2. OUTLINE OF CHAPTER 16
The Sale Of Goods Act
Terms in the contract of sale
Title to the goods
Remedies of the seller
Seller’s liability
Remedies of the buyer
5. APPLICATION OF THE ACT
SALES (& agreements to sell)
NOT:
Barters
Leases or bailments
Consignments
Non-contractual transfers of property
OF GOODS
NOT:
Land or intangible property
Provision of services
6. CONTRACT OF SALE
The Act says:
A contract of sale of goods is a contract whereby the
seller transfers or agrees to transfer the property in
goods to the buyer for money consideration called the
price.
7. CONTRACT OF SALE
The Act says:
A contract of sale of goods is a contract whereby the
seller transfers or agrees to transfer the property in
goods to the buyer for MONEY consideration
called the price.
8. SALE VS. AGREEMENT TO SELL
S. 3(4)
Transfer the property of goods
Now = sale
Future = agreement to sell
S. 3(5)
Agreement to sell becomes sale when conditions are
fulfilled or “the time elapses”
9. SALE VS. CONSIGNMENT
Consignor sends goods to an agent (consignee)
who will offer them for sale at a new locations
Ownership does not pass to consignee
• Consignor
Goods
• Consignee
Ownership
• Purchaser
GoodsGoods
10. WHAT ARE GOODS? (AKA: CHATTELS)
Property
Real
Corporeal
(tangible)
Incorporeal
(intangible)
Personal
Choses in
Possesion
(tangible)
Choses in
Action
(intangible)
11. OWNERSHIP & POSSESSION
Separation of Ownership & Possession occurs
frequently in contracts for sale of goods
Title may pass to buyer but possession remains with
seller
OR
Possession may pass to buyer while title remains with
seller
14. CAVEAT EMPTOR
“LET THE BUYER BEWARE”
Not a rigid rule but flexible general principle
Applies where goods are in existence and specific items
may be inspected by buyers
Encourages buyers to take care to determine goods
BUT
Protection for buyers come from implied terms
found in The Sale of Goods Act
15. TERMS TO UNDERSTAND:
CONDITION VS. WARRANTY
Condition
A major or essential
term of the kn, the
breach of which may
relieve the injured party
from further
performance
Warranty
A less or non-essential
term that does not
relieve the injured party
from performance
Now covered under
Consumer Protection
Act in Sk.
16. CONDITION VS. WARRANTY
Condition treated as warranty
13(1) Where a contract of sale is subject to a condition to be fulfilled by the seller,
the buyer may waive the condition or may elect to treat the breach of the condition
as a breach of warranty and not as a ground for treating the contract as
repudiated.
(2) Whether a stipulation in a contract of sale is a condition the breach of which
may give rise to a right to treat the contract as repudiated or a warranty the
breach of which may give rise to a claim for damages but not to a right to reject the
goods and treat the contract as repudiated depends in each case on the
construction of the contract.
(3) A stipulation may be a condition though called a warranty in the contract.
(4) Where a contract of sale is not serverable and the buyer has accepted the
goods or part thereof or where the contract is for specific goods the property in
which has passed to the buyer, the breach of a condition to be fulfilled by the seller
can only be treated as a breach of warranty and not as a ground for rejecting the
goods and treating the contract as repudiated unless there is a term of the contract
expressed or implied to that effect.
(5) Nothing in this section affects a condition or warranty fulfilment of which is
excused by law by reason of impossibility or otherwise.
17. IMPLIED TERMS AS LISTED ON PAGE 333
Subject to certain exceptions and qualifications, the Sale of Goods
Act implies the following:
implied condition that seller has the right to sell
s. 14(a)
implied warranty of quiet enjoyment
s. 14(b) & CPA s. 48(b)(ii)
implied warranty of no undisclosed charges or encumbrances
s.14(c) & CPA s. 48(b)(i)
implied condition that the goods correspond to description
s. 15
implied condition that the goods will be reasonably fit for purpose IF
that purpose was made known to seller
s. 16(1)
implied condition goods are of merchantable quality
s. 16(2)
implied condition bulk will correspond with sample
s. 17(2)
18. EXEMPTION CLAUSES
Seller may insist that a kn of sale contain an
express term relieving it from the liability imposed
by implied terms.
Must be clear and direct language
Seller cannot completely exempt himself from liability
In Sk one cannot contract out of implied warranties
according to The Consumer Protection Act
19. PAYMENT
If time of payment not expressly set out in kn:
court assumes delivery and payment are concurrent
(presumed cash sale)
Except credit card payment (seller waits for payment from
credit card company)
court assumes time set for payment is warranty
(cannot rescind kn, must sue for payment)
20. DELIVERY
QUANTITY
Is condition
TIME SPECIFIED
Is condition
PLACE OF DELIVERY
Normally seller’s place of business or wherever goods
are situated UNLESS express or implied (trade practice)
FOB – “free on board” - location is specified
CIF – cost, insurance, freight – goods are shipped to buyer
COD – cash on delivery – seller undertakes to deliver
21. RISK OF LOSS
Generally:
s. 22(1)
Goods remain at the seller’s risk until the property transfers to
the buyer
Exceptions:
s. 22(2)
fault of one of the parties
s. 13(4)
blah, blah. . . . . must first determine whether goods are
specific or ascertained, etc. etc. . . . .
23. WHO MAY PASS GOODS?
NEMO DAT QUOD NON HABET:
UNLESS
s. 23(1) - sale was authorized by the 1st buyer, or
seller is estopped from denying authorization to sell
s. 24 – seller had voidable title (not yet voided) he
can pass good title to a bfp w/o notice
24. SELLER OR BUYER IN POSSESSION
Act protects bfp w/o notice in the “normal course of
business”
Caveat: goods that can be registered on the PPR are
“notice”
POTENTIAL FRAUD:
Buyer who does not take possession of goods when title
passes consequently runs the risk that a fraudulent
seller may sell them to a 3rd party
OR
Seller allows buyer to take possession of goods before
title has passed
25. WHEN DOES TITLE PASS?
1. If unconditional kn for goods in
deliverable state?
When kn is made
2. If seller is bound to do
something to goods to put
them in deliverable state?
When buyer has received notice
that it has been done
3. If unconditional kn for goods in
deliverable state BUT seller is
bound to do something to
ascertain price?
When buyer has received notice
that it has been done
1. If goods delivered on approval
When buyer :
signifies his approval;
does some act to indicate adoption
of transaction;
retains goods beyond reasonable
time.
2. If sale is of future goods by
description
When goods of that description
in deliverable state are
appropriated to the kn with the
assent of the other
SPECIFIC GOODS UNASCERTAINED GOODS
26. BILL OF LADING
Determines who has title to the goods that are in
the course of transit
28. REMEDIES OF THE SELLER
Lien
Stoppage in transit
Repossession
Resale
Damages for non-acceptance
Action for the price
Retention of deposit
29. LIEN
Right of person in possession of property to
withhold goods until payment is received
when kn does not state the buyer is to have credit
when terms of credit have expired without payment and
seller is still in possession of goods
when buyer become insolvent before delivery (be
careful!)
30. STOPPAGE IN TRANSIT
Also when buyer becomes insolvent before
delivery
Carrier is bound to obey instructions
31. REPOSSESSION
Only available in bankruptcy and insolvency and after
following specific rules
Applies only to goods that were delivered in relation to a buyer’s
business, not to consumer goods
Goods must still be in the possession of the buyer and in the same
condition as they were when sold
RIGHT OF REPOSSESSION RANKS ABOVE ANY
OTHER CLAIM TO THE GOODS
Except bfp fv w/o notice
32. RESALE
Becomes sellers mitigation efforts
May sue for deficiency between resale price and
original kn
33. DAMAGES FOR NON-ACCEPTANCE
When title did not change hands
Text uses special order of musical instrument as
illustration of this concept
34. ACTION FOR THE PRICE
Once a buyer has accepted the goods, she cannot
reject the goods
Exceptions in CPA s. 48 –acceptable quality and
durability
Often retailers allow returns and refunds as a
matter of customer service
35. RETENTION OF DEPOSIT
DEPOSIT V. DOWN PAYMENT
Deposit:
To be forfeited if buyer does not perform its part of the kn
Down payment
Paid by the buyer as an initial part of the purchase price
38. MISREPRESENTATION
RECALL:
GENERALLY:
Π can claim damages if misrepresentation is:
1) material;
2) intended to influence the π into entering into the kn; and
3) indeed acted upon
The court may set aside the kn OR make economic
adjustment
If innocent misrepresentation – right to rescind kn
39. MISREPRESENTATION
Recall :
If innocent:
Only remedy available is recission
Otherwise
Buyer must establish fraud or negligence
40. BREACH OF A TERM
The Sale of Goods Act sets out circumstances
where a buyer will not be entitled to terminate kn
even if seller has breached terms:
s. 13(4) Where a contract of sale is not severable and the buyer has accepted the goods or
part thereof or where the contract is for specific goods the property in which has passed
to the buyer, the breach of a condition to be fulfilled by the seller can only be treated as a
breach of warranty and not as a ground for rejecting the goods and treating the contract
as repudiated unless there is a term of the contract expressed or implied to that effect.
