3. SOGA(cont)

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TOPIC 3:TOPIC 3:

SALE OF GOODSSALE OF GOODS(continue)(continue)

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5. TRANSFER OF TITLE5. TRANSFER OF TITLE

Sec 27 (1) of SOGA:-Sec 27 (1) of SOGA:-

The general rule is that “where goods are soldThe general rule is that “where goods are sold

by a person who is not the owner thereof andby a person who is not the owner thereof and

who does not sell them under the authority nor who does not sell them under the authority nor with the consent of the owner, the buyer acquirewith the consent of the owner, the buyer acquire

no better title to the goods than the seller had.”no better title to the goods than the seller had.”

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The English rule :-The English rule :-Nemo dat quod non habet” Nemo dat quod non habet”

(no one can dispose of that which is not his to(no one can dispose of that which is not his to

dispose of.)dispose of.)

The rationale of this rule is to protect the right of The rationale of this rule is to protect the right of

ownership.ownership.

When a person sells goods which belong toWhen a person sells goods which belong tosomeone else, the buyer cannot get a good title.someone else, the buyer cannot get a good title.

The true owner still can recover the goods at lawThe true owner still can recover the goods at law

without paying any compensation to the buyer, evenwithout paying any compensation to the buyer, even

if the buyer had paid the seller for the goods.if the buyer had paid the seller for the goods.

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However, there are exceptions for this generalHowever, th

ere are exceptions for this general

rule (rule (

nemo dat quod non habet rule).nemo dat q

uod non habet rule).They are:-They a

re:-

i)i) EstoppelEstoppel

ii) Sale by mercantile agentii) Sale by mercantile agent

iii) Sale by one of joint owner iii) Sale by one of joint owner iv) sale under a voidable titleiv) sale under a voidable title

v) Sale by seller in possession after salev) Sale by seller in possession after sale

vi) Sale by a buyer in possessionvi) Sale by a buyer in possession

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(1) Estoppel

(1) Estoppel

Where the owner made a representation (byWhere the owner made a representation (bystatement or conduct) that the seller was entitled tostatement or conduct) that the seller was entitled to

sell the goods and the buyer relies on thatsell the goods and the buyer relies on that

representation, the buyer obtained a good titlerepresentation, the buyer obtained a good title

because the owner is estopped by hisbecause the owner is estopped by hisrepresentation from denying the seller’s authority torepresentation from denying the seller’s authority to

sell.sell.

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(2) Sale by Mercantile Agent(2) Sale by Mercantile Agent

A person acts as a mercantile agent where he hasA person acts as a mercantile agent where he hasauthority either to sell goods or to consign (deliver) goodsauthority either to sell goods or to consign (deliver) goodsfor the purpose of sale or to buy goods or to raise moneyfor the purpose of sale or to buy goods or to raise moneyon the security of goods.on the security of goods.

Eg:Eg: second hand car dealer, broker or auctioneer second hand car dealer, broker or auctioneer

A person in possession of goods or document of title toA person in possession of goods or document of title togoods with the consent of owner can pass a good title togoods with the consent of owner can pass a good title tothe buyer as a mercantile agent.the buyer as a mercantile agent.

The sale shall be valid as if he was expressly authorizedThe sale shall be valid as if he was expressly authorizedby the owner of goods PROVIDED that the person takingby the owner of goods PROVIDED that the person takingthe goods(buyer) acting in a good faith and has no noticethe goods(buyer) acting in a good faith and has no noticethat the agent did not have authority.that the agent did not have authority.

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Pearson v Rose & Young Ltd [1950] 2 All ERPearson v Rose & Young Ltd [1950] 2 All ER

Pearson left his car with Hunt, a mercantile agent. HePearson left his car with Hunt, a mercantile agent. Hehad not authorized Hunt to sell the car or he did nothad not authorized Hunt to sell the car or he did notintend to pass the property in car. Shortly after Huntintend to pass the property in car. Shortly after Huntobtained the car, he sold it to a third party. It was arguedobtained the car, he sold it to a third party. It was arguedthat a good title cannot pass because Pearson had notthat a good title cannot pass because Pearson had not

consented to Hunt having possession of the car.consented to Hunt having possession of the car.

Held: Eventhough possession was obtained by trick, thisHeld: Eventhough possession was obtained by trick, thiswas a sufficient consent.was a sufficient consent.

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(3)(3) Sale by one of Joint Owner Sale by one of Joint Owner

Goods may be owned by more than one person.Goods may be owned by more than one person.

Sec 28 SOGASec 28 SOGA states that:-states that:-

If one of several joint owner of goods has the soleIf one of several joint owner of goods has the solepossession of them by permission of the co-owners, thepossession of them by permission of the co-owners, theproperty in goods is transferred to any person who buysproperty in goods is transferred to any person who buysthem from such joint owner in good faith and has not atthem from such joint owner in good faith and has not atthe time of the contract of sale notice that the seller hasthe time of the contract of sale notice that the seller has

no authority to sell.no authority to sell.

