Acts and Regulations

2016, c.110 - Sale of Goods Act

Full text
Current to 1 January 2024
2016, c.110
Sale of Goods Act
Deposited December 23, 2016
DEFINITION, INTERPRETATION AND APPLICATION
Definitions
1The following definitions apply in this Act.
“action” includes counterclaim and set-off.(action)
“buyer” means a person who buys or agrees to buy goods.(acheteur)
“contract of sale” includes an agreement to sell as well as a sale.(contrat de vente)
“delivery” means voluntary transfer of possession from one person to another.(délivrance)
“document of title” has the same meaning as it has in the Factors and Agents Act.(titre documentaire)
“fault” means wrongful act or default.(faute)
“future goods” means goods to be manufactured or acquired by the seller after the making of the contract of sale.(objets futurs)
“goods” includes all chattels personal other than things in action or money and also includes emblements, industrial growing crops, and things attached to or forming part of the land that are agreed to be severed before sale or under the contract of sale.(objets)
“plaintiff” includes defendant counterclaiming.(demandeur)
“property” means the general property in goods and not merely a special property.(propriété)
“quality of goods” includes their state or condition.(qualité des objets)
“sale” includes a bargain and sale as well as a sale and delivery.(vente)
“seller” means a person who sells or agrees to sell goods.(vendeur)
“specific goods” means goods identified and agreed on at the time a contract of sale is made.(objets déterminés)
“warranty” means an agreement with reference to goods that are the subject of a contract of sale, but collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages, but not to a right to reject the goods and treat the contract as repudiated.(garantie)
R.S.1973, c.S-1, ss.1(1)
Interpretation
2(1)A thing is deemed to be done “in good faith” within the meaning of this Act when it is in fact done honestly, whether it is done negligently or not.
2(2)A person is deemed to be insolvent within the meaning of this Act who either has ceased to pay his or her debts in the ordinary course of business, or cannot pay his or her debts as they become due, whether the person has committed an act of bankruptcy or not.
2(3)Goods are in a “deliverable state” within the meaning of this Act when they are in such a state that the buyer would under the contract be bound to take delivery of them.
R.S.1973, c.S-1, ss.1(2), (3), (4)
Application
3(1)The rules of the common law, including the law merchant, except in so far as they are inconsistent with the express provisions of this Act, and in particular the rules relating to the law of principal and agent and the effect of fraud, misrepresentation, duress or coercion, mistake, or other invalidating cause, continue to apply to contracts for the sale of goods.
3(2)Nothing in this Act affects any enactment relating to personal property security or any enactment relating to the sale of goods that is not expressly repealed by this Act.
3(3)The provisions of this Act relating to contracts of sale do not apply to any transaction in the form of a contract of sale to the extent that the transaction is intended to operate as an agreement that creates or provides for an interest in goods to secure payment or performance of an obligation.
R.S.1973, c.S-1, s.56; 1993, c.36, s.12
1
FORMATION OF THE CONTRACT
Contract of Sale
Contract of sale of goods
4A contract of sale of goods is a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration called the price, and there may be a contract of sale between one part-owner and another.
R.S.1973, c.S-1, ss.2(1)
Contract may be absolute or conditional
5A contract of sale may be absolute or conditional.
R.S.1973, c.S-1, ss.2(2)
Sale distinguished from agreement to sell
6If, under a contract of sale, the property in the goods is transferred from the seller to the buyer, the contract is called a sale; but, if the transfer of the property in the goods is to take place at a future time or subject to a condition to be fulfilled later, the contract is called an agreement to sell.
R.S.1973, c.S-1, ss.2(3)
When agreement to sell becomes sale
7An agreement to sell becomes a sale when the time elapses or the conditions, subject to which the property in the goods is to be transferred, are fulfilled.
R.S.1973, c.S-1, ss.2(4)
Capacity to buy and sell
8(1)In this section, “necessaries” means goods suitable to the condition in life of the minor or other person, and to his or her actual requirements at the time of the sale and delivery.
