SALE OF GOODS
Possession, Ownership & Risk
•	Ownership and possession are two separate concepts
•	Generally speaking, the owner of goods bears the risk of those goods, that is, if they are damaged or destroyed the owner bears the loss
•	In common transactions for the sale of goods the item is exchanged for money at the same time so the passing of possession, ownership, and risk is instantaneous
•	The Sale of Goods Act provides us with rules for determining when risk in goods passes from the seller to the buyer in circumstances where the intention of the parties cannot be determined
Sale of Goods Act
•	Governs the transfer in title of property between sellers and buyers
•	The Sale of Goods Acts applies when there is:
o	A contract for the sale of goods, not land or labour (even if the labour includes the supply of materials);
o	Money consideration (at least in part); and
o	A contract for the transfer or agreement to transfer property in the goods to the buyer 
Rules for Passing of Risk
•	Rule 1
Where there is an unconditional contract for the sale of specific goods that are in a deliverable state, property passes at the time of making of the contract:
see Bodilingo Pty Ltd v Webb Projects Pty Ltd
•	Rule 2
If a contract is for the sale of specific goods to which the seller has to do something to put them into a deliverable state, title does not pass until such thing is done and the buyer has notice of it
•	Rule 3
Where there is a contract for the sale of specific goods in a deliverable state, but the seller has to weigh, measure, test or do something to determine the price, title does not pass until the seller does this and the buyer has notice of it
•	Rule 4
Where goods are delivered to the buyer on approval, title does not pass until the buyer signifies their approval or the time agreed for rejection passes, where no time is agreed, a reasonable period of time passes
•	Rule 5
Where there is a sale of unascertained or future goods by description, title does not pass until the goods are unconditionally appropriated to the contract
•	Rule terminology
‘Specific goods’ are goods identified and agreed upon at the time the contract of sale is made
‘Unascertained goods’ are goods sold under a description where no particular goods were identified and agreed upon at the time when the contract was made
‘Future goods’ are goods to be manufactured or acquired by the seller after the making of the contract of sale
‘Deliverable state’ means a state that would require the buyer to take possession of the goods
‘Unconditional contract’ is a contract not subject to a condition precedent
•	Romalpa Clauses
o	The Sale of Goods Act states that ownership in goods passes when the parties intend it to pass
o	Where goods are sold on credit terms the seller can retain ownership in the goods until fully paid by including a Romapla clause in the contract
Implied Terms
•	Goods sold must come with title, quiet possession, and be free from encumbrance (Rowland v Divall)
•	Goods sold must correspond to description and sample (Varley v Whipp)
•	Goods sold must be of merchantable quality and be fit for their purpose (Australian Knitting Mills Ltd v Grant)
Buyer Remedies
•	Damages for non-delivery
•	Specific performance
•	Breach of warranty of quality
•	Rescission
Seller Remedies
•	Damages for non-payment
•	Sue for price
•	Stoppage in transit
•	Lien
•	Resale