Sale of Goods: Formation, Terms, and Remedies
Core concepts
Sale-of-goods questions turn on a handful of building blocks: the distinction between a sale (title passes for a price) and an agreement to sell (title passes later); the classification of goods as existing, future, specific, or unascertained; and the moment property and risk pass. Risk generally follows property unless the parties agree otherwise or the buyer delays taking delivery. Implied terms matter enormously: title, description, fitness for purpose, and merchantable/satisfactory quality. These are conditions, so breach can entitle the buyer to reject and terminate, not merely to damages. Rules on acceptance (intimation, use inconsistent with ownership, lapse of reasonable time) can extinguish the right to reject. Unpaid sellers have real remedies (lien, stoppage in transit, resale) and personal remedies (price action, damages).
Traps
- Confusing the right to reject with the right to damages; acceptance kills the former, not the latter.
- Assuming risk always follows delivery. It follows property, subject to contrary agreement.
- Treating implied quality terms as warranties. In consumer and many commercial settings they are conditions.
- Forgetting that nemo dat protects a seller with voidable title who resells before avoidance, and that factors/mercantile agents can pass better title than they hold.
- Missing exclusion clauses that may be void against consumers or unreasonable between businesses.
Worked rule of thumb
Ask four questions in order: (1) What kind of goods and contract? (2) Which express and implied terms apply, and are any excluded? (3) Has property and risk passed, and has the buyer accepted? (4) Which remedy survives acceptance? If the buyer has accepted, damages are usually the only route; if not, rejection plus refund is available.