SALE OF GOODS ORDINANCE
SALE OF GOODS ORDINANCE
(CHAPTER 26)
ARRANGEMENT OF SECTIONS
Section
1. Short title
2. Interpretation
PART I FORMATION OF THE CONTRACT
Contract of sale
3. Sale and agreement to sell
4. Capacity to buy and sell
Formalities of Contract
5. Mode of making contract of sale
6. (Repealed)
Subject-matter of contract
7. Existing or future goods
8. Goods which have perished
9. Goods perishing before sale but after agreement to sell Price
10. Ascertainment of price
11. Agreement to sell at valuation
Conditions and warranties
12. Stipulations as to time
13. When condition to be treated as warranty
14. Implied undertaking as to title, etc.
15. Sale by description
16. Implied undertakings as to quality of fitness
Sale by sample
17. Sale by sample
PART II EFFECTS OF THE CONTRACT
Transfer of Property as between seller and buyer
18. Goods must be ascertained
19. Property passes when intended to pass
20. Rules for ascertaining intention
21. Reservation of right of disposal
22. Risk prima facie passes with property
Transfer of title
23. Sale by person not owner
24. Market overt
25. Sale under voidable title
26. (Repealed)
27. Seller or buyer in possession after sale
28. (Repealed)
PART III PERFORMANCE OF THE CONTRACT
29. Duties of seller and buyer
30. Payment and delivery are concurrent conditions
31. Rules as to delivery
32. Delivery of wrong quantity
33. Delivery by instalments
34. Delivery to carrier
35. Risk where goods are delivered at distant place
36. Buyer's right of examining goods
37. Acceptance of goods
38. Buyer not bound to return rejected goods
39. Liability of buyer for neglecting or refusing to take delivery of
goods PART IV RIGHTS OF UNPAID SELLER AGAINST THE GOODS
40. Definition of unpaid seller
41. Unpaid seller's rights
42. Withholding delivery
Unpaid seller's lien
43. Unpaid seller's lien
44. Part delivery
45. Termination of lien
Stoppage in transitu
46. Right of stoppage in transitu
47. Duration of transit
48. How stoppage in transitu is effected Resale by buyer or seller
49. Effect of sub-sale or pledge by buyer
50. Sale not generally rescinded by lien or stoppage in transitu
PART V ACTIONS FOR BREACH OF THE CONTRACT
Remedies of seller
51. Action for price
52. Damages for non-acceptance Remedies of buyer
53. Damages for non-delivery
54. Specific performance
55. Remedies for breach of warranty
56. Interest and special damages
PART VI SUPPLEMENTARY
57. Exclusion of implied terms and conditions 57A.
(Repealed)
58. Reasonable time a question of fact
59. Right, etc., enforceable by action
60. Auction sale
61. Reservation of right to bid
62. Saving
Whole document:
To codify the law relating to the sale of goods.
[cf. 1893 c. 71 U. K.]
[1 August 1896]
1. Short title
This Ordinance may be cited as the Sale of Goods Ordinance.
(Amended 5 of 1924 s. 6)
2. Interpretation
(1) In this Ordinance, unless the context otherwise requires-
"action" includes suit, counterclaim, and setoff;
"business" includes a profession and the activates of a public body, a
public authority, or a board, commission, committee or other body
appointed by the Governor or Government; (Added 58 of 1977 s. 2. Amended
59 of 1989 s. 20)
"buyer" means a person who buys or agrees to buy goods;
"contract of sale" includes an agreement to sell as well as a sale;
"delivery" means voluntary transfer of possession from one person to
another; "document of title to goods" includes any bill of lading, dock
warrant, warehouse keeper's certificate, and warrant or order for the
delivery of goods, and any other document used in the ordinary course of
business as proof of the possession or control of goods, or authorizing or
purporting to quthorize, either by indorsement or by delivery, the
possessor of the document to transfer or receive goods thereby
represented;
"fault" means wrongful act or default;
"future goods" means goods to be manufactured or acquired by the seller
after the making of the contract of sale;
"goods" includes all chattels personal other than things in action and
money. The term includes emblements, industrial growing crops, and things
attached to or forming part of the land which are agreed to be severed
before sale or under the contract of sale;
"plaintiff" includes a defendant counterclaiming;
"property" means the general property in goods, and not merely a special
property; "quality of goods" includes their state or condition;
"sale" includes a bargain and sale as well as a sale and delivery;
"seller" means a person who sells or agrees to sell goods;
"specific goods" means goods identified and agreed upon at the time a
contract of sale is made;
"warranty" means an agreement with reference to goods which are the
subject of a contract of sale, but collateral to the main purpose of such
contract, the breach of which gives rise to a claim for damages, but not
to a right to reject the goods and treat the contract as repudiated.
