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    Chapter 2 SOGA

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    GURDIT SINGH TOOR A L SATWANT SINGH TOOR Unknown
    1) The document discusses key concepts in the sale of goods under Malaysian law, including the definition of a contract of sale, distinction between existing/future goods, passage of property, and exceptions to the nemo dat quod non habet maxim. 2) A contract of sale involves the transfer of goods from the seller to the buyer for a price. It can be an executed sale or an agreement to sell depending on when property passes. 3) Property in existing specific goods passes when the parties intend it, while future/unascertained goods require appropriation with buyer-seller consent before property passes.

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    Chapter 2 SOGA

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    GURDIT SINGH TOOR A L SATWANT SINGH TOOR Unknown
    180 views24 pages
    1) The document discusses key concepts in the sale of goods under Malaysian law, including the definition of a contract of sale, distinction between existing/future goods, passage of property, and exceptions to the nemo dat quod non habet maxim. 2) A contract of sale involves the transfer of goods from the seller to the buyer for a price. It can be an executed sale or an agreement to sell depending on when property passes. 3) Property in existing specific goods passes when the parties intend it, while future/unascertained goods require appropriation with buyer-seller consent before property passes.

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    Sales of Goods Act

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    1) The document discusses key concepts in the sale of goods under Malaysian law, including the definition of a contract of sale, distinction between existing/future goods, passage of property, and exceptions to the nemo dat quod non habet maxim. 2) A contract of sale involves the transfer of goods from the seller to the buyer for a price. It can be an executed sale or an agreement to sell depending on when property passes. 3) Property in existing specific goods passes when the parties intend it, while future/unascertained goods require appropriation with buyer-seller consent before property passes.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    180 views24 pages

    Chapter 2 SOGA

    Uploaded by

    GURDIT SINGH TOOR A L SATWANT SINGH TOOR Unknown
    1) The document discusses key concepts in the sale of goods under Malaysian law, including the definition of a contract of sale, distinction between existing/future goods, passage of property, and exceptions to the nemo dat quod non habet maxim. 2) A contract of sale involves the transfer of goods from the seller to the buyer for a price. It can be an executed sale or an agreement to sell depending on when property passes. 3) Property in existing specific goods passes when the parties intend it, while future/unascertained goods require appropriation with buyer-seller consent before property passes.

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    of 24

    PCL0012

    TOPIC 2:
    Sale of Goods
    Recommended Textbook:
    The Commercial Law of Malaysia, by Beatrix Vohrah & Wu Min Aun, (2000).
    (A) Formation of Contract
    • The main statute applicable is the Sale of Goods Act 1957 [Act
    382] (‘SOGA’).
    • SOGA applies only in Peninsular Malaysia. For Sabah &
    Sarawak, both states continue in using the principles of English
    law by virtue of S.5 (2) of the Civil Law Act 1956.
    • S.4 (1) of SOGA defines a contract of sale as “a contract
    whereby the seller transfers or agrees to transfer the property in
    goods to the buyer for a price.”
    • ‘Price’ is defined in section 2 of SOGA as ‘the money
    consideration for a sale of goods.’
    (A) Formation of Contract
    • S.4 (3) of SOGA:
    oA contract of sale is called a Sale/Executed Contract of Sale when the
    property in the goods (ownership) is transferred from the seller to the
    buyer.
    oWhereas, the contract is called an Agreement to Sell/Executory Contract
    of Sale if the transfer of the property in goods is to take place at a future
    time/subject to some condition there after to be fulfilled.
    • ‘Contract of sale’ includes both sale and an agreement to sell.
    • A sale occurs when ownership or ‘property in good’ passes to the buyer.
    • Note: ownership or ‘property in good’ should be distinguished from possession.
    oA person may be the owner although not in possession of the goods. [e.g. lend
    books to ors]
    oA possessor of goods may not be the owner. [e.g. borrower – books borrowed
    from library]
    (A) Formation of Contract
    Distinction between a sale & an agreement to sell
    Harper Gilfillan Sdn. Bhd. v Kean Toh Amang Factory Sdn. Bhd.
    & Lee Kwee Hong (Claimant) [1986] 1 MLJ 249
    oPlaintiffs obtained judgment against the first defendant caused a writ
    of seizure.
    oThe bailiff seized a number of goods at the factory.
    oLater, Lee Kwee Hong (Claimant) claimed the goods seized belonged to
    him, relying on a written sale and purchase agreement.
    oPlaintiffs contended that, at the date of seizure of the goods, property
    in the goods/ownership was still with the judgment debtor (1st Def).
    oCourt agreed, held that property did not pass to the claimant in an
    agreement to sell, only a jus in personam (right to sue the person) is
    created.
    (A) Formation of Contract
    • S.2of SOGA defines goods as every kind of movable
    property including stocks and shares, growing crops, grass
    and things attached to or forming part of the land which are
    agreed to be severed before sale or under the contract of sale.
    • Immovable property, actionable claims, trees and fixtures
    attached on earth and not severed are outside of this
    definition.
    • Trees form part of land are immovable, not ‘goods’ – What
    about logs?
    (A) Formation of Contract

