Hertfordshire Law School - Commercial Law: Sale of Goods Analysis

This assignment delves into the complexities of commercial law, specifically focusing on the Sale of Goods Act 1979. The scenario involves Noel, an antique collector, and his transactions with Old Antique Ltd. The assignment examines the transfer of property and risk in three distinct scenarios: the p...Read More

Running head: COMMERCIAL LAW
COMMERCIAL LAW
Name of the Student
Name of the University
Author Note

1COMMERCIAL LAW
When a sale in relation to any particular good takes place, the most important factor
regarding the sale is considered to be the transference of property and risk from the seller in
favor of the buyer. It relates to the transference of ownership from the seller to the buyer. The
Sale of Goods Act enforced in the year 1979, directs and monitors the situations and conditions
in connection to such transfers. The transfer is given effect when there is an exchange of
property and the price of property between the seller and the buyer. This paper has discussed the
points mentioned above with the help of the scenario provided by the given question1.
The first issue is in relation to the Epoque clock and whether there exists a passing of the
property as well as the risk upon Noel.
According to sub-section 1 of Section 5 as provided in the Sale of Goods Act enforced in
the year 1979, mentions the concept of future goods2. The future goods are regarded as goods
that are regarded as the substance of any particular contract regarding sale, may either be
considered as goods that are existing, which are possessed or owned by seller, or may be
considered as goods that must be acquired or manufactured by the seller after the contract
regarding sale has been made3.
Section 12 of the Sale of Goods Act of the year 1979 provides the implied condition in
relation to the ability of the seller regarding the transference of the title in connection to the
goods to the purchaser4.
The case of Niblett v Confectioners' Material [1921] 3 KB 387 is an important case in the
provided scenario5. In this case, it was held that the sellers were unable to enjoy the right or
1 Bridge, Michael G. The international sale of goods. Oxford University Press, 2017.
2 Sale of Goods Act, 1979
3 Lista, Andrea. International Commercial Sales: The Sale of Goods on Shipment Terms. Informa Law from
Routledge, 2016.
4 Ibid
5 Niblett v Confectioners' Material [1921] 3 KB 387

2COMMERCIAL LAW
entitlement in relation to the sale of the goods and hence the purchasers had the right to forsake
or renounce the contract. In this particular case, it was opined by Atkin L.J. that no violation
would be caused regarding the implied condition as provided in section 12 if the seller is
successful in passing to the buyer a right or entitlement to sell irrespective of the incapability of
the buyer. This view was also supported in the case of Anderson v. Ryan [1967] I.R. 346.
Section 17 as provided in the Sale of Goods Act enforced in the year 1979 states that
when a particular contract is established in relation to ascertained or specified goods, then the
property regarding such goods is transferred in favor of the buyer during the time that is decided
as per the intention of the parties7. It is also mentioned in this particular section that the intention
in relation to the parties must ascertained on the basis of the comportment of parties, terms
regarding contract and the circumstances or instances of the case8.
The second issue is in relation to the eight marble statuaries, which have been taken on
‘sale or return’ basis, and whether there exists a passing of the property as well as the risk upon
Noel.
Section 18 as provided the Sales of Goods Act forwards the rules, which may be applied
in situations of ‘Sale or Return’ (SOR) based contract. As per rule 4, the law states that goods
shall pass from the seller in favor of the buyer either through SOR or on approval. The good
shall pass when an approval or acceptance relating to the transaction is demonstrated. It shall be
considered by the law that the goods have already passed from the seller in favor of the buyer if
nothing is signified by buyer before the approach of the deadline9.
6 Anderson v. Ryan [1967] I.R. 34
7 Sale of Goods Act, 1979
8 Akrami, Farzaneh, Sakina Shaik Ahmad Yusoff, and Suzanna Mohd Isa. "Open Price Term under the United
Kingdom Sale of Goods Act 1979." Jurnal Undang-undang dan Masyarakat (2018).
9 Andrews, Neil. "Sources and General Principles of English Contract Law." Arbitration and Contract Law.
Springer, Cham, 2016. 165-175.

