Contract of Sales Of Goods SS3 Commerce Lesson Note

CONTENT

• Sale of goods – application, definition and relevant Act
• Conditions constituting acceptance under the contract of sale of goods
• Duties and rights of parties to the contract
• Hire Purchase Act 1975 – application and provisions

 NOTES

SALE OF GOODS

A contract of sale of goods is a contract whereby the seller transfers the property in goods to the buyer for a monetary consideration called the price.

The parties to this contract are known as the seller (vendor or transferor) and the buyer (vendee or transferee). The seller must be either the owner of the goods or his duly authorised agent. 

The relevant law is the Sale of Goods Act 1893. This law does not cover the buying and selling of immovable or real property like land and houses. The Sale of Goods Act deals with only the rules and regulations which govern the buying and selling of personal movable property like motor vehicles, futures, machinery, food, clothing and other similar commodities.

 PROVISION OF THE SALE OF GOODS ACT (1893)

1. A seller has the legal right to offer goods for sale
2. The sample goods offered to the customer must have the same quality as the actual goods the seller displays for sale
3. If the seller sells by description, the description must correspond with the description of the actual goods displayed for sale
4. The goods must be suitable for the purpose they are meant to serve
5. The goods offered for sale must be free from any claim in favour of any third parties (i.e. equities).
6. A buyer must examine carefully the goods he is to buy and make sure of the quality before buying and failure to do so; bears the consequences of any default. This is the principle of “CAVEAT EMPTOR” or “let the buyer beware”

 CONDITIONS THAT CONSTITUTE ACCEPTANCE IN THE CONTRACT OF SALE OF GOODS

In a contract of Sale of Goods, the buyer is deemed to have accepted goods (i.e.) taken over their ownership under the following circumstances.

1. If he informs the seller that he has accepted them
2. If, after receiving the goods he does any act concerning the goods which can only be done by the owner e.g. reselling the goods.
3. If he retains the goods beyond a reasonable period without informing the seller that he rejected them.

 EVALUATION QUESTIONS

1. State three provisions of the Sales of Goods Act 1893
2. State three conditions that constitute acceptance in a contract of Sale of Goods

DUTIES AND RIGHTS OF PARTIES OF THE CONTRACT

1. Sellers owe the duty, subject to the express terms of the contract to:

• Deliver the goods at the right time
• Ensure that the goods supplied are of the right quantity and quality
• Pass good title to the buyer

      2. Buyers too owe the duty, subject to the express terms of the contract

• To accept and pay for the goods
• To observe all stipulations as to time