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Action for price

Does section 49 of the Sale of Goods Act 1979 set out the only circumstances in which a seller of goods can maintain an action for the price?

Does section 49 of the Sale of Goods Act 1979 set out the only circumstances in which a seller of goods can maintain an action for the price? Yes, says the Court of Appeal in Caterpillar (NI) Ltd v John Holt & Co (Liverpool) Ltd [2013] EWCA Civ 1232.

Section 49 states:

(1) Where, under a contract of sale , the property in the goods has passed to the buyer and he wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may maintain an action against him for the price of the goods .

(2) Where, under a contract of sale, the price is payable on a day certain irrespective of delivery and the buyer wrongfully neglects or refuses to pay such price , the seller may maintain an action for the price…

Caterpillar (C) sold generators to John Holt (D), which in turn sold them on in Nigeria. C’s terms and conditions of sale contained a retention of title clause, with the effect that property in the generators would not pass to D until the price was paid.

D accepted delivery of a number of generators and sold them on to a third party in Nigeria for good consideration. C subsequently brought an action for the price. Section 49(2) did not apply on the facts. C argued that s. 49(1) applied, as property had passed immediately before resale of the generators. It obtained summary judgment.

On D’s appeal, C relied on s. 49(1) but also argued that an action for the price could be maintained even if the conditions of s. 49 were not satisfied. In allowing the appeal, the Court of Appeal unanimously concluded that an action for the price can only be maintained if either of the conditions in s. 49 is satisfied. Property in the goods had not passed to D due to the retention of title clause and C could not maintain an action for the price.

Permission to appeal to the Supreme Court was granted.

Winston Jacob / 1st Nov 2013


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