Kenya Sale of goods Law

This section gives you details on sale of goods

law under the Kenya Sale of Goods Act
CAP.31 of the laws of Kenya.Below are some
topics and a comprehensive introduction to the
Kenya sale of goods law-
Formation of a contract of sale
The subject matter in a contract of sale
Definition of a sale of goods contract
Transfer of property in goods
Remedies of a seller
Remedies of the buyer
Duties of the seller to the buyer
Sale of goods by a non-owner
Sale under a voidable title
Caveat emptor
Price in a contract of sale
Distinction between sale of goods and
other form of contracts
Types of goods
Perfomance of a contract for the sale of
goods which includes the topics below-
 1. Payment and delivery concurrent
conditions.
2. Rules as to delivery.
3. Delivery of wrong quantity or
description.
4. Delivery by instalments.
5. Delivery to carrier as buyers agent.
6. Risk where goods delivered elsewhere
than at place of sale.
7. Acceptance.
8. Duties of seller and buyer.
9. Buyer is not bound to return rejected
goods.
10. Liability of buyer for neglecting or
refusing delivery of goods.
Introduction to Kenya sale of goods law
The Kenya sale of goods law is an area of the
legal system which describes the rules
applicable to a contract of sale (or, to be more
specific, purchase and sale, or emptio
venditio), generally described as a contract
whereby one person agrees to deliver to
another the free possession of a thing in return
for a price in money.The rules for the sale of
goods are spelt out in the Kenya sale of goods
Act.

Definition
The contract of sale, as it is known in Kenya
today, derives its origins from the Roman
consensual contract of emptio venditio. In D
18.1 (the title devoted to the contract of emptio
venditio), there is no all-embracing definition of
the special contract, but certain critical
features can be extracted from the early
fragments of the title:

Sale is a contract of the law of nations, and so

is concluded by simple agreement. There is no
sale without a price. There can be no sale
without a thing to be sold.

The Roman-Dutch lawyers followed these

guidelines closely in their definitions of the
contract of sale. For example, Voet said:
 Purchase definedBut in this title, as
distinguished from lease, it is a bonae fidei
contract, resting on consent, by which it is
arranged that merchandise shall be
exchanged at a definite price. There are three
essential requirements for itconsent,
merchandise and price. If one of them is
wanting, there is no purchase.

Essentials
In general terms, the essential elements of a
contract of sale are no different to the essential
elements of any other contract. There must be
contractual capacity and consensus, the
agreement must be legal (not contrary to
public policy), performance must be possible,
and any formalities required by law must be
complied with. The contract of sale does,
however, have a number of additional
substantive requirements (known as
essentialia), which are assimilated into the
general contractual structure. Of course, like
any contract, the requirement of consensus, or
agreement, is the most important general
element.
Agreement

Under the Kenya Sale of goods law, he parties

must be in agreement that the object of the
contract is to purchase and to sell the res
concerned, for the price agreed upon, and that
the seller will (usually) ensure the transfer of
possession and/or ownership of the res to the
buyer.

The general principles relating to consensus in

purchase and sale are the same as those
pertaining to other multilateral consensual
contracts. The relevant points may be
summarised as follows:
There must be an agreement of the minds
of the parties, mutually communicated, usually
by means of offer and acceptance.
The parties must act with the intention of
contracting a sale. there must be a concursus
animorum animo contrahendi.
The agreement should be free from
mistake or error, and should not have been
induced wrongfully by misrepresentation,
duress or undue influence.
The agreement should be legal and satisfy
the dictates of public policy.
The agreement should be rational. It
cannot therefore exist in cases of extreme
youth, irrational intoxication or insanity.
In sales in particular, there must be agreement
as to:
the subject matter of the sale and its
essential characteristics;
the price to be paid; and
any other item raised in the negotiations
and expressly or impliedly regarded as
material.
The two essentialia of a contract of sale are
therefore
the thing sold; and
the price to be paid.
Thing sold

The parties to the sale under the Kenya sale of

goods law must reach agreement over the
subject matter of the sale. The general
requirement is that the subject matter of the
sale should be
defined and ascertainable (although
the merx need not be entirely specific); and
existing at the time of the contract, or
having a potential existence.
It is best to tackle the intricacies of this
particular section by first examining things that
can be sold, and secondly, things that cannot
validly be sold.
Things that can be sold

