THE LAW OF SALE OF GOODS IN ZAMBIA

1. The Contract of Sale of Goods

- One of the oldest

- One of the most necessary
- Most common type of commercial transaction
- Millions concluded each single day and the majority of them
do not give rise to any problem
- Important part of everyday life in Zambia

2. The law governing the Sale of Goods in Zambia contained in

English Sale of Goods Act 1893

- Supplemented by common law principles where these have

not been altered by statute
- In U.K
- Amended by misrepresentation Act and 1979 Sale of Goods
Act
- Sale of Goods Act 1893
• Codified common law
• Not fully comprehensive because common law rules
apply if not consistent with provisions of Act (S. 61 (2)).
• Parties are free to conclude a contract on terms they
please
3. The Nature of Contract of Sale

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(a) What is a Contract of Sale?
S.I 1 provides that:
“a contract of sale of goods is a contract
whereby the seller transfers or agrees to
transfer the property in the goods o the
buyer for a money consideration called
the price.”

By S.I (2) the contract may be absolute or conditional.

Includes 2 distinct transactions:

A sale and an agreement to sell

- Where the transfer of property (ownership) takes places

immediately from seller to buyer, the contract is called a sale.

- Where the transfer of property is to take place at a future

time or subject to some condition to be fulfilled, the contract
is an agreement to sell. (S.I (3)).

The distinction between a sale and an agreement to sell is important

because several consequences flow from the passing of property
(ownership). The following must be noted:

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(a) Unless otherwise agreed, the risk of accidental loss or damage
passes with property;

(b) Once the property has passed from Seller to Buyer, the seller
can sue for the price even if there has not been delivery i.e. no
transfer of possession;

(c) If property has passed to the buyer he may claim the goods if
the seller becomes bankrupt or goes into liquidation;

(d) If the seller resells the goods after the property in them has
passed to the buyer, the second buyer acquires no title to the
goods unless he is protected by one of the exception to the nemo
dat rule.

• Nemo dat quod non habet – no one gives who

possesses not.

Statutory definition of a Contract of Sale recognizes 4 basic

ingredients in any contract of sale –

1. It is a contract between a seller and a buyer;

2. The subject matter of that contract is goods;

3. The purpose of the contract is to transfer property (ownership)

in the goods;

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4. The transfer of the property in the goods is for a money
consideration called the price.

➢ A contract between a seller and a buyer

- Like any contract, a contract of sale of goods must satisfy
certain minimum requirements to be recognized and
enforced.

- There must be an offer and an acceptance, sufficient

consideration and an intention to enter into legal relations.

- The contract must not fail any of the tests set for a valid
contract such as not being unlawful or contrary to public
policy.

- Vitiating factors such as duress, mistake and

misrepresentation apply to contracts of sale to the same
extent as they do to other contract.

- Make invalid or ineffectual.

- Impair quality or efficiency.

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Section 3 of the Act states that a contract of sale may be made
in writing with or without seal or orally or partly in writing and
partly by word of mouth or may be implied from the conduct of
the parties.

There is therefore, generally no formality that must be satisfied

in concluding a contract of sale.

Exceptional cases are certain Instalment Sales covered by the

Hire Purchase Act, Cap 399.

The Act does not provide for offer and acceptance relating to the
formation of the contract. The general law of contract therefore
applies.

The terms of the contract must be certain and depending on the

facts of each case the Court may imply terms into the contract.

Acceptance of an offer must be communicated.

➢ Terms of a Contract of Sale

The normal principles of contract law determine the contents of

a contract of sale.

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A statement will become a term of a sale of goods contract if the
maker warrants it to be true and the maker intends it to be
binding.

Mere representation may not be contractual. Oscar Chess

Ltd V. William (1957) 1 WLR 370

Contractual terms may be classified as Warranties or

Conditions.

The Act distinguishes between conditions and warranties by

reference to the buyers remedies and not their nature.

The Act recognizes that:

• A condition is a more vital term the breach of which

entitles the innocent party to treat the contract as
repudiated.

• A Warranty is a subsidiary term, the breach of which

only entitles the innocent party to damages.

In terms of Section 11 of the Act –

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• Where a contract of sale is subject to any condition to
be fulfilled by the seller, the buyer may waive the
condition, or may elect to treat the breach of such
condition as breach of warranty, and not as a ground
for treating the contract as repudiated.

➢ The subject matter of the Contract

The subject matter of a contract of sale is goods.

Goods are defined in section 62 as including:

“all chattels, personal other than things in

action and “money … the term includes
emblements, industrial growing crops and
things attached to or forming part of the land
which are agreed to be severed under the
contract of sale.

The definition excludes such things as land and things (choses)

in action such as shares, trade marks, debts and negotiable
instruments.

Goods include crops minerals, energy and things forming part

of the land but not land itself.

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➢ Transfer of Property

The transfer of property in goods is the very essence of a

contract of sale.

The Act uses the term property to signify ownership rather than
the physical chattel subject of the contract of sale.

• Passage of property will be discussed in detail in

another discussion/session.

