Topic: Sale of goods/hire purchase

Search 500 + past questions and counting.
Professional Bodies Filter
Program Filters
Subject Filters
More
Tags Filter
More
Check Box – Levels
Series Filter
More
Topics Filter
More
  • 5 Marks

BCL – May 2021 – L1 – Q3b – Sale of goods/hire purchased

Listing the timelines within which a seller must deliver goods under the Sale of Goods Act, 1962 (Act 137).

List FOUR (4) timelines under the Sale of Goods Act, 1962 (Act 137), within which a seller must deliver goods to the buyer. (5 marks)

Section 16 of the Sale of Goods Act, Act 137, provides for the timelines within which the seller must be ready to deliver the goods in exchange for a price:

  • If no time is fixed for the delivery of the goods, they must be delivered at a reasonable time.
  • The parties to a contract of sale may, whether with or without consideration, agree that delivery should be made at a date or time other than that stipulated for in the contract.
  • Where the buyer agrees to accept delivery from the seller at a date later than stipulated in the contract without substituting another date.
  • Where the seller contracts to use his best endeavour to deliver the goods on, or not later than a given date, the seller must deliver the goods within a reasonable time after the date.
    (Four points @ 1.25 marks each = 5 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)

  • 8 Marks

BCL – Nov 2018 – L1 – Q2c – Sale of Goods/high purchased

Determine when property in goods passes from the seller to the buyer in a sale of goods contract.

In a contract of sale of goods, at what time will property in the goods pass from the seller to the buyer? (8 marks)

  • Where there is a contract of sale of unascertained goods, the property in the goods is not transferred from the seller to the buyer unless the goods are ascertained.
    (Section 25 of the Sale of Goods Act, 1962 ACT 137) (5 marks)
  • Under a contract of sale of goods, property in the goods passes when they are delivered to the buyer.
    (Section 26 of the Sale of Goods Act, 1962 ACT 137) (3 marks)
  • 6 Marks

BCL – May 2018 – L1 – Q3b – Sale of Goods/Hire Purchase

Discuss the basic requirements of a Hire Purchase agreement and the steps a hirer should take upon termination.

b) Komosa Limited entered into a Hire- Purchase agreement with Mr. Gyeabour over a car. The agreement was to last for a period of 4 years of monthly instalment. The instalment arrangements went on for three and half years till Mr.Gyeabour decided to terminate the arrangement and stopped paying the instalment. For the remaining period, the Company had no news of Mr. Gyeabour or the car. When the car was later found, the air conditioning compartment was in a bad state of disrepair. The Company now intends to sue Mr. Gyeabour who has resurfaced. Mr. Gyeabour is now pleading with the Company for mercy.

Required:
i) Describe TWO basic requirements that should be outlined in a Hire Purchase Agreement. (4 marks)

ii) Explain to Mr. Gyeabour TWO steps he should have taken in respect of the termination and the damaged car under the Hire-Purchase Act, 1974 NRCD 292. (6 marks)

i) Basic Requirements that should be outlined in a Hire Purchase Agreement
Every agreement shall contain:

  • A statement of the cash price and the hire-purchase price or total purchase price, as the case may be, of the goods;
  • The amount of each instalment by which the price is to be paid and the date or the mode of determining the date upon which each instalment is payable;
  • A description or list of the goods to which the agreement relates sufficient to identify them;
  • A notice, which is at least as prominent as the rest of the contents of the agreement, in the terms set out in the First or Second Schedule to this Decree.
    (Section 3 of NRCD 292)
    (Any 3 points for 4 marks)

ii) Steps Mr. Gyeabour Should Have Taken:

  • The hirer under a hire-purchase agreement is entitled at any time before the final payment under a hire-purchase agreement falls due, to terminate the agreement by giving notice of the termination to the person entitled to receive payments under the agreement.
  • Where the hirer terminates the hire-purchase agreement, he is liable to pay the difference between the total of the sums of money paid and one-half of the hire-purchase.
  • Where the agreement is terminated, the hirer shall return the goods at the expense of the hirer to the premises from which they were originally supplied or to any other place as the owner may direct.
  • Where the agreement is terminated, the hirer who has failed to take reasonable care of the goods is liable to compensate the owner for the loss or damage caused by his failure.
    (Section 6 NRCD 292)
    (Any 3 points for 6 marks)
  • 10 Marks

BCL – Nov 2023 – L1 – Q2b – Sale of Goods/Hire Purchase

Discuss the legal nature of goods under a hire purchase agreement and the implications of repossession by the seller.

