S. 6 – No implied condition as to the existence of goods.
- There is a warranty that the seller has a right to sell the goods.
- The seller is responsible for defects in the quality of the goods.
- However, there is no implied condition that the goods exist.
S. 6 SOGA 1979 – in a contract relating a sale of specific goods, the contract is void if the
goods have perished at the time when the contract is made without the knowledge of the
seller.
o Such alteration was made pursuant to HL case of Couturier v Hastie (1856) 5 HLC 673.
A cargo of corn deteriorated before the contract of sale was made.
C argued that D was liable for the corn. Held D was not liable.
Reason: the contract was void for mistake.
o Another view states that it was a matter of construction of the contract.
Issue: whether the contract is construed in a way that there is an implied condition
that goods existed?
Possible resolutions:
a. Implied condition precedent that the goods were in existence. Non-fulfilment
of the term releases the parties from the contract.
b. Seller contracted/warranted that the goods were in existence. Non-
fulfilment of the term makes the seller liable for non-delivery (and the buyer
would not be liable for non-acceptance).
i. [Australia case] McRae v Commonwealth Disposals Commission (1951)
84 CLR 377
1. D contracted with C to sell a shipwrecked tanker on a certain reef.
2. Both the tanker and the reef were found to be non-existent.
3. Held D would have been liable for breach of contract unless an
implied condition that the ship was in existence can be established.
4. Held from the construction of the contract, D had made a promise
regarding the existence of the tanker.
c. Buyer contracted to take the risk of the goods having perished. Non-existence
of the subject matter of the contract makes the buyer liable for the price in the
absence of delivery (seller not liable for non-delivery).
General rule
a. An implied condition that in a sale of specific goods, the chattels are in
existence at the time of contract and at the time of performance of the
contract.
b. Circumstances of the case must be considered to determine if the principle
was displaced.
c. [Australia case] Goldsborough, Mort & Co Ltd v Carter (1914) 19 CLR 429
i. D agreed to sell about 4000 sheep pastured on a certain land.
ii. The contract stated that the buyer would take and pay for the actual
number delivered if there were less than the agreed amount of sheep.
iii. 890 acceptable sheep were found. C claimed damages for short delivery.
iv. Held not liable. The principle was displaced due to the circumstances of
the case.
v. The seller did not know the actual amount of sheep and the buyer was
aware of the possibility of shortage.
- S. 6 SOGA – Where there is a contract for the sale of specific goods, and the goods without the
knowledge of the seller have perished at the time when the contract is made, the contract is
void.
- There is a warranty that the seller has a right to sell the goods.
- The seller is responsible for defects in the quality of the goods.
- However, there is no implied condition that the goods exist.
S. 6 SOGA 1979 – in a contract relating a sale of specific goods, the contract is void if the
goods have perished at the time when the contract is made without the knowledge of the
seller.
o Such alteration was made pursuant to HL case of Couturier v Hastie (1856) 5 HLC 673.
A cargo of corn deteriorated before the contract of sale was made.
C argued that D was liable for the corn. Held D was not liable.
Reason: the contract was void for mistake.
o Another view states that it was a matter of construction of the contract.
Issue: whether the contract is construed in a way that there is an implied condition
that goods existed?
Possible resolutions:
a. Implied condition precedent that the goods were in existence. Non-fulfilment
of the term releases the parties from the contract.
b. Seller contracted/warranted that the goods were in existence. Non-
fulfilment of the term makes the seller liable for non-delivery (and the buyer
would not be liable for non-acceptance).
i. [Australia case] McRae v Commonwealth Disposals Commission (1951)
84 CLR 377
1. D contracted with C to sell a shipwrecked tanker on a certain reef.
2. Both the tanker and the reef were found to be non-existent.
3. Held D would have been liable for breach of contract unless an
implied condition that the ship was in existence can be established.
4. Held from the construction of the contract, D had made a promise
regarding the existence of the tanker.
c. Buyer contracted to take the risk of the goods having perished. Non-existence
of the subject matter of the contract makes the buyer liable for the price in the
absence of delivery (seller not liable for non-delivery).
General rule
a. An implied condition that in a sale of specific goods, the chattels are in
existence at the time of contract and at the time of performance of the
contract.
b. Circumstances of the case must be considered to determine if the principle
was displaced.
c. [Australia case] Goldsborough, Mort & Co Ltd v Carter (1914) 19 CLR 429
i. D agreed to sell about 4000 sheep pastured on a certain land.
ii. The contract stated that the buyer would take and pay for the actual
number delivered if there were less than the agreed amount of sheep.
iii. 890 acceptable sheep were found. C claimed damages for short delivery.
iv. Held not liable. The principle was displaced due to the circumstances of
the case.
v. The seller did not know the actual amount of sheep and the buyer was
aware of the possibility of shortage.
- S. 6 SOGA – Where there is a contract for the sale of specific goods, and the goods without the
knowledge of the seller have perished at the time when the contract is made, the contract is
void.
