 ) (J83) 1 M. & W. 545.
warranty, nnder the condition that the buyer could

(1870 LJL 7 e:^ 7*' correspond with the warranty: Head v. TalieTsall
20
THE CONTTMCT OF SALE OF GOODS
occurrence takes place the contract is no longer effective Since a con*

tract which is made subject to a condition subsequent is therefore su
ject to defeasance, such conditions may also be called
conditions, because their effect is to resolve a contract wwch
formerly valid, effective and binding. In such cases the fulfilpien
the condition is subsequent upon the making of a contract ^
effective and it has the effect of retrospectively dctcmuiung ^
contract. An example is provided by the case of The Vesta. ^
a contract provided that the buyer should buy specific and
goods (which constituted a sale immediately effective and
property in the goods *). but that if the goods did not mce
requirements of his business he could reject them.* The goo s
seized as prize before they reached the buyer. It was arêd t a
effect of this condition subsequent or resolutive condition was
cuc<.i iiija buuuiiiuu aumcqucm -
that no effective contract evet came into existence, an
property in the goods never passed to the buyer (who was a c
but remained in the original owners, enemy aliens in bme oi

The Judicial Committee of the Privy Council (which had _
held that the English law of sale of goods applied to such j
and cases *) held that the contract was valid and binding .^l*
property to the neutral buyer, despite the possibility that it F

subsequently be defeated if the goods did not meet the be
of the buyers business. The goods were therefore not liable

seized as prize. _ , . ^
There is one qualification to the above general propositions a

conditions precedent and subsequent which roust be noticed. H
condition which is necessary to make the contract effective or w ic
will make it ineffective retroactively is rendered incapable of fu
ment or is fulfilled (whichever is relevant) because of the defau
either party, such party cannot take advantage of the situation
argue that the contract is to no effect. This is so on the ground t a
a party cannot take advantage of his own wrong. Only if
Unless the parties have (hereunUer stipulated for certain effects in the event of iti
non-fulfilment of a stated condition: e/. the cases ated Infra, notes 1, .
riWJI I A C 774. where li was said that the buver had the opdofl ot djvew^
[1921] I A C. 774, where It was said that the buyer had the option of djv
himself of title: at p. 783, per Lord Sumner.
* /n/ra, pp 64-74.
* Thit was not a case of reiection for breach of a condition as to flU3|i|y |

pp 313-314), but of fulfilment of a condition subsequent. The ambifUity
** condition ** should again be noted.
I "
ABSOLUTE AND CONDITIONAL SALES
21
condition is satisfied because of human acts or natural events over

which neither party had any control will the contract be ineffective.*
Care must be taken to distinguish between conditions precedent

and subsequent, as described above, and other types of condition
which may affect either the passing of property in goods under a
binding contract of sale^ or the performance of the contract by
either party (e.g., a condition relating to the quality of the goods or
their correspondence with sample*). The ambiguity of the term
condition has already been noted and will be examined in greater
detail later: - here it is necessary to point out, by way of conclusion
to this part of the discussion, that what is here being discussed is not
the contents of the contract of sale, i.e., the legal character and effect
of its terms so far as the purpose and obligations of the contract are
concerned, but the ways in which the parties can regulate and
delerraine between themselves whether and how they are going to
be bound by a contract of sale.
Finally, as already seen, conditional sales must be distinguished

from options to buy (such as are to be found in hire-purchase con-
tracts) as well as mortgages of goods, under which property in the
goods mortgaged may revest in the original owner on repayment of
the money loaned to him.**
4. Sales and Agreements to Sell
At common law a distinction was drawn between an executory

contract of sale, which was a "pure contract, and an executed
contract of sale, which was a contract and a conveyance, since under
it property in the goods sold was conveyed to the buyer. The former
merely conferred contractual rights, i.e^ jura in personam, to the
ûyer, and gave him no rights at all to the goods in respect of which
the contract was made. The latter conferred not only jura in personam
stemming from the contract, but also jura in rem, namely, rights of
property in and over the goods sold (though there were exceptions
m this). As already seen, a contract of sale of goods is designed to
the position with respect to fnntratios of a contract of sale of goods which

binding and effective at the time of the frustratins event; Infra, pp. 242-246
must be drawn between the faOure of a condition precedent or
which renders the contract nugatory ab Milo (except to the extent
Steed by the pa-*' *-. ,
the wntract t , .
wntract lapse, e
Owtracts) Act, t, a uiiiu. pp.
; {"/ra. pp. 74-83 ^
* Jn/ra, pp. 156-178.
PP. 141-142. 197-200.
opra. pp. 8-10, where the importance of these distinctions is discussed.
22
THE CONTBACT OF SALE OF GOODS
pass properly in the goods to the buyer. But the Act distinguishes
etween a sale (which Is the name now given to an executed eonuact
of sale) and an asreement to sell (which is the current name for the
former executory contract of sale). In view of the provision of the
ct that a sale passes property in the goods when the contract is
made, the Act further provides that the term sale includes a
oargam and sale as well as a sale and delivery. This means tot
dehvery of the goods is not essential for the passing of the property
thcrera (though the parties may make such delivery a condition to
the passing of property if they choose). The terms of their contract,
or the nature of the agreement, will determine whether their contract
rs a sale or an agreement to sell. Which it is will depend, as the Act
stipulates, on the provisions relating to the passing of property. Hie
contract may expressly reveal the intentions of the parties or it may
e necess^ to infer their intentions from the sutTOUnding circiim-
s ances.^ How this is to be done, and the way in which Ihc
assrsts in the determination of this question, are matters which wH
be considered in detail later. It is important here to point ml
Whether a contract of sale is a sale or an agreement to sell is
vital for various reasons.
out above, a sale gives jura in rent to the buyer,

j nornially in the case of a sale the goods become the
ôpe^ of the buyer when the contract is made. Hence the bay
ronH * * damage with respect to the goods once the
c^twt IS made (though, in this respect also, there may be

agreement to other effect ), and the buyer can recover the goods,
Tv.ecie raiêsenting their value, from anyone who has obtained
* Soods. however innocently, without his authority,
of thf* i/-? limited number of instances under the provisions
acaurn. n J blher legislation, such a person can
Morcoverîfo ft 'c' against the original buyer."
deliverTo/.n 'J* '*' buyer may sue for
PerforSânL'or 'bemselves (to the extent to which speciBc
courts tn- u v ^ of goods may be enforced by tbc
for dnn?ages"?o; m=rice,..'"' """
. t,s.ajt.r.l(
SG.A. it 16-19; Infra pp ** * older oiodej of pteadinS-
Infra, p. Bw ngt Use provisiorii of S.G.A. ss. 32 (3). 3^
* infra, pp. lOS-129.
SALES AND AGREEMENTS TO SELL
23
By contrast, an agreement to sell merely gives the buyer jura in

personam. Hence he acquires no property in the goods at the time
the contract is made (though it is the intention of the parties that he
should do in due course, whereupon the agreement to sell becomes
a sale ). This means that the seller bears the risk of loss or damage
with respect to the goods (subject to any agreement to the contrary),
and the buyer has no right to recover the goods in question from any
third party who may have acquired them, whether innocently or not.
Moreover, if an agreement to sell is broken by the seller or the buyer
die innocent party can only sue for unliquidated damages for breach
of contract. There can be no action for the agreed price on the part
of the seller*: though to this general rule there is one special
statutory exception.**
ClUPTER 2
CREATION OF THE CONTRACT
Application of the general law. The creation of a cOntrac

sale of goods is a matter for the general commoa law
affected by other relevant statutes. Since the repeal of sec i
there are no provisions of the 1893 Act which regulate m c a
a contract of sale of goods is made. Thus it is necessaiy
beyond the Act to discover between whom and how c
of sale of goods can validly be made.
Capacity. Both parties must have legal capacity to mate a

of sale of goods. Section 2 of the Act leaves questions of capa
buy and sell to the general law. However, that section a so
that where necessaries are sold and delivered to an infant
pay a reasonable price for such goods.* Necessaries af
as meaning " goods suitable to the condition in hfe ^
other person, and to his actual requirements at the tune oi

and delivery.* Under the Infants Relief Act. 1874/ ^
necessaries are excepted from the provision that contracts ^ ^
repayment of money or for goods supph'ed or to y.
"absolutely void. It would seem from the decision in ^

Nleld * that, because of this Act, an infant, in conducting trade
involves the s^c of goods to others, may well be
liability on any contracts made in the course of the business. W
this is so. and the effects of such contracts, if they are *' ahso it ^
void, arc matters of dispute.* It would seem that such a
J By the Law Reform (EAforcemeni of Actkms) A, 1954. j-mVards,
S G A. s, 2, proviso. Itiis appties also to mental mcompctenti and an -gj >(

to which, d. Fridman, Mental Incompelency, Part I (1963) 79 L.V.
pp 50^516 for a fuU discussion.
* SGA. 8. 2, proviso. , i74"
TVeitel."n)e Infants ReljefAc^

. ants Rehef Art, 1874 A {tU.
. .hcf Act, 1874 a Short Rfbuttef,
, ..... .j.f, nrtrtycan-
, M*
' i, . ai " y> mtrary
Tteitci;* reply b in 74 L.Q.R.%t pp. lOS^JOS *Such cws* as there are

inconclusive, li b clear, however, that an infant cannot obtain specific perto^
ol a contract that b absolutely void within the 1874 Act; Lumley t .
cvo/rII8951 1 QB. 683-
11912] 2 K.B. 419.
7A
CAPAQTY
25
would validly pass property in goods sold by or to the infant,^ even

though the adult certainly, and the infant possibly,* cannot sue on
such contract, eg., for non-delivery or non-acceptance, respectively.
It has been held that a racing bicycle was a necessary for an infant
only earning a small wage a week. So, too, have an engagement ring
and a wedding ring purchased by an infant for his fiancee. But
other jewellciy and articles of luxury which were of no utilitarian
value to the infant have been held to come outside the scope of the
term necessaries.*' The fact that an article of utility is luxurious will
not of itself make such an article into something which is not a
necessity. Whether this is so or not depends upon the condition of
life of the particular infant at the material time. An article of
utility may well not be a necessary if the infant is already well
provided with such goods at the material time, c.g., where an infant
bought an extravagant number of waistcoats.** Whether or not the
seller of the goods knows that the Infant has a sufficient number
of the articles concerned appears to be irrelevant. It is the situation
of the infant that is the test, not the knowledge of the person supplying
the goods,**
If the subject-matter of a contract of sale is necessaries, the
question arises whether an executory contract, i.e., one for the future
sale and delivery of such goods, vdll be valid and binding. On one
view, the 1893 Act, by making an infant liable to pay only a reason-
able price, has impliedly enacted that an executory contract of 5ale
of necessaries to an infant is of no effect: it has made the infants
liability quasi-contfactual. However, It might be argued that the
1893 Act simply substitutes a reasonable price for the contractual
the 1874 Act. If this is coirect, then such a contract will not be totally
*nlhout effect and therefore veud: ^ce under such a contract the infant may
ootam sufficient benefit from the use of the goods to deprive him of the right to
*h3t the consideration for his payment has totally failed: see Treitel, loe. dl.
. Atiyah, loc. cit. pp. 101-102.
il pI, Wargreow (1898) 78 L.T, 296.
& Co. Ltd. V, Amery [IW61 2 AU E R. 86.
tL*'* ^0 V. Fleming (1840) 6 M. & W. 42; Jenner v. tValker (186S)
39S; RewUngf v. Graham 0901) 70 I.J.Ch. 368.
M 1 1*^1 2 K.B. I,
Johwone V. Marks (1887) 19 Q B.D. 509, niis is true after the 1893 Act: and
wvoives the plaintiff in proving that the infant did not have an adequate supply
iiom other sources at the material rime: Rash v, Inman, supra.
26
CREATION OF TOE CONTRACT
price where necessaries have actually been supplied, without affcc g

executory contracts. This interpretation is very questionable, an i
is suggested that the better view is that only executed contracts o
of necessaries give rise to legal effect. ,
No contractual liability will arise, however, where a

sale, whether executory or executed, was for goods ,
necessaries. The only way in which an infant would

liable in such instances would be by an action claiming .
of money given to the infant by the other party,* or by suing t e
for the commission of some tort, such as detinue.* if such ao ac
can be successfully maintained without having to rely on the co
in question.** , A and
It must be added. 6oaIly, that even if an infant has

paid for goods which are necessaries, he may be able to
what he has paid if the goods have not been consumed by
there has been something analogous to what would I* ^
of contract, a total failure of consideration, e.g., if the seller
right to sell the goods to the infant.** This is true also of aou ^
the case of infants, however, if goods are not necessanw.
then, even
if they have been delivered and^ paid for, the infant will be a
repudiate the contract and recover his money, as long as he
return the goods to the seller in their original condition, or, po
unless he has received any benefit from having the goods.**
Formation of the contract. The parties, in agreeing, must

to create a valid, binding contract which affects their legal re ^ ^
ship. An agreement that is binding in honour only, will not

contract of sale of goods.*'
H LetHe V. SftUJl [1914) 3 K.B. 07. Vut restitution stops
begins: IbU. ( p. 618, per Lord Stunner. Therefore it max be that Jr ^

of dealing with the goods cannot be recovered from the In/snlt
Slofks r. WOjon [19131 2 K.B, 235.
gmwanx. All/ah, **7he Uabiirtx of Infonti'ln fraud and Rwiitution (IJ?) '
M.L.R. 273.
It Fen^^nJ V. /)/,// f|923I 2 K.B. 500: see //. pp. 95-103.. ^
* S'* * alfftiM r. CanaJt, fufra; Frarce r. Brain, tuprf The dupute. h^* *
the rjorttion irbether conwetj within s. I of the 1^74 Act are ** vow ^ i jc
icBw. or merely voidable at she optioo of the infant: r/. tupm. notes N *
lOMrt be remembered. In this conteai, lhac there Is a distinciioR between total ra
of romlderatloO. for hkh money paid b recoverable by an infant, and
ot the aJraniafe beUeved lilely ro aecnw to the infant from the oontra'
Sifirtbrrg V. Sealj lUrJi) UJ. ||923| 2 Oi. 452, wuh which cootratf
t ..-.a..- r, . - i<j 3 Ch jyj.
rei.r*e*JVrrp rUeltkai 3
* A Frank v. Crampron ||923J 2 K.B 261; (192
kstendrd imitt be one et sale of roodt:see Aemi/m v. Cknrman
FORMATION OF THE CONTRACT
27
A contract of sale of goods, like any other contract, is made

by the express or implied acceptance by one party of an express or
implied offer made to him by the other party. The rules as to the
distinction between an offer and an invitation to treat, correspondence
of offer and acceptance, the time when an acceptance takes effect,
revocation of offers, mode of communication of offers, all apply to
contracts of sale of goods,* Auction sales, however, require special
mention. By the Sale of Goods Act,* a sale by auction is complete
when the auctioneer announces its completion by the fall of the
hammer,** or in other customary manner. Until such announcement
is made, any bidder may retract his bid.** His bid is an offer which
is only accepted by the fall of the hammer.** An advertisement of
an auction is not itself an offer capable of being accepted by
attendance on the part of a potential bidder, as was made clear in
ffarris v. Nickerson,*^
As Is true of all contracts, the operation of an offer or an

acceptance is affected by a mistake on the part of the offeror or the
acceptor. Such a mistake may relate to the identity of the other
rontracting party or of the goods. It is not part of the function of
this work to investigate, let alone solve, the disputes which have
arisen as to the correct way to interpret the cases and the precise
doctrines which regulate the effect of mistake of fact upon the
ormation of a contract. So far as the identity of a party is concerned,
e case of Ingram v. Liitle ** indicates that when such identity is

material the lest is objective. The issue is whether a reasonable
man would interpret the offer as being made to the person who
m't V. LC.C. Asylums d Mtntal Deficiency Committee

f,y .J 677: ofTer by supplier ro send eoods in quantities specified
P^rty: held that there was no obligation to order any goods, but an
^^sation to supply goods as and when ordered, l-e., no binding contract until
* w *y one of the parties.
Fifoot, Law of Contract (6th ed., 1901), Anson, Principles of the

*' S DA** PP' 2^52, 2>^, for a discussion of these problems,
saie* S ojf lot is prima fade tbc subject of a separate contract of
passing: see. Denmint r. Skinner IWSJ 2 K.B. 164: Infra.
the bid below the withdrawn bid would stand, and would be capable
wiihdra^*^****^ by the auctioneer in the customary manner, unless itself
If reserve price, as permitted by S G.A. s. 38 (4). a bid is
ttwfM' ^^^.ourr and an acceptance by the auctioneer is also conditional upon

*' * For/ejoie [190^ 2 K.B 1.
9^1 the New Zealand cate of Fowce/r r. Star Car Sales LtJ.
** '* material the mlstale Is rot important. Tbc nature

ot m surrounding esrcumstances will show whether the Wenury
party was material. Injram r. Ltiile, npra. at p 57. per pearec
28
CIIEATION OF THE CONTRACT
actually purports to accept it; the Issue is not whether the

accepting the offer understood it to be made to him- The identity an
the attributes of a contracting party most be differentiated: <^y *
former is relevant and important (though the latter may help
establish the former). So, too, where the mistake involved is con-
cerned with the goods themselves. Apart from a mistake
by fraud, which renders a contract voidable, a mistake abou
goods will only nullify a purported contract if it is a mistakes
their identity, and not their character, quality or
made clear in a number of cases. However, a mistake abou
character of the goods will entitle a party to relief, where the o
party is aware of the mistake and attempts to take advantage
e.g., by accepting an offer which was made in a mistaken form, a
Hariog V. Colin <Sc Shields*^ The position as regards mistake in^
be summarised by saying that the law is interested in dlscovenng
intentions of the parties as to agreement, not their motives
agreeing as they have done.**
Settlement and constnictioD of terms. Assuming that

been an offer and an acceptance which correspond and
vitiated on the grounds of mistake, the apparent agreement be ^

the parties will still not constitute a valid contract of sale or g
unless the parties have sutBciently identified the terms of the con
In this respect, two matters call for discussion. One is the que*
whether, taking into account the language used by the parties,
a concluded contract between them: the other is the exact con
of such contract where it is alleged that all its terms have not b
Specifically stated cither orally or in writing. Both matters are rca
aspects of the general problem of construing a contract.
The extent to which the courts may construe the language f

parties, and so decide that they are contractually hound, wt
falling into the pit of constructing a contract for the parties fm
what they have said or done, has been discussed by the
writer elsewhere and in greater detail.** It suffices to say here t e
whether the exact terms of the contract have been stated
* See Bet! v. Lever Bros. |I932I AC I6I; IlarrUon A Jones LrJ. v.
lAnÛr Qp. 646; Rost v. Blm 119531 2 Q.B.
, ( fuie Cons'TOCiio'
** .. .
V. Lf>*r Bros., supra, at p 224. per Lord Aiktn. See. e/. Pope Feorsc"
. Buenos Ayres Sew Oas Co. tlW2) B T.L.R. 758,
*1 rridnun. Conttruint. Without Cotuiructuis Contract * <1960) 76 LQR-
SETILEMENT ANO CONSTRUCTION OF TERMS
29
sufficient certainty to entitle the court to hold that there is a contract,

and not merely a basis for some future agreement, is a difficult
question of fact, which depends upon the precision of the language
used and the extent to which such language is capable, by necessary
implication, of being made clear and precise.**
The problem of deciding the terms of a contract concluded

between the parties may often involve: (a) the implication of a term
or terms on the ground of business efficacy," * or on the basis of
the course of dealing of the parties *; (b) the introduction of a term
Or terms by the application of some custom or usage which is not
repugnant to or inconsistent with the contract *; (c) the admission
of oral evidence to elucidate a written contract. The basic and
governing principle is that the Intentions of the parties are to be
discovered by looking at what they have said and done, whether
orally or in writing, and by testing their acts and language in
accordance with what a reasonable man in the situation of the
Ipariies would have understood those acts and that language to have
meant. The "reasonable man," in the context of a commercial
Contract, may well be " the reasonable business man, rather than
the Ordinary man in the street.**
Cooslderation. The consideration for a contract of sale of goods

must be in money, and is called the price.** Under the provisions of
the Sale of Goods Act the price may be fixed by the contract, left to
be fixed in a manner agreed by the contract, or determined by the
course of dealing between the parties ** If none of these alternative
** Instom & Co. (19J7) 33 T.L.R. 475; ScamnieU V.
Bishop A Baxter Ud. v. AnglO'Eastern Trading &

(r 2 All ^R. 598; British Electrical & Associated Industries
Pressings Ud. (19531 I WL.R. 280; llillas A Co. v. Areas

U93^ 147 L.T. 503; FoXey r. Classique Coaches Ud. [19341 2 K.B. i;
Tfe w ^ Simmands (19531 1 Q.B. 543.
|j/ (1889) 14 P.D. 64. See A. V. Pound A Co. v. M. IF. Hardy A CO.
he hIS' impUcaUon oC & itnn relating to export licences. No term can

^liere iJie provisions hare expressly provided for the contingency in
Proorrte v. Pardess Co-operath/e Society of Orange Growers (1940)
ti ih;?' ( agency, not sale).
II V- f'icBrayne 11964J 1 AU E.R. 430; discussed infra, pp. 149-150.
>. Horst 119111 1 K.B. 934; Produce Brokers Co. Ltd. V. Oljmpfcr
C'o. Ud. (19161 I A.C. 314; Re an Arbitration Between L. Sutro A
II ri Symons A Co. (I9I7I 2KB 341.
elL of Lord Sunonds in Adamasfos Shipping Co. Ud. V. Anglo-

t ^d. 119591 AC. 133 at p. 158.
*: t (')' JWPra. p. 14. For the law relating to deposits See Howe v.
(>884) 27 Ch D. 89. See also GoBagher v. Shilcoek [19491 2 K.B. 765. For
ri. ^'i'utahie doctrine of relief from forfeiture of a deposit, see Siockloser r.
II (nT" Q - '*76.
tender the Uniform Cottunercial Code, s. 2-305, the parties may

open price lerm. By thb the parties, if they so intend, can contract
wntraci oi sale even though the price is not settled. Certain consequences
30
CREATION OF THE CONTRACT
modes of fixing a price is adopted by the

a reasonable price: and what is a reasonable pnce is q
fact dependent on the circumstances of each ne
There may be an agreement to sell goods on the e ^

price is to be fixed by the valuation of a third P^ny- .j js
party cannot or does not make any such valuation t e g ^

avoided. Thus, in such situations the fixing of th P
independent valuer is a condition precedent to the exi
contract. If goods or any part of them have ^hat
appropriated by the buyer, he must pay a ^ orevcutwl
he has obtained.^^ If the independent valuer has

from making the valuation by the fault against the
the party not in fault may bring an action for
party in fault. . i,nf*ver pt*
At common law parties were free to determine w

they desired as the consideration for the contract.
Restrictive Trade Practices Act. 1956,'* price maintenance, .
of resale prices, was permitted between gggctfi

instances and subject to certain statutory conditrow.
the 1956 Act has now been limited by the Act s'*
Under this statute the above-mentioned provisions of tne gjjjpted
still applicable where goods are, or are to be CT<.motjon
goods for the purpose of the Resale Prices Act, 19o4.
goods is a matter for the Restrictive Practices Court. Act
not exempt then their price may be controlled under _ ^ndi*
only in so far as the price in question is a maxitnum ^
tions which purport to impose a minimum price on non-exc p
are void under the Resale Prices Act, 1964.
flow therefrom: *. 2-305 (l (a) (b) (c). Br conlrast thv way

to be bound in the absence of a fi*ed or agreed price: S- ' '
the difliculcies seen in Foley v. CXasflque Coaches I1934J 2 K I. i-
* S OA. i. 8 C). . . of diitereRCf*
S OA. I. 9 (I) : valuation must be distinguished from the arbitraucm

between the parties by some kind of Judicial inquiry. c r. A s. 9
S.OA. I. 9 (1). ^ bcTf
*> Various statutory provisions regubte the position as bctwMn w ^ ^
' ' . / .
Note also that some statutory price control of goods ifiU 'gfjo. Se*
b minimal in importance: see, et- Iron and Steel Act, 1933, ss.
liabbury's Laws oj EngUnJ, 3rd ed., Vol. 38, pp. 169-174. ., -
** s. 23. Tbb provUiofl reversed the effect of inch decisions as
|19(M) 1 Qi, 334; AfeCrvrher t. T/reAer 119011 2 Ch. 306; DunJop v. '
(I9I3IAC 847. ,, ^ 1964.
* See Lever, The Law of Restrictive Praeriefs anJ Resale trice hialnteaancw.
Chap. 3, for a fuQ and detailed diicvtuon.
\VRmNO
31
WriJing. By section 3 of the 1893 Act contracts of sale may be

made under seal, in writing, orally, or by implication from the
conduct of the parties. Since the repeal of section 4 of the Sale of
Goods Act in 1954 ** it is no longer necessary for any contract of
sale of goods to be contained in or evidenced by a written document
or memorandum, so far as the 1893 Act is concerned. Moreover,
as a result of the Corporate Bodies* Contracts Act, I960, it is also
no longer necessary for contracts made by a corporation to be under
seal or in writing. Thus it would appear that any contract of sale
may be made orally no matter how great the price to be paid for
the pods and no matter what the status of any of the contracting
parties. To this general proposition, however, two qualifications must
be noted. In the first place, by virtue of what is now contained in the
Hire-Purchase Act. 1965, certain credit-sale agreements are required to
he to some extent in writing. Secondly, under the Bills of Sale Act,
1878, certain sales of goods (/.e., where the seller retains possession
of goods while parting with property therein) must be contained in a
document which is required to be registered if they are to be valid as
against creditors of the seller,*^ This is to prevent fraud on creditors
o' the seller, and does not affect the transaction as between seller
and buyer. Sales which are not genuine but are intended to operate
as security for (he loan of money are not sales at all and do not
come within the Sale of Goods Act.*
V^dlty. A contract of sale of goods will be invalid and void if

It IS illegal at common law or under any statutory provision. But
an innocent party who has been the victim of fraud, etc., or who can
s ' resile from the contract where the contract remains wholly
executory, may be able to sue for breach of contract or to recover
money paid to the guilty party.**
ihe Sale of Goods Act,* where a sale by auction is not

1^ subject to a right to bid on behalf of the seller, it is not
ul for the seller to bid himself or to employ any person to bid
til*?* Reform (Enforcement of Actions) Act, 1954.
Commercial Law, 1964, <3iap. 5,
dealt with by the Bills of Sale Act, 1882; and the

s 6I 1893, which does not affect the Bills of Sale Act (S.GA.
are int/ni j PPb *o transactions in the form of a contract of sale which
SGa s M /5s ^ mortgage, pledge, charge or other security:
coniraMrJx- Hence the importance of distinguishing contracts of sale from

* See Or mortgages: supne, p. 9
119S4I fnn "5? Fifoot, op. eft., pp. 289-295, 309-319. See Maries v. Trant
possibility Of suing if the illegality need not be
a cause of action: ;yftigA t. Aft (1960] A C. 167 (see Fridman,
* SgJ . iWegal Transactions (1962) 112 Law 3. 299).
8 (3): tor sales subject to a reserve price, see S.GA s. 38 (4).
3a
CREATION OP THE CONTRACT
^ auctioneer knowingly to take any bid from ihfi
person. Any sale contravening this rule may be

u'c vf try the buyer. Moreover, if the seller or someone
tn r Jo* J highest bona fide bidder will be able
**+ # * ôsaction as fraudulent and sue the auctioneer if he is

party to the sellers conduct. What if the auctioneer is innocent
//rr ^piicity7 The much discussed decision in War}ow \-
this occurred, and the bidder was permitted to sw.
fftfJl ^ could find some appropriate ground for his action, leaves
ms question unsettled, panicuhfly in the iight of the later dicta in
enmrf is Suggested that, despite arguments io the
j ^ objection in the way of permitting
such a bidder an action.
of cooduci relating to auction sales, which involve

iiif sêements between bidders or fraud by sellers, are mad*
* (1*^ f *
nv ^-2*; Aiuon. Rfooi. r^v of Coiîratt. tU* ^
t, 6^0R 35-37; Trettef, i4H-

* (l&3) 6 a A s. 4M. Oow. 68 L.QR. ^57; SUde. 69 UQR- 2*
Chapter 3
SUBJECT-MATTER OF THE CONTRACT

1. Goods
Statafory definition
The meaning of the expression goods depends upon the

context in which it is found.* The Sale of Goods Act * provides a
definition of the expression in the context of that Act, and what
that definition states has already been explained in connection with
the distinction between contracts of sale of goods and other similar
contracts.* From what has been said earlier, it is clear that the subject-
matter of a particular contract must clearly be shown to be goods
within the statutory definition for the contract in question to be
governed by the 1893 Act.
Categories of goods
Certain distinctions between kinds of goods which come within

the sco^ of the 1893 Act are to be found in the statute itself. Other
distinctions are implicit in the language of the Act as expounded
ut the cases. The importance of these distinctions is great, since
upon the precise legal nature of the goods which are the subject-
matter of any particular contract of sale will depend such questions as
U) whether the contract is a sale or an agreement to sell, (ii) when
pfoiwrty in the goods passes from the seller to the buyer, (iii) whether
specific performance of the contract may be decreed, (iv) whether
ere is a valid contract of sale, (v) whether the doctrine of frustration

applies to the contract in question.
2. The Different Categories
Existing and fntnre goods
The goods which form the subject-matter of a contract of sale

uiay be either existing goods, owned and possessed by the seller, or
goods to be manufactured or acquired by the seller after the making
< A C. 9(M at PP 908-909, per Lord Sumner.
* 5'ttpra, pp.
33
P.S o. 2
34
SUBJECr-MATIER OF THE CONIHACT
of the contract of sale. The latter are called by the Act, future
goods. * It is clear from this provision of the Act that a vîd
contract of sale of goods may be made in respect of goods which
the seller does not own or possess at the time of cODtractic|.
Generally speaking, of course, the seller will be the owner ot
possessor of goods he is selling. It is important to notice that it JS
not necessary for the seller to be absolute owner of such goods. As
already noted, a contract of sale of goods is concerned with
passing of property, not title *: and this means that, subject o
the implied statutory condition as to the right to sell the goods. ^
mere possession of goods will be enough for them to be ca
" existing goods. It will be seen, in the next section, that witluQ
the category of existing goods there is a further division which is
great importance. .
A contract for the sale of existing goods can be a sale as oppos-

to an agreement to sell : whether it will be so or not depen^ up
the provisions of the contract as to the passing of property in
goods. In the absence of any such provisions the relevant pectin
of the Act will become operative, and, by virtue of them, the
may or may not be a sale.* However, a contract for the sale of nj
goods can never be a sale, and can only be an agreement to
goods, even though the seUer purports in the contract of sale to t
a present sale of the goods,* Logically this is so because there ca
not be an immediate transfer of property in future goods, si^
they are, by statutory definition. stiU to be manufactured or acquw
by the seller, I.e., not yet in his ownership or possession, ^
nothing strange about the idea of selling goods which the seller neit
owns nor possesses. Any person may sell or ofTcr for sale
price whatever goods of which he is not the o\vner but which
* S.GJV. *. 5 <1).
* Supra, p 3.
* Â. 1 . 12 (I); la/ra. pp.
77e is abo the problem of the ale of pooj* beliCYcd to be n Vh
to be owned or poMeed by the aelter. at the time of the contract, birt P

not m etittmee. Whether a contraa for the tale of luch f^s is ^
my Ictal effect at aU. Is a matter which wfll be pvrtued later In this eba^
Note alvj the problem freferrn] to su/w, p. 2S) which arises "ben ^
we beLev^ by one or both parties to be of one kind, and are In tsrt _
wtireJr different nature: cf. HUhohon A V<nn r. Smith Marriott
(Ocorran linen told, by mistake, as of the penod of Charles f) *"4

Intematl^ OalUrUt (I950J 2 K D. fS (picture oU under the belief that **
psin-ed by ConiuHe).
* pp. iA-93.
* contract wffl not coma whhln ^
fii t*ble of eompfetc transfer by
^ aale are exwed by those Acu: ndls of Sale ^
THE DIFFEREWT CATEGORIES
35
expects or hopes to acquire.* However, if there is anything fraudu-

lent about such a sale or offer to sell there may well be liability on
the part of the seller to any person who relies upon his representations.
Such liability would not be contractual but tortious, i.e., in deceit.**
If there is no fraud, but the seller innocently, but negligently, sells
or offers for sale something which he hopes to acquire but never does,
it may be that there will be liability in tort to the person relying on
his representation to his detriment. Such liability, if it exists at all,
will be for negligence.**
Sales of fnfure goods

Prior to the Act there was a difference between the common law
and equitable approaches to the sale of future goods. At common
law a contract for the sale of such goods produced no effect so far as
the passing of property in such goods when they came into existence
or were acquired was concerned. In equity, however, according to
the decision in Holroyd v. Marshal]^* as soon as such goods came
into existence the buyer acquired an equitable right to them, such right
being valid against all save a purchaser for value of the goods
without notice of the buyers prior equitable right. Thus a contract
of sale of future goods amounted to an equitable assignment of them.
In Tailby v. Official Receiver** it was held by the House of Lords
ât such a contract would have this effect as long as the thing, when
it came into existence, answered to the description in the contract
or was capable of being identified as the thing or one of the things
sold under the contract.** Thus, according to the equitable doctrine,
where it was applicable, the seller became trustee of the goods for the
buyer when the goods became identified as the subject-matter of the
contract, or as Lord Hanworth put it in Re Wait * when the subject-
matter of the contract became specific.
As a result of what was said in that case, particularly by Atkin LJ.,

it would seem that, since 1893, the equitable doctrine may no longer
be applicable. In Re Wait there was a sale of 1000 tons of wheat
ex Challenger to X. He then sold 500 tons to Y, who paid in advance
of delivery of the goods or the bills of lading. Before the arrival of
J AjeJla V, IVoNley [1898] 1 Ch. 274 at p. 280, per Stifling J.
280 - 281 .
jhis aepends upon the complex question whether a duty of care exists not to make
inacnirate statements: see Hedley Byrrte . Wri/er [1964] A.C. 465. discussed in
detail In (1964) 27 M.LR, 121.
** 0861) 10 H.L.C. 191.
** 0888) 13 App.Cis. 523

1. nlR, ^rd WatSQo.
** 11927] 1 Oi. 606 at p. 623.
36
sumrcr-iJATiTR op tiie contract
goods, X went bankrupt, and the question arose whether Y or

bankruptcy was entitled to the goods. The majority
01 the Court of Appeal held that Y was not enliUed to spedfic
^rforaance of his contract of sale with X, under section 52 of the
ct, ecause the goods were not specific or ascertained, never haviag
been appropriated to the contract. This aspect of the case does not
arise in this context.*' But the majority of the court also held that there
Was no such equitable assignment of the 500 tons as would entitle
_ê court to enforce the contract as against X's trustee in bankruptcy,
ihe reason given by Lord Hanworth M.R. for arriving at this coa-
c usion was that there was no specific appropriation of the goods to
tiie^ contract as was necessary to bind the goods by an equitable
assipiment.^* The learned judge did not expressly state that th
had been overruled by the provisions of the Act
ot 1893. Indeed it would seem to be reasonable to infer from his
reôning, that, in appropriate cases, that doctrine was appUcahl-
^ LJ,. however, did clearly say in his judgment that the cquitahfc
oemne could not be said to have survived the provisions of the Act
S w goods sold under a conUact
anriM L transfer as between seller and buyer
ppear to be complete and exhaustive statements of the legal relations
In,.*,.**!. A seUer or purchaser may create any
dMi 5 n * by way of charge, equitable assignment, or any othef
uMung with Of disposition of goods, the subject-matter of sale; and

contract ^ equity as one of the terms expressed in the
Durtnan agreement to sell or the acts m
th/- ^ contract mentioned in the Code will only produce
states. Though equity migW

bv n/ 1 ,' performance of a contract for valuable considerUtioD
as<:e:^flr a present transfer of property which
f beneficial interest in the property, provided the

fonnancf. which a wurt of equity will decree specific Ft
also annlipH ^fiJther logically nor legally true that the convcrs
equitv^^ftnid *!? ^ contract of which a court o!
passed M specific peifonnance, the benefidal interest
coSS LJ. went on to examine, it was not
were oart of 3 ^ contract for the sale of goods which

ere part of a speedied whole, the scUer agreed to make a transfer
* See Infra, pn 40 150

* U9Z7] I Ch. 606 at po
TIIE DirrEREm- categories
37
of property cither present or when the property was in fact acquired,

for example, in the case of a sale of an egg out of the eggs collected
yesterday.** To hold otherwise would be in contravention of the
language of the Act and would fundamentally affect business trans-
actions.** Nor did the fact that the price had been paid affect the
position.**
Thus, according to Atkin LJ., it would seem that a contract to

sell future goods creates no right of property of any kind in the buyer
even when the goods have become identified, unless the goods have
also been specifically appropriated to the contract in accordance with
the provisions of the Act which will be examined in due course.
Some writers ** have therefore suggested that the equitable doctrine
is no longer one capable of being regarded as still in existence. It must
be noted, however, that this was not the express opinion of the majority
of the Court of Appeal, that the case of Re Wait can really be
said to have been decided on the ground that, even if the doctrine is
still alive, it did not apply on the facts of the case, and that it may
well be that the question is still open to argumem and final decision.
There appears to be one class of goods in respect of which there

may be a sale even though they are not existing at the lime of the
contract, i.e., in respect of which the legal property in the goods can
pass to the buyer without any need to conform to the provisions of
the Act relating to the transfer of property, which were regarded by
Atkio LJ. in Re Wait as governing all transactions so as to exclude
the operation of .even the doctrine of equitable assignment of
property. Such goods are those which have potential existence.
Potential property
The distinction existed at common law between future goods to be

manufactured or acquired by the seller, the position with respect to
which has been considered above, and future goods in which the seller
had what was called a potential property." Such goods compre-
hended things which were the natural produce or expected increase of
Something already owned or possessed by the seller, e.g., hay to be
grown in a field, wool to be grown on sheep owned by the seller, milk
to be yielded by the sellers cows in the coming month. In respect of
such things a contract of sale amounted to an immediate grant or
ibid, at p. 637.
* Ibid, at pp. 637. 639-641.
** Ibid, at pp. 637-639.
BM/om/n on Sale {8th ed.. 193(9, at PP. 134-136; AUyab, Sate of Goods (2nd cd ,
1963), at pp. J03-1(W.
38
sumccr-MATn'R or ntn comnAcr
assignment and not merely an agreement to sell operating /n

There appears to be no true and âlid reason for distinguishing
goods from other future goods, unless it be that the source oi
increment is already in existence. But. even so, the prospecine
increment may never materialise, which brings in its train
other problems to be considered below. Nor is it clear whriher
doctrine is restricted in operation to natural produce or cxicn
artificial products such as butler or cheese to be made from the fut
milk of certain cows.*' In such cases, however, there is
automatic identification or appropriation of the goods and some
additional is required, some novas oclits tnteneniens.^
subject-matter of the contract is made specific and
the rationale of the doctrine, if such it be. is lacking in such
It is not clear, in view of the language of the Act, whether this w
mon law doctrine is still operative. It might be argued
goods, after the Act. arc not future goods, but existing goods.
they are not " acquired * by the seller, but accrue to him as a
of his owning or possessing the source of the increment .
sold.** This would only apply, of course, to the natural produc

some existing goods.
Contingent sales
A further problem arising in this respect is concerned

sale of an expected accrual or acquisition that never matena
According to the Act, there may be a contract for the sale of go
the acquisition of which by the seller depends upon a confinge ^
which may or may not happen.* If the contingency does not
then the sale will not be valid and binding. This was the explana *
given by Atkin LJ. in Re Wait'^ of the decision in .
Coupland a case before 1893 in which the contract was for

sale of 200 tons of potatoes to be grown on a specified piece of la
When the crop failed, through natural causes and not because of a/
fault on the part of the seller. It was held that the seller was no
*9 The cases are coUecteU and discussed in Benjamin on Sale, pp. 136-13?:
Halsburys Laws of England, 3rd ed., Vol. 34, p. 64, note (o). Kote that ifl
V. Coupland (1874) L.R. 9 Q.B. 462. a contract of sale of 200 tons of
be grown on a specified field was a sale, though it was held subject to an iP
condition as to possibility of perfonnanee: Infra, pp 41-42.
Benjamin on Sate, pp. 139-141.
9* Cf. Chalmers, Sale of Goods (14th ed., 1963), at p 33, note (o).
S O A. s. 5 (2).
9 [1927] 1 Ch. 606 at p 631. .
*9 (1874) L.R. 9 QB. 462; (1876) 1 Q.BD 258. Contrast with this the case
Lebeaupln v. Crispin (1920] 2 K.B. 714
IHE DIFFERENT CATEGORIES
39
liable for failure to deliver the whole 200 tons, since the contract was
for the sale of specific goods and was subject to an implied condition
that delivery of 200 tons of potatoes grown on such land was possible.
However, that case, and similar ones, could be regarded in a different
light. For a sale involving a contingeiKy, e.g., the growth of a certain
crop, or the birth of certain young animals, or a catch of fish, could be
treated not as a contract dependent for its validity upon the occur-
rence of some contingency, but as a sale of a chance, emptio spei,*^
by virtue of which the buyer was bound to pay for whatever should
be forthcoming, even if it should turn out to be nothing at all. Such
a contract of sale must be distinguished from emptio rei speratae,^'
i.e., a conditional contract by which the parties are only bound if
something does come into existence. Ether type of contract may
be agreed between the parties : which has been will be a question of
fact, i.e., of construction of the contract. Thus where there is a sale
of something to be acquired by the seller in the future the exact
nature of the contractual obligations of the parties is dependent upon
whether the contract is for the sale of potential property or a con-
tingency (both of which would be examples of emptio rei speratae)
or is a sale of a mere expectation dependent on a chance {emptio
spei).*^
Specific, ascertained and unascertaioed goods
In dealing with the passing of property in goods which are the

subject of a contract of sale, the Act impliedly distinguishes
between specific and unascertained goods. Specific goods are
defined in the Act as goods identified and agreed upon at the time
a contract of sale is made. * Specific goods are, therefore, goods
which are clearly the goods to be sold under the contract. They are
manifestly identified as the only goods which may be delivered by
the seller in performance of his obligations. No others will do. For
example, if the contract is for the sale of a particular car or horse.
** 11115 h a term employed in Roman law: see Digest 18.1,8,1, and Digest 19,1,11,18.
Another Roman term: sec Digest 18,1,8.
pother explanation of cases like Ilcwelt . Coupta/id is that they arc uncon-
muonal sales in which the seller wanants that the crop or other subject inafter
(v.~- , , -r jjjjcg jj no crop, etc., the seller will
' ^ Goods (2aded., 1963), at pp. 21-22.

, . -ct of sales to which it is alleged
, ' . . I- . . ( 185 S) 5 H.L.C. 673 and ^fcR^ê r.
. . I) 84 C.L.R, 377: Infra, pp. 44-<5.
" PP- ^93.
different iDterpretation of '* specific ** see the judgment

Melhsn LJ. m floMell v Couptand, tapra, at p. 262, which appears to have
t*en repudiated by Atkin LJ. in Re IFaff, supra, at p. 630.
40
SUBJECr-MATIIR OF THE CONIRACT

no Other may be delivered by the seller in pursuance of the contract,
even if it may be argued that what has been delivered is the exact
equivalent of what was contracted for by the parties.
However there is no equivalent statutory dehnition of unascer-

tained goods. Nor is there any definition of ascertained goods,
an expression which also occurs in the sections of the Act dealing
with the passing of property as well as in the section dealing with
specific performance.' The basic differentiation of the Act is between
specific and unascertained goods. These two expressions refer to
the category of the goods at the time the contract is made, which,
for many purposes, is the material moment. From the context of the
word in the Act it would seem that the statute is referring to the goods
becoming ascertained subsequently upon the making of the
contract. The importance of this lies in the effect of ascertata-
ment of goods upon the passing of property in them (as well as its
effect on the possibility of obtaining a decree of specific performance)-
Ascertained goods, therefore, would seem to be distinguishable fro
specific goods. This would make ascertained goods a variety o
unascertained goods, viz-, unascertained goods which have become
more particularly identifiable after the contract has been made.
In Thames Sack & Bag Co. v. Knowles & Co.** Sankey J. rvL\ta
that the individuality of the goods must in some way be found
before the goods could be said to be ascertained. In that case Uie
was a sale of ten bales of Hessian bags according to a particular fo^
of contract, well known in the trade in question, by which the goods
had to be ready and available for delivery. An invoice was sent to
the buyers giving the specific marks nnd numbers of the bales to be
sent to them. According to a custom of the trade, this was appfO'
prialion of the goods to the contract. It was held that the goods were
not ascertained (they were not specific since they had not been
Identified and agreed upon at the lime the contract was made): hence
specific performance was denied to the buyer.
The ruling of Sankey J. referred to above has been given a

of approval by Atkin LJ. in Re Wait,** where he said that ascertaionl
probably meant identified in accordance with the agreement after the
time a contract of sale was made. This w'ould seem to mean that a
contract may commence as one for the sale of unascertained goodJ.
e.s., a Vauxhall Victor car, and become one for the sale of ascertained
SO.A. I. 52.
** llSl Vk^ * ^ htortyôod . DuJl
119211 1 oi. eo6 at p. CM: cf. Lori llamronh M.R. IbU. ai p. 622.
THE DIFFERED CATEGORIES

41
goods when some identification takes place, i.e., the Vauxhall Victor
car which I have put aside in a particular place in the showroom.
By contrast, unascertained goods are usually goods defined by refer-
ence to a genus, e,g., 100 tons of barley, a dozen copies of Salmond
on Torts. In addition, however, unascertained goods may be an
xmidentified part of a specified whole, e.g., as in Re Wait. 500 tons
out of the 1,000 tons which were being carried in a particular ship.
In that case it was held that the goods were not sufficiently identified
or ascertained to entitle the buyer to claim specific performance of
the contract. Goods to be manufactured or acquired by the seller
may also be unascertained, e.g.. ten of the cars produced next week
by my factory (though such goods can also be specific). From all
this, therefore, it would seem that the distinctions now under dis-
cussion cut across the distinction considered in the previous section
between existing and future goods. Existing goods may be specific,
ascertained or unascertained. So. loo. may future goods.
Futnre specific goods
That future goods may be unascertained is undeniable. It would

seem also that future goods (as defined in the Act) may be specific.
For example, there could be a contract of sale in which the subject-
matter was a specific article owned at the time of the sale by X and
to be acquired by the seller from X and sold to the buyer. Such a
contract would be an agreement to sell, not a sale, as the Act clearly
stipulates. Indeed, for the purposes of the question of passing of
property in future goods, it would seem not to matter whether such
goods are specific or unascertained. In either event no property could
pass in such goods under the contract without anything further.*
But the case of Howell v. Coupland ** points to the importance of the
distinction between future specific and future unascertained goods
for the purposes of the application of the doctrine of frustration.**
If that case be correctly decided, it may well be that there can be
a sale (and not merely an agreement to sell) in respect of future
specific goods. The facts of that case, which have been set out
earlier, show that the potatoes in question were regarded by the court
as specific, and not xmascertained goods, even though it might appear
that the precise goods were not specifically identified or agreed upon at
the time of the contract and that the sale was for a genus, viz., a
certain quantity of potatoes. It is arguable, however, whether the sale
* See tn{ra, note 43.
** Supra.
** See Infra.
42
SUBJECT-MAmR OF THE CONIRACT
in question was of future goods. Whether the contract was proper y

to be described as a sale or an agreement to sell depends upoQ *
doctrine of potential property ** and upon the notion of continpn
sales which have been earlier discussed. It is suggested that, in a
sense, the contract in this case could be described as a sale of spec c
future goods, subject, of course, as the court found, to ^
condition as to possibility. On this basis, therefore, existing

future goods may be subdivided into specific, ascertained and un
certained goods, thus allowing for a total of six different catego
of goods which may be the subject-matter of a contract of s c
goods. _ .
Though the distinction between specific and ascertained go

the one hand and unascertained goods on the other is ^
established in principle, and important in practice,
exactly between the first two categories and the third and to
which category is involved in any particular case may
blems. Thus a contract of sale of one item from a
e.g., one cow from a herd. Is an agreement to sell
goods. But suppose that the whole consists of a dozen
specified in some way, e.g., the twelve volumes of Shakespeare i
library, and the contract is made in respect of any eleven ^
volumes, although this is also an agreement to sell tinasce
goods it becomes increasingly like a contract to sell specific g
In other words the more easily identifiable the goods which
subject-matter of the contract the less the contract is a sale of
and the more closely it resembles a contract for the sale of
goods. Theoretically speaking, this may be of no importance. ^
when questions of passing of property, risk and frustration .
becomes of great importance to determine whether the goods w
are being sold are specific or unascertained. Moreover, ^
seen in the ensuing section, the effect of extinction of the ^ ^
matter of the contract before or after the contract is made wifi* ^
depend upon whether the goods can accurately be described as spccia
or unascertained.
Importance of distinction
This leads to a consideration of why the differentiation
categories is important. In the first place, property in specific
may pass as soon as the contract Is completed, and before anyth'''^
else is done. ^Vhcther or not this is so depends upon the
of certain sections of the Act. or upon the teims of the contract-
THE DIFFERED CATEGORIES
43
Property in unascertained goods will not pass until there has been
some identification and appropriation of the goods to the contract.**
Hence there may be a sale of specific goods but not of unascertained
goods. A contract relating to such goods will be an agreement to
sell,** Secondly the Sale of Goods Act permits a court to order
specific performance of a contract to deliver specific or ascertained
goods.* But it does not permit such a decree in respect of unascer-
tained goods, as the case of Re Watt * conclusively shows. Thirdly,
the provisions of sections 6 and 7 of the Act, to be examined below,
only apply to contracts dealing with specific goods. They have no
application to contracts of sale of unascertained goods, even where
the goods have been ascertained. Lastly, while there may be
frustration of a contract for the sale of specific goods, and possibly
of a contract where the goods have been ascertained, it would seem
to be a matter of some dispute whether the doctrine of frustration
applies to a contract of sale of unascertained goods. Judicial opinion
on this matter appears to be divided*^: and it may well be that the
application of this doctrine depends on the exact Lind of unascertained
goods involved.**
3. PiRiSHiNO OF Goods
Statutory provisions
Reference has previously been made to the provisions of the Act

relating to the perishing of the subject-matter of a contract of sale of
goods. In brief what those provisions do is to regulate the position
of the parties where specific goods have perished either before a
contract of sale has been made or after such time. However, the
language of these provisions, when considered in the light of the
previous common law and of other sections of the Act, has given rise
to certain problems of interpretation and application.
dierc may be future specific goods, as suggested
aooTe m the text, future goods will not come within the category of specific
goods for the purpose of the pas^g of property, even though the goods in
question are identified and agreed opon'*; this u the effect of SG.A. s. 18,
Rule 5 (1): see Infra, pp. 84-90:
S s 1 (3): iupra, pp 4. 22
5 O A. 8. 52.
** Supra,
*^ Cf. Russell J. in Re BadUehe Co. Ltd. [II1 2 Ch. 331 at pp. 381-383, and the
cited and discussed, with Aôith LJ. in Monkland v. Jack Barclay
j-ra. [1931] 2 K.B. 232 at p. 238. Contrast, also, the decision iaRe an Arbllrallon
oetweert Shlptart, Anderson d Co. and Barrtson Bros. & Co. [1915] 3 KB. 676
*Pific goods) with the laognage of Pickford LJ. in Blackburn Bobbin
2KB 467 at p. 469, dealing with goods
not spccinc.
** See Infra, pp. 244-245. ,
44
SUBJECr-MATTCR OF TIIB CONTRACT
By section 5 of the Act, where there is a contract for the sale of

s^cihc goods and the goods without the knowledge of the seller
^ Pushed at the time when the contract is made, the contract is
Sti ' V where there b an agreement to sell specific goods,
d subsequently the goods, without any fault on the part of the scUct
perish before the risk passes to the buyer, the agreemeal
IS thereby avoided. ^
specific goods: and the reason for

rs IS obvious. In the case of both sections the intent of the pro-
ision IS to release the parties from their respective obligations where
e con^ct may be regarded as being pointless or without founda*
ion eit er ab initio or as a result of some intervening event for wluch
neither party was responsible.^ A contract of sale of goods ^
only be pointless in this respect where the parties had in mind the sale
or sorne particular item or items, which could not be replaced by
the substitution of some equivalent item or items.
Non-existent and perished goods
attributable to the expressions "perished* and

sections gives rise to some difficulty. There are
two aspects to this question.
reasonable to conclude that ia

perish * the Act is excluding from the scope of these
never ^ particular section 6) the case of specific goods which
exist J the parties believed that they
Ih?r tu , ordinary meaning of the word "perish suggests some*

Ianeuap,^r,f"^ cxist^ but has since ceased to exist. Moreover Ih
classicl-c/ ^ demands such an interpretation. Thus, in th
of com >t; v. Hastie < the contract concerned a ca^
in fart Salonica on a particular ship. Such com had
the tim^ fh ^5tcncc as a cargo on the ship in question: hu*
SSenS o SO. the com ms m looser to
is a ''"''o of ha oasc.
could be deacrib!^'^ \ ^ conceded that the cargo of corn
could be deaenbed as having "periahed." in the aenae in which to*
?f rither party, inch Irtrty tl ts
liable contracSlIy ^kI ft party ^
*f>>SH-l-.C673, On . .
, v fl the Safe or
J^notu jrotmdf for tbli
^ th lelkr that tbe y . * . * . ' " ' .
OitahW ^ nto... *
PERISHING OF GOODS
45
expression is used in section 6. It was once in existence, but had
ceased so to be at the material date. On the other hand, in the
Australian case of McRae v. Commonwealth Disposals Commission
the contract concerned a specific oil tanker alleged to have been ship-
wrecked on a specified reef. It emerged that neither the reef nor
the tanker existed. The High Court of Australia did not apply the
Australian provisions corresponding to section 6 of the Enîsh Sale
of Goods Act, but dealt wth the case on different grounds.** This,
it is suggested, was justifiable since a tanker which never existed
could not be said to have " perished-*
Thus, whatever else section 6 of the Act does, it cannot affect a

contract dealing with goods never having any existence at any time.
In such cases the position of the parties must be regulated by the
common law, (1) the law relating to mistake, where the parties
are both under the belief that there is something for them to contract
about.** or (2) the law relating to the purchase of a chance by the
buyer, thereby involving the buyer in liability for the price even
though there is nothing for him to buy,** or (3) the law relating to
the construction of contracts, under which a term may be implied
into the contract regulating the rights and liabilities of the parties in
the event of no goods actually existing.** A further possibility is that
the contract is one involving a sale depending on a contingent within
section 5 (2) of the Act.^
It is possible that the principle applied in McRae's case will be

relied upon in cases of res extinc/a, i.e., when something once existed
but docs so no longer.** Although the language of section 6 appears
to be mandatory, and applicable to all instances of the perishing of
goods which had once been in existence, but were so no longer at the
time the contract was made, in fact it may be that the provisions of
section 6 can be excluded by some appropriate express term or
** (1951) 84 C.L.R. 377.
seller (mpliedly warranted the eTBtence of the tanker. For critidsm

Cheshire atid Fifoot, op, at., pp. 192-193. In contrast see
Atiyah. loc. cil , supra, note 50, at pp 347-349. For the doctrine of collateral
warranty see infra, pp. 143-147.
*' See supra, pp, 27-28.
* Supra, pp. 38-39.
, supra, note 50, seems to be that the question is always

We ol construction: and that if the goods never existed prima fade the seller
Pmnjses that the goods exist, whereas if the goods have perished, the prima fade
** 1^* contract is void, by virtue of s. 6.
Supra, p. 38.
46
suruEcr-MATirR or the oomTucr
terms in the contract, or by the necessary or reasonable implication o

some term or terms in accordance with the doctrines that have en
considered in an earlier chapter. In this respect, it may be that e
provisions of section 55 of the Act, under which any right, duty
liability arising under a contract of sale by implication of laj
be negatived or varied by express agreement or the course of c
between the parties or usage, may be very relevant. Tho
may well be that, in appropriate cases, rights and duties
otherwise arise from the strict application of section 6 co
excluded.^
The meaning of perish "
What then will amount to the perishing of specific goods?

their absolute destruction in (he form in which they were
agreed to be sold will constitute perishing,
are burnt, or, by analogy with insurance cases, ^ u they ^
impregnated with sewage through the ship on which
being transported sinking and being salvaged,* or, ^jy
with Couturier v. Hastie, if a cargo of com is sold to d

and no longer exists as the same specific parcel of goods.** ....
respect it has been held in Barrow, iMne & Ballard Ltd. w
& Co. Ltd. * that where there is a sale of a speciOc indivisib c P ^
of goods (in that case 700 bags of nuts), and a quantity r g
is stolen, the goods have perished within the meaning of sec i
To compel the buyer to take the smaller number of bags, wbic
all that was left, would have been to compel him to take some ^
be had not contracted to lake. In that case the contract
described as being entire : hence any interference with the otig
quantity of bags could legitimately be considered to
perishing of the specific goods contracted to be sold. K
to see, however, what would happen where no such enaph^^
be placed on the exact quantity of items comprehended^ m ^
contract. Moreover, can stolen goods be said to have penshe
9* Supra, pp. 25-29.

9 eg., the obhgaiion to return the purchase price if paid in advance. jj,
e* Cf. Au'yah, Sale of Goods, 2nd cd., at p 2S. Chalmers, Sale of
at p. 35, is to the like eilect: sec Produce Brokers Co. v. Olympia Oil
ri9'71 } K.B 320.
and tiarrison Bros & ^
nent). a case which w*
PERISHINO OF GOODS
47
the same way as, e.g., burnt or sunken goods? To what other situations
can the decision in this case be extended or applied?^
The true meaning of perish is rendered even more difficult to

discover as a result of the decision of Morris J. in Horn v. Minister
of Food,** which, unlike the earlier case, was concerned with section
7, not section 6. In this case, the contract was for the sale of a
specific lot of 33 tons of potatoes. Care was used by the seller in
storing and protecting the potatoes. Nonetheless the potatoes rotted
between the date of the contract and the date of delivery. It was held
that section 7 did not apply so as to relieve the buyer of his liability
to pay the price or damages for non-acceptance, because the potatoes
were stDl potatoes despite their deterioration. Admittedly, this
decision could be said to be obiter, since the learned judge also
decided that risk had passed to the buyer, thereby excluding the
operation of section 7. However, the approach of the learned judge
to the question of '* perishing cannot be totally ignored.
A further problem is the effect of the partial perishing of specific

goods. The Barrow Lane case was one in which the contract was
entire. Hence the operation of section 6 when only a part of the
contracted quantity of bags disappeared. This principle would seem
to be applicable to any entire contract. But if the contract is severable
the effect of a partial perishing of the subject-matter of the contract
is mote questionable. It may be that the contract is void or avoided
as regards the perished part, though it is difficult to see any justification
tor applying the idea behind the sections to such a situation. In this
respect the corresponding provisions of the American Uniform Sales
Act are more helpful. As will be seen later.'' they refer to and deal
With the situation which arises where there is a sale or a contract to
sell specific goods and part of the goods have perished, or a material
part of the goods have so deteriorated in quality as to be substantially
changed in character.
^possibility
Section 7 raises special problems. This section, which also

applies only to specific goods, is concerned with agreements to sell,
not sales, and to the perishing of goods between the date of the
^ Jn Chalmers, op. ett, nt p 35, that the section could apply to a
of fivf ..f .u. -u .j,y .. the time
. s
* 11948) 2 ; . ^
** 7 0 ), 8 ( 2 ).
** tnfra, p. 50.
48
SUBJECT-MATTER OF THE CONTRACT
contract and the time when risk passes to the buyer. When risk
so passes is something which most be considered later.^^ In the
present context, it suffices to note that what the section seems to deal
with are situations in which, without any fault on the part of seller or
buyer, the contract becomes impossible to perform by reason of the
perishing of the goods. Hence the section has no application
where impossibility results from any other cause, e.g., the passing
of a statute making illegal the sale of the kind of goods involved,
or the intervention of a state of war making the buyer into an alien
enemy or making deliveiy of the goods impossible. In such cases,
therefore, as in the case of agreements to sell unascertained goods,
the common law doctrine of impossibility of performance or frustra-
tion applies. This means that the Law Reform (Frustrated Contracts)
Act, 1943, will regulate the rights and liabilities of the parties, so
that the contract will not entirely be without effect.^* In cases within
section 7, however, the contract is avoided, which means that neither
party wiU have any right to recover any expenses incurred in fulfilling
the contract. All that will happen will be that the seller will be
excused from liability for non-delivery while the buyer is excused
from the payment of the price.* It will be noticed, however, that the
same arguments are applicable to section 7 as to section 6, so that it
may well be that the apparently mandatory provision of section 7
can be excluded by appropriate express or implied terms retaining
the liability of either party even if the goods perish.
It has been queried whether this section would now apply to the
kind of situation which arose in Howell v. Coupland, in which the
then emergent doctrine of impossibility or frustration was applied. It
will be remembered that the contract there concerned a specific parcel
of goods to be grown by the seller. This was regarded as a sale of
specific goods, to which that doctrine could apply. Since then, how-
ever, the statutory definition of specific goods has been enacted, and.
as a result, it may be questioned whether the goods in that case could
now be described as specific so as to bring the case within section 7.
In view of the comments of Atkin LJ. in Re Wail,'^ to which refer-
ence has earlier been made,* it may well be that in contracts of this
kind the common law doctrine of impossibility or frustration is
Infra, pp 236-240.
T* On frustration, s generally infra, pp. 242-248.
T Anything paid by the buyer will l recoTerable on the ground of failure of

consideration.
T This is the view of Atiyah, op. cit., p. 114.
119271 1 Ch- 606 at p 630.
Supra, p. 38.
PERISHING OF GOODS
49
applicable, and not the provisions of section 7. In view of this, it is

open to question whether section 7 of the Act can be said to be the
statutory enactment of the principle stated in Howell v. Coupland,
It is suggested, however, that, in view of the emphasis placed by the
court in that case upon the fact that the crop was of a specified amount
to be grown on a specified piece of land, the goods in that case could
conceivably be regarded as specific even within the definition in the
Act. On this basis, therefore, section 7 would be applicable. It
must be remembered that in Re Wait the court was not concerned
with the precise problem involved in section 7, Hence what is there
said about Howell v. Coupland must be regarded with caution so far
as the provisions of that section are concerned.
Criticism of the Act
From what has been said above, it will be apparent that the pro-
visions of sections 6 and 7 of the Act leave much to be desired as
regards clarity and certainty. Not only is it difficult to state with any
degree of assurance the precise situations to which these sections
apply, it is also far from clear what some of the expressions employed
in those sections mean and involve.
Thus while it seems fairly obvious that section 7 is intended to

deal with impossibility of performance, it is not clear whether section
6 is intended to cope with a particular kind of mistake on the part of
seller and buyer.^^ Moreover, section 7 as it stands is very limited in
its application. The doctrine of impossibility or frustration at com-
mon law will apply to all other situations which might arise in con-
nection with a contract of sale of goods except the narrow one
comprehended in section 7. In the light of developments in the law
of mistake and construction of contracts and in the doctrine of
impossibility or frustration since 1893, it might be thought desirable
to amend the present law contained in the Act by provisions which
more widely and carefully expound what is to happen in all the
various situations that can (and, of course, do) arise. The existing
provisions, as has been shown, are not comprehensive enough to
permit the easy discovery of an answer to problems which emerge
from the destruction or non-existence of goods.
Moreover, even where the sections do apply, they still leave

questions difficult to resolve. For example, as has been seen above,
what exactly does the expression ** perish mean? This is far from
settled by the 'case law since the Act. Nor is there any clear
TT Oiatmers, op. cit., t p. 34, regards s. 6 as possibly being based on either mlstalLe
or impossibility.
48
SUBJECr-MATHiR OF nffi CONTRACT
contract and the time when risk passes to the buyer. When risk
so passes is something which must be considered later.^* In the
present context, it suffices to note that what the section seems to deal
with are situations in which, without any fault on the part of seller or
buyer, the contract becomes impossible to perform by reason of the
perishing of the goods. Hence the section has no application
where impossibility results from any other cause, e.g., the passing
of a statute making illegal the sale of the kind of goods involved,
or the intervention of a state of war making the buyer into an alien
enemy or making delivery of the goods impossible. In such cases,
therefore, as in the case of agreements to sell unascertained goods,
the common law doctrine of impossibility of performance or frustra-
tion applies. This means that the Law Reform (Frustrated Contracts)
Act, 1943, will regulate the rights and liabih'ties of the parties, ^
that the contract will not entirely be without effect. In cases within
section 7. however, the contract is avoided, which means that neither
party will have any right to recover any expenses incurred in fulfilling
the contract. All that will happen will be that the seller will be
excused from liability for non-delivery while the buyer is excused
from the payment of the price. It will be noticed, however, that the
same arguments are applicable to section 7 as to section 6, so tot
may well be that the apparently mandatoiy provision of section 7
can be excluded by appropriate express or implied terms retaining
the liability of cither party even if the goods perish.
It has been queried whether this section would now apply to the
kind of situation which arose in Howell v. Coupland, in which the
then emergent doctrine of impossibUity or frustration was applied* It
will be remembered that the contract there concerned a specific parcc
of goods to be grown by the seller. This was regarded as a sale of
specific goods, to which that doctrine could apply* Since then, how-
ever, the statutory definition of specific goods has been enacted, an ,
as a result, it may be questioned whether the goods in that case could
now be described as specific so as to bring the case within section 7.
In view of the comments of Atkin LJ. in Re IFo/V, to which refer-
ence has earlier been made, it may well be that in contracts of this
kind the common law doctrine of impossibility or frustration is
Tt Infra, pp. 236-240.
* On frustration, see generally Infnf. pp. 242-24S. , t i . nf
T Anything paid by the buyer iritf recoverable ob the ground of fawirr
consideration.
* Thb is the view of Atiyah, cp. eit-, p. 114.
M 119271 1 Ch. 606 at p. 630.
Supra, p. 33.
PERISHING OF GOODS
49
applicable, and not the provisions of section 7. In view of this, it is

open to question whether section 7 of the Act can be said to be the
statutory enactment of the principle stated in Howell v. Coupland.
It is suggested, however, that, in view of the emphasis placed by the
court in that case upon the fact that the crop was of a specified amount
to be grown on a specified piece of land, the goods in that case could
conceivably be regarded as specific even within the definition in the
Act. On this basis, therefore, section 7 would be applicable. It
must be remembered that in Re Wait the court was not concerned
with the precise problem involved in section 7. Hence what is there
said about Howell v. Coupland must be regarded with caution so far
as the provisions of that section are concerned.
Criticism of (he Act
From what has been said above, it will be apparent that the pro-
visions of sections 6 and 7 of (he Act leave much to be desired as
regards clarity and certainty. Not only is it difficult to state with any
degree of assurance the precise situations to which these sections
fippiy* it is also far from clear what some of the expressions employed
in those sections mean and involve.
Thus while it seems fairly obvious that section 7 is intended to

deal with impossibility of performance, it is not clear whether section
6 is intended to cope with a particular kind of mistake on the part of
seller and buyer.* Moreover, section 7 as it stands is very limited in
its application. The doctrine of impossibility or frustration at com-
mon law will apply to all other situations which might arise in con-
nection with a contract of sale of goods except the narrow one
comprehended in section 7. In the light of developments in the law
of mistake and construction of contracts and in the doctrine of
impossibifity or frustration since 1893, it might be thought desirable
to amend the present law contaioed in the Act by provisions which
more vddely and carefully expound what is to happen in all the
various situations that can (and, of course, do) arise. The existing
provisions, as has been shown, arc not comprehensive enough to
permit the easy discovery of an answer to problems which emerge
from the destruction or non-existence of goods.
Moreover, even where the sections do apply, they still leave

questions difficult to resolve. For example, as has been seen above,
what exactly does the expression perish mean? This is far from
settled by the case law sin the Act. Nor is there any clear
Q>ilmer*. op. cit., at p. 34, regards s. C as posilbty being based on efoAer mistake
or Impossibility.
50
SUBJECr-MAntR OF TTIE CONTRACT
authority on the effect of a partial perishing of the goods. The

American Unifonn Sales Act at least attempts to provide answers to
these queries. In the sections of that Act which correspond to sections
6 and 7 of the Sale of Goods Act what is to happen is stated in more
detail. Those provisions run as follows:
Section 7 (2)
Where the parties purport to sell specific goods, and the goods
without the knowledge of the seller have perished in part or have
wholly or in a material part so deteriorated in quality as to be
substantially changed in character, the buyer may at his option treat
the sale
( 0 ) as avoided, or
(b) as transferring the property in all the existing goods or in

so rnuch thereof as have not deteriorated, and as binding^ the
buyer to pay the full agreed price if the sale was indivisible,
or to pay the agreed price for the goods in which the property
passes as if the sale was divisible.
Section 8 (2)
Where there is a contract to sell specific goods, and subsequently,

but before the risk passes to the buyer, without any fault on the part
of the Seller or the buyer, part of the goods perish or the whole or a
material part of the goods so deteriorate in quality as to be
substantially changed in character, the buyer may at bis option treat
the contract
( 0 ) as avoided, or
(W as binding the seller to transfer the property in all of the

existing goods or in so much thereof as have not deteriorated,
and as binding the buyer to pay the full agreed price if the
contract was indivisible, or to pay the agreed price for so
much of the goods as the seller, by the buyers option, is
bound to transfer if the contract was divisible.
A reading of these provisions reveals that the scope of the law therein
contained is clearer and more precisely defined than in the English
provisions: that the uncertainUes of meaning hidden in the English
provisions are avoided: and that the effect of perishing under the
American provisions is not so drastic and inflexible as under the
English statute. It may be suggested, therefore, that, when considera*
tion is given to the revision of the existing English law, something
along the lines of the above provisions should be incorporated. Even
though there are difficulties of application connected with such
phrases as a material part and deteriorated in quality so as to be
substantially changed in character, it is nonetheless suggested that
such provisions afford better means of regulating the rights and
duties of the parties than the current English sections.
Chapter 4
THE EFFECTS OF A CONTRACT OF SALE

1. Property and Contract
the distinction between proprielaiy and contractual rights is well

known, and has been referred to in an earlier chapter in connection
with the difference between a sale and an agreement to sell.^ From
what was said there it will be clear that an important feature of a sale
(as opposed to an agreement to sell) is the passing of property in the
goods and the consequent availability to the buyer of proprietary
rights of action, such as detinue and >nversion.* A further effect
of such passing of property by a sale is that the buyer may be able to
obtain a decree of specific performance of the contract. Side by side
with such proprietary effects of a contract of sale of goods, the usual
and some special contractual rights and duties arise. A contract of sale
of goods is. therefore, at one and the same time a straightforward con*
tract, with some peculiarities stemming from the subject-nature of the
agreement and the particular provisions of the Sale of Goods Act, and
a means of conveying property in goods which come within the scope
of that Act. As has been seen, this duality does not immediately arise
in the case of a mere agreement to seD, which is a pure contract not
affecting the property in the goods agreed to be sold. It only exists
in the case of a sale. However, since an agreement to sell eventually
becomes a sale (unless for some reason it falls by the wayside and never
lakes effect, for example, by virtue of the operation of section 7 of
the Act) the conveyancing effects of the contract are merely postponed
to some future date or event, and not completely ousted.
The contract itself suffices to pass such property, without anyueed

for actual or symbolic delivery of the goods. In this respect English
^ Supra, pp. 21-23.
* will be BvaOabte against third parties, except where i third party can bring
himsell within the protection of ss. 21^ of the Sale of Goods Act (Infra,
pp. lOS . --. .. -r ., , , .
Lawson, Z. . , I ! . >
Zias passed ' . . ' . .
bayei can . . . . . .
delivered r ,
to ine buyer): Lawson, loc. clt says he may not because of the unpaid
seller s lien (on which see tnfra. pp. 25^21^
* Hence the statutory inclusion of the old bargain and sale as well as sale and
delivery within the scope of the definhion of sale: S GA. s. 62 (I).
51
52
EFFECTS OF A OONTOACT OF SAI
law differs from Roman law which drew a sharp distinction between
the creation of a contractual relationship between seller and buyer
by the completion of the contract and the passing of property in goods
by their transfer by some appropriate legal method.*
However, it is insufficient to distinguish thus simply between the

contractual and the proprietary effects of a contract of sale of goods.
Greater complexity is involved. To begin with, the Sale of Goods
Act (like the American Uniform Sales Act, but unlike the American
Uniform Commercial Code) distinguishes between property and
title. This, as will shortly be seen, involves certain difficulties in
the way of accepting that a contract of sale of goods is, in all instances,
a method of transferring ownership of goods. Secondly, the con-
tractual rights and obligations which arise by virtue of a contract of
sale of goods may be said to fall into two different and quite distinct
categories, different because some rights and obligations may be
excluded by agreement of the parties whereas others are so funda-
mental to a contract of sale of goods as to be mandatory, distinct m
that some relate to the contents of the contract whereas others are
concerned with the performance of the contract. With the details of
these matters succeeding parts of this book will be concerned. lo
the present context it is intended to discuss the more general aspects
of these problems.
2. Property and Titlb
General property
Under the Act the seller transfers or agrees to transfer the

property in goods to the buyer. Property is defined as meaning
the general property in goods, and not merely a special property.
It would appear at first sight that, by this statutory definition, it was

intended that sales under the Act should transfer ownership in goc^s
from seller to buyer. The distinction between general and s^ci^
property lies in the difference between the aggregate rights enjoyed
over things by an owner and the special interests over things which
may be enjoyed and exercised by someone with more limited legal
powers over things, such as a pledgee or bailee. Thus while goods
may be physically possessed by one person by virtue of some relation-
ship such as bailment between him and the person having general
4 Which depended on the legal category of the goods in the period when
law distinguished between res manetpl and res nee mancipL See, genera^
Lawson, The Passing of Property and Risk in Sale of Goods a Comparative
Study (1949) 65 L Q JL 352.
a S.OA. a. J (1).
S.OA. 8. 62 0).
PROPERTY AND nTLE
53
property in the goods, ownership is in such latter person and may

be transferred by a contract of sale to a third party. Such a transfer,
of course, may be expressly or impliedly subject to the rights vested
in the person having possession or special property in the goods : or
such rights may continue to exist, despite the transfer of ownership,
by virtue of some rule of law.*
However, the expression "general property," while it may be

intended to mean " ownership," does not necessarily have that effect.
This is because, in respect of goods, English law does not appear to
have arrived at any general concept of property " therein, as it has
with respect to land.* Historical development, in particular the
growth of remedies for the recovery of goods from others, is the
reason for this anomalous differentiation between goods and land.
Thus, in speaking of "general property" as being the subj'ect of
transfer by a contract of sale of goods, the Act is probably only
referring to the complete and out-and-out transfer by the seller to the
buyer of every right or interest enjoyed by the seller in and over the
goods which are the subj'ect-matler of the contract. What the seller
is obliged to transfer to the buyer, and what is transferred to the
buyer when the terms of the contract or the provisions of the Act are
fulfilled as respects the passing of property, is not necessarily absolute
ownership or dominium of the goods, but merely the totality of the
rights enjoyed by the seller over the goods. As a corollary of this,
there is also transferred to the buyer, by virtue of the provisions of the
Act, and in the absence of any contractual term to the contrary, the
risk of loss or damage to the goods, and the right of the buyer to
receive any benefits accruing after the completed sale. As has been
pointed out, the transfer of property to the buyer also has the
effects of depriving the buyer of the right to reject specific goods for
breach of condition ** and rendering the buyer liable to an action for
the price of the goods, as opposed to an action for damages for breach
of contract.
Thus, the idea of transfer of " property " from seller to buyer is
important only in so far as it affects the relationship inter se of the
^ the equitable doctrine of coa5tnictive tnists.
* See, generally, Kirtlfy, "'Hie AobSein of a Law of Property in Goods (1949)

12MLJ( 424.
* Lawson, loc. cll^ supra, note 3, at pp. 359, 360, suggests that, apart from
the rffects of the transfer of property are for the most part, if not entirely,
UJusofy, and are without any practical consequence. Ibe buyer is in no better
position, from the point of view of remedies, whether or not he has obtained
property.
Atijah, SaU of Goods, 2nd ed., at pp. 92-93.
Infra, pp. 183. 309, 3M.
54
EFFECTS OF A CXfrRACr OF SALE

parties to the contract of sale of goods. The fact that such pro-
perty will or can be transferred without the necessity of any physical
delivery of the goods is materia! only to the extent to which it
affects the rights and liabilities of the seller and the buyer as between
themselves.^* For these purposes, therefore, it is unnecessary to
interpolate into the contract of sale of goods any concept of owner-
ship or title in or to the goods which are being sold. Even for the
purpose of distinguishing sale of goods from other, similar contracts,
it is not necessary to go beyond the idea of general property as
outlined above, since that suffices to differentiate a contract of sale
of goods from contracts such as hire-purchase or mortgage.
The object of the contract
It would seem, therefore, that the object of a contract of sale of

goods, according to the language and intent of the Act, is not the
conveyance of ownership in goods (as is true of a contract of sale of
land) but the transfer from one person to another of the transferor s
interest in such goods. If this were indeed all that the Sale of Goods
Act said on the subject then it would be incorrect to describe a con-
tract of sale of goods as a kind of conveyance of goods and as having
proprietary effects over and above its contractual consequences. A
contract of sale of goods would then be a way of transferring slightly
different interests over goods, larger in content and scope, than may
be transferred by other contracts such as hire or hire-purchase.
However, other provisions of the Sale of Goods Act make it difB*

cult to accept such reasoning and conclusions. For, elsewhere in the
Act, by contrast with the opening definition section and those which
are concerned with the transfer of property as between seller and
buyer, the Act refers to title, Le., to complete and absolute ownership
of goods.
Thus, under section 12 (I) there is an implied condition that the

seller has the right to sell the goods or will have such right at the time
when the property in the goods is to pass to the buyer. This the
statute calls, in the marginal note,** an 'Implied undertaking as to
> It ihoulJ be noticed, bowerer, that, cm though rroperty. without
may hare paned from aellcr to buyer, the buyer may he disentitled 1 e"" *5
the rrent of the ubse<jyenf bankrurtcy of the seDcr. by reason of the prorWonj w
the bankruptcy law rebtinf to fraudulent conreyances and reruled *T^
TJwe is also the ptmihillty that the tale may require rctistratlon under the BUJ
of Sale Acts, and, bcklng tudi rrfbtration, may be roid ajtainst the selW*
cred.tors. To such estent, therefore, the rroTisloni of the Sale of Goods An
as rerardi transfer of from seller to buyer may be to no ara3.
IS Which is nm admiisMe to construe the atatote: R, e. Metrcpotlsan Fclkc

mtnlontr I AH C-R. : at p. R.
PROPERTY AND TTIUB
55
title. Next, under the heading of '* effects of the contract (which
is Part n of the Act) there is a sub-heading transfer of title under
which, in several sections, the Act a)nsiders the extent to which and
circumstances in which a person not an owner of goods can confer
a good title to the goods on a buyer from him. Section 12, therefore,
clearly contemplates that the object of a sale is to transfer title from
seller to buyer, not simply whatever " general property the seller
has over the goods. Sections 21 to 26 of the Act clearly contemplate
that there may be a transfer of title, not simply general property,
by a contract of sale of goods, even where the seller has no legitimate
title. Such transfer of title, as section 25 (I) shows,'* may even take
place where a seller has previously sold goods, i.e., transferred the
property in them, to an earlier buyer, with the result that the first
buyer is unable to claim the goods from the second buyer.
These considerations suggest that there may be such a thing as

title to goods and that the Sale of Goods Act is really dealing with
the transfer of such title as between seller and buyer when it refers
to property and defines that expression in the manner indicated
above. However, despite some argument to the contrary, it is
suggested that, in view of the opening phrase of section 12 (viz.,
"unless the circumstances of the contract are such as to show a
different intention ), the implied condition as to title may be excluded
by appropriate language or conduct on the part of the seller and
buyer,* If such condition is excluded, then it would seem that
there is no need for the seller to transfer title, as long as he transfers
property in the goods, which indeed may only consist in a transfer of
possession, if all he has in the goods is a right to immediate possession
of them. If this is correct, then a sale of goods Is not necessarily a
conveyance of goods, only a method of disposing of possession of
goods.
On the other hand sections 21 to 26 of the Act, to which reference

was made above, do involve transfers of title which will be good
against the whole world and not merely a transfer of possession.
Whereas earlier sections of the Act are concerned with the transfer
of property as between seller and buyer these sections deal with
//ra. pp. 121-123.
S Hudson, The Condition as to Title in Sale of Goods (1957) 20 M.L.R.