Yaro Ltd deals in cars. They let out their brand new car to Nakare on a hire purchase agreement. The total purchase price stood at GH¢86,000 payments to be made in two years. The monthly installment agreed on was GH¢3,600. With almost three quarters of the payment made, Nakare for unknown reasons refused to make further installment payments. Nakare refused to communicate to Yaro Ltd.

Officials of Yaro Ltd, including the accountant, while on a normal duty tour, chanced on the car and took possession of it. Nakare admitted to non-fulfillment of regular installment but argued that the company’s action was in error.

Required: i) With almost three quarters of the total purchase price paid, explain the legal nature of the goods. (5 marks)

ii) What are the possible implications of the actions of the officials of Yaro Ltd under the hire-purchase agreement? (5 marks)

i) The goods become protected goods. (1 mark)

Protected goods are goods which have been let under a hire-purchase agreement, one-half of the price or total price of which has been paid, whether in pursuance of a judgment or otherwise, or tendered by or on behalf of the hirer. (2 marks) In relation to which the hirer has not terminated the hire-purchase agreement or in the case of a hire-purchase agreement, the bailment, by virtue of a right vested in the hirer. (2 marks)

ii) The possible implications of the actions of the officials of Yaro Ltd under the hire-purchase agreement:

  • The owner shall not enforce a right to recover possession of protected goods from the hirer otherwise than by an action (court action).
  • Where the owner recovers possession of protected goods in contravention under the Hire-purchase Act, N.R.C.D. 294, the agreement if not previously terminated, is terminated, and
  • The hirer is released from liability under the agreement and is entitled to recover from the owner, in an action for money had and received, the sums of money paid by the hirer and the security given in respect of the agreement.
  • The guarantor is entitled to recover from the owner in action for money had and received, the sum of money paid under the contract of guarantee or under security given in respect of the agreement.
  • However, the Court may on application by the hirer make an order for the return of the goods to the hirer and for the rescheduling of payments due under the agreement.               (5 marks)
  • 20 Marks

BCL – Nov 2017 – L1 – Q6 – High purchase, Contract Law

Discuss the rules for transfer of risk in sale of goods and explain the concepts of liquidated damages and quantum meruit.

a) State the essential rules concerning the transfer of risk in the sale of goods. (12 marks)

b) Explain the following:
i) Liquidated damages (4 marks)
ii) Quantum meruit (4 marks)

(Total: 20 marks)

a) Essential rules concerning transfer of risk in the sale of goods:

  • Intent to Transfer Risk: The risk in the goods in a contract of sale is transferred to the buyer when the parties intend it to be transferred. (3 marks)
  • Default Position: Unless a different intention appears, the goods are at the seller’s risk until the property in them passes to the buyer, after which the goods are at the buyer’s risk. (3 marks)
  • Fault-Based Risk: Where delivery of the goods has been delayed through the fault of either the buyer or the seller, the goods are at the risk of the party at fault as regards any loss, damage, or deterioration which might not have occurred but for the delay. (3 marks)
  • Bailee’s Liability: The duties or liabilities of either seller or buyer as a bailee of the goods of the other party or any destruction, loss, or deterioration of or damage to the goods caused by the fault of either party are not affected by anything in the law. (3 marks)

(Total: 12 marks)

b)

i) Liquidated damages: Liquidated damages refer to a specific figure agreed upon by the parties themselves as a reasonable pre-estimate of the loss brought by a breach of contract rather than as a penalty for breach. Liquidated damages have three main features:

  • There is a specific figure.
  • This specific figure is agreed to by the parties themselves.
  • This specific figure, which is agreed to by the parties themselves, is a reasonable pre-estimate of the loss occasioned by a breach of contract. (4 marks)

ii) Quantum meruit: Quantum meruit means “as much as it is worth.” It is not a claim for damages under a contract but an award to compensate a person in certain circumstances where a contract either never existed or subsequently ceased to exist, or where the contract has been breached, thereby preventing a party from performing under it. The claimant may be rewarded for their work or goods as much as they are worth in terms of reasonable value. (4 marks)

(Total: 20 marks)

  • 10 Marks

BCL – July 2023 – L1 – Q2a – Sale of Goods/Hire Purchase

Analyze the fitness for purpose in a sale of goods scenario and the seller's fundamental obligation under the Sale of Goods Act.

Kofi Adabla visited the showroom of Car Dealers Ltd, a company that sells used vehicles. Kofi Adabla informed Car Dealers Ltd that he needed a vehicle that could withstand the rugged terrain. Kofi Adabla had his Mechanic with him. The salesman at the Car Dealers Ltd recommended a slightly used vehicle to Kofi Adabla. Kofi Adabla’s Mechanic did a thorough examination of the vehicle after which Kofi Adabla decided to buy the vehicle at a price of GH¢55,000.

Three months after Kofi Adabla bought the vehicle, it developed a mechanical fault which was promptly repaired by Car Dealers Ltd under the terms of sale, exhausting the warranty. Three months later, the vehicle developed another mechanical fault but Car Dealers Ltd refused to repair it. Kofi Adabla now threatens to sue.

Required:

i) Explain whether Kofi Adabla will succeed on a claim that the vehicle was not fit for the purpose for which it was acquired and that there was a breach of the conditions of sale. (5 marks)

ii) State the fundamental obligation of the seller under the Contract for Sale of Goods under the Sale of Goods Act, 1962 (Act 137). (5 marks)

i) Under section 13 (1) of the Sale of Goods Act, 1962 ACT 137, there is no implied warranty or condition as to the quality or fitness for a particular purpose of goods supplied under a contract of sale except that there is an implied condition that the goods are free from defects which are not declared or known to the buyer before or at the time when the contract is made, but that condition is not an implied condition.

However, where the buyer has examined the goods, in respect of defects which could have been revealed by the examination, there is an implied condition that the goods are fit for the purpose – Section 13(1)(a)(i).

On the strength that the mechanic did a thorough examination and under section 13(1) (a) (i), Kofi Adabla fails to succeed on his claim.

(5 marks)

ii) 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. Any 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.

(5 marks)

  • 8 Marks

BCL – Dec2022 – Q2b – Sale of goods/hire purchase

Identify and explain issues in a contract of sale of goods involving government property.

As part of efforts in catering for Ghanaians who were displaced by the Russian war on Ukraine, the Government of Ghana erected tents in Poland. These tents are no longer in use because all Ghanaians were evacuated back to Ghana. As a result, the Government set up a disposal board to sell these tents. The board agreed to sell the tents to Dominika who left an amount of GH¢10,000,000 as a security deposit for her purchases. According to the written agreement between the disposal board and Dominika, the price for the tents and the dates on which payment was to be made were to be agreed between the parties as and when the tents became available. In July 2022, a new disposal board took over and refused to sell the tents to Dominika. They stated that they no longer considered themselves bound by the contract.

Required:
Identify FOUR (4) issues in the contract of sale of goods in the above scenario. (8 marks)

Issues in the Contract of Sale of Goods:

  1. Existence of a Contract of Sale:
    Whether or not there is a contract of sale of the tents between the Board (representing the Government of Ghana) and Dominika. According to Section 1(1) of the Sale of Goods Act, 1962 (Act 137), 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.
  2. Consideration in the Form of Security Deposit:
    Whether or not the GH¢10,000,000 as a security deposit is to be considered as consideration under the contract of sale. Section 1(1) of the Sale of Goods Act, 1962 (Act 137) requires a money consideration to validate the sale.
  3. Price Determination:
    Whether or not under the contract of sale of goods, the price is allowed to be fixed in a manner agreed upon by the parties. Section 6 of the Sale of Goods Act, 1962 (Act 137) permits the price to be determined by the method agreed upon by the parties.
  4. Breach of Fundamental Obligation:
    Whether the new Board representing the Government is guilty of its fundamental obligation to sell and deliver the tents to Dominika. According to Section 8(1) of the Sale of Goods Act, 1962 (Act 137), it is the duty of the seller to deliver the goods and the duty of the buyer to accept and pay for them in accordance with the terms of the contract.

Take control of your business data with insight and in-depth understanding by taking this course. 

Services

Contact Info

  • +233203701923
    +233543919232
  • info@noohrabusiness.com

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope