The document provides definitions and explanations of key concepts in Malaysia's Sales of Goods Act 1967. It discusses what constitutes goods, the different types of goods, and how contracts of sale are formed. It also covers important implied conditions and warranties in contracts of sale, including title to goods, correspondence with descriptions, quality and fitness, merchantability, and sale by sample. The document explains when property or ownership is transferred from the seller to the buyer and exceptions to the general rule of nemo dat quod non habet (no one can transfer better title than they have). Finally, it discusses the performance of contracts of sale through delivery and acceptance of goods, as well as remedies available to buyers and sellers for breaches of contract.

1. Sales Of Goods Act 1967
Prepared by :
Rasidah binti Kassim
PPD

2. DEFINATION
Goods means every kind of movable
property other than actionable claims
and money; and includes stock and
shares, growing crops, grass and things
attached and forming part of lands
which are agreed to be served before
sale or under the contract of sale.
Section 2.

3. Meaning of Goods
• “...all chattels other than things in action
and money.”
• Physical thing which can be touched
and moved
• Things in action are rights that can only
be enforced by legal action (intellectual
property rights, guarantees, debts), and
are not goods
3

4. Kinds Of Goods:
• Existing goods- Section 6(1) These are the goods
which are in existence and are physically present in
the seller’s possession.
• Specific goods- Section 2(14) – These are the goods
identified and agreed upon at the time the contract is
made.
• Ascertained goods- These are identified after the
formation of the contract.
• Unascertained goods- These are the goods which
are not specifically identified or agreed upon at the
time of the contract of sale.
• Future goods – Section 2(6) Goods which are to be
manufactured or produced or acquired by the seller
after making contract of sale.

5. Contract of Sale
• Sec 4(1) a contract wherein the seller
transfer or agrees to transfer the property
in goods to the buyer for a price.
• Sale occurs when the ownership passes
to the buyer.

6. Agreement to Sell
• Sec 4(3) to sell is a contract under which
the transfer of the property in the goods is
to take place at future time or subject to
some condition thereafter to be fulfilled.
• Sec 4(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 tranfered.

7. Formation of the contract
• Contact must have an offer and buy : 5(1)
• Contact provide immediate delivery/
payment/ both. payment can by
installment : 5(1)
• Price paid for goods is the money
consideration.
• Contract may be writing/ oral or both : 5(2)
• Capacity to contract refer to Contract Act
1950.

8. Terms of the contract
Condition: It is a stipulation essential to main
purpose of the contract, the breach of which gives
right to the repudiate the contract and to claim
damages. 12(2) SOGA 1967
Warranty: It is a stipulation collateral to main
purpose of the contract, the breach of which gives rise
to claim for damages but not the right to reject the
goods and treat contract as repudiated. 12(3) SOGA
1967

9. Differences Between Condition
and Warranties
Condition Warranty
1. A condition is essential to 1. It is only collateral to
the main purpose of the main purpose of contract.
contract.
2. The aggrieved party can
2. The aggrieved party can claim only the damages in
repudiate the contract or case of breach of
claim damages or both in warranty.
case of breach of
3. A breach of warranty
condition.
cannot be treated as
3. A breach of condition breach of condition.
may be treated as breach
of warranty.
9

10. 1. Condition as to title : sec.14(a)
seller has the right to sell.
2. Sale by description :sec.15
goods shall correspond with the
description.
3. Condition as to quality or fitness
:sec16(1)
4. Condition as to merchantability
:sec.16(2)
5. Sale by sample :sec.17
10

11. Implied Warranties
1. Warranty of quiet possession : sec.14(b)
2. Warranty of freedom from encumbrances
sec.14(c)
11

12. CONDITION

13. 1.Sec 14 (a) Right to sell
• Unless circumstances show a different
intention, there is an implied condition
that a seller has a right to sell the goods
• If the seller did not own the goods, the
contract is void
• A seller can enter an agreement to sell
what he does not already own so long
as he owns them at the time of the sale
13

14. Case :
• Rowland v Divall (1923)
• A thief stole a car and sold it to the
defendant. The defendant sold it to the
claimant (a car dealer) who sold it to a
customer.
• The police took the car from the
customer and returned it to the owner.
• The Claimant returned the customer’s
money and sued the defendant. 14

15. …continued
• The claimant was successful.
• The court held that since the defendant
never had the right to sell the car, which
still belonged to the owner, the contract
was void.
• Normally, the looser will be the party who
bought from the thief.
15