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As mentioned in section 25 as provided in Sale of Goods Act of 1979, a purchaser in
relation to a ‘conditional sale agreement’ may not be regarded as an individual who has decided
to purchase goods10.
According to section 35 of the aforementioned Act, it is presumed that a purchaser has
accepted and acknowledged the goods, when the purchaser communicates to the seller that the
acceptance regarding the goods has been made by him11. It is also presumed that the purchaser
has acknowledged his acceptance in relation to the goods when any act is performed by him
regarding the goods that is not consistent with the seller’s ownership. As per sub section 4 of this
particular section, it is also presumed that the acceptance in relation to the goods has been
acknowledged by the buyer when a reasonable time goes by during which the buyer has retained
the goods and such retention of goods has not been communicated by the buyer to the seller12.
As per section 35A of the aforementioned Act, a buyer shall enjoy the right to reject or
discard all or few of the goods, if any violation is caused by the seller in relation to the contract13.
The buyer may accept few goods, which may or may not have been affected by the violation
caused by the seller. However, such acceptance by the buyer does not deprive the buyer
regarding his right or entitlement to reject or discard the rest of the goods14.
The third issue is in relation to the sale of four marble statuaries (which were taken on
‘sale or return’ basis) and whether there exists a passing of the property as well as the risk upon
10 Ibid
11 Sale of Goods Act, 1979
12 Zeller, Bruno. "Conformity of Goods." International Sales Law. Nomos Verlagsgesellschaft mbH & Co. KG,
2016.
13 Ibid
14 DiMatteo, Larry A. "Pre-contractual Liability in the Common Law." International Sales Law. Nomos
Verlagsgesellschaft mbH & Co. KG, 2016.

4COMMERCIAL LAW
Noel. However, Noel destroys a sculpture and while returning the sculptures, Old Antique
refused to take back the remaining sculptures and requested complete payment.
According to section 47 of the Act mentioned above, it may be said that the right or the
entitlement of the seller in relation to lien, retention or stoppage regarding transfer, shall not be
affected by any kind of disposition or sale that might have been made by the purchaser15. Only
when the seller provides his assent regarding such disposition by the purchaser, the rights of the
seller shall be affected. However, it must be mentioned that when the document relating to title
regarding goods is transferred by the purchaser in favor of any other individual in return for a
valuable consideration and in good faith, then it gives rise to two circumstances. Firstly, if the
transfer is made through sale, then such transfer shall defeat the rights of the seller. Secondly, if
the transfer is made through pledge or any other kind of disposition, then the rights of the seller
may be exercised in a manner, which shall not supersede the transferee’s right16.
The case of Rowland v Divall [1923] 2 KB 500 is a relevant case in this regard17. In this
case, the claimant was a car dealer who purchased a car from defendant. Afterwards the claimant
sold the car to another individual from his showroom. However, unbeknownst to the claimant
and the defendant the car was a stolen car. Hence, the car was given back to the actual owner.
The claimant had to return the payment made to him by the individual (customer). A suit was
filed by the claimant against the defendant as per the Sale of Goods Act. It was held that the
defendant was unable to enjoy any rights regarding the selling of the goods because no title was
15 Ibid
16 Soyer, Baris, and Andrew Tettenborn. "What is a reasonable contract of carriage for CIF/CIP purposes?–section
32 (2) of the Sale of Goods Act 1979." International Trade and Carriage of Goods. Informa Law from Routledge,
2016. 43-54.
17 Rowland v Divall [1923] 2 KB 500

5COMMERCIAL LAW
obtained from the thief. The actual owner of the car retained the ownership. It was also stated
that the claimant did not have entitlement in relation to any compensation18.
In the case of Clayton v. Le Roy [1911] 2 K.B. 1031, it has been stated that when fine art
or the antiques that are stolen are sold in the market overt, it is very much possible that the title
of the buyer may become denounced, defamed or desolate where the source and origin regarding
the goods is well-known19.
Section 50 as provided in the Sale of Goods Act of 1979 states that when the purchaser
wrongly refuses or neglects the acceptance and payment regarding the goods, then in such
situation the seller may file a suit for damages against the purchaser in relation to such non-
acceptance20.
In the provided scenario, Noel is a collector of antiques. Noel agreed to buy antiques
from Old Antique Ltd. he agreed to purchase three items, namely, an antique clock, marble
sculptures and a toy steam train. The marble sculptures were on ‘sale and return’ basis. However,
when Noel returned to the shop the day after, he discovered that the toy train and the clock had
been stolen. The marble sculptures remained in the shop as these were left and not stolen. Noel
took the sculptures and sold four sculptures to an individual named Mandy. However, Mandy
never attempted to take the sculptures. Noel broke a particular sculpture. Noel attempted to
return the sculptures to Old Antique Ltd. However, the Old Antique demanded full payment and
declined to accept the sculptures.
18 Aboukdir, Anwar. "The timing of the passing of property and risk under the English Sale of Goods Act 1979, the
CISG and the Libyan law–the interplay between the principle of party autonomy and the default rule." (2016).
19 Clayton v. Le Roy [1911] 2 K.B. 1031
20 Sale of Goods Act, 1979

6COMMERCIAL LAW
According to sub-section 1 of Section 5 as provided in the Sale of Goods Act enforced in
the year 1979, mentions the concept of future goods21. The future goods are regarded as goods
that are regarded as the substance of any particular contract regarding sale, may either be
considered as goods that are existing, which are possessed or owned by seller, or may be
considered as goods that must be acquired or manufactured by the seller after the contract
regarding sale has been made. Applying this section it may be stated that the antique goods in the
provided scenario may be considered as future goods22.
The case of Niblett v Confectioners' Material [1921] 3 KB 38723 and the case of
Anderson v. Ryan [1967] I.R. 3424 should be applied in the provided scenario. In the Niblett case,
it was held that the sellers were unable to enjoy the right or entitlement in relation to the sale of
the goods and hence the purchasers had the right to forsake or renounce the contract. In this
particular case, it was opined by Atkin L.J. that no violation would be caused regarding the
implied condition as provided in section 12 if the seller is successful in passing to the buyer a
right or entitlement to sell irrespective of the incapability of the buyer. Hence, noel may act
accordingly25.
Section 17 as provided in the Sale of Goods Act enforced in the year 1979 should be
applied in the given scenario26. It states that when a particular contract is established in relation
to ascertained or specified goods, then the property regarding such goods is transferred in favor
of the buyer during the time that is decided as per the intention of the parties. It is also mentioned
21 Sale of Goods Act, 1979
22 Canavan, Rick, Christian Twigg-Flesner, and Hector MacQueen. Atiyah and Adams' Sale of Goods. Pearson
Higher Ed, 2016.
23 Niblett v Confectioners' Material [1921] 3 KB 387
24 Anderson v. Ryan [1967] I.R. 34
25 Hayward, Benjamin. "What's in a Name: Software, Digital Products, and the Sale of Goods." Sydney L. Rev. 38
(2016): 441.
26 Sale of Goods Act, 1979

7COMMERCIAL LAW
in this particular section that the intention in relation to the parties must be ascertained on the
basis of the comportment of parties, terms regarding contract and the circumstances or instances
of the case. It may be said that in the given scenario, the transference of the goods may be
according to the intention of the parties depending upon the circumstances27.
Section 35 of the aforementioned Act should be applied in the given scenario28. It is
presumed that a purchaser has accepted and acknowledged the goods, when the purchaser
communicates to the seller that the acceptance regarding the goods has been made by him. It is
also presumed that the purchaser has acknowledged his acceptance in relation to the goods when
any act is performed by him regarding the goods that is not consistent with the seller’s
ownership. As per sub section 4 of this particular section, it is also presumed that the acceptance
in relation to the goods has been acknowledged by the buyer when a reasonable time goes by
during which the buyer has retained the goods and such retention of goods has not been
communicated by the buyer to the seller. In the given scenario, it may be said that by the actions
of Noel it may be presumed that Noel acknowledged the acceptance29.
Section 35A of the aforementioned Act should be applied in the given scenario30. A buyer
shall enjoy the right to reject or discard all or few of the goods, if any violation is caused by the
seller in relation to the contract. The buyer may accept few goods, which may or may not have
been affected by the violation caused by the seller. However, such acceptance by the buyer does
not deprive the buyer regarding his right or entitlement to reject or discard the rest of the goods31.
27 Lista, Andrea. International Commercial Sales: The Sale of Goods on Shipment Terms. Informa Law from
Routledge, 2016.
28 Ibid
29 Alkhadhari, Abdulwahab. Remedies for the breach of a commercial contract for the sale of goods: a comparative
analysis between the English Sale of Goods Act 1979 and the Contract of Sale of Goods in Saudi Law . Diss.
University of Stirling, 2018.
30 Ibid
31 Pawlowski, Mark, and James Brown. "How many contracts in an auction sale?." Nottingham Law Journal 25
(2016): 1-15.