(2) A thing is deemed to be done "in good faith" when it is in fact done
honestly, whether it is done negligently or not. (Amended 8 of 1912 s. 47)
(3) A person is deemed to be insolvent who either has ceased to pay his
debts in the ordinary course of business or cannot pay his debts as they
become due, whether he has committed an act of bankruptcy or not and
whether he has been adjudged bankrupt or not. (Amended 8 of 1912 s. 47)
(4) Goods are in a "deliverable state" when they are in such a state that
the buyer would, under the contract, be bound to take delivery of them.
(Amended 8 of 1912 s. 47)
(5) Goods of any kind are of merchantable quality within the meaning of
this Ordinance of they are as fit for the purpose or purposes for which
goods of that kind are commonly bought as it is reasonable to expect
having regard to any description applied to them, the price (if relevant)
and all the other relevant circumstances; and any reference in this
Ordinance to unmerchantable goods shall be construed accordingly. (Added
58 of 1977 s. 2) [cf. 1973 c. 13 s. 7 (2) U. K.] (Amended 59 of 1989 s.
20)
PART I FORMATION OF THE CONTRACT
Contract of sale
3. Sale and agreement to sell
(1) A contract of sale of goods is a contract whereby the seller transfers
or agrees to transfer the property in goods to the buyer for a money
consideration, called the price. There may be a contract of sale between
one part owner and another.
(2) A contract of sale may be absolute or conditional.
(3) Where under a contract of sale the property in the goods is
transferred from the seller to the buyer, the contract is called a sale;
but where the transfer of the property in the goods is to take place at a
future time or subject to some condition thereafter to be fulfilled, the
contract is called an agreement to sell.
(4) 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.
4. 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:
Provided that where necessaries are sold and delivered to an infant or
minor, or to a person who, by reason of mental incapacity or drunkenness,
is incompetent to contract, he must pay a reasonable price therefor.
(2) In this section, "necessaries" means goods suitable to the condition
in life of such infant or minor or other person, and to his actual
requirements at the time of the sale and delivery.
Formalities of contract
5. Mode of making contract of sale
Subject to the provisions of this Ordinance and of any enactment in that
behalf, 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:
Provided that nothing in this section shall affect the law relating to
corporations.
6. (Repealed 58 of 1977 s. 3)
Subject-matter of contract
7. 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 the seller after the making of the contract of
sale, in this Ordinance called "future goods".
(2) There may be a contract for the sale of goods, the acquisition of
which by the seller depends upon 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.
8. 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 the
contract is made, the contract is void.
9. 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 thereby avoided.
Price
10. 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 manner thereby agreed, or may be determined by the
course of dealing between the parties.
(2) Where the price is not determined in accordance with the foregoing
provisions, the buyer must pay a reasonable price. What is a reasonable
price is a question of fact dependent on the circumstances of each
particular case.
11. 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 such third party
cannot or does not make such valuation, the agreement is avoided:
Provided that if the goods or any part thereof have been delivered to and
appropriated by the buyer, he must pay a reasonable price therefor.
(2) Where such third party is prevented from making the valuation by the
fault of the seller or buyer, the party not in fault may maintain an
action for damages against the party in fault.
Conditions and warranties
12. Stipulations as to time
(1) Unless a different intention appears from the terms of the contract,
stipulations as to time of payment are not deemed to be of the essence of
a contract of sale. Whether any other stipulation as to time is of the
essence of the contract or not depends on the terms of the contract.
(2) In a contract of sale, "month" means prima facie calendar month.
13. When condition to be treated as warranty
(1) Where a contract of sale is subject to any condition to be fulfilled
by the seller, the buyer may waive the condition, or may elect to treat
the breach of such condition as a breach of warranty, and not as a ground
for treating the contract as repudiated.
(2) 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 a right to reject the goods and treat the contract. as repudiated,
depends in each case on the construction. of the contract. A stipulation
may be a condition, though called a warranty in the contract.
(3) Where a contract of sale is not severable, and the buyer has accepted
the goods or part thereof, the brach of any 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 a term of the contract, express or implied, to that
effect. (Amended 47 of 1969 s. 5)
(4) Nothing in this section shall affect the case of any condition or
warranty, fulfillment of which is excused by law by reason of
impossibility or otherwise.
14. Implied undertaking as to title etc.
(1) In every contract of sale, other than one to which subsection
(2) applies, there is-
(a) an implied condition on the part of the seller that in the case of the
sale, he has a right to sell the goods, and in the case of an agreement to
sell, he will have a right to sell the goods at the time when the property
is to pass; and
(b) an implied warranty that 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 that 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.