236 for full discussion: infra, pp. 5M-103. For the exclusion of such war-
ranty under the Uniform Conunettial Code, see s. 2-312 (2). For the possibility
of exclusion at common law in America if appropriate, clear language is used;
see Bogert, Britten and Hawkland, Cases and Materials in the Law of Sales and
Security (4th ed., 1962), pp 149-151.
56
crrEcis OF a ooimwcr of sale
transfers of title which, by implication, nffect not only the seller and
buyer but also third parties.
The American and English views contrasted
In the United States, the Unifonn Sales Act maintains the distinc-
tion between property and title referred to and discussed above.*^
But the Uniform Commercial Code, more sensibly, it is suggested,
makes use of only one notion, ////c, when considering the definition
of " sale, when providing for the obligation of the seller correspond-
ing to the obligation contained in section 12 of the Sale of Goods
Act, and when dealing with transfers as between seller and buyer
and the position of third parties buying in good faith. Thus, this
Code does not seem to suffer from the ambivalence of the Sale of
Goods Act (and the Uniform Sales Act) in ibis respect.
Therefore, instead of approaching the notion of sale fro

point of view of considering such a contract as a transfer of ownership
without the need for delivery, or from the point of view of making
the contract of sale simply a contract under which the seller was
obliged to make good title separately (as in Roman law), the
Goods Act treats ownership as being divided into two aspects. Firs
of all. there is the effect of the contract of sale as regards rights ove
the goods as between the immediate parties to the contract. Secondly,
there is the extent to which a contract of sale can effectively opera e
as an outright conveyance of absolute, indefeasible ownership of goo s.
The result of this is that in dealing with the proprietary effects o t e
contract of sale of goods it is necessary to differentiate the situation
as between seller and buyer from the question of the title to the goo s.
3. Classification of Contractual Obligations
The contents of the contract

Much of the Sale of Goods Act is concerned with the purely con-
tractual rights and obligations arising out of a contract of sa e o
goods. The nature and scope of such rights and obligations may W
said to constitute the contents of the contract, for they explain an
limit what is involved for either paity as a result of such a contrac
IT Uniform Sa! Act. ss. I (1) (2). 12 O). 17-20. 2>-0. Note
Sales Act deals with negotiable doemnents of title to goods m a way not
hended in the Sale of Goods Act; ef. Lawson, toe. /.. i-f- m.
For negotiation of documents of title m Engluh law, see the Bills of Lading:
1855; SO. A. 8. 47 proviso; /n/rtf. pp, 264, 272. .
18 Unifonn Commercial Code. *s. 2-106 Ok 2-312 fl). 2-401, 402, 403; cf. also
ss. 7-502, 503.
CLASSIFICATIOS OF CXJlllACrUAL OBLIGATIONS
57
However, it is suggested that it is incorrect to explain and discuss

these matters simply by the language of rights and duties, i.e., by
stating what a contract of sale of goods involves in terms of con-
tractual duties on seller and buyer respectively.'* Tbough at first
sight the contents of the contract may appear to be explicable in this
way, it is suggested that theoretically and practically the contents of
a contract of sale of goods fall into two groups.
The first is concerned with the actual definition and scope of the
contract itself, /.e., the terms of the contract agreed between the
parties. Under this head come the provisions of the Act relating to
conditions as to description, quality or fitness, sales by sample (and,
possibly, as to time *') and the provisions relating to the treatment
of a breach of condition as a breach of warranty.** These matters
are connected with the subject-matter of the contract, in other words,
the character and quality of the goods which are being sold.
The second group is concerned with the effects of the contract as

between the parties. The provisions of the Act coming under this
head are those relating to the duties of the seller and the buyer as
regards delivery,** payment,** and aweptance of the goods.** Such
matters do not affect the contract Itself so much as its performance.
Terms of the contract
It will be seen, in subsequent chapters, that the Sale of Goods

Act provides for the implication of rlain terms in a contract of sale
of goods in (he absence of any express or implied agreement between
the parties to the contrary. The importance of this lies in the fact
hat, despite the Act, the parties may make for themselves any con-
tract they choose so far as such matters are concerned. Thus the
provisions of the Act are not mandatory and always applicable. They
are better regarded as being guides to the contents of a contract of
sale of goods, or as providing what the law considers to be the ideal
or normal scope of such a contract. This leaves the parties free to
exclude altogether or modify in any desirable way what the Act
provides (though, as will be seen, recent developments in the law
Appear to indicate that there are limits to the extent to which the
parties may act in this manner).
n W 151-178
* 1 O extent to w1
so payment: Infra, pp. 200-201.
u cp-t- * y* pp 181-184
u ** 27-33: Infra, pp. 203-220.
* ôa' V' 28- Wra. pp. 22^232,

S.GA. ss. 34-37: infra, pp. 220-2.
wtddt tune tiffects stipulations other than those
58
EFFECTS OF A OWmUCr OF SALE
Various difficult problems are raised by these provisions of the

Act, and especially by the tenninology involved. The problems in
question are concerned with the gcoerk nature of a contract of sale
of goods and the scope of the obUgations that such a contract creates
from the point of view of the goods themselves. Indeed some of the
problems which will be discussed in this connection are fundamental
to the law of contract generally and are not confined to the sale of
goods. By contrast, the provisions of the Act which deal with
performance of the contract raise questions of a different nature.
The duties of performance
The provisions of the Act which lay down the obligations of the
parties so far as the performance of the contract is concerned are of
a different order from those which have been mentioned above.
Although the requirements of the Act in this respect may to some
extent be modified by agreement between the parties, by and large it
is true to say that what the Act stipulates is obligatory upon the
parties. In other words, where performance is concerned, the Act
does not merely provide a model which may or may not be copied or
accepted by the parties as they choose but states precisely and almost
unalterably what it is that seller and buyer are obliged to do once
they have validly contracted for the sale of goods.
The provisions of the Act discussed in the preceding section are

concerned with the formation of a contract of sale of goods; the
provisions of the Act under consideration here are concerned with its
fulfilment. While all these provisions may be regarded as dealing
with the contractual aspects of the contract (by contrast with the
proprietary effects of such a contract which were discussed earlier),
some fall into a different category from others. For this reason it is
suggested that, in considering the extent to which a contract of sale
of goods gives rise to contractual rights and duties, as opposed to
proprietary consequences, it is both logically correct and practically
important to distinguish between what may be called conditions
and what may rightly be termed duties.
A farther distinction
It is possible to consider contractual and statutory terms relating

to the character and quality of Uie goods sold as being ancillary to the
main purpose and function of a contract of sale, which is the transfer
of property in the goods, and as applying solely to the definition of
CUSSinCATlON OP CONTRACItlXl. OBUGXTIOSS
59
the goods which are being sold.** Such terms, therefore, supplement
the dhlincUon between specific and unascertained goods by adding
further distinctions which affect the identification of the goods to
be sold by reference to the quality of such goods, distinguishing goods
of a certain character, which were intended by the parties to be the
subject of the sale, from goods of a different character, which are
outside the scope of the contract. To put it another way, they are
pertinent to the definition and scope of the contract agreed between
the parties. In contrast, the obligations respecting performance of
the contract, so far as delivery of the gex^s, acceptance of the goods,
and payment of the price are concerned, belong to a different class
or category of contractual obligations, in that they regulate the
position of the parties once the terms of a binding contract of sale
have been agreed.* The obUgaUons relating to the character and
quality of the goods may therefore be called static : those relating
to performance may be called dynamic.
OwS)1?S.'Srct''?6o a Contract of Sale of Goods
Part n
PROPRIETARY EFFECTS OF THE CONTRACT
THE TRANSFER OF PROPERTY
I. Introductory
Rib distinctions between different types of goods that are to be

found in the Sale of Goods Act become of considerable importance
in connection with the '* transfer of property as between seller and
buyer. This phrase, the signidcance of which has been considered
earlier,^ indicates that the provisions to which it is the sub*heading,
are designed to regulate the legal effects of the contract between the
seller and the buyer so far as those parties, and only those parties, are
concerned.
Indeed, the importance of the transfer of property in the goods

which are sold lies not in that transfer itself so much as in its ancillary
consequences. As will be seen in the ensuing chapter, a person who
has no property in goods may nonetheless pass a good title to them.*
Hence, from the point of view of the position of the buyer as against
third parties, it may not matter that the seller has no title to sell.
As regards the buyers position with respect to the seller, however,
the question when property passes or is transferred to the buyer is
cardinal. Three issues hang upon this question.
First, the effect on the rights and obligations of the parties of the
total or partial loss, deterioration, damage or destruction of the goods
is dependent on the transfer of property, unless some express or
implied agreement (or custom) otherwise provides.* This may be
called the risk issue. By way of corollary to that, and by virtue
of the language of section 7 of the Act,* the effect of the goods perish-
mg, where the contract is an agreement to sell specific goods, also
depends on the transfer of property.
Secondly, for reasons which will appear in due course (when

section 11 of the Act is considered), the transfer of property from
seller to buyer will sometimes have the effect of depriving the buyer
^ Supra, pp. 52-56.
* l"fra, pp. 106-129
* See S.G.A s. 20; discussed Infra, pp. 236-240.
* Supra, pp 44~49
Since the effect of the perishing of the goods depends on the passing of risk to the
buyer, which, In turn, depends on the passing of property to him,
* Infra, pp, 181-185.
63
64
TRANSFER OP PROPERTY
of a right to reject the goods which he may enjoy because the goods
are not of the right quality, quantity, description, etc. This may be
called the rejection issue.**
Thirdly, once property has passed to the buyer, the seller loses
and the buyer acquires proprietary rights of action in respect of the
property, both as regards the seller himself and, subject to the defeat
of the buyers title by the operation of the sections of the Act to be
discussed later, as regards the outside world. A further consequence
of this is that the seller is then enabled to sue the buyer for the price
of the goods, and not merely for damages for breach of contract.
This may be called the property-price issue.
These three issues will fall to be decided differently in accordance

with the precise category of goods involved in any individual instance,
and with the application of the sellers reservation of a right of
disposal of the goods, now governed by the provisions of section 19
of the Act. This section, as wU be seen,* can override the effects of
the preceding provisions of the Act. in certain circumstances, so as
to delay the transfer of property when it would otherwise occur.
To explain the effect of the Act, it is necessary to discuss the

relevant provisions in connection with (a) specific goods and (b)
unascertained and future goods.
2. SPEcmc Goods
Intention of the parties
By section 17 (1) of the Act, where there is a contract for the sale
of specific or ascertained goods the property in them is transferred
to the buyer at such time as the parlies to the contract intend it to
be transferred. As Lord Watson said in McEntire v. Crossley Bros>
Ltdy : It does not in the least follow that, because there is an agree-
ment of sale and purchase, the property in the thing which is the
subject-matter of the contract has passed to the purchaser, Ibat is
a question which entirely depends upon the intention of the parties.
The law permits them to settle the point for themselves by an expres-
sion of their intention upon the point. Hence, in that case, a contract
by which the property in an engine sold by the respondents to X
was not to pass until all the instalments of the purchase price were
paid did not prevent the contract being one of sale and purchase,
Infra, pp 108-129.
SPECIFIC GOODS
65
despite the argument of the respondents that it was one of hire

with an option to purchase added.
To discover the intention, of the parties, as required under the Act,

regard must be paid to the terms of the contract, the conduct of the
parties, and the circumstances of the case.^* This deliberately vague
and general statutory language allows considerable latitude to the
parties and to any court which has to decide this question. The
vagueness of this provision of the Act was indeed remarked upon in
Varley v. Whipp by Channell J. who also said that it correctly
represented the state of the authorities when the Act was passed.
Hence it is necessary to see what the parties have expressly provided,
or impliedly decided, where the contract is one for the sale of specific
or ascertained goods. For example, in cases in which the seller has
contracted to build for and sell to the buyer a ship, whether the buyer
obtains property in goods which are intended to be incorporated in
the ship before such incorporation, and the time when property in the
completed ship passes to the buyer, have been held to depend upon
the precise terms of the contract.** In Saks v. Tilley ** diamonds
were sent with a bill of exchange to the buyer for him to accept such
a bill. The invoice was marked settled by acceptance. The bill
was never accepted by the buyer, hence it was held that no property
ever passed to him, since the intention of the parties was that property
in the diamonds should not be transferred until the bill of exchange
was accepted. It was made clear in that case that the provisions of
section 17, stated above, ousted the otherwise applicable provisions
of section 18 (discussed below) as to the passing of property in the
case of an unconditional sale of specific goods. In that case, however,
the term as to acceptance of the bill of exchange was inserted in the
contract at the same time as the goods were delivered to the buyer.
In Dcnnant v. Skinner the term that property in goods sold by
Propetw <Ud not pass to X, Tvbo failed to pay alt the instalments; hence the
11 e assignees of X acquired no right to the property when X became bankrupt.
* t2). See the remarks of Greer LJ. in the peculiar case of Lord Eldon
t, 11533) 2 K.B. 1 at p. 16
JMJ9001 1 QB 513 at p. 317.
^Reld V, Macbeth & Gray A.C 223; Lalng & Son Ltd. v. Barclay, Curie
* -o. trd. 11908] A.C. 35; Re Dlyih ShltAuUdlng A Dry Dock Co. Ltd. 11926]
Cn. 484; AfeDougafl v. Aeromarint oj Emr*'orlh 11958] 3 All E.R. 431. Set also
Infra, pp. 75.76,
jj (1915) 32 T.L.R. 143.
** ^*^**^- C"/* s regards the effect of a similar provision upon the power
, ,*"5 to pass title to an innocent third party, although the bu>'cr hid no
"' H. by virtue of the Factors Act, 18S9 (Infra, pp 123-I2S). AWWnj
V. millams [I94I 2 Alt E.R. 135 at p. 140. per Davies LJ
n inis ue, however, the sale was not by aueUon, and the learned judge said
mat such a ebuse was operative, but only as between seller and buyer.
rje-O. 3
66
TRANSFER OF PROPERTY
auction should not pass to the buyer until a cheque given by way of
payment should be cleared was not inserted into^the contract until
after the fall of the hammer at the auction, the result of which, as
already seen,** was that properly passed right away, making it too late
to postpone the passing of property by the inclusion of such a term
in the contract. No ouster of the relevant provisions of section 18
occurred.
Other cases illustrate the different considerations that may be

material in deciding this question. Thus the fact that a cargo was
expressed to be at the buyers risk from the moment it was placed
on board ship for delivery to the buyer was held, in The Parchim,^'
to indicate that property was intended to be transferred at that time.
In another instance ** the terms of the contract showed that the in-
tention of the parties was that, until payment of the purchase price,
property in a specific parcel of wheat was not intended to pass. Even
where a contract stipulated that property was to pass when goods
were placed on board ship it was held that the rejection issue was
to be decided in favour of the buyer, i.e., that the express language
did not oust the intention that only goods within the fficaning of the
contract were to be supplied.** In other cases it has been held that
the surrounding circumstances, such as the delivery of Lucozade in
bottles which were returnable,* ibe normal method of buying plS*
at auctions,** and the importance of the weight of coal that was being
bought (which involved the weighing of a load before it left the
sellers place of business) ** were vital to determine when property
was transferred.
It should be noted that the section refers to ascertained as

Well as specific goods. The difficulties involved in the former
expression have elsewhere been considered.** However, it would
seem that, so far as the application of this particular provision is
Supra, p. 27.
11918] A C. 157 at p.. 168, pr Lord Parker. Cf, Uie opinion of Bankes and
LJr. as to the necessity for eoods to be put on the railway for delivery before
property passed in Underwood Ud. v. Burgh Castle Brick & Cement Syndicate
[1922] 1 K.D. 343 at pp. 345. 346.
1* Re an Arbitration between Shlpfon, Anderson A Co, and JlarrUon Bros, A

II9j^^ 3 K.B. 676. Cf.Re Anehor Une 119371 Ch. 1. See also Chtetham A Co-
i>
** _ 19) 2 All E.R.
** ' linal case InToWng
iry oflence relating
to the sale of coal.
** Supra, PP 40.41.
SPEaFIC GOODS
67
concerned, no special problems arise, the situation being the same,

i.e., everything turning upon the expressed or implicit intention of
the parties, whether the goods be specific or ascertained.
This all-important intention, however, may not easily be discover-

able. Nothing may be said or done by the parties to elucidate what
they meant to happen as regards the passing of property: nor may
the previous course of dealing between the parties, if any, the
customs or usages of the trade or business involved, if such there be,
or the surrounding circumstances, throw any light upon this question.
In such a situation, therefore, the provisions of the Act become
applicable. What the Act does is to lay down certain prima facie
rules for ascertaining the intention of the parties as to the time at
which property in the goods is to be transferred to the buyer, if no
different intention is manifested in the ways mentioned above.** The
content of these rules differs according to the nature of the goods
involved and the terms of the contract relating to them.
Unconditional sales
The first rule propounded by the Act applies to an unconditional

contract for the sale of specific goods in a deliverable state." ** In
such instances, the property passes to the buyer when the contract
is made. The Act provides that it is immaterial whether the time of
payment or the time of delivery, or both, arc postponed.
It follows from this last statement therefore, as Romer L.J. pointed

out in Re Anchor Line (Henderson Bros.) Ltd.,** that where the time
of payment and the time of delivery are both to be postponed the
contract is not a conditional contract: and although, in such circum-
stances, the completion of the contract is, in a sense, deferred, the
property will pass when the contract is entered into by the parties.
English law, therefore, unlike some other systems, does not consider
relevant to the question of transference of property either payment
of the purchase price for goods or their physical delivery.
So far as the former is concerned, the obligation to pay, which is

dependent on the delivery of the goods unless the contrary is agreed,**
is a quite distinct contractual obligation, independent of the acquisi-
tion of property in the goods sold by the buyer. The Act recognises
the possibility of credit sales (particularly in relation to the sellers
** SOA. s. 18. See Underwood Ltd. V. Burgh Caille Brick & Cement Syndicate
I1922J 1 K.B. 343 at p. 345, per BAnkes LJ.
S.OA. $. 18, r. 1.
[1937] Ch. 1 at p. 9.
S OjV. s. 28: infra, pp 206, 230.
68
nUNSFER OF PROPERTY
rights as against the goods themselves in the event of non-payment

of the purchase price **): and such sales, which must be distinguished
from contracts of hire purchase, which they appear to resemble
greatly, raise special problems at common law, under the Sale of
Goods Act, and under other legislation.* Unless the contract so
stipulates, either expressly or by implication, however, the payment of
the price is not a feature of the transfer of property in the goods.
So far as delivery of the goods is concerned, a clear division is

made between property and possession. A buyer to whom property
has been transferred as a result of the operation of the contract or the
statutory rules now being considered may have the right to posses-
sion of the goods, but passing of property and right to possession are
two different things. Indeed, although property may have passed,
it would appear from the language of section 28 of the Act that the
buyer will not be entitled to possession of the goods unless he^ is
ready and willing to pay the price, or the contract provides otherwise-
This inability to claim the goods does not affect the buyers proper^
in them, however. He may even transfer such property to a third
party, the seller being unpaid at the time, in such a way as to entitle
the third party to claim the goods from the seller. This will lesuU
either where the seller has assented to such a sale of the goods of
where the buyer deals with documents of title (not the goods
themselves) and certain other conditions are fuIQlIed.*
Thus, provided that the sale is unconditional, the goods arc

specific, and they are in a deliverable state, property passes when the
contract fs made. The same rule is to be found in America in the
Uniform Sales Act.** But the Uniform Commercial Code adopts the
view that, in the absence of any alteraatlve express agreement, title
to goods passes on completion of performance of the contract by the
seller by the physical delivery of the goods, where the contract requires
delivery to the buyer.* Where delivery is to be made without moring
the goods, title passes cither when a document of tide is delivered to
the buyer, or, if the goods are ideotiGed at the time the contract is
made, and no documents are to be delivered, title passes when the
contract is made.* The later legislation, therefore, docs not make
* S s. 41 : Infra, pp. 252. Z5S.
Infra, pp. 258-259. Cf. supra, p 9.
*4 Dennant v. Skinner 11948] 2 K.B. 164 U p. 172, per Hallett J.
* S G.A. s. 47; Infra, pp. 263-266.
* U.S.A. I. 19. r. 1.
Cf. supra, pp. 52, 56.
M UC.C 1 . 2-401 (2) (a) (b).
IS nu f. 2-401 (3) (a) (b).
spEanc GOODS
69
mere contracting suffice to pass property, save by way of an excep-

tional instance. Nor does the Uniform Commercial Code involve
the difficult questions of whether a contract is conditional, whether the
goods are specific, or whether the goods are in a deliverable state.
In view of the complexities which these requirements of the Sale of
Goods Act and the Uniform Sales Act raise, it may be thought that
similar changes should be introduced into English law.
(a) Specific goods
The difficulties which the language of the Sale of Goods Act

produces spring from the ambiguity of the words employed. It has
already been seen that the concept of " specific goods *' has given
rise to problems of classification.** While, in general, it may be easy
to establish whether goods come within the scope of the statutory
definition of specific goods that has already been examined, there
are marginal instances in which it is by no means clear whether the
goods can properly be classed as specific or unascertained. Much
turns on the question of identification ** of goods at the time the
contract is made. Whereas under the Uniform Commercial Code
(by which identification of goods is fundamental to the passing of
title) identification can be made at any tine and in any manner
explicitly agreed by the parties *^ (implied identification taWng place
in other instances and by other means **), under the Sale of Goods
Act identification must take place when the contract is made** and
involves the construction of the contract to determine whether
sufficient identification has occurred. The case of Kurscll v. Timber
Operators & Contractors Ltd.* illustrates how difficult this can be.
In that case the contract was for the purchase of merchantable timber
growing in a Latvian forest. The trees to provide the timber were
to be selected and cut by the purchaser. As a result of the nationali-
sation of forests by the Latvian Government, after the purchaser had
* Supra, pp 39-43.
*T U.CC. s. 2-501 (1).
la \lz., hen the contract is nude, if the goods exist and are {deniificd; if the
contract is for the ule of future goods, when they are shipped, marked or
otherwise des^nated by the seller as goods to which the contract refers (contrast
SGA. s. IS, rule 5, Infra, pp 8>4W)l ** certain stated times, in the caw of
the sale of crops or unborn young; U.CC. a. 2-501 (1) (a) (b) (c>. It should be
noted (I) that (he deli^'crable state of the goods is not part of identification;
(7) that identification may resemble ** app ro priation ** under the Uniform Sales
Aa and the Sale of Goods Act, except for the fact that only the tellers conduct
Is relevant under the Uniform Cornmerctal Code, whereas the other statutes
involve the buyer as well.
S.aj\. I. 62 (1).
11927] I K.B. 293.
70
TRANSFER OP PROPERTY
paid the first instalment of the price, the question arose whether the
money was recoverable, which raised the risk issue. It was held
by the Court of Appeal that the sale was not one within Section 18
of the Act, since the goods were not specific. It was not a contract
for all the trees in the forest: it was a contract for selected trees, v/t.
those suitable for the timber that was required by the purchaser.
Hence property did not pass under the contract and the risk of
was on the seller, not the purchaser.
(b) Deliverable state
That the goods should be specific, however, is not the only

requirement. They must be in a deliverable state. By the Act.
goods are in a deliverable state when they are in such a state that the
buyer would under the contract be bound to take delivery of them.
In the case just referred to, for example, the timber sold under me
contract was not in a deliverable state until it had been severed,
hence there was an additional reason for excluding the operation o
the statutory rule to the situation before the court. A leading case
on the interpretation of this provision is Underwood Ltd, v.
Castle Brick < Cement Syndicate** The contract there concern

the sale of a condensing engine embedded in a flooring of cement
bad to be detached and dismantled before it could be delivered y
rail as the contract specified. The sellers detached the engine, but i
loading it on a truck it was damaged by accident, so that the ou^
refused to accept it. The " risk issue raised in Ibis case was .
in favour of the buyers, on the ground that section 18, rule 1, *
not apply, because the sellers had to do something which they
not yet done to put the engine into a deliverable state. In coming
to this conclusion, Baokes LJ. remarked ** that a deliverable
did not depend upon the mere completeness of the subject*ma
in all its parts. It depended on the actual state of the goods ,
date of the contract and the state in which they were to be delivere
by the terms of the contract. This, clearly, refers to the point tha
the buyer must be bound under the contract to take delivery of t e
goods if they were delivered to him in the state in which they
at the material time. For this reason it was argued in Lord EW<^
v. Hedley Bros.** that property had not passed under a contract by
which the buyer could refuse to take delivery of, or pay for mouldy of
*t S.OA- S. 62 (4>.
{19221 1 K.B. 343.
41 Ibli. at P. 34S.
[I93J] 2 KB. 1.
SPECIFIC fflXDDS
71
unmerchantable hay. But the Court of Appeal decided that the con-
tract was in such terms as to show that the parties intended that
property should pass to the buyer when the contract was made.
Hence section 17 of the Act ousted the otherwise applicable provisions
of section 18, rule 1. On the other hand, in Vigers Bros. v. Sanderson
Bros.*^ goods were sold and shipped under a contract by which the
property was deemed to pass when the goods were put on board.
Goods not of the specified length were shipped and were rejected by
the buyers. It was held that the terms of the contract did not
exclude the right of the buyer to reject goods which did not come
within the meaning of the contract (subject to the obligation under
the contract to refer the dispute to arbitration). Here the buyer was
not bound to take delivery of the goods : hence they were not in a
deliverable state and, apart from the terms of the contract, property
was not transferred by the contract itself.
It would appear, therefore, that if the goods, at the material time,

do not fulfil the requirements of the contract because, for example,
they are unmerchantable, do not correspond with sample or descrip-
tion, or are not in the right quantity, property in them will not pass
under the contract, even though they may be specific and the contract
is unconditional. This, perhaps, is one way of viewing the con-
troversial decision in Varley v. Whipp** although such an approach'
does not appear to have been adopted by the court itself in that case.
Mention of this case leads to the other requirement of rule 1 of section
18, that the contract be uncondiliona!.*
(c) An unconditional contract
The exact interpretation of this phrase in the context of section

18. rule 1. has given rise to much difficulty and debate. Whereas the
decisions appear to give one meaning, the textbook writers and other
commentators seem to adopt a different one. This controversy stems
from the ambiguity of the word condition which has earlier been
mentioned.*^
An example of what is clearly covered by this phrase is to be found

in Gale v. New.** The contract was for the purchase of the remains
of shells and other similar material from a military shooting range.
The purpose of this contract was to enable the range to be cleared
' tt90II 1 Q.B 60S.
1^900] 1 QB. 513; discussed tn}ra.

Sui>ra. pp 16, 21; Infra, pp. 141, 197
II937J 4 AU ER. 645.
72
TTUNSFER OF PROPERTY
of metal by private persons : and therefore the contract was not coin-
pleted until the metal was removed. It was held that property in
the metal did not pass to the purchaser until he actually removed
the spent shells from the range. Hence the plaintiff, who had formerly
enjoyed the concession, could not sue the next contractor for wa*
vemion of metal left on the range at the expiry of the plaintiff
agreement with the War Office. The property-price issue which
arose in this case was decided against the purchaser on the grouDO
that the contract was conditional. It would seem to be clear that,
the context of the facts of this case, the expression referred to a
condition precedent, i.e., a condition which must be fulfilled
the contract is to become effective, and not to a condition whic
affected the rights and duties of the parties under a valid, immediate y
effective contract. Writers are undivided in their opinion that.^în the
light of (j) the use of the expression conditional contract else
where in the Act, (ii) the distinction between conditions precedent an
subsequent on the one hand and conditions which are
stipulations of a contract on the other, and (hi) the loss of th np
to reject for breach of condition which is provided for by
11 of the Act where property has passed in specific goods or goo
have been accepted within the meaning of the Act,** the expression
unconditional in section 18. rule 1, must refer to the absence o
any conditions precedent or subsequent in a contract for the sale o
specific goods in order that property shall pass when the contract s
made. Any opposing view would result in absurdity. The reasons
for this are as follows : (a) specific goods may not be rejected ^
breach of condition once property has passed in them, (b) prope^
passes where goods are specific and in a deliverable state, ff t e
contract is unconditional, once the contract is made, before any
delivery, and therefore before the buyer can see whether or not to
reject them for breach of condition, but (c) all, or nearly all contracts
of sale will be subject to implied statutory conditions. Therefore
(1) section 18, rule 1, can never apply; or (2) if it does apply
application deprives the buyer of his right to reject before he can
discover whether he ought to reject; or (3) if the goods are such as to
Srt jurrtx. pp. 63-64, Infra, pp. 1S2-IS4 for thli matter. ..
c See Smith. The Right to Rescind for Breach of Condition In a Sale of Spe^*
Good* under the Sale of Goods Act. 1893 fl957) 14 hf.L.R. *^',7^
Conditions, Warnntics and Descriptions of QuaLty in Sale of

41953) 16 M L.R. 174 at pp. 174-180; Auyah. Sate of Coodi, 2nd cd..
96. IlaUhury. Laws of Batland. Jrd erf, Vol. 34 at p. 68, now (<r) regards
condinonsl as an unnecesurr word, having regard to the coverine
s 18. But muit not every word In an Act of Parliament be given meaning if
logtaD/ and grammaiicaOy possible to ito so7
SPECIFIC GOODS
73
involve a breach of condition, they will not be in a deliverable state

(since the buyer will not be bound to accept them), therefore he need
not rely on his right to reject, which means in turn that section 11
(1) (c) can never apply.
^\île these arguments would seem to be not merely persuasive

but decisive so far as the interpretation of this provision is concerned,
two decisions appear to make their acceptance difficult, if not
impossible. To begin with, in Varley v. Whipp there was a sale of
a second-hand reaping machine which turned out to be older than it
was stated to be by the seller. The buyer refused to take it. The
seller sued for the price, arguing that property had passed by virtue
of the provisions of the Act. It was held that the sale was a sale
by description (the goods not corresponding with description): the
contract was therefore not unconditional but conditional, and property
did not pass when the contract was made: there bad been no accept-
ance of the goods: hence the seller was not entitled to the price,
since he had not transferred property to the buyer and was himself
in breach of contract. In Ollett v. Jordan,^^ which was a criminal
case, the offence in issue involving the question whether there had
been a ** sale of certain herrings, it was held, obiter it would seem,
that, since the herrings were not fit for human consumption, the sale
could not be said to have been completed by their delivery by rail to
the buyer. The contract was subject to an impDed condition as to
the fitness of the herrings to be eaten as food. Therefore, since the
contract was conditional, property did not pass when, after the con-
tract was made, the goods preWously not specific had been so
appropriated to the contract as to become ascertained.
The effect of these cases and the judgments therein is to make

the proper interpretation of section 18, rule 1, extremely difficult.
Only by regarding these cases either as wrongly decided or as justifi-
able on grounds other than those apparently expressed as being the
basis for the actual finding of the court, can the more logical and
reasonable approach to the provision now being considered prevail.
It would seem to be plain, from the point of view of common sense,
that the draftsman of the Act intended the expression uncondi-
tional to refer to conditions precedent and subsequent, and had no
thought for the complication of the issue by the introduction of
express or implied conditions as to quality, etc. It would, therefore,
be erroneous in principle to adopt any other interpretation. Unfortu-
nately, it must be admitted, the attitude expressed in the cases
fl9001 1 O.B. 573.

* I19I8J 2 KD. 41.
74
transfer of PROPERIY
referred lo above is not entirely without foundation in a technical

sense, since the words used in the Act can be given the interpretation
placed upon them by these cases. In view of this, therefore, it is
suggested again that this particular provision is ripe for revision,
especi y since the Uniform Commercial Code appears to be aWe
^ same situation without involving any cquivalcst
ambiguities and complexities.
Conditional sales*
In contradislinction to sales of the kind which have been discusstd

above, the Sale of Goods Act. in section 18, lays down prima facie
rules for dctemiining when property in goods sold is to be transferred
where there is some feature of the contract which makes its effect
conditional upon something being done either by the selier or the
Ouyer.^ In such instances, property remains vested in the seller liatil
What IS to be done has been done in accordance with the lanpiage
Dt the statute. There are three different situations contemplated by
ine Act: first, where goods have to be put into a deliverable
state; secondly, where goods have to be weighed, measured, tested or
otherwise dealt with so as to ascertain the price: thirdly, where goods
are sold on approval, sale or return, or under some similar kind of
renns. Afi such sales are conditional, the lenn 'conditional" here
eiQg used to refer to the existence of a condition precedent,
to a condition affecting the contents of the contract.
(i) In a deliverable state
Ride 2 of section IS provides that where there is a contract for the

bound to do something
tn goods, for the purpose of putting them into a deliverable slate, the
ore done, and the buyer has
notice that such t^gs have been done. The meaning of the expres-
whMn '*=<*1' 'ecu examined. In casts
bo nansfer of property is dependent upon the pet-

Orel, ^ Whatever is necessary to put the goods into
7 ^ ^ make it obligatoiy upon the buyer to accept
is I '"" be noted that, even if the seller has done whatever

L huv r T P^pnrty will not pass unless and unlil
the buyer has received notice to this effect. The Act does not stipulate
** conneoton wuh u,, rcsemlion of the rieht ri
?s<icSi5iSSj ,b* ; wolrS'Stiso'"
SPECIFIC GOODS
75
whether such notice should come from the seller or may come from
outside sources, e.g., observation by the buyer or his servants or
agents. Nor docs it state whether such notice must be actual or con-
structive. In accordance with what has been said in commercial
cases not necessarily involving the safe of goods, it may be suggested
that notice to be effective in cases of this kind must be actual. That
still leaves open whether or not the notice must come from the
seller.
In most cases, clearly, this particular problem will not arise.

What docs cause difficulty is whether the seller has in fact put the
goods into a deliverable state. As already seen, this will depend upon
the exact terms of the contract between the parties. In the old case
of Acramen v. Mortice^* for example, the seller had to cut off
portions from trunks of trees purchased by the buyer and deliver to
the buyer only the unrejected portions of such trunks. Before this
could be done with respect to all the trunks bought by the buyer, the
seller went bankrupt. The buyer then sent his own employees to cut
off the rejected portions and take delivery of what was left. It was
held that this amounted to convenioo, for the property in the trunks
thus handled by the buyers employees remained vested in the trustee
in bankruptcy of the seller. With this may be compared the post-1893
cases of Underwood Ltd. v. Burgh Castle Brick & Cement Syndicate
and Vigers Bros. v. Sanderson?* which have been earlier discussed.
As may also be seen from Kursell v. Timber Operators & Contractors
Ltd.?* in the case of the sale of speciGc goods attached to the realty,
which are to be severed by the buyer, property in such goods will
only pass when they are so severed.
Goods to be manufactured by the seller to the order of the buyer

may be treated as specific goods, within this rule, or as unascertained
goods, to which rule 5 of section 18 applies. If they are regarded as
within rule 2. then it would seem that Uie expressions a deliverable
state and appropriated to the contract (found in rule 5) have
much in common. Indeed, in some cases involving the building of
ships to the buyers order, in which the question has arisen whether,
and at what time, materials used in the construction of the ship have
become the property of the buyer, although the terminology of
appropriation has been used, it might appear that the courts were
*s Benfambt on Sate at p. 307 Suggests that aa the Act does not state that the seller
must give notice, *' notice must therefore mean *' knowledge,"
(1849) 8 C.B. 449.
11922] 1 K.B. 343.
119011 1 K.B. 608.
(19271 1 K.B. 293.
76
considering whether the materials in question were in a " deliverable

state. This is particularly true where the question at issue ^
whether property in a ship being built for the buyer passed to hiifl
before its completion and dehvciy, or on its completion and readiness
for delivery.*
There is a comparable similarity between goods being put id s

deliverable state and goods being delivered on board a ship so ^
to give one party to the transaction an insurable interest. In
instances, also, though the language used appears to suggest ina
appropriation to the contract is involved, what is being consider
is something very similar to the question whether the goodsârc
in a deliverable state so as to be effective to transfer property.
The real distinction between these various instances would s

to lie in the differentiation between specific and unascertained go
If the goods involved in any of these cases, /.e.. the materi^s
ship or the load to be put on board, can be regarded as specific
then the contract would come within section 18, rule 2: if.
hand, because of the way the difference between specific and
tained goods is applied in marginal cases, the goods are
considered as unascertained, then sjtion 18, rule 5.
applicable rule (unless, of course, in either instance, the parties P
expressed their intentions clearly). . *
Thus there would seem to be a close resemblance between fu

and rule 5, subject to the distinction between the kinds of goods
which each rule properly applies. One important difference, hc^
ever, in the content, as opposed to tbe applicability, of the
that under rule 5, but not under rule 2, what must be done to
goods may be done either by the seDcr or by the buyer, dej^n
on the agreement between the parties, and It must be done with 1 ^
assent of the other party. Rule 2 only involves conduct by the seller*
and docs not require the buyers assent. Both these rules, therefort.
taking into account the differences just mentioned, require that some
thing be done to the goods to show that they, and only they, arc th
goods which the parties intended to be the goods which were so
and that other goods (however apparently the equivalent or aJikw
will not do.
See Sra/fi r. AfoorrdtSS) II App Gii.3S0(ror the Bujhoritles and principle

1893): KeU V. Macbtlfi A Cray JIWI AC 223; Letng A Son LtJ. r.
Curtt A Co. LtJ. II90S1 A.C 35; Re Btnh ShlpbuBJlng A Dry Dock Co.
Cb. 4; McDoufallr. ArromoTine of Emrworth Ltd. (mSl 3 AO
* See ArtJerton V. kforlee I AppCu. 713; Colonial Insurance Co. of
Zealand V. Adelaide Marine Insurance Co. (I8SS) 12 App CiL ]2S.
SPECIFIC GOODS
77
(ti) Ascertaining the price
Where there is a contract for the sale of specific goods which are
already 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, then, by rule 3 of
section 18, property does not pass until such act or thing is done and
the buyer has notice that it has been done.
Here the problems connected with " notice which have been
mentioned in relation to rule 2, also arise. Under this rule, however,
there is no question of determining which goods are those which have
been sold (as is the case with rule 2): the goods are agreed and
identified, and ready for acceptance by the buyer : it is the price which
is still to be determined; and this depends on the quantity, quality,
amount or other variable which remains to be settled by the agreed
process. i.e., weighing, measuring, or whatever other method is
involved.** Under rule 2 something has to be done to the goods
to put them in a deliverable state. It is the goods themselves which
must be dealt with by the seller. Under rule 3 whatever the seller is
obliged to do must be done *' with reference to the goods. This would
suggest that the scope of rule 3 is wider, and that the test or other act
required of the seller need not physically concern the goods them-
selves. For example, it might be that the price of the goods is to be
dependent upon the price at which an equivalent quantity or type of
goods are sold to a third person.
The criminal case of /?, v, Tidesweil * illustrates what is involved.

There goods were sold to the defendant at an agreed price per ton.
The weighing was to be done by the sellers weigher and the total
amount sold entered in a book so as to inform the seller how much
to charge, Ihe defendant and the weigher agreed that the weigher
should put a smaller amount in the book than was actually weighed.
It was held that the defendant was guilty of larceny of the amount of
the goods sold which had not been recorded in the book. To arrive
at this conclusion the court bad to, and did hold that property in
the goods passed to the defendant only when the amount sold was
entered in the book. Hence when the defendant took possession of the
excess he had not acquired property in it and was guilty of larceny.
Similarly in the old case of Simmons v. Swift the risk issue
** Note that the suspension of the ascrrtaitiment of the exact price docs not alTect the
existence and validity of the contracti ef. SGJi. ss. t (I), 8 (I). It only affects
the transfer of property,
U905I 2 K.B. 273.
(1826) 5 a & a 857.
78
TRANSrCR or PROPERTY
was decided in favour of a buyer under a contract by which goods

were sold at an agreed price per ton, the goods to be weighed by the
seller. Before all the goods could be weighed and delivered to the
buyer, a river overflowed and carried off the rest of the goods. It
was held that the buyer did not bear the risk of such loss since
property in the goods carried off had not yet passed to him. On the
other hand in Nanka Bruce v. Commonwealth Trust Ltd.*^ though
the weight of the goods sold was to be checked by a sub-purchaser
from the buyer, and the buyer was to pay the seller according to such
weight, the Privy Council held that "the testing was merely to see
whether the goods fitted the weights as reported,* and this testing
was not suspensive of the contract of sale or a condition precedent
to it.
Thus it is possible that, despite an agreement as to the weighing-

testing or measuring of goods, there is no such suspensive condition
affecting the transfer of property therein as would bring the contract
within rule 3. For such weighing, etc., might have to be done by the
buyer or someone else, such as the sub-purchaser in the case just cited-
It is only if the seller is obliged to do something of this kind,
the price to be paid is dependent upon such action by the seller, that
the rule operates to delay the transfer of property.
(lii) Approval, return, etc.
The language of rule 4 of section 18. which has been judicially

described as unfortunately chosen,** difficult to construe.*^ and
very happy, * permits the delivery of goods on approval, or **
sale or return, or on other simifor terms, without property thereby
passing to the buyer. For this to happen the buyer must do one of
three things. He must signify his approval or acceptance to the
seller : or he must do some other act adopting the transaction : ur*
without signifying his approval or acceptance to the seller, he must
retain the goods, without giving notice of rejection, beyond the time
fixed for the return of the goods (if such a time has been fixed by the
parties) or beyond a reasonable time. What is a reasonable time for
this purpose is a question of fact.
Several difficult questions arise from this provision of the Act.

in the first place, when is a sale one which comes within its scope?
If the contract expressly stipulates that the sale is one '* on approval.
* ri926] A.a 77.
*7 H897I l Q B 201 at p. 203. Lord Esher.
' laid. ( p. 2<M, pfT Lopes LJ.
** ''' 1*934] 2 K:.B 206 at pp 214-215, r^r
SPEQFIC GOODS
79
or the goods are delivered expressly ** on sale or return, or some

similar language, such as on trial or on approbation, is used
at the material time, it would seem that, prima facie, the sale is one
within this rule and there is a suspensive condition attached to the
contract, as a result of which the transfer of property is delayed until
the necessary act or conduct on the part of the buyer occurs. But
it must be remembered that this rule, like the others in section 18,
must always be construed as being subject to the provisions in the
main enactment **; hence the parties can expressly or impliedly agree
otherwise so far as the transfer of property is concerned. Thus, if
the language used by the parties is capable of being construed as
ousting the application of rule 4, the transaction will not be governed
by this rule. For this reason, in Weiner v. Smith: Weiner v. GilW'
where goods were delivered upon the terms of a document which
stated; On approbation. On sale for cash only or return. . . .
Goods had on approbation or on sale or return remain the property
of {the seller] until such goods are settled for or charged, it was
held by the Qjurt of Appeal that rule 4 was not applicable. A
different intention (as stated in section 18 iiselO was held to be
apparent from the language used by the parties. Thus what might
seem, at first sight, to be a contract within the rule must be carefully
examined to see whether a contrary Intention can be construed from
its terms.
Secondly, when does property pass to the buyer in contracts
within the rule? On this question there is a substantial corpus of
decisions. The situation is clear where the prospective buyer signifies
his approval or acceptance. What amounts to acceptance of goods
is dealt with in section 35 of the Act in language very similar
to the wording of rule 4 of section 18 (as will be seen in due
course ). So, too, is the situation clear where the buyer signifies
his rejection of the goods, as in Berry v. Star Brush Co.,''*
from which it appears that the buyer may reject goods sold on
approval even though the goods themselves are satisfactory but there
is an external reason (in this case the anticipation of trouble from
Ornstein r. Alexandra Furnishing Co. (1895) I2 T.L.R. 128, per Collins J.
See, eg., Percy Edwards Ltd. v VaugJ f ~ -
pass except on payment of cash on or 1
tons Ltd. (1925) 133 L.T. 680; in wWA ,
lerms of the contract, the buyer was ' ' .
purchaser under rule 4: see at pp. 6SS~ ' '
119061 2 KB. 574.
Infra, pp 222, 224
See Bndley Cohn Ltd. v. Ramsay 0911) 28 T.L.R. 12, 388, where a refusal to
sellers price was a suiScient rejection of the eoods.
(1915) 31 TXJl. 603.
80
THANSFER OF PROPERTY
employees) for rejecting the goods. What have given rise to difficuHy
have been cases in which it has been argued that property passed
either because the buyer has done some other act adopting the
transaction or because the buyer has retained the goods beyond the
fixed or a reasonable time. In a sense these two different modes o
effecting the transfer of property in cases of this type overlap, in that
the conduct of the buyer could be construed cither as an
the transaction or as necessarily involving him in retaining the goo^
beyond a fixed or reasonable lime. This is particularly so la
cases (of which there are several) in which the prospective buyer
has taken delivery of goods on approval or sale or return and^ as
subsequently sold or pawned them. It would seem from the decisions
that it does not matter whether the buyer had the intent to se or
pledge the goods when he obtained delivery of them from
or subsequently formed such intent. In both instances it is the sc
of the buyer in selling or pledging the goods which amounts to an
adoption of the original transaction.
This was first decided, after the Act, in Kirkham y.^ At e

borough ''' in 1897. Lord Esher gave as bis reason for deciding tna
property had passed the following argument;
There must be some act which shows that he adopts baw

action; but any act which is consistent only with hu bsmg
purchaser b sufBcient. The act done . . . was that he
goods. He could not get them back from the papmbrokw witn
repaying the sum advanced and such a situation is inconsWent
bis free power to return them. He ought not to have done
unless he meant to treat himself as a purchaser, and by doms
he made himself a purchaser.**
Lopes LJ. said that if the recipient of the goods retains them c
an unreasonable lime he has done something inconsistent with t e
exercise of his option to return them and thereby adopts the trans-
action. ric instanced the sale or pledge of the goods as acts incon-
sistent with their return because by pledging goods (and presumaby
a fortiori by selling them) the buyer no longer has free coniro
over them 'so as to be in a position Co return them. It would sw*
from this language that what the court had in mind as determining
r* Cf. the diEerenl judgments idven in Cewt x, Winkel (1912) 2S TAJC. ^

Vaughan Williams Lj. and ITefcher Moulton LJ. , ,
Unless s. 18, rule 4, does not apply for other reasons: see the cases ated in
TO. tupra.'Welner r. CBl, suprg, and Truman Ltd. t. Atttnbormigh (19W1 '
T.L.R. 607 here the buyers title was voidable because of his fraud. Contra*
J^nJon /rwttlfrt Lid. T. Attenberouth, supra,
tt U8T7I 1 QJJ. 201.
r tbU. at p.'203.
** IbU. at p. 2CM.
spraFic GOODS
81
the issue was that the act of selling or pledging the goods necessarily
involved keeping them beyond a reasonable time, rather than being
an adoption of the transaction. This would seem to be the reasoning
employed by the Court of Appeal in the case of Genn v. Winkel?'^
in which there were several transactions of this type, from A to B to
C, each of them involving a choice between adopting or rejecting
goods. The final purchaser could not return the goods because they
were lost. It was held that merely handing the goods over to a third
person on sale or return did not make the first purchaser on such
terras a buyer to whom property had passed: but the loss of the
goods by the final party in the string of purchasers on sale or return
made it impossible for the goods to be returned to the original seller
within a reasonable time: hence the original buyer had become the
owner of the goods.*^
But the language used in Kirkham v. Attenborough and by Lord

Alverstone L.CJ. in Weiner v. Gill * which suggests that selling or
pledging goods is inconsistent with the right to return them and
therefore, it is suggested, results in mab'ng it impossible for such
goods to be returned within a reasonable time, is different from the
language used by Scrutton LX in London Jewellers Ltd. v.
Attenborough.** The reason given there for pledging being an
adoption of the transaction is that the buyer on approval or on sale
or return had no right to pledge them unless be was the owner.*
This suggests that by adoption ** the Act means acting as an
owner," or acting inconsistently with the rights of the seller as owner.
The language of the other cases suggests that it is not acting as an
owner that is involved but acting so as to make the return of the
goods impossible within the framework of the contract or the pro-
visions of the Act. It is suggested that, unless the approach of
Scrutton LJ. is accepted, there will be confusion between the two
different methods of acquiring property in goods sold on approval
or sale or return which are set out in the Act. There must clearly
be some distinction between the adoption of the transaction and the
retention of the goods beyond a fixed or reasonable time. The
former is an express acceptance of the goods otherwise than by
0912) 28 T.LR. 483.
^ But how is this consistent with the idea that the fact that goods delivered on
pproval or sale or return perish while in the hands of the buyer does not transfer
property as long as the loss was not the fault of the buyer end a reasonable time
elapsed: Eiphkk v. Bames (1880) 5 CP.D. 3217 (.Contra if a third
wrty, to whom the buyer delivered the goods, fraudulently misappropriated them:
Barker (1879) 4 ChD. 279.)
" ! ?* 2 K.B. 574 .e p 578.
[15341 2 K.B. 206 at pp. 214-215.
82
TRAKSFHl OF PROPERTY
siguifying such acceptance to the seller; the latter is an implied, or

statutory transfer of property where it is reasonable to do so having
regard to the position of a seller, that it would not be reasonable
to allow the prospective buyer to retain the goods indefinitely and
thereafter return them, since this would be to the prejudice of the
seller, in that, for example, he might in the meantime have lost a sê
which he could have made if he had possessed the goods by
reclaiming them from the buyer.
That the adoption of the transaction is different from delay in the

return of the goods is evidenced by the cases which turn solely on lb
question whether the goods have been kept beyond a rcasonab
time. Ihis will depend upon the nature of the goods and of tW
contract concerning them.* For example, keeping a horse on tn
for more than seven days was retaining the horse for more than a
reasonable time.** So was keeping a suite of furniture for tw
days after informing the seller that the goods would not be sent bac
unless the seller paid for their carriage in advance.** |
retention must be by the buyer. Hence in He Perrier,*^ where ^
goods were kept by the sheriff as a result of the levying of execuoo
on the buyers property by his creditors, it was held that propcny
had not passed to the buyer and the seller was entitled to recoie
the goods. , .
The fact that the goods have been damaged or have

without any fault on the part of the buyer, while they are still bci g
held by him on approval or on sale or return and before a reasona
lime has elapsed, will not make the buyer liable for the price (in ^
absence of any agreement to the contrary). This is shown by the
of Elphtck V. Barnes.'* In the more recent case of Poole v. Snata
Car Sales Ltd.** where goods delivered on sale or reiuu sêf
damaged by the employees of the buyer, the seller obtained judgmen
for the price of the goods because they had not been returned witlu"
a reasonable time. Willmer LJ.** accepted the correctness of th
decision in Elphlck v. Barnes, but queried what the situation wou^
have been had the goods been returned within a reasonable time
Tor wha{ ii rntoublc lime H the liumond trade, lee Ctnn r.

for a rratonable lime In the med car trade ice Poole r. Smith's Car Sales tea-
ijJ II9I 2 All HR. 4^2.
Marth V, ltuihei.nar.ett (19'n> 16 Tl-R. 376.
* OrniielH t, AleianJn Furnlthlnt Co. (IW3) 12 T.L.R. 123.
tl9II Ox. 275.
(ItST) 3 C.r.D. 321 : hot cf. ahar b uid surra, note SI, la rtUliort to U**
nd dodiJon in Cei>i t, 11 itJLW.
* 2 AD HR. 4?2.
IhU. ai jv 417.
SPEOFIC GOODS
83
their damaged condition, the damage having been caused by the

employees in question while acting outside the course of their
employment. It would seem from what the learned judge said that
the onus would be on the buyer returning the goods to prove that the
damage had occurred otherwise than through his fault.
Before leaving this part of section 18, it is worthy of note that the
American Uniform Sales Act and Uniform Commercial Code dis-
tinguish between a delivery of goods on sale or return and a delivery
of goods on approval or on trial or satisfaction. The distinction in
the Uniform Commercial Code is based on whether the goods are
delivered primarily for resale (sale or return) or for use (on
approval).*^ Under the U.C.C. the distinction is important so far as
regards the rights over such goods of the buyers creditors while the
goods are at the buyers place of business.** But under the Uniform
Sales Act* the importance of the distinction lies in the fact that
in the case of a delivery on sale or return property passes
immediately to the buyer but may revest in the seller if ie buyer
exercises his option to return the goods instead of paying the price,
by returning or tendering the goods within a reasonable time or
within the time fixed by the contract, if any. On the other hand, fn
sales on approval the position is the same as under the Sale of
Goods Act. i.e., property remaining in the seller until the buyer acts
in a way stated in the legislation. The American approach seems
to be based on a more realistic commercial differentiation, involving
the notion of credit as well as the transfer of property, and talcing
into account the special problems produced by the need to protect
creditors rights.*
3. UNASCERTAtNED AND FUTURE GoODS
Ascertainment
Where there is a contract for the sale of unascertained goods, no

property in the goods is transferred to the buyer unless and until the
goods are ascertained.* It has earlier been seen what is meant by
unascertained and ascertained goods.* Unascertained goods
may be goods identified by description only, e.g., a stated quantity
* *. 2-326 0) For the questions of risk and title see s. 2-327.
. 2-326 (2) (3)
* rule 3 (1) (2).
** ^ England, may be dealt with by the ** reputed ownership clause in the
P^kruptcy Act, 1914, s. 38 fo).
S O A. s. 1 6 : see, e^.. taurle hlerewood t. DudlA & Sons [1 926] 1 K.B. 223,
PâDy at pp. 2M-235, per Scnitton U.
Supn. pp. 4(Ml.
84
ttwnsitr of PROPERTJ'
of some commodity, in other words, generic goods: or they may be

goods to be manufactured or acquired by (he selier, ie., future goods,
or they may be a portion of a specific whole, not yet severed mo
identified. Until some required act is performed, which ascertains
which goods are those to be delivered to the buyer, no properly cao
pass. Generic and future goods are particularly and specific:^/
dealt with by section 18, rule 5. of the Sale of Got^s Act. In so far
as a contract of sale of goods which are part of a specified whole can
also be considered to be a contract for the sale of unascertained goo s
by description, it would seem that this rule also governs the trans cr
of property in such instances. Even if this is not so, howe^^r, i
would seem from the cases that the same doctrines are apphea e
in such instances.
Appropriation
By virtue of rule 5 (I) of section 18, in the case of a contract

the sale of unascertained or future goods by description,
in the goods will pass to the buyer when goods of that
a deliverable state, are unconditionally appropriated to the coQtrw
either by the seller with the asscat of the buyer or by the buyer w
the assent of the seller. Such assent may be express or
may be given either before or after the appropriation is made, w
this means is that, provided goods answering to the descriptioo c
tained in the contract are in a dch'verable state, the
element in the transference of property in such goods is " oppfop
tion to the contract (subject to the consent of both parties to sue
appropriation). What amounts to appropriation is therefore vi
and has caused much difficulty in the cases.
In a case in which the contract itself, which was concerned

the construction and sale of a ship, specifically stated that prope
was to pass in things appropriated for the ship when Ihe
instalment of the purchase price was paid. Re Blytk Shipbuild>n$
Dry Dock Co. Lid..** the difficulties surrounding the word app^
priation were stressed. It was made clear that, even though t
expression was being used in a contract, and was not being
its statutory use, it must be read in its proper technical sense. B
therefore limited to mean goods which had been so dealt with that th
seller could not use them except for the purposes of the contract jn
question, U.. as part of the ship, and that the purchasers could no^
Supra, pp. 70-7t.

119261 Oi. 494.
UNASCERTAINED AND FUTURE GOODS
85
refuse to accept them as part of the ship. But the mere intention to
use certain goods for the purpose of the ship was not enough to
transfer the property to the purchaser.* The word appropriated
was described by Sargant L J.' as ** a term of legal art, with a certain
definite meaning. For appropriation there had to be some definite
act, such as the affixing of the properly to the vessel itself in the case
in question, or some definite agreement between the parties which
amounted to an assent to the property in the materials passing from
one party, /.e., in the instant case, the builders, to the other, the
purchasers. This case and others * were concerned with the transfer
of property in goods to be manufactured by the seller for tbe buyer,
i.e., where the contract was for the sale of future goods. In such
cases, and in others of the like kind, e.g., where the seller has to
instal machinery in working order.* the transfer of property depends
upon the exact terms of the contract, what the seller has to do
before property passes, or. if there arc no express terms capable of
providiog an answer, upon the determination of the question when
appropriation, in the technical legal sense elaborated above, has
taken place. Thus in many instances what is involved is tbe con-
struction of a particular contract, not the interpretation and applica-
tion of a statutory term with a long history of explanation in the cases
behind it.
In contrast, where the contract is for the sale of generic goods, or

a part of a specified whole, it is ** appropriation in the technical
sense which is the test. Two pre-1893 cases, Aldridge v. Johnson *
and Langton v. Higgins * may still be used to illustrate this. In the
former the seller was to pul the barley sold by him into the buyers
sacks. It was held that only the barley which had actually been
loaded into such sacks became the buyers property. Tbe barley which
had been put aside by the seller to be loaded into other sacks
eventually did not become tbe buyers property. In Langton v.
fligslns the filling of the buyers bottles with oil sold by the seller
was an act of appropriation which passed property in the oil to (he
buyer. The rule of law," said Martin B.,* in words which still are
** Ibid, at pp, 517-518, per Warringtoa U.
' Ibid, at p. 518.
* Retd V. Macbeth &. Cray [1904] A.C. 223 (aPPlring Seaih t. hfoore (I8S6) 11
"fPCas. 350); Loing & Sons Lid. t. ffarelay. Curie A Co. Ltd. [1908] A.C. 35;
McDougan V. Aeromarlne of Emswarth Ltd. {1958J 3 AH E.R. 431.
^^tage T. Ralgh & Son Ltd. (1893) 9 TXJt 289; Pritchett v. Currie [1916]
^ Q*. 315.
* (1857) 7 E. & B. 885.
(1859) 4 H. * R 402.
Ibid, at pp. 403-409.

86
mANSFTR OF PROPERXy
relevant, is that where the article corresponds with that agreed to

be sold and anything which is to be done by the vendor is done by
him, the property passes to (he vendee and he is liable for the pnec.^
On the basis of these cases, it was argued in Anderson v. Morice
that where some, but not all of (he bags which constituted a cargo
sold by S to B had been delivered on board a stated ship the
had acquired an insurable interest in the cargo, i.e.. had
something like property in the goods. This was not upheld by
equally divided House of Lords, though this decision was a
distinguished by the Privy Council in a somewhat similar case.*
Sale and delivery are distinct acts. though sometimes the dc iv

of goods may amount to appropriation of them within ru e
Some conflicting decisions have been rendered under provisions ^
the Licensing Acts which involved determining when and ^
sale of goods within those Acts had taken place.'* 1 so
appears to be agreed that in such statutes the term sale does
bear the same strict meaning as it does under the Sale of
such cases are not authoritative on the point now being
However, from other cases, clearly decided under the Sale of
Act, it would seem (hat delivery of part of a consignment of go^
or of documents of title thereto will not sufBce to pass t-ye
goods sold, where the goods sold are part of a larger whole an
not yet been severed from the larger quantity so as to identify
as goods appropriated to the particular contract in question,
the other hand, in Denny v. Skelton '* where the wrong portion w
delivered to one buyer and the wrong portion to another .
was held that the delivery of the wrong portion, which was the
amount under the contract, was sufficient to constitute
appropriation and therefore to pass property.
Thus, whether future goods, generic goods, or part of a lar^

quantity of goods are being sold, in the absence of any express e
r (1876) J AppCas. 713. mSS)
# Colonial Insurance Co. of Sew Zealand y. Adelaide Marine Insurance Co. l .

12 App.Cas. 128. Ilie difference seems fo be between a cargo which is 0
one which is a divisible quantity.
nerrs v. Beatile (18961 1 Q B. 519 at p. 523, per Wills J
10 Infra. ..
Pletts V. Campben (189512 QB. 229; PUtti Y. Seattle, supra-, SobUttf- nopt^
son (19051 2 K.D. 214.
IS .
. 0I 1 K-B 376.
^rie &
87
which stipulates when, or on the fulfilment of what conditions pro-

perty passes, some clear, unequivocal, definite act, identifying the
goods as those which are intended to be given in satisfaction of the
obligations of the seller, must take place. An unexpressed or implicit
intention to do so on the part of the seller is insufficient. In fact,
as was pointed out by Pearson J. in a recent case,* appropriation by
the seller may be said always to involve an actual or constructive
deliveiy.' But such matters as who is stated in the contract as bear-
ing the risk of the loss of the goods, and whether the seller must
do something more than prepare the goods for acceptance and
carriage by the buyer, may also be relevant.
It must be pointed out here, however, that there is a distinction

between a sale of future goods, to which rule 5 applies, and a sale of
goods which have potential existence, which, as already seen,^^ is a
contract under which property passes when the goods come into
actual existence and are capable of identification without the need
for any act of appropnatioa. When a contract is of this type is a
matter which has already been discussed, and the difficulties involved
in this question have been seen.
Appropriation, to be effective, must be unconditional, and must be

by the mutual consent of the parties. 11105, where a c.i.f. contract was
in such terms as to show that the seller did not intend the buyer to
acquire property in the goods unless and until he paid for them, it
would seem that even an act which woidd otherwise have amounted
to appropriation would not suffice to pass property, since It was
classified as a conditional appropriation.* However, it would seem
to be impossible to lay down a general rule applicable to all c.i f.
contracts. What such contracts are is something which cannot be
discussed in greater detail in the present context.* It suffices here to
say that contracts of this kind raise special problems in all parts of
the law of sale of goods. So far as appropriation is concerned, c.i.f.
contracts have given rise to particular problems in connection with
the giving of notices of appropriation. These, although the contrary
might appear from the name, are not intended to pass and do not
Carlos FederspM <t Co. S.A. v. ChiHfS Twigg & Co. Ltd. [1957] 1 Lloyds Rep
240 at pp. 255-256.
Hmce the suggestion in Oialmers, op. cit. at p. 77 that " delivery ought to be
substituted for " appropriation " as the lest of transference of property. But this
would seem to run counter to the whole idea of the law that property in goods and
possession of them are quite discinet.
Supra, pp. 37-33.
^ County TanaHttg Co. (1916) 86 LJ.K.B 44S.
P PP- 448-449, per Atkin J.
t-or detailed discussion see Kennedy's CJJF. Contracts (3rd ed., 1959), Chap. 1.
88
pass the property. The goods must still become ascertained and
property will pass when It was intended that it should. This, in turn,
depends upon the terms of the contract, the conduct of the parlies,
and the circumstances of the case, in the absence of any deary
expressed intention. The notice of appropriation will, therefore, no
be exclusively effective.** Indeed other clauses in the contract may
override whatever has been stated in the clause which deals^w
such notices.** However, it appears from Pignatoro v. Gilroy
where the appropriation of goods within section 18. rule 5, ta e
place and the seller sends a notice of their appropriation to
buyer, in the event of the buyer neglecting to reply to that no i
promptly it must be inferred that he assents to the appropriation, a
on the expiry of a reasonable time after receipt of the notice,
property must be deemed to haw passed. nal
Such a situation in fact arose in that case, and the Divisio

Court, reversing the county court judge, held that property ha
transferred. In the absence of any express terms as to the m
of appropriation, it follows that the method of appropriation m
be inferred from the terms of the contract, the circumstances o ^
case, and, if any, the usual practice in contracts of the kind ^ jg
involved or the usual practice operative as between the ^
question. For example, it seems to have been held in Ba ^

Anilin md Soda Fabrik v. Basle Chemical Works*' that
goods by post to a buyer, when the goods have been ordered by P
is sufficient to amount to an appropriation within this rule ^
vest property in the goods in the buyer from the moment of pn^ in ^
In one c.i.f. contract case, Crozier Stephens & Co. v. Auerbac .
it would seem to have been suggested that property in goods
to the buyer at the moment of delivery on board a ship, so that
goods were at the buyers risk throughout the voyage. This lea s
a consideration of the second part of rule 5, which specifically
with the question of delivery,
i Smyth t Co. V. Solley A Co. ItSW) 3 AU ER. 60 at pp. 65-66, per Lord V.'risht-
a* Luis de Rldder Ltd. v, Andre et Cie S.A. JIWIJ 1 AH E R. 380.
II9I9J 1 K.B. 459. j,
a* II89SI A.CL 200. But it is assent to appropriation, not assent to deuveW

involved: hence the arfumenc by Atiyah. op, cfl, p 106 that there Is
between cases where the bulk has been examined by the buyer and those wbe _
buyer has not seen the large quantity of goods. Sed quaere: as long ** u*
leaves the matter to the discretion of the seOer, this should be conclos^,
to the whole question of acerp(aner, which may a/Tect rights of re/ecliofl
damages: see Infra, pp. 309, 314.
as II90SI 2 K.B. I6I.
89
Delivery
It has already been seen that the method of appropriation expressly

or impliedly agreed upon by the parties will depend upon the type of
contract concerned and the situation surrounding the contract, and
that in most cases appropriation and delivery are synonymous (though
this is a matter of fact and not a matter of law). In one set of circum-
stances, however, it is a matter of law that delivery amounts to
appropriation. Under rule 5 (2). where, in pursuance of the contract,
the seller delivers the goods to the buyer or to a carrier or other
bailee (whether named by the buyer or not) for the purpose of trans-
mission to the buyer, and does not reserve the right of disposal, he is
deemed to have unconditionally appropriated the goods to the
contract.* What is meant by reserving the right of disposal will be
considered below : here it is enough to illustrate what is involved by
the ordinary c.i.f. contract under which the seller holds the documents
against payment of the price.*^ Even in the absence of such a reserva-
tion, however, not every delivery of the goods in the ways mentioned
in rule 5 will suffice to transfer property. The essence of the
authorities which decide that appropriation to the contract by delivery
to the carrier at the beginning of the transit may be sufficient to pass
the property, said Ridley J. in Healey v. Howlett < Sons ,*^ " is that it
should be known to whom the goods are appropriated and not that
the question as to who is to bear any loss that may happen should be
open to any discussion or be determined by accident. Therefore, in
that case, when 20 boxes had been selected by the railway for trans-
mission to the buyer, it was held that the buyer was not bound by this
selection, so as to bear the risk of the deterioration of the goods after
delay in delivery. 190 boxes, for transmission to different consignees,
had been given to the railway and there had not been any specific
marking of the buyers boxes with his name before they went to the
railway. Hence, mere delivery to the railway was not a sufficient
appropriation by the seller. Cases such as Inglis v. Stock** which
appear to hold that delivery to a ship, even though the goods are not
wrmarked, is sufficient, were distinguished on the ground that
insurable interest, not property, was involved. Hence, it may be that
tuch laay depend, however, upon whether the goods to be delivered ore divisible
r not: see the cases cited in notes 7, 8, supra. If delivery to a particular place is
iûired under the contract, no property is transferred until such dehvtry is wade;
w would seem to be a common law, not statutory, doctrine. Cf. the Uniform
Mies Act, s. 19, r. 5,
^ Co , supra.
! 337 at p 343.
0885) 10 App.Cas. 263.
90
TOANSFER OF PROPERTy
the cases which discuss the effect of a partial delivery on board ship
are not relevant to this rule, any more than the c.i.f. contract cases, ia
which some reservation of the right of disposal is almost invariably
involved. What the provisions of the Sale of Goods Act are on this
question must now be considered.
4. Tiib Right of Disposal
A conditional sale
It has already been seen that, under the terms of rules 2, 3 and 4
of section 18, there may be a conditional sale of goods, under which
property is not transferred until certain acts or events are performed
or take place. In addition to such examples of statutory conditional
sales, section 19 of the Act mentions one other, namely, where the
seller reserves what is called in the Act the right of disposal of the
goods until certain conditions are fulfilled. The seller may do this
where the contract is for the sale of specific goods or where the goods
are not specific but have been subsequently appropriated to th*
contract (so that, by virtue of rule 5 of section 18 property would
otherwise be transferred to the buyer). In such cases, notwithstanding
the delivery of the goods to the buyer, or to a carrier or other bull*
for the purpose of transmission to the buyer, the property in the goods
does not pass to the buyer until the conditions imposed by the seller
are fulfilled.
This is a very general principle, a more particular instance of

which is mentioned in section 19 (2) under which where goods are
shipped and by the bill of lading the goods arc deliverable to the order
of the seller or his agent, the seller is prima facie deemed to reserve
the right of disposal. This rule was laid do^vn in Mirabita v. Impcrio^
Ottoman Bank* in 1878. It is clear from the judgment of Kennedy
LJ. (dissenting) in the Court of Appeal in Biddell Bros. v. Horst
that these statutory provisions are based on the earlier case. Property
in the goods sold passes conditionally, according to the judgment of
Kennedy LJ.. where the bill of lading for the goods, for the purpose
of better securing payment of the price, is made out in favour of the
vendor or his agent or representative. It passes unconditionally where
the bill of lading is made out in favour of the purchaser or his agent
or rcprcscnialive as consignee.
* (I87f) 3 Ei.D. !64

> (19111 I i:.B. 9 ai p. 956.
THE RIGHT OF DISPOSAL
91
Basis and sYOtfcing o the rule
The idea that an otherwise outright transference of propertji

(under the provisions of the Sale of Goods Act) is nonetheless a con*
ditional sale is intrinsically hound up twth the sale of goods to he
shipped by the seDer to the buyer, and the commeicial concept of
transference of property by the delivery from hand to hand, i-e., the
negotiation, of bills of lading. A bill of lading is ** a writing signed
on behalf of the owner of the ship in which the goods are embarked,
aclaiowledging the receipt of the goods, and undertaking to deliver
them at the end of the voyage, subject to such conditions as may
be mentioned in the bill of lading.*** Such documents, which are
governed by a special statute, the Bills of Lading Act, 1855, are of
great importance, since they are documents of title to goods and
propeity in goods may be transferred by the sale of, or other forms of
dealing with them. They are of particular importance in connection
with c.ii. contracts of sale.* Sales involving bills of Jading
are most I&cly to attract the operation of the doctrine of the
reservation of the right of disposal that is dealt with in secUon 39.
The reason for this lies in the negotiability of bills of lading, as a
consequence of which the seller may find that he has lost his rights as
an owner in respect of the goods, as well as his rights as against the
goods themselves (wWch will be considered in due course *), by virtue
of a dealing with bills of lading by the buyer, unless the seller takes
the prûtion of reserving the right of disposal, either by the method
stated in section 19 (2) or otbenvisc.
The workings of the general rule, and its particular application to

the case of sales involving bills of lading are illustrated by two pre-
i93 cases. Godfs v. Rose and Ogg v. Shuter,^^ In the former, the
wntraci was for the sale of a quantity of oil. held by a wharfinger for
the seller, to be delivered free and paid for within fourteen days. An
the oil was sent to tie wharfinger by the seller and
e Wharfinger sent an acknowledgment, addressed to the buyer, that
me oil was transferred to the buyers name. When the seller sent this
buyer he asked for immediate payment, which
teiused. as was ihe return of the acknowledgment. The buyer
0 possession of the oil from the wharfinger, some oil before
me rest after the seller countermanded his order to deliver to the
I! P- ^5.
** (1854) 17 CJJ 229

*' (*175) I Cpj;). 47 '
92
TOANSFER OF PROPERTi
buyer. It was held that properly had not passed to the buyer because
the intention to refuse delivery of the oil without payment indicated a
reservation of the right of disposal. A somewhat similar situation
arose in the more recent case of Re an Arbitration between Shipton
Anderson &. Co. and Harrison Bros. &. Co.*' where, again, paynio^
was to be made by the buyer in cash within a specified time as agaimt
a transfer order.
In Ogg V. Shuter a sale of potatoes from France was involved.

The terms were cash against the bills of lading, and the bills of lading
were made out to the seller. The buyer refused to pay cash for the
bills of lading on the ground that sixteen sacks were short, whereupon
the potatoes were sold by the selleris agent to a third party. When
the agent was sued by the buyers for conversion, it was held tha
property had remained in the seller, not merely a lien on the goods lot
the price: this was because of the form of the bills of lading. Con-
sequently, the sellers agent had committed no tort in disposing o
his principals propeny.
But the form of the bill of lading is not the only test. For the ense
of The Parchim * shows that such matters as the agreement between
the parties as to which shall bear the risk of loss of the goods may
indicate that property was transferred, and that no right of dispose
had been reserved by the seller. It must, of course, be rememhete
that the Act only slates that in the ciremnstanees mentioned the se et
has only prinia facie reserved the right of disposal. The facts may
clearly show that no such reservation can correctly be inferred.
Bills of exchange
Another special instance of reservation by implication of the fight

of disposal is given in section 19 (3). By this section, which reproduce^
what was determined by the House of Lords In the leading case o
Shepherd v. Harrison*^ where the seller of goods draws on the bujff
for the price, and transmits the bill of exchange and the bill of ladm?
to (he buyer together to secure acceptance or payment of the hill o
exchange, the bujer is bound to return the bill of lading if he does not
honour the bill of exchange, and if he wrongfully retains the bill o
lading the property in the goods docs not pass to him. Various
*r 119131 3 K.D 676.
[1918] A-C 157, wpecialJjr at p. I6X, ptr Lord Parker. _ f.
Cf. ShfphrrJ V. Ilanlton (1871) L.R, 5 IIX. II6 with Ex p. Danner (1876) 2 Cn.i'
278 and Kanlg . DranJi (I90l) W L.T. 743.
* (1871) I_R. 3 IIL. IIS.
THE RIGHT OF DISPOSAL
93
prize cases from the first world war illustrate the workings of this
rule, which it is unnecessary to discuss in great detail here.*^
It must be stressed, however, that despite the apparently strict

denial by section 19 (3) that property passes to the buyer where he
has not honoured the bill of exchange, the decision in Cahn v.
Pockelts Bristol Channel Steam Packet Co. Ltd.** seems to indicate
that, where the buyer negotiates the bill of lading to an innocent third
party, who takes without notice of the buyers failure to pay or honour
the bill of exchange, such third party will acquire property in the goods
as against the unpaid seller, by virtue of the operation of the Factors
Act, 1889, and section 47 of the Sale of Goods Act/* This decision
brings out once again what was stated at the beginning of this chapter,
namely, the importance of distinguishing, both as regards meaning
and effect, the sections which have been discussed in this chapter,
which deal solely with the issue of property as between seller and
buyer, from those provisions of the Sale of Goods Act which consider
the position of the title of outside parries to goods acQu'ifed from
either the seller or the buyer, where one of them is acting improperly
as far as the contract between them is concerned.
ri9l51 P. 71; The Prtnz AdeJberl [19I7J AC 5S6; The

of 1 A But note that ooly a Hen may w reservrd, not a right
PoKhIm II918I A.C 157 at p. 170. per Lord PaAer.
* M to
infra, pp. 26i~76. 272.
THE STATUTORY OBLIGATIONS

95
The scope of the obligation
It is signiOcant that the subsection speaks of the right to sell the

goods: it does not talk in terms of property or title (though the
marginal heading reads : implied undertaking as to title, etc ). In
view of the fact that the very definition of contract of sale refers to
the transfer of property in goods {i.e. the general property), it
might be thought that the provisions of section 12 (1) were unneces-
sary, or, at any rate, that they referred to something very different
from property.
It is clear that the seller of goods need not be their owner, or have
any general * property in them, either at the time of the sale or at
the time when, under an agreement to sell, property is to pass. He
may be the agent of the true owner. He may be acting under some
other legal power, invested in him by virtue of some other legal
relationship existing between him and the true owner. As long as he
has the right to sell, he will have fulfilled the condition implied by
the Act. Thus one who is not an owner of goods which are sold, and
is not the agent of the owner, nor is otherwise empowered to act in such
a way as to exercise the owners right to sell the goods, is in
breach of the statutory condition if be sells. This is so even though the
seller is innocent of the fact that he is not the owner and has no
right to sell, as happened in Rowland v. Divall, a case which has
caused much argument. There the defendant sold the plaintiff a motor
car which, it happened, was stolen. After the plaintiff had possessed
and used the car for only a few months, the fact that the car was
stolen, and therefore had not belonged to the defendant when he sold
it, became known to the police, who took possession of it from the
plaintiff. The plaintiff sued for the return of the purchase price, on
the ground of total failure of consideration. It was held by the Court
of Appeal that the defendant was in breach of the implied condition
set out in section 12 (I), and that therefore the plaintiff was entitled
to succeed. The court held irrelevant both the possession and use of
the car by the plaintiff for a few months, and the fact that, since the
car was in the possession o! the police, the plaintiff could not return it
to the defendant.
Property as consideration
Among the interesting features of this case, it is notable that,

though the plaintiff was relying on a breach of the implied condition
as to title he was not really attempting to rescind the contract and sue
[1923] 2 K.B. 500.

96
TIIE TITTX OF niE SELLER
for damages, which, as will be seen, is the normal remedy in cases of

breach of condition. He was suing on the basis of failure of con-
sideration. This is what has created the difDcultics. The attitude of
the Court of Appeal was that the consideration for the price paid by
the plaintiff was not possession of the car, {.e. physical delivery of it
to the plaintiff, but what Scrutton LJ. called legal title and legal
nght to possession and what Atkin LJ. referred to as the
property. It would seem to follow from the language of the judges in
this case that, whereas in the case of other conditions that arc implied
under the Act, or are expressly incorporated into a contract of sale,
the statute forces a buyer, in certain circumstances, to treat a breach
of such condition as a breach of warranty, thereby affecting the reme-
dies available to the buyer, by depriving him of the right to rescind
the contract and reject the goods, and conGning him to an action for
damages, where there is a breach of the implied condition as to
right to sell, the buyer can always claim the return of tbe
purchase price on the basis of failure of consideration. This doctrine
has been applied in some later cases of hire-purchase contracts,
not contracts of sale, in respect of which it has been said that
the same principles governed the situation of a purchaser from one
who had no right to sell the goods on hire-purchase,* even in a case
where, as a result of the conduct of the seller, the right to sell the
goods was conferred on him ex post facto.
If the case of Buttenvortk v. Kingsway Motors is correct, it

would seem that a seller with no right to sell cannot rectify his impro-
per act in selling by some subsequent conduct which does invest him
with such right, for example, buying the goods in question from the
true owner.** Nothing in the Sale of Goods Act indicates the possibi-
lity that this might happen under English law. But in the Uniform
Commercial Code there is a provision ** to the effect that the seller
may cure an improper delivery or tender where the time for perform-
ance has not yet expired. American case law would seem to suggest
* Infra, pp 30S-309.
f In the report of this case m [19231 All E R Rep. 270 at p. 273. Hus gives a
...j . 1 J T Reports.
. tan y. Southern Counties Car Fm-
. E the buyer in some circumstances

by acquiring title from the origiiial owner: Whltehom Bros v, Davison 11911]
1 K.a 463 .
s 2-508 (1) The warranty contiuned in s 2-312 (I) (a) is that the title conveyed
should be good, and its tr^sfer iÛfoL
TOE STATUTORY OBUGATIONS
97
that cure of an improper delivery or tender is permissible even

where the time for performance has passed, provided that the seller
can do so without subjecting the buyer to any inconvenience, risk or
loss.** If this were permitted under English law, the buyer might have
collateral protection from loss, inconvenience or risk arising from
the original improper delivery by the other provisions of section 12
which will be considered later.* However, what might be called
** late cure does not seem to be allowed at present: the buyer appa-
renily can always treat the sellers failure to pass property as justifying
the return to him of the purchase price.** Indeed, so much is this so
that, to one writer,** it raises the nightmare possibility that a buyer
might, in all innocence, buy and consume goods, e.g., whiskey, which
the seller had no right to sell, and then recover the purchase price from
the seller. The basis for such recovery would be that Rowland v. Divall
makes the consideration for the purchase price not the goods them-
selves but property therein : and the prospect that the buyer might be
sued by the true owner for conversion should entitle him to recover
the purchase price, in case he is compelled, by an action, to pay
damages, viz., the value of the goods, to the true owner. But the
owner might sue the seller, not the buyer. Hence the seller might be
compelled to return the purchase price to the buyer and pay an
equivalent sum (or at any rate the value of the goods) to the true
owner. Admittedly, any innocent seller would have a remedy against
the person from whom he purchased the goods. Eventually, however,
there would be a seller who obtained the goods from the original
wrongdoer, such as a thief, from whom he would be able to recover
nothing. The entire loss would therefore fall on one person. Such a
situation would not arise it Rowland v. DivaU is regarded as bad
law.* But it would also not arise (a) if that case could be distinguished
where the goods in question are not durable, such as a motor car, but
consumable, such as whiskey (and arc in fact consumed) : or (b) if
the law is amended, so far as loss through the criminal act of a thief
is concerned, to admit of the principle of apportionment of the loss
Bogeit, Bnsion, and Hawktand. Cos and Mcttrlcd on the Law of Sale and
Security (4th ed , 1962) at pp 164-167.
Infra, pp. 103-106.
Even when the buyer cannot retnni the goods because of the breach of which he
complains. Cf. Unifonn Sales Act, $ 69 (3); Uniform Commercial Code. s. 2-608
( 1 ).
Atlyah, Sale of Goods (2nd ed., 196^ pp 35-36. But see the argument of Treitel,
Law of Contract, pp. 637-638 as to the application of s. 6 of the Law Reform
(Married Women and Tortfeasors) Act, 1935, f.e apportionment
1* See also infra, pp. 102-103 on the application of s. 11 ( 1 ) (c) to the fact-situatio
n
in this case.
P.S.O
98
TEE TIIl^ OF THE SEUER
caused to two innocent parties, te.. an owner and a purchaser from the
thief, by the conduct of the thief.
This last is a problem which will arise in another context. Suffice

it to say here that the approach of the Court of Appeal in Rowland
V. Divall leads to great difficulty. It might have been better if the court
had either adopted the view that delivery of the goods, and not
transfer of property, was the consideration for the payment of the
price, or had refused the plaintiff a remedy on the basis of failure of
consideration, permitting a remedy only on the footing that what was
involved was the breach of a condition, implied by the statute under
section 12. This approach, admittedly, raises another difficulty, to be
considered in detail later, namely, the effect of the acceptance of the
goods in the light of section 1 1 (1) (c) of the Act but at least it has
the merit of not confusing a breach of condition as to title with a
failure of consideration. It is arguable that such an approach is
precluded by the provisions of section 54 of the Act, by which nothing
in the Act affects the right of the buyer to recover money paid where
the consideration for the payment of it failed. But that provision still
leaves it open to a court to determine when the consideration has
failed : and this would have enabled the court in Rowland v. Divall
to treat the circumstances as not involving such a failure, thereby
excluding the application of section 54.
Is more than property involved?
Thus, on the basis of Rowland v. Divall, not only under the

provisions of section 1 of the Act, but also under those of section 12
(I), the seller must transfer to the buyer property in the goods, and he
will be guilty of a breach of condition if, lacking the right to sell, he
transfers no property. It would appear, however, from the decision in
Niblett Ltd. v. Confectioners^ Materials Co. Ltd.*^ that section 12 (1)
involves even more than property, when it refers to the " right to sell.
In that case the defendants sold the plaintiffs tins of condensed milk*
When the goods were delivered ft was discovered that some of the
tins bore labels marked with the "Nissly brand. This brand
infringed the trade-mark of the hfestle Co. The buyers were therefore
refused permission to export the tins and sell them in the state ifl
which they were delivered to them. They had to remove the labels
and sell them at a loss. They sued the sellers, claiming damages on
tnfra. pr 110-112.
*9 M/ra. rP 18J-185. 300-311.
i 11921) 3 K-B- 357. diapprorinf tbc dedii'on of Lord RdikII L.CJ. In Monfons
f. Martdtn (1893) 12 RJ.C 2
IHE STATUTORY OBUGATIONS
99
various grounds. One of these was that, in selling them tins with
labels which infringed a third partys trade-mark, the sellers were in
breach of the condition implied by section 12 (1). There was no
doubt that the sellers owned the tins and the milk contained therein.
They could be said, however, not to own" or have the right to
sell, the labels on the tins in the form in which they were. To quote
Scrutton L.J.**; The [sellers] impliedly warranted that they had
then a right to sell them. In fact they could have been restrained by
injunction from selling them, because they were infringing the rights
of third pcRons. If a vendor can be stopped by process of law from
selling, he has not the right to sell. Atb'n L.J.** indicated that even
a right to pass property in goods would be insufficient to satisfy the
condition if there was a title superior to that of the seller so that the
possession of the buyer might be disturbed. If this case is correctly
decided, therefore, it appears that even to be entitled to dispose of the
property in goods is not enough if there is some legal obstruction to
the free disposition of the goods, when sold to him, on the part of the
buyer.
To accept this is to make section 12 (1) very broad in its meaning

and scope. In fact it was possible to decide this case in favour of the
plaintiffs either under the provisions of section 12 (2) or under those of
section 14 (2) of the Act. It would seem that the court took the
attitude that there was a remedy under section 12 (1), which precludes
any possibility of distinguishing or restricting the application of this
case. Thus, until such time as the House of Lords is able to consider
the implications of the implied condition as to right to sell, the law
is in the unsatisfactory state of making the provisions of section 12 (1)
involve even more than is comprehended in the idea of property
which is clearly regarded by section 1 (1) of the Act as the main,
indeed the entire, basis of a contract of sale.
Application of section 12 (i)
Mention of this leads to the question whether the condition implied

by section 12 (1) can ever be excluded. The section reads unless the
** Was there therefore a failure of consideration, which would entitle a buyer in such
circumstances to recover the purchase price if paid in advance?
[19211 3 K.B. 387 at p. 398.
* Ibid at pp. 402-403
* It seems to involve also a very broad interpretation of the word goods in s. 12
(1), by including the name under which goods are sold as part of the goods.
Does this conflict with the defimtion of ** goods in s. 62 (1) which excludes
things in action ?
Infra, pp. 103-ICM, 166-174
100
TlfE mix OF HIE SELLER
circuxnslances of the contract arc such as to show a different inten*

tion. There are decisions which indicate that the condition may be
impliedly excluded. In Payne v. Elsden,^^ Ridley J., relying on the
pre-1893 case of If'ood v. Baxter,^* held that in the case of a sale
by an auctioneer there was no implied warranty of title. But this
is the only case which directly raises this problem. In Nibkit Ltd. v.
Confectioners' Materials Co}* Atkin L.J., who was the only member
of the court to consider this aspect of section 12, stated the
words now under consideration were inserted to exclude sales by a
sheriff under an execution (even though, as will be seen later,
this kind of sale is dealt with specifically in section 26 of the Act),
and. in the words of the learned judge, " other cases where by imphea-
tion or by express terms there Is no warranty of title, In the United
States, the Uniform Sales Act ** exempts from liability under any
implied warranty or condition of title, a sheriff, auctioneer, mortgage
of other person professing to sell, by virtue of authority in fact or law,
goods in which a third person has a legal or equitable interest.
Presumably any such person acting without due authority might
be liable, quite distinctly, under the doctrine of the implied warranty
of authority of an agent}* not a seller. The Uniform Commercial Code
approaches this question differently. The particular warranty set out
in section 2-312 (1) (which differs slightly from that contained in
section 12 of the Sale of Goods Act and section 13 of the Unifor
Sales Act) may be excluded or modified only by specific language,
ie., by an express terra, or by circumstances which give the buyer
reason to know that the person selling does not claim title in himself
or that he is purporting to sell only such right or title as he or a third
person may have. ** This language seems wide enough to include
cases within the Uniform Sales Act exemption refened to above,
as well as situations such as that in Payne v. Elsden. The American
provisions, however, seem to be more clearly expressed and definitive
(as well as more restrictive). The language of the Sale of Goods Act
is vague, so far as the scope of the application of the section >s
if (1900) 17 TXR. 16.
8 (1883) 49 LT. 45. ^
. . 1 ..-. .,*.1 ....ned on the
. . , . .ree named
II . , . . . . the result
at mjra, pp.
* I. 13 (4).
a* See Fridman, Law of Ageriey, p. 157 ei

at Uaiforffl Commercial Code, f, 2-312
IME STATUTORY OBLIGATIONS
101
concerned, in the same way as many other passages in the Act are
vague and productive of uncertainty.
Express exclusion
The comments of Atkin LJ., referred to above, suggest that the

parties may also expressly indicate their intention of excluding this
condition (in the same way, as will be seen in due course,** that they
can exclude the operation of other conditions and warranties that are
implied by the Act). There seems to be no reason, therefore, why, in a
contract of sale, the parties cannot agree that the seller does not
guarantee he has the right to seU the goods in question. It is argued,
however, that, under the Act, a contract of sale is one which involves
the transfer of property in goods which are sold. Therefore, if the
condition implied by section 12 (I) is excluded, the contract, whatever
else it may be. is not one of sale. This, however, ts not necessarily so,
because the law undeniably recognises that there may be a sale of a
chance, f.e.. the sale of something which it is hoped will eventuate.
This could include a sale in the hope that the seller turns out to have
the right to sell, thereby leaving the buyer free from the prospect
of any external interference or dispossession. As long as the contract
contemplates the sale of whatever property or right the seller may
have in the goods (expressly referring, therefore, to the possibility,
indeed the likelihood, that the seller has no right to sell), the contract
could still be one of sate and yet could oust the operation of section
12 (1). This was not queried in Payne v. Elsden, where the exclusion
was implicit. There is no reason why it should be queried where the
exclusion is explicit,** particularly since section 12 (1), while
recognising the possibility of exclusion, still refers to " every contract
of sale, seemingly accepting that a contract can be one of sale
even though the condition as to title is excluded.
Once this is accepted as a possibility, it may be that the problems

created by Rowland v. Divall can be circumvented another way. Thus,
if the contract excludes the condition implied by section 12 (1), can
it still be said that, if the seller has no right to sell, and the buyer is
dispossessed, the buyer can sue for total failure of consideration?
If it is agreed that, despite the provisions of section I (1), the obliga-
tion to transfer property can be modifled by the parties in the way
Infra, pp 186-188.
* See the discussion by Hudson ** Hie Condftion as fo Hile in Sale of Goods (1957)
20 M.L.R. 236, and Reynolds, Wartanty, Condition and Fundamental Term
(1963) 79 1..Q R. 534 at pp. 541-542. As for sale of a chance see supra,
pp. 38-39.
102
THE TITTI! OF Tlffi SELLER
indicated above, a seller who gives possession, even though he has

no right to sell and cannot transfer property, has not failed to
provide consideration for the purchase price. This question was not
dealt with in Rowland v. Divall, because the contract there did not
contain any exclusionary clause. It will be seen, however, in discussing
conditions as to quality of goods, that in many modem contracts
the parties exclude all statutory (and other) express and implied
conditions and warranties ân exclusion which has created problems
for the courts.*^ If they do so they therefore exclude the condition
implied by section 12 (1). The point has not so far emerged, but it
might at any time. It will then be necessary for the courts to determine
whether section 12 (1) can be excluded, as suggested above, which
would be the simplest solution (though possibly not. in all cases, the
fairest), or whether the obligation to transfer property is to be
considered as fundamental * (so that the failure to perform it is to be
considered what one recent writer describes as a fundamental
breach. choosing to regard this issue from a different angle). If ^îs
obligation is fundamental, then it may not be excluded, in which
event the decision in Rowland v. Divall would always be the same.*
The effect of acceptance of the goods
What the court in that case did consider was whether the doctrine
contained in section II (I) (c) of the Act applied. Under this
provision, in certain circumstances, a breach of condition must be
treated by the buyer as a breach of warranty, permitting only of a
action for damages.*" The facts in Rowland v. Divall were such as to
allow this provision to apply. If it applied to a breach of the condition
as to right to sell. It appears from the judgment of Atkin L.J*
was the only member of the court to consider this question) that
section 1 1 (1) (c) is inapplicable to this particular condition, because
a seller cannot sell goods which arc not his property. ** But there
is no justification, in the Act or the co mm on law. for this proposition
(in the absence, of course, of any fraud or similar conduct). There
is no reason why a seller should not contract to sell goods which are
not his property if the buyer knows that they are not. The buyer
ST Infra, pp 186-193
* Reynolds, toe. cit., fupra, note 36.
* Hie Committee on Consumer Protection (1962, Cmnd. 1781) recommended Uiat

condition and the warranties in s. 12 (2) (3) should be irrevocably implied: s
. . . . . . .06
.. . ..las
no right to seU
niB STATUTORY OBLIGATIONS
103
xepts a risk. As long as there is nothing illegal about the contract,

g if the contract contemplates a theft by the seller of a third
srsons goods, there is no reason why the contract should not be
alid, and even exclude the liability of the seller should he fail to
ansfer property to the buyer. If this is correct, as it is suggested that
, is, then, in proper cases, section 11 (1) (c) should operate so as to
reclude the buyer from relying on a breach of condition. Although
3 admit this is not to admit that the doctrine of failure of considera-
ion is inapplicable, it has been argued that in Rowland v. DivaU
be buyer should not have been allowed to recover for total failure
if consideration, but should only have been allowed to recover in an
ction for breach of warranty a sum by way of damages, i.e., the
irice of the car less the benefit received from having the use of it
or the period in which it was in his possession.**
What emerges from these considerations of the provisions as to

ight to sell is that, in its present form, the Act has given rise to
iroblems which ought never to have arisen bad the possibilities been
iropcrly foreseen. Whether the solution lies in the redefinition of the
joncept of a contract of sale, i.e.. excluding the idea that it involves a
;ransfer of property and making it turn on the delivery of physical
possession, or the alteration of section 12 (1), or the amendment of
the provisions relating to acceptance of goods and the effect of
acceptance,** is something which is difficult to decide in the present
context. There is no doubt, however, particularly in the light of the
provisions of the Uniform Commercial Code, as opposed to the
Uniform Sales Act, that something can and should be done.
(2) Quiet possession and freedom from incumbrances

