The Sale of Goods Act 1896 (Qld) (the Act) governs transactions between a buyer and a seller. Such transactions can range from the purchase of hot chips at a takeaway store to the supply of millions of dollars’ worth of highly specialised medical equipment to a hospital.
What are ‘Goods’?
The term ‘goods’ is defined in section 3 of the Act. Goods include: ‘all chattels personal other than things in action and money, and also includes emblements and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale’. The definition excludes items such as land, debts, insurance policies and contracts for work and materials.
What is a ‘Sale of Goods’?
The term ‘contract of sale of goods’ is defined in section 4 of the Act as: ‘a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price. There may be a contract of sale between one part owner and another. A contract of sale may be absolute or conditional…’ There must be a monetary consideration as part of the payment for the goods in order for the Act to apply.
The Act includes provisions relating to:
- Contract formation
- Performance of the contract
- Rights of an unpaid seller against goods
- Resale by a buyer or seller
- Actions for breach of contract
A Contract for the Sale of Goods
Like all contracts, a contract for the sale of goods requires an agreement, which involves offer and acceptance. Generally, advertising goods for sale does not amount to an offer to sell but an ‘invitation to treat’, which is not binding and instead is seeking an offer from a customer. There are no particular formalities required for the making of a contract for the sale of goods. A price may be fixed by the contract or decided later, but it must be reasonable. A contract is enforceable if it is partly written, oral or made by conduct.
Romalpa Clause
A Romalpa clause, also known as a ‘retention of title clause’, allows the seller to reserve the right of disposal of the goods. It is a provision in a sale of goods contract where the buyer has possession of the goods, while the seller retains title to the goods until certain conditions of the contract of sale are fulfilled. This ensures that the seller retains the title to the goods until the buyer has met a requirement or paid the price. A Romalpa clause can be beneficial to both the buyer and seller because it allows the goods to be delivered without the need for upfront payment from the buyer.
Buyers’ Duties and Obligations Under the Act
It is the buyer’s duty to accept and pay for the goods in accordance with the terms of the contract of sale. Generally, once the buyer has ‘accepted’ the purchased goods under a contract of sale, any breach of a condition by the seller can only be treated as a breach of warranty. This means that the buyer cannot terminate the contract on the basis of the breach. If the seller is ready and willing to deliver the goods requested by the buyer, and the buyer does not accept delivery of the goods within a reasonable time, the buyer will be liable to the seller for any loss caused by the buyer’s neglect or refusal to take delivery.
Sellers’ Duties and Obligations Under the Act
It is the seller’s duty to deliver the goods, transfer ownership of them and warrant that they conform with the contract of sale. The goods must be delivered by the seller at a time and place as agreed upon by the parties under the contract for sale. Where the contract does not specify a time for delivery, then it is the seller’s duty to deliver the goods within a reasonable timeframe.
Action
- Identify and understand the specific requirements and obligations under the Act
- Ensure contracts for the sale of goods are clearly drafted and comprehensively detail the terms of sale
- Include Romalpa clauses where beneficial to protect the seller’s interests
- Seek legal advice to navigate complex commercial transactions and ensure compliance with relevant legislation
Seeking Advice
Commercial transactions can be complex, so it is important to know when (and how) the Sale of Goods Act 1896 (Qld) applies. Make a booking with Fox Piper today about your sale of goods matter for a confidential consultation on your legal rights and options.
Conclusion
Understanding the Sale of Goods Act 1896 (Qld) is crucial for both buyers and sellers involved in commercial transactions. Being aware of your rights and obligations under the Act can help avoid disputes and ensure smooth business operations. If you require assistance, seeking advice from Fox Piper can provide the necessary guidance and support.
