ABSTRACT
Buying and selling is a major activity in human life. Man cannot fully exist without having the essentials needed to keep him living in this world. Buying and selling have been in existence with the human race from time immemorial.
BRIEF HISTORY OF SALE OF GOODS ACT.
In Nigeria, before the reception of the Sale of Goods Act 1893, customary law applied to customary sales as it applies to other customary commercial transactions. The law of sale of goods in Nigeria is principally governed by the Sale of Goods Act, 1893, an English Law adopted in Nigeria long before political independence as one of the statutes of general application in the country. As it is with several other statutes of general application, this statute has become part and parcel of Nigeria’s legal system most especially in transactions that involve goods.
In the last couple of decades, the Sale of Goods Act has increasingly proven problematic in application and has generated enormous confusion and controversies resulting in discordant court decisions. This is principally owing to the nature of the law that has been in operation for over a hundred years, notwithstanding contrasting socio-economic transformations that have taken place in the last century. The law of sale of goods in Nigeria is principally governed by the Sale of Goods Act, of 1893, an English Law adopted in Nigeria long before political independence as one of the statutes of general application in the country (Obilade, 1979).1 As is with some other statutes of 4.0. Relationship between freedom of contract and terms implied by statute in the contract for the sales of goods. application, this statute has become outdated and out of tune with the current realities of business and contractual transactions involving both movable and immovable properties. As such, certain of its provisions have become either moribund or inapplicable in given sets of circumstances; hence this research undertakes a critical review of some of the major provisions relating to the rights of parties to a sale of goods contract to strengthen the law and its application for better business and contractual transactions. Particular focus is on the validity of a contract for the sale of goods and the rights and remedies available to both the buyer and the seller.
THE DOCTRINE OF FREEDOM OF CONTRACT IN CONTRACT FOR THE SALE OF GOODS (regarding section 55 of the Sales of Goods Act 1893).
Over the years Nigerian courts have delivered on the above matter some of the cases decided related to the freedom of parties while entering into contractual transactions are thus. ;
In Conoil Plc v Vitol SA, the Supreme Court Justices were unanimous on the contractual effect of a choice of court agreement. Nweze JSC in his leading judgment stated that: “In all, the truth remains that if parties agree, they are bound by its terms.” Okoro JSC concurred that: “The law is quite’ settled that parties are bound by the contract they voluntarily enter into and cannot act outside the terms and conditions contained in the said contract. When parties enter into a contract, they should be careful about the terms they incorporate into the contract because the law will hold them bound by those terms. No party will be allowed to read into the contract terms on which there has been no agreement. Any of the parties who do so violate the terms of that contract…. Having agreed that any dispute arising from the contract should be settled at the English court, the appellant was bound by the terms of the contract.”Eko JSC also concurred that: “Where parties, fully cognizant of their rights, voluntarily elect and nominate the forum for the resolution of any dispute arising from their contract, with international flavour as the instant, the courts always respect and defer to their mutual wishes and intention. The courts only need to be satisfied that, in their freedom of contract, the parties negotiated and agreed freely to subject their dispute to the laws and country of their choice.
Similarly, in the case of Beaumont Resources Ltd v DWC Drilling Ltd, “the Court of Appeal Justices were unanimous on the contractual effect of a choice of court agreement. Otisi JCA held that: “…it is settled that, in the absence of fraud, misrepresentation and illegality, parties to an agreement or contract are bound by the terms and conditions of the contract they signed… It is also well established that the Court cannot make contracts for the parties, rewrite the contract or go outside the express terms of the contract to enforce it…
Sankey JCA concurred that: “The Court of law, on the other hand, must always respect the sanctity of the agreement of the parties – the role of the Court is to pronounce on the wishes of the parties and not to make a contract for them or to rewrite the one they have already made for themselves. The judicial attitude or disposition of the Court to terms of agreement freely entered into by parties to contract is that the Court will implement fully the intention of the contracting parties. This is anchored on the reasoning that where the terms of a contract are clear and unambiguous, the duty of the Court is to give effect to them and on no account should it re-write the contract for the parties. In the absence of fraud, duress or misrepresentation, the parties are bound to the contract they freely entered into.”
The above judicial statements are replete with applying the principles of Nigerian contract law to the terms of a choice of court agreement. In essence, parties are bound by the clear and unambiguous terms of a choice of court agreement, which the Nigerian court will strictly enforce. This is so concerning section 55, of the Sales of Goods Act 1893.
IMPLIED TERMS AND THEIR FORMS UNDER THE CONTRACT FOR THE SALES OF GOODS
Implied terms generally, it is important to note that the doctrine of freedom of Contract as discussed under above and that of the sanctity of contract prevents the court from interfering with it whatever the parties might have agreed to, therefore parties to a contract of sale are at liberty to make any stipulation they desire to govern them subsequently in their contract subject only to what is illegal, immoral or what is contrary to the public policy or any other vitiating elements of a contract generally however, where parties to the contract of sale advertently or otherwise failed, neglected or refused to make any stipulation on the issues covered by the implied terms that will regulate them in their relationship or their, at that time the provision of The (SOGA) sales of goods act will be implied to constitutes what parties have agreed on, these implied terms are contained under the provision of section 10, 12, 13, 14, and 15 Sales of goods act 1893,.