The implied condition as to right to sell is supported by two
further obligations that are implied into a contract of sale in the
absence of any circumstances showing a contrary intention. Both
of these obligations take the form of warranties and not conditions,
a distinction that is of vital importance as regards the nature of the
buyers remedies.**
The first of these is an implied warranty that the buyer shall have
and enjoy quiet possession of the goods.* What this exactly involves
is not very clear. In the Niblett case, the facts of which have been
given, it was held by Atkin LJ. (the other members of the court not
See Reynolds, toe. eti., supra, note 36 at pp. 534-535.
As to which see Infra, pp. 183-184, 221-229. 309. 314.
Cf. infra, pp. 140-143.
S.Gj\. . 12 (2)
TUB UTLE OF IHE SELLER
IM
choosing to express any opinion) that the sellers had been guilty
of a breach of this implied warranty and were liable in damages
accordingly.* This was because the buyers were never allowed to
have quiet possession. They had to strip off the labels before they
could assume possession of the goods. Atkin LJ. went on to state
that probably this warranty resembled the covenant for quiet enjoy*
ment of real property (a resemblance which would seem to be
implicit in the language of Scnitton L.J.) and therefore purported
only to protect the buyer against the lawful acts of third persons,
breaches of the contract of sale, and tortious acts by the seller. How-
ever, in Mason v. Biirninghant ** it was held that the implied warranty
could be relied upon to entitle a buyer, who had been dispossessed
by the true owner of a typewriter purchased from the seller, to
recover from the seller, independently of damages recoverable
section 12 (1), additional damages representing the cost incurred
by the buyer in having the typewriter overhauled before the date
of the dispossession. Lord Greene stated that the seller could
defend himself from an action based on breach of this implied
warranty by pleading the eviction of the buyer by title paramount*
If this case is correctly decided, it means that a buyer who iuctjr*
expense in unsuccessfully defending an action brought against lum
by the true owner can recover such loss from the seller.* It ^1*
means that in cases such as Rowland v. Divall a possible remedy
the buyer might well be to sue for breach of this implied warranty,
when damages will be recoverable in accordance with the principle*
laid down in the Act. Such an approach to cases of this kind would
obviate the need to distinguish Rowland v. Divall or declare that it
was wrongly decided on the basis of failure of consideration. But it
Would mean that the buyer might recover Jess than the purchase
paid to the seller. Whether or not such an approach is acceptable, tt
follows from Mason v. Dumingham that this implied warranty w
quite distinct from the implied condition in section 12 (1).
enables a buyer to recover damages in respect of loss which would
not necessarily come within the scope of an action based on a breach
of that implied condition, and which does not result from any conduct
on the part of the seller-
* 3 K.Q. 397 p. 403.
*t ibU. at p. 39S.
IIW-JJ 2 K.B. 543.
4 ;wi. ai ^ 563. .
C/. IJofdi A Seviilik Flnaner ZjJ. . Modrm Con A Coravens (Klngsicn) Lto-
J1964I 2 AD LJl. 732. dbomed below.
THE STATUTORY OBLIGATIONS
105
The second implied warranty is that the goods shall be free

from any charge or incumbrance in favour of any third party, not
declared or known to the buyer before or at the time when the contract
is made.*^ This is expressed in futuro. Hence it has been argued that
this warranty has no reference to the position at the time of delivery,
so that the buyer only has a remedy if he is subsequently affected
by any charge or incumbrance in existence at the time of delivery.*
The Uniform Commercial Code (unlike the Uniform Sales Act,
which is in the same terms as the Sale of Goods Act) creates an
implied warranty that the goods shall be delivered free from any
security interest or other lien or incumbrance.* Since the English
statute is concerned with the position as regards property in goods
which are sold it would seem that the warranty of freedom from
charges or incumbrances logically follows from the earlier implied
condition in section 12,
The operation and effects of these implied warranties are illustrated

in the recent case of Lloyds & Scottish Finance Ltd. v. Modern Cars
& Caravans {Kingstori) Ltd.** There a sheriffs officer entered a
caravan occupied by a judgment debtor and his wife and read out his
warrant of execution of a writ of fieri facias. The wife claimed that
the caravan was hem. Both the debtor and his wife refused to sign a
walking possession agreement, and they were told that the caravan
must not be moved. Some time later the defendants bought the
caravan from the debtor and removed it. At this lime the defendants
had no knowledge of the writ. After they had been informed of the
writ, the defendants sold the caravan to the plaintiffs, hire-purchase
financiers. The contract of sale contained an express warranty that
the caravan was the unincumbered projwrty of the defendants. This
was part of a hire-purchase transaction. The caravan was later seized
by the sheriff from the person who was buying the caravan on hire-
purchase from the plaintiffs. He paid no further instalments to the
plaintiffs and stopped his cheque to the defendants for the initial
payment. When the defendants protested, the sheriff instituted inter-
pleader proceedings between them and the judgment creditor. No
order was made as the court held that the defendants had made no
adverse claim to the caravan. The plaintiffs, at the suggestion of the
defendants, then laid a claim to the caravan, which was withdrawn
on legal advice that it was not maintainable. The plaintiffs paid
S GA. s. 12 (3)
*3 Benjamin on Sale (8th ed ). pp. 681, 653.
s. 2-312 (1) (b).
11964] 2 All EJt. 732,
106
THE TIltE OF THE SELLER
the cost of the interpleader proceedings of the execution creditor, the

sheriff, and their solicitor. They then claimed damages from the
defendants for breach of warranty. Edmund Davies J. held (for
reasons which are not relevant here that the defendants were In
breach of their express warranty that the caravan was unincumbered,
and were in breach of the implied warranties under section 12 (2) (3)
of the Sale of Goods Act. Because of this, not only were the
defendants liable for the loss to the plaintiffs ensuing from the refusal
of the hirc'purchaser to pay the price of the caravan which he was
buying from the plaintiffs on hire*purchase, they were also liable
to pay the costs of the claim made by the plaintiffs to the sherifi-
This was because, the defendants being in breach of the warranty
as to quiet enjoyment, the reaction of the plaintiffs was reasonable
having regard to their duty to mitigate their damages as far as was
possible. This was mote particularly the case when, as here, the
steps involving the plaintiffs in extra loss, which they need not
otherwise have suffered, were taken at the instigation of the defendants,
even though maturer advice, given after time for reflection, led to
the abandonment of the action begun by the plaintiffs.
This was a case, therefore, in which there was no breach ot w

condition as to right to sell the goods, but there were breaches of
ancillary warranties, as a result of which the buyer, who had suffers
financial loss, was able to be reimbursed.
2. Sales Wnnoux Title
The effect of the Act
From what has been said in the preceding section it should be

evident that the purpose of the law, as contained in the Act, is to
ensure that a buyer obtains such property in the goods that are sold
to him as will enable him to exercise all the rights of an owner over
them, unless he has specifically, and without being induced by fraud,
etc., contracted to obtain something less. To effect this the Act pto*
vidcs him with certain remedies, based upon the failure by the seller
to fulfil obligations imposed on him by the Act with respect to
property, quiet possession and freedom from charges and encum-
brances. The provisions of section I contemplate that a sale by
someone who is not invested with properly in goods, or the legal right
to dispose of the property in goods, will be an invalid sale, incompetent
to transfer property to the buyer. But this is not completely true.
* S Infra, pp. 124-129.
SALES WIIHWT TITLE
107
Both at common law and under the Act there are situations in
which it is indubitable that a seller who has neither property nor
the right to dispose of property may nonetheless transfer property
to a buyer in such a way as to preclude any other person from
subsequently claiming such property from the buyer and either
dispossessing him or forcing him to pay compensation representing
the value of the goods. The Sale of Goods Act, in fact, expressly
recognises this, when it provides in section 21 (1) that, subject to the
provisions of the Act, where goods are sold by a person who is not
the owner thereof, and who docs not sell them under the authority
or with the consent of the owner, the buyer acquires no better title
to the goods than the seller had. The ensuing language of this
subsection, together with the words of section 21 (2) and sections 22-
26, clearly shows that, whereas the basic principle of the common law
and the Act is nemo dot quod non habet, i.e., no one can transfer to
another something which he has not got himself, viz., property in
goods, there are clear exceptions to this, by virtue of which a non-
owner can transfer not merely property in goods as between himself
and the buyer from him, but also title. It is significant that, by way
of sub-heading to the relevant provisions, the Act speaks of " Transfer
of Title, whereas in other places, as already pointed out,** it refers
constantly to property. This, as already indicated, shows that,
in this context, the Act is referring to something like an absolute,
indefeasible title to goods,*^ similar to the kind of title which can
exist in respect of realty.
By virtue of sections 21-26 of the Act, sales by a non-owner will

be valid to pass good title to the purchaser in the following situations :
where the true owner is estopped from denying the sellers authority
to sell; where the sale is effective under the Factors Act, 1889; where
the sale takes place in market overt where the seller has a voidable
title to the goods sold; where a seller or buyer who is in possession
of the goods or documents of title to the goods sells them to another
person (not the original buyer or seller of the goods in question);
where the sale is under any special common law or statutory power
of sale or under the order of a court of competent jurisdiction,
including, under this head, sales of goods subjected to a writ of
** Supra, p 54
Cf. the language of Lord Denning MJL in C.E.B Draptr & Son Ltd. v. Edward
Turner & Son Ltd. [1965] 1 QK 424 at p. 432: . . . the word sale
properly connotes the transfer of ateolute or general property in a thing for a price
in money.**
108
nm niiE of nn: seller
fieri facias or other writ of execution, where the purchaser acts ia

good faith without notice of such writ or any other similar wriL
From this summary of the effects of the Sale of Goods Act, It will
be seen that some of these situations originate with the common law,
some have been developed by statute out of the common law. and
some are strictly statutory in origin. At the present time it may be
said that, whether originally common law or statutory, they all take
effect by virtue of the Sale of Goods Act (in conjunction with the
relevant provisions of the Factors Act, 1889).
(i) Estoppel
The Sale of Goods Act expressly provides that the doctrine

nemo dot quod non habet shall not apply if the owner of goods is by
his conduct precluded from denying the sellers authority to sell.
This would seem to mean that the owner will be estopped from raising
his ownership where the seller has been given the appearance of acting
as the owners agent. However, it would seem dear from the cases
that the principle of estoppel is not confined to instances of apparent
or ostensible agency but may extend to cases of apparent or ostensible
ownership on the part of the seller of the goods, where such appear-
ance results from the conduct of the true owner.
Whether the seller is alleged to have the appearance of an agent

or an owner, the cases show that something more than mere possession
of the goods in question is required before estoppel can be pleaded.
It is necessary for the seller to be armed with some indicia which
made it appear that he was either the owner or had the right to sell. "
The mere handing over of a chattel to another does not create an
estoppel. There will be no estoppel unless the doctrine of ostensible
ownership applies, for example, when the owner gives the recipient
a document of title, or, invests him with the indicia of ownership-*
If the owner of a car, for example, as was held in Central Newbury
Car Auctions Ltd. v. Unity Finance Ltd.p* gives mere possession of it
Under the Hire-Purchase Act, 1964, Part HI (not repealed by the Hire-Pui't'^
Act, 1965), there is a further new exception to the nemo dot rule, ia the case ot
motor vehlctes sold under conditional sale agreements within that Act 1
S.tiA. S. 21 (1).
i Eastern Distributors Ltd. v. Catdrini (19571 2 Q B 600 at p. 610, per Devlin 1.

s Central Newbury Car Auctions Ltd. v. Unity Finance Ltd. [1957] 1 QB. 37]
p 388, per Hodson LJ.
11957] 1 QB 371.
SALES WIIHOUT TITLE
109
to another (such other not being a mercantile agent or a purchaser, in

respect of whom, as will be seen later, special, and different, con-
siderations are applicable), he does not hold out or represent that
other person as being entitled to sell.* Nor does possession of the
registration book of the car add anything to possession of the car
itself. For that and other cases * have held that such a book is not a
document of title. On the other hand, possession of certain hire-
purchase documents was held by the Court of Appeal in Eastern
Distributors Ltd. v. GoWring to cloak their possessor with sufficient
indicia of apparent ownership to make the common law doctrine of
estoppel applicable, even though the seller did not have physical
possession of the vehicle which was being dealt with in the transaction.
In this latter case the Court of Appeal seem to have doubted whether
this doctrine of apparent ownersWp was a true instance of estoppel
at common law, for its effect was to transfer a real title, Le. one good
against the whole world and not a mere metaphorical title by estoppel,
i.e one valid only against the representor and his privies.*^
Whatever be the true view as to this, it must be stated that for

the doctrines of estoppel, apparent ownership or apparent agency
(whichever be the more appropriate in a given set of circumstances)
to apply it must be shown that the true owner has done something,
or permitted something to be done, which has misled an innocent
purchaser into buying the goods believing that by so doing he was
buying from one who had the right to sell them.
A distinction may be drawn between estoppel by conduct or

representation and estoppel by negligence. In cases of the former it
is the wilful conduct or representation of the owner (though the
consequences thereof may not be intended) which results in the
operation of the estoppel.* The issue in such cases js whether the con-
duct or representation alleged suffices to allow the purchaser to raise
the estoppel. Thus the character of the person to whom possession of
the goods is given, e.g., if he is a dealer in goods of the description
concerned, or the place where the goods are put by the owner, eg.,
a shop where such goods are normally sold, may well suffice to raise
an estoppel if the possessor of the goods or occupier of the shop sells
Ibid at p. 396, per Morris LJ. Contrast with this the facts and decision in Uoyds
& ScoUlsh Finance Ltd, v. tViillarruon 119&j 1 W.L.^ 4(M, where the seller was
held out as a prindpal.
s jp- * T, ,, *...x *-j
; Pearson v.
' Credit Co.
110
TEIE nTLE OF THE SELIXR
them to an innocent purchaser. But giving goods to someone, not

otherwise appearing to deal normally with such goods, will not suffice.
For example, in Jerome v. Bentley & the owner of a ring gave it
to X to dispose of for him. limiting his authority to a stated number
of days. After that period had expired X sold the ring to the
defendants. It was held that no estoppel arose because X was not
in the position of a dealer in such articles which would have led the
defendants into believing that he was cither the owner of the nng
or otherwise entitled to dispose of it. It is not surprising that, as
Lord Wright said in Mercantile Bank of India Ltd. v. Central Bank of
India Ltd.J^ there are very few cases ... in which a plea of estoppel
by representation has succeeded.
Because of this limitation on the operation of the doctrine of

estoppel by conduct, it has been argued on numerous occasions that
there is a parallel doctrine of estoppel by negligence, which can operate
where the doctrine of estoppel by conduct or representation might not
apply.^* It has been suggested that wherever the true owner, by his
negligence, has enabled a fraudulent person to dispose of the owners
goods to an innocent third party (usually by permitting the fraudulent
person to have possession of the goods or documents of title to the
goods), an estoppel should arise against the true owner. This sugges*
tion dates from a dictum of Ashhurst J. in Lickbarrow v. Mason
in 1787. But the trend of the cases is against such a principle; for,
if it were admitted into the common law, it would throw the door of
estoppel wide open. That this doctrine is not a part of the law
would seem to be clear from statements that if it were the law there
would have been no need for the enactment of the Factors Acts (the
effects of which will be seen in due course). As was pointed out by the
Note that in such cases the Factors Act may also operate; but it is possible I***
common law estoppel could arise However, what the Factors Acts did was i
. . 1 prujopl
. has
, s by later
suiuiis. see pp iii-iiu

to 119521 2 All ER. 114.
n [19381 A C. 2S7 at p. 302. In that case the Privy Council refused to apply estopljl
to the conduct of a bank which handed back to merchants a receipt
pledged to the bank, and thereby gave the merchants the opportunity to pledge tne
same goods frauduIenUy with another bank. Contrast the decision of the Pnty
Council in Commonwealth Trust v. Aketey {1926] A C. 72, not followed in the
later case.
TS For the doctrine of estoppel by negb'gence see the judgment of Dlactbum J- w

Swun r. North British Australasian Co. (1863) 2 H. & C. 175.
* (1778) 2 T.R. 63 at p. 70.
* See, e DuJbrrt v. JeruooJ & Ward (1934) 51 T.L.R. 99 at pp. 99-100.
SALES WITHOUT TITLE
111
House of Lords in Farquharson Bros, v. King'^ it is impossible

to take the idea of an owner enabling a fraudulent person to
defraud a third party too far. To do that might well permit the
introduction of the idea that anyone who, by negligence, allows his
goods to be stolen would lose his title thereto to any innocent
purchaser from the thief. The cases show that, however negligent
an owner is as regards his property or the documents of title to his
property, e.g., railway receipts, or delivery orders,^* he will not
necessarily be estopped from raising his ownership as against the
outside world, including an innocent purchaser for value from the
intervening rogue. Even where the owner has been defrauded by a
false impersonation by the rogue he will be able to assert his title
as against a purchaser from such rogue, as long as the effect of the
false personation is to render the original sale by the true owner to the
rogue one which is void for mistake, and not merely voidable.
However, there arc cases in which negligence by the true owner

will raise an estoppel against him. Such cases arise where the owner
is under a duly of care to the subsequent innocent purchaser (individu-
ally or as a member of the gener^ public) to take care as regards
the title of the owner to his property.* It would seem, as a result
of the discussion and decision in the Central Newbury Cars case,
coupled with similar discussions In cases not involving title to
property but rights arising under contracts and instruments resemb-
ling, but not being the same as, negotiable instruments such as
cheques.** that the scope of estoppel by negligence is severely
limited, possibly applying only to cases of negligence in the handling
of negotiable instruments.*** If this is so, then the doctrine of estoppel
119021 A C. 325.
Central Newbury Cars Ltd. v. Unify Finance Ltd , supra

Mercantile Bank of India v. Central Bank of India, supra.
Laurie & Morewood y. Dudin 1192Q 1KB 223.
^9 Ingram v. Little [19611 1 Q.B. 31, discussed supra, pp. 27-28. For the distinction
between void and voidable sales, see Infra, pp. 11^121.
As Lush J. said in Heap v. Motorist^ Adôry Agency [19231 1 K.B. 577 at

p. 587 : Negligence, in order to give rise to a defence under [s 21 (1)1 must be
more than mere carelessness on the part of a person in the conduct of his own
âirs, and must amount to a disregard of bis obligation towards the person who
is setting up the defence. Cf. Lord Macnaghten in Farquharson Bros. v. King
[1902] A C. 325 at pp. 335-336.
Campbell Discount Co Ltd. V. Gall [19611 1 QB 431, a hire-purchase case the

actual decision in which would now seem to be reversed by the Hu^Purchase Act,
1965. s 16.
** Orbit Mining and Trading Co. Ltd. v. IVestmlnsfer Bank Ltd, [1963] I Q B. 794.
Cf. also Muskham Finance Ltd. v. Howard [1963] 1 Q B 904.
** see Mercantile Credit Co. Ltd. T. Hamblin [1964] 3 All ER. 592 at pp.
112
Tim TITTJJ OF HIE SELLER
by negligence must be of very little relevance to the law of sale of

goods.*
(ii) Sales by mercantile agents**
The Sale of Goods Act does not affect the provisions of the Factors
Act, 1889.* Hence it is necessary to consider how far that statute
permits valid sales by a non-owner. By virtue of section 2 of that
Act (which is the important provision as regards this part of the
law), a mercantile agent, in possession of goods or of documents
of title to goods, with the consent of the owner, may sell, pledge or
otherwise dispose of such goods, while acting in the ordinary coiuse
of his business as a mercantile agent, so as to pass as good a title
to the other party as if he were expressly authorised by the owner
of the goods to do what he has done, provided that the person taking
under the disposition acted in good faith and without notice of the
mercantile agents lack of authority.
Various problems arise with respect to the interpretation of this
provision (some of the language of which is defined in other sections
of the Act). Thus it is necessary to determine when the person
selling goods to an innocent purchaser is a mercantile agent, when
he is in possession of the goods with the consent of the owner, whether
it is necessary for him to have such possession as a mercantile agent,
when the sale by him is in the ordinary course of his business as such
an agent, and whether the purchaser was in good faith and acted with*
out the requisite notice. In addition there may be a question whether
the goods sold are goods within the meaning of the Factors Act. and
whether the transaction with the innocent party was a sale, pledge
or other disposition within the Act.
A mercantile agent is one having in the customary course of

business as such agent authority either to sell goods or to consign
goods for the purpose of sale, or to raise money on the security of
if
to innocent purchasers
** See Fndman, Law of Agency, pp. 24-25, 186-194
S G A. s 21 (2) (a). This prcmsson al preserves the effect of any enactment

enablmg the apparent owner of goods to dispose of them as if he were the
owner the f ' - - , . , ,
of Benjan ,
Chalmers, ' ' ,
Act. 1855
dealings 1 '
1878 It ...
further.
For ss. 8, 9 of the Factors Act, 1889, see tafra.
SALES WITHOUT TITLE

113
goods. A mere servant or bailee will not be a mercantile agent.*

But one who acts for only one principal or in respect of one trans-
action may yet be a mercantile agent.** However, the person con-
cerned must have been given the goods in question to sell, consign
for sale, or raise money on. Yet. in Heap v. Motorists* Advisory
Agency a fraudulent person who obtained possession of a
car under the pretence that he knew someone who might buy it (no
such person being in existence) was not a mercantile agent at the
time of obtaining such possession, possibly on the ground that the
alleged buyer was fictitious. Whether in any individual instance
the seller was a mercantile agent when he obtained possession of the
goods is a question of fact, sometimes difficult to determine. It is
clear, however, that a business transaction must be involved : merely
obtaining possession of goods as a friend of the owner, even though
with the ostensible object of selling them, will not suffice. The Factors
Act is designed to deal with commercial transactions,* not trans-
actions between friends for the sake of convenience.
For this reason it would seem that the possession must be obtained
in the capacity of mercantile agent, ie., with one of the kinds of
authority specified in the provision of the Act set out above.* Hence
if the owner gives the person concerned possession of the goods to
display in a showroom,* to effect some repairs to them, to keep
in a warehouse,* or to obtain offers for the goods (but lacking some
essential feature such as the ignition key or registration book of a
car), the Factors Act will not apply. It is true that in Turner v.
Sampson * Channell J. said that whether possession had been
8T Factors Act, 1889, s 1 (1)
*8 Heyman v. FUwker (iiSS) 13 CB(n.s.)5I9; Lowthtr v. Harris [1927] 1 KB. 393;
Stas Motor Guarantee Ltd. v. Br U'agon Co. Ltd. [1934] 2KB 305.
*9 Lowther v. Harris, supra ; Budberg r. Jervood & Ward (1934) 51 T L R. 99
90 [1923] 1 K.B. 577.
91 See Weiner v. Harris [1910] 1 K.B 285 where a person who obtained goods on sale
or return, the property in them remaining vested in the party surrendering posses-
sion, was held to be a mercantile agent.
89 Budberg v. Jerwood & Ward, supra
9* Staffs Motor Guarantee Ltd. T. Br. Wagon Co. Ltd., supra at p. 313, per
MacKinnon J.
9* Brovn & Co v. Bedford Pantechnicon Co. Ltd. (1889) 5 T.L.R. 449.
99 Staffs Motor Guarantee Ltd. v. Br. Wagon Co, Ltd., supra

99 Cole V. North Western Bank (1^5) LR. 10 CP. 384, even though the warehouse-
man was also a broker.
9r Stadium Finance Ltd. V. Robbins 11962) 2 QB 664, at p 674, per Willmer L.J.
9S noin IV TT n inn i* ~ nr* .ur, s- .u,
* reserve " pnee was tued.
114
TIIE TITLE OF THE SELLER
obtained as a mercantile agent did not depend upon the actual

authority of the mercantile agent but upon what authority such an
agent had in the ordinary course of his business, i.e.. his customary
authority. But it would seem from dicta of Denning L.J. in Pearson
V. Rose & Young Ltd.*^ and WiUmer LJ. in Stadium Finance Lid. v.
Robbins^ that the better view is that the express, not implied, authority
given to the mercantile agent will determine this issue.
Possession must be obtained by consent, the consent necessary

being that of the owner (which would include a joint owner with the
mercantile agent).* Consent is presumed until disproved.* It
continue to operate, despite actual withdrawal, until the person
taking from the mercantile agent has notice of such withdrawal.^ What
is the effect of a consent to obtaining possession of the goods or
documents of title resulting from the perpetration of some fraud on
the owner by the mercantile agent? There was considerable debate
in the cases as to whether a distinction was to be drawn between
larceny by a trick or obtaining by false pretences. Whatever effects
this distinction may have as regards section 23 of the Sale of Goods
Act,* it is now clear that, however fraudulently the consent has been
wrested from the owner by the mercantile agent, for the purposes
of the Factors Act. it will be deemed to be consent to the agent's
having possession of the goods.* However, it would seem that the
fraudulent conduct of the mercantile agent may affect the question
whether he has been given possession of goods within the meaning
of the Act, or the question whether the sale by the mercantile agent
was in the ordinary course of his business as such.
[I95II 1 KB. 275 at p. 288.

1 Supra, note 97.
* Lloyds Bartk Ltd. v. Bank of America Nation^ Trust &. S<rvtt\gs Association fl938]
2 K.B. 147.
Factors Act, 1889, i. 2 (4). As it was done in Stadium Finance Ltd. v. Robhins,
* Ibid. s. 2 (2) See also Ibid. s. 2 (3) as to possession of documents of title to goods.
8 See Opptnhelmer V Frazer & fFyatr (I907I 2 K.B. 50; Oppenhelmer v.
borough & Son [1905] I K.B 221; Lake r. Simmons [1927] AC. 487; ftfoPji-
Motorists' Advisory Agency [1923] 1 K.B 577; Foikes v. King [1923] 1 K.B. 28^-
Infra, pp 118-121.
T Pearson v. Rose 4 Young Ltd, supta\ Stadium Finance Co. Ltd. v. Robbl^>
supra. Note that s. 24 of the Sale of Goods Act, which revests title in good*
stolen in the onginal owner. Infra, p. 117. may not apply in the case of duposî*
lions valid under the Factors Art, 1889. betause of the preservation of we
U189.
SALES WITHOUT TITLE
115
It is important that the transaction by the mercantile agent with

the purchaser from him should be in the ordinary course of his
business, which means while he was acting in such a way as a
mercantile agent would act.^ Selling a car without a registration book
was not acting within the ordinary course of a mercantile agents
business.*^ Nor was selling a car without the ignition key (which would
have opened the compartment where the registration book was kept).'*
On the other hand a sale of a car to someone who had no business
premises, when the sale took place in Warren Street in London, in
and around which there was a well-established street market for cash
dealing in used cars, was held to be a sale in the ordinary course of
business of a mercantile agent in Newtons of Wembley Ltd. v.
Williams.^*
The person dealing with the mercantile agent must have acted
in good faith and without notice of the mercantile agents wrongful
usurpation of authority. In the Sale of Goods Act ** it is provided
that a thing is deemed to be done in good faith when it is in
fact done honestly, whether it be done negligently or not. There
seems no reason why this should not also apply to the Factors Act.
The onus of proving good faith and lack of notice, as well as the
consent of the owner to the mercantile agents possession of the goods,
seems to be on the person dealing with the mercantile agent.'* Where
the sale is to joint partners it would seem that bad faith or lack
of notice by one of them will deprive both of the protection of the
Act.'* Bad faith or constructive notice may be shown by the unusual
nature of the price paid for the goods," or the fact that, in the case
of a vehicle, the registration book was missing.'*
Finally, the transaction effected by the mercantile agent with

the innocent party must be a sale, pledge or other disposition. It is
not clear what is meant by or other disposition. The sale of a
registration book of a vehicle was not such other disposition as
Oppenkelmer v. Attenborough <6 Son (I908J I K.B 221 at pp. 230-231, per
Buckley LJ.
Pearson v. Rose young, supra.
11 Stadium Finance Ltd. v. Robbins, supra.
i [1964J 2 AU E.R. 135; affirmed by the Coott of Appeal [19651 1 QB. 560.
14 S G.A. 8. 62 (2)
1* Heap V. Motorists' Advisory Agency, supra, at p. 590, per Lush J. Contrast, as

far as concerns lack of good farth purchaser from seller with a voidable title,
under s. 23 of the Sale of Goods Act, Whbehorn Bros. v. Davison [1911] 1 K.B.
463
1* Oppenkelmer v. Frazer & Wyatt (I907I 2 K.B 50
11 Janesleh v. Attenborough & Son (1910) 102 L.T. 605; Mehta v. Sutton (1913) 108
L.T. 214.
1* Pearson v. Rose & Young, supra, at p. 289, per Denning LJ. Contrast, on these
facts, the decision on this point in Stadium Finance Ltd. v. Robbins, supra
116
THE TITLE OF tllE SEIXER
would bring the transaction within the Act in the case of JobVtn v.
Watkins & Boseveare (Motors) Ltd.'* Nor in another case was the
delivery of goods to an auctioneer for sale even though the auctioneer
made advances as against the selling price of the goods- Generally
speaking, however, the cases which give rise to problems under the
Factors Act involve either sales or pledges of goods.
Though the purpose of the Factors Act is to enlarge the authority

of certain kinds of agents, and thereby to add to commercial con-
venience, it must be admitted that the courts have tended to restnet
the operation of the Act by the technical and constricting interpreta-
tions placed upon the language of the Act in the cases. It has been
pointed out that two basic principles conflict in English law; on
the one hand there is the idea that an owner is not lightly to lose
his property, borne out in the way the courts have approached the
question of estoppel; on the other there is the idea that commerce
requires the protection of persons who buy goods in good faith even
though the seller may turn out to have no right to sell. From thui
doctrine emerged the idea of the ostensible or apparent authority
of an agent, which became extended by the Factors Acts during the
nineteenth century,** until, it is suggested, the wider authority con*
feixed upon mercantile agents (within the meaning and limits lain
down in the Act of 1889 as interpreted by the courts) can !:
to be a species of implied, rather than apparent authority, since tt
is permanently attached by the law to such an agents express
authority, and not dependent upon a reading of the particular facts
in any individual case.** Be that as it may, it is suggested that, it
may be unfortunately, the law has inclined against broadening the
scope of the Factors Act, as it has against enlarging the scope of the
other exceptions to the nemo dat rule here under consideration.
(iii) Market overt**
Where goods are sold in market overt, according to the usage of

the market, the buyer acquires good title, provided he buys in good
faith and without notice of any defect or want of title on the pad
1# 119491 1 AH E R. 47.
so Waddingion & Sons y Neate d Sons (1907) 96 L.T. 7B6.
SI Pearson v. Rose & Young Lid , supra, at pp 286~2B7, per Denning L J.
gale Motor Finance Corp Lid. V. I^nsport Brakes Ltd. [1949] 1 K.B. 322 a
pp. 336-337, per Denning LJ.
*s Eastern Distributors Ltd. v. Goldring [1957] 2 Q B. 600 at pp 607-611.
Devlin J.
ss See Fridman, op. cit., pp. 184-185.

S4 Fridman, op, cit., pp 194-195.
SALES WITHOUT TITLE
117
Of the seller. A market overt is an open, public and legally

constituted market. It may be constituted such by grant, prescrip-
tion or statute. Hence in Bisliopsgate Motor Finance Corporation
Ltd. V. Transport Brakes Ltd?' Maidstone market was held to be a
market for this purpose since it had been created by a statute of
1824. But constitution as a market under some local law will not
suffice. Within the Qty of I-ondon every shop is a market overt so
far as the sale of goods ordinarily sold in such a shop is concerned.
The goods must also be sold in the ordinary hours for doing business,
and on normal business days, during the day and in an open part
of the shop. Hence an upstairs auction room was held by Scrutton J.
not to be a market overt in Clayton v. LeRoy?^ The sale must be by
the shopkeeper not to hint.** The idea behind the doctrine would
seem to be that if someone not an owner sells goods in the normal way
in his shop (in the City of London) or at a market (outside the City),
in circumstances in which the element of publicity is attached to the
sale,* as opposed to some secretive attempt at disposing of. e.g.,
stolen goods (by way of dealing with them as a fence ), such a sale
should be upheld if the purchaser has acted in good faith and without
notice.*' It is the purchasers state of mind which is important, not
the sellers. The seller may be dishonest : he. too. may be innocent.
But his mind is not relevant. What is important is whether he has sold
the goods in the normal way. Hence a sale of plate by a scrivener
was held not to come within the scope of this exception to the nemo
dat rule in the classic Case of Market Overt.*^ But a sale of a car by
private treaty, such sales being permitted by the usages of the market,
where a sale by auction failed to materialise, was held to be valid in
the Bisliopsgate Motor Finance case.**
By section 24 (1) of the Sale of Goods Act the property in the

goods sold in market overt may revest in the original owner* (or
** SGA- s. 22 (1). This does not apply to sale of horses. Ibid, s, 22 (2), or to
Scotland, ibid. s. 22 0>.
Lfe V Sayes A Robinson (1856) 18 CB. 599 at p. 601, per Jems CJ.
11949] 1 K.B. 322.

* 11911] 2 K.B 1031. Cf. also Arâth Tobacco Co. Ltd. v. Oeker (1931) 47 TL R.
177 in which, obiter again, the question whether the sale must be m an open shop
was considered
* JIargreave v. Spink [1892] I Q B. 25; Ardath Tobacco Co. Ltd, v. Ocker, supra
See Hargreave v. Spink, supra, at p 26, per WiUes J. Cf. the judgment of
Scrutton J. in Clayton v. LeRoy, supra.
t As to which sec I>enning LJ. in Blshopsgate Motor Finance Co. Ltd. V. Transport
Brakes Ltd. [1949] 1 K.B. 322 at p 338.
0596) 5 Co Rep. 83b.
As to the meaning of owner see BuOer A Co. Ltd. v. Brooks Ltd. [19301 All
E.R.Rep. 534.
118
THE TITLE OF THE SELLER
his personal representative) if the goods were originally stolen acd

the offender has been prosecuted to conviction.* But this does not
apply where the goods were obtained by fraud or other wrongful
means not amounting to larceny,** or if the sale in market overt was
by a mercantile agent and the Factors Act, 1889, applies to the
transaction.*^ Nor, despite the revesting of title in the original owner,
will any innocent intermediate parties who have dealt with the go^s
be guilty of conversion, as long as they acted before the conviction
of the thief, since, at the material time, they would have been buying
from one who had title by virtue of the doctrine of market overt.
(iv) Sales under a voidable title
If the seller of goods (whether or not he is in possession of thein

at the material time) has a voidable title to them, he will pass good
title to a purchaser from him who buys in good faith and without
notice of the sellers defective title, if such title has not been avoided
at the time of the sale.** If the seller is in possession of the pods,
or the documents of title to the goods, the transaction with ^
innocent purchaser might be valid under section 25 of the Act
Whether or not that section applies, an innocent purchaser can acqui^
good title from one who has only a defective, since voidable, title
himself.
To acquire such a title the seller must have gained possession

of the goods under a contract with the true owner, such contract being
valid imtil determined by the true owmcr on the basis of fraud or
mistake However, this will only be the situation where the contract
with the true owner was a de facto contract. There must have been
a contract, albeit one which was voidable at the option of the owner
of the goods. If there was no such contract, either because the
contract was in fact a nullity on the grounds of mistake,* of
because the goods were stolen, obtained larcenously from the
true owner,** then no title of any kind passes to the person obtaining
the goods, who. consequently, has no title to pass to the innocent
purchaser from him.
* S also Larceny Act, 1916, t. 45; CHminal Appeal Act, 1907, for funJ>w poin**
relating to the operation of this nile.
i S O A. s. 24 (2).
T See lUpra, p 114, note 7.
M SG.A. f. 23.
> Jnfra. ^ ^ ^ _
* See! e.r v. MoiorUis" Advbory Age^X
119231 1 , ; . DavUon 119111 1 K.B. 463;
Folkes < ? , .
SALES WITHOUT TITLE
119
It is evident^ therefore, that a vital distinction exists between

contracts which are valid though voidable ex post facto and contracts
which do not have any legal existence at all ab initio because of the
mistake of the owner of the goods, and that an equally vital distinction
exists between obtaining goods larccnously, e.g., by a trick played
on the true owner, and obtaining them by false pretences, in cases
of which title, albeit voidable title, passes to the maker of the false
pretences, who can pass on a valid title to an innocent third party.
These two distinctions overlap, in that where there is a mistake which
makes the contract with the true owner a nullity throughout, the
fraudulent person contracting with the true owner, if he obtains
possession of the goods, will be guilty of larceny by a trick, whereas
if the mistake is one which renders the contract voidable on the
ground of fraud, the fraudulent person who obtains the goods will
be guilty of obtaining by false pretences. This distinction in the
criminal law is based upon the difference between a voluntary, though
fraudulently induced, parting with possession of goods by the true
owner, and a voluntary, though fraudulently induced, transfer of
property in the goods. Whereas this distinction is no longer of
importance in cases involving dispositions by a mercantile agent who
has obtained possession of goods with the consent of the owner,**
it is still essential where the sale is not by a mercantile agent but by
someone who is alleged by the innocent purchaser to have been
invested with a voidable title at the time of the sale.
The cases on mistake in the law of contract, up to and including

Ingram v. Little,*^ show how errors as to the identity of goods, the
nature of the transaction, and, especially, the identity of the other
contracting party (which has given rise to the greatest amount of
difficulty in this respect), affect the validity of subsequent transactions
by the fraudulent person. It is unnecessary here to repeat what has
been said earlier as to the effects of mistake on contracts of sale.**
All that need be said in the present context is that only where the
mistake is such that the contract is valid ab initio but voidable ex
post facto will the provision of the Sale of Goods Act now under
consideration apply.
A voidable title is a good title until a person entitled to avoid

elects to avoid it and does avoid it, in which case that which was a
title, though a voidable title, becomes an invalid title.** It is
Supra, p 114.
** 11961] 1 Q B. 31 : with which contrasl PhllUps v. Brooks [1929] 2 K3. 243.
** Supra, pp. 27-28.
tVhliehorn Bros. v. Davison, supra, at p 481, per Buckley LJ.
120
important, therefore, to determine whether avoidance of the title

has taken place and when it took place, since a sale to a third party
after such avoidance will not pass good title to such third party,
however innocent. In this respect the judgment of Lord Denning
M.R., which was upheld hy the Court of Appeal, in the recent case of
Car & Universal Finance Co, Ltd. v. Caldwell*^ is of the utmost
importance. In that case a car was obtained by false pretences from
the true owner. When the false pretence, which was the giving of a
cheque knowing it would be dishonoured, was discovered, the owner
informed the A.A. and the police, asking them to trace and recover
the car. By the time the car was found it had been bought by a firm
of motor car dealers who, on acquiring it from the fraudulent person,
immediately sold it to a finance company who eventually sold it to
another finance company. Lord Denning held, inter alia, that when
the owner informed the police and the AA. he effectively rescinded
the contract with the rogue who purported to buy the car from him.
and successfully avoided the voidable title thereby acquired. This
meant that subsequent dealings with the car were ineffective to bar the
owners title. Lord Denning stated categorically that communication
of an election to avoid a voidable contract or title is not necessary,
where such communication is impossible, as long as the person
concerned takes all possible steps to regain the goods.*^ The Court
of Appeal agreed with this where the impossibility of communicating
such election was the result of the fraudulent conduct of the person
with the voidable title, even though the effect of permitting avoidance
in this way, as opposed to the normal, generally accepted method of
telling the other party that the contract was avoided, was that an
innocent stranger to the original transaction might be deprived of the
goods which he bought directly or indirectly from the fraudulent
party. But the Court of Appeal left open what the situation would
be if the impossibility of communicating the election sprang from the
innocent act of a party who had obtained goods as a result of an
innocent misrepresentation. In such cases, it might be thought, there
was not the same justification for enlarging upon the ways in which
a decision to avoid a voidable title may be effectively expressed so
as to bar the operation of section 23 of the Sale of Goods Act.**
The later case of Newtons of Wembley Ltd. v. Williams ** followed

this decision and applied it to somewhat similar facts. In this case
11965J ! QO. 523.
IblJ. at p. 532.
tbU. at pp. 531-552, per Sners U.; p. 533, ptr Lord Upjohn.
|t9fyi 2 AH E.R. 135.
SALES WITHOOT TOXE
121
the owners of the vehicle which had been obtained by false pretences
took various steps to trace the fraudulent person and the car, including
sending a stop notice to the Hire-Purchase Information Bureau.
It was held by Davies LJ. (and affirmed by the Court of Appeal)
that the owners had effectively avoided the contract of sale made by
them and had thereby brought the voidable title acquired by the
fraudulent buyer from them to an end. However, the case was
distinguished from the CaWn-e// case on the issue of good faith and
lack of notice of the defective title. In the Caldwell case it was held
by the Court of Appeal (reversing the decision of Lord Denning on
this point) that the first finance company which bought the vehicle
did not have notice of the defective title of the person who obtained
it from the owner by the false pretence as to his ability to pay for it.
This decision was not necessary for the determination of the case,
in view of the way the court approached the issue of avoidance of
title. In the Williams case, however, the fact that the title of the
fraudulent person was effectively avoided by the owners did not end
the matter, since various provisions of the Factors Act, 1889, applied
to render the eventual sale to an innocent purchaser valid so as to
bar the original owners title. Such provisions of the Factors Act did
not have any relevance b the situation in the Caldwell case.
It appears to have been held in Whitehorn Bros. v. Davison that

in cases under section 23 of the Sale of Goods Act (as opposed to cases
arising under section 2 of the Factors Act **) the onus of proving good
faith and lack of notice of any defective title is not on the innocent
purchaser from whom the original owner seeks to reclaim his goods.
The onus of proving bad faith and notice is placed upon the original
owner.
(v) Sellers and buyers in possession
Under sections 8 and 9 of the Factors Act, 1889 (which alter the
previous common law), and under the almost exactly similar pro-
visions of section 25 (1) (2) of the Sale of Goods Act. 1893, a seller or
buyer in possession of goods or documents of title to goods has
certain powers to pass good title to a stranger who receives such goods
from such seller or buyer (or from a mercantile agent acting for such
seller or buyer) under a sale, pledge or other disposition (or, by virtue
of the Factors Act, under any agreement for sale, pledge or other
I1965J 1 QB. 560.
s* Supra, p 115.
122
THE nXLB OF HIE SELLER

disposition), as long as such stranger acts in good faith and without
notice of the previous sale (where he buys from a seller in possession)
or of the rights of the original seller (where he buys from the buyer jn
possession). The parallel provisions of these two Acts would seem
both to be in force as a result of the express saving of the Factors Act
by the Sale of Goods Act. Certain features of these provisions require
elaboration.
First, so far as dispositions by a seller in possession are concerned,

the seller must be in possession of (he goods under a contract of sale,
whether his possession is uninterrupted or is resumed subsequent
to the making of such contract. It would seem to be irrevelant to
section 8 of the Factors Act (and section 25 (1) of (he Sale of Goods
Act) whether the seller has such possession with the consent of the
buyer. Thus the delicate questions which once arose, though no
longer do so, under section 2 of the Factors Act, but still arise under
section 23 of the Sale of Goods Act, as to the character of the sellers
possession,* are not of importance in relation to these exceptions to
the nemo dot rule. As long as there is no break in the continuity
of the physical possession, the seller can pass title under tbJS
section, regardless of any private transaction between the seller aoa
the original purchaser which might alter the legal title under which
the possession was held. This was decided by the Privy Council lO
Pacific Motor Auctions Pty. Ltd. v. Motor Credits {Hire Finance)
Jjd.^' in 1965. overruling the decision in Sta^s Motor Guaranty
Ltd. V. Br. Wagon Co. Lrd..** which was said to be wrongly decided.
Possession through an agent will come within this provision. Thus in
City Fur Manufacturing Co. v. Fureenbond the seller sold furs t
the plaintiff. The furs, at the lime, were in Xs warehouse. The seller
then pledged the furs to the defendant. It was held that section 25 (D
applied, because possession, in section 25 (I), must be interpreted lO
* 5G A. 5. 21 (2) lot. Note also that mercantje agent has the same meaning io
both Acts by virtue of S Cj.A. s. 2J O) . . .
See Afirem Ltd. v. Ceorte Cohtn, Som A Co. Ltd. (1934) 50 T.L.R. 411. wnef
goods were in the possession of the selVr under a contract of manufacture.
* Contrast the position under *. 9 of the Factors Act and S C A. *- 25 (2), infra.
Supra, pp 114. 119.
t [19651 2 W.L.R. 881. , . _
* il9WI 2 K.B. 305, a seller who obtained possession under a contract of hlf^
purchase srai said to hold as bailee, not leHcr. C/. Oore t. Dore [19531 The Timet.
November 18, discussed by Afiyah, Sale of Goodt, 2nd ed , pp. 137-138,
the teller, having sold goods, agreed to store them until the buyer
possession. Held: that the surute did not apply to validate a second sale by the
teller. This case would seem to be ipc or Ttct now. If the seller agrees to kcP
goods for the time being, whether to enforce payment or to accommodate the
buyer, s. 25 (t) of the Act is nonethclcsi applicable.
' [19371 I AU E.R. 799.
SALES WITHOUT TITLE
123
accordance with the construction placed upon that word by section

1 (2) of the Factors Act, i.e., as including possession by someone else
on behalf of the vendor. Similarly, if the goods are really in the
possession of the sellers agent, though nominally in the possession
of such a person acting in his own behalf, as where there is a
colourable hire-purchase transaction between the seller and the agent,
the provisions now under consideration will apply should the seller
subsequently sell to another party.* The seller must transfer to the
third party physical delivery of the goods. An assignment by deed
is insuflBcient.*^ So, too, where the third party was already in posses-
sion of the goods, as warehouseman, a subsequent statement that the
goods were pledged to him as security for certain advances was held,
in Nicholson v. Harper,*^ not to attract the operation of this provision.
Hence if goods are bailed with X by the seller, and then sold to X,
the statutory provisions would not give X protection and title as
against the original buyer from the seller. It is to be noticed, finally,
that the purchaser from such seller in possession will acquire what-
ever rights he would have acquired if the person making the delivery
or transfer were expressly authorised by the owner of the goods to
make the same. This, like section 2 of the Factors Act. makes
transactions under this provision into examples of what may be
called statutory implied authority. The seller is an agent of the true
owner for the limited purposes of the statute. It is important, however,
to contrast this power of the seller to resell under this section of the
Sale of Goods Act (whether he is paid or unpaid) with his power
and, indeed, right, to resell where he is unpaid, under another provision
of that Act, viz., section 48.** Such resales are of a different
order from resales under section 25 (1) of the Act, and, indeed, do
not include pledges or other dispositions (which come within the
scope of section 25 (1)).
The provisions relating to sales by buyers in possession differ

in some particulars. Thus, in such cases the buyer must have obtained
possession of the goods, or documents of title to the goods, with the
consent of the seller.** Since both Acts deal with a person having
bought as well as one having agreed to buy goods, it would
seem that they are contemplating a situation in which goods have
been bought with the result that property therein has passed to the
*0 Union Transport Finance Ltd v. BaUardU 119371 t 510-

Kliio V. BilbU. Hobson & Co. (1895) 72 L.T. 266.
** 118951 2 Ch 415.
tnjra, pp 274-279.
S G A s. 25 (2) ; Factors Act, 1889, s. 9
124
THE niTE OF THE SELLER
buyer. If this is so then it would seem to restrict the rights of a

buyer who has obtained property in goods to dispose of them to third
parties, since under section 25 (2) of the Sale of Goods Act. or
section 9 of the Factors Act. he could only do so (a) if he has posses*
sion of the goods or documents titie as well as property io the goods,
and (b) if he deals with a third party who acts in good faith and
without notice of any lien or other right of the original seller in respect
of the goods. Such a conclusion is absurd, it is suggested, because a
buyer with property can dispose of title irrespective of possession of
the goods, he need not deal with pcRons who are in good faith, it is
not clear what good faith means in this context where the buyer
is owner as well as possessor, and, lastly, if the buyer has possession it is
hard to see what rights the seller will have with respect to the goods,
whether the seller is paid or unpaid. As will be seen. once the
buyer, who is also the owner, has possession of goods the seller will
cease to be able to exercise bis real remedies over and in respect of the
goods and will be forced to rely on his personal right of action for
price. Only if he recovers possession will his real remedies revive. If
so then the buyer will not ^ in a position to act under section 25 (2).
Therefore no problem would arise. Hence, it is suggested, the better
view of this provision is to treat it as expanding or enlarging the
power of a buyer without property in goods to transfer a title free
from any incumbrance existing in favour of the seller, not as restrict-
ing the rights of a buyer with property in goods.
Thus if the buyer has not yet acquired property he may transfer
title despite such lack, and if he has acquired property he may transfer
to someone who buys from him within section 25 (2), or section
9, a title which is free from any rights of lien, etc., which the original
seller may have in respect of the goods. .g., where he has not yet bwn
paid by the buyer, or is in possession of the goods, but has parted with
possession of the documents of title. It is necessary to mention here,
with respect to this last point, that a transfer of documents of title
may defeat an unpaid sellers right of lien, or stoppage in transitu.
under section 47 of the Sale of Goods Act, as well as under section
25 (2).*^ Indeed section 47 is wider in its effects, since section 25 (2)
only gives the same effect to a transfer by a buyer in possession as
would result from a delivery or transfer by a mercantile agent in
possession of the documents of title with the consent of the owner.
> C/. Atiyah, Sale of Goods, ZnJ , pp 13^140.
Itffra. pp. 231-279.
T S hire, pp 256-273, for thc rteMs and the content and effecu of *
the Sle of Goods Act.
SALES WTIIOUT TITLE
125
This may well be more limited, in view of the restrictive way section 2
of the Factors Act has been interpreted by the courts,* than the effect
of a transfer under section 47. However, there is a distinction between
section 25 (2) and section 47 in this respect in that the documents of
title transferred under section 47 have to be the same documents
received by the buyer, whereas under section 25 (2) other documents,
relating to the same goods, may effectively pass title to the person
talcing from the buyer in possession.* Thus the advantages of
invoking one of these provisions as against the other may be denied
by facts which may make such a selection impossible.
The specific statement in the statutes that the possession of the

buyer must be with the consent of the seller means that the problems
raised with respect to the similar woids in section 2 of the Factors
Act have arisen under section 25 (2) of the Sale of Goods Act. The
same result was achieved with regard to section 25 (2) as was reached
with respect to the Factors Act when, in Dtt Jardin Beadman Bros.
it was held that whether the requisite possession was obtained

by larceny by a trick or by false pretences the possession was with
the consent of the seller so as to permit the application of section 25
(2) to the protection of a purchaser from the buyer. Nor does it matter
that consent to the possession of the goods or documents of title to the
goods after having been given by the seller, is subsequently withdrawn.
This was decided in Cahn v. Pocketts Bristol Channel Steam Packet
Co'* where a buyer obtained a bill of lading to goods which he
transferred to the plaintiff on the sale by him to the plaintiff of the
goods represented by the bill of lading. When the goods were stopped
in transit by the original sellers, before they reached the plaintiff, it
was held that, by virtue of this section, a good title was acquired by
the plaintiff free of the sellers right to stop in transit.
Possession, i.e., actual custody of the goods or documents of title,

must be obtained' by the buyer in his capacity of a person who has
bought or agreed to buy goods. Hence a person who obtains goods
on approval or on sale or return will be in possession as a
buyer, not simply as a bailee, when he signifies his approval or
8 Supra, pp 112-116.
So held in D. F. Mount ltd. v. Jay & Jay Co. Ltd. [I960) I K.B 159, Infra,
PP 264-265.
^0 Supra, p 114
' virtue of s. 21 (2) (a) of the Sale

tvest property in ê original owner,
where there has been a disposition
* Q sec per Davies LJ. in Neyrtom of Wembley Ltd. v. Williams
11964) 2 AUER. 135 at p. 139.
126
acceptance or docs any other act adopting the transaction, or the time
for approval (or a reasonable time) has elapsed, within the meaning
of section 18, rule 4, of the Sale of Goods ActJ* Thus, a sale by such
a buyer on approval, etc., will at one and the same time amount to an
act adopting the transaction between him and the seller to him within
section 18, and to an effective transfer of title to the purchaser from
him within section 25 (2), as was held in London Jewellers Ltd. v.
Attenborough.* Before the buyer has done what is required by
section 18, rule 4. however, he will not be within section 25 (2).
Because of the requirement that the buyer must be in possession in
the capacity of one who has bought or agreed to buy goods, and not
therefore as the agent or bailee of the seller, it has been held that a
person who is buying goods on hire-purchase, Le., with only an
eventual option to buy. Is not a person who has agreed to buy goods
within this provision. Therefore a transfer by him to a third party
is not effective to bar the original owners rights and property*
However, in one case, where under the agreement of hire-purchase
the goods could not be returned to the original owmer, it was held that
the person buying on hire-purchase was a person who had agreed to
buy within this provision so that a disposition by him was valid. So.
too. where the agreement involved an obligation to buy, even if such
obligation w*as conditional.
Under the Hire-Purchase Act. 1965, a person who is buying

goods under a conditional sale agreement within the meaning ol
that Act (/.r., an agreement for the sale of goods for not more than
2.000 under which the purchase price or part of it Is payable by
instalments and the property in the goods is to remain In the scHer,
although the buyer has possession, until such conditions as to the
p3)-ment of (he instalments or otherwise as the agreement specifies are
fulfilled) * Is not a person who has bought or agreed to buy goods for
the purposes of the provisions here being considered. However, t
must be noted that, under the 1964 Act.** a bona fide private pur-
chaser of a motor sehiclc without notice of the conditional sale
T I>Ktltvx! rp ri9WJ 2
* *. SUf.hrT, |irl A.C 471; BAiv Motor Surttf Co. . Cot t'
I K n
F.-.-v MVlf Co IjJ . Clt75> 73 L.T. U6.
t r,/ F..V* Jinil 2 QB 3fl
Tt * uiuSo IlfllTJ 2 K.B 4*0. b ^hieh cooJ.t)oni1 uk m
f*rt *.*1 ef4km .*
ti.J I (ll. I 2. A liffw i-jf Orecr In Coti?0: Ow
I .
It Act. r?. tV fronitinr,* ct M.h i.V*cU tie cafttjSj Codoo
7V r--l et I Art t- cc< trn ritV4W.

sAus wrraouT title
i^y
Justice Act, 1965. By this provision a writ of fieri facias or other writ
of execution against goods (or anything else of his that may lawfully be
seized in execution) binds the properly of the execution debtor as soon
as it is delivered to the sheriff (or a county court registrar in certain
circumstances) to be executed. But this does not affect the debtors
title to such goods, or his power to pass a good title to such goods
(free of the incumbrance of the judgment debt) to a purchaser acting in
good faith and for valuable consideration, and without notice that
such writ, or any other writ by virtue of which the goods of the execu*
tion debtor might be seized or attached, had been delivered to and
remained unexecuted in the hands of the sheriff.* Thus if an execu-
tion debtor sells goods in market overt, or to a purchaser for value
who buys in ignorance of the existence of a writ out against the
sellers goods, the buyer will acquire good tille.^ However, this will
only result where the goods of the execution debtor remain unseized.
Once they have been seized, i.e., once the writ has been executed, then
even though the debtor remains in possession of the goods he cannot
pass good title, free from incumbrances, to a buyer from him, even if
such buyer acts in good faith and without notice.**
3. The Innocent Purchaser

Real and metaphorical titles
There remains only one further general point to consider. Al-

though it has been said that, in the circumstances discussed in the
preceding section, the innocent purchaser, who buys in good faith
and without notice of the lack of title on the part of the person selling
to him, acquires a good title to the goods he buys, this is not com-
pletely true in all the instances mentioned above. As is indicated in
the judgment of the Court of Appeal in the Eastern Distributors case,
there is a distinction between real and metaphorical titles. In some
instances, e.g., sales in market overt (as long as the goods were not
originally stolen), the buyer in good faith obtains a title which cannot
be defeated by any claim by (he original owner, even if the buyer
himself was not the purchaser in market overt but was a successor in
title to such a purchaser. Thus the effect of the transaction between
so A s. 26 (1), proviso. As valuable consideration need be given, a trustee in

bankruptcy is not protected, since he acquires title by operation ol law not by
Purchase: Re Cooptr [1938J Ch, 922.
^Voodtand v. Fuller (1840) 11 Ad. & E. 859. But if such a purchaser buys with
of the writ, he takes subject to the charge of the execution creditor.
^ Scottish Finance Ltd. v. Modem Cars and Caravans (Kingston) Ltd

11964] 2 All E.R. 732: discussed supra, p. 105.
F.S.O. 5
J30
THE TITIX or THE SILLER
the person without title and the first innocent purchaicr is to deter*
mine the original owTier's title and convey a real title to the fini
innocent purchaser and to those buying or otherwise acquiring frora
him. In some instances, however, notably, as the jodgment refer^ to
makes clear, cases of estoppel, which is a doctrine that applies w
personam and not in rem, the first innocent purchaser can only raJ
an estoppel against the original owner whose conduct gave rise to -
estoppel, or against the privies of such person, viz., his successors la
title by inheritance, personal representatives, etc. It might app^*
therefore, that an innocent purchaser whose claim to title is
estoppel might not be able to assert and prove his title to goods
against some third party, not a privy of the original owner, who ha
possession of the goods under some claim of title and refused
them up to the innocent purchaser. The question that was raised lO
the Eastern Distributors case was whether the cjcccption to the nemo
dat rule that is found in section 21 (I) of the Sale of Goods Act Js ao
instance of common law estoppel, which creates a metaphorical, *
real, title, or of some other doctrine, e g., that of apparent autlionly* lO
which cases the innocent purchaser from someone who has the appat*
ent authority of an agent to sell does acquire a real title good ^
and not merely valid in personam against the original owner and ws
privies.** ^ ^
It is not clear whether the doctrine of apparent authority Is

from or part of the doctrine of estoppel, or whether the rule set o
in section 21 (I) of the Act is an instance of estoppel, or apparen
authority.* Since successful cases of transfer of title by estoppel
rare, as are instances of acquisition by asserting the apparent authonty
of the seller to sell, it may well be that these questions are of
academic than practical interest. AH, therefore, that need be said her
is that, where the Sale of Goods Act and the Factors Act apply* ^
seller who Is in breach of the implied condition set out in section 12 ( )
of the Sale of Goods Act would seem not to have broken such con-
dition, but to have fulfilled his obligation to pass good title to t e
seller. If this is correct, it would appear that the curious situation
can arise in which a seller at one and the same time is and is not in
breach of an obligation arising under the Act. This suggests that. i
the Act is ever revised, what should be inserted in place of the preseo
condition in section 12 (1) is some provision that where title is no
acquired by the buyer (except where the parties have expressly of
# See Lloyds t Scottish Finance Ltd. y, Williamson [1965] t \V.L.R. S04, - . _

i Bui see the case dted in the previous note and Mercantile Credit Co. Ltd
Hamblin I19M] 3 AU &R. 5SO at p SOL per Pearson L.J
THE INNOCENT PURCHASER
131
impliedly excluded any liability for a failure to make title) the seller
should be liable to the buyer for breach of contract. From this it
would follow that, in situations within sections 21-25 of the Act.
where title was acquired by an innocent purchaser, there would be no
breach of any condition or other term the seller who, at the time
of the sale, had no title or right to sell.
Part III
CONTRACTUAL EFFECT OF THE

CONTRACT OF SALE OF GOODS
Qiapter 7
THE CHARACTER AND QUALITY OF THE GOODS
1. Express Undertakings as to tub Character and Quality

OP Goods
The general nature of representations

The problem for consideration in this section is the effect in law
of express statements about the character or quality of goods which
are the subject-matter of a contract of sale. Such statements take the
form of undertakings as to the nature of the goods or their fitness
either in general or as respects a particular purpose or use. They are,
in fact, representations about the gocMls which affect the making of a
contract of sale. It will be seen later in the chapter how such represen-
tations may be classified and how the classification of such represen-
tations affects their legal consequences.
Benjamin' defines a representation as a statement or assertion

made by one party to the other before or at the time of the contract of
some matter or circumstances relating to it.** Two features of this
definition require comment. In the first place, the moment of time at
which the statement is made may be of great importance as regards
the category into which the representation falls. If it precedes the
making of the contract, then it may simply be a mere '* representa-
tion, or it may amount to a collateral undertaking of some kind. If it
accompanies the making of the contract, then it may constitute an
express term in such contract. Though it may be pure chance that the
statement occurs at one particular point in the negotiations rather than
at another, it would seem that the exact point could be material. That
this should be so would appear to be illogical, since the real status of
a representation should not depend upon when it is made but rather
upon the intention of the parties as to its legal effect. However, it
would seem to be accepted that the time of making the representation
may be material in the way and for the purpose stated.
Secondly, the definition quoted above brings out the fact that a
representation may refer to any relevant issue, not only the character
or quality of the goods but also such other matters as the reliability
of the seller or the creditworthiness of the buyer. With representations
1 Sa!e, 8th ed , at p. 5S4.
135
136
not affecting the character and quality of the goods themselves the
present discussion is not concerned. Such representations may
the question whether the contract has come into existence
where the representation is as to the identity of a party and
a fundamental mistake which renders the contract void ah initio)-
They may have effect as conditions precedent or subsequent or w
ancillary or secondary contracts. In so far as they do, then they wtH
make a contract of sale conditional, in the sense in which that expres-
sion has been explained when dealing with the distinction betweei^
absolute and conditional contracts of sale,* or they will constitute
a separate contract binding the parties at the same time as t e
contract of sale they have made. The reason why represcnialions
as to the character and quality of the goods have been singled ou
for particular mention (and not referred to and discussed in relation
to conditional contracts of sale in an earlier chapter) is
Sale of Goods Act contains several provisions relating to imph
contractual terms of this kind (derived, as will be seen, from
common law developments before 1893). Hence such reprcsentati^
or undertakings may be separated from other representations
are subsidiary to the main issues in a contract of sale of 'jc'
the issues of property and quality (including the character of l
goods, since this may affect their quality or fitness). Whether W
goods are specific or are identified by some kind of descriptio
statements about the character or quality of the goods may ^ '
trusted with statements which arc extnnsic to the subject-inatter of

contract, such as, for example, statements about the character of on
of the parties. The problem that can arise, and causes some difliou y
when it does, is to determine whether a statement refers to
description of the goods or deals with something extrinsic, fo
example, a statement which refers to the present location of t c
goods may be a part of the description of the goods or it may be a
condition precedent.^
* Supra, pp. 27-28. _
Supra, pp. 15-21; cf, Bfnjamio. ep. <*.. pp. 581-598, for U/usfratioiw of
frequently encounter^ express conditions of this kind. ^
* St. ft-, the judgment of GonneO J. In VarUr r, JVMpp (I9001 1 Q D. 51 3 ' ^

In Maephertot, Train & Co. LrJ. r. Rau & Co. 7jd. 11935] 1
statement that goods were in s named ship due n London on a slated ^

held to be part of the description of the goods. In Btnabu & Co. v. Fnw
Broken Co. UJ. (I92l) 57 T.L.R. 09. 851, It was held that a
goods were on a named ship ** afloat " from Portugal was a cond/iion precedfli .
ef. also the judgment of McOirdie 3. in /. Anm A Co. r. Comptolr
11921] 3 K.B. aj5 at pp. 40441. The question is one of construction
esprees terms of the cootraci. It would seem that aoraefimes the courts eoolu*
EXPRESS UNDERTAKINGS AS TO CHARACTER AND QUALITY 137

It may well be that the distinction between difTerent kinds of
representations is irnportant only as regards the remedy available
to a buyer. In particular where a contract contains a clause exempting
the seller from liability for defects, and excluding the operation of
terms, whether express or implied at common law or under statute,
which would otherwise afford protection to the buyer in the event
of the goods being defective in some way, it may he that one way,
if not the only way, to circumvent what mi^t otherwise be the logical
and legal effect of such a contract is by the introduction of some
express representation which can be held to be binding, and upon
which the buyer can sue. The need to achieve such circumvention,
as will be discussed in due course, has also led to the criticism of the
way the law developed before 1893, and was crystallised in the Sale
of Goods Act, as regards the classification of express and implied
undertakings as to the character and quality of goods.
Representations, contractual terms and coDateral contracts
When a statement is made by the seller of goods about the

character or quality of goods, the effect of such statement differs
according to the category into which it comes. Any decision as to
such category depends upon the inlemions of the parlies as to the
effect of the statement and the construction placed by the law upon
such statement in the light of the intentions of the parties and the
surrounding circumstances. The basic distinction at common law is
between statements which are intended to be terms in the contract
of sale and statements which are meant by the seller, and are under-
stood by the buyer, to be mere inducements to the buyer to contract
for the purchase of the goods.* Statements of the latter type are of
different effect depending upon whether the statement in question
involves a fraudulent or an innocent misrepresentation.^ A fraudulent
misrepresentation, i.e., a misstatement which was known to be such by
the party making it, is always a ground for having a contract declared
condition precedent with a condition as lo description: see Fisher, Reeves <6 Co.
Ltd. V. Armour [19201 3 K.B 614. Whether any real difference results from treating
an express term of this kind as a condition relating to description or a condition
precedent may depend upon the subsequent conduct of the buyer, le., the effect
of waiver, the inclusion of an exception clause in the contract, and other factors.
See further, injra, pp. 143, 186-194
* CA the pre.1893 cases of Banrterrtuin t. W/ule (1861) 10 CB(ns.) 844 and

EopJdm V. Tanqueray (1854) 15 CB 130.
subject of misrepresentation see Cheshire andFifoot, Law of Contract
(oth ed , 1964), pp. 225-253; Anson, Prtneiptes of the English Law of Contract
(22nd ed . 1964). pp. 207-242 ; TreiteL Law of Contract, 1962, pp. 206-254. See
iurther, infra, pp 306-305. 331-333.
138
THE aiARACTER AND QUALITY OF THE GOODS
void and for claiming damages if it induced the making of ,

tract. It docs not make the contract void ab initio (unless it m
such a fundamental mistake in the mind of the other party ^ ^
the contract a nullity, e.g., a misstatement about the identity of

tracting party where such identity was highly relevant to the
of the contract*): but it does entitle the party deceived to
contract avoided, if he so chooses. An innocent misrepresentation^
a misstatement which was not known to be such by the party m
it. even if he were negligent in making it, docs not at commo
entitle the party who has been misled, and has contracted on t e
of such misstatement, to avoid the contract,* and, generally spra^ ^
does not, at common law, give him any right to sue for ^(5
equity, however, such an innocent misrepresentation may

relief of various kinds, though not to an action for damages.
and, if so. subject to what limits, such equitable relief is availab e

an innocent misrepresentation has induced the making of ^
of sale of goods is a question which will have to be considerro ^
later stage.* Here it suffices to say that, if such relief is
buyer, it is quite distinct from the remedies available to a buyer
the representation relied upon was a term of the contract of
though, in Leaf v. International Galleries.^' Denning L-J*
have equated innocent misreprcsentatious giving rise to equi
relief with contractual terms giving rise to remedies at
so far as distinguishing types of representations and the resp^^
forms of relief appropriate to each is concerned.
Where an innocent roisrepresentafion was negligently made.

at common law, unless there were a fiduciary relationship between
parties,'* no liability would arise on the part of the person ma ^
the representation and no action for damages could be brought aga
him. As was said on many occasions, an action for damages w
not lie for an innocent misrepresentation unless

such misrepresentaimti
* C/. Ingram v, Litih fl961I 1 QB. 31: tupra, pp. 27-28. #ndame<'*
* However, if such niisrepresentalion was the basis of a mhtake of s nm
nature on the part of the parties it render the contract a nuluo- . ^
depends on the nature of the mistalcC. at common law, te., was it to
i . , . . , . enn otf.
. .. o.
. . . . . ... . . 1 L.T.
was a contractual term. The only situations in wWch such an action

could be maintained were those in which the person making the
representation owed a duty to the person to whom the representation
was made to use care in making such statement. Until the decision of
the House of Lords in Hedley Byrne & Co. v. Heller & Partners,^* in
1963, it would seem that the situations in which such a duty of care
was owed were rare. As a result of that case, the exact effects and
ramifications of which are still a matter of debate, it may be that there
is now a more widely effective remedy for an innocent misrepresenta-
tion, negligently made, on the faith of which a person has been
induced to enter into a contract of sale, even where such representa-
tion is not a term of the contract of sale itself.** This, too, is a matter
which must be considered in greater detail at a later stage.**
The dichotomy between representations and terms of a contract,

however, has been upset by the introduction of a third idea, the
concept of the " collateral contract. ** In appropriate instances, a
statement, on the strength of which a buyer enters into a contract of
sale of goods, may not be a term of the eventual contract of sale, but
may be more than a mere representation. It will then give rise to
an entirely separate contract.** breach of which (e.g., the failure of the
goods to come up to the standard they were represented to be by the
statement) can give rise to an action for damages against the repre-
sentor, i.e., the seller, even if the main contract excludes his liability.
Thus, whether a statement is a * mere representation (and if so

whether it was fraudulently, innocently, or negligently made), a
representation which is the basis for a collateral contract, or a term of
an eventual contract of sale of goods, is something which may well be
vjtal so far as concerns the position of a buyer who has bought goods
which in character or quality fall short of what he believed they were.
> HeUbut, S}mons & Co. v, puckJtlon II9I3J A C. 30 at p. 48, per Lord ^fouIton;
flarrison v. KnowJet <5 Foster 11917] 2 K.B. 606 at p 608, per Baifliache J.
** 11964] A.C. 465.
** C/. Stevens, Hedley Byrne v. KcUer;' Judicial Creativity and Doctrinal Possi-
Dility (1964) 21 M L.R, 121, espeewDy at pp. 155-160.
* Infra, pp. 304-305.
Qieshire and Fifoot, op. dl , pp 53-56; Anson, op. dr., pp. 117-118; Treitcl,
op. rt/, pp, 210-212; Weddertwm, Collateral Contracts (19591 CLJ. 58. It
ûid seem that the doctrine arose origuially in relation to contracts for the sale
^ ol land, but may have spread to contracts for the sale of goods.
-g.. where A induces B to contract with C by stating that the goods C Is selling
ol excellent quality: there wouM be a contract between A and B; see the
judgment of Edmund Davies J. in IPefli (Aferstham) Ltd. r. BudJand Sand &.
SiUca Co. Ud. (1964J I All E.R. 41: Infra, p. 146.
140
TIIE aURACTER AND QOALITV OF HIC GOODS
WarraoUcai and condKloos **
At this point something must be said about the two classes info
which contractual terms are said to be divided, viz., warranties and
conditions.
Prior to the Sale of Goods Act. the common law developed two
distinct concepts. On the one hand, stemming from the law of ton
rather than from the law of contract, there was the idea of warranty
(/.e.. guarantee), which (a) Involved some statement or representation
intended to be binding as betw'cen the person making It and the penon
to whom it was made, and (b) was regarded by the courts as heln^
ancillary to the main contract. It would seem that, in developing
concept, the courts were attempting to distinguish statements whi'?
could be construed as contractual promises (e.g., that a partJcmSf
horse, which the representor was selling, was sound) from others
were designed only to influence a purchaser towards buying, f-c., do'
contractual promises, or mere** representations (e.g., that there was a
ready market for articles of the sort that the seller was selling)-
case of Oscar Chess Ltd. v. WUUatns ** Denning LJ. ?
*' warranty in (his sense as describing, in ordinary English, *' !
ing promise. During the nineteenth century, in what may be regaror

as the formative period of the law of sale of goods, mafly
investigated the meaning and effect of warranties in this sense.* _
would seem from these cases (bat such ancillary contractual pronJisffS
could be regarded either as forming independent promises. In tbeffl*
selves contractual and binding, or as terms of the contract eventually
made by the parties. In the case of Street v. Blay,** in 1831.
held that for breach of a warranty, once the property in the gonds
had passed to the buyer, the buyer had only a remedy in damage-
he could not then reject the goods. The development of the case
dealing with warranties between 1831 and the date when the Sale
Goods Act was drafted led to the definition in that Act of warranty
as an agreement with reference to goods which are the subject of a
contract of sale, but collateral to the main purpose of such contract,
the breach of which gives rise to a claim for damages, but not to n
i> Reference should be made to the following [or historical discussion and tnodt^
analysis: Prosser, The Implied Warranty of Merchantable Quality (1943) z*
CB R. 466 at pp 447-451 ; Sfoljar. * Conditions. Warranties and Descriptions
Quality in Sale of Goods 0952) IS ML.R. 425; (1953) 16 MXJt
Reynolds, Warranty, Condition and Fundamental Term (1963) 79 L.O-F-
at pp. 534-540.
s [19571 J All E R. 325 at p 327.
*s Sloljar, 15 M L R, 425 at pp. 432-441

ss 0831) 2 B. <& Ad 456.
right to reject the goods and treat the contract as repudiated. ** A

warranty was a subsidiary term in a contract. **
Alongside this development, the courts formulated a distinct con-

cept, that of condition. The expression condition, so far as con-
tracts are concerned, has been shown to have many varying meanings.*
Originally it would seem that it was taken over from conveyancing and
used to refer to requirements which had to be satisfied in order to
produce a binding contract. In this respect a distinction was drawn,
as earlier seen, between conditions precedent and conditions sub-
sequent.** However, another use of the expression arose in and out
of the cases on sale of goods which involved problems relating to
the character or quality of goods, particularly cases involving the sale
of goods by description. It emerged that a statement as to the nature
of the goods, by which the goods were identified (e.g., a secondhand
Bugatti car was a statement which made a contract of sale of goods
a sale of goods by description, as a result of which a failure to deliver
goods of such description was a breach of contract which entitled the
buyer to reject the goods and regard the contract as repudiated by the
seller. Where the goods which were sold were not identified by words
of description, but could be regarded as specific goods (e.g., this horse),
no such terra could be incorporated in the contract. The obligation of
the seller was to deliver the item specified, failure to do which would
amount to a failure of consideration, entithng the buyer to refuse to
pay or to recover what he had paid.** Terms which dealt with descrip-
tion were therefore regarded as fundamental to a contract of sale, and
were thus also given the appellation condition, possibly on the
ground that they were similar to what were accepted as conditions
precedent or subsequent, in that the failure of the stipulated event to
materialise resulted in the failure of the contract itself to become valid
and bindmg. In this way the concept of condition, which came into
existence in order to describe statements which were regarded as
enshrining essential requirements for the validity of a contract, was
broadened to include terms of a valid contract which were regarded as
so essential or fundamental as to entitle a buyer to treat the contract
as repudiated if they were broken, i.e as what Denning LJ. in the
** S.GA. 1. 62 (1).
! 2T' 119571 1 All EJl. 325 t p. 32S, per Denning LJ.
^ Stoljar, The Contractual Concept ot CondJtion ** (1953) 69 L.Q.R- 485.
"Pw. pp. 19-20. Such conditioiu were diflerentiated from warranties"
, r, terms of a contract of safe: Benjamin, op. eit. at pp. 557, 661.
15 M.L.U, 425 at pp. 438-441. Any other failure, e.g., where the goods
were the right goods but faulty in ttuality, become a breach of M/OTrmty.
142
Oscar Chess case called *' vital terms in a contract of sale of

goods. It seems that the misapprehension and confusion may havs
resulted from the failure to notice that what were really being dealt
with were different kinds of promises, viz., dependent and independent
promises, the breach of which produced different effects in law.
that as it may, the extended sense of the expression condition
received statutory approval (though it was not expressly incorporated
in the Act) in the Sale of Goods Act, in which not only is the distinc-
tion between specific goods and goods sold by description
important but also condition and warranty are differentiat
with regard to the effects of a breach of each type of term. Breaches o
condition give rise to a right to treat the contract as repudiated,
breaches of warranty give rise to a claim for damages, but not to a
right to reject the goods and treat the contract as repudiat
Whether a term is a condition or a warranty, under the Act, depen s
on the construction of the contract.** A stipulation may be a condition
though called a warranty in the contract. Furthermore, under we
Act, conditions may be waived, or a breach of a condition may be
treated by the buyer as a breach of warranty and not as a ground fo^
treating the contract as repudiated *: and, in certain circumstan^
which will be more fully explained and discussed later, the A
compels a buyer to treat a breach of condition as a breach oi
warranty, with important and far-reaching consequences. * ^
Thus, in the law of sale of goods, the words condition 8^

warranty have become technical expressions used to distinguis
vital terms in a contract, the breach of which gives the right to trw
the^ contract as at an end, from subsidiary terms, the breach c
which does not.
This distinction would seem, historically and as a matter

statutory construction, to be rightly confined to terms expressly
incorporated in a contract of sale of goods or implied into such a
contract by the Sale of Goods Act and other statutes to like effect. B
has also been applied, however, to statements not forming terms o
such a contract but otherwise having contractual effect, by way of a
* I1957I 1 AU E R. 323 at p 328.
** "'""Ucs and other Contractual Temu (193^ ]
S "* PF- 536-338 See supra, p. 136. note 4. a*
S.OJ^ II (1) conditloas as to description and conditions precedent.
Ibid.
* IbU.
M SC A. s. 11 (I) (a).
* S OA. 1. II (I) (<). PP 181-185. for discussion of $. II.
EXPRESS UNDERTAKJNGS AS TO aiARACTTR AND QUALIIY 143
collateral contract,"** and. perhaps even more unjustifiably and

illogically, to contracts other tlmn contracts of sale of goods. Recently
Diplock L.J. criticised this extended use of the distinction between
conditions and warranties and showed how it was incorrect in theory
and impracticable so far as concerned the solution of problems in
respect of contracts other than the contract of sale of goods.**
Whether or not such criticism is well founded, or will result in the
alteration of the law, at the present time, so far as the law of sale of
goods is concerned, the distinction between conditions and warranties
is undoubted and fundamental. It is therefore necessary, in consider-
ing the effect of statements as to the character and quality of goods
which are the subject-matter of a contract of sale, to bear such
distinction in mind, and to discuss the categories into which such
statements fall in the light of such distinction. As will be seen in due
course, the distinction between warranties and conditions, created
before 1893, and apparently eoshrinai in the Sale of Goods Act,
iQRy be archaic and iU-suited to the modem law of sale of goods.
This fossilisation of the law has produced particular difficulty in
relation to the exclusion of obligations appertaining to the character
and quality of goods, and has led to the suggestion that this distinction
is no longer exclusive or useful.**
The construction of representations
The test of whether a representation is binding or not would seem

to be the intention of the parties in the light of all the surrounding
circumstances. As far back as the time of Lord Holt CJ. it Was stated
that words which on the face of them appear to be simple representa-
tions of fact may, if the context so requires, import a contract of
Warranty.** The intention of the representor is all-important. This
Was reiterated in the leading case of Heilbut, Symons & Co. v. Buckle-
In that case, which was not concerned with the sale of goods.
Lord Moulton, in a speech which has become the basis for the
modem law, stressed that to establish a collateral contract strict proof
Was required of the intention to contract.* The intention of the
parties can only be deduced from the totality of the evidence.**
U CT* P-
uong Kong Fir Co. U3. r. Kawasaki Risen Kedsha 11962] 2 Q.B. 26 at pp. 65-70,
8 ? mTolving a stipulation as to seaworthiness in a charterparty.
M PP-
V Gardner (1684) 1 Sh. 68; Medina v. Stoughton (1700) 1 Ld Raym. 593.
* mu' A
144
Tirt aiAIWCIXR AND QUALITY OP THE GOODS
Despite what had been said in the earlier case of De Lafsallejf-

Guildford,* no decision on the issue whether a collateral contract ba
or had not been entered into hy the parties could be based as a matttt
of law on the distinction between knowledge of some fact which was
peculiarly that of the seller and knowledge of some fact which v,ai
shared by both parties. Lord Moulton was careful to differentiate a
warranty or representation relating to a specific thing from
question which arose when goods were sold by description and t
answering to that description became a condition of the contract
is not clear what Lord Moulton intended to convey by this;
sentations about either specific things or goods sold by
may be collateral contracts or terms of the contract of sale- ^ .
over, as will be seen later, the suggested differences between coua e ^
contracts and contractual terms may not be well founded, ^
principle or on the basis of the distinction made by Lord Mo
Later cases illustrate the principle contained in Heilbut, Syfio
V. Buckleton, . ^
Thus, a statement by an auctioneer at an auction that a ^

unserved was held in Couchman v. HiU ** to amount to a coha
warranty, for breach of which the auctioneer was liable,
main contract excluded liability for faults, imperfections and e
of description. In Harling v. Eddy** a statement by an .
that there was nothing wrong with a heifer was held to give nse
collateral contract, because the auctioneer said he would tase
heifer back if there were, and the exemption clause in the o
contract was held to be inapplicable. ' . . j
In the later case of Oscar Chess Ltd. v. Williams ** Denning

uttered a warning about the dangers involved in treating
agreements as being either collateral warranties or collateral con
tions, thereby importing into these different types of contrac
technical distinctions of the contract of sale of goods. As long ^
was made clear that there was a distinction between vital fermSp
breach of which gave the right to treat the contract as at an end.
subsidiary terms, which did not. then no harm was done.
essential, crucial question still remained; Was the representation
binding promise or only an innocent misrepresentation? This was
* 119011 2 K.IJ. 215 at p, 221, prr A. U Smith MR. .
* 11^71 K B. 554. Nole the problem of the legality of such collateral

Tailed by the editor of (he Law Reports, discussed by Evershed bf R. o 1
2 K.B. 739 at p 745. ^
* fl95II 2 K.B 739. Contrast with the decision in this case the Iangu*S*
Baitbsche J. in flarrhon v. KnawUs 4t Foxter 11917] 2 KJl <506 at p 6i0
* [1957] 1 All E.R. 325 at p. 328
question of law, not fact, and depended upon the conduct of the
parties, their words and their 'behaviour, rather than on their thoughts.
If an intelligent bystander would reasonably infer that a warranty was
intended, that would suflSce. The test here, as with contract generally,
was objective, not subjective.^
In this respect Denning L.J.** referred to two kinds of situation in

which a binding promise might be inferred from the circumstances.
One was where the seller stated a fact which was or should be within
his own knowledge, and of which the buyer was ignorant, intending
that the buyer should act on it and the buyer did act on it.*^ Though
this cannot be said to be universally true (to quote the language of
Lord Moulton in Heilbut, Symons & Co. v. Buckleton **), it was
possibly true, if the facts so proved. The second situation referred to
by Denning L J. was where the seller made a promise about something
which was or should be within his control.** But no collateral contract
was intended where the seller had no knowledge of his own, and
merely passed on information received by him from elsewhere, as
happened in Routledge v. Afe/Coy.** A further point was made by
Denning L.J. If an oral representation was afterwards rendered into
writing, it was good evidence that it was intended as a warranty (and
it may be added that warranty here might be said to include
"condition in appropriate cases). If it was not put into writing,**
that was evidence against a warranty (or condition) being intended.
But it was by no means decisive.
The question of writing has indeed caused much difficulty because

of the fact that proof of a collateral contract might involve the
An illustration Is provided by the recent case of Dick Bentley Productions Ltd.
V, Harold Smith (A/o/orr) Ltd. 11965] 1 WL.R. 623, in which it was held that the
statement as to the mileage done by a second-hand car, contained in the
speedometer reading, constituted a warranty, for breach of which the buyer
could sue. It IS interesting that Lord Denning M.R. stated that the onus was
on the seller to show that the tnisrepresatutmn was really innocent, that he
vras innocent of fault in making it, and that it would not be reasonable in the
arcumstanccs for him to be bound by it. Tbis, with all respect, is what the
Reform Committee, in its Report ot Innocent Misrepresentation (1962,
ppnd. 1782), recommended It is questionable whether It is in fact the present
law: see further, infra, p 303.
** U957] 1 All E.R. 325 at p. 329.
Couchman v. Hill, supra; BarUng v. Eddy, supra. Cf. also Harrison .

