SALE OF GOODS
Introduction
Sale of goods at heart of most commercial transactions; pulls together most subject
matter covered so far (property, contract etc)
Sale of goods: who owns good, obligations on buyer and seller in transaction.
Main statutes:
CRA 2015 (came into force 1 Oct 2015 never) applies to non consumer
relationships
o Ch 2 CRA deals with contracts for sale of goods between trader and
consumer
SOGA 1979 applies to non consumer relations or consumer relations where
CRA is silent
I. THE CONTRACT OF SALE
Where consumer buyer, look to CRA
Where non-consumer (a commercial) buyer, look to SOGA
1. What is a contract of sale of goods?
Section 2(1) SOGA: “A contract of sale of goods is a contract by which the seller
transfers or agrees to transfer the property in the goods to the buyer for a money
consideration called the price.”
SOGA 2(4): where ownership changed = sale
SOGA 2(5): where ownership will pass at future time = agreement to sell
Hughes v Pendragon Sabre (t/a Porsche Centre Bolton) [2016] 1 Lloyd’s Rep 311
Facts:
Porsche garage entered contract with Mr Hughes to say if garage ever
allocated certain limited edition Porsche they would sell it to Mr Hughes
Held:
Agreement for sale not sale itself
Section 5(1) CRA “A contract is a sales contract if under it (a) the trader transfers or
agrees to transfer ownership of goods to the consumer and (b) the consumer pays or
agrees to pay the price.”
CRA s5(2): if trader agreed to sell to consumer something currently being
manufactured this also constitutes a sales contract.
, 2. Five key elements for contract of sale of goods
a. Two parties: a buyer and a seller
b. A contract
c. Transfer of property (contract must relate to transfer of property)
d. Goods (property must be goods)
e. The price (monetary consideration)
A. A Buyer and a Seller
S61(1) SOGA: buyer buys (or agrees to buy) goods, seller sells (or agrees to sell)
goods.
CRA s1(1): CRA only applies to trader seller and consumer buyer
CRA s2: Trader means a person acting for purposes relating to that person’s trade,
business, craft, or profession, whether acting personally or through another
person….
Wathelet v Garage Bietheres (C-149/15), judgement of 9 Nov 2016
Held: includes where trader mearly acting for an intermediary or on behalf
private person who has not duly informed the consumer of the fact that owner
of goods is a private individual.
S2(7) CRA: Business defined as including activities of any governmental department
or local or public authority.
S2(3) CRA: A consumer means an individual acting for purposes that are wholly or
mainly outside that individual’s trade, business, craft or profession. Except (for the
most part) an individual buying second hand goods at a public auction in person
(s2(5) CRA).
Can't have a company acting as a trader
ii The Contract
General principles of contract law will apply: there must be consensus in idem;
parties must have capacity, etc.
(For further reference, see MacQueen and Thomson, Contract Law in Scotland, 5th ed,
2020; or Black, Woolman on Contract, 6th ed)
S3(1) SOGA: Capacity – general law applies.
S4(1) SOGA: Form – contract of sale may be written, oral, partly in each or
constituted (implied) by the conduct of the parties.
CRA s1(2): CRA applies to consumer contracts whether in writing or not.
The Consumer Contracts (Information, Cancellation and Additional Charges)
Regulations 2013 (“the 2013 Regulations”)
Came into force in June 2013
Reg 4: "trader" and "consumer" same as CRA
, Reg 5: Trade is under number of obligations to a consumer in on-premises and off-
premises or distance contracts.
Some contracts that the 2013 regulations do not apply to:
Contracts for supply of foodstuffs, beverages, or other goods intended for
current consumption in the household (reg 7(2))
and which are supplied by a trader on frequent or reqular rounds to the
consumers home, residence, or workplace (reg 6)
sale of a medicinal product under prescription – reg 7(2).
Reg 5: on-premises contract - defined in reg 5 – as a contract between a trader and
consumer which is neither a distance contract or an off-premises contract.
See e-commerce (below) re distance contracts.
Off-premises contracts are generally not entered into in the business
premises of the trader. On premises contract will include many regular sales
of goods – where the contract is entered into between the parties when they
are on the trader’s business premises.
Reg 9(1): on premises contract: before consumer is bound by an on-premises
contract the trader must give or make available to the consumer certain information
set out in Schedule 1 in a clear and comprehensible manner, if that information is not
already apparent from the context.
reg 9(2): Reg 9 does not apply to a contract which involves a day to day
transaction and is performed immediately the contract is entered into.
The information set out in Schedule 1 includes the main characteristics of the
goods, the identity of the trader, the total price of the goods including taxes,
arrangements for payment, delivery, performance, time of delivery and the
trader’s complaint handling policy.
