Sale of Goods

1. Sale of Goods Prince Ganaku

2. Prince Ganaku Nanor v Auto Parts Sections 1, 6, 16, 57, 58, 81

3. Prince Ganaku Nanor v Auto Parts • In Nanor v Auto Parts, Nanor entered into a contract with Auto Parts to purchase a 23-seater Nissan Homer bus. Although the price of the bus had not been determined, Nanor paid a deposit/part-payment of ₵19,000. • Auto Parts did not have the car available, but promised to deliver the vehicle within 6 months. When the time of delivery came, they failed to deliver, but took another ₵1000 from him, in respect of changes in the price of the vehicle that they claimed was being shipped. • In another five months, when the vehicles finally arrived, Auto Parts said that the vehicles belonged to other customers and refused to give Nanor one.

4. Prince Ganaku Nanor v Auto Parts • In Nanor v Auto Parts, one of the issues to be determined was whether a contract of sale existed. • Under Section 1(1) of the Sale of Goods Act 1962 (Act 137), a contract for the sale of goods is a contract whereby the seller agrees to transfer property in goods to the buyer for a consideration called the price, consisting wholly or partly of money. • Under Section 6(1), the Act provides that the price may be fixed by the contract or may be left to be fixed in a manner thereby agreed, or may be determined by the course of dealing between the parties

5. Prince Ganaku Nanor v Auto Parts • In this case, the Court had no difficulty holding that a contract for the sale of goods existed. • The facts gleaned from both parties’ accounts demonstrated, first and foremost, that there was an offer to buy, made by the plaintiff, and an agreement, on the part of the seller, to sell a Nissan Homer 23-seater bus. According to the Court, this satisfied the definition under Section 1(1). • Further, even though the parties were not agreed on the price of the vehicle and the date of delivery, that dispute did not, in itself , render the contract void.

6. Prince Ganaku Nanor v Auto Parts • Indeed, the Nanor alleged that a price was agreed upon. That assertion was challenged by the Auto Parts who alleged that the price was to be determined at the date of delivery. • Thus, the Court concluded that it was contemplated between the parties that the contract would definitely include a price, even though the price was as yet undetermined. • Another issue was whether it was possible or lawful to vary the date of delivery of the goods.

7. Prince Ganaku Nanor v Auto Parts • The Court held that it was, under Section 16(4) of Act 137 which provides that where the buyer agrees to accept delivery from the seller at a date later than stipulated in the contract, without substituting the date for another date, the seller must deliver the goods within a reasonable time, having regard to the reasons for which the delivery was postponed. The section also allows the buyer to notify the seller of the latest date on which delivery will be accepted. • Another issue which was up for consideration was whether, the plaintiff was entitled to specific performance, the Court answered this is the negative, holding that under Section 58 of Act 147, specific performance is only ordered with respect to specific or ascertained goods.

8. Prince Ganaku Nanor v Auto Parts • Specific goods were defined in Section 5as those goods identified and agreed upon at the time of the making of the contract of sale. Ascertained goods were also defined in Section 81as goods identified and agreed upon AFTER the contract of sale is made. • The Court buttressed its position by also stating the common law position that “an order of specific performance should not be made where the goods are of a very ordinary description and are not alleged to be peculiar or of such rare or unique quality that similar goods are unobtainable”.

9. Prince Ganaku Nanor v Auto Parts • Consequently, since the subject matter of the contract was not any specific vehicle, but rather any Nissan Homer 23-seater bus, the order for specific performance was denied. • This did not leave the buyer remediless however. According to Section 57(1), if a buyer pays all or part of the price to the seller, and the seller either refuses/neglects to deliver, or delivers and repossesses the goods, the buyer, without prejudice to his other rights, is entitled to recover from the seller the amounts he has paid, subject to any counterclaim for damages available to the seller.

