SALE OF   GOODS     DISTINGUISHED        FROM       OTHER COMMERCIAL TRANSACTIONS

CONTENTS

1.0   Introduction

2.0   Objectives

• Main Content
• Gift
• Exchange
• Bailment
• Hire purchase
• Loan

4.0   Conclusion

5.0   Summary

6.0   Tutor Marked Assignment

7.0   Reference/Further Readings.

 Introduction

In commercial transaction, there are other transactions that are similar to sale of goods but a close examination of sale of goods and these other transactions as we shall soon see in this unit are different. Sale of Goods is distinguishable from these other commercial transactions but similar to them in context. Some of these transactions include: exchange, bailment, hire purchase, gift and loan.

Objectives

In this unit, learners are expected to be able to know what sale of goods contracts are and the differences between sale of goods and other related transactions.

MAIN CONTENT

SALE AND EXCHANGE

The consideration required under section 1(1) of the Act must be money whereas an exchange involves a transfer of goods for other goods. A contract of exchange simply means the giving of goods to the person in exchange for the other persons goods-barter.

In other words, money, which is a prerequisite for a contract of sale is not involved in a contract of exchange. When there is an exchange the property in the goods passes. However where goods are exchanged for part goods and part money it could be sale. In Adridge v. Johnson, the court held the exchange of 52 bullocks for 100 quarters of barely plus payment of 112 pounds to be sale.

Okany has argued also that where value is put on the goods it can be considered as a sale whether or not the consideration is paid in money or in kind. I do not agree with this position because the requirement of section 1(1) of Sale of Goods Act is the exchange of goods for money consideration, not putting of value on the goods. Also in exchange, the value of the goods to be exchanged will necessarily be valued to ensure fair dealing.

SALE AND BAILMENT

A bailment is a transaction under which goods are delivered by one party (the bailor) to another (the bailee), on certain specified terms, which generally provide that the bailee is to have possession of the goods and subsequently redeliver then to the bailor in accordance with his instruction. The property in the goods is not intended to and does not pass on delivery, and in fact remains with the bailor, though it may sometimes be the intention of the parties that it should pass in due course, as in the case of ordinary hire purchase contract.

In sale, on the other hand, there is usually an indication that the property in the goods would pass to the other party in the transaction. In other words, in a contract of sale for bailment there is no transfer of property in the goods from the bailor to the bailee, whereas in the case of sale, the property in the goods should be transferred from the seller to the buyer

SALE AND HIRE PURCHASE

Generally, contracts of hire purchase resemble contract of sale very closely, and indeed in practically all cases of hire-purchase, the ultimate sale of the goods is the real object of the transaction.

The distinction between them is very clear and extremely important at this initial stage.

A contract of sale involves two parties, the buyer and the seller, whereas a hire purchase transaction invariably involves three parties to it, namely, the seller, of the goods who sells them to finance a company, which in turn leaves the goods on hire purchase terms to the hirer(who may not become the buyer).

Under a hire purchase transaction,(as it shall be seen later)the hirer,(who may or may not become the buyer) has possession of the goods and is entitled to their use, although he is not the owner.

SALE AND GIFT

A gift is an immediate, voluntary and gratuitous transfer of any property from one person to another. In other words, it is a transfer of property without any consideration. It is, not binding.

Sometimes, problems arise with regard to transactions in which what is regarded as “free” gift is offered as a condition of entering into some other transaction. In Esso Petroleum Ltd v. Commissioners of Customs and Excise (1976) 1 ALL E.R. 117, garages selling petrol advertised a “free” gift of a coin (bearing a likeness of a footballer) to anyone buying four gallons. It was held by the House of Lords that, although the transaction was not a gift, in as much as the garage was contractually bound to supply the coin to anyone buying four gallons of petrol, it was not a sale of goods either. The transaction was characterized as one in which the garage promised to supply a coin in consideration of a customer buying the petrol. It was thus, in substance, a collateral contract existing alongside the contract for the sale of the petrol.

SALE AND LOAN

A party wishing to borrow money may use his property or goods as security for the loan. In this situation the lender retains the possession of the goods or the title document until the loan is paid in accordance with the agreed terms. This arrangement is excluded by section 61(4) of the Sale of Goods Act.

SELF ASSESSMENT EXERCISE (SAE) TWO

Distinguish between Sale of Goods and

• Exchange
• Bailment
• Hire Purchase
• Gift
• Loan

CONCLUSION

This unit has exposed learners to the distinction between sale of goods and other commercial transactions like exchange, bailment, hire-purchase, gift and loan.

SUMMARY

Through this unit, learners have been able to know the distinction between sale of goods on one hand and exchange, bailment, hire- purchase, gift and loan on the other hand.

TUTOR MARKED ASSIGNMENT

1)             Distinguish between sections 1(1) and 1(3) of the Sale of Goods Act of 1893.

REFERENCES/FURTHER READINGS

1. Sale of Goods Act,
2. Rawlings, Commercial Law, University of London, (2007)
3. Igweike, Nigerian Commercial Law, Sale of Goods, Malthouse Law Books, (second edition) 2001
4. Okany, Nigerian Commercial Law,
5. John Alemo Musa Agbinika and Josephine Aladi Achor agbonika, Sale of Goods, 2009.