The Sale of Goods
Act 1996
Title
1. This Act shall be cited as the “Sale
of Goods Act”.
Sale of Goods
2. A Sale of Goods is an agreement between
the seller and the buyer to transfer the
property in goods by the seller to the
buyer for a determined price. In this
Act, the said agreement shall be referred
to as the Contract for Sale of Goods.
Capacity
3. (a) Parties to a Contract for Sale
of Goods shall have the capacity to enter
into a contract.
(b) A minor or a person incapable of
entering into a contract shall pay a reasonable
price in respect of necessaries sold and
delivered to him.
Existing or future
goods
4. Goods sold under a contract shall
be either existing goods or future goods.
Existing goods under this section shall
refer to goods which are owned or possessed
by the seller. And future goods shall
refer to goods which shall be manufactured
or acquired by the seller after entering
into the contract.
Price
5. The price as regards a contract for
sale shall be the price fixed in the contract
or the price determined in a manner agreed
in the contract.
6. Parties to a contract may agree that
the price be determined by a third party.
Implied Terms
7. Where no expressive provision is made
in the contract that the goods are sold
in pursuance of the right of the seller
to sell the goods and a contrary provision
does not appear in the contract, it shall
be implied that the seller has the right
to sell the goods in question. The right
of the seller to sell the goods at the
time of agreement to sell shall be considered
valid if the ownership in the goods transfers
to the buyer.
Transfer of ownership
8. The ownership in the goods shall
transfer to the buyer at such time determined
in accordance with the contract.
Fitness for purpose
9. Goods sold under a contract shall
be considered reasonably fit for a particular
purpose where such purpose has been made
known to the seller by the buyer.
Right to retain property of goods
10. The seller has the right to retain
the goods until the fulfilment of the
terms of the contract or part thereof.
In such event the ownership of the goods
shall not pass to the buyer until such
terms are fulfilled.
Risk
11. Unless otherwise agreed, regardless
of whether the property has been transferred
or not, any risks inherit in the goods
shall be deemed to have passed from the
seller to the buyer at the time of the
transfer of ownership of the goods. In
this section risk shall mean the risk
of any undesirable consequences which
may result from the ownership of the goods
being transferred.
.
Duty of both parties
12. The duty of the seller is to deliver
the goods in accordance with the terms
of the contract. Similarly the duty of
the buyer is to accept the goods and pay
its price in accordance with the terms
of the contract.
Rules of delivery of
goods
13. Unless otherwise agreed:-
(a) Delivery of the goods and payment
of the price shall be concurrent conditions.
(b) Place where the goods are delivered
is the place where the seller conducts
his business.
(c) The buyer is not bound to accept any
goods delivered by instalments.
Delivery of wrong quantity
or defective goods
14 (a) The buyer is not bound to accept
any quantity of goods delivered by the
seller more than or less than the amount
for which the buyer contracted to buy.
(b) Where the seller delivers to the
buyer a quantity of goods less than the
amount for which the buyer contracted
to buy and if the buyer accepts them,
the buyer shall pay for them at the proportional
rate to the agreed price.
(c) Where the seller delivers to the
buyer a quantity of goods more than the
amount for which the buyer contracted
to buy, the buyer may accept the quantity
of goods for which he contracted. Where
the buyer accepts the whole of the goods
so delivered, he shall pay for them at
the rate proportional to the agreed price.
(d) Where the seller delivers to the
buyer the goods included in the contract
together with goods not included in the
contract, the buyer may accept the goods
which are in accordance with the contract
and reject the rest or may reject the
whole.
(e) In the event of any defect in goods,
the buyer may reject the goods provided
such defect occurred prior to delivery
from the seller to the buyer.
Legal acceptance of
the goods
15. The buyer is deemed to have legally
accepted the goods if the buyer acts in
any of the following ways.
(a) Where the buyer communicates to the
seller his acceptance of the goods.
(b) Where the buyer retains in his possession
the goods for reasonable period without
communicating his rejection of the goods
to the seller.
(c) When the goods have been delivered
to the buyer and the buyer does any act
which affects the ownership of the seller.
Right to rescind sale
16. Unless otherwise agreed, either party
shall have the right to rescind the sale
of goods provided that the seller and
the buyer have not parted subsequent to
the conclusion of the sale.
Rights of unpaid seller
17. Notwithstanding that the ownership
of the goods is to transfer to the buyer
in accordance with the provisions of this
Act the seller, to whom the price of the
goods has not been paid to, shall have
the following rights.
(a) In the event he is in possession
of the goods, the legal right to retain
them until payment of the price thereof.
(b) The right of resale to a third party.
Lien on the goods
18.
(a) The seller has the right of exercising
a lien under the following circumstances.
(i) Where the seller has not received
credit.
(ii) Where the goods have been sold on
credit and the term of credit has expired.
(iii) Where the buyer becomes insolvent.
(b) The seller loses his right of lien
where the buyer or his agent has obtained
possession of the goods in accordance
with this Act or the seller has waived
his right thereof.
Sale to third party
19.
(a) The seller shall resell the goods
upon occurrence of any of the following
circumstances.
(i) Where the goods are perishable in
nature.
(ii) Failure on the part of the buyer
to settle payment of the price within
a reasonable period after the buyer has
been given notice of the intention to
resell the goods.
(iii) Where it has been stipulated that
upon breach of the contract by the buyer
the seller is entitled to resell the goods
to a third party, the buyer is in breach
of the contract.
(b) In the event the seller suffers damage
as a result of the breach of contract
by the buyer the seller may claim damages
in respect thereof.
Suit for price
20. Where the buyer neglects to pay for
the goods or refuses to pay the price
thereof the seller may file suit to recover
the price.
Buyer’s remedy
for breach of contract
21.
(a) Where the seller neglects to deliver
the goods or refuses to make delivery
thereof, the buyer may file suit to seek
damages in relation to the loss suffered
by the buyer.
(b) Damages under sub-section (a) of
this section shall be the difference in
value between the agreed price and the
market price of the goods at the time
specified in the contract as regards delivery,
or the difference in value between the
agreed price and the expenses incurred
by the buyer in acquiring similar goods
from a third party.
22. Unless otherwise defined in this
Act:-
(a) Goods shall include all kinds of
movable property other than money.
(b) “Seller” shall mean a
person who sells or agrees to sell.
(c) “Buyer” shall mean a
person who buys or agrees to buy.
(d) Delivery shall mean the voluntary
transfer of possession from one person
to another. Delivery shall include transfer
of possession effected by delivery made
hand to hand or carrying or sending through
a third party.
(e) “Credit” shall mean a
document issued in a transaction concerning
sale of goods that contains a promise
to pay within a specified period
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