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115

3â Rules governing the passage of property

 

 

 

of the recognised statutory nemo dat exceptions, namely, estoppel; mercantile

 

agent; seller in possession; buyer in possession; Hire-Purchase Act 1964, s.27;

 

voidable title; sale under court order; and market overt.

 

Section 6 looks at the concurrent duties of delivery and payment with the

 

duty being on the seller to deliver the goods and a duty on the buyer to pay

 

the agreed contract price for them. The section looks particularly at three issues

 

relating to delivery and payment, namely, time and place of delivery; delivery of

 

the wrong quantity; and delivery by instalments.

 

Section 7 considers the remedies that are available to both seller and buyer

 

when delivery and payment has been successfully achieved. Thus, it deals with

 

both monetary remedies and remedies that the seller may have against the

 

goods themselves. The section includes seller’s remedies, including real remed-

 

ies, and personal remedies, and buyer’s remedies.

2â Background to the passage of property and risk

In both commercial sales and consumer sales, the transfer of the property to goods is of concern to both seller and buyer, even if only when things go wrong. In a time of recession and economic uncertainty, such as the current recession, when small businesses face difficult times and even high street stores may succumb to financial troubles,1 the ownership of goods becomes of increasing importance. When a seller goes into liquidation or a buyer becomes bankrupt, the transfer of property will identify who has ownership of the goods, and thus who must bear the loss. This is so irrespective of whether payment has been made, as payment is not linked to transfer of property but rather to delivery. Prima facie, the loss will generally fall on the owner. This is due to the rebuttable presumption in section 20 that risk passes with title irrespective of whether delivery has occurred, although this does not necessarily follow, especially in consumer sales where statute provides that the risk remains with the seller until delivery.2 This provision has been enhanced by the passage of the Consumer Rights Directive,3 Article 20 of which provides that the risk in the goods will pass to a consumer when he or a third party (other than a carrier and indicated by the consumer) has acquired material possession of the goods.

3â Rules governing the passage of property

The rules governing transfer of property are found in sections 16–19 of the Sale of Goods Act 1979 and depend on whether the goods are specific goods or unascertained, specific goods being defined as those ‘identified and agreed on

1For example, HMV, Focus, etc.

2Sale of Goods Act 1979, s.20(4).

3Directive 2011/83/EU of the European Parliament and of the Council on consumer rights.

116

 

The passage of title, delivery and payment

 

 

 

 

 

at the time a contract of sale is made’.4 Hence, where the precise goods cannot be

 

identified at the time of the contract, as in Kursell v. Timber Operators5 and Re

 

 

Wait,6 the goods cannot be classed as specific. As section 61 of the 1979 Act only

 

defines specific goods, it follows that all other goods are necessarily unascer-

 

tained at the relevant time, becoming ‘ascertained’ in the course of contractual

 

performance as the identity of the goods to be provided under the contract is

 

finalised. Unascertained goods, when identified, are reclassified as ‘ascertained’

 

goods and do not become ‘specific’ goods within the meaning of the 1979 Act.

 

 

(a)â Sale of Goods Act 1979, section 17

 

 

All transfers of property start with section 17 of the 1979 Act, which stipulates

 

 

that the passage of property in specific and ascertained goods will pass when

 

 

the contracting parties intend it to pass, their intention being deduced from the

 

 

terms of the contract, the conduct of the parties and the circumstances of the

 

 

case. In short, it is a question of fact. It may be that the parties intend the property

 

 

to pass straight away, on some specified date, or on the happening of some spe-

 

 

cific event. This legitimises the use of devices such as reservation of title clauses,

 

 

as governed by section 19 of the 1979 Act, which are themselves an example of

 

 

the contracting parties agreeing the time or event at which property is to pass.

 

 

Section 17 is a prime example of the freedom enjoyed by contracting parties to

 

 

expressly agree the terms of their contract without undue interference from stat-

 

 

ute. This reinforces the essential nature of the 1979 Act as being a statutory frame-

 

 

work which facilitates and, at times, governs some aspects of contracts of sale, but

 

 

which is not a straight-jacket controlling every aspect of a contract at the expense

 

 

of the contractual freedom of the parties. In practice, however, contracts are often

 

 

silent on the issue of the passage of title to the goods, the seller being more con-

 

 

cerned with payment and the buyer with delivery, although stipulating these may

 

 

be taken as inferring the intention of the parties that property in the goods will

 

 

pass at the same time.7

 

 

 

Given the primacy of section 17, it follows that the remaining provisions

 

 

governing the passage of property are secondary in nature and fill any vacuum

 

 

left by the contracting parties not specifically agreeing the time of transfer.8

 

4

Sale of Goods Act 1979, s.61.

 

5

[1927] 1 KB 298. The contract involved the sale of timber to be harvested over a period of fifteen

 

 

 

years. The timber was to be measured at the time of felling to identify which timber fell within the

 

 

 

terms of the contract. Thus, the timber covered by the contract could not be identified at the time

 

 

 

that the contract was made, only at various times over the next fifteen years. The timber was not

 

 

 

specific goods.

 

6

[1927] 1 Ch. 606. This concerned the sale of 500 tonnes of wheat from a bulk cargo of 1,000

 

 

 

tonnes. They were unascertained at the time of the contract but would become ascertained when

 

 

 

separated from the remainder.

 

7

Ward v. Bignall [1967] 1 QB 534.

 

8

A similar approach is to be found in ss.14–15 of the Supply of Goods and Services Act 1982

 

 

 

dealing with the time of performance in contracts for the provision of services and the

 

 

 

consideration due for such contracts. In both sections, the provisions are only applicable where

117

3â Rules governing the passage of property

 

 

 

This is reinforced by the opening words of section 18 of the 1979 Act, which

 

confirm that the rules contained therein apply ‘unless a different intention

 

appears’, a clear reference to the primacy of any contractual agreement by the

 

parties.

 

 

Q1 Consider the importance of section 17 in reflecting the freedom of con-

 

tracting partiesÂ

to agree the terms of any contract that they may conclude.

(b)â Sale of Goods Act 1979, section 18 rules

The section 18 rules divide somewhat naturally into those governing specific goods and those applicable to unascertained goods, specific goods being governed by section 18 rules 1–4 and unascertained goods by section 18 rule 5 with the issue of unidentified shares in a bulk being dealt with separately in section 20A of the 1979 Act. The provisions regarding specific goods are relatively straight-forward with the main issues arising in respect of unascertained goods.

Rules 1, 2 and 3, all of which address the passage of property in specific goods, revolve around the concept of the goods being in a ‘deliverable state’. The meaning of this term is defined in section 65(5) of the 1979 Act as being when the goods ‘are in such a state that the buyer would under the terms of the contract be bound to take delivery of them’. It follows that if the buyer would not be bound to take delivery, it cannot be said that the goods are in a deliverable state. However, when the goods are available, comply with the terms of the contract and the seller is in a position to pass the property in them to the buyer, such that, under the terms of the contract, the buyer is obliged to take delivery of them, they are in a ‘deliverable state’ within the meaning of the 1979 Act. Naturally, if something remains to be done to the goods by the seller before delivery and passage of property in them can take place, the goods are not in a ‘deliverable state’ and the property in them cannot pass until that thing has been done.9

(i)â Section 18 rule 1

Section 18 rule 1 stipulates that when specific goods under an unconditional contract are in a deliverable state, the property in them will pass at the time that the contract is made, irrespective of whether the time for delivery or payment or both are postponed. This requires an understanding of the term ‘unconditional contract’ in this context. Theoretically, an unconditional contract could mean one of two things: either that the contract does not contain any conditions, or that it has no preconditions that restrict when it comes into effect. The

there is a contractual vacuum because the parties have not expressly agreed the term, it will not be resolved in a manner laid out in the contract and there is no previous course of dealings between the parties.

9Rugg v. Minett (1809) 11 East 210, in which barrels of turpentine were to be topped up by the seller prior to delivery. The goods were destroyed before the task was completed.

118 The passage of title, delivery and payment

first of these options is not sustainable as all contracts will have some terms that are so fundamental as to render them contractual conditions. Indeed, all contracts for the sale of goods will necessarily contain conditions, even if only the implied conditions under sections 12–15 of the 1979 Act. Therefore, an ‘unconditional contract’ must mean a contract the performance of which is not limited by some precondition, such as the need for the seller to acquire the goods from a third party, before contractual performance can begin. It follows that this would include agreements to sell as defined in section 2(5) of the 1979 Act. Equally, a term specifying that the property in the goods will not pass until payment has been made would be a conditional contract, and hence not subject to section 18 rule 1. In practice, such a contract would be subject to section 19, which governs reservation of title clauses.

It should be noted that if the contract is unconditional and the goods are in a deliverable state, the property in them will pass under rule 1 irrespective of whether the time of delivery or payment, or both, is postponed.10 Thus, property in the goods can pass to a buyer while the goods are still in the possession of the seller awaiting collection or delivery. Equally, property will pass despite the fact that payment is to be delayed by, for example, the sending of an account for settlement, such as routinely occurs in business-to-business contracts where the goods are provided on normal trade terms such as ‘payment within 30 days’.

(ii)â Section 18 rule 2

Section 18 rule 2 provides that when the seller needs to do something to put the goods into a deliverable state, the property in them will not pass to the buyer until that thing has been done and the buyer has been notified that it has been done. Underwood v. Burgh Castle Brick & Cement Syndicate11 provides a good example of this concept in practice. The sellers contracted to sell a 30-ton condensing machine which, at the time of sale, was bolted to the floor. The contract involved the delivery of the machine, ‘f.o.r.’ (free on rail), which required the seller to arrange for its removal from its present position and for its safe loading onto a train. The Court of Appeal held that property in the goods could not pass under rule 1 as the goods were not in a deliverable state, as they needed both to be unbolted and removed from their present location and, further, to be delivered and loaded onto the train. Consequently, the passage of property would be governed by rule 2 instead.

Rule 2 requires not only that the goods be put into a deliverable state, but also that the buyer has notice that it has been done. Only then can the property in the goods pass. This raises the question whether the notice required is actual or constructive, to which there is no clear answer. The section does not explicitly require the seller to inform the buyer, merely requiring that the buyer has

10Article 18(1) of the Consumer Rights Directive, above n. 3, will require delivery in consumer contracts to take place within thirty days of the contract.

11[1922] 1 KB 343.

119

3â Rules governing the passage of property

 

 

 

had notice. This suggests that the buyer could have been informed by someone

 

other than the seller.

 

Q2 Consider the relationship and essential differences between section 18

 

rules 1 and 2.

 

(iii)â Section 18 rule 3

 

Section 18 rule 3 is likewise concerned with the actions of the seller, providing

 

that where there is the sale of specific goods in a deliverable state but the seller is

 

bound to weigh, measure, test or do some other thing for the purpose of ascer-

 

taining the price, then the property cannot pass until that thing has been done

 

and the buyer has notice of it. Rule 3 is little used, being very precise in its word-

 

ing. If anyone other than the seller is required to do the weighing, etc.,12 rule 3

 

will not apply, with property passing under rule 1 or rule 2 as appropriate.

 

(iv)â Section 18 rule 4

 

Section 18 rule 4 does not expressly refer to specific goods in the way that rules

 

1–3 do but is concerned with the passage of property where the goods are pro-

 

vided to the buyer on a sale or return basis. This arguably stretches the use of

 

the term ‘buyer’ as, clearly, if the person receives the goods on a sale or return

 

basis but does not buy them, he can hardly be termed the ‘buyer’.13 Further, it

 

could be argued that sale or return is not a contract of sale at all but is really

 

an ‘agreement to sell’ subject to a condition that the ‘buyer’ decides to buy.14

 

However, the rule is more concerned with how the property in the goods might

 

pass rather than with semantics. Property can pass either positively through

 

the buyer accepting the goods or doing an act consistent with adopting them,

 

or negatively by allowing the expiration of the specified return period or, alter-

 

natively, a reasonable period without rejecting the goods. Actions that would

 

be deemed to adopt the transactions would include selling them or otherwise

 

using or parting with them in a way that would preclude giving them back to

 

the seller. Thus, giving them away as a gift would suggest adoption, as would

 

destroying the character of the goods by using them as a component in a new

 

product. By contrast, the situation is less clear where the buyer provides them

 

to a sub-buyer also on a sale or return basis. It may well depend on whether the

 

prescribed periods in each contract are such that the buyer could reclaim the

 

goods from the sub-buyer in sufficient time to return them to the seller within

 

the relevant period.15 The ability to hand them back at the end of the return

 

12

See Nanka-Bruce v. Commonwealth Trust Ltd [1926] AC 77, in which the buyer’s sub-buyer was

 

 

to weigh the goods. The Privy Council held that s.18 r.3 did not apply.

 

13

As a result of this, it is questionable whether a person in possession of goods under a sale or

 

 

return contract could pass good title to an innocent third party under Sale of Goods Act 1979,

 

 

s.25, as he is not truly a person who has ‘bought or agreed to buy the goods’.

 

14

See P.S. Atiyah, J.N. Adams and H. MacQueen, The Sale of Goods (11th edn, Pearson Education

 

 

Ltd, Harlow, 2005) ch. 19, 329.

