Property, Risk & Frustration

final year


Property in English Law background info....

- English law places great importance on concept of ‘property’ but brief definition in s.61 SGA 1979 (SGA). Proff Atiyah + Lawson+Goode=our preoccupation w/concept of property=excessive, property plays marginal in law of sale. Distinction in s2. SGA between sale and agreement to sell.

- Len Sealy in Commercial Law: Text, Cases, and Materials (4th ed) 2009: in contrast to other jurisdictions that enact rigid+simplistic laws that attempt to deal with every future eventuality, the traditional rules governing ‘property’ in English law readily permit a ‘peg to hang a new rule on’.

The SG(A)A was an attempt to circumvent the unfortunate consequences of s.16 SGA following the proposals of the  Law Commission (no 215) 1993: Sale of Goods Forming Part of a Bulk. The SG(A)A=eliminate the impediment to freedom of contract that s.16 triggered as prevented parties from achieving results they wanted. Difficult to see how the amendments have omitted the impracticalities of requiring parties to always separate out the bulk+identify the goods relating to the contact. Law Comm: English law is lagging far behind commercial requirements of the day. 

The passing of property is a contentious area that often produces unfortunate consequences as a result of the complex rules assigned to the passing of property. Parties must insert their own terms at every opportunity in order to be classified within the ‘unless otherwise agreed’ clause and avoid the vulnerability to insolvency that s.16 imposes.



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Sale vs. agreement to sell

- Distinction s2. SGA between sale +agreement to sell (property transfer after making of contract

- Agreement to sell: contract executory, B has rights in personam only against S. B's remedy is damages for breach. S remedy=damages for breach4non-acceptance. S, if retained property, can sell goods+give good title to diff B. B, w/out title can only agree2sell to 3rd party. S bares risk of loss. If goods perish=contract frustrated. If S insolvent=B no right to goods but damages+return of price paid (Re Wait but s20A). B insolvent=S goods back even if delivered. Profits belong to S.

- Sale (& property passed to B): contract executed (conveyance occured). B =proprietary rights in goods. B's remedies against S for breach=damages+tort. S remedy against B for breach =damages, contract price s49(1). S who parts with title cant sell goods to diff B but B can sell to 3rd+ give good title if property passed. B=risk of loss (s.20). Goods perish=contract not frustrated. If S insolvent=buyer can claim goods (Alridge v Johnson). If B insolvent=S cannot claim back goods,can claim price outstanding+damages for loss suffered. Profits belong to B. 

- Aliakmon (HoL's, Lord Oakbrook): steel damaged on Aliakmon's vessel due to D negligence. Court held=goods not B's (C&F B's) property when damaged, claim for economic loss but D owed no duty of care. Property hadn't passed under contract as no payment yet. Wear Breeze (Roskill J) case affirmed. No legal ownership or possessory title so no duty of care.

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Passing of property key notes:

- Passing of property=single most important element of the SG's. W/out it= no title/ownership/property can pass to B. Glue of the contract+ w/out= entire contract falls apart.Sealy states that there are 11 significant consequences of the passing of property. 

-SG(A) attempted to modify passing of property in unascertained goods as a way of reducing the harshness. SG(A)A made s.16 SGA subject to s.20A,applies to a contract for the sale of a specified quantity in unascertained goods. If s.20A met= goods or some of them form part of a bulk which is identified+B paid £ for goods, unless otherwise agreed, property in an undivided share in the bulk is transferred to the buyer to become an owner/tenancy in common. The SG(A)A relates to insolvency and bulk sales of fungible goods. A buyer is nearly always bargaining for ownership, although s.12(3) states some other bargaining but this must be declared.

- Equity regards as done that which ought to have been done.Obligation to transfer an asset is treated in equity=transfer. Exception to this rule=agreement for sale of goods per Re Wait (LJ Atkin: CoA overturned finding that equitable property right was granted as equitable right cannot arise in law, s.16 of 'The Code' states that no property can pass when goods are unascertained+no room of consciousness in commerce. Insolvency=real problem, as outlined by Sealy & Hooley, although s.20A attempts 2protect B in different ways. Holroyd v Marshall dicta suggests specific goods of unspecified part of specified bulk may be enforceable in equity!



