Sales of Good (SOGA)

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    Introduction

    The Sale of Good Act 1957 (SOGA herein forth) was enacted in 1957 and the statue was

    applicable to sale of goods in peninsular ala!sia ("ast ala!sia)# e$cluding the statesof %enang and alacca& The Act was later re'ised in 199 and it includes both states1&

    The states of Sabah and Sarawa (*est ala!sia) are not go'erned b! this act insteadthe! are go'erned b! section 5(+) of the ,i'il -aw Act of 195.# which pro'ides# a/ong

    others# that the law to be ad/inistered in "ngland in the lie case at the correspondentperiod& The "nglish statue applied is the Sale of Goods Act 1979# which is a re'ision of

    the Sales of Goods Act 109&As a result Sabah and Sarawa are bound b! statute to

    continue to appl! principles of "nglish law relating to the sale of goods& The contrastbetween the laws *est and "ast ala!sia has the potential to raise unwarranted legal

    proble/s# e'en though "nglish statue is the principle source of law for both parts of

    ala!sia (%heng# 19972 3eatri$ and *u# 1991)&The Act contains definitions or interpretations which clarif! what the wording used in it

    refers to and the conte$t& 3elow are so/e of the definitions of e! ter/s in the SOGA&

    3u!er 4a person who bu!s or agrees to bu! goods&Seller 4a person who sells or agrees to sell goods&Goods 4/eans e'er! ind of /o'able propert! other than actionable clai/s and /one!2

    and includes stoc and shares# growing crops# grass and things attached to or for/ing part

    of the land which are agreed to be se'ered before sale or under the contract of sale&specific goods 4 /eans goods identified and agreed upon at the ti/e a contract of sale is

    /ade2 and an! e$pression used but not defined in this Act which is defined in the

    ,ontracts Act 195 Act 1.6# shall ha'e the /eaning assigned to it in that Act&uture goods 4 /eans goods to be /anufacture or produced or ac8uired b! the seller after

    the /aing of the contract of sale&

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    41SA-" O GOOS A,T 1957 is an Act relating to the sale of goods& *hen enacted itwas applicable in ederal Territor!# :ohore# ;edah# ;elantan# s

    certificate# wharfinger>s certificate# railwa! receipt# warrant or order for deli'er! of goodsand an! other docu/ent used in the ordinar! course of business as proof of the possession

    or control of goods# or authori?ing or purporting to authori?e# either b! endorse/ent or

    b! deli'er!# the possessor of the docu/ent to transfer or recei'e goods thereb!represented&

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    seller transfers or agrees to transfer the propert! in goods to the bu!er for a price& Section

    @ also states that the contract of sale /a! be absolute or conditional& The difference

    between the two is that an absolute contract of sale entails a seller transferring propert! ingoods to the bu!er# and the contract is nown as a sale# where as in a conditional contract

    of sale the seller consents to transfer the propert! in goods to the bu!er for a price

    pending the fulfill/ent of certain conditions and according to section @ of SOGA thecontract is nown as# agree/ent to sell& The agree/ent to sell will beco/e a sale when

    the conditions are fulfilled (SOGA section @)&

    Section 5 of the SOGA deals with the for/ation of# the contract of sale of goods& or thecontract of sale of goods to e$ist# there has to be an offer to bu! or an offer to sell for a

    price& urther/ore an acceptance of the offer has to follow and ulti/atel! the contract

    /a! pro'ide for i//ediate deli'er! or i//ediate pa!/ent or both or install/ents

    deli'er! or install/ents pa!/ent or both& The agree/ent to for/ a contract between thebu!er and the seller /a! be in writing or partl! in writing and partl! b! word of /outh or

    b! word of /outh or /a! be i/plied fro/ the conduct of the parties&

    Ter/s of a contract of Sale of Goods

    The ter/s of a contract of sale of goods are based on section 1+ of the SOGA and can besplit into two parts2 condition and warrant!& ,ondition is the funda/ental ter/ of the

    contract# and the breach of the condition gi'es the inured part! the right to reect the

    contract& *arrant! refers to stipulation collateral to the /ain purpose of the contract# thebreach of which gi'es the inured part! the right to clai/ for da/ages but not to reect the

    goods and treat the contract as repudiated& According to section 1 of SOGA# the inured

    part! can treat a breach of condition as a breach of warrant!# which /eans that the inuredpart! is entitled to clai/ for da/ages but not reect the contract& The case in point is the

    case ofB

    Associated etal S/elters -td '& Tha/ ,heow Toh(197+) 1 -: 171

    The ederal ,ourt allowed the respondent or the bu!er to treat breach of condition asbreach of warrant!# resulting in the bu!er being entitled to clai/ for da/ages within the

    scope of Section 1 of the Sale of Goods Act# 1957&

    3enefits to concerned parties

    SOGA ai/s to protect concerned parties in the transaction and the e'entual transfer ofownership of a good fro/ a seller to a bu!er&