➢ Money Consideration

The consideration must be money and a barter transaction is

not within the scope of the Act (S.I).

4. Contract of Sale Contrasted With Similar Contracts

Contracts are governed by the Sale of Goods Act.

(i) Sale and Gift

Provisions of the act do not apply to a gift.

A gift involves a transfer of property in goods without any

consideration.

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Unless the transfer is by deed, it does not bind the parties
to it.

Where ‘free gifts’ offered by a retailer or manufacturer as

part of a sales promotion there may be a contract, but he
contract will generally not be one of sale.

Esso Petroleum Limited V. Customs & Excise

Commissioners (1976) 1 All ER 117.

o Free coins to drivers who bought 4 gallons of petrol as

a sales promotion.
o Each coin bore likeness of member 1970 England
Football World Cup Squad.
o Motorists encouraged to collect full set.
o HOL – had to decide whether coins were supplied for
retail sale to determine whether company was liable to
pay purchase tax value.
o Held that there was no contract of sale.

(ii) Sale and Exchange

A contract of sale is one for transfer of property for a money

consideration called the price.

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The price is money.

S. 61 excludes money in definition of goods.

A transaction of barter cannot be treated as a sale

(iii) Sale and Supply of Services

Material to make distinction

• Implied duties of seller as to quality and fitness of the

goods or services supplied in sale of goods contract may
not apply in a contract for the supply of goods because
in contracts for supply of goods, suppliers duties are
those of due care only.

(iv) Sale and Hire Purchase

• Governed by two separate statutes;

• Hire Purchase contracts are typically standard term
contracts;
• Seller has right to maintain an action for price against
buyer where buyer fails to pay for goods (S. 49 S.O.G.
A.).

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• In Hire Purchase, an action on the balance of hire
purchase instalments cannot be maintained when hirer
returns the goods.

(v) Capacity to Enter into a Contract of Sale

Capacity to buy and sell is regulated by the general law

concerning capacity to contract and to transfer and
acquire property (S. 2).

A proviso to Section 2 provides that infants and persons

with mental incapacity are obligated to pay a reasonable
price for any necessaries sold and delivered to them.

• Necessaries – goods suitable to the condition in life of

such infant or minor or other person, and
to his actual requirements at time of sale
and delivery.

S.I Infant Relief Act 1874

✓ Contracts for goods supplied or to be supplied, other

than contracts for necessaries with infants shall be
void.

(vi) Status of the Subject Matter of Contract of Sale

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(a) Existing and Future Goods

S.5 (i) of Act – goods subject of contract of sale may be

inexistence or they may be future goods.

Identified and agreed upon by parties at time contract

is made (specific goods)

Goods to be manufactured or acquired by seller after

conclusion of contract or unascertained goods – referred
to by the parties by description only e.g. 200 reams of
bond paper out of cargo of 1,000 reams.
Majory Mambwe Masiye V Cosmas Phiri (2008) ZR
56.

(b) Ascertained and Unascertained Goods

Term ascertained goods’ is not defined in the Act, but in

RE Wait (19270 1 Ch 606 at 630 Lord Atkin was of
view that the expression probably means identified in
accordance with the agreement after the contract is
made.

Future Goods are usually unascertained and in terms

of S. 16 property in them will not pass from seller to

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buyer at time the contract is made until such goods
have been ascertained.

Even after they have been ascertained the passing of

property may be deferred until the fulfillment of a
condition making them deliverable.

During this time the buyer would not obtain specific

performance of a contract (because property will not
have passed).

Sections 6 and 7 of the Act which deal with perishing of

goods envisage Specific goods (i.e goods in existence at
the time of contract).

Section 6 provides that where a Contract is for sale of

Specific goods and without the knowledge of the seller
they perish at the time the contract is made, then the
contract is void.

(vii) The Price

By Section 8 (1) of the Sale of Goods Act, the price in a

contract of sale of goods may be fixed by the contract or
may be left to be fixed in an agreed manner.

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e.g. by a third party, valuer or determined by the course
of dealings between the parties.

Where parties have not expressly agreed on the price and

have not agreed that it be fixed by a valuer or by
arbitration, a Court may be able to imply the price the
parties intended should be paid in other similar
transactions between the same parties.

The price is determined with reference to the course of

dealings between the parties.

Course of dealing between the parties may be difficult to

ascertain.

The Courts are reluctant to allow unilateral variation of

price agreed upon by the parties.

Keembe Estates Ltd V. Galaunia Farms Ltd , Appeal No.

33 of 2003.

(viii) Stipulation as to Time

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Section 10 states that stipulation as to time of payment is
not deemed to be of essence of a contract of sale unless
the contract indicates a contrary intention.

However, all other time stipulations are normally

considered to be of the essence.

In Harley V. Hymans (1920) 3 KB 475 the Court stated

that:

“In ordinary commercial contracts for sale of goods the

rule clearly is that time is prima facie of the essence with
respect to delivery.”

Failure to comply with a stipulation as to time other than

time of payment will be considered as a breach of a
condition and the buyer will be entitled to reject the goods
without proof of damage.