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-RISK: Len Sealy in 'Risk in the law of sale' CLJ 1972: 'Risk is a derivative, and essentially negative concept, a way of saying that either or both of the primary obligations of 1 party shall be enforceable, and those of the other shall be deemed to be discharged. Legal consquences attaching to 'risk' are defined in terms of parties' other duties. Consumer sales=risk passes on deliver per EC Directive 1999 implemented by SI 2002/3045. See 20(4)SGA. Really needed?

- S20(1)'unless otherwise agreed, goods remain S's risk until prop transferred to B, but when property transfered, goods=B's risk,delivery or not: Head v Tattersall 1871: horse hunted by Duke's hounds incorrect. Horses diff2description,be returned or B obliged to keep w/faults. B took horse, accidentally injured, returned horse damaged, entitled+£ given back. Not disentitled himself. Accident beyond Bs control. Vested property subject to right of recission+revest in S. Risk + Sterns v Vickers: CoA: Scrutton LJ: sold 200k stored white spirit. V contracted to sell 120k white spirit to Sterns. Sterns resold to 3rd party. Vickers obtained warrant ack'd 120k held for Stern, forwarded to 3rd party B. 3rd party B made own arrangements for further paid storage. 3rd party went to collect=defunct. CoA=property not passed to B, but had assumed risk of loss in their bulk from warrant. (Unascertained) undivided portion of larger bulk but undivided interest in larger insurable bulk=no passing of prop. Interest=risk after delivery order assent. S done all req. 

- Demby v Barden: delay in delivery was B's fault and loss on B per s.20(2)+Wiehe v Dennis Bros. 

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- s6 SGA: ‘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 a contract is made, the contract is void’

- Couturier v Hastie(1856): well known, agued not brought cargo as specific goods, court held subject matter of contract was cargo, as not delivered, S couldnt sue for price. Contrary to s.6?

 - McRae v Commonwealth Disposals Commission (1950): agreed to buy oil tanker advertised but there was no vessel. S liable for breach of promise but B wanted to be put in position had there been a contract. Contract void but never existed so cant perish! Contrary to s.6?

- s7 SGA: '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 avoided’ Deals with unforseen event and not contemplated. 

- Howell v Coupland (Lord Coleridge) crop promised to be sold struck by disease and only 80 tonnes produced. Took delivery of smaller amount and £ but sued for damages failure to deliver. Court held no control over disease, and impossible for S to perform contract and he was excused on terms that the parties understoof should be in contract. Not an absolute contract for deliver.

Blackburn v T W Allen: absolute obligation to deliver specific not generic goods=different!

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The Property: ownership?

- S. 2(1) and 61(2) = transfer of property is KEY

- S. 2(2) and S.12(3): part owners is ok, sale of limited title ok if declared i.e. sell 1/20th of horse. 

- Interest (quantum of rights) is different from title (measures strength of interest): Proff Goode. 

- Possession imp in English law: animo domini: better title than everyone (except true owner) BUT possession depends on payment not the passing of property which is the key part to confer good title against the whole world. Passing of property means B will generally have good title to them if S becomes insolvent when goods still in S's possession=HUGE importance of passing of property.

- s.61 goods definition: including 'all personal chattels other than things in action and money'. 

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Classification of goods SGA:

Sir Mackenzie Chalmers' distinction of goods:

S.5: Existing & Future Goods: 

- Goods owned/possessed by S = existing goods (can be specific or unascertained)

- Goods to be manufacturer/acquired by S after contract creation = future goods (s61.(1)

- Sale of future goods = agreement to sell (s. 2(5) or s.5(3))

Specific (61), ascertained (16) & unascertained goods (?):

- Goods identified and agreed upon at time of contract of sale (inc. undivided share of goods expressed as fraction/percentage - law comm recommendation) = specific goods (s.61(1))

- Not defined in SGA = unascertained goods (s18(5) states how unascertained can be ascertained

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3rd category: quasi-specific property?

- Following on from specific goods and unascertained goods, Roy Goode stated that Sir Mackenzie Chalmers had missed a 3rd categoy: quasi-specific goods. LJ Atkin would argue that this is not needed as equitable rights can be created but the difficulty lies with an extress trust because of the 'certainty of subject matter' woudl fail an express trust per the important case that was not reported for 10 years of Re London Wine. In Re Goldcorp, the court described Re Wait as undoubtedly correct. Tenancy in common was created by the SG(A) following the apparent practical probelms in Gosforth. However, in Re Goldcorp, the SG(A) would not change the decision because you must not assume bulk and there was no specified bulk. 

