SALE OF GOODS ORDINANCE

SALE OF GOODS ORDINANCE

CHAPTER 26.

THE SALE OF GOODS ORDINANCE.

ARRANGEMENT OF SECTIONS.
Section Page

1 & 2 Short title and interpretation ...... ... ... ... 433

PART I.

FORMATION OF THE CONTRACT.

3- 4............Contract of sale ...... ... ... ... ... ... ... ... ... 434
5- 6.................Formalities of contract ... ... ... ... ... ... ... 435-436
7- 9 Subject-matter of contract ... ... ... ... ... 436
10-11......Price ............................ ... ... .... ... ... 436
12-16 Conditions and warranties ... ... ... ... ... ... ... 437-438
17 Sale by sample ........................ ... ... ... ... 439

PART II.

EFFECTS OF THE CONTRACT.

18-22 Transfer of property as between seller and buyer ... ... 439-441
23-28...........Transfer of title ........ ... ... ... ... ... ... 442-443

PART III.

29-39 PERFORMANCE OF THE CONTRACT. 444-447

PART IV.

RIGHTS OF UNPAID SELLER AGAINST THE GOODS.

40-42 Duties of buyer and seller, delivery etc . ... .... ... ... 447-448
43-45.............Unpaid seller's lien ... ... ... ... ... ... ... ... 448-449
46-48.............Stoppage in transitu ... ... ... ... ... ... ... 449-450
49-50..................Re-sale by buyer or seller ... ... ... ... ... 450-451

PART V.

ACTIONS FOR BREACH OF THE CONTRACT.

51-52.............Remedies of seller ..... ... ... ... ... ... ... ... 451-452
53-56.............Remedies of buyer ...... ... ... ... ... ... ... 452-453

PART VI.

57-62 SUPPLEMENTARY. 453-454





CHAPTER 26.

SALE OF GOODS.

To codify the law relating to the sale of goods.

[1st August, 1896.]

1. This Ordinance may be cited as the Sale of Goods
Ordinance. [63

2. In this Ordinance-
'action' includes suit, counterclaim, and set-off;
'buyer' means a person who buys or agrees to buy goods;
'contract of sale' includes an agreement to sell as well as
a sale;
'delivery' means voluntary transfer of possession from one
person to another.
'document of title to goods' includes any bill of lading,
dock warrant, warehouse keeper's certificate, and war-
rant or order for the delivery of goods, and any other
document used in the ordinary course of business as
proof of the possession or control of goods, or authoriz-
ing or purporting to authorize, either by indorsement or
by delivery, the possessor of the document to transfer
or receive goods thereby represented;
'fault' means wrongful act or default;
'future goods' means goods to be manufactured or acquired
by the seller after the making of the contract of sale;
'goods' include all chattels personal other than things in
action and money. The term 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;
'plaintiff' includes a defendant counterclaiming;
'property' means the general property in goods, and not
merely a special property;
'quality of goods' includes their state or condition;
sale' includes a bargain and sale as well as a sale and
delivery;
'seller' means a person who sells or agrees to sell goods;
'specific goods' means goods identified and agreed upon
at the time a contract of sale is made;





('warranty' means an agreement with reference, to goods
which are the subject of a contract of sale, but collateral
to the main purpose of such contract, the breach of which
gives rise to a claim for damages, but not to a right to
reject the goods and treat the contract as repudiated.

(2) A thing is deemed to be done 'in good faith' when
it is in fact done honestly, whether it is done negligently or
not.

(3) A person is deemed to be insolvent who either has
ceased to pay his debts in the ordinary course of business
or cannot pay his debts as they become due, whether he has
committed an act of bankruptcy or not and whether lie has
been adjudged bankrupt or not.

(4) Goods are in a 'deliverable state' when they are in
such a state that the buyer would, under the contract, be
bound to take delivery of them. [62

PART I

FORMATION OF THE CONTRACT.

Contract of sale.

3. (1) A contract of sale of goods is a contract whereby
the seller transfers or agrees to transfer the property in goods
to the buyer for a money consideration, called the price.
There may be a contract of sale between one part owner
and another.

(2) A contract of sale may be absolute or conditional.

(3) Where under a contract of sale the property in the
goods is transferred from the seller to the buyer, the contract
is called a sale; but where the transfer of the property in
the goods is to take place at a future time or subject to some,
condition thereafter to, be fulfilled, the contract is called an
agreement to sell.

(4) An agreement to sell becomes a sale when the time
elapses or the conditions are fulfilled subject to which the
property in the goods is to be transferred. [1





4. (I) Capacity to buy and sell is regulated by the
general law concerning capacity to contract, and to transfer
and acquire property : Provided that where necessaries are
sold and delivered to an infant or minor, or to a person who,
by reason of mental incapacity or drunkenness, is incom-
petent to contract, he must pay a reasonable price therefor.

(2) Necessaries in this section means goods suitable to
the condition in life of such infant or minor or other person,
and to his actual requirements at the time of the sale and
delivery. [2

Formalities of contract.

