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§ 3.1. Concept of the sale contract of the goods in common law and its features in Scotland

The basic statute source of law, regulating purchase and sale, the Law on purchase and sale of 1979 (Sale of Goods Act 1979) 286 which often was exposed to changes is. Main principles of a general law, during too time, also are important.

Purchase and sale is the contract and, hence, certain rules of its regulation originate from the general contractual principles. So, regulation of relations of purchase and sale represents a difficult complex of norms and rules. The analysis of legal regulation of purchase and sale should include in the subject not only purchase and sale, but also rent, rent with the call future (hire purchase), and also dogovory deliveries of the goods and services. Besides, it is necessary to underline importance of expansion of protection of the rights of buyers. The importance of protection of the rights of buyers is marked, for example, by the statute positions fixed in articles 12-15 of the Law on purchase and sale of 1979. Except the Law of 1979 it is necessary to mention fixed by the Law on unfair treaty provisions of 1977 (Unfair Contract Terms Act 1977) 287 doctrine of an exit from contractual relations (contracting-out) 28

The first law in England which it is system has organised regulation of relations on purchase and sale of the goods, there was a Law on the purchase - to [286 [287] [288] sale 1893 [289]. The given statute, nevertheless, acted as the example of ordering developed for application is exclusive in England. Only in four years the English Parliament has passed the law, allowed to apply position of the Law of 1983 in Scotland. We already noticed, that till 1897 purchase and sale regulation in England and Scotland essentially differed. The Scottish legal regulation of purchase and sale, unlike English, was based on the romano-German right. Saying to that the Law of 1893 has resulted English legal regulation of purchase and sale in system, it is necessary to consider, that there were significant changes of the Scottish right.

The law of 1979 on purchase and sale of the goods has continued consolidation of the norms regulating trade relations, and remains today the organic law regulating the contract of purchase in England. In view of that fact, that some positions regulating the relations of purchase and sale in Scotland were, are developed at later stage, already after initial working out of the Law of 1893, it is not surprising, that its positions had defects and required perfection. [290] statute reforms which took place last decades, has resolved the majority of these problems.

The most important statute reform of the Law of 1979 has grown out of joint consultations of the English and Scottish commissions by right. The [291] joint report published in 1987, had the result an adoption of law about purchase and sale and delivery of the goods of 1994. This law is the most important certificate, allowed to solve some problems of the Scottish right. Including, the English approach to division of the maintenance of the contract into "cores" (condition) and "minor" (warranty) has been excluded from application sphere in Scotland. Besides, the Law of 1994 has expanded protection of the rights of buyers and the consumers, provided with the conditions of the contracts which are distinct from conditions of purchase and sale provided by the statute.

The following joint report which has been published in 1993, has poured out in Amendments of 1995 to the Law on purchase and sale 1994

~ ~ 292

Year which has expanded again the rights of buyers.

Later amendments have been brought by Regulations about purchase and sale and delivery of the goods of 2002. The given arch of the norms which have become effective on March, 31st, 2003, has been accepted for the purpose of application of the Instruction of EU (Directive 99/44/EC on certain aspects of the sale of consumer goods and associated guarantees, 1999) within the limits of certain aspects of purchase and sale of consumer goods and corresponding guarantees. The regulations have brought some the important changes in sphere of protection of the rights of the consumers, especially appreciable from which were: amendments about conditions in law about satisfactory quality (implied term as to satisfactory quality), occurrence of the right of the consumer on repair or goods replacement (consumer's right to the repair or replacement of goods), fastening of guarantees for consumers (regulating consumer guaranties). Certain positions of the Instruction were obligatory, others - had recommendatory character. So, for example, member states could fix legislatively restrictive term in two months for the statement the consumer to the seller about defects of the goods. As the given position would weaken protection which is accessible to consumers at present in England, it has not been included in Regulations of 2002. Also some other positions of the Instruction as the operating English right fixed [292] higher level of protection of consumers in appropriate way have not been included. Legal regulation of the rights of consumers develops slowly. The reason is that consumers seldom initiate proceedings because of excessively high costs. It explains the limited quantity vysokourovnevyh decisions on the important questions, such as conditions in law about quality and the conformity of the goods. [293]

Definition of the contract of purchase is fixed by the Law of 1979. The contract of purchase is a contract by means of which the seller transfers or agrees to transfer the property in the form of the goods to the buyer for reciprocative performance in the form of money which cost is called. [294]