16. 2. Correspondence with
Description Sec 15 SOGA
• When goods are sold by description, there
is an implied condition that the goods will
correspond with that description
• Goods may be specific or unascertained
• Specific goods must be the exact same
product described (a particular bicycle)
• Unascertained goods can be any that
match the description (a load of corn)
16

17. Case :
Arcos Ltd v E.A. Ronaasen & Son (1933)
• Seller contracted to sell wooden parts for
making barrels. The goods were
unascertained. 10% did not correspond to
the description (were too large).
• The court held that the contract was void
and the claimant could reject all parts
received.
17

18. 3. Quality and Fitness : Sec
16(1) (a)
• Implies reasonable fitness for buyer’s
purposes
• satisfactory quality means that a
reasonable person would believe the
quality to be acceptable considering the
description (if any), price, and all other
relevant circumstances
18

19. ….. continued
• will not be implied when:
– Defects are specifically pointed out before the
contract was made
– The buyer examines the goods before buying
them and the defect is the type that the buyer
should have noticed
– Case :

20. 4. Merchantability Quality
Sec 16 (1) (b)

21. 5. Sale by Sample :Sec 17 (1)
• If goods are sold by sample,
– The bulk of the goods must correspond with
the sample in quality
– The bulk must be free from hidden defects
that would make the quality unsatisfactory if
the defects would not be discovered after a
reasonable examination of the sample
21

22. Case :
• Godley v Perry (1960)
• A boy bought a toy that was defective and
caused him to loose an eye. He sued the
shopkeeper under Sec. 17 and won.
• The shopkeeper sued the supplier who had
sold the products to him under
• The court held that the defect was not
discoverable by reasonable examination of
the sample
22

23. WARRANTY

24. 1. Enjoy Quiet Possession
Sec 14 (b)
• No person will interfere with buyer’s right
to quiet enjoyment of the good
– Ex. Patent right

25. 2. Goods are Unencumbered
Sec14( C)
• Goods will be sold without encumbrances
– Ex. No mortgage on the house or claim to the
good

26. Privity of Contract
• Contract only binding between contracting
parties. Buyer and seller.
• If third party used he cannot sue the seller
but the manufacturer.

27. Transfer of Property

28. Transfer of Property
• We need to know exactly when ownership
passes from seller to buyer because
– The goods might become lost or damaged
– Either the buyer or seller might become
insolvent (bankrupt) and this affects the other
party’s rights
• Sec 26 when property passes to the buyer
the goods are in buyer’s risk whether the
goods are delivered or not.

29. Transfer of Property
• Ownership of specific goods passes from
buyer to seller:
– At the time the parties agreed it will
– If they do not state when, it can be implied by
conduct
– There are 4 special rules dealing with specific
goods if the parties have not stated when
ownership transfers or it cannot be implied

30. ….continued
• Sec 20: specific goods in a deliverable
state that are sold unconditionally are
transferred upon making the contract
• Sec 21: when the seller must do
something to the specific goods to put
them into a deliverable state, they are
transferred when he does it and notifies
the buyer

31. …continued
• Sec 22: when the seller must weigh,
measure, or test the goods to find the
price, ownership transfers once this is
done and the buyer is notified
• Sec 23(1) : contract for unascertained or
future goods

32. … continued
• : when the goods must be delivered on
approval, sale or return, ownership
transfers when approved, buyer shows he
accepts the good, or keeps goods longer
than a reasonable time

33. Transfer of Title

34. Nemo Dat Quod Non Habet
• Definition : Sec 27; no one can transfer
better title than he has himself.
• Example :
• Case : Lim Chui Lai Vs Zeno Ltd

35. Exception to Nemo Dat Quod Non
Habet
1. Estoppel
• The owner of the goods is by his conduct
precluded from denying the seller’s
authority to sell. Sec 27 SOGA
• Example :

36. 2. Sale by a Mercantile Agent
• Sec 27 SOGA
• An agent may pass good title in selling
goods belong to his principal.
• An agent having a customary course of
business have authority to sell goods.
• Example broker, autioner.

37. 3. Sale by One Joint Owner
• Sale by one of the owner effectively
transfer title to a buyer but must follow sec
28 :
a) one owner has sole possession of the
goods by permission other owner.
b) buyer good faith and don’t know the
seller lack of authority.

38. 4. Sale under a Voidable contract
• Sec 29 seller get a goods from other party
under voidable contract and then sale to
other buyer, the buyer have good title if
the buyer :
a) good faith
b) the buyer don’t know the seller does not
have a title/ ownership.