The case of Bowes V. Shand (1877) 2 AC 455 decided that

early delivery f goods is as much a breach as late delivery.

(ix) Implied Conditions and Warranties in Contracts of Sale

of Goods

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The Sale of Goods Act implies certain terms and conditions
in every contract of sale

Section 12 to 15 set out these terms.

(a) Implied Condition that the Seller has the right to sell

The Act protects the buyer by guaranteeing to the buyer

that the seller is the owner of the goods he is selling.

Section 12 provides that:

In a Contract of Sale, unless the circumstances of the

contract are such as to show a different intention there is

(i) An implied condition on the part of the sellers that in

the case of a sale, he has the right to sell the goods,
and in the case of an agreement to sell he will have
the right to sell the goods at the time when property
is to pass;
(ii) An implied warranty that the buyer shall have and
enjoy quiet possession of the goods;
See, Clement H. Mweempe V The Attorney
General, International Police, Avis Rent A Car
(2012 Vol 2) ZR 155.

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(iii) An implied warranty that the goods shall be free from
any charge or encumbrance in favour of any third
party not declared or made known to the buyer before
or at the time when the contract is made.

If a buyer buys goods from the seller who has no good

title to the goods, he acquits a defective title to the
goods and must be generally return the goods the
goods to the true owner

Liability imposed by section 12(1) is strict and does

not depend on the fault or negligence or knowledge
of the seller. Thus the provision is breached even if
the seller honestly believed that he had the right to
sell.

(b) Correspondence with Description

Section 13 of the act implies a condition in a contract of

sell that the goods must comply with the description
supplied.

A sale by description is a sale where words are used to

identify the goods sold. Therefore a sale of future or
unascertained goods is a sale by description.

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The rule in section 13 was explained in words of Lord
Blackburn in Bowes V Shands (1877) 2 AC 455;

“If you contract to sell peas, you cannot oblige a party to

take beans. If the description of the article tendered is
different in any respect it is not the article bargained for
the other party is not bound to take it.”

For Section 13 to apply, the descriptive statement must

be or form a term of the contract in question.

(c) Quality and Fitness – Implied Condition as to

Merchantability

Until recently the maxim caveat emptor or buyer beware,

was the primary principle in the sphere of the sale of goods
as it did and still does in the sale of land.

The Sale of Goods Act provides in section 14 that except

as provided by act, there is no implied condition or
warranty as to quality or fitness for any particular purpose
of goods supplied under a contract of sale.

There are many exceptions to the general rule that the buyer
must beware of section 14 of the Sale of Goods Act – in effect
implies exceptions in contracts of sale of goods as follows:

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(i) An implied condition as to merchantable quality;
(ii) An implied condition of fitness for purpose;
(iii) Conditions and warranties for purpose;
(iv) A condition of freedom from latent defect on a sale by sample.

Where the seller sells goods in course of a business, there is an

implied condition that the goods supplied are of merchantable
quality but there is no such condition –

(a) As regards defects drawn to buyers attention before contract is

made; or

(b) If buyer examines the goods before the contract is made, as

regards defects which the examination ought to reveal.

For the buyer to rely on Section 14 (i) he must have made know to
the seller the particular purpose for which the goods are required.

Where goods are used for one purpose only or where the purpose
for which goods are required are obvious the law implies that no
further indication is required.

Priest V Last (1903) 2 KB 148

- Hot water bottle

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- A hot water bottle is required for a particular purpose within
provisions of Section 14.

Where goods have a range of purposes, the buyer must indicate

particular purpose for which he requires the goods.

Summary of Principles applicable to protection afforded to

buyer under Section 14 are as follows:

(i) If goods have only one purpose, they are unmerchantable if

they have defects rendering them unfit for that purpose e.g.
underpants in Grant V. Australian Knitting Mills (1936) AC
85.

(ii) Where goods are intended for immediate use, they must be
merchantable when they are sold and delivered.

(iii) Where goods are sold under a contract which involves transit
before use, the goods must be merchantable at the time the
contract is made and for a reasonable period thereafter.

(iv) Where the buyer examines the goods he will not be protected
as regards defect which that examination ought to have
revealed.

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(v) Where goods are sold by the seller in the course of business
and the buyer makes known to the seller any purpose for
which the goods are being bought, there is an implied
condition that the goods supplied under the contract are
reasonably fit for that purpose, whether or not that is a
purpose for which such goods are commonly supplied.

(vi) The buyer must show that he relied on the seller’s skill or
judgment.

(vii) Where the defect occurs as a result of the special or abnormal

situation of the buyer which was not revealed to the seller at
the time of the sale, the seller will not be held liable.

Griffiths V Peter Conway Ltd (1939) 1 All ER 685

The buyer of a Harris Tweed Coat contracted dermatitis from

its use due to her unusually sensitive skin. She sued arguing
the coat was not merchantable.

Held: as coat would not have been harmful to a person with

a normal skin, seller was not liable.

(viii) The implied conditions as to merchantability are excluded if:

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(a) Any defects are brought to the buyers attention before or
at time the contract is made; or

(b) The buyer examines the goods before the contract is made.
See Examination Council of Zambia V Reliance Technology
Limited (2014 Vol 3) ZR 171.