The seller can transfer the property, i.e. the property right to the goods, by means of the contract of purchase. Nevertheless, the seller can agree to transfer the property during any moment in the future or to conclude the contract under a certain condition. In both cases the contract falls under the definition resulted above. In cases of contracts under a condition, the condition can be dilatory (execution of obligations is postponed till the moment of performance of a condition) or resolutive (obligations already in force and condition realisation cease obligations). [295]

It is important to pay attention that the Law 1979 defines the goods for England and for Scotland differently. In article 61 (1) of the Law of 1979 different definitions of the goods for England and Scotland are fixed. In England the goods is the personal personal estate, except the property charged with incorporeal rights and money (all personal chattels other than things in action and money), and in Scotland - as any material personal estate, except for money (all corporeal moveables except money) [296]

As object of the given work is the Scottish right, the further research starts with the Scottish definition of the goods. The non-material property, such as objects of the copyright, cannot be the goods, as well as inherited property. The definition of the goods fixed by article 61 (1) of the Law of 1979, proceeds as follows: «in particular, the goods include incomes from the earth, industrially grown up crop and the earths of a thing adhered to or being a part which are in advance adjusted to branch before purchase and sale or by means of purchase and sale, and also include an indivisible share of the goods.» [297] Definition of the goods has appeared to be applied hardly in cases with the software. The disk obviously gets under goods definition, but the software product drops out of goods definition, for which disk - only a data carrier. Moreover, the software can be loaded through the Internet that excludes purchase of such product from subjects of regulation of the Law of 1979. It is especially important, that at purchase of the software the Law of 1979 does not give protection to the buyer. The case law is inconsistent and does not give a definite answer on a question what approach to the software within the limits of the purchase and sale contract should be. [298]

The concept "goods", besides, includes an indivisible part of the goods. The goods also are subdivided on existing (existing goods) - the property belonging to the seller at the moment of sale - and future (future goods) - property which will be made or received by the seller after purchase and sale making contract. In a case if a contract subject are the future goods the contract define as the agreement on sale of the future thing (agreement to sale). Besides, the goods share on individually certain things (specific goods) - defined and adjusted during purchase and sale making contract - and things, generic (unascertained goods) - not having specific signs. [299]

The contract of purchase transfers the property right to the buyer while the agreement on sale of the future thing gives to the buyer only the incorporeal right in relation to the seller. Distinction between the contract of purchase (sale) and the agreement on sale of the future thing (agreement to sale) is exclusively significant in many questions, first of all in inconsistency questions when the buyer has no right to a thing at bankruptcy of the seller at presence only the agreement on sale of the future thing. [300]

There is a set of the contracts reminding dogovory of purchase and sale which do not fall under regulation of the Law of 1979. For example, if the exchange of the goods for the goods takes place and there is no element of payment "price" (price) (counter monetary satisfaction), the barter (barter), instead of purchase and sale will take place. If the contract assumes the partial exchange which most often is taking place at sale of second-hand cars "price" includes the goods plus money (surcharge at an exchange). The legal analysis to which were exposed such dogovory within the limits of consideration of various affairs in court [301], tends to their definition as contracts of purchase. The fact of definition of such contracts as contracts of purchase gives to the buyer a legal protection of the rights of the consumer. Similar protection of the rights now is given within the limits of the contract of barter by the Law on purchase and sale and delivery of the goods of 1994, that is a principal cause of definition of the contracts assuming an exchange for the goods with partial monetary satisfaction as the contract of purchase was lost by the former value.

The contract on performance of works and delivery of materials (contract for work and materials) also caused earlier certain difficulties in definition of its nature as such dogovory assume granting as the goods, and services. As well as in a case with barter contracts, the question has lost the urgency after the Law of 1994 which has given the same protection of the rights of consumers for other contracts similar to contracts of purchase. A question of classification of some other contracts certain difficulties, for example, rent with the call future (hire purchase), purchase and sale on credit (credit sale) and purchase and sale under a condition (conditional sale).302 also causes

The law of 1979 is not applicable to transactions in the form of the contract of purchase and sale which will be realised by means of the mortgage (mortgage), pledge (pledge) and other forms of maintenance of execution of obligations (other securities).303 Such transactions are considered as the feigned. By the Scottish right application of pledge without livery is practically impossible for the bailee. Hence, sometimes the parties enter the agreement which looks as the contract of purchase, but has the purpose maintenance with a personal estate without transition of the right of possession to it. The law of 1979 excludes possibility of its application to such [302 [303]

To transactions: the property right to the goods do not pass also maintenance will be недействительно.304

To the contract of purchase standard rules of the conclusion of the contracts are applied, any additional formalities it is not required. The regulations of protection of the rights of consumers of 1987 regulate purchase and sale making contract in certain circumstances. If the legal body concludes the contract of delivery of the goods or services with the physical person, being out of a premise belonging to the supplier, the supplier is obliged to give to the buyer the notice in writing that the buyer has the right to terminate the contract within seven days. If the given requirement is not observed, the contract will not give in to enforcement (unenforceable).305

Similar positions of Regulations 1987 regulate dogovory hiring of premises, dogovory deliveries of the goods or services to the consumers, concluded by means of remote communications. The set of types of contracts does not come within the purview of Regulations of 1987. For example, dogovory grantings of services in residing, a transfer and entertainments (supply of accommodation, transport, catering or leasure services), dogovory purchase and sale of the personalised goods (personalised goods) and to that similar. If the contract comes within the purview of Regulations and is not an exception the buyer has the right to terminate the contract within seven working days. At cancellation of the contract of purchase it is considered, that it has not been concluded. The cost of the goods paid by the buyer should be returned in this case within 30 days, and any credit contract connected with purchase (related credit agreement) also is considered not prisoner. The buyer [304 [305]

Is obliged to return the goods to the seller and to show thus reasonable degree of care about the goods (reasonable care).306

Goods cost is usually fixed in the contract of purchase, but also can be defined and in another way. In the contract the way of an establishment of the price can be provided, or it can be defined on the basis of the order got by the parties (by a course of dealing) concrete counterparts. If the price has not been defined by one of earlier specified ways, the buyer is obliged to pay the reasonable price (resonable price) for the goods. The reasonable price is defined in each concrete case according to circumstances. The parties also can agree that goods cost will be defined by the third party. In a case if the third party will not define cost, the contract is nullified (avoided).31

Term is not the essential treaty provision of purchase and sale if in the contract other is not specified. In case of term instructions as essential treaty provision, non-observance of term by one party allocates other party of the contract with the right of cancellation of the contract (entitled to rescind). Whether is term an essential condition is defined by means of interpretation of positions of the contract. If term has not been observed, but was not the essential treaty provision, indemnification of losses, instead of a discharge on договору.308 will be a due measure of settlement

Main objective of the contract of purchase is transfer of the right to the goods, that is transition of the property right from the seller to the buyer. [306 [307] [308]

The main principles fixed by the Law on purchase and sale of 1893, concerning conveyance of property on the goods strongly differed from the principles of the Scottish right previous the Law of 1893. According to a general law for property right transition the desire and intention of the seller and delivery was necessary. According to the Law 1979 general rule was, that the property right to the goods passes while the parties namereny to make this transition. In a case if the subject of the contract of purchase is not individualised (unascertained goods), cannot pass the property right while the thing will not be defined. An exception are the things constituting a subject of certain wholesale purchase (identified bulk). [309]

The parties should express obviously the intention about conveyance of property. In case such intentions obviously it is not expressed, the Law of 1979 clearly specifies, that it should follow from treaty provisions, acts of the parties of the contract and circumstances of business. [310] nevertheless, interpretation of such ambiguous things can cause certain difficulties. For this case the Law of 1979 contains the established set corrected, which define presence of concrete intention. The given rules to contain in section 18 of the Law on purchase and sale of 1979. It is necessary to notice, that the given rules are applicable only in case of absence of accurately fixed intention of the parties. [311]

The first rule says: In case of the absolute contract of purchase and sale of individually certain thing in suitable for delivery a condition the property right to the goods passes to the buyer at the moment of making contract, without dependence from, whether payment, either delivery, or that and another is postponed. [312] absolute contract means, that it does not contain dilatory or subsequent conditions. The suitable condition for delivery means, that their qualities correspond to that the buyer would be obliged them to accept in case of delivery. Now the condition about property right transition only at the moment of delivery or payment is very extended.