 

15

See P. Dobson and R. Stokes, Commercial Law (7th edn, Sweet & Maxwell, London,2008).

120 The passage of title, delivery and payment

period is crucial. A provision that the property is not to pass until the goods have been paid for, as in Weiner v. Gill,16 would, of course, constitute ‘a different intention’ on behalf of the parties, lifting the transaction out of section 18 and potentially placing it under the remit of section 19 on reservation of title.

Q3 Analyse the various ways in which property may pass under section 18 rule 4.

(v)â Section 18 rule 5: unascertained goods

The passage of property to unascertained goods raises particular issues. As a general rule, property cannot pass until the goods have been ascertained17 although there is a statutory exception in respect of undivided shares in goods forming part of a bulk18 introduced by section 3 of the Sale of Goods (Amendment) Act 1995. As with the transfer of specific goods, the intention of the contracting parties is paramount, that being deduced from the contractual terms, the conduct of the parties and other circumstances. In the absence of any express intention, section 18 rule 5 dictates the passage of property and thereby the allocation of risk.

Rule 5 provides both for the situation of unascertained goods in a deliverable state and, since 1995, for unascertained goods forming part of a bulk. The latter provision is a significant addition, providing help to international trade where goods may be transported for a period of weeks in a ship’s hold with sellers and buyers wanting to deal with the goods while they are in transit. The net effect is that rule 5 effectively deals with two different yet related situations.

Rule 5(1) provides that when unascertained goods are in a deliverable state and are unconditionally appropriated to the contract, the property in them will pass. This unconditional appropriation may be by the seller with the assent of the buyer or vice versa, with the assent being either express or implied and occurring either before or after appropriation. What matters is that the goods have been irretrievably allocated to the contract with the seller not being able to change his mind and use different goods to fulfil the contract. Thus, the seller putting goods labelled with the name of the buyer to one side and sending a delivery note identifying the particular goods and entitling the buyer to immediate possession would be unconditional appropriation,19 as would a customer dispensing petrol into his car, the latter being an example of unconditional appropriation of the goods by the buyer with the implied assent of the seller.

Goods may also be unconditionally appropriated by exhaustion when the seller has dispatched goods for more than one buyer by a carrier who is responsible for allocating the goods as each delivery is made. When the last but one

16 [1906] 2 KB 574.â 17â Sale of Goods Act 1979, s.16.â 18â Ibid. s.20A.

19Hendy Lennox (Industrial Engines) Ltd v. Grahame Puttick Ltd [1984] 2 All ER 152, but contrast Carlos Federspiel & Co. SA v. Charles Twigg & Co. Ltd [1957] 1 Lloyd’s Rep. 240, in which packing up the goods and putting labels on them was not sufficient to constitute unconditional appropriation as the seller could have substituted other goods if he had so chosen.

121

3â Rules governing the passage of property

 

 

 

delivery is made such that the only goods that remain with the carrier are

 

those intended for the buyer, the goods are unconditionally appropriated at

 

that point.20 Section18 rule 5(3) reinforces the rule regarding appropriation by

 

exhaustion. It provides that, where there is a contract for the sale of a specified

 

quantity of unascertained goods in a deliverable state forming part of a bulk

 

identified by contract or by subsequent agreement between the parties, then

 

property will pass to the buyer if two conditions are satisfied. These are, first,

 

that the buyer is the only buyer to whom goods are due out of the bulk and, sec-

 

ondly, that the quantity of goods remaining is equal to or less than the quantity

 

of goods due to the buyer. Further, where a single buyer has several contracts

 

for goods to be drawn from an identifiable bulk, the property will pass when

 

the bulk is reduced to, or to less than, the aggregate of goods due to the buyer

 

and he is the only buyer remaining.21 Note that the goods must not merely be

 

identifiable but must also be in a deliverable state, as per the previous discus-

 

sion above in respect of other rules.