8(2)Capacity to buy and sell is regulated by the general law concerning capacity to contract, and to transfer and acquire property, but when necessaries are sold and delivered to a minor, or to a person who by reason of mental incapacity or drunkenness is incompetent to contract, he or she shall pay a reasonable price for them.
R.S.1973, c.S-1, s.3; 1986, c.4, s.48
Formalities of the Contract
How contract made
9(1)Subject to the provisions of this Act and of any statute on the subject, a contract of sale may be made in writing, either with or without seal, or orally, or partly in writing and partly orally, or may be implied from the conduct of the parties.
9(2)Nothing in this section affects the law relating to corporations.
R.S.1973, c.S-1, s.4
Existing or future goods
10The goods that form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or future goods.
R.S.1973, c.S-1, s.6(1)
Contract based on contingencies
11There may be a contract for the sale of goods, the acquisition of which by the seller depends on a contingency that might or might not happen.
R.S.1973, c.S-1, s.6(2)
Sale of future goods deemed agreement to sell
12If by a contract of sale the seller purports to effect a present sale of future goods, the contract operates as an agreement to sell the goods.
R.S.1973, c.S-1, s.6(3)
Perishing of specific goods
13(1)If there is a contract for the sale of specific goods, and the goods without the knowledge of the seller have perished at the time when the contract is made, the contract is void.
13(2)If there is an agreement to sell specific goods, and subsequently the goods, without any fault on the part of the seller or buyer, perish before the risk passes to the buyer, the agreement is avoided as a result.
R.S.1973, c.S-1, s.7, s.8
Determination of price
14(1)The price in a contract of sale may be fixed by the contract, or may be left to be fixed in a manner agreed by the contract, or may be determined by the course of dealing between the parties.
14(2)If the price is not determined in accordance with the previous provisions, the buyer shall pay a reasonable price, and what is a reasonable price is a question of fact dependent on the circumstances of each particular case.
R.S.1973, c.S-1, s.9
Valuation by third party
15(1)If there is an agreement to sell goods on the terms that the price is to be fixed by the valuation of a third party, and the third party cannot or does not make the valuation, the agreement is avoided; but if the goods or any part of them have been delivered to and appropriated by the buyer, the buyer shall pay a reasonable price for them.
15(2)If the third party is prevented from making the valuation by the fault of the seller or buyer, the party not at fault may maintain an action for damages against the party at fault.
R.S.1973, c.S-1, s.10
Conditions and Warranties
Time
16(1)Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not deemed to be of the essence of a contract of sale.
16(2)Whether any other stipulation as to time is of the essence of the contract or not depends on the terms of the contract.
16(3)In a contract of sale, “month” means, in the absence of evidence to the contrary, calendar month.
R.S.1973, c.S-1, s.11
Conditions and warranties
17(1)If a contract of sale is subject to a condition to be fulfilled by the seller, the buyer may waive the condition or may elect to treat the breach of the condition as a breach of warranty, and not as a ground for treating the contract as repudiated.
17(2)Whether a stipulation in a contract of sale is a condition, the breach of which may give rise to a right to treat the contract as repudiated, or a warranty, the breach of which may give rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated, depends in each case on the construction of the contract.
17(3)A stipulation may be a condition, though called a warranty in the contract.
17(4)If a contract of sale is not severable, and the buyer has accepted the goods, or part of them, or if the contract is for specific goods the property in which has passed to the buyer, the breach of a condition to be fulfilled by the seller can only be treated as a breach of warranty, and not as a ground for rejecting the goods and treating the contract as repudiated, unless there is a term of the contract, express or implied, to that effect.
17(5)Nothing in this section affects the case of a condition or warranty the fulfilment of which is excused by law by reason of impossibility or otherwise.
