Rule 3 – where there is a contract for the sale of specific
goods in a deliverable state but the seller is bound to
weigh, measure, test or do some other act or thing with
reference to the goods for the purpose of ascertaining the
price, the property does not pass until the act or thing is
done and the buyer has notice that it has been done.
If, for example, you agree to buy a particular bag of
potatoes, at a price of 80p per kg, you will not become
the owner of the potatoes until the seller has weighed the
bag and informed you of the price payable. If, however,
it is agreed that the buyer will do the weighing, measur-
ing or testing, ownership of the goods will pass in accord-
ance with rule 1, i.e. when the contract is made.
Rule 4– when goods are delivered to the buyer on
approval or on sale or return...the property in the
goods passes to the buyer:
(a) when he signifies his approval or acceptance to the
seller or does any other act adopting the transaction;
(b) if he does not signify his approval or acceptance to
the seller but retains the goods without giving notice
of rejection, then, if a time has been fixed for the
return of the goods, on the expiration of that time,
and, if no time has been fixed, on the expiration of
a reasonable time.
Property in goods delivered on approval will pass
under part (a) of this rule either when the buyer informs
the seller that he wishes to buy them or he ‘adopts’ the
transaction, for example by re-selling the goods. Part (b)
of the rule is illustrated by the following case.
of that description and in a deliverable state are uncon-
ditionally 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 then
passes to the buyer; and the assent may be express or
implied and may be given either before or after the
appropriation is made.
Goods are unconditionally appropriated to the con-
tract when they are separated from the bulk and ear-
marked for a particular buyer. Delivery to a carrier will
amount to an ‘appropriation’ if the buyer’s goods can be
clearly identified.Part 3Business transactions
310
Elphickv Barnes(1880)The seller handed a horse over to a prospective buyer on
approval for eight days. Unfortunately, the horse died on
the third day. It was held that ownership of the horse had
not passed to the buyer and, therefore, the seller would
have to bear the loss.Unascertained goods
In a sale of unascertained goods, the property passes to
the buyer only when the goods have been ascertained
(s 16). If the parties then fail to mention when they
intend ownership to pass, s 18, rule 5 will apply.
Rule 5– (1) where there is a contract for the sale of
unascertained or future goods by description, and goods
Healyv Howlett & Sons(1917)The claimant agreed to sell 20 boxes of mackerel to the
defendant. He despatched 190 boxes of mackerel by rail
for delivery to various customers, but the boxes were not
labelled for particular customers. Employees of the rail-
way company were entrusted with the task of allocating
the correct number of boxes to each destination. The
train was delayed and the fish deteriorated before 20
boxes could be set aside for the defendant. It was held
that the property in the goods had not passed to the
buyer because the defendant’s boxes had not been
appropriated to the contract.The Sale of Goods (Amendment) Act 1995, which came
into force on 19 September 1995, contains two provi-
sions in respect of the transfer of property in unascer-
tained goods. The first provision, which becomes s 18,
rule 5(3), gives statutory effect to the principle of
‘ascertainment by exhaustion’. This is a situation where
goods are successively drawn from a bulk until all that
remains are the goods which fulfil the contract in ques-
tion. For example, if restaurant A buys 10 bottles of
whisky from a bulk of 200 bottles stored in a distillery
and the distiller sells 190 bottles to other customers,
the remaining 10 bottles belong to restaurant A. The
property in the goods passes to the buyer when the bulk
is so reduced as to match the buyer’s contract. The buyer
need not have made any payment but the goods must be
in a deliverable state.
The second provision introduces a new concept of
co-ownership of a bulk. Section 16 must now be con-
sidered subject to a new s 20A. Section 20A deals with
the following type of situation: a buyer agrees to buy
500 tonnes of coal out of a cargo of coal in the holds of