The second rule says: In case of the contract of purchase of individually certain thing and the obligation of the seller to result this thing in suitable for delivery a condition the property right to the goods does not pass to the buyer till the moment while the suitable condition for delivery will not be reached also the buyer will not be notified on it. [313]

The third rule says: In case of the contract of purchase of individually certain thing in a suitable condition for delivery, but in case of restriction of the seller by the obligation to weigh, measure, check up or make any else action concerning the goods for the purpose of definition of its cost, the property right to the goods does not pass to the buyer while the seller will not make necessary actions and the buyer will not be notified on it. [314]

The fourth rule says: In case of delivery of the goods to the buyer at the moment of acknowledgement, purchase, return or other similar condition of the property right passes to the buyer:

When he informs the seller on acknowledgement or goods reception, or makes other action which the consent to the transaction serves as acknowledgement;

Provided that he does not inform the seller on acknowledgement or reception of the goods and leaves to itself the goods without notice about refusal, if for goods return certain term is fixed, after this term and if such term is not fixed, after reasonable срока.315 (This rule can be excluded under the agreement of parties.) 316 fifth rule consists of three parts. The first part of the fifth rule says: In case of the contract of purchase of uncertain or future things (future goods) with the description when the goods corresponding to such description and in a suitable condition for delivery, will be certainly allocated for execution of a contract (unconditionally appropriated to the contract) the seller with the consent of the buyer or the buyer with the consent of the seller, the property right to the goods passes to the buyer; the consent can be expressed or meant (express or implied), also it can be received both to, and after allocation товара317.

The second part of the fifth rule says: In a case when in executions of a contract the seller delivers the goods to the buyer, to the intermediary (carrier), to the person who is carrying out bailment, (bailee) or to the keeper (custodier) (chosen by the buyer or not) for transfer to the buyer without the order right, such actions are considered as unconditional allocation for execution of a contract (unconditionally appropriated the goods to the contract).318 This rule illustrates an individualization of the goods within the limits of the contract of purchase. Simple transfer to the intermediary or the supplier is not goods individualization as the goods can be not defined that does not allow the right of [315 [316] [317] [318] properties to pass. Besides, the property right cannot pass, in a case if the seller reserves the right to itself orders the goods. [319]

The third part of the fifth rule says: In case of the contract of purchase and sale of certain quantity of the uncertain goods in a suitable condition for the delivery, representing a part of wholesale purchase, (specified quantity of unascertained goods in a deliverable state forming part of a bulk) which it is defined by the contract and the separate agreement between the parties, and the volume of wholesale purchase is reduced to established, if the buyer is the unique buyer under the contract to whom the part of the given wholesale purchase is intended:

Reduction of volume of wholesale purchase is considered unconditional allocation for execution of a contract;

The property right to a part of wholesale purchase passes to

320

To the buyer. [320]

The given rule illustrates an individualization of a thing for execution of a contract by means of withdrawal (appropriation by exhaustion). The volume of wholesale purchase is reduced to such degree, that the remaining quantity of the goods inevitably is intended to the buyer. It is enough of it for goods individualization, and, hence, for property right transition. [321]

The part of wholesale purchase as a subject of the contract of sale and purchase has certain complexities in regulation. Sections 20А and 20В the Law on purchase and sale of 1979 contain the important positions regulating the given question. The law of 1979 recognises that it is impossible to sell the uncertain goods. Hence, if a subject of the contract of purchase and sale is the part of wholesale purchase, the property right cannot pass to the seller while wholesale purchase will not be divided into corresponding parts as differently it is impossible to define, on what goods the buyer possesses the property right. The given circumstance can cause certain difficulties at an inconsistency of the seller, namely the rights of the buyer in the given situation. That the legislation did not lose the appeal to the international counterparts, in 1995 corresponding Amendments have been approved to the Law on purchase and sale which are presented by sections 20А and 20В in the Law on purchase and sale of 1979. [322]

If the buyer has paid certain quantity of the goods which is a part of wholesale purchase, it gets the right to a share of wholesale purchase and becomes the co-owner of wholesale purchase together with the seller and-or the buyer (jami). The share of the seller, the right on which has the buyer, is defined proportionally to a dale of the cost paid by the buyer to the seller, from cost of all wholesale purchase. It is important to notice, that the given positions are applicable only in case the parties have not agreed about other. The risk of loss or damage of all wholesale purchase lays on the seller. The buyer in any case has the right to a share of wholesale purchase which is proportional to the cost paid by it.

If the buyer has paid only a part of the volume of wholesale purchase intended to it and the goods part has been delivered it only, it is considered, that the part of wholesale purchase for which he has paid has been delivered the seller. On a general law for the order wholesale purchase the consent of all proprietors that is impractical for purchase contracts is necessary -

Sales of a part of wholesale purchase. [323] hence, prezjumiruetsja, that each proprietor agrees on:

1) delivery of a part of wholesale purchase to other proprietor which is necessary to it under the contract; [324]

2) the order at own discretion other proprietor

325

Part of the wholesale purchase which owner it is. [325]

As it has been noted earlier, main principle of transition of the property right to the goods is intention of the parties. Section 19 of the Law on purchase and sale of 1979 are allowed to keep to the seller the right of the order the goods till the moment of execution of certain conditions. In spite of the fact that delivery has been carried out, the seller keeps the property right to the goods till the moment of performance of such conditions.

