SOGO

• Sale


  An executed contract
• Agreement to Sell


  An executory contract
• Types of contracts


  • Executed
  • Can be executed
  • Not yet executed
• Sale


  • The property in the goods passes from the seller to the buyer immediately so that the seller is no more the owner of the goods sold
• Agreement to Sell


  • The transfer of the property in goods is to take place at a future time or subject to certain conditions to be fulfilled
• Goods are destroyed


  In a Sale, the loss falls on the buyer even though the goods were in the possession of the seller
• Goods are destroyed


  In an Agreement to Sell, the loss falls on the seller even though the goods were in the possession of the buyer
• Sale


  • Performance of the Sale is an absolute and without any condition
• Agreement to Sell


  • Performance is conditional and is made in future
• Sale


  • The property is with the buyer and as such the seller cannot resell the goods. If he does so the buyer can recover the goods sometimes even from third parties
• Agreement to Sell


  • The property in the goods remains with the seller and he can dispose of the goods as he likes although he may thereby commit a breach of his contract
• Buyer wrongfully neglects or refuses to pay the price


  In a Sale, the seller can sue for the price even though the goods are still in his possession
• Buyer fails to accept and pay for the goods

  In an Agreement to Sell, the seller can only sue for the damages and not for the price even though the goods are in the possession of the buyer
• Risk


  Passes with ownership of goods
• The risk and the ownership of the goods go together
• In case of loss of the goods, the loss needs to be borne by the party who has the ownership of the goods at the time of the loss
• In exceptional circumstances, the goods may be at the risk of one party and the ownership may be with the other
• Exceptions to risk passing with ownership

  • Agreement
  • Delay
  • Trade custom
  • Section 32(2) Delivery
  • Section 32(3) Insurance
  • Section 33
• Agreement


  • Consolidated Coffee Limited vs Coffee Board AIR 1981 SC 162
• Delay


  If delivery has been delayed through the fault of the buyer/seller, the goods are at the risk of the party in fault as regards any loss which might not have occurred but for such fault
• Delay


  • Denby Hamilton & Co Ltd vs Barden (1949) 1 All ER 435
• Trade custom


  Customary rule prevailing in a particular trade which is generally followed by the parties
• Section 32(2) Delivery


  Where the seller undertakes to deliver the goods, he is required to make a "reasonable contract of carriage" with the carrier on behalf of the buyer having regard to the nature of the goods and circumstances of the case. If he omits to do so and the goods are lost or damaged in the transit, the buyer can decline to treat the delivery to the carrier as a delivery to himself.
• Section 32(3) Insurance


  Where goods are sent through a route involving sea transit under circumstances in which it is used to insure, the seller is required to give such notice to the buyer enable him to insure the goods during sea transit. And if the seller fails to do so, the goods are deems to be at the sellers risk during sea transit.
• Section 33


  Where seller agrees to deliver the goods at seller's own risk at a place other than the place where they are when sold, buyer must unless otherwise agreed to take any risk of deterioration, necessarily incidental to the course of transit.
• Section 33


  • Bull v Robinson
  • Scottish and Newcastle International vs Othan Ghalanos (2008) UKHL 11
  • Marsh and Murrel vs Joseph Emanuel Ltd (1961) 1 All ER 485
• FOB and CIF


  Risk and property passes independently, risk passes when the goods crossed ships rail
• When property passes before risk


  • Head vs Tattersall
• When risk passes before property

  • Stern vs Vickers Limited
• Doctrine of Frustration


  A contract can be totally frustrated by an extraordinary or unforeseeable event. It can also occur where goods are accidentally lost or damaged. It is something not contemplated by the parties and provided for by a term of the contract. Hence both parties relieved from the obligation.
• Risk and frustration may conveniently be treated in proximity since the operation of frustration is bounded by the transfer of risk. Risk is associated with the price. It determines when the buyer must pay for goods accidently damaged, lost or destroyed. Where a contract is frustrated, it is automatically discharged. The primary effect of this is to excuse the party, usually the seller whose performance is affected by the frustrating event from liability for breach of contract.
• Doctrine of Frustration


  • Barrow Lane & Ballard Limited vs Philip Philp & Co Limited (1928)
  • Hr & Sainsbury vs street 1972
• Section 3


  Capacity to contract is governed by the general law concerning capacity to contract, and to transfer and acquire property.
• Section 4


  No particular form is necessary when making a contract of sale and accordingly a contract for sale of goods can occur in the following ways: 1) It can be in writing 2) By word of mouth 3) Partly in writing and partly by word of mouth 4) Implied from the conduct of the parties
• Section 5


  A contract for sale will not be enforceable by action unless, 1) the buyer shall accept the part of the goods sold and actually receive the same, 2) Pay the price or part thereof, 3) Some note or memo in writing of the contract be made and signed by the party to be charged or his agent in that behalf.
• Exclusions from the application of SOGO

  • Gift
  • Loan
  • Hire Purchase
  • Lease