10. Prince Ganaku Mok Beer Bar v Gada Sections 15(1), 16(2), 21, 23, 27(4)

11. Prince Ganaku Mok Beer Bar v GADA • In this case, the respondent bought two bottles of whiskey, and subsequently appealed to the plaintiff to keep the bottles for him until he came for them later. The appellant’s wife unwittingly sold them. • One issue was whether the agreement to keep the whiskey until the respondent collected it was a condition of the contract of sale. The Court held, having regard to the circumstances, especially the fact that it was the respondent who appealed to the plaintiff to keep the bottles for him, that it wasn’t

12. Prince Ganaku Mok Beer Bar v GADA • This determination was based on Section 15(1) which requires that “unless the parties otherwise agree, the seller must be ready and willing to deliver the goods in exchange for the price”. • The seller was. • Section 16(2) also provides that if the seller cannot deliver the goods on the spot, and offers to deliver on a later date, and the buyer agrees to this, it becomes a condition of the contract. • That was not what happened in this case.

13. Prince Ganaku Mok Beer Bar v GADA • Section 21 further states that the fundamental obligations of the buyer are to pay the price and accept the goods. Accordingly, it was the respondent’s duty to take his goods after he had paid for them, a duty which he had failed to perform. • Section 23 states that whatever stipulations the buyer makes as to the time of payment or the time of accepting delivery are not conditions of sale. Consequently, the agreement formed out of the appeal to the seller to keep the goods could not be a condition of the contract.

14. Prince Ganaku Mok Beer Bar v GADA • Having determined that the delay in receiving the goods was not attributable to the seller, the Court considered the import of Section 27(3)which provides that whoever is at fault for a delay in delivery bears the risk of any damage or deterioration which might not have occurred but for the delay. It was held that the delay was the fault of the respondent • That notwithstanding, the Court conceded that the agreement to keep the goods created a bailor-bailee relationship. Under Section 27(4), the fault-provision in Section 27(3)does not apply where the seller or buyer acted as a bailee of the goods. • In other words, whatever liabilities a bailee has in respect of goods damaged or lost goods would be enforceable against the seller-bailee/buyer-bailee, notwithstanding Section 27(3)

15. Prince Ganaku Mok Beer Bar v GADA • Consequently, there was a breach of baileeship duties by the seller who was vicariously liable for his wife’s conversion

16. Prince Ganaku Mok Beer Bar v GADA • The decision is unsatisfactory on a few grounds. • First, Section 15(1) begins with the words, “Unless the parties otherwise agree…”. Although, the seller was ready and willing to deliver the goods per Section 15, he agreed to postpone delivery. This is not inconsistent with Section 15. • Secondly, Section 16(3) allows for the parties to arrange for the delivery to be made at a time other than that contemplated by the contract, at which time the seller would be bound to deliver, and the buyer bound to accept, unless a further change is made.

17. Prince Ganaku Mok Beer Bar v GADA • Thirdly, Section 18(1) provides for three means of delivery; • Actual Delivery: Where the seller transfers physical control of the goods to the buyer • Symbolic Delivery: Where the seller transfers the means of obtaining the goods to the buyer • Constructive Delivery: Where the seller transfers the documents of title to the goods to the buyer. • Although the seller was ready and willing to deliver, he didn’t actually effect any of the means of delivery. Instead, it was agreed that the delivery would happen at a later date, consequently. The seller was in breach of the contract of sale.

18. Prince Ganaku Mok Beer Bar v GADA • It is also possible that the Court misconstrued the meaning of the Section 23. Its effect is that If the buyer says he will come for the goods at 6pm, and he doesn't come for it at 6pm, he would not be held to have breached the contract. • Under Section 27(3), if the buyer says he will come at 6, and he doesn't come at 6, and at 7 the goods are stolen, it's the buyer's fault. • Section 27(3)does not say that if there is a subsequent agreement that the goods should be transferred at 7pm instead of 6pm, it is the fault of the person who made that offer. Fault, in this case, is unilateral; it takes two parties to come to an agreement.

19. Prince Ganaku Birch v Asempa Sections 8, 19, 21, 26(2), 27(2)

20. Prince Ganaku Birch v Asempa • The plaintiff paid for 7000 blocks on behalf of her brother, took delivery of 2640 and left 4360 at the premises of the seller. The seller died and the blocks subsequently disappeared. • The plaintiff demanded the return of the 4360 blocks from the family of the seller. The seller’s family demanded the receipt, but upon examining it, found nothing on the receipt showing that only part of the blocks had been delivered.