- Sarah Worthington: 1999: 'Sorting out ownership in a bulk: gifts, sales and trusts' JBL: simple problem=common issue of defining when an indiv obtains equitable ownership interest in part of a bulk of tangible or intangible property. Transfer of owernship may be by gift, sale or trust. Lack of a generally accepted solution. Purchaser of goods forming part of bulk cannot in absence of explicit arrangements obtain equitable interest in goods. Equity is similarily discriminating, unsurprisingly quasi-specific property at common law and in equity (where bulk identified and quantum to be extracted is too) have consquences more akin to those found with specific property than those with completely unascertained property. 

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Ascertained goods: exhaustion

- Goods unascertained (i.e. not identified & agreed on) at time contract of sale made but s. 61states agreement after contract for sale if identified goods= goods then become ascertained per Re Wait Atkin LJ. Can be automatic i.e. next calf born to cow or more commonly by exhausation:

- Wait & James v Midland bank 1926: (Roche J) only wheat remaining was that of pre-paid B's Redlers who had promised to Midland Bank remaining wheat and exactly this wheat remained in warehouse as all other Bs had taken, remaining wheat of 500 tonnes ascertained by exhausation and banks claim prevailed, even though Wait & James had not been paid, transfer of property happened 10 days before asserted rights as unpaid S's.  (now also in s18(r5(3)). 

- The Elafi 1982: (Mustil J) (now s.18 rule 5(4)) on ship left was only to one single B=exhaustion. Agreed in 2 contracts to buy two lots of copra, part of larger cargo aboard the Elafi. All copra which has been sold to other B's offloaded, leaving only amounts sufficient to meet remaining 2 B's. Held sperate quantities ascertained by exhausation and property had passed to them. Totality of alcohol was sold! Cover notes issued covered all of the stock so that the bulk was identified when it was reduced and the goods were ascertained.


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When property passes (S.16-19) s.16

s16 SGA: ‘[Subject to section 20A] Where there is a contract for the sale of unascertained goods no property in the goods is transferred to the buyer unless and until the goods are ascertained.’

1. Re Wait [1927] (Atkin J): CoA: no room in sale of goods law even for notion that equitable title might pass or equitable interest created, regardless of establishment in other transfers. 1000 tonnes, bought 500, which part was the 500? not segregated/ascertained. Diff now under SG(A)A.

2. Re London Wine [1986] (Oliver J): affirmed Re Wait. (3 customers, brought all stock, two or more customers bought quantities that together exhausted, customer with acknow'd that wine held. no seg. of wine so unascertained+unidentified+not specific, company insolvent=no rights, even if told kept aside. S=no oblig to sell what holding! Certificate of title and price paid in full but property not passed=no segregation/earmark. Bank prevailed. No specific bulk so not affected by SG(A)A. Re Goldcorp Exchange [1995]: approved Re Wait + Re LondonWine. Certificate but no appropriation as no specific bulk, not affected by SG(A)A. compare w/3. Re Stapylton [1994]: segregated=sufficient appropriation/ascertainment+TiC of goods. 

4. Customs & Excise Comm v Everwine [2003] (CoA): held in bonded warehouse, faxed release notes on order=property passed when goods specified whole of stock=s18r5, but no appropriation+no property passed when held greater quantity of stock+no phys segregation where release notes didnt cover on specified numbers, goods=unascertained+no prop passed!

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When property passes (S.16-19) s17

S. 17: intention of parties; ‘(1) Where there is a contract for the sale of specific or ascertained goods the property in the goods is transferred to the buyer at such time as the parties to the contract intend it to be transferred. (2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case.’ Court can give effect to implied and express intention of parties!

- Re Anchor Line[1937]: contract to sell a crane for deferred purchase price+court inferred intention property in crane remain with S, express clause that B had risk. Parties intended opposite, wouldnt have inserted clause for risk as would have occured when property passed.

- R V Ward Ltd v Bignall [1967] “in modern times very little is needed to give rise to the inference that property in specific goods is to pass only on delivery or payment” (Diplock LJ): more appropriate to consumer and retail sales. 

- Re Blyth Shipbuilding & Dry Docks Co Ltd [1926]

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When property passes (S.16-19) s.18 overview

S.18: ‘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.

- Presumptive rules in s.18 (diff to s.16 and 17) for ascertaining intention of parties which court can apply. Assumptions always subject to unless otherwise agreed though. Only prima facie presumptions and can be rebutted to the contrary. Not regarded as rules of law. 