(2) In a contract of sale, in the case of which there appears from the
contract or is to be inferred from the circumstances of the contract an
intention that the seller should transfer only such title as he or a third
person may have, there is-
(a) an implied warranty 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; and
(b) an implied warranty that neither-
(i) the seller; nor
(ii) 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;
nor
(iii) 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, will disturb the buyer's quiet
possession of the goods.
(Replaced 58 of 1977 s. 4)
[cf. 1973 c. 3. s. 1 U. K.]
15. Sale by description
(1) Where there is a contract for the sale of goods by description, there
is an implied condition that the goods shall correspond with the
description; and 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.
(2) A sale of goods shall not be prevented from being a sale by
description by reason only that, being exposed for sale or hire, they are
selected by the buyer.
(Added 58 of 1977 s. 5) [cf. 1973 c. 13 s. 2 U. K.]
16. Implied undertakings as to quality or fitness
(1) Except as provided by this section, and section 17, and subject to the
provisions of any other enactment, there is no implied condition or
warranty as to 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 condition that the goods supplied under the contract are of
merchantable quality, except that there is no such condition-
(a) as regards defects specifically drawn to the buyer's attention before
the contract is made; or
(b) if the buyer examines the goods before the contract is made, as
regards defects which that examination ought to reveal.
(3) Where the seller sells goods in the course of a business and the
buyer, expressly or by implication, makes known to the seller any
particular purpose for which the goods are being bought, there is an
implied condition that the goods supplied under the contract are
reasonably fit for that purpose, whether or not that is a purpose for
which such goods are commonly supplied, except where the circumstances
show that the buyer does not rely, or that it is unreasonable for him to
rely, on the seller's skill or judgment.
(4) An implied condition or warranty as to quality or fitness for a
particular purpose may be annexed to a contract of sale by usage.
(5) Subsections (1), (2), (3) and (4) apply to a sale by a person who in
the course of a business is acting as agent for another as they apply to a
sale by a principal in the course of a business, except where that other
is not selling in the course of a business and either the buyer knows that
fact or reasonable steps are taken to bring it to the notice of the buyer
before the contract is made.
(6) In the application of subsection (3) to an agreement for the sale of
goods under which the purchase price or part of it is payable by
instalments any reference to the seller shall include a reference to the
person by whom any antecedent negotiations are conducted.
(7) In subsection (6) "antecedent negotiations" means any negotiations or
arrangements with the buyer whereby he was induced to make the agreement
or which otherwise promoted the transaction to which the agreement
relates.
(Replaced 58 of 1977 s. 6)
[cf. 1973 c. 13 s. 3 U. K.]
Sale by sample
17. Sale by sample
(1) A contract of sale is a contract for sale by sample where there is a
term in the contract, express or implied, to that effect.
(2) In the case of a contract for sale by sample-
(a) there is an implied condition that the bulk shall correspond with the
sample in quality;
(b) there is an implied condition that the buyer shall have a reasonable
opportunity of comparing the bulk with the sample;
(c) there is an implied condition that the goods shall be free from any
defect, rendering them unmerchantable, which would not be apparent on
reasonable examination of the sample.
PART II EFFECTS OF THE CONTRACT
Transfer of property as between seller and buyer
18. Goods must be ascertained
Where there is a contract for the sale of unascertained goods no property
in the goods is transferred to the buyer unless and until the goods are
ascertained.
19. Property passes when intended to pass
(1) Where there is a contract for the sale of specific or ascertained
goods, the property in them is transferred to the buyer at such time as
the parties to the contract intend it to be transferred.
(2) For the purpose of ascertaining the intention of the parties, regard
shall be had to the terms of the contract, the conduct of the parties, and
the circumstances of the case.
20. Rules for ascertaining intention
Unless a different intention appears, the following are rules for
ascertaining the intention of the parties as to the time at which the
property in the goods is to pass to the buyer-
Rule 1. Where there is an unconditional contract for the sale of specific
goods in a deliverable state, the property in the goods passes to the
buyer when the contract is made, and it is immaterial whether the time of
payment or the time of delivery, or both, be postponed.
Rule 2. Where there is a contract for the sale of specific goods and the
seller is bound to do something to the goods, for the purpose of putting
them into a deliverable state, the property does not pass until such thing
be done, and the buyer has notice thereof.
Rule 3. Where there is a contract for the sale of specific goods in a
deliverable state, but the seller is bound to weigh, measure, test, or 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
be done, and the buyer has notice thereof.
Rule 4. When goods are delivered to the buyer on approval or "on sale or
return" or other similar terms, the property therein passes to the buyer-
(a) when he signifies his approval or acceptance to the seller or does any
other act adopting the transaction;
(b) if he does not signify his approval or acceptance to the seller but
retains the goods without giving notice of rejection, then, if a time has
been fixed for the return of the goods, on the expiration of such time,
and if no time has been fixed, on the expiration of a reasonable time.