R.S.1973, c.S-1, s.12
Implied condition or warranty as to title, quiet possession and encumbrances
18In a contract of sale, unless the circumstances of the contract show a different intention, there is
(a) an implied condition on the part of the seller that in the case of a sale the seller has a right to sell the goods, and that in the case of an agreement to sell the seller will have a right to sell the goods at the time when the property passes,
(b) an implied warranty that the buyer shall have and enjoy quiet possession of the goods, and
(c) an implied warranty that the goods shall be free from any charge or encumbrance in favour of a third party, not declared or known to the buyer before or at the time when the contract is made.
R.S.1973, c.S-1, s.13; 1982, c.3, s.71
Implied condition re description
19If there is a contract for the sale of goods by description, there is an implied condition that the goods correspond with the description, and, if the sale is by sample, as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample if the goods do not also correspond with the description.
R.S.1973, c.S-1, s.14
Implied condition re quality or fitness
20Subject to the provisions of this Act and of any statute on the subject, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows:
(a) if the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description that it is in the course of the seller’s business to supply, whether the seller is the manufacturer or not, there is an implied condition that the goods are reasonably fit for the purpose, but in the case of a contract for the sale of a specified article under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose;
(b) if goods are bought by description from a seller who deals in goods of that description, whether the seller is the manufacturer or not, there is an implied condition that the goods are of merchantable quality; but if the buyer has examined the goods, there is no implied condition as regards defects that the examination ought to have revealed;
(c) an implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade; and
(d) an express warranty or condition does not negate a warranty or condition implied by this Act unless inconsistent with it.
R.S.1973, c.S-1, s.15
Implied condition re sale by sample
21(1)A contract of sale is a contract for sale by sample if there is a term in the contract, express or implied, to that effect.
21(2)In the case of a contract for sale by sample,
(a) there is an implied condition that the bulk corresponds with the sample in quality,
(b) there is an implied condition that the buyer shall have a reasonable opportunity to compare the bulk with the sample, and
(c) there is an implied condition that the goods are free from any defect, rendering them unmerchantable, that would not be apparent on reasonable examination of the sample.
R.S.1973, c.S-1, s.16
2
EFFECTS OF THE CONTRACT
Transfer of Property
Transfer of property in unascertained goods
22If there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained.
R.S.1973, c.S-1, s.17
Transfer of property in specific or ascertained goods
23(1)If there is a contract for the sale of specific or ascertained goods, the property in them is transferred to the buyer at the time that the parties to the contract intend it to be transferred.
23(2)For the purpose of ascertaining the intention of the parties, regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case.
R.S.1973, c.S-1, s.18
Rules re ascertainment of time of transfer
24Unless a different intention appears, the following are rules for ascertaining the intention of the parties as to the time when the property in the goods passes to the buyer:
Rule 1.If there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, be postponed.
Rule 2.If there is a contract for the sale of specific goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property does not pass until that thing is done and the buyer has notice of it.
Rule 3.If there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, measure, test, or do another act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until that act or thing is done and the buyer has notice of it.
Rule 4.If goods are delivered to the buyer on approval or “on sale or return,” or other similar terms, the property in them passes to the buyer
(a) when the buyer signifies the buyer’s approval or acceptance to the seller or does any other act adopting the transaction, or
(b) if the buyer does not signify the buyer’s approval or acceptance to the seller but retains the goods without giving notice of rejection, then, if a time has been fixed for the return of the goods, on the expiry of that time, and if no time has been fixed, on the expiry of a reasonable time.
Rule 5. (1)If there is a contract for the sale of unascertained or future goods by description, and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer, or by the buyer with the assent of the seller, the property in the goods immediately passes to the buyer, and the assent may be express or implied, and may be given either before or after the appropriation is made.
Rule 5. (2)If, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee or custodian, whether named by the buyer or not, for the purpose of transmission to the buyer, and does not reserve the right of disposal, the seller is deemed to have unconditionally appropriated the goods to the contract.
