Question Tag: Sale of Goods

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  • 7 Marks

BCL – May 2017 – L1 – Q7b – Sale of goods/hire purchase

Explain the transaction between K&K Company Limited and XBF Company Limited regarding goods delivered by sample.

b) Juba is a sales representative of K&K Company Limited. He visited the premises of XBF Company Limited. XBF Company Limited was interested in providing its core staff with protective clothing consisting of masks, gloves, and boots. After describing the types of protective clothing to the sales representative, Juba showed the XBF Company Limited samples of the masks, gloves, and the boots that his company intended to sell. The company accepted the samples. On the day of the delivery, the auditors of XBF found that the goods delivered did not match with the samples.

Required: Explain the transaction between K&K Company Limited and XBF Company Limited in terms of the provisions of the Sale of Goods Act, 1963 Act 137. (7 marks)

  • In a contract of sale of goods by description, whether or not the sale is by sample as well as by description, there is an implied condition that the goods shall correspond exactly with the description. (3 marks)
  • In a contract of sale of goods by sample, whether or not the sale is by description as well as by sample, there is an implied condition that the goods shall correspond exactly with the sample. (3 marks)
  • Thus, the goods delivered did not correspond to the description or the sample. (1 mark)

(Total: 7 marks)

  • 6 Marks

BCL – May 2017 – L1 – Q7a – Sale of goods/hire purchase

Differentiate between specific goods and unascertained goods in terms of definition.

a) What is the difference between ‘specific goods’ and ‘unascertained goods’ in terms of definition? (6 marks)

 

  • Specific Goods: Goods identified and agreed on before or at the time the contract of sale is made. This requires that the actual goods that the buyer is to receive under the contract can be identified at the time that the contract is agreed. Examples include goods bought at a supermarket picked from the shelf or a second-hand car chosen off a garage forecourt and sold by reference to its registration number.
  • Unascertained Goods: Goods which are not identified and agreed upon at the time the contract is made. These are goods that are yet to be manufactured or grown, or goods that are acquired after making the contract. Unascertained goods never become specific; they only become ascertained.

(3 marks for each definition = 6 marks)

  • 6 Marks

BCL – May 2017 – L1 – Q5c – Sale of goods/hire purchase

Distinguish between a contract for the sale of goods and an agreement to sell.

c) Distinguish between a contract for the sale of goods and an agreement to sell. (6 marks)

  • A contract for the sale of goods is where the seller transfers or agrees to transfer the property in goods to the buyer for a consideration. Here, the property in goods passes immediately upon the conclusion of the contract.
  • An agreement to sell is a situation where the parties agree that the property in the goods would be transferred to the buyer at a later date, subject to some condition that has to be fulfilled.
  • An agreement to sell becomes a sale upon the fulfillment of the condition subject to which property in the goods is to be transferred.

(3 points at 2 marks each = 6 marks)

  • 10 Marks

BCL – May 2017 – L1 – Q3b – Sale of goods/hire purchase

Explain the aspects of delivery of goods in a sale of goods contract, including the cost of delivery, means of delivery, and place of delivery.

b) Explain delivery of goods in relation to:

i) Cost of putting the goods into deliverable state. (2 marks)

ii) Means of delivery. (6 marks)

iii) Place of delivery. (2 marks)

 

i) The expenses of and incidental to putting the goods into a deliverable state are to be borne by the seller unless the contract for the sale states otherwise. (2 marks)

ii) Unless otherwise agreed, the seller may deliver the goods to the buyer by:

  • Transferring to the buyer the actual physical control over the goods; or
  • Transferring to the buyer the means of obtaining actual physical control of the goods; or
  • Transferring to the buyer documents of title to the goods;
  • Delivery of the goods to the authorized agent of the buyer is a delivery to the buyer unless otherwise intended.
  • Delivery is also occasioned when the contract specifies a delivery of the goods to be given to a carrier to be delivered to the buyer.
  • Where the goods are to be delivered to a third party on behalf of the buyer and the third party acknowledges possession of the goods.

(6 marks)

iii) Place of delivery is the seller’s place of business if there is one, or place of residence unless the contract specifies the intention to deliver at a particular place. (2 marks)

  • 5 Marks

BCL – May 2016 – L1 – Q2a – Sale of Goods/Hire Purchase

Identify five ways in which property in goods passes from a seller to a buyer.

