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Chapter 14

ACTG 2P40 Chapter Notes - Chapter 14: Personal Property, Implied Warranty, The Seller

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Tommy Wall

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ACTG Chapter 14
Sale of Goods
The Sale of Goods Act:
In the 1700s there were lots of disputes dealing with sale of goods so the British Parliament
simplified the rules by passing a statute called the Sales of Goods Act, Canadian provinces soon
followed with similar acts
The SGA did not try to change the law, it more accurately detailed the law
Codified: Existing common law rules passed in statute form
The SGA does apply to consumers but most provinces have other legislation addressing the
specific needs of the consumer.
Contracts of Sale:
Sale: A contract whereby the seller agrees to transfer property or goods to the buyer for a
money consideration, called a price. It states that money must change hands, the statute will
not deal with barters
Agreement to Sell: The transfer is deferred until a future, either a specific date or until a specific
requirement is met
Consignment: Transfer of possession of goods from one business to another for the purpose of
offering a sale
Goods: For the SGA to apply the subject matter must be a good, i.e. any personal property other
than money
Chattels: Tangible personal property
Ownership: When one has a legal entitlement to property
Possession: When one simply has a good or property with them, but do not legally own it
Caveat Emptor: Buyer Beware
o The buyer must investigate the purchase of suffer the consequences, it is a good general
guideline but not a specific law
o It applies where the goods are items that may be inspected by the buyer, where the
seller has not made any misrepresentations about them
Statutory Protection for the buyer:
o Condition: an essential term in the contract, a breach may relieve the other party of
o Warranty: A non-essential term that does not relieve the injured party from
o Seller’s Title: When one is offering to sell goods, he or she implies she has the right
(ownership) to do so, a warranty that the buyer will have and enjoy possession of the
goods and an implied warranty that the goods will be free from any charge or embrace
by a third party, not declared to the buyer during the contract
o Description: circumstances about the good: there is implied condition that the goods
will correspond with the descriptions
o Suitability and Quality: Two exceptions to the general rule that the buyer must exercise
care to the suitability and quality of goods
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