    • Under s 6 (1) of SOGA, there are 2 types of goods:


    (i) Existing goods; and
    (ii) Future goods.
    (i) Existing Goods
    • Goods which are already owned/possessed by the seller at the time of the contract
    of sale.
    • It may be further divided into either specific goods or unascertained goods.
    • “Specific goods” – goods are specific if they are ‘identified and agreed upon at the time a
    contract of sale is made’ (s 2 of SOGA).
    o e.g. Car registered as AKU 8055

    • “Unascertained goods” – mentioned in s 18 of SOGA but not expressly defined; by inference


    it means ‘goods not identified and agreed upon at the time a contract of sale is made.
    o e.g. sales by description – 100 chairs, but no specific description on what kind of chairs.
    o Nagurdas’ case (1911) 12 SSLR 67
    − there was a sale of flour bearing a well-known trademark previously.
    − Later on, the flour was ordered based on the description as “the same as our previous
    contract", which identical in quality.
    − However, it failed to bear the same well-known trademark when it was delivered to the
    buyer.
    − Held: not comply with description.
    (i) Existing Goods
    • S.19 of SOGA - if it is a contract for the sale of specific/ascertained
    goods, the property in the goods passes to the buyer when the parties
    to the contract intended it to be passed.
    (ii) Future Goods
    • S.18 of SOGA - Where there is a contract for the sale of unascertained goods (future
    goods), no goods can be transferred to the buyer unless and until the goods are
    ascertained.
    • Sale of unascertained goods and appropriation
    S 23(1) of SOGA :
    • 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 provided in the contract,
    with the consent of both buyer and seller, the goods thereupon passes to the buyer.
    • Such consent may be express or implied.
    Elements of Contract of Sale
    • S 5 (1) of SOGA: a contract of sale is made by an offer to buy or sell goods
    at a price and by the acceptance of such an offer.
    • S 2 of SOGA: a buyer is a person who buys or agrees to buy goods and a
    seller is a person who sells or agrees to sell goods.
    • S 4 (1) of SOGA: a contract of sale is made when the seller transfers/agrees
    to transfer the property in goods to the buyer for a price.
    • S 2 of SOGA defines price as the money consideration for a sale of goods.
    • The essence of a sale of goods is the transfer of goods from the seller to the
    buyer.
    Maxim: ‘Nemo Dat Quod Non Habet’
    • S 27 of SOGA - where goods are sold by a person who is not the owner,
    and who does not sell them under the authority or with the consent of
    the owner, the buyer acquires no better title to the goods that the
    seller had.
    oEnshrined in the maxim nemo dat quod non habet, meaning you can’t
    give what you don’t have.
    oThus if goods are pruchased from a person who is not the owner and
    who does not sell them under the owner’s authority, the buyer
    does not acquire a title even if he has paid the value in good
    faith.
    oAim of this rule: protect right of ownership so that if, e.g. goods are
    stolen and subsequently sold, right of the original owner is retained.
    Maxim: ‘Nemo Dat Quod Non Habet’
    Development of nemo dat rule:
    Bishopsgate Motor Finance Corpn. Ltd v Transport Brakes Ltd
    (1949) 1 KB 322
    [Lord Denning]
    • “In the development of our law, two principles have striven for
    mastery. The first is for the protection of property: no one can
    give a better title than he himself possesses. The second is
    the protection of commercial transactions: the person who
    takes in good faith and for value without notice should get a
    good title. The first principle has held sway for a long time, but it
    has been modified by the common law itself and by statute so as to
    meet the needs of our own times."
    Maxim: ‘Nemo Dat Quod Non Habet’
    There are few exceptions to the general rule:
    1. Estoppel
    • S 27 - the nemo dat rule is not applicable when the real owner of the goods is by
    his conduct precluded from denying the seller’s authority to sell.
     Owner of goods by his conduct makes it appear to a buyer that the person who
    sells the goods has the authority to do so and the buyer acts in reliance on it.
     Owner will be estopped from denying the seller’s authority.
     Buyer who takes in good faith and for value will acquire a good title by estoppel.
    2. Sale by Mercantile Agent
    • Proviso to s 27 - a title is effectively transferred, when a mercantile agent who is
    in possession of the goods with the consent of the owner, sell the goods when acting
    in the ordinary course of business of a mercantile agent.
    Maxim: ‘Nemo Dat Quod Non Habet’
    3. Sale by one of joint owners
    • S.28 - If one of several joint owners of goods has the sole possession
    of them by permission of the co-owners, the property in the goods is
    transferred to any person who buys them of such joint owner in
    good faith and has not at the time of the contract of sale
    notice that the seller has no authority to sell.
    4. Sale under a Voidable Contract
    • S.29 - Where the seller of goods has obtained possession thereof under a
    contract voidable under section 19 or 20 of the Contracts Act 1950, but
    the contract has not been rescinded at the time of the sale, the buyer
    acquires a good title to the goods provided he buys them in good faith and
    without notice of the seller’s defect of title.
    4. Sale under a Voidable Contract