- Applies to specific and unascertained goods unlike previous sections that apply to specific only. 

The 5 rules:

Rule 1. unconditional contract....  specific goods in a deliverable state

Rule 2. specific goods to be put into a deliverable state by the seller

Rule 3. specific goods to be weighed, measured etc. to ascertain the price

Rule 4. goods delivered on approval or on sale or return

Rule 5. unascertained goods

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S 18 Rule 1

Rule 1. unconditional contract....  specific goods in a deliverable state - unconditional contract for the sale of specific goods in deliverable state,property passes to B when the contract made, immaterial if time for £ or delivery postponed.’ S.61(5) B contract+bound to take delivery. 

 a) uncond.contract  b) specific goods(Everwine)  c)deliverable state(Underwood/Phillip Head)

- Tarling v Baxter (1827) (Bayley J): parties agreed sale of hay on land beloning to S's brother. £to be made in 1 month+no hay to be cut until £. Before £ due, hay destroyed in fire but B bound to pay. Right of possession+right of property=distinct. Intention to immed. acquire right of property.

- Dennant v Skinner [1948]: paid for auction car with uncleared cheque as pretended to be son of reputable motorist. Car sold to 3rd party twice. Claimed return of car, but court held property had passed to rogue on fall of hammer and S bore loss as ineffective purported reservation!

- Underwood Ltd v Burgh Castle Brick & Cement Syndicate Ltd [1922]: test =whether anything remained2be done2engine to put in deliverable state. Engine to pieces=didnt postone time of transfer. Engine damaged during removal,B refused. Entitled2refuse as S's prop still. Not passed!

- Philip Head v Showfronts: stolen carpet not in deliverable state until laid and s's property still.

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S 18 Rule 2

- ‘Rule 2 - Specific goods to be put into a deliverable state by S: 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 in a deliverable state, the property does not pass until the thing is done and the buyer has notice that it has been done.’

Seen in same cases again:

- Underwood Ltd v Burgh Castle Brick & Cement Syndicate Ltd [1922]: test is whether anything remained to be done to engine to put in deliverable state per contract not packaged etc. Taking engine to pieces did not postone time of transfer of property. Other chattels require dismantling first and transfer at time of sale. Engine damaged during removal from land,B refused to accept. Held entitled to refuse as S's property, prop not passed!  Must have everything done to it that S's had to do! No stress as engine had to be taken to pieces. Important part=fixed to land not loose!

- Philip Head v Showfronts: stolen carpet not in deliverable state until laid and s's property still. Buyer must have NOTICE of 'deliverable state' before transfer of property occurs. Restricted to acts performed by S. 

-BUT... Fruit ready for picking, crops to be harvested can be in a state that B would under contract be bound to take delivery of them even though still attached to land. 

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S 18 Rule 3

- ‘Rule 3 Specific goods to be weighed, measured etc. to ascertain the price: 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 purposes of ascertaining the price, the property does not pass until the act or thing is done and the buyer has notice that it has been done.’

- Turley v Bates (1863): sale for heaps of fireclay on Turleys land to be carted and weighed by B. B took 270 tons of clay and £ for it. Action for price of rest. B argued property had not passed+only liable for damages that clay had fallen in value. Court held prop had passed+B liable. £ agreed on quantity+until weighed=contract incomplete. Performance was condition precedent to transfer of property, all that remained was by B w/full auth from S=distinguished other cases where S had more to do. Intention=whole property of heap would pass, regardless of requirement of weighing. 

- Nanka-Bruce v Commonwealth Trust [1926]: shipper of cocoa, claim for damages in conversion of 160 bags of cocoa. Testing of cocoa merely to see if goods fitted weights represented, not suspensive of contract of sale of condition precedent to it. No contract for weighing. Full price per contract therefore due. 

- Castle v Playford (1872): cargo of ice and £ on arrival, weighed on board during delivery. Contract=risk with B. Ship lost at sea. Court=B liable to pay estimated £! 

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S 18 Rule 4

- Rule 4 -Goods delivered on approval or on sale or return: when goods delivered to B on approval or on sale or return, property passes to B. (Can have VAT implications per s. 6(2)(c) Vat Act 1994 (Compton & Woodhouse v Revenue & Customers 2008: VAT due on day of delivery of mail order goods sent on '60 days approval', not after 60 days, intention of both C+customers property/risk pass immed. subject to a condition subsequent that goods might be returned within 60 days)

     (a) when he signifies his approval or acceptance to the seller or does any other act adopting the transaction;

     (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 that time, and, if no time has been fixed, on the expiration of a reasonable time.’