5.Subject to the provisions of this Ordinance and of
any enactment in that behalf, a contract of sale may be made
in writing (either with or without seal), or by word of mouth,
or partly in writing and partly by word of mouth, or may
be implied from the conduct of the parties : Provided that
nothing in this section shall affect the law relating to
corporations. [3

6. (1) A contract for the sale of any goods of the
value of one hundred dollars or upwards shall not be enforce-
able by action unless the buyer shall accept part of the goods
so sold, and actually receive the same, or give something in
earnest to bind the contract, or in part payment, or unless
some note or memorandum in writing of the contract is made
and signed by the party to be charged or his agent in that
behalf.

(2) The provisions of this section apply to every such
contract, notwithstanding that the goods may be intended
to be delivered at some future time, or may not at the time
of such contract be actually made, procured, or provided, or
fit or ready for delivery, or some act may be requisite for
the making or completing thereof, or rendering the same fit
for delivery.

There is an acceptance of goods within the meaning
of this section when the buyer does any act in relation to the
goods which recognizes a pre-existing contract of sale,
whether there is an acceptance in performance of the contract
or not. [4





Subject-matter of contract.

7. (I) The goods which form the subject of a contract
of sale may be either existing goods, owned or possessed by
the seller, or goods to be manufactured or acquired by the
seller after the making of the contract of sale, in this Ordin-
ance called 'future goods.'

(2) There may be a contract for the sale of goods, the
acquisition of which by the seller depends upon a contin-ency
which may or may not happen.

(3), Where by a contract of sale the seller purports to
effect a present sale of future goods, the contract operates
as an agreement to sell the goods. [5

8. Where there is a contract for the sale of specific
goods, and the goods, without the knowledge of the seller,
have perished at the time when the contract is made, the
contract is void.

9.Where there is an agreement to sell specific goods,
and subsequently the goods, without any fault on the part
of the seller or buyer, perish before the risk passes to the
buyer, the agreement is thereby avoided. [7

Price.

10. (1) 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.

(2) Where the price is not determined in accordance
with the foregoing provisions, the buyer must pay a reason-
able price. What is a reasonable price is a question of fact
dependent on the circumstances of each particular case. [8

11. (1) Where there is an agreement to sell goods on
the terms that the price is to be fixed by the valuation of a
third party, and such third party cannot or does not make
such valuation, the agreement is avoided : Provided that
if the goods or any part thereof have been delivered to and
appropriated by the buyer, he must pay a reasonable price
therefor.





(2) Where such third party is prevented from making
the valuation by the fault of the seller or buyer, the party
not in fault may maintain an action for damages against the
party in fault. [9

Conditions and warranties.

12. (1) Unless a different intention appears from the
terms of the contract, stipulations as to time of payment are
not deemed to be of the essence of a contract of sale.
Whether any other stipulation as to time is of the essence
of the contract or not depends on the terms of the contract.

(2) In a contract of sale, 'month' means prima facie
calendar month. [10

13. (I) Where a contract of sale is subject to any con-
dition to be fulfilled by the seller, the buyer may waive the
condition, or may elect to treat the breach of such condition
as a breach of warranty , and not as a ground for treating
the contract as repudiated.

(2) Whether a stipulation in a contract of sale is a con-
dition, the breach of which may give rise to a right to treat
the contract as repudiated, or a warranty, the breach of which
may give rise to a claim for damages but not a right to
reject the goods and treat the contract as, repudiated, depends
in each case on the construction of the contract. A stipula-
tion May be a condition, though called a warranty in the
contract.

(3) Where a contract of sale is not severable, and the
buyer has accepted the goods or part thereof, or where the
contract is for specific goods, the property in which has
passed to the buyer, the breach of any condition to be
fulfilled by the seller can only be treated as a breach of
warranty, and not as a ground for rejecting the goods and
treating the contract as repudiated, unless there is a term
of the contract, express or implied, to that effect.

(4) Nothing in this section shall affect the case of any
condition or warranty, fulfilment of which is excused by
law by reason of impossibility or otherwise. [11





14. In a contract of sale, unless the circumstances of
the contract are such as to show a different intention, there
is-
(a)an implied condition on the part of the seller that,
in the case of a sale, he has a right to sell the
goods, and that, in the case of an agreement to
sell, he will have a right to sell the goods at the
time when the property is to pass;
(b)an implied warranty that the buyer shall have and.
enjoy quiet possession of the goods;
(c)an implied warranty that the goods shall be free.
from any charge or incumbrance in favour of any
third party, not declared or known to the buyei
before or at the time when the contract is made. [12

15. Where there is a contract for the sale of goods by
description, there is an implied condition that the goods
shall correspond with the description ; and if the sale is by
sample, as well as by description, it is not sufficient that
the bulk of the goods corresponds with the sample if the
goods do not also correspond with the description. 113

16. Subject to the provisions of this Ordinance and of
any enactment in that behalf, there is no implied warranty
or condition as to the quality or fitness for any particular
purpose of goods supplied under a contract of sale, except
as follows-
(a)where the buyer, expressly or by implication,
makes known to the seller the particular purpose
for which the goods are required, so as to show
that the buyer relies on the seller's skill or judg-
ment, and the goods are of the description which
it is in the course of the seller's business to supply
(whether he is the manufacturer or not), there is an
an implied condition that the goods shall be reason-
ably fit for such purpose: Provided that, in the
case of a contract for the sale of a specified article
under its patent or other trade name, there is no
implied condition as to its fitness for any parti-
cular purpose;
(b)where goods are bought by description from a
seller who deals in goods of that description
(whether he is the manufacturer or not), there is





an implied condition that the goods shall be of
merchantable quality: Provided that if the buyer
has examined the goods, there shall be no implied
condition as regards defects which such examina-
tion ought to have revealed;
(c)an implied warranty or condition as to quality or
fitness for a particular purpose may be annexed by
the usage of trade;
(d)an express warranty or condition does not nega-
tive a warranty or condition implied by this Ordin-
ance, unless inconsistent therewith.
[14

Sale by sample.

