Get Started. It's Free
or sign up with your email address
Rocket clouds
Sale of Goods by Mind Map: Sale of Goods

1. Law applicable to the sale of goods in Malaysia

1.1. -The sale of goods act 1957 -Contracts act 1950

2. Definition of goods

2.1. GOODS (Sec. 2 SOGA)

2.1.1. Movable property

2.1.2. growing crops

2.1.3. Stock and shares

2.1.4. Things attached to/forming part of the land, which are agreed to be severed before sale

2.2. Agreement to sell 2nd Limb of Sec. 4(3) Where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled Sec 4(4) An agreement to sell becomes a sale when time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred

2.3. Contract of SOGA Sec. 4 (1) a contract whereby the seller transfer the property in goods to the buyer for a price 1st Limb of Sec. 4 (3) the property in the goods is transferred from the seller to the buyer

3. Formation of contracts of SOGA

3.1. 1. AGREEMENT/CONTRACT (s. 5 SOGA) -there must be an OFFER to buy/to sell goods at the price and the ACCEPTANCE of such offer. -Contract of sale may be made in:- i- writing; ii- by words of mouth; iii- partly in writing & partly in words; or iv- may be implied from the conduct of parties

3.2. 2. PARTIES -Both parties shall have LEGAL CAPACITY to enter into the contract.

3.3. 3. PRICE (s. 9 SOGA) -means the MONETARY CONSIDERATION as to compensate for the sale of goods. -price may be fixed by:- i- the contract itself; ii- in the manner agreed in the contract; iii- in the course of dealing between the parties

4. CLASSIFICATION OF GOODS

4.1. Existing

4.1.1. Ascertained

4.1.1.1. (1)Waheeda agrees to sell to Beinda 2 units out of 30 units of her computer, Dell PRO 6110 serial no. my111000 and my111001

4.1.2. Unascertained

4.1.2.1. (2)Waheeda agrees to sell to Beinda 2 units out of 30 units of her computer, Dell PRO 6110

4.2. Future

4.2.1. Ascertained

4.2.1.1. (3)Proton Edar Sdn. Bhd. agrees to sell to Yaseen 2 units of GEN – 2 car, yet to be manufactured at Tanjung Malim.

4.2.2. Unascertained

4.2.2.1. (4)Ali would like to sell his Proton Wira, plate no. JDC 10 to Ah Chong. Ah Chong agrees to sell the car to Muthu after he acquires it from Ali next month.

5. TERMS OF CONTRACT OF SALE OF GOODS

5.1. TERMS OF CONTRACT (s. 12 SOGA)

5.1.1. CONDITION (4) TERMS OF CONTRACT (s. 12 SOGA) WARRANTY Sec. 12(2) -Def: A stipulation essential to the main purpose of the contract the breach of which gives rise to a right to treat the contract as repudiated.

5.1.2. WARRANTY Sec. 12(2) -Def: A stipulation collateral to the main purpose of the contract the breach of which gives rise to claim for damages, but not to a right to reject the goods & treat the contract as repudiated.

5.2. IMPLIED TERMS OF CONTRACT (s. 14 – s.17 SOGA)

5.2.1. • The SOGA implies a number of stipulations in every contract of the sale of goods. • These implied terms apply only when the party to the contract of the sale have not excluded or modified them. • There are: • 5 IMPLIED CONDITIONS • 2 IMPLIED WARRANTIES

5.3. IMPLIED CONDITION s. 12(2)

5.3.1. As to Title Sec. 14(a) Rowland v. Divall

5.3.2. Sale by Description – The goods must correspond with the description Sec. 15 Beale v. Taylor

5.3.3. As to Merchantable Quality Sec. 16(1)(b) Wilson v. Rocket Cockerall & co.

5.3.4. Sale by Sample - Sec. 17(1) Must fulfill 3 conditions: s.17(2)(a)(b)(c) Godley v. Perry

5.3.5. As to Quality/ Fit For purposes Sec. 16(1)(a) Griffiths v. Peter Conway

5.4. IMPLIED WARRANTY s. 12(3)

5.4.1. The buyer shall have quiet possession of the goods Sec. 14(b) Microbeads A.G. v Vinhurst Road Markings Ltd

5.4.2. The buyer shall have quiet possession of the goods Sec. 14(b) Microbeads A.G. v Vinhurst Road Markings Ltd

5.5. section 14 (a)

5.5.1. • Seller must have title/ownership/property in goods to transfer to buyer in sale of goods contract • If seller does not have title, seller is in breach & buyer can repudiate contract

5.6. section15

5.6.1. • Buyer has not seen the goods & is relying on description (eg. Mail order, catalogue)

5.6.2. DESCRIPTION

5.6.2.1. SPECIFIC

5.6.2.1.1. some SMALL DISCREPANCY

5.6.2.2. GENERAL

5.6.2.2.1. Must be a CONSIDERABLE DISCREPANCY

5.7. IMPLIED CONDITION AS TO FITNESS FOR PARTICULAR PURPOSE – S.16(1)(a)

5.7.1. Exception to caveat emptor Conditions to be fulfilled by the buyer in order to invoke s.16(1)(a): 1) Disclosure of purpose Case: Griffiths v. Peter Conway Ltd 2) Reliance on seller’s skill & judgment Case: Grant v. Australian knitting Mills 3) Goods supplied are the kind that seller normally supply in his business Case: Spencer Trading Co. Ltd v. Devon 3) The goods were not bought under patent or trade name Case: Panglima Aces Sdn Bhd v. Highway Bricks Work (Serendah) Sdn Bhd

6. TRANFER OF PROPERTY / RISK

6.1. Sec. 11 “Unless a different intention appears from the terms of the contract, stipulation as to time of payment are deemed to be of the essence of a contract of sale.”