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For example: A and B is co-owners of For example: A and B is co-owners of Proton Perdana car. A with B consentProton Perdana car. A with B consentused the car. A later without B consent sellused the car. A later without B consent sell

the car to C. C will get a good title eventhe car to C. C will get a good title eventhough B did not give his consentthough B did not give his consentprovided C acted in good faith and has noprovided C acted in good faith and has nonotice that A has no authority to sell.notice that A has no authority to sell.

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(4.)(4.) Sale Under a Voidable TitleSale Under a Voidable Title

The seller may derive his title from an earlier The seller may derive his title from an earlier sale by the true owner. That earlier sale maysale by the true owner. That earlier sale mayhave been voidable. (under Section 19 or 20 of have been voidable. (under Section 19 or 20 of the Contract Act 1957) but if the earlier sale wasthe Contract Act 1957) but if the earlier sale wasnot rescinded at the time of the second sale, thenot rescinded at the time of the second sale, thebuyer acquires good title provided he buys inbuyer acquires good title provided he buys ingood faith and without notice of any defect ingood faith and without notice of any defect intitle .title .

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A contract is voidable when consent of theA contract is voidable when consent of theoriginal owner is caused by coercion, fraud,original owner is caused by coercion, fraud,misrepresentation or undue influence.misrepresentation or undue influence.

Eg:Eg: Bobby obtained goods from Ina byBobby obtained goods from Ina bycoercion and sells them to Dorris who buy themcoercion and sells them to Dorris who buy theminnocently. At the time Dorris buys the goods,innocently. At the time Dorris buys the goods,Ina has not rescinded the contract made withIna has not rescinded the contract made with

Bobby. Dorris obtains good title to the goods.Bobby. Dorris obtains good title to the goods.

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(5.)(5.) Sale by a seller in possession after Sale by a seller in possession after

salesale

Sec 30 SOGASec 30 SOGA

A purchaser can obtain a good title to goodsA purchaser can obtain a good title to goods

when he buys from a seller who has alreadywhen he buys from a seller who has alreadysold the goods to previous buyer but retainedsold the goods to previous buyer but retainedpossession of goods or document of title topossession of goods or document of title tothem, has then sold them to secondthem, has then sold them to second

purchaser.purchaser.

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As long as Second purchaser is in goodAs long as Second purchaser is in goodfaith and has no notice of the previousfaith and has no notice of the previoussale he obtain a good title even thoughsale he obtain a good title even thoughseller had no title to give to secondseller had no title to give to secondpurchaser.purchaser.

The first buyer will lose the title but he canThe first buyer will lose the title but he cantake legal action against the seller whotake legal action against the seller who

would be liable to himwould be liable to him

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(6)(6) Sale by a buyer in possessionSale by a buyer in possession

Sec 30(2) SOGA:-Sec 30(2) SOGA:- If a buyer having bought or agreed to buyIf a buyer having bought or agreed to buy

goods, obtain possession of the goods or goods, obtain possession of the goods or document of title with the consent of the seller,document of title with the consent of the seller,he can pass a good title to a subsequent buyer he can pass a good title to a subsequent buyer acting in a good faith, even if under the firstacting in a good faith, even if under the firsttransaction he has not obtained a good title.transaction he has not obtained a good title.

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Newton of Wembley Ltd v Williams (1964)Newton of Wembley Ltd v Williams (1964)

3 ALL ER5323 ALL ER532 The Plaintiff sole a car toThe Plaintiff sole a car to AA who paid by cheque. Although he waswho paid by cheque. Although he was

given possession of car, it was agreed that the property would notgiven possession of car, it was agreed that the property would notpass until the cheque was honoured. The cheque was dishonoured.pass until the cheque was honoured. The cheque was dishonoured.ButBut AA had resold the car tohad resold the car to BB who bought it without knowledge of thewho bought it without knowledge of theposition.position. BB resold it to C, (Defendant). The Plaintiff tried to recover resold it to C, (Defendant). The Plaintiff tried to recover the car from C.the car from C.

Held:Held: A,A, the original owner was in possession with the consent of thethe original owner was in possession with the consent of theowner. Hence, he could pass a good title toowner. Hence, he could pass a good title to BB who later onwho later ontransferred it to C. The Plaintiff’s claim failed & C was thereforetransferred it to C. The Plaintiff’s claim failed & C was thereforeentitled to keep the car.entitled to keep the car.

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REMEDIES FOR BREACH OFREMEDIES FOR BREACH OF

CONTRACT OF SALE OFCONTRACT OF SALE OFGOODSGOODS

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REMEDIES FOR BREACH OF SALE OF GOODSREMEDIES FOR BREACH OF SALE OF GOODS

CONTRACTCONTRACT

A. SELLER’S REMEDIESA. SELLER’S REMEDIES

1.1. Rights of unpaid seller against the goodsRights of unpaid seller against the goods

There are three types of There are three types of remediesremedies:-:- LienLien Stoppage in transitStoppage in transit

Resale of goodsResale of goods

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(i) Lien

Sec 47 SOGA:

A lien is a right of an unpaid seller in possession of A lien is a right of an unpaid seller in possession of goods to retain them until the price has been paid or goods to retain them until the price has been paid or his debt secured or satisfied.his debt secured or satisfied.

The seller has right to retain the goods if he is unpaidThe seller has right to retain the goods if he is unpaidseller and the right of retention operates until the seller seller and the right of retention operates until the seller is paid.is paid.

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(ii)(ii) Right of stoppage in transitRight of stoppage in transit


a)a) This is a right given to an unpaid seller who hasThis is a right given to an unpaid seller who has

handed the goods to an independent carrier for thehanded the goods to an independent carrier for thepurpose of having them transported to thepurpose of having them transported to the buyer tobuyer to

recover the goods from the carrier and to hold themrecover the goods from the carrier and to hold them

until the buyer pays the price.until the buyer pays the price.

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b)b) The right to stop exists for as long as the goods are in theThe right to stop exists for as long as the goods are in thehand of the independent carrier. The seller may exercisehand of the independent carrier. The seller may exercise

the right at any time before the goods are handed over tothe right at any time before the goods are handed over tothe buyer or before the carrier acknowledges to the buyer the buyer or before the carrier acknowledges to the buyer that the goods are being held for them.that the goods are being held for them.

c)c) Stoppage will be carried out by unpaid seller giving noticeStoppage will be carried out by unpaid seller giving notice

to the carrier, altering original instructions. The carrier mustto the carrier, altering original instructions. The carrier mustobey his notice and the seller must pay the expenses of re-obey his notice and the seller must pay the expenses of re-delivery.delivery.

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(iii)(iii) Right of ResaleRight of Resale


As a seller, he may resell the goods and if he does so,As a seller, he may resell the goods and if he does so,

the second buyer obtains good title and the originalthe second buyer obtains good title and the original

buyer’s right to the goods is defeated.buyer’s right to the goods is defeated.

Circumstances in which the unpaid seller may re-sellCircumstances in which the unpaid seller may re-sell

the goods:-the goods:-

i)i) Where the goods are perishable in nature;Where the goods are perishable in nature;

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ii)ii) Where unpaid seller gives notice of his intention to resell if the buyer Where unpaid seller gives notice of his intention to resell if the buyer

does not within reasonable time, pay the price and the buyer doesdoes not within reasonable time, pay the price and the buyer doesnot do so; or not do so; or

iii)iii) Where in the contract, the seller reserves the rightWhere in the contract, the seller reserves the right

to dispose of the goods if the buyer does not pay,to dispose of the goods if the buyer does not pay,and the buyer does not do so.and the buyer does not do so.

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(iii) Action of damages for non acceptance. If the(iii) Action of damages for non acceptance. If thebuyer buyer wrongfully refuses to accept and pay for thewrongfully refuses to accept and pay for thegoods, the seller may sue him for damages for goods, the seller may sue him for damages for

non-acceptance (Section 56).non-acceptance (Section 56).

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B. THE BUYER’S REMEDIESB. THE BUYER’S REMEDIES

1.1. Damages for non-deliveryDamages for non-delivery

Where the seller wrongfully neglect or refuses to deliver Where the seller wrongfully neglect or refuses to deliver

the goods to the buyer, the buyer may sue the seller for the goods to the buyer, the buyer may sue the seller for

damages for non-delivery.damages for non-delivery.

2. Specific Performance2. Specific Performance

In a contract for delivery of specific goods, the court mayIn a contract for delivery of specific goods, the court may

order the seller to perform the contract i.e by deliveringorder the seller to perform the contract i.e by delivering

the said goods to the buyer.the said goods to the buyer.

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3. Damages for breach of warranty3. Damages for breach of warranty

Where there is a breach of warranty by the seller, the buyer may sue him for Where there is a breach of warranty by the seller, the buyer may sue him for

damages for breach of warranty.damages for breach of warranty.

4. Sue for special damages4. Sue for special damages Buyer may sue the seller for the refund of the price in a case of breach of theBuyer may sue the seller for the refund of the price in a case of breach of the

contract made by seller.contract made by seller.

5. Sue for wrongful detention of goods5. Sue for wrongful detention of goods

Where the title to the goods had passed to the buyer, he may sue the seller for tortWhere the title to the goods had passed to the buyer, he may sue the seller for tortof wrongful detention of goods.of wrongful detention of goods.

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END OF LECTUREEND OF LECTURE

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3. SOGA(cont)