- Kirkham v Attenborough [1897]: adopting transaction when jewellery delivered+property passes.

- Weiner v Gill [1906]: delivered diamond brooch, cash or return, pawned goods. Property in possession generally confers good title. Property had passed and exceptions didnt apply. 

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s 18 Rule 5

- Rule 5: unascertained goods:  1) 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 unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods then passes to the buyer; and the 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 or custodier (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 taken to have unconditionally appropriated the goods to the contract. 3) Where there is a contract for the sale of a specified quantity of unascertained goods in a deliverable state forming part of a bulk which is identified either in the contract or by subsequent agreement between the parties and the bulk is reduced to (or to less than) that quantity, then, if the buyer under that contract is the only buyer to whom goods are then due out of the bulk— (a)  the remaining goods are to be taken as appropriated to that contract at the time when the bulk is so reduced; and (b)  the property in those goods then passes to that buyer. (4) Paragraph (3) above applies also (with the necessary modifications) where a bulk is reduced to (or to less than) the aggregate of the quantities due to a single buyer under separate contracts relating to that bulk and he is the only buyer to whom goods are then due out of that bulk.

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S 18 Rule 5 cont'd

- Wait v Baker (1848): property doesnt pass unless subsquent appropriation. Appropriation=different meanings. In England, property doesnt pass until bargain of specific article+everything done according to intention of parties was necessary to transfer property in it. 

- Mucklow v Mangles: contracted to build barge, whole of agreed £ paid as work progressed. When nearly finished, B's name painted on stern. Two days later, seized by sheriff's officer who was executing judgement against S. S made bankrupt. Had sheriff rightly seized barge or was B's property. Property had not passed to B as not completed. Sheriff entitled!

- Pignataro v Gilroy [1919]: didnt collect rice,reminders4amonth+stolen. Property+risk passed2B.

- Healy v Howlett & Sons: uncondi. approp: ordered 20 fish, S dispat. 200, instruct earmarking 4B. Delayed b4 earmark, fish defunct, no prop passed. No severance of unidentified part of bulk.

- Carlos Federspeil v Charles Twigg [1957]: (Pearson Jagreed to buy bikes from S and paid £. Goods to be loaded on ship. Bikes manufactured per contract,packed in crates marked with B's name to earkmark?. S=insolvent b4 shipment. B argued unsucc. prop passed.Contract for unascertained goods by descrip for sale of future goods to be manufactured. No appropriation within s18(r5)! Intention=property not to pass before shipment despite correspondence!Setting apart/selection=not enough as can change mind, must irreovocably attach to contract.

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S 18 Rule 5 cont'd again

- Wardar’s Co v W Norwood & Sons Ltd [1968]: (LJ Salmon) agreed to buy 600 frozen ox kidneys out of 1500 in store. Driver to pick goods up, refrigerator not on. Kidneys unfit for purpose. CoA= loss fell on B as property passed when picked up and deteroration happened after that time. Bulk was a specified bulk+segregation of the part sold from the rest was only thing required for unconditional appropriation.

- Hendy Lennox v Grahame Puttick: goods were earmarked by serial numbers of the wine = irrevocably attached to contract and S cannot replenish stock.  

Aldridge v Johnson: (pre-SG(A)A) until appropriation and separation of particular quantity or signification of assent to particular quantity, property not passed. Appropriation only of 155 sacks. Would now be able to claim interest in bulk proportionate to specified 200 sack bulk. When S filled some sacks=property passed, even though still in S's possesion. 

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S 18 Rule 5 cont'd more

- Modern law doesnt punish 'mixing'. 2 B's= tenants in common of resulting mix.Any doubts to quantity/quality resolved in innocent party's favour per Indian Oil Corpn v Greenstone Shipping. 

Wait & James v Midland bank 1926: (Roche J) only wheat remaining was that of pre-paid B's Redlers who had promised to Midland Bank remaining wheat and exactly this wheat remained in warehouse as all other Bs had taken, remaining wheat of 500 tonnes ascertained by exhausation and banks claim prevailed, even though Wait & James had not been paid, transfer of property happened 10 days before asserted rights as unpaid S's.  (now also in s18(r5(3)).