What is a reasonable time is a question of fact.
Rule 5.
(1) Where there is a contract for the sale of unascertained or future
goods by description, and goods of that description, and in a deliverable
state, are unconditionally appropriated to the contract, either by the
seller with the assent of the buyer, or by the buyer with the assent of
the seller, the property in the goods thereupon passes to the buyer. Such
assent may be express or implied, and may be given either before or after
the appropriation is made.
(2) Where, in pursuance of the contract, the seller delivers the goods to
the buyer or to a carrier or other bailee (whether named by the buyer or
not) for the purpose of transmission to the buyer, and does not reserve
the right of disposal, he is deemed to have unconditionally appropriated
the goods to the contract.
21. Reservation of right of disposal
(1) Where there is a contract for the sale of specific goods, or where
goods are subsequently appropriated to the contract, the seller may, by
the terms of the contract or appropriation, reserve the right of disposal
of the goods until certain conditions are fulfilled. In such case,
notwithstanding the delivery of the goods to the buyer, or to a carrier or
other bailee for the purpose of transmission to the buyer, the property in
the goods does not pass to the buyer until the conditions imposed by the
seller are fulfilled.
(2) Where goods are shipped, and by the bill of lading the goods are
deliverable to the order of the seller or his agent, the seller is prima
facie deemed to reserve the right of disposal.
(3) Where the seller of goods draws on the buyer for the price, and
transmits the bill of exchange and bill of lading to the buyer together to
secure acceptance or payment of the bill of exchange, the buyer is bound
to return the bill of lading if he does not honour the bill of exchange,
and if he wrongfully retains the bill of lading the property in the goods
does not pass to him.
22. Risk prima facie passes with property
Unless otherwise agreed, the goods remain at the seller's 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 buyer's risk,
whether delivery has been made or not: Provided that where delivery has
been delayed through the fault of either seller or buyer, the goods are at
the risk of the party in fault as regards any loss which might not have
occurred but for such fault:
Provided, also, that nothing in this section shall affect the duties or
liabilities of either seller or buyer as a bailee of the goods of the
other party.
Transfer of title
23. Sale by person not owner
(1) Subject to the provisions of this Ordinance, where goods are sold by a
person who is not the owner thereof, and 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, unless the owner of the goods is
by his conduct precluded from denying the seller's authority to sell.
(2) Provided, also, that nothing in this Ordinance shall affect-
(a) the provisions of the Factors Ordinance (Cap. 48), or any enactment
enabling the apparent owner of goods to dispose of them as if he were the
true owner thereof; or (Amended 8 of 1912 s. 47)
(b) the validity of any contract of sale under any special common law or
statutory power of sale or under the order of a court of competent
jurisdiction.
24. Market overt
(1) Where goods are openly sold in a shop or market in the Colony, in the
ordinary course of the business of such shop or market, the buyer acquires
a good title to the goods, provided he buys them in good faith and without
notice of any defect or want of title on the part of the seller.
(2) (Repealed 58 of 1977 s. 7)
25. Sale under voidable title
When the seller of goods has a voidable title thereto, but his title has
not been avoided at the time of the sale, the buyer acquires a good title
to the goods, provided he buys them in good faith and without notice of
the seller's defect of title.
26. (Repealed 21 of 1970 s. 35)
27. Seller or buyer in possession after sale
(1) Where a person having sold goods continues or is in possession of the
goods, or of the documents of title to the goods, the delivery or transfer
by that person, or by a mercantile agent acting for him, of the goods or
documents of title, under any sale, pledge, or other disposition thereof,
to any person receiving the same in good faith and without notice of the
previous sale, shall have the same effect as if the person making the
delivery or transfer were expressly authorized by the owner of the goods
to make the same.
(2) Where a person having bought or agreed to buy goods obtains, with the
consent of the seller, possession of the goods or the documents of title
to the goods, the delivery or transfer by that person, or by a mercantile
agent acting for him, of the goods or documents of title, under any sale,
pledge, or other disposition there-of, to any person receiving the same in
good faith and without notice of any lien or other right of the original
seller in respect of the goods, shall have the same effect as if the
person making the delivery or transfer were a mercantile agent in
possession of the goods or documents of title with the consent of the
owner.
(3) In this section, "mercantile agent" has the same meaning as in the
Factors Ordinance (Cap. 48). (Amended 8 of 1912 s. 47; 5 of 1924 s. 13)
28. (Repealed 52 of 1987 s. 45)
PART III PERFORMANCE OF THE CONTRACT
29. Duties of seller and buyer
It is the duty of the seller to deliver the goods, and of the buyer to
accept and pay for them, in accordance with the terms of the contract of
sale.