Widespread example is use of conditions about title deduction on a thing. Such conditions allow the parties to fix in the contract, that the seller reserves the property right till the moment of payment of full cost of the goods the buyer even if the goods are already put the buyer. Such reservations do not contradict the Scottish right as as a matter of fact are suspensive condition of the contract of purchase. More problematic case are so-called reservations of a covering of all payments. Such reservations fix, that the property right to the goods does not pass to the buyer till the moment while the buyer will not pay to the seller all payments which it should pay within the limits of all transactions between the seller and the buyer. Such condition could be apprehended as attempt to create maintenance by means of a material personal estate without the right of possession on it, that would make such condition void. As a result, the House of Lords has made the decision, that such conditions are valid, in case of application of sections 17 and 19 (1) Laws about kupleprodazhe 1979 as the buyer does not try to create maintenance without transition of the right of possession as it does not possess the property right to the goods. [326]

Transition of the property right to the goods is connected with risk transition, that is definition of the party which bears risk of damage or goods destruction. The positions regulating the moment of transition of risk, contain in section 20 of the Law on purchase and sale of 1979. Nevertheless, the Regulations of 2002 had been made the important amendments to the given section, defining, that section 20 has not fixed sphere of application of certain criteria. These criteria are intended for the contract of purchase with participation of consumers (consumer contract) in which as the consumer the buyer acts. The consumer contract - the contract of purchase where one party operates within the limits of realisation of trading and enterprise activity, and other party pursues private interests. [327] consumer - the physical person operating proceeding from interests which are not covered by frameworks of trading, enterprise or professional interests. [328] Goods also should correspond to definition usually delivered for a private use and consumption of things. [329] regulations of 2002 had been brought the amendment according to which last requirement was not applied if the consumer is the physical person (individual). In this case, the seller bears risk till the moment of delivery of the goods to the buyer. Hence, there is a rule blanketnoj protection of the rights of consumers (blanket consumer protection) from risk in cases of the contract with the "obvious" consumer («pure» consumer). [330]

In all other cases, except participation of the "obvious" consumer if the parties have not agreed about other, the general rule is, that the proprietor of the goods bears risk of damage or goods damage. It means, that the risk passes simultaneously with transition of the property right to the goods. [331] hence, it is important to notice, that the risk should not be connected with possession of the goods.

Positions of section 20 of the Law on purchase and sale of 1979 have two exceptions. First, if delivery term is broken, guilty of non-observance of term of delivery the party will bear risk of damage or goods damage. Secondly, nothing releases the party which bears the obligation on thing storage, from a liability for damages, grown out of its imprudence. [332]

Certain positions of the Law of 1979 regulate  destruction of the goods, following the general principles of the conventional law. Namely, the law of 1979 provides, that in case of the contract of purchase of individually certain things they have lost the qualities by the moment of making contract without the knowledge of the seller, the contract is nullified. Also occurs in case the contract has been concluded, but the risk has not passed to the buyer. The goods which did not exist at all are equated to individually certain goods in such cases. Special conditions on risk transition appear in case the contract provides the right of the buyer to refuse the goods. In this case the risk passes to the buyer after the goods are considered the accepted buyer that does not cancel its duty to store the goods properly till the moment of transition of risk. [333]

In certain cases for the parties is expedient to provide in the contract other conditions of transition of risk.

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A source: Afanaseva Taisija Aleksandrovna. LEGAL REGULATION OF RELATIONS OF THE TRADING TURN In Scotland. The dissertation on competition of degree of the master of laws. Moscow, 2017. 2017

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  2. § 3.3. The rights and duties of the buyer in the sale contract of the goods by the right of Scotland
  3. § 2. Concept and contract elements (the foreign trade contract) international purchase and sale of the goods
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  10. Bessolitsyn Dmitry Aleksandrovich. the LEGAL PROTECTION In case of BREACH OF CONTRACT of the INTERNATIONAL PURCHASE AND SALE of the GOODS. The DISSERTATION ON COMPETITION of the SCIENTIFIC DEGREE of the MASTER OF LAWS. St.-Petersburg -,
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  13. UGRIN Timothy Stepanovich. the CONTRACT of the INTERNATIONAL PURCHASE AND SALE of the GOODS. The DISSERTATION on competition of a scientific degree of the master of laws. Moscow -, 2002 2002
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