SOGA

• Applicable Laws


  The Sale of Goods Act 1957 (SOGA 1957) applies in Malaysia except for the states of Pulau Pinang, Melaka, Sabah and Sarawak. The English Sale of Goods Act 1893 is applicable in the states of Penang, Malacca, Sabah and Sarawak.
• Purpose of the legislation

  It is aimed to protect consumers.
• Contract of Sale


  The main purpose is the transfer of ownership. It is defined as 'a contract whereby a seller transfers the property in goods to the buyer for a price or an agreement to transfer the property in goods for a price.' There must be goods, money consideration and transfer of property.
• Property in goods


  Refers to ownership or title to the goods. A sale occurs when the ownership or property in goods passes to the buyer.
• Absolute or conditional contract of sale


  A contract of sale may be absolute or conditional.
• Goods do not include land, choses in action or rights, and services such as work and labour.
• Immovable property will be subject to SOGA 1957 if it has been separated from the land.
• Goods


  • Trees are regarded as land until severed, so logs and timber will be goods under SOGA 1957.
• Section 2 of SOGA excludes land, actionable claims, and money as goods.
• Buyer


  A person who buys/agrees to buy goods
• Seller


  A person who sells/agrees to sell goods
• Types of Goods


  • Existing goods
  • Specific goods
  • Ascertained goods
  • Unascertained goods
  • Future goods
• Existing Goods


  Goods that are physically in existence and in possession of the seller at the time of the sale.
• Future Goods


  Goods to be manufactured/produced/yet to be acquired by the seller after the making of the contract of sale.
• Specific/Ascertained Goods


  Goods identified and agreed upon at the time of the making of the contract of sale.
• Unascertained Goods


  Goods not identified and agreed upon at the time a contract of sale is made, but may be identified after the contract is made.
• Unascertained Goods


  • Selling a pen out of a pencil case, as the specific pen is not known.
• Price


  Money consideration for a sale of goods. The price may be fixed by the contract, fixed according to a certain manner agreed in the contract, determined by the course of dealing between the parties, or a reasonable price.
• Formation of Contract of Sale

  A contract of sale of goods is formed in the same way as any other contract - in writing, by words of mouth, partly in writing and partly in words, or implied from the conduct of the parties. The parties must have legal capacity to enter into the contract.
• Sale vs Agreement to Sell

  A sale is when the property in the goods is transferred from the seller to the buyer. An agreement to sell is when the transfer of property in the goods is to take place at a future time or subject to some condition.
• Ownership vs Possession


  Ownership refers to having legal rights over the goods, while possession refers to physical control over the goods. The owner can sell the goods, while the possessor cannot.
• Condition


  A stipulation essential to the main purpose of the contract, the breach of which gives the right to treat the contract as repudiated.
• Warranty


  A stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not the right to reject the goods and treat the contract as repudiated.
• Whether a stipulation is a condition or warranty depends on the construction of the contract.
• The contract cannot be repudiated and the innocent party can merely claim damages if the buyer waives the condition or elects to treat the breach of condition as a breach of warranty, or if the contract is not severable and the buyer has accepted the goods or part thereof.
• Acceptance of Goods


  The buyer has accepted the goods if they inform the seller they have accepted, if they do something inconsistent with the seller's ownership, or if they keep the goods without informing the seller after a reasonable time.
• Implied terms and conditions can be negated or varied by express agreement, course of dealing between the parties, or usage that binds both parties.
• Implied Terms


  • Implied condition as to title
  • Implied warranty of quiet possession
  • Implied warranty that the goods are unencumbered
  • Implied condition that goods must correspond with description
  • Implied condition that goods must be reasonably fit for purpose
  • Implied condition that goods must be of merchantable quality
  • Implied terms in sale of goods by sample
• Implied Condition as to Title


  This amounts to a guarantee that the seller has the right to sell the goods.
• Implied condition as to title


  This condition amounts to a guarantee. If the seller does not have the title or ownership then there is a total failure of consideration.
• An implied condition on the part of the seller that he has a right to sell the goods
• Seller must have title/ownership/property in goods to transfer to buyer in sale of goods contract
• If seller does not have title, he/she is unable to transfer the title to the buyer
• Buyer can repudiate contract and recover full
• Rowland v Divall [1923]2 KB 500


  • Rowland sold a car to Divall, but the car was actually stolen from someone else and Divall was not the true owner. Rowland had to return the car to the true owner and then sued Divall for breach of the implied term.
• Implied warranty that the buyer shall have quiet possession of goods

  There is an implied warranty that the buyer shall have and enjoy undisturbed possession of the goods. This means a third party will not come and claim ownership after the sale has taken place. This implied stipulation is merely a warranty and not a condition.
• Implied warranty that the goods are unencumbered


  There is an implied warranty that the goods are free from any charge in favour of a third party who is unknown to the buyer for example, storage charges which have to be paid before the goods can be collected.
• Implied condition that in a sale of goods by description, the goods must correspond with the description


  Where there is a sale by sample as well as by description, it is not enough that the bulk of the goods correspond with the sample if the goods do not also correspond with the description. Description is about identity not the quality of the goods.
• If the goods do not match the description, this is a breach of condition
• The buyer can refuse to accept the goods and repudiate the contract and claim damages