Knowles A Foster 11917J 2 K.B. 606
** [1913] A.C 30 at p. 51.
** 9/ ^^thster V, Hlggln [1948] 2 All E.R. 127 (a hire-purchase case); Curris r.

c/iemfeaf Cleaning Co. 11951] 1 K.B. 805 (a ease involving a contract for services,
cleanmg goods)
11954] 1 AU aR. 855, where the representation was false but no allegations of
iraud were made.
* This Indeed is what occurred in Routledge v, McKay, svpns.
146
THE CHARACTER AND QUiU.mr OF THE GOODS
infringement of the doctrine that parol evidence may not be intro-

duced to contradict a written contract, where the contract is in wnting.
The extent to which such oral collateral contracts may be
where the main contract is in wnting remains to be firmly detcnmn -
There are indications in cases such as Couchman V. Hill and Hapin$
V. Eddy (where, however, the contract was not completely in
that such technical rules will not be used to deny the validity and e
of collateral oral representations. But there is still doubt on
aspect of the modern doctrine of collateral contracts. *
One further point must be considered. This is whether there

any theoretical justification for and validity in the distinction between
collateral terms and collateral contracts.^^ Given that a represcnta o
is intended to have promissory, binding eflfect, /.c.. is not intM
and taken as a mere inducement to make a contract of sale, e ^
must be some consideration for the making of such representation i
is to have such effect. Where, as in some cases, the represent
is made by A to B and as a result B is induced to contract with
it is clear that the consideration for the representation by A i*
undertaking to contract with C But where the representation
by A, a potential seller, to B. a potential buyer, and as a result Jr
goods from A. it is difficult to see whether such representa i
constitutes a term in the contract of sale, whether collateral o *
wise, or a collateral contract. Indeed the two seem to
times it would seem that the representation is treated as a colJa
term and sometimes as a collateral contract. In the recent case
Wells (.Mersthani) Lid. v. Bttcklaitd Sand & Silica Co. Ltd** n
the buyer had bought goods from X on the faith of a
from Y that they were of a certain quality, Edmund Davies J. .
the buyer could bring an action against V when the goods fell s o
of the quality indicated. The learned judge, however, went furi e
than cases of this kind when he stated ** that as between A
potential seller of goods) and B (a potential buyer), two iogredicut

and two only . . . arc required in order to bring about a colJat^ta
contract containing a warranty: (I) a promise or assertion by A ^
to the nature, quality or quantity of the goods which B may reasona ?
regard as being made animo contrahendi, and (2) acquisition by B o
** Wedderbum, toe. Ht., tupra, note 17, at pp. 57-64, 8I--84.
* JblJ. It pp. 64-76.
See B'ovn . sheen & Richmond Car Sates Ltd. [ITSOJ 1 AD E.R. M02; Sha^^
Pier Ltd. y. Petel Products Ltd. {I95l| 2 K.B. 854; Andrews y. Uepkiwn [IW'J
1 OB 229; Wrfjfrbtim, loc, eit.. npra. note 17, t pp. 66-69.
1 All E.R. 41. '
* tbU. at pp. 45-4.
EXPRESS UNDERTAKINGS AS TO QIARACTER AND QUALITY 147
the goods in reliance on that promise or assertion. It would seem, on

this basis, that in all cases the consideration for the promise contained
in the representation is the making of the contract of sale, whether
the person making the representation is the seller or someone else
(e.g., a dealer who arranges sales between finance companies and
purchasers of goods). If this is so, then it is arguable that such
collateral bargains arc really part of the eventual contract of sale
where the representor is himself (he seller, and are not strictly
speaking collateral. Yet they are so treated by the cases. The
reason for this extension of the meaning of collateral contract
may well lie in the need to circumvent some principle of law which
would otherwise stand in the way of providing the buyer with a
rcmedy. In the case of sales of goods it may well be the rules
developed after 1893 as to the construction of exemption clauses.
As will be seen, the stringency of the law as a result of such
developments has led to the need to create novel doctrines to afford
protection to buyers.
Thus, it may well be that whereas there is said, in some instances,

to be a distinction between collateral terms and collateral contracts,
no such distinction really exists. The courts merely classify a
representatioa as a term or a separate contract in accordance with
the needs of the particular case. Only where a third party (not a seller
of goods) is involved is it completely necessary to speak of a collateral
contract.
Finally, in relation to the construction of representations, a point

raised earlier must be reconsidered. This is the effect of the time at
which the representation was made. It would seem that, in determin*
mg whether a statement is a representation, collateral contract (or
collateral term), or a term in the contract, some reliance must be
placed upon the point during the negotiations at which the statement
Was made. The further away from the making of the contract it
was made the more likely is it to be construed as a collateral
argain (if it is given any legal effect at all). The closer it is to the
moment of contracting the more likely it Is to be regarded as a term
of the contract. Yet even this is not always so. For, in the last
analysis, it would seem that the courts will construe such representa-
mns in the light of giving effect to their binding nature, once it has
II !oe. elt. at pp 69-75
** 'fra. pp. 186.194
148
TTIC OMRACTTR AND QUMITT OF TlfC GOODS
been decided that the representation in question was intended to ^

binding.*
2. Implied Undertakings as to the Qiaracter akd

Quality of Goods
Terms implied by custom or from tacit figreemcot
In accordance with the genera! law of contract, there may tc

implied into a contract of sale of goods terms additional to those
expressly agreed between the parties.* The implication of such le^
may result from the operation of some custom or usage which sS
parties in the trade, business or market in which the seller and baye
arc dealing, or from the surrounding circumstances, as a consequea^
of which it is reasonable to infer that the parties have impliedly
to contract subject to the suggested implied term. The Sale a
Goods Act*^ recognises that the situation of the parties ,
aflfected not only by express agreement (which has been coasiac
in the previous section) but also ** by the course of dealing
the parties, or by usage, if the usage be such as to bind both
to the contract. Indeed, as regards the particular issue of the
or fitness of goods for a particular purpose, it is expressly
in the Act* that an implied warranty or condition as to
or fitness for a particular purpose may be annexed by the usage
trade to a contract of sale.
A custom or usage, to have such effect, must be notorious, ccrtaiR

and reasonable and must not offend against the intention of 9^1
legislative enactment.* Nor must it be inconsistent with the tenor
of the document as a whole. ** If the contract is in writing, therefore,
the question whether an alleged custom is operative will depond no
Under the Unifonn Sales Act s. 12. - anr affirmation of fact or any
the seller relating to the goods is an express warranty if the natural
such affirmation or promise is to induce the buyer to purchase the goods ^
huyw purchases the goods reiyug thereon.* But affirmations of th^yaw ,
would
ses and
as beeo
part
t21 cot
eed tfie
t S.GA s' 55 ' PF- 28-29.
/bU. i i4 OX
** Anson, op cit^ p. 129.
* I^ôn Export CorporaUon Ltd. r. JubOee Coffte Roasting Co. [1958J I

661 at p. 675, per Lord Jenkins.
IMPLIED UNDERTAKINGS AS TO CHARACTER AND QUALITY
only Upon the generality and certainty of the custom but also upon
whether such custom is reconcilable with the express written terms
of the contract.*
The theoretical basis of the incorporation of customs as implied

terms of a contract of sale is that, by not expressly contracting in a
manner to exclude such customs, the parties may be taken to have
tacitly agreed to be bound contractually by any custom of the trade,
business or market which may be said to be known to them by virtue
of their general dealings therein. The implication of other terms,
however, is based upon a sUîly different idea, namely, that, although
nothing has been expressly agreed as to a particular feature of their
contract, the circumstances and the conduct of the parties lead to the
inevitable conclusion that, had their minds been directed to such
feature, the parties would have said expressly what is later alleged
to have been agreed implicitly. Such a conclusion may be justifiable
for one of two reasons. In the first place, under the doctrine of The
Moorcock^'' as a matter of law, terms may be implied into a contract,
where such implication is not ruled impossible by virtue of the express
agreement of the parties, in order to give efficacy to the transaction
and to prevent such a failure of consideration as cannot have been
within the contemplation of either side. But this doctrine, as has
been stressed on many occasions, is of narrow application, and its
wquirements are stringent.* It may well be that, in the law of sale
goods, the doctrine of business efficacy is of minor, if any,
importance. Secondly, where the parties have previously transacted
contracts of a similar type to the one the construction of which is in
question, and have included certain terms which are not expressly
agreed in such later contract, it may be possible to infer, as a matter
loot, that they must have intended to contract on the same basis
as the earlier contracts.* In the recent case of McCutcheon v.
^cBrayne Ltd.,'^ which was concerned with a contract of carriage,
not of sale, the House of Lords made it clear that, merely because
such previous dealings, terms were not necessarily to be implied
which were omitted in a subsequent contract. " Previous dealings are
Broktrs Co. Ltd. v. Olympia Oi! & Cake Co. Ltd. [19161 1 A.C 314.
w Lord Eldon v. Hedley Bros. (19351 2 K B. 1 on cusCom in the hay trade as to

er property.
* (1889) 14 PJD 64.
e * P*'" no'ron Lj,

T 9 n f" Pîabmun Kismeshwar 11950] 1 AU E R. 51.
rtttoi * ^Pfa.
UWl I ah E.R. 430: see also HardwtOc Game Farm r. Ltd. 11964]
* Uoyd s Rep. 227 at pp. 268-269.
150
Tire CHARACIIR AND QUALITY OF THE GOODS
relevant," said Lord Devlin, only if they prove knowledge of the

terms, actual and not constructive, and assent to them." If
dealings show numerous agrecmcnls to a particular term by a party
who knew of such term, there is a basis for saying that such tenn
can be imported into the last and latest transaction. But such
is not conclusive as to the inclusion of such a term. EvcrythiaS
depends upon the circumstances.
It must be remembered that if the contract is in writing

more difficult to introduce an implied term, whether the imphca
arises from custom or tacit agreement, because of the
parol evidence may not be given to vary or contradict a '
document.** If such implied term adds to or interprets the
provisions of the written contract, it will be accepted. If it
effect of going against what is written, it will not be admitted. ^
the contract is entirely or panly oral, then it will be easier to intreo
evidence of implied terms based on custom, business efficacy,
previous dealings between the parties, though it will still be .
to prove strictly that it was (he intention of the parties to be bous
contractually by such term or terms.
Terms implied by statute
Under certain provisions of the Sale of Goods Act, which appj

to contracts of sale generally (except conditional sale agreem^ls un
the Hire Purchase Act, 1965 ), and certain other Acts, which app ^
only to sales of particular commodities,
a contract of sale of goods, unless anyth!
contrary by the parties. The statutes
contracts of sale are designed to protect consumers, in respect ol rtic
character or quality of the goods concerned, for especial reasons-
The provisions of the Sale of Goods Act reproduce in statutory fp
the earlier common law developments, referred to in the prcvwi*^
section of this chapter, as to conditions and warranties of dcscript'^n
and quality in sales of specific goods and sales of goods by descript'O*
and in sales by sample. Those common law developments came abo
by way of reaction to the earlier doctrine of the common law whic
was that of caveat emptor, that, in the absence of fraud or express
terms may be imphw i

ng is expressly agreed to t e
which deal with particular
t* (IWl I AD E.R. 430 ai p 437. ^
Jarvbs V, flitiarla A Ctnrral Plamattont Tmr Lid. fl924} t Oi. 2S7 at p

XVT P. O Lawtcflce J.
* Act. 1965, t 200} Tor the definitJon of the arfeerontti in qaentjcm,
tee ibu. tv I ( 1 3 . 3 : turn*, p.
IMPLIED UNDERTAKINGS AS TO CHARACTER AND QUALITY 151
agreement by the seller, he was not liable to the buyer should the
goods lack the character or quality expected of them by the latter.
There was no guarantee of quality unless an express guarantee (i.e.,
warranty ) was given. As will be seen, despite the Act. it may still
occur that no such protection, liability or guarantee arises in respect
of a contract of sale of goods, because of the express exclusion of
the otherwise relevant and operative terms. Before considering how
far the statutory attempts to oust the doctrine of caveat emptor may
be nullified, it is necessaiy to see the extent to which that Act, as
interpreted by the courts, and other relevant statutes, have affected
the earlier. common law.
(i) Under the Sale of Goods Act
(a) Description
Where there is a contract for the sale of goods by description, it is

provided by section 13 that there is an implied condition that the goods
shall correspond with the description. If the sale is by sample as
well as by description, then, in addition to the other requirements of
a sale by sample,^* the bulk of the goods must correspond not only
with the sample but also with the description.^* Two problems arise
under this provision of the Act. The first is : when is a sale a sale
hy description? The second is : when do goods correspond with their
description?
Sales by description
The meaning of description is open to doubt. It may refer

to factors relevant to the definition of the goods or to other attributes
which are stated and believed by the parties to apply to defined goods,
ûs, it has been argued that there is inherent confusion in the use
of the word description " in the Act between identification of goods
PP; 175-178.
in Unifomi Sales Act, s, 14, contains a similar provision to Uiat
j- Uie Ainerican legt^tion, having abolished the condilion-
thffn f refers to the sUtutoiy term as an implied >*wrHnf^. Under
Commercial Code, there is no equivalent implied warranty. It is

2-313 (I> (b) that there may be an express warranty that
parte ^.'"7'
R wot . ' . '
be c .....
TOchf
bold t
clause
ti. Andrews v. Singer
&. Co. II9MJ 1 K.B. 17.
152
THE aiARACTER AND QUALIIT OF THE GOODS
afld characterisation of them. The importance of the difference ay

lie in this : that if goods are identified by description and the wron|
goods are delivered (e.g., as where beans arc delivered and the
specifies peas, the classic example given by Lord Abinger in
V. Hopkins^*), the buyer may refect the goods proffered ^ ^
delivery, and claim for a breach of contract/' and an exemp
or exclusion clause will not release the seller from liability for bre^
of contract since he will not have fulfilled the contract in any
but if the description goes merely to some characteristic of Ih B
an exemption or exclusion clause. If appropriately worded, may ^
in the complete release of the seller from any kind of ^ .
breach of contract.*' It is clearly vital to determine what esen
tion really involves. .
Unfortunately, it is suggested, the cases do not

distinguish one use of description * from another, and sewn c
the need for goods sold by description to correspond
description indiscriminately as referring to goods of the same to ^
and goods of the requisite character. It is possible to go
to say that, where no exemptioo clause is involved, and
is simply whether the contract has been performed in
with its express and implied terms, description will be taken .
to character: where an exemption clause is involved, then, in ac

ance with the doctrine of construing and applying such clauses s
against the party in whose favour such clause operates, the courts s
to be prepared to treat description as referring to identity, so as
avoid the conclusion that the exemption clause protects the sc
from liability.
Thus the following characteristics have been held to be

the description of goods sold so as to make the contract a sa
description; the age of a machine, the number of tins in a case.
* See generaHy, AfonCrose, *T7e Operation of Description in a
Goods ^1937) 15 Can.BR^76a; Stoljar, V ; 0^^^
Son
yigefs
. , j A Peal
1 C/. inim. w loo-jee tieitcr uw suetceaiiun Or me uouuiiuiei- on
Protection (1962, Onnd 178J). tntas. 45^59, that the condition a* to con^^^.
dence with description should he Irreroeably implied save as to auctio'
descriptions
J Xarler . XVMpp 11900} I Q.D. 513.

*s R* Moore A Co. and Landauer A Co. (ti^tl 2 K.B. 519.
IMPLIED UNDERTAKINGS AS TO
oiaracter and quality 153
the date of arrival of a ship in which the contract goods were being
transported,* the length and width of rolls of rubber, the average
weight of carcases of frozen meat,* the weight of starch in bags,
the shipment of goods under the deck and not as deck-cargo. In
contrast a reference to boots as waders,** which would seem to he a
word of identification rather than character, was not pail of their
description.* On the other hand, it would seciUt from what was said
by Channcll J. in Varley v. Whipp?'* that even where specific goods
are being sold, the sale may be one by description, at least as long
as the buyer has never seen the goods in question. The most usual
application of the rule about sales by description was no doubt to the
case of unascertained goods (in respect of which the description
of the goods clearly operated for the purpose of their identification);
hut it also applied to cases involving specific goods, unseen by the
buyer, where there was no identification otherwise than hy descrip-
tion. This would suggest, unlike the cases referred to above,*^ that
description and identification are Interchangeable. But in Rapalli v.
K. I, Take Ltd.* it appears to have been suggested that there was no
diilereflce between breach of warranty of quality and departure from
description, U., that both were concerned with the character, not the
identity of the goods. Authority for this kind of approach may 'be
found in the judgment o! Lord Wright in Grant v. Australian Knitting
Wlh when* ft was said : there is a sale by description even though
the buyer is buying something displayed before him on the counter;
n thing is sold by description, though it is specific, so long as it is sold
not merely as the specific thing but as the thing corresponding to a
description, e.g.. woollen undergarments, a hot-water bottle, a second-
ed Ttapiog machine.* There are several cases * which suggest that
> KS V P 119551 1 W.LJt. 640.
^ Barman (1923) 129 L.T, 502.
McSL 1*9191 1 K.B. 198 at p. 207, per
'T* ^*933) 148 L.T. 263.
llTOl 1 o 64 T.LJt. ISO.

9. $59^ 119471 K.B. 554
he Mdwit^^r **?* coniUtutes a substantial ingredient
** Notes sS ^ ^ * condition.*'
U?i \ JJoyU's Rep. 469.
tStwM " Contrast the
154
niE aiAIWCTER AND QUALITV OF THE GOODS
a sale of specific goods over the counter, where the goods are on
display, even though the description of the goods is not
for their identification, is a sale of goods by description, and
such sales are not confined to sales of goods unseen by the buyer.
e.g.> where the buyer places an order on the strength of a
The cases in question, admittedly, arose under the provisions
section 14 (2) of the Act. which deals with the quality of
by description, and not under section 13. But, it is suggested.
is no reason why they should not be authoritative on the
tion of section 13. On this basis, therefore, it is possible to argue
the implied condition as to correspondence with
taken as meaning that goods of the right identity and we
character {i.e., possessing the right characteristics), must be
by the seller. Whether any language expressly used by the pa i
to be taken as an essential part of the description, I ns w p
to identify the goods or as qualifying their character, is a questio

construction.
Correspondence with description ,
From what was said above as to the meaning of

it follows that whether the seller has delivered goods correspon ^
with their description will depend upon whether the desenptw
held to refer to the identity of the goods or their character. It o
former, then, as long as the right type of goods are delivered,
condition implied by section 13 will be performed (though, of cpn
there might be a breach of some other express or implied condition
even though the goods lack some necessary or desired ty
characteristic. If to the latter, then the seller must deliver

the right kind of goods but also goods of that kind with
appropriate characteristics or qualities.
Thus in Areas v. Ronaasen <5 Son the contract was for

sale of slaves to be itach thick. Some were of that thickness.
were not. Despite this discrepancy, the staves could still be used
the purpose for which the seller knew the buyer was going to use the
(iV., the quality of the goods was not impaired). Nonetheless
House of Lords held that the buyer could reject the goods since the/
did not answer to the description in the contract. As Lord Buckmas c
said *; ** If the article they [/.e., the buyers] have purchased is not w
CodUy y. retry, supra, ! p 40, per Edmuad Davies 3.
eg, under *. 14 (I) or . 14 <2>: In/ra.
*1 flVJJl A.a 470: et. Beek . Szymanowski A Co. 11924] A.C. 43.
11933] AC. 470 at p. 474.
IMPLIED UNDERTAKINGS AS TO aiARACTER AND QUALITY 155
fact the article that has been delivered, they are entitled to reject it,
even though it is the commercial equivalent of that which they have
bought. Similarly, goods adulterated by mixture with some substance
which was not what the buyer wanted, and indeed rendered the
contract goods useless since signiGcantly different, were not goods
which corresponded with description, in Vigers Bros. v. Sanderson
Bros.'* They were goods which the buyer did not buy. However,
where what is mixed with the contract goods is sufficiently dis-
tinguishable to enable the buyer to separate his goods from the
different goods which arc not what he bought, then there will be no
breach of the condition as to correspondence with description. Hence
in Paul Ltd. v. Pirn & Co.} where the contract referred to the cargo
of maize shipped on a named vessel, the 58 tons of tobacco which had
been smuggled on board the ship and were not mentioned on the bills
of lading were not so mixed up with the cargo which the buyer had
contracted to buy to entitle the buyer lo reject. He was therefore
liable for wrongful rejection. ' >
On the other hand, in cases such as Re Moore & Co. & Londoner
Co.} goods of the right identity, but not possessed of the right
characteristics, were held to give the buyer the right to reject them
for breach of the implied statutory condition now under consideration.
In that case the contract provided for the sale of canned fruits in
cases containing 30 tins each. The seller delivered half of the cases
containing 24 tins each and the rest with 30 tins inside, though the
right total quantity of tins under the contract was delivered and there
was no difference in the market value of the goods as delivered from
at of the goods contracted for. It was held that the buyer was
entitled to reject since the goods were of a different description from
at stipulated in the contract It was stressed that possible sub-sales
*ght make the contents of each case a vital matter. In contrast,
w renfell v. E. B. Meyrowitz Ltd.* where the contract was for
y^ng goggles fitted with safety-glass lenses, it was held that
s ety.glass referred to a certain type of laminated glass. When one
pair of goggles broke and a splinter injured the eyes of the buyer it was
f/nnocA: Bros. v. Lewis I

, * Co. Y. Meyer [1930] 2 K.B. 312.
Peat Ltd. [1923] 1 K.B. 690;
Inis ca ' wmwi vuiHiasi aorrowman v. urayiun ^ ea-u. sj.
S G A c* peculiar meaning of " the cargo * Cf. and contrast
o P- 2*-
Kb 109 ^lombre Saccharine Co. v. Corn Products Co. [1919] 1
ll%n o A Bosman (1923) 129 L.T. 502.
j P- Scruttwi Ut.; c/. [I919J 1 K.B. 198 at p. 207,
* 11936} 2 All E It 1313.

156
TIIE aiARACTER AND QUALIIY OF THE GOODS
held that there was no breach of the condition implied by section

because the seller had delivered goods of the right identity.
safcty.glass goggles as generally understood, viz., goggles made iro
laminated glass, and of the right characteristics, since such laminated
glass was what was intended, whether or not the buyer believed that its
qualities of toughness, etc., were greater than those which such glass
actually possessed.
It must be mentioned, in conclusion, that the obligation to deliver

goods corresponding with their description in the contract is a stnct
one. Subject to the effect of any recognised trade usage on the iotei*
pretation of the language used in the contract, if the contract specifies
conditions of weight, measurement and the like, those conditions mm^
be complied with. If the seller wants a margin he must stipulate fo^
The conditions of the contract must be strictly performed.* *
only exception to this is if there are microscopic deviations whjc
business men. and therefore buyers, will ignore.' Such exceptmnal
instances will more easily occur where there is an excess or defimeocy
in quantity than where there is a difference between the descriph
of the contract goods and the description of the goods actually
delivered.*
(b) Quality and fitness
The Sale of Goods Act, section 14, implies into certain

of sale conditions os to the fitness and quality of goods. Apart fm
such statutory implied terms, or terms which may be implied (eit '
as warranties or conditions about the qualify or fitness for any par*
ticular purpose of goods supplied under a contract of sale) by virtue
of the provisions of some other statute,' no warranties or conditiuus
to such effect may be implied into such a contract,* except where sue
an implied warranty or condition is annexed to the contract by
usage of trade.** Thus, caveat emptor is still the general rule, cxclud
only where statute or custom permit the implication of a warranty nr
TOndition as to quality or fitness or the parties have express y
incorporated such a warranty or condition into their contract. If they
have done so. then it appears from the Sale of Goods Act that such
Ltd. T. Ronaastn A Son |I933I A.C 470 at p. 479, ptr Lord AiTm-
INJ. It p. 4S0, rrr Lord Aatn.
tbU. at p 479, per Lord Alkin.
tbU. It p. 40, prr Lord AtkJa.

See Infra, pp. 175-179.
*.* f * Sales Act. t. 15.
* r" P r45, TJ>e poiiUon Is the same in America; Vnilorra
Sales Art, s. 15 (3)
IMPLIED UNDERTAKINGS AS TO CHARACTER AND QUALITV 157
express term will not exclude the operation ol f
that Act unless the express term is mconsisteot with *e statmo^

implied term. The context o this last provision "I** *
reader it applicahle only to implied terms relating to quality or fitn s .

It would seem, therefore, that an express term dealmg with..c.J-.
correspondeoce with description or sample may owt the opcratio^ ol
the statutory implied terms relating to such questions, even
worded as to he inconsisteni with the terms implied by the Act.
However, this is by no means dear.
One general point is manifest. In order to come within the scope

of the statutory terms set out in section 34 of the Sale of Goods Act,
the goods in question must be supplied under a contract of sale.
Goods supplied not under a contract, or under a contract of a different
kind from a contract of sale (e.g., a contract of hire, or hire-puTcbase)
need not conform to the standards set out in the Act. Hence, in
Ceddling V. Marsh}* where a bottle of mineral water burst, injuring
the buyer, and the retailer who had sold the bottle sued the mann*
facturer alleging a breach of the condition implied by section 14 ()),
it was argued that the bottle was not supplied under a contract within
the scope of the provision, since the contract provided that the bottles
should be hired, not sold, despite the forfeiture of the deposit money
on each bottle that was not returned. It was held that although the
contract relating to the bottles was one of hire, yet, since delivery of
the bottles was ^scotial to the sale of , their contents, the sale of the
contents in the bottles and the hire of the bottles was the subject
of only one contract. Hence the bottles were supplied under a contract
of sale, even though they themselves were pot bought and sold under
such a conlraci. It would seem, therefore, that the net of section 14
^ may be very widely cast,
I section creates two implied conditions, applicable in two
j 1 ercQt situations, which, as will be seen, overlap, in much the same

f Vi-ay as the conditions themselves, as interpreted by the courts, tnay be
Coit*!?.*-!?} Under the Uniform Cbmoicrcial
.i!; -wwranijw are connraed consbfent with
** unreasonable to do to. in which

vnaiiei UetCTtnmts which wamuity fa dominant, Exoreu
UKOl I indica^ far die test, leave the portion to some doubt,
it Co. Ud. (19M1 1 Q fi. 598.
rowfcd locloded the objecttonable. explosive

the coal that wa, .ctaafly ordered under the contract.
158
said to overlap.^* One implied condition deals with the fitness o

goods for a particular purpose, the other with the merchantable qualit
of goods.
(1) Fitness for purpose
Contracts within scope of the provision. The implied condition

set out in section 14 (1) applies, except where the proviso to that
subsection operates, where the goods are of a description which it iJ
in the course of the seller's business to supply (whether he be the
manufacturer or not) and where the buyer, expressly or by
implication, makes known to the seller the particular purpose for
which the goods are required, so as to show that the buyer rcii
on the Sellers skill or iodgment.'* Three factors are therefore
relevant: (i) the course of the sellers business; (ii) knowledge on the
part of the seller of the purpose of the goods: (iii) reliance on the
sellers skill or judgment. Only if a contract of sale satisfies these
requirements will it be possible to imply into it the condition of fih*^**
o the goods that is contained in this subsection.
The requirement that the goods be of the kind which the

normally deals with in the course of his business means that a privaW
secondhand sale is not within the section. Only where such second*
hand goods of the relevant type are customarily sold will this
provision apply, The broadness of the language of the Act resulu
m the very general application of this provision to all kinds of goodJ.
Whether manufactured or not. and whether manufactured by the
seller or only sold (wholesale or retail) by him. Thus the provisiofl
has been held to apply to the sale of milk by a dairy. tins of salmon.**
bath buns. and fly gum. to name only a few instances. Even if the
U9s r R W?]*' ri) Md (2) of the Sale of Good*
' combine these rrorWonj. r<n
tJTuo^ sT.t'**?"'' Cbmmerriai CWe. *. 2-3H.
whether the t^Ct*** twnilar term, but caUfd hws*^'
uê/ r>L iMnufacturer or Mt of the Pdi.
SI" >* "P'-cd werrax'/ .rtf*
'-3T6. -ihcre the wrller at the *

|snJcubr purpose tof which the
ft I* ^ " kni or fudeneet
from UI he en. this ddteri
faterpr^ Wihf eSTrtf*^ Uoiform S*le*
I* '* ^ 2 K-a m *
** Ow.-.'owt/.r * f ISTH, 21 ij ,
" c. UJ. ^ ^
IMPLIED UNDERTAKINGS AS TO CHARACTER AND QUALITy 159
goods are in a special form in a particular instance, as in Spencer

Trading Co. Ltd. v. Devon^^ where a special kind of gum was ordered
from the seller (who normally dealt in all varieties of gum), the
provision will apply as long as the variety of the goods involved does
not take them outside the description of goods which it is in the course
of the sellers business to supply.
The problem of affixing the seller with knowledge of the purpose

for which goods were intended is complicated by two facts: first,
that goods may have more than one purpose, secondly, that goods
tnay normally have a particular purpose, in the ordinary course of
^gs, which is obvious from the nature or description of the goods.
tendency of the decisions since the Act, according to the opinion

of Lord Wright in 1934,* has been to give a liberal interpretation
to the words now under consideration. In Preist v. Larr,* where what
J^s in question was a hot-water bottle which burst, causing injury
0 the purchasers wife, it was held that there was a breach of the
implied condition set out in section 14 (I). Although nothing was
said about the purpose of the goods, there was knowledge of such
pur^se on the part of the seller. The reason for this is made clear
in the judgment of Collins where it is said that in the case of
goods capable of general use for a multitude of purposes,
1 order to give rise to the implication of a term under section 14 (1), it
necessary to show that, although the article sold was capable

. for many purposes, in the particular case it was sold
su h ^ particular purpose. TTius, in a sale of goods of
ca^ , positive statement must be shown from which it
seP , that the actual intended purpose was brought to the
facM'h ** ^ where the discussion begins with the
to ^ '^*tiptioa of the goods, by which they are sold, points

proX- purpose only ... the first requirement [of this
the satisfied, namely, that the particular purpose for which
whe^ ^ required should be made known to the seller. Thus,

V. ^ Purâser bought a bath bun, it was possible in Chaproniere
the court to infer that the seller must have known that
just a ^hich the purchaser required the bun was to eat it,
s a hot'Water bottle was to be used for warming someone in
Supra_
^ Aranranw Brvnze & Brass Co. Ltd. [1934) A.C 402
n. Aiwrotion Knitting Mills {19361 A.C. 85 at

160 THE aiARACTER AND QUALITY OF 1102 GOODS
Preist V. Last. The courts have gone further, however. In

Uners Ltd. v. Rea Ltd.^* the sale \vas of coal to be
The coal delivered by the seller was unsuitable for {
which the buyer intended it to be used. It was held by t 6

Lords that there was a breach of the implied condition un ^ --ijjis
14 (I). The buyer had disclosed that he wanted the coal for use ^
particular ship, and the seller, by undertaking to provi e s
and accepting the task of providing coal for the name
traded to supply coal suitable for the purpose of such s ip-

same effect is the decision of the House of I^rds in
<Sc Co. Ltd. V. Manganese Bronze c Brass Co. Ltd.. -
contract was for the provision of two propellers for a sp
It was held that the sellers knew the purpose for which the I
were required, i.e., that they should be suitable for the snipm
Hence they were liable for breach of the implied condition j

14 (I) when one propeller, being defective, caused ^ dis*
From these cases, therefore, it may be deduced that

tlnction between a particular purpose and the ordinary vse ^
Knowledge of a particular purpose must be strictly prove .
facts may entitle a court to infer that the seller must pa .^jned,
the particular purpose. Knowledge of ordinary use may be p
as a general rule, from the fact that the description or to
goods points to only one use, and that such use is weu
anyone normally selling such goods. re to be
The problem of knowledge of the use to which dUSt
put is closely connected with the requirement that the

have made known such purpose so as to show he was relying ^
sellers skill or judgment. The Act says so as to show
also shows, as was pointed out by Lord Sumner in A
Liners Ltd. 'f. Rea Ltd.^* Hence, as that case determines, the
of the Act is satisfied if the reliance is a matter of reaw ^

inference to the seller and to the court." * If goods are order
special purpose, and that purpose is disclosed to the vendor so
accepting the contract, he undertakes to supply the goods w >c
* ri922I 2 A C. 74 .. 14 (U
* (1934J A.C. 402. TTjJs case has been called the high-water oi u
cases Mash & Murrrll Ltd. V. Emanuet [1961] 1 All E R-
Diplocfc J
[19221 2 A.C 74 st p. 90. , . . ^ ^ coo-
* Ibid, at p. 90, ptr Lord Sumner. The crucial time is the time wn p^nui!
tract is made: IbiJ. la Oodlry v. Perry (I960] 1 All E.R. ^ P" J..toaiet **
Daries J. held that the inference readilf and prP*tly arises where the
of extremely tender years.
suitable for the object required, such a contract is sufiBcient to establish

that the buyer has shown that he relies on the sellers skill and
judgment. Even if the seller has no reasonable opportunity of
exercising his skill and judgment towards selecting and supplying the
goods, the Act will apply, since the implication as to the reliance of
the buyer on the seller can still be made. Positive evidence of such
reliance need not therefore be given as long as the facts support the
drawing of the inference, thereby affirmatively proving the requisite
reliance. Such inference could not only be drawn in the Manchester
Liners case, where the contract was to supply coal for a named ship,*^
but also in the Cammell Laird case, where the buyers laid down
detailed specifications as to the propellers to be made by the sellers.
There was still, in Lord Macmillans words, an important margin
within which the [sellers] skill and judgment had scope for exer-
cise. In that case also. Lord Wright, approving some earlier
language of Lord Sumner, said that the buyers reliance on the
sellers skill or judgment need not be total or exclusive.** Lord
Sumner said : the reliance in question must be such as to con-
stitute a substantial and effective inducement which leads the buyer to
sgree to purchase the commodity.** Hence the condition could be
implied in proper cases where it was only in some respects that the
tmyer relied on the sellers skill and judgment.** Thus where the
particular purpose is disclosed, (he inference as to reliance may be
made even where detailed instructions are given as regards the goods
y the buyer to the seller. Where the goods have an ordinary use or
purpose the inference may easily be drawn, as in the hot -water bottle
und bath*bun cases, from the fact that the buyer intends the goods for
such ordinary use or purpose. By contrast, where a buyer orders a
particular article by some established name, apart from the possible
application of the proviso to section 14 (I).*^ this may show that there
âs no reliance on the sellers skill or judgment, and the buyer
74 at p. 79, per Lord Buckmaster. Hie opinion of Lord
^ Bros. V. Cheney Eggar A Co. I1896I 2 Q.B. 59 that evidence
cn ^ introduced to prove knowledge of the purpose and reliance on the
I Bin o be incorrect.
tt,*" '^"î**** Gome Farm r, S.AJ'Jji. Ltd. n9MI 2 Lloyds Rep. 227.
tWUt of reliance was rehutted: see pp. 271-272, per Havers J.
' P-
196^ ^ Storage Co. Ltd. v. Sdlca Get. Corp. (1928) 33 Com Cas. 195 at
'* case, supra at p. 429, per lord 'Wright-
the CammeU Laird case, supra at p 424, per Lord
fn/m.
F.S.O. <
162
me aiARACTTR AW) QUALITV OF mE GOODS
intended to buy the brand or type of article in question irrespective o

the opinions or suggestions of the seller. This occurred, for
in Daniels & Daniels v. JVhite Sons Ltd.** with respect .
of lemonade, ordered by the name of its manufacturer, u

Baldry v. Marshall,** the application of the proviso to section
was excluded precisely because there had been an ^
the sellers skill and judgment, despite the purchase of e

under a trade name. Everything would seem to turn, there o ,
the correct inferences to be drawn from the contract itse ^
Cainmell Laird case,'** or from what was said by the P^rti^

during the negotiation of the contract. The contract itse ^
nothing about reliance upon the sellers skill or judgment.
about the buyers conveying to the seller the purpose for w ^
goods were required (where some particular purpose âs
buyers mind). As the Privy Council made clear in
Council V. Dependable Motors** all that may be the
buyer should contract in reliance on what took o
negotiations and that such reliance at the time of contracting
be a matter of reasonable inference to the seller and the court.
Contents of the implied condition. Where the subsection P ^

there is an implied condition in the contract that the goods s ^
reasonably fit for the purpose made known to the seller jj
The cases already cited on the interpretation of section 14 (1) ^
by their facts the workings of this implied condition. Thus a
propeller which was unacceptable to Lloyds was not ^
for the purpose of being attached to the ship for which i

required.** Coal that could not be burned in the boilers of e
ship was not reasonably fit for the required purpose made Imo
the sellers.** Nor was a tractor that could not be used for
*8 [1938] 4 AU E.R 258. Cf. Stpnntr Ptrmain & Co V. Webb & Co. no
55 at p 57 where previous dealing with the tonic water proved ,,r
reliance on the seller and the goods may have been bought under t e
patent name.
* 11925] 1 K.B. 260. _ lord
* See, e.g, [1934] AC 402 at p. 422. per Lord Wright; at p. 419, P*'ôst
Macmillan. Note the suggestion of Lord Wnght at pp. 423-424 that xJJL^
be affirmatively shown, described as inacojrate and hefedcal by I/ughes, 22
484 at p. 489.
[1961] A C 336 at p. 351, per Lord Reid. This was a case where negotiatiotw
conducted on behalf of a coiporatioa by an agent
^8 TVie Camrrteil Z.alrd ease, supra.
s Manchester Liners Ltd. v. Rea Ud, supra.
construction, which the sellers knew was its intended purpose.** A

hot'Water bottle which could not withstand hot water, but burst, was
not reasonably fit for the purpose for which it was intended to the
knowledge of the seller.* Nor was milk so infected with typhoid fever
as to render it undrinkable without danger.** Nor was a Bugatti car a
comfortable car for touring purposes, as the buyer had stipulated in
Baldry v. Marshall.*^ In Geddling v. Marsh,*^ which was discussed
earlier In connection with another phrase in this section,* it was also
held by Bailhache J. that the mineral water in the bottle was not
reasonably fit for the purpose of being sold to customers because it
generated such a quantity of gas as to burst the bottle. The examples
could be multiplied. But the generalisation may be made that what
the statute envisages is that the goods are safe and suitable for their
use by the buyer in any special way he intends to use them, if known
to the seller, or in the ordinary way such goods are used.
It is to be noted that the liability of the seller is not dependent

upon negUgence by him (whether he be the manufacturer or not).
The seller may be liable for negligence (if he be guilty of negligence)
to the buyer in addition to his liability imder the implied condition,
or in substitution therefor, if the condition has been excluded. The
seller, if also the manufacturer, may be liable for negligence to
someone other than the purchaser in accordance with the principle
enunciated in Dortoghue v. Slevenson.^^ But under section 14 (1)
negligence need not be alleged or established. The liability for breach
of the implied condition, if it applies, is strict. On the other hand, as
IS shown by the decision in Griffiths v. Peter Conway Ltd.,^^ the seller
Will not be liable for breach of the implied condition if the injury to
buyer, or the unfitness of the article for its intended purpose, was
result of some abnormality on the buyers part which was not
Councit V. Dependable Motorz Pty. Lid 11961] AC 336. But a

d-band car is reasonably fit for the purpose * if it is in a roadworthy
lUon, fit to be driven along the road in safety, even though not as perfect
M a new car: Bartlett v. Sidney Maraa Ltd. 11965] 1 W.L.R. 1013 at p. 1017,
" V. to,
I nSl''; J';:*"') Ociry Cc. Ltd , supra.
^1 1 K.B. 260.
11920] ! K B. 668 at p. 673.
" P. 157.
^2. C/. Grant v, Australian Knliibtt mU Lid. 11936] A C. 85. The

m,,, wUcT/manufactuier to persons other than the bujer from him is a
M IWV t on Tort (7th cd., 1963), pp. 259-274
iivsJi \ All EJL 685.
164
disclosed to the seller and was unforeseeable by him.* Hence there

was no liability under section 14 (1) in that case where a Harris tweed
coat gave the buyer dermatitis because the buyer possessed an
abnormally sensitive skin, since there was nothing in ê cloth that
would have affected the skin of a noimal person. The case of Man-
Chester Liners Ltd. v. Rea Ltd., where the coal supplied, though
suitable for ordinary steamers, was not suitable for the particular
steamer involved, was distinguished on the ground that the name of
the ship for which the coal was intended was revealed to the sellers,
who must have known, in the ordinary course of their business as
suppliers of coal for steamers, that different ships took different coal,
and by undertaking to supply coal for the ship in question undertook
to supply coal suitable for that particular ship.* In the Griffiths case
the seller only undertook to supply a coat fit for wear by ordinary
people, without sensitive skins, in other words, fit for use as a coat by
members of the public generally. The distinction is clearly brought
out by the language of Diplock J. in the case of Mash & Murrell
Ltd. V. Emanuel,^* where, it is said that the effect of section 14 (1) is
that if the particular purpose is made known to the seller so as to
show reliance on the latter^s skill and judgment, then suitability for
that particular purpose is an implied condition of the contract. If
such particular purpose is not made known, the assumption being
that the buyer requires them for the ordinary purposes for which such
goods are intended to be used, the implied condition is one that they
are fit for those ordinary purposes.
That case, though reversed on its facts by the Court of Appeal,

also establishes, following the prc-1893 case of Beer v. Walker^* (a
case on merchantable quality ^now dealt with under section 14 (2)
rather than of fitness for a particular purpose).^ that the implied
condition in section 14 (I) applies to the goods not only when they
are sent to the buyer but also the whole time that they are being
>2 This would seem to assimilate strict liabibty under s I4 (1) and s 14 (2) mth
Lability for neeLgence, as recent cases on remoteness in connection with the tort
of ne^'gence show. Is such asrimilation reasonable, in view of the fact that
delivered. The goods, therefore, must not only be fit for the purpose
when chosen and sent: they must also be fit for the purpose in
question when they arrive at the buyers place of business, or wherever
he is taking possession of them under the contract of sale.
Exclusion of the condition. It is provided in section 14 (1) how-

ever, that in the case of a contract for the sale of a specified article
under its patent or other trade name, there is no implied condition as
to its fitness for any particular purpose. The meaning and applica-
tion of this proviso have caused some dlfBculty. The proviso assimies
the absence of any express assurance by the seller and deals only with
cases of express or implied infonnation by the buyer of the purpose
for which he requires the article, so framed as to show that the buyer
relies on the sellers skill or judgment. The idea behind the proviso
is that by ordering an article under its patent or trade name the buyer
is explicitly not relying on the sellers skill or judgment as to the
fitness of the article for its intended purpose.* Hence to make a sale,
one under a trade or other patent name, the buyer must specify it
under its trade name Jo such a way as to indicate that be is satisfied,
rightly or wrongly, that it will answer his purposes and that he is not
relying on the skill or judgment of the seller. As Baldry v.
Marshall*'* shows, there may be a sale under a trade name but not
within the proviso, by the reintroduction of the concept of reliance.
In the case of Bristol Trarrtways & Carriage Co. Ltd. v. Fiat Motors
Ltd**' a sale of a 24/40 h.p. Fiat omnibus and six 24/40 h.p. motor
chassis was not a sale under a patent or trade name and the condition
implied by section 14 (1) applied. This was because "Fiat had not
become a trade or patent name, and the proviso was held to be con-
fined to articles which in fact had a patent or trade name under which
they could be ordered. Such a name is acquired by user, and whether
or not it has been so acquired is a question of fact in each case.* In
Baldry v. Marshall ** it was said that although a " BugatU car was
ordered, the proviso might not apply to an article like a motor car
B8 Bristol Tramways i Carriage Co. Lid. t. Fiat Motors Ltd. [19101 2 K.B. 831 at
p. 839, per Farwell LJ.
S9 Baldry v. Marshall [19251 I K.B. 260 at p. 266. per Bankes LJ.
Supra But only where the use of the Euods is not obvious: Hughes, 22 ML.R.
4S4 at p. 491. See, e.g, fVilson v. RIefce/r Cockerell & Co. Ltd.. Infra.
i Supra.
* Bristol Tramways v. Fiai Motors, supra at p 840, per Farwell LJ. The suggestion
was made by Lord Russell in Gdleside Bros t. Cheney Eggar & Co. [18961 2 Q B
59 at p. 64 that the proviso applies not to raw commodities or materials but to
the supply of manufactured articles. Bed quaere.
s Supra at p. 269, per Sargant LJ.

166
which was sold under a veiy elaborate and specific description. A

sale of Coalite, however, was held to be a sale under a trade or
patent name in Wilson v. Rickett Cockerell & Co. Ltd.** thereby
excluding the operation of the implied condition as to fitness for
purpose where explosive material was mixed with the Coah'te and
caused damage to the room of the purchaser.**
The proviso may be excluded, as seen above, by the circumstances,

from which it may be deduced that the sale was not in actuality one
under a trade or patent name. The possibility of this occurring seems
to make the utility of the proviso questionable. Moreover, where the
operation of the proviso renders the condition implied by section 14
(1) inapplicable, it may well be that the implied condition set out in
section 14 (2) can still operate for the benefit of the buyer. This, as
will be seen, has been the effect of the judicial interpretation of the
language of section 14 (2), Consequently, and justifiably it may ^
admitted, as is shown by the redrafting of the law on this subject in
America by the Uniform Commercial Code,** which significantly
alters the original statement in the Uniform Sales Act*^ (almost a
verbatim copy of the provisions of the 1893 Act on this point), it has
been argued that the differentiation between the conditions implied in
section 14 (i) and section 14 (2) is outmoded, and indeed has been
outflanked by the decisions of the courts.** This will become clearer
after the provisions of section 14 (2) have been examined.
(2) Merchantable quality**
Contracts within scope of the provision. The condition implied

under section 14 (2) operates where goods arc bought by description
from a seller who deals in goods of chat description (whether he be the
* II9J4] 1 Q B. 393. In Sumntr r<muiln d Co. v. IVtbb A Co. [19221 1 K.B. 55 it

waj qucftionnl whether ule of ** WebV* Indian Tonic was luch a aate
Ai mil he leen below, *. 14 (2) aprtieO.
** ts. 2-314, 2-313.
t K U <1) (2). __
t p. 1016. Cofltran the lanicuare of Kcnnet}/ UJ. in the Bristol

ow, rapm. at p. S43 In which ii n uM that be tnerchaniable but no*
Ct for a rorUevlsr purpeyie for which they were boucht. ^
TTie COfr_~y'tee cn Cor.wjuer Protection flVO. Cmr.A 1731) para*. ,

rrCDooTwninJ chapfra in ihl* part of the Uw, by mallnc ihlt condition nibjt to
aoLU.* oeaUy by t-he lencr. at^ by delefinc patent or other trade caff*
rjT*er. Tha lepned Warranty f Aferchintabte QuaCty* flWP *

CaAOIt 445.
manufacturer or not).^ What is a sale by description has

already been discussed.^^ The cases previously cited (some of which
were decisions under section 14 (2)) make it clear that for a sale to be
by description it is not necessary that the buyer purchases the goods
unseen, as was argued by counsel for the defendant retailer in Godley
V. PerryJ^ On the contrary, as that case and several earlier ones
establish,* a sale of goods over the counter may nonetheless be a sale
by description. It would seem that, although section 13 speaks of a
contract for the sale of goods by description, whereas section 14 (2)
refers to the situation which arises where goods are bought by descrip-
tion, there is no real difference in effect, according to the cases,
between these two variously phrased provisions.
In the same way, although section 14 (1) refers to goods being of

a description which it is in the course of the seller's business to supply,
whereas section 14 (2) speaks of a seller who deals in goods of that
description, nothing would appear to turn upon the different phraseo-
logy of the two provisions. The cases which illustrate the meaning of
the expression found in section 14 (1) would appear to be equally
authoritative as regards the interpretation of section 14 (2). It is
strange, however, that in a section which, fundamentally, is designed to
deal with one particular problem in sales of goods, two different ways
of expressing a requirement, which is common to both parts of the sec-
tion, should be found, and that two ways of expressing another
requirement, which is common to two provisions which are concerned,
in different ways, with what is the same thing, namely the quality of
the goods, should have been Inserted by the draftsman. On the whole
the expression in the Uniform Commercial Code,* viz., that the seller
is a merchant with respect to goods of that kind, is preferable, in this
context at any rate, since it avoids the niceties and problems raised by
the meaning of description. The American omission of the need for
the goods to be bought by description is also more welcome, again
because it makes unnecessary any debate about the meaning of the
phrase sale by description. It is clear that section 14 (2) is really
dealing with goods that are normally sold by the seller (excluding,
therefore, as was seen in connection with section 14 (1), second-hand
TO me Umfonn Sales Act, here, as elsewhere, includes the seller who is the grower of
the goods: s 15 (1). Under the Uniform Conunercial Code, s 2-314 (1), the seller
must he a merchant with respect to goods of this kind.*
T> Supra, pp. 151-154.
(I960] 1 All ER. 36.
* iVren v. Holt 11903] 1 KB. 610; MoreUi^ Fitch & Gibbons [1928] 2 K.B 636;
Grant v. Australusn Kniitim Mitts Ltd. [1936] A C. 85 at p, 100, per Lord Wright,
r* s. 2-314 (1). o'
168
sales by a private individual as opposed to a dealer Why then

confuse the situation by invoking the mystic words bought by
description and goods of that description 7
Contents of the implied condition. Where the subsection applies

there is an implied condition that the goods shall be of merchantable
quality. This expression has produced much diflBculty and has been
the subject of considerable debate in the cases, some of which have
produced very strange results.
It has been said that the phrase merchantable quality seems to

be more appropriate to a retail purchaser buying from a wholesale
firm than to private buyers, and to natural products, such as grain,
wool or flour, than to a complicated machine (as in the Bristol Trant'
ways case itself, in which this was said by Farwell But it is
clear that it extends to both. However, the condition is not that the
goods should be merchantable. but that they should be of mer-
chantable quality, and that is more restricted, said Bankes LJ., in
Sumner Permain & Co. v. Webb &. Co.'* than it would have been if it
had required that the goods should be merchantable.
The Sale of Goods Act provides that quality of goods includes

their state or condition. TTiis somewhat extends the natural meaning
of the word quality. That this is so is shown by the case of Niblett
V. Confectioners' Materials Ltd.*'* which has already been examined in
connection with the implied condition as to the right to sell the
goods.** It was also held in that case, by Bankes and Atkin LJJ-
only however, that the conduct of the sellers amounted to a breach of
the implied condition under section 14 (2). This was because the state
of the condensed milk was that it was packed in tins bearing labels.
The labels were as much part of the state or condition of the goods as
the tins were. The state of the packing affected the merchantable
quality of the goods. The condition as to merchantable quality
applied not only to a complicated machine, as in the Bristol Tramways
case, but also equally to the packing in which goods are put, which
may, and in the NibJett case did. form a most important feature of the
For a case where s. 14 (2) applied to a sale of a second-hand car by a dealer

sec BanUtt v. Sidney Marcus Ltd., supra.
TS [1910] 2 K.B. 831 at p 840.
M [19221 I K.D. 55 at p 60
TT s GJi. . 62 (1).
TS (I92IJ 3 K.n. 3S7.
Supra, pp. 98-99.
goods as delivered.* This, it is suggested, seems to assimilate mer-

chantable quality with description, when the Niblett case is compared
with Re Moore & Landaiier,^' where the number of tins in a case was
an essential feature of the description of the goods. Indeed, in the
Bristol Tramways case Farwell LJ. smd that the phrase was used as
meaning that the article was of such a quality and in such condition
that a reasonable man acting reasonably would after a full examina-
tion accept it under the circumstances of the case in performance of
his offer to buy that article. Similarly, in Sumner Permain v.
Scrutton LJ. (who had not approached the bliblett case from the
standpoint of section 14 (2)) said that merchantable quality* meant
that the goods complied with the description in the contract, so that
to a purchaser buying goods of that description, the goods would be
good tender. In that case the sale was of tonic water which contained
such an excess of salicylic acid that it could not legally be sold in the
Argentine as the buyers intended. Previous consignments of such
tonic water bought by the buyers from the sellers were saleable in the
Argentine. Section 14 (1) was held not to apply because the previous
sales showed that the buyers were not relying on the seUers* skill or
judgment (and the proviso may also well have been applicable). It
was held that there was no breach of the implied condition as to
merchantable quality, because the goods could be sold elsewhere. In
the Niblett case the goods could not be sold by the buyers anywhere,
without involving the buyers in legal action for breach of the rights of
Nestles.* In the Niblett case the internal quality of the goods, i.e., the
milk, was beyond reproach. It was a collateral circumstance which
rendered the goods unmerchantable. Conversely, in Sumner Per-
main v. Webb, the internal quality of the goods was not beyond
reproach, yet the goods were not unmerchantable.
This leads to the question whether by merchantable quality

the Sale of Goods Act means saleable by the buyer or "usable
*0 I192I1 3 K.B. 387 at pp. 395, 396, per Baoku LJ.
11921] 2 K.B 519: supra, p 155.
** Supra at p. 841. In BartUU t. Sidney Jifarcus Ltd. {1965) 1 W.L.R. 1013 at p.

1016, Lord Denning M.R. s^d that the lest propounded by Lonl Wri^f, Infra,
was preferable Jo this more compneated test of Farwell LJ. In the same case,
at p 1018. Salmon LJ. reprded the ditTerencs between these tests as a matter
of semantics.
Supra at p. 63.
Which did not cover legal title to goods or the legal right to sell: tbld.
[19221 I K.B 55 at pp. 65-66, per AtUn LJ. comparing the tins in that with
tms that were blown or indented.
t^son V. Kleken Ccckerfll d Co. Lid 11954] 1 Q.D, 598 at p. 613, per Romer
170
THE aiARACTER AND QUALITY OF THE GOODS
generally by the buyer." In the old case of Gardiner v. Gray*^ Lord

EUenborough said that goods to be merchantable must be saleable.
The purchaser was not to be expected to buy goods to put them on a
dunghill. Wills J. in a case prior to the Act. Wieler v. Schilizzi.*'
also said that the buyer had a right to expect, not a perfect article, but
an article which could be saleable in the market. But the post-1893
cases seem to suggest that this is too narrow. Thus, in the Bristol
Tramways case** Farwell LJ. stated that the goods must be accept-
able as contract goods whether the buyer bought them for his own use
or to sell again. In Sumner Permain v. Webb,^^ Scruttoa LJ. stressed
that by saleable " was not meant legaDy saleable. The phrase
merchantable quality " did not mean that there must in fact be per-
sons ready to buy the goods nor that there can legally be a buyer of
the goods.** Bankes LJ. said that it was impossible to bring within
the expression, even as extended by the Sale of Goods Act. the cap-
ability of the goods being lawfully resold according to the law of the
country in which it was known that the resale was intended to take
p ace.* Atkin LJ. seems to suggest that the goods must correspond
with their description and not differ from the usual quality of the
dwenbed goods to such an extent as to make (hem unsaleable.** But
this would seem to be too restricted a view. To similar effect is his
statement in thc Niblett case** that goods which could not be sold
except by exposing the buyer to an injunction were unsaleable and
unmerchantable.
^s division of opinion has become clearer in more recent yean,

c > Hardwick Game Barm v.
o..4.F.P.i4.*" there are two schools of judicial thought, the conflict

having arisen since the Bristol Tramways case, the Niblett case and the
case of Sumner Permain v, Webb. This later judicial view is based
upon the idea of the utility of the goods for one of the purposes for
which they would normally be used, even if not for the purpose
intended by the particular buyer.** Hence if normally only used for
one purpose, the goods must be fit for that use: if normally used for
different purposes, fit for any one, unless the buyer made known the
(1856) 17 CB, 6!9 at p. 624
(1815) 4 Camp 144.
Supra at p. 840.
Supra at p. 64.
Ibid, at p. 63
tbid. at p. 60.
Ibid, at p. 64.
*< Supra at pp. 403-4(M.
* J1964] 2 Lloyd* Rep. 227 at p 270
Wrijh? rnm 0929) 35 Qm Ou 90 .1 p. IK. pn

particular use intended, when th^ would have to be fit for such
intended use. Thus in the Cammell Laird case^ Lord Wright said
that merchantable quality meant under section 14 (2) that the goods
in the form in which they were tendered were of no use for any purpose
for which such goods would normally be used and hence were not
saleable under that description. In Grant v. Australian Knitting
Mills'^ Lord Wright said that whatever else merchantable might
mean, it did mean that the article sold, if only meant for one particular
use in ordinary course, was fit for that use, Merchantable does not
mean that the thing is saleable in the market simply because it looks
all right; it is not merchantable in that event if it has defects unfitting
it for its only proper use but not apparent on ordinary examination.
In the Wilson case.** in which Coalite was mixed with material which
caused an explosion when lit. it was said that the presence of the
offending piece made the consignment of Coalite unfit for burning.
Qearly in that case the purchaser did not buy Coalite for resale, but
for use in a fire. If the meaning of merchantable quality was that
goods were saleable, the implied condition would not have applied.
In the case of Hardwick Game Farm v. Havers J. "in
accordance with the more recent current of authority adopted the

meaning given to the expression by Loni Wright and held that Brazil*
Ian groundnut meal purchased under the contract was of merchantable
quaUty since, though unfit for use for one purpose, namely, as a
compound food for poultry, it was not of no use for any purpose
for which it would normally be used. So, too, in Bartlett v. Sidney
Marcus Ltd.^* the Wright test was adopted to apply to a sale o! a
second-hand car, which was held to be merchantable when it was in a
usable condition, even though it was not perfect, and required treat-
ment to its clutch, of which the buyer was aware before he bought
the car.
On this basis the distinction between the Niblett case and Sumner
Permain v. Webb becomes clear. In the former, the milk could not be
sold or used for the purpose for which it was intended by the buyers,
a purpose which was known to the sellers. In the latter case, the
JI934] A.C. 402 at p. 430. la Bartlett v. Sdney Mareua Ltd., supra, at p. 1016.
Lord Denning M.R. thought that there was a considerable temtory which fell
between cases within this test and cases within the test propounded by Ixird
"Wnght in the Grant case. ** The article may be of some use thou^ not
entirely effident use for the purpose. It may not be in perfect condition but
yet it is in a usable condition. It ts then . . . merchantable.
11936] AC 85 at rP- 99-100.
fl954J 1 Q B 598 at p. 60S, per Dennmg LJ.

a Supra at p. 271.
Supra.
172
niE aiARAcrtR and quALmr or the goods
goods could be sold, though not in the Argentine: hence they could be
used for the purpose of resale, which was known to the sellers, though
not for resale in one particular country. The need for goods to be
" saleable only arises if the purpose for which they ore going to be
used is resale and such purpose is made knonn to the seller either
expressly by the buyer or by necessary and reasonable inference from
the sellers knowledge of the parties and the surrounding circum-
stances. As a result of this interpretation of " merchantable quality
therefore, as Lord Wright pointed out in the Grant case,* there may be
many cases, particularly where goods arc bought for use by the buyer
other than resale, where the implied conditions In section 14 (1) and
section 14 (2) overlap.*
Goods which need something done to them in order to render them

usable in accordance with the intentions of the buyer, even if what
needs to be done is trivial, will not be of merchantable quality.* A
defect which could easily be cured is as serious as a defect that would
not yield to treatment. On the other hand if the goods are fit for use
by the buyer if the buyer deals with them in the way such goods would
normally be used, then they will be merchantable. Thus in fJeil v.
Hedges^ the buyer bought pork chops which became infected because
they were only partially cooked by the buyer and then were eaten.
They should have been properly cooked, in which event they would
not have caused the buyer any injury. It was held by McNair J. that
the condition as to merchantable quality was fulfilled because the
pork when supplied was in such a condition that if properly cooked
according to accepted standards it would have been innocuous. The
buyer, therefore, must not treat the goods in some special way and
then claim that they arc not fit to be used, if the goods would have
been fit for use if treated in the normal w'ay.
It would seem from the decision in Mash & Murrell Ltd. v.

Emanuel * that goods must be of merchantable quality not only when
s Supra at p. 100. _
* Hence, in a case such as GrlffUhs v. Peter Conway Ltd, [I939J 1 All E.R. 685,
(discussed jtipro. p 163) the implied conditicm as to merchantable quality could
not aid the buyer since thi ' *
a person susceptible to de
Sidney Marcus Ltd., sui '
condition under s. 14 (2)
* Jackson v. Rotax Motor &
A Co Ltd. [1949] 1KB. .
* Grant v, Australian Knitting Mills Lid. n936J A.C 85 at p. 100, per Lord Wnght
* [19511 1 T.L.R. 512. . , .
t (19611 1 AU E.R. 485; [19621 1 All E.R. 77. See Fridman. When Goods Must
be Fit for Use (1961) 111 LJ. 383. Cf. supra, p 164. Note the effect of the
provisions of S GA. s. 33 on the deterioration of goods in transit: Infra, p 239-
sold but also for a reasonable time, which includes time for arrival and
disposal on arrival by the buyer.
Exclusion of the condition. Under the proviso to section 14 (2),

if the buyer has examined the goods, there is no implied condition as
regards defects which such examination ought to have revealed. Just
as the proviso to section 14 (1) renders the implied condition as to
fitness for purpose inoperative where the buyer is not relying on the
sellers skill or judgment, so under section 14 (2) the implied condition
as to merchantable quality is inoperative where the defect rendering
the goods unmerchantable is patent and the buyer knows or ought to
have known of it as a result of an examination made by him, thereby
exonerating the seller of any liability as respects the quality of the
goods. But the proviso does not apply where no examination that the
buyer could or would normally have made would have revealed
the defect.*
Thus in Wren v. HoU * no examination by the buyer would have

revealed to him that the beer was contaminated by arsenic. That
defect was latent. Hence section 14 (2) applied. The same was true
in the Wilson case of the consignment of halite. However, it is not
clear whether the buyer must have actually examined the goods for the
proviso to operate. It may or may not be sufficient that the buyer had
the opportunity of inspecting the goods.*^ On the other hand the
language of the proviso, according to Bray J. in Thornett & Fehr v.
Beers <6 Sons^* shows that the statute docs not require a full examina-
tion. Hence, in that case, where the buyer was allowed facilities for
inspecting barrels of vegetable glue, but, for lack of time, merely
looked at the outside, and thus did not discover that the goods were
Unmerchantable, as he would have done had he looked into the bar-
rels, it was held that the implied condition was inapplicable, since the
* 7 Kniulng MUh Ltd. [193^ AC 85 at p. 100, per Lord Wright
There is a similar restriction under the Uniform Commercial Code, s. 2-316 f3> fM
[19031 I K B. 610.
Supra
11 rt Tt ...
If
lU.- . . vM., tJii. wuui ia*.es a contrary
This yiffw, it is suggested, iimtcs the conclusion Uiat there is inconsistency

beên sales by description and sales by sample under s. 15. \Vhat if a sale
13 both by description and sample? Must there be an actual cjcaminauon to
.. uie toueu view is doubtful: cf. previous note.
174
buyer had examined the goods and that examination would have
revealed the defect in question.
(3) Fitness and merchantability compared
From what has been said in the preceding pages, it will be evident
that, whatever may have been the original intention of the draftsman,
the courts have interpreted these two subsections in such a way as to
result in their virtually covering the same ground, subject to the dif-
fering effect of the provisos. The way that purpose in subsection
(1) and merchantable quality in subsection (2) have been construed
as relating to the obvious use of goods or some specialised use if
made known to the seller expressly or by implication by the contract
or by some surrounding circumstances or prior negotiations, has led
to the conclusion that whatever be the nature of the goods or the kind
of sale involved there will be an implied condition relating to the
quality of the goods applicable, unless the contract has excluded the
Act. The chief difference between the subsections lies in the distinc-
tion between sales under a trade or patent name, and contracts where
the buyer has examined the goods. The former may result in the
exclusion of the implied condition under subsection (1), but not of
that in subsection (2): the latter may result in the exclusion of the
implied condition under subsection (2) but not of that in subsection (1).
It is not surprising, therefore, that a recent commentator on this

section of the Act ** has suggested that the subsections be redrafted
along lines which would make the actual wording of the statute
correspond with the real effect the language of the statute has in the
light of the judicial interpretation that has been discussed earlier. In
this respect it may be pointed out that the Unifonn Commercial
Code does attempt to give some distinct meaning to the condition as
to merchantable quality by providing that goods to be merchantable
must be at least such as (a) pass without objection in the trade under
the contract description, (b) in the case of fungible goods,** are of fair
See Fridman, "The QuaLty and Fitness of Goods (I960) 110 hJ. 2l7 Note
that some overlapping occurs with the provisions of S G.A. s. 15, which deals with
sales of goods by sample: tn/ra.
Hughes, loe. cit., at pp. 49J-4W.
ss 8. 2-314. Note that the serving for value of food or drink to be consumed either
on the premises or elsewhere is s sale for the purpose of this section. Cf. tor
English law, the difEculties which enieêd in Lockett v. A. & M. Charles Ltd-
J19381 4 All E.R. 170, where an unpHeci term was imported into such a contract but
only after some hesitation.
Goods which must be weighed, measured or tested before properly h them is

passed to the buyer: see Chalmers, Sale cl Coeds I4th ed. at p. 75. note (e)
IMPLIED UNDCRTAKINGS AS TO CHARACTER AND QUALITY 175
average quality within the description, (c) are fit for the ordinary pur-
poses for which such goods are used, (d) arc, within the variations
permitted by the agreement, of even kind, quality and quantity within
each unit and among all units involved, (e) are adequately contained,
packaged, and labelled as the agreement may require, (f) conform to
the promises or affirmations of fact made on the container or label if
any. All these requirements are cumulative, not alternative. This
provision attempts to incorporate what the cases have decided, with-
out involving any problem of determining the exact meaning of mer-
chantable. It is also to be noted that this provision does not make
any exception for goods which have been examined, whether the
alleged defect is patent or latent. All in all, therefore, it may be
argued that the time has come for some revision of section 14, in such
a way as to remove doubts and uncertainties as to the scope and mean-
ing of its provisions and unnecessary duplication of the protection it
purports to provide for buyers.**
(c) Sales by sample
Application of the Act. In the particular instance of a sale by

sample, additional conditions are implied into the contract under sec-
tion is of the Sale of Goods Act. A contract of sale will be a contract
for sale by sample where there is an express or implied teim in the
contract to that effect.** Thus whether any contract is one to which
the provisions of section 15 of the Act apply is a question of fact to be
determined in accordance with the principles relating to the construc-
tion of contracts and the rules regarding the implication of terms
which have been examined earlier.
That special rules should be applicable to sale by sample is under-

standable. The purpose of a sample, as Lord Macnaghten explained
m the leading case of Drummond v. Van Ingen?* which comprehen-
sively stated the law on this subject before the passing of the Act, is
to present to the eye the real meaning and intention of the parties with
regard to the subject matter of the contract, which, owing to the imper-
fection of language it may be difficult or impossible to express in
woMs. The sample speaks for itself. But it cannot be treated as
saying more than such a sample would tell a merchant of the class to
Consumer Protection (1962, Cmod 1780, Paras. 444-446 recotn.

ended change in the law by making this condition as to merchantable quality
implied, Save as regards defects of which the biJyer should have been
had examined the goods, and as regards second hand goods and
SGA early described as snA in writing and goods offered by auction.
(18S7) 12 App.Qis. 284 at p. 297.
176

which the buyer belongs, using due care and dih'gence, and appealing
to it in the ordinary way and with the knowledge possessed by mer-
chants of that class at the time. A sample, therefore, corresponds
very closely with a verbal description of goods. Hence at first sight
there would seem to be a close similarity between a sale by description
and a sale by sample. However, the Act clearly differentiates, in sec-
tion 13, between sales by description and sales by sample, since in
sales by sample which are also sales by description (a different cate-
gory from sales simply by description) the bulk of the goods must cor-
respond with the sample and with the description.* In ChampanJiac
& Co. Ltd. V. Waller & Co. Ltd.^^ which involved a sale of Govern-
ment surplus balloons by sample, with all faults and imperfections,
the goods being sold as sample taken away, Slade J. held that the
exclusion of liability for faults and imperfections could relieve the
seller of liability for a fault as respected the description of the goods,
but it could not affect the obligation, arising under section 15, to pro-
vide goods which corresponded with sample in quality. Hence, the
seller was liable because the balloons as delivered were perished and
unmerchantable, although the sample taken away was in good condi-
tion, Slade J. carefully distinguished sales by sample from sales by
description, even though, if goods ate sold by sample, showing the
buyer a sample is an offer to sell goods the bulk of which will conform
to the description which is conveyed to the buyers mind by his being
tendered the sample.*
Conditions implied by the Act
In the case of a contract for sale by sample (apart from the implied
condition in section 13 where the sale is also by description), the Act
implies three conditions into the contract.
The first is that the bulk the rest) of the goods should cor-
respond with the sample in quality. Quality, under the Act, includes
the state or condition of the goods.** Hence, this would include the
labelling of the goods as well as their internal quality.** It is clear
from Ruben v. Faire Bros. & Co.** that even if the defect in quality,
which renders the bulk not the same as the sample, is easily remediable
by some act of the buyer, there will be a breach of this implied con-
*9 Supra, p. 151.
i IW81 2 AU E.R. 724.
J Ibid, at pp. 725-726.

it S GJ^. s. 15 f2) (a).
n SOA. . 62 (I).
* Cf. Nibifti V. ConffctloTxers' Matrrials Ltd (1921] 3 K-B. 387: lupra, p 168.
* 11^9] 1 K.B 254.
dition. The Uniform Sales Act*' has a similar provision (except that
the term is described as an implied warranty). But under the Uniform
Commercial Code,** any sample or model which is made part of the
basis of the bargain creates an express warranty that the whole of the
goods shall conform to the sample or model, which would seem to
cover not only correspondence in identity but also in quality. Under the
Sale of Goods Act, it would appear, even if the contract expressly
provides that payment of the price is to be made against delivery of
shipping documents, before the arrival of the goods, there will ^ a
right to reject for breach of this implied condition if the goods in fact
do not correspond with the sample in quality, as happened in Polenghi
Bros. V. Dried Milk Co.
This is connected with the second implied condition, which is that

the buyer shall have a reasonable opportunity of comparing the bulk
with the sample.* Hence, in the case just mentioned, even an express
agreement to pay before inspection did not sufBce to oust the obliga-
tion to permit comparison between the bulk and the sample, so as to
preclude rejection by the buyer where the goods did not fulfil the first
condition implied by section 15 .
Thirdly, there Is an implied condition that the goods shall be free

from any defect, rendering them unmerchantable, which would not be
apparent on reasonable examination of the sample.** This deals with
latent defects which have the effect, in the light of the interpretation of
the expression unmerchantable ** which has already been discussed,
of making the goods unfit for any purpose for which they would
ordinarily be used, or for the special purpose for which the seller knew
they were intended. This, indeed, is a statutory enactment of the
decision of the House of Lords in Drummond v. Van where
there was a sale by sample of worsted coatings, which the sellers knew
were to be resold to clothiers. Tbe bulk of the goods corresponded
with the sample, but were unmerchantable, and they were returned to
the buyers by their customers. There was a defect in the goods, viz.,
slipperiness, which made them give way under the strain of ordin-
ary wear when made up, and such defect was not discoverable by due
diligence or ordinary inspection of such goods. It was held that there
. 16 (a).
s. 2-313 (1) (c).
(1904) 92 L.T. 64.
'> S GJ,. j 15 (2) (6).
Ibid s. 15 (2) (ci
Supra, pp. 168-173.
* (1887) 12 AppCas. 284.
178
was an implied warranty that the goods were fit for use in the manner
in which goods of such quality and general character ordinarily would
be used. In view of the way unmerchantable has been construed
in the context of section 14 (2), it would seem that this implied war-
ranty at common law has now become the statutory implied condition
under section 15. As is obvious from the wording of the section, there
is no liability on the part of the seller for patent defects which a
reasonable buyer would have discovered for himself by examination of
the sample. The statute does not require here, however, as it does
under section 14 (2), that any examination should actually take place.
It suffices that an examination would have revealed the defect if an
examination of the sample had been undertaken. As Stable J. said
in Houndsditch Warehouse Co. Ltd. \. Waltex Ltd.*^ : if there is a
defect in the sample which renders the goods unmerchantable, and the
buyer, notwithstanding and with knowledge of that defect in the
sample, is content to take a delivery which corresponds with the
sample and gets such a delivery, he has no ground for complaint.
This would appear to be so where, even though the buyer has no actual
knowledge of the defect, he could have acquired such knowledge by
making a reasonable examination of the sample. The examination
that is involved is a reasonable examination, not a practicable "
one, as Edmund Davies J. pointed out in Godley v. Perry?* Hence, in
that case, where the buyer tested catapults by pulling at the elastic,
which showed no defect in the goods, though another kind of examina-
tion, also practicable, might have revealed that there was something
wrong with them, it was held that the defect was a latent one, not dis-
coverable by reasonable examination, since, with goods of the type
involved, the examination made by the buyer was all that could
reasonably be expected of him.
() Under other statutes
The Sale of Goods Act is a statute of general application to all con-

tracts of sale of goods. Hence the implied conditions considered
above will apply to sales of all types of goods, as long as the contract
of sale in question is one which comes within the scope of sections 13,
14 and 15. There are other statutes which deal with sales of particular
Under the Uniform Commercial Code, 9 ^316 (?) (b) there is no implied warranty
as respects defects which an examination ought to have revealed if the buyer has
examined the sample or model as fulh^ as he desired or has refused an examination
I1W4I 2 AH E.R. 518 at p 519.
(19601 1 All E.R. 36 at p 41.
kinds of goods and imply terms, usually warranties rather than condi-
tions, relating to the quality or fitness of the goods which come within
their scope. In a general work on the law of sale it is unnecessary to
do more than mention such legislation.
Thus, the Merchandise Marks Acts. 1887-1953,*^ deal with the use
of trade descriptions in connection with goods,* and provide for a
warranty, that a trade description is not a false trade description, to be
implied into a contract for the sale of goods to which a trade descrip-
tion has been applied.** Under the Fertiiisers and Feeding Stuffs Act,
1926,* there is an implied warranty in a sale for use as food for cattle
or poultry of certain specified articles that the article is suitable to be
used as such and does not, except as otherwise stated expressly in the
statutory statement, contain any ingredient that is set out in the Act.
This warranty applies notwithstanding any contract or notice to the
contrary. Other provisions which may be mentioned in this context,
are the Anchors and Chain Cables Act, 1899,** the Hop (Prevention
of Frauds) Act, 1866,** the Seeds Act, 1920. and the Food and Drugs
Act. 1955.
Under other Acts,** the sale of defective articles, or goods which

contravene some statutory requirement as to quality or fitness for use,
may amount to a criminal offence. This may not give the buyer any
remedy in damages against a seller who infringes the law, whether
knowingly or innocently. But it operates to prevent the sale of such
goods as far as the criminal law by the invocation of penal sanctions
can do so. It is unnecessary in this context to discuss such statutes in
any detail.
3. Waiver and Exclusion of Undertakings as to the Character

AND Quality of Goods
The rights ol the parties
Agreement being the basis of the contract of sale, the parties have
the power to affect by their agreement the application or otherwise of
** For a dkcussion of the wording of these Acts s the Final Report of the Commit-
88 M ^sunier Protection 1962 (Qnnd. 1781), Part V.
Act, 1887, ss. 3, 5.
Draper v. Edward Turner & Son Ltd. [1965] 1 Q B. 424; Hard-

wKk Came Farm v, SA.P.P.A. [19641 2 Uoyds Rep 227, for problems arising
proTision.
** s. 18.
Protection Act. 1961; Road Traffic Act. I960; Fabrics (MUdescrip-

on) Act, 1913; Weights and Measures Act, 1963.
180
niE aiARACTER AND QUALITY OF THE GOODS
some express or implied term of the contract, including terms which

deal with the character and quality of the goods as discussed in the
preceding two sections of this chapter. Such power is expressly
reserved by the Sale of Goods Act.** A distinction must be drawn,
however, between conduct amounting to waiver of the performance of
such a term and a prior agreement between the parties to exclude the
application of otherwise operative terms.
Waiver of due performance of a term is ex post facto and is the

unilateral act of one party, whether buyer or seller. It is always open
to a party to a contract to waive a term, whether condition or war*
ranty, which is inserted for his benefit.* In contrast, the parties may
bilaterally agree to some different contract, other than the one origin-
ally made between them. They may do this expressly, by agreeing
afresh in the light of changed circumstances, or impliedly, as where
the seller delivers goods of the wrong quality, character (or quantity)
and the buyer, by accepting them, impliedly agrees to an entirely new
contract, possibly with different terms as to payment. Such conduct
by the parties, it is suggested, is distinguishable from waiver in the true
sense, in that it is bilateral, and gives rise to a new contract, whereas
waiver is unilateral and only operates to vary in some way the original
contract, without replacing it by a new one.* Hence, when Denning
LJ. recently stated*^ that waiver, forbearance, agreed variation and
substituted performance were interchangeable expressions, which one
employed being immaterial, since what was involved was a kind of
estoppel, it is suggested that this was going too far. There is a distinc-
tion between waiver and a fresh agreement. It may be that the import-
ance of this distinction is no longer great since the repeal of section 4
of the Sale of Goods Act,* which means that neither the original
contract nor any new one need be evidenced in writing, thus obviating
the need to determine whether the parties had varied their original
** S G A. s 55, which dâls with varistion or exclusion by express agreement, course

of dealing and usage-
's Panoutsos v. Raymond Badley Corporation of New York [19171 2 KB. 473 at
p. 477, per Viscount Reading CJ.
Under the Uniform Commercial Code, s 2-209 a distinction is drawn between

modification or rescission by parol agreement (which iiiTolves, in the U S.A.. the
statute of frauds see Uniform Commercial Code s 2-201) and waiver. An unsuc-
cessful attempt at modification or rescission may operate as a waiver: Unifoiw
Commercial (^de s. 2-209 (4).
Charles Rickards Ltd. v. Oppenheim [1950] J K B. 616 at p. 623. following the

judgment of McCardie J. in Bartley v. Hymans [I920J 3KB 475, and relying
upon the doctnne of promissory estoppel " stated by himself in Central London
Property Trust v. High Trees House Ltd. [1947] K B 130. See Fridman, Prt^
mlssory Estoppel (1957) 35 CBR. 279. Fridman, Promissory Estoppel
(1964) 114 LJ. 747.
Supra, p 24. Note that this suU applies in the U.SA.; cf note 46, supra.
WAIVER AND EXCLUSION OF UNDERTAKINGS
181
agreement, by waiver, or had entered into a new contract (which would

have needed some writing). But the distinction may still be important
in some situations, and should therefore still be made. Where waiver
is effective the waiver can sometimes be retracted by giving reasonable
notice to the other party, the reasonableness of which being judged as
at the date when notice of the retraction of the waiver is given.*
From waiver in the strict sense outlined above, and the making of
a new contract which relieves either party of some obligation under
the original agreement between them and may therefore be considered
to involve a new contractual relationship, must be distinguished the
prior agreement of the parties, in the original contract of sale, to
exclude the operation of terms relating to the character and qualify of
the goods. A contract of sale may stale expressly in some form or
other that the seller is to be exempt from performance of such terms
or from liability for breach of such terms. Such exemption or exclu-
sion clauses in a contract of sale raise difficult problems which will be
cxîned later. At this juncture, however, it is only necessary to
point out that, juristically, the exclusion in advance and by agreement
of an otherwise operative term is different from the subsequent aban-
donment of a right arising under an original contract of sale, whether
such abandonment occurs unilaterally by waiver or bilaterally by
fresh agreement.
Waiver
The Sale of Goods Act enacts certain provisions which incor-

porate the common law relating to waiver, but modify it, in relation to
contracts of sale of goods, in the light of the distinction between condi-
twns and warranties. Thus, so far as such contracts are concerned,
ffie Common Jaw doctrine of waiver must be applied in a slightly
different way in certain circumstances.
The effect of the Act depends upon whether the term in question is
s condition or a warranty. The difference between these two cate-
gories of terms has already been considered, when the artificiality and
istorical origins of such distinction were discussed.** Whether a
stipulation in a contract of sale is a condition or a warranty depends.
** Rickards Lid. v. Opptnhrim 119501 1 K.B. 616: cf. Uniform Comniercial
deV Hiis may be of greater important in relation to time of
payment than in relation to ibe character and quality of the goods: ef.
80 PP 201-203.
8 x j * by S GA. s. 55 , supra, note 44.
^ ttote 44.
Supra, pp. 140-143.
182
according to the Act,* in each case on the construction of the contract.

A stipulation may be a condition, though called a warranty in the
contract.* Thus the status of a term in the contract is decided by
the contract itself and not by matters subsequent to the contract, as the
case of yVollis v. Pratt shows. In that case the contract excluded
warranties, and it was held that this did not operate to excuse
liability for breach of a condition which, by virtue of the provisions of
the Act shortly to be considered, was to be treated as a breach of
warranty ex post facto.
That being the framework within which the provisions of the Act
operate, it must now be seen what the Act stipulates as to waiver. In
effect the Act. though only dealing with the position of the buyer, con-
tinues the common law in force, but adds a statutory free choice and,
as it were, a statutory compulsory choice. Thus, where a contract of
sale is subject to any condition to be fulfilled by the seller, the buyer
may waive the condition.* This leaves the common law rules to
govern the relations between the parties. However, under the Act,'
the buyer may elect to treat the breach of such condition as a breach
of warranty, and not as a ground for treating the contract as
repudiated. This means, therefore, .that the buyer can choose
whether to regard the contract as unperformed by the seller, as repu-
diated by him, and therefore as relieving the buyer from performance
of his obligations and giving him a right to sue for damages for non*
performance,* or as entitling him merely to sue for damages for
breach of warranty.* Thus if goods of the wrong description or
quality have been delivered by the seller, in breach of an express con-
dition or one of the implied statutory conditions, the buyer may reject
the goods and sue for breach of coolract, i.e.. non-performance, or may
keep the goods and sue for damages or set off the breach of warranty
in diminution or extinction of the price.**
All this applies where the Act leaves the buyer free to decide what
to do. However, in some instances the buyer is left with no such
B| S.GJA. s. II (1) W.
< IbU.i these were "very retnartaWc words" according to Lord Alverstone in
n'allls V. Pratt II9J1J A.G 394 at p, 397.
ss I19I1I A C. 394: see further on this case, Infra, p. 187.
e SG.A. s. n (I) (a).
r Ibid.
*8 From the definition of eondirien which may be extracted from fs. 11 (I) (b) (cj,
62 0) For the nature and effect of repudiation see Nienaber, "TTie Effect of
Anticipatory Repudiation " (1962) CLJ. 213; Montrose, ' Some Problems About
Fundamental Terms " (1964) GLJ. 60 at pp. 6^-75.
See SGA. ss. II (1) (b), 62 (1).
SC.A. s 53: discussed infra, pp. 3l4'-322.
183
freedom. Under the Act *: ** Where a contract for sale is not severable
and the buyer has accepted the goods, or part thereof, or where the
contract is for specific goods, the property in which has passed to the
buyer, the breach of any condition to be fulfilled by the seller can only
be treated as a breach of warranty, and not as a ground for rejecting
the goods and treating the contract as repudiated, unless there be a
term of the contract, express or implied, to that effect. Thus, in
situations to which this provision is applicable, the buyer cannot claim
that the seller has broken a condition and therefore treat the contract
as repudiated, with consequent rights to sue for breach of contract : he
must sue only for damages for breach of warranty. This does not
mean that a condition becomes a warranty under this provision: it
means that a breach of condition is to be treated as a breach of war-
ranty. The term broken retains its status of condition, as the House
of Lords held in Wallis v. Pratt.*^
The real problems arising under this provision have been con-
cerned with determining when it is applicable, i.e., whether a contract
of sale is not severable and there has been acceptance of the goods,
whether the contract is for specific goods, property in which has passed
to the buyer. Whether a contract of sale is severable depends upon
whether it is an instalment contract and if so whether the instalments
^ to be regarded as separate deliveries of an indivisible parcel of
goods or separate contracts.** The nature of " acceptance of goods,
S GA. 1. 11 (1) (c). italics supplied. TTus does not apply to conditional sale agree-
njcnts rader Ihe Hire-Purdiase Act. 1965: see s. 20 (1) of that Act. A breach
pisy be treated as a breach of warranty if it would have been so
had it been contained or implied in a '* corresponding hire-purchase
M " * condition to be fuiailed by the owner; Ibid. s. 20 (2). As
. . * ** a corresponding hire-purchase agreement see Ibid. s. 20 (4). It

. *cre is no slatutorr election or waiver in relation to such sales:
as a b ^ îver in fact will a breach of condition in such a sale be treated
warranty For the meaning of conditional sale agreement see
9nnr,^ Act, 1965, s. 1 (I) Sudi agreements are not credit-sales and
* 119111^1"/^^* closely to ccHitracts of hire-purchase.
^ 394, adopting the dissenting judgment of Fletcher-Moulton LJ. in the
0* Appeal [1910] 1 K.B. 1003.
'scussion, pp. 211-216 infra, of S.GA. s. 31. But it is possible that a

ct inay be severable even though not an instalment contract. If so there may
be acceptance of part of the goods. Otherwise there must
* rejection or total acceptance. This is not so under the Uniform

Coêrcial Code, s. 2-601.
85Q ccnt case of /. Rosenthal & Sons Ltd. v. Esmcdl [1965] 2 AU E.R.
context* f Lords had to craisidcr the meaning of severability in the
that wb Pcaisoo, at p. B70, said that the provision meant
time wntract was severable had to be considered at the material
in the material respect. The material time was the time at which the
184
TIIE aiARACTtR AND QUALITY OF THE GOODS
which raises difficulties of interprefalion and application of the refc*

vant provisions of the Act,** will also be dealt with elsewhere.** For
the moment it suffices to point out that the application of this provision
of the Act as to compulsory election of remedies, or modified waiver of
breach of condition, as it may be called, presents considerable diffi*
cuhy in the light of these requirements. So, too, if the contract is
one within the second limb of this provision, i.c., for specific goods
where property has passed. The distinction between specific and
unascertained goods has been shown earlier to be fraught with prob-
lems, at least in what may be considered marginal cases.** The
problem of the passing of property has also earlier been seen to be
difficult, notably where rule 1 of section 18 of the Act is involved.**
It was seen, when discussing that provision of the Act, that the con-
struction of the word ** unconditional ** in the phrase '* unconditional
contract,* has given rise to debate and confusion. In the light of those
difficulties, it is not surprising (hat this provision of the Act as to
statutory election or modified waiver is not always easy to apply***
la this respect it is rotewonhy that the Uniform Sales Act, which
by and large re-enacts the Sale of Goods Act provisions, does not fol-
low the English legislation verbatim here. Under that Act * where
the obligation of either party to a contract to sell or a sale is subject
to any condition which is not performed, such party may refuse to
proceed with the contract or sale or he may waive performance of the
condition. If the other party has promised that the condition should
happen or be performed such first-mentioned party may also treat the
non-performance of the condition as a breach of warranty. Ibis pro-
vision, it will be seen, applies to seller and buyer, unlike the English
statute which deals only with the buyers rights and powers. It also
goes beyond conditions " to be fulfilled by the seller (which is the
buyer had to decide how he was to treat the sellers breadi of condjli^.
Where the seller had the option to make the contract one transaction or divide
It into two or more transactions by his mode of performance, the fact that he
had such an option did not make the contract severable; it was necessary to
see how he had exercised bis option in tbe performance of the contract.
< vfc. S G A. $s. 34, 35.
/n/n, pp. 221-329.
8 Supra, pp. 39-41.
Supra, pp. 67-74.
* See. eg.. Varley v. Whlpp [19001 1 QB 515 end tbe debate thereon: supra.
e> *. 11 (1).
185
English phrase) and applies where the party in question has pro-
mised that the condition should happen. /.e.. it affects conditions
which are not necessarily within the power of the party in question to
fulfil. Further, the Uniform Sales Act provides that where property
in the goods has not passed, the buyer may treat the fulfilment by the
seller of his obligation to furnish goods as described and as warranted
expressly or by implication in the contract to sell as a condition of the
obligation of the buyer to perform his promise to accept and pay for
the goods. This is slightly different from the provisions of the English
Act as to statutory election or modified waiver, and does not involve
the same difficulties as to severability and acceptance that have been
mentioned above. Also it gives the buyer an option; it does not make
his subsequent conduct os regards the breach compulsory. It is sug-
gested, therefore, that the current provisions of the Sale of Goods Act
(which have been applied by the Court of Appeal to cases of innocent
misrepresentation not involving a term of the contract or a collateral
agreement, so as to deprive the buyer of a right to reject goods for
such misrepresentation, even where knowledge of the misrepresenta-
tion was discovered very soon after delivery of the goods or such
knowledge could not have been discovered any earlier than it was
are in need of redrafting.
One final point in relation to waiver should be mentioned. The

prorisions of the Act discussed above do not affect the case of any con-
dition or warranty, fulfilment of which is excused by law by reason of
impossibility or otherwise. This means that the statutory provisions
as to frustration of contract in the Sale of Goods Act and the Law
eform (Frustrated Contracts) Act, 1943,^* are not in any way affected
y the law as to waiver which is contained in the Act. Thus only
^ ere (he non-fulfilment of a condition is the fault of the seller will
e buyer have a free choice as to waiver or be held bound by the
provisions of the Act relating to compulsory election or modified
waiver. t' ^
WI p Galleries [19501 2 KB. 86; Long v. Lloyd [1958] 1
SGA 7 li ^ 331-332.
Ir * goods of the enact right quality cannot be obtained
S G.A natural disaster cr gOTCnitnenUl decree.
a coUat^Mt ' ' PP* 43-49. Note in connection with s. 6 the problem of
Dhoo^î as to the exlslmce of Uie goods: McRae v. Commonwealth
// p 84 C"-
1 C.LR. 377, discussed supra, p. 45.
186
TTIC aiARACTTR AND QUAUTY OF 'niC COOPS

Exclusion
That the contract of sale may exclude all or any terms relating to
the character and quality of the goods, whether such terms be implied
by common law, custom or statute, has already been established.
Only where some statute, e.g.t the Fertilisers and Feeding Stuffs Act,
1926, expressly precludes the parties from agreeing to the exclusion
of a statutory implied term, will such exclusion be legally impossible.
The question then arises, however, as to the effect in law of such an
exclusion. This is primarily a mailer of construction of the contract,
though, as will be seen, in recent years there has been some develop-
ment of judicial policy which seems to fake this issue out of the con-
fines of construction of contracts and put it into quite another
category of legal question.
The basic vital point at which must start any discussion of the
problems created by the parlies power to exclude undertakiags
relating to the character and quality of the goods is the doctrine that
exemption or exclusion clauses arc strictly construed against the party
in whose favour they are expressed, Le., in the context of sale of
goods, the seller. It must therefore be shown by clear, unambiguous
words in the contract that the seller has been relieved of any other-
wise arising consequences or liability as regards the character and
quality of the goods. Thus, in cases before and after the Act,
words in a contract which stated that the goods were bought with
ail faults and errors of description,^* with alJ faults and imper-
fections, with all faults and defects, * etc., have been
T* On tius oatCer reference should be made to the following: Ox>te,
Clautes (1964) especiaUy at pp. 37-60. 104-] 16; Unger, 'nie Doetrioe of tne
Fundamental Term (1957) Business L.R. 30; MelwUc, "The Core of a ^n-
tract (1936) 19 M L.R. 26; GninfeM, ** Reform in the Law of Contract (1>>
24 M L.R. 62 at pp. 71-79; Reynolds, * Warranty, Condiuoa and Fundamenui
Term (1963) 79 LQR. 534; Montrose. "Some Problems about Fundamental
Tenns (1964) C.LJ. 60.
78 Supra, p. 179.
rr See. e.g . Beck v. Szymanowski A Co. [J923J 1 K.B. 457 at p 466, per SemUon
LJ.; [1924] A C. 43 st p 48, per Lord Buefcmaster. C^fCj op, pp.
, . ' . . '. "mere
, " sub*
, . . . would
r ' . ' . . ! ' s
T Ckampanhae & Co. LtS. v. IValler A Co. Ltd. (1948] 2 AH .R. 724; ef. Couch-
man V. Bill I1947J K.B. 554.
*8 Munro A Co. v. Meyer [1930] 2 K.B, 312.
187
construed in different ways, depending upon whether the defect com-

plained of by the buyer was a failure of the goods to correspond
with description or sample, or was a defect of quality not connected
with such correspondence, and whether the words could be taken
as being sufficiently wide and clear to cover the type of defect that
was in question.**
Thus the cases show that an attempt at the exclusion of liability

for defects may fail because the defect in question is not one of
quality but is connected with the identity of the goods. In such cases,
however, the alleged exempting clause has not specifically stated the
nature and status of the terras that are excluded. It has simply
attempted to protect the seller from liability for certain types of
defects. By contrast, there are cases in which the contract of sale
has attempted to exclude the operation of undertakings relating to
the character and quality of the goods by reference to such under-
takings specifically as terms of the contract, whether express or
implied. The history of such cases reveals that the courts, applying
t e strict construction doctrine, have arrived at the stage by which, by
using appropriate language, all express or implied terms can, prima
acie, be excluded. This line of cases commences with Wallis v.
TOff.M êre a contract for the sale by sample of common English
samfoin * stated that the sellers gave no warranty express or implied
g description or any other matters. The sellers delivered giant
&ish sainfoin, and, when sued for breach of warranty, under
Act,* argued that, by virtue of that provision,
reach of condition, namely, no correspondence between sample
ulk, âs turned into a breach of warranty, and that such
Warranty was excluded by the agreement. The House of Lords held
at. although the remedy available to the buyer was for breach of
a y, the term broken remained a condition, and was not
xc uded by the agreement which had not specifically mentioned
new Andrews v. Singer.^* on the sale of a number of
r contract stated that all conditions, warranties and

1 ties implied by statute, common law or otherwise were excluded.
' Co. 119241 A.C. 43; Minister of Materials v. Steel
177 LT * TLR. 499; Nicholson & Venn v. Smith Marriott (1947)
I1S541 1 K.B. 17,
18S
TIIE CHARACTER AND QUAUTY OF THE GOODS
One car which was delivered and accepted was an old Singer car.
When the buyers sued for breach of contract the sellers argued that
the implied condition as to correspondence with description under
section 13 of the Act was excluded by the contract. The 0)urt of
Appeal held, however, that the condition that the goods should corre-
spond with description was not implied by the Act but arose expressly
under the contract. Hence it was not excluded.* Finally, in
LEstrange v. Graucob on a sale of an automatic slot machine
the contract provided, in small print which the buyer did not read,
that any express or implied condition, statement or warranty, statutory
or otherwise, not stated in the document was thereby excluded. The
machine did not function and was not reasonably fit for the purpose
for which it was intended, nor was it of merchantable quality, as
required under section 14 (1) (2) of the Act. The Court of Appeal
held that the language of the exemption clause was wide enough to
exclude the sellers liability. As a result, therefore, it would seem
that use of the right language might have the effect of ousting
the operation of all undertakings as to character and quality of the
goods, whether express or implied.
However, it would appear, both from the cases referred to above

as to the distinction between defects in quality (which may b
excluded by appropriate words) and defects in identity (which such
words will not include so as to provide exemption from b'ability to
the seller), and from more recent cases which have invoked a doctrine
variously called the fundamental term or fundamental hreacb."
the apparently overwhelming effect of wide exclusionary language
may be illusory. Furthermore, by the doctrine of collateral contracts
a similar effect may be produced. Finally, in some cases misrepresen-
tation has been held to exclude the olherwise operative effect of an
exemption or exclusionary clause, whether such misrepresentation
were false or innocent. These methods of avoiding the consequences
of the cases on the construction of exemption clauses must now
be considered.
(i) Fundamental terms
The idea that there is some fundamental term in a contract which

must be performed, irrespective of any clause in the contract relieving
*s In Karsalti (Harrow) Ltd. v. tVallis 1195^ 1 W,L.R. 936 at p. 943 Parker LJ, said
that the right way to view this ease was that what was delivered was not what
was contracted for," t.e , the exemption clause covered defects of quality but not
of Identity.
M 11934] 2 K.B. 391.
189
a party from the performance of other terms or from liability for

breach of such other terms, is one -that has gained ground in recent
years in a number of cases, not all of them concerned with the
contract of sale of goods.*^ ^Vbat has been held, or suggested, is that
where a contract specifies that certain goods must be delivered, but
excludes the operation of otherwise governing terms as to the
character and quality of the goods, the delivery of something which is
so defective as to make the article delivered substantially different
from what was contracted for. so as to make it a totally different thing,
is not merely conduct in breach of a term as to character or quality,
which term has been expressly excluded by the contract, but a non-
performance of a fundamental term. non-performance of the
contract itself, for which liability cannot be excluded, no matter what
language is used in the contract (unless the contract is interpreted as
being " binding in honour only * and therefore having no legal effect
at all).
Thus in Karsales (Harrow) Ltd. v. Wallis,^* to give but one

example, Denning LJ. said: ** Exempting clauses of this kind, no
matter how widely they are expressed, only avail the party when he
is canying out his contract in its essential respects. . . . They do not
avail him when he is guilty of a breach which goes to the root of
the contract. . . , The principle is sometimes said to be that the
party cannot rely on an exempting clause when he delivers something
* different in kind from that contracted for, or has broken a funda-
mental term or a fundamental contractual obligation, but these
are . . , all comprehended by the general principle that a breach
which goes to the root of the contract disentitles the party from
relying on the exempting clause.
For this doctrine to operate, however, the goods delivered must

not just be defective, i.e.. unfit for the purpose intended, or not of
merchantable quality, or not quite of the description (in the qualitative
sense) required; they must be suffering from such a congeries of
See Alexander v. Railway Executive 11952] 2 K.B. 882; Smeaton Hanscomb v.