17. (1) A contract of sale is a contract for sale by
sample where there is a term in the contract, express or
implied, to that effect.

(2) In the case of a contract for. sale by sample-
(a)there is an implied condition that the bulk shall
correspond with the sample in quality;
(b)there is an implied condition that the buyer shall
have a reasonable opportunity of comparing the
bulk with the sample;
(c)there is an implied condition that the goods shall
be free from any defect, rendering them un-
merchantable, whiffi would not be apparent on
reasonable examination of the sample. [15

PART II.

EFFECTS OF THE CONTRACT.

Transfer of property as between seller and buyer.

18. Where there is a contract for the sale of unascer-,
tained goods no property in the goods is transferred to the
buyer unless and until the goods are ascertained. [16

19. (1) Where there is a contract for the sale of
specific or ascertained goods, the property in them is trans-
ferred to the buyer at such time as the parties to the con-
tract intend it to be transferred.





(2) For the purpose of ascertaining the intention ol
the parties, regard shall be had to the terms of the contract,
the conduct of the parties, and the circumstances of the
case. [17

20. Unless a different intention appears, the following
are rules for ascertaining the intention of the parties as to
the time at which the property in the goods is to pass to
the buyer-

Rule I. Where there is an unconditional contract for
the sale of specific goods in a deliverable state, the property
in the goods passes to the buyer when the contract is made,
and it is immaterial whether the time of payment or the time
of delivery, or both, be postponed.

Rule 2. Where there is a contract for the sale of
specific goods and the seller is bound to do something to
the goods, for the purpose of putting them into a deliver-
able state, the property does not pass until such thing be
done, and the buyer has notice thereof.

Rule 3. Where there is a contract for the sale of
specific goods in a deliverable state, but the seller is bound
to weigh, measure, test, or do some other act or thing with
reference to the goods for the purpose of ascertaining the
price, the property does not pass until such act or thing
be done, and the, buyer has notice thereof.

Rule 4. When goods are delivered to the buyer on
approval or 'on sale or return' or other similar terms, the
property therein passes; to the buyer-
(a)when he signifies his approval or acceptance to the
seller or does any other act adopting the transac-
tion ;
(b)if he does not signify his approval or acceptance
to the seller but retains the goods without giving
notice of rejection, then, if a time has been fixed
for the return of the goods, on the expiration of
such time, and if no time has been fixed, on the
expiration of a reasonable time. What is a reason-
able time is a question of fact.

Rule 5. (I) Where there is a contract for the sale of
unascertained or future goods by description, and goods





of that description, and in a deliverable state, are uncondi-
tionally appropriated to the contract, either by the seller
with the assent of the buyer, or by the buyer with theassent
of the seller, the property in the goods thereupon passes
to the buyer. Such assent may be express or implied, and
may be given either before or after the appropriation is
made.

(2) Where, in pursuance of the contract, the seller
delivers the goods to the buyer or to a carrier or other bailee
(whether named by the buyer or not) for the purpose of
transmission to the buyer, and does not reserve the right
of disposal,. he is deemed to have unconditionally appro-
priated the goods. to the contract. [18

21. (1) Where there is a contract for the sale of
specific goods, or where goods are subsequently appropri-
ated to the contract, the seller may, by the terms of the
contract or appropriation, reserve the right of disposal of
the goods until certain conditions are fulfilled. In such.
case, notwithstanding the delivery of the goods to the
buyer, or to a carrier or other bailee for the purpose of
transmission to the buyer, the property in the goods does
not pass to the buyer until the conditions imposed by the
seller are fulfilled.

Where goods are shipped, and by the bill of lading
the goods are deliverable to the order of the seller or his
agent, the seller is prima facie deemed to reserve the right
of disposal.

(3) Where the seller of goods draws on the buyer for
the price, and transmits the bill of exchange and bill of
lading to the buyer together to secute acceptance or pay
ment of the bill of exchange, the buyer is bound to return
the bill of lading if he does not honour the bill of exchange,
and if he wrongfully retains the bill of lading the property
in the goods does not pass to him. [19

22. Unless otherwise agreed, the goods remain at the
seller's risk until the property therein is transferred to the
buyer, but when the property therein is transferred to the
buyer the goods are at the buyer's risk, whether delivery
has been made or not: Provided that where delivery has
been delayed through the fault of either seller or buyer,





the goods are at the risk of the party in fault as regards
any loss which might not have occurred but for such fault :
Provided, also, that nothing in this section shall affect the
duties or liabilities of either seller or buyer as a bailee of
the goods of the other party. [20

Transfer of title.

