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)