Sassoon !. Seity [1953] 2 All E.R. 1471; Spurltng v, Bradshaw [1956] I W.L.R.
wl; Karsales {Harrow) Ltd. v. Wanu [1956] 1 W.LJl. 936; Yeoman Credit Co.
Ltd. V. Apps [1962] 2 Q B. 508; Asitey Industrial Trust Ltd. v. Grlmley [1963] 2
All E.R. 33; Charterhouse Credit Co. Ltd t. Tolly [1963] 2 Q.B. 683.
*8 Coote, op cii., pp. 7-8.
[1956] 1 W.L.R. 936 at pp. 940-941. Cf. the earlier statement of the principle by
Scrutton L J. in Gtbaud v. G WJly. 11921] 2KB 426 at p. 435 : GrtmfeM, op eit.,
supra, note 75, at pp. 67-68 ; CooCe, op. eit., pp. 99-103.
190
TIIE CHARACTER AND QUALITY OP TTCE GOODS
defects as to make the thing delivered not the thing bought by the
buyer, e.g., an engineless car which cannot be used as a car at all in
the ordinary way.*' Stating this reveals one practical difficulty of the
doctrine, namely, that of deciding when an article is so defective as
to be different, not merely lacking in the desired quality and character.
The cases show that the line that has to be drawn is a very fiae.
subtle one. But there is another difficulty, theoretical or juristic h
nature rather than practical. This is the problem of defining and
categorising the " fundamental term so as to ensure that it is not
within the scope of an otherwise suitably phrased exemption clause.
This involves the distinction between conditions and warranties which
is certainly basic and accepted in contracts of sale of goods, even
though it is not so necessarily involved in other contracts, despite
the apparent acceptance by the courts of this dichotomy in such other
contexts.
If conditions, as understood at common law and in the Sale^ of

Goods Act,* are such fundamental terms as justify a buyer in treating
the contract as repudiated, should a condition be broken by the
seller, what more fundamental term can there be? Further, if th
implied condition as to correspondence with description in the Sale
of Goods Act refers to the identity of goods as well as, or in contrast
with, their quality, can there be a more basic, fundamental term which
entitles a buyer to treat the contract as not performed, and therefore
broken, if the goods do not correspond with description and the
contract excludes implied statutory conditions? The cases on sale
of goods seem to suggest that there can be a more fundamental term
than a condition. i.e., something narrower, * or at the core of
the contract, some central or main promise which must be performed
irrespective of everything else.'* A condition, to quote a recent
writer,* may be said to be an important term giving the party injured
by its breach the right to repudiate, which he will lose in certain
i> Pollock & Co. V. Macrae, 1922 SC(HL.) 192 at p. 200, per Lord Dunedin; cf.
Yeoman Credit Co. Ltd. v. Appj {19^1 2 Q3. 508.
Karsales {Harrow) Ltd. v. Wallis, supra. Yeoman Credit Co. Ltd. v. Apps, supra.
Cf., however. Charterhouse Credit Co. Ltd, y. Tolly, supra, where the car waj m
better condition yet there was breach of a fundamentjJ term. Contrast Astley
Industrial Trust Co, Ltd. v Grimley, supra, where no such breach occurred,
ea See supra, pp. 141-142.
* Smeaton Hanseomb v. Sassoon /, Se/ty II953J 2 All E.R. 1471 at p. 1473, ptr
Devlin J.
* hfelville, ' The Core of a Contract " (1916) 19 M L R. 26 at p. 37.
5 Reynolds, Warranty, Condition and Fuodamental Term (1963) 79 L.Q R. 534,

at p. 544.
191
circumstances, and a fundamental term or condition is an even more

important term also entitling repudiation.* but with two further
features, that the right to repudiate will not be so easily lost, if at
all, and that breach of such a term precludes the party in breach from
relying on exemption clauses. The cases also seem to suggest that
this doctrine can be invoked despite the apparently exhaustive division
of terms in a contract of sale of goods into conditions and warranties
by the Sale of Goods Act. Though these ideas appear logically
irreconcilable, they seem to be accepted by the courts. Writers on
the subject, however, have been more exercised by the manifest juristic
inconsistencies, particularly in the law of sale of goods, where the
condition-warranty division is firmly accepted, though as regards other
types of contract there are suggestions in the cases, as well as by the
Writers, that this division is inapplicable and should not be imported
from the law of sale of goods.^ To circumvent -these theoretical
problems it has been argued that the doctrine should be better
regarded as a doctrine of fundamental breach rather than as one of
breach of fundamental /cr/n.** This would provide a more flexible
approach. The suggestion has therefore been made that where
events occur, as the result of a breach of contract, which substantially
deprive the party not at fault of what he contracted for, there is a
fundamental breach which entitles him to repudiate and also precludes
the party at fault from relying on exemption clauses. Whether this
approach is acceptable is a matter of debate. It has been rejected by
at least one other writer.' Instead, it is argued that the doctrine is
a -twofold one of breach of a fundamental term and of fundamental
breach. Breach of a fundamental term depends on the actual agree-
ment of the parties as to (he obligations to be performed. Funda-
mental breach is in fact *' total breach. The one depends on
construction of the contract; the other on "a judicial evaluation of
the character and effect of non-pcrformance. *
Thus the possibility of evading the otherwise applicable exclusion

clause by the invocation of this doctrine, whatever it be finally called,
is dependent upon many factors which call into question its utility
as a means of curtailing the power of a seller to limit or exclude his
liability. Much yet remains to be determined by the courts.
And to - --
mental '
Ilong K
the artic
* Ibid, at p. 547.
i Montrose, he. cit. at p. 65, note 17.
About Fiinda-
Q.B. 26. See
Ibid, pp 66, 67.
192
THE CHARACTER AND QUAUTT OF THE GOODS

(ii) Collateral terms
It has already been seen that outside, and distinct from, the main
contract there may be some collateral undertaking which binds the
seller, even where the main contract is itself unenforceable or provides
no remedy.* In two cases, Coachman v. Hill* and Marling y. Eddy*
such collateral undertakings have been utilised to provide a buyer
with a remedy with respect to defective goods where the contract
excluded the operation of express or implied conditions and war-
ranties. In the former case the sale was of an unserved heifer with al
faults, imperfections and errors of description. At the sale an oral
representation was given that the heifer was unserved. In fact it was
in calf and. after having been bought, it died. It was held that there
was a collateral warranty, for breach of which the seller was liable
despite the exemption clause in the contract of sale. In Marling^ v.
Eddy an oral statement that there was nothing wrong with the heifer
and that if there were the seller would take her back was held to
amount to a collateral condition (because of the promise to take the
goods back, i.e., to permit rejection of the goods). Hence it was
affected by an exemption clause excluding warranties in the printed
conditions of sale. The principle applicable In such cases was staled
by Denning L.J.^ to be that if a seller of goods by auction givs
an express oral warranty, he cannot escape from his responsibility
for it by saying that the catalogue contained an exempting clause.
It may he, therefore, that all these cases establish is that in auction
sales extrinsic representations may oust the operation of an otherwise
applicable exemption clause. If they are so restricted they will not
be of great value generally. If they are capable of greater generalisa*
tion, then another method will have been found of circumventing
the decisions on exemption clauses in appropriate situations.
(ill) Misrepresentation
There is the final possibility that an exemption clause will not avail
a seller who has inserted such a clause in the contract of sale where the
seller has been guilty of a fraudulent or innocent misrepresentation
* Supra, pp 143-147.
4 [1947] K.B 554. , .
[1951] 2 K.B. 739, which seem* to repudiate the suggestions in the language o
Bailbache J. in Ilarrisort v. Kaowlei & Foster (1917] 2 K3. 606 at p. 610.
The Editor of the Uw Reports noted K B. 554 at p. 560) that the legahW
of such collateral warranties at an auctioo sale was not discussed. In Ilarllng

EJJy, supra, at p 745, Evershed M R. drew ft distinciioo between s public state-
ment at such an Auction ftnd a pnrate arrangement.
T [1951] 2 KB. 739 at p 746.
193
as to the contents of the exemption clause which has induced the

buyer to enter into the contract, even where such misrepresentation
IS oral and the contract is written. That there will be liability if the
seller has been fraudulent, even where he has excluded otherwise
applicable conditions and warranties, is firmly stated in fVard v.
Hobbs.^ But it would seem that even an innocent misrepresentation
might have the same effect, i.e., not of giving an action in itself
(though even this is debatable in the light of the decision in Hedley
Byrne v. Heller^ where the misrepresentation has been negligently
made but of preventing the seller from relying upon the protection
of an exemption clause. The only case in which this appears to
have occurred is one concerned with a cleaning contract,^' but there
would seem to be no theoretical reason why the same should not apply
to a contract of sale of goods. It is clear, however, that some
misrepresentation must have taken place. If the seller has not
represented anything as being true or applicable to the goods, then
the exemption clause cannot be ousted in this way.
The need for change
Thus it would seem that in this area of the law there is room
for much development and change. Critics of the present position
point to the rigidity of the condition'warranty dichotomy and the
absurd results to wWch it has led. They point also to the difficulty
of understanding and applying the doctrine of fundamental breach
or the fundamental term, whatever exactly it be. There can be little
doubt that some alteration of the law is overdue and needed. In the
United States the Uniform Conunercial Code seems to make
exclusion much more difficult and requires proper notification to the
buyer, particularly in relation to merchantability and implied war-
ranties of fitness. Moreover, it would seem that American courts are
(1878) 4 App.C^s. 13.

[19641 A C. 465.
SeeaL i. * ; . ...
1 Wl . . .
before
too la . .
involv . . . ._ .... . _
PP. 331-332. C/. also Harrison A Jones Ltd. t. Bunlen & Lancaster Ltd 119531
1 QB 646.
Curtis V. Chemical Cleaning Co. {19511 1 K.B. 805
Henpp s-v j ^ itness for purpose, etc.,
' e seller knew the goods
' Hof>i.j(1878)4 AC. 13
. 1 V , -10, supra.
F.S.O 7
194
more inclmed io refuse to eolbrce exemption clauses wbjcb are

unreasonably against the public interest in that they are too wide
and far-reaching.^* It would seem, therefore, that much might be
done, in amending the law of sale of goods in England, towards intro-
ducing in a direct, and not indirect, way (as has happened through
the doctrines discussed above) some judicial control of the operation
of such clauses.'
Bfnnlnfiffn y. Bloomfield Moton Inc. (I95S9 32 N J. 358, cited in Bogert, BritJM

and Hawkland. Cases end Matertais on the Law of Sales end Security (4th ed ,
1962) at pp. 120-135. espedaUy at pp 129-132. See, also, Prosser, "'riie Implied
Warran^ of Merchantable Quality 0943) 21 Cu.B R. 446 at pp. 453-492.
1* Prohibition of such contracting'Out was, indeed, re comm ended Iv the Committee

on Consumer Protection (1962, Cmnd. 1781), paras. 426-439.
Chapter 8
PERFORMANCE OF THE CONTRACT
1. The Ditties of the Parties
Effecting the purpose of the contract
It is the duty of the seller to deliver the goods, and of the buyer
to accept and pay for them, in accordance with the terms of the
contract of sale.' This provision of the Sale of Goods Act reveals that
the performance of a contract of sale of goods involves delivery of
the goods, acceptance of them, and payment of the price. These duties
arc concerned with the effectuation of the purpose of a contract of
sale of goods, which is the transfer of property in goods in return for
the payment of a sum of money.* The obligations considered in the
previous chapter, which were concerned with the identity and character
of the goods that were being sold, are of importance in relation to the
clarification of the terms of the contract between the parties. The
nature of those obligations, in general and in relation to any particular
transaction, is vital so far as the ancillary rights and liabilities of the
parties are concerned. But the primary duties imposed on the
parties at common law and under the Act are those which revolve
around the transfer of the goods and the payment of the price. It Is
true that terms relating >to the quality, description and fitness of the
goods may affect the question whether the contract has been per-
formed, in the sense of the delivery of the right goods as required by
the contract. But they do so from die point of view of the performance
of the contract in a particular instance. They do not go to the more
general question to be considered in this chapter, namely, what
duties arise from the making of a contract of sale of goods in
relation to the purpose and function of such a contract.
In this respect mention must once again be made of the distinction

between property and possession. The purpose of a contract of sale
of goods is the transference of property. Delivery, however, is con-
cerned with possession of the goods.* Property and possession are
I S GA. s. 27.
* S G A. s. 1 (I) : supra, pp 4, 5.
It should be noted that this not nccnnite in respect of cl.f., fob. and other
such special contracts of sale of goods, inTOlmg the deliTery of documents not
necessarily goods: see Karberg & Co. t. Biythe Green & Co 11916J I K.B 495
195
196
PERFORMANCX OF TIIE CONTRACT
not the same thing. A contract of sale of goods must involve the
transfer of property (or at least the intention to transfer property
or such rights over the goods as arc enjoyed by the seller)*; it need
not involve the giving of possession. In most instances, of course, the
parties contemplate and intend that possession of the goods should be
obtained by the buyer, as well as property in them. But such posses-
sion may only be notional, as where B instructs S to send the goods
directly to X who is in turn buying the goods from B. Such a
delivery of possession, to a sub-purchaser, is clearly within the scope
of the notion of delivery of the goods which the Act has in mind.
The same, it is suggested, is true where the seller remains in possession
of the goods, under the contract of sale or some other contract entered
into between seller and buyer. In such an instance, as in the former,
delivery of the goods bears a somewhat special meaning. But in
all these instances the common law and the Act make delivery an
intrinsic part of the performance of the contract, even though, by virtue
of statutory definition, sale involves the transfer of property rather
than the transfer of possession.
Origins and status of duties
The duties in respect of delivery, acceptance and payment are, of

course, contractual. But the precise nature and extent of such duties
may be regulated either by the contract itself (if it contains suf-
ficiently express and precise terms) or by the provisions of the Sale
of Goods Act (where the contract does not deal fully with the duty
in question). What the Act stipulates as to delivery, acceptance and
payment will be considered in due course. It is necessary to point out
first, however, that the parties arc free to make whatever arrangements
they deem fit with respect to all these matters. If they have done so
then their rights and liabilities will be determined in accordance with
such agreement. In so far as they have not themselves made
appropriate arrangements, their relationship will be governed by
the Act.
at p. 510, per Bankes LJ.; p 5J4, per Warrington L J. On these contract* SM

Kennedy's CJJ^, Contracts (3rd ed, 1959); Sassoon, F.O. Contracts, I960 But
these special contracts do not affect the general point made in the text Note also
that dealings with documents of title to goods may pass property when the posses-
sion of the goods themselves has not been affected, by virtue of such provisions as
SQA. 8. 29 (3); Bills of Lading Act. 1855; Factors Act, 1889.
* Supra, pp. 52-56
Hence it raises problems m connection with the acceptance of goods. Infra,

pp 226-229.
Tirc DUTIES OF THE PARTIES
197
A further distinction must be made. As with undertakings relating

to the character and quality of the goods,* the obligations of the
parlies with respect to delivery, acceptance and payment may be
contained in express or implied terms of the contract, or in some
collateral undertakings which, as already seen, may elfeotively govern
the duties of the parties. A term in the contract may be either a
condition or a warranty. The status of any such term is a matter of
construction. The effect of such a -term or undertaking wDI depend
upon its status, as was seen in connection with the character and
quality of the goods. It is unnecessary here to do more than refer
once again to the earlier passages in which the distinction between
and different effects of conditions and warranties were discussed.
A further point must be made. It has already been seen that con-
ditions in the sense of vital terms of the contract (in contrast to
warranties) must be distinguished from conditions in the sense
of terms which require performance or fulfilment before the contract
becomes effective. Such latter conditions are conditions precedent."
In the present context a further distinction must be drawn with respect
to such conditions precedent, a distinction which overlaps the other
distinction just mentioned.
Conditions precedent
Some conditions precedent affect the very existence of the contract.

Others affect not the contract itself but the performance of contractual
obligations by one of the parties. The former are properly or strictly
called conditions precedent. The latter are not really conditions
precedent (though they are sometimes so called): they are more
correctly described as conditions in the sense of vital terms of the
contract, the breach of which entitles the other party to treat the con-
tract as repudiated. It may be seen, however, that in some respects
while there may be a theoretical difference between such types of
conditions precedent, there is a close similarity between their practical
effects.
Thus it may be a condition precedent to the existence of a contract

of sale that the buyer open a valid, irrevocable credit in favour of
the seller with a banker. Failure to open such a credit at all, or by
an appropriate or agreed date, will excuse the seller from performance
of the contract, on the ground that the contract has not become
* Supra, pp. 135-179.
Supra, pp 140*143, for earlier discosuon of all these matters
* Cf supra, pp 18--19.
198
PERFORMANCE OF THE CONmCT
binding upon him. On the other hand, a condition as to payment

of the price in advance or the giving of credit will not affect the
existence of the contract, though it will affect the proper performance
of the contract by taking the place of the statutory provision that
delivery of the goods and payment of the price are concurrent con*
ditions.^ Hence a breach of such a condition, while not resiJting in
the failure of a contract to materialise and be binding, will affect,
in the sense of postponing or discharging, the sellers obligation to
deliver the goods. The same may be said to be true as regards
conditions relating to the state of the goods, i.e., their readiness for
delivery. Such a term may be a condition precedent to the existence
of a contract, or it may be a term which affects the other party s
obligation to accept or pay for the goods. It is a question of
construction in each case into which category the condition falls.
The problem is complicated by the questions of waiver and

exclusion. Breach of a condition precedent will prevent the contract
becoming binding, though it may give rise to an action for breach
of the separate undertaking, if any. which was underlying the contract
of sale. Breach of a condition which affects the duties of the parlies
may amount to a repudiation of the contract itself, thus giving rise
to an action for breach of the contract of sale. A breach of a con*
dition precedent (strictly so called) may be waived by the other
party, thereby making the contract of sale binding despite such breach.
Breach of a condition which Is a term of the contract of sale may also
be waived, both in fact and by operation of law statutory election
as it has earlier been called).** Such a waiver has effects which have
been considered in the previous chapter. The effect of a waiver may
be different depending upon what type of condition is involved.
Further, it would seem to be impossible to exclude in advance the
operation of a condition precedent (though performance of it may be
waived ex post facto, i.e., after the contract has been made). On the
other hand, a condition which goes to proper, due. contractual
performance of the contract of sale may be excluded from operating
in advance. Whether an exemption or exclusionary clause will have
i SGu\. S 2S. S further, Infra, pp. OT6. 230 Cf. also /Imos A Wood Ltd. n
Karro'n (IWS) 64 TL.R. 110: aKrerment Hut discount jiven if price paid
a stated period from delivery, full price if payment not made within such period,
r* See supra, pp. 182-183; SO.A, *. II (I) (c).
THE DUTIES OF THE PARTIES
199
such an effect is a question which has already been considered, when

it was seen that much depends upon the interpretation of the contract
generally and the clause in particular.**
Performance of a condition precedent in the strict sense may be

excused by the operation of the doctrine of impossibility or frustration,
as a result of which the contract becomes ineffective.** A condition
which is a vital term in the contract itself may also become impossible
to fulfil, or may be affected by the doctrine of frustration. In such
an instance, however, the question may be not whether the contract
exists, but whether one party or another is excused from his obliga-
tions as regards performance. The practical effect of this difference
may not be very great, since the Law Reform (Frustrated Contracts)
Act, 1943,** may apply in either situation to regulate the financial
position of the parties. But the difference may be important as regards
any collateral effects, in that in the one instance the contract of sale
is rendered nugatory and is discharged.* whereas in the other the
contract still remains extant and only the obligations to which it gives
rise are affected by the impossibility or frustrating event. Whether
the condition is a condition precedent in the strict sense or a con-
dition of the contract it is provided by the Act** that the provisions
as to waiver and election (whether such waiver or election be the
result of a real choice by the party in question or is imposed by the
statute through the passing of property or the acceptance of the goods)
are inoperative where the fulfilment of the condition (or warranty) is
excused by law by reason of impossibility or otherwise, f.e., by the
doctrine of frustration.
In connection with the distinction between a condition precedent

strictly so called and a condition which relates to the performance of
the contract, it must be pointed out again that sometimes a condition
as to description is a condition precedent and sometimes it is a term
connected with performance. Which it is may be relevant when
determining the effect of a breach of condition, particularly if waiver
of the condition or the breach is in issue, or there is an exemption
Surfa. pp. 18S.193.
jj T. ., ,.1. ....... ^ ^ ^ ^ unfuUilled because of
*' . ion. In any event the
" ' . - - I for the non-fulfilment
. ' ' breach of contract, if
the condition precedent is separately suf^rted by consideration.
Infra, pp 246-243.
Possibly not without some ciTeCt if the fulfitinent of the condition precedent Is
prevented by the wrongful act of one party (if by a stranger to the contract the
tort of procuring a breach of contract may have been committed).
SOJV. s. 11 (3).
200
PWFORMANCE OF TIlE CO^^^lAC^
clause the effect of which, if operative, would be to exclude the

liability of the seller for non*pcrformance of the condition. As
indicated earlier,*^ there are cases in which such conditions have
been construed as conditions precedent, and others where such con-
ditions have been regarded as terms of the contract capable of
exclusion by agreement. Such ambiguity has led to some difficulty
and uncertainty. However, in the light of such cases it is only
possible to draw attention to the different ways in which such under-
takings may be interpreted and applied. leaving it open for individual
instances to be decided differently according to the circumstances.
Time
The distinctions and ambiguities discussed in the previous section

may be illustrated by reference to the provisions of the statute and
to the decisions which are concerned with the problem of time in
relation to the performance of a contract of sale of goods. Under the
Sale of Goods Act " Unless a different intention appears from the
terms of the contract stipulations as to time of payment are not deemed
to be of the essence of a contract of sale, ^êlher any other stipu-
lation as to time is of the essence of the contract or not depends on
the terms of the contract. In Hartley v. Hymans** McCardie J.
suggested (probably erroneously) that this provision was in conflict
with the provisions of section 61 (2) of the Act that the *' rules of the
common law, including the law merchant, save in so far as they are
inconsistent with the express provisions of this Act . . . shall continue
to apply to contracts for the sale of goods. This was because the
common law did not look at the terms of a contract but at the
nature of a contract and the character of the goods being sold. In
commercial contracts the rule was that time was prima facie of
essence with respect to delivery. Therefore a condition which relates
to and affects the time at which goods are to be delivered * may well
be essential to the contract. However, such a condition, it would
appear from the cases, may be a term which operates as part of
the description of the goods (within the meaning of section 13 of the
Act as discussed earlier)*' or it may be a condition precedent to
IT Supra, pp. 135-137
* SOjV. s. 10 (1) What this means is that an action will only lie tor late per-
foimance where time is stipulated as bcin; * of the essence " For
time being of the essence see Charles Rickards trd. v. Oppenhelm [1950] 1KB
616; McDougall y, Aeromarlrte Ltd. [15*58] 3 AH E,R. 431.
If [1920] 3 K.B. 475 at pp. 483-489.

so Supra, p 136.
St Sudi as a sale of goods ** to arrive on a stipulated ship, a clause^ which states

that a certain ship is " ready to load (or uses some simibr expression), a ebuse
201
the effectiveness of the contract. This is made clear by the decision of

McCardie J. in Aron v. Comptoir Wegimont?^ where it was held
that an express requirement that goods should be shipped at a
particular tim e was not a mere part of the description of the goods
(as it was suggested such a term might be in Bowes v. Shand^^) but
was a condition precedent* the failure to fulfil which entitled the buyer
to reject goods not shipped at the specified date, despite a clause in
the contract that the buyer was not entitled to reject for differences
in value from the grade, type or description specified.
Waiver
The distinction between these different kinds of condition as to

time is blurred by the possibility that the buyer may waive such a
condition, whichever type it be. under section 11 (1) (o) of the Act.**
The practical difference between such types of condition is revealed,
however, by a case such as that last cited, where an exemption or
exclusion clause would have the effect of ousting the operation of the
condition if it is of one type but not if it is of another, or by cases
in which the statutory election effected by section 11 (1) (c) of the
Act would operate if the condition Is a term of the contract but
might not if the condition is a condition precedent properly so called.
If the condition is a true condition precedent, the conduct of the
buyer, e.g., his acceptance of goods delivered late, may operate as a
waiver in fact of the breach of condition. But this would seem to
have the effect of relieving the seller from liability for breach of
contract, and of effectuating (he contract which otherwise might be
a nullity. It may also entitle the buyer to treat the breach of
condition precedent as a breach of warranty.**
A further point has been raised. If the buyer wrongfully

repudiates ** the contract by rejecting goods which he ought to accept
which deals with the place or mode ot shipment of goods: for examples see
Benjamin on Sale, 8th ed., at pp 58I-5SW.
** [19211 3KB 435. C/, also Berg A Sons v. Landauer (1925) 42 T.L.R. 142 (dale
of bill of lading matenal therefore not excluded by E- & 0. ).
** (1877) 2 App Cas. 455, per Lord Cairos In fact the term in question was treated
as involving a condition precedent.
** see supra, p. 182. But if the condiUon is for the benefit of both
parties there can only be bilateral waiver; Maine Spinning Co. v. Sutdiffe A Co
(1917) 87 LJ.K.B. 382,
Supra, pp. 182-183.
See Hartley v. Hymans 119201 3 K3 475 at pp. 486-487.
If the bwer (or seller) wrongfully repudiates in advance or anticipation by some

a which shows that he has no iatentioif of being bound by the contra when
the lime comes for performance of his ude of the bargain, then it is clear that this
202
under the contract, does the seller have to prove that his tender of
the goods was in accordance with the contract, or that he was ready
and willing to perform his part of the bargain? In the case of
Braithwaite v. Foreign Hardwood Co.^^ it was suggested that a
repudiation by the buyer, if wrongful, amounted to a waiver of
the performance of any conditions precedent which were to be fulfilled
by the seller, in 'this case the correspondence of the goods with
description and quality.* It is noteworthy that in this case the term
as to description should have been considered a condition precedent.
The decision in this case has caused some difficulty. Following this
case it has been said that if the performance of a condition precedent
by the plaintiff has been rendered impossible by the neglect or default
of the defendant it is equal to performance." It has been said that
the case decides that : *' If the buyer wrongfully repudiates his
contract and the seller does not tender performance on his part but
accepts the repudiation and claims damages, the buyer is not
relieved from liability by proving that if he had not repudiated the
contract but called for performance, the seller would have been unable
or unwilling to perform it." On the other hand, in British & Sen-
ningtons Ltd. v. N.W. Cachar Tea Co.,** where the House of Lords
held that, a buyer having wrongfully repudiated a contract, the seller
was cot bound to prove that he was ready and willing at the date of
such repudiation to deliver the goods at the contracted place of
operates to relieve the other party of (be necessity to perform conditions precedent
(if any) binding upon him. Such party may sue for breach of contract or may
attempt to secure performance by givuig effect to the contract on his side:
Whilt <S Carter (Councils') Ltd. r McGregor (1962] A.C. 413. On anticipatory
breach see Universal Cargo Carriers Corp. r. Cl/atl [1957] 2 Q B. W1 at
pp. 436-438.
** [1905] 2 K.B 543 The correctness of the decision and reasoning in this otse
was left open by the House of Lords in /. Rosenthil Sons Ltd. v. Esmail
{1965] 2 All EJL 860, at p. 870, per Lord Pearson.
Cf. with thu the statement by Lord flalsbuiy in Forrest A Son Ltd. v, Aramayo
(1900) 83 L.T. 335 at p, 338 that ** whenever (here are concurrent obligations the
party who seeks to recover against the other must show that he has always been
ready and willing to perform the obbgations upon him. ... In a contract for
the sale ... of a cluitel, the one party must be ready and willing to deliver,
and the other to accept deUvery."
*9 Ter McCardie J. in Colley r. Overseas Exporters [1921] 3 K.B, 302 at p. 309.
*1 Taylor v. Oakes, Roncoronl & Co. (1922) 127 l^T. 267 at p. 269, per Greer J.
. .1 . j-. .. - t. > ....J
to perform it. As to an antldpatory bread) that Is not accepted, see tV/ilte &
Carter (CouneCs) Ltd. v. McGregor {19^] AC. 413; supra, note 27.
** [19231 A.C 48.
203
delivery (which in fact he could not do). Lord Sumner said. dis-
cussing the Braithwaite case, that it did not lay down that a buyer
who has repudiated a contract for a given reason which fails him has,
therefore, no other opportunity of defence as to the whole or as to
part, but must fail utterly.
This conflict of opinion makes it difBcult to say what is the effect

of conduct by the buyer which may be considered as an implied
waiver of the performance of a condition precedent on the part of the
seller. It also leaves uncertain the distinction between conditions
precedent and other conditions, from the point of view of determining
into which category a particular condition falls. These difficulties,
however, do not affect the main point which is that either type of con-
dition may be waived, or the breach thereof treated as a breach of
warranty, not a breach of condition (with effects which have previously
been examined). But the status of any given condition may be of
importance if the decision in Braithwaite' s case is overruled or
interpreted as meaning that a wrongful act by the buyer does not
affect the seller's duty to perform conditions precedent (though not
other conditions), and makes such performance, or the willingness and
ability of the seller to provide such performance, an essential element
in the proof of the seller's case in an action by him against the buyer
for breach of contract by wrongful repudiation. Hence, also, the
need for determining whether stipulations as to time of delivery,
location of goods, etc., are conditions precedent or are conditions
which are vital terms in the contract itself.
2. Delivery
Meaning
Delivery is defined in the Sale of Goods Act as the volun-

tary transfer of possession from one person to another. The duty of
the seller, therefore, is to transfer possession of the goods to the
buyer,** unless the contract stipulates to the contrary either expressly
*9 Ibid at p. 71.
* Cf. Devim J. in Universal Cargo Carriers Corp. v. Citall [1957] 2 Q.B. 401 at
p. 443; A rescission or repudiation, if ^veit for a wrong reason or for no reason
at ail, can be supported if there are at the time factors in existence whidi would
have provided a good reason. This is certainly true of the contract of employ-
ment Is it also true of the contract of sale of goods?
ss S GA. s. 62 (1)
88 Bidden Bros. v. Horst Co. 1 KB. 934 at p. 958, per Kennedy J.; Kwel
Tek Chao v. Br. Traders d Shippers ltd. 119541 2 Q.B. 459 at p. 486. per
tkslin J.
202
under the contract, does the seller have to prove that his tender of
the goods was in accordance with the contract, or that he was ready
and willing to perform his part of the bargain? In the case of
Braithwaite v. Foreign Hardwood Co.* it was suggested that a
repudiation by the buyer, if wrongful, amounted to a waiver of
the performance of any conditions precedent which were to be fulfilled
by the seller, in this case the correspondence of the goods with
description and quality.* It is noteworthy that in this case the term
as to description should have been considered a condition precedent.
The decision in this case has caused some difficulty. Following this
case it has been said * that if the performance of a condition precedent
by the plaintiff has been rendered impossible by the neglect or default
of the defendant it is equal to performance. It has been said that
the case decides that: If the buyer wrongfully repudiates his
contract and the seller does not tender performance on his part but
accepts the repudiation and claims damages, the buyer is not
relieved from liability by proving that if he had not repudiated the
contract but called for performance, the seller would have been unable
or unwilling to perform it. ** On the other hand, in British & Ben-
nlngtons Ltd, v, N.W. Cachar Tea Co.,** where the House of Lords
held that, a buyer having wrongfully repudiated a contract, the seller
was not bound to prove that he was ready and willing at the date of
such repudiation to deliver the goods at the contracted place of
operaces to relieve the other party of the necessity to perform conditions precedent
fif any) binding upon him Su^ party may sue for breach of contract nr may
attempt to secure performance by giving effect to the contract on his side:
White & Carter (Councih) Ltd Y AfeOregor J1962I A.C. 413 On anticipatory
breach see Universal Cargo Carriers Corp. t. Citatl [1957] Z QD. 401 at
pp 436^38.
** [19051 2 K.B. 543, The correctness of the decision and reasoning in this ca*
vras left open by the House of Lords in /. Rosenthed & Sons Ltd. v. Email
[1965] 2 All E R. 860, at p 870. per Lord Pearson.
* C/. with ihb the statement by Lord Malsbury in Forrest d Son Ltd. v. Aramaya
(1900) 83 L.T. 335 at p. 338 that ** whenever there are concurrent obligations the
party who seehs to recover against the other must show that he has always been
ready and willing to perform the obligatims upon him. ... In a contract for
the sale ... of a chattel, the one party must be ready and willing to deliver,
and the other to accept delivery.**
se Per McCardie J. in Colley y. Overseas Exporters [1921] 3 K.B. 302 at p. 309.

at Tailor v. Oakes, Roneoronl & Co. (1922) 127 L.T. 267 at p. 269, per Greer J.
Is the Court of Appeal it was said {ohUer it Is suggested, since there was no such
203
delivery (which in fact he could not do). Lord Sumner said,** dis-
cussing the Bralthwaite case, that it did not lay down that a buyer
who has repudiated a contract /or a given reason which fails him has,
therefore, no other opportunity of defence as to the whole or as to
part, but must fail utterly.**
This conflict of opinion makes it difficult to say what is the effect

of conduct by the buyer which may be considered as an implied
waiver of the performance of a condition precedent on the part of the
seller. It also leaves uncertain the distinction between conditions
precedent and other conditions, from the point of view of determining
into which category a particular condition falls. These difficulties,
however, do not affect the main point which is that either type of con-
dition may be waived, or the breach thereof treated as a breach of
warranty, not a breach of condition (with effects which have previously
been examined). But the status of any given condition may be of
importance if the decision in Braithwaite's case is overruled or
interpreted as meaning that a wrongful act by the buyer does not
affect the sellers duty to perform conditions precedent (though not
other conditions), and makes such performance, or the willingness and
ability of the seller to provide such performance, an essential element
in the proof of the sellers case in an action by him against the buyer
for breach of contract by wrongful repudiation. Hence, also, the
need for determining whether stipulations as to time of deliveiy,
location of goods, etc., are conditions precedent or are conditions
which are vital terms in the contract itself.
2, Delivery
Meaning
Delivery is defined in the Sale of Goods Act ** as the volun-

tary transfer of possession from one person to another." The duty of
the seller, therefore, is to transfer possession of the goods to the
buyer,** unless the contract stipulates to the contrary either expressly
*s Ibtd at p 71.
** Cf, Devlm J. in Universal Cargo Carriers Corp. v. Cltati 11957] 2 Q.B 401 at
p. 443 : A resdsston or repudiation. If given for a Wong reason or for no reason
at all, can be supported if there are at the time factors in existence which would
have provided a good reason." This is certainly true of the contract of employ-
ment. Is jt also true of the contract of sale of goods?
8 S GA s. 62 (1).
*8 Bidden Bros v. Horst Co. 11911] 1 KB, 934 at p. 958, per Kennedy J.; Kwel
Tek Chao v. Br. Traders & Shippers Ltd. 11954] 2 QB. 459 at p. 486. per
Devlin J,
204
PERFORMANCE OP TTffi CONTRACT
or impliedly.*^ The Act does not define what is meant by posses*

sion, which means that it is for the common law to say when an act
by the seller constitutes a sufficient transfer of possession to satisfy
the requirements of the Act. Since possession is a notoriously complex
and subtle concept to understand and apply, it is not surprising that
there is considerable difficulty in some instances in deciding whether
possession of goods has been transferred. In this context, however,
it is unnecessary to enlarge overmuch upon this question. It suffices
to point out that there may be a delivery of possession in the ordinary
straightforward way, or by allowing goods already in the possession
of the buyer under some other contract or arrangement (such as a
bailment) to remain under bis control under a contract of sale, or
by the seller retaining possession not as owner of the goods but as
bailee from the buyer. Such latter instances are constructive
delivery, involving an attornment by the seller to the buyer, or a
holding by the buyer on his own account, where he previously
attorned to the seller. There is another such instance of constructive
delivery, te., where the goods are in the possession of a third person
as bailee of the seller and such person continues to possess the goods
but does so as bailee of the buyer and attorns to him.*
Delivery may also be symbolic, c.g., where the key of the

place where the goods are stored is given to the buyer.** What is
symbolic is the transfer of control over the goods. In this respect
where the contract expressly or impliedly permits of the transfer
of possession symbolically by the transfer of some document which
permits the possessor thereof to obtain possession of goods a
document of title), delivery is effected by handing such document over
to the buyer. Whether such a document has such effect is often a
matter of mercantile law or custom. It is clear now that in c.ii.
contracts delivery of the documents is sufficient to satisfy the duty
eg, Levey & Co. v, Goldberg [1722] I KB. 688 where McCardie J. held
the seller did not have to tender delivery but need only have been ready and willins
to deliver: cf S GA a. 28, as to delivery and payment being concurrent conditions,
therefore the seller must be ready and wiUmg to give possession and the buyer
ready and willing to pay the price.
es Cf. SGA. s. 29 (3): but note that this does not affect the operation of the issue
Of transfer of documents of title to goods. Sec, generaDy, Publirt City Distillery
Ltd. V. Doherty [I9I4J A.C 823 at pp 845-848, per Lord Atkinson The problem
of possession is also relevant in relation to Uie sellers lien and right of stoppage
in transit: In/ra. pp 256-273 For the American rule see UCC s. 2-503 (4).
39 See, eg, If'rlghtson v. McArthur & RutchUora V919) Ltd. [192JJ 2 K.B 807.
The same is not true of fob. contract^ see Sassoon, F.OJB. Contracts (I960),
pp. 33-55, especially at p. 48 <f seq.
DEtlVERY
205
placed on the seller by the Act** The goods arc delivered, so far
as they are physically delivered, when they are put on board a ship
at the port of shipment. The documents are delivered when they are
tendered. This distinction in such contracts between the goods and
the documents relating to the goods. i.e., the bill of lading, invoice
and the policy of insurance,** has led to the proposition that there
is a right to reject the documents which is distinct from the right to
reject the goods, with consequent effects, as will be swn, upon the
provisions of the Act relating to acceptance and its results. What
is undoubted, however, is that in such contracts (and it would seem
in ex ship contracts) the duty of the seller is not to deliver the
goods but the appropriate documents. Indeed, delivery of the goods
will not sufBce if the documents are not in order. Whether, in other
kinds of contracts of sale of goods, delivery of documents which
permit the gaming of control of goods, such as delivery warrants
or orders, will sufBce as a performance of the duty to deliver, is an
open and difficult question.** The answer may depend upon whether
mercantile custom recognises such documents as effective to transfer
property in goods or the right to claim property in goods.
It should be noted at this point that delivery of goods may have

different effects in different circumstances, depending upon whether
it is delivery to the buyer, delivery to a canier on behalf of the seller,
delivery to a carrier on behalf of the buyer, delivery by the carrier
to the ultimate consignee, te.. the buyer, or delivery by the seller to a
sub-purchaser from the buyer. Any of these varieties of delivery may
amount to a performance by the seller of his obligation to deliver.
Bidden Bros. T. Horst Co, 11912) A.C 18. See Kennedy's CJ F, Contraels (3rd ed ,
1919), at pp. 1-3, 4-9, IOS-123. It must be noted that the delivery of the
documents does not mean that property in the goods passes; c/. S.GA. s 19,
discussed iiipra, pp. 90-93. See also Kennedy, <?p. c//., pp 133-151.
** fCwl Tek Chao V. Br. Traders &. Shippers Ltd., supra at p. 486, per Devlin 3
The bills of ladmg in law and fact represent the goods Possession of the bill
o( lading places the goods at the dispo^ of the buyer: Bidden Bros v. Horst &
Co. (19111 1 K-B. 934 at p. 956, per Kennedy LJ. Hence the importance and
negotiability of bills of lading.
The shipping documents: see Johnson v. Taylor Bros. [1920] A C. 144 at p. 155,
per Lord Atkinson.
Kwel Tek Chao v. Br. Traders & Shippers Lid , supra See Infra, pp. 221-229.
* Explained and discussed by Lord Sumner in Yangtsze Insurance Association v.
Lukmanfee (1918] AC 585.
* Orient Co. Ltd v. Brekke & Howlid 119131 1 JC.B. 531.
206
PERFORMANCl! OF TIIE CONTRACT
But they may have different effects as regards the rights and liabilities
of the parties with respect to a breach of contract, or the question
of risk, or the rights of the seller over and in respect of the goods
should he remain unpaid by the buyer.**
When delivery becomes obligatory
Unless otherwise agreed, states the Act,** delivery of the goods

and payment of the price are concurrent conditions. 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- Thus, in the
absence of any express, implied or customary stipulation as to the
time for delivery, * or the giving of credit, the seller is not bound
to deliver unless the buyer is ready and willing to pay the price.
It is to be noted that these conditions are concurrent, and not
precedent. Either condition may be made a condition precedent by
agreement between the parties, whether such agreement be express
or implied. If either condition is made into a condition precedent,
then what has earlier been said about such conditions, and their
effects upon the duties, rights and liabilities of the parties, will be
applicable.*^ If neither condition is a condition precedent, then, as
Lord Halsbury made clear in Forrest v. Aramayo,** delivery and
payment must occur together. Hence if the buyer is not ready and
willing to take delivery and pay the price, the seller will not be
liable for damages for delay in deliveiy.
Rules as to delivery
Just as the contract may stipulate when delivery is to be made,

thereby ousting the operation of the provision of the Act referred to
above, so the contract may expressly or impliedly provide for the
manner and requisites of delivery. Whether the contract does so
provide, and, if so, the effect of the contract and the nature and scope
of the sellers duty to deliver, are questions of construction. In the
See Infra, pp. 226-229. 236-240, 261, 268-270.
*9 S GA. 8. 28
*0 As to time of delivery being of the essence of the contract see supra, p 200 If
the contract stipulates a time and involves a period of months, the expression
month prima fade means caleodar ittonth: SGA. s. 10 (2) As to the
impbcations of terms by agreement or custom, see supra, pp 148-150.
St Supra, pp 197-200. Note particnlarly the problem of waiver in relation to

breaches of condition other than conditions as to time of dehvery. If the buyer
is obliged under the contract to give delivery instructions his failure to do so
may affect the question of risk: Horn v. Minister of Food [1948] 2 AD E R. 1036
8* 09<W) 83 L.T. 335 at p 338: supra, note 29.
DEUVERY
207
absence of any such express or implied stipulations, the provisions of

the Act will apply. These must now be considered.
^Vhether 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 express or implied contract between the parties. If
nothing is said in such contract, the place of delivery is the sellers
place of business, if he has one. and if not, his residence. If 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, that
other place is the place of delivery.** The effect of this is that delivery
normally takes place at the premises of the seller, unless the parties
have agreed to the contrary. Such agreement, of course, is implicit
in c.i.f., f.o.b. and ex ship contracts, for example, which are governed
by their own special rules.** In respect of other contracts it may be
that the seller is obliged to deliver to the buyers premises, as in
Galbraith A. Grant Ltd. v. Block where someone other than the
buyer took delivery at the buyers premises. It was held that this
was a good delivery, even though the person in question was not
acting on behalf of the buyer but made off with the goods. Under
the circumstances the seller was not negligent in the manner of the
delivery.
Where under the contract of sale the seller Is bound to send the
goods to the buyer, but no time for sending them is fixed, the seller
is bound to send them within a reasonable time.** A failure to send
the goods within a reasonable time will be a breach of contract by
the seller, i.e., a breach of condition, which may be waived and
treated as a breach of warranty by the buyer in accordance with the
principles already examined. Should the contract stipulate that goods
arc to be delivered by the seller as required " by the buyer, the buyer
must make known his requirements within a reasonable time.*^ A
failure by the buyer to do so may be a breach of contract by him,
or it may show, if the lapse of time is inordinate, that the parties
have abandoned the contract so that neither is liable to the other.*
S G A. 8. 29 (1) A reasonable opponvsnity of examining the be
ailorded the buyer: SGA. s 34 (2): infra, pp. 223-226

** In America the relevant provisioo is U.C.C. a 2-503 (3). For the question of
risk where the seller agrees to ftcliver elsewhere than where the goods are
situated, see S G.A. s. 33 : Infra, p. 239.
11922] 2 K.B 155.

s S G A. s 29 (2).
Pearl Mill Co. Ltd. v. Ivy Tannery Co Lid. n9191 1 K.B. 78 at p. 81, pur
Rowlatt J. Sec also Kler d Co. y. Whitehead frott d Steel Co. [1938] I All E.R.
B* fbid. at p. 83, per McCardie J.
208
PERFORMANCE OF TOE CONTRACT
It must also be noted in connection with the duty to deliver within

a reasonable time that what is a reasonable time is a question of fact,*
and that demand or tender of delivery may be treated as ineffectual
unless made at a reasonable hour (what is a reasonable hour being
also a question of fact).*
Where the goods at the time of sale are in the possession of a

third person, there is no delivery by seller to buyer unless and until
such third person acknowledges to the buyer that he holds the goods
on his behalf.^ As already seen, this is an illustration of constructive
delivery, and involves an attornment by the bailee of the seller to
the buyer. It must be noted that this provision does not affect the
operation of the issue or transfer of any document of title to goods.*
Hence such documents may be delivered and pass property in goods
as well as satisfy the obligation as to delivery wherever the goods are
and without the need for any attornment. This, of course, is of
especial importance and relevance in contracts of sale such as those
which are c.i.f.
Finally, unless otherwise agreed, the expenses of, and incidental

to putting the goods into a deliverable state (the meaning of which
expression has been earlier considered)** must be borne by the
seller.**
Delivery of wrong quantity
The quantity of goods to be delivered, just as their quality, may

be an intrinsic part of the description of the goods. If it is, then a
failure to deliver goods of the right quantity will be as much a breach
of the condition implied by section 13 of the Act as would be a failure
to deliver goods of the right quality. In so far as the seller delivers
goods of the wrong quantity, by sending less or more than stipulated
in the contract, or by sending goods which are of the right quantity
and quality and goods which are not, then the buyer would be
entitled to reject the goods tendered by the seller and sue for breach
of contract.** Or the provisions of section 1 1 of the Act as to voluntary
* S.GA. 8. 56.
S G A. . 29 (4). Cf. U.CC . 2-503 (I), which is fuller than the Engtish provision.
S.G JV. . 29 (3). Cf. U CC. i. 2-503 (4)
* Jbll.. document of title has the tame definition as in the Factors Act. 1889,
s. I (4): S.G.A. %. 62 (1) It should be nMed that such documents of title are
not bills of sale and do not require re^tration: Bills of Sale Act, IS7S, t. 4.
* Supra, pp 70-71.
SGJ^. s. 29 (5). In America the buyer nay have to furnish facflitiea for the
receipt of the goods, U CC. a. 2-503 (I) (b).
M Crren T. Arecs Ltd. (1931) 47 T.L.R. 336; WBentko r. FtnwUk & Co I193S]
3 AH HR. 429.
DEUVERY
209
or statutory election or waiver* may be applicable. However, it

would seem possible to argue, in the light of the provisions of section
30 of the Act. that the obligation to deliver the right quantity of goods
as contracted for is a distinct obligation from that of delivering goods
of the right description or the right quality.^ That section explicitly
lays down what follows should the seller not deliver the right quantity
of goods. What is there provided is subject to any usage of trade,
special agreement, or course of dealing between the parties. * This
means that the parties can contract beforehand as to what is to happen
in any of the eventualities dealt with in the section, or can agree after
the event, by making a fresh agreement on the basis of the incorrect
or inaccurate delivery. In the absence of any such prior or subse-
quent agreement, the following rules are laid down. Where the
seller delivers to the buyer a quantity of goods less than he contracted
to sell, the buyer may reject them, but if the buyer accepts the goods
so delivered he must pay for them at the contract rate.^ If more are
delivered than the quantity contracted to sell, the buyer may accept
the goods included in the contract and reject the rest, or he may
accept or reject the whole. If he accepts the whole of the goods
delivered he must pay for them at the contract rate.^
Thus the buyer has an option to reject the goods delivered or

accept ail, or the right amount. Two points must be considered. The
first is when this choice is open to the buyer. It would seem that
to entitle the buyer to exercise his option under the Act, the difference
in quantity must be substantial. In carrying out a commercial con-
tract some slight elasticity is inevitable, as Bigham J. said in Harland
& Wolff Ltd. V. Burstall (where rejection was permitted). But the
maxim de minimis non curat lex applies here, as elsewhere, so as to
disallow rejection where the variation is so microscopic as not to
*9 Supra, pp. 182-184.
Cf, Areas Lid, v. Raruiasen & San (1933] AC. 470 at p 479, per Lord Atkin: cf.
Beekv.Szym ' r'- r* . , .i , .-
the buyer an < , '
1 K.B. 574 a
these duties. ... , ^
partial accept ... .
quality penni , , i .
S GA. a. 30 (4).
l.e , the delivery of the wrong qnaotity operates as an offer of a new contract
wWch may be accepted by the buyer, thereby precluding him from suing for
brMô^he original contract: Gabriel Wade d English v. Areas Lid. (1929) 34
to S.GA. s. 30 (1).
Ti IbU. s. 30 (2).
ts (1901) 84 L.T. 324: ef. Lomas d Co. r. Barff (1901) 17 TX.R. 437.
210
PERFORMANCE OF TIIE CONTOACT
amount to a serious amount. There must be an excess or deficiency

in quantity which is capable of influencing the mind of the buyer, as
Lush J. said in Shipton, Anderson & Co. v. IVcil Bros.,'* where rejec-
tion was denied to the buyer. In that case the extra amount was
trivial, having regard to the quantity involved, and the sellers were
not charging the buyer for such excess. In other cases, however, the
goods delivered were too much or too little, and so were not the
goods specified in the contract. In every case it is a question of
fact whether rejection should or should not be permitted.
The second question which arises is the effect of an exemption or

exclusion clause. If such a clause is wide enough to excuse the
seller for breaches of implied statutory condition, can it be said that
a failure to deliver the right quantity Is a breach of the implied
condition as to correspondence with description (thereby not giving
rise to liability or the right to reject because of the exclusion clause)
or is a breach of some other fundamental condition, or some con-
dition precedent not excluded from operating as between the parties
by virtue of such clause? It would seem that the decisions draw a dis-
tinction between description (>., character and quality) and quantity
such as to make exemption clauses which are applicable to conditions
relating to description not equally applicable to conditions as to
quantity.^* If this is correct, then, despite the inclusion in the contract
of such a clause, the seller will not be excused from liability and the
buyer will not be prevented from exercising his option to reject
the goods, where the default of the seller fakes the form of delivery
of an incorrect quantity. If. on the other hand, in any particular
case, the contractual quantity of goods can be characterised as part
of the description, a different conclusion may be forthcoming. In
such a case, however, it is arguable that the quantity of the goods
might be construed as a " fundamental term, or a failure to deliver
the right quantity might be held to be a fundamental breach, " as
a result of which, in accordance with what has earlier been seen,*
the exemption clause might still be held to be inoperative in this
context.
T See Jackson v. Rolax Motor A Cyde Co. {1910] 2 K.B. 937 at p 945, per
Cozens-Hardy M.R.
* {1912] I K.B. 574 at p. 577.
M For other examples see Behrcnd & Co. Ltd. t. Produce Brokers Co. Ltd. (1920]
3 K.B. 530; Payne & Routh v. UlUeo 0920) 36 T.L.R. 569; Re Thomett & Fehr
& YuBts Ltd. 11921] I K.B 219.
s* See the cases referred to in note 67, supra.
tr Cf. the cases referred to in note 65, supra.
TS Supra, pp. 18S-I9!.

DELIVERY
211
Under the Sale of Goods Act. also, where the seller delivers goods
he contracted to sell mixed with ** goods of a different description
not included in the contract, the buyer may accept the goods which
are in accordance with the contract and reject the rest, or he may
reject the whole.'** It has been held that the expression mixed with "
does not refer to physical confusion but is equivalent to accompanied
by. Thus where the contract speciffes a quantity of peas and such
quantity is delivered but in sacks in which the peas are mixed in with
beans, it would seem that the buyers right to reject is based not
on this provision but on the provisions of section 13 of the Act.'
This provision is meant to deal with cases where the goods sold are
delivered together with, but separate and distinct from other goods,
e.g., where some cases contain 24 tins per case, others 30 tins per
case, and the contract stipulates that there should be 30 tins in each
case.* It would seem that, even though the goods answering the
contractual description have been accepted within the meaning of
the Act, it is still possible for the buyer to reject the whole consign-
ment if it includes non-contractual goods within the meaning of this
provision.* Similarly, if the goods are delivered in instalments and
the contract provides that each item is to be considered as a separate
interest, this would not deprive the buyer of his right to reject the
whole of the goods under the provision, even though it would deprive
him of his right to reject for failure to deliver goods of the right
quality.** This decision seems to underline the argument that the
obligation to deliver goods of the right description and quality is
distinct from the obligation to deliver the right quantity of goods.
It also leads to the question of instalment deliveries and their effect
ofl the obligations of the parties.
Instalment deliveries
Unless otherwise agreed, the Sale of Goods Act provides that the
buyer of goods is not bound to acwpt delivery of the goods by
s G.A. 8. 30 (3).
^ l-anJauer <t Co. (1921] 1KB. 73; affirmed on other grounds
119211 2KB 519 (on which see supra, p. 155).
Or, if this implied condition is excluded, on the doctrine of fundamental breach

or breach of a fundamental term.
63 Moore Co., v. Landauer & Co , supra
8S Infra, p. 221.
B* ^ndon Plywood Timber Co. Lid. v. Nasic Oak Extract Factory & Steam
Co. Ltd. 11939] 2 KB. 343 Hence there U another reason for
diHerentianng delivery of the right quantity of goods from delivery of the right
quality of goods: cf. supra, note 67.
85 Faahe OfY Osakeyth v. Goddard 0936) 154 L.T. 124.
212
PERFORMANCE OF TIIE CONTRACT
instalments.** As Bailhache J. said in a case which involved the delivery

of goods to the buyers barges from a ship on which the goods had
been put by the seller*^: In the absence of any stipulation to the
contrary the buyer, being ready with his craft, is entitled to delivery
of the whole of an indivisible parcel of goods sold to him for delivery
from a vessel which has begun delivery to him." Therefore, in that
case, Behrend & Co. Ltd. v. Produce Brokers Co. Ltd.,** the buyer
was held entitled to reject for delivery of the wrong quantity under
section 30, where some goods were discharged to his barges before
the ship went to another port to return two weeks later in order to
complete the delivery of the goods bought by the buyer. Thus, to per-
mit the delivery of the right quantity of goods otherwise than all at the
same time, which is the basic obligation imposed on the seller by
section 30 of the Act,** there must be some agreement between the
parties to that effect. Such an agreement may be incorporated in the
original contract of sale or it may arise by the conduct of the buyer
after the seller has delivered in separate lots, i.e., by a process of
waiver or by the implication of a new or varied contract. If the
latter occurs what is really happening is that the buyer is waiving
or varying the original obligation on the seller. If the former is the
case, dien the contract itself varies the otherwise applicable obligation
on the seller. Such a contract is rightly called, as the ITniform Com-
mercial Code does call it,** an instalment contract," defined in that
Code as a contract which requires or authorises the delivery of
goods in separate lots to be separately accepted, even though the
contract contains a clause ' each delivery is a separate contract
or its equivalent. This definition is not in the Sale of Goods Act,
which speaks only of what is to happen where there is a contract
for the sale of goods to be delivered by slated instalments, which are
to be separately paid for. *
Thus whether delivery is to be in instalments is a question of

construction of the contract. It is to be noted, however, that if the
s S.G.A. s. 31 (1).
Behrend & Co Ltd. r. Produce Broken Ltd. [1920] 3 KB. 530 at p. 538.
89 Supra
Cf. abo under 3 G.A. s. 23 which makes delivery of the goods (t e., all the goods)
aod payment of the pnee, prima fade concurreat conditions.
80 U.CC. s 2-612 (I)
*1 S GJi. 8. 31 (2).
* See, eg, Howell v. Evans (1926) 42 T.LJt 310 where a contract to sell a let
of engravings '* to be sent to the buyer as pabhshed was an instalment contract.
Cf. where goods are to be sent Co the buyer " as required Pearl Mill Co. Ltd.
T. Ivy Tannery Co. Ltd. [1919] I K B. 7S. C/, abo, /. Rosenthal & Sons Ltd.
T. EsmdB [1965] 2 All EJl. 860, where (be contract gave the seller the option
DEUVERY
213
contract does permit such delivery this does not merely make the
contract divisible. It can still be an entire contract, though perfor-
mance of it is divisible. The obligation on the seller is still to deliver
the entire contractual quantity, though he is not obliged to deliver
such quantity at one time. The problem then arises as to the effect
of a breach by either party of his obligations with respect to any one
instalment. The common law position was discussed by the House
of Lords in Mersey Steel & Iron Co. v. Naylor, Benzon & Co.'^ where
it was held, on the facts of that case, that payment for a previous
instalment was not a condition precedent to a right to claim that the
next instalment should be delivered. Hence the failure by the buyer
to pay for earlier instalments did not relieve the seller of his obliga-
tion to deliver subsequent instalments. The problem was to determine
whether the breach by the party in qu^tion, Lc., failure to deliver or
to deliver the right goods or goods of the right quality on the part of
the seller, failure to accept or to pay on the part of the buyer, was
such a material breach as to go to the root of the contract and amount
to such a repudiation by one party as would justify the other party
in considering himself relieved of bis contractual obligations. This
problem is part of the whole question of anticipatory breach, mention
of which has earlier been made.** It was said in this case that the
conduct of the parties must be investigated to see whether the party
in breach intended a renunciation of the contract.*
The Sale of Goods Act provides that, in the case of instalment

contracts, if 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 instalmeots. 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
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
to deliver by instaloients or as one entire contract and it vras held that he had
elected to deliver the goods as one transaction.
** (1884) 9 App Cas. 434
* P 202, -where the case of BrofrAwafte v. Fonign Hardwood Co. [19051 2
KB 543 was discussed As seen in that context a breach by the buyer in respect
of one iwtalment may nonetheless inTolre the seller in proving his own readiness
and willingness to deliver in accordance with the terms of the contract; le., the
bujrer may be able to rely on a reason for refusing to perform his contract if
such reason is valid, even though he originally relied on an invalid or wrong reason.
(1884) 9App.Cas 434 at pp 438-439, per Lord Selbome.
214
PERFORMANCE OF lUE CONTRACT
repudiated.** This provision applies even though the contract

stipulates that each delivery constitutes a separate contract, according
to the decision in Munro & Co. v. Meyer*' which decides what is
expressly contained in the Unifonn Commercial Code. But, as is
validly stated in Benjamin on Sate,** this clause is not a full statement
of the law because it does not cover all possible breaches by seller
or buyer. It does not mention an omission by the seller to make any
delivery at all, or his refusal to make a particular delivery: nor does
It refer to instances where the price of an instalment is not separately
payable; nor does it deal with instances in which the amount of the
instalments is not stated.** Benjamin also points out * the apparent
conflict between the sellers obligation and the buyer's rights under
section 30 (1) * and the situation under section 31 (2) where the breach
is a severable one and not a repudiation of the entire contract. Hence
the submission of nine propositions which explain and amplify the
provisions of the Act.* These propositions are based largely upon
pre-1893 cases. It is therefore suggested that their authority is some-
what limited in the light of the fact that cases before 1893 must be
reviewed in accordance with the provisions of the Act. Cases since
1893 would suggest that how instalment contracts are to be interpreted,
and how the obligations, rights and liabilities that arise thereon are
to be stated, are matters of construction, bearing in mind always the
obligation contained in section 30 (I) and the need to prove that a
contract is for instalment delivery under section 31 (1).
Thus it is necessary to decide just what the obligations of the

parties are as regards delivery and payment, in order to determine
whether any particular failure by either party amounts to a breach
of an entire contract, entitling rejection of goods, an action for the
price, or damages, as the case may be, or is a severable breach
S.G A. 8. 31 (2). The American equiTaJent, which is slightly different in content

and effect, is U CC. s 2-12 (2) (3). It must be noted that the acceptance of
one instalment does not prevent the rejection of later instalments which constitute
a defective delivery ^ the seller; Jackson t. Rotax Motor &. Qycle Co. If9l0i
2 K.B. 937.
ST [1930] 2 K.B 312.
8 8th ed. at p. 727.
9 But see Jackson v. Rotax Motor & Cycle Co, supra. It would seem that if there
*. . ' . ' i 4 substantial
. .r Wnght J.) by
. - . . If payment Is
.... . _ would not be
a breach.
1 Op. eft., p. 734.
a And the need for concurrence of delivery and payment under s 25, it may be
added.
s Op. cit., pp. 734-736.
DELIVERY
215
which may be waived or treated as not affecting the continuation of

the contract, while at the same time entitling the injured party to sue
for the particular breach, as opposed to breach of the whole contract.*
It must also be decided on the facts of any individual case whether
the character of the delivery or the payment is a condition precedent
to further delivery or payment.
The Act, as stated above, deals with the situation which arises
in certain particular (and perhaps most generally occurring) instances,
namely where delivery is defective or payment is not made. A
number of cases have discussed the question whether a particular
breach, coming within the scope of this subsection, has amounted
to a severable breach or a repudiation of the contract. In one such
case, Millar's Karri & Jarrah Co. v. Weddell Turner & Co.,* Bigham J.
expressed the applicable principles in these words:
'* If the breach is of such a kind, or takes place in such circumstances

as reasonably lead to the inference that similar breaches will be
committed in relation to subsequent deliveries, the whole contract
may there and then be regarded as repudiated and may be revoked.
If, for instance, a buyer fails to pay for one delivery in such circum'
stances as to lead to the inference that he will not be able to pay for
subsequent deliveries: or if a seller delivers goods differing from the
requirements of the contract and does so in such circumstances as
to lead to the inference that be cannot or will not deliver any other
kind of goods in the future, the other contracting party will be under
no obligation to wait to see what may happen: be can at once
cancel the contract and rid himself of the difficulty."
In that case the buyer was held entitled to repudiate the contract on
the failure by the seller to deliver goods within the terms of the
contract in the fini instalment. Similarly, in Ballantine & Co. v.
Camp^ where the contract provided that each instalment had to
conform to the description in the contract, it was held that the buyer
could reject a particular shipment which varied in weight from the
contractual weight. On the other hand, failure to make punctual pay-
ment of the whole price of an instalment has been held not to amount
to a breach which justified refusal to deliver on the grounds of
repudiation by the buyer. In the same way failure to deliver has
also been held not to be a repudiating breach by the seller where
* statement ot what 5* meant to be the common hw (without reference to,
^t the sê as S GA j. 11 0>) ^ Lord Alverstone CJ. in Worl^n, Clark <t

Co.v. ZJoyd Brazlfeno 119081 1 K.B. 968 at p. 977.
(1903) 100 L.T. 128 at p. 129.
(1923) 129 L.T. 302.
Co. (1915) 31 T.LJt 110; Bayzu r. Saundm (19191
381 .
216
PERFORMANGB OF "niE CONTRACT
this was the result of a mistake by the seller, not a deliberate intention
not to deliver. An attempt to lay down some kind of principles to
apply to cases within section 31 (2) was made in Maple Flock Co. Ltd.
V. Universal Furniture Products {Wembley) Ltd.? where the seller
delivered too great a quantity of rag flock in one instalment. It was
held that this was not a breach which amounted to a repudiation
because it was unlikely to recur. Two factors were said to be relevant:
(a) the quantitative ratio of the breach to the contract as a whole;
(b) the degree of probability that the breach would be repeated. But
the question for the court was always to determine on the merits
of the case what effect, if any, the breach or breaches should have on
the contract as a whole.^
Where the breach is severable then the injured party may recover
what the Act calls compensation, as opposed to cases of repudiation
where the injured party may treat the contract as completely broken
by the other party, permitting of appropriate remedies such as rejection
of goods, action for price, or action for damages. Compensation, how-
ever, covers more than just damages for breach of contract : it covers
also the price of an instalment.**
Delivery to a carrier
As seen above, the obligation to deliver, in the absence of any

special agreement, is fulfilled by tendering possession of the goods at
the sellers place of business or residence, or, in some instances, at
the place where the goods are situated. The seller is not obliged at
common law or under the Sale of Goods Act to send the goods to the
buyer. This obligation can only arise under the contract of sale itself.
Should the contract of sale specify delivery by sending the goods to
the buyer, problems arise as regards when delivery actually occurs and
the effect of loss or deterioration of the goods during the time that
they are being sent. The question of risk of deterioration, which is
dealt with in the Act,** must be left for the moment, as the statutory
provision in this regard is better explained in the general context of
the subject of risk.** The other effects of delivery of goods to a carrier
for transmission to the buyer do fall to be considered here.
Dumerdl <t Co. v. Ruddin hid. 11953) 2 AH E R. 294.
(1934) 1 KB 148.
10 Ibid, at p 155, per Lord Hewart CJ.
11 Workmart, Clark <6 Co V. Lloyd Braztleao ff908I I K.B 965 at pp. 978-979,
pgr Farwell L J.
1 * S G.A s 33. ,. .
IS Infra, p 239 Note also that it is rclevaat in connection with the iitipuea
conditions a* to fitness for purpose and merchantability: supra, pp J64. 172.
DEUVERY
217
Where the contract authorises or requires the seller to send goods

to the buyer, delivery of the goods to a carrier for the purpose of
transmission to the buyer is prima facie deemed to be delivery of the
goods to the buyer, whether the carrier has or has not been named
by the buyer.^* In other words, the carrier is presumed to be the bailee
or agent of the buyer, not the seller, thereby making delivery to the
carrier an effective discharge of his duty to deliver on the part of
the seller.^ This seems to be a perfectly straightforward and accept-
able rule. Where it applies, its effect would be to give the buyer
possession of the goods (since this is what is involved in delivery of
them) through his intermediary, the carrier. But this conflicts with
the provisions of the Act relating to the right of an unpaid seller
to exercise the right of stopping the goods while they are in the
course of transit. This right, and the rules which appertain to
it, will be discussed elsewhere. It suffices in the present context
to point out that, despite the provisions of the Act relating to
delivery to a canier cited above, it would seem that goods may
still be in the course of transit while they are in the control of
a carrier by land or water for the purpose of transmission to the
buyer (at least until the buyer, or his agent, takes delivery of them
from the carrier). There are certain qualifications of this which
must be mentioned at a later stage *: but they do not affect the point
DOW being discussed which is that, whereas under one section of the
Act possession has passed to the buyer by delivery to a carrier, under
another section no such possession will be deemed to have passed.
In other words what suffices to pass possession for the purposes of
delivery docs not suffice to pass possession so as to defeat the unpaid
sellers right of stoppage in transit. Yet, it may be argued, how can
goods be delivered and yet not delivered at one and the same time?
The answer seems to be that everything depends upon the purpose
SQA. s. (t>. Contrast the lotmiitation ol the cqurvatenl ot this provision in

- the Uniform Commercial Code, s. 2-5(M.
ii ^ ^ r - t ~ y Chemical Works [189S] A.C
; case of transmission through the posL
& D. Thomas r. Alper & Sons 11953]
t* The presumption may be rebutted, by reservation by the seller of a right of

disposal (SGA. s 19 (1): supra, pp. 90-93) or by the assumption of the
risks of carriage where the seller undertakes to nê delivery himself, though there
may be some risk still on the buyer; S.CA. $, 33: Infra, p. 239
* 9^' ^5: Infra, pp, 266-271. The Uniform Commercval Code avoids
this conflict by not making delivery to a carrier delivery to the buyer: see
ss. 2-504, 2-705.
SGA. s 45 0).
t Ibid. s. 45 (3) (5): Infra, pp 270-271.
218
for which it is necessary to decide whether or not possession has

passed to the buyer.
In the context of delivery, therefore, i.e., in order to determine

whether the seller has performed his contractual obligation in this
respect, delivery to a carrier in the circumstances set out above will
operate as a transfer of possession. As long as there has been no
negligence by the seller or his carrier in delivering the goods, even
the fact that the goods have not reached the buyer, because of the
intervening act of some dishonest person, will not render the seller
liable for non-delivery.* However, tbe Act further stipulates that,
unless otherwise authorised by the buyer, the seller must make such
contract with the carrier on behalf of the buyer as may be reasonable
having regard to the nature of the goods and the other circumstances
of the case. If the seller omits to do this, and the goods are lost or
damaged in course of transit, the buyer may decline to treat the
deliveiy as delivery to himself, or may hold the seller responsible in
damages.** Thus, where the seller has not made a reasonable contract
with the carrier to cover the eventuality of loss or damage to the
goods, the risk of such loss or damage is on the seller, despite tbe
fact that property in the goods may have passed to the buyer, with
tbe collateral effect, as will be seen,** that risk of loss or damage has
also passed to the buyer. An old case which illustrates this rule
at common law is Ciarfee v. Hutchins,** where the carrier required
notice of the fact that goods delivered to him were over the value
of 5 in order to make him liable for their loss. The seller gave no
such notice. It was held that be had failed to take reasonable pre-
cautions and make a reasonable contract with the carrier. Therefore
the risk of Joss of the goods was on him. In the more modem case
of Young & Sons Ltd. v, Hobson & Partners ** it was agreed that
goods should be sent by rail to the buyer. The seller sent the goods
at owners risk, which was Jicid to be an * e contract to
DELIVERY
219
It would seem, therefore, that, where this provision of the Act

applies, it is the duty of the seller to insure the goods, or to make
an appropriate contract of carriage which provides for insurance of
the goods from the point of view of the buyer, i.e., by making the
carrier responsible for loss or damage. Under section 32 (3) of the
Sale of Goods Act,* however, (he seller is not obliged to insure, but
is bound to give such notice to the buyer as will enable him to insure
the goods. This provision applies where goods are sent partly or
completely by sea and the insurance can be effected during their sea
transit. It may be excluded, however, by agreement between the
parties. If the seller is bound to give such notice, and fails to do so,
the goods are deemed at his risk during the sea transit. This again
provides an exception to the general rule that where property has
passed to the buyer risk of loss or damage has also passed.
This obligation to notify the buyer so that the buyer may insure
the goods during their sea transit can only arise where the contract
itself does not expressly or impliedly provide for insurance to be
effected by the seller. Thus in c.i.f. and ex ship contracts, the obli-
gation to insure is on the seller. In the former because it is part of his
contractual duty to insure the goods and forward the policy of
insurance, together with the other shipping documents.** In the latter
because, until certain things are done by the seller, yiz., payment of
the freight, furnishing the buyer with an effectual direction to the ship
to deliver, the buyer is not bound to pay for the goods and has no
insurable interest in the goods, as opposed to the profits thereon,
which the seller, as seller, can insure for him.** Of course, even in a
c.ii. contract, there may be an obligation on the seller to notify
the buyer of the shipment, so as to permit the buyers effecting
insurance. But such obligation arises by virtue of the particular
contract between the parties, not because of the provisions of the
Sale of Goods Act. In such contracts, therefore, the above provision
does not apply unless voluntarily incorporated in the contract.
** The Uniform Commercial Code s (c) makes notification of the shipment
a requirement in all cases where the seller Is required or authorised to send the
goods to the buyer, as long as a particular destination is not involved. The same
provision, s. 2-501 (a) (b) requires a reasonable contract of carriage and tender
or delivery of documents necessary lor obtaining possession of the goods
** C'/. rupro. p. 205. Law & Bonar Ltd, v. Br, American Tobacco Co. Lid [19161
2 K.B. 605 See Kennedys C.f F. Contracts, 3rd ed., at pp 85-87.
*T Yangtsu Insurance Association y. Luhnanjee [19181 A C. 585 at p. 589, per

Lord Sumner.
220
PIRFORMANCn OF TIIE CONTOACT
However, it has been held, that this provision and the obligation
it imposes apply to f.o.b. contracts, where the duty of the seller is
to deliver goods on board ship at his own expense, the buyer being
responsible for freight charges (unlike the position in c.if. contracts
where payment of freight is pan of the duly of the seller) and the
goods being at his risk.** The obligation to notify the buyer will not
be unfulfilled, however, as long as the buyer has enough information
to enable him to obtain the necessary insurance cover.*
3. Acceptakcb
The buyers duty

Correlative to the sellers duty to deliver the goods is the buyers
duty to accept and pay for the goods in accordance with the terms
of the contract.** Payment will be dealt with in the succeeding section.
Acceptance by the buyer must first be considered. This is an important
question, not only because a failure to accept may be a breach of
contract entitling the seller to sue for damages for non-acceptance.**
but also because acceptance of the goods, or a part of them, if the
contract is not a severable one. will have the effect of a statutory
election, if the seller has broken a condition in the contract, resulting
in the buyers being able only to sue for damages for breach of
warranty, and being deprived of his right to reject.**
A distinction must be drawn between a rightful and a wrongful

refusal to accept. As already seen, if the seller has been guilty of a
breach of condition, the buyer is entitled to reject the goods tendered
by the seller.** He need not. therefore, accept such goods. If the seller
has not broken any conditions of the contract and has tendered the
right goods in the right quantity, the buyer is bound to accept them.
Even if the seller has been guilty of a breach of warranty, the buyer
is still bound to accept the goods, though he may sue for damages
for breach of warranty, or set-off such damages against the price of
the goods.** It is therefore essential to detennine whether the
situation is such that the buyer is obliged to accept or is free to
88 TVImble & Sorts & Co. v. Rosenberg <S Sons 11913] 3KB 743 (with the dissent of
Hamilton L J.); Northern Steel & Hardware Co. l-td. v. Batt & Co Ltd. (1917)
33 TLR 516.
Sassoon, FO.B. Contracts, pp. 1, JlO-lII.

so See the cases cited in note 28, supra.
#1 S GJi. s. 27.
2 SGj\ s 50 (1): infra, pp. 286-300
AOIEPTANCE
221
reject the goods tendered by the seller. This problem may turn upon
an examination of the goods by the buyer. Hence the Act provides
for an opportunity for examination of goods, as will be seen below.
Should the buyer not be bound to accept the goods, and the goods
have been delivered to him, then, in the absence of any contrary
agreement, the buyer is not bound to return the goods to the seller.
It is sulBcient if he intimates to the seller that he refuses to accept
them. The buyer cannot retain possession of the goods, by way
of exercising any lien on them akin to an unpaid vendors lien of
goods, if the buyer has paid the price of the goods in advance.^ He
must make the goods available to the seller, even though he is not
himself obliged to return them.* But the buyer, as an involuntary
bailee of the goods in such circumstances, must exercise reasonable
care in respect of them, though, otherwise, any risk of loss or damage
is on the seller.
Wrongful refusal to accept goods is another matter. If it occurs

after the seller has delivered ihc goods, the buyer is liable for damages
for non-acceptance.** When the seller is ready and willing to deliver
the goods, and requests the buyer to take delivery, and the buyer
does not within a reasonable time after such request take delivery of
the goods, he is liable to the seller for any loss occasioned by his
neglect or refusal to take delivery, and also for a reasonable charge
for the care and custody of the goods. This, however, does not affect
the rights of the seller where the neglect or refusal of the buyer to
take delivery amounts to a repudiation of the contract.** Thus an
unjustified failure to accept delivery of the goods is a breach of
contract for which the buyer will be liable in damages to the seller.
But such a failure may be so fundamental as to amount to a breach
entitling the seller to consider the contract repudiated by the buyer,
so as to enable the seller to pursue whatever remedies are available
to him on such a repudiation.**
The meaning of acceptance
The duty to accept involves taking possession of the goods by the

buyer. It was seen in connection with delivery, that a distinction must
S OA. S. 36
Lfonj A Co. V. May A Bakrr Ltd. [1923] 1 KJ3 685: for the unpaid endor
lien see infra, pp. 256-266.
>s Hardy A Co. v, mUrns A Foster [1923} 2 K.B. 490 at p 496, per Bankes LJ.
* S G A. s. 50 0): injto, pp. 285-300.
*0 S GA. s. 37.
C/. the discussion of S.GA. a. 31 (2), supra, pp. 213-216.
222
rcRroRMANci: or Titr coymcr
be drawn between property and possession.** Just as the duty to

deliver is concerned with giving possession of the goods to the buyer,
and not with the transfer of property, so the duty to accept involves
the taking of possession, and is not concerned with the acquisition of
property. This distinction is emphasised by the provisions of the
Act dealing with statutory election where there has been a breach
of condition by the seller.** The Act distinguishes two sets of
circumstances in which the buyer is precluded from treating a breach
of condition as such and is compelled to treat it ns a breach of
warranty. One is where the contract is not severable and the goods
or part of them have been accepted. The other is where property
has passed in specific goods. Thus, the Act reveals that acceptance
relates to possession, more especially, for the purposes of the above-
mentioned provision, where the goods are unascertained. It is said
in Benjamin.** that acceptance is a taking of the goods by the buyer
with the intention of becoming owner. Hence where property has
passed under the contract it is said that the buyer is deemed to have
accepted them. But this must only be so in the context of the buyers
right to reject. ^Vheê the performance of his contractual duties by
the buyer is Involved, it would seem that, even if property in the
goods has passed to him. he must take physical possession of the goods
either actually or constructively (in a manner corresponding to
constructive delivery by the seller).**
Acceptance may be admitted to have some connection with owner-

ship. In the first place, the statutory provision which states what
amounts to acceptance ** is in very similar terms to the provision of
the Act which regulates when a buyer of goods on approval or sale
or return is said to acquire property in such goods.** That provision,
as already seen,** involves a positive signification of approval or
acceptance, an adoption of the transaction, i.e.. dealing with the goods
as if the buyer were their owner inconsistently with the ownership
of the seller, or retention beyond a fixed or reasonable time. The
section of the Act which deals with acceptance, as will be seen,
involves somewhat the same alternatives. Secondly, one way of
accepting goods that have been delivered is to act in a manner
inconsistent with the ownership of the seller. Whatever precisely this
Supra, pp 203-204
SGA. s. II (1) (c)- supra, pp 182-184.
** Sale, 8th ed , at p. 750.
** Cf. supra, p 204

* SG.A. s. 35: infra
*1 SGj^. s. 18, r. 4
** Supra, pp 78-83.
ACCEPTANCE
22
may involve, it must mean that where the buyer acts as owner t
the goods he accepts them. Hence, in some situations, acceptance ca
be shown by conduct on the part of the buyer which takes th
form of dealing with goods as an owner would, i.e., exercising th
rights of an owner over them. However, it must be pointed out tbs
the transfer of property in goods does not always operate as a
acceptance, since the contract may provide for a right of rejectior
even though property has passed. Ibis may occur where goods at
sold under an express or implied resolutive condition subsequent.^
Hence, it is suggested, to talk of acceptance in terms of the intentio
to acquire ownership is misleading. Acceptance is concerned witl
possession of goods. As the judgment of Devlin J. in Kwei Tek Cha<
V. British Traders & Shippers shows, there may be a passing o
conditional property In goods to a buyer, but yet no acceptance o
the goods by him as long as he has not actively interfered with th
physical possession of the goods.
Problems have occurred, however, in connection with the definitioj

of acceptance and the application of the provisions of the Act t<
individual cases, because of the possible conflict between section
of the Act. which states when acceptance occurs, and section 34
which confers on the buyer a right to examine the goods befop
acceptance, a right which is correlative to the sellers duty to fumisl
the buyer with an opportunity to examine the goods.
Acceptance and examinatioa
Unless otherwise agreed, when the seller tenders delivery of good;

to the buyer, he is bound, on request, to afford the buyer a reasonabh
opportunity of examining the goods for the purpose of ascertaining
whether they are in conformity with the contract.' The importanc<
of this obligation lies in the fact that, under the Act, where goods an
delivered to the buyer, which he has not previously examined, be f<
not deemed to have accepted them unless and until he has had a
reasonable opportunity of examining them for the purpose of ascer-
taining whether they arc in conformity with the contract.* This
means that there must be an opportunity for a proper, not merely a
cursory examination of the goods.** The question has arisen in this
As to which see supra, pp. 15^20.
n954) 2 Q B. 459: see infra.
*SGA 8.54(1).
M SO A. 8. 34 (2).
B. A P. ty/iolesale ZHsMtiuferj v Marko [1953] CL.Y. 3266. Note that an

SG a. s. 14 (2) may be cursory: Thornett & Fthr v. Beers
liyjvj I K.D. 486; supra, p. 173.
224
PERFORMANCE OF TIfE CONTRACT
connection as to the proper place for such an examination. In a case

decided just before the Act. Perkins v. PW/,* it was held that there
was a presumption that the pface of delivery was the place of inspec-
tion : hence, in that case, where goods were to be delivered to a named
railway station near the buyers premises, the buyer was held to
have accepted the goods when he examined a bulk sample of them
when they were at the station and then instructed the stationmaster
to send the goods on to his sub-purchaser. Where the goods are to
be examined is therefore a question which can only be answered by
construction of the contract. Elsewhere than the premises of either
seller or buyer may be indicated by the contract and the knowledge
of the parties, as in Moiling v. Dean,^^ where the seller knew that
goods were to go to America, and it was held that the place of
examination was America. In several cases involving f.o.b. contracts
it has been held that the port of shipment is not the place of examina*
tion, nor even the port of delivery, if that port is not the originally
designated port.*
Whether a reasonable opportunity for examination has been

provided, and whether the buyer has, or may be deemed to have
availed himself of such opportunity, are questions of fact. A question
of law which arises in this connection is whether, irrespective of such
examination taking place, or an opportunity for such examination
being afforded the buyer, it can be held that the buyer has accepted
the goods. The language of the Act cited above would seem to be
mandatory, in consequence of which it might be argued that, whatever
else is necessary to constitute acceptance, there must have been either
an examination of the goods by the buyer or a reasonable opportunity
therefor.
This, however, would not appear to be the law. Under section 35

of the Act the buyer is deemed to have accepted the goods when he
intimates to the seller that he has accepted them, or when the goods
have been delivered to him and he does any act in relation to them
which is inconsistent with the ownership of the seller, or when after the
lapse of a reasonable time, he retains the goods without intimating
to the seller that he has rejected them. The first and third situations
are reconcilable with the proposition that acceptance does not take
place until examination or a reasonable opportunity for examination.
In either of these two situations it is likely that the buyer will have
64 [1893] 1 QB 193
55 (1901) 18 T.LR. 217.
56 ScaJiarU v. Ofverbtrg & Co. (1921) 37 T.LJt. W7; Bokj & Co. v. Rayner & Co.
(1921) 37 T L R. 519; Bragg v. Vilartova (I92^ 40 T.L.R. 154.
ACCEPTA^:E
225
examined the goods or will have neêcted to do so despite his having

had an opportunity to examine them. It is the other situation, where
the goods have been delivered and the buyer does an act inconsistent
with the ownership of the seller,* that gives rise to the possibility
that there may be acceptance under this section of the Act although,
in the absence of either examination or a reasonable opportunity for
examination, there is no acceptance under section 34 of the Act. In
Hardy <6 Co. v. Hillerns & Fowler the Court of Appeal held that
these sections were independent, and that section 35 was not
subordinate to section 34. Hence, even though no examination had
taken place, and a reasonable time for an examination had not elapsed,
the conduct of the buyer could amount to an acceptance of the goods.
The basis of this decision would seem to be that the buyer could
intimate his acceptance of the goods before a reasonable time for
examination of them had passed, re., in a manner which indicated that
he was dispensing with examination (waiving his right to examine, it
mi^t be said). Similarly, the same could be effected by acting
inconsistently with the sellers right of ownership before a reasonable
time for examination had passed. Though the decision in this case
as to what amounts to an act inconsistent with the sellers rights as
an owner has led to difficulty, this point has not been discussed In
subsequent cases. The Report of the Law Reform Committee on
Innocent Misrepresentation, however, discussing this question in
the context of the right to rescind a contract of sale of goods for
innocent misrepresentation, suggests that the effect of the law is to
make the Act appear to deprive the buyer of any right to reject
defective goods before he has had an opportunity of examining them.
This would be on the ground that section 35 overrides section 34
and makes examination unnecessary. Accordingly, that Report
suggests, inter alia, that it should be made clear that acts which
would amount to acceptance within the meaning of section 35 should
not be held to do so until the buyer has had a reasonable opportunity
of examining the goods as contemplated by section 34.
Until such a change in the law comes about the provisions of

section 35 will govern. This means that without examination there
will be acceptance in one of the three situations set out therein.
Tie buyer must have got delivery before he do the act: Hardy A Co. Y. nuiemt
4 Fov.ter 11923] 2 K.B. 490 at p. 49S, f>er Atkin LJ. Hence the problem where
the buyer himself has Deter obtained i^ysical possession of the gi^s.
119231 2 K.B. 490.
1962, Quad. 1782, paras. 14, 15.
F.S.O. S
226
As far as the first and the third arc concerned, it is unnecessary to

go into any lengthy explanation- It is the second possibility that
has given rise to difficulty.
Acts inconsistent with the sellcr^s ownership
This provision of the Act has produced judicial debate and

contradictory decisions.
In Hardy & Co. v. Hillems & Fowler there was a sub-sale by

the buyer to another person. The goods were delivered to the buyer
and were then despatched, without prior examination, to the sub-
purchaser. He discovered that the goods were not in accordance with
the contract and he rejected them. Before a reasonable time for
examination had expired, the buyer purported to reject the goods as
against the seUer to him. It was held that he was too late to do so.
Section 35 applied because, in sending the goods to his sub-purchaser,
the buyer had acted in a manner inconsistent with the ownership of
the seller, whether or not property had passed under the contract
to the buyer. The material date at which the character of the buyers
act became relevant was the date of the notice of rejection, since upon
that date ownership revested in the seller. The act of resale on the
part of the buyer was inconsistent with that revested ownership. This
was because, at the date of rejection, the buyer was obliged to
place the goods at the disposal of the seller. He could not do this
because he had committed an act which prevented him from recovering
possession which he could pass on to the seller. " It is not enough,
said Bankes LJ.,*' " that the buyer should, as in the present case, be
in a position to give the seller possession at some later date, he must
be able to do so at the time of the rejection. The same was held
true, in Benaim v. Debono.*^ where the seller despatched the goods
directly to the sub-purchaser, upon the instructions of the buyer,
he., where there never was an opportunity for examination by reason
of the conduct of the buyer. In the later case of Ruben v. Faire,*^
where again the seller sent the goods directly to a sub-purchaser,
Hilbery J. held that there had been acceptance because asking the
seller to deliver to the sub-purchaser was taking constructive delivery
of the goods at the sellers premises.
0 11923] 2 K.n. 490.
Ibid, at p 496.
e* (19241 A.C 514.
> [1949] I K.B. 254.
acceptance
227
This approach to the question has not gone uncriticised. In Kwei