- Healy v Howlett & Sons: 20 boxes of an unidentified part of a bulk failed to be earmarked and therefore property had not passed. 

- Carlos Federspiel v Charles Twigg=cast doubt on earmarking as form of severance sufficient4property to pass. Pearson J =‘mere setting apart or selection by the seller of goods=not enough as can change mind+replenish with other goods in performance of contract. 

- Donaghy's Rope & Twine v Wright: (NZ case): even if goods stored w/other similar goods, if sufficiently earmarked and S can identify goods set aside for B, immaterial that nobody could tell which goods for the B. Doubtful this is acceptable 'what in S's mind'!

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When property passes (S.16-19) s19

S. 19Reservation of right of disposal.

(1) Where there is a contract for the sale of specific goods or where goods are subsequently appropriated 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; and in such a case, notwithstanding the delivery of the goods to the buyer, or to a carrier or other bailee or custodier 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.

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Academic Commentary:

- Duncan Sheehan (2011): Personal property law Chapter 2: 3 reasons why passing of property=important. A) Risk passes prime facie w/property to determine liability if goods destroyed+determines who can insure. B) S cannot sue for £ until passed. C) determines who has right to sue 3rd parties for damage. Re Wait entrenched proposition that equitable title in goods does not pass prior to legal title but this may be different for shares(specificially enforcebale contract for their sale=constructive trust). Certainty of subject matter/ascertainable goods= trite law per Lord Mustil Re Goldcorp. Unconditional approp=important for other areas of prop law too: fixed charge that exists where asset been unconditionally appropriated to the £ of secured debt(Re Cosslett.) Earmarking/appropr. in international sales (CIF contract goods)=unconditionally appropriated when S passes to B details of shipment inc. identity of ship(notice of appropr). Quasi-specific goods not in Act but refers to particular cat of unascertained=given proportion in numerical form (not fraction/% as would be sale of specific goods creating TiC) from an identified bulk+it is a breach for S to source goods from different bulk. Worthington:underestimates equity to argue that numerically defined proportion is problematic however, equity only helps in cases where party seeks to create trust or sell assets not defined as goods. Interelationships between different concepts of ascertainment+appropriation+parties' intention=complex,must be examined in no of different factual contexts. Deed+delivery conveyance=much less complex then sale as have to state what asset is!

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Only applies if:

- S. 20A(1)(a): goods or some of them form (unidentified) part of identified bulk in contract or subsquent agreement between parties. 

- S. 20A(1)(b): buyer has paid £ for some or all of goods subject to contract forming part of bulk

When applies (unless otherwise agreed):

1. property in undivided share in bulk transferred to B AND 2. B becomes owner in common 


- S. 20A(3): property interest in bulk limited to amount paid for and due to B from bulk

- S. 20A(4) any shorfall in bulk, undivided share in bulk of each B will be reduced proportionately

- S20B: deemed consent by co-owner to dealings in bulk goods

- Reversed Re Wait, only if contract formed part of identified bulk+ part £ or full paid. Price paid = proportionate, not quantity contracted to buy+co-owner with S until phys separation. 

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Commentary of s20A

- Tom Burns (1996: MLR): 'better late than never: the reform of the law on SG forming part of a bulk': B's were at grave risk if S became insolvent in contracts worth millions of pounds for goods in identified bulk. Reform (1995) didn't occur for many years (Re Wait 1927!) USA didnt wait to change their Uniform Sales Act as Karl Llewlyn (ambassidor of new commercial code) said: 'law is a means to social ends, not an end in itself' that was inspired by UK rules. Used to contract for risk or loss of goods so that could get insurance for his interest or performance bonds=Odd, costly and complex way around unsatisfactory state of law? Reforms do not go far enough as no rules on specific insolvency implications in undivided goods or if co-owner B's become insolvent. No provision to spread burden more evenly. Judiciary attempted with exhausation approach but were limited by statute. Piecemeal change better than none but can lack coherence and the law difficult to access by users. Codification would solve but that is unlikely. Reform better late than never.

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Draft Consumer Rights Bill impact

Risk: (30) Passing of risk

(1) A sales contract is to be treated as including the following provisions as terms.

 (2) The goods remain at the traders risk until they come into the physical possession of.

(a) the consumer, or

(b) a person identified by the consumer to take possession of the goods.

- See statute book too! (highlighted bits).

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