Generally speaking, anything can be sold, be it

corporeal or incorporeal in nature. Physical
existence is not required in order for there to
be a valid sale. Anything that can be held,
possessed or sued for can be the subject of a
valid sale. There are, however, certain more
specialised issues that need to be discussed,
in order for the full picture to emerge.
The question in respect of a sale of res sua is
whether or not a person can enter into a valid
contract of sale, involving the purchase of a
thing which is (unbeknownst to him) his own
property already. The general rule is that
things owned by the buyer cannot be the
subject of a valid sale. It is possible, however,
for the purchaser to buy rights in his own
property which he does not yet hold.
Unascertained goods may form the subject
matter of a valid contract of sale. Such sales
may be termed generic sales, or emptio
generis. Future goods, or goods which do not
yet exist, may also be the subject of a valid
sale. Such a sale may take one of two forms.
A sale under the Kenya sale of goods law can
come into being if it involves a thing which is
not yet in existence, provided that the
thing may, in the ordinary course of events,
come into existence. Pothier says the
following:
There cannot, in truth, be a contract of sale
without a thing sold, but it is sufficient that the
thing sold may exist, though it has no present
existence. Thus, it is common before harvest,
to sell the wine which we may make; and in
such case, there is a sufficient thing to
constitute the object of a valid contract, though
as the thing sold does not yet exist, the
contract depends upon the condition of its
future existence; and if it should not yet
happen to exist, that is, if no wine should be
made, there will be no sale.
These sort of contracts are known as emptio
rei speratae. A classic example would be that
where Boucher agrees to purchase Smith's
next crop of maize at Ksh40 per bag. Because
the sale involves maize, it appears at first
glance to be a generic sale, but it is
distinguishable on at least two grounds:
1. The source of the grain is specified: It
must be Smith's crop.
2. The agreement is subject to a
suspensive condition: If Smith's crop does
not materialise, there is no sale.
It is possible to purchase the expectation or
hope that something might come into
existence, irrespective of whether it does or
does not come into existence in future. The
jurisprudent Pomponius is quoted as saying:
Sometimes, indeed, there is held to be a sale,
even without a thing, as where what is bought
is, as it were, a chance. This is the case with
the purchase of a catch of birds or fish. The
contract is valid even if nothing results,
because it is the purchase of a hope.
Such a contract is a contract emptio spei. For
example, Boucher agrees to purchase Smith's
next catch of fish for Ksh200. What is sold in
this case is the hope or expectation of a catch,
not the catch itself. The spes exists at the date
of sale. It makes no difference to the
obligations of the parties whether Smith
catches anything at all. Thus, Boucher runs
the risk of making a loss, in that he must pay
even if nothing comes into existence, but may
benefit in that he may receive greater value
than his capital outlay.
Res aliena, things which are not the property
of the seller, may also be the subject of a valid
sale. It is not essential that the seller be the
owner of the goods at the time of delivery. The
sale is not void simply because the seller is not
the owner of the res vendita, and has sold it
without the owner's authority. What is essential
is that the seller delivers the property to the
buyer, and ensures that his possession is not
thereafter interfered with by anyone with better
title. The buyer in such circumstances is
protected (at the very least) by the residual
warranty against eviction.
Delivery of the res, in such circumstances,
would result in transfer from the seller to the
buyer of whatever rights the seller had. The
buyer would acquire civil possession of
the res, the consequences of which would
be, inter alia,
the right to ownership upon completion of
prescription;
the right to the fruits of the property; and
the right to utilise possessory remedies.
Things which are the subject of litigation in
rem (res litigiosa) may be the subject of a valid
contract of sale as well. Such a sale might
occur where property, which is the subject of
pending court action, is sold in the interim.
Should such property be sold, the purchaser
will be bound by the judgment in the action.
The successful plaintiff will be entitled to
recover it from the purchaser (the new
possessor) by execution, without further
proceedings.
 Where property is the subject of an action in
rem, it becomes res litigiosa at litis contestatio.
Things that cannot be sold