Tek Chao v. British Traders <6 Shippers Devlin J. drew a
distinction, so far as c.i.f. contracts were concerned, between delivery

and acceptance of the shipping documents and delivery and acceptance
of the goods; and in the New Zealand case of Hammer & Barrow v.
Coco-Co/o* Richmond J. of the Supreme Court of New Zealand
distinguished Ruben v. Faire in a manner which invites some comment.
It must first be pointed out. however, that this provision requires

that the goods should have been delivered to the buyer. This is
essential.** In Hardy v. HiUerns & Fowler this had been done.
Hence it may be said not to be surprising that a redclivery of the
goods by the buyer to his sub-purchaser should be considered an act
of acceptance. In the other two cases which have followed this one,
however, there was no actual delivery to the buyer, in the sense of
putting the goods in his physical control or custody. To hold that a
delivery by the seller directly to the buyers sub-purchaser is a
delivery to the buyer, whether constructive or otherwise, it is
suggested, is to strain the meaning of the language of the Act. even
if such language is artificial rather than colloquial. It is this feature
of these decisions which Devlin J. and RieWond J., rightly it is
suggested, take up and use to distinguish the Hardy case.
Devlin J.,* dealing with a c.l.f. contract, held that the right to
reject the documents which were sent to the buyer under such a
contract was separate and distinct from the right to reject the goods,
when they arrived later than the documents. Hence, any intermediate
dealing with the documents did not amount to an acceptance of the
goods, within the Sale of Goods Act, so as to result in the buyers
loss of his right to reject the goods for non-conformity with the
contract. A distinction was also drawn between the conditional
property obtained by the buyer when the shipping documents were
delivered to him and the absolute property he obtained when the
goods themselves were delivered and accepted. The conditional
property reverted to the seller if the goods, upon examination, were
found to be not in accordance with the contract. Hence, dealings with
the documents are only dealings with the conditional property in the
goods, and not acting inconsistently with the sellers ownership
within the meaning of section 35. As long as the buyer is only
Taluable note by J. D.
Rosenitial & Sons Ltd.
V. tsmad [1965] 2 All E.R. 860 at p 869. per Lord Pejrson.
228
PCRI ORMANCE OF TIIE CONTRACT
dealing with such conditional properly, whether by way of sale or

pledge, he is not making it impossible for himself to return the goods
to the seller, should they turn out to be unacceptable when they
arrive at the place where he can examine them. The decision in the
Hardy case was therefore based on the fact that the delivery to the
sub-purchaser after tender of the goods to the buyer interfered with
the reversionary interest of the seller, /.c., his right to have the goods
physically returned to him in the place where the examination look
place. '* The despatch to a third party is an act . . . which interferes
with the reversionary interest. A pledge or transfer of documents
such as that which takes place in the ordinary string contract docs
not.
This argument would seem to turn upon the premise that

** delivery to the buyer involves the goods reaching the place of
examination, and does not occur until then. Hence until such lime
as this takes place there is no delivery to the buyer and anything done
by the buyer (whether or not inconsistent with the sellers ownership)
does not have the effect of operating as an acceptance. However,
this view of delivery does not accord with the attitude adopt^
by the Sale of Goods Act * that delivery to a carrier is prima facie
delivery to the buyer, the application of which would suggest that
once the goods are in the hands of a carrier for despatch to the
buyer or his sub-purchaser then the buyers conduct can amount to an
acceptance within section 35. In the New Zealand case,** Richmond J.
did not accept the view that delivery means delivery to the place
of examination. This is hardly surprising since, to adopt that view
would mean (a) that delivery had a strange and strained meaning
in this context, and (b) that despite what was said in the Hardy case
section 34 would clearly take precedence over section 35 because there
would have to be a reasonable opportunity for examination, i e., at
the place of delivery, before there could be any acceptance. But the
interpretation placed by Richmond J. upon the expression an act
inconsistent with the ownership of the seller nonetheless effected a
limitation upon the interpretation resulting from the earlier English
cases.** For the learned judge held that property in the goods did
not pass to the buyers when they were sent by the sellers to the
buyers sub-purchasers, since the goods in fact did not correspond
with their contract description. Hence property could not pass until
s s. 32 (I)
#9 Jlofnmer & Barrow v. Coeaôla {19^1 N.Z,Lp.R. 723 at pp. 727729, rejecting an
attempt to distioguisb Ruben v, Faire, mpra, on this ground
TO See McClean, loe. cll., supra, note 65 at pp. 196-197.
230
PI:RFOR^ÂNCB OF THE CONTRACT

Otherwise agreed, payment of the price and delivery of the goods
are concurrent conditions; therefore the buyer must be ready and
willing to pay the price in exchange for the goods.* Since a contract
of sale of goods is one by which property in goods is transferred for
a money consideration called the price, it follows that when property
in the goods has passed, the buyer becomes bound to pay for the
goods according to the terms of the contract. However, since pay-
ment and delivery ore also mutually dependent, payment may become
due not on passing of property but on delivery. Moreover, it is
contemplated by the Act that the contract may provide for payment
on a day certain irrespective of delivery, in which instance, when
the day for payment has come, the price must be paid although
property in the goods has not passed and the goods have not been
appropriated to the contract.*
Thus, depending upon the terms of the contract between the

parties, payment may become due on passing of property, delivery of
the goods (or tender of delivery), or at any other time, irrespective of
transfer of property or delivery. Tht parties may therefore accelerate
payment, by making it due before the buyer derives any positive
advantage from the contract in the form of property in, or possession
of, the goods, or they may postpone payment, as where the seller
allows the buyer credit. TTie importance of the allowance of credit
is twofold. In the first place the provisions of the Sale of Goods Act
relating to the rights of an unpaid seller over and in respect of the
goods themselves will not apply nor will the seller be able to main-
tain an action for the price, until the period of credit has elapsed.
Secondly, the statutory provisions in the Hire-Purchase Act, 1965.
relating to credit-sales may be applicable, if the sale in question
is a credit-sale within the scope of that legislation, i.e., one under
which the purchase price is payable by five or more instalments.
Such contracts fall into a special category (which cannot be examined
in det^ in this work **). The law which governs them has an afSoity
T s G.A s. 28.
IT S G.A. s 1 (I)
T8 Cf. S.G A. s. 49 (1).
T9 S G A s. 49 (2>.
80 S.G A. ss 38-48; Infra, pp. 252-779 If the sate is on credit, the period of credit
will still stand if the buyer refuses to do somethioS he is obliged to do by way o*
giving the seller security ; Robe v. Otto (1903) 89 L T. 562
t Hire-Purchase Act, 1965, ss 1 (I), 2. Credit sates do not include conditional safe
agreements : Hire-Purchase Act, 1965, $. 1 (I). For the definition of such agr^
ments see ibid
** For discussion see Goode, Hireûrîase Law and PracUee, 1962, Chap 29;
Supplement, 1964, Chap 12.
PAYMENT
231
with hire-purchase law. just as such credit-sales are analagous to

contracts of hire-purchase, though differing from them in many
respects, such as the transfer of property in the goods.
Performance of the obligation
This, to a large extent, depends upon the terms of the contract,

since, as seen above, the Sale of Goods Act leaves the question of
payment entirely to the parties. Unless a different intention appears
from the terms of the contract, stipulations as to time of payment
are not deemed to be of the essence of a contract of sale.* In this
respect, the opening of a bankers confirmed credit may be essential
before dispatch, particularly by way of shipment, of the goods.
In situations of îs kind, as already seen, payment is not merely
an obligation which the contract of sale imposes on the buyer,
correlative to the duties of the seller: it is a condition precedent to the
sellers performance of his obligations. In such cases, therefore,
failure to pay, i.e., to open the required credit, results in there
being no contract, rather than in a breach of a contract of sale by
non-payment.
It is the obligation of the debtor, i.e., the buyer, to seek out and
pay his creditor, i.e., the seller. Whether the conduct of the buyer
amounts to a proper discharge of his duty to pay depends upon the
circumstances. For example, where a buyer was accustomed to send-
ing cheques through the post to the seller, and had done so on
numerous previous occasions, this did not result in a finding that the
course of dealing between the parties had crystallised into payment in
this way. Therefore when, on one occasion, a cheque thus sent was
lost in the post, it was held that the buyer had not paid, and was liable
to the seller for the price of the goods. Whether payment to an
agent is a good discharge depends upon the authority of the agent.
1 e., whether he has express, implied or apparent authority to receive
payment, or his improper act in receiving payment has been ratified
by the seller, his principal. Thus the method, place and time of
PP-
M * P- 200.
See Pmia * Co. SJ>A. v. Thurmannûlson fl952} 2 QB. 84; Sinason-Tetcher

Ô'P- OOcakts and ORseeds Trading Co. Ltd. [I954I 3
AH ER. 468; Ian Stack Ltd. v. BaUr Bosley Ltd. [1958] 2 QB. 130: cf. supra,
p. 193, note 9
8 Supra, pp. 197-200.
T Comber v. Leyland [1898] A C. 524; Angar v, VasMer (1902) 18 T.L.R. 596

M (1897) 77 L.T. 43
Cf.lniernalhnal Sponge Importers Ltd. t. Watt & Son [1911] A.C 279; Bulwick
V. Urani [1924] 2 K.B. 483. Sec, goterally, Fridman, Law of Agency, pp. 148-149.
232
PERFORMANCE OF IHE CONTRACT
payment aie all mailers of contract. i.e express agreement, implica-

tion from custom or the course of dealing of the parties, or necessary
construction. That being so, it is not necessary here to particularise
further.**
Deposit and forfeitore
It may be added, however, that the rights and liabilities of the

parties are sometimes affected by a prior part-payment by the buyer.
The effect of such part-payment differs according to whether it is a
genuine advance instalment of the purchase price, a deposit intended
to operate as security for the due performance of his obligations
by the buyer, or an amount which is designed to be forfeited should
the buyer improperly resile from, or break, the contract.
If the part-payment is a genuine first instalment, it will be return-

able should the contract not be fulfilled, or be taken into account as
against the full purchase price, should the contract be performed by
the seller. If it is a deposit, it is a matter of agreement between the
parties as to what is to happen should the sale go off through the
fault of the buyer. In the absence of agreement the deposit may well
be forfeited.' However, it must be added that, in equity, a term in
a contract of sale which provides for forfeiture of an advance payment
where the contract is not completed may well be regarded as
unconscionable (even if not strictly penal within the scope of the
rules relating to penalties as opposed to pre-arranged liquidated
damages payable in the event of non-fulfilment by one party). If such
is the case, forfdture cannot be enforced.**
5. Factors Affecting the Performance of the Contract
Modification of duties
In a number of ways, for a variety of reasons, the duties which

have been examined and discussed in the previous sections may be
unfulfilled without resulting in any liability being imposed on the party
whose obligation was involved. First of all. as was seen in relation
#0 For discussion on some fencral principles wbidi affect payment by
any creditor, and therefore apply to the law of sale of goods, see Benjamin on
8lh cd., pp. 766-809.
SI Howe y. Smith (1884) T? ChD. 89; Afoyson v. aouet J19241 AC. 90;
British and International Mining S Finance Corp. Ltd. [1939] 1 K.B. 724. Cf. a**"
Gallagher v. Shneock [1949] 2 K.B. 765 (Infra, p. 278). , .
s* See, eg, Stockloser V. Johnson iI9MI 1 QJI 476; Cheshire and Hf*'
Conrraer. 6th ed., pp. 51J-514; Treiiel. Law of Contract, pp. 617-620; Fnat
Mendutg Bargains (1964) 114 LJ. 582.
FACTORS AFFECTING PERFORMANCE OF CONTRACT
233
to the obligations arising in connection with the character and quality

of goods, one party may waive the due performance of his obligation
by the other, or the contract may restrict or exclude altogether the
otherwise applicable, stringent obligation. Secondly, the provisions
of the Act relating to risk may have an important effect upon the
liabilities of seller and buyer as regards delivery, acceptance and
payment. Thirdly, the rules relating to frustration, at common law
and under the Sale of Goods and Law Reform (Frustrated Contracts)
Acts, can also modify, if not oust completely, the rights and duties
of the parties.
Waiver and exclosion

What is meant by waiver and by exclusion, under what conditions
and in what circumstances waiver may occur or be inferred, or the
contract may exclude conditions and warranties, have earlier been
discussed.* It is not necessary, therefore, to reconsider the theoretical
questions arising from the subsequent or antecedent exclusion of
strict performance of otherwise applicable legal duties, whether arising
under the statute or contractually. Suffice it to say, in the present
context, that where performance of the contract is concerned, as
opposed to the fuldlment of contractual obhgations relating to the
character and quality of the goods, the same difficulties have not been
encountered. This is particularly true as respects exclusion: since
It is unlikely that a contract will provide, or be construed as providing
for the wholesale exemption of a party from his obligations as regards
delivery, acceptance or payment.** Admittedly, where delivery of the
wrong quantity of goods is involved, it may be that an exemption
clause will be invoked to protect the seller from liability for breach
of contract. As already seen, however, the effect of such a clause will
depend upon whether the quantity of the goods is a matter of descrip-
tion, i.e., character and quality, or is one of performance, i.e., delivery
of the contract goods. Upon this characterisation the operation and
effect of such a clause hangs.**
Whereas, therefore, exclusion is of greater importance in relation

to the obligations considered in the previous chapter, it is waiver that
234
PERFORMAKCE OF TirE CONTRACT
is of greater relevance as regards performance of the contract.

Hence the cases dealing with performance are concerned with the
operation and effect of waiver, rather than with the construction and
application of exemption clauses.
It has earlier been seen that wrongful repudiation of a contract

of sale by one party may operate os a waiver of conditions precedent
to be performed by the other party.** In view of the subsequent dicta
purporting to interpret the case of Braiihwaile v. Foreign Hardwood
Co. Ltd.,*^ this must be considered an unresolved question. Waiver
by repudiation must be distinguished, however, from, on the one hand,
repudiation of the contract amounting to an intention of no longer
being bound by it (which may be justified or wrongful, its exact
effect depending upon which it is)** and, on the other hand, abandon*
ment of the contract, which may be unilateral (and therefore wrongful)
or bilateral, i.e., as a result of the express or tacit agreement of the
parties, as where the contract is not performed over a long period of
time and it is clear that it is too late for performance.** Unlike
repudiation and abandonment, waiver is concerned with conduct by
one party operating to relieve the other from the due performance
of his obligations, or from liability for non*perfonnance thereof,
without, at the same time, bringing the contract itself to an end.
Thus it is possible that the buyer may waive the obligation of the
seller to deliver at an agreed time or place, or that the seller may
waive the buyers obligation to accept or to pay at on agreed time
or place. One point roust be made clear. If the term which creates
the obligation is properly construed as being for the benefit of both
parties, not merely one or (he other, its due performance cannot
be waived by one party alone.* Thus in the Fibrosa case.* at first
instance. Tucker J. held that the sellers obligation to deliver the goods
at Gdynia could not be waived by the buyer alone. The seller had
the right to insist upon delivery at that port if he so desired. Subject
to this, however, it is clear law that a party may waive an obligation
imposed by the contract on the other party.* The doctrine which
Supra, pp 201~203.
OT (1W5J 2 K.B 543. discussed tupra. pp. 202-203

# Bradley v. Netvjom, Sons A Co [I919J A.C 16
8 FUher Ltd. v. Eastwoods Lid (I936J I AU E R. 421 ; cf. Pearl Mill Co. . W
Tannery Co. (19191 I K.B. 78.
, t Mtdne Spinning Co v. Sutelige A Co. (1917) 87 L.J K B. 382

i Fibrosa Sji. V. Falrbalrn Lawson Combe Barbour Ltd. [1942] 1 KB. 12 **
pp. IMl.
See, egn LJartiey v. Hymans (19207 3 K.B 475; Partoutsos r. Eajmond Hadley
Corp. of N.Y. (1917] 2 KB 473; Charles Rickards Ltd. v. Oppenheim [t950J
1 K.B. 616: cf. supra, pp. 179-180.
235
applies in such instances has been variously called waiver, forbearance,

agreed variation, and substituted performance. It has also been
said to give rise to a kind of estoppel, Le., operative against the party
waiving the obligation.^ This is a question which has been considered
earlier. From what was then said it would appear that such language
is loose and imprecise, bluning distinctions which exist and are
of importance. It might be better, it is suggested, to differentiate true
waiver, i.e., the unilateral exclusion of an otherwise operative duty,
from other methods whereby a party is relieved from his contractual
obligations in all their strictness.
Risk and frustration
Compared and distinguished. In one sense risk and frustration

have much in common. Both ace concerned with what is to happen,
as regards the rights and liabilities of the parties, should the complete
fulfilment of the contract of sale of goods become impossible, e.g.,
because the goods have been destroyed by fire or have been stolen,
because the outbreak of war makes delivery of the contract goods from
or to a stipulated place impossible. Both doctrines of law are con-
cerned with events that occur without the fault of either party. Should
one party be at fault it is clear that, in the absence of express agree-
ment to the contrary, that party alone is responsible for the loss
resulting from the inability to fulfil the contract that comes about
because of his conduct. Fault on the part of seller or buyer, therefore,
displaces the otherwise applicable rules relating to risk and frustration.
They only become effective where both parties are innocent of any
conduct which has rendered the complete fulfilment of the contract
impossible.
On the other hand, as one learned writer rightly points out,*

whereas an executory contract of sale may be frustrated, with the
consequent result that neither party is liable to the other, a contract of
sale which is executed by the transfer of property (and, therefore,
of risk, as will be seen) may be frustrated but still involve liability on
the part of the seller to the buyer or buyer to seller, independently of
their respective liabilities or immunities as a result of the operation
of the doctrine of risk. Conversely, whereas the doctrine of risk may
excuse one party from liability to the other, even in an executed
contract of sale, the doctrine of frustration may be inapplicable.
* Ckaries RIcknrdt Ltd. t. Oppfnhtim. supra, t p 623, prr TVnnmg LJ.
Ifartley v. supra, at pp. 49*-95, pfr McCardie J.
* Supra, p. JgO.
* Atiyah. Salt of Goods, 2nd cd., at p. 107.
Contrast
236
thereby resulting in some form or degree of liability as between the

parties. For example, by the operation of the doctrine of risk, the
buyer may be liable for the price, even though the goods are perished.
But he may also be liable for damages for non-acceptance, e.g-, in
the form of a reasonable charge for storage of the goods, ^ if he cannot
rely on the doctrine of frustration to discharge such liability.
It is therefore important to differentiate the two doctrines and

elucidate not only what each involves but also when each is applicable
and its effects. In brief the distiaction between the two doctrines is
this The doctrine of risk regulates the liabilities of the parties where
the contract remains undischarged, but also incapable of complete
fulfilment in the sense that the goods, or the goods in their pristine
condition, cannot be delivered, and the parties are still bound to each
other. The doctrine of frustration, on the other hand, operates to
discharge the contract and relieve the parties from liability there-
under (though by the Law Reform (Frustrated Contracts) Act, 1943,
as will be seen, there may be some obligation to compensate a party
notwithstanding the frustration of the contract).
(i) Risk
Common law. Risk means that if goods are accidentally lost

or damaged, the loss thereby occasioned falls on a particular party.
If it is the seller, then he is liable to pay damages for non-delivery of
the goods even though he cannot deliver them; if it is the buyer, then
he will have to pay the price agreed in the contract, even though he
cannot be given the goods. On whom risk falls is therefore a vital
question. The civil law maxim was res peril domino, i.e., risk was a
concomitant of property. This, indeed, was also the maxim of the
common law before 1893. In Martineau v. Kitching,^ two reasons
were given by different members of the court for holding that risk
had passed to the buyer on the facts of that case : (a) because property
in the goods had been transferred to himt (b) because under the
contract risk had passed. Thus, it may be said that at common law
risk passed either as a corollary of property or by virtue of the terms
of the contract. In some contracts, in which provision was made for
insurance of the goods, it was held that a buyer obtained an
insurable interest," when certain things were done, e.g., the com-
mencement of the loading of goods on board ship, even where he
T s G A. s. 37.
(1872) UR- 7 QB. 436.
237
did not acquire property in the goods because they were still unascer-
tained. Property and risk, therefore, while usually co-extensive,
were not necessarily so at common law.
Statutory provisions. Under the Act, the basic rule would seem to
be res pent domino. Unless otherwise agreed, the statute provides,
the goods remain at the sellers risk until the property therein is trans-
ferred to the buyer, but when the property therein is transferred to the
buyer, the goods are at the buyers risk whether delivery has been
made or not. Risk, therefore, is primarily an offshoot of property, not
possession. Hence, as already seen, many of the cases concerned with
the question of transfer of property raise that issue simply to decide
what has been called the " risk issue. The connection between risk
and property, however, while of the utmost importance, must also be
qualified, by virtue of the provisions of the Sale of Goods Act. Who
must bear the risk of accidental loss or deterioration may be deter-
mined by other considerations than whether property has been trans-
ferred. Thus, the Act provides for loss following a delay in or refusal
to take delivery for the situation where seller or buyer is a bailee of
the goods, for the situation where goods are sent by sea, or are
delivered at the sellers risk to a distant place. In addition, the Act
specifically permits the parties to make whatever agreement they
choose as to risk.
Agreement between the parties. It is clear that the parties may

expressly or impliedly " agree to some purely artificial allocation of
the risk and if they express that agreement in suitable language in the
contract (or, it may be added, if such an agreement can be implied in
accordance with the general rules relating to the implication of terms)
it must somehow be given effect * This being so, it would seem
possible for risk to pass not only when property is transferred (the
usual case), but also where possession but not property has been
transferred, or where neither properly nor possession have changed.
Conversely it may be possible for risk to remain with the seller even
though property has been transferred.
* V. Morlee (1876) 1 AppCas 713; Colonial Insurance Co. of Nev

f G-A. s. 20. fim provUo. s. 37.
II f * provuo.
* l^-A. * 32 (3): supra, p 219.

oGA. $, 33.
V, rl language of S GA. s, 2a
I A-C 293 at p. 319, per Lord Nonnafld ; </., e g., Rutter r. Palmer
119221 2 K.B. 87 (not a case of sale of goods).
238
Thus, in Sterns Ltd. v. Vickers^ there was a sale of 120,000

gallons of white spirit, part of a larger quantity in a tank. The sellers
gave the buyers a delivery warrant by the use of which the buyers
could acquire possession of the spirit. After the warrant had been
accepted by the party storing the spirit, but before the buyers
requested delivery, the spirit deteriorated in quality. It was held that
whether or not property in the spirit had passed to the buyers (which
would seem to have been unlikely since there was no appropriation of
the unascertained goods as required under the Sale of Goods Act),'
risk had passed to the buyers on acceptance of the delivery warrant by
the third party. In The JuUa^^ a contract was held not to be a c.i f.
contract (under which risk passes as soon as the goods are shipped
irrespective of passing of property or possession).* Consequently the
goods were still at the risk of the seller. Lords Porter and Nonnand
pointed out that the only instances in which risk would seem to pass
to a buyer who had obtained neither property in nor possession of
goods were those in which the buyer had an interest in an undivided
part of a bulk parcel on board a ship, or elsewhere, obtained by
attornment of the bailee to him, ** or where the buyer rather than
the seller was seen to have an immediate and practical interest in the
goods, as for instance when he has an immediate right under the
storekeepers delivery warrant to the delivery of a portion of an
undivided bulk in store or an immediate right under several contracts
with different persons to the whole of the bulk not yet appropriated to
the several contracts.** The above cases are instances where posses-
sion (/ e., constructive possession), but not property, had passed. In
Horn V. Minister of Food ** neither property nor possession had passed
to the buyer, yet, under the terms of the contract, risk of deterioration
passed to the buyer since the seller had exercised reasonable care m
the storage of the potatoes and their protection against the weather.
Lastly, as regards risk remaining with the seller despite the passing of
property and possession, it may be argued that in a conditional sale
II 11923] 1 K.B. 78
i Supra, pp 84-89.
i* 11949] A C. 293.
* Bidden Bros. V. Horst Cc. 119111 I K.B. 934 at p. 956, per Ktnnedy LJ.; II912J
A.C. 18. In fob. contracts risk passes upon dcLvery, even though the seller ha*
retained property, /.e., a jus dlsponeadlz Sassoon, F.OJS. Contracts, at pp 38-39.
Cf. Uoitorm Sain Act. s. 22 (a>.
[1949) A.C. 293 at p. 312. per Lord Porter.
** IbU. Bl p. 319, per Lord Nonnand.

s IIWSI 2 All E.R. 1036.
239
by virtue of which property may revest in the seller upon the occur-
rence of a resolutive condition, this sort of situation could occur.**
Moreover, under section 32 (3) of the Sale of Goods Act, which
has already been considered,** the seller who fails to give adequate
notice to the buyer so as to enable him to insure goods being sent by
sea may be at risk. So, too, under section 33 of the Act, where the
seller has agreed to deliver goods at his own risk at a place other than
that where they are when sold, he will be liable for any extraordinary
deterioration of the goods. The buyer, however, unless otherwise
agreed, will bear the risk of deterioration in the goods necessarily
incident to the course of transit.** As already indicated, however,**
this provision must be read as being subject to the implied condition
that goods will be fit for the purpose for which they were intended, or
of merchantable quality, not only when shipped or otherwise dis-
patched to the buyer, but also when (hey arrive and for a reasonable
time thereafter to enable the buyer to see whether they are of the right
quality.** In these instances also, therefore, the seller may be at risk
although he has neither property nor possession of the goods.
Statutory exceptions. Mention must finally be made of two provisions

of the Act which operate by way of exception to the rule that risk is
transferred with property. The first is that where delivery has been
delayed through the fault of either buyer or seller the goods are at the
risk of the party in fault as regards any loss which might not have
occurred but for such fault.* Thus in Demby Hamilton & Co. Ltd. v.
Barden * the seller contracted to deliver thirty tons of apple juice to
the buyer. The apples were crushed and the juice was put in casks
and kept pending delivery. Property had not passed to the buyer.
** c//. at pp. 10^110, discusses the case of Head v. TaltersaU (1871)
7 Ex. 7 as possibly surviving the 1893 Act. But, as he points out, by

virtue of s. 18, r. 4 (b) of the Act, in such cases property would not have
passed. C/. Foote v. Smilhs Car Sales (Botham) Ltd. [1962] 2 AU E.R. 482.
** Supra, p. 219.
Cl. Butt V. Robisort (1854) 10 Ex. 342.
Supra, pp 164-165.
** ***** proviso. If one party is at fault he cannot set up against the
might have occurred even it the wrongful act had never been
[1949] 1 AU E.R. 435.
240
PERFORMANCE OF TIIE CONTRACT
After some twenty or so tons had been delivered, no further deliveries

were made through the delay of the buyer. The remaining juice
eventually went putrid. It was held that under the provision cited
above risk had passed to the buyer, who was liable for the price. It
must be noted that only such loss as " might not have occurred but
for the delay of the party in question may be recovered in an action.
Hence loss which is causally unconnected with the delay in question
is not loss attributable to the parly guilty of the delay. This raises
delicate issues of causation which may be troublesome in this context
as elsewhere in the law. The test would seem to be one of directness
rather than foresight : though there appears to be no authority which
is helpful, let alone decisive, on this issue.
The second exception is that the doctrine of risk does not affect the
liabilities of either seller or buyer as bailee of the goods of the other
party. If either seller or buyer is a bailee, therefore, he must take
reasonable care of the goods even if the seller has not delivered
because the buyer is late in taking delivery. However, in this respect
mention should be made of the provision in section 37 of the Act that
when the seller is ready and willing to deliver the goods and requests
the buyer to take delivery, and the buyer does not within a reasonable
time after such request take delivery of the goods, be is liable to the
seller for any loss occasioned by his neglect or refusal to take delivery
(as well as for reasonable storage charges). This may tend to relieve
the seller of some liability for loss or deterioration in such circuin*
stances.
American provisions. At common law and under the Uniform

Sales Act,** the situation as regards risk is the same in the United
States as in England. Basically the test of who shall bear the risk of
loss or deterioration is who has property in the goods. This doctnne
is of course subject to exceptions in cases of express agreement to the
contrary or delay through fault by either party. In addition, under the
Uniform Sales Act,** where the goods are delivered to the buyer or his
bailee but property is retained by the seller to secure performance of
his obligations by the buyer, the goods will be at the buyers risk from
the time of such delivery.
The Uniform Commercial Code, however, adopts a different atti-

tude. This is because the draftsman of the Code. Professor Llewellyn,
disapproved of the common law approach, which he categorised as
*1 S O.A. s. 20, second proviso

8* U.SjV. s 22.
s U.SA. s. 22 (ff)
241
lumpôncept Ihinking,** since it made everything, risk, rights of

action, etc., turn on the transfer of property. Instead. Professor
Llewellyn preferred a narrow issue approach, i.e., one by virtue of
which each issue was to be determined in accordance with the test
most closely applicable to the rights and duties involved in a particular
instance. To quote from a leading American work on sale ** : Lump-
concept thinking employs wide premises. In each case a decision is
made under the specific facts as to whether title is in the buyer or the
seller, and this decision then dictates the answer to myriad problems,
such as risk of loss, liability for price as against damages, liability for
taxes, etc, . . . [U]nder the U.CC the search does not usually start
with location of tide. Rather it starts with an analj'sis of the problem
in terms of narrower issues and an ascertainment of whether or not
there arc any specific provisions dealing with those issues. If there are
not, passage of tide still is important; if there are, it is relatively
unimportant.
Under the Uniform Commercial Code ** risk of loss in the absence

of breach by either party will pass in one of a number of alternative
situadons. These are: (1) delivery to a carrier where the contract
does not require delivery at a particular destination (2) tender at a
particular desdnation if stipulated in the contract, even if the goods
are still in the possession of the carrier (in both these instances pro-
vided that the contract requires or authorises the seller to ship the
goods by carrier); (3) where goods arc held by a bailee to be delivered
without being moved (a) on receipt of a negotiable document of tide,*^
(b) acknowledgment by the bailee of the buyers right to possession, or
(c) after receipt of a non-ncgotiable document of tide or other written

direction to deliver, in certain situations*; (4) on receipt of the
goods,* if the seller is a merchant **; (5) on tender of delivery in other
cases: (6) in accordance with the agreement of the parties. Where
there has been a delivery by the seller which fails to conform to the
contract so as to give rise to a right of rejection, then risk remains on
the seller undl cure or acceptance.**
This necessarily brief summary nonetheless reveals, it is suggested,

that the more recent American provisions are more realistic and
** Britton & Hawktand, Cases and Material on Sale and Security (4th <
1962). at p. 246
s. 2-509.
thou^ the shipment is under rescrralion within s. 2-S05.
têd in s 1-201 (!5).
!! yte I those mentioned in s. 2-503 (4) (ft).
***5 physical possession of them: s. 2-103.

o if Eoods. etc.: s. 2-IM.
t VJmlorm Commercial Code, s 2-510 (I).
242

flexible, and therefore superior to the rigid, mechanistic approach of
the provisions of the Sale of Goods Act. \Vhen the law of sale of
goods is revised, therefore, it is to be hoped that attention will be paid
to the American approach to the subject of risk.
(ii) Frustration*'
What the doctrine involves. In general, a man is not discharged

from his obligation of fulfilling his contract because be is able
to say he could not fulfil it. That is one of the main reasons for his
paying damages, that he could not fulfil it. Thus, to admit of an
excuse for non-fulfilment, a parly should expressly provide to such
effect in the contract.** If he does, the provision will be carefully
construed by the courts.* However, in the absence of any express
stipulation excusing a party from non-performance in a certain event,
the contract will be absolute, * and a party will only be dis-
charged from his obfigation to fulfil the contract if it can be said that
a state of affairs has arisen which has displaced what was a funda-
mental condition or basis of the contract.*^ This, indeed, is where
the doctrine of frustration becomes relevant.
Frustration, in relation to sale of goods, refers to the impossibility

of a contracts being performed either because of a change of circum-
stances which makes it legally or physically impossible to do so
the passing of a statute making certain sales illegal, or the destruction
of the subject-matter of a contract of sale) or because of a change of
circumstances which makes a contract no longer the same commercial
venture as it was when the parties originally contracted There are
thus three distinct instances of frustration: (a) legal impossibility;
(b) physical destruction (or, possibly, a substantial alteration in the
physical character) of the goods which are being sold; (c) some other
event which affects physical performance of the contract.
Whichever type of frustration is involved, the Sale of Goods Act

provides that nothing in section 11, which deals with breaches of
conditions and breaches of warranties, shall affect the case of any
See, generally, Cheshire & Fifoot. Law of Contract {6th ed ) pp. 478-500; AnsoD,
rinf of Contract, 22nd <d , pp 4M-479; Trwtel, Law of Contract, pp 547-586.
Sargant & Sons v. Paterson & Co. (1923) 129 L.T. 471 at p 473, per Rowlatt J.
See New Zealand Shipping Co, v. SocUtf des Ateliers et Chantiers de France
[1919] AC. I.
<5 See, e.g , hfatsoukis v. Pnesiman & Co [1915} I K.B 681; Wills A Son v. Cw*-
ningham & Co [1924] 2 K.B. 220; Smyth t. Undsay [1953] 2 All E-R. 1064. Cf-
the situation sphere a licence has to be obtained to deal with certain goods: see
Found Co. V. Hardy & Co I1956J A.C 588.
Sargant & Sons v. Paterson A Co sufwa, note 43
FACrCSS AFTTCTING OF <XtCrJL\C7
cTcf^drc cr RzrT 2 :i:y, cf oHii x> exc^ssfJ by U\r S' rcsscc.
cf iz^cssbCiy or c^bsroist.** *ISa; 5 tJa jtasal hw of ccc.s^cc

cTssts frCT drt psnggraajg c^ ^ coctrscnaJ cK^:5cvrs
S tbi a.T'pJjcatics of the dccciuc ^ frcsrra&is, co'iSj is lb? Salt
cf Gcois Act win pm'tsi ssdi ecctist fross btisg cJtcSt, Kc''p>'c\-cr,
i: is still to be dstersustd vbta tbe dorais? cd frossatios ajîts; to
CCSS2S3 cf salt of goods.
Wfcm tie doctriae is sppTfcabk. So far as sapttvtsisg illegality is

cooctratd. Halt rtqairss to bt said, Siaoe parries car,no: xeilidly
caVg a contract of sale which is illegal, for whatex'er reason it
be illrgal, it seems dear that a contract originatly >'ar!d and legal
Kiridj becomes illegal by a change in the law, or by seme oororrence
snnh as the outbreak of war which makes one of the contracting patties
22 enemy alien, will immediately become an illegal contract and there*
fore nnlL
The problem of destnietion of the goods is more ccmplicalevl.

Here the distinctioa between specific and unasccttained goesJs, already
Men to be difficult to apply, is of great impottanee. To begin with,
trader section 7 of the Sale of Goods Act. where there is an agreement
to ssH specific goods, and subsequently the goods, without any fault
on the part of the seller or bui'cr. perish before the risk passes to the
bnj'sr, the agreement is thereby avoided. By \irtue cf this provision,
the meaning of and problems arising from which haw been earlier
considered ** in the drcumstanccs envisaged in this section the con*
tract is frustrated. For this to result, there must be an agreement to
sen specific ** goods (i.e., property in the goods must not ha\x been
transferred to the buyer), there must be no fault by cither party, risk
must stni be on the seller, and the goods must have perished." Thus,
an executed sale, where property has been transferred, cannot be frus-
trated by the perishing of the goods. Nor will the doctrine apply
where the parties have agreed otherwise as to risk, or either pNirly is
2t fault (e.g., possibly by being in delay os to deliveij or acceptance of
the goods). Equally, where the goods have not ** perished," this pro*
VHioa win not apply. ^Vhat is meant by this term has given rise to
difficulty, elsewhere considered.* It would seem that the expression
** SGA. s. 11 (3).
< Supra, pp. 44-49.
** Note the tlifficulties as to the meaning of tWs word in this context restilting front
^ decision in Bonvll v. CouptanJ (1876) 1 Q.B.D. 258. as interpreted by AtVin
iJ. m Re iValt 119271 1 Ch. 606: sec jwrfa. pp. 38-39, 48-49.
** Supra, pp 46-47.
244
PERFORMANCE OF IHE CONTRACT
bears the same meaning as in section 6 of the Act, which suggests that
if even part of the goods has perished (which would include being
stolen) and the contract is not severable, the contract is frustrated.
This is not the only comparison with section 6 of the Act that has
been drawn. One learned writer ** suggests that, in the same way as
section 6, section 7 is only a prima facie rule of construction.* If
this is correct, then there are three possibilities: (a) that the contract
is frustrated if the goods perish; (b) that the seller contracts that they
will not perish, so that he is liable if they do; (c) that the buyer agrees
to accept the possibility that the goods will perish, so that he is still
liable if they do. This interpretation, as also the similar interpretation
of section 6. is debatable.
Whatever section 7 may involve or mean, it is clear that it does not

apply cither to unascertained goods or to cases where a contract to sell
specific goods is alleged to be frustrated otherwise than by the perish-
ing of the goods. The latter question will be dealt with below. So
far as the " perishing of unascertained goods is concerned, it would
seem from the cases that, in the absence of any express agreement to
the contrary, there cannot be frustration of a contract to sell unascer-
tained goods on the basis of the perishing or destruction of the goods.
This will be so even if the seller intended to obtain the goods from a
particular source and physical events have made this impossible.
As Pickford LJ. said in Blackburn Bobbin Co. Ltd. v. Allen & Sons
*' ^Vhy should a purchaser of goods, not specific goods, be deemed
to concern himself with the way In which the seller is going to fulfil his
contract by providing the goods he has agreed to sell? '* Despite these
judicial observations, however, it would seem that there may be frus-
tration of a contract to sell goods which will become specific, c.g-.
crops to be grown on a particular field,** or machinery to be manu-
factured by the seller.* Whether such a contract is a sale of specific
. ; I . , dy
s* a. Tupra, p. 43.
S'" 11.
. fi9igj 2 K.B-
rf!
. TL.R. 769
I fy A
' law. nertf-
ttwlni the contract wat not fnntrated).
MonJkUU V. Jack RirHay Ijj. {i93f| 2 KJJ 252 at p 258, p<r Aaqulih hJ.
IT 119131 2 K.n 467 at p 469.
ttemtU . Ccupta'tJ (1876) f Q t) D. 25.
Arrtrhy T. Mjtrt (1867) L.R. 2 Cl*. 5I.
FACTORS AF F ECTING PERFORMANCE OF CONTRACT
245
or unascertained goods is a dilScult question. The cases would seem

to suggest that such things are specific goods : but the definitions dis-
cussed in an earlier chapter of what arc specific and what are unascer-
tained goods make it very debatable whether it is correct to describe
such goods as anything but unascertained. If this is so, then it would
appear that there may be frustration of a contract to sell unascertained
goods by perishing of the goods. Alternatively, it must be said that
such contracts are contracts to sell unascertained goods for every
legal purpose except as regards the doctrine of frustration. In respect
of the doctrine of frustration such goods are specific. This, it is
suggested, is a possible view, but one which may be undesirable,
inconsistent and illogical.
There remains the third type of frustration situation, i.e., where the
contract is still capable of being performed but its performance would
involve something different from what was originally promised, as a
result of some unforeseen circumstances. Apart from destruction or
perishing of the goods themselves, there may be other reasons why the
contract of sale cannot be physically performed as originally agreed.
In such instances the doctrine of vis major or act of God may be
applicable.* Thus, if the parties contemplated that the goods would
be loaded on and delivered by a particular ship, the stranding of such
ship, making loading of the goods thereon impossible, will discharge
the contract.*^ Whether the contract is in such terms that its perform-
ance in such a way is a condition precedent is a question of construc-
tion. Under the doctrine of frustration, it may be that the parties are
relieved of their respective obligations only if it is possible to imply
a term to such effect into the contract, i.e., that the contract is to be
discharged if a particular event, viz-, the one which actually occurs,
takes place.** Vêther such a term could be implied was indeed the
very question before the court in Howell v. Coupland.^^ in which, as
earlier seen, a contract to sell a specific quantity of potatoes to be
grown on the sellers field was frustrated when the crop was less than
had been contemplated as being likely to result. In other instances it
may be that whether the change in question frustrates the contract
depends upon the true basis of the doctrine of frustration and its
, where there is a sale of specific goods which are requisitioned by the Govera-
S'"*: Shipton, Anderson & Co. Harrison Bros. & Co. [19151 3 K.B. 676.
^ Knight V. Ashton, Edridge & Co. [19011 2 K.B. 126
with the case cited in the previous note, Ashmore & Son v. Cot & Co
jlW] 1 QB. 436: Comptoir Cofttmerdtd Anversois v. Power, Son A Co. [1920]
l^K B. 868. C/. Tsakiroglou <6 Co. Ltd. v, Noblee Thorl G.m bJf, [1962] A C,
** Supra,
246
PERFORMANCE OP THE CONTTUCT
application to the particular instance. There has been much debate in

recent years as to the underlying nature of the doctrine.* In the pre-
sent context it is unnecessary to elaborate upon this debate. Suffice it
to say that whether the doctrine rests on the implication of a term, the
question of doing justice between the parties, the alteration of the
basis of the contract, or something else, it would seem to be a matter
of construction of the contract. As Lord Denning M.R. said in a
recent case : *' To see if the doctrine applies, you have first to con-
strue the contract and see whether the parties have themselves pro-
vided for the situation that has arisen. If they have provided for it,
the contract must govern. There is no frustration. If they have not
provided for it, then you have to compare the new situation with the
old situation for which they did provide. Then you must see how
different it is. The fact that it has become more onerous or more
expensive for one party than he thought is not sufficient to bring about
a frustration. It must be more than merely more onerous or more
expensive. It must be positively unjust to hold the parties bound. R is
often difficult to draw the line. But it must be done, and it is for the
courts to do it as a matter of law.
Effects of frustration. The present position is complex because

it is an amalgam of the common law and the Law Reform (Frustrated
Contracts) Act, 1943. What that Act provides as regards the effects of
operative frustration is more a matter for the general law of contract
than for the special contract of sale of goods.* Generally speaking. >t
may be said that the effect of that Act, where it applies, is to discharge
the contract and to enable the parties to settle their financial respoflSJ-
bilities inter se equitably. Money paid by one party to the other is
recoverable: money due at the time of the frustration becomes no
longer due.^ Severable contracts may be treated as severed, so as to
permit of frustration of part and validation of the rest.* Where one
party has incurred expense jn attempting or beginning to fulfil the con-
tract, and the contract is afterwards frustrated, such expenses may be
recovered from the other party. This is despite the fact that the money
paid to the party incurring the expense may be recovered by the other
party under the provisions of the Act.* Moreover, where a contract
See the textbooks died in note 42, sapm.
s Ocean Tramp Tankers Corp. r. V/O Sovfrachl [1964] 1 All E.R. 161 at p. 166
* Cf. note 64, supra.
Law Reform {Frustrated ContractsJ Act, 1943, s. I (2)
Ibid. s. 2 (4).
9 Ibid, s 1 (2) proviso, (4) (5).
FACTORS AFFECTINO PERFORMANCE OF CONTRACT
247
is not severable, then a party who has partially performed his side of
the contract may recover from the other a just and reasonable amount
to cover such performed part of the contract,^'' despite the common
law doctrine of Cutter v. Powell that in entire contracts there must
be entire performance if any payment is to be due from the party for
whose benefit the contract was to be performed.
However, the problems arise because the 1943 Act specifically

excludes from its operation any contract to which section 7 of the
Sale of Goods Act, 1893 . . . applies. Nor does it apply to any
other contract for the sale, or for the sale and delivery, of specific
goods, where the contract is frustrated by reason of the fact that the
goods have perished. In the case of such contracts, therefore, the
common law which applied before the 1943 Act wUl stiU apply, and
the modifications introduced by that statute will have no effect.
Therefore the common law rules as to retention of money already
paid, unless it can be argued that there has been a total (not partial)
failure of consideration.^* no compensation for expenses incurred by
one party or benefit conferred on the other party, and discharge from
all obligations not yet accrued at the time of the frustrating event, /.a,,
perishing of the goods, will stUI apply.** It is therefore important to
determine whether a contract comes within the scope of these exclu-
sionary provisions of the 1943 Act.
Contracts within section 7 of the Sale of Goods Act have pre-

viously been considered. Where that provision applies the contract is
frustrated, and the agreement is avoided. This means that the parties
are discharged from their obligations, but the equitable adjustment of
financial liabilities rendered possible by the 1943 Act cannot be made
Why this should be so in the particular instance where the goods
perish and in no other is not clear. Tbcre seems to be no justice in
this exclusion. So far as the other words of the exclusionary clause
of the 1943 Act are concerned, there has been great perplexity amongst
textbook writers as to their scope.*' Since these words, too, refer to
specific goods which perish, the difference between these two portions
M Jfcy (Fnmrated Coolracts) Act, 1943, s 2 (5) (c).
A.C. 32.
inwii Foods dslirered to a buyer have been retained by him, thereby
K. him in paying a reasonable, or possibly the contract price or a proportion

H Soods so retained.
aSfe 2 <=* !
248
of the provision must turn on the distinction between a sale and an

agreement to seU, and (possibly or **) upon the question whether risk
has passed to the buyer, since section 7 deals with agreements to sell
where risk has not yet passed to the buyer. But in such an instance,
i.e., where goods are sold and risk has passed, perishing of the goods
will probably not amount to frastration; hence the 1943 Act would
not apply in any event. The buyer will be liable for the whole price.
It is possible, however, as Atiyafa points out, that there may be a
contract under which property but not risk is transferred, or risk
but not property has been transferred. In such instances, too, if there
can be frustration by perishing of the goods, which is doubted, the
1943 Act will not apply, and the seller or buyer, respectively, will be
liable without any statutory benefit under that Act.
Thus, not only is it difficult to see what, if anything, the last words
of this provision of the 1943 Act involve: it must also be said that the
effect of this provision is, as one writer has put it, capricious. If
goods are not specific (and, in the light of some cases, whether goods
are or are not specific is sometimes both debatable and dependent
upon fine distinctions), if they do not perish but are requisitioned, or
the contract becomes otherwise impossible to perform, then the 1943
Act will apply, despite the doctrine of risk which might otherwise
govern the position of the parties.
On the whole, therefore, it may be argued that, at the present time,

in the absence of any express or implied agreement between the
parties, there is no reason why the doctrine of risk should not be
completely ousted, where neither party is at fault and the goods have
perished or have deteriorated, so as to permit of apportionment under
the 1943 Act. If this is thought to be too revolutionary and unaccept*
able, then it may be argued that there is no reason why contracts of
sale of goods should not be completely removed from the ambit of the
1943 Act, at least so far as the complete loss or partial deterioration
of the goods is concerned, so as to leave the position of the parties to
be entirely ruled by the doctrine of risk. Either solution, it may be
suggested, is preferable to the present attempt to compromise between
the application of the twin doctrines of risk and frustration.
t >r. p. Its.
t TrfJtet. e>p rtr, p. 579.
Part IV
REMEDIES
Chapter 9
RIGHTS OF AN UNPAID SELLER AGAINST THE GOODS

1. Real Remedies
Their nature
More than once the distinction has been drawn between property
in goods and possession of them. This distinction is of great import-
ance also in relation to the remedies available to a seller in certain
circumstances. Under the Sale of Goods Act,' which follows the
prior common law, a seller who is unpaid within the meaning of the
Act may retain or reacquire possession of the goods he has sold, even
though property in such goods has been transferred to the buyer by
the contract of sale. Where property has not been transferred to the
buyer under the contract, so that the buyer has no title but may only
insist Upon delivery in due performance of the contract, then, under
the Act, the seller is empowered to withhold delivery and retain pos-
session. In other words, in appropriate circumstances, a buyer will
not be entitled to possession of the goods by delivery whether or not
he has previously obtained property in the goods by contract.
As will be seen, the Act protects an unpaid seller to the extent of

permitting him to maintain his control of the goods, or regain control
where the goods have passed out of his possession (as long as they
have not come into the possession of the buyer), and to realise on the
security of the goods, as it were, by reselling them to another buyer.
Since these remedies involve dealing directly with the goods them-
selves, as opposed to merely bringing an action against the buyer for
the price or for damages (remedies which, as will be seen, are also
available to the seller, and may indeed be the only ones available to
him), such remedies have been called real, i.e., based on, and
involving the res. The object of the provisions of the Act as regards
such real remedies is to ensure that the seller receives complete or
partial pa5nnent for the goods in situations in which the buyer is
undeniably insolvent or likely to be insolvent and therefore unable to
discharge his obligation to pay the price.
' 1:1. 39-.
251
252
RIGHTS OF UNPAID SELLER AGAINST GOODS
When they arise
The rights to be discussed in this chapter are exercisable only by

an unpaid seller as defined by the Act. For the purposes of the Act
the seller of goods is deemed to be an unpaid seller when the whole of
the price has not been paid or tendered, and when a bill of exchange
or other negotiable instrument has been received as conditional pay*
ment. and the condition on which it was received has not been fulfilled
by reason of the dishonour of the instrument or otherwise.* It
been said, as regards one of the real remedies available to an unpaid
seller, that tender divests lien . . . waiver of tender will produce the
same result as actual tender in divesting a defendant of his right to
assert a vendors lien. Thus a seller who has waived the requirement
of payment or tender of payment will not be able to allege that he is
an unpaid seller for the purposes of the Act. Where the seller has
sold on credit, therefore, he has presumably waived his rights against
the goods, at least until the period of credit has expired, without
payment ensuing, or the buyer becomes insolvent before the period of
credit has expired.*
It appears from the Act that in the context of the remedies now
being considered the term seller is not confined, as elsewhere,
to *' a person who sells or agrees to sell goods, * but includes " any
person who is in the position of a seller, as, for instance, an agent of
the seller to whom the bill of lading has been indorsed, or a consignor
or agent who has himself paid, or is directly responsible for, lh
price. Hence a commission agent, or a del credere agent,* or an
agent who has made himself personally liable on the contract of sale,
will be entitled to exercise these remedies for his protection.** But
it was decided in Lyons & Co. v. May & Baker ** that a buyer who
rejected goods, justifiably, after having paid the price, was not
entitled to exercise any lien thereon to ensure the repayment to hitn
of the price.
* S.OJ\. f. 38 (1) (a) (i). By -or otherwbe *' oold seem to be meant tbe
insotvency of the buyer, which b not ipecificaUy meotioned in the section: Cun^
V. Bolckow, Vaughan & Co. (1875) L.R. 10 OuApp. *91 at p. 501, per MeUish LJ-
* Per McCardie J. in Cohen v. RwAe {1927] 1 K.D. 169 at p. 180.
* Cf. S GJi. I. 41 (I): Infra, see Benjamin on Saie, 8th ed. at p. 835.
I SGjA. t. 62 (1)
* S OJA. t. 33 (2).
T Caiiabogiou r. Ctbb (1883) 11 Q.BD. 797.
I As Co which see Fridman, Low of Agency, p. 26.
* IbU. pp. 152-156. . _
1* IbU. p. 135 See, es^t Imperial Bank v. London A St. Katherine'i Doeki CO.
(1876) 5 OLD. 195.
u {1923J I KJ). 685.
REAL REMEDIES
253
Their scope
Three remedies are made available to an unpaid seller, even

though property in the goods may have passed to the buyer.^* These
remedies arise by implication of law, which means, by virtue of the
provisions of the Act,^ that they may be excluded or varied by
express agreement, course of dealing, or usage which binds both
parties. They are also only exercisable in accordance with the
provisions of the Sale of Goods Act and other statutes in that
behalf (which means, in effect, section 10 of the Factors Act, 1889,
now reproduced in section 47 of the Sale of Goods Act The
remedies in question are: (1) a Hen on the goods for the price while
the unpaid seller is in possession of them : (2) in case of the insolvency
of the buyer, a right of stopping the goods in transitu after he has
parted with the possession of them: (3) a right of resale as limited
by the Act.
Where the property in goods has not passed to the buyer, the
unpaid seller, in addition to his other remedies, has a right of with-
holding delivery similar to, and co*extensive with, his rights of lien
and stoppage in transitu where the property has passed to the buyer.*
This last provision, in particular, gives rise to theoretical, if not
practical, problems. But both provisions invite comment.
It has been pointed out * that the actual provisions of the Act
confuse the legal powers of an unpaid seller with his rights. Under
section 25 (1) of the Sale of Goods Act ** a seller has the power to
transfer title to a bona fide purchaser from him of goods which have
already been sold to someone else to whom property was transferred
under the original sale. That this normally would be a breach of
contract is undeniable. But it will not be a breach of contract if the
seller in question is unpaid within the meaning of the Act, since in
such circumstances he not only has the power but also the right to
resell the goods to someone else. Moreover, in the case of a contract
of sale under which property has not been transferred to the buyer,
the seller, whether paid or unpaid, has the right as well as the power
to sell the goods to someone else, so as effectively to transfer property
to that other person. The only circumstances in which such conduct
Would amount to a breach of contract on the part of the seller are
S Gj\. g. 39 (1)
iKfra, p. 263.
U *
Atiyah, Saif of Goods, 2nd ed., pp. 15S-161.
" Supra, pp. 121-123
254
those which arise where there is an agreement to sell specific goods

or to sell unascertained goods which have become ascertained, though
property has not yet passed because the goods have not yet been so
unconditionally appropriated to the contract as to fulfil the require-
ments of section 18. rule 5 (1), of the Act. In such situations the
seller may well be under the obh'gation to deliver the precise goods
in question, despite the fact that property therein remains vested
in him and has not been transferred to the buyer. Where this is
so, then the seller must be able to rely upon the Act to protect him
from liability for non-delivery and breach of contract. Thus, what
the Act should do is to distinguish the powers of a seller in respect
of resale after non-delivery from his right to resell after withholding
delivery, and to make it quite clear that, irrespective of the powers
of a seller, whether paid or unpaid, to withhold delivery and resell
goods to a third person so as to invest such person with title thereto
(under the earher provisions of the Act), an unpaid, but only an unpaid,
seller has the right to withhold delivery and the right to resell to a
third person, whether the seller has or has not got property in the
goods at the material time. To establish this right clearly is
necessary because, if it does not exist, whatever powers a seller
may have of transferring title to a third person despite his previous
transfer of property to the original buyer, the seller who does so raay
be in breach of contract. In order to protect a seller from an action
for breach of contract in circumstances in which it is manifestly just
that with impunity he should be able to withhold delivery and resell
the goods, the Act ought to make it plain that such are his rights,
where he is unpaid, whether or not property has been transferred
to the original buyer. This, in the light of the provisions referred to
above, the Act does not do. The result, therefore, is that, under
the provisions of the Act, there may be situations in which an unpaid
seller who resells the goods validly transfers title to the third person
but lays himself open to an action for breach of contract at the suit of
the original buyer, even though such buyer is unable to pay the
contract price for the goods-
What is more, the language of the Act, when dealing with the
rights of an unpaid seller who is still invested with property in the
goods, is so framed as to confuse situations in which the seller,
even without failure to pay on the part of the buyer, is entitled to
1* Supra, pp 84-88. .
J Unleis It could be argued that an unpaid Mller ho resellj roods, prope^ in
has passed to the buyer, Is simply mitisatlng his damages, as be is obUged to oo;
see Infra, pp 298-300
real remedies
255
withhold delivery, since he is under no obligation under the contract

to deliver any particular goods, with situations in which, but for the
provisions of. the Act as regards unpaid sellers, he would be obliged
to deliver particular goods. Strictly construed, therefore, the
statutory language in question would have the effect of limiting
the common law rights and powers of a seller, whether paid or unpaid,
of withholding delivery of goods without subjecting himself to liability
for breach of contract by non*delivery. If this, indeed, is the result of
the Act, then the drafting of the provisions in question is certainly
most curious.* This assertion will be made clear when resale by the
seller is discussed in detail later in the chapter.
Moreover, the right of resale contained in the Act and conferred
on an unpaid seller is strictly limited in its scope and availability.**
It does not automatically arise on non*payment. Hence an unpaid
seller must be careful to ensure that, even where he comes within
the provisions of the Act entitling him to resell, he has acted within
the confines of the statutory right-
From what has been said above, therefore, it may be seen that,
although the law grants sellers a right of self*belp in circumstances
in which it may well be thought that prevention of loss to the
seller beforehand is preferable to limiting the seller to a possibly
nugatory remedy in damages against the buyer after the event, such
right of self-help is rigidly controlled by the law. That this is so
ts home out by an examination of the conditions which must be
satisfied before such self-help is available and the conditions which
must be fulfilled by a seller in availing himself of such self-help. Here,
as in other branches of the law, it may be said that the law recognises
the need for, but leans against, self-help as a remedy.
It is worthy of note that, whereas the Uniform Sales Act repeats

e language of the Sale of Goods Act,** the Uniform Commercial
does not make any distinction between cases in which the
sc er has. and those in which he has not, parted with properly in the
goods. Nor does the Uniform Commercial Code permit different
mmedies depending upon whether or not property has been irans-
rred. Indeed the Ctode * goes further than the Sale of Goods Act
** Hence the
'eaion p ^
In the ^
Ue corre
exclusion
proTtsIoni . . . ,
>
256
Ricirrs OF UNPAID SIXLCR AGAINST GOODS
and the Unifonn Sales Act and empower the selfcr to exercise real
remedies not only where the buyer "fails to make a payment due
on or before delivery but also where the buyer wrongfully rejects
or revokes acceptance of goods ... or repudiates with respect
to a part or the whole." In such instances, with respect to any goods
directly affected and, if the breach is of the whole contract (as
opposed to with respect to an instalment) " then also with respect to
the whole undeliverrf balance, the aggrieved seller may (a) withhold
delivery of such goods; (b) stop delivery by any bailee . . . (d) resell
and recover damages. . . Such a seller may also pursue other
remedies. In addition, where the buyer is insolvent, the seller may
refuse deliveiy except for cash, including payment for all goods
previously delivered under the contract, and stop delivery.** In some
instances a seller may even reclaim goods, subject to the rights of a
buyer in the ordinary course (/>., a bona 6de purchaser from the
insolvent buyer) or a 1/ea creditor.*
Thus the modem American law is much broader in its provision

of real remedies, and much less open to criticism of the kind expressed
above in respect of the provisions of the Sale of Goods Act. It **
particularly interesting to note that real remedies under the Unifonn
Commercial Code are not confined merely to ** unpaid sellers.
2. The Unpaid Sellers Lien
Its natore
A lien at common law is possessory and depends on possession

It also presupposes that the properly in the goods has passed. A
person cannot have a lien on his own goods. These sentences from
the judgment of Lord Wright in Nippon Yusen Kaisha v. Ram}ii><^^
Serowgee state the essential features of common law liens in generm
and the unpaid sellers lien in piarlicular. The function of a lien is
to entitle a creditor to retain possession of goods belonging to his
debtor until the amount of the debt is paid. Where the creditor is
entitled to exercise a general lien he may retain possession of any
goods to enforce the payment of any debt. Where the lien is a pa^
ticular lien only those goods in respect of which the debt is owe
may be retained by the creditor. The law views general liens with
disfavour, precisely because of their generality and the breadth o
their scope as regards the debtors goods. Such a lien, therefore, wi
2 * U CC. s. 2-702 (1).
2 Ibid. s. 2-702 (2) (3). See abo Ibid. . 1^1. 2-403.

2 11935] A.a 429 at p. 444.
THE UNPAID SEIXERS LIEN

257
arise only if there is an express agreement to such effect between the

parties or a trade or other custom or usage which creates such a lien
in the circumstances. The unpaid sellers lien is a particular lien only,
arising originally at common law and now under the Sale of Goods
Act. It may be exercised only in respect of the price of the goods
which are being retained.*^ No other charges may be comprehended
within the scope of tins lien, charges for keeping the goods,**
even where the buyer is liable to pay such charges (which he is not
where the goods are kept because of non-payment of the purchase
price) on the ground of his neglect or refusal to take delivery.*
The impaid sellers lien is a qualification of the sellers obligation

to deliver the goods. Its purpose is to enforce payment : therefore
it will endure only as long as the seller is unpaid. As already seen,
therefore, tender of the price will divest the seller of his lien, and
waiver of tender will have the same effect.** But the lien only gives
a right to retain possession: it does not invest the seller with
property,** even though it apparently supports an action for conversion
or trespass by the seller against anyone, other than the buyer, who
improperly handles or deals with the goods.** Where property has
not passed to the buyer, however, the seller may retain possession
and^ will be able to protect his property by the requisite actions
against strangers, not on the basis of any lien (since he cannot
exercise a lien over his own goods) but by virtue of his property in
the goods.
From what was said in the previous section it is clear that a seller
who still retains property may exercise over goods in his possession
a nght of withholding delivery similar to and co-extensive with his
oght of lien where property has passed.** This " quasi-lien, as
enjamin on Sale calls it,* applies in the same circumstances and
u 1 "twed to in S GA. ss. 39 (1) (o). 41 (1).
Shipping Co. (iSW) 8 HL,C 338. Atiyah. op. eit . at
p. ibS suggesu th? *- -* * j 1 . i ..
not exercKable by . . . .
storekeeper. Sed . . . / . .
pose, without lead . . ... . .

Particulart *
i*a * P 221.
*' * ' * '-om manufacturing or
: Lensbolum S Co.
SI t * A - , Atkin U
U' ^ra]i:252.
Moulton^* Ftetcher-
* T. Rnmjlban Sfrowgfe [19381 A.C 429 at p. 445, per Lord
p.s,a. 9
256
and the Uniform Sales Act and empowers the seller to exercise real
remedies not only where the buyer " fails to make a payment due
on or before delivery but also where the buyer wrongfully rejects
or revokes acceptance of goods ... or repudiates with respect
to a part or the whole. In such instances, with respect to any goods
directly affected and, if the breach is of the whole contract (as
opposed to with respect to an instalment) then also with respect to
the whole imdelivered balance, the aggrieved seller may (a) withhold
delivery of such goods; (b) slop delivery by any bailee . . . (d) resell
and recover damages. . . . Such a seller may also pursue other
remedies. In addition, where the buyer is insolvent, the seller may
refuse delivery except for cash, including payment for all goods
previously delivered under the contract, and stop delivery.** In some
instances a seller may even reclaim goods, subject to the rights of a
buyer in the ordinary course (Le.. a bona fide purchaser from the
insolvent buyer) or a lien creditor.**
Thus the modem American law is much broader in its provision

of real remedies, and much less open to criticism of the kind expressed
above in respect of the provisions of the Sale of Goods Act. It is
particularly interesting to note that real remedies under the Uniform
Commercial Code are not confined merely to unpaid sellers.
2. The Unpaid Sellers Lien

Its nature
A lien at common law is possessory and depends on possession.

It also presupposes that the property in the goods has passed. A
person cannot have a lien on his own goods. These sentences from
the judgment of Lord Wright in Nippon Yusen Kaisha v. Ramjiban
Serowgee * state the essential features of common law liens in general
and the unpaid sellers lien in particular. The function of a lien is
to entitle a creditor to retain possession of goods belonging to bis
debtor until the amount of the debt is paid. Where the creditor is
entitled to exercise a general lien he may retain possession of any
goods to enforce the payment of any debt. Where the lien is a par-
ticular lien only those goods in respect of which the debt is owed
may be retained by the creditor. Hie law views general Hens with
disfavour, precisely because of their generality and the breadth of
their scope as regards the debtors goods. Such a lien, therefore, will
u U CC I. 2-702 (1).
* IbU s. 2-702 (2) (3). See also Ibid. *. I^tU, 2-403.

s [19381 A.C 429 at p. 444.
THE UNPAID sellers LIEN
257
arise only if there is an express agreement to such effect between the

parties or a trade or other custom or usage which creates such a lien
in the circumstances. The unpaid sellers lien is a particular lien only,
arising originally at common law and now under the Sale of Goods
Act. It may be exercised only in respect of the price of the goods
which are being retained. No other charges may be comprehended
within the scope of this lien, e.g., charges for keeping the goods,**
even where the buyer is liable to pay such charges (which he is not
where the goods are kept because of non-payment of the purchase
price) on the ground of his neglect or refusal to take delivery.
The unpaid sellers lien is a qualification of the sellers obligation

to deliver the goods. Its purpose is to enforce payment*: therefore
it will endure only as long as the seller is unpaid. As already seen,
therefore, tender of the price will divest the seller of his lien, and
waiver of tender will have the same effect.*' But the lien only gives
a right to retain possession: it does not invest the seller with
property,* even though it apparently supports an action for conversion
or trespass by the seller against anyone, other than the buyer, who
improperly handles or deals with the goods.** Where property has
not passed to the buyer, however, the seller may retain possession
and will be able to protect his property by the requisite actions
against strangers, not on the basis of any lien (since he cannot
exercise a lien over his own goods) but by virtue of his property in
the goods.
From what was said in the previous section it is clear that a seller
who still retains property may exercise over goods in his possession
a right of withholding delivery similar to and co-extensive with his
right of lien where property has passed.** This quasi-lien. as
Benjamin on Sale calls it,** applies in the same circumstances and
particular?
*9 S G A. 8. 37: supra, p. 221.
so T> f... ..
Moulton LJ.
>* Nippon Yusen Kaisha t. Ramfiban Serovgee [19381 A C 429 at p. 445, per Lord
Wright.
*4 S.GA. s. 39 (2): supra.
*8 At p. 847.
F.S G. 9
258
subject to the same conditions as the statutory lien enjoyed by a seller

who has parted with property.**
When it arises
The first essential is that the unpaid seller should be in possession

of the goods.*^ What is meant by possession and when possession
may be said to be transferred are matters which have been referred
to in an earlier chapter in connection with delivery.* The unpaid
seller must have actual possession, personally or through a servant
or agent, or constructive possession, by means of a bailee such as a
warehouseman, or symbolic possession, by being in control of the
means of possessing the goods.* Problems have arisen in cases in
which goods were in the possession of a bailee holding them on behalf
of the seller, and thereafter the goods have been sold to the buyer.
At what point, if at all, did the bailee cease to possess on behalf of
the seller and hold the goods for the buyer, so as to render the unpaid
sellers lien inoperative? In such cases the issue has turned upon the
effect of some document such as a dehVery order or warrant, and the
need or lack of necessity for acknowledgment or attornment by
the bailee.* In the present context it suffices to point out that upon the
delicate question of possession, notoriously a difficult concept to apply*
will depend the validity and availability to the seller of his lien.
Secondly, the seller must be an unpaid seller, as already

explained.*^ Hence payment or lender of the price destroys the
sellers right to retain possession of the goods.
Thirdly, under the provisions of the Act, the right to retain

possession may only be' exercised in one of three instances.**
first is where the goods have been sold without any stipulation
as to credit. This, presumably means that the buyer is obliged to
pay immediately if he wishes to obtain delivery, in accordance with
the general provisions of the Act as to payment and delivery.** If he
is unwilling or unable to pay, then the seller is not obliged to part
with possession of the goods and deliver them to the buyer. But. as
* Se Ex p. Chalmers (1873) L.R. 8 CJi App. 289

S GA. 8. 41 (1).
Supra, pp. 2oi-2CM.
** JVrightson V McArthur & Hufehbons {1919) Ltd. [1921] 2 K B. 807.
*0 See, e-g; Poulton <t Son y. AngltyAmeriettn Oil Co. Ltd. (1910) 27 T.L.R. 38, 21o,
Dublin City Distillery Ltd. y. Doherty 119141 A.C 823 at pp. 827-828. per Lord
Aikinsoa.
Supra, p. 252.
*s S.G.A. 8. 41 (1) (a) (b) (c).
viz , S O.A. 8. 28: supra, pp. 206, 230.

259
has been pointed out/* the agreement between the parties may be that
the buyer is allowed credit but is not entitled to immediate delivery,
i.e.t that the stipulation as to credit is designed to give the buyer time
to pay, not to allow him possession before payment. Even, therefore,
if there is a stipulation as to credit, this may not disentitle the seller
to retain possession until the price is paid. The second situation
envisaged by the Act is where the goods have been sold on credit,
but the term of credit has expired. Under this the seller may retain
goods which he has kept in his possession, whether or not the
agreement as to credit entitled him to keep the goods in his posses*
sion (though he may be liable to the buyer if he was not so entitled),
when the time for payment, which was postponed by agreement
between the parties, has expired. It must be noted therefore that,
whether or not the agreement stipulated for immediate delivery but
postponed payment, the seller will have his lien (or quasi-lien) if he
still has the goods. The third instance is where the buyer becomes
insolvent. A person is deemed to be insolvent within the meaning
of the Sale of Goods Act who either has ceased to pay his debts in
the ordinary course of business, or cannot pay his debts as they
become due, whether he has committed an act of bankruptcy or
not. The tight to retain goods where the buyer becomes insolvent
arises whether or not the sale was one with a stipulation as to credit.
Hence a seller who has sold goods on credit may still refuse to deliver
them. He cannot be compelled to deliver, with the result that he would
have to prove in the buyers bankruptcy for the unpaid price, a remedy
which may well turn out to be worthless or less valuable than dealing
with the goods themselves.
The above provisions apply in the normal case, i.e., where there
is an entire, indivisible contract of sale and the unpaid seller is in
possession as a seller at the material time. Two special situations
must be considered.
(a) Seller who is agent or bailee. Under the Act, the seller may
exercise his right of lien (and presumably also his quasi-lien) not-
withstanding that he is in possession of the goods as agent or bailee
for the buyer.** At common law it seems to have been held that once
the seller changed the character of his possession by attorning to the
buyer, becoming the buyers agent or bailee, the seller waived his lien.
That this may still be so is undeniable. It will depend upon the
Atiyah, op. cil., p. 163.
S GA. $. 62 (3).
<6 S.G.A. s. 41 (2).

260
circumstances. But before the Act even a waived lien would revive
if the buyer became insolvent.^ It now appears that even if the
buyer is solvent the unpaid seller may exercise his lien where he is
the buyer's agent or bailee in the same situations as may an unpaid
seller who Is in possession as a seller.
(h) Part delivery. The common law rule, set out in the speech
of Lord Blackburn in the leading pre-1893 case of Kemp v. Falk**
was that delivery of part of the goods was prima facie delivery of that
part, and only that part. Proof was necessary that it was a constructive
delivery of the whole of the goods so as to oust the application of the
unpaid sellers lien. Under the Act, the rule is that where an unpaid
seller has made part delivery of the goods, he may exercise his right
of lien on the remainder, unless such part delivery has been made
under such circumstances as to show an agreement to waive the
lien. Thus, if the contract is an instalment contract, the seller's
lien will not necessarily be lost because he has delivered part of the
goods. The seller may exercise his lien over the rest. It is a question
of construction of the contract in the light of all the surrouncling
circumstances. If the contract is severable, however, then different
considerations may apply. In such cases delivery of one instalment,
/.ft, the goods referable to one part of the contract, will result in the
loss of the sellers lien as regards that instalment. But the question
arises whether such delivery also destrojs the sellers lien In respect
of the rest of the goods, which have not yet left his possession-
Tbe answer would seem to be that the seller cannot exercise a lien
over undelivered instalments in respect of non*poyment of the
of a delivered instalment, since that would have the effect of making
the lien general, not particular.** But if the non-payment amounts
to n repudiation of the contract, the seller can retain possesdon of
the undeltvrred instalments, not on the ground of lien, hut because
he is no longer obliged to deliver. Likewise, non-delivery of sub-
sequent instalments is permitted if the buyer, after one Instalment
has Icen delivered, becomes insolvent.** However, even if the buyer
is ln*.ol\ent. the seller must delisTf goods for which he has received
* we ii.f SIS : r,-r *n ef trts r
* 7 51 F
SOA, * 41.
A* S- .-N pf
. r- e..ti tirniU'S
ti .t^*^r** A (mi SI Tt R. Iia
> r*t rw M ur'ji UR icâ.-s- tn
261
the price, though he may retain goods involved in a separate contract

or part of the contract, in respect of which he is still unpaid.*^
How it is lost
Apart from termination of the unpaid sellers lien by payment or

tender of the price (though not merely by his obtaining judgment
for the price of the goods). it may be lost in one of three ways
specifically mentioned in section 43 of the Act. as well as in another
way contained in the proviso to section 47.
Under section 43 (1) the sellers lien is lost (a) when he delivers
the goods to a carrier or other bailee for the purpose of transmission
to the buyer without reserving the right of disposal of the goods:
(b) when the buyer or his agent lawfully obtains possession of the
goods : (c) by waiver thereof.
Delivery to a carrier effectively determines the sellers lien, unless

the seller has reserved a right of disposal, but he may still exercise his
right of stoppage in transitu, as will be seen, whereupon the goods
revert to bis possession (through the agency of the carrier) and the
lien revives. It should be noted, however, that, whereas a lien may be
exercised even where the buyer is not insolvent, stoppage is a right
which only arises in cases of the buyers insolvency. Hence, once
the goods are in the hands of a carrier for transmission to the buyer,
then, unless such carrier is still the agent of the seller, only insolvency
on the part of the buyer will entitle the seller to recover possession
of the goods.*^ What is meant by reservation of a right of disposal
has been considered earlier, in connection with transfer of property,
and it is unnecessary here to do more than refer back to the relevant
pages of discussion.*
What is meant by the buyer or his agent " lawfully obtaining

possession of the goods is difficult to state. Clearly once the seller
without having been misled by fraud has given possession to the buyer
the lien is lost. Clearly also if the buyer or his agent obtains
possession by, e.g., theft, the lien is not lost. What if the buyer or his
agent obtains possession by some trick, thereby inducing the sellers
* Merchant Banking Co. of London v. FhoenU Bessemer Steel Co, (1877) 5 Oi D

205 at p. 220, per Jessel M R.
S G.A. s, 43 (2).
Infra, pp 266-273.
** In some circumstances delivery to a carrier may be deemed to be delivery to the

buyer, in which event neither stoppage in transit nor lien will be exercisable: see
SOA. f. 32 (1): supra, pp. 217-218.
*s Supra, pp. 90-93, discussing S.OA. a. 19.
262
consent to a transfer of possession? Benjamin on Sale states that

the possession must not be obtained tortiously. Is obtaining by
conduct amounting to larceny by a trick obtaining tortiously? It has
been argued that such an obtaining must determine the sellers lien
in order to give effect to the provisions of the Act (and the Factors
Act) under which a buyer in possession can pass good title to an
innocent third party.*^ Yet since lien is concerned with possession
and the provisions in question deal with title, there may be little
connection between the two, despite the reference to the third party s
receiving the goods in good faith and without notice of any
lien or other right of the original seller in respect of the goods. On
the other hand, in relation to these provisions, obtaining possession
by larceny by a trick has been held to be obtaining with the sellers
consent hence the same may be true in relation to section 43
of the Act, if the provisions of the Act are to be interpreted con-
sistently. What if the buyer or his agent obtain possession othewse
than in the capacity of buyer, e.g., as the sellers agent or bailee?
In view of the nebulousness of the tenn possession it may be that the
seller retains possession in law even though the buyer has possession
in fact, and that, in consequence, the sellers lien continues. On the
other hand if possession in section 43 means simply custody of the
goods then in whatever capacity the buyer obtains the goods
the sellers lien will be lost.
Waiver of the lien is a question of fact. In cases where there is a
stipulation as to credit, then while the period of credit is unexpire ,
it is clear that there is a temporary waiver of the lien.** The ben
revives when credit expires. Such a waiver is implied. But waiver
may be express, either by total exclusion or as a result of a term
as to lien which is inconsistent with the statutory Hen in the Act.
Whether the seller has impliedly waived his lien depends upon t e
circumstances, such as whether he possesses as the buyers agent or
bailee, whether he has dealt wrongly with the goods, whether, having
refused credit, the seller later agreed to the buyers taking possession
before payment, .
Another instance of implied waiver is where the seller is estopped

from raising his lien as a result of his conduct in allowing a sub-
purchaser from the buyer (or. e.g, a pledgee) to believe that the
At p. 849.
Atiyah, op cit , pp. 16&-167.
t S.GJV s. 7S (2); Factors Act, 1889, s 9; mpra, pp. 123-128,
* Supra, p. J25. ^
* PouUon & Son v. Anglo-American OU Co. Ltd. (1910) 27 T.L.R. 38 at p. 39, p<
Chaonell J.
263
buyer has paid the purchase price or is otherwise not subjected to the
unpaid sellers lien. In such circumstances the seller cannot exercise
his right of lien as against the sub-purchaser.* This is exemplified
(but not, it is suggested, exhaustively defined) by the provisions of
section 47 of the Act by virtue of which the unpaid sellers right
of lien ... is not affected by any sale or other disposition of the goods
which the buyer may have made, unless the seller has assented
thereto. The difference between estoppel amounting to implied
waiver and the provisions of section 47 lies in the fact that estoppel
requires signification of the sellers assent to the sub-purchaser (or
pledgee, etc.), whereas, under section 47. it is assent to the original
buyer that is involved. It is necessary, therefore, to consider sepa-
rately, the meaning and effects of section 47, particularly in view of
the contents of the proviso to that section.
Section 47 does not state the kind of goods to which it applies.

It has been queried whether it applies to unascertained as well as
specific goods. Pickford J. in one case,** and Salmon J. in another *
both suggested that in the case of specific goods the assent of the
seller to a sub-sale may be more readily inferred than in the case of
unascertained goods. The assent which affects the sellers lien under
section 47 has been described by Pickford J. in Mordaunt Bros. v.
British Oil & Cake Mills Ltd.** as such an assent as in the circum-
stances shows that the seller intends to renounce bis rights against
the goods. It is not enough to show that the fact of a sub-contract has
been brought to his notice and that he has assented to it merely
in the sense of acknowledging the receipt of the information . . . The
assent . . . means ... an assent given in such circumstances as show
that the unpaid seller intends that the sub-contract shall be carried
out irrespective of the terms of the original contract. In that case
unpaid sellers were held not to have assented to a sub-sale when they
accepted delivery orders sent to them by the sub-purchasers who had
received such orders from the original buyers. The sellers delivered
goods under these orders to the sub-purchasers as long as the original
buyers paid the sellers. When the original buyers failed to continue
paying, the sellers claimed the right to exercise a lien on the goods
* See, e g., Knights v. Wiffen (I870> L.R. 5 Q B 660. But mere knowledge of a sub-
contract will not amount to an estoppel: Povlion Son v. Anglo-American Oil
Co. Ltd. (1910) 27 T.LJl 38 at p. 39, per Channell J.
** Which also apply to stoppage in transitu z Infra.
Mordaunt Bros. v. British OR & Cake A/flZi Ltd. [J9101 2KB 502 at pp. 506, 507.
Mount Ltd. v. lay & Jay {Provblons) Co. Ltd. [1960] I Q B 159 at pp. 167-
[1910] 2 K.B. 502 at p 507.
264
RIGHTS OF UNPAID SECXER AGAINST GOODS
Still in their possession as against the sub*purchasers. This conten-

tion was upheld. But in the more recent case of D. F. Mount Ltd. v.
Jay & Jay {Provisions) Co. Ltd.*^ it was held that the sellers bad
assented to a sub-sale by their buyer in circumstances which showed
that the sellers were anxious to get rid of the goods on a falling
market, and knew that their buyer was only going to be able to pay
them out of the proceeds of sub-sales by him to other parties, such
proceeds only being available to him as against delivery orders in
favour of his customers. As the sellers were reputable merchants
Salmon J. felt convinced that It was not their intention to get rid of
their goods on a falling market on the basis that if their buyer
defaulted they could hold the goods against the customers from whom
he obtained the money out of which they were to be paid.
However, from the proviso to section 47 it appears that the assent

of the unpaid seller is not always necessary to show that his hen is
defeated by a sub-sale or similar disposition of the goods. This
provides that, where a document of title to goods has been lawfully
transferred to any person as buyer or owner of the goods and that
person transfers the document to a person who lakes the document
in good faith and for valuable consideration then, if such l^t-
mentioned transfer was by way of sale, the unpaid sellers right of hen
is defeated, and if it was made by way of pledge or other disposihon
for value, the unpaid sellers right of lien can only be exercised subject
to the rights of the transferee. The expression document of title
to goods has the same meaning in this context as in the Factors
Act,'' under which it includes any bill of Jading, dock warrant,
warehouse-keepers certificate, and warrant or order for the delivery
of goods, and any other document used in the ordinary course of
business as proof of the possession or control of goods, or authorising
or purporting to authorise either by endorsement or by delivery, the
possessor of the document to transfer or receive goods thereby
represented. Though the proviso to section 47 of the Sale of Goods
Act reproduces in part section 9 of the Factors Act, 1889,'*
reproduces with additions section 10 of the Factors Act, 1889, there
are certain dififerenccs. Thus section 10 of the 1889 Act makes no
distinction between transfers by way of sale or pledge and says that
11960] 1 Q3. J59.
TO By virtue of S GA. s 62 (1)
Ti Factors Act, 1889, s. 1 (4). For a brief account of bills of lading, delivery orders,
warrants and certificates see Benjamin on Sale, pp. 857-S5S
T* Note that s. 9 of the Factors Act, 1889, is also reproduced In toto with some slight
modifications, in s. 25 (2) of the Sate of Goods Act, 1893: supra, pp. 12J-128
TOE UNPAID SH.tER*S LIEN
265
the transfer by the buyer to a bona fide purchaser from him shall
have the same effect as the transfer of a bill of lading.^ Under section
9 the possession of the document of title must have been obtained
with the consent of the seller: under section 47 it must have been
lawfully transferred, i.e., obtaining by larceny by a trick will not
sufBce, though the consent of the seller is irrelevant. Under section
9 of the 1889 Act the sub-purchaser must take without notice of any
lien over the goods; under the Sale of Goods Act, section 47, proviso,
notice is immaterial, since notice is not inconsistent with good faith.
A thing is deemed to be done in good faith, under the Sale of Goods
Act,^* when it is in fact done honestly, whether it be done negligently
or not.
Thus under the Sale of Goods Act and the Factors Act, buyers in
possession of documents of title (as well as buyers in possession of
goods as buyers, and buyers who are in the position of mercantile
agents apart from their treatment as such by the Factors Act where
they are in possession as buyers) have a power of transferring property
to innocent purchasers from them, free from any lien which may have
been exercisable over the goods. To determine whether a disposition
Is effective under the proviso to section 47, however, it must be decided
whether the document in question, if it is not within one of the speci-
fied categories, is a document of title to goods within the Sale of Goods
and Factors Acts, and whether the transfer fulfils the conditions laid
down in the relevant provisions. Thus, whereas delivery orders clearly
come within the Acts. delivery notes may not do so/* Even if the
document of title is one which Is created by the seller the original
owner) himself, as contrasted with a document created by someone
else by means of which property and possession are transferred,
the document will come within the Acts/* Under the proviso to
section 47, it would appear from the judgment of Salmon J. in the
Mount case ** that the very same document of title which the seller
creates or puts into circulation must be transferred by the buyer to
the sub-purchaser : but, where the sub-purchaser is relying on section
25 (2) of the Sale of Goods Act section 9 of the Factors Act),
the document of title need not be the same as was created or put
Which, by the Bills of Lading Act, 1855, means that property passes by negotiation
and endorsement.
S.GJi. I. 62 (2).
Ant Jurgens v. Louis Dreyfus & Co. 11914] 3 K.B. 40.
Laurie d Morewood v Dudin & Sons 11925] 2 K.B. 383 ! [1926] 1 K.B 223.
Arit. Jurgens t. Louis Dreyfus d Co , supra.
* [I960] 1 Q3. 159 at pp. 16&.169.

266
into the buyers hands by the seller. This ortlGcial result stems from
the rigorous language of section 47 which was plainly indicative
of such an approach. The language of section 25 (2) and section 9
was said to be less rigorous and to permit a more relaxed
interpretation.
Its effects
Although the valid exercise of his lien by an unpaid seller relieves

him of liability for non-delivery of the goods, it does not operate to
rescind the contract.^" Thus the seller may still sue for the price or
damages. But, as will be seen, an unpaid selier who has exercised his
right of lien may be able to resell the goods to a third party, who will
acquire good title thereto as against the original buyer.*'* The effect
of such a resale will be considered later.**
3. Stoppagb in TkANsrru
The right to stop goods
An unpaid seller has the right to resume possession of goods

which have left his possession as long as they are still in the course
of transit, i.e., have not come into the possession of the buyer, and
provided that the buyer has become insolvent.** By the exercise o
this right the unpaid seller, as already seen, may regain his right to
exercise a lien on the goods which be lost when he parted wJt^
possession of them.* By virtue of the common law prior to the Act
and the provisions of the Act itself,** this right may be exercised
by persons other than sellers, e.g., agents of a seller to whom bills o
lading have been endorsed, and also by persons who have agrew
to buy goods and have agreed to sell such goods before property m
the goods has passed to them.*
This right is available whether or not property in the goods b^

been transferred to the buyer.** It is therefore a very important righ
T9 s GA. s. 48 (1).
so S.GA. s. 48 a).
81 Infra, pp. 276-279.
88 S.G.A ss. 39 (I) (ft), 44.
84 BenjamlD, op. eit., pp. 880-882.
85 S G.A. s.^ 38 (2); supn. p. 2
,.fi <r.A. * ^
STOPPAGE IN TRANSITU
267
since it entitles the unpaid seller to interfere not only with the posses-
sion of goods which are in the hands of someone who is not his servant
or agent but also with the property in goods vested in another. In
view of the importance of this right it is curious that various explana-
tions have been given for its origins and basis. This expansion of the
ordinary rights of a vendor has been said to be founded on " strict
justice, an equitable principle, and the custom of merchants,
later engrafted onto the common law and equity It has been said
to be based on the idea that one man's goods shall not be applied
to the payment of another man's debt, i.e., that a buyer who is
insolvent must not be allowed possession of goods he has bought
with the result that they will become part of his general property
available to meet the demands of all his creditors, not simply the
unpaid seller. Yet, particularly in the light of the comment that the
doctrine of stoppage in transitu is always construed favourably to
unpaid vendors,* it might be said that this right unduly favours
one creditor of a bankrupt or insolvent to the exclusion of others,
and is in sharp contrast to the general principles of bankruptcy law
which seek to prevent preference of one creditor beyond the rest.
It is not surprising therefore that Brett LJ. in Kendal v. Marshall
Stevens & Co.** denied that the doctrine was founded on an ethical
principle, any more than it was founded on contract between the
parties. In a sense it may be said to be an extremely unethical
principle. Perhaps as a consequence of what may be termed
its general commercial injustice, the right of stoppage in transitu
*8 Kendal y. Manhall Stevens & Co. (1883) 11 Q3 D. 356 at p 369, per Bowen LJ.
** . Carrulhers (1841) 8 M. & W. 321 at p. 331, per Gumey B.
Ibid, at p. 334, per Parke B.
K^dal v.^Marshall Stevens i Co., supra at pp. 364, per Brett LJ. ; 368, per
* 4 ' . '
p8i|t to regain property In the goods on the insolvency of the buyer,

failed or was forbidden to stop the goods in transit, fds goods could
P^y someone eises debt. Tbus the ** inaccurate rhetoric was justified
Ôn^y. even if not justified now, or In 1916.
a 20 Q.B.D. 613 at p. 617, per Lord Esher M.R.
* (1883) 11 Q B D. 356 at p. 364.
268
RIGHTS OF UNPAID SEU.ER AGAINST GOODS
has fallen somewhat into disuse, if not disfavour, and the growth of the
system of payment for goods by bankers confirmed credits has
rendered this doctrine more or less obsolete. Such a method of ensur-
ing payment for goods, before their delivery, makes it far less necessary
to protect an unpaid seller who has parted with possession of goods
only to discover that the buyer is insolvent.
When it may be exercised
The seller must be impaid and the buyer must be insolvent.