R.S.1973, c.S-1, s.19
Reservation of right of disposal by seller
25(1)If there is a contract for the sale of specific goods or if goods are subsequently appropriated to the contract, the seller may, by the terms of the contract or appropriation, reserve the right of disposal of the goods until certain conditions are fulfilled, and, in that case, despite the delivery of the goods to the buyer, or to a carrier or other bailee or custodian for the purpose of transmission to the buyer, the property in the goods does not pass to the buyer until the conditions imposed by the seller are fulfilled.
25(2)If goods are shipped, and by the bill of lading the goods are deliverable to the order of the seller or the seller’s agent, the seller is, in the absence of evidence to the contrary, deemed to reserve the right of disposal.
R.S.1973, c.S-1, ss.20(1), (2)
Bill of exchange sent with bill of lading
26If the seller of goods draws on the buyer for the price, and transmits the bill of exchange and bill of lading to the buyer together to secure acceptance or payment of the bill of exchange, the buyer is bound to return the bill of lading if the buyer does not honour the bill of exchange, and if the buyer wrongfully retains the bill of lading, the property in the goods does not pass to the buyer.
R.S.1973, c.S-1, ss.20(3)
Transfer of risk
27(1)Unless otherwise agreed, the goods remain at the seller’s risk until the property in them is transferred to the buyer, but when the property in them is transferred to the buyer the goods are at the buyer’s risk whether delivery has been made or not, except that if delivery has been delayed through the fault of either buyer or seller the goods are at the risk of the party at fault as regards any loss that might not have occurred but for that fault.
27(2)Nothing in this section affects the duties or liabilities of either the seller or buyer as a bailee or custodian of the goods of the other party.
R.S.1973, c.S-1, s.21
Transfer of Title
Sale by person other than owner
28Subject to the provisions of this Act, when goods are sold by a person who is not the owner of them, and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless, by the owner’s conduct, the owner is precluded from denying the seller’s authority to sell.
R.S.1973, c.S-1, ss.22(1)
Application
29Nothing in this Act affects
(a) the provisions of the Factors and Agents Act or any enactment enabling the apparent owner of goods to dispose of them as if the apparent owner were the true owner of them, or
(b) the validity of any contract of sale under any special common law or statutory power of sale or under the order of a court of competent jurisdiction.
R.S.1973, c.S-1, ss.22(2)
Purchase of voidable title
30If the seller of goods has a voidable title to them but the seller’s title has not been avoided at the time of the sale, the buyer acquires a good title to the goods if the buyer buys them in good faith and without notice of the seller’s defect of title.
R.S.1973, c.S-1, s.23
Validity of sale by person other than owner
31(1)In this section, “mercantile agent” has the same meaning as in the Factors and Agents Act.
31(2)When a person having sold goods continues or is in possession of the goods, or of the documents of title to the goods, the delivery or transfer by that person, or by a mercantile agent acting for that person, of the goods or documents of title under any sale, pledge, or other disposition of them to any person receiving them in good faith and without notice of the previous sale, has the same effect as if the person making the delivery or transfer were expressly authorized by the owner of the goods to make it.
31(3)When a person having bought or agreed to buy goods obtains, with the consent of the seller, possession of the goods or the documents of title to the goods, the delivery or transfer by that person, or by a mercantile agent acting for that person, of the goods or documents of title under any sale, pledge, or other disposition of them to any person receiving them in good faith and without notice of any lien or other right of the original seller in respect of the goods, has the same effect as if the person making the delivery or transfer were a mercantile agent in possession of the goods or documents of title with the consent of the owner.
31(4)Subsection (2) does not apply to a sale, pledge or other disposition of goods or documents of title to goods by a person who continues or is in possession of the goods under a sale of goods without a change of possession within the meaning of the Personal Property Security Act.
31(5)Subsection (3) does not apply to a sale, pledge or other disposition of goods or documents of title to goods by a person who obtains possession of the goods under a security agreement entered into with the seller under which the seller has a security interest in the goods within the meaning of the Personal Property Security Act.
R.S.1973, c.S-1, s.24; 1978, c.49, s.1; 1993, c.36, s.12
3
PERFORMANCE OF THE CONTRACT
Duties of buyer and seller
32It is the duty of the seller to deliver the goods, and of the buyer to accept and pay for them, in accordance with the terms of the contract of sale.