23. (1) Subject to the provisions of this Ordinance,
where goods. are sold by a person who is not the owner
thereof, and who does not sell them under the authority or
with the consent of the owner, the buyer acquires no.better
title to the goods than the seller had, unless the owner of
the goods is by his conduct precluded from denying the
seller's authority to sell.
(2) Provided, also, that nothing in this Ordinance
shall affect---
(a)the provisions of the Factors Ordinance, or any
enactment enabling the apparent owner of goods to
dispose of them as if he were the true owner there-
of ; or
(b) the validity of any contract of sale under tiiy
special common law or statutory power of sale or
under the order of a court of competent jurisdic-
tion. [21

24. (1) Where goods are openly sold in a shop or
market in this Colony, in the ordinary course of the
business of such shop or market, the buyer acquires a good
title to the goods, provided he buys them in good faith and
without notice of any defect or want of title on the part of
the seller.
(2) Nothing in this section shall affect the law relating
to the sale of horses. [22

25. When the seller of goods has a voidable title there-
to, but his title has not been avoided at the time of the sale,
the buyer acquires a good title to the goods, provided he
buys them in good faith and without notice of the seller's
defect of title. [23

26. (1) Where goods have been stolen and the
offender is prosecuted to conviction the property in the
goods so stolen revests in the person who was the owner





of the goods or his personal representative. notwithstandine,
any intermediate dealing with them, whether by sale in
accordance with the provisions of section 24 or otherwise.

(2) Notwithstanding any enactment to the contrary
where goods have been obtained by fraud or other wrongfu
means not amounting to larceny, the property in such
goods shall not revest in the person who was the owner of
the goods, or his personal representative, by reason only
of the conviction of the offender. [24

27. (1) Where a person having sold goods continues
or is in possession of the goods, or of the documents of title
to the goods, the delivery or transfer by that person, or by a
mercantile agent acting for him, of the goods or documents
of title, under any sale, pledge, or other disposition there-
of, to any person receiving the same in good faith and
without notice of the previous sale, shall have the same
effect as if the person making the delivery or transfer were
expressly authorized by the owner of the goods to make the
same.

(2) Where a person having bought or agreed to buy
goods obtains, with the consent of the seller, possession
of the goods or the documents of title to the goods, the
delivery or transfer by that person, or by a mercantile
agent acting for him, of the goods or documents of title,
tinder any sale, pledge, or other disposition thereof, to any
person receiving the same in good faith and without notice
of any lien or other right of the original seller in respect
of the goods, shall have the same effect as if the person
making the delivery or transfer were a mercantile agent in
possession of the goods or documents of title with the con-
sent of the owner.

(3) In this section, 'mercantile agent' has the same
meaning as in the Factors Ordinance. [25

28. (I). A writ of fieri facias or other writ of execu-
tion against goods shall bind the property in the goods of
the execution debtor as from the time when the writ is de-
livered to the bailiff to be executed ; and, for the better
manifestation of such time, it shall be the duty of the bailiff,
without fee, upon the receipt of any such writ to indorse





upon the back thereof the hour, day, month, and year when
he received the same: Provided that no such writ shall
prejudice the title to such goods acquired by any person in
good faith and for valuable consideration, unless such
person had, at the time when he acquired his title,
notice that such writ, or any other writ by virtue of which
the goods of the execution debtor might be seized or
attached, had been delivered to and remained unexecuted in
the hands of the bailiff.

(2) In this section, 'bailiff' includes any officer
charged with the enforcement of a writ of execution. [26

PART III.

PERFORMANCE OF THE CONTRACT.

29. It is the duty of the seller to deliver the goods, and
of the buyer to accept and pay for them, in accordance with
the terms of. the contract of sale. [27

30. Unless otherwise agreed, delivery of the goods and
payment of the price are concurrent conditions, that is to
say, the seller must be ready and willing to give possession
of the goods to the buyer in exchange for the price, and
the buyer must be ready and willing to pay the price in
exchange for possession of the goods. [28

31. (1). Whether it is for the buyer to take possession
of the goods or for the seller to send them to the buyer is
a question depending in each case on the contract, express
or implied, between the parties. Apart from any such
contract, express or implied, the place of delivery is the
seller's place of business, if he has one, and if not, his re-
sidence : Provided that, if the contract is for the sale of
specific goods, which, to the knowledge of the parties when
the contract is made, are in some other place, then that
place is the place of delivery.

(2) Where under the contract of sale the seller is
bound to send the goods to the buyer, but no time for send-
ing them is fixed, the seller is bound to send them within
a reasonable time.





(3) Where the goods at the time of sale are in the
possession of a third person, there is no delivery by seller
to buyer unless and until such third person acknowledges
to the buyer that he holds the goods on his behalf: Pro-
vided that nothing in this section shall affect the operation
of the issue or transfer of any document of title to goods.

(4) Demand or tender of delivery may be treated as
ineffectual unless made at a reasonable hour. What is a
reasonable hour is a question of fact.

