Is this Contract Governed by the Sale of Goods Act?

Is this contract governed by the sale of goods act? • Is this a contract for goods, or an interest in the land? – must be goods to be covered by the SGA a. Statutory starting point à s 1(b) i. Goods include growing crops and things attached to or forming part of the land – agreed that these are to be severed either before or under the contract of sale b. Timing at which the goods are to be severed i. Fredkin v Gliens: intention of the parties determines whether it’s a sales contract or interest in land • If time is unspecified, then goods must be severed within a reasonable time for it to be SGA • Facts: contract for entry to land to remove hay; no time limit; found to be sale of goods ii. Carlson v Duncan: the explicit terms of the contract govern whether it’s a sales contract or interest • for SGA to apply, must be a defined time limit – eg ‘timber severed under sale’ • Facts: contract said “as much time as he desires” to remove timber – interest in land • • Is this contract a barter? If yes, then not governed by SGA Is the price set out in money or money value? If yes, then not a barter, it’s a sale a. Statutory starting point à s 6 i. A contract of sale of goods is a contract where the seller transfers/agrees to transfer the property in the goods to a buyer for money or money value ii. Dollar value of what the buyer is paying must be either set out in money terms or be easily ascertainable (10% of the market value) iii. Messenger v Greene: If property is parted with for valuable consideration that is either actual money or measured in money terms (ascertainable/determinable), then the contract is not a barter • Facts: contract for sale and delivery of wood in exchange for a sale of groceries – both had money value ascribed to them in K, but amounts offset so no money passed – not a barter iv. Mason & Risch v Christner: if even part of consideration is goods without value assigned = barter • Facts: contract to buy a new piano with $500 and an old piano (no value ascribed); barter • • Is this contract for labour? If yes, then not governed by SGA Is this contract for materials? If yes, then governed by SGA a. Robinson v Graves: Ask whether the application of skill and labour in the production of the product is the substance of the contract, if so, then contract for labour and not goods i. Essence test: is the contract essential for owning property (sale of goods) or having work done (labour K)? ii. Facts: person hired a painter to paint a portrait, who supplied painting supplies – not a sale of goods b. Gee v White Spot: If the contract is primarily to transfer goods from one party to another then an incidental service component won’t change its characterization from a sale of goods contract i. Facts: P got botulism from beef dip, was determined to be a sales contract ii. Nuance: if it was a fancier restaurant, could argue that it becomes a service contract rather than goods • Is this contract for labour, but materials are suppled? Not governed by SGA, but can still get protection c. Young v McManus: can still imply material fitness warranties from CL if it’s a labour contract, but not the rest in SGA i. Facts: roofer was hired who supplied goods which were faulty, implied CL terms even though a labour K d. Best protection: separate the contract into a labour contract, and a separate contract for the supplies/goods i. Or, expressly stipulate in the contract what protection the goods are getting • • Is this a lease contract? Or can it be characterized as a sale? Can this lease contract be characterized as a sale? If yes, then governed by SGA a. Essential difference: A contract of sale transfers a general property interest whereas a lease contract transfers a specific property interest (temporary possessory interest) b. A true lease is when B uses the property for a period of time, then returns it to A with the value intact c. A lease becomes a sale when there is a compulsory lease period +: i. Automatic transfer of title to the lessee at the end of the lease ii. Possession reverts back to lessor at the end of term but there is no commercial value remaining in property iii. Option to purchase is exercised (becomes sale) or not a true option (sale from the beginning - nominal $) d. Lee v Butler: If payments are mandatory and for a fixed period, and ownership transfers at the end, it is a conditional sale and governed by the SGA from the beginning i. Facts: hire-purchase agreement for furniture where A gets ownership at the end, but sold before completed ii. Lessee can transfer good title to a bona fide 3rd party purchaser for value prior to completing payments • WHY? – s 30(3) A buyer in possession dealing with a BFPFV can transfer title to equity’s sweetheart e. Helby v Mathews: if payments are optional and ownership is not inevitable, it is a lease and not governed by SGA i. A bona fide purchaser for value would not be able to claim the protection of s 30(3) ii. Facts: lease agreement for a piano, but lessee pledged it as collateral for an advance, not governed by SGA Is this an agency/consignment contact? If yes, can it be characterized as a sale? If yes, there are two contracts of sale – both are governed under SGA a. True consignment à A passes ownership to C through B i. The contract of sale is between A and C ii. B is never the owner and has no responsibilities of ownership b. Sale à when the consignment contract between A and B can be characterized as a sale i. There are two contracts of sale: one between A-B, and B-C ii. B obtains ownership in the interim and passes it to C c. A consignment contract is characterized as a conditional sale when B will become owner if unable to find a buyer d. Weiner v Harris: A true agency K is when B gets possession of goods from A with no right to buy or instruction to sell i. If B sells goods to C and C is a BFPV, C can claim protection of s 59 ii. Although B is in breach of its agency contract with A, B has possession and can transfer good title to C iii. A is estopped from denying B’s ostensible authority to sell • • • Facts: consigned jewelry with no right to buy, who sold it as collateral – consignor loses e. Re Stephanian’s Persian Carpets: A true consignment exists when B never becomes the owner, never has the responsibilities of ownership i. If B has no obligation to pay A until B either sells the goods or buys the goods then it is a consignment K ii. Facts: consigned carpets to person who went bankrupt, P able to recover carpets because true consignment iii. But, if B has responsibilities of ownership – pay taxes, maintain the goods – treated as a sale f. If the contract between A-B can be characterized as a conditional sale then a BFPV can claim the protection of 30(3) i. If it’s a conditional sale then B is a buyer, not an agent; Ownership passes through B to C who gets good title g. Consignor can choose to structure consignment contract to transfer ownership to consignee when they find a buyer