(d) Implied Condition that the Goods will Correspond

with the Sample

Section 15 deals with sale by sample.

Sample is a specimen, a model, pattern, a likeness etc.

A contract of sale is a contract of sale by sample where

there is a term in the contract express or implied to that
effect.

In a contract for sale by sample 3 conditions are

applicable:

(i) There is an implied condition that the bulk shall

correspond with the sample in quality;

(ii) There is an implied condition that the buyer shall

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have a reasonable opportunity of comparing the bulk
with the sample.

(iii) There is an implied condition that the goods shall

be free from any defect, rendering them
unmerchantable, which would not be apparent on
reasonable examination of the sample.

The third condition means that the seller is liable if the

goods are defective but he escapes liability if the defect in
the goods could have been discovered by reasonable
examination of the sample whether buyer has made any
examination or not.

(x) Excluding the Implied Terms (Contracting Out –

Exemption Clauses)

Section 55 of the Act allows complete freedom to contract

out of any of the obligations implied by the Act.

The Section deals with exemptions clauses relating to the

implied terms provided for in Sections 10 (i) and 12 – 15 of
the Act.

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The Courts tend to frown upon Exemption Clauses that
seek to protect a contracting party who is guilty of
fundamental breach of the contract.

The Courts construe strictly any terms which purport to

exclude any of the terms implied by the provisions of the
Act.

Examples

A term excluding “guarantees” or “warranties” does not

exclude a condition.

Baldry V. Marshall (1925) 1 KB 260

A clause excluding implied conditions does not exclude

any express conditions.

Andrew Brothers (Bornemouth) Ltd V. Singer & Co. Ltd

(1934) 1 KB 17.

An express oral term may be held to override a printed or

written exemption clause.

A failure to carry out the contract at all, e.g by delivering

entirely different goods from those contracted for, would

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be a breach of a “fundamental term” , and the Court will
normally construe any exemption clause as not intended
by the parties to apply in this situation.

Karsales (Harrow) Ltd V Wallis (1956) 2 All ER 866

Harbutt’s Plasticine Ltd V Wayne Tank and Pump Co.

Ltd (1970) 1 All ER 225

(xi) Transfer of Property in the Goods

Section 16 of the Act provides that –

Where there is a contract for the sale of unascertained

goods no property in the goods is transferred to the buyer
unless and until the goods are ascertained.

Ascertainment of goods may take various forms.

In terms of Section 17 of the Act, property in the goods

passes at such time as the parties wish it to pass.

For purposes of ascertaining the intention of the parties,

the terms of the contract, the conduct of the parties and
the surrounding circumstances of each case will be
considered.

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(i) Rules For Ascertaining Intention

Section 18

Unless a different intention appears, the following are the

rules for ascertaining the intention of the parties as to time
at which the property in goods is to pass to the buyer.

Rule 1 - where there is an unconditional contract

for the sale of specific goods in a
deliverable state, the property in the goods
passes to the buyer when the contract is
made.

- It is immaterial whether time of payment

or time of delivery or both be postponed.

Rule 2 - where there is a contract for the sale of

specific goods and the seller is bound to do
something to the goods to put them into a
deliverable state, the property does not
pass until such thing be done, and the
buyer has notice thereof.

Rule 3 - where there is a contract for the sale of

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specific goods in a deliverable state, but
the seller is bound to weigh, measure, test
or do some other act or thing to the goods
for the purpose of ascertaining the price,
the property does not pass until such act
or thing be done and the buyer has notice
thereof.

Rule 4 - when goods are delivered to the buyer on

approval or ‘on sale or return’ or similarly
terms the property therein passes to the
buyer:

- When he signifies his approval or

acceptance to the seller or does any
act adopting the transaction.
- If he does not signify his approval to
the seller but retains the goods
without giving notice of rejection
then if a time has been fixed for
return of the goods, on expiration of
such time, and if no time has been
fixed, on expiration of a reasonable
time.

Rule 5 - (a) where there is a contract for the sale

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of unascertained or future goods by
description and goods of that
description and in a deliverable state
are appropriated to the contract,
either by the seller with the assent of
the buyer, or by the buyer with the
assent of the seller, the property in
the goods to the buyer.

(b) where in pursuance of the contract,

the seller delivers the goods to the
buyer or to a carrier or other bailee
or custodies for the purpose of
transmission to the buyer and does
not reserve the right of disposal, he is
deemed to have unconditionally
appropriated the goods to the
contract.

Property will not pass under Rule 1 of Section 18 unless the goods
are specific or ascertained goods.
For property to pass under Rule 1 of Section 18, goods must be in a
deliverable state. Goods are in a deliverable state when they are in

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such a state that the buyer would under the contract be bound to
take delivery of them.

Rule 3 will not apply where the act or thing to be done to the goods
is anything other than for purpose of ascertaining the price and
where the thing to be done is to be done by someone other than the
seller.

Petro V Reginam (1957) The African Law Reports 515 (High Court
of Nyasaland).