(5) Unless otherwise agreed, the expenses of and in
cidental to putting the goods into a deliverable state must
be borne by the seller. [29

32. (1) Where the seller delivers to the buyer. a
quantity of goods less than he contracted to sell, the buyer
may reject them,. but if the buyer accepts the goods so
delivered, he must pay for them at the contract rate.

(2) Where the seller delivers to the buyer a quantity
of goods larger than he contracted to sell, the buyer may
accept the goods included in the contract and reject the
rest, or he may reject the whole. If the buyer accepts the
whole of the goods so delivered he must pay for them at
the contract rate.

(3) Where the seller delivers to the buyer the goods
lie contracted to sell mixed with goods of a different des-
cription not included in the contract the buyer may accept
the goods which are in accordance with the contract and
reject the rest, or he may reject the whole.

(4) The provisions of this section are subject to any
usage of trade, special agreement, or course of dealing
between the parties. [30

33. (I) Unless otherwise agreed, the buyer of goods.
is not bound to accept delivery thereof by instalments.

(2) Where there is a contract for the sale of goods
to be delivered by stated instalments, which are to be
separately paid for, and the seller makes defective, deliveries
in respect of one or more instalments, or the buyer neglects
or refuses to take delivery of or pay for one or more instal-
ments, it is a question in each case depending on the terms





of the contract and the circumstances of the case, whether
the breach of contract is a repudiation of the whole contract
or whether it is a severable breach giving rise to a claim
for compensation but not to a right to treat the whole
contract as repudiated. [31

34. (1) Where, in pursuance of a contract of sale,
the seller is authorized or required to sdnd the goods to
the buyer , delivery of the goods to a carrier, whether
named by the buyer or not, for the purpose of transmission
to the buyer is prima facie deemed to be a delivery of the
goods to the buyer.

(2) Unless otherwise authorized by the buyer, the
seller must make such contract with. the carrier on behalf
of the buyer as may be reasonable having regard to the
nature of the goods and the other circumstances of the
case. If the seller omits to do so, and the goods are lost
or damaged in course of transit, the buyer may decline to
treat the delivery to the carrier as a delivery to himself,
or may hold the seller responsible in damages.

(3) Unless otherwise agreed, where goods are sent by
the seller to the buyer by a route involving sea, transit,
in circumstances in which it is usual to insure, the seller
must give such notice to the buyer as may enable him
to insure them during their sea transit, and, if the seller
fails to do so, the goods shall be deemed to be at his
risk during such sea transit. [32

35. Where the seller of goods agrees to deliver them
at his own risk at a place other than that where they are
when sold, the buyer must, nevertheless, unless otherwise
agreed, take any risk of deterioration in the goods neces-
sarily incident to the course of transit. [33

36. (I) Where goods are delivered to the buyer, which
lie has not previously examined, he is not deemed to have
accepted them unless and until he has had a reasonable
opportunity of examining them for the purpose of ascer-
taining whether they are in conformity with the contract.

(2) Unless otherwise agreed, when the seller tenders
delivery of goods to the buyer, he is bound, on request,






to afford the buyer a reasonable opportunity of examining
the goods for the purpose of ascertaining whether they are
in conformity with the contract. [34

37. The buyer is deemed to have accepted the goods
when he intimates to the seller that he has accepted them,
or when the goods have been delivered to him, and he
does any act in relation to them which is inconsistent with
the ownership of the seller, or when after the lapse of a
reasonable time, he retains the goods without intimating
to the seller that he has rejected them. [35

38. Unless otherwise agreed, where goods are delivered
to the buyer, and he refuses to accept them, having the
right to do so, he is not bound to return them to the seller,
but it is sufficient if lie intimates to the seller that he refuses
to accept them. [36

39. When the seller is ready and willing to deliver
the goods and requests the buyer to take delivers', and the
buyer does not within a reasonable time after such request delivery of
take delivery of the goods, he is liable to the seller for
any loss occasioned by his neglect. or refusal to take
delivery, and also for a reasonable charge for the care and
custody of the goods : Provided that nothing in this
section shall affect the rights of. the seller where the neglect
or refusal of the buyer to take delivery amounts to a re-
pudiation of the contract. [37

PART IV.

RIGHTS OF UNPAID SELLER AGAINST THE GOODS.

40. (I) The seller of goods is deemed to be an unpaid
seller within the meaning of this Ordinance-
(a) when the whole of the price has not been paid or
tendered ;
b) when a bill of exchange or other negotiable instru-
ment has been received as conditional payment,
and the condition on which it was received has
not been fulfilled by reason of the dishonour of
the instrument or otherwise.






(2) In this Part, 'seller' includes any person who is
in the position of a seller, as, for instance, an agent of
the seller to whom the bill of lading has been indorsed,
or a consignor or agent who has himself paid, or is directly
responsible for, the price. [38

41. Subject to the provisions of this Ordinance and
of any enactment in that behalf, notwithstanding that the
property in the goods may have passed to the buyer, the
unpaid seller of goods, as such, has by implication of
law-
(a)a lien on the goods or right to retain them for
the price while he is in possession of them;
(b)in case of the insolvency of the buyer, a right of
stopping the goods in transitu after he has parted
with the possession of them;
(c) a right of re-sale as limited by this Ordinance. [39

42. Where the property in goods has not passed to
the buyer, the unpaid seller has, in addition to his other
remedies, a right of withholding delivery similar to and
co-extensive with his rights of lien and stoppage in transitu
where the property has passed to the buyer. [40

Unpaid seller's lien.