R.S.1973, c.S-1, s.25
Delivery and payment concurrent conditions
33Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller shall be ready and willing to give possession of the goods to the buyer in exchange for the price, and the buyer shall be ready and willing to pay the price in exchange for possession of the goods.
R.S.1973, c.S-1, s.26
Ascertainment of intention re delivery
34Whether it is for the buyer to take possession of the goods or for the seller to send them to the buyer is a question depending in each case on the contract, express or implied, between the parties.
R.S.1973, c.S-1, ss.27(1)
Place of delivery
35Apart from any contract, express or implied, the place of delivery is the seller’s place of business, if the seller has one, and, if not, the seller’s residence; but if the contract is for the sale of specific goods, that to the knowledge of the parties when the contract is made are in another place, then that place is the place of delivery.
R.S.1973, c.S-1, ss.27(2)
Time for delivery
36If under the contract of sale the seller is bound to send the goods to the buyer, but no time for sending them is fixed, the seller is bound to send them within a reasonable time.
R.S.1973, c.S-1, ss.27(3)
Delivery if goods in possession of third person
37(1)If the goods at the time of sale are in the possession of a third person, there is no delivery by the seller to the buyer unless and until the third person acknowledges to the buyer that the third person holds the goods on the buyer’s behalf.
37(2)Nothing in this section or sections 34, 35, 36, 38 or 39 affects the operation of the issue or transfer of any document of title to goods.
R.S.1973, c.S-1, ss.27(4)
Reasonable hour of delivery
38Demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour, and what is a reasonable hour is a question of fact.
R.S.1973, c.S-1, ss.27(5)
Expenses of putting goods into deliverable state
39Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state shall be borne by the seller.
R.S.1973, c.S-1, ss.27(6)
Delivery of smaller, larger or mixed quantity
40(1)If the seller delivers to the buyer a quantity of goods less than the seller contracted to sell, the buyer may reject them, but if the buyer accepts the goods so delivered the buyer shall pay for them at the contract rate.
40(2)If the seller delivers to the buyer a quantity of goods larger than the seller contracted to sell, the buyer may accept the goods included in the contract and reject the rest, or the buyer may reject the whole, but if the buyer accepts the whole of the goods so delivered the buyer shall pay for them at the contract rate.
40(3)If the seller delivers to the buyer the goods the seller contracted to sell mixed with goods of a different description not included in the contract, the buyer may accept the goods that are in accordance with the contract and reject the rest, or the buyer may reject the whole.
40(4)The provisions of this section are subject to any usage of trade, special agreement, or course of dealing between the parties.
R.S.1973, c.S-1, s.28
Instalment delivery
41(1)Unless otherwise agreed, the buyer of goods is not bound to accept delivery of them by instalments.
41(2)If there is a contract for the sale of goods to be delivered by stated instalments that are to be separately paid for, and the seller makes defective deliveries in respect of one or more instalments, or the buyer neglects or refuses to take delivery of or pay for one or more instalments, it is a question in each case depending on the terms of the contract and the circumstances of the case, whether the breach of contract is a repudiation of the whole contract or whether it is a severable breach giving rise to a claim for compensation, but not to a right to treat the whole contract as repudiated.
R.S.1973, c.S-1, s.29
Delivery to carrier
42When, in pursuance of a contract of sale, the seller is authorized or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer is, in the absence of evidence to the contrary, deemed to be a delivery of the goods to the buyer.
R.S.1973, c.S-1, ss.30(1)
Contract with carrier on behalf of buyer
43Unless otherwise authorized by the buyer, the seller shall make such contract with the carrier on behalf of the buyer as is reasonable, having regard to the nature of the goods and the other circumstances of the case, and if the seller omits to do so, and the goods are lost or damaged in course of transit, the buyer may decline to treat the delivery to the carrier as a delivery to himself or herself, or may hold the seller responsible in damages.