THESE PROVISIONS AUTOMATICALLY APPLY UNLESS A DIFFERENT INTENTION APPEARS IN THE CONTRACT.
IMPLIED STIPULATION AS TO TIME:
Section 10 (1) of SOGA provides:
“Unless a different intention appears from the terms of the contract, stipulations as to the time of payment are not deemed to be of the essence of a contract of sale. Whether any other stipulation ‘as to time is of the essence ‘of the contract or not depends on the terms of the contract”.
Three (3) things are evident from the above provision:
1. That the application of the provision of S.10 is subject to the express agreement of the parties. Where the parties expressly agree otherwise, the provision of s.10 of SOGA becomes inapplicable.
2. Time of payment is not of the essence and therefore it is not fundamental in a contract of sale. In other words, where expressly not agreed upon, it is not a condition upon which the buyer or the seller can rely to terminate the contract and claim damages.
3. Other stipulations as to time will be measured or determined by the terms of the Contract of sale.
In the case of Amadi v. Thomas Aplin & Co. Ltd. (1972) v.1 All E.R. pg. 225.
” The court held that the parties to a contract of sale would always determine at the time of their contract as to whether any stipulation as to time will be fundamentally essential or not “.
2. IMPLIED CONDITIION AS TO TITLE OR OWNERSHIP; This can be seen as a manifestation of the maxim ” Nemo dat quad non habet ” (you can not give what you do not have).
. Unless a different intention appears from the terms of the contract or circumstances of the contract, sec. 12(1) of SOGA provides:
“an implied condition on the part of the seller that in the case of a sale, he has a right to sell the goods, and that in the case of an agreement to sell, he will have a right to sell the goods at the time when the property is to pass:”.
The case of Akoshile v Ogidan (1950) NLR 87 P.57 is very useful in this regard
In this case, the defendant sold to the plaintiff a car which the defendant claimed to have bought from a European. Subsequently, the European from whom he bought the car was convicted of stealing the car.
” The court held that the defendant had breached Section 12(1) of SOGA which enabled the plaintiff to repudiate the contract and claim a refund of the money paid”
IMPLIED CONDITION AS TO DESCRIPTION
(S.13) Section 13(1) of SOGA 1983 provides: “Where there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description; and if the sale is by sample, as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description.”
It is important to note that description within the concept of section 13(1) of SOGA 1893, has not been given a wide interpretation. Description include:
1. The class of the goods
2. Ingredients used in the production
3. The thickness or otherwise of the goods
4. The Packaging mode of the goods
5. The Quality and quantity of the goods etc.
In the case of Varley v. Whipp 1900 V.1 KB Pg 1.
In this case, there was a sale of a second-hand reaping machine which was described as new the previous year and the seller further said that the machine was only used to cut 50-60 acres of land. At the time of the contract, the buyer did not see the machine. However, when it was delivered to him, it was found to be very far from the way it was described, and the machine was found to be much older.
“The court held that there was a breach of Section 13 of SOGA, and the court made the following observations; the term, ‘sales of goods by description’ must apply to all cases where the purchaser has not seen the goods but is relying on the description alone. The most usual application of that section, no doubt, is to unascertained goods, but I think it must also be applied in cases such as this where there is no identification otherwise by description”.
FITNESS FOR PURPOSE (S.14(1)).
Section 14(1) provides that:
“Where the buyer, expressly or by implication, makes fitness. known to the seller the particular purpose for which the goods are required, to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description which it is in the course of the seller’s business to supply (whether he is the manufacturer or not), there is an implied condition that the goods shall be reasonably fit for such purpose, provided that in the case of a contract for the sale of a specified article under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose”
The provision of S14(1) is an exception to the Common law rule of caveat emptor meaning let the buyers beware of what he is buying. The buyer should examine the goods and the buyer should by such examination be able to decide whether he wants to buy the goods or not. The seller is not under any obligation to disclose anything about the goods except if he is specifically asked.
However, the provision of section 14(1) of SOGA protects the buyer against this Common law rule (caveat emptor) provided the following conditions are satisfied:
1. That the buyer notified the seller of the purpose for which he requires the goods. This could be done either expressly or implication or contructively. However, on the application of this condition, where the goods can only be used for one particular purpose, the seller will be presumed to know that particular purpose.
See the case of Grant v. Australian Knitting Mills (1936) Pg 85.
In this case, the plaintiff purchased underpants, wore them and eventually infected with dermatitis. the court held that when the plaintiff wanted an underplant it was impliedly concluded that he was going to wear it and having been infected with diseases as a result, it became unfit for the purpose for the purposes required and therefore there was a breach of section 14(1) of SOGA. which entitled to terminate the contract and claim damages.
2. Secondly, if the goods may be used ordinarily for only one particular purpose, but there is a special circumstance known to the buyer but unknown to the seller, such special circumstance or knowledge should not be communicated to the seller. It would be the responsibility of the buyer to disclose any such special circumstance or knowledge that is peculiar to him.
See the case of Gritins v. Peter Conway Ltd (1939) vol. 1 All E.R. pt 685.
In this case, the plaintiff had usually very sensitive skin and he bought a coat from the defendant. As a result of wearing it, he was infected with a skin problem but it was found in the case as a fact that this fabric material would not have infected a normal person and the plaintiff filed an action under S.14(1). The court held that: “This was an unusual situation which ought to have been disclosed by the buyer to the seller and therefore, the seller was not in breach of S14(1).
MERCHANTABLE QUALITY.
This is regulated by sec, 14(2) SOGA,1893; which provides:
“Where goods are bought by description from a seller who deals in goods of that description (whether he be the manufacturer or not), there is an implied condition that the goods shall be of merchantable quality; provided that if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed”
Merchantable may be explained to mean that the condition of the goods must be such that they suit the purpose of the buyer, and that they are they are not only suitable but must be readily usable in that nothing needs to be done to use it. The provision is intended to protect the buyer against being sold defective goods that would not be suitable and readily usable or that require something to be done to the goods before they can be used as a result of a defect. The application of S14(2) is not absolute. It is only intended to cover goods with hidden defects that are not patently visible upon a reasonable examination by the buyer. Therefore, S14(2) provides that if the buyer examines the goods and could not have reasonably noticed any defect in that case, the buyer is protected. In other to enjoy the protection of section 14(2) by the buyer, the following conditions must be satisfied ; (1). The goods must be sold by description meaning that the goods must correspond with the right identity process and characteristics with which it was described whether or not the buyer has seen the goods.
(2). The seller deals regularly in the goods described whether he is the manufacturer or not as long as he accepts the order for the goods.
(3). The goods are apparently of merchantable quality that no clear defect or patent defect could reasonably be noticed upon an examination.
See the case of Plastic Manufacturer v. Toki Nig. Ltd. (1976) 12 CCHCJ pg 271.
In this case, the plaintiff was a manufacturer of plastic containers and the defendant wanted the containers for keeping shampoos. Therefore the containers were supplied and were found to be unfit for the purpose supplied. “It was held that the containers were of merchantable quality because nothing is required to be done to them in other to use them and since the containers may be required for varieties of purposes and the purpose to which the containers were required were not specified to the seller, the buyer cannot terminate the contract for this reason.
However in the case of B.S. Brown & Son v. Grakes (1970) N.L.R. pg. 750, it was held that the price theory will be used with utmost constraint and shouldn’t be used exclusively whether the goods are merchantable quality or not.
SALE BY SAMPLE
Section 15(2) provides that where there is a sale by sample, there is an implied condition that: the bulk shall correspond with the sample in quality. The buyer shall have a reasonable opportunity to compare the bulk with the sample. The goods shall be free from any defect rendering them unmerchantable which will not be apparent on a reasonable examination of the sample
RELATIONSHIP BETWEEN FREEDOM OF CONTRACT AND TERMS IMPLIED BY STATUTE IN THE CONTRACT FOR THE SALES OF GOODS.
In Conoil Plc v Vitol SA, the Supreme Court Justices were unanimous on the contractual effect of a choice of court agreement. Nweze JSC in his leading judgment stated that: “In all, the truth remains that if parties agree, they are bound by its terms.”
Similarly, in the case of Beaumont Resources Ltd v DWC Drilling Ltd, “the Court of Appeal Justices were unanimous on the contractual effect of a choice of court agreement. Otisi JCA held that: “…it is settled that, in the absence of fraud, misrepresentation and illegality, parties to an agreement or contract are bound by the terms and conditions of the contract they signed… It is also well established that the Court cannot make contracts for the parties, rewrite the contract or go outside the express terms of the contract to enforce it…
Sankey JCA concurred that: “The Court of law, on the other hand, must always respect the sanctity of the agreement of the parties – the role of the Court is to pronounce on the wishes of the parties and not to make a contract for them or to rewrite the one they have already made for themselves. The judicial attitude or disposition of this is for the Court to enforce the agreement freely entered into by parties to a contract that the Court will implement fully the intention of the contracting parties. This is anchored on the reasoning that where the terms of a contract are clear and unambiguous, the duty of the Court is to give effect to them and not to rewrite such agreement.
On the other hand implied terms are legislated to guide parties who while entering the contract for sales of goods, however, where parties so wish can set aside part or the entire provision.
It is also important to note that in the case of execution, SOGA,1893. Will provide parties with a way to follow however, parties are not bound to follow such a guide. Parties in their will can throughout those implied terms as mentioned and also decide to be binding by their agreement also the entire provision of sales of Goods Act could be set aside so that their agreement shall supersede the Whole SOGA notwithstanding any contradiction to the Act. Section 55 of SOGA provides ;
. Where any right, duty, or liability would arise under a contract of sale by implication of law, it may be negatived or varied by express agreement or by the course of dealing between the parties, or by usage, if the usage is such as to bind both parties to the contract.
However, in an instance where parties did not exclude the provision of SOGA in their agreement or negative by their previous cause of dealings or invalidate the by usage or custom in business, if a matter arises thereafter the presumption is that the provision of sales of good