30. Payment and delivery are concurrent conditions
Unless otherwise agreed, delivery of the goods and payment of the price
are concurrent conditions, that is to say, the seller must be ready and
willing to give possession of the goods to the buyer in exchange for the
price, and the buyer must be ready and willing to pay the price in
exchange for possession of the goods.
31. Rules as to delivery
(1) Whether it is for the buyer to take possession of the goods or for the
seller to send them to the buyer is a question depending in each case on
the contract, express or implied, between the parties. Apart from any such
contract, express or implied, the place of delivery is the seller's place
of business, if he has one, and if not, his residence:
Provided that, if the contract is for the sale of specific goods, which,
to the knowledge of the parties when the contract is made, are in some
other place, then that place is the place of delivery.
(2) Where under the contract of sale the seller is bound to send the goods
to the buyer, but no time for sending them is fixed, the seller is bound
to send them within a reasonable time.
(3) Where the goods at the time of sale are in the possession of a third
person, there is no delivery by seller to buyer unless and until such
third person acknowledges to the buyer that he holds the goods on his
behalf:
Provided that nothing in this section shall affect the operation of the
issue or transfer of any document of title to goods.
(4) Demand or tender of delivery may be treated as ineffectual unless made
at a reasonable hour. What is a reasonable hour is a question of fact.
(5) Unless otherwise agreed, the expenses of and incidental to putting the
goods into a deliverable state must be borne by the seller.
32. Delivery of wrong quantity
(1) Where the seller delivers to the buyer a quantity of goods less than
he contracted to sell, the buyer may reject them, but if the buyer accepts
the goods so delivered, he must pay for them at the contract rate.
(2) Where the seller delivers to the buyer a quantity of goods larger than
he contracted to sell, the buyer may accept the goods included in the
contract and reject the rest, or he may reject the whole. If the buyer
accepts the whole of the goods so delivered he must pay for them at the
contract rate.
(3) Where the seller delivers to the buyer the goods he contracted to sell
mixed with goods of a different description not included in the contract
the buyer may accept the goods which are in accordance with the contract
and reject the rest, or he may reject whole.
(4) The provisions of this section are subject to any usage of trade,
special agreement, or course of dealing between the parties.
33. Delivery by instalments
(1) Unless otherwise agreed, the buyer of goods is not bound to accept
delivery thereof by instalments.
(2) Where there is a contract for the sale of goods to be delivered by
stated instalments, which are to be separately paid for, and the seller
makes defective deliveries in respect of one or more instalments, or the
buyer neglects or refuses to take delivery of or pay for one or more
instalments, it is a question in each case depending on the terms of the
contract and the circumstances of the case, whether the breach of contract
is a repudiation of the whole contract or whether it is a severable breach
giving rise to a claim for compensation but not to a right to treat the
whole contract as repudiated.
34. Delivery to carrier
(1) Where, in pursuance of a contract of sale, the seller is authorized or
required to send the goods to the buyer, delivery of the goods to a
carrier, whether named by the buyer or not, for the purpose of
transmission to the buyer is prima facie deemed to be a delivery of the
goods to the buyer.
(2) Unless otherwise authorized by the buyer, the seller must make such
contract with the carrier on behalf of the buyer as may be reasonable
having regard to the nature of the goods and the other circumstances of
the case. If the seller omits to do so, and the goods are lost or damaged
in course of transit, the buyer may decline to treat the delivery to the
carrier as a delivery to himself, or may hold the seller responsible in
damages.
(3) Unless otherwise agreed, where goods are sent by the seller to the
buyer by a route involving sea transit, in circumstances in which it is
usual to insure, the seller must give such notice to the buyer as may
enable him to insure them during their sea transit, and, if the seller
fails to do so, the goods shall be deemed to be at his risk during such
sea transit.
35. Risk where goods are delivered at distant place
Where the seller of goods agrees to deliver them at his own risk at a
place other than that where they are when sold, the buyer must,
nevertheless, unless otherwise agreed, take any risk of deterioration in
the goods necessarily incident to the course of transit.
36. Buyer's right of examining
(1) Where goods are delivered to the buyer, which he has not previously
examined, he is not deemed to have accepted them unless and until he has
had a reasonable opportunity of examining them for the purpose of
ascertaining whether they are in conformity with the contract.
(2) Unless otherwise agreed, when the seller tenders delivery of goods to
the buyer, he bound, on request, to afford the buyer a reasonable
opportunity of examining the goods for the purpose of ascertaining whether
they are in conformity with the contract.