Identify FIVE ways in which property in goods passes from a seller to a buyer. (5 marks)

  • In a contract for the sale of unascertained goods, property passes when the goods are ascertained.
  • Property in goods passes when the parties intend it to pass.
  • Property in goods passes when the goods are delivered to the buyer.
  • Where goods are delivered to the buyer on approval, or on sale or return or other similar terms, the property in the goods passes to the buyer when he signifies his approval or acceptance to the seller, or any other act adopting the transaction.
  • When the buyer keeps goods sold on approval, or on sale or other similar terms, the property in it then passes when the buyer retains the goods without giving notice of rejection.
  • If a time has been fixed for the return of the goods, on the expiration of such time, or after a reasonable time, property passes.

[Any 5 points at 1 mark each for a total of 5 marks]

  • 6 Marks

BCL – Nov 2016 – L1 – Q2c – Sale of Goods/Hire Purchase

Determine if Tracy Achiaa has legal grounds to recover the impounded vehicle.

Orlando Motors, an American Automobile Company, paid for three (3) cars and consigned them to Mr. Kobby Ayensu in Ghana by a bill of lading; vehicle No. GTB 7084 was one of the three (3) cars. Mr. Kobby Ayensu, as the consignee, took delivery of the vehicles and registered vehicle No. GTB 7084. He later sold the vehicle he registered to Tracy Achiaa. The appropriate change of ownership was then effected. Later, one Mr. Oko Lartey who was claiming interest in the cars, sued Mr. Kobby Ayensu in respect of the cars and immediately went to court and obtained an order resulting in the impounding of the vehicle from Tracy Achiaa.

Required:
Explain whether there is any legal basis for Tracy Achiaa to take action to recover the impounded vehicle.

There is a legal basis for Tracy Achiaa to take action to recover the impounded vehicle:

  • Tracy Achiaa was a bona fide purchaser for value without notice under the provisions of the Sale of Goods Act, 1962 (Act 137), and, therefore, had a legal interest in the vehicle. By the provisions of Section 26 of Act 137, property in the vehicle had passed to her.
  • Even if under an agreement between Mr. Oko and Mr. Kobby Ayensu, Mr. Ayensu could be regarded as a mere agent of Mr. Oko, and as a mercantile agent in possession, Mr. Ayensu could, under Section 30 of Act 137, validly dispose of the vehicle to Tracy Achiaa.
  • The vehicle was shipped to Mr. Kobby Ayensu by Orlando Motors Ltd. as consignor, and Mr. Kobby Ayensu as consignee. By the bill of lading, Mr. Kobby Ayensu was the owner of the vehicle, as proclaimed to the whole world, and therefore, Tracy Achiaa validly acquired the vehicle from Mr. Ayensu under a contract of sale, which passed on valid title in the vehicle to her. Tracy Achiaa is, therefore, protected, on the face of it all, by Act 137.
    (3 points at 2 marks each = 6 marks)
  • 8 Marks

BCL – Nov 2016 – L1 – Q2b – Sale of Goods/Hire Purchase

Identify differences between Free On Board (FOB) and Cost, Insurance, and Freight (CIF) contracts.

Identify FOUR differences each between Free On Board (FOB) contracts and Cost, Insurance, Freight (CIF) contracts.

Free On Board (FOB) Contracts

  • The buyer is entitled and bound to nominate a ship to the seller calling during the agreed period.
  • The seller is bound at his own expense, to have the goods on the ship nominated by the buyer.
  • The seller is bound at his own expense, to give such notice to the buyer.
  • The seller is not bound to effect any insurance on the goods.
  • The seller is bound to transmit to the buyer bills of lading by which the goods are deliverable to the buyer.
  • The risk of the goods passes to the buyer when they are shipped.
    (4 points at 1 mark each = 4 marks)

Cost, Insurance, and Freight (CIF) Contracts

  • The seller is bound at his own expense to ship the goods during the period, if any, to the port agreed upon or to acquire goods afloat which have been so shipped.
  • The seller is bound, at his own expense, to effect on the goods an insurance of the type normal for goods and voyage of the kind in question.
  • The seller is bound to transfer to the buyer proper shipping documents in accordance with the terms of the contract.
  • The buyer is bound to take up proper shipping documents and, on doing so, to pay the price in accordance with the terms of the contract.
  • The goods are deemed to be delivered to the buyer, and the property therein accordingly passes to the buyers, on the transfer to him of the bills of lading.
  • The risk in the goods passes to the buyer when they are shipped or acquired afloat.
    (4 points at 1 mark each = 4 marks)
  • 6 Marks

BCL – Nov 2016 – L1 – Q2a – Sale of Goods/Hire Purchase

Explain the relationship between the parties under the Sale of Goods Act.