The Appellant was convicted of house breaking. Prior to his

conviction, he had disposed of the stolen goods so that a third party
ended up in possession of them, having obtained them in market
overt. The trial magistrate held that the third party had obtained good
title.

Held: The Sale of Goods Act 1893 of England applied. By Section 24

(1) of the Act property in stolen goods reverts to the owner upon
conviction of the thief, notwithstanding any intermediary dealings,
including inter alia a sale in market overt.

(ii) Goods on Approval or Sale or Return

Where a person who has received goods on sale or return terms

pledges them he thereby does an act adopting the transaction

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within the meaning or Rule 4 (a) and property in the goods
passes to him and the original owner cannot recover them from
the person to whom the goods have been pledged.

Kirkham V. Attenborough (1897) 1 QB 201 (CA)

(iii) Unascertained Goods and Appropriation

Where the seller delivers to the buyer goods still mixed with
other goods, no property can pass until the goods have been
unconditionally appropriated.

Healey V Howlett (1917) (1919) 1 KB 377

Under Section 16 of the Act, property in Unascertained goods

could not pass.
- To constitute appropriation of goods to the contract and the
parties must have had an intention to attach the contract
irrevocably to those goods. So those goods are subject of sale
and become the property of the buyer
- It is by agreement of the parties that the appropriation
involving change of ownership is made.
- An appropriation by the seller with the assent of the buyer
involves an actual or constructive delivery. If the seller
retains possession, he does so as bailee for the buyer.

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- Usually the appropriating act is the last act to be performed
by the seller.

(iv) Reservation of Right of Disposal

Section 19
(1) Where there is a contract for the sale of specific
goods or where goods are subsequently
appropriated to the contract. The seller may, by the
terms of the contract or appropriation reserve the
right of disposal of the goods until certain
conditions are fulfilled. In such case,
notwithstanding the delivery of the goods to the
buyer, the property in the goods does not pass to
the buyer until the conditions imposed by the seller
are fulfilled.
(2) Where goods are shipped and by the bill of lading
the goods are deliverable to the order of the seller
or his agent. The seller is prima facie deemed to
reserve the right of disposal.
(3) Where the seller of goods draws on the buyer for the
price and transmits the bill of exchange and bill of
lading to the buyer together to secure acceptance
or payment of bill of exchange, the buyer is bound
to return the bill of lading if he does not honour the
bill of exchange, and if he wrongfully retains the bill

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of lading the property in the goods does not pass to
him.

(v) Ascertainment by Exhaustion

Unascertained goods may become ascertained and

appropriation effected through the process of
exhaustion.
Wait and James v Midlands band (1926) 31 Cam
Cas 172
- Wheat in a warehouse.
- Lots sold to different purchasers.

(vi) Ascertainment by Segregation

In Re Goldcorp Exchange (1994)3 WLR 199 (pc)
- Sell of bullion to two groups.
- One group bought bullion for future delivery at 7 days notice.
- Other group purchased bullion from a company later taken
over by the seller.

Held:
- Bullion subject of contracts of sale was unascertained.
Property in it could not pass to purchaser.
- Bullion from company which seller had taken over had been
ascertained to pass property to second group.

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12. TRANSFER OF RISK IN THE GOODS

It is critical to determine at what time the risk passes from

the seller to the buyer because of inter alia the financial
consequences of loss or damage.

Under the common law, the general rule relating to the

passing of risk is tied to the question of passing of
property. It states that whichever party has the general
property in the goods sold under a contract of sale, at any
given moment, bears the risk too.

The Sale of Goods Act captures this common law rule in

Section 20 which states as follows:

“unless otherwise agreed, the goods remain at the

seller’s risk until the property therein is transferred to
the buyer, but when the property therein is transferred
to the buyer, the goods are at the buyer’s risk whether
delivery has delayed through the fault of either buyer
or seller the goods are at the risk of the party in fault
as regards any loss which might not have occurred but
for such fault”.

Risk and possession do not necessarily go together. Risk can

pass to the buyer or remain with the seller, regardless of who

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has the possession or control over the goods. The risk passes to
buyer with the passing of the property in the goods even if the
seller still has the possession of them.

Exceptions envisaged by Section 20 of the Act

(a) A Contrary Agreement

The parties may decide whether Section 20 will apply to them

or not.

The parties can conclude a contract that may allocate the

risk regardless of the passage of property.

(b) Where there is interest in the goods the party bearing the
loss may have neither the property in nor possession of the
goods but merely an intermediate and practical interest’ in
them.

Stern Ltd V. Vickers Ltd (1923) 1 KB 78

(c) Where there is delay in delivery of Goods

Proviso to Section 20

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- Where delivery has been delayed through the fault of either
buyer or seller the goods are at risk of the party in fault as
regards any loss which might not have occurred but for such
fault.

Demby Hamilton & Co. Ltd V Barden (1949) 1 All ER 435

(d) Bailee’s Liability

The second proviso to Section 20 states that –

Nothing in this Section shall affect the duties and liabilities

of the buyer or seller as bailee of goods on behalf of the other
party.

