Terms Implied by SGA 1979
S12
S12 SGA
What it says S12(10 – S has right to sell goods (and agreement to sell covered)
S12(2)(a) – warranty that the goods are free from charge or encumbrance
S12(2)(b) – warranty that B will enjoy quiet possession of goods
S12(3) – sale of limited title
S12(5A) – classifies terms
S12(1) – right to sell
Rowland
Legal Principle S12(1)
Ratio S12(1) is a condition, therefore when breached the contract can be rescinded,
and B can demand return of purchase money, unless has waived this condition
Generally – B cannot rescind a contract of sale and get back the purchase money
unless he can restore the subject matter
Notes This rule can be very harsh – shown in Butterworth – where demonstrates it
favours 3rd party purchasers even where S thought he legally had good title
Law Commission report recommended that B in these circumstances should be
entitled to recover no more than actual loss – nothing taken to implement this
Nibblet
Legal Principle Scope of s12(1)
Ratio S12(1) is much wider in its scope than inferred from the label ‘implied condition
to title’, which it’s commonly applied to – here, even though S owned the goods
he was in breach of s12(1) because of copyright issues (‘Nissly’ milk sued by
‘Nestle’ as he didn’t have title to the name)
Butterworth
Legal Effect of s12(1) breach
Principle
Facts
HP Sells Sells sells
A to B to C to D to E
Ratio A tried to get car from E, even though B paid HP after sales to A
Held – B guilty of breach of s12(1), therefore E can recover full purchase price,
even though used car lots
Mason
Legal Principle S12(1) and s12(2)(b) relationship
S12
S12 SGA
What it says S12(10 – S has right to sell goods (and agreement to sell covered)
S12(2)(a) – warranty that the goods are free from charge or encumbrance
S12(2)(b) – warranty that B will enjoy quiet possession of goods
S12(3) – sale of limited title
S12(5A) – classifies terms
S12(1) – right to sell
Rowland
Legal Principle S12(1)
Ratio S12(1) is a condition, therefore when breached the contract can be rescinded,
and B can demand return of purchase money, unless has waived this condition
Generally – B cannot rescind a contract of sale and get back the purchase money
unless he can restore the subject matter
Notes This rule can be very harsh – shown in Butterworth – where demonstrates it
favours 3rd party purchasers even where S thought he legally had good title
Law Commission report recommended that B in these circumstances should be
entitled to recover no more than actual loss – nothing taken to implement this
Nibblet
Legal Principle Scope of s12(1)
Ratio S12(1) is much wider in its scope than inferred from the label ‘implied condition
to title’, which it’s commonly applied to – here, even though S owned the goods
he was in breach of s12(1) because of copyright issues (‘Nissly’ milk sued by
‘Nestle’ as he didn’t have title to the name)
Butterworth
Legal Effect of s12(1) breach
Principle
Facts
HP Sells Sells sells
A to B to C to D to E
Ratio A tried to get car from E, even though B paid HP after sales to A
Held – B guilty of breach of s12(1), therefore E can recover full purchase price,
even though used car lots
Mason
Legal Principle S12(1) and s12(2)(b) relationship
