Sale of Goods and Services: Understanding Property Transfer and Implied Guarantees in NSW, Study notes of Construction

Download Sale of Goods and Services: Understanding Property Transfer and Implied Guarantees in NSW and more Study notes Construction in PDF only on Docsity! Week 5 - Sale of Goods and Services Sale of Goods Act 1923 (NSW) Sales Agreements Transfers Property • Property in goods means the same thing as ownership • Possession of goods refers to the control or custody of goods • Unless buyer has agreed to bear the risk, any damage or loss suffered to goods before property passes to buyer is borne by seller. Transfer of Title by Non-Owner • Seller cannot pass better title than they possess • Exceptions: • -Sale of Goods Act 1923 (NSW) ss 26-27 • -Estoppel • Agency • -Power of Sale pursuant to court order • Seller retains possession after contract of sale • Rightful owner of goods is entitled to recover from those with no title to them. • Rules on when ownership passes to buyer remains part of the Sales of Goods Act not ACL. Goods Sale of Goods Act s 5(1): ‘Goods’ include all chattels personal other than things in action and money. The term includes emblements and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale. Categories of goods • Specific - existing • Unascertained - Re Goldcorp • Ascertained - Re Wait • Future Classifying goods • Affects when title passes • Requires ascertaining of unascertained goods before title passes • Passing of title dependent on parties' intentions Is Contract for Sale of Goods? • If main purpose of contract is transfer of title to goods, contract is a contract for sale of goods - Toby Construction Products Pty Ltd v Computer Bar Sales Pty Ltd (1983) • If main part of agreement relates to skill and experience of one or parties and use of materials is ancillary to main purpose, it is contract for work and materials - Robinson v Graves (1935). Price - Sale of Goods Act NSW • Section 13 Ascertainment of price • The price in a contract of sale may be fixed by the contract, or may be left to be fixed in manner thereby agreed, or may be determined by the course of dealing between the parties. • Where the price is not determined in accordance with the foregoing provisions, the buyer must pay a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each particular case. Terms of Sale Contracts • In sale of goods each party is negotiating on ‘equal terms’ and so maxim caveat emptor applies • Buyers have themselves to blame if fail to make careful inspections of goods before purchasing • Legislation takes into account disadvantaged buyer, as it implies a number of terms into such contracts as either conditions or warranties. • Distinction between conditions and warranties under law of contract is preserved by sale of goods legislation. General Rules • Passing of ownership (and risk): • Existing – owned or possessed by seller at time of contract • Future – goods to be manufactured and risk passes when goods ascertained. • Specific – identified and agreed upon at time of sale/contract and risk passes at time agreed by parties. • Unascertained – goods defined by description only and risk passes when goods ascertained. • Ascertained – goods which have become identified and agreed upon by the parties after contract and risk passes at a time agreed to by parties. Specific Rules • Where there is a contract for sale of specific goods property in goods is transferred to buyer at time agreed to by parties. • Goods are ascertained when identified as goods agreed on after contract has been made. • Specific goods are goods identified at time contract is made. Reservation - Right of Disposal • To preserve property (or ownership) rights of seller in goods they have sold until paid in full, sellers often include reservation of title clause in contract of sale of goods. • This creates equitable interest or charge in favour of original seller. • If buyer failed to pay for goods, it was argued that seller could repossess them because they still had property and title in them. • These are referred to as Romalpa clauses. • General Motors Acceptance Corp Australia v Southbank Traders Pty Ltd [2007] Performance of Sale Contract • To complete a contract for sale of goods: • Seller must be ready to deliver or give possession of goods; and • Buyer must be ready to accept and pay for them in accordance with terms of contract. • Delivery takes place when there is voluntary transfer of possession from seller to buyer. • This need not be physical act of handing over; may be symbolic as in delivery of warehouse key or in handing over document of title, such as bill of lading. Implied Guarantees Consumer Guarantees Ownership: Title-Right to sell; Undisturbed possession; Free from undisclosed securities. Goods: Description; Acceptable quality; Fit for disclosed purpose; Comply with sample or demonstrated model; Facilitates for repairs and supply spare parts (manufactures); Express warranties (manufactures and suppliers).