(e) Where the Seller is bound to send goods to the buyer by

sea Under Section 32 (1) of the Act delivery to a carrier is
prima facie deemed to be delivery to the buyer provided the
carrier is independent of the seller.

City Council of Ndola V. Colcom Co-Operative Zambia

Limited (1968) ZR 182

Dunlop V. Lambert (1839) Sol & Fin 600

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13. TRANSFER OF TITLE BY NON-OWNER

Section 21 (1) of Sale of Goods Act provides that:

Subject to the provisions of this Act, where goods are sold by a

person who is not the owner thereof, and who does not sell them
under the authority or with the consent of the owner, the buyer
acquires no better title to the goods than the seller had, unless
the owner of the goods is by conduct precluded from denying
the sellers authority to sell.

A person selling property on behalf of the owner should have

the authority of the owner, otherwise no good title would be
passed to the purchaser. Nemo Dat Quod Non Habet Rule

See Clement H. Mweempe V The Attorney General,

International Police, Avis Rent A Car (2012) Vol 2) ZR
155

EXCEPTIONS TO THE NEMO DAT RULE

There are 8 exceptions under which a non-owner will be able to pass

good title even if he may have none himself, or he has a defective one.

(i) Estoppel

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Section 21 (1) provides that where goods are sold by a non-
owner who does not sell them under the authority of the
owner the buyer acquires no better title than the seller unless
the owner of the goods is by his conduct precluded from
denying the sellers’ authority to sell.

To raise estoppels it must be shown that either the owner

represented that the seller was entitled to sell the goods or
that the owner was negligent in allowing the seller to sell the
goods.

The owner must have acted in such a way as to mislead the

buyer into believing that the seller was entitled to sell the
goods.

Eastern Distributors Ltd V. Goldring (1957) 2 QB 600

Estoppels by conduct may be successfully pleaded when the
true owner of goods acted so negligently as to induce the
buyer into believing that the seller is in fact the owner of the
goods.

To establish estoppels by negligence it must be shown that:

(a) There was a duty of care;

(b) The duty was breached;

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(c) Detriment resulted to the buyer, the breach of duty being
the effective cause.

Merchantile Credit Co. V. Hamblin (1965) 2 QB 242

(ii) Sale under the Factors Act

Section 2 (1) of the Factors Act of 1889 provides that:

Where a mercantile agent is, with the written consent of the

owner in possession of goods or of documents of title to
goods, any sale, pledge or other disposition of the goods,
made by him when acting in the ordinary course of business
of a mercantile agent, shall be as valid as if it were expressly
authorized by the owner of the goods to make the same…
Section 21 (2) of the Sale of Goods Act, provides that ‘nothing
in this Act shall affect the provisions of the Factors Act…
enabling the apparent owner of goods to dispose of them as
if he were the true owner thereof’.

(iii) Sale Under Special Common Law or Court Orders

Section 21 (1) (b) of the Sale of Goods Act provides that

nothing in the Act would affect the validity of any contract
under special common law or statutory power of sale or
under a Court Order.

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These special powers may be exercisable by pledgees, agents
of necessity and executors and administrators.

(a) Statutory Powers

Sellers of goods under statutory power do pass a good title

even if the owners of the goods did not authorize or
consent to the sale.

Section 3 of the Disposal of Uncollected Goods Act,

Cap 410 confers a right on bailees, in certain
circumstances, to sell goods held under bailment for
repair or other treatment and not re-delivered.

The Sheriff of Zambia and his bailiffs have the right to sell
seized property and pass good title to purchasers. Section
15 (1) of the Sheriff Act Cap 49.

Statutory power of sale include those conferred on an

unpaid seller of goods under the Sale of Goods Act (Section
25 (1)).

Other persons who may have statutory power to sell are

liquidators and trustees in bankruptcy, mortgagees in
possession etc.

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(b) Court Order

Under the Rules of the Supreme Court of England (the

White Book ) 1999 Edition Order 29 Rule 4, the Court
has power to make an order as to sale of goods of a
perishable kind or likely to deteriorate if kept or which for
any other reason it is desirable to do so.

(iv) Sale by Agent

An agent who sells on behalf of his principal will pass good

title if the agent has authority to do so.

(v) Sale Under Voidable Title

By Section 23 of the Act, where the seller of goods has a

voidable title but the title has not been avoided at the time of
the sale, the buyer obtains good title to the goods provided
he buys the goods in a good faith and without notice of the
defect in title.

(vi) Sale in Market Overt

Section 22 (1) of the Sale of Goods Act Provides that:

40
Where goods are sold in market overt according to the usage
of the market, the buyer acquires a good title to the goods,
provided he buys them in good faith and without notice of
any defect or want of title on the part of the seller.

The term ‘market overt’ only applies to an open public and

legally constituted market open between the hours of sunrise
and sunset and where goods for sale are openly or publicly
displayed (Lee V. Bayes (1856) 18 CB 601.

Shops are market overt for things which by the trade of the
owner are put there for sale.
Goods are exposed publicly for sale and in Arath Tobacco V
Ocker (1930) 47 TLR 177, it was held that the sale must be
by the shopkeeper and not to him.