43. (1) Subject to the provisions of this Ordinance,
the unpaid seller of goods who is in possession of them
is entitled to retain possession of them until payment or
tender of the price in the following cases, namely-
(a)where the goods have been sold without any
stipulation as to credit;
(b)where the goods have been sold on credit, but the
term of credit has expired;
(c) where the buyer becomes insolvent.

(2) The seller may exercise his right of lien notwith
standing that he is in possession of the goods as agent or
bailee for the buyer. [41

44. Where an unpaid seller has made part delivery of
the goods, he may exercise his right of lien or retention
on the remainder, unless such part delivery has been made





in such circumstances as to show an agreement to waive
the lien or right of retention. [42

45. (1) The unpaid seller of goods loses his lien or
right of retention thereon-
(a)when he delivers the goods to a carrier or other
bailee for the purpose of transmission to the buyer,
without reserving the right of disposal of the
goods;
(b)when the buyer or his agent lawfully obtains
possession of the goods;
(c) by waiver thereof.

(2) The unpaid seller of goods, having a lien or right
of retention thereon, does not lose his lien or right of
retention by reason only that he has obtained judgment
for the price of the goods. [43

Stoppage in transitu.

46. Subject to the provisions of this Ordinance, when
the buyer of goods becomes insolvent, the unpaid seller
who has parted with the possession of the goods has the
right of stopping them in transitu, that is to say, he may
resume possession of the goods as long as they are in
course of transit, and may retain them until payment or
tender of the price. [44

47. 1) Goods are deemed to be in course of transit
from the time when they are delivered to a carrier by land
ot, water, or other bailee for the purpose of transmission
to the buyer, until the buyer, or his agent in that behalf,
takes delivery of them from such carrier or other bailee.

(2) If the buyer or his agent in that behalf obtains
delivery of the goods before their arrival at the appointed
destination, the transit is at an end.

(3) If, after the arrival of the goods at the appointed
destination, the carrier or other bailee acknowledges to the
buyer, or his agent, that he holds the goods on his behalf
and continues in possession of them as bailee for the buyer
or his agent, the transit is at an end, and it is immaterial
that a further destination for the goods may have been
indicated by the buyer.





(4) If the goods are rejected by the buyer, and the
carrier or other bailee continues in possession of them, the
transit is not deemed to be at an end, even if the seller
has refused to receive them back.

(5) When goods are delivered to a ship chartered by
the buyer, it is a question depending on the circumstances
of the particular case whether they are in the possession
of the master as a carrier, or as agent to the buyer.

(6) Where the carrier or other bailee wrongfully
tefuses to deliver the goods to the buyer or his agent in
that behalf, the transit is deemed to be at an end.

(7) Where part delivery of the goods has been made
to the buyer or his agent in that behalf, the remainder
of the goods may be stopped in transitu, unless such part
delivery has been made in such circumstances as to show
an agreement to give up possession of the whole of the
goods. [45

48. (1) The unpaid seller may exercise his right of
stopping in transitu either by taking actual possession of
the goods or by giving notice of his claim to the carrier
or other bailee in whose possession the goods are. Such
notice may be given either to the person in actual posses-
sion of the goods or to his principal. In the latter case
the notice, to be effectual, must be given at such time and
in such circumstances that the principal, by the exercise
of reasonable diligence, may communicate it to his servant
or agent in time to prevent a delivery to the buyer.

(2) When notice of stoppage in transitu is given by
the seller to the carrier or other bailee in possession of the
goods, he must re-deliver the goods to, or according to the
directions of, the seller. The expenses of such re-delivery
must be borne by the seller. [46

Re-sale by buyer or seller.

49. Subject to the provisions of this Ordinance, the
unpaid seller's right of lien or retention or stoppage in
transitu is not affected by any sale or other disposition of
the goods which the buyer may have made, unless the seller
has assented thereto : Provided that where a document of





title to goods has been lawfully transferred to any person
as buyer or owner of the goods, and that person transfers
the document to a person who takes the document in good
faith and for valuable consideration, then, if such last-
mentioned transfer was by way of sale, the unpaid seller's
right of lien or retention or stoppage in transitu is defeated,
and if such last mentioned transfer was by way of pledge
or other disposition for value, the unpaid seller's right of
lien or retention or stoppage in transitu can only be exer-
cised subject to the rights of the transferee. [47

50. (1) Subject to the provisions of this section, a
contract of sale is not rescinded by the mere exercise by
an unpaid seller of his right of lien or retention or stop-
page in transitu.

(2) Where an unpaid seller who has exercised his
right of lien or retention or stoppage in transitu re-sells
the goods, the buyer acquires a good title thereto as against
the original buyer.

(3) Where the goods are of a perishable nature, or
where the unpaid seller gives notice to the buyer of his
intention to re-sell, and the buyer does not within a reason-
able time pay or tender the price, the unpaid seller may
re-sell the goods and recover from the original buyer
damages for any loss occasioned by his breach of contract.