37. Acceptance of goods
The buyer is deemed to have accepted the goods when he intimates to the
seller that he has accepted them, or (except where section 36 otherwise
provides) when the goods have been delivered to him, and he does any act
in relation to them which is inconsistent with the ownership of the
seller, or when after the lapse of a reasonable time, he retains the goods
without intimating to the seller that he has rejected them. (Amended 47
of 1969 s. 5)
38. Buyer not bound to return rejected goods
Unless otherwise agreed, where goods are delivered to the buyer, and he
refuses to accept them, having the right to do so, he is not bound to
return them to the seller, but it is sufficient if he intimates to the
seller that he refuses to accept them.
39. Liability of buyer for neglecting or refusing to take delivery of
goods When the seller is ready and willing to deliver the goods and
requests the buyer to take delivery, and the buyer does not within a
reasonable time after such request take delivery of the goods, he is
liable to the seller for any loss occasioned by his neglect or refusal to
take delivery, and also for a reasonable charge for the care and custody
of the goods:
Provided that nothing in this section shall affect the rights of the
seller where the neglect or refusal of the buyer to take delivery amounts
to a repudiation of the contract.
PART IV RIGHTS OF UNPAID SELLER AGAINST THE GOODS
40. Definition of unpaid seller
(1) The seller of goods is deemed to be an unpaid seller within the
meaning of this Ordinance-
(a) when the whole of the price has not been paid or tendered;
(b) when a bill of exchange or other negotiable instrument has been
received as conditional payment, and the condition on which it was
received has not been fulfilled by reason of the dishonour of the
instrument or otherwise.
(2) In this Part, "seller" includes any person who is in the position of a
seller, as, for instance, an agent of the seller to whom the bill of
lading has been indorsed, or a consignor or agent who has himself paid, or
is directly responsible for, the price. (Amended 5 of 1924 s. 13)
41. Unpaid seller's rights
Subject to the provisions of this Ordinance and of any enactment in that
behalf, notwithstanding that the property in the goods may have passed to
the buyer, the unpaid seller of goods as such, has by implication of law-
(a) a lien on the goods or right to retain them for the price while he is
in possession of them;
(b) in case of the insolvency of the buyer, a right of stopping the goods
in transitu after he has parted with the possession of them;
(c) a right of resale as limited by this Ordinance.
42. Withholding delivery
Where the property in goods has not passed to the buyer, the unpaid seller
has, in addition to his other remedies, a right of withholding delivery
similar to and co-extensive with his rights of lien and stoppage in
transitu where the property has passed to the buyer.
Unpaid seller's lien
43. Unpaid seller's lien
(1) Subject to the provisions of this Ordinance, the unpaid seller of
goods who is in possession of them is entitled to retain possession of
them until payment or tender of the price in the following cases, namely-
(a) where the goods have been sold without any stipulation as to credit;
(b) where the goods have been sold on credit, but the term of credit has
expired;
(c) where the buyer becomes insolvent.
(2) The seller may exercise his right of lien notwithstanding that he is
in possession of the goods as agent or bailee for the buyer.
44. Part delivery
Where an unpaid seller has made part delivery of the goods, he may
exercise his right of lien or retention on the remainder, unless such part
delivery has been made in such circumstances as to show an agreement to
waive the lien or right of retention.
45. Termination of lien
(1) The unpaid seller of goods loses his lien or right of retention
thereon-
(a) when he delivers the goods to a carrier or other bailee for the
purpose of transmission to the buyer, without reserving the right of
disposal of the goods;
(b) when the buyer or his agent lawfully obtains possession of the goods;
(c) by waiver thereof.
(2) The unpaid seller of goods, having a lien or right of retention
thereon, does not lose his lien or right of retention by reason only that
he has obtained judgment for the price of the goods.
Stoppage in transitu
46. Right of stoppage in transitu
Subject to the provisions of this ordinance, when the buyer of goods
becomes insolvent, the unpaid seller who has parted with the possession of
the goods has the right of stopping them in transitu, that is to say, he
may resume possession of the goods as long as they are in course of
transit, and may retain them until payment or tender of the price.
47. Duration of transit
(1) Goods are deemed to be in course of transit from the time when they
are delivered to a carrier by land or water, or other bailee for the
purpose of transmission to the buyer, until the buyer, or his agent in
that behalf, takes delivery of them from such carrier or other bailee.
(2) If the buyer or his agent in that behalf obtains delivery of the goods
before their arrival at the appointed destination, the transit is at an
end.
(3) If, after the arrival of the goods at the appointed destination, the
carrieror other bailee acknowledges to the buyer, or his agent, that he
holds the goods on his behalf and continues in possession of them as
bailee for the buyer or his agent, the transit is at an end, and it is
immaterial that a further destination for the goods may have been
indicated by the buyer.
(4) If the goods are rejected by the buyer, and the carrier or other
bailee continues in possession of them, the transit is not deemed to be at
an end, even if the seller has refused to receive them back.