21. Prince Ganaku Birch v Asempa • One of the issues was whether the blocks had been delivered. The Court held that the blocks had been delivered and the contract of sale had been discharged. • Under Section 8 of Act 137, the fundamental obligation of the seller is to deliver the goods to the buyer, after the latter had paid for them. • Having paid for the blocks, the obligation of the purchasers under Section 21 of Act 137 is to accept delivery of the goods.

22. Prince Ganaku Birch v Asempa • Further, Section 19 of Act 137 provides that unless a contrary intention appears, the place of delivery is the seller’s place of business and if he doesn’t have one, then it is his residence. • Again, under Section 26(2) property in the goods in goods passes under a contract of sale, when they are delivered to a buyer, unless, of course, a different intention is apparent. • Under Section 27(2) the goods are at the seller’s risk, until property in them passes to the buyer, after which the goods are at the risk of the buyer.

23. Prince Ganaku Birch v Asempa • On the issue of whether the seller became a bailee, after the blocks were left at his residence, the Court observed that there were three kinds of bailees, all of which may have different characteristics, disabilities and duties; • The Bailee for Reward • The Gratuitous Bailee • The Involuntary Bailee • On the evidence, the seller was an Involuntary Bailee.

24. Prince Ganaku Birch v Asempa • An Involuntary Bailee is one who, through no voluntary act of his own, comes into the property of another. • In this case, the evidence shows that the seller sold the blocks to the plaintiff and delivered it at the statutorily designated place of delivery. The plaintiff then left the blocks at the premises for over three years. • An involuntary bailee has no duty of care, as is imposed on the gratuitous bailee or the bailee for reward. He is impliedly authorised to take reasonable steps to return the property, but he will not be held tortiously liable if he merely keeps and loses the property, even if the loss was occasioned through his own negligence [Howard v Harris].

25. Prince Ganaku Birch v Asempa • A third issue considered was whether the family, in refusing, to deliver the blocks to the plaintiff was guilty of wrongful detention. The Court held in the negative. • First, the demand was made on the family who were not, at the time, legal representatives of the estate of the deceased. • Secondly, and more importantly, if there are bona fide doubts as to the plaintiffs rights to the goods, a qualified refusal to deliver may not amount to wrongful detention [Clayton v Le Roy]

26. Prince Ganaku Sackey v Fattal Sections 8(2),11 &12 This case was determined before the sale of Goods act was enacted, but still holds some relevant insight.

27. Prince Ganaku Sackey v Fattal • Fattal ran a business where he, as a middle man, took orders of Kente from Ghana, and ordered them from Japan for his customers. • His modus operandi was generally that he would present samples to the Ghanaian customers for their inspection and examination, before placing their orders. • It came to pass that Sackey, upon examining some of these “order samples”, placed two different orders.

28. Prince Ganaku Sackey v Fattal • The manufacturer shipped the goods of Sackey’s first order, and while they were still in transit, Fattal managed to obtain a portion of the shipment to show Sackey. • When Sackey examined these “shipped samples”, he realised that they were slightly different than what he ordered, but he accepted them anyway. • In the case of the second order, Fattal wasn’t able to obtain the “shipped samples” on time, and by the time he was able to obtain them, Sackey had already paid him the full price for both shipments.

29. Prince Ganaku Sackey v Fattal • When the full shipments were finally delivered, both contained goods much inferior to the “order samples”. • Counsel for the defendants contended that where a buyer of goods has accepted the goods, in the sense of taking them into physical possession, he cannot thereafter complain about defects in the goods or claim damages for failure on the part of the seller to deliver goods of contract quality. • In other words, the buyer only has two options, and no more; he can either reject all the goods or tender full payment of the price upon accepting the goods.

30. Prince Ganaku Sackey v Fattal • The Court held that where part of the goods is inferior to sample, the buyer may reject the whole or he may retain the whole and claim damages in respect of the inferior part. • This mirrors Sections 11 and 12 which deal with sale of goods by sample and description respectively, and state that there’s an implied condition that the goods will correspond with the sample/description provided. • A breach of condition generally entitles the innocent party to terminate the contract or accept and sue for damages.

31. Prince Ganaku Sackey v Fattal • The relevance of Section 13(1)(a)(ii) or its equivalent was not considered, but may be apposite. • It provides as a starting point that there is generally no statutorily implied warranty or condition as to the quality or fitness for a particular purpose of goods supplied under a contract of sale. • There is an exception where there are defects in the goods which are either not known to the buyer or not declared to the buyer, before or at the time the contract is made. In that case, there would be a statutorily implied condition that the goods are free from defects.