(4) Whe re the seller expressly reserves a right of
re-sale in case the buyer should make default, and on the
buyer making default, re-sells the goods, the original con
tract of sale is thereby rescinded, but without prejudice to
any claim the seller may have for damages. [48

PART V.

ACTIONS FOR BREACH OF THE CONTRACT.

Remedies of seller.

51. (1) Where, under a contract of sale, the property
in the goods has passed to the buyer, and the buyer
wrongfully neglects or refuses to pay for the goods accord-
ing to the terms of the contract, the seller may maintain
an action against him for the price of the goods.





(2) Where, under a contract of sale, the price is pay
able on a day certain irrespective of delivery, and the buyer
wrongfully neglects or refuses to pay such price, the seller
may maintain an action for the price, although the pro-
perty in the goods has not passed, and the goods have
not been appropriated to the contract. [49

52. (1) Where the buyer wrongfully neglects or
refuses to accept arid pay for the goods, the seller may
maintain an action against him for damages for non-

(2) The measure of damages is the estimated loss
directly and naturally resulting, in the ordinary course of
events, from the buyer's breach of contract.

(3) Where there is an available market for the goods
in question, the measure of damages is Prima facie to be
ascertained by the difference between the contract price and
the market or current price at the time or times when the
goods ought to have been accepted, or, if no time was fixed
for acceptance, then at the time of the neglect or refusal
to accept. [50

Remedies of buyer.

53. (1) Where the seller wrongfully neglects or
refuses to deliver the goods to the buyer, the buyer may
maintain an action against the seller for damages for non-
delivery.

(2) The measure of damages is the estimated loss
directly and naturally resulting, in the ordinary course of
events, from the seller's breach of contract.

(3) Where there is an available market for the goods
in question, the measure of damages is prima facie to be
ascertained by the difference between the contract price and
the market or current price of the goods at the time or
times when they ought to have been delivered, or, if no
time was fixed for delivery, then at the time of the neglect
or refusallto deliver. [51

54. In any action for breach of contract to deliver
specific or ascertained goods, the court may, if it thinks





fit, on the application of the plaintiff, by its judgment
direct that the contract shall be performed specifically,
without giving the defendant the option of retaining the
goods on payment of damages. The judgment may be
unconditional, or oil such terms and conditions as to
damages, payment of the price, and otherwise, as to the
court may seem just. The application by the plaintiff may
be made at any time. before judgment. [52

55. (1) Where there is a breach of warranty by the
seller, or where the buyer elects, or is compelled, to treat
any breach of a condition on the part of the seller as a
breach of warranty, the buyer is not, by reason only of
such breach of warranty, entitled to reject the goods; but
he may-
(a)set up against the seller the breach of warranty
in diminution or extinction of the price; or
(b)maintain an action against the seller for damages
for the breach of warranty.
(2) The measure of damages for breach of warranty
is the estimated loss directly and naturally resulting, in the
ordinary course of events, from the breach of warranty.

(3) In the case of breach of warranty of quality, such
loss is prima facie the difference between the value of the
goods at the time of delivery to the buyer and the value
they would. have had if they had answered to the warranty.
(4) The fact that the buyer has set up the breach of
warranty in diminution or extinction of the price does not
prevent. him from maintaining an action for the same breach
of warranty if he has suffered further damage. [53

58. Nothing in this Ordinance shall affect the right of
the buyer or the seller to recover interest or special damages
in any case where by, law interest or special damages may_
be recoverable, or to recover money paid where the con
sideration for the payment of it has failed. [54

PART VI.
SUPPLEMENTARY.
57. Where any right, duty, or liability would arise
under a contract of sale by implication of law, it may be
negatived or varied by express agreement or by the course





of dealing between the parties, or by usage, if the usage
be such as to bind both parties to the contract. [55

58. Where, by this Ordinance, any reference is made
to a reasonable time, the question what is a reasonable
time is a question of fact. [56

59. Where any right, duty, or liability is declared by
this Ordinance, it may, unless otherwise provided by this
Ordinance, be enforced by action. [57

60. In the case of a sale by auction-
(a) where goods are put up for sale by auction in lots,
each lot is prima facie deemed to be the subject
of a separate contract of sale;
(b)a sale by auction is complete when the auctioneer
announces its completion by the fall of the hammer,
Or in other customary manner. Until such
announcement is made any bidder may retract his
bid;
(c)where a sale by auction is not notified to be subject
to a right to bid on behalf of the seller, it shall
not be lawful for the seller to bid himself or to
employ any person to bid at such sale, or for the
auctioneer knowingly to take any bid from the
seller or any such person. Any sale contravening
this rule may be treated as fraudulent by the
buyer;
(d) a sale by auction may be notified to be subject to
a reserve or upset price, and a right to bid may
also be reserved expressly by or on behalf of the
seller. [58

61. Where a right to bid is expressly reserved, but not
otherwise, the seller, or any one person on his behalf, may
bid at the auction. [59

62. (1) The rules in bankruptcy relating to contracts
of sale shall continue to apply thereto, notwithstanding any-
thing in this Ordinance.
(2) The rules of the common law, including the law
merchant, save in so far as they are inconsistent with the
express provisions of this 0rdinance, and in particular the
rules relating to the law of principal and agent, and the
effect of fraud, misrepresentation, duress or coercion, rnis-





take, or other invalidating cause, shall continue to apply
to contracts for the sale of goods.

