192 Chapter 7The Sale of Goods Act 1979
The unconditional appropriation must be done either by the seller with the buyer’s
agreement or by the buyer with the seller’s agreement. (But a court will generally be fairly
willing to infer that either the buyer or the seller agreed to the unconditional appropriation.)
It is important to notice that if the goods are unascertained at the time of the contract then
the governing rules are ss. 16, 17 and 18 Rule 5. Once the goods become ascertained you
do not switch to s. 17 and s. 18 Rules 1– 4. It is also important to realise that the appropriate
sections must be applied in the correct order. First s. 16, then s. 17, then s. 18 Rule 5.Example
Sal sells 100 tonnes of wheat (unascertained goods) to Baz. The parties did not show any
intention as to when ownership was to pass. Sal delivers 100 tonnes of wheat to an inde-
pendent carrier to take to Baz. First, s. 16 provides that ownership cannot pass until the
goods are ascertained. The goods became ascertained when they were identified as the
particular goods to be used in performance of the contract. Second, if the parties had shown
an intention as to when the ownership should pass then this intention would have been given
effect by s. 17 (as long as the goods had become ascertained). Third, as the parties did not
show an intention as to when ownership was to pass, s. 18 Rule 5 would apply. Ownership
would therefore have passed when the 100 tonnes of wheat were delivered to the carrier to
take to Baz. This would have been an unconditional appropriation of the goods to the con-
tract and Baz would be taken to have agreed to it. ( The position here is confirmed by s. 32(1)
which states that where in pursuance of a contract of sale the seller is authorised or required
to send the goods to the buyer, delivery of the goods to a carrier for the purpose of trans-
mission to the buyer is prima facie deemed to be delivery of the goods to the buyer.
However, it should be noticed that the rule in s. 32(1) is displaced where the buyer deals as
a consumer. Then s. 32(4) provides that delivery of the goods to a carrier is not delivery to
the buyer. Delivery will take place when the carrier actually gives possession of the goods to
the consumer.)Appropriation by exhaustion
Section 18, Rule 5(3) allows for unconditional appropriation by exhaustion if the following
conditions are satisfied:
(1) The buyer must have bought a specified quantity of unascertained goods which form
part of a bulk. Goods form part of a bulk if they are contained in a defined space or area
and all the goods are interchangeable with all the other goods.Carlos Federspiel & Co SA vCharles Twigg & Co Ltd (1957)A seller who had sold unascertained goods put goods matching the contract description
into a crate. The crate was labelled with the buyer’s name and the seller intended that the
goods in the crate were the ones to be used to fulfil the contract. The seller then became
insolvent.
HeldProperty had not passed. There had been no unconditional appropriation because
the seller could have changed his mind and used the goods in the crate to fill other orders.