Who is an unpaid seller and when a buyer is insolvent have already
been considered. It suffices here to point out that the seller takes the
risk that the buyer may not in fact be insolvent when he stop
the goods in transit. If it emerges that the buyer is solvent, then the
seller must deliver the goods and will be liable to the buyer
for loss resulting from the delay in delivery caused by the stoppage.
The most difficult question, however, is to determine whether me

goods are in the course of transit, so as to pennit the exercise of this
right, or have reached their destination so as to render too late aJy
attempt by the seller to stop (hem. The Sale of Goods Act purports
to state succinctly, in section 45, the principles which apply to the
determination of this issue. .
Basically the essence of the doctrine is, as Rolfe B. stated w

Gibson v. Carruihers,* that during the transitus the goods should
in the custody of some third person, intermediate between the se ef
who has parted with and the buyer who has not yet acquired actw
possession. If the third person, the carrier, is the agent of I
seller, the seller could exercise his right of lien. If the carrier is t e
agent of the buyer, then the seller could not exercise any right o
stoppage in transitu. In this respect it is necessary to refer once
again to section 32 (I) of the Act by which, in certain circumstances,
delivery of goods to a carrier for transmission to the buyer is pfima
facie delivery of the goods to the buyer.* By virtue of this it ^
appear that hardly ever would a seller be able to exercise the ng t
of stoppage. But this provision, as has already been suggt^
conflicts with the provisions of section 45 (I) of the Act. by wbic
goods arc deemed to be in course of transit from the lime when
the)' arc delivered to a carrier by land or water, or other bailee .
for the purpose of transmission lo the buyer, until the buyer, or
jrra. rr IT?.
M (ISO) s M. A W. n at p. 333.
t pp.
269
agent in that behalf, takes delivery of them from such carrier or other
bailee. . . These provisions must be construed consistently.
Hence, it may be that, for the purpose of determining whether the
seller has fulBlIed his obligation to deliver the goods, section 32 (1)
applies, i.e., a constructive delivery suffices, whereas for the purposes
of deciding whether the seller can exercise his right of stoppage in
transitu, section 45 (1) applies, there must be an actual delivery.
If that is so, then the only question, in this context, is whether, as
Cairns LJ. put it in Schotsmans v. Lancs. & Yorks. the goods
are in the hands of a middleman. According to Brett L J. in Kendal v.
Marshall Stevens & Co.* goods appropriated to the contract by
the vendor and delivered by him to a carrier to be transmitted to the
buyer are in the constructive possession of the buyer, but they are
in the course of transit and the right of stoppage may be exercised.
This was denied by Bowen LJ. in the same case.' To Bowen LJ. the
transit was at an end only where the buyer took actual possession
of the goods or where someone took possession of the goods from
the carrier on the buyers behalf, which was an instance of con-
structive possession. The carriers possession, on the other hand, was
independent of both vendor and buyer.
The law prior to the 1893 Act is well stated and summarised
in two leading decisions in the Court of Appeal, Kendal v. Marshall
Stevens & Co.* and Bethell v. Clarke In the light of the provisions of
the Act it is perhaps unnecessaiy to do more than refer to these
cases, since the Act would now seem to give statutory effect to these
and other decisions.
It has been seen that, under the Act, while the goods are in the
hands of an independent carrier (not the agent of either party) they
are in the course of transit. The question often arises, therefore,
whether the goods are still in the carriers bands. The answer seems
to depend upon whether (a) the goods are still in the hands of some
carrier or depositary awaiting delivery to or receipt by the buyer or
his agent, even where there has been a change of intermediary or
direction,* as long as such change has not resulted from the interven-
tion of the buyer starting the goods on a ** different and new voyage, *
!! ChApp. 332 at p. 335.
(1883) 11 356 at p. 364,
* Ibid, at p. 369.
* Supra.
* (1888) 20 Q.B.D. 615.
* See Bethell v. Clark, supra; Lyons r. BoSmmz (1890) 15 App.Cas. 391 ; Kemp v.
tsmay, Imrte & Co. (1909) 100 L.T, 996.
* t-x p. Golding, DavU & Co. Ltd. (1880) 13 OiJJ. 628 at p. 637, per Cotton LJ.
270
or (b) the goods have reached a place where their further destinatioii
is to be determined by the buyer or his agents.
The Act expresses this as follows. By section 45 (2): "If fh

buyer or his agent in that behalf obtains delivery of the goods before
their arrival at the appointed destination the transit is at an end.
Hence in Redddll v. XJnion Castle Mail S.S. Co. htd.? where the
buyer intercepted the goods at the end of one stage in their transit,
after which the goods were in the custody of a carrier who charged
the buyer warehouse rent, it was held that transit had ended. "Where
the original tramitus is interrupted by the buyers, said Bailhacbe J..
the test is whether the goods will be set in motion again widiout
further orders from the buyers; if not the transit is ended and the
right to stop lost.
By section 45 (3); If, after the arrival of the goods at the

appointed destination, the carrier or other bailee . . . acknowledges to
the buyer or his agent that he holds the goods on his behalf and
continues in possession of them as bailee ... for the buyer or his
agent, the transit is at an end. and it is immaterial that a further
destination for the goods may have been indicated by the buyer.
This indeed is what happened in Kendal v. Marshall Stevens A Co.*
The issue is whether or not the goods have arrived at their " appointed
destination. As long as they are still not at that place, even though
they are not actually in motion, then they will be in transit unless
section 45 (2) applies to the situation.*
If goods are rejected by the buyer, and the carrier or other bailee
continues m possession of them, then, even if the seller has refused
to have them back (as occurred in Bolton v. Lancs. & Yorks.
according to the Act, the transit is not deemed to be at an end.
It has been suggested that this may conflict with the provisions of
section 45 (3), in that the carrier may have told the buyer that he
holds the goods on his behalf, so as to make section 45 (3) applicable,
before the buyer has rejected them, so as to make section 45 (4)
applicable. According to Willes J. in the Bolton case,* to divest the
See Krnddl v. Marshall Stevens & Co. supra\ Ex p. Miles (t8S5) 15

Jobson V. Oppenheffrt Co. (1905} 2l T.LIr. <6S.
(1914) SI LJJC.B 360: see also Flischkt Sc Sons v. Allison Bros. Ltd. U936] 2
E.R. 1009.
8 (1914) 84 LJ.K B. 360 at p. 362.
Supra. .
10 See also the ludements of Lord Esher MJL and Lopes LJ. in Befhell v. ClarK,
supra at pp. 617, 620.

it (1866) UR. 1 CP. 431.
u S.OA. s. 4S (4).
IS Aiiyah, op. dt , p. 172.

i Supra at p. 441.
271
vendor of his right to slop the goods in transitu, the buyer must so
assent to the receipt of the goods in performance of the contract as to
show that he has taken actual or constructive possession of them; and
that cannot be so long as he repudiates them.
If the carrier or other bailee wrongfully refuses to deliver the

goods to the buyer or his agent in that behalf, the transit is deemed to
be at an end.^ Thus whether the carrier performs his contract by
attorning to the buyer, or fails to perform it by wrongful refusal to
deliver, the result as regard stoppage in transitu is the same.
Where goods are delivered to a ship chartered by the buyer it is a

question depending on the circumstances of the particular case
whether they are in the possession of the master as a carrier or as
agent to the buyer.' If the buyer sends his own ship, or one which,
by virtue of Ae charterparty, becomes his for the voyage, delivery to
the ship ends the transit, as happened in Schotsmans v. Lancs. &
Yorks. Ry.'^ If the charterparty does not effectively transfer ownership
of the ship to the buyer for the voyage, then, even if the ship has
been nominated by the buyer,** delivery to the ship does not end the
transit, since the master of the ship is agent of the carrier, not of the
buyer, hence the goods are in the custody of the carrier, i.e., the ship-
owner, as occurred in Berndtson v. Strang^*', the buyer will have
only a constructive possession (if that, according to Bowen L.J. in
Kendals case), as was held in Ex p. Rosexear China Clay Co.*
The right of stoppage in transitu may therefore be exercised as

long as all the goods arc in the course of transit within the meaning
of the provisions considered above. Where part delivery of the goods
has been made, the remainder may still be stopped in transitu.
according to the Act,** unless such part delivery has been made under
such circumstances as to show an agreement to give up possession of
the whole of the goods. Clearly, similar considerations apply here as
in the case of the effect of part delivery upon the unpaid seller's Hen.**
When it is lost
Apart from by termination of the transit in any of the ways

iscussed above, the right to stop the goods in transit may be lost as
* S OA. t. 45 (6)
S GA. s. 45 (S:
^ ^-App. 332. Note however the importance of the wording of the

Chelmsford L.C. at p. 336.
SOA 4SC7).
Supra, pp. 26()-261.
272
a result of dealings by the buyer with the goods or with documents

of title to the goods. It has already been seen, in relation to the
unpaid sellers lien, that sub-sales to which the seller has assented (or
as regards which he is estopped from denying their validity and
effect) will determine his rights, by virtue of the provisions of section
47 of the Act.* These provisions apply to the right of stoppage
in transitu in exactly the same terms. Hence a sub-sale or transfer of
a document of title to goods which comes within the scope of these
provisions will effectively result in the loss of the right to stop the
goods in transitu. However, it may be that, in cases of pledge of
documents of title, the unpaid seller can insist on stoppage in transitu
(and lien as well) provided he is willing to pay the amount advanced
by the pledgee on the security of the documents in question. This
is because, seemingly following the decision of the House of Lords m
Kemp V. Falk,^* the Act says ** that, in the case of such a pledge or
other disposition for value, the unpaid sellers right of lien or .
stoppage in transitu can only be exercised subject to the rights of the
transferee. But in cases of sub-sales, within the proviso to section
47, the unpaid sellers rights arc defeated. This would suggest,
despite cases to the contrary before 1893,* that once a sub-sale has
taken place within section 47, the unpaid seller loses all rights to the
goods or the money which they have produced for the buyer by the
sub-sale, and is left only to prove in the buyers bankruptcy.**
Reference has earlier been made to the relationship between the

provisions of section 47 of the Sale of Goods Act and section 25 (2)
of that Act and sections 9 and 10 of the Factors Act, 1889.* It would
appear from dicta in Cahn v. Pocketts Bristol Channel Co. Ltd.**
that these other sections also affect the right of stoppage in transitu,
since section 47 is expressly stated to be subject to the provisions of
the Sale of Goods Act. If this Is correct, as it would seem to be, then
the right to stop the goods in transitu may be lost by any dealings by the
buyer which come within the scope of section 25 (2) and section 9
of the respective Acts.
Supra, pp. 262-266.
(1882) 7 AppGis. 373.
*s S GA. s. 47, proviso.
Ex p. Gotdint, DavU & Co. Ltd. (1880) 13 ChJJ. 628,
S Atiyah, op. cit., pp. 173-174,

ss Supra, pp. 264-265.
* {19991 1 QB 643 at p. 657.
STOPPAGE IN TOANSITU
273
ts exercise and effects
The right may be exercised by the seller by his taking actual

possession of the goods or giving notice of his claim to the carrier or
3ai]ee in whose possession the goods are. The notice may be given to
ihe actual possessor of the goods or his principal. If to the latter it
must be given at such time and under such circumstances that the
principal, exercising reasonable diligence, may communicate it to his
servant or agent in time to prevent delivery to the buyer.*
When such notice is given, the carrier or bailee in possession of

the goods must redeliver the goods to, or at the direction of the seller.
The expenses of such redelivery must be borne by the seller (though
it may be that the seller could prove for them in the buyers bank-
ruptcy). The carrier, indeed, has a lien on the goods for his freight,
which prevails over the sellers lien.** and would therefore seem to
arise and take precedence over the rights of the seller once the seller
has stopped the goods in transitu. But if the carrier does not deliver
the goods, as a result of the sellers notice to stop, then the carrier, as
well as the seller, may be liable for the failure to deliver the goods
if the buyer is not, in fact, insolvent. On the other band, if the carrier
wrongfully delivers (he goods despite the notice to stop them, and the
buyer is insolvent, it is clear that the carrier will be liable to the
seller for the loss resulting to him unless there are circumstances which
exonerate him.** Hence, in cases of difficulty, the carrier should bring
ê appropriate interpleader proceedings, calling upon seller and
buyer to resolve their conflicting claims to the goods.
Tbe exercise of the right of stoppage in transitu does not rescind

the contract,** though once the goods have been stopped the seller
tnay be able to resell them in accordance with the provisions of the
Act to be examined in the next section.** Since the sale still survives,
tender of payment by the buyers trustee in bankruptcy obliges the
se ler to redeliver the goods, unless the original insolvency could be
c d to involve a repudiation by the buyer of the contract.
LiA V ^ liability to pay the carriers expenses see Booth SS. Co.
'* ** *** geiteral lien; UJS. Sttet Products Co.
^ tadfeg presented to him in ignorance of

7 A- Mats A Co. V. East A West Mia Docks (1882)
(1883) 11 QBD property in such cases see Sanders v. hfaelean
kOA. I 48 (\)
ro'o> (O:
274
RIGHTS OF UNPAID SELLER AGAIIOT GOODS
4. Resale by the Seller
The right to resell
The distinction has earlier been drawn between the right to resell
the goods and the power to resell them.** The difference lies not in
the effect of such a resale as regards a third party buying from the
seller (since whether the seller is exercising his right or his power,
such a third party may acquire title in the goods to the exclusion of
the original buyer), but in the consequences as between the seller and
the original buyer. Where the seller has the right to resell, he may
commit no breach of contract by so doing : where he has only a power
of resale, then his conduct in reselling will always amount to a
breach of contract.*^
The power to resell stems from possession of the goods. Posses-

sion of the goods may remain in the seller, despite the contract of
sale, as a result of agreement between the parties, breach of contract
by the seller, or the sellers exercise of his rights of lien and stoppage
in transitu as an unpaid seller. In the first two instances, the sellers
power of resale is derived from section 8 of the Factors Act (section
25 (1) of the Sale of Goods Act).** Where the seller who has parted
with property is in possession as a result of bis exercising his lien or
stopping the goods in transitu, then if he reseUs the goods, under
section 48 (2) of the Act, the buyer acquires a good title thereto as
against the original buyer. If the resale by the seller is under section
48 (2) it would appear to be unnecessary for the seller actually to be
in possession of the goods, or for the person buying to receive the
goods *' in good faith and without notice of the previous sale (as
requisite under section 25 (1) and the corresponding provision of
the Factors Act).
The right to resell comes from either retention of property in the

goods or from the provisions of the Act. Thus, irrespective of the
provisions of the Act (and as is recognised by the fact that in section
39 (2) the unpaid seller who has not transferred property to the buyer
is not expressly given any right of resale in the same way as an unpaid
seller who has transferred property).** a seller who still has property
has a legal right to sell the goods to a third party, notwithstanding
* Supra, pp. 253-255.
ir Liabilities in lort may also arfae, fcirspectiw of contract, if the seifer ha* psrtfa
with property and has no right under statute to resell, / e the buyer Is not in
default.
* Supra, pp. 121-123.
* Cf. tupra. pp 253, 254-255.
RESALE BY THE SELLER
275
his contract of sale with the original buyer/ Such right may be
exercised by him whether or not he is unpaid, whether or not he has
exercised his quasi-lien or has stopped the goods in transitu (if he is
an unpaid seller), and whether or not he has possession of the goods.
An example of resale by a seller who has property but is out of
possession would be where the buyer, having received the goods, has
repudiated the contract. The seller would then be entitled to treat the
contract as at an end and resell the goods.**^ Indeed, if the repudiation
is wrongful, amounting to a breach of contract, the seller may be
obliged to resell the goods in order to mitigate the damages suffered
by him as a result of the buyers wrooûl repudiation. However, it
must be clear that the buyer has repudiated the contract: as has been
seen earlier,** this is not always an easy issue to determine. Failure
to pay the price may not be repudiation particularly if only part
delivery has taken place and only part payment is involved. It must
be noted, however, that if the seller has delivered the goods, without
transferring property in them, and retakes the goods in order to resell
them, this will operate as a rescission of the contract by the seller.
As Swift J. said in Attorney-General v. Pritchard,** in the case of an
agreement for the sale of goods the owner cannot retake them and at
the same lime sue for their price.
Under the Sale of Goods Act the seller may resell the goods where
he has expressly reserved the right of resale in case the buyer should
make default.** The seller also has a right of resale *' where the goods
^ of a perishable nature, or where the unpaid seller gives notice to
the buyer of his intention to resell and the buyer does not within a
reasonable time pay or tender the price. *' In all these instances
under the Act the seller must be an unpaid seller as defined in the Act.
th below, different results follow depending upon whether
e resale takes place under an express reservation in the contract or

^ er the circumstances otherwise envisaged in the provision of the
c set out above. For the moment however, it suffices to state that.
limits set out in the Act. and only where the unpaid
c Cl has transferred property to the buyer, can the seller exercise a
statutory right of resale.
3 M. & G. 100 with CMnery v. Vlat! (1860) 5 H. &
The P--. V 7. . , ,
4- . " , ' V/ ' . r-
276
In view of the reference in the Act to a right of resale where goods

are of a perishable nature, it has been suggested that a seller who
has parted with property may justify a resale to a third party under
the doctrine of agency of necessity, where goods are perishable,
and the buyer cannot be traced or communicated with in lime to
enable the goods to be delivered to him or instructions taken as to
what to do with the goods.** It is suggested, however, that such an
extension of the doctrine of agenqr of necessity, a doctrine which is
jealously regarded and narrowly con6oed by the law. is not sub-
stantiated by the cases. On the contrary, from what is said in some
modem cases involving attempts by bailees to assume the mantle of
agents of necessity,*^ it would seem highly unlikely that the already
limited right of resale granted to sellers by the common law and the
Sale of Goods Act will be extended in such a fashion.
Nothing appears to be said, either at common law or under the

Sale of Goods Act. as to the exercise of the right to resell. It would
seem that the seller may resell privately or publicly, to whomsoever
he desires, and at whatever price he desires (though this last matter
may affect the sellers right to recover damages from the buyer for
breach of contract). Under the Uniform Commercial Code,** the
seller who resells, in the situations envisaged by the Code as entitling
him to do so, has his powers expressly regulated and defined, particu-
larly where a public sale is involved.** At such a public sale, it may
be noted, the seller himself may boy the goods.** It is to be noted that,
if the seller resells privately, he must give the buyer reasonable notifi-
cation of his intention to resell.** At common law no such notification
is necessary: nor, under the English Sale of Goods Act, is such notifi-
cation always necessary. When it is required ** its purpose is to
establish the sellers right to resell, not to regulate his exercise of such
right (as is true of the provision of the Uniform Commercial Code
dealing with notification).
The effects of a resale
It is unnecessary in the present context to consider again the legal

effect of a wrongful resale by a seller who has parted with property
McCardie J. m Prager v. BlalspM II924J 1 K.B. 566. On agen<y of necessity ^

general and this sugsestion see FridmaD, law of Agency, Oiap. 7, especisuy
pp 65-67.
M Sachs r. htOdos ll>l 2 K.B- 23; hfunro r. Winmolt {19491 1 K.B. 295.
* t. 2-705.
** I. 2-706 (4).
RESALE BY 'mE SELLER

277
and is selling goods which are in his possession without any legal right
to do so. Apart from such situations a seller may resell where he is
unpaid and is seeking to protect himself from loss by the buyers
default. The effects of such a resale may depend upon whether the
seller has or has not still got property in the goods.
The provisions of the Sale of Goods Act only apply where the
seller has transferred property to the buyer. If property has not passed,
not only can the seller effectively give title to the second buyer, he
will also have an action for damages arising from the buyers default,
f.e., his failure to pay the price on the agreed date, or his neglect or
refusal to take delivery, under section 37 of the Act,"* arising from his
inability to pay the price. Such a resale will not operate to rescind the
contract unless the prior refusal or neglect of the buyer could be said
to amount to a repudiation. But this docs not mean that the seller
can sue for the price: for. as he has resold, he cannot deliver the
goods, and if he is not ready, wiUing and able to deliver he cannot
recover the price. He can only sue for damages in respect of the loss
occasioned to him by his having to resell.
Where the unpaid seller has transferred property to the buyer, his
right to resell depends exclusively upon the Act. It has already been
seen under what conditions this right is exercisable. It remains to
consider what effect its exercise has upon the rights of the parties to
the original contract, as well as upon third parties.
In the first place a distinction must be drawn between resale

pursuant to an express reservation of such right in case of the buyers
default and resale otherwise under the Act, whether before or after
the seller has parted with possession. If the seller resells under his
expressly reserved right, then ** the original contract of sale is thereby
rescinded, but without prejudice to any claim the seller may have for
damages.* Thus, in such instances, the seller regains property in
the goods and sells as owner. He is able, therefore, to retain any
profit he may have made by such resale. The buyer, having lost
property, cannot claim that he is entitled to have what is left of the
sale price paid over to him after the original price (owed by the
buyer to the seller) has been deducted by the seller. Indeed, should
such resale be at a loss, the seller is expressly empowered by the Act
to recover any deficiency from the buyer. It would seem from the
judgment of Finnemore J. in Gallagher v. Shilcock.^^ that in the case
of a resale under an expressly reserved right of resale, any deposit
** Supra, p 221.
* S.OA. 8 43 (4).
* [1949J 2 K.B. 765.
278
RIGHTS OF mPAID SELLER AGAINST GOODS
paid in advance by the buyer will be forfeited to the seller (though it

would be taken into account if the seller were claiming damages for
loss occasioned by the need to reseU),*
The situation is different (though criticism has been made of the

artificiality and illogicality of the difference) where the resale is by
an unpaid seller who has not expressly reserved the right to resell
but is doing so because the goods are perishable or after notice to the
buyer and failure on his part to pay or tender the price. Nothing is
said in the relevant provision of the Act as to such a resale rescinding
the contract. Indeed, it may be inferred from other juxtaposed
provisions that such a resale does not rescind the contract.* For the
Act expressly states * that the exercise by an unpaid seller of his right
of lien or stoppage in transitu docs not in itself rescind the contract,
i.e. that, by so acting, he does not reacquire property in goods property
in which has been already transferred to the buyer. Hence the need
for the succeeding provision that, where an unpaid seller who has
exercised his right of lien or stoppage in transitu re*sclls the goods,
the buyer acquires a good tit/e thereto as against the original buyer.**
If this is so where goods have been repossessed by the seller, it must
also be so where he has retained possession. In all such instances, if
the seller resells, he does not do so as absolute owner. This was
indeed held to be the law by Finnemore J. in Gallagher v. Shilcosk.**
Since the seller was not reselling as absolute owner he would be
accountable to the buyer for any profit made by him.** Any loss
caused to the seller by his having to resell would not be deductible
from such profit, though it could be recovered in an action by the
seller against the buyer. Moreover, since the buyer was owner, the
seller could not claim to forfeit any deposit or part payment given by
** In the New Zealand case of Commission Cor Sates (ITastlngs) Ltd. v. {iPST}
N^.L.R. 144 it was held that a deposit paid by a buyer was forfeited when he
repudiated the contract by returning the goods bought. But the seller, baYing
parted with possession, could not reseD as an unpaid teller.
Atiyah, op. eit., p. 179.
ts Under S.OA. s. 43 (31 , ,
Contra^ Ben\amin on Sate, 8th ed , pp. 940, 951, based on an Interpretation ot

Lomond r. DavoH (1847) 9 Q.B. 1030; on which decision s. 43 (4), but not . 48 (J).
of the 1893 Act is founded.
0 S GA. . 43 (1).
X SGA. . 48 (2).
* Supra, note 55 at p. 773. .
Hence, tays Atiyah. op. eti , pp 179-180, there b not only an unqualified right
resile, by the eterdse of which the tellef retains any profit he males : there b also
a qualified right of male, not pennitling the retention of profit. But thb b what
the Act expressly recognises when it talks of a right of sale as limited by tWs
Act "r S.Ow\. t. 39 0) (e).
RESALE BY THE SELLER
279
the buyer. In that case the buyer did not claim the profit made by the
seller on the resale of the motor-boat originally ordered by the buyer
(property in which had passed to the buyer). Although profit had been
made by the seller, the buyer claimed only the return of the deposit
given by him to the seller at the time of making the contract. This it
was held he was entitled to recover.
These differences do not seem to exist under the Uniform Com-

mercial Code. Under this Code nothing is said as to whether or not
the original contract is rescinded by any particular form or occasion
for resale. This does not seem to be important. Under whatever
circumstances the seller resells, a buyer from him who buys in good
faith at the resale takes the goods free of any rights of the original
buyer, even though the seller fails to comply with one or more of the
requirements of the Code as to resale by the seller.** Moreover,
whatever be the justification for the resale, the seller is not accountable
to the buyer for any profit made on it ** (though a person in the
position of a seller, i.e., a person who comes within a definition *
similar to the broad interpretation of seller contained in the
English Sale of Goods Act,*^ must account for excess over the amount
of money in respect of which he is exercising his right of resale). This
assimilation of different types of and occasions for resale seems more
reasonable and sensible than the apparent distinctions which stem
from the present statutory provisions.
*! H-9S* * f5).
tl ' 2-706 (6).
sof* ii'I? <*>
S.GA. 8. 38 O): supra, p. 252.
Chapter 10
THE SELLERS PERSONAL REMEDIES FOR BREACH OF

CONTRACT
1. The Effect of BREAai of Duty by nra Buyer
Real and personal remedies distingnished
Some of the rights of the seller where the buyer is in breach of his
duty to pay the price have been considered in the previous chapter.
There it was shown that such rights, which arise only where one
particular duly has been broken by the buyer or remains unfulfilled
through his neglect, involve the exercise of what have been called
real remedies, since they directly affect the goods themselves. It is
necessary now to point out that, apart from such remedies, the seller
also has rights of action against the buyer personally to recover sums
of money representing what he has lost. Such rights of action may
be termed personal remedies, since they can only be exercised
against and in respect of the buyer (or those who represent him,
his executors). No third party who is a stranger to the contract of
sale of goods can be sued in respect of the buyers wrongful conduct.*
This contrasts sharply with the sellers right to retain or regain
possession of the goods even where the buyer has resold them, though,
admittedly, such right is qualified by limitations which have been
examined and discussed.
The sellers personal remedies arise from the fact that the
conduct on the part of the buyer which gives rise to their exercise
is a breach of contract, which, at common law, apart from the Act,
entitles the seller to sue in respect of any damage suffered by liim as
a consequence. Such remedies are the normal corollary of a breach
of contract at common law: the sellers real remedies, though per-
mitted at common law before the Act, stem from the law merchant,
particularly the law relating to sale of goods, and not from the
general law of contract.
The real remedies of the seller can only be exercised when the
buyer has not paid the price of the goods, so that the seller is an
1 Unless the burden of & coatract of sale may be assigned Sec supra, p. 1-
note 92, as to assignment of contract) of sale.
280
EFFECT OF BREACH OF DUTY BY TOE BUYER
281
unpaid seller within the meaning of the Act (or a person treated as
such for this purpose *). The personal remedies of the seller, however,
are not restricted in their exercise to situations in which the buyer
has been guilty of non-payment of the price. As will be seen, over
and above the actions for the price and for damages which the seller
may bring where there has been non-payment or non-acceptance
accompanied by non-payment and by virtue of the provisions of
section 37 of the Act,* if not under the general principles of the
common law, the seller has a right of action for damages for loss
occasioned by the buyers neglect or refusal to take delivery of the
pods. What is curious about this provision of the Act is not that it
is contained in the Act but that it comes in Part HI, i.e., under the
heading of Performance of the Contract rather than in Part V,
e., under the heading of Actions for Breach of the Contract.
Different duties
pa ,T^ buyer, i.e., to accept and pay for the goods, have
earner been considered.^ The duty to pay the price is remediable by
tn of this duty can also entitle the seller
wSnT remedies. The duty to accept the goods
aw'Pnf bability in an action for non-acceptance, if failure to

fha* v apompanied by non-payment, presumably on the ground
pnnH ^ conduct, the seller has been deprived of the price of the
ôas Md has therefore suffered loss. But faUure to accept. U., to
mav ffoods, even if unaccompanied by failure to pay.
the language of
an actio, f, ' accept m such circumstances will not support
SKtion 31 of lU contract generally, or an action under
<lMy on the h I 1" 1= ''Ilnl' Posc any

tot S;;. ^ ability on hiri
by the'senerof'hof' bo oitorcise
*111 in the on * P"uoua! remedies, where the goods are
buyer U he, e hn^r =Iuuoo by the
ho personal *>' n-payment. only
and pay to, ^ ^ ^ pursued. Breach of the duties to accept

P y lot the goods can also lead to the exercise of real and
282
sellers PERSOiVAt REAfEDIES TOR DREAOI
personal remedies by the seller. Breach of the duty to accept,

unaccompanied by any breach of the duty to pay for the goods, can
only give rise to personal remedies.
In addition, a contract of sale of goods could stipulate as an

essential condition of the contract a dale for acceptance.* Failure to
accept on such date would be a breach justifying the sellers treatment
of the contract as repudiated.* But should the seller deliver, and the
buyer accept the goods after the agreed date, this would amount to a
waiver of the condition by the seller.* Yet he might have suffered loss
through the delayed acceptance. Such a situation might not come
within section 37 of the Act, since (a) that provision seems to envisage
a complete failure to take delivery of the goods, despite payment of
the price, and (b) the buyer may have taken delivery of the goods
within a reasonable time after the sellers request to him to take
delivery, as section 37 requires, and yet he might be in breach of the
condition to take delivery on a stipulated date. Hence, it is suggested,
id such a case the only remedy available to the seller would be an
action for damages for breach of warranty, the breach of condition
presumably only being capable of being treated as a breach of
warranty, by virtue of the waiver on the part of the seller. Such a
remedy would arise at common law, on the basis of breach of contract,
and not under any statutory provision.* It would also involve the
conclusion that the statutory provision as to election by a buyer to
treat a breach of condition by the seller as a breach of warranty
could also apply, conversely, to a breach of condition by the buyer. In
practice this is unlikely to be a very important or frequently arising
situation.** But, in the light of the distinctions to be drawn between
real and personal remedies, and the different duties which arise
contractually or under the statute, some mention of this possibility
ought to be made.
Since lime can be made of the essence **; S G A. lO (1)5 supra, pp 2CO-20I.
ie., under SG A. s. II (1) (ft): supra, p M2.
* ie., by comract, not under any provisions of the Act: cf. supra, pp. I". 180, 2CU
By S O A. s. 54 : Nothing m this Art shall affect the right ol . . . the sellei W

recover , . . special damages in any case where by law . . . special damages may
be recoverable.
w SGA. 8. U (!) (0). ,
. .... .t.. .(......ps h; injihnitv to store other
, ... . by the
' . . . , . , . There
. . ^ . . . I . ' 'effer of
credit which may give rise to an action lof damages agauisi luui; joi 11*6
thus raised see Trans Trust SJJiJj. v. Danublan Trading Co. Ltd. 119521 2
Q B. 297.
EFFECT OF BREACH OF DUTY BY THE BUYER
283
The sellers personal remedies
leaving aside the last possibility, therefore, for reasons already

stated, and the remedy which may be available in appropriate
circumstances under section 37 of the Act, the seller has the following
rights of action.
First, he may sue for the price of the goods, under conditions laid
down in the Act. Secondly, again under conditions laid down in the
Act, and in accordance with the provisions of the Act as regards the
calculation of damages, he may sue for damages for non-acceptance.
To these possibilities a third must be added. This arises not out

of a breach by the buyer of his duties under the contract and the Act
once the contract has been concluded between the parties, but out of
the possibility that, in making the contract, he has been guilty of
some default. K the buyer has induced the seller to contract with him
by some misrepresentation or by duress or coercion, then the seller
may have rights of action against the buyer. The sellers remedies may
depend upon the nature of the default, e.g. whether the misrepresenta-
tion was fraudulent or innocent. These distinct possibilities will be
considered below in due course.
2. Action for the Price
When maintainable
Two situations are contemplated by the Act in respect of which

the seller can sue the buyer for the price of the goods. The first is
where, under a contract of sale, the property in the goods has
passed to the buyer, and the buyer wrongfully neglects or refuses to
pay for the goods according to the terms of the contract. ** Thus,
no action can be brought for the price, under this provision of the
Act, if property has not passed, or if the buyers neglect or refusal to
pay is not wrongful. If, therefore, the time for payment of the price
has not arrived, or a period of credit has not expired, or the seller
IS not ready and willing to make delivery of the goods, or the seller is
otherwise in breach of contract, e.g., by having delivered defective
goods or the wrong quantity, entitling the buyer to reject them, the
pnee is not payable and no action may be brought in respect of the
price.
The second situation is where, under a contract of sale, the price

IS payable on a day certain irrespective of delivery, and the buyer
** S.OA. s. 49 ( 1 ).
284
sellers personal remedies for breach
wrongfully neglects or refuses to pay such price, . . . although the

property in the goods has not passed and the goods have not been
appropriated to the contract.** Were it not for this provision, as
was pointed out in a very early chapter,** there could be no action by
the seller for the price unless property in the goods had passed to the
buyer, or, as McCardie J. pointed out in Colley v. Overseas Exporters
Ltd.^^ the buyer was estopped from denying that property had
passed to him. In that case it was argued, first that property has
passed to the buyer, secondly, that if it had not in fact passed the
buyer was estopped from denying that it had passed, so as to entitle
the seller to sue for the price. What happened in this case was that
unascertained goods were sold f.o.b. They were delivered to the port
of shipment but not put on board a ship by the seller because of the
buyers failure to nominate a suitable ship. There was no agreement
between the parties as to payment on a specific date irrespective of
delivery. McCardie J. held that the seller could not sue for the
price, because the circumstances did not bring the case within cilbef
of the statutory provisions set out above, there was no ground for
establishing any estoppel merely because the buyer failed to act as he
ought to have done under the contract, and, save in the specif
statutory situations, " no action will lie for the price of goods until
the property has passed. This means that only where the Act
permits an action for the price, on the passing of property or
where there is a special agreement making the price payable irrespec-
tive of delivery, can such an action be maintained. On that basis a
delivery of goods, which is normally concurrent with payment of the
price,*" will not substantiate an action for the price unless such
delivery results in a passing of property in the goods. Furthermore, if
the contract is for the sale of unascertained or future goods and the
buyers failure to pay the price occurs not on or after an agreed day
but by way of repudiation of the contract before such day, then, i
goods have not been appropriated to such contract by the time of t e
repudiation, and. in consequence, property has not passed, the sellers
remedy is by an action for damages, not an action for the pnee.
Hence the doctrine established by the House of Lords as to the
of anticipatory breach by way of repudiation of a contract in W
<6 Carter {Coiincili) Lid. v. McGregor,** as Lord Keith pointed out.
i S.G.A. 5. 49 (2).
Supra, p. 23.
IS [19211 3 K.B. 302 at p. 310.
S O.A. s. 28 : supra, pp. 20S, 230.

I1962I A.a 413.
18 Ibid, at p. 437.
ACTION FOR 'THE PRICE
285
does not apply to contracts for the sale of goods. The seller cannot
perform the contract, regardless of the buyers conduct, and sue
for what he is entitled to under such contract. He must treat the
repudiation as a breach and claim damages.
The application of the provision permitting an action for the

price even where property has not passed depends upon whether the
contract stipulated payment on a day certain irrespective of delivery.
It has been suggested that an action under this provision can be
brought where the contract of sale provided for payment of the price
by instalments, so that the seller could sue for the &st, unpaid instal-
ment. But where an f.o.b. contract provided for its implementation
by delivery of documents, not goods, and payment was to be made
against such delivery, it was held that the price was not payable
inespective of delivery,' nor was the price payable under the con-
tract on a day certain. On tender of the shipping documents with-
out delivery of the goods, the seller could not sue for the price if the
buyer failed to perform his contractual obligations : he could only
claim damages.*
What may be claimed
Not only the price may be sought by the seller. By virtue of the
Law Reform (Miscellaneous Provisions) Act, 1934,** interest on the
price may be awarded to the seller. The basis for such a claim would
appear to be that the seller has been deprived of the use of a definite
of money on account of the buyers failure to pay the price.**
No other incidental damages may be claimed in such an action for
the price. As seen earlier, for other loss it may be necessary for the
Mller to bring an action for breach of contract, te., for damages at
alleging a breach of condition or a default under section 37 of
e Act. Under the Uniform Commercial Code,** the seller who sues
.or the price, where such an action can be brou^t, can also recover
incidental damages, including any commercially reasonable charges,
expenses or commissions incurred in stopping delivery, in the trans-
portation, care and custody of goods after the buyers breach, in
connection with return or irsale of the goods or otherwise resulting
^ from what is su'd in tyorkman. Clark A Co. Ltd. v.
itXr 968 p. 977, pff Lord Alrerstone CJ.
A Co. T. Uslle A Anderson 119211 WJ7, 235. See also Stein.

t 3 honoring Co. (1916) 86 LJ.K.B, 448.
** PP- ^231.
286
SELLERS PERSONAL REMEDIES FOR BREACH
from such breach. ** The situation under the Sale of Goods Act
may well be the same if the seller is suing after having resold the
goods under provisions discussed in the previous chapter. But if he
has not resold, because he could not resell, and is simply pursuing his
personal remedies against the buyer, then it may well be difficult for
the seller to recover more than the actual price, even where he has
incurred additional loss.
Foreign money
If the price is to be paid in a foreign currency (which would have

to be provided for in the contract, since, prima facie, the price must
be paid in England in English currency, by the giving of legal
tender),* the question has sometimes arisen as to the relevant date on
which rates of exchange are to be calculated. This could be important
if currency has depreciated between the date of the contract, the date
the price was due, and the date on which an action is brought and
judgment obtained for the price. The decisions mate it clear that
the relevant date is the date when the debt became due, whatevM the
cause of action be. Hence, in the context of sale of goods, this is the
date when payment should have been made by the buyer, le., on
delivery of the goods, or some agreed date.* If the debt arises by
virtue of a judgment obtained by the seller in a foreign court, then
the relevant date is the date of such judgment.*
3. Damages for Non-Acceptance

When an action may be brought
Under the Sale of Goods Act,** where the buyer wrongfully

neglects or refuses to accept and pay for the goods, the seller may
** Uniform Commerdal Code, s 1-710
as See the cases and statutes cited in Oialmers, SaU o] Goods, l4th ed , p. 145,
(cHA). Payment by biU of exdiange, not curri^, depends upon the fenns oi
contract of sale : Chalmers, op pp. 145-146.
s VtUndaU v. Pankhurst, jyrtsht & Co. 0923) 39 T L.R 628; v. TyUkliyon
II924I 2 K.B. 166; Madthlne Vionwt A Cle v. Wills [1940] 1 K.B. 72: e/. Cum-
mings V, London Bullion Co. Ltd. [1952] I Q.B. 327. For the different effect ot
tender of payment by the debtor after Uie action was commenced sec SodHi oes
Hotels le Totnjuet Poris-Plages V. Cummings (1922] 1KB. 451. ^
*T East India Trading Co. Ine, v, Carmel Exporters & Importers Ltd. [1952] 2 Q "
439.
* S.OA, s. 50 (1). Where foreign currency b mvolved the same principles as to
rates of exchange apply as in the case of an action for the price. See the csxs
cited in note 26, supra.
DAMAGES FOR NON-ACCEPTANCE
287
maintain an action against him for damages for non-acceptance. Such

an action may be brought whether or not property in the goods has
passed to the buyer.
Even where property has not passed and the buyer has neglected
or refused to accept and pay for the goods, an action for damages for
non-acceptance may not be maintainable. This depends upon whether
the parties have fixed in advance the damages which are payable to
the seller in such an eventuality. The difficulty is to differentiate
liquidated damages, i.e., a sum agreed between the parties as
representing the loss to the seller arising from the buyers default,
from a " penalty, j.c., a sum which is intended by the parties to
enforce fulfilment of the contract by the buyer. It is unnecessary in
the present context to consider in detail the general law relating to
penalties in relation to breach of contract.^* Suffice it to say that the
test is whether the amount stipulated in the contract as payable is a
genuine pre-estimate of damages suffered by the seller or a payment
w ich is designed to operate In terrorem. Nothing necessarily turns
the language used in the contract itself. If the contract speaks
0 liquidated damages it would still be possible to construe it as
volvmg a penalty: and vice versa. The value of the anlcle involved,
focf parties have been held to be irrelevant
ors. So, too, in t>iestal v. Stevenson*^ was the fact that two
rln!!!"* ^ contract were involved. In that case, where the
ne u 10.000 tons of coal, and provided for a
ass'LiA of this contract, one shilling per ton, it
Pcnaltv A treated as liquidated damages, not a
astringem ^ considered unconscionable and
amount nr * generally unreasonable result, either in
the court r ^ ^ditions under which payment is made, so that

the sum ?c V fo recovered. If
not an action damages, thcrefon:, an action for such sum, and

* Sec D ^ generally may be brought If the sum is a
^ ^totor Co. Ud. [19151 A.C.
discussion see Cheshire and

Pp. S'K-SW.Treitj, tm!. ^^^32, Anson', Law of Contract. 22nil ed.,
'ntKHti Tot^h Certtna, pp. 612-15.
;> 11906] 2 '.'/ 119361 2 AH EX 515.
** Sttvan Jjj V r-
w prindjla bid doni -*!'* would be too remote in accordance
be tteorcred: pas S eôn Uw and imder the Act, disemred below,

Mc.\dt 3. ""wt Ltd. Y, Cerapnanjotl ltd. supra at p. 422, par
288
penalty, only damages assessed in accordance with the general law

may be recovered. It is necessary, therefore, to consider the rules
applicable to such assessment.
Measure of damages
The basic principle, as enunciated by Lord Atkinson in the leading

case of Wertheim v. Chicoutimi Pulp Co.* (which was concerned with
the failure of the seller to deliver, not the failure of the buyer to accept)
is that, in giving damages for breach of contract, the party com*
plaining should, so far as it can be done by money, be placed in the
same position as he w'ould have been if the contract had been
performed. That is the only principle, Lord Atkinson added. "It
is a just principle. Since non-acceptance of goods is a breach ol
contract, the ordinary principles, applicable to a case of breach of
contract, and laid down in the leading case of Hadley v. BaxendaleP
are the principles which also determine the assessment of damages.**
What was stated in that case has been given statutory force by the
Sale of Goods Act,*^ which provides, in the case of actions for
damages for non-acceptance, that the measure of damages is the
estimated loss directly and naturally resulting in the ordinary course
of events from the buyers breach of contract. The object of this
provision, as indeed the object of the formulation of the rules in
Hadley v. Baxendale, is to differentiate normal, foreseeable con*
sequences of a breach of contract (for which damages are recoverable),
from abnormal, special, particular loss which might occur unforeseen
by the buyer, and not foresecably likely to result from his default,
such loss not coming within the scope of recoverable damages. Thus
the underlying test of recoverable damages, as the case of Victoria
Laundry {Windsor) Ltd. v. Newman Industries Ltd.*' shows, is fore-
sight of consequences. They may be consequences which the ordinary
reasonable man contemplates as being likely to occur, i.e., direct and
natural consequences, under the first rule in Hadley v. Baxendale
and the provision of the Sale of Goods Act referred to above. Ot
they may be special consequences, foreseen by the party in default as
a likely result in the light of his knowledge of the intentions of the
other party and the probable effects of a breach upon the position of
such other party. Such consequences come within the second rule in
* 119111 AC. 301 at p. 307.
(1854)9 E*. J41.
For ^ne pr^cjplrt and their eapmiiion in the cases see Cheshire and nfoot.
T .A'**"- rP. 48S-503, Treiiel, cp. rf/., pp. 589-606.
fiS^2 ^
290
sellers personal remedies for BREAai
but also the liability of a seller for non-delivery or late delivery, as

will be seen in due course.^* The problem of determining what this
test involves is complicated by two factors. In the first place, there is
little authority on the subject, since, in the main, it does not seem to
have given rise to much practical difficulty, whatever theoretical
difficulties there may be in connection with its meaning and applica-
tion. Secondly, in recent years, the practice of price fixing has
affected the whole concept of market.^* Indeed in such recent cases as
there have been on this subject, much turned on the fact that there was
a fixed or standard price for the goods in question. The learned
author referred to above has indeed suggested that, as a result of
such recent cases, available market and an existing current
price have not been kept as distinct as they were in the past, wiA the
effect of rendering uncertain the meaning of the term available
market and restricting the application of market valuation within
the Sale of Goods Act.^* In the present context it is perhaps neither
necessary nor possible to go into as much detail as is contained in the
article by the author in question. It is necessary, however, to consider
what the expression available market has been said to mean a
different times, and what it may now mean in consequence of recen
decisions.
One general consideration ought perhaps to be borne in

The object of the provisions of the Sale of Goods Act dealing wit
the relevance of an available market is to put into effect the firs
rule in Hadley v. Baxendale, i e., to distinguish direct from consequen-
tial loss. Consequential loss, it may be said, is generally irrecowra e
except where the second rule in Hadley v. Baxendale is applic^
that is to say, where the defaulting party has some special knowlw^
from which he can or ought to be able to deduce that there ^
special loss to the innocent party should a default occur.^* On this
basis the best test for assessing damages is not what profit has been
lost because of the default in question, but what expense has been
incurred by the innocent party as a result of the default. In d*
context of non-acceptance this means the difference between what the
seller would have obtained from the buyer and what he obtains from
a resale, if a resale is possible. But such resale must be related to
some objective standard, if such a standard can be found. It would
Infra, pp 32W31.
In view of the Resale Prices Act. 1964 (fupra, p. 30), it may be that this is do longe
a source of difficulty.
** Waters, op. cit. at pp. 365-366
Dy virtue of S OA. s. 54. *upra, p. 289
292
Ltd.^* viz. ; A market for this purpose means more than a particular
place. It means also a particular level of trade.
The tendency has been, therefore, to give an extended rather than
a restrictive meaning to the expressions market and available
market. In Thompson v. Robinson (Gunmakers) Ltd.,^^ Upjohn I.,
who felt that the matter was not res integra, but in any event
arrived at his conclusion without having to apply the market test, said
obiter that an available market' merely means that the situation
in the particular trade in the particular area was such that the
particular goods could freely be sold and that there was a demand
sufficient to absorb readily all the goods that were thrust on it, so that
if a purchaser defaulted, the goods in question could readily be
disposed of. In the later case of Charier v. Sullivan, Jenkins LJ-
doubted if the definition given by James I..J. in the Dunkirk Colliery
case (by which Upjohn J. considered himself bound) should ^
literally applied as an exhaustive definition of an available market in
all cases. On the other hand be did not feel that the definition adopted
by Upjohn J., and quoted above, was entirely satisfactory. All that
he would say, however, was the somewhat negative proposition that
there was probably not an available market for particular goods ta
the sense relevant to the section of the Sale of Goods Act that was
involved in the case before the court, unless the goods are available
for sale in the market at the market or current price in the sense of
the price . . . fixed by reference to supply and demand as the price at
which a purchaser for the goods can be found, be it greater or less
than, or equal to, the contract price." Hence, where goods could only
be sold at a fixed retail price, the section in question could not
apply, since that section seemed to postulate that in the cases to
which it applies there will, or may be a difference between the
contract price and the market or current price. Sellers LJ.,^ who
had regarded the definition of Upjohn J. as very acceptable in an
earlier case at first instance, also refrained from attempting
personal definition in Charter v, Stdlivan, and said that a market could
exist in a variety of circumstances and apart, of necessity, from a
defined place. But, he went on to say, ** since its trading has to serve
as a factor in measuring the damages, it must nt least be a market m
which the seller could, if he wished, sell the goods left on his hands."
1 All E-R. 1033 ! p. 1056
IIW) Ch. 177 at p. in.
II9S7] 2QD 117 at p. 128.
*T tbU. ai p 133-
DAMAGES FOR N0N-ACX:EPTANCE

293
In both these cases the prima facie rule contained in section 50 (3)
of Ac Act was not applied because it was held that there was no
available market. This was because in Thompson v. Robinson
(punmakers) Ltd?^ the supply of cars of the type involved exceeded
the demand for such cars, there being a fixed retail price for such cars,
i.e., the seller could not go to any market (however defined) and
dispose of the car not accepted by the buyer, while in Charter v.
Sullivan?^ where the buyer also refused to accept a vehicle, there was
an excess of demand over supply, but it was nonetheless held that
there was no available market since the cars were sold at a fixed retail
price. Jenkins LJ.* said in this respect that the relevant provision of
the Act " seems ... to postulate a market in which there is a market
or current price, he., a price fixed by supply or demand at which (be it
more or less than the contract price) a purchaser can be found. If the
only price at which a car can be sold is the fixed retail price and no
purchaser can be found at that price. I do not think that it can reason-
ably be said that there is a market or current price or that there is
an available market.
This equation of available market with the existence of a

market or current price has been criticised.* It may be said that the
effect of the remarks in Charter v. Sullivan (as well as the decision in
the earlier case) leaves it open to question whether the lest of an
available market is whether the demand for goods exceeds their supply
or that the price is free to fluctuate. If it is the latter, then in cases
involving price fixing ** there will not be an available market.
Ihe relevance of an available market
If there is an available market, does this mean that the statutory

rule provides the only test for assessing the damages recoverable by
the seller? If the contract and market prices are the same the answer
Would seem to be: yes. Damages are then nominal. The same is true
if the market price is higher. If the market price is lower than the
Contract price the statutory rule is the test and will give rise to
substantial damages. If the seller resells at lower than the market
price, his damages are still to be measured in terms of the difference
between the contract and market prices, not that between the contract
[1955] Ch. 177: see Charier v Sullivan 11957] 2 Q B. 117 at p 126. per Jenkins LJ.
[1957] 2 QB. 117,
294
and resale prices. On grounds of directness and on grounds of the

sellers duty to mitigate his damages,** the loss caused to the seller by
reselling at a price less than he could have obtained (which price was
the same as, if not greater than the contract price) must not be
attributed to the buyer. Only the loss which was foreseeable as a
likely result is recoverable, i.e., the difference between the contract and
market prices, which may be nothing, if they are the same or the
market price is higher. If the seller resells at a price which is higher
than the market price, what is the measure of damages? It would
appear reasonable to suggest that the seller has lost only the difference
between the contract and resale prices: he has not lost the difference
between the contract and market prices. Whether the market price
is the same, less or more than the contract price, the answer should
not be different. In one case, Campbell Mostyn {Provisions) Ltd. v.
Barnett Trading Co.,** where the seller resold goods at more than the
market price, it was held that the measure of damages was the
difference between the contract and market prices and the resale price
actually obtained by the seller was irrelevant. However, in that case
the date of the resale was later than the date of the breach by the
buyer: and at the date of such breach the market price was below
the market price at the date of the resale and was also below tlw
contract price. What the answer would be if the resale occurred
immediately upon the breach, and were for more than the market
price, is open to question. Clearly there is a difference. In the case
of resale later than breach the seller is speculating on the market,
and what he loses or gains thereby has nothing to do with the buyer.
If the resale is immediately upon breach, which is the situation
contemplated by the Act, whatever the seller loses or gains is
properly attributable to the buyers conduct and must be taken into
account.**
It must be noted, in this connection, that the Act specifies that the
time for ascertaining the market price is the date of acceptance under
the contract, or, if no such date is fixed, the date of the buyers
default. In cases concerned with the similar language of the section
which governs the buyers action for damages for non-delivery on the
l-f.. S G.A. . 50 (2).
* /n/ra. pp. 298-300. . ^ n i
*s [J9541 1 Ll<3yd$ Rep. 65, following Jamci v. Moolla Dawood [1916] A C. WJ.
case of shares. . j
Note that resale by the seller is a relevant factor in assessing his damages,
resale, or projected resale, by the buyer may not be relevant to the
his damages: Infra, pp. 318, 326 Should the two parlies be treated ex
the same?
DAMAGES rOR NON-ACCEPTANCE
295
part of the seller,*^ it has not been definitely decided whether a

contract which specifics delivery within a reasonable time is or is not
8 contract for deliver^ at a fixed lime. It has been held that where a
time for deliver)' is fixed by reference to the happening of a specified
event a time for den\ery is fixed. Since these two sections are in
much the same terms, it would seem reasonable to infer that what
has been said os to a time for delivery is equally applicable to a
time for acceptance. That being so. the situation is confused.
It would seem to be clear, houever. from those cases which deal

wth the question of damages for non-delivery, that an anticipatory
breach by the seller (and the same would appear to apply to such
a breach by the buyer) will not mean that the relevant date for taking
the market price to calculate the damages recoverable is advanced.
The date is still the date of delivery (if it is the sellers default) or
acceptance (if the default is that of the buyer). Thus, so far as claims
by the seller arc concerned, the seller can accept the repudiation and
sue immediately, and the court roust arrive at the market price at the
date of acceptance as best it can, subject always to the possibility
that the seller should have done something by way of mitigation of
his damages. Alternatively, the seller can refuse to accept the
repudiation, treat the contract as still binding, and sue when the date
for acceptance has passed. Either way the relevant date for taking
the market price is the date for acceptance. The seller cannot gain
any advantage by suing immediately upon repudiation, should the
market price emerge as being lower than at the date for acceptance,
and claim the time of repudiation os the time at which the market
price, which is the datum line for assessing damages, is to be ascer-
tained. The same will be true if the market price has faUen between
the date of repudiation in advance by the buyer and the date when
he ought to have accepted the goods under the contract, and the
seller has refused to accept such anticipatory repudiation, as he is
entiUed to do. The seller is not obliged, even by the doctrine of
mitigation of damages, to resell at once. He can wait until the due
date for acceptance and claim damans assessed by reference to the
difference between the contract price and the market price at that
^ <. sc A
3 K.B. 535
693,
s. 51 (3): Infra, p. 328. See Miaett v. Van Ileek & Co. fl920]
: [1921] 2KB 369; MelaehHno v. Nlckoll & Knlghl (1920] 1 K.6.
MeJachrlno v. Nlckoll & Knight, supra. For the situation where delivery is post-
poned at the request of one of the parties and there is subsequent default by the
3 KB 0*73) LJl. 10 C.P. 598; Hanley v Hymans [1920]
Ibid, at p 699, per Bailhache J.
296
date.^ If the seller accepts the repudiation when it takes place in

advance of the date for acceptance, then he is obliged to mitigate his
damages and resell before the market falls. If he fails to do this, and
the market falls by the time the date for acceptance arrives, the
sellers damages will be calculated by reference to the difference
between the contract price and the market price at the date of the
accepted repudiation. The seller is not at liberty to permit the loss to
be aggravated to the last farthing, as Matthew J., said in Roth & Co.
V. Taysen, Townsend & Co.,* by the neglect of means which ought to
be adopted by a prudent man whereby the loss may be diminished.
The exclusion of the market test
From what has been said earlier, it is evident that there may be
cases in which the market test is inapplicable, because there is no
available market, within the meaning of that expression. It has also
been suggested, in Thompson v. Robinson iCimmakers) Lid.''* and
Charter v, SulUvanP that the market test is inapplicable where its
strict application would lead to injustice, because it would produce an
inaccurate assessment of the damages suffered by the seller. In such
instances, therefore, the court is thrown back on the general principle
stated in section 50 (2) of the Act, namely, ** the estimated loss directly
and naturally resulting in the ordtnaiy course of events, from the
buyers breach of contract. The court must therefore assess the
loss to the seller as best it can. Le.. on the basis of loss of profit.*
If the goods have in fact been resold, despite the absence of a market,
it may be that the resale price is taken as evidence of a notional
market price, provided that the terms of the resale are substantially
the same as those of the origioal contract.
The problem that has most exercised the courts, however, is how
to assess damages where there is no market, but the seller has resold
the goods in question, and seeks to argue that, but for the buyers
default he could have sold two lots of goods, one to the original buyer
and another to the buyer fo whom he sold the contract goods when
TP Tredegar Iron <5 CocI Co. Ud. . Hawthorn Bros. (1902) 18 TX.R. 716. ^
also Sudan Import Co, Ltd. 't. S G. de Compensation (I958J 1 Lloyd i Rep. jiy-
Ti (1895) 73 L.T. 628 at pp. 629-630.
fJ [19551 Oj. 177,
TI [19371 2 Q B. 117. .
,4 . .... . -
DAMAGES rOR NON-ACCEPTANCE
297
the original buyer defaulted. He is therefore claiming that, although

he made a profit on the actual resale, he has lost the additional profit
that he would have made on the sale to the original buyer.
In Re Vic Mill Ud.'* a company ordered certain machines which

it later could not accept. Some of the machines, having been finished,
were resold by the sellers to other customers at less than the original
contract price. The issue of damages as regards these machines gave
rise to no problems. Other machines, however, were not ready at the
date of the buyer's failure to accept. No work had been done on
them, but parts had been purchased in preparation for their manufac-
ture. On the repudiation of the contract by the buyer, the seller modi-
fied these parts and sold them to another customer. The sellers then
claimed the loss of profit they would have made if the contract had
been performed. The buyers argued that the only damage suffered
by the sellers was the cost of altering the unused parts and fitting
them for resale. The Court of Appeal upheld the sellers contention,
and decided that the sellers had lost the chance of making two sets of
profit, one from the defaulting buyer, in respect of the machinery
that was altered, the other from the actual buyer, for whom
they would have made separate and other machinery. Hamilton
LJ. pointed out the importance of the fact that the sellers had
room and opportunity to perform both contracts, if they had been in
existence at the same time. Hence the test was whether there was an
opportunity to make two lots of profit, an opportunity of which the
sellers had been deprived by the buyers default. If no such oppor-
tunity had existed, then the sellers could not have claimed loss of
profit on the sale to the defaulting buyer, since the sellers would have
wade that profit, though from a substituted customer. In the case
before the Court of Appeal, the customer was an additional, not a
substituted customer.
For this reason, and on these grounds, the House of Lords, in

Rill &. Sons v. Showell & Sons Ltd.'* permitted a buyer to introduce
evidence to prove that the seller could not have earned more as a
result of acceptance by the buyer, because the seller could not have
dealt with more than one order at a time. By proving this the
defaulting buyer showed that a substituted, not an additional, customer
had been sold the goods not accepted by the original buyer.
119131 1 Ch. 465.
Ibid, at p 468.
* (1918) 87 LJ.K.B 1101.
298
This differentiation was taken up and further exemplified in the

two recent cases referred to above. In Thompson v. Robinson
{Gunmakers) Ltd.'^ the loss of profit on the sale of the car was
recovered because the seller, being unable to sell the car at all since
the supply of cars in question exceeded the demand for such cars, had
to return the car to his supplier. No sale at all was made. In this
case, therefore, there was neither a substituted nor an additional
customer. There was no customer. The market test was inapplicable
because there was no market, as explained above. But it was an
inapplicable test in any event, as Upjohn J. held, because its applica-
tion would have led to the award of merely nominal damages, clearly
unjust since the seller lost his profit as a result of the buyers default.
In Charter v. Sullivan demand for the type of car in question was
greater than supply. Hence the seller really lost no profit because of
the buyers failure to accept. The seller could not obtain more cars to
seU than he in fact had. All those he could obtain he could sell. He
had therefore sold all the cars he had for sale. By not selling to the
buyer he was not prevented from selling more cars or compelled to sell
fewer cars. He suffered no loss and therefore was entitled only to
nominal damages. In this case, therefore, the seller disposed of the
goods to a substituted, not an additional, customer.
These recent cases illustrate not only the difficulties inherent in
the concept of available market, but also the problems involved in
calculating damages where the market test is inapplicable.^
Mitigation of damages
It is the duty of the seller, where the buyer is in default by failing

to accept the goods, to mitigate bis damages. This involves some
reasonable and not extraordinary conduct on the part of the seller.
In the leading case of British Westinghouse Electric & Manufacturing
Co. Ltd. v. Underground Electric Railways Co. of London Ltd.?*
Supra.
*0 Supra. _ ^
See aUo Trans Trust L. t. Danublan Trading Co. Ltd, 11952] 2 0 B. 297,
where an action for non^cceptance would Iutc produced only nominal damage*.
of lo of profit, cf. Ian Stack Ltd. *r. Baker Bosley Ltd [1958] 2 Q.B 130. On the
grant of Indemnity c/. Infra, p. 327. io relation to action* by buyers.
M [1912] A C. 673 at p. 689.
DAMAGES FOR NON-ACCEPTANCE
299
Lord Haldane referred to the duty imposed on a plaintiff (in that case it
was the buyer but the principle is equally applicable to sellers) of
taking all reasonable steps to mitigate the loss consequent upon the
breach. This duty " debars him from claiming in respect of any
part of the damage which is due to his neglect to take such steps.
Even if he is under no duty to act, any action he has taken, as a
prudent man of business, which has diminished his loss will be taken
into account so far as concerns its effect in diminution of his loss.
But the subsequent transaction, if it is to be taken into account, must
be one arising out of the consequences of the breach, and in the
ordinary course of business.**
Resale by the seller is obviously one mode of mitigating his loss.

Mention has been made already of such action on the part of the seller
and its effects upon his claim for damages for non-acceptance. In this
context it is perhaps relevant to refer again to the point that the
material time for resale is immediately upon breach by the buyer;
delay in reselling on the part of the seller may not enlarge or
diminish the damages recoverable by him. Indeed, failure to resell
immediately upon breach may be a breach of the duty to mitigate
loss.**
A problem which arises in this connection is whether a seller is

obliged, in fulfilment of the duty to mitigate, to expend money upon
goods in order to render them fit for resale upon failure to accept
by the original buyer. It has been held in Jewelowski v. Propp **
(not a case of sale of goods) that a plaintiffs duty to mitigate cannot
be taken so far as to make it necessary for him to spend money in
order to minimise his loss. In this case the expenditure was
Speculative, and ended successfully for the plaintiff. Where goods
are not accepted and have to be altered for resale, such expenditure
is not speculative ; hence it has been suggested that the general
principle, that money need not be spent to mitigate loss, is inapplic-
able, and a failure by the seller to make the goods fit for resale, even
if it involves spending money to do so. would amount to a failure
to take reasonable steps to mitigate loss, within what was said by
Lord Haldane, so as to disentitle the seller to damages resulting
from such failure. Perhaps any decision on such a question in an
individual case may turn upon whether or not the expenditure of
** ibid, at p. 690.
** Cf. Roth &. Co. V. Taysen, Townsend &. Co. (1895) 73 L.T. 628.
K.B. 5t0
** Atiyah, Sale of Goods, 2nd ed., p 188, note 5.
300
money was reasonable or unreasonable, having regard to the charac-

ter of the goods, the demand for them, and the amount of money
required to make them fit for resale.
4. Misrepresentation, etc.
The application oE the common law

Except where they are inconsistent with the express provisions
of the Sale of Goods Act, the rules of the common law continue
to apply to contracts for the sale of goods. This applies in particular
to, inter alia, the effect of fraud, misrepresentation, duress or
coercion, mistake or other invalidating cause. Thus a contract
of sale of goods may be void or voidable and may give rise to an
action for damages on the basis of mistake, duress or coercion, or
because of the fraudulent misrepresentation of one of the parties.
A seller, therefore, may have a remedy should the buyer be guilty
of any such invalidating conduct. It is unnecessary in the present
context to do more than refer to the general principles of the law
of contract as regards such matters.** The effect of mistake has already
been considered.** Duress and coercion, in the context of sale of
goods, do not raise any special problems. Nor does fraud on the
part of the buyer, A buyer who has been guilty of a fraudulent
misrepresentation may be sued in tort for deceit, and the contract
which results from the fraud may be rescinded by the seller.**
Innocent misrepresentation
There seem to be few authorities on the effect of an innocent

misrepresentation by the buyer on a contract of sale which results
therefrom. The effect of such a misrepresentation by the seller will be
considered in the next chapter,** So far as such conduct on the part
of a buyer is concerned, in the light of the provisions of the Act and
the law before the Act, it might be thought that, even where the
misrepresentation is not a term of the contract (thereby justifying an
action for breach of contract, or possibly rejection, if the term has the
status of a condition and its breach is not waived), the seller would
SOJi. i. 61 (2)
s See Cheshire and Fifoot, Lav / Contraet, 6th ed , pp. 187-224, 226-237, 24I-Z'3.
253-260; Anson, Principles of the Law of Contract, 22nd ed., pp. 207-216,
243-297; Treitel, Law of Contract, pp. 1S6-W. 255-263.
* Supra, pp. 27-28.
Ot fraud by the buyer see Benfamln on Sale, 8lh ed., pp. 432-451.
t Infra, pp. 331-332.
MISREPREStNTATION. ETC.
301
be entitled to rescind the contract and sue for an indemnity, but not
damages.
The problem is complicated by the fact that the Sale of Goods

Act specifically prescr\es the rules of the common law. Does
this include equity? At common law a misrepresentation which
was innocent might be of legal effect: (a) if it formed the basis of a
contract, i.e., if its correctness were a condition precedent; (b) if it
could be used to raise an estoppel against the party making it; (c) if
it caused a mistake which could be relied upon to have the contract
declared void ab initio', (d) if it could be treated as a term of the
contract, i.e., a condition or warranty. Thus an innocent misrepre-
sentation, which was not a term of the contract and did not sub-
stantiate a claim of mistake, was of very limited effect. In equity,
however, such a misrepresentation could found an action for rescission
of the contract, if the misrepresentation induced the making of a
contract, without actually being a term of such contract, as well
as a claim for indemnity, but not a claim for damages. Moreover,
the equitable right to rescind was subject to certain qualifications.**
Has this equitable right, such as it is, survived the Sale of Goods Act?
The better view** would seem to be (hat it has, although this has
been denied by a New Zealand court in Riddiford v. Warren.** In
cases concerning a buyer's right to rescind (which will be more fully
considered in the next chapter) it seems to have been accepted that
this equitable right still continues to be available, though, as will be
seen, there Is some doubt about the limits of its availability. More-
over. in Goldsmith v. Rodger** in 1962, the Court of Appeal seem
to be clearly of the opinion that a seller who had been induced to
contract to sell a motor fishing boat at a lower price because of the
buyers innocent misrepresentation as to defects in its keel was able
to claim rescission of the contract. Donovan LJ. said, at one point
in his j'udgment * ; The notice of appeal goes on to surest that an
innocent misrepresentation by a purchaser would not j'ustify rescission
On th- - '
* Treitel 200; cf. ^njamin,
op. ci .06 at pp. 635-636,
Pr Atkin LJ.
(1901) 20 NZ-L-R. 572.
pp 331-332. ,,
* [19621 2 Lloyds Rep. 249. I am greatly indebted to my coUeague Mr. G. Battersby

for drawing my attention to this case. _
In fact what the seller t *' * " ''
coods on the basis of t
wunty court judge and - h
[1962] 2 Lloyds Rep. 249 at p. 251.
302
sellers personal remedies for breaqi
by the vendor. I am afraid that I do not follow that at all. It may be

that in 90 per cent, or more of cases of innocent misrepresentation
the representor is the vendor. But what difference should it make
whether one party rather than the other is induced to contract by
misrepresentation? I feel myself there is no substance in that point
and no authority has been quoted in support of it.
Thus, on the ground of reason, the Act is not a complete code

and it specifically preserves the law relating to the effect of misrepre-
sentation (without specifying whethet fraudulent or innocent is meant,
yet at the same time particularly distinguishing fraud from other
invalidating causes), on the ground of authority, and on the ground
of justice, i.e., the need to permit a remedy for an innocent misrepre-
sentation that is not contained in a term in the contract, it is suggested
that the seller and the buyer may claim rescission in appropriate
cases.
The problem then arises, however, of when this remedy is

available and what it involves. So far as the first point is concerned,
and without going into too great detail, it may be said that rescission
cannot be claimed where the party who is affected by it becomes
aware of the truth and affirms the contract by words or conduct.
Lapse of time, for example, may be evidence of such conduct.
Secondly, rescission cannot be claimed where third parties have
acquired rights bona fide and for value, e.g., where goods are sold
as a result of an innocent misrepresentation by the buyer and then
sold by the buyer to a third person. Thirdly, it must be possible to
obtain restitutio in integrum, i.e., to put the parties into their original
state before tbe contract.^ Fourthly, and this is the point which has
caused most difficulty, in order to obtain rescission it must be shown
that the contract has not been executed, i.e., completed as between
the parties. This doctrine, that an innocent misrepresentation will
not permit of rescission where the contract has been executed origin-
ally applied to contracts coaceming land. In Seddon v. North Eastern
Salt Co.^ this doctrine appears to have been extended to cases of sales
of goods or choses in action. Tbe question whether this is correct
is perhaps more relevant to rescission by a buyer than a seller, since
(a) it is more likely to arise in practice in such context, and (b) there
have been cases which have discussed this issue in relation to the
buyers remedies but not in relation to those of the seller. It will
S, e g., Anson, op. cit., pp. 224-232. _
> But this does not mean that rescission b impossible if the goods have detenorated
before tbe truth is discovered,
s 11905] 1 C3i. 326
MISREPRESENTATION, ETC.
303
therefore be considered more fully later.* It may be said in this

context, however, that if a seller has executed the contract, e.g., by
making delivery of the goods, and then discovers the innocent
misrepresentation, it may be too late for him to claim rescission
otherwise than because of the execution of the contract.* If no other
ground for refusing rescission should exist, however, then it will be
very relevant to determine the effect of such delivery. As yet the
problem has not arisen in a practical form: but, on the basis of
what has been said in cases involving claims by buyers, it may be
argued that delivery of goods would operate to determine the right
to rescind, at least where the claim for rescission was brought after an
unreasonable lapse of time.
If the law is changed in accordance with the recommendations of

the Law Reform Committee,* then, as will be seen, mere delivery
by the seller, ije., execution by him of the contract, will not operate
to determine the right to rescind. As a further consequence of
changes which may result from the enactment of the recommenda-
tions of that Committee, the remedy available in actions for rescis-
sion would also be different. At the present time, in an action for
rescission, apart from the actual rescission, all that may be claimed
is the benefit conferred by each party upon the other as well as an
indemnity payable by the representor to the other party.* Such an
indemnity must be distinguished from damages, and is far more
limited in its scope.* The Committee recommended that in actions
for rescission the representor should be liable, either in lieu of
rescission or in addition thereto, to pay damages for any loss suffered
in consequence of the misrepresentation, unless he proved that up to
the time the contract was made he believed the representation to be
true and had reasonable grounds for his belief.** Such an alteration in
the law would have far-reaching results.
It may be added that, in equity, where a party has been guilty

of an innocent misrepresentation, the other party may defend an
action for specific performance by pleading and proving such
Infra, pp 331-332.
* * g; rescission may be refused because Uiird parties hare acquired rights or

because restitutio In Integrum is impossible.
C/. the effect of acceptance by the buyer on his right to rescind: Infra, pp 309-310
10th Report on Innocent Misrepresentation, 1962, Oimd. 1782.
t Anson, op. eit., p. 222.
C/. Whittington v Seale-Hayne (1900) 82 L.T. 49; Newblgging v. Adam (1886)

34 ChJ3. 582; (1888) 13 App.Cas 308.
This appears to have been stated, errtmeously it is suggested, as the existing

law, by Lord Denning M R. in Didc Bendep Productions Ltd. v, Harold Smith
{Motors) Ltd. 11965J 1 W.LR. 623: supra, p 145.
304
misrepresentation. In the context of sale of goods this effect of such

a misrepresentation may not be very important. As will be seen, a
buyer has only a limited right to claim specific performance of a
contract of sale of goods : in so far as such a claim may be brought,
however, it would seem that it may be defeated by proof that the
contract was induced by an innocent misrepresentation on the part
of the buyer.*'
N^ligent misrepresentafian
The discussion thus far has been concerned with the effects of
fraudulent or innocent misrepresentation. It is possible, however, for
a party to be neither fraudulent nor wholly innocent. A party may
negligently make a misrepresentation which induces a contract of sale
of goods, without such misrepresentation constituting a term in the
contract. Clearly such a misrepresentation could qualify as an
innocent misrepresentation, the effects of which have been considered
above. But, as seen, if it is to be treated as an innocent misrepre*
sentation it may be of limited effect, so far as compensation is
concerned, or of no effect at all if a claim for rescission is barred on
one of the grounds mentioned earlier. Hence the suggestion, following
the decision of the House of Lords in Medley Byrne & Co. Lid. v.
Heller & Partners Ltd.^^ which has been discussed earlier,'* that,
in the light of the extension therein made to liability for negligence,
it may now be possible for an action for damages (as contrasted with
an indemnity) to be brought where a party to a contract of sale of
goods has induced the making of such contract by some negligent
misstatement, with consequent loss to the other party. If this
suggestion is correct, then it would seem possible for a seller, who has
suffered loss by reason of such a misstatement and the contract he has
been induced to make as a result, to sue the buyer for damages, not
merely for rescission and indemnity, even where an action for rescis-
sion would be untenable. The same, of course, would be true of a
buyer. If this is correct then the need to amend the law, in accordance
with the recommendations of the Law Reform Committee mentioned
above, has to some extent gone. However, if this is the present
AnsoQ, ofi- ct/., p. 221.
>0 SGJV, . 32: Injra. pp 32^330.
a. the seller*! to repudute based on Innocent mlsrepresenutloa *s a defence
to an action for damages in Coidsmtth t, Rodsrr, supra.
IS II964J A.C 465. See Anson, cp. efr., pp. 2I6-2I9.
5uprfl. pp I3S-J39
Anson, cp. cit., PP 244-241.
MISREPRESEOTATION, ETC.
305
State of the law, it is still not quite what the Committee thought
desirable. In the first place it would only apply to negligent
misrepresentations, not to innocent misrepresentations generally.
Secondly, where the Committee thought that the burden of disproving
negligence should be on the party making the representation, the
present law, if it is indeed the law, puls the burden of prowng that
the representation was negligently made upon the injured party,
alleging misrepresentation. Subject to these points, however, if the
Hedley Byrne case has effected a significant change in this part of the
law, it will have removed much of the difficulty and most of the
limitations of the previous law relating to non-fraudulent misrepre-
sentations.
OlAPTER II
REMEDIES OF THE BUYER AGAINST THE SELLER
1. "Did CussirjcATJON op Duties and Remedies

Different breaches of duty
The appropriate remedy available to the buyer will depend upon

the duty which has been broken by the seller and the nature of the
breach. From what has been said in earlier chapters it will be clear
that these duties may be divided Into three groups. First, there are
the duties with respect to the right to sell the goods, arising possibly
from the contract itself but more probably from the provisions of
section 12 of the Act.* Secondly, there are the duties relating to the
character and quality of the goods, arising by virtue of the express
or implied terms of the contract or sections 13 to 15 of the Act.*
Thirdly, there are the duties relating to performance of the contract
by the seller, i.e.. delivery of the goods, arising either by virtue of the
express or implied terms of the conttuct or by virtue of the provisions
of sections 27 and 30 of the Act.* Thus the seller may be liable
in respect of a failure to make good title, some defect in the character
or quality of the goods, or some default in respect of their delivery.
Different remedies
It would seem reasonable to suppose that these different breaches

of duty should give rise to different remedies. This indeed is what the
1 Ilie buyer may also have remedies agaiast third parties (1) He may be able to
sue on a collateral warranty even for personal injury; supra, pp 14&-147.
(2) He may be able to sue anyone whose fraudulent or negligent tnisrepresentation
induced him to enter into a contract of sale with the seller: his remedy would
be an action in tort for deceit or negligence (tn the light of the decision in
Hedley Byrne v. Heller [1964] A C. 465) (3) He may be able to sue in trespass,
detinue or conversion if a stranger interferes with his rights of possession or bis
title. These tortious remedies need not be examined in detad here.
One point may be raised. Could not the remedy by way of collateral waaanty
be extended to cover Implied waaaoties so as to give consumers a remedy in
1 ... .i.r...,,',.. on the market?
. Cf. Gdlan, products

* inesota Press, I960),
pp. .... u.,, ....
a Supra, Chap. 6
8 Supra, Chap. 7.
I Supra, pp. 203-220
305
CLASSIFICATION OF DUTIES AND REMEDIES
307
Sale of Goods Act recognises. The allocation of the appropriate

remedy for each breach, however, is complicated somewhat by the
distinction between conditions and warranties and the consequences
of that distinction as made clear in the Act, as well as by the possibility
that liability for breach of any particular duty may have been
excluded by a clause in the contract. These complicating factors have
been considered in earlier chapters, in the context of the duties them-
selves. As will be seen, they must also be taken into account when
considering the remedies available for breach of any of these duties.
The most usual and important remedies which are available to a

buyer are ; (i) rejection of the goods; (ii) an action for damages for
breach of warranty, non-delivery, or delayed delivery: (iii) specific
performance of the contract, i.e., delivery of the goods under the order
of the court. In addition it may be possible for the buyer to rescind the
contract and sue for damages, to sue for damages, or merely to
rescind the contract, if (he seller has been guilty of a fraudulent,
negligent or innocent misrepresentation. Further, the buyer may
have a claim for the return of money paid by him to the seller,
where the consideration for the payment of it has failed. This par-
ticular remedy is expressly reserved by the Act.
These remedies appear to be not mutually exclusive, but, in

appropriate cases, cumulative. In some instances, however, the
conduct of the parties, in particular of the buyer, or the terms of
the contract, may permit the buyer to pursue only one remedy. In
others, notably where the wrong goods have been delivered, the buyer
can both reject the goods tendered and sue for damages, in the instance
in question, for non-delivery of the correct goods.
The appropriateness of the remedy
It is therefore essentia] to establish which remedies are appropriate

to. and available in respect of, any particular breach of duty on the
* Cf. supra, pp. 300-305, in respect trf the seller's remedies where the buyer has
been guilty of such conduct. In English law the buyer has no remedy as regards
the goods themselves equivalent to the sellers remedies of hen, etc., on the
insolvency of the buyer. Under the Umform Commercial Code, s. 2-502, the
of damages resulting from breach by the sdler from
the price still due
308
REMEDIES OF BUYER AGAINST SELLER
part of the seller. However, there is no clear pattern on the basis

of which the law may be explained. The distinctions between the
duties which arise in respect of title, character and quality and
delivery do not exactly correspond with the different remedies which
have been mentioned. In part this is because the condition-warranty
dichotomy, which, as already seen, is a fruitful source of difficulty,
transcends the distinctions between different duties. Another reason
is that the remedies of rescission and suing for failure of consideration
exist quite independently of the normal remedies of rejection and
action for damages. Lastly, the discretionary remedy of specific
performance is an equitable addendum to the common law remedies
which were originally available in respect of the sale of goods, and
therefore is of special application.
Perhaps the best way of explaining the buyers remedies, there-

fore, is not by reference to, and on the basis of the remedies
themselves, but by reference to and in connection with the duties
which may be broken by the seller. Though this involves a certain
amount of overlapping and cross-reference, it is suggested that it is a
more logical, as well as a more easily intelligible, method of exposi-
tion. Even on this approach the subject of misrepresentation must
be separately discussed.
2. "nTLE
The nature of the duties
It has already been seen that under section 12 of the Act there
are implied into every contract of sale, unless expressly or impliedly
excluded, a condition as to the sellers right to sell and two warranties,
one relating to quiet possession, the other relating to the freedom of
the goods from any charge or encumbrance in favour of a third
party.^ Thus the seller may be guilty of a breach of condition or a
breach of warranty, or both, where he sells goods without any right to
do so arising from property in them or the right to dispose of the
property by virtue of any statutory or other power such as that of an
agent. The buyer has different remedies depending upon whether the
seller has committed a breach of condition or a breach of warranty.
But. as will be seen below, such remedies may not be exhaustive.
Breach of condition
Rejection: Where the seller has broken the implied condition as

to his right to sell, prima fade, the buyer may reject the goods.
T Supro. pp W-t06.
TTHi
309
decline to pay, or recover the price, and sue for damages for non-
delivery. Discussion of the lattm: remedy may usefully be postponed
until the whole question of non-delivery is considered. What must
be discussed here is the extent of the buyer's right to reject, a right
which arises in aU cases of breach of condition, though, as will be seen,
it may not be exercisable in all instances of such a breach.
It has been seen that the hallmark of a condition is that it is so

important a term of a contract of sale of goods that breach of it by
one party entitles the other to treat the contract as repudiated.
Where it is the seller who is in breach of a condition, the buyer may
reject the goods proffered or tendered to him by the seller. Thus if
the seller tenders goods which he has no right to sell, the buyer may
lawfully refuse to accept them, may treat the contract as broken, and
may sue for damages. This, of course, will only be so where the
contract does not expressly or by implication exclude the statutory
implied condition. Where that condition is so excluded, then delivery
or tender of goods which the seller has no right to sell will not be a
breach and the buyer may have no remedy.
Loss of the right to reject
The right to reject for breach of condition, however, may be lost

in one of several ways. In an earlier chapter these have been
mentioned.* They are: (1) by express waiver on the part of the
buyer, who may waive the condition completely or elect to treat a
breach of condition as a breach of warranty and not as a ground for
treating the contract as repudiated **; (2) by acceptance of the goods,
or a^ part of them, where the contract is not severable **; (3) by the
passing of property in the goods, where the contract is for specific
goods.**
Express waiver needs no further consideration. It is a pure

question of fact in each case. Acceptance of goods has been discussed
m an earlier chapter, when the problems raised by the statutory
provisions were considered and criticised.** It would seem from
what was said that, at the present time, there is considerable difficulty
* Supra, pp. 141-142.
See Infra, p. 312.
Supra, pp. 181-184.
** S G A. s. 1 1 ( 1 ) (a). Tiiere may also be implied waiver or waiver by virtoe of som

e
applicable trade usage: see S.Gj\. a. 55.
S.G.A. 8. 11 (1) (a),
** ffrW. Whether s 11 ( 1 ) (c) applies to the implied condition as to right to sell,

has been queried by Atkin U.: supra, p 102.
Supra, pp. 221-229.
310
about applying the provisions relating to acceptance in a manner

which avoids conflict between them. However, once the buyer has
acted in respect of the goods in one of the ways set out in section 35
of the Act. it will be too late for him to claim to be able to reject
the goods for breach of condition. When property is transferred from
seller to buyer, in the case of a sale of specific goods, has been dis-
cussed earlier.^ In the present context the difficulties, already
mentioned. that are involved in the true construction of section IS.rulc
1, of the Act most clearly and pertinently arise. If the sellers right
to sell is a condition of a contract of sale of specific goods, then such
a contract may not be unconditional within the meaning of that rule.
If it is not, then, no matter what state the goods are in, it would seem
that property does not pass. But this is a curious and possibly frus-
trating interpretation of the rule. Hence it has been suggested that
unconditional in this rule bears a somewhat special meaning. So
too with the meaning of in a deliverable state. If this is given its
normal meaning, then there will be difficulties about applying this rule
where there has been a breach of condition. Yet the provisions of the
Act (v/z., section 11 (I) (c)) require that rule I be applied in such
cases. Hence some construction of the rule must be found which
enables a consistent and not repugnant interpretation of all these inter-
locking provisions. Such an interpretation, however, leads to the con-
clusion that, where the contract is for the sale of specific goods, the
right to reject is immediately lost, unless the contract is conditional
in the sense of subject to a condition precedent or subsequent. For
this reason, as will be seen, attempts have been made to claim rescis-
sion of the contract, rather than rejection of the goods, on grounds
of mistake or innocent misrepresentation.** In the context of the
condition as to the sellers right to sell, another approach has been
mooted. This is by an action for the return of the purchase price
on the grounds of total failure of consideration.
It should be mentioned, however, that even if the right to reject

the goods and claim that the contract has been repudiated has been
lost in one of the ways considered above, the buyer will still be able
to claim damages for breach of warranty. The measure of damages in
such an action will be discussed later. For the moment it suffices to
say that it is by no means clear what a buyer may recover by way of
damages where the implied condition as to the sellers right to sell has
been broken and the buyer is compelled by the Act to treat this as a
i Supra, pp. 64-83.
t See, further, Infra, pp 331-333
JT Infra, pp. 315-323.
TntJB
311
breach of wananty. Certainly the buyer may recover the price paid
for the goods where he has been deprived of them because they belong
to someone else. Whether he can claim any other, more consequential,
loss is a question of some difficulty. Probably the best and most
acceptable answer is that he cannot, unless there is knowledge on the
part of the seller of some special circumstances from which he can
reasonably infer that the buyer wU incur special loss should the
goods not become his.'
A further point also requires mention. As already seen there are

instances in which a seller without title can nonetheless pass good
title, free from attack by any third party, to the buyer. In such
instances, although it may be said that the seller is in breach of the
implied condition that he has the right to sell the goods, it may also
be said that this breach has not involved the buyer in any loss. By
virtue of the common law and statutory provisions earlier considered
the buyer will be invested with a title which is good against the whole
world. Hence, the buyer would seem to lose his right to reject and
his claim for damages for breach of warranty in such cases, although,
as will be seen below, he may have a claim m damages, if be has
been involved in the expense of defending his title, under another
provision of the Act.'
Failure of consideration
Should the right to reject for breach of condition with its ancillary
right to claim damages for breach of contract be lost by reason of
acceptance of or transfer of properly in the goods, it would still seem
possible, in the light of the decision in Rowland v. Dlvall*^ for the
buyer to reclaim his purchase price on the ground of total failure of
consideration. This case, and the problems to which it has given
rise! have been considered in detail in an earlier chapter. It is
unnecessary to reconsider these matters here. Suffice it to say that
this method of recovericg the purchase price, which is speciGcaUy
retained by section 54 of the Act, would seem to be available to a
"buyer who has paid the purchase price and has had to sunendcr
possession of the goods to the true owner, because he never acquired
title to them under any of the common law or statutory provisions
The point was raised by counsel in Mason t. Durningham 11949] 2 K.B. 545 at
P 557 and mentioned by Singleton LJ, IbU. at p. 560: but no answer was given,
amcc the issue did not properly arise on the facts and the pleadings.
** Supra, pp. 106-129.
*0 viz., S.OJ\. $. 12 a). Infra, pp. 312-313.

