Nature, Definition, and Scope of SOGA

Another chapter has began and the topic I am going to write today is regarding the tutorial question discussed during class. SOGA or also stand for Scope of Sale of Goods Act 1957 is a law to govern the rights of the buyer and seller. It is an essential law regarding the sale of goods. Here is some FAQs regarding the nature, definition and scope of SOGA.

What is ‘sale of goods’ contract?

Sale of goods contract is a contract whereby the seller transfers or agree to transfer the property in goods to the buyer for a price [Section 4 (1), Sale of Goods Act 1957]. It is said that sale occurs when the seller passes the ownership to the buyer.

Discuss the elements necessary to exist in a sale of goods contract.

The elements necessary to exist in sale of goods contract are parties to the contract, price and also offer and acceptance. In a contract of sale of goods, the parties involved are the seller and buyer. Their capacity is governed under the Contracts Act 1950 where;

The contract is made by an offer to buy or sell goods at a price + acceptance of such an offer (s.5(1)). 

The offer & acceptance may be made in writing or/and by word of mouth, or implied from conduct (s.5(2))

The most essential elements that must included in a contract of sale of goods is the price. Price involved the money consideration in a sale of goods. 

What is ‘goods’ under the SOGA?

By definition from Section 2,SOGA, goods is defined as 'every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass and things attached to or forming part of the land which are agrees to be severed before sale or under the contract of sale'. Land is excluded from the SOGA.

Goods can be in the form of future goods or existing goods [Section 6,SOGA].  Besides that, there are specific goods and unascertained goods. Future goods are goods that to be produced by seller ONLY after making the contract of sale [Section 2, SOGA]. For example, a construction company may only start building the house in housing area after they make the contract of sale to the buyer. The property (house) is then classified as future goods.

Mean while, existing goods are the goods that already possessed by seller or owned by the seller. Specific goods are goods that are identified and agreed upon the contract of sale of goods is made. For example, when we go to a second hand car dealer and we bought the second hand car after we inspect it. The property ( second hand car) is said to be a specific goods. Unascertained goods are the goods that identified by description of the goods only. For example, I browsed through an online boutique and saw a pretty cloth that sell for RM 23. I bought the cloth through the online boutique just by seeing the description of the cloth. The cloth is an unascertained goods.

Price in an important feature in a sale of goods contract. How is price being fixed? 

There are few manners in which the price may be fixed;

• Fixed by contract
• Left in a manner to be agreed, eg by 3rd party
• Determined by course of dealing of the parties
• By subject to a reasonable price, s.9.