(5) When goods are delivered to a ship chartered by the buyer, it is a
question depending on the circumstances of the particular case whether
they are in the possession of the master as a carrier, or as agent to the
buyer.
(6) Where the carrier or other bailee wrongfully refuses to deliver the
goods to the buyer or his agent in that behalf, the transit is deemed to
be at an end.
(7) Where part delivery of the goods has been made to the buyer or his
agent in that behalf, the remainder of the goods may be stopped in
transitu, unless such part delivery has been made in such circumstances as
to show an agreement to give up possession of the whole of the goods.
48. How stoppage in transitu is effected
(1) The unpaid seller may exercise his right of stopping in transitu
either by taking actual possession of the goods or by giving notice of his
claim to the carrier or other bailee in whose possession the goods are.
Such notice may be given either to the person in actual possession of the
goods or to his principal. In the latter case the notice, to be effectual,
must be given at such time and in such circumstances that the principal,
by the exercise of reasonable diligence, may communicate it to his servant
or agent in time to prevent a delivery to the buyer.
(2) When notice of stoppage in transitu is given by the seller to the
carrier or other in possession of the goods, he must re-deliver the goods
to, or according to the directions of, the seller. The expenses of such
re-delivery must be borne by the seller.
Resale by buyer or seller
49. Effect of subsale or pledge by buyer
Subject to the provisions of this Ordinance, the unpaid seller's right of
lien or retention or stoppage in transitu is not affected by any sale or
other disposition of the goods which the buyer may have made, unless the
seller has assented thereto:
Provided that where a document of title to goods has been lawfully
transferred to any person as buyer or owner of the goods, and that person
transfers the document to a person who takes the document in good faith
and for valuable consideration, then, if such last-mentioned transfer was
by way of sale, the unpaid seller's right of lien of lien or retention or
stoppage in transitu is defeated, and if such last mentioned transfer was
by way of pledge or other disposition for value, the unpaid seller's right
of lien or retention or stoppage in transitu can only be exercised subject
to the rights of the transferee.
50. Sale not generally rescinded by lien or stoppage in transitu
(1) Subject to the provisions of this section, a contract of sale is not
rescinded by the mere exercise by an unpaid seller of his right of lien or
retention or stoppage in transitu.
(2) Where an unpaid seller who has exercised his right of lien or
retention or stoppage in transitu resells the goods, the buyer acquires a
good title thereto as against the original buyer.
(3) Where the goods are of a perishable nature, or where the unpaid seller
gives notice to the buyer of his intention to resell, and the buyer does
not within a reasonable time pay or tender the price, the unpaid seller
may resell the goods and recover from the original buyer damages for any
loss occasioned by his breach of contract.
(4) Where the seller expressly reserves a right of resale in case the
buyer should make default, and on the buyer making default, resells the
goods, the original contract of sale is thereby rescinded, but without pre
judice to any claim the seller may have for damages.
PART V ACTIONS FOR BREACH OF THE CONTRACT
Remedies of seller
51. Action for price
(1) Where, under a contract of sale, the property in the goods has passed
to the buyer, and the buyer wrongfully neglects or refuses to pay for the
goods according to the terms of the contract, the seller may maintain an
action against him for the price of the goods.
(2) Where, under a contract of sale, the price is payable on a day certain
irrespective of delivery, and the buyer wrongfully neglects or refuses to
pay such price, the seller may maintain an action for the price, although
the property in the goods has not passed, and the goods have not been
appropriated to the contract.
52. Damages for non-acceptance
(1) Where the buyer wrongfully neglects or refuses to accept and pay for
the goods, the seller may maintain an action against him for damages for
nonacceptance.
(2) The measure of damages is the estimated loss directly and naturally
resulting, in the ordinary course of events, from the buyer's breach of
contract.
(3) Where there is an available market for the goods in question, the
measure of damages is prima facie to be ascertained by the difference
between the contract price and the market or current price at the time or
times when the goods ought to have been accepted, or, if no time was fixed
for acceptance, then at the time of the neglect or refusal to accept.
Remedies of buyer
53. Damages for non-delivery
(1) Where the seller wrongfully neglects or refuses to deliver the goods
to the buyer, the buyer may maintain an action against the seller for
damages for non-delivery.
(2) The measure of damages is the estimated loss directly and naturally
resulting, in the ordinary course of events, from the seller's breach of
contract.
(3) Where there is an available market for the goods in question, the
measure of damages is prima facie to be ascertained by the difference
between the contract price and the market or current price of the goods at
the time or times when they ought to have been delivered, or, if no time
was fixed for delivery, then at the time of the neglect or refusal to
deliver.
