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THE SUBJECT MATTER OF A CONTRACT OF SALE OF GOODS:


Copyrights, patents, trade marks are not personal chattels and are thus not goods that can be sold. 

Different Types of Goods
2. (1) 3 types of goods

1.            Existing Goods;
2.            Future Goods; &
3.            A spes.

Existing Goods


Existing Goods may be either owned by or in possession of the seller.  Existing Goods may also be specific or unascertained.  The distinction between specific goods and unascertained goods is crucial.  The key thing being that in a sale of goods contract, the purpose is to transfer or pass the property in the goods from the seller to the buyer and property will not pass to the buyer from the seller subject to …
Specific goods are goods, which have been identified and set aside for the purposes of contract of sale.  That particular contract, property passes instantly in a sale of specific goods.

Section 18.   Property in unascertained goods.

18. Where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained.”

Section 19 property in specific goods or ascertained goods passes when intended to pass.

19. (1) Where there is a contract for the sale of specific or ascertained goods, the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.

(2) For the purpose of ascertaining the intention of the parties, regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case.

2.         FUTURE GOODS:

Future goods include goods not yet in existence e.g. crops to be grown, industrial products to be processed or manufactured.  Future goods also include goods that physically exist but they are not yet acquired by the seller. Future goods cannot be specific goods within the Act within Cap 31 but note that under certain circumstances future goods may be so sufficiently identified that courts have sometimes said that future goods can be specifically identified.

Future goods meaning that the goods do exist but the seller does not yet have property in those goods and so he cannot transfer them.
                                               

 

Howell V. Coupland (1876) 1 Q.B.D. 258


The case was decided on the basis of future goods.  It was held that a sale of two hundred tonnes of potatoes to be grown on a particular piece of land was a specific sale of goods.  Although the potatoes were not grown the contract was held to have existed.  The piece of land that was supposed to grow the potatoes disappeared under water but it had been so well defined that a contract was held to have existed.  The contract was frustrated.  The doctrine of frustration cannot apply in any case where the goods are not specific.   Specific goods are those that have been set aside and agreed upon by the parties.  The potatoes were not even grown yet the court used the doctrine of frustration.  The goods in this case were future goods and you cannot have frustration in goods that did not exist in the first place.

Could this case have been decided on the basis of A spes?

A spes


This is a sale of a chance, which is different from future goods mainly through the construction of the terms used by the courts.  It arises where a potential buyer agrees to buy future goods from a particular source and agrees to take the risk of the goods never coming into existence e.g. I agree to buy whatever crop is produced from plot ‘A’ of your land in Kitale Town at a thousand shillings per bag.  The buyer has offered to buy whatever crop is grown on that land and is taking a chance because the crop might never get grown.  It looks like a gamble and in a gamble one party stands to lose and one party stands to gain.   The buyer takes the risk and undertakes to pay the price of the non-existent goods.  The seller undertakes to produce and deliver the crop come rain come shine.  So there is no winner and no loser.  If the goods do not get produced on that piece of land, the seller is bound to deliver and he might have to go out and buy the goods elsewhere because he must deliver.  The buyer by undertaking to pay 1000 still has to pay 1000 even if the crop price was to drop to 200 per bag because he has undertaken to do the same.

It is a risk by both parties, the seller undertaking the risk that the goods might never be produced and the buyer taking the risk that the price might depreciate in the meantime.

There are 3 categories of goods
Existing goods – goods that actually exist when the contract is entered into, future goods - goods yet to be produced or grown and don’t necessarily exist and are not in the possession of the seller and A spes-  here each party chances or gambles

 
 
 

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