Rejection of Goods

Acceptance, Rejection, Delivery, Non-Payment - Justin Santiago

Acceptance

S34 – reasonable time and opportunity to examine, not deemed to have accepted the goods until buyer as had a reasonable opportunity of examining the goods in order to ascertain whether they conform with the contract

S35 - buyer is deemed to have accepted the goods in the following situations :-
S35(1)(a) - When he intimates to the seller that he has accepted the goods
S35(1)(b) - When the buyer does some act in relation to the goods inconsistent with the ownership of the seller
S35(2) - In a sale by sample whether the sample conforms with the bulk
S35(3) - Right to examine can be waived or excluded by the contract but not in consumer contracts
35(4) - Retaining the goods beyond a reasonable time
35(6)(a) - Buyer will not be deemed to have accepted the goods merely by agreeing to their repair S35(6)(a), buyer will lose the right to reject if the buyer agrees to the repair of the goods and the repair is properly effected : J&H Ritchie Ltd v Lloyd Ltd.
S35A – Right of partial rejection
S35A(3)- Where the contract is for a sale by installments, these rules apply to the right to reject each installment as if it were a separate contract of sale

Rejection

Rejection of goods by a buyer carries with it serious consequences as it would entitle the innocent party to treat the contract as discharged - S11(3)resulting in the termination of the contract and the awarding of damages for the breach.

A buyer can reject goods if there is a breach of an express condition or a breach of an implied condition.

Effect of rejection

a. Reject the goods and claim damages for any loss
b. Accept that part of the goods which conform to the sale contract and reject those that do not conform

Where the buyer rejects the goods, the property in them revests in the seller.

Express Condition - Wrong Quantity

S30(1) Right to reject goods unless for non-consumer buyer discrepancy in the quantity delivered is so slight as to render it unreasonable for the buyer to reject (S30(2A)– de minimis principle. The onus of proof is on the seller S30(2B). Secondly a buyer (whether or not dealing as a consumer) may not reject the whole delivery if the shortfall or excess is not material S30(2D).

Implied Condition

Implied by statute SOGA 1979 - satisfactory quality, fitness for purpose if goods are sold in the course of business.

Delivery

S29(2) Place of delivery is the seller’s place of business, S32 delivery to a carrier deemed to be delivery of goods to the buyer, at seller’s risk unless informs buyer

S29(3) Delivery at a reasonable hour

S29(4) Attornment situation, T becomes a bailee of the goods for B only if T acknowledges that he is now holding the goods on B’s behalf

S29(6) Putting in a deliverable state borne by seller

S51 Damages for non delivery or late delivery loss naturally and directly resulting in the ordinary course of events – Hadley v Baxendale, market price rule

Payment

1. Lien – S41(1) retain possession until price is paid or tendered
2. Stopping goods in transit – S44-46 buyer must also have been insolvent
3. Right of resale – S48(1),S48(3),(4) second buyer acquired a good title against the original buyer
4. S49 Action for the Price – property must have passed