Means when broken kn does not contemplate
delivery by instalments & buyer has indicated she
will keep goods, buyer must keep goods and can
only sue for damages
42. REMEDIES OF THE BUYER
Range of remedies including:
Common law contract
For damages
Tort
Conversion
Deceit
Consumer protection
Sale of Goods Act
Specific performance
44. WHAT IS IT???
The Consumer Protection Act is a consolidation of consumer
protection legislation.
Part II – covers unfair marketplace practices.
Part III – is the old Consumer Products Warranties Act.
Part IV.1 - electronic commerce meant to ensure that consumers benefit
from equal protection across Canada.
Part IV.2 - future performance contracts.
Part IV.3 - covers personal development services contracts.
Part IV.4 provides new rules for travel club contracts.
Part IV.5 provides new rules for distance contracts that are entered into
by phone or by mail.
Part IV.6 protects consumers who purchase and use gift cards and
certificates ("prepaid purchase cards").
The Act also sets out consumer responsibilities, including the
duty to first make a reasonable effort to minimize any loss
resulting from an unfair practice and to attempt to resolve a
dispute with a supplier before taking further action.
46. UNFAIR PRACTICES
Act makes:
1) offence for a supplier (retailer, manufacturer or
distributor) to make a false that might reasonably
deceive or mislead a consumer.
2) an unfair practice for a supplier to take
advantage of a consumer not in a position to
protect their own interests.
47. UNFAIR PRACTICES (CONT.)
Act gives the Director of Consumer Protection the
authority to take action before someone has
actually suffered a loss as a result of an unfair
practice.
48. REMEDIES FOR UNFAIR PRACTICES
Consumer may commence an action in court against a supplier.
OR
a range of other options, such as mediation.
If these efforts fail, the Act provides for a series of remedies that
depend on the severity of the breach.
For example, it provides for:
the Director can take action on behalf of disadvantaged or
vulnerable consumers;
voluntary agreements for compliance between a supplier and the
Director;
the court to order restitution; and
an application by the Director to the court for an injunction.
50. WARRANTIES
Under Part III of the Act, Consumer Products
Warranties, retailers are deemed to give minimum
warranties known as statutory warranties
whenever they sell a new or used consumer
product.
51. MINIMUM STAT WARRANTIES
INCLUDE:
the product belongs to the buyer without
undisclosed liens or other claims;
the product is of acceptable quality;
the product is reasonably durable and fit for the use
intended as well as for any specific purpose stated
by the retailer;
the product matches its description and the quality
of any samples shown to the consumer; and
spare parts and repair facilities will be available for
a reasonable period of time.
52. WARRANTY COVERAGE
Anyone who buys the product from the original
consumer, receives it as a gift, or receives it by law
is deemed to be given the same warranties by the
seller or manufacturer as the original purchaser.
53. EXPRESS & ADDITIONAL WARRANTIES
A seller is deemed to accept any express
warranties on labels or packages unless the
consumer is told, prior to the sale, that the seller
does not accept them.
A seller does not accept warranties in advertising
produced by the manufacturer unless the seller
expressly or impliedly adopts them.
55. UNSOLICITED GOODS
when unasked for goods are received, the recipient
has no legal obligation to the sender to pay for
these unsolicited goods unless the recipient has
first acknowledged, in writing, that he or she intends
to accept the goods.
57. INTERNET SALES CONTRACTS
These rules apply to Saskatchewan residents and
to non-residents purchasing goods or services
exceeding $50 online from Saskatchewan
businesses.