 

Given the immense rise in the use of the Internet as a trading forum for both

 

businesses and consumers, it is of considerable importance to analyse the pas-

 

sage of property in this situation. Essentially, when goods are bought on the

 

Internet or by some other form of distance selling, the seller unconditionally

 

appropriates the goods with the implied assent of the buyer when the seller posts

 

them. Alternatively, delivering the goods to a carrier, or other bailee or custodier,

 

to transport to the buyer without the seller reserving a right of disposal will cause

 

unconditional appropriation resulting in the passage of property in the goods,22

 

leaving the goods at the risk of the buyer during transit. However, the dichot-

 

omy between consumer buyers and non-consumer buyers, apparent in other

 

areas of the sale of goods,23 raises its head once again. Section 20(4) of the Sale

 

of Goods Act 1979 provides that, in consumer contracts, goods remain at the

 

risk of the seller until delivery to the consumer occurs. This will be reinforced

 

by the Consumer Rights Directive, which seeks to protect consumer buyers by

 

stipulating that the risk in goods will only pass where the consumer or a third

 

party other than the carrier and indicated by the consumer has acquired mater-

 

ial possession of the goods.24 Thus, when goods are purchased via the Internet,

 

property may pass to both non-consumer buyers and consumer buyers when

 

the seller unconditionally appropriates the goods by dispatching them, however,

 

while the risk in them will pass to the non-consumer buyer with title, it will not

 

pass to the consumer buyer until material possession occurs.

 

Q4 Analyse the scope of the term ‘unconditional appropriation’ in relation to

 

the passageÂ

of property in unascertained goods.

20Healy v. Howlett & Sons [1917] 1 KB 337.

21Sale of Goods Act 1979, s.18 r.5(4).

22

Ibid. s.18 r.5(2).â 23â For example, remedies under ibid. s.15A.

24

Consumer Rights Directive, above n. 3, Art. 20.

122

The passage of title, delivery and payment

 

 

(c)â Sale of Goods Act 1979, section 19: reservation of title clauses

Reservation of title clauses involve the contracting parties agreeing the time when the property in the goods is to pass, typically when the buyer pays for the goods and, as such, conforms to the section 17 stipulation that the property will transfer when the parties so intend. Consequently, the section 18 rules will not apply in the presence of a reservation of title clause. Reservation of title clauses blur the divide between specific goods and ascertained goods, applying, as they do, to contracts for both. Thus, section 19(1) governs both specific goods, i.e., goods identified at the time that the contract is made, and ascertained goods, i.e., those goods not identified at the time that the contract is made but which have subsequently been appropriated to the contract. Naturally, a reservation of title clause cannot attach to unascertained goods because of the need to identify the goods that are subject to the clause.

It is possible for the seller to reserve the right of disposal of the goods until certain conditions are satisfied notwithstanding the delivery of the goods to the buyer or a carrier or other bailee or custodian of the goods for transmission to the buyer.25 Further, when goods are shipped, the seller is presumed to have reserved the right of disposal if the bill of lading renders the goods deliverable to the order of the seller or those of his agent.26 Equally, where the seller has drawn on the buyer for payment and the seller transmits the bill of lading and the bill of exchange to the buyer, property will not pass if the latter fails to pay and has wrongfully retained the bill of lading.27

Reservation of title clauses more usually occur in commercial contracts rather than consumer ones, and it may be that in difficult economic times such as the current recession, their use becomes even more attractive as a way for sellers to protect their position against the inherent risks of a buyer proving insolvent. There are, however, some restrictions on their use in that such clauses are largely restricted to situations in which the buyer is able to return the goods to the seller in their original state, and cannot operate once the goods have lost their identity by being subsumed into another product.28

The leading decision on reservation of title clauses is the Romalpa29 case in which the Court of Appeal recognised the ability of a seller to use a reservation clause both to retain the property rights in goods and, where the clause imposes on the buyer a fiduciary relationship with the seller, to have a claim over the proceeds of sale of any goods by the buyer. This is particularly pertinent where both buyer and seller expect that the buyer will resell the goods to a third party. The later decision in Armour v. Thyssen Edelstahlwerke AG30 extended the scope

25

Sale of Goods Act 1979, s.19(1).

26

Ibid. s.19(2).â 27â Ibid. s.19(3)

28For example, Borden (UK) Ltd v. Scottish Timber Products [1981] Ch. 25; Re Peachdart Ltd [1984] Ch. 131.

29Aluminium Industrie Vaassen BV v. Romalpa Aluminium Ltd [1976] 2 All ER 552.

30[1991] 2 AC 339.

123 3â Rules governing the passage of property

of reservation clauses by confirming the validity of ‘all monies’ clauses under which the clause reserves the property in the goods to the seller not merely until monies owing on that particular contract are paid, but until all monies owing by the buyer to the seller under other contracts have been paid. Typically, a reservation of title clause will impose a requirement that the buyer stores the goods separately from those acquired from any other source so that in the event of the liquidation of the buyer, the seller can easily identify his goods and reclaim them.

