A CRITICAL EXAMINATION OF PASSING OF PROPERTY AND RISK IN THE GOODS IN SALE OF GOODS CONTRACT.

Abstract

Passing of property in the goods has over the years been recognized as
one of the most important aspect of sale of goods contracts: on the ground
that passing of property in the goods from the seller to the buyer either in
ascertained or unascertained goods, involves the delivery of the goods and
the risk of loss. It also involves the various stages of parties’ performance
of their obligations. Though, the intention of the parties can be discerned
from the terms of the contract, conduct of the parties and the
circumstances of the case in specific/ascertained and unascertained
goods, but there are problems of the buyer bearing the risk of loss, when
the goods have been shipped but has not been delivered/received by the
buyer. The challenges is observed more in a cost, insurance and freight
(C.I.F.) contract/transportation term particularly when goods are bought
afloat and the buyer is deemed to have assumed the risk of loss on
shipment. There is also problem of transfer of property in unascertained
goods forming part of the bulk and goods in undivided shares forming part
of the bulk. It is in order to resolve these problems and to achieve the aim
of this article, that a doctrinal method of research was used: whereof we
used the primary research materials such as Sale of Goods Act, 1893, Sale
of Goods Act, 1979 of England, and the Sale of Goods (Amendment) Act,
1995 of England and case laws; secondary research materials like
opinion of law writers in textbooks, journals and tertiary sources like
online materials. We found out that in interpreting the intention of the
parties, due regard is not made to the nature of the goods which is the
subject matter of the contract. Our findings also include that the
application of rule 5 of section 18 of the Act, relating to passing of risk
and property in unascertained goods forming part of the bulk and property
in the goods in undivided share forming part of the bulk, there are harsh
and inequitable effects on the transactions of parties particularly against
the buyer. We further found that with the provisions of sections 20A and
20B of the English Sale of Goods (Amendment) Act 1995; such harsh and
inequitable provisions of sections 16 and 18 rule 5 of the 1979 English
Sale of Goods Act, has been cushioned. At the end, we recommended that
the provisions of the amended Sale of Goods Act 1995 (English) should be adopted in Nigeria, in order to remedy the harsh effects and litigations in
this respect.