54. Specific performance
In any action for breach of contract to deliver specific or ascertained
goods, the court may, if it thinks fit, on the application of the
plaintiff, by its judgment direct that the contract shall be performed
specifically, without giving the defendant the option of retaining the
goods on payment of damages. The judgment may be unconditional, or on such
terms and conditions as to damages, payment of the price, and otherwise,
as to the court may seem just. The application by the plaintiff may be
made at any time before judgment.
55. Remedies for breach of warranty
(1) Where there is a breach of warranty by the seller, or where the buyer
elects, or is compelled, to treat any breach of a condition on the part of
the seller as a breach of warranty, the buyer is not, by reason only of
such breach of warranty, entitled to reject the goods; but he may-
(a) set up against the seller the breach of warranty in diminution or
extinction of the price; or
(b) maintain an action against the seller for damages for the breach of
warranty.
(2) The measure of damages for breach of warranty is the estimated loss
directly and naturally resulting, in the ordinary course of events, from
the breach of warranty.
(3) In the case of breach of warranty of quality, such loss is prima facie
the difference between the value of the goods at the time of delivery to
the buyer and the value they would have had if they had answered to the
warranty.
(4) The fact that the buyer has set up the breach of warranty in
diminution or extinction of the price does not prevent him from
maintaining an action for the same breach of warranty if he has suffered
further damage.
56. Interest and special damages
Nothing in this Ordinance shall affect the right of the buyer or the
seller to recover interest or special damages in any case where by law
interest or special damages may be recoverable, or to recover money paid
where the consideration for the payment of it has failed.
PART VI SUPPLEMENTARY
57. Exclusion of implied terms and conditions
(1) Where any right, duty or liability would arise under a contract of
sale of goods by implication of law, it may (subject to the Control of
Exemption Clauses Ordinance (Cap. 71)) be negatived or varied by express
agreement, or by the course of dealing between the parties, or by usage if
the usage is such as to bind both parties to the contract. (Amended 59 of
1989 s. 20)
(2) An express condition or warranty does not negative a condition or
warranty implied by this Ordinance unless inconsistent therewith.
(3) - (11) (Repealed 59 of 1989 s. 20)
(Replaced 58 of 1977 s. 8)[cf. 1973 c. 13 s. 4 U. K.]
57A. (Repealed 59 of 1989 s. 20)
58. Reasonable time a question of fact
Where, by this Ordinance, any reference is made to a reasonable time, the
question what is a reasonable time is question of fact.
59. Right, etc., enforceable by action
Where any right, duty, or liability is declared by this Ordinance, it may,
unless otherwise provided by this Ordinance, be enforced by action.
60. Auction sale
In the case of a sale by auction-
(a) where goods are put up for sale by auction in lots, each lot is prima
facie deemed to be the subject of a separate contract of sale;
(b) a sale by auction is complete when the auctioneer announces its
completion by the fall of the hammer, or in other customary manner. Until
such announcement is made any bidder may retract his bid;
(c) where a sale by auction is not notified to be subject to a right to
bid on behalf of the seller, it shall not be lawful for the seller to bid
himself or to employ any person to bid at such sale, or for the auctioneer
knowingly to take any bid from the seller or any such person. Any sale
contravening this rule may be treated as fraudulent by the buyer;
(d) a sale by auction may be notified to be subject to a reserve or upset
price, and a right to bid may also be reserved expressly by or on behalf
of the seller.
61. Reservation of right to bid
Where a right to bid is expressly reserved, but not otherwise, the seller,
or any one person on his behalf, may bid at the auction.
62. Saving
(1) The rules in bankruptcy relating to contracts of sale shall continue
to apply thereto, notwithstanding anything in this Ordinance.
(2) The rules of the common law, including the law merchant, save in so
far as they are inconsistent with the express provisions of this
Ordinance, and in particular the rules relating to the law of principal
and agent, and the effect of fraud, misrepresentation, duress or coercion,
mistake, or other invalidating cause, shall continue to apply to contracts
for the sale of goods.
(3) Nothing in this Ordinance or in any repeal effected thereby shall
affect the enactments relating to bills of sale, or any enactment relating
to the sale of goods which is not expressly repealed by this Ordinance.
(4) The provisions of this Ordinance relating to contracts of sale do not
apply to any transaction in the form of a contract of sale which is
intended to operate by way of mortgage, pledge, charge, or other security.
(5) (Repealed 59 of 1989 s. 20)
(6) The amendments of this Ordinance made by the Sale of Goods (Amendment)
Ordinance 1977 (58 of 1977) shall not apply to contracts to which this
Ordinance applies which were entered into prior to the date of
commencement of that Ordinance; and all such contracts shall continue to
be governed by the provisions of this Ordinance in operation immediately
prior to the date of commencement of the Sale of Goods (Amendment)
Ordinance 1977 (58 of 1977). (Added 58 of 1977 s. 10)
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