Transfer of Prop

TRANSFER OF PROPERTY
IN GOODS
Property in goods = title/ownership =

Possession
it is important to ascertain the time when the

property in goods passes to the buyer. Bcoz,
the risk is transferred together with the
property
in goods S. 26
buyer cannot transfer title to another person

unless he has title over the goods
Eg : hire purchase :a person may be in
possession of car but title remains with the owner
(bank)
Before property passes to the buyer, the goods remain at the

sellers risk.
When property passes to the buyer, the goods are at the
buyers risk irrespective of whether the goods have been
actually delivered to the buyer or not : S. 26
Unless otherwise agreed, the goods remain at the sellers 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 buyers risk whether delivery been made or not. Provided
that where delivery has been delayed through the fault of either
the buyer or seller, the goods are at the risk of the party in fault
as regards loss which might not have occurred but for such
fault
In short, Section 26 of the said Act provides

that unless the ties agree otherwise, risk is
borne by the owner regardless of either he is
in possession or not.
If the goods delivered on sale or return, the
risk lies on the seller until the property has
passed to the buyer UNLESS the damage or
loss is caused by the buyers fault
Rules pertaining transfer of property in

goods
Transfer of property of unascertained
goods
1. Sec 18 : sale of
unascertained
goods
= property
transferred
after the goods
ascertained
A ctc to buy
a new car which
form part of a larger consignment,
no title to be passed until the seller
has ascertained
which car to be sold
Transfer of property of ascertained goods
2. Sec 19 : sale of
specific goods
= property transferred
at the time
intended by party
Intention of parties =
Based on terms of the ctc,
conduct of the parties,
circumstances of the case
To assist in ascertaining the intention of the

parties:
Sec 20: if unconditional

ctc for the sale
of specific goods
in a deliverable state
=the property in the goods
passes to the
buyer when the ctc is made
Deliverable state: when the goods
are in such state that the buyer
would under the ctc be bound to
take delivery of them. S. 2
Sec 21: if conditional

ctc of specific gds
in a deliverable state
The seller is bound
to do something
to the goods for the
purpose of putting them
into a deliverable state
= the property in the goods
did not pass until such things
is done & the buyer has
notice (knowledge) of it
.
Sec. 22 if the goods in

deliverable state, BUT the seller
is bound to weigh, measure,
test, or to 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
E.g:
1. Ben agrees to buy Joes bicycle and Joe agreed that Ben will
pay him next month. The property in the goods passes
immediately to Ben even though Ben has not paid for it yet.
2. Zakaria agrees to buy Wongs car on condition that Wong
gives the car a new coat of paint. In such a case, property in
the car passes only after the car receives a new coat of paint
and Zakaria has been notified of the same
3. Siti agrees to sell vegetables to Aminah at RM8.00
kilogram; property in the vegetables does not pass until
vegetables have been weighed and Aminah informed of
same.
per
the
the
4.
Mimi ordered a book, How to Diet Effectively and Painlessly, from a catalogue through
the post. The said book was lost in the post. Mimi must bear the loss as property in the
goods passed to her when the parcel was posted.
5.
Good Books Sdn. Bhd. delivers books to Latifah on approval and to be returned within
10 days without obligation if not satisfied, and Latifah does any one of the following acts:
accepted the books; or
sells the books to Mat (Latifah would have done any other act adopting the
transaction); or
Latifah does not return the books within 10 days.
If no period was fixed for the return of the books, and if Latifah has kept the books for an
unreasonably long period, e.g. two months, property in the goods would have passed to
Latifah and she would be liable to pay for them.
TRANSFER OF TITLE
GEN RULE (SEC 27):where the
goods are sold by a person who is not
the owner & 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
MAXIM : Nemo dat quad non habet ( no

one can transfer a better title than he has
himself)
PURPOSE : to protect the right of
ownership so that the right of the original
owner is retained.
EG: goods are stolen & subsequently
sold, the right of original owner is retained.
(seller & innocent purchaser may be sued
for the tort of conversion).
Lim Chui Lai v Zeno

Zeno entered into an agreement with
Ahmad (contractor) to provide Ahmad with
the materials for Ahmads construction.
Zeno delivered the materials to the
construction site. When Zeno attempted to
sell the materials, they discovered that the
materials had been sold by Ahmad to Lim.
Held: Ahmad had no title to the goods so
he could not pass any title to Lim.
EXCEPTIONS
1. Estoppel
- When the owner of the goods by his
conduct makes it appear to a buyer that
the person who sells his goods has his
authority to do so & the buyer relied on it.
(S 27)
- Implication:
- Owner is estopped from denying the
sellers authority
- Buyer who takes in goods faith & for
value will acquire a good title by
estoppel.
N.Z. Securities v Wrightcars

A agreed to sell a car to B & B was given possession of
the car upon tender of a cheque as payment. It was
agreed that the property (title) in the car was not to pass
until the price had been received by A.
B then sold the car to C. However, before the sale to C
was finalized, C had contacted As office to ask about
the car. C was informed by As employee that B had paid
for the car.
Later A found the cheque given by B was dishonoured
so A repossess the car. C sued A for conversion
Held: C was successful in claiming that A was precluded
by his conduct from denying Bs authority to sell so that
title had passed to C
2. Sale by a mercantile agent (sec2)

- eg : broker, auctioneer, dealer etc.
- conditions to fulfill:
a. At the time of disposition, the
mercantile agent must be in possession
of the goods or the document of title to
goods.
b. The possession must be with the
consent of the owner even if it is not for
the purpose for sale. eg: for display.
c. The disposition must be made when

acting in the ordinary course of business of a
mercantile agent( the person must act in
such a way that a mercantile agent would
act i.e within business hours,at a proper
place of business etc)
d. The buyer must have acted in good faith &
at the time of the contract of sale, must not
notice the agents lack of authority to sell.
-good faith = honestly.
3. Sale by one of joint-owners

-
condition: (s 28)
a. One of the several joint-owners has

the sole possession of the goods by
permission of the co-owner.
b. The buyer acts in good faith and has
not at the time of the contract of sale
notice that the seller lacks authority
to sell.
4. Sale under a voidable contract (sec 29)

- Where the true owner transfers to the
seller possession of the goods through
factors that are voidable, i.e. fraud,
coercion, misrepresentation or undue
influence, so the seller may pass a
good title to a bona fide (innocent)
purchaser so long as the contract has
not been rescinded by the true owner
at the time of a sale.
5. Sale by a seller in possession after sale.

- A seller who has parted with title to the
goods but remains in possession of the
goods or of the document of title can pass a
good title to a bona fide buyer.
- Implication:
- The 2nd buyer gets a good title whereas the
original buyer loses his
- The original buyer can sue the seller for
remedy.
6. Sale by a buyer in possession
- A buyer who agreed to buy goods obtains

possession of the goods or the document
of title with the consent of the seller, can
pass a good title to an innocent person
under any sale.
-Newton of Wembley v Williams

- Pf sold a car to A who paid by cheque & it was agreed
that title would not pass until the cheque was
honoured.
- A was given possession of the car but the cheque was
dishonoured. Pf rescinded the ctc.
- A then sold the car to B who bought it without
knowledge of the fact. B then sold it to df. Pf try to
recover the car from df.
- Held:The df had a good title to the car that he had
bought although there was a prior defect in title. This is
because A, the original buyer, was in possession with
the consent of the pf & it follows that he could pass a
good title to B who in return transferred it to the df.

Transfer of Prop

Uploaded by

Copyright:

Available Formats

Transfer of Prop

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Transfer of Prop

Uploaded by

Copyright:

Available Formats

TRANSFER OF PROPERTY

Property in goods = title/ownership =

it is important to ascertain the time when the

buyer cannot transfer title to another person

Before property passes to the buyer, the goods remain at the

In short, Section 26 of the said Act provides

Rules pertaining transfer of property in

Transfer of property of ascertained goods

To assist in ascertaining the intention of the

Sec 20: if unconditional

Sec 21: if conditional

Sec. 22 if the goods in

MAXIM : Nemo dat quad non habet ( no

Lim Chui Lai v Zeno

N.Z. Securities v Wrightcars

2. Sale by a mercantile agent (sec2)

c. The disposition must be made when

3. Sale by one of joint-owners

a. One of the several joint-owners has

4. Sale under a voidable contract (sec 29)

5. Sale by a seller in possession after sale.

6. Sale by a buyer in possession

- A buyer who agreed to buy goods obtains

-Newton of Wembley v Williams

You might also like