Such clauses are intended to allow the seller to protect himself from the consequences of any liquidation of the buyer. Were the property in the goods to pass to the buyer, the unpaid seller would merely rank as an unsecured trade creditor and, as such, run the very real risk of receiving nothing at all in the liquidation or, at best, receiving only a proportion of the money that he is owed. Bodies such as banks, who have secured loans against the business assets of the buyer as either fixed or floating charges, would have priority at the expense of the seller.

In some situations, the seller may be required to register their interest as a registerable charge. As mentioned above, the ability of the seller to physically reclaim the goods cannot subsist once the goods have lost their identity by being subsumed within another product. Thus, in Borden,31 the resin supplied by the seller had been irretrievably changed by being mixed with wood chips to make chipboard, while in Re Peachdart,32 the leather had been used to manufacture handbags, the court holding in both instances that the ability of the seller to enforce the clause had ended.

If the seller wants to extend his protection, he may seek to include a clause giving him a right to reclaim manufactured goods produced using his materials, but such a clause would require to be registered if it is to be enforceable.

Q5 Consider the role of retention of title clauses in protecting the position of the seller, particularly in the event of the insolvency of the buyer.

(d)â Undivided shares in a bulk

The issue of undivided shares in a bulk raises particular issues of concern in relation to trade generally but especially international trade. Bulk tankers may be carrying a huge volume of one product intended for delivery to a number of identified buyers, potentially from several countries, each of whom has a contract for a given amount of the goods to be drawn from the bulk, with the goods remaining in transit for weeks or even months awaiting delivery. While the goods remain undivided prior to delivery, they are unascertained such that, following traditional contract rules, title in them would not pass until either delivery or exhaustion occurs. However, in 1995, new provisions were introduced

31 [1981] Ch. 25.â 32â [1984] Ch. 131.

124 The passage of title, delivery and payment

that strengthen the position of buyers of undivided shares in an identifiable bulk as regards their ownership rights in the goods during transit.33 These should facilitate international trade by giving buyers ownership rights which identify goods sufficiently to allow for sub-sales of identifiable goods prior to them being separated from the bulk. However, the application of the provision is closely controlled and does not simply apply to all unascertained goods forming part of a bulk but only those satisfying specified criteria. Thus, it will only apply to sales of a specified quantity of unascertained goods where the goods form part of an identifiable bulk and, further, where the buyer has paid the price for some or all of the relevant goods.34 Unless the parties agree otherwise, as soon as these conditions have been satisfied, or at such later time as the parties agree, the buyer will acquire property in the undivided share and also be an owner in common in the bulk along with the other buyers.35 The undivided share that will be protected via this mechanism is that quantity of the goods for which the buyer has paid in relation to the quantity of the goods in the bulk at the time. Where the total of the undivided shares exceeds the bulk, as might occur where part of the bulk has been lost, then the undivided share of the buyers is reduced proportionately so that the total shares equal the bulk available. Further, where the buyer has only paid for part of the goods due to him, that will be treated as payment for a corresponding proportion of the goods and any delivery of goods made to the buyer will relate first to those goods for which he has paid.

The purpose behind this move to allocate some ownership rights is to permit the owners in common to deal with the goods prior to delivery and thereby facilitate trade. This necessitates the co-owners recognising the rights and duties of each other vis-à-vis the goods. Thus, by virtue of section 20A of the Sale of Goods Act 1979, each co-owner is deemed to have consented to the delivery of goods out of the bulk to each of the co-owners as those goods are due to him under the contract– in short, allowing each co-owner to receive delivery of his share.36 Equally, co-owners are deemed to consent to every other co-owner dealing with or removing, delivering or otherwise disposing of his undivided share of the goods while those goods still form part of the bulk.37 Under section 20B(1), no cause of action can arise against a co-owner in respect of his legitimate actions when the consent of other co-owners is deemed to have been given under that subsection. Section 20B(3) restricts the impact of section 20A on other legal obligations. Thus, an owner in common has no obligation to compensate any other owner in common for any shortfall in the quantity of goods that the latter receives. Further, sections 20A and 20B will not affect any contractual arrangements between co-owners about any adjustments between

33Sale of Goods Act 1979, ss.20A and 20B, as inserted by Sale of Goods (Amendment) Act 1995, s.1(3).

34

Sale of Goods Act 1979, s.20A(1).â 35â Ibid. s.20A(2).

36

Ibid. s.20B(1)(a).â 37â Ibid. s.20B(1)(b).