59. SUPPLIER MUST ALSO PROVIDE:
a written or electronic copy of the contract within 15
days after the agreement was entered into;
60. CONSUMER MAY CANCEL:
at any time after the contract is entered into until 7 days after
receiving a copy of the contract if:
the consumer was not given an opportunity to accept or decline the contract,
or to correct errors before entering into the contract;
the disclosure requirements under the Act were not met;
OR
within 30 days after entering into it if a copy of the contract is not
received from the seller within 15 days;
OR
at any time before the goods are delivered or the services begun
if:
the goods are not delivered or the services (other than travel, transportation or
accommodation services) are not begun within 30 days after the date or
amended date agreed to; or
travel, transportation or accommodation services are not begun on the date or
amended date agreed to; or
a delivery date or a commencement date is not provided in the contract; and
the supplier does not deliver the goods or begin the services within 30 days
after the date the contract was entered into
61. CHARGEBACKS TO CREDIT CARDS
MANDATORY MECHANISMS
if the contract was properly cancelled but the refund
was not received from the internet seller within the
required 15 days.
63. FUTURE PERFORMANCE CONTRACTS
the delivery of the goods or services or the payment
for the goods or services is not completely made
when the parties enter into the contract.
64. WHAT ARE THEY?
PERSONAL DEVELOPMENT SERVICES CONTRACTS
are contracts for services related to health, fitness, dieting,
modelling, talent, martial arts, sports, dancing or similar
activities that require payment in advance
TRAVEL CLUB CONTRACTS
a consumer, through a membership in a travel club or
vacation club, acquires the right to discounts or other benefits
on the purchase of transportation, accommodation, or other
services related to travel.
REMOTE CONTRACTS
are contracts where the consumer and the supplier are not
present together (e.g., agreements made by phone, fax or
mail).
65. CPA SETS OUT COMMON RULES:
requiring contracts to be in writing and to contain
specific information;
setting out the time period and manner in which a
contract must be provided to a consumer; and
setting out the manner in which notice of
cancellation of a contract must be given by the
consumer to the supplier.
66. CPA SETS OUT OTHER RULES:
Personal development services:
limiting the term of personal development services
contracts to no more than two years and prohibiting
suppliers from requiring or accepting prepayment of
fees for any periods totalling more than 12 months;
prohibiting a supplier from receiving payment for
personal development services that are not available at
the time the payment is made except if the payment is
made to a trust corporation;
requiring suppliers to give consumers the option to pay
monthly instalments;
67. CPA SETS OUT OTHER RULES:
Travel Club rules:
limiting the term of travel club contracts to no more than
one year;
prohibiting travel club operators from requiring or
accepting prepayment of fees in an amount greater than
the prescribed amount; and
Remote Contracts rules:
allowing a consumer who makes a remote purchase
using a credit card to obtain a refund from the credit
card company, if the supplier fails to provide a refund
after the consumer has exercised a right of cancellation.
69. GIFT CARDS
With some exceptions, it:
prohibits expiry dates on most gift cards and certificates;
requires disclosure of terms and conditions on gift cards and
certificates;
prohibits suppliers from charging inactivity or dormancy fees
that reduce the value of a gift card or gift certificate if it is not
used within a certain period of time;
prohibits any other fees that may be charged in relation to gift
cards or certificates unless authorized in the regulations; and
provides that any agreement, whether verbal, written, express
or implied, that the benefits of the Act do not apply or are not
available, is void. A consumer may recover any money paid
under such an agreement by commencing an action in court.
70. THE SALE OF GOODS ACT
VS. CONSUMER PROTECTION ACT
If:
Goods only (no
services)
Transfer of property
Money consideration
CAN kn out of SGA
If:
Consumer product
(ie. Personal family or
household use)
Retail seller
CANNOT kn out of
CPA
SOG CPA
71. QUESTIONS TO ASK TO DETERMINE WHICH
ACT:
1) Is there a sale for money?
2) Is it for goods or services?
3) Is it for commercial or domestic use?
Editor's Notes
For example, it is an unfair practice for a supplier to:
represent that goods or services are of a particular standard, quality, grade, style, model, origin or method of manufacture if they are not;
represent that goods or services are available or are available for a particular reason, price, quantity, or at a particular time if the supplier knows or can reasonably be expected to know it is not so, unless the representation clearly states any limits;
charge a price for goods or services that is substantially higher than an estimate provided to the consumer, except where the consumer has expressly agreed to the higher price in advance;
take advantage of a consumer by including in a consumer agreement terms or conditions that are harsh, oppressive or excessively one-sided; or
take advantage of a consumer by exerting undue pressure or undue influence on the consumer to enter into a transaction involving goods or services.