R.S.1973, c.S-1, ss.30(2)
Delivery by sea transit
44Unless otherwise agreed, when goods are sent by the seller to the buyer by a route involving sea transit, under circumstances in which it is usual to insure, the seller shall give such notice to the buyer as may enable the buyer to insure them during their sea transit, and, if the seller fails to do so, the goods are deemed to be at the seller’s risk during the sea transit.
R.S.1973, c.S-1, ss.30(3)
Delivery to place other than where goods sold
45If the seller of goods agrees to deliver them at the seller’s own risk at a place other than that where they are when sold, the buyer shall, in spite of that, unless otherwise agreed, take any risk of deterioration in the goods necessarily incident to the course of transit.
R.S.1973, c.S-1, s.31
Examination of goods by buyer
46(1)When goods are delivered to the buyer, that the buyer has not previously examined, the buyer is not deemed to have accepted them unless and until the buyer has had a reasonable opportunity to examine them for the purpose of ascertaining whether they are in conformity with the contract.
46(2)Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, the seller is bound, on request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract.
R.S.1973, c.S-1, s.32
Acceptance
47The buyer is deemed to have accepted the goods when
(a) the buyer intimates to the seller that the buyer has accepted them,
(b) the goods have been delivered to the buyer, and the buyer does any act in relation to them that is inconsistent with the ownership of the seller, or
(c) after the lapse of a reasonable time, the buyer retains the goods without intimating to the seller that the buyer has rejected them.
R.S.1973, c.S-1, s.33
Rejected goods
48Unless otherwise agreed, if goods are delivered to the buyer, and the buyer refuses to accept them, having the right to do so, the buyer is not bound to return them to the seller, but it is sufficient if the buyer intimates to the seller that the buyer refuses to accept them.
R.S.1973, c.S-1, s.34
Neglect or refusal to take delivery
49(1)When the seller is ready and willing to deliver the goods, and requests the buyer to take delivery, and the buyer does not within a reasonable time after the request take delivery of the goods, the buyer is liable to the seller for any loss occasioned by the buyer’s neglect or refusal to take delivery, and also for a reasonable charge for the care and custody of the goods.
49(2)Nothing in this section affects the rights of the seller when the neglect or refusal of the buyer to take delivery amounts to a repudiation of the contract.
R.S.1973, c.S-1, s.35
4
RIGHTS OF UNPAID SELLER
AGAINST THE GOODS
Definition of “seller”
50In this Part, “seller” includes any person who is in the position of a seller, as, for instance, an agent of the seller to whom the bill of lading has been endorsed, or a consignor or agent who has himself or herself paid, or is directly responsible for, the price.
R.S.1973, c.S-1, ss.36(2)
Unpaid seller
51The seller of goods is deemed to be an “unpaid seller” within the meaning of this Act
(a) when the whole of the price has not been paid or tendered, or
(b) when a bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has not been fulfilled by reason of the dishonour of the instrument or otherwise.
R.S.1973, c.S-1, ss.36(1)
Rights of unpaid seller
52Subject to the provisions of this Act and of any statute on the subject, even though the property in the goods may have passed to the buyer, the unpaid seller of goods, as such, has by implication of law
(a) a lien on the goods or right to retain them for the price while the seller is in possession of them,
(b) in case of the insolvency of the buyer, a right of stopping the goods in transit after the seller has parted with the possession of them, and
(c) a right of resale as limited by this Act.
R.S.1973, c.S-1, ss.37(1)
Right to withhold delivery
53When the property in goods has not passed to the buyer, the unpaid seller has, in addition to any other remedies, a right of withholding delivery similar to and coextensive with the seller’s rights of lien and stoppage in transit when the property has passed to the buyer.
R.S.1973, c.S-1, ss.37(2)
Unpaid Seller’s Lien
Availability of lien
54(1)Subject to the provisions of this Act, the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases:
(a) when the goods have been sold without any stipulation as to credit;
(b) when the goods have been sold on credit, but the term of credit has expired; