I. Property in the goods and action for the price in the common law
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Common law jurisdictions in general do not consider the seller to be entitled to the full purchase price solely because it is due under the contract, or because a duty to pay the price has arisen.697 The understanding is that while the contract provides for the obligations and duties of the parties, it is the law that determines the parties’ remedies.698 While this statement broadly represents the understanding of common law jurisdictions, it should not – combined with the focus on “specific performance” of the obligation to de
1. English law and legal systems that are inspired by the Sale of Goods Act 1979
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Section 49(1) of the Sale of Goods Act 1979 states:
“Where, under a contract of sale, the property in the goods has passed to the buyer and he wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may maintain an action against him for the price of the goods.”
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The key question regarding the seller’s price action is, thus, whether property of the goods has passed to the buyer.699 Alternatively, recovery of the purchase price is possible if a payment on a day certain was agreed upon.700 The latter threshold is one not crossed lightly, but rather addresses contracts under which the buyer is required to pay unconditionally, regardless of whether the seller has already performed.701
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If the requirements for a price action are not fulfilled, the seller can only claim damages for non-acceptance (section 50 of the Sale of Goods Act 1979). This will usually not amount to the full purchase price, as generally only the difference in price between the market price at the time when the goods ought to have been accepted and the contract price is recoverable.702 Moreover, the claim is subject inter alia to the doctrine of mitigation of damages, a defense the seller would generally not have to accept in a price action as a debt claim.703 Notably, two procedural aspects should be highlighted. First, claiming the price is possible with a significantly lighter burden in gathering evidence and can be awarded by summary judgment.704 Second, English law does not allow for a conditional judgment that awards
a) Historical roots
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This limited scope of the possibility to receive the price with the help of a common law court can be traced back to a fundamental decision hidden in the historic roots of the common law. Similar to the approach of Roman law, the common law was structured around limited actions.706 Since a mere agreement did not give rise to an action, it was generally not enforceable in England during the Middle Ages.707 Thus, in the thirteenth century, neither the seller nor the buyer could sue the other on the basis of a mere promise to sell or buy under the common law.708 Sellers could only sue for the price with an action of debt when they had fulfilled their obligation, which meant that they had to have already delivered the goods since the transfer of possession onto the buyer was still a prerequisite for the transfer of property.709
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This description of the historical status of the common law during that time should, however, not be taken to mean that it governed the private agreements of normal merchants. Remarkably, the law of merchants at that time, which was adjudicated outside of common law courts, already accepted the mere consent between two merchant parties sufficient to conclude binding and enforceable agreements.710 The common law of that time was not concerned with (small) private agreements.711 In the following centuries, the common law supplanted the law of merchants in a steady process, which was ultimately successful due to concurrent political developments.712 In
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After 1400 under the common law, the buyer was allowed to require the specific goods bargained for with the action of detinue with conclusion of the contract.715 This action was, however, understood to protect the property (and was not a contractual claim), leading to the opinion that the property in specific goods is generally transferred with the conclusion of the contract.716 Since, for this reason, the seller had already fulfilled his or her obligation,717 he or she was in turn allowed to recover the price with an action of debt.718 This enforcement was not believed to follow from the “promise”, but rather from a “duty springing from the [buyer’s] receipt of property.”719 It is, however, very important to note that this only applied to specific goods, while the seller could not claim the purchase price if generic goods or goods still to be produced were bargained for (later called contract to sell in contrast to sale of goods).720
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The following extension of the action of debt in other situations (other than a sale) around the fifteenth century led to a generalization in the legal terminology: The performance of the party that claimed the price was tagged a “quid pro quo”.721 The action of debt, however, had its own historical restraints that hindered a direct development in the direction of a contractual claim as understood by civil law lawyers. Most notably, the buyer could raise the defense of “wager of law”.722 If the buyer together with eleven compurgators denied the existence of the debt, the claim of the seller was unsuccessful.723 Inter alia for this severe practical limitation, the action of assumpsit (an action originally rooted in the law of torts) was further ex
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During the seventeenth and eighteenth centuries, the common law developed a general theory of contract that provided for the enforcement of promises under the limiting prerequisite of a sufficient consideration.725 It is important to note that this theory concentrates on the conclusion of binding agreements and unifies this legal question. This has to be differentiated from the remedies that are available to the parties once the contract has been concluded. In this respect, the old line of thinking regarding actions survived and evaded the hurdles of time and reform – without providing the quid pro quo, the creditor could not sue for the debt.726 Even though courts of equity and common law were combined by the Supreme Court of Judicature Acts 1873 and 1875, a uniform system for procedure and pleadings was introduced and the different actions have since been available in the same process,727 while the underlying distinction regarding the remedies still applies.
b) Current English law
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Against this backdrop, the discussion of the action for the (purchase or other) price in case law and scholarly work in the twentieth and twenty-first century appears coherent with the historical development, even for jurists with a civil law background. The Sale of Good Act 1893 cemented the established system of the common law in sections 49 and 50 for sales law. Section 17 of the Sale of Goods Act 1893 made the transfer of property only dependent on the intention of the party, and section 18 rule 1 of the Sale of Goods Act 1893 stated that unless a different intention of the parties appears, in case of specific goods, property passes with conclusion of the contract. Section 18(2) of the Sale of Goods Act 1893 clarified that the transfer of property in case of unascertained or future goods is dependent on the appropriation of the goods to the contract with the assent of the buyer. Presently, the Sale of Goods Act 1979 contains equivalents of each of these provisions.
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An important case to test the relevance of the historical roots for the current English law emerged from a sphere outside of sales law. White & Carter (Councils) Ltd v McGregor 728 is a contract law case from Scotland, but due to its reception and development in subsequent English case law, it can be
355
The House of Lords reversed the judgments by a slim majority decision and allowed the appeal of White & Carter. Both prior judgments had relied on Longford & Co v Dutch 731, a case with indistinguishable facts and which was, therefore, binding on the lower courts as all Lords accepted. In Longford & Co v Dutch, Lord President Cooper stated
“[t]he pursuers [company providing the bins] could not force the defender to accept a year’s advertisement which she did not want, though they could of course claim damages for her breach of contract. On the averments the only reasonable and proper course, which the pursuers should have adopted, would have been to treat the defender as having repudiated the contract and as being on that account liable in damages [...].”
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The conclusion was drawn that Longford & Co had no remedy to recover the price for the advertisement, but rather was restricted to claim damages. Due to the duty of mitigation, this specifically meant that the pursuers would have been required to look for an alternative interested party for the advertisement. While Lord Morton of Henryton and Lord Keith of Avonholm both argued that White & Carter (Councils) Ltd v McGregor should be decided accordingly, the majority consisting of Lord Reid, Lord Tucker, and Lord Hodson held that Longford had not been correctly decided. Lord Reid only considered there to be two possible explanations for denying the claim.
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First, one could argue in favor of an equal treatment with the more common situation in which a party cannot perform his or her obligation without coop
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Second, his Lordship considered the existence of some general equitable principle or public policy that required a limitation of the remedies of the party that unilaterally fulfilled his or her obligations under the contract.734 The only equitable principle that Lord Reid accepted was that parties should be denied the contract price and be limited to a damages claim when they had no “legitimate interest, financial or otherwise”, in performing the contract.735 This restriction has been criticized,736 and in parts even regarded as merely obiter 737. To many scholars, this exception to the general rule appears to be more important than the actual general rule of the case, i.e., that generally a claim for the price must be allowed if the claiming party completed the contract.738 This exception has been developed and it seems to be good law that the legitimate interest is generally presumed to exist and it is up to the other party to prove that it is in fact absent.739 It is, however, not relevant to sales law where sections 49 and 50 of the Sale of Goods Act 1979 provide an exhaustive rule,740 and in most contracts (except for speci
359
What is worth highlighting here regarding the topic of the claim for the purchase price, however, is a different facet: Efficiency is not considered to be relevant for the question of legitimate interest by the majority. The dissenting decisions by Lord Morton of Henryton and Lord Keith of Avonholm, in contrast, relied heavily on the wastefulness of the behavior of White & Carter.743 Directly addressing this aspect, Lord Hodson even stated:
“it may be unfortunate that the Appellants [White & Carter] have saddled themselves with an unwanted contract causing an apparent waste of time and money. No doubt this aspect impressed the Court of Sessions but there is no equity which can assist the Respondent.” 744
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This case shows how alive the historic roots in English law are.745 Moreover, efficiency or wastefulness as a leading principle746 is not supported by this part of English law.747 Even though one could read an efficiency bar into the exception of “no legitimate interest”, the required degree of unreasonableness or inefficiency would evidently have to be extreme.748 The law is not concerned with the question of whether a seller should resell the goods or whether the buyer is better placed to fulfill the task of disposing of unwanted goods.749 Rather, it still concentrates on whether the party claiming for the price provided a quid pro quo.750 If a party can do so without the co-operation of the other party, only the exception regarding the lack of a legitimate interest can prevent the performing party from later claiming the price. Section 49 of the Sale of Goods Act 1979, in turn, seems to be a relic from a conception of “real” contracts,751 even if the mere transfer of property is sufficient for a quid pro quo, while the transfer of possession is neglected. The latter fact is due to the rules in the Sale of Goods Act 1979, which allow for the transfer of property by mere agreement.752 Since the transfer of property is dependent on the assent of the buyer, the seller can generally not “force” the goods onto the buyer.753 Consequently, the seller cannot provide
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This can be illustrated by an example:754 If B buys a specific cow from S, property will pass immediately upon conclusion of the contract under section 18 rule 1 of the Sale of Goods Act 1979. Even without a transfer of possession, and even if B no longer wants the cow due to a declining market, S will be able to maintain an action for the price under section 49(1) of the Sale of Goods Act 1979 and receive the full price. In contrast, if B has just bought any cow from S (an unascertained good), the latter will generally have no possibility to enforce the claim for the price if B refuses to perform. If the seller cannot claim the price, he or she is left with damages under section 50 of the Sale of Goods Act 1979. Subsection 3 of this section reads:
“Where there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted or (if no time was fixed for acceptance) at the time of the refusal to accept.”
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In addition, the doctrine of mitigation requires the seller who faces an unwilling buyer to resell the goods on the market.755 The breaching buyer should not bear the consequences of a declining market, if the seller could reasonably resell the goods on the market.756 In the example provided, S would have to sell the cow elsewhere within a reasonable time, because otherwise this calculation of damages would lead to him or her bearing the negative consequences of the drop in market price.
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Section 50(3) of the Sale of Goods Act 1979 and the doctrine of mitigation could be taken to signify that the English legal system considers the seller to be better equipped to resell the goods on the market. This would, however, fail to recognize that under English law, diametrically different results are reached if a specific good was sold, although a specific good does not necessarily mean that there is no market for the good and the seller is not in a better position to dispose of the good. Moreover, if the seller is a consumer and the buyer is a dealer, this consideration would also not hold true.757 For these reasons, combined with the development of English law analyzed above, efficiency is not the core purpose of the provision, but might just be the consequence in some cases. This is supported by the fact that case law
c) The Res Cogitans and future English law
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While the depicted state of English law was, thus, relatively stable over many centuries, PST Energy 7 Shipping LLC and another v OW Bunker Malta Ltd and another (“The Res Cogitans”)761 may have been a seismic shock to English law and its action for the purchase price. As described above, the litigated contract was not considered a sales contract under section 2(1) of the Sale of Goods Act 1979 because it allowed the end-user to consume the goods in which property was retained before payment.762 Consequently, a notable number of credit sales will hence no longer be subject to the limitations of section 49(1) of the Sale of Goods Act 1979.763 Even more far-reaching with regard to the action for the purchase price is the obiter dictum of the Supreme Court stating that it would have overruled F. G. Wilson Engineering Ltd v John Holt & Co. Ltd 764 if it had been necessary.765 The latter decision clarified that no other legal basis for claiming the purchase price under a sales contract that is subject to the Sale of Goods Act 1979 is applicable. This may signify a far-reaching extension of the action for the purchase price in the future, even in cases concerning sales contracts under the Sale of Goods Act 1979. The resulting smoke from the decision has
2. Other common law jurisdictions
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Apart from England, there are many common law countries that follow similar rules. Comparable provisions to section 49(1) of the Sale of Goods Act 1979 exist in Australia.767 Australia’s different states have their respective Sale of Goods Acts, but they are very similar in structure and content.768 All of them are based on the United Kingdom Sale of Goods Act 1893.769 Hong Kong and Singaporean law likewise contain identical rules to English sales law.770 The interpretation of these provisions by English courts is highly influential.771 In addition, the Canadian provinces (apart from Québec) have adopted the Sale of Goods Act 1979’s approach to the seller’s action for the price.772 Notably, there was an unsuccessful effort to modify the action for the purchase price under Canadian law in this regard in favor of the interpretation under the UCC in the USA discussed below.773 In conclusion, many other common law jurisdictions have followed the English model of generally restricting the seller’s claim for the price if property has not yet been transferred to the buyer.
163 3. Different motives for the shaping of the claim for the purchase price in the USA
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US law originally had the same starting point as English law.774 Questions regarding the quid pro quo and the lack of enforceability of a mere promise were also preeminent in legal thought across the Atlantic.775 In line with English law, the seller who had promised to transfer property but later faced an unwilling buyer, could not recover the purchase price and was limited to damages.776 But case law took a different turn: New York courts developed a rule that the seller could claim the purchase price, even if property had not passed, if the transfer was wrongfully prevented by the buyer (the socalled New York Rule).777 Some courts in other US states followed this approach,778 while others remained committed to the rule of English law, i.e., that passing of property is a necessary precondition and not possible against the buyer’s will.779
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Despite this innovative approach of many courts in developing and following the New York Rule, the legislator sent the courts back to the law before the New York Rule in 1906, when it introduced section 63 of the Uniform Sales Act of 1906.780 According to Llewellyn, although the New York Rule was a sensible and persuasive solution, it was rejected mainly because England had not developed its rule so far, and furthermore the rule had rested on “dubious legal reasoning”.781 The new provision restricted the availability of the price action in states that followed the New York Rule, while it was more readily available in states that had previously followed English law.782 Section 63 of the Uniform Sales Act of 1906 stated:
“(1) Where, under a contract to sell or a sale, the property in the goods has passed to the buyer, and the buyer wrongfully neglects or
(2) Where, under a contract to sell or a sale, the price is payable on a day certain, irrespective of delivery or of transfer of title, and the buyer wrongfully neglects or refuses to pay such price, the seller may maintain an action for the price, although the property in the goods has not passed, and the goods have not been appropriated to the contract. But it shall be a defense to such an action that the seller at any time before judgment in such action has manifested an inability to perform the contract or the sale on his part or an intention not to perform it.
(3) Although the property in the goods has not passed, if they cannot readily be resold for a reasonable price, and if the provisions of section 64 (4) are not applicable, the seller may offer to deliver the goods to the buyer, and, if the buyer refuses to receive them, may notify the buyer that the goods are thereafter held by the seller as bailee for the buyer. Thereafter the seller may treat the goods as the buyer’s and may maintain an action for the price.”
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Although section 63 of the Uniform Sales Act of 1906 returned in its first paragraph to the rule that the passing of property is a prerequisite for the price action, paragraph 3 broke with the historical reliance on a quid pro quo: In case a resale was not reasonably possible for the seller and where labor or expenses of material were necessary for the seller to produce the goods (section 64(4) of the Uniform Sales Act), the seller was allowed to claim the price even though property had not passed. The possibility of a resale and the case of specifically produced goods do not refer to situations in which a plus in terms of quid pro quo is involved compared to other sale contracts. Even if one considered the necessity for the seller to inform the buyer that he or she will hold the goods as a bailee for the buyer as a remaining (fictional) facet of the transfer of property,783 the ties between the relict of limited enforcement of promises and the system of contractual actions were seriously weakened.
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The introduction of the Uniform Commercial Code in 1951 can be seen as loosening the ties even more, since section 2-709(1)(b) of the Uniform Commercial Code dropped this requirement.784 Section 2-709(1) of the UCC states:
“When the buyer fails to pay the price as it becomes due the seller may recover, together with any incidental damages under the next section, the price
(a) of goods accepted or of conforming goods lost or damaged within a commercially reasonable time after risk of their loss has passed to the buyer; and
(b) of goods identified to the contract if the seller is unable after reasonable effort to resell them at a reasonable price or the circumstances reasonably indicate that such effort will be unavailing.”
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Moreover, section 2-709(1)(a) of the UCC replaced the requirement of passing of property with the requirement of acceptance of the goods on the part of the buyer. Even though some lawyers may be inclined to argue that the buyer has accepted the goods as soon as property passes, “acceptance” under the UCC is a term of art and is not to be equated with the transfer of property.785 This is in line with the general theme of the UCC to eliminate the concept of property from the central role the concept had under the Uniform Sales Act.786 Llewellyn – one of the principal drafters of the UCC – considered property to be a “useless additional link in reasoning” when deciding whether the price or damages is an adequate remedy for the seller.787 The fact that the transfer of property became mostly irrelevant for the question of remedies between the parties in general, and the price action under the UCC in particular, was not met with applause everywhere.788 However, this development lead to more discussions regarding the merits of the price action as to whether the buyer or the seller is better equipped to sell the goods elsewhere under the respective circumstances. White and Summers state explicitly that the policy behind section 2-709(1)(a) of the UCC is that in case the buyer does not accept the goods the seller is “generally denied the price [...] for the seller is usually in the business of selling those goods, is likely to have better market contacts and is therefore in a better position to salvage by redisposing of the goods through normal channels.”789 This changes once the buyer has accepted the goods, which is why he or she cannot later claim that the seller has to take them back and dispose of them in order to mitigate the damage.790
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It is questionable, however, whether the shift from “property” to “acceptance” as a prerequisite successfully cut the “useless additional link in reasoning”, as Llewellyn may have had in mind. This is because the complex question of transfer of property was not replaced by a description of factual circumstances, but rather by the complex legal concept of “acceptance”. Even though section 2-606 of the UCC defines acceptance, it is a difficult and normative notion.791 Possession alone does not amount to an acceptance.792 Moreover, under the UCC, the buyer can reject the goods in a procedurally correct manner even though there is no sufficient substantive reason for the rejection.793 Therefore, when functionally compared to the rule in English law, the buyer under both rules still has the possibility to unilaterally prevent the seller from being able to claim the purchase price.
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The real progress, thus, lies in sections 63(3) of the Uniform Sales Act 1906 and 2-709(1)(b) of the UCC.794 In accordance with English law, the mitigation principle does not apply to the action for the purchase price under section 2-709 of the UCC.795 Yet, section 2-709(1)(b) allows sellers to recover the full purchase price if they cannot reasonably resell the goods. Under these circumstances, this resale will most of the time mirror an action that would be required by the seller in terms of mitigating the damage. The difference lies in the fact that the buyer under the general doctrine would have to prove a missed opportunity of the seller to mitigate the damage, while under section 2-709(1)(b) sellers have to prove that they were not able to execute a reasonable resale or that any such efforts would have been unavailing from the outset. Since, in many cases in merchantable trade, sellers will be able to resell the goods, their claim for the purchase price would often be denied, but they are protected in cases where they cannot do so in a reasonable manner.796 This is more seller-friendly than English law, where sellers would have to prove their damages in this case.
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In the example of the sale of a cow,797 the results under the UCC at first appear similar, but are different upon a closer look. First, in contrast to English law, it is not relevant whether a specific cow or any cow was sold, since the claim for the price under section 2-709(1) of the UCC is not dependent on a transfer of property. If B refuses to accept the cow and a claim under section 2-709(1)(b) of the UCC is not possible because a market for cows exists, S is confined to damages under section 2-706 of the UCC if he resells the cow or damages as calculated under section 2-708 of the UCC. From the time of performance, the seller thereby bears the risk of a drop in the market price.
4. Summary
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Thus, on the one hand, countries that follow the lead of the Sale of Goods Act 1893 or 1979 still exhibit the doctrinal problem that arose from the general rejection of enforcement of mere promises, and rely on the concept of property as a quid pro quo to decide whether the seller can successfully sue for the price. On the other hand, the USA has moved away from the concept of property to the concept of acceptance of the goods and the question of a reasonable resale. The USA has, thereby, evolved beyond past doctrinal issues. In the USA, in turn, the central question is instead whether the seller can be reasonably expected to sell the goods elsewhere under considerations of efficiency – a question that courts in England seem not to be as interested in. Yet, both legal systems concur – although for different reasons – that it is the seller who generally bears the burden of redisposing of the goods. If the seller cannot claim the price and still does not resell the goods despite a reasonable opportunity to do so, an adverse movement in the market is generally to his or her own detriment.
| 697 | Treitel/Peel, para. 21-006. |
| 698 | Treitel/Peel, para. 21-006. |
| 699 | Bridge, Sale of Goods, paras. 3.01, 11.60; Stadler, Verkehrsschutz durch Abstraktion, p. 268. |
| 700 | Sec. 49(2) SGA 1979; highly skeptical regarding this provision, Bridge, Sale of Goods, para. 11.71; explaining the historical roots of the provision, Weidt, pp. 47 et seq. |
| 701 | Further explanations Bridge, Sale of Goods, paras. 11.67 et seq. |
| 702 | Sect. 50(3) SGA 1979. |
| 703 | Jervis v Harris [1996] 1 Ch 995, 202; Bridge, Sale of Goods, para. 11.61; Treitel/Peel, para. 21-013. |
| 704 | Bridge, Debt Instead of Damages, pp. 423, 425. |
| 705 | Weller, JZ 2008, 764, 769; German Supreme Court, 28 April 1900, RGZ 46, 193, 198 et seq. regarding sections 49, 50 Sale of Goods Act 1893. |
| 706 | Farnsworth, 69 Columbia Law Review (1969), 576, 592. |
| 707 | Holdsworth, p. 412; Farnsworth, 69 Columbia Law Review (1969), 576, 592. Roman law, in contrast, while having been structures around actions and originally not having considered the mere agreement binding and actionable (Eck, p. 14), later seems to have considered a mere agreement of a sales contract to be actionable, Zimmermann, pp. 230 et seq. Yet, at a later stage of Roman law, the binding character of the sales contract was again tied to (partly) execution, Zimmermann, pp. 275 et seq. Also highlighting the contrast between English law and Roman law in this regard, Rüfner, pp. 233, 237. |
| 708 | Holdsworth, p. 282. |
| 709 | Rheinstein, p. 18. |
| 710 | Rheinstein, p. 43; Rüfner, pp. 233, 242, 246, 247; Fandl, 34 Berkeley Journal of International Law (2016), 1, 10. |
| 711 | Farnsworth, 69 Columbia Law Review (1969), 576, 592. |
| 712 | Rheinstein, pp. 43 et seq. |
| 713 | Woodward v Rowe (1666) 2 Keb 106, 84 ER 864; Bainbridge, 24 Virginia Journal of International Law (1984), 619, 626. |
| 714 | Pillans v Van Mierop (1765) 3 Burr 1663, 97 ER 1035. The House of Lords overturned the decision in Rann v Hughes (1778) 7 TR 350n, 101 ER 1014n (HL). |
| 715 | Rheinstein, p. 18; Hager, Gefahrtragung, p. 58; Häcker, ZEuP 2011, 335, 339. |
| 716 | Rheinstein, p. 18; Hager, Gefahrtragung, p. 58; Holdsworth, pp. 282 et seq.; Goode, Commercial Law, 2nd edn, p. 187. |
| 717 | Transfer of possession was not seen as necessary for that matter, see Neufang, p. 85. |
| 718 | Rheinstein, p. 18; Hager, Gefahrtragung, p. 58. |
| 719 | Farnsworth, 69 Columbia Law Review (1969), 576, 586. |
| 720 | For the distinction see Neufang, p. 86. |
| 721 | Holdsworth, p. 421; Pollock/Maitland, p. 212; Rheinstein, p. 19. |
| 722 | Zimmermann, p. 779; Farnsworth, 69 Columbia Law Review (1969), 576, 597. |
| 723 | McGovern, 54 Iowa Law Review (1968), 19, 26 et seq. |
| 724 | Rheinstein, pp. 22 et seq.; Ames, 2 Harvard Law Review (1888–1889), 53. |
| 725 | Beatson/Burrows/Cartwright, pp. 16–17; Furmston, p. 10. |
| 726 | Rheinstein, p. 129. |
| 727 | Cartwright, p. 275. |
| 728 | [1961] UKHL 5. |
| 729 | Liu, 74 Modern Law Review (2011) 171, 172. |
| 730 | The second instance: White & Carter (Councils) Ltd v McGregor (1960) SC 276. |
| 731 | (1952) SC 15. |
| 732 | See Lord Reids’s explanation in White & Carter (Councils) Ltd v McGregor [1961] UKHL 5. |
| 733 | See the explanation by Lord Keith of Avonholm in White & Carter (Councils) Ltd v McGregor [1961] UKHL 5. |
| 734 | Lord Hodson, while supporting the majority, did not accept any limitation in contrast to Lord Reid and potentially Lord Tucker. |
| 735 | Lord Reid in White & Carter (Councils) Ltd v McGregor [1961] UKHL 5. |
| 736 | Bridge, Sale of Goods, para. 12.52; Liu, 74 Modern Law Review (2011) 171, 189; but see, Treitel/Peel, para. 21-015 stating that the rule of the case “represents a reasonable compromise between the interests of the two contracting parties”. |
| 737 | Weidt, p. 158. |
| 738 | For example, cf. Liu, 74 Modern Law Review (2011) 171 (“critical issue in that case, the notion of ‘legitimate interest’”); same conclusion by Flessner, FS Bucher, pp. 145, 163. |
| 739 | Ocean Marine Navigation Ltd v Koch Carbon Inc. (The Dynamic) [2003] 2 Lloyd’s Rep 693; Zhu, 8 King’s Student Law Review (2017), 13, 16. |
| 740 | See F. G. Wilson Engineering Ltd v John Holt & Co. Ltd [2012] EWHC 2477 (Comm), 1 All ER 786, which clarifies that no other legal basis for claiming the purchase price under a sales contract that is subject to the SGA 1979 is applicable; McKendrick, Remedies of the Seller, para. 9-057; contra Merrett, Chitty on Contracts, para. 46-367, who advocates that the seller should be entitled to sue when the contract expressly or impliedly allows for it and the time for payment is not related to the passing of property or delivery. The legal situation might be different in Australia, cf. High Court of Australia, Minister for Supply & Development v Servicemen’s Cooperative Joinery Manufactures Ltd [1951] HCA 15, (1951) 82 CLR 621, where Williams J stated: “But the parties can make any contract they please with respect to the payment of the price and if they provide that it is to be paid before the property passes, the seller can sue for the price as soon as it becomes payable, for the payment of the price is a condition precedent to the passing of the property. Usually such a contract provides for the payment of the price on a day certain, but in the present case no day of payment is fixed.”; different without explanation Plaimar Ltd v Waters Trading Co [1945] HCA 34, (1945) 72 CLR 304, at 318. Lord Mance’s obiter dictum in PST Energy 7 Shipping LLC and another v OW Bunker Malta Ltd and another (“The Res Cogitans”) [2016] AC 1034 (UKSC), [2016] UKSC 22, para. 58 might signify that this conclusion under English law may be changed in the future. |
| 741 | Cf. Ministry of Sound (Ireland) Ltd v World Online Ltd [2003] EWHC 2178 (Ch), [2003] 2 All ER (Comm) 823 at para. 41; see also Megarry J in Hounslow London Borough council v Twickenham Garden Developments Ltd [1971] Ch 233, pp. 253 et seq., where he states that not only the necessity for active co-operation excludes the debt claim but also passive co-operation such as letting somebody work on his or her property; Weidt, p. 157. |
| 742 | Colley v Overseas Exporters [1921] 3 KB 302; Bridge, Sale of Goods, para. 11.65; Goode, Commercial Law, 2nd edn, p. 425. |
| 743 | Liu, 74 Modern Law Review (2011) 171, 180. |
| 744 | Lord Hodson in White & Carter (Councils) Ltd v McGregor [1961] UKHL 5. |
| 745 | This case’s connection with and its relevance within sales law is also accepted by Twigg-Flesner/Canavan, p. 398 fn. 2; whereas highly skeptical regarding the case and its radiating effect Lord Denning MR in Attica Sea Carriers Corporation v Ferrostaal Poseidon Bulk Reederei GmbH (The Puerto Buitrago) [1976] 1 Lloyd’s Rep 250, 255. Flessner, FS Bucher, pp. 145, 163 concludes divergently that this case rather shows how far English law has moved away from the understanding with which section 49(1) SGA 1979 was drafted. |
| 746 | As claimed by Liu, 74 Modern Law Review (2011) 171, 179 et seq. At the same time, Liu argues the relevant issue is not whether a claim for the price exists after the conditions have been fulfilled, but rather whether a party should be allowed to fulfill them at all. |
| 747 | Burrows, Remedies, p. 387. |
| 748 | Chen-Wishart, Chitty on Contracts, para. 30-011. |
| 749 | Similarly Liu, 74 Modern Law Review (2011) 171, 184, when he accepts that the discussion about “legitimate interest”, and in his view efficiency is irrelevant, if the contract requires cooperation, as is the case regarding most sales contracts; Twigg-Flesner/Canavan, pp. 402, 403. |
| 750 | Similar conclusion on sect. 49(1) SGA 1979, Gullifer, Lloyd’s Maritime and Commercial Law Quarterly (2014), 564, 579: “The original rationale for section 49(1) was that, until property had passed, the seller has not completely fulfilled his promise, and executed consideration was necessary for an action in debt. But with the abolition of the forms of action, this historical justification seems outdated, and as discussed above, many of the cases make no distinction between delivery and the passing of property.” |
| 751 | Jansen/Zimmermann/Kleinschmidt, p. 1192 para. 5; probably with similar assessment Rabel, Recht des Warenkaufs II, p. 42. |
| 752 | Sect. 17 SGA 1979. |
| 753 | Saidov, Journal of Business Law (2019), 1, 13. |
| 754 | Merkin/Saintier, p. 416. |
| 755 | McKendrick, Contract Law, 13th edn, p. 368. |
| 756 | Beheshti, 24 Uniform Law Review (2019), 497, 510; citing Jamal v Moolla Dawood [1916] 1 AC 175, 179; Bunge SA v Nidera BV [2015] UKSC 43, 80, [2015] Bus LR 987. |
| 757 | Merkin/Saintier, p. 416 are skeptical for this reason. |
| 758 | Bridge, Sale of Goods, para. 11.63. |
| 759 | Chen-Wishart, Chitty on Contracts, para. 30-009. |
| 760 | Cf. also Saidov, Journal of Business Law (2019), 1, 10 who for similar reasons considers the transfer of property as a prerequisite for the action for the price to be “somewhat flawed”. |
| 761 | [2016] AC 1034 (UKSC), [2016] UKSC 22. |
| 762 | For the facts of the case and details on the contract characterization, see above paras. 292. |
| 763 | Saidov, Journal of Business Law (2019), 1, 6. |
| 764 | [2012] EWHC 2477 (Comm), [2014] 1 All ER 785. |
| 765 | PST Energy 7 Shipping LLC and another v OW Bunker Malta Ltd and another (“The Res Cogitans”) [2016] AC 1034 (UKSC), [2016] UKSC 22, para. 58; cf. Saidov, Journal of Business Law (2019), 1, 9 et seq. on the consequences of this aspect for the action for the price. |
| 766 | Bridge/Gullifer/Low/McMeel, para. 19-025; Saidov, Journal of Business Law (2019), 1, 11–12 who depicts different possible interpretations of the Supreme Court’s obiter dictum regarding the exclusive character of sect. 49(1) SGA 1979. In contrast, Goode/McKendrick, paras. 7.33–7.35 consider the created uncertainty to be overstated and cite Wood v Tui Travel plc [2017] ECWA Civ 11, [2018] QB 927 and Cockett Marine Oil DMCC v ING Bank NV and OW Bunker Malte Ltd [2019] EWHC 1533 (Comm), [2019] Lloyd’s Rep Plus 77 as examples of the decision being interpreted narrowly. |
| 767 | Sect. 55(1) Goods Act 1958 in Victoria; sect. 52(1) Sale of Goods Act 1954 in the Australian Capital Territory; sect. 51(1) Sale of Goods Act 1923 in New South Wales; sect. 50(1) Sale of Goods Act 1896 in Queensland; sect. 48(1) Sale of Goods Act 1895 in South Australia; sect. 48(1) Sale of Goods Act 1895 in Western Australia; sect. 53(1) Sale of Goods Act 1896 in Tasmania; sect. 51(1) Sale of Goods Act 1972 in the Northern Territory. See also Automatic Fire Sprinklers Proprietary Ltd v Watson [1946] HCA 25; (1946) 72 CLR 435, 464. |
| 768 | Thampapillai, p. 30. |
| 769 | Thampapillai, p. 30. |
| 770 | Sect. 51(1) Sale of Goods Ordinance in Hong Kong; sect. 49(1) Sale of Goods Act 1979 in Singapore. See for case law in Hong Kong, Gilman and Company Ltd v Yokohama Musen Industrial (HK) Ltd [1976] HKLR 821 with a critical comment in 7 Hong Kong Law Journal [1977] 128. |
| 771 | Yap, 46 Common Law World Review (2017), 269, 277. |
| 772 | See for example, sect. 52(1) Sale of Goods Act 1996 in British Columbia; sect. 47(1) Sale of Goods Act 1990 in Ontario. |
| 773 | Bridge, Debt Instead of Damages, pp. 423, 443. |
| 774 | Gabriel, 23 Barry Law Review (2018), 129, 131. |
| 775 | Waite, 17 Michigan Law Review (1918–19), 283, 284 et seq. |
| 776 | Waite, 17 Michigan Law Review (1918–19), 283, 287 et seq. |
| 777 | Dustan v. McAndrews, 44 N. Y. 72 (1870); Heyden v. De Mets, 53 N. Y. 426 (1873); Habeler et al. v. Rogers et al., 131 F. 43 (2nd Cir. 1904); cf. Williston, §§ 562 et seq., pp. 1399 et seq. But see Waite, 17 Michigan Law Review (1918–19), 283, 291 arguing that the idea behind the rule was not to overturn the notion that the seller cannot thrust title on an unwilling buyer, but rather that the buyer will oftentimes already be in possession of the goods. |
| 778 | For example, in Missouri, Crown Vinegar and Spice Co. v. Wehrs, 59 Mo. App. 493 (1894); in Ohio, Shawhan v. Van Nest, 25 Ohio St. 490 (1874); Williston, § 562, p. 1400. |
| 779 | An example from case law is Hoffman v. Gosline, 172 Fed. 113, 96 C. C. A. 318 (6th Cir. 1909); for English law in this regard, see Merrett, Chitty on Contracts, para. 46-362. |
| 780 | Jensen, § 522. |
| 781 | Lewellyn, XV New York University Law Quarterly Review (1938), 159, 178. |
| 782 | Williston, Vol. 3, § 562, p. 1400. |
| 783 | Neufang, p. 95. |
| 784 | Neufang, pp. 90, 95. |
| 785 | White/Summers/Barnhizer/Barnes/Snyder, p. 301. |
| 786 | Neufang, p. 87; Stone, p. 44. |
| 787 | Lewellyn, XV New York University Law Quarterly Review (1938), 159, 175. |
| 788 | Williston, Harvard Law Review (1950), p. 568 evaluated this to be “unsatisfactory and can result only in confusion” and opposed the new price action specifically on pp. 586 et seq. |
| 789 | White/Summers/Barnhizer/Barnes/Snyder, p. 299. |
| 790 | Siemens Energy & Automation Inc. v. Coleman Electrical Supply Co. Inc., 46 F. Supp. 2d 217 (1999). |
| 791 | Cf. White/Summers/Barnhizer/Barnes/Snyder, pp. 357 et seq. |
| 792 | Whaley, 24 Drake Law Review (1974), 52, 64; White/Summers/Barnhizer/Barnes/Snyder, p. 357. |
| 793 | Zhong Ya Chemical (USA) Ltd v. Industrial Chemical Trading, Inc., 2001 WL 69438, 43 UCC2d 879 (2001) sub B, later clarified but without material changes in regard to the subject of citation by Zhong Ya Chemical (USA) Ltd v. Industrial Chemical Trading, Inc., 2001 WL 1491378 (2001); Brandeis Machinery & Supply Co. LLC v. Capitol Crane Rental Inc., 765 N. E.2d 173, 47 UCC2d 200 (Ind. App. 2002); Honnold, 107 University of Pennsylvania Law Review (1959), 299, 327; unclear whether this also holds true for a revocation of acceptance, White/Summers/Barnhizer/Barnes/Snyder, p. 302. |
| 794 | Similarly, Neufang, p. 95. |
| 795 | White/Summers/Barnhizer/Barnes/Snyder, p. 304. |
| 796 | See as an example for the latter situation Jacobson v. Donnkenny, Inc., 1967 WL 8844, 4 UCC 850 (N.Y. Sup. 1967). |
| 797 | For the solution for this case under English law, see above paras. 361 et seq. |
Property in Goods and the CISG (2024), S. 152—167