8COMMERCIAL LAW
The case of Rowland v Divall [1923] 2 KB 500 should be applied in the given scenario32.
In this case, it was held that the defendant was unable to enjoy any rights regarding the selling of
the goods because no title was obtained from the thief. The actual owner of the car retained the
ownership. It was also stated that the claimant did not have entitlement in relation to any
compensation. It may be said that in the given scenario, it must be proved by Noel that he had
absolute ownership in relation to the goods that he took after the shop was broken into33.
The case of Clayton v. Le Roy [1911] 2 K.B. 1031 should be applied in the given
scenario. Noel must act accordingly34.
Applying section 50 as provided in the Sale of Goods Act of 1979, it may be said that
when the purchaser wrongly refuses or neglects the acceptance and payment regarding the goods,
then in such situation the seller may file a suit for damages against the purchaser in relation to
such non-acceptance35. In the given scenario, Old Antique may file a suit for damages against
Noel if he wrongly refuses or neglects the goods or any related payment36.
To conclude it may be said that the most important factor regarding a sale is considered
to be the transference of property and risk from the seller in favor of the buyer. It relates to the
transference of ownership from the seller to the buyer. The Sale of Goods Act enforced in the
year 1979, directs and monitors the situations and conditions in connection to such transfers. The
transfer is given effect when there is an exchange of property and the price of property between
the seller and the buyer. In this paper, discussion has been forwarded in connection to the points
mentioned above with the help of the scenario provided by the given question. Therefore, after
32 Rowland v Divall [1923] 2 KB 500
33 Bridge, M. G. "ProPerty, title and debt in Sale of GoodS." Nat'l L. Sch. India Rev. 29 (2017): 21.
34 Clayton v. Le Roy [1911] 2 K.B. 1031
35 Sale of Goods Act, 1979
36 Bridge, M. G. "ProPerty, title and debt in Sale of GoodS." Nat'l L. Sch. India Rev. 29 (2017): 21.

9COMMERCIAL LAW
the proper assessment of the laws provided in legislation and case laws, it may be stated that
there exists a passing of the property as well as the risk in relation to the transactions that are
entered upon by Noel.

10COMMERCIAL LAW
References
Aboukdir, Anwar. "The timing of the passing of property and risk under the English Sale of
Goods Act 1979, the CISG and the Libyan law–the interplay between the principle of party
autonomy and the default rule." (2016).
Akrami, Farzaneh, Sakina Shaik Ahmad Yusoff, and Suzanna Mohd Isa. "Open Price Term
under the United Kingdom Sale of Goods Act 1979." Jurnal Undang-undang dan
Masyarakat (2018).
Alkhadhari, Abdulwahab. Remedies for the breach of a commercial contract for the sale of
goods: a comparative analysis between the English Sale of Goods Act 1979 and the Contract of
Sale of Goods in Saudi Law. Diss. University of Stirling, 2018.
Anderson v. Ryan [1967] I.R. 34.
Andrews, Neil. "Sources and General Principles of English Contract Law." Arbitration and
Contract Law. Springer, Cham, 2016. 165-175.
Bridge, M. G. "ProPerty, title and debt in Sale of GoodS." Nat'l L. Sch. India Rev. 29 (2017): 21.
Bridge, Michael G. The international sale of goods. Oxford University Press, 2017.
Canavan, Rick, Christian Twigg-Flesner, and Hector MacQueen. Atiyah and Adams' Sale of
Goods. Pearson Higher Ed, 2016.
Clayton v. Le Roy [1911] 2 K.B. 1031.
DiMatteo, Larry A. "Pre-contractual Liability in the Common Law." International Sales Law.
Nomos Verlagsgesellschaft mbH & Co. KG, 2016.

11COMMERCIAL LAW
Eldridge, John, and Timothy Pilkington. "Discharged Contracts and Quantum Meruit: Mann v
Paterson Constructions Pty Ltd." Sydney L. Rev. 41 (2019): 255.
Hayward, Benjamin. "What's in a Name: Software, Digital Products, and the Sale of
Goods." Sydney L. Rev. 38 (2016): 441.
Lista, Andrea. International Commercial Sales: The Sale of Goods on Shipment Terms. Informa
Law from Routledge, 2016.
Niblett v Confectioners' Material [1921] 3 KB 387.
Pawlowski, Mark, and James Brown. "How many contracts in an auction sale?." Nottingham
Law Journal 25 (2016): 1-15.
Rowland v Divall [1923] 2 KB 500.
Sale of Goods Act, 1979.
Soyer, Baris, and Andrew Tettenborn. "What is a reasonable contract of carriage for CIF/CIP
purposes?–section 32 (2) of the Sale of Goods Act 1979." International Trade and Carriage of
Goods. Informa Law from Routledge, 2016. 43-54.
Zeller, Bruno. "Conformity of Goods." International Sales Law. Nomos Verlagsgesellschaft
mbH & Co. KG, 2016.