Lonrho Cotton Zambia Ltd V. Mukuba Textiles Ltd (2002)

ZR 43

Rajan Patel V. Attorney General (2002) ZR 59

(vii) Disposition by Seller in Possession

This occurs where a seller remains in possession of the

property sold and sells the property to a third party.

41
By Section 25 (1) where a person who has sold goods remains
in possession of the goods or of documents of title to the
goods, the delivery or transfer by that person of the goods or
documents of title to a third party who receives the same in
good faith and without notice of the previous sale has the
same effect as if the person making the delivery or transfer
had the express authority of the owner in doing what he did.

Where a seller in possession wrongfully disposes of the goods,

contrary to the terms of the contract to a second buyer, the
latter acquires a title that supersedes that of the original
buyer.

Pacific Motor Auction V. Motor Credits (1965) AC 867

(viii) Disposition by Buyer in Possession

The issue of disposition by buyer in possession is dealt with

by Section 25 of the Act.

See Power Equipment Limited V Goldtronics Limited,

Barclays Bank Zambia Plc (2012) Volume 3) 358 re
Section 1, 5(1), 12(1), 18, 21(1) and 25(2) of SGA.

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14. PERFORMANCE OF THE CONTRACT

Performance of the contract of sale means delivery of the goods

conforming to the contract description by the seller and
acceptance and payment for them by the buyer.

It is the duty of the seller to deliver the goods and of the buyer
to accept and pay for them in accordance with terms of the
contract.

See Larfage Cement Plc V African Brothers Corporation Ltd

(2016 Vol.2) 31.

(a) Acceptance and Payment by Buyer

Section 35 stipulates three conditions under which a buyer

will be deemed to have accepted the goods:

(i) If he expressly conveys his acceptance to the buyer;

(ii) If the buyer having taken delivery of the goods does an
act in relation to the goods which is inconsistent with
the ownership of the seller.

Jaffco Ltd V. Northern Motors Ltd (1971) ZR 78

43
(iii) If the buyer having taken delivery of the goods
retains them beyond a reasonable time without
expressly conveying his rejection of them to the seller,
he will be deemed to have accepted them.
Leaf V. International Galleries (1950) 1 ALL ER 693

Under Section 34 (1) of the Act, it is provided that where goods are
delivered to the buyer; which the buyer has not previously examined,
he is not deemed to have accepted them unless and until he has a
reasonable opportunity of examining them for purposes of
ascertaining whether they are in conformity with the contract.

Reasonableness of time will vary from goods to goods

Bernstein V. Pamson Motors (Golden Green) Ltd (1987)

2 All ER 220

Unless otherwise agreed, delivery of the goods and

payment of the price are concurrent conditions.

(b) Delivery of Goods

Delivery is defined as voluntary transfer of possession from

one person to another (Section 62 (2) of the Sale of Goods
Act).

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Delivery may take any of the following five ways:

(i) A physical transfer of possession;

(ii) A physical transfer of the means of control e.g. giving the
buyer the key to the warehouse where the goods are
stored.
(iii) A physical transfer of document of title e.g. a bill of lading
(iv) Attonement i.e. by arranging that a third party who holds
the goods acknowledges to the buyer that he holds them
on his behalf.
(v) Alteration in the character of the seller’s possession e.g.
where the seller agrees to hold until the buyer wants them.

(c) Time and Place of Delivery

Unless there is an agreed date of delivery, the seller is bound

to make delivery within a reasonable time. In the absence of
any agreement between the parties, the place of delivery is,
by Section 29 (1) the sellers place of business, if he has one,
or his residence.

However, if the contract is for specific goods, which to the

knowledge of the parties when the contract was made was in
some other place then that place is the place of delivery.

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(d)Delivery to Carrier

Section 32 of the Act

(i) If the seller is authorized or required to send goods to

the buyer delivery of the goods to a carrier for purpose
of transmission to the buyer is prima facie deemed to be
a delivery of the goods to the buyer.
(ii) The seller must make such contract with the carrier on
behalf of the buyer as may be reasonable having regard
to the nature of the goods and other circumstances.
(iii) Where goods are sent by the seller to the buyer by sea
transit and it is usual to insure, the seller must give
such notice to the buyer as may enable him insure the
goods.

If the seller fails to do so, the goods shall be deemed to

be at his risk during such sea transit.

City Council of Ndola V. Colcom Co-operative (

Zambia) Ltd (1968) ZR 182

Galbraith & Grant Ltd V. Block (1922) 2 KB 155

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(e) Delivery of Wrong Quantity or Wrong Goods

Section 30 of the Act

(i) Where the seller delivers to the buyer a quantity of

goods less than he contracted to sell, the buyer may
reject them. If the buyer accepts the goods so delivered
he must pay for them at the contract price.

(ii) Where the seller delivers to the buyer the goods he

contracted to sell mixed with goods of a different
description, the buyer may accept the goods which are
in accordance with the contract and reject the rest or
he may reject the whole.

The seller has a duty to deliver goods of the quantity

specified in the contract, no more, no less.