    S 19 & S 20 of CA 1950:
    Maxim: ‘Nemo Dat Quod Non Habet’
    5. Sale by Seller in Possession of Goods
    • S.30 (1) - a seller who has no title to the goods but remains in
    possession of the goods/the documents of title can pass a good title
    to a bona fide buyer.
    6. Sale by Buyer in Possession of Goods
    • S.30 (2) - a buyer who have bought the goods or agreed to buy the
    goods and have obtained possession of the goods or the document of
    title with the consent of the seller, can pass a good title to an
    innocent buyer under any sale or disposition.
    (B) Discharge of Contract
    • Similar to ordinary contract, a contract of sale may be discharged in the following
    ways: -
    i. By Performance; &
    ii. By Breach.
    Discharge by Performance
    • S.31 of SOGA - it is the duty of the seller to deliver the goods.
    • S.36 of SOGA - the place of delivery are as follows:
    (a) Sale of existing goods - place at which the goods are when the sale is made.
    (b) Agreement to sell existing goods - place at which the goods are when the
    agreement to sell is made.
    (c) Sale of future goods - place at which the goods are produced.
    Discharge by performance

    Discharge by Performance

    Seller Buyer

    Accept Delivery
    Delivery

    Payment

    Take Delivery
    (B) Discharge of Contract
    • S.37 of SOGA – if the seller delivers to the buyer wrong quantity:
    i. the quantity of goods are less than what he contracted – the buyer
    may totally reject the goods or accepts it.
    ii. the quantity of goods are more than what he contracted – the
    buyer may accept the goods which are in accordance with the
    contract and reject the rest, or he may reject the whole.
    iii. the goods mixed with other 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.
    (B) Discharge of Contract
    The buyer may discharged his duty under a contract of sale of goods
    by performing the following –
    i. pay the seller;
    ii. accept delivery of the goods from the seller; or
    iii. take delivery of the goods from the seller.

    Exception to Performance
    i. Impossibility of Performance
    ii. Consent or Agreement (not to perform)
    (B) Discharge of Contract
    Discharge by Breach
    • Breach of contract of sales on part of the seller occurs when the
    seller fails or refuses to perform or fails to perform
    satisfactorily his duty to deliver the goods.
    • Breach of contract of sales on part of the buyer occurs when the
    buyer fails or refuses to perform or fails to perform
    satisfactorily his duty to pay for the goods; to accept the goods;
    and to take delivery of the goods.
    Discharge by breach

    Discharge by Breach

    Seller Buyer

    Fails to accept delivery


    Fails to make delivery

    Fails to make payment

    Fails to take delivery


    (B) Discharge of Contract
    Remedies for Breach
    Remedies for Seller:
    • S 55 of SOGA - where the buyer wrongfully neglects/refuses to pay for the
    goods, the seller may sue the buyer for the price.
    • Remedies for non-payment:
    • S 46 of SOGA:
    i. Lien [a right to keep possession of property belonging to another person until a debt
    owed by that person is discharged];
    ii. Stoppage in transit; and
    iii. Resale.
    • S 44 of SOGA: when the seller is ready and willing to deliver the goods and requests
    the buyer to take delivery, but the buyer does not, refuse or neglect within a
    reasonable time after such request, to take delivery of the goods, he is liable to the
    seller for any loss occasioned by his neglect or refusal.
    • S 56 of SOGA: where the buyer wrongfully neglects or refuses to accept and
    pay for the goods, the seller may sue him for damages for non-acceptance.
    (B) Discharge of Contract
    Remedies for Buyer:
    • Damages for non-delivery
     S 57 - where the seller wrongfully neglects or refuses to deliver
    goods to the buyer, the buyer may sue the seller for damages for
    non-delivery of goods.

    • Specific Performance
     S 58 - if there is a breach of contract to deliver specific/ascertained
    goods, the buyer may apply from court a decree directing that the
    contract to be performed specifically.

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