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What are the rules that govern the passing of property?

      

What are the rules that govern the passing of property?

  

Answers

Maurice
It is the essence of the contract of the sale of goods that property in the goods pass to the
buyer.

It determines when risk in the goods pass to the buyer hence the party is liable in the event
of loss or destruction.

It determines the remedies available to the parties, for example, the seller can only sue for
the price after property in the goods had passed.

(Property in goods passes to the buyer at different times in different contracts hence the
passage of property is governed by the following rules:
(i) Sale of unascertained goods.
Under section 18 of the Act, where there is a contract for the sale of unascertained
goods, property passes to the buyer when the goods are ascertained.

(ii) Sale by auction.
Under section 58 (1) of the Sale of Goods Act where there is a sale by auction, property
passes to the buyer when the auctioneer announces its competition by the fall of the
hammer, or in such other customary manner. Until the hammer falls, the bidder may
retract his bid.

(iii) Sale by reservation.
Under section 21 (1) of the Act, where there is a contract for the sale of specific goods
or where goods are subsequently appropriated to the contract but the seller reserves the
right of disposal of the goods until certain conditions are fulfilled, property in the goods
pass to the buyer when the conditions imposed by the seller are fulfilled.

(iv) Sale by description.
Under section 20 (e) (i) of the Act where there is a contract for the sale of unascertained
goods by description, property in them passes to the buyer when:
(a) Goods of that description.

(b) In a deliverable state.

(c) Are unconditionally appropriated to the contract.

(d) By the buyer with consent of the seller or by the seller with consent of the
buyer.

(v) Sale by approval or on sale or return
Under section 20 (d) of the Act where goods are delivered to the buyer on approval or on sale or return or other similar terms, property in them passes to the buyer.
(a) When he signifies his approval or acceptance or

(b) When he does any other act adopting the transaction for example reselling or
pledging the goods or

(c) When he retains the goods after expiration of the stipulated or reasonable
time without signifying his rejection.

(vi) Unconditional sale of specific goods in a deliverable: under section 20 (d) of
the Sale of Goods Act, where there is an unconditional Sale of Specific goods in a
deliverable state, property passes to the buyer when the contract is made.

(vii) Sale of specific of goods to be put into a deliverable state: under section 20 (b)
of the Act where there is a contract for the sale of specific goods and the seller if bound
to do something for the purpose of putting the goods into a deliverable state, property
in them passes to the buyer when they are put into a deliverable state and he is notified.

(viii) Sale of specific goods to the weighted, measured or tested: under section 20 (c)
of the Act, where there is a contract for the sale of specific goods but the seller is bound
to weigh, measure, test or do some other act or thing for the purpose of ascertaining the
price, property in the goods passes to the buyer when they are weighted, measured,
tasted, or that other thing is done and the buyer is notified.
maurice.mutuku answered the question on May 3, 2018 at 09:10

Next: Why is it important to determine when property in goods passes from seller to buyer?
Previous: Discuss the liability of parties to a bill of exchange.

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