Delivery of the wrong quantity entitles the buyer to

reject the goods and treat the contract as repudiated.

Shipton, Anderson & Co. V. Weil Brothers & Co.

(1912) 1 KB 574

Hart V. Mill (1846) 153 ER 771

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15. SELLERS BREACH AND BUYERS REMEDIES

The Seller is in breach if-

(a) He fails or neglects to deliver goods contracted for in

accordance with the contract; or
(b) He fails to comply with any term of the contract.

Where the seller is in breach the buyer has the following

remedies;

(a) A right to reject the goods and treat the contract as

repudiated.
(b) A claim for damages.
(c) An action for specific performance.
(d) An action for money had and received.
(e) An action in tort.

(1) The buyer’s right to reject the goods.

- Buyers first and primary remedy
- Available to buyer when seller’s breach goes to the root of the
contract.
Lyons (JL) and CO. v May and Baker Ltd (1923) 1 KB 685

48
(2) Loss of right to reject.
The buyer may loss the right of rejection of the goods in
certain circumstances even if the seller was guilty of a
relevant breach.
These are set out in section 11 (1) (a) of Sale of Goods Act as
follows;
Where a contract of sale is subject of any condition to be
fulfilled by the seller, the buyer may waive the condition, or
may elect to treat the breach of such condition as a breach
of a warranty, and not as a ground for treating the contract
as repudiated.

Further section 11 (1) (c) states that:

Where a contract is severable, and the buyer has accepted

the goods, or part thereof, or where the contract is for specific
goods, the property in which has passed to the buyer the
breach of any condition to be fulfilled by the seller can only
be treated as a breach of warranty, and not as a ground for
rejecting the goods and treating the contract a repudiated.
Unless there is a term in the contract to that effect.

(3) Acceptance by act inconsistent with seller’s ownership

where the buyer has resold and delivered the goods to the sub-
buyer, he will be deemed to have done an act inconsistent with
the sellers ownership and will lose the right to reject the goods.

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Perkins v Bell (1893) 1 QB 193

(4) Payment buy the buyer

The principle of cash on delivery is implicit in all contacts for
the sale of goods.
S28 – provides that unless otherwise agreed, delivery of goods
and payments of price are concurrent conditions i.e. the
seller must be ready and willing to give possession of the
goods and the buyer must in return be ready and willing to
pay the price in exchange for possession of the goods.

(16) BUYER’S BREACH AND SELLERS REMEDIES.

Where the buyer is in breach of the contract of sale, the seller
has a number of remedies available to him.

(a) Where the buyer wrongfully neglects or refuses to accept and

pay for the goods, the seller may maintain an action against
him for damages for non-acceptance (Section 50 of the Act)

- The measure of the damages is the estimated loss directly

and naturally resulting in the ordinary course of events from
the buyer’s breach of contract.
- Where there is an available market for the goods in question
the measure of damages is prima facie to be ascertained by
the difference between the contract price and the market or
current price at the time or times when the goods ought to

50
have been accepted or, if no time was fixed for acceptance,
then at the time of refusal to accept.
Zambia Consolidated Copper Mines Ltd V Good ward
Enterprises Limited (2000) ZR 48

Lombe Chibesakunda V Rajan Lekhraj Mahtani (1998) ZR

60.

(b) Unpaid sellers lien under Section 41

The unpaid seller’s lien is entitlement to retain the goods

until the buyer has paid or tendered the whole of the price.
The lien is a qualification on his duty to deliver the goods to
the buyer. The lien arises whether the contract is for sale of
specific goods or an executor contract to supply
unascertained goods-but the lien will arise when the goods
are ascertained.

The lien is limited to the price, it does not cover the expenses
of keeping of goods.

Y B And F Transport Limited V Sopersonic Motors

Limited (2000) ZR 22.

An unpaid seller loses his right of lien when the goods are
delivered to a carrier for transmission to the buyer without

51
the seller reserving the right of disposal e.g. by taking a bill
of lading in his own name.

An unpaid seller loses his right of lien when the buyer or his
agent lawfully obtains possession of the goods or by waiver.

If the buyer becomes insolvent the unpaid seller has the right
to recover goods that have left his possession but are still in
course of transit “stoppage in transitu”.

AUCTION SALES

Offer and Acceptance

When goods are put up for sale by action in lots, each lot is
prima facie deemed to be the subject of a separate contract
of sale (Section 58(1) of the Act).
Each bid is an offer and the sale is complete when the
auctioneer announces its completion by the fall of the
hammer, or in other customary manner.
A seller has no right to bid himself or through his agent
unless the sale is notified to be subject to a right to bid. Any
sale that contravenes this rule may be set aside by the
buyer.as being fraudulent.

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An auctioneer has certain obligations when he sells goods
thus:

(i) He warrants his authority to sell.

(ii) He warrants that he knows of no defect I his principal’s
title.
(iii) He undertakes to give possession against the price paid
into his hands.
(iv) He undertakes that such possession will not be
disturbed by hos principal or himself.

However, an auctioneer does not warrant his principal’s title to sell

specific goods if he discloses that he is acting for a principal even
though he does not name the principal.

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