Mr. Bossman bought a Nissan diesel vehicle from Trans Africa Engineering and Motor Co. Ltd. However, when the vehicle broke down, Mr. Bossman did not go to the dealers for spare parts, but rather went to Messrs Jones Williams & Co., and through one of its directors, placed an order for the spare parts from Japan. The order was placed for the spare parts with TSS Co. Ltd, and by Telex, headed “we quote for Japan,” TSS Co Ltd, supplied Jones Williams & Co. with the requisite quotation, and that the spare parts would be delivered in three (3) months’ time. Mr. Bossman then got his foreign bankers to transfer the amount, being the cost of the spare parts to the bankers of Messrs Jones Williams & Co. Ltd, who in turn, paid the amount to the suppliers. When the spare parts were not forthcoming, Mr. Bossman sued Messrs Jones Williams & Co. for the return of his money, interest, and damages. Before the court case started, Mr. Bossman received the spare parts, and therefore had to abandon his claims.

Required:
a) Explain the following in terms of the provisions of the Sale of Goods Act, 1962 (Act 137):
i) The relationship between Mr. Bossman and Messrs Jones Williams & Co. Ltd.
ii) The relationship between TSS Co. Ltd and Messrs Jones Williams & Co. Ltd.

i) The relationship between Mr. Bossman and Messrs Jones Williams & Co. Ltd:

  • The relationship is one of agency and not of sale of goods.
  • Messrs Jones Williams & Co. Ltd never delivered to Mr. Bossman a pro-forma invoice of its own stating the price at which it would sell the spare parts to Mr. Bossman or the time it would deliver the goods.
  • All that Messrs Jones Williams & Co., Ltd did was to give Mr. Bossman a copy of the telex from the suppliers and asked him to pay for the cost of the spare parts calculated from the unit prices.
  • The obligation that Messrs Jones Williams & Co Ltd assumed towards Mr. Bossman was that of using its best endeavors to procure the goods for him on the most favorable terms, and they were not responsible for the delay.
    (3 marks)

ii) The relationship between TSS Co. Ltd and Messrs Jones Williams & Co. Ltd:

  • When the TSS Co. Ltd agreed to procure the goods for Messrs Jones Williams & Co. Ltd, TSS Co. Ltd did that as the agent of Messrs Jones Williams & Co. Ltd, or as a principal party standing towards Messrs Jones Williams & Co. Ltd in the relationship of a seller.
  • The contract between the supplier TSS Co. Ltd and Jones Williams & Co. Ltd was of the type in commercial circles known as Free on Board (FOB) contract. By the rules of FOB Contracts, the supplier assumed the responsibility for shipping the goods to the buyer.
  • The seller TSS Co. Ltd assumed no responsibility for insurance or freight, nor did it give guarantees as to the time of the arrival of the ship at its destination.
  • The only representation which TSS Co. Ltd made was that it was ready, willing, and able to deliver the goods (spare parts) within three (3) months to any port in Japan nominated by Jones Williams & Co. Ltd and load them at their own expense on the ship designated by them (Messrs Jones Williams & Co. Ltd).
    (3 marks)
  • 9 Marks

BCL – Mar 2024 – L1 – Q2b – Contract Law, Sale of goods/hire purchase

Evaluate whether Tinda Oil Ltd. can succeed in a court action against Azigipaa Ltd. based on the provisions of the Sale of Goods Act.

Azigipaa Ltd invited tenders for the purchase of a tanker, said to be lying off the Island Bebre, together with the oil it was said to contain. Tinda Oil Ltd submitted a tender for which Azigipaa Ltd accepted. Tinda Oil Ltd went through considerable trouble and expense to modify a ship that the company owned for salvage work, and also brought equipment and engaged a crew. There was no tanker anywhere near the Island as described by Azigipaa Ltd. Tinda Oil Ltd has decided to take action in court against Azigipaa Ltd.

Required:

i) In light of the provisions of the Sale of Goods Act, is Tinda Oil Ltd likely to succeed in its action? (5 marks)

ii) List TWO (2) fundamental obligations of a seller under the provisions of the Sale of Goods Act 1962, Act 137.