The information provided (except the main characteristics of the goods) is to
be treated as a term of the contract and any change made before or after the
contract is entered into is ineffective unless the change was expressly agreed
between the consumer and trader: CRA s12.
reg 10: off premises contracts - trader needs to provide information listed in sch 2 (or
consumer not bound)
iii Transfer of Property
SOGA only applies where property in goods is being transferred.
PST Energy 7 Shipping LLC v OW Bunker Malta Ltd [2016] AC 1034
Facts:
o Fuel being sold
o Ownership doesn’t pass until fuel paid for
o Contract said buyer must pay for fuel within 60 days of receival but
buyer used fuel immediately
o By time it obtained title there was no fuel.
, Supreme court held:
o Not contract for sale of goods so didn’t fall under SOGA
o Instead, contract which let buyer use as much of sellers fuel as they
wanted so long as they paid for it after
o So when paid, no good - not sale of goods.
Cockett Marine Oil DMCC v ING Bank NV [2019]EWHC 1533 (Comm)
Held:
o PST case only applies to whether something counts as sale of goods
under SOGA
o Parties can use "sale of goods" as term of art
o SOGA doesn’t apply where transaction doesn’t meet technical
definition of SOGA
Wood v TUI Travel plc (t/a First Choice [2017] 2 All ER (Comm) 734.
Court of appeal held:
o Doesn’t mean property cannot pass where good is to be consumed
o Only requires property must pass before good is consumed.
CRA 5(1): there is a sales of goods contract only if the trader transfers or agrees to
transfer ownership of the goods to the consumer.
s2(2) SOGA and s3(5)(a) CRA: There may be a contract of sale between one part
owner and another.
Only a sales contract under CRA 15 if ownership in the goods is being transferred.
Note however CRA also applies to all supplies of goods such as hire and hire
purchase but these contracts are not the focus of these lectures.
s2(4) SOGA: “Where…the property in the goods is transferred from the seller to the
buyer the contract is called sale.”
s2(5) SOGA: “Where… the transfer of the property in the goods is to take place at a
future time… the contract is called an agreement to sell.”
iv Goods
s61 SOGA: “ ‘goods’ includes… all corporeal moveables except money; and in
particular ‘goods’ includes emblements, industrial growing crops, and things attached
to or forming part of the land which are agreed to be severed before sale or under the
contract of sale”
Atiyah et al note that this definition is “virtually all-embracing”
exceptions and problem areas:
Software:
Introduction
Sale of goods at heart of most commercial transactions; pulls together most subject
matter covered so far (property, contract etc)
Sale of goods: who owns good, obligations on buyer and seller in transaction.
Main statutes:
CRA 2015 (came into force 1 Oct 2015 never) applies to non consumer
relationships
o Ch 2 CRA deals with contracts for sale of goods between trader and
consumer
SOGA 1979 applies to non consumer relations or consumer relations where
CRA is silent
I. THE CONTRACT OF SALE
Where consumer buyer, look to CRA
Where non-consumer (a commercial) buyer, look to SOGA
1. What is a contract of sale of goods?
Section 2(1) SOGA: “A contract of sale of goods is a contract by which the seller
transfers or agrees to transfer the property in the goods to the buyer for a money
consideration called the price.”
SOGA 2(4): where ownership changed = sale
SOGA 2(5): where ownership will pass at future time = agreement to sell
Hughes v Pendragon Sabre (t/a Porsche Centre Bolton) [2016] 1 Lloyd’s Rep 311
Facts:
Porsche garage entered contract with Mr Hughes to say if garage ever
allocated certain limited edition Porsche they would sell it to Mr Hughes
Held:
Agreement for sale not sale itself
Section 5(1) CRA “A contract is a sales contract if under it (a) the trader transfers or
agrees to transfer ownership of goods to the consumer and (b) the consumer pays or
agrees to pay the price.”
CRA s5(2): if trader agreed to sell to consumer something currently being
manufactured this also constitutes a sales contract.
, 2. Five key elements for contract of sale of goods
a. Two parties: a buyer and a seller
b. A contract
c. Transfer of property (contract must relate to transfer of property)
d. Goods (property must be goods)
e. The price (monetary consideration)
A. A Buyer and a Seller
S61(1) SOGA: buyer buys (or agrees to buy) goods, seller sells (or agrees to sell)
goods.
CRA s1(1): CRA only applies to trader seller and consumer buyer
CRA s2: Trader means a person acting for purposes relating to that person’s trade,
business, craft, or profession, whether acting personally or through another
person….
Wathelet v Garage Bietheres (C-149/15), judgement of 9 Nov 2016
Held: includes where trader mearly acting for an intermediary or on behalf
private person who has not duly informed the consumer of the fact that owner
of goods is a private individual.
S2(7) CRA: Business defined as including activities of any governmental department
or local or public authority.