    I/plied ter/s of the Sale of Goods Act# 1957

    The statutor! of i/plied ter/s /ain function is to protect the rights to e'er! bu!er or

    consu/er& These statutor! i/plied ter/s are in Section 1@4 17 of the Sales of Goods Act#

    1957 and are the i/plied ter/s in e'er! contract of sale of goods&Section 1@ of the SOGA is di'ided into three parts& The first part states that an i/plied

    condition on the part of the seller# that# in the case of a sale# he has a right to sell thegoods# and that in the case of an agree/ent to sell# he will ha'e a right to sell the goods at

    the ti/e when the propert! is to pass& This in short /eans that it is an i/plied condition

    to the seller to ensure that the bu!er will eno! the ownership as well as possession anduse of the goods# failure to do so gi'es the bu!er the right to reect the contract as the

    issue constitutes an i/plied condition (Ca?/an and Shuor# +1)& The ne$t part states

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    that there is an i/plied warrant! that the bu!er shall eno! 8uit possession of the goods#

    and if the seller fails to co/pl!# the bu!er is entitled to clai/ for da/ages since the

    /atter is being constituted as an i/plied warrant!& %aragraph c# the last part of Section 1@of SOGA# states that there is an i/plied warrant! that the goods shall be free fro/ an!

    charge or encu/brance in fa'or of an! third part! not declared or nown to the bu!er

    before or at the ti/e when the contract is /ade& If the seller fails to co/pl!# the bu!er isentitled to clai/ for da/ages since the /atter is being constituted as an i/plied warrant!&

    Section 15 of the SOGA is on the sale of goods b! description& It states that where there is

    a contract for the sale of goods b! description there is an i/plied condition that the goodsshall correspond with the description2 and# if the sale is b! sa/ple as well as b!

    description# it is not sufficient that the bul of the goods corresponds with the sa/ple if

    the goods do not also correspond with the description& The case in point is the case ofB

    %urshotu/das and ,o& ' itsui 3ussan ;aisha -td& (1911) 1+ SS-C .7In this case# the part!>s pre'ious contracts entailed the sale goods being flour# which was

    sold in bags bearing a recogni?ed trade/ar& -ater the pre'ious contract description of

    flour was used to order and flour of identical 8ualit! was deli'ered but# short of the sa/e

    well4nown trade /ar& The court held that the goods did not co/pl! with the description(3eatri$ and *u# 1991)&

    Section 1. of SOGA# in a nutshell sa!s that there is no i/plied condition or warrant! asto the 8ualit! or fitness for an! particular purpose of goods# unless the bu!er re8uests the

    goods be reasonable for a purpose and the goods be of /erchantable 8ualit!& The last

    section of i/plied ter/s is Section 17 of SOGA# and in su//ar! points out that# whendealing with goods b! sa/ple# it is re8uired b! the seller to ensure that the bul of the

    goods /ust correspond with the sa/ple& If the seller fails to co/pl!# the bu!er is entitled

    to reect the contract since the /atter is being constituted as an i/plied condition&

    interest& Therule is illustrated in s na/e# the second defendant had to pa! off EI

    inance fro/ who/ he had earlier obtained a hire4purchase facilit!& or this purpose#

    the second defendant retained the registration card& After obtaining the cancellation ofendorse/ent of EI>s ownership# the second defendant sold the car to 3 whose purchase

    was financed b! the first defendant& The first defendant endorsed its ownership clai/ onthe registration card& The plaintiff applied to the court to deter/ine whether or not the

    first defendant had a better title to the car&FeldB allowing the application B

    After a full pa!/ent was /ade b! the second defendant to EI inance and EI

    inance had relin8uished all rights to ownership o'er the car# the plaintiff had ac8uiredownership to the car and the second defendant>s further dealings on the car with the first

    defendant are therefore illegal& To that end# the first defendant ac8uired no title or

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    interest o'er the car when the! purchased it and their onl! re/ed!# if an!# is against the

    second defendant personall! for the return of the purchase price but as against the

    plaintiff the! cannot clai/ an! right ownership o'er the car&

    Anal!sis of the sale of goods law

    or/ation of the contract

    The Subect /atter of the contract in'ol'es the following areas& It /a! in'ol'e goods or

    ser'ice that are presentl! a'ailable or goods that /a! be a'ailable in the future& There/a! be a contract that depends upon a condition set be the seller which /a! or /a! not

    occur& *hene'er the seller atte/pts to create a contract on the present sale of future

    goods this contract operates as an agree/ent to sell the goods this contract then lawfull!beco/es an agree/ent between the two parties to sell the goods beco/es null&

    It should also be noted that under the sale of goods law Section 7 if the goods before a set

    contract deteriorated or co/e under so /uch har/ the good no longer beco/es fit for its

    intended purpose without the nowledge of the seller&

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    Fowe'er according to section 1 the bu!er is entitled to treat a condition as a breach of

    warrant!& *e can see this in the case of Associated etal S/elters -td H Tha/ ,heow

    Toh& Fere the plaintiff purchased a furnace fro/ the defendant& It was stated in thecontract that this could reach a te/perature of about +. but theirs could not& So the!

    sued for da/ages& It was held that the! were allowed to treat the breach of conditions as a

    breach of warrant! as sue for da/ages&

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    the deli'er! was dela!ed because of hi/&

    3! section +7 of the sale of goods act we can see that when a good is sold b! a person

    who is not the owner without the authorit! of the owner the bu!er attains no better titlethan the owner unless owner is precluded fro/ den!ing the seller authorit! to do so& If we

    loo at Feap H otorists Ad'isor! Agenc! -td *e can see here Feap was induced to

    gi'e

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    At the end

    The contract act 195 in ala!sia shall also appl! to contract for the sale of goods&

    or/ation

    There are no noticeable differences between the + countries concerning specifications

    under the contract of sale# for/alities of contract# subect /atter of contract# the price#conditions and warranties# and sale of goods& Since all specifications under the for/ation

    are 8uite si/ilar# one need not go through both of the countries for/ation part of the saleof goods act but can get the idea fro/ reading either of the two&

    "ffects of contract

    Transfer of propert! as between seller and bu!er

    The specifications of the following for the two countries are the sa/eB Goods /ust beascertained2 propert! passes if intended to pass2 rules for ascertaining intention2

    reser'ation of right of disposal2 ris pri/a facie passes with propert!&

    Transfer of Title

    Sale b! person not the ownerB the Australian 'ersion /aes a reference to /ercantile lawact 19.+ and registration of interests in goods act 199 noting that the latter and the

    for/er are not affected b! the act& Other than the pre'ious state/ent nothing is differentin this section for the two countries&

    Australia has + sections which e$plain the re'esting of propert! in stolen goods on

    con'iction of offender and the effects of writs of e$ecution&

    Other specifications under resale under 'oidable title and seller or bu!er in possessionafter sale for the two countries are 'er! si/ilar&

    CIGFTS O E

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    seller /ust be willing to gi'e the goods to the bu!er in e$change for their price and the

    bu!er shall also be willing to pa! the re8uired price b! the seller in order to accept the

    goods& This will happen in /ost cases unless otherwise agreed of so/ething b! theparties&

    eli'er!

    Cules as to deli'er! of goods under the ala!sian Sale of goods act is general and brief#

    it states that it>s up to what the parties agreed on to deli'er the goods or an!wa! that canlead to the bu!er hold possession of the goods& It co'ers so/e conditions which are

    si/ilar to those of Australia which will co/e ne$t& *hile the Australian Sale of Goods

    act of deli'er! gets into detail and gi'e conditions# lie it depends on the agree/entbetween the parties# whether the seller will send the goods to the bu!er& It goes on to

    discuss the place of deli'er! which is /ostl! of the seller if the seller has one# or their

    residence or it depends on their contract& It /entions the ti/e period and goods on a thirdpart! the responsibilit! of the seller to /ae the goods are deli'ered in good condition&

    The onl! condition that the ala!sian act does not co'er but the Australian act co'ers is

    that of the rules of deli'er! does not affect the operation of the issue or transfer of adocu/ent of title to goods and de/and&

    eli'er! of wrong 8uantit!

    3oth countries ha'e the sa/e rules regarding the wrong 8uantit! deli'eries& It is stated

    that if the seller deli'er less than that agreed on# the bu!er can reect it or he decides to

    accept if# he /ust pa! the a/ount agreed on the contract# and if the goods are of a larger8uantit!# the bu!er /a! reect the/ and if he decides to accept the/# he has to tae the

    e$act 8uantit! agreed on pa! the e$act a/ount& In case of the /i$ goods# the bu!er /a!

    reect the/ or if he decides to accept the/# he /a! onl! tae the goods agreed on and pa!the necessar! a/ount&

    Install/ent deli'er!

    It is clearl! /ention in both countr! acts that the bu!er of the goods has to reect the

    deli'er! unless there is a contract between the parties co'ering that particular /atter andif so# the goods /ust be paid separatel!&

    eli'er! to carrier and ris if goods are deli'ered at distant place

    3oth countries share si/ilar acts which e$plain that the seller is responsible for sending

    goods to the bu!er and /aing all necessar! co//unication with the carrier and thebu!er can onl! /ae contact with the carrier if referred b! the seller to do so& If the seller

    fails to /ae an! arrange/ents with the carrier or the bu!er and the goods are deli'ered

    in bad condition# the bu!er can decline to accept the goods or he can hold the sellerresponsible for da/ages&

    In case of goods being sent b! sea# the bu!er has to be infor/ed b! the seller and it>s

    i/portant to insure# the seller shall notif! the bu!er of such circu/stances and if the

    seller fails to do so# he is responsible for their safet! during sea transportation&

    3u!ers right to e$a/ining the goods and acceptance

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    The bu!er has the right to e$a/ine the goods to see if the! arri'ed in good condition and

    if the! satisf! the agree/ents on the contract then that>s when he can infor/ the seller to

    ha'e accepted the goods&The bu!er has to infor/ the seller that he has seen the goods or if he does not do that it>s

    concluded that the goods ha'e arri'ed safel!& If the bu!er accepts the goods and reects

    the/ and does not infor/ the seller for a certain period of ti/e# the goods are regarded asaccepted b! the bu!er&

    ala!sian law and Australian law co/parison

    3reach of contract

    The ala!sian sale of goods act and Australian sale of goods act are 'er! si/ilar# the!onl! differ in s/all aspects of e$plaining the sections in the 'arious parts of the act& The

    following will e$plain and co/pare the pair&

    Action for price

    Section 5+ of the Australian sale of goods act 195@ is identical to the section 55 of the

    ala!sian sale of goods act 1957& The acts state that a seller can sue the bu!er if heMsheneglects or refuses to pa! for the goods according to the ter/s of the contract& The bu!er

    can still be sued for not pa!ing e'en when the! ha'e not ac8uired the goods as long asthere was a certain da! of pa!/ent as agreed in the contract&

    a/ages for non4acceptance

    Section 5 of the Australian sale of goods act 195@ is si/ilar to section5. of the

    ala!sian sale of goods act& It reads that the bu!er can be sued if the bu!er wrongfull!neglects or refuses to accept and pa! for the goods& The Australian act continues to

    e$plain further that da/age is the esti/ated loss directl! and naturall! resulting in the

    ordinar! course of e'ents fro/ the bu!er>s breach of contract but if there is an a'ailable

    /aret for the goods# the /easure of da/ages is pri/a facie to be ascertained b! thedifference between the contract price and the /aret or current price at the ti/e or ti/es

    when the goods ought to ha'e been accepted# or# if no ti/e was fi$ed for acceptance# at

    the ti/e of the refusal to accept&

    a/ages for non4deli'er!

    Section 5@ of the Australian sale of goods act 195@ is si/ilar to section 57 of the

    ala!sian sale of goods act& It states that the bu!er can sue the seller if the seller

    wrongfull! neglects or refuses to deli'er the goods to the bu!er& The Australian sale ofgoods act continues to e$plain da/ages in the sa/e wa! as abo'e in section 5 of

    Australia&

    Specific perfor/ance

    Section 50 of the ala!sian sale of goods act is si/ilar to section 55 of the Australiansale of goods act# it discusses about that in an! suit for breach of contract to deli'er

    specific or ascertained goods&

    Ce/ed! for breach of warrant

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    Section 59 of the ala!sian sale of goods act is si/ilar to section 5. of the Australian

    sale of goods act# but the Australian act further e$plains the /easure of da/age as abo'e&

    Cepudiation of contract before due date

    section . of the ala!sian sale of goods act states that *here either part! to a contract

    of sale repudiates the contract before the date of deli'er!# the other part! /a! either treatthe contract as subsisting and wait till the date of deli'er!# or he /a! treat the contract as

    rescinded and sue for da/ages for the breach&

    Interest b! wa! of da/ages and special da/ages