11923] 2 K.B. 500.
Supra, pp. 95-103
312
referred to above. This will be so even if the buyer has enjoyed

possession and use of the goods for a period. The seller cannot
defend himself against such an action on the basis of the transfer of
possession, because the consideration for the purchase price is not
physical delivery of the goods, despite the dependence of payment
on delivery and vice versa under the Act**; it is transfer of title.
Even transfer of property as between seller and buyer will not suffice.
Though this may be the purpose of the contract, as the Act stipulates,
it is not the consideration for the payment of the purchase price.
Exclusion of the condition
This leads to a further point. It has been seen that a seller may
exclude the operation of conditions that might otherwise be expressly
or by implication at common law or under statute be made terms of
the contract. The effect of such exclusions has been seen to be
complete, as long as the exclusionary clause is properly worded.**
However, under the doctrine of fundamental breach or breach of a
fundamental term it may still be possible for a buyer to claim
rejection of the goods and damages.** In the context of the implied
condition as to the sellers right to sell, and in the light of Rowland
v. Divall, it may be argued that the obligation to transfer title
in the goods to the buyer is so fundamental that it can never be
excluded, except possibly where the contract clearly contemplates
that both parties realise that the seller has, or may not have, the right
to sell the goods and the buyer is taking a chance in this regard.
If no such construction can be placed upon the contract, then it would
seem that even though the implied condition as to the sellers right
to sell is expressly excluded by the contract, the buyer will still be
able to claim the return of the purchase price on the grounds of total
failure of consideration where the seller bad no right to sell and the
goods have been claimed from the buyer by their true owner.
Breach of warranty
Damages: Where there has been a breach of the implied warran-

ties that are included in a contract, unless expressly or by implication
excluded, under section 12 (2) (3) of the Sale of Goods Act, the
buyers remedy is an action for damage for breach of warranty. The
* le., S G.A. 8. 28: supra, pp. 206, 230.
8* Supra, pp. 18&-188.
J Supra, pp. 188-191.
TITLE
313
measure of damages in actions for breach of warranty will be dis-

cussed more fully later in this chapter.* At this point it suffices to
state that, in accordance with the test usually adopted in such cases, it
was held by the Court of Appeal jn Mason v. Burnmsham that in
an action based on breach of the warranty implied by section 12 (2) of
the Act, the buyer could recover not only the cost of the typewriter
which was later discovered to have been stolen, and had to be
returned to the true owner, but also the money spent by the buyer on
overhauling and improving the typewriter. Such expense, as Single-
ton LJ. pointed out, arose in the ordinary course of events and
followed directly and naturally from the purchase by the buyer of the
typewriter.
It is open to debate whether, in an action for damages for breach

of this implied warranty, a buyer could recover the costs incurred by
him in defending an action for the return of the goods brought
against him by their true owner, or one who claimed to be their true
owner. Whether such a claimant were or were not successful, it is
suggested that the effect of such a claim would be to disrupt the " quiet
possession ** of the buyer, in much the same way as the necessity
to strip the labels from the tins of condensed milk before they could
be sold was an interference with the quiet possession of the buyer in
Nibleit v. Confectioners' Materials Ltd.'*
In the absence of any authorities, it is not clear what may be

recovered by a buyer in an action for damages for breach of the
warranty implied by section 12 (3) of the Act.* As already seen, the
meaning and scope of this provision are far from clear. It is not
surprising therefore that there is little guidance on the measure of
damages recoverable for its breach. Presumably the general rule
applicable to actions for damages for breach of warranty would
apply. What that rule is will be considered below.
3. Character and Qi/AtnY
Conditions and warranties
It has already been seen that a contract of sale of goods may

contain express conditions or warranties relating to the description,
identity, quantity or quality of the goods, or conditions as to such
features of the goods may be implied under provisions of the Sale
* Infra, pp 315-323.
119491 2 KB. 545: supra, p KM.

** Ibtd. at p 561.
* 119211 3 K.B. 357 : supra, p. 93.

>0 Supra, pp 105-106.
314
RE^ÊDIES OF BUYER AGAINST SELLER
of Goods Act.^ The rights of the buyer, where a breach of such

conditions or warranties has occurred, depend upon whether the tenn
broken is a condition or a warranty. As already seen, a buyer may
reject goods which are tendered in breach of condition, and sue for
non*delivery (as well as for the return of the whole or any part of the
purchase price that has been pre-paid) unless the right to reject for
breach of condition has been lost for one of the reasons mentioned
in the previous section,** Where the right to reject has been lost, or
the term that has been broken was originally an express or impUed
warranty, the buyers only remedy is in damages.
Action for damages
Under the Act,** where there is a breach of warranty by the seller,

or where the buyer elects, or is compelled, to treat any breach of a
condition on the part of the seller as a breach of warranty, the buyer
is not by reason only of such breach of warranty entitled to reject the
goods: but he may (a) set up against the seller the breach of warranty
in diminution or extinction of the price: or (b) maintain an action
against the seller for damages for the breach of warranty. The right
to set up a breach of warranty in diminution or extinction of the price
of the goods was recognised in Mondel v. Steel.** Such a defence is
technically a set*off,** it is really a counterclaim for damages which
is allowed as a matter of practice to be set off in this way to prevent
circuity of actions, / e.. an action by the seller against the buyer for
the price and a separate action by the buyer against the seller for
breach of warranty.* However, it is also provided by the Act ** that
the fact that the buyer has set up the breach of warranty in diminu-
tion or extinction of the price docs not prevent him from maintaining
an action for the same breach of warranty if he has suffered further
damage. In other words, if the damages which may be claimed by the
buyer for breach of warranty, in accordance with the principles to be
Suprt2, pp. 135-178,
** Supra, pp. 309-310 Note Uiai there must be total fe|eciion or total acceptance,
a buyer cannot reject part of Uie foods and keep the rest, Tbis may be M
2-6
T*
-/u.CC,
goods is
may be
1 aetjon
delive
rejecte
IS SGA
for * . .
S4 (1841) 8 M. & W. 858.
ti Btighir. Rogers im7]tK1i.9i7. ,
as Bow. McLachan A Co. v. Ship " Camosun ** fl909] A C. 597 at pp. 610-6II, P"
Lord GoreU.
I S GA. f. 53 (4).
aiARACTER AND QUALITY
315
examined below, exceed the price of the goods, thereby completely

setting-off the sellers claim for the price, the buyer may bring a
separate action for the additional loss he has suffered, by suing for
breach of warranty.
However the right to set off a breach of warranty, or to bring

an action in respect of such a breach, may be lost by express or
implied waiver, or by notice of a trade usage, in the same way as the
right to reject the goods.** Whether such rights have been waived
expressly by the contract is a matter of construction. But the language
must plainly indicate that such rights of set-off or action have been
excluded or waived.* Similarly language in a contract, e.g., an
agreement to submit a dispute to arbitration,** must be plain and clear
before it will be implied that the right to set-off or claim for breach
of warranty has been excluded or waived.
Measure of damages
The measure of damages for breach of warranty, says the Sale

of Goods Act,** is the estimated loss directly and naturally resulting,
in the ordinary course of events, from the breach of warranty. This is
the first rule in Hadley v. Baxendale.** The continued operation of
the second rule, that loss which is foreseen as being likely or
probable as a consequence of certain circumstances especially known
by the seller is recoverable even though it is not directly and naturally
& result of the breach, is recognised by the provisions of section 54
of the Act, as seen in the previous chapter in relation to the remedies
available to a seller.* Thus the Sale of Goods Act merely enacts
these common law rules in relation to actions for damages by a buyer
as well as by a seller. In the case of breach of warranty of quality.**
the Act * provides that the loss which directly and naturally results
** S GA. s. 55.
** [1923] 1 K.B, 457 at p. 486, per Scrutton LJ.; [1924] A.C,
4A ^'<1 Wrenbury.
c(' Broi. V. Len/j & Peal Ltd. [1923] 1 K.B. 690 with Ayscough v.
<1 4^ 4 Co. (1924) 93 LJX.B. 924

s 53 (2). cy. U.C.C., s. 2-714 (2). But incidenul and consequential
** recovered under ibid, s 2-715; cf. infra, p 324. note 85
PP- 286-289.
Presumably an express warranty or one implied by trade usage: there are no

statutory implied warranties of ouality, only implied conditions: see iVaUis v.
Baynes (1911) AC. 394, supra, pp. 183. 187. However, it would $e^
mat If a condition as to quabty is broken, but the buyer is confined to his remedy
m damages, this provision will apply. It would also appear to apply to breaiies
t Warranty (or condition treated as breaches of warranty) relating to description,
*^ple, etc.
* SGA. s. S3 (3).
316
REMEDIES OF BUYBl AGAINST SELLER
in the ordinary course of events from the breach, is prima facie

the difference between the value of the goods at the time of delivery
to the buyer and the value they would have had if they had answered
to the warranty. These being the statutory provisions, the cases
must be examined to see how those provisions are interpreted and
applied in practice.
It would seem from the cases that foreseeable results can cover
many different kinds of loss. Thus where the buyer was obliged to send
goods to America, as the seller was well aware, and was obliged to
pay for their return when they turned out to be unsuitable, it was held
in Molting v. Dean that the damages recoverable by the buyer
included such expenses, since they were within the contemplation of
the parties as a reasonable and natural consequence of the breach
by the seller. So, too, in Holden v. Bostock & Co. Ltd the buyer
recovered not only the cost of the beer which had to be destroyed
because the sugar bought from the sellers to be used in manufacturing
the beer contained arsenic, in breach of warranty, but also the costs
incurred in giving notice to the buyers customers of changes in the
materials to be used by the buyer in future manufacture. In Cullinane
V. British " Rema" Manufacturing Co. Ltd.,** it was held that the
damages recoverable by the buyer in an action for breach of an express
warranty were either the capital loss resulting to the buyer front
the breach of warranty, i.e., the difference in value of the goods or
the business loss reasonably within the contemplation of the parties
when the contract was made, as being the probable result of a breach,
i.e., the foreseeable results of the breach of warranty. Such loss was
foreseeable because the sellers knew that the buyer required the plant
sold by the sellers to perform a particular function. But the capital
and business loss could not both be recovered. In some instances of
breach of warranty, damages for personal injuries (including loss of
consortium where the buyers wife died as a result of eating defective
goods bought from the seller**) have been held to be recoverable
on the ground that the injuries were the direct and natural result of
the breach of warranty.
< (1901) 18 T.L.R. 217. Cf. U.CC, > 2-715 (1).
(1902) 18 T.L.R. 317: for later libgation aruug from this incident sec Bostock &
Co. Ltd. V. Nicholson 4 Sons Ltd. ()9(MJ 1 K.B. 725: Infra.
* 119541 1 Q.B. 292.
* Jackson v. IVatson 4 Sons [1909} 2 K3. 193.
so See ej. Frost v A>lesburjr Dairy Co [19051 I KB. 608; Ceddllng v. Marsh
119201 1 KB 668: WUson v. Rickets Cockerell [1954] 1 Q B. 598; Andrew's Y.
nopkinson (19571 > QB. 229. Cf. U.CC. s. 2-713 (2) (fc).
CHARACrni AND QUALITY
317
Where the difference in value of the goods is the measure of the

damages recoverable the crucial date under the Act is the time of
delivery. Nonetheless, in cases in which a breach of condition has had
to be treated as a breach of warranty, because of the buyers conduct
(e.g.. acceptance of the goods), it has been held that the time for
toking the market price, on the basis of which the difference in value
IS to be assessed, was not the date of delivery but the date when the
breach of warranty was discovered. Thus in Van den Hurk v. Martens
& Co.i this was the date when the goods were opened by the ultimate
consignee, not the original buyer, since the original seller knew that
the goods were intended for export by the original buyer. In Kwei
Tek Chao v. British Traders & Shippers Ltd.^^ the date that was
material was the date when the buyers discovered the sellers breach
of obligation as to the contents of the bills of lading, not the date
when the documents were tendered. The value that is involved under
e first rule in Hadley v. Baxendale is the value of the goods them*
reives, not the value of any by-product of the goods. Hence in
v. Tory," where the seller sold a bull and stated that the
butter fat content of its dam was higher than it actually was, the
damages recoverable by the buyer who bought the bull for breeding
purposes was the difference in value of the bull, not the difference
m value of the bulls progeny in the light of their lesser utility as milk
and butter producers. This was because the seller did not know that
the bull was required for breeding purposes. If be had had such
nowledge the greater loss, i.e., the greater difference in value, would
ave been recoverable under the second rule in Hadley v. Baxendale.
There are considerable difficulties involved in the calculation

of damages for breach of warranty of quality on the basis of the
ifference in value of the goods as delivered from their value had they
oot been defective.* One such difficulty is the relevance of a resale
price should the buyer have resold the goods or contracted to resell
cm. This may tend to prove the value of the goods as warranted or
cir value as delivered. But it is far from clear whether such prices
IlWO] 1 K.B. 850.
Li V n in Taylor <E Sons v. Bank of Athens (1922) 91
seW, ; T76 and /. Finlay 4 Co. v. Kmk Boo Tong IIM. (19291 1 K B. 400, the
Wisdescriptions in bihs of lading.
353. See also, as to the calculation of the value of goods,

thffrpfn, (1898) 73 L.T. 136, where an orchid warranted white, and
PurnncM '^^ble, flowered purple, and therefore much less useful for resale
orew damages were assessed on the bads of the resale value of a white
We flowered.
McGregor on Damages, 12th ed., pp. 361-363.
318
are relevant. A further difficulty arises when the goods as delivered

are in fact utterly worthless since they cannot be resold. If they cannot
be used by the buyer for his own personal purposes the situation would
seem to be clear. The buyer can recover what it would cost him to
obtain suitable goods on the market But if the goods were intended
for resale and cannot be resold it may be more difficult to determine
the buyers loss. In the Kwet Tek Chao case, for example, Devlin J.
had to calculate the buyers damages on the basis of the difference
between the contract price of the goods and their salvage value at the
material date.
In view of the difficulties, and because section 53 (3) gives only a

prima facie rule, it would seem that it is not a provision frequently
applied. Moreover, where a breach of warranty of quality is involved
it would seem that the damages which are sought are frequently not
so much loss in the value of the goods themselves, which may indeed
be minimal, but the injuries caused to the buyer or to other goods
of the buyer as a result of the defective quality of the contract goods,
or the losses, by way of expenses, or loss of profits, incurred by the
buyer,* Some of these losses do not easily fall within the first rule in
Hadley v. Baxendale, i e., within section 53 (2) of the Act. They are
recoverable, if at all, under the second rule, i.e., section 54. The most
important problems occur where the buyer has made sub'sales, relying
upon the purchase of goods from the seller. Such cases, if successful,
rest upon sections 53 (2) (c), 54, not upon section 53 (3).
Sob-sales
Where the buyer has made a contract with a sub-purchaser on the

faith of his contract with the seller, and involving the goods sold
to him by the seller, the breach of warranty by the seller, particularly
the breach of a warranty of quality, may involve the buyer in liability
to his sub-purchaser in one of two ways. He may be liable for
damages for non-delivery to his sub-purchaser because he cannot
deliver faulty goods; or he may be liable to his sub-purchaser for
breach of warranty where, believing them to be sound or the right
goods, he passes the goods on directly to the sub-purchaser.^ Such
S See, e Slater v, Hoyle & Smith Ltd. |!920I 2 K B. 11 where a resale price was
disregarded. C/. the cases on DosMteiiTeiT, tnfra, pp. 326-328.
s In Taylor & Sons Ltd, v. Bank of Athens (1922) 91 LJ.)C.B. 776 at p 778,
AfcCardic 3. said that the damages tmder a. 53 (3) may be muck more restricted
than those under subs. (2), for subs (3) provide* a somewhat ngSd and feed
standard. Hence, prcsunubly, claims aw founded on subs. (2).
ST The situation with regard to inabHity to deliver to a sub-purchaser will be dealt

with later; Infra, pp 326-328.
319
liability may cause the buyer different kinds of loss, i.e., loss of
profit on the sub-sale, damages payable to the sub-purchaser for
breach of warranty by the buyer, as regards the goods sold by him,
to the sub-purchaser, costs incurred in defending an action for breach
of warranty brought against him by the sub-purchaser, or in paying
compensation to the sub-purchaser without disputing whether there
was a breach of warranty. There may also be loss incurred through
prosecution of the buyer as a result of the defective quality of goods
sold or otherwise used by him and obtained originally from the seller
who was in breach of warranty in selling them to the buyer. These
problems have been raised in several cases, and involve the question
whether such loss can be said to be a direct and natural result of
the breach of warranty.
The principles upon which such cases are decided are the two
rules in Hadley v. Baxendale, as contained in and applied by the
Sale of Goods Act. In each case the question must be answered
whether the loss complained of is a direct and natural result of the
breach of warranty, i.e., something that would be foreseen by a
reasonable seller as being a likely consequence, or is a result that is
foreseeable by him in the light of his special knowledge or his
of some special circumstances.
ûs in several cases it has been held that damages paid by a buyer
0 his sub-purchaser because of the defective quality of the goods
supplied by the buyer (obtained originally from the seller) were
recoverable in an action for breach of warranty brought by the buyer
^Sînst the seller. The basis for such a decision has been that the seller
hnew the buyer wanted the goods in question for resale in their original
or some altered state the second rule in Hadley v. Baxendale),
3-s m Kasler &. Cohen v. Slavouski^^ Or that it was in the contempla-
tion of the parties, particularly the seller, as reasonable business men,
nt the goods would be used in one or another of two ways for
cattle food, as in Pinnock Bros, v, Lewis & Peat LidP Or that it
Was in the contemplation of the seller tlmt the probable consequences
a breach by him would be the failure by the buyer to fulfil his
contract to supply goods, as in Agios v. G. W. Colliery Co.* In
cases of this kind the buyer has recovered not only the damages
paid to his sub-purchaser but also the costs incurred in defending
" jlrai 1 K.B.'690,

118991 1 Q.B 4J3
s Stavonski v. La Pelleterie (1927)

320
an action brought against even where, as in Sidney Bennett Ltd.

V. Kreeger,*^ the buyer only defended such an action when the seller
refused after having been requested by the buyer to do so. On the
basis of these cases it may be argued that loss of profit on such
resales should also be recoverable in similar situations.*
On the other hand, in Slater v. Hoyle & Smith iJd.** in which

the buyer claimed only such loss of profit, it was held that the
difference between the market price of the goods as delivered, i.e.,
defective in quality, and the contract price agreed between the buyer
and his sub-purchaser, could not be recovered. In coming to this
conclusion, after considering the cases involving claims for loss of
profit following non-delivery of goods, Scrutton LJ. said* that
all the English decisions show that a plaintiff cannot measure the
real value of what he has lost by reference to a contract peculiar to
himself, for which the defendant is not responsible, and that his loss
therefore is not measured by that price. What the situation is with
regard to damages for non-delivery will be considered in due course.**
It suflSces for the moment to state that there may be a conflict between
the cases on recovery of damages and costs incurred by a buyer and
the cases on loss of profit. Certainly loss of goodwill cannot be
recovered, i.e., loss of profit on further sales, in an action for breach
of warranty, as this would be regarded as too remote a consequence
of the breach.^ Moreover, even if damages have been paid out by
the buyer to his sub-purchaser for breach of warranty by the buyer,
such damages may not be recoverable from the original seller where
the warranty given by the buyer to his sub-purchaser is a different
warranty from that given to him by the seller. As Scrutton L.J. said
in Dexters v. Hill Crest Oil Co.,** speaking of a chain of sales and
sub-sales : '* in order to make a sum recovered for breach of the last
contract in the chain the measure of damages for a similar breach of
a contract higher up in the chain, it is essential that the contracts
along the chain connecting them should be the same. Thus in British
t As in Hammond V. Bussey (18S7) 20 QBJ}. 79 where there was a special

agreement: cf. Prince of Waies Dry Dock Co. v. Fownls Forge Co. Ltd. (I90t)
90 L.T. 327.
ei (1925) 41 T.LJL 609.
es Mayne and McGregor, op. eii., at p. 373.
4 11920] 2 K-B. n.
s Ibid, at p. 24.
e Infra, PP. 324-328.
t Bostock & Co. Ltd. . Nicholson &. Sora Ltd. [1901] 1 K.B. 725.
*s 11926] t K.B, 34S at p. 359.
aLÂCIXR AND QUALITY
321
Oil & Cake Co. Ud. v. Durstali & Co** the difference between the
conditions or warranties invohed in the sale and the sub*rale were
sufEciently immaterial to permit the rccoverj of damages paid by the
buyer to his sub-purchaser. The seller had sold copra cake to the
buyer: the latter had sold copra cake to his sub-purchaser warranted
free from castor. Copra cake not free from castor was not copra cake
at all. Hence the failure to correspond with the description of copra
cake was the same thing as failure to fulfil the warranty free from
castor." But in Hostock d. Co. Ud. v. Nicholson & Sons Ltd.."'*
where the seller did not know the purpose for which the buyer required
the commercial sulphuric acid, it was held that the buyer could not
recover from the seller the damages he had paid to sub-purchasers of
brewers sugar made from the acid, although such damages were
payable because the acid contained arsenic and the sugar manufactured
from it was contaminated, and therefore rendered defective beer in
the manufacture of which it was used. Though the acid was
warranted free from arsenic, the brewers sugar was not warranted
in quite the same terms. Hence, as Bruce J. said, "no liability
is incurred in the ordinary case of a separate and distinct collateral
contract with a third party uncommunicated to the original contractor
or wrongdoer, although the non-performance of the contract may
in one sense have resulted from the original wrongful act or breach
of contract."
In Biggin Co. Ltd. v. Permanite Ud.** Pcvlin J. stated the general

principles to be that damages payable to a sub-purchaser were
recoverable by a buyer from a seller provided that the description
of the goods and the warranties were the same in the sub-contract
as in the original contract, and the buyer lacked any knowledge of
the defect in quality before he sold the goods to the sub-purchaser.
In other words, provided that the buyer was passing on the goods, with
the benefit of the original warranty, to bis sub-purchaser. In that
case, however, Devlin J. held that the buyer could not recover money
paid to the sub-purchasers by way of compromise of an action brought
by them against him, since this was not a consequence in a 1^
sense of the sellers breach of warranty, he., it was irrelevant. ^ e
Court of Appeal reversed this decision, without actually objecUng
322
to the general principles stated by Devlin J., on the ground that the
settlement was an upper limit of damage and was reasonable.*'*
As well as recovering damages for breach of contract paid by him

to a sub-purchaser, it would seem that a buyer can also recover
damages paid and costs incurred by him to a third party for damage
done to his person or property because of the defective quality of
goods sold to the buyer, as in Mowbray v. Merryweather''* and
Scott V. FoleyJ^ So, too, if the buyer has incurred costs or paid fines
as a result of criminal proceedings brought against him because of the
defective quality of the goods.* though there is some dispute about
this on the ground that to permit the passing of liability over to the
seller in cases of this kind might well be against public policy in that it
would defeat the aims of the legislation designed to protect the
community from bad foodstuffs, drugs, etc.**
Factors affecting damages
It was seen in the previous chapter (hat. in calculating the damages

payable to an aggrieved party for breach of a contract of sale of goods,
two factors sometimes require consideration. One is the possibility
that the parties may have agreed in advance as to the amount to be
paid by a defaulting party to the other should a breach occur. As
already seen,** the effect of such an agreement will depend upon
whether the amount involved is a genuine pre-estimate of the damages
suffered by the other party, /.e.. liquidated damages, or is really in the
nature of a penalty. The other relevant factor is the duty of an
injured party to mitigate his damages.** It would seem to be equally
applicable to instances of breach of warranty, including breaches of
T* [1951] 2 K.B. 314. SomerveU LJ. at p. 317 said that the damages were to be
assessed on the basis of Lability to the sub-purdiaser subject, if necessaiy, to its
being shown, for example, that some different tenns had been introduced wto
the contract.
T4 [18951 2 QB. 640
(1599) 15 TL.R 55 Cf. also, as to costs, Britannia Hygienic Laundry Co. tw- *
Thornycroft (1925) 41 T.LR. 667: reversed on the facts (1926) 42 T.L.R.
t Cf. Craze V. Fry (1903) 67 JJ*. 246 with Co/nrtf v. Uyham [1913] 2 K B. 220
Cf. also Payne v, MinUtry of Food (1953) 103 Lj. 141 with Proops v. ChapUn
(1920) 37 T.L.R. 112.
TT Leslie V. Reliable Adverilsinz Agency |19151 I K.B. 652; Askey v. Golden Wine
Co. [1948] 2 All E R. 35 ; Maries v. Tram (19541 1 Q B 29.
TS Supra, pp. 287-288. The Uniform Conunerdal Code, ss 2-718, 2-719, bas
complex provisions relating to the Iiqoidaiioa or limitation of damages, and the
modification or limitation of remedies by agreement.
i Supra, pp. 298-300
323
warranty of quality, as to other kinds of breach by either seller or

buyer.*
4. Delivery
Different kinds of breach
^ far as the duty to deliver the goods is concerned, the seller may
be in breach in a variety of ways. Thus he may deliver the wrong
quantity or the wrong quality of goods; he may deliver the right
quality, and quantity of goods but at a lime later than that stipulated;
he may completely fail to deliver the goods. Delivery of the wrong
quantity or description of goods is in fact a special kind of breach
which is dealt with especially in section 30 of the Act.* In this
section of the chapter it is necessary to discuss non-delivery and
delayed delivery of the contract goods.
Non-delivery
By the Sale of Goods Act,** where the seller wrongfully neglects

or refuses to deliver the goods to the buyer, the buyer may maintain
an action against the seller for damages for non-delivery. But the
neglect or refusal must be wrongful: hence if the buyer has previously
repudiated the contract by word or conduct, or has failed to tender
the price, if the time for payment Is due, or is otherwise in breach
of his obligations under the contract, the seller will not be acting
'vrongfully in failing to deliver. The right of the buyer to sue for
non-delivery in appropriate cases does not depend upon whether or
not property has been transferred to him under the contract. Nor is
the transfer of property relevant to the other possible remedy of the
** involve accepting an offer from the party In default: Payzu Ltd. v.
11919] 2 K.B. 581 at p. 589, per Scruttoo L.J. Sec. e.g, Houndsdttch
unr^* y. Waltex Ltd. [1944] K.B. 579 where it Aat a buyer
abr
bel
Brc
the
to miti
See iu
not de.
quantit
V. Nos
disting
by ss.
inappli
** S.GA. ,
F.S.O. n*
324
buyer. Under the Act ** where there has been a failure to deliver speci-
fic or ascertained goods (the properly in which may not have passed
to the buyer), in an action for breach of contract the court, if it thinks
fit, on the application of the buyer, may direct by its judgment that the
contract shall be specifically performed, without giving the defendant
the option of retaining the goods on payment of damages. This may
be done conditionally as regards damages, payment of price, etc., or
unconditionally. It is a discretionary remedy and may be applied
for by a buyer at any time before judgment in an action for breach
of contract for failure to deliver. In what circumstances, and to what
extent this remedy is available will be considered below.** First,
however, it is necessary to discuss the more usual remedy of damages
for non-delivery. Here, as elsewhere, the real problem is how the
damages payable to the buyer arc to be measured.
Measure of damages
The statutory rules in relation to an action for non-delivciy are

exactly the same as those which apply to actions for non-acceptance.
In other words the two rules in Hadley v. Baxendale provide the
basis for the provisions of the Act. Thus, the measure of damages
is the estimated loss directly and naturally resulting in the ordinary
course of events, from the sellers breach, i.e., failure to deliver.**
Where there is an available market for the goods in question, prhna
facie this is to be ascertained by the diflference between the contract
price and the market or current price at the time or times when the
goods ought to have been delivered, or, if no time was fixed, then
at the time of the refusal to deliver.** The second rule in Hadley v.
Baxendale, under which special consequential loss may be recovered
if foreseeable by the seller in the light of his particular knowledge
of the facts and circumstances, is contained in section 54 of the Act,
which is equally applicable in this context as in relation to actions
by the seller or by the buyer for breach of warranty. In considering
the remedies of the seller, the language of the above provisions has
been examined and elaborated, particularly the meaning of the phrase
2 S G A. s 52.
*s Infra, pp 329-330.
84 SOA. s. 51 (2).
s SGA. s. 51 (3): ef. U.C.C, s 2-713 (I) onder which the time for ascertaining
the market price is when the buyer learned of the breach. For the p/a of the
market price, see U.C.C., a. 2-713 (2). See also s. 2-723. For the recoveiy ot
" incidental and consequential damages see U C.C 8. 2-715, which covert
expenses particularly foreseeable loss, and injuries to person or property proxi-
mately resulting from breach of warranty.
DELIVERY
325
available market. What was there said on all these matters is

also relevant in the present context. Some mention must be made,
however, of the cases that have been concerned with, and the problems
that have arisen from, the particular question of non-delivery.
Application of the market price test
The fundamental principles were stated by Lord Atkinson in

Privy Council in Wertheim v. Chicoutimi Pulp Co^ The market
value is taken because it is presumed to be the true value of the goods
to the purchaser. In cases of non-delivery the price at which the
purchaser might, in anticipation of delivery, have resold the goods is
properly treated, where no question of loss of profit arises, as an
entirely irrelevant matter.** The purchaser not having got the goods
should recover by-way of damages enough to enable him to buy
similar goods in the open market. Thus the market price of the goods
in question, or similar goods, is taken as the datum line, not the
price at which the buyer had contracted to resell them. If the cost of
buying similar goods in the open market is no greater than the con-
tract price, the buyer will have suffered no loss and can only obtain
nominal damages for breach of contract by failure to deliver.** These
principles were reiterated in the House of Lords in JVilUams Bros. v.
Agius Ltd.,* where, unlike the Wertheim case.*^ the doctrine laid
down in the judgment was applied to the facts of the case. That
doctrine was summed up by Lord Dunedin in these words *: The
buyer ... is entitled to be put in the position in which he would have
stood if he had got fthe goods] at the market price of the day and
barring special circumstances the defaulting seller is neither mulct In
damages for the extra profit which the buyer would have got owing to
a forward resale at over the market price . . . nor can he take benefit
of the fact that the buyer has made a forward resale at under the
market price. As was shown by the decision of the Privy Council in
Sheik Mohammed v. Bird?^ the fact that the buyer made a greater
* Swpra, pp 283-293.
M PP- 307-303.
|7?^>anacWv.A/6rn(l885)t8QBD.67. ,,,
County Natural Gas & Fuel Co. . ConoU II911] A.C 105 at pp. 117-118.
^ Lord Atkiftson. By contrast, therefore, if extra expense has been inoirrM in
lo acquire goods on the market that expense fa recoTcrablc: see fll/uie t.
<875) L.R. 10 QB. 265; Bfockbum Bobbin Co. r. Allen & Sara Ltd
** 7^ decision in which sras critJdsed, as being wrongly decided, by Scnitton U.
in Slater y. & smith Ltd. 119201 2 KB 11 at p. 23-24. The Uertheim

* n^Ji delayed dclfaety. o ^
* 119141 AC. 510 at pp. 522-523. * (921) 37 T.LJL 405.
326
profit from his resale because of the sellers default in delivery did
not reduce the damages payable by the seller. In other words extran-
eous contracts made by the buyer are excluded from consideration.
Only the value of the goods in the market is to be taken, 'as Scrutton
LJ. stated in Slater v. Hoyle & Smith Ltd.* where the doctrine of
Williams Bros. v. Agius was applied to an action for breach of
warranty.
The relevance of snb-sales
Unfortunately this apparently settled and fundamental principle,

that sub-sales by a buyer are to be ignored in calculating the damages
payable by a seller who has failed to deliver, was upset by the decision
of the House of Lords in 1928 in Re Hall & Pirn < Co.'s Arbitration!*
which was said ** to have astonished the Temple and surprised St.
Mary Axe. In that case the buyers loss of profit on a resale was
held to be recoverable. The contract in fact provided for sub-sales
and it can be said that the seller ought to have known the likelihood
not merely the possibility of resales and loss of profit if the goods
were not delivered. The ordinary rules of damages, i.e., the first rule
in Hadley v. Baxendale, was not applicable. The speeches in the
House of Lords all appear to stress the importance of the sellers
knowledge, not mere supposition, of resale by the buyer.*^ TIic
possible conflict between this decision and Williams Bros, v. Agius
was considered by the Court of Appeal in /. Finlay &. Co. v. Kwik
Hoo Tong HM.** in the following year. Scrutton and Sankey LJJ.
criticised the later decision of the House of Lords and wished to
confine it to its special facts, i,e.. the knowledge of the seller as to
sub-sales involving the very same goods. Greer L J.** did not think
the two House of Lords decisions irreconcilable, and said that the
I1920J 2 K.B. II at p. 20.
s (1928) 139 L.T. 50.
By couosel In Finlay v. Kwik Hoo Tong |1929J I K.B. 400 at pp. 417-41o> **
quoted by Sankey LJ. .
t (1928) 139 L.T. 50 at p. 32, pr Lord Haldane, 53 per Lord Dunedin, 35 per Lord
Shaw. Note also that the seller must contemplate that the very same goods will
be resold: Kwel Tek Chao v. Br. Traders A Shippers Lid. [1954) 2 Q.B. 459
[I929I 1 K.B. 400. TTib case was not concerned with non-delivery but with a
i , r ... r' >iipn]eat
, , , . i . i. . { in sucb
. , , - , of the
, I ' . , - let price
. . , ^ * -r- I Taylor A Sons
, , , tX.Br. Traders
DEUVERY
327
judgment in Hall & Pint commended itself to him as a reasonable

and sound view of what ought to be the law on the subject of taking
into account sub^contracts in estimating damages arising out of the
principal contract.
Reconciliation of these cases may be based upon the difference

between the general rule, i.e., the first rule in Hadley v. Baxendale,
the market price test, and the special rule, Le., the second rule in
Hadley v. Baxendale, the test of special circumstances.^ This is
certainly what is applicable where there is no market in which the
goods are readily available. As Patrick v. Russo-British Grain Export
Co. Ltd.* shows, where such is the case, the resale price of the goods
is the datum. If there is no market price, said Scrulton LJ.,* the
value must be otherwise ascertained, and a resale price may be some
evidence of such value. But it is clear that the loss of profit on resale
can never be recovered unless the buyer can bring himself within the
second branch of the rule [i.e., in Hadley v. Baxendale\ and can show
special circumstances and a right to special damages as is reserved by
section 54 of the Sale of Goods Act. This indeed is what was allowed
in Leavey v. Hirst* and in Household Machines Ltd. v. Cosmos
Exports Ltd.* Indeed in the latter case, the court went further and
gave the buyer a declaration of indemnity which would cover the
buyer in respect of liability incurred by him to third parties through
the non-delivery by the seller of goods sold by the buyer to such third
parties." The exact extent to which a buyer can recover loss of this
kind, whether actual or potential, even where the seller knows that
there are going to be resales of the goods in question, is open to
doubt. In view of the doubt about the recovery of loss of profit, this
further extension is also rightly problematical.
It must be noted that, where the Hall &. Pirn doctrine (if such it
may be called) does apply, the sub-contracts of which notice is taken
S.GA. 8. 54.
* {1927] 2 K3. 535.
* tbld at p 538. If there is a market then loss of pro6t may still be wavered
(a) if the sale is of specific goods and the buyer has resold those goods; (>) if the
resale contract has the same delivery date as the contract of sale: ibid, at p. 341,
per Scrutton LJ.
" tlW4I K.B. 24.
MI9461 2 M E R. 622. w
* But see Trans Trust SlJi.L. v. DamAian Trading Co. [1952] 2 Q B. 297, where
it was said that damages should be awarded if the liability were meurreo ana a
declaration of indemnity should not be given in advance.
I-- ' ^ . T. f/ugeni
awing such
s, 12lh ed.
P.S.O. 1I*
328
by the court in the assessment of the damages must be contracts in

accordance with the market, not extravagant and unusual bargains. *
Hence in that case the loss of profit was recoverable since the sub*
contracts were in the usual course of business and of the usual type.
In Household Machines Ltd. v. Cosmos Exports Ltd^ the court did
not award the full profit which would have been obtained under the
sub-contract, but only a percentage fixed in accordance with what
was reasonable and usual.
The relevant date
Where the strict market price test is applicable the relevant date
is the date when the breach occurs, i.e., when the seller notifies the
buyer of his inability to perform the contract,^ when the shipping
documents should be delivered, in the case of a c.i.f. contract, not
when the goods themselves ought to have arrived.*^ Thus the date
when repudiation by the seller is acknowledged for the purposes of
assessing damages is the date when the contract ought to have been
performed by the delivery of the goods. An anticipatory repudiation
does not advance the date of performance, as it were, by enabling the
buyer to have the damages assessed in accordance with the market
price prevailing at the date of such repudiation.** Subject to the
necessity for the buyer to mitigate, the damages must still be assessed
with reference to the market price of the goods at the time when they
ought to have been delivered under the contract, as Bailhache J. said
in Metachrlno v. NickoH <6 Knight.^* The language of section 51 (3)
of the Act does not apply to anticipatory breach. It has already been
seen ** that this case, and the language of Bray J. and the Court of
Appeal in Millett v. Van Heek & Co.** make it difficult to know
whether a contract providing for delivery of goods within a reasonable
time, or within a reasonable time after a future date, is a contract for
delivery of the goods at a fixed time within the meaning of that sub-
section. It appears, however, according to the former decision, that
where a time for delivery is fixed by reference to the happening of an
event, there is a fixed time for delivery within section 51 (3).
Re Ilall Co.t Arbltratton (1928) 139 L.T. 50 at p 53, per Lord Dunedm
Supra.
Ashmore A Son v. Cox & Co. [1899] 1 Q.B 436.
t Sharpe A Co v. Nosawa A Co. [1917] 2 K.B. 814; c}. Produce Brokers Co. v.
iVels A Co. (1918) 87 LJ K.D 472.
* See, further, supra, pp 294-296.
>* (192QI 1 KB. 693: on mlci^tion in this respect see Rolh A Co. t. Taysen,
Townsend A Co. (1895) 73 L.T. 628: supra, p. 296

* Supra, pp. 295-296.
IS [1920] 3 K.B. 535; [19211 2 K.B 369.
DELIVERY
329
Factors affecting damages
In this context, as elsewhere, the plaintiffs duty to mitigate his

damages will also be relevant. The nature and extent of that duty
has already been considered. So, too, if the contract fixes a sum to
be paid by the seller in the event of his failure to deliver the goods,
the recovery of such sum will depend, as in other, similar instances,
upon whether this sum can be construed as a penalty or as liquidated
damages, in accordance with the principles discussed in an earlier
chapter.^^
Specific performance
Mention has earlier been made of the possibility that the buyer
may claim, and obtain, specific performance of the contract to deliver
goods. This is only possible, however, where the goods are specific or
ascertained. The meaning of these expressions has been clarified ear-
lier.^* Hence in Re Wait,^^ as already seen, the buyer could not claim
specific performance of the contract to sell the agreed number of tons
of wheat on board the ship in question, because the wheat was not
specific goods, nor had the contractual quantity of wheat become
ascertained by anything done since the making of the contract.
Even where the goods are specific or ascertained, the buyer will
not necessarily obtain specific performance. It is a matter for the
discretion of the court. Though this remedy may be granted whether
property in the goods has passed or not,*' this does not mean that it
will of necessity be granted where property has in fact been transferred.
If the goods are ordinary articles of commerce and of no special value
or interest, no grounds will exist for any special order for delivery.
In such cases damages will fully compensate the buyer.*^ Thus in
Cohen v. Roche ** specific performance of a contract to sell an
antique chair was refused. So, too, in Dominion Coal Co. Ltd. v.
Dominion Iron & Steel Co. Ltd.^^ where the contract was to supply all
Supra, pp 298-300.
Supra, pp 287-288.
Supra, pp 39-41,
(1927] 1 Ch. 606, supra, pp. 35-36 C/. also Thames Sack A. Bag Co. Ltd v.
Knowles & Co Ltd. (1918) 88 LJ.K.B. 585: supra, p 40.

*0 Jones V. Bari of TankerviUe [1909] 2 Oi. 440 at p 445, per Parker J.
yVhiteley v. Hilt [1918] 2 K.B. 818 at p. 819. per Swinfen-Eady MR ; Cohen y.

Roche [1927] 1 K.B. 169 at p. 181, per McCardie J. In USJi. v. Motor Trucks
Ktd. [IW4] A.C 197 it was held that the buyer could not obtain rectification of a
bitten contract and specific performance the contract as rectified.
[1927] I K.B. 169

** [1909] A C. 293.
330
(he coal a steel company would require. Damages for wrongful

repudiation of this contract were an adequate remedy. But in Behnke
V. Bede Shipping Co. Ltd.^* specific performance was granted of a
contract to deliver a ship, because (he ship was of peculiar and
potentially unique value to the buyer. He wanted it for his immediate
use and damages would not have been an adequate compensation.
Where property in the goods has passed to him, the buyer may
have an alternative claim for specific restitution in an action of
detinue. But such a claim is just as dependent on the discretion of the
court as a claim for specific performance. McCardie J. in Cohen v.
Roche pointed out that in the pre-1893 case of Chinery v. Viall^*
it had been decided that, as between buyer and seller, the buyer cannot
recover larger damages by suing in tort, i.e. for detinue or conversion,
instead of contract, i.e. for non-delivery. In the same way he cannot
be better off suing in detinue for specific restitution than if he merely
sued on the contract for specific performance. There was no absolute
right to compulsory delivery by suing in detinue.
Delayed delivery
Late delivery may be a breach of condition. But nothing in th*

Sale of Goods Act specifically deals with the measure of damages
where the seller has delivered the right goods on a date later than that
stipulated. Such a delivery, however, will be wrongful only if time of
delivery has been made of the essence of the contract, in accordance
with the provisions of the Act.*^ It would seem that, if the buyer
accepts the goods, notwithstanding the lateness of the delivery, and in
spite of the fact that he could reject them for breach of condition, he
will be compelled by the Act to treat such late delivery as a breach of
warranty, in which event the damages will be assessed in accordance
with what has previously been said on the subject of actions for breach
of warranty.* From the judgment of the Court of Appeal in Victoria
Laundry (yVindsor) Ltd. v. Newman Industries Ltd.?* the tests for
assessing damages in cases of delayed delivery will be the same as
those in cases of non-delivery or breach of warranty generally, i.e..
2i [1927] 1 K.B. &49.
119271 1 KB 169 at p. ISO.
5 It. * N. 2S3. For mare rrtwit cases on this point ef. Behize Motor
Co y. Cox 119141 1 K.B. 244; JVMMeyT. tiOt. supra; United Dominions Trust
Lid r. Parkway Motors Ltd. 119551 1 W.L.R. 719 where the ngbt of a
hire-purchase to assign was mrolvcd, thus leading to the question of damaS
for conversion against an assignee ot such a purchaser.
T vir..SGA.s 10 (1): supra, pp. 200-201.
Supra, pp. 315-323.

t* 11949] 2 K.B 528.
DEUVERY
331
the first and second rules in Healey v. Baxendale. Thus, basically,

the measurement of damages is in terms of the difference between the
market value of the goods at the contractual time for delivery and
their market value at the time of actual delivery. Sub-sales will be
as irrelevant here as in cases of non-delivery.*
But consequential loss, e^., loss of profit either on sub-sales or on

use of the goods during the period for which the buyer has been
deprived of the goods, expenses incurred by the buyer because of the
delay, compensation to sub-purchasere, etc., all of which may be
recoverable, as already seen, where there has been a breach of
warranty by the seller or a complete failure to deliver on his part,
may also be recovered where the ground of complaint of the buyer is
delay in delivery.*' This will be so where the circumstances permit
the application of the second rule in Hadley v. Baxendale, i.e., where
the seller ought to have foreseen, in the light of the particular facts
known to him at the time of making the contract, that the loss in
question would probably result from a failure to perform the contract
properly on his part. Hence in the Victoria Laundry case the buyer,
a launderer and dyer, was able to recover loss of business profit,
where, because of the sellers delay, the buyer was deprived of the
use of a boiler for some months. The sellers, an engineering company,
knew the nature of the buyers business and could foresee that loss of
such profit would be likely to result from delay by them. But the
sellers were not liable for the loss of particularly profitable dyeing
contracts entered into by the buyer, because the sellers knew nothing
of such contracts. This case clearly establishes the principles on
which damages for delayed delivery of goods may be recovered.**
5. Additional and Alternative Remedies
Misrepresentation
In the previous chapter ** the possibility of claiming rescission of

a contract of sale of goods on the ground of innocent misrepresenta-
tion and the possible position of a party who had been induced to
make such a contract by a negligently made misrepresentation were
** See Mayne and McGregor, op cit., pp. 351-353.
1 Ibid. pp. 353-359; cf. also tupra, pp. 315-322. . , i,;nc tn
[1949] 2 K-B. 528 at pp. 539-540. Note Oral the general principles "
tmtigation of damages, and cl^ms for liquidated damages, as distmrt irom

penalties, apply to claims for delayed deliYcry equally as well as to c^s t^
non-delivery: see, e.g., as to penalties and Lquidated damages, C> .
Enginrering & Shipbuilding Co. Ltd. v. Don Jose Ramos Yzquierdo y CasiantHa
11906] AC. 6.
* Supra, pp. 300-305.
332
both discussed. It was seen that the present scope of the law as
regards both remedies was uncertain. So far as rescission is concerned
it would seem from the decisions in Leaf v. International Galleries*'
and Long v. Lloyd that an innocent misrepresentation not forming
a term in the contract can ground an action for rescission. But such
an action will fail if it is brought after too long a delay or if the
goods have been accepted (within the meaning of that expression as
used and applied in cases of breach of condition under the Sale of
Goods Act). It is not clear whether transfer of properly in the goods
renders an action for rescission untenable. In neither case was this
point settled. If claims for rescission arc to be treated in the same way
as claims to reject goods for breach of condition which would seem
to be the approach of Denning LJ. in Leafs case then it would
appear valid to argue that a claim to rescind a contract of sale of
goods for innocent misrepresentation will be lost if property in the
goods has passed. This might be said to be applying the doctrine of
Seddon V. North Eastern Salt Co.** to such contracts, on the ground
that the buyer ought not be in a better position than if he were
claiming for breach of condition.** In any event, even if a claim for
rescission is still open to a buyer, from what has been said earlier it
is clear that his remedies are strictly limited. In particular he will be
unable to claim damages for any loss caused to him by the misrepre*
sentation. being confined only to an indemnity.** Only if there were
negligence on the part of the seller will he possibly be able to sue, m
tort, however, rather than In contract, as already seen. Changes
would follow from the recommendations of the Law Reform Com*
miticc referred to earlier. But at the present lime the coniracttu!
remedy for innocent misrepresentation is very uncertain in its avail*
ability and very limited in its scope if it is indeed available either in
general or in a particular instance. Tort liability for negligence by the
* IIWI 2 K.a tA.
H95I J W.L.R. 73J. ,
* I 0>. ef. Arttl r. Jay flWIJ I K.B. t/A. Bui II 1 oprt to
hfiSef oMiract cf cf b by t.ê raviine cf
tV doctin* of S^Jani att requi/n i!ui iJse cor.uan be rirmitU if

tor fc'VKfBt cmerfrtenatwn it to be baa\i. Ote of Uk of
csfcj to crtsira^tt of wSe of goojt I lKl if b rot ctosr

<co!-ct njy be uU to be ftecufrU. It It by detnery of the foodi, irsntef
fTcjvrtf o* e.xriejsee e^ !*< f-ieidt?
I!t b 7 t*s rrot be ir:i4tr;rtertjrioo b Pot B
ft-rt ttrn ef tJ* *-'^1 O-ftHort be rnitij <r--'
rreo-.W from u.*if;woi.
*' rr Kf-K'f
ADDITIONAL AND ALTERNATIVE REMEDIES

333
seller may be more helpful to a buyer, but this only arises, if it arises
at all, where there has been lack of reasonable care as regards the
making of the relevant statement.*
Tortious liability
Mention of this leads naturally to the point that, not only for
negligence, but on other groimds, a buyer may have an action in tort
against the seller in addition, or by way of an alternative to his
actions for breach of contract
Thus, although the position where the seller has been guilty of
an innocent or even a negligently made misrepresentation is in doubt,
there is no question but that the seller will be liable in deceit if he
has given a fraudulent warranty on the faith of which the buyer has
entered into the contract. This liability arises irrespective of whether
the warranty is or is not a term in the contract, and despite any
attempt by the seller to exclude applicable conditions and warranties
by the use of appropriate language in the contract. For this liability
is tortious, not contractual. Hence an exclusion clause will not be
construed as covering fraud of this kind. In an action for fraud the
measure of damages is the difference between the real value of the
goods at the time of their delivery and what the buyer paid for them.
Prima facie the highest limit of the buyers loss is the whole extent of
his loss, i.e., what was in the buyers pocket and is now in the seller s.
The price paid is therefore very relevant, by contrast with the situa-
tion in actions in contract for breach of warranty, where the measure
of loss is based on market values and represented values.^* Moreover,
it would seem to be clear that consequential loss which clearly results
from the fraud is recoverable, i.e., the extent to which the buyer is
out of pocket. But this will not 'include loss of profit if the goods had
been what they were represented to be and on the faith of this the
buyer contracted with a sub-purchaser to make a profit from such
resale.
Other fonns of tortious liability that may be relevant in cases of

sale of goods are conversion and detinue. Actions of these kinds
may be maintained in appropriate circumstances where property (or
the right to possession) has been transferred to the buyer under the
oantract of sale. However, where such an action can be brought
* As lo the possibility of an action for nesliswl misrepresentation, see supra. PP
304-305.
See UcConneU v. IVrtght {I903J I 0. 546.

** C/. Mayne and McGregor, op. rff., pp. 800-S03.
334
against a seller, who has failed to deliver goods contracted to be

delivered, or has sold them wrongfully to a third person, after
property therein had been transferred to the original buyer, it is clear
that the buyer cannot recover greater damages by suing in conversion
than for breach of contract by non-delivery**; nor can he obtain a
decree of specific restitution by suing in detinue where he would not
have obtained a decree of specific performance bad he sued on the
contract of sale.**
5 U. A N. Tk*
INDEX
Acceptance
^^309^ condition, after, effect of.
buyers duty as to. 59. 195, 220

uty of, effect of breach, 282
emulation of goods and, 223 et sea.
goods, of, effect on implied condition
as to right to sell, 102, J03
approval or sale or return, on, of, 79
meaning of, 221, 224
non-acceptance, action for, 283. 286
ft seq,
msure of damages in, 288

mitigation of damages in. 298
effect of. 220
lability for. 221
refusal of, 220

under Sale of Ooods Act, 224
Action
breach of contract, for, 53

wan^ty for, M7. 310. 312 314
delayed delivery for, 307, 330
ffllsrepresentatlon, for. 283
non-a^ptance, for, 283, 236
tnarfcet price, absence of, 296
relevance of, 293
measure of damages in, 296
damages in, 296

non-delivery, for, 307. 323
P'- foA 53. 283 et seq.
wnat u recoverable in, 285
Agency
S; '' >.
dislmgilished from. 6
Agent
^^îssion, 6
rights of as unpaid seller 2^1

Astinguished from buyer 6
meamng of, 6-7 ^ '
mercantile, definition of. 112

^POsmon by. 112 et sea
possession of. 113, 114 ^
re/ej^ce of good faith in sale by,
J* by, in ordinary course of

DUsmess, US
necessity, of, 128
Acent conf.
scUer of goods, where, lien of if

unpaid, 259
Agreement to Sell
breach of, remedies for, 23
deffued, 4
future goods, of, 34
passing into sale, 23. 51
sale, distinguished from, 4, 21-23, 57
unascertained goods, of, 43
Apparent Owner
disposiuon by, 108-112
Appropriation
delivery as. 89-90
goods of, to contract, 36, 43
meaning of, 84-88
Approval.
sale on, 74, 78-83

Ascertained Goods
frustration of contract for sale of, 43
property, transfer of, in, 64-83
specific goods, dulingtushed from, 40
specific performance of contract for
sale of. 43
Assent
appropriation of goods to contract,

84, 57
Assignment
contract of sale, of. 18 n.

future goods, of, 35-37
AuenoN >
bidders, agreement between, at, 32

fraud at, 32
sale by, 27
seller, bidding by or on behalf of,

at. 31-32
Authority
apparent, contrasted with estoppel, 130

Available Market
absence of. effect of, 296
meaning of, 239 et seg.
relevance of in assessment of damages,
293 et seq.
Bailee
buyer or seller as bailee for other, 240

deliveiy to. See Deuvery: Carrier.
sellers ben when he bolds as, 259-260
Bargain and Sale
included In tenn sale. 51
336
INDEX
Barter. See Exchange.
Biu. OF Exchange
delivery of, with bill of lading, effect.

92-93
dishonour of, 92
Biu. of Lading
disposal, reservation of, by 90-93

meaning of. 91
return of, 92
transfer of. effect of. 2M-266

Bill of Sale
law as to, saving for, 10
mortgage of goods, as, 9-10
Breach of Condiuon
acceptance, effect of on, 309
breach of warranty, as, election to
treat, 182
passing of property before, effect, 309,

310
Breach op Cqntbact. See Achon:

Damages
Breach op Warranty
action for, 314
breach of condition, as, election to

treat, 182
damages,
action for, right to, 314 ei seg.

measure of, In action for, 315 et sea
price, diminution or extinction of,
from. 314
Bulk
sample, comparison with, opportunity

for, 177
correspondence with, need for, 176

Business Efficacy
doctrine of, scope and effect of. 149

Buyer
actions against, 283 et seq

actions by, 311, 314, 323
capacity of, 24
damages, action for, by. 307
delivery to, 203 et seq.
duties of, 281
election by, compulsory, as to condi-

tions, 183, 198
voluntary, as to conditions, 182

examination of goods by, 223-226
insolvent, when, 259
neglecting to take or refusing deliveiy,
281, 286. et seq
payment and tender by, 229 et seq.

possession, in, sale by, 123 et seq.
effect of. 127
who is, 126, 127
rejection of goods by, 307
remedies for breach of duties by,
seller's, 280 et seq.
remedies of, 306 et seq,
return of rejected goods by. 228
Buyer cant.
sub-sales by, effect of, 262-266, 272,

318-322, 326-328
C.LF. Contracts
appropriation of goods to, 87-88
ri^t to reject, buyers, under, 227
sellers duty to insure, under, 219
Capacity
buy and sell, to, 24-26

Carrier
buyers agent to receive goods, 216

delivery to, 216 et seq.
lien of, 273
right of, to freight, on stoppage w

transitu, 273
transfer of possession by, 217

Ounce
sale of. 39, 45
Character of Goods
exclusion of undertakings as to, 186
et seq.
express undertakings as to, 133 et seq

implied undertakings as to, 148
waiver of undertakmgs as to, I8I
seq.
Charge or Other Securtty

Sale of Goods Act does not apply to,
10, 31
OtOSES
in action, distinguished from goods, H

Codifying Statute
interpretation of, 4
CoUATERAL CONTRACTS
collateral terms, contrasted with, 146
el seq.
nature of, 146
representations, contrasted with, 139

CbtLATERAL TERMS
collateral contracts, contrasted with,

156 el seq, _ .
exclusion of undertakings, in relation

to. 292
Common Law
innocent misrepresentation at, 301

saving for, 3, 301
special powers of sale, under, 128-129

Condition: CoNomoNS (in Contracts
OF Sale)
breach of, as breach of warranty, 201

remedies in respect of, 308 el seq.
cdiaracter and quality of goods,
remedies in respect of, 313, 314
conditional contracts of sale, 4, 18
conditions precedent, distinguished

from, 297
INDEX
337
CoNomoN: CoNDniONs (in Cownucrs

OP SAiE)-ôn/.
delayed delivery, remedies in respect

of, 330
description, as to, implied, 151

fitness for purpose, of goods, implied,
as to, 158 et seq.
contents of, 162
exclusion of, 173
historical development of, 140
implied. See Implied Conditions.
meaning of, 16, 141
precedent or subsequent, 19-21, 30
quality and fitness, as to, implied, 156
nght to reject for breach of, loss of,
309 el seq.
&le of Goods Act under, 142

title, as to, remedies m respect of,
303 el seq.
exclusion of, effect of, 312

warranty, distinguished from, 142-3,
197
when to be treated as, 57
Condition Precedent
condition in contract, distinguished
from, 136 n. 4. 197
fst^Ption of goods, contrasted with.
different kinds of. 197

exclusion of, 193
frustration, effect of, on, 199
meaning and effect. 19
waiver of breach of, 198
CONDITtON SUBSEQttEI^
meaning and effect, 19^20
Ct^moNAL Sale Agreements
'* i26 buyer in possession,
Sale of Goods Act and Hire-Purchase

Act, under, 9
Consideration
failure of, effect of, 311
money as, 6, 14, 29
03NSTRucnVE DELIVERY
mstances of, 204
CoNSTRtrcnvE Possession
examples of, 258
t^NTRACT OP Sale
abmlute and conditional, 15 et seq.
assignment of, 18
distinguished from novation, 18
bilateral, 6
breach of. See Action: Damages

capacity to make. See Capacity:
Parties
conditional. 4, 18 el seq.
transfer of property by. 74-83

Mnsideration for. See Consideration-
aenmtion of, 4
executed and executory, 22
Contract of Sale coni.

formation of, 26 et seq
frustration of. See Frustration
other contracts, distinguished from, 6
passing of property by, 6
rescusion of. See Rescission.
transfer of property and nsk by. See
Risk : Transfer of Property.
unconditional, transfer of property by,
67-74
validity of. 31
variation of. See Variation.

waiver of. See Waiver
Contracts Other Than Sale
distinguished from sale, 6
CoNiRAcruAL Terms
representations, contrasted with, 137
Conversion
buyer, availability to, 51, 306 n 1, 333

effect of satisfied judgment in, 7
Cb.NVEYANCB
included in sale, SI
Corporation
contracts by, 31
Credit
absence of, sellers lien in, 258-259

expiry of, sellers lien on, 259
provuion for, exclusion of, on buyers
insolvency, 259
sale on. 9. 258
Credit Sale
agreements within Hire-Purchase Act,
distinguished from hire-purchase, 9

Custom
Usage, when effective, 148
available market, relevance of, to, 293

et seq.
breach of warranty, action for, 307,

310, 312. 314
delay^ delivery, for, 307
evidence, acuon for non-acceptance,
in. 297
factors affecting, 322

innocent misrepresentation, for, 301,
3W
interest as, 28S
bquidated, distinguished from penalty,

287
m relation to breach of warranty, 322

market price, relevance of to, 293
et seq.
exclusion of. 296

measure of,
action for non-acceptance, in, /oo

action for breach of warranty of
quahty, in, 3IS
338
INDEX
fnitJfition of. 29^

bfca:h cf warranty, in, J22
non-?wf>{ince. action (or. 283 2S6
non-deliTcry, action (or, 3OT, 323
tncarare cf. In. 288
pjyaVlc to ub-purchaMf. relrranct In
action for t^cach of warranty of
cjwiliry. 321
rccii!. 2-8-9
ipcafic rwrfontunce in addition to, 22

effect of in action for breach
of warranty of quality, 318 t arq.
all
jooJi diitinctiiihfd from, II

Drcrrr. Sre raii-o.
DruY
drhrery. in, effect on IndJence of lUk.

239
Drimiiiir StiTt
rooJ in. 67. M. 70-71. 72. 7i-76
fneanint of. 70
DrirvtiY
rrrorriation at, 16. f%90

Horf Of baiJer. to. 87
Kryer'i djty at to. 57
b7TJ* to rek<t. 2f9
etc5jk*nf7 ebute. effect of on. 210
B-Jff Sate of Ooodi Art. 2!l
carrier, to. D, 216 ti trq
effrrt on teffer't Lm. 261
effect on ttopTtff In tfa*tl:u. 27
cwt'furite." 2>i
ikbyol. Bt'k'n for, 3ff7. 3^

d-xu-w'*, of. djry at to, 274.3
in rrb'i-n to. 227. 22l
etnrr e^, 2^1
l?rr-?f>rr. v-i-ef VrJiyfn CoT . -iefcUI

CrtSr. V,
if. 211 e* a<q

rf. 2l
r.-VkI<.r*y, a.-t!**n fw, 27*. 377, J2I

of dr-rrin in. 324
'r tf miZrra
tf.'r < 221
ft, 1,*..' nr}. *f r*1 fr.f'* tn.
tn 271
**
.r 2?
nf r. on '-CJW/*
Deuvtay con/.
symbolic, 2W
third person In possession of {oods,

where. 2(M. 203
time for, 207
wrone quantity, of, 208
DrrosiT
part-payment as. 232
DtSOtlPTlO*!
condition as to as condition precedent,

\V>
correspondence of poods with, 16. 154

implied terms as to, 151
aale of poods by. 84
meaninp, 151
merchantable quality. Implied cov

dltion as to, 166
transfer of property In, 84-90
DrsTai-CTtos or Tmvo Sotn
after apeement to sell, but before
ruk pallet. -W. <7-47
before tale. 44-47
art also Risk: rratsiirvo or Goods
DmaioeipoN
poods in t/ansit, of. rules as lo. 237

DmviT
buyer. aralbbiLty to, 51, 506 n. I,

33)
effect of utiified )gdrnent In, 7

fatfant. haSlity of. in, 26
DtsKwu
4esera'ion of of, 9<>-93
Dorr-vr.vr or Tme
rvarl-p. 2M
pMsesiion cf. lifchti ariilnc from. 268

eCcft l.en. effert cf dmfmts wlA
CO. IM-S
ttcpfup* In rrcnif.'M. effect of desle'P
wrh e*c. 272

traosfre of, M
pi^*>n iKapadated by. uir fa. 27.
Ibwf t
*ret. sasba for. 3
Ott; O-ITTS
h*n.S cf. rr-wtfv f-r.
detsrry. In reipv-l ef. 721
fV ki rnpr.s cf. rrîes cf b-rrrr.
t wWfirss*!!
fes. '.aS^t fcs 17
Pjurr tst treeuM
*- 1.1 r.s. y
bwere* fetr
l.t >1
INDEX
339
Equitable Doctbines
appLcation of, under Sale of Goods
Act. 3. 35-37
future goods, on sale of, 35-37

Equity
innocent misrepresentation, remedies

for, 300-301
saving of, after Sale of Goods Act,

3. 301
Estoppel
apparent authority, contrasted with, 130

conduct, by, 109
negligence, by, 110 et seg.
owner, against, where goods sold by
another. lOS et seg.
Sale of Goods Act, under, lOS

Evidence
damages, action for non-acceptance, in.

297
oral, to elucidate a written contract.

29
Ex Ship CoNnucr
sellers duty to insure goods, 219
Examination
acceptance and, 223 et seg

opportunity for, sellers duty to pr^
vide, 223
reasonable opportunity for, what is,

224
Exchanob
sale, distinguished from, 14-15
ExausiON
fundamental term, in relation to. 188

et seg
performance, as applying to, 233 et

seg.
rights of parlies, 179-180, 1S6 et seq.

waiver, distinguished from, 181
Expenses
dehvery, of, 208
FO.B. CONTEACTS
sellers duty to notify buyer under, 220

Factors Act
buyer in possession, disposition by, 123

et seq.
eSect of, 127
construction of, scope of, 116

dispositions under, 112 et seq , 115, 121
et seq.
mercantile agent, disposition by, 112

et seq.
saving for in Sale of Goods Act, 112

seller in possession, after sale, dispo^
tion by, 122-123
sellers hen, effect of on. 264-265

stoppage In iramitu, effect of on, 272
Failubb of Consideiution
effect of, 311
False Pretences
larceny, distinguished from, 114, 118

obtaining by, voidable title created by,
118-121
Faults
sale with all, need to correspond with

description, 186-187
Fitness of Goods
See Quality of Goods: Goods.
Forfetiure
deposit, of, 232
FltAUD
effect of, 17, 28, 31
remedies for, 31
FlUUDULENT MiSREPRESENTATTON
meaning and effect of, I37-13S
remedies for, 300
Froctus
industriales, II
naturaies, 12
Frustration: Impossibility
conditions precedent, effect on, 245
doctrine of, scope of, 242
when apphcable, 243 et seq.
general effect of, 246 et seq.
Law Reform (Frustrated Contracts)

Act, under, 17, 48, 246 et seq.
risL. compart with, 235 el seq.
&le of Goods Act, under, 243 et seq.,

247-248
Fundamental Ttaun
concept of, 188-189
exclusion of, 189 et seq
Future Goods
See Goods.
Generic Goods
meaning of, 83-84
property passing of, in, 85-87
Gift
sale, distinguished from, 6

Good FAnn
defined, 115
relevance to disposidon by mercantile

agent, IIS
Goods
acceptance of, 195, 220 et seq.

ascertained. See Ascertained Goods.
diaracter and quality of,
exclusion of undertakings as to, 186
et seq
express undertakings as to, 135 et

seq.
340
INDEX
Goods cont.
character and quality of eont,

implied undertakings as to, 148 el
seq.
waiver of undertakings as to, I8I ei

seq
choses in action, distinguished from,

II.
defined, 10 el seq., 33
deliverable state, in, 67, 68, 70-71,
74-76
delivery of, 195, 203 el seq

destruction of, eOect of, 243 el seq.
examiaatSoD of, 223-226
existing, 33-33
fitness for purpose of, 158
future. 33-35, 84-90
generic. See Genebic Goods.
land, things growing on, distinguished
from, 11-12
merchantable quality of, 166

fitness, compared with, 174
payment for, 195, 229 et seq.
perishable, right of resale of, 275-276
perishing after sale, 17, 43 ei seq.
before sale, 17, 43 el seq

potentially existent, 37-38, 87
rejection of, effect on stoppage In
transitu, 270
services, distmguisbed from, 12-14

specific. See Specific Goods.
supplied under contract of sale, mean*
mg of. 157
unascertained See Unascektained
Goods.
Orowino Crops or Trees

sale of, n-12
Hire

Hire-Purchase
hirer cannot pass title under, 8

implied conditions as to quality and
fitness. 9
nature of, 8
rights under, 8
Hours for Delivery
reasonable, must be, 203
lUECALITY
effect of, 31-32
party, innocent, remedies for, 31

Implied Contutions
course of dealing, from, 16
custom, from, 16, 29
description, as to. 16, 37
Implied Conditions eoni.

exclusion of, 16, 55
quality and fitness, as to, 16, 57
right to sell, as to, 5, 16, 54 et seq , 94
acceptance of goods, effect of. 102-
103
application of, 99-100

express exclusion of, 101-102
scope of, 95 et seq.
sample, as to, 16, 21. 57
tide as to, 54 et seq.
trade usage, from, 16, 29
Implied Terms
custom or tacit agreement, from, 16,

148 el seq.
description, as to, 151 et seq.
merchantable quality, as to, 166 el seq.
contents of, 168-173
exclusion of, 173-174
quality and fitness, as to, 156 el seq.
Sale of Goods A, under, 151 el seq.
sample, sale by, in, 176-178
statute, by, 150
title, as to, M el seq
Implied Warranty
freedom from incumbrances, as to, 105
quiet possession, as to. ]03-](M
iMTOSSniLTTY
agreement to sell, io, 47-49

effect of, 47^9
meaning of in Sale of Goods Act, 47-

49
See also Frustration

Industrial Growino Crops
included in goods, 11-12
Infant
capacity to buy and sell, 24 et seq.

liability for necessaries of, 24 et seq.
Innocent Misreprescntation
meaning and effect, 138
recommendations of Law Reform Com-
mittee on, 303
remedies tor, 300-303
specific performance, as delerice to
action for, 303-3M
Insolvency
re-sale on buyer's, 274
seller's hen on buyers, 256
stoppage in transitu on buyer's, 266
what constitutes, 260
Instalments
buyer not usually bound to accept,

211-212
contract for delivery by, 211-213

delivery by, under Sale of Goods Act.
213-214
part-payment, 232
twice payable by, 214 el seq.
INDEX
341
IS'StJRANCB
sea transit, in cases of, 219-220

sellers duty as to, 21S-220
iNTOmON
parties, of, principles for ascertainise,

29, 65
property, to transfer, 64-67

Ktuiest
price on, tiability to pay, 285
Jus DlSPOVDrtJI
meaning of, 90
reservation of, 90-93
Land
excluded from *' goods, II

sale of things gto'vtne on, 11-32
Lakceny
false pretences, distinguished from,

114, 118
Leaseiiolps
goods, disdngnuVied frera. It

Lmt
carrier, of. See Camuo.

seller, of. See Unpaid Soxu's Ltcr.
Liquidated Damaged
non-deLvery, in action for, 329
penalty, distinguished from, 287
warranty, in relation to breach of. 322-
Maxket
available, meaning, 289 et teq

lack of, eETect on measure of damages.
296 el seq.
overt, sale in. 116-118

Pn. rule for measure of damages.
289 et seq., 324 tt seq.
Market Overt
defined, 117
sale m, 116 et seq.
Market Price
ascertainment of, time for, 294-295

exclusion of. 296-298
measure of damages, as, 293 et seq.
"^hry, relevance of, in action for,
relevant date of. in action for non-

delivery, 328
Uniform Commercial Code, under. 289

(n. 40)
warrMty of quality, relevance of, in

acuon for breach of. 320-321
Measure op Daxiaoes. See Damages.
MEASUtUNO
contracts involving, 74, 77-78

Mental Incompctency
person sutfering from, sale to, 24
MotCA-NTTU: Agent
definition of, 1I2-II3
disposition by, 112 et seq
relevance of good faith to, 115
possession of, 1I3-II4
sale by, in ordinary course of business,
115
MERatANTiSLE Quality
fitness, compared to, 174-175
implied condition as to, 166 et seq.
content of, 168-173
meaning of, 169 et seq.
tale by sample, implied condition of.
In. 175
MtSRtTRESENTA-nON
action for. 283

effect of, 17
exclusion of undertakings, in relation

to. 192-193
(laudulent. 137-138
mnocent, 137-138
effect of, 300 et seq.
mistaie, as cause of, I3S (n 9)
oeghgeni. 35, 138-139, 304-305
remedies for, 300, 331-333
see also. Fraud: Fraudulent Mis-
representation: Innocent Mis-
representation: Necucent
Misrepresentation.
Mistake
effect of, 17. 27-28, 45

MmCATioN OF Damages
duty as to, 298 ef seq.
non-delivery, in relation to action for,
329
warranty, in relation to actioo for

breach of, 322-323
Mixed Goods
delivery of. effect of, 211
meaning of, 211
Money
consideration, as. See Price

whether goods, 10, 11
" Mowni
meaning of, 206
Mortgage
registration of, 9
sale, distinguished from,
8. 9. 21. 31. 54
Necessaries
definition of. 24
342
IND^
Necessaries cont.
infant, supplied to, 24 et seq.

Neoiicence
irrelevance of to liability under implied

conditton as to fitness of goods for
purpose, 163-164
Negligent Misrepresentation
effect of. 138-139, 304-305
Negotiable Instrument
goods, distinguished from, 11
Notice
actual or constructive, 74-75

deliverable state, of, 74
what IS, under Factors Act, 115
Novation
assignment, distinguished from, 18
Offer
acceptance of, 27
OpnoN TO Buy
conditional sale, distinguished from,
8 . 21
Ownership
acceptance, connection with, 222-223
apparent, seller with, 103, 109
seller, of, acts inconsistent with, 226
el seq
transfer of, 52 el seq.
Part Owner
sale by one to another, 4
Parties
capacity of, 24
drunkards, 24
infant, 24 et seq
mental incompeteocy, 24
Passino op Property
See Transfer op Property.
Pawnbroker
powers of sale of, 128
Payment
buyers duty as to, 59, 195, 229-230

breach of doty of, remedy for, 281
delivery and, 67-68
instalments, in, 214 et seq.
non-payment, action lor, 283 et seq.
what is recoverable in, 285-286

part-payment, effect of, 232
performance of obligation as to, 231
el seq.
sellers hen, effea of on, 258

statutory provisions as to, 229-231
time of. 15. 206. 230
when due, 230
set oho Price.
ItolALTY
liquidated damages, distinguished from,

287
Performance
buyer, by, 195
content of, 58
duties as to, 195 et seq.
factors affecting, 232-233 ei seq
impossibility of, 242 et seq
rules of, modification of. 53
seller, by, 195
Perish
meaning of, 44
Perishable Goods
rc-saie of, on buyers default, 275
PERtsHiNO of Goods
effect of, 43 et seq
Place
delivery, of, 207

examination, for, 224
Pledge
buyer in possession, by, under Factors

Act, 121, 123 et seq.
sale, distinguished from, S
seller ui possession, by, under Factors
Act, 121 et seq.
Possession
buyer in, sale or pledge by, 123 et seq.

effect of, 127
who is. 126-127
buyer or his agent, of, effecting seller's

Ueo. 261-262
buyer's right to. 68

coDsmicuve, 204, 258
cootraeu passing, 8
meaning of, 125-126
property, distinguished from, 68
resumption of, right to, by stoppage
in transitu, 266
retention of, by seller, 31
nght to, distinguished from property,
195-196
seller in, sale or pledge by, 122-123

symbobc, 2(M, 258
transfer of, by delivery to carrier, 217
Post
deGvery by, 88
Price
action for, 64, 283 el seq.
what is recoverable in, 285-286

ascertainment of, 29, 77-78
breach of duty to pay, remedy for, 281-
282
foreign currency, when in, 286

freedom to determine, 30
money, must be expressed in. 6. 14.^
payment of, buyer's duty as to, 195,
229-230
tnitalments. in, 214 et seq.
INDEX
343
PiicE <(jnr.
payment of, buyeri duty a* to~coii/.

resemation of property until, 66
sellers L'en, efiect of on, 238
statutory provisions as to, 225-231
lime for, 15
when due, 230
performance of obligation as to, 231

et seq.
reasonable, 29, 30
recovery of by buyer, 310-311
resale, on. agreement fixing, 30
reservation of property by seller until
payment of, 66
subsûently to be settled, 29
third party, fixed by, 30
valuation, facd by third party, 30
EaiNapu. AND Agent
saving for hw of, 3
Property
compulsory transfer of. 7

consideration, as, 95 ei ttq.
definition of, 3, 52-53
gwral and special, distinguished.
passing of, elTect on right to reject,

309-310
possession, distinguished from. 195-196

pwession, right to, distinguished from,
potential, 37-38
price, consideration for, as, 4
ruk, connection srith, 53. 63, 236-237
prima fade goes with,
transferred with. 237
statutory exceptions, 239-240
sale, as essence of, 8-10
tide, contrasted with, 95, 97-98
transfer of, obligation as to, 98-99
acceptance of goods, effect on. 102-
103
express exclusion of, I0I-102

ste aUo Transfer of Property.
Purchaser
innocent, 112, 115, 118, 129-131

Purpose
goods, fitness for, 158 i seq.
compared with, 174-
*^hÛble quality, in relation to,
parucular, goods required for, sellers

knowledge that, 159-161
QuAim
implied conditions as to, 16

Warranty of, breach of, action for, 314-
315 et seq,
measure of damages in. 315

sub^sales, effect of, on, 318 et seq.
Quii-rnr of Goods
exclusion of undertakings as to. 186
tt seq.
express undertakings as to, 135 et seq
fitness for purpose, implied condition
as to. I5S-I62
Identity, distinguished from, 187-168
implied undertakings as to, 148 et seq.
meaning of, 168
merchantable, 166 et seq
sample, in sale by, 176-178
waiver of undertakings as to, 181
et seq.
QOAKjnY
wrong, delivery of, 208-211

QOASt-CoNTRACr OF SaLB
sale, distinguished from, 7-8
Quasi-Lien
meaoing. 257
when arising, 257
Qoicr Possession
implied warranty s
REASONABU!
price. 7. 29-30
time, 78. 79-83
Reiect: Rejechon
approval or sale or return, on, 78, 79
buyer, by, 307, 314
buyers right to, exclusionary clause,
effect of on, 210
delivery of wrong quantity, on,
209-210
Sale of Goods Act, under, 211

condiUon, for breach of, 53, 308-309
right of, terminating with passmg of
property, 64
loss of, 309 et seq.
sale by seller without title, effect
of on. 311 _
stoppage m transitu, effect of, on,

270-271
wrongful, effect 6f, 221
when, 220-221
Remedies
buyer, of, 306 et seg., 331 et seq

charaêr and quality of goods, m
respect of, 313-315
misrepresentation, for, 300 et seq.
non-acceptance, action for, 286 et seq.
measure of damages in, 288 et seq

non-delivery, m respect of, 323-324
personal, for breach of contract, 280,
283
price, action for, 283 et seq.
344
INDEX
REMEDtES COnf.
"real, 251 el seq.

lien, 256 el seq.
nature, 251
personal remedies, distinguished

from, 280
resale, 274 el seq.
scope, 253 el seq
stoppage m transliu, 266 el seq.
Uniform Commercial Code, under.
255-256
vhen arisiog, 252, 280-281

title, in respect of duties as to, 308
Representations
construction of, 143 et seq.
contractual terms and collateral con-
tracts, contrasted with, 137 et seq.
nature of, 135
Repudiation
non-acceptance as, 281
wrongful, effect of on seller as remedies
201 ei seq.. 221. 234
when constituting, 220-221
Resale
common law, at, 274-275

damages for non-acceptance, effect of.
on. 29(W91. 29&-2?7

delayed delivery, relevance of to action
for. 331
effects of, 276 el seq.

exercise of right of, 276
mitigation of damages, as, 299
non^lellvery. relevance of to action for,
326 et seq.
right of, distlngubbed from power.

252, 274-275
remedy o! unpaid seller, as. 252,

274 el seq.
Sale of Goods Act. under, 275

Uniform Commercial Code, under. 279
warranty of quality, relevance in action
for breach of. 317-318
Resale IhticES Act
maximum prices on resale under, 30
mmimum prices on resale under, 30
Rescission
agreement of parties, by, 17

availability of, 302-303
buyer, by, for misrepresentation, 331
332
equitable remedy of. 301

recommendations of Law Reform Com-
mittee on, 303
Restricttve TkADB PRACncis

Act of 1956, effect of, 30
Rennw
sale Of. 74. 78-83

Right to Sell
implied condiuon as to. M et seq.

Rioirr TO Seu. eoni.
Implied condition as to conf.

actrptaflce of goods, effect on, 102-
103

scope of, 95 el seq.
Risk
accidental loss of goods before passing

of. 44
agreement, effect of, on, 237 et seq.

bailee, where seller or buyer, 240
common law as to, 236-237
delay by seller, on, 239
frustration, compared with, 235 el seq.
meaning. 236
prima fade passes with property, 53

sea transit, in cases of, 239
sialutory provisions as to, 237
transferred with property, 237
statutory exceptions. 239-240
Uniform Commercial Code, under,
240-241
Uniform Sales Act, under, 240

Roman Law
title in, 56
transfer of property, as to, 52
agreement to sell and, 4

approval, on, 74, 78 el seq.
auction. See Auction Sale.
buyer in possession, by, 123 et seq.
effect of, 127-128

chance, of, 39, 45
contingwcy, on, 38-39
description, by, meaning, 151-152
merchantable quality, Implied
condition as to, in, 166 el seq.
distinguished from agency, 6-7
agreement to sell. 4, 22-23
exchange, 14
gift, 6 I
hire, 8
hire-purchase, 8, 9
mortgage, 6, 21, 31
option to buy, 8, 21
pledge, 8, 31
powers of, common taw and statutory.

128
quasi-contracts of, 7
return, or, 74, 78 et seq
sample, by, meaning, 175-176
seller in possession, by, 122-123
seller wilhoui title, by, 106 et seq
transfer of property, as, 5
voidable title, under, 118 et seq
Sals op Goods Act

eê of hw, as. 3-4
criticism of, 49-50
INDEX
345
Saib op Goods Act conr.

cjclusion of provision!, 4. 46, 48. 37.
79
ipecial statutory or common law

powers of sale, savins for, 128
Sau on Approval. See Sale.
Sale or Return. See Sup

SA itPLOC
comparison of bulk with, 177

correspondence of goods with. 21. 17&-
177
merchantability of bulk in sale by. 177-
178
le by, 173 ei seq.

aprrtmation of Sale of Goods Act,
implied condrlions In, 176 et eq.
Seal
contracts under, 31
Seller
agent or bailee, lien of, as, 239-260

deliver goods, duty of. to. 193
msurc goods, duty of, to, 219
meaning of, 232
mitigation of damages by. 298-300

Botify buyer in f.o.b. contract, duty
of, to. 220
personal remedies of. 280 et seq,

possession. In. sale by. 122-123
rl remedies of. 231 et itq.
right to sell, implied condition as
(0, 94 et teq.
of goods, effect on,
102-103

scope of, 95 et teq.
mipald, rights of against goods, 251
et seq.
1^01 f>y
Sellers Ljen. S'ee Unpaid Sellers Lien.

Services
goods, distinguished from, 12-14

Smi'ERABLE Contract
instalment deliveries, 183, 211-216
lots at an auction, 27
Shares
goods, distinguished from, 11

SPEcrnc Goods
goods, distinguished from.
defined. 39
discussed. 39-43. 69-70

4U
in. 42. 64 et seq . 74

'^J^ÎjWore sale complete. 44 et
SPEOnc Goods conL

^cific performance of contract for
sale of, 43
Spccapic Performancb
non-delivery, in cases of. 329-330
remedy of, 22, 307
apedfie or ascertained goods, on sale

of. 43
Statutes
application of other, 3
Stolen Goods
revesting of property In osrner of, on

conviction of thief, 117-118
Stoppacb in Transitu
exerase and effects of, 273
origins of, 267-268
remedy of unpaid seller, as, 232
resale after, 278-279
right of, 2M et seq
iransiL duration of, 268-271
unaffeanl by delivery to carrier, 261
when available, 266
exercisable, 268
lost. 271-272
Sub-Sals
damages for non-acceptance, effect of

on. 299-291, 296-297
delayed delivery, relevance of to action
for, 331
mitigation of damages, by seller, as.

299-300
non-delivery, relevance of to action

for, 326 et seq
stoppage in transitu, effect of on, 271-

272
unpaid sellers lien, effeet of on, 263-

265
warranty of quahty, effect of in relation

to action for breach of. 316 et seq.
Tender
delivery, of, improper, under Uniform

Commercial (^de, ^
Terms
certainty of, 28-29
collateral, contrasted with collateral

contracts, 146 ef seq.
construction of, 28-29
contractual, contrasted with represen-
tations, 137-138
description, as to, impL'ed, 131
fitness of goods for purpose, as to,
implied. 138 et seq.
fundamental, 188-191
implication of, 29
impUed by custom or tacit agreement,

29. 148 el seq.
implied by statute, 150-151, 178-179
346
INDEX
I^RMS eont.
implied under Sale of Goods Act,

151 el seg.
merchantable quality, as to, implied,

166 er seg

quality and fitness, as to. implied,
156 el seg
sale by sample, implied in, 176-178

settlement of, 28-29
Testino
contracts involvine, 74, 77-78

Theft
See Larceny: Stolen Goods.
Time
construction of stipulations as to. 200

delivery, for, 207-208
descnption or condition precedent. 200-
201
essence of contract, when, 200

month, meaning of, 206 (n. 5(0
reasonable, 78, 79-83
Title
duties in respect of. 303

exclusion of conditions as to. 312
real and metaphorical, contrasted, 129-
130
remedies for breach of duties as to, 303

sale by seller irithout, 106 et seg.
seller, of, 94 el seg.
transfer of. See Transfer op Tine,
voidable, sale under, 118-121
Tortious Liability
seller, of. 33><334
third parties, of, 306 (n. 1)
Tradino Stamps
whether goods, 1 1
TRANSFER OP Property Between Seller

AND Buyer
compulsory, 7
conditional contract of sale, in, 74-83

efiects of, S3, 63 et seg.
future C^s, of, 35 el seg.
in goods, by or to infant, 24-25
presumptions as to, 67 el seg.
right of disposal, reservation of, as
aflects, 90-93
tale, on, 51, 63 et seg.
on approval or return, 74, 75-83

specific goods, of, 39. 64 et teg.
third party, to, by buyer, 68
time of, presumed. 15
unconditional contract of tale. in. 67-74
Transfpb op Risk
prima fade passes with property, 22

See also RiSK.
Transfer op TmE
general rules as to, 52 ei seg.
Tuhstt
See Stoppage in Transitu.
Unascertained Goods
ascertained goods, distinguished from,
40
generally, 39 et seg , 83 el seg.

genus, as a, 41
meaning of, 40
passing of property in, 43, 83-90

sellers hen, and, 263
unidentified part of a specified whole,
40-41
Uniform (3oMMERaAL Code

drafting, 10
effect of. 10
goods, defined, 10
price m, 14
property and title, no distinction

between, 52
real remeês, 255-256
sale of goods on approval, S3
rale or return. 83
title, transfer of, 6S, 74
warranty under, 148, 151
Uniform Sales Act
drafting. 10
effect of, 10
perished goods, under, 50

price in, 14
property and title, distinguished, 52_

properly, presumptionv as to passing
of. 65-69
rale of goods on approval, 83

rale or return, 83
warranty under, 148, l5l
Unpaid Seller
defined, 231
legal powers of, 252 et seg

lien of, 256 el seg.
non-acceptance, action for, by, 286

et seg.
personal remedies of, 280

price, action for, by, 283 el seg
resafe, ngfit of, 254 et seg.
rights against goods. 251 et seq.
stoppage In traruliu, right ft ^
et seg.
where agent or bailee, 259-260
Unpaid Sellers Lien

arising, when, 250 et teg.
effects of, 266
lost, how, 261 el teg.
nature of, 252. 256 el teg.
part delivery, after, 260
provisions of Sale of Goods Ad as

to, 258 el seg.
rcule after, 278-279
seller agent or baDee. where. 239 - 2 dJ
subrale, effect of, on, 263-265
agrecmen, , ^ ^
infract Parties l
INDCil
'îv 347
307. 3,
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N. M. Tripathi Private Ltd.

Steimatzkyi Agency Ltd.

U.S.A. AND CANADA

Of (he Middle Temple, Barrister^t'Law

Vi THE SAME AITTHOE

printed in Great Britain by

In the hope of forestalUng foreseeable comments, I should say at the

The law throughout is stated as it was on October I, 1965.

This has involved referring to such statutes as the Resale Prices

I must record ray deep gratitude to my friend and colleague,

United Nations Day, 1965

Table of Statutes ....

1. Teie Contoact of Sale op Goops 3

1. Scope and Sources of the Law .... 3

2. Definition of Contract of Sale .... 4

4. Sales and Agreements to Sell .... 21

2. Creation of the Contract 24

3. Subject-Matter of the Coniract 33

2. The Different Categories 33

4. Thb Effects of a Contract of Sale .... 51

1. Property and Contract 51

2. Property and Title 52

3. Classification of Contractual Obligations . . 56

PROPRIETARY EFFECTS OF THE CONTRACT

5. Tkb Transfer of Property ...... 63

3. Unascertained and Future Goods .... 83

4. The Right of Disposal 90

6. The Title of the Seller 94

1. The Statutory Obligations 94

2. Sales Without Title 106

CONTRACTUAL EFFECT OF THE

7. THB OiARACTER and QUAtITY OF THE GOODS

J. Express Undertakiogs as to the Character ana

2. Implied Undertakings as to the Character and

3. Waiver and Exclusion of Undertakings as to tne

Character and Quality of Goods . . *

8. Performance of the Contract

1. The Duties of the Parties

5. Factors Affecting the Performance of the Contract .

9 . Rictrrs of an Unpaid Seller Agajnst the Goods

2. The Unpaid Seller's Lien , . .

4. Resale by ihc Seller

10. The Seller's Personal Remedies for Breach of

1. The Effect of Breach of Duty by the Buyer .

2. Action for the Price

3. Damages for Non-Acceptance . .

U. Remedies or the Buyer Against the Seller

1. The Classification of Duties ond Remedies .

3. Character and Quality ......

5. Additional and Alternative Remedies .

AaukUN V. MowiCE (1849) 8 C.B. 499

Adanujtoi Shipping Co. Ltd, v. Anglo-Saxon Petroleum Co. Ltd. [I939J

Andrews Bros. Ltd. v. Singer & Co. Ltd. (19M) 1 K.B 17 .

Angar v. Vwivier (1902) 18 TL.R. 596

Angel V. Jay [19111 1 K.D. 6Sf

Ardath Tobacco Co. Ltd, v.

B. & P. WKOifSALB DiSTRiBirroRS V. Mamto I1953J CL.Y, 3266 223

Badischc Co Ltd, P' 43

Badishe AniLn und S , 217

Baldry y. Marshall [I , 165

Ballantine & Co. v. ( , 215

Banner, Ex p (1876) 2 Ch.D. 278 92

Full Text of "Sale of Goods"

Full Text of "Sale of Goods"

I'"-'"-' 76, 86, 237