S2(3) CRA: A consumer means an individual acting for purposes that are wholly or
mainly outside that individual’s trade, business, craft or profession. Except (for the
most part) an individual buying second hand goods at a public auction in person
(s2(5) CRA).
Can't have a company acting as a trader
ii The Contract
General principles of contract law will apply: there must be consensus in idem;
parties must have capacity, etc.
(For further reference, see MacQueen and Thomson, Contract Law in Scotland, 5th ed,
2020; or Black, Woolman on Contract, 6th ed)
S3(1) SOGA: Capacity – general law applies.
S4(1) SOGA: Form – contract of sale may be written, oral, partly in each or
constituted (implied) by the conduct of the parties.
CRA s1(2): CRA applies to consumer contracts whether in writing or not.
The Consumer Contracts (Information, Cancellation and Additional Charges)
Regulations 2013 (“the 2013 Regulations”)
Came into force in June 2013
Reg 4: "trader" and "consumer" same as CRA
, Reg 5: Trade is under number of obligations to a consumer in on-premises and off-
premises or distance contracts.
Some contracts that the 2013 regulations do not apply to:
Contracts for supply of foodstuffs, beverages, or other goods intended for
current consumption in the household (reg 7(2))
and which are supplied by a trader on frequent or reqular rounds to the
consumers home, residence, or workplace (reg 6)
sale of a medicinal product under prescription – reg 7(2).
Reg 5: on-premises contract - defined in reg 5 – as a contract between a trader and
consumer which is neither a distance contract or an off-premises contract.
See e-commerce (below) re distance contracts.
Off-premises contracts are generally not entered into in the business
premises of the trader. On premises contract will include many regular sales
of goods – where the contract is entered into between the parties when they
are on the trader’s business premises.
Reg 9(1): on premises contract: before consumer is bound by an on-premises
contract the trader must give or make available to the consumer certain information
set out in Schedule 1 in a clear and comprehensible manner, if that information is not
already apparent from the context.
reg 9(2): Reg 9 does not apply to a contract which involves a day to day
transaction and is performed immediately the contract is entered into.
The information set out in Schedule 1 includes the main characteristics of the
goods, the identity of the trader, the total price of the goods including taxes,
arrangements for payment, delivery, performance, time of delivery and the
trader’s complaint handling policy.
The information provided (except the main characteristics of the goods) is to
be treated as a term of the contract and any change made before or after the
contract is entered into is ineffective unless the change was expressly agreed
between the consumer and trader: CRA s12.
reg 10: off premises contracts - trader needs to provide information listed in sch 2 (or
consumer not bound)
iii Transfer of Property
SOGA only applies where property in goods is being transferred.
PST Energy 7 Shipping LLC v OW Bunker Malta Ltd [2016] AC 1034
Facts:
o Fuel being sold
o Ownership doesn’t pass until fuel paid for
o Contract said buyer must pay for fuel within 60 days of receival but
buyer used fuel immediately
o By time it obtained title there was no fuel.
, Supreme court held:
o Not contract for sale of goods so didn’t fall under SOGA
o Instead, contract which let buyer use as much of sellers fuel as they
wanted so long as they paid for it after
o So when paid, no good - not sale of goods.
Cockett Marine Oil DMCC v ING Bank NV [2019]EWHC 1533 (Comm)
Held:
o PST case only applies to whether something counts as sale of goods
under SOGA
o Parties can use "sale of goods" as term of art
o SOGA doesn’t apply where transaction doesn’t meet technical
definition of SOGA
Wood v TUI Travel plc (t/a First Choice [2017] 2 All ER (Comm) 734.
Court of appeal held:
o Doesn’t mean property cannot pass where good is to be consumed
o Only requires property must pass before good is consumed.
CRA 5(1): there is a sales of goods contract only if the trader transfers or agrees to
transfer ownership of the goods to the consumer.
s2(2) SOGA and s3(5)(a) CRA: There may be a contract of sale between one part
owner and another.
Only a sales contract under CRA 15 if ownership in the goods is being transferred.
Note however CRA also applies to all supplies of goods such as hire and hire
purchase but these contracts are not the focus of these lectures.
s2(4) SOGA: “Where…the property in the goods is transferred from the seller to the
buyer the contract is called sale.”
s2(5) SOGA: “Where… the transfer of the property in the goods is to take place at a
future time… the contract is called an agreement to sell.”
iv Goods
s61 SOGA: “ ‘goods’ includes… all corporeal moveables except money; and in
particular ‘goods’ includes emblements, industrial growing crops, and things attached
to or forming part of the land which are agreed to be severed before sale or under the
contract of sale”
Atiyah et al note that this definition is “virtually all-embracing”
exceptions and problem areas:
Software:
