Management Accounting

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  • Topic: Contract, Sale of Goods Act 1979, Contract of sale
  • Pages : 6 (1851 words )
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  • Published : April 8, 2013
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SALE OF GOODS ACT 1908,
‘ROMALPA’ CLAUSES, PASSING OF PROPERTY
CONSUMER GUARANTEES ACT 1993

1. (a)Why is it important in a Sale of Goods (SOG) contract to be precise about the time at which property passes? (Clue: what passes with property?)

* When the property pass, the risk of the property pass to buyer too. Under the S 22 of SOG Act, Unless otherwise agreed, the goods remain at the seller's risk until the property therein is transferred to the buyer; but when the property therein is transferred to the buyer the goods are at the buyer's risk, whether delivery has been made or not. Provided 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. So the precise time is important in a Sale of Goods. (From Lecture 4.2 Page 57)

(b) [i] What is the difference between ascertainment and unconditional appropriation to a contract under section 20 Rule 5 of the Sale of Goods Act? [ii] Provide a practical example for the sale of certain goods which clearly explains this distinction.

* Rule 1.Where there is an unconditional contract for the sale of specific goods, in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, is postponed. * Rule 2.Where there is a contract for the sale of specific goods, and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property does not pass until such thing is done, and the buyer has notice thereof. * Rule 3.Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, measure, test, or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing is done, and the buyer has notice thereof. * Rule 4: Where goods are delivered to the buyer on approval, or on sale or return or other similar terms, the property therein passes to the buyer— * (a)When he signifies his approval or acceptance to the seller, or does any other act adopting the transaction: * (b)If he does not signify his approval or acceptance to the seller, but retains the goods without giving notice of rejection then, if a time has been fixed for the return of the goods, on the expiration of such time, and if no time has been fixed, on the expiration of a reasonable time. What is a reasonable time is a question of fact. * Rule 5.(1)Where there is a contract for the sale of unascertained or future goods by description, and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be expressed or implied, and may be given either before or after the appropriation is made. * (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 transmission to the buyer, and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract. (From Lecture 4.2 Page 51-53) * Healey v Howlett 1917 1 KB 459. Healey (Buyer) in England ordered 20 boxes of fish from seller (Howlett) in Iceland. Seller dispatched 190 boxes by rail and told the railway staff to set aside 20 boxes for the buyer. The train was delayed. The agent chose 20 for Healy but then found the fish were bad, though not Howlett’s fault. Court held that there was no appropriation till the agent marked the boxes, therefore no property in the fish had passed to the buyer, and so the fish were still at the...
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