Introduction to the Sale of Goods Act (SOGA) 1893
What is the Sale of Goods Act?
● The Sale of Goods Act 1893 is the primary legislation governing the sale of goods in
Zambia.
● It preserves the principle of freedom to contract, meaning that parties are free to
agree on the terms of their sale contract.
● The Act was received from English law and applies in Zambia under the English
Law (Extent of Application) Act.
Key Aspects Covered by SOGA:
1. Nature of a Contract of Sale
2. Transfer of Ownership and Risk
3. Performance of the Contract
4. Rights and Duties of Buyers and Sellers
5. Remedies for Breach of Contract
What is a Contract of Sale?
Definition (Section 1, SOGA)
A contract of sale of goods is a contract where the seller transfers or agrees to transfer
ownership (property) in goods to the buyer for a money consideration (price).
A sale can take two forms:
1. Sale → Ownership passes immediately upon contract formation.
2. Agreement to Sell → Ownership passes later, upon fulfillment of a condition.
Key Legal Effects of a Sale vs. Agreement to Sell:
● Risk follows ownership unless parties agree otherwise.
● If ownership has passed, the buyer can claim the goods if the seller becomes
insolvent.
● If ownership hasn’t passed, the seller can still resell the goods.
Transfer of Ownership and Risk
What is ‘Property’ in Goods?
● "Property" refers to legal ownership, not just physical possession.
● Ownership must pass for a valid sale to occur.
When Does Ownership Pass?
● For specific goods (Section 17, SOGA) → Ownership passes when parties intend
it to pass.
● For unascertained goods (Section 16, SOGA) → Ownership does not pass until
goods are identified.
● For goods still mixed with others → No ownership transfer occurs until they are
separated (Healey v Howlett (1917) 1 KB 377).
Section 20: Transfer of Risk in Goods
General Rule (Section 20, SOGA):
● Risk passes with property unless otherwise agreed.
● If ownership has passed to the buyer, the buyer bears the risk of loss or
damage—even if the goods are still with the seller.
● If ownership hasn’t passed, the seller bears the risk.
Exceptions to Section 20 (When Risk Doesn't Follow Ownership)
There are five key exceptions where the normal rule that "risk follows ownership" does not
apply:
1. Express Agreement by the Parties
● The parties can override Section 20 by contractually agreeing on who will bear the
risk.
● Example:
○ A buyer and seller agree that the seller will bear the risk until the goods are
delivered.
○ If the goods are damaged in transit, the seller remains responsible.
Case Reference:
● Sterns Ltd v Vickers Ltd (1923) 1 KB 78
○ Even though ownership had passed, the risk remained with the seller
because of a special agreement.
2. Delay in Delivery of Goods
● If either party delays delivery through their own fault, they bear the risk of
loss—even if ownership has already passed.
Case Reference:
● Demby Hamilton & Co Ltd v Barden (1949) 1 All ER 435
○ A buyer delayed accepting apple juice, which spoiled. The court held that the
buyer bore the risk because they were at fault for the delay.
3. When a Third Party Holds an Interest in the Goods
● Risk may pass to someone who neither owns nor possesses the goods but has
an intermediate or practical interest in them.
Example:
● A bank that finances goods in a trade deal might bear the risk if they have a
security interest in the goods.
4. Bailee’s Liability for the Goods
● If a seller hands goods over to a bailee (third party in possession of goods), risk
may remain with the seller until proper transfer of possession occurs.
Case Reference:
● Sharp v Butt (1930) 25 Tas LR 33
○ A seller gave goods to a bailee, but the buyer refused to take delivery. The
seller remained responsible for the risk.
5. Sale of Goods in Transit (Goods Sent by Sea or Carrier)
● If the seller is bound to send the goods by sea, risk does not pass until:
1. The goods are delivered to the carrier (if carriage is at the buyer’s risk), or
2. The goods arrive safely (if carriage is at the seller’s risk).
Case Reference:
● Ndola City Council v Colgum Industries (1968) ZR 182
○ The contract specified when risk would pass, affecting liability for damaged
goods in transit.
Other Important Doctrines Affecting Transfer of
Ownership and Risk
1. Nemo Dat Quod Non Habet (‘No One Can Give What They Don’t Have’)
● A seller cannot transfer better title than they possess.
● If a thief sells stolen goods, the buyer gets no legal ownership.
Case References:
● Bishopsgate Motor Finance Corp Ltd v Transport Brakes Ltd [1949] 1 KB 322
○ A seller with no legal ownership could not pass a good title.
● Clement H. Mweempe v AG & Interpol (2012) 2 ZR 155
○ Confirmed that stolen goods must be returned to the true owner.
Exceptions to Nemo Dat Rule (Section 21, SOGA)
Certain exceptions allow a non-owner to pass a valid title:
1. Estoppel (Section 21(1)) – If the true owner allows another person to act as the
owner, they cannot later deny it(Eastern Distributors Ltd v Goldring (1957) 2 QB
600).
2. Sale by Court Order (Section 21(2)(b)) – A court can authorise a sale, even if the
seller lacks ownership.
3. Sale by a Mercantile Agent (Section 21(3)) – If an agent acts within their
authority, they can pass a good title.
Conclusion
● Ownership and risk in a sale of goods contract generally pass together, but
Section 20 allows for exceptions where risk does not follow ownership.
● Courts prioritise agreements between the parties, meaning risk can be separately
assigned through contract.
● The nemo dat rule ensures that only rightful owners can transfer ownership, but
exceptions allow good title to pass in limited situations.
By understanding these principles and exceptions, buyers and sellers can protect their
rights and avoid legal disputes in contracts for the sale of goods.