12

A. D. 1893.

Sale and agreement to

sell.

[56 & 57 VICT. c. 71.]

AN ACT FOR CODIFYING THE LAW RELATING TO
THE SALE OF GOODS.

Be it enacted, &c.,

PART I.

FORMATION OF THE CONTRACT.

Contract of Sale.

1.-(1.) A contract of sale 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.

(3.) sale, agreement to sell. These expressions are considered simpler and more easily intelligible than "executed" or "executory" contract of sale.

(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.

Example 1.-A. agreed to buy twenty hogsheads of sugar, but no memorandum of the bargain was made; four hogsheads were delivered and accepted; sixteen others. were afterwards filled up and appropriated to A. with his consent. The property passed to A., the Statute of Frauds was satisfied by the part acceptance, and the "agreement to sell" became a "sale" (Rohde v. Thwaites 1).

In the case of Heilbutt v. Hickson (see post, section 15 (2) (c), Sale by Sample), the original agreement for the sale of the shoes never "became a sale," although the buyers appeared to treat the goods as their own, because one of the “conditions to be performed" was that the French authorities (the sub-buyers) should not reject them as being unmerchantable.

Example 2.-A. sold B. a horse upon condition that it should be taken away by B., and tried by him for eight days, and then returned if B. should not think it suitable for his purposes. The horse died on the third day without fault of either party. A. could not maintain an action for the price (Elphick v. Barnes 3).

buy and sell.

2.-Capacity to buy and sell is regulated by Capacity to 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 incompetent to contract, he must pay a reasonable price therefor.

1 6 B. & C. 388. [1827.]

2 L. R. 7 C. P. 438; 41 L. J. C. P. 228; 27 L. T. 336; 20 W. R. 1035. [1872.]

3 5 C. P. D. 321; 49 L. J. C. P. 698; 29 W. R. 139; 44 J. P. 651. [1880.]

Contract of

sale, how made.

Necessaries in this section mean 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.

By the Infants' Relief Act, 1874,1 all contracts with infants, except for necessaries, are void. What are necessaries, and what is a reasonable price, are questions of fact. Ryder v. Wombwell (solitaires, smelling-bottle, and goblet). Evidence may be given to shew that the infant was already sufficiently provided. (Johnstone v. Marks) (clothes).

mental incapacity.-If this is unknown to the other party, and if no advantage is taken of it, the contract is binding, "especially when the contract is not merely executory, but executed in the whole or in part, and the parties cannot be restored altogether to their original position (Molton v. Camroux 4).

drunkenness.-A contract made by a man too drunk to know what he was about is voidable, "and if the drunken man upon coming to his senses ratifies the contract, he is bound by it" (Matthews v. Baxter 5).

Formalities of the Contract.

3.-Subject to the provisions of this Act and of any statute 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

137 & 38 Vict. c. 62.

2 L. R. 3 Ex. 90; L. R. 4 Ex. 32; 38 L. J. Ex. 8; 19 L. T. 491; 17 W. R. 167. [1868.]

3 19 Q. B. D. 509; 57 L. J. Q. B. 6; 33 W. R. 806. [1887.]

4 2 Ex. 487; 4 Ex. 17; 18 L. J. Ex. 356. [1848.]

5 L. R. 8 Ex. 132; 42 L. J. Ex. 73; 28 L. T. 169; 21 W. R. 389.

[1873.]

from the conduct of the parties. Provided that nothing in this section shall affect the law relating to corporations.

For a good instance of a contract being implied from the conduct of the parties see Brogden v. Metropolitan Railway Co.1 (contract for coals established by conduct) where Lord Chancellor Cairns said, "there may be a consensus between the parties far short of a complete mode of expressing it, and that consensus may be discovered from letters or from other documents of an imperfect and incomplete description . . . as regards form;" and recognized "a course of dealing which created on the one side a right to give the order, and on the other side an obligation to comply with the order." He further said, that the approbation required to complete "the document signed by Mr. B. was clearly given when the company commenced a course of dealing which is referable in my mind only to the contract, and when that course of dealing was accepted and acted upon by Messrs. B. & Co. in the supply of coals."

4

Lord Hatherley said the agreement would be binding "if it should be found that, although there has been no formal recognition of the agreement in terms by the one side, yet the course of dealing and conduct of the party to whom the agreement was propounded has been such as legitimately to lead to the inference that those with whom they were dealing were made aware by that course of dealing that the contract which they had propounded had been, in fact, accepted by the persons who so dealt with them."

5

As to silence giving consent, Lord Selborne said, “I by no means say that if nothing had been done upon the footing of the agreement, silence would have given consent in such a sense as to bind the parties on either side."

Contract of

sale for 101.

Lord Blackburn said,1 "I have always believed the law to be this, that when an offer is made to another party, and in that offer there is a request, express or implied, that he must signify his acceptance by doing some particular thing, then as soon as he does that thing he is bound."

Their Lordships deprecated the views expressed by Brett, J., and Lord Coleridge, C.J., in the Courts below, "with reference to the possibility of a mental assent.”

Subject to the provisions of this Act.—The provisions referred to are contained in section 4, which incorporates the provisions of the Statute of Frauds, s. 17, and Lord Tenterden's Act.

2

Where the contract was made partly in writing and partly by word of mouth parol evidence was admissible, even under the Statute of Frauds, not to vary the contract, but to supply omissions in the written document. In Lockett v. Nicklin (casks of railway grease), the legal presumption that delivery and payment should be contemporaneous acts, was allowed to be rebutted by parol evidence. Alderson, B., said, "The documents in question are not a contract, but are writings out of which, with other things, a contract is to be made," and held that the defendant had a right to adduce evidence, "not to contradict the written instruments, but to shew the real contract, of which the paper contains only one of the terms."

Semble, that if the whole contract had apparently been expressed in the document, parol evidence in addition would not have been admitted: see Ford v. Yates 3 (39 pockets Sussex hops), and comments thereon in the present case by Parke, B.

4.-(1.) A contract for the sale of any goods of and upwards. the value of ten pounds or upwards shall not be enforcible by action unless the buyer shall accept

1 P. 691.

2 2 Ex. 93; 19 L. J. Ex. 403. [1848.]

32 M. & G. 549; 2 Scott, N. R. 645. [1841.]