133 |
6â Delivery and payment |
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owner reclaiming his title to the goods.64 Once again, an innocent third party |
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who attempts to keep the goods in that situation will be liable in conversion |
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and so must return the goods to the owner and seek compensation from the |
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fraudster. |
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(g)â Sale under court order |
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Finally, an innocent purchaser may acquire good title to the goods where they |
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have been sold as the result of the High Court ordering their sale or where he |
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has innocently purchased them when, unknown to him, they were subject to a |
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writ of execution. |
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(h)â Market overt |
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The most colourful of the nemo dat exceptions, namely market overt, which |
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protected the innocent buyer purchasing goods from a market overt65 accord- |
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ing to the normal usages of that market and between the hours of sunrise and |
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sunset, has now been abolished. It was repealed in 199566 amidst concerns that |
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this exception facilitated the sale of stolen goods causing the innocent owner to |
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lose title to them. |
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Q9 Consider whether the nemo dat exceptions provide an acceptable balance |
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between the protection of an innocent buyer and the legitimate rights of the |
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true owner. |
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6â Delivery and payment |
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While passage of property governs ownership and risk, two factors which are |
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becoming increasingly important in the prevailing economic climate are deliv- |
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ery and payment, with many sellers and buyers being equally, if not more, con- |
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cerned by these factors. Buyers want the goods while sellers want the money |
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and, unless something goes wrong, issues of ownership and risk will not really |
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concern them, while delivery and payment will always be important. Unless |
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the parties agree otherwise, delivery and payment are concurrent,67 such that |
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the seller must be ready and willing to deliver the goods and the buyer must be |
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ready and willing to pay for them in accordance with the contract. Delivery is |
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the ‘voluntary transfer of possession from one person to another’68 and can be |
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by the physical delivery of the goods to the buyer, or by providing him with the |
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64 |
Cundy v. Lindsay (1878) 3 App. Cas. 459. |
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65 |
Retail shops in the City of London plus certain open markets in England. There were no markets |
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overt in Wales or Scotland. |
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66 |
Sale of Goods (Amendment Act) 1994, s.1. |
67 Sale of Goods Act 1979, s.28.â 68â Ibid. s.61(1).
134 The passage of title, delivery and payment
means to control the goods. The latter includes, for example, giving the buyer the physical means of control, e.g., the keys for a car, or, alternatively, by giving him the appropriate documents to allow him to control the goods, the most important example of which is undoubtedly bills of lading used in international trade contracts. A further method of delivery occurs when a third party in possession of the goods attorns by acknowledging that the goods are now held to the order of the buyer not the seller.69 Typically, this third party would be a warehouse or a carrier.
(a)â Time and place of delivery
Delivery raises obvious issues as regards the time and place of delivery, delivery of the wrong amount, and in what situations delivery by instalments may be acceptable. Sections 27–33 of the 1979 Act establish the framework within which issues regarding delivery are addressed while preserving the contractual freedom of the parties. Thus, the place of delivery is decided by the parties but with a fallback position that in the absence of agreement whether express or implied, delivery occurs at the seller’s place of business or, alternatively, his residence or, in the case of contracts for specific goods known to be at some other place, that place. Given this, delivery charges are acceptable as the seller is providing a service over and above his legal obligation. Further, if the seller agrees to deliver at his risk to a place other than where the goods were at the time of the contract, the buyer remains liable for any deterioration of the goods necessarily due to the transit.70 Delivery must be made at a reasonable hour and, where the seller has agreed to send them to the buyer, within a reasonable time. In practice, of course, time is likely to be of the essence in a commercial contract with a failure to deliver being an actionable breach of the contract. Likewise, with consumer buyers time will be of the essence if a delivery date is included in the contract but, in the absence of such a term, the Consumer Rights Directive will require delivery to the consumer or a third party of his choosing within a period of thirty days from the conclusion of the contract,71 with non-com- pliance entitling the consumer to a full refund if the trader fails to deliver the goods by a second delivery date.72 Thus, in consumer sales, the status of delivery will be heightened in comparison with the current situation, in which consumers can feel thwarted by an inability to get sellers to deliver goods on time.
The distinction between consumer buyers and non-consumer buyers is again apparent with regard to the use of carriers to transport the goods from seller to buyer. Generally, where the seller is authorised or required to send the goods to the buyer, delivery of the goods to the carrier constitutes delivery to the buyer,73 but this provision is expressly overruled in consumer contracts where delivery to a carrier
69 |
Ibid. s.29(4).â 70â Ibid. s.33. |
71 |
Consumer Rights Directive, above n. 3, Art. 18(1). |
72 |
Ibid. Art. 18(2).â 73â Sale of Goods Act 1979, s.32(1). |
135 |
6â Delivery and payment |
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does not constitute delivery to the consumer buyer.74 Unless otherwise agreed, |
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the seller is obliged to contract with the carrier on behalf of the buyer and is under |
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a duty to make the best contract possible, a failure to do so allowing the buyer to |
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claim damages from the seller if anything happens to the goods.75 Delivery drivers |
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employed by the seller are not carriers for this purpose. Where carriage is by sea, the |
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goods are likely to be at the risk of the buyer, particularly under an FOB contract,76 |
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and the buyer must be told of the carriage arrangements to facilitate him insuring |
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the goods during transit,77 though again the parties are free to agree otherwise. |
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(b)â Delivery of the wrong quantity |
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Two policies are relevant when considering a delivery of the wrong quantity of |
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goods, namely, the law ignoring trifling breaches and a distinction in remedies |
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available to non-consumer and consumer buyers. The former, evident in common |
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law in Shipton, Anderson v. Weil Bros,78 is now encapsulated in section 30(2D) of |
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the 1979 Act, which prevents rejection of the goods unless the shortfall or excess |
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is material. Thus, where the seller has delivered less than the contractual amount, |
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the buyer cannot reject them, and where the seller has delivered too much, the |
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buyer cannot reject all of the goods, unless the shortage or excess is material. In |
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the latter situation, the buyer would still be able to reject the excess while retaining |
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the contractual amount.79 This position is reinforced, though with a variation for |
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consumer buyers, by section 30(2A), which provides that a non-consumer buyer |
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cannot reject the goods where the shortfall or excess is so slight that it would be |
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unreasonable for him to do so, wording that resonates with the variable remedies |
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in section 15A of the 1979 Act for breach of the statutory implied conditions. The |
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right of the consumer buyer to reject the goods is protected, although this may be |
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largely academic as the average consumer does not typically buy large quantities |
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of loose goods, with the possible exception of DIY enthusiasts ordering sand or |
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gravel by weight or wood or turf by width and length. |
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(c)â Delivery by instalments |
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Delivery in instalments is relatively rare in consumer contracts. Thus, the rules |
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governing instalment deliveries are primarily of interest in the commercial |
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74 |
Ibid. s.32(4). |
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75 |
See Thomas Young v. Hobson (1949) 65 TLR 365, in which the seller was held liable when the |
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goods were carried at the buyer’s risk when the carrier would have carried them at his own risk |
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for the same price. |
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76 |
An FOB (free on board) contract is one under which the buyer arranges for the shipment |
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of the goods and for their insurance cover for the voyage (see Part 3 Chapter 1). The seller’s |
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responsibilities for the goods end when they are loaded on board. |
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77 |
Sale of Goods Act 1979, s.32(3). |
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78 |
[1912] 1 KB 574, in which the seller was due to deliver 4,950 tonnes and actually delivered 55lbs |
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excess. It was held that the buyer could not reject the whole consignment. |
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79 |
Sale of Goods Act 1979, s.30(1). |