Nothing in this Ordinance or in any repeal effected
thereby shall affect the enactments relating to bills of sale,
or any enactment relating to the sale of goods which is
not expressly repealed by this Ordinance.

(4) The provisions of this Ordinance relating to con-
tracts of sale do not apply to any transaction in the form
of a contract of sale which is intended to operate by way
of mortgage, pledge, charge, or other security. [61

Note. The following Imperial Statutes and parts thereof so
far as they were applicable in Hong Kong were repealed by this
Ordinance-

1 James 1, c.21. An Act against Brokers.
29 Car. 2, c.3. The Statutes of Frauds, Sections 15 and 16.
9 Geo. 4, c.14. The Statute of Frauds Amendment Act, 1828,
section 7.
Originally 7 of 1896. Fraser 4 of 1896. 56 & 57 Vict. C. 71. Short title. Interpretation. [s. 2 cont.] Sale and agreement to sell. Capacity to buy and sell. Mode of making contract of sale. Contract of sale for $100 and upwards. Existing or future goods. Goods which have perished. Goods perishing before sale but after agreement to sell. Ascertainment of price. Agreement to sell at valuation. Stipulations as to time. When condition to be treated as warranty. Implied undertaking as to title, etc. sale by description. Implied conditions as to quality or fitness. Sale by sample. Goods must be ascertained. Property passes when intended to pass. [s. 19 cont.] Rules for ascertaining intention. Reservation of right of disposal. Risk prima facie passes with property. [s. 22 cont.] Sale by person not owner. (Cap. 48.) Market overt. Sale under voidable title. Revesting of property in stolen goods on conviction of offender. Seller or buyer in possession after sale. (Cap. 48.) Effect of writ of execution. [s. 28 cont.] Duties of seller and buyer. Payment and delivery are concurrent conditions. Rules as to delivery. Delivery of wrong quantity. Delivery by installments. [s. 33 cont.] Delivery to carrier. Risk where goods are delivered at distant place. Buyer's right of examining goods. Acceptance of goods. Buyer not bound to return rejected goods. Liability of buyer for neglecting or refusing to take delivery of goods. Definition of unpaid seller. [s. 40 cont.] Unpaid seller's rights. Withholding delivery. Unpaid seller's lien. Part delivery. Termination of lien. Right of stoppage in transitu. Duration of transit. [s. 47 cont.] How stoppage in transitu is effected. Effect of sub-sale or pledge by buyer. Sale not generally rescinded by lien or stoppage in transitu. Action for price. [s. 51 cont.] Damages. For non-acceptance. Damages for non-delivery. Specific performance. Remedies for breach of warranty. Interest and special damages. Exclusion of implied terms and conditions. [s. 57 cont.] Reasonable time a question of fact. Right, etc., enforceable by action. Auction sale. Reservation of right to bid. Savings.

Originally 7 of 1896. Fraser 4 of 1896. 56 & 57 Vict. C. 71. Short title. Interpretation. [s. 2 cont.] Sale and agreement to sell. Capacity to buy and sell. Mode of making contract of sale. Contract of sale for $100 and upwards. Existing or future goods. Goods which have perished. Goods perishing before sale but after agreement to sell. Ascertainment of price. Agreement to sell at valuation. Stipulations as to time. When condition to be treated as warranty. Implied undertaking as to title, etc. sale by description. Implied conditions as to quality or fitness. Sale by sample. Goods must be ascertained. Property passes when intended to pass. [s. 19 cont.] Rules for ascertaining intention. Reservation of right of disposal. Risk prima facie passes with property. [s. 22 cont.] Sale by person not owner. (Cap. 48.) Market overt. Sale under voidable title. Revesting of property in stolen goods on conviction of offender. Seller or buyer in possession after sale. (Cap. 48.) Effect of writ of execution. [s. 28 cont.] Duties of seller and buyer. Payment and delivery are concurrent conditions. Rules as to delivery. Delivery of wrong quantity. Delivery by installments. [s. 33 cont.] Delivery to carrier. Risk where goods are delivered at distant place. Buyer's right of examining goods. Acceptance of goods. Buyer not bound to return rejected goods. Liability of buyer for neglecting or refusing to take delivery of goods. Definition of unpaid seller. [s. 40 cont.] Unpaid seller's rights. Withholding delivery. Unpaid seller's lien. Part delivery. Termination of lien. Right of stoppage in transitu. Duration of transit. [s. 47 cont.] How stoppage in transitu is effected. Effect of sub-sale or pledge by buyer. Sale not generally rescinded by lien or stoppage in transitu. Action for price. [s. 51 cont.] Damages. For non-acceptance. Damages for non-delivery. Specific performance. Remedies for breach of warranty. Interest and special damages. Exclusion of implied terms and conditions. [s. 57 cont.] Reasonable time a question of fact. Right, etc., enforceable by action. Auction sale. Reservation of right to bid. Savings.

https://oelawhk.lib.hku.hk/items/show/1678

1950

v1

26

24