Commercial Law & The Sales of Goods

One of the most important types of contract at the present is a contract for the sales of goods. The purpose of such a contract is the transfer of ownership of goods from the seller to the buyer. The law relating to contracts for the sale of goods has now been consolidated in the SALE OF GOODS ACT 1979( henceforth SOGA), which came into effect on 1st January 1980. The SOGA 1979 replaces the SOGA 1893, which was a codification of most of the common law rules on contracts of sale of goods. SOGA 1979 regulates the CONTRACT FOR SALE OF GOODS in a number of ways although now the statutory provisions of SOGA has been amended by the Sale and Supply of Goods Act 1994 and the Sale of Goods ( Amendment ) Act 1995 .

The Sale of Goods Act 1979 covers wide varieties of issue regards the contact of sale of goods:

Firstly, a number of obligations are implied into every contract of sale of goods for the benefit of the buyer. This will include an obligation on the part of the seller to have a right to sell (S12) and to ensure that the goods purchased are in conformity with the description (S13) and is both of satisfactory quality (S14(2)) and is especially fit for the purpose for which it is purchased (S14(3)).

Secondly, the Act defines when property in the goods are to pass from the seller to the buyer (S16, S17, and S18). The Act lays down a general rule that risk passes when ownership passes (S20) and that it is possible for a seller to retain property in the goods until some condition is satisfied (S19).

Thirdly, the Act deals with the position of third parties that enter into contracts of sale of goods with a seller who does not own the goods and/or who does not have the right to sell. The general rule is NEMO DAT QUOD NON HABET1 found in the first limb of S21 (1), i.e., “no one can give a better title than he himself possesses”. The Act also lays down most of the exceptions to the nemo dat rule.

Finally, the obligations of the parties are also taken into consideration. Finally, the Act also provides remedies available to the seller and the buyer under a contract for the sale of goods. These remedies are in themselves non exhaustive and in this respect, the remedies under the common law of contract is also made available to the parties of the contract. (S62(2)SOGA 1979)


Definition of Contract of Sale of Goods.

SOGA 79 applies to contracts for sale of goods, as defined in S2 (1) - "A contract of sale of goods is a contract by which the seller transfers or agrees to transfers the property in the goods to the buyer for a money consideration called price". If the above elements are present then there is a contract for sale of goods and the contract will be governed by SOGA 79. However, if any of the elements are not fulfilled, the contract involved would not fall when S2 (1) and will not be governed by SOGA 79 . Hence there must be a contract and all the elements of a valid contract must exist.


1 L. Denning in Bishopsgate MotorFinance v Transport Brakes(1949)