PART I CONTRACTS TO WHICH ACT
APPLIES
1. Contracts
to which Act applies
(1) This Act applies
to contracts of sale of goods made on or after (but not to those made before) 1
January 1894.
(2) In relation to
contracts made on certain dates, this Act applies subject to the modification of
certain of its sections as mentioned in Schedule 1 below.
(3) Any such
modification is indicated in the section concerned by a reference to Schedule 1
below.
(4) Accordingly,
where a section does not contain such a reference, this Act applies in relation
to the contract concerned without such modification of the
section.
PART II FORMATION OF THE
CONTRACT
Contract of sale
2. Contract of
sale
(1) A contract of
sale of goods is a contract by which the seller transfers or agrees to transfer
the property in goods to the buyer for a money consideration, called the
price.
(2) There may a
contract of sale between one part owner and another.
(3) A contract of
sale may be absolute or conditional.
(4) Where under a
contract of sale the property in the goods is transferred from the seller to the
buyer the contact is called a sale.
(5) Where under a
contract of sale the transfer of the property in the goods is to take place at a
future time or subject to some condition later to be fulfilled the contract is
called an agreement to sell.
(6) An agreement to
sell becomes a sale when the time elapses or the conditions are fulfilled
subject to which the property in the goods is to be
transferred.
3. Capacity to
buy and sell
(1) Capacity to buy
and sell is regulated by the general law concerning capacity to contract and to
transfer and acquire property.
(2) Where necessaries
are sold and delivered to a minor or to a person who by reason of mental
incapacity or drunkenness is incompetent to contract, he must pay a reasonable
price for them.
(3) In subsection (2)
above 'necessaries' means goods suitable to the condition in life of the minor
or other person concerned and to his actual requirements at the time of the sale
and delivery.
Formalities of
contract
4. How
contract of sale is made
(1) Subject to this
and any other Act, a contract of sale may be made in writing (either with or
without seal), or by word of mouth, or partly in writing and partly by word of
mouth, or may be implied from the conduct of the parties.
(2) Nothing in this
section affects the law relating to corporations.
Subject matter of
contract
5. Existing or
future goods
(1) The goods which
form the subject of a contract of sale may be either existing goods, owned or
possessed by the seller, or goods to be manufactured or acquired by him after
the making of the contract of sale, in this Act called future
goods.
(2) There may be a
contract for the sale of goods the acquisition of which by the seller depends on
a contingency which may or may not happen.
(3) Where by a
contract of sale the seller purports to effect a present sale of future goods,
the contract operates as an agreement to sell the goods.
6. Goods which
have perished
Where there is a contract for the sale of
specific goods, and the goods without the knowledge of the seller have perished
at the time when a contract is made, the contract is void.
7. Goods
perishing before sale but after agreement to sell
Where there is an
agreement to sell specific goods and subsequently the goods, without any fault
on the part of the seller or buyer, perish before the risk passes to the buyer,
the agreement is avoided.
The price
8.
Ascertainment of price
(1) The price in a
contract of sale may be fixed by the contract, or may be left to be fixed in a
manner agreed by the contract, or may be determined by the course of dealing
between the parties.
(2) Where the price
is not determined as mentioned in subsection (1) above the buyer must pay a
reasonable price.
(3) What is a
reasonable price is a question of fact dependent on the circumstances of each
particular case.
9. Agreement
to sell at valuation
(1) Where there is an
agreement to sell goods on the terms that the price is to be fixed by the
valuation of a third party, and he cannot or does not make the valuation, the
agreement is avoided; but if the goods or any part of them have been delivered
to and appropriated by the buyer he must pay a reasonable price for
them.
(2) Where the third
party is prevented from making the valuation by the fault of the seller or
buyer, the party not at fault may maintain an action for damages against the
party at fault.
Implied terms etc.
10. Stipulations about
time
(1) Unless a
different intention appears from the terms of the contract, stipulations as to
time of payment are not of the essence of a contract of
sale.
(2) Whether any other
stipulation as to time is or is not of the essence of the contract depends on
the terms of the contract.
(3) In a contract of
sale 'month' prima facie means calendar month.
11. When condition to be
treated as warranty
(1) This section does
not apply to Scotland.
(2) Where a contract
of sale is subject to a condition to be fulfilled by the seller, the buyer may
waive the condition, or may elect to treat the breach of the condition as a
breach of warranty and not as a ground for treating the contract as
repudiated.
(3) Whether a
stipulation in a contract of sale is a condition, the breach of which may give
rise to a right to treat the contract as repudiated, or a warranty, the breach
of which may give rise to a claim for damages but not to a right to reject the
goods and treat the contract as repudiated, depends in each case on the
construction of the contract; and a stipulation may be a condition, though
called a warranty in the contract.
(4) Subject to
section 35A below where a contract of sale is not severable and the buyer has
accepted the goods or part of them, the breach of a condition to be fulfilled by
the seller can only be treated as a breach of warranty, and not as a ground for
rejecting the goods and treating the contract as repudiated, unless there is an
express or implied term of the contract to that effect.
(6) Nothing in this
section affects a condition or warranty whose fulfilment is excused by law by
reason of impossibility or otherwise.
(7) Paragraph 2 of
Schedule 1 below applies in relation to a contract made before 22 April 1967 or
(in the application of this Act to Northern Ireland) 28 July 1967.
12. Implied terms about
title, etc.
(1) In a contract of
sale, other than one to which subsection (3) below applies, there is an implied
term on the part of the seller that in the case of a sale he has a right to sell
the goods, and in the case of an agreement to sell he will have such a right at
the time when the property is to pass.
(2) In a contract of
sale, other than one to which subsection (3) below applies, there is also an
implied term that—
(a) the goods are
free, and will remain free until the time when the property is to pass, from any
charge or encumbrance not disclosed or known to the buyer before the contract is
made, and
(b) the buyer will
enjoy quiet possession of the goods except so far as it may be disturbed by the
owner or other person entitled to the benefit of any charge or encumbrance so
disclosed or known.
(3) This subsection
applies to a contract of sale in the case of which there appears from the
contract or is to be inferred from its circumstances an intention that the
seller should transfer only such title as he or a third person may
have.
(4) In a contract to
which subsection (3) above applies there is an implied term that all charges or
encumbrances known to the seller and not known to the buyer have been disclosed
to the buyer before the contract is made.
(5) In a contract to
which subsection (3) above applies there is also an implied term that none of
the following will disturb the buyer's quiet possession of the goods,
namely—
(a) the
seller;
(b) in a case where
the parties to the contract intend that the seller should transfer only such
title as a third person may have, that person;
(c) anyone claiming
through or under the seller or that third person otherwise than under a charge
or encumbrance disclosed or known to the buyer before the contract is
made.
(5A) As regards England and Wales and
Northern Ireland, the term implied by subsection (1) above is a condition and
the terms implied by subsections (2), (4) and (5) above are
warranties.
(6) Paragraph 3 of
Schedule 1 below applies in relation to a contract made before 18 May
1973.
13. Sale by
description
(1) Where there is a
contract for the sale of goods by description, there is an implied term that the
goods will correspond with the description.
(1A) As regards England and Wales and
Northern Ireland, the term implied by subsection (1) above is a
condition.
(2) If the sale is by
sample as well as by description it is not sufficient that the bulk of the goods
corresponds with the sample if the goods do not also correspond with the
description.
(3) A sale of goods
is not prevented from being a sale by description by reason only that, being
exposed for sale or hire, they are selected by the buyer.
(4) Paragraph 4 of
Schedule 1 below applies in relation to a contract made before 18 May
1973.
14. Implied terms about
quality or fitness
(1) Except as
provided by this section and section 15 below and subject to any other
enactment, there is no implied term about the quality or fitness for any
particular purpose of goods supplied under a contract of
sale.
(2) Where the seller
sells goods in the course of a business, there is an implied term that the goods
supplied under the contract are of satisfactory quality.
(2A) For the purposes of this Act, goods
are of satisfactory quality if they meet the standard that a reasonable person
would regard as satisfactory, taking account of any description of the goods,
the price (if relevant) and all the other relevant
circumstances.
(2B) For the purposes of this Act,
the quality of goods includes their state and condition and the following (among
others) are in appropriate cases aspects of the quality of
goods—
(a)