5.6 Remedies for Breach of Contract

5.5.5 Sale by a Seller in Possession after Sale

 Under Section 30(1) SOGA 1957, if a seller resells to a second buyer the goods sold by him previously to the first buyer, the second buyer will obtain good title to the goods if he has received the goods in good faith and without notice of the previous sale.  The first buyer will lose the title but he/she can take legal action against the seller who would be liable to him.  E.g.: Azira Furniture sold a set of sofa to Sasha and promises to deliver the sofa the next day. Before the delivery, Azira Furniture sold the same set of sofa to Vishanti, who buys the sofa in good faith and without the notice of the prior sale. Vishanti gets a good title to the sofa.

5.5.6 Sale by a Buyer in Possession

 Under Section 30(2) SOGA 1957, if a buyer, having bought or agreed to buy goods, obtains possession of the goods or the documents of title with the consent of the seller, he can pass a good title to a subsequent buyer acting in good faith, even if under the first transaction, he has not obtained a good title.

Newtons of Wimbley Ltd v Williams [1965]

Facts: The plaintiffs sold a car to A who paid by cheque. Although he was given possession, it was agreed that the property would not pass until the cheque was honoured. The cheque was dishonoured but A had resold the car to B who bought it without knowledge of the position. B resold it to defendant. The plaintiffs tried to recover the car from him.

Held: A, the original buyer, was in possession with the consent of the owner. Hence, he could pass a good title to B, who in turn transferred it the defendant. The defendant was, therefore, entitled to keep the car.

5.6 REMEDIES FOR BREACH OF CONTRACT

 Chapters V and VI of the Sale of Goods Act 1957 deal with the following situation: o Rights to sue unpaid seller against the goods; o Rights to sue for breach of contract; o Rights of the buyer to sue for damages for non-delivery; o Rights of the buyer to commence an action for specific performance; o Remedies available to the buyer for breach of warranty; and o Buyer’s action in tort.

5.6.1 Rights of The Unpaid Seller Against the Goods

 Section 45(1) SOGA 1957, states that unpaid seller is a seller whom: o The whole of the price has not been paid or tendered or o Where a bill of exchange or other negotiable instruments has been received as conditional payment, and the condition on which it was received has not been fulfilled due to the instrument being dishonoured or for some other reason.

Lien

 It is a right of seller to keep possession of the goods until the buyer settle the payment.  If the seller has made part delivery of the goods, he may exercise his right of lien on the remainder unless the part delivery has been made under such circumstances which indicate that the seller waived the lien under Section 48 of SOGA 1957.  The unpaid seller loses his lien in the following circumstances by virtue of

Section 49(1) SOGA 1957: o When he delivers the goods to a carrier or other bailee in order that the goods to be transmitted to the buyer without reserving the right of disposal of the goods; o The buyer or his agent lawfully obtains possession of the goods; o When the seller waives his lien.

Stoppage in transit

 It is a right of seller of stopping the goods in transit in the case of buyer’s insolvency.  When the seller gives notice of stoppage in transit to the carrier or the bailee who is in possession of the goods, the carrier or bailee shall redeliver the goods to or according to the directions of the seller at the seller’s expense.

Resale

 Seller has authority to resale the goods with regards with Section 54(2) SOGA 1957: o The goods are of a perishable nature; or o He gives notice to the buyer of his intention to resell and buyer does not within reasonable time pay the price; or o The seller expressly reserves a right of resale in case the buyer should make default and the buyer makes such default.

5.6.2 Rights of The Seller to Sue for Breach of Contract

 The seller can sue for the price of the goods under Section 55(2) SOGA 1957 where:

o The property in the goods has passes to the buyer and the buyer wrongfully neglects or refuses to pay for the goods; and o Where it is contracted that the price be paid on a certain date irrespective of delivery and the buyer wrongfully neglects or refuses to pay such price even though the property in the goods has not passed and the goods have not been appropriated to the contract.

5.6.3 Rights of Buyer in a Situation Where the Seller Breaches the Contract

Rights of buyer to sue for non-delivery

 Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may sue the seller for damages for non-delivery under Section 57 SOGA 1957.

Rights of buyer to bring action for specific performance

 The buyer may bring an action for the specific performance of the contract by the delivery of specific or ascertained goods.  But this remedy is only available at the discretion of the courts. Usually specific performance is ordered by the court only when goods are of special or peculiar kind.

Remedies available to buyer for breach

 Where the seller commits a breach of warranty or where the buyer elects or is compelled to treat a breach of condition by the seller as a breach of warranty, the buyer cannot reject the goods, but may; o Set up against the seller the breach of warranty in diminution or extinction of the price; or o Sue the seller for damages for breach of warranty. Even if the buyer has set up a breach of warranty in order to lower the price, he can still sue the seller for damages due to the same breach of warranty.

Buyer’s action in tort

 The buyer can sue the seller in tort by bringing an action in detinue and conversion.  Detinue is the wrongful detention of chattels belonging to the plaintiff after their return has been demanded, whereas conversion is the dealing with goods in a manner inconsistent with the ownership of the buyer.