(4 marks)

i) Likelihood of Tinda Oil Ltd succeeding:

The question to begin with is whether or not the tanker falls under the definition of goods under the contract for the sale of goods.

Goods as defined under section 81 of the Sale of Goods Act, 1962 ACT 137 include movable property and growing crops or plants and any other things attached to or forming part of the land which are agreed to be severed before sale by or under the contract of sale.

The next question is whether the tanker lying off the island Bebre is specific or unascertained goods.

Section 5(1) of the Sale of Goods Act, 1962 ACT 137 provides that the goods which form the subject of the contract of sale may either be specific goods identified and agreed upon before or at the time when the contract is made or unascertained goods not being so identified and agreed upon.

Section 9 of the Sale of Goods Act, 1962 (Act 137) provides that in a contract for the sale of specific goods there is an implied condition on the part of the seller that the goods are in existence at the time when the contract is made.

The scenario relates to the case of McRae vs Commonwealth Disposal Commission, treated under common mistake. In that case, the court awarded damages to the plaintiff on the ground that the commission had implicitly warranted the existence of the tanker. The case, however, had found attraction to the sale of goods that although the view was expressed that it well may be to regard the contract for the sale of non-existing goods (tanker) as void.

As regards the application of the scenario to Act 137, the tanker which is non-existent neither falls under the category of unascertained goods which had not been identified.

The goods were non-existent, and therefore Tinda Oil Ltd succeeds in its action.

(5 marks)

ii) Fundamental obligations of a seller:

Section 8 of the Sale of Goods Act, ACT 137 provides that:

  • In the sale of specific goods, the fundamental obligation of the seller is to deliver those goods to the buyer.
  • In a sale of unascertained goods, the fundamental obligation of the seller is to deliver to the buyer goods substantially corresponding to the description or sample by which they were sold.
  • A provision in a contract of sale which is inconsistent with or repugnant to the fundamental obligation of the seller is void to the extent of the inconsistency or repugnance.

(Any 2 points @ 2 marks each = 4 marks)

  • 20 Marks

BCL – May 2019 – L1 – Q5 – Agency, Sale of goods/hire purchase

Discusses the object of a sale of goods, legal advice for parties in a sale involving stolen property, and the duties of an agent.

Yaa Konadu purchased a car from Kofi Apenteng. Two months later, it was discovered that the car was stolen property before it was acquired by Apenteng, and both parties were innocent. Konadu had to give back the car through the police. Apenteng had no title to pass on, so Konadu sued him for the refund of the whole of her money despite the fact that she had used the car for two months.

Required: a) Explain if the object of the sale of the car was met for either Yaa Konadu or Kofi Apenteng.
(4 marks)

b) Advise the parties.
(6 marks)

c) Explain FOUR (4) duties of an agent to his principal.
(10 marks)

a) Object of the Sale:

  • The object of a sale of goods is to transfer the property from the seller to the buyer. In this case, no property was legally transferred to any of the parties because the car was stolen.
  • Legal Reference: Section 1(1) of the Sale of Goods Act, 1962 (Act 137) states that a contract of sale of goods is a contract whereby the seller agrees to transfer the property in goods to the buyer for a consideration called the price, consisting wholly or partly of money.
  • Conclusion: The object of the sale was not met, as Kofi Apenteng did not have the title to pass on to Yaa Konadu.

(4 marks)

b) Advice to the Parties:

  • Advice to Yaa Konadu: Under Section 8 of the Sale of Goods Act, 1962 (Act 137), the fundamental obligation of the seller is to deliver goods to the buyer after the sale. Since Apenteng had no title to the car, Konadu is entitled to a refund of her money. She is also entitled to damages for breach of condition.

    (3 marks)

  • Advice to Kofi Apenteng: The legal maxim “nemo dat quod non habet” applies, meaning no one can transfer a better title than they possess. Apenteng failed to confirm the legal ownership of the car and must repay Konadu her entitlements. He may then sue the person from whom he acquired the vehicle to recover his money.

    (3 marks)

c) Duties of an Agent: The duties of an agent to their principal include:

  • Acting on behalf of and being subject to the control of the principal.
  • Acting in good faith and not making undisclosed profits.
  • Acting within the scope of authority or power delegated by the principal.
  • Discharging duties with appropriate care and diligence.
  • Avoiding conflicts between personal interests and those of the principal.
  • Promptly handing over to the principal all monies collected on the principal’s behalf.

(4 points @ 2.5 marks each = 10 marks)

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