32. Prince Ganaku Sackey v Fattal • However, in the case of a sale by sample where the buyer has examined the sample, that exception would not apply in respect of defects which should have been revealed by a reasonable examination of the sample. • In respect of the first order, in this case, Sackey examined a portion of the actual shipment, and decided to accept it. • It is submitted that if this case had been decided after the Sale of Goods Act was enacted, it is unlikely that Sackey would have been able to reject any of the first shipment.

33. Prince Ganaku Kwetey v Botchway Sections 1(1), 8, 10, 55, 56

34. Prince Ganaku Kwetey v Botchway • Botchway acquired a boat on hire-purchase from GIHOC. The engine of the boat broke down, and she took a loan from ADB to purchase another engine. To secure this loan, she mortgaged her house. • Soon, this other engine, being secondhand, also broke down. The Bank, at the time, embarked on a general rehabilitation drive for all the boats it had financed, which had broken down. • The Bank’s policy was that it would refurbish the vessels, and let the owners pay the expenses afterwards, failing which it would sell boats to the highest bidders to recover their expenses.

35. Prince Ganaku Kwetey v Botchway • As it turned out, Botchway hadn’t paid for a while, and the Bank wrote to her to demand payment by a certain date, after which it would assume the right to deal with the boat as they pleased. That letter was never received. • Subsequently, Kwetey applied to buy one of the refurbished boats. The Bank offered Botchway’s boat to Kwetey and asked her to pay by a certain date or face the possibility of losing the boat to someone else. • Eventually Botchway was informed of the letter that was never received, and the fact that the Bank had already offered the Boat to someone else.

36. Prince Ganaku Kwetey v Botchway • Fortunately for Botchway, Kwetey didn’t pay by the deadline, and Botchway proceeded to make a part-payment on the debt owed. • Shortly afterwards, Kwetey paid ₵150,000 for the same boat, and the bank accepted the money. • Botchway, hearing that Kwetey was taking measures to appropriate the boat, instituted an action preventing the Bank from transferring title to Kwetey. The Bank subsequently released the boat to Botchway, after which she discontinued her action. • Kwetey, however, persisted in her counterclaim.

37. Prince Ganaku Kwetey v Botchway • Among the issues the Court considered was whether ADB sold the boat to Kwetey. • The Court held that they did, under Section 1(1) of Act 137 which provides that a contract for the sale of goods is a contract whereby the seller agrees to transfer property in goods to the buyer for a consideration called the price. Consequently, an agreement to sell will constitute a valid contract of a sale. • Further, not only was there an agreement to sell, there was also al the elements of a valid contract. The Bank offered, Kwetey accepted, there was consideration.

38. Prince Ganaku Kwetey v Botchway • The second issue was whether the ADB had the right to sell the boat, whether by authorization from Botchway, or by virtue of the details of the transaction. • The Court found that the Bank had only advanced money for the engine and its subsequent rehabilitation. There was no evidence showing that she had mortgaged the boat to the bank. If anything, she had mortgaged her house, so the bank could not purport to sell the boat under mortgage. • Further Kwetey contended that Botchwayauthorised the bank to sell the boat.

39. Prince Ganaku Kwetey v Botchway • The Court considered two alternatives. • The first alternative was where the authorisation was given before the letter-that-was-never-received was sent. That authorisation would have been given when she assented to the rehabilitation on condition that the Bank could repossess the boat and sell it. • If the first alternative was the case, then that offer to the bank authorising them to sell the boat was waived by the bank’s counter–offer demanding payment by a certain date.

40. Prince Ganaku Kwetey v Botchway • The second alternative was where Botchway’s offer to the Bank to sell the boat was made after the Bank had demanded payment in the letter-that-was-never-received. That authorisation would have been given when she acquiesced to the sale of the boat. • If the second alternative was the case, then the authorisation would be effective. • The Court found from the evidence that the first alternative was the case.