6.2. STIPULATION AS TO TIME

6.3. TRANSFER OF PROPERTY/RISK

6.3.1. Definition: • Transfer of OWNERSHIP of goods. • Transfer of TITLE of the goods. • “passing of property” = “passing of possession”

6.4. Himatsing & Co v. P.R. Joitaram [1970]2 MLJ 246 Held: Whether the stipulated time of delivery was the essence of the essence of the contract or not depended on the evidence; in particular, documentary evidence.

6.5. TRANSFER OF TITLE

6.5.1. GENERAL RULE Legal maxim/rule:“nemo dat quod nan habet” -No one can give a better title than he has himself. -No one can give what he or she has not got

6.5.2. SEC. 27 SOGA “…where goods are sold by a person who is not the owner thereof, & who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had…”

6.5.3. RATIONALE OF THE RULE -To protect the right of ownership of the owner. -To protect the interest of the owner

6.5.4. EXCEPTIONS TO THE RULE OF “nemo dat quod nan habet”

6.5.4.1. Estoppel (Sec. 27)

6.5.4.2. Sale by Mercantile Agent (proviso to Sec. 27)

6.5.4.3. Sale by One of Joint Owners (Sec. 28)

6.5.4.4. Sale under a Voidable Title (Sec. 29)

6.5.4.5. Sale by a Seller in Possession after Sale (Sec. 30(1))

6.5.4.6. Sale by a Buyer after Sale (Sec. 30(2))

7. PERFORMANCE OF THE CONTRACT OF SALE

7.1. BY DELIVERY

7.1.1. Definition : Sec 2 “voluntary transfer of possession from one person to another.”

7.1.2. Duty: Sec 31 “…duty of SELLER to deliver the goods…”

7.1.3. Delivery of Wrong Quantity- section 37: • LESS •If the seller delivers to the buyer a quantity of goods LESS than he contracted, the buyer may: •Reject the goods, or •If accept, pay at the contract rate

7.1.4. Delivery of Wrong Quantity- section 37: • LARGER •If the seller delivers to the buyer a quantity of goods LARGER than he contracted, the buyer may: •Accept the goods included in the contract reject the rest, or •Reject the whole goods, or •If accept the whole, pay at the contract rate

7.1.5. Delivery of Wrong Quantity- section 37: • MIXED •If the seller delivers to the buyer the goods he contracted to sell mixed with goods of a different description not included in a contract, the buyer may: •Accept the goods which are in accordance with the contract reject the rest, or •Reject the whole goods

7.2. BY ACCEPTANCE

7.2.1. Duty: Sec 31 “…duty of BUYER to accept & pay…”

7.2.2. Right of examining the goods : Sec 41(2) “..reasonable opportunity of examining...”

7.2.3. 3 situations where acceptance are deemed to take place: Sec 42 • 1. When the buyer intimates to the seller his acceptance. • 2. When the goods have been delivered to the buyer, the seller does any act which is inconsistent with the ownership of the seller. • 3. When, after the lapse of a reasonable time, he retains the goods without intimating his rejection to the seller.

8. REMEDIES FOR BREACH OF CONTRACT OF SALE OF GOODS

8.1. A. Breach by the Buyer = RIGHTS OF THE SELLER B. Rights of unpaid seller against the goods (RIGHTS IN REM) 1. Rights of the seller against the buyer personally (RIGHTS IN PERSONAM) B. Breach by the Seller = RIGHTS OF THE BUYER 1. Right of the buyer to bring an action for non-delivery 2. Right of the buyer to bring an action for specific performance 3. Remedies available to the buyer for breach of warranty 4. Buyer’s action in tort 4

8.2. RIGHTS OF THE BUYER

8.2.1. (1) RIGHT OF THE BUYER TO BRING AN ACTION FOR NON-DELIVERY - Where the seller wrongfully neglect or refuses to deliver the goods to the buyer, the buyer may sue the seller for damages for non-delivery. Section 57,SOGA (2) RIGHT OF THE BUYER TO BRING AN ACTION FOR SPECIFIC PERFORMANCE - The buyer may bring an action for specific performance of the contract by the delivery of specific or ascertained goods. - This remedy is available only at the discretion of the courts. - Usually it is ordered by the court only when goods are of a special or peculiar kind, e.g. a valuable painting or a priceless antique. B. RIGHTS OF THE BUYER 51 (3) REMEDIES AVAILABLE TO THE BUYER FOR BREACH OF WARRANTY - Where the seller commits a breach of warranty or where the buyer elects or is compelled to treat a breach of condition by the seller as a breach of warranty, the buyer cannot reject the goods but he may: (i) set up against the seller the breach of warranty in diminution or extinction of the price; or (ii) sue the seller for damages for breach of warranty. (4) BUYER’S ACTION IN TORT - The buyer can sue the seller in tort by bringing an action in DETINUE and CONVERSION