How Effectively the Rules of Passing of Property and Transfer of Risk in the Sale Of Goods Act 1979

The passing of any risk associated with preservation of the property sold or in the process of being sold is governed by Section 20(1) of the Sale of Goods Act 1979 which provides as follows: ‘Unless otherwise agreed, the goods remain at the sellers’ risk until the property in them is transferred to the buyer, but when the property in them is transferred to the buyer the goods are at the buyer’s risk whether delivery has been made or not.’

In other words, the risk passes with the property in question. By virtue of Section 17 (1) property passes ‘…at such times as the parties to the contract intend it to be transferred.’3 Moreover, Section 16 requires that the goods which are the subject matter of the sales contract be ascertained. Section 16 provides that ‘where there is a contract for the sale of unascertained goods no property in the goods is transferred to the buyer unless and until the goods are ascertained.’4 While the Sale of Goods Act fails to describe ‘ascertained’ goods common law maintains the position stated by Lord Atkin in Re Wait [1927] 1CH 606 where he said that ‘ascertained probably means identified in accordance with the agreement after the time a contract of sale is made.’5 Lord Atkin went on to say that goods are ascertained when they have been identified in accordance with the agreement after [the] contract. . . is made. parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case.’7 The rules for ascertaining the parties’ attention are contained in Section 18 of the 1979 Act.

There are sometimes legal consequences that make the passing of property from one person to another important to the foregoing provisions of the Sale of Goods Act 1979. Some of the most important legal consequences are associated with the risk involved with damage to the goods and whether or not the buyer or the seller should assume responsibility for the damages incurred.