41. Prince Ganaku Kwetey v Botchway • The Court further cited a principle from Sasu v Nuadualah that where there is a simple creditor-debtor relationship between two parties, the creditor does not acquire any rights in rem by which it could sell the property of the debtor. The right acquired is in personam against the debtor for the repayment of the loan. • Thirdly, the issue of whether the bank breached the contract of sale with Kwetey was considered. On this, the court considered two relationships; • The relationship between the Bank, the Boat and Kwetey • The legal relationship between the Bank and Kwetey

42. Prince Ganaku Kwetey v Botchway • As regards the relationship between the bank, the boat, and Kwetey, the Court held that since the bank did not have title or the right to sell the goods, Kwetey did not acquire any title to the boat. • As regards, the relationship between the Bank and Kwetey, the court held that the agreement to sell constituted a binding contract of sale. • When Kwetey did not pay within the stipulated time, the Bank could have treated the agreement as repudiated and refused to sell her the boat, assuming it had a boat to sell, but it didn’t.

43. Prince Ganaku Kwetey v Botchway • Instead, the Bank took her money, and must consequently be held to have waived their right to insist on payment within the stipulated time. Thus, the original contract remained unaffected. • “If what happens is a mere forebearance to insist on delivery or acceptance according to the strict terms of written contract, the original contract remains unaffected, and the obligation to deliver and to accept the full contract quantity still continues” [BW Glover v South Derwent Coal] • Thus, having forborne to insist on payment within the stipulated time, the bank was obliged to deliver what it had contracted to sell, therefore its non-delivery constituted a breach of contract.

44. Prince Ganaku Kwetey v Botchway • With respect to remedies, all the remedies claimed, by Kwetey, with respect to ownership of the boat were dismissed, because the Bank, quite simply, did not have title. • Kwetey also claimed specific performance and/or damages for breach of contract. Section 10 provides that there is an implied warranty in every contract of sale that the seller has the power to transfer title in goods in accordance with the contract. • This was not the case. The bank did not have power to transfer title, and thus did not transfer title.

45. Prince Ganaku Kwetey v Botchway • Under Section 8, the fundamental obligation of the seller is to deliver the goods purchased to the buyer, the seller could not, and did not deliver the goods, and thus committed a fundamental breach of contract. • Section 55 provides that where a seller commits a breach of condition or a breach of warranty, the buyer may maintain an action against the seller for damages for the breach complained of, or he may set up a claim to damages in reduction or extinction of the price.

46. Prince Ganaku Rockson v Armah Sections 13(1), 26, 27, 52

47. Prince Ganaku Rockson v Armah • Rockson sold his Mercedes Benz vehicle to Armah, in a credit sale. Upon examining it, Armah discovered that the vehicle had recently been in an accident. • Rockson initially disputed the extent of the damage, but later admitted it and promised to fix it. The attempt at fixing it began with Messrs. R.T. Briscoe, but Rockson found that their charges were too high, so with Armah’s acquiescence, he took it to a cheaper wayside fitter. • Two months after Armah had taken delivery of his “fixed car”, it broke down again, and Armah discontinued payment

48. Prince Ganaku Rockson v Armah • The issue for determination is whether the respondent was right in rejecting the contract. • The Court found on the evidence that Armah only agreed to abide by the terms of the contract of sale, if Rockson put the car in as near a condition as it was pre-accident. Armah’s willingness to accommodate repairs at a moderate price did not mean Rockson had to do shoddy work. • That notwithstanding, the Court held, citing Fisher, Reeves & Co v Armour that where a buyer elects to keep a defective car for an inordinately long time, it is not open to him thereafter to avoid the transaction.

49. Prince Ganaku Rockson v Armah • Further, according to Section 51, a buyer may not reject goods which he has accepted. • What does it mean to have accepted goods? According to Section 52(b), a buyer is deemed to have accepted goods, if he does not within a reasonable time, after delivery of the goods, inform the seller that he rejects them. • The Court observed the critical importance of time to the question of whether a contract may be repudiated.

50. Prince Ganaku Rockson v Armah • For example, according to Section 26(2), property passes from seller to buyer where the goods are delivered to the buyer. Under Section 27, the goods are at the seller’s risk until property in them passes to the buyer, at which point, the risk also passes to the buyer. • Consequently, it would be unfair to the seller if the buyer were able to retain the goods for a long time, while risk still remained with the seller. • Thus, any undue delay in rejection amounts to a positive presumption that the property in the goods have passed