Management Accounting
SALE OF GOODS ACT 1908,
‘ROMALPA’ CLAUSES, PASSING OF PROPERTY
CONSUMER GUARANTEES ACT 1993
1. (a) Why is it important in a Sale of Goods (SOG) contract to be precise about the time at which property passes? (Clue: what passes with property?)
* When the property pass, the risk of the property pass to buyer too. Under the S 22 of SOG Act, Unless otherwise agreed, the goods remain at the seller's risk until the property therein is transferred to the buyer; but when the property therein is transferred to the buyer the goods are at the buyer's risk, whether delivery has been made or not. Provided that where delivery has been delayed through the fault of either buyer or seller, the goods are at the risk of the party in fault as regards any loss which might not have occurred but for such fault. So the precise time is important in a Sale of Goods. (From Lecture 4.2 Page 57)
(b) [i] What is the difference between ascertainment and unconditional appropriation to a contract under section 20 Rule 5 of the Sale of Goods Act? [ii] Provide a practical example for the sale of certain goods which clearly explains this distinction. * Rule 1.Where there is an unconditional contract for the sale of specific goods, in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, is postponed. * Rule 2.Where there is a contract for the sale of specific goods, and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property does not pass until such thing is done, and the buyer has notice thereof. * Rule 3.Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, measure, test, or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act
‘ROMALPA’ CLAUSES, PASSING OF PROPERTY
CONSUMER GUARANTEES ACT 1993
1. (a) Why is it important in a Sale of Goods (SOG) contract to be precise about the time at which property passes? (Clue: what passes with property?)
* When the property pass, the risk of the property pass to buyer too. Under the S 22 of SOG Act, Unless otherwise agreed, the goods remain at the seller's risk until the property therein is transferred to the buyer; but when the property therein is transferred to the buyer the goods are at the buyer's risk, whether delivery has been made or not. Provided that where delivery has been delayed through the fault of either buyer or seller, the goods are at the risk of the party in fault as regards any loss which might not have occurred but for such fault. So the precise time is important in a Sale of Goods. (From Lecture 4.2 Page 57)
(b) [i] What is the difference between ascertainment and unconditional appropriation to a contract under section 20 Rule 5 of the Sale of Goods Act? [ii] Provide a practical example for the sale of certain goods which clearly explains this distinction. * Rule 1.Where there is an unconditional contract for the sale of specific goods, in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, is postponed. * Rule 2.Where there is a contract for the sale of specific goods, and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property does not pass until such thing is done, and the buyer has notice thereof. * Rule 3.Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, measure, test, or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act