39. 5. Sale by a Seller in Possession
after sale
• Sec 30 (1) SOGA
• a seller who has parted with title to the
goods but remains possession of the
goods or document of title can pass a
good title to a bona fide buyer.
• Second buyer have a good title, and
original buyer loses. First buyer can sue
the seller.

40. 6. Sale by a Buyer in Possession
• Sec 30 (2) SOGA
• buyer have bought goods obtain
possession of the good and document
from the seller can pass a good title to
innocent buyer (good faith).
• The second buyer have a good title.
• Case : Newton Vs William

41. PERFORMANCE OF THE
CONTRACT
1. DELIVERY
2. ACCEPTANCE

42. 1. DELIVERY
a) Delivery
• Sec 31 :Duty seller deliver goods, duty buyer to accept
goods and pay for them.
• Exception sec 32 :
• Sec 33 Definition of Delivery :voluntary transfer of
possession from one person to another.
• Sec 57 : If seller neglect or not deliver goods buyer can
sue the seller for undeliver.

43. b) Place of Delivery
• Sec 36 (1) : goods are send to the buyer
according to terms in contract.
• Sec 36 (5)
• Sec 40

44. c) Time of Delivery
• Sec 36(2) : if time for deliver the good not
stated fixed so have to send at resonable
time.
• Sec 36 (4) : it is not efficient delivery if the
time is not resonable.

45. d) Delivery of Wrong Quantity
• Sec 37 (1): Qty less than from the contract –
buyer can reject them or accept and have to pay
at contract rate.
• Sec 37 (2) : Qty larger than buyer can :-
a) accept the goods and reject the rest
b) reject all
c) accept all and have to pay at the contract rate
• Sec 37 (3) : Mixed goods buyer can :-
a) accept the goods and reject the rest
b) reject all

46. e) Delivery by Installments
• Sec 38 (1) : Good must be deliver at one
and same time except is not bound to
accept the goods by installment.
• Sec 38(2) : If the contract by installment
the seller is not deliver the goods or buyer
not pay depends to contract either cancel
the contract or claim for compensation
only.

47. • F) Delivery to Carrier or Wharfingers
• Sec 39 (1) : Send the goods to carrier
either named or not for purpose of
transmission and prima facie the risk to
the buyer.
• Sec 39(2) :The seller duty is not only to
ship the goods but also arrange insurance

48. 2. Acceptance
• Sec 42 : buyer accept the good if :-
a) when buyer intimates to the seller his
acceptance
b) when goods deliver to buyer and buyer not
act inconsistent
c) after reasonable time buyer still retains goods
• Sec 41 (1) :buyer must check the goods before
seller deliver if not the buyer not deem to accept.
• Sec 41 (2) : except the seller is bound to give
buyer to check the goods to make sure folwed
the contract.

49. REMEDIES FOR BREACH
OF CONTRACT
1. SELLER REMEDIES
2. BUYER REMEDIES

50. REMEDIES OF THE
SELLER

51. 1. Right of seller to sue the buyer
for breach contract
• Failure of buyer to take delivery
Sec 44
• Failure of buyer to accept goods
Sec 56
• Failure of buyer to pay for goods
Sec 55

52. 2. Right of Unpaid
Seller
• Sec 45 (1): Unpaid seller is:-
a) the whole price is not paid
b) Negotiable instruments is conditional
payment.
• Right of unpaid seller :-
a)Right of Lien
b)Right of Stoppage in Transit
c)Right of Seller to Resale

53. a) Lien
Sec 46 (1) (a)
• Seller can retain the goods until payment
made.
• The right arise if:-
a) good sold without any stipulation of
credit
b)goods sold through credits and term
credit was expired
c)buyer become insolvent

54. b) Right to Stoppage in Transit
Sec 50
• Unpaid seller who has parted with the
possession can stopping goods in transit when
buyer become insolvent.
• Stopping transit can :-
a) seller take the goods from bailee Sec 51 (1)
b) seller give notice to bailee

55. c) Right to Resell
Sec 54 (3)
• Seller cannot end the sale contract for
breach the contract.
• But seller can resell (sec 54(2) if :-
a) goods is perishable
b) seller give notice to buyer for resell
goods and buyer still not pay
c) seller have express right buyer breach
contract.

56. REMEDIES OF THE
BUYER

57. 2. Buyer Remedies
1. Damage for Non Delivery
Sec 57 : Seller not deliver the goods
2. Specific Performance
Sec 58 : Through court order and for special goods
3. Action in Tort
Sec 56 :
4. Breach of Warranty
Sec 59 :

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