There are various things which cannot be sold

in the Kenya sale of goods law. Res extra
commercium are among them. Numerous
rules of statutory and common law prohibit the
sale of certain things, often on grounds of
public policy. For example, the common law
does not sanction the sale of a person
(slavery), and statute prohibits the sale of
human tissue, and of many narcotics, chemical
substances and so forth.
It is also quite clearly impossible to purchase a
thing that never existed. The most extreme
example would be the putative sale of a
mythical or fictitious object. Justinian says:
Anything, whether moveable or immoveable, which admits of private ownership, may be
made the object of a stipulation; but if a man stipulates for the delivery of a thing which
either does not or cannot exist, such as [...] an impossible creature, like a hippocentaur, the
contract will be void
Legal effects of the contract
Passing of ownership
Under the Kenya sale of goods law,it is not a
requirement of a valid contract of sale that
ownership should pass from seller to buyer.
Although parties to a sale usually contemplate
this happening, it is not an essential feature of
a contract of sale, and (as we have seen)
sales by non-owners are permissible. At
common law, the transfer of a real right of
ownership (the performance of the contract) is
regarded as a separate legal transaction from
the contract itself, which creates only personal
obligations.
Because ownership does pass as a result of
most contracts of sale, however, the issue of
ownership is an important incidence of a sale.
Usually, to transfer ownership in a res, it is not
only necessary that it be physically delivered
by the owner; it is necessary also that the
owner have the intention of transferring the
right of ownership to the buyer, and that the
buyer have the intention of becoming the
owner of the thing in question.
As far as sales are concerned, there are
certain additional refinements:

Immoveable property
In the case of immovables, ownership under
the Kenya sale of goods law passes upon
registration of transfer. Registration constitutes
delivery in the case of immovables, and
ownership passes whether the price has been
paid or not.

Incorporeals
Ownership in incorporeals is transferred by
means of cession.

Moveable property
Ownership in moveable property is transferred
upon delivery of the res; coupled with
either payment of the purchase price, the
provision of security or the giving of credit.
Delivery

Delivery under the Kenya sale of goods law

will usually occur by means of traditio.
Ownership will pass on traditio only if the
following essentials are present:
The thing must be capable of ownership.
The seller must have legal capacity to sell.
Traditio must be made by the seller (or his
agent), since the owner of the thing cannot be
deprived of his ownership by the wrongful act
of another, and no-one can transfer greater
rights in a thing than he possesses. No-one
can make someone else the owner of a thing
of which he is not the owner.
The seller must intend to pass ownership
to the buyer.
Delivery must be made to the buyer (or his
agent).
The buyer must have legal capacity to
become owner of the thing.
The buyer must accept delivery, intending
to acquire ownership in the thing.
Forms of delivery

Delivery may occur in two ways.

Actual delivery

Actual delivery (traditio vera) occurs where

the res vendita is physically handed over by
one person to another de manu in manum.
Constructive delivery

Constructive delivery concerns those various

methods of transferring ownership by which no
physical handing over of the res vendita takes
place. There are five methods of constructive
delivery:
traditio longa manu;
traditio brevi manu;
constitutum possessorium;
symbolic delivery; and
attornment.
Payment

It is important to distinguish between how

ownership passes in cash and credit sales
respectively. In a cash sale, ownership passes
once there has been (in addition to delivery)
due payment of the purchase price. In a sale
on credit, the fact that credit has been given is
an indication that ownership merely passed on
delivery. In an ordinary credit sale, the seller
cannot claim that he did not intend ownership
to pass until the full price had been paid. (This
does not cover the situation where the sale is
one subject to a pactum reservati dominii).
In the absence of agreement (express or
implied) that credit has been granted, it is
presumed that every sale is a cash sale. The
presumption of a cash sale may therefore be
rebutted by adducing evidence of an
agreement to give credit. If the rebuttal
succeeds, ownership will pass on delivery. If
credit has not been granted, ownership will not
pass until the price has been paid, even if
delivery has in the meantime taken place. An
agreement to give credit must be clear and
specific.
That being said, it is now much more difficult to
show an agreement on credit than under the
common law.
Where a sale is for cash, and the seller
accepts a cheque for payment of the cash
price, ownership will not pass (notwithstanding
the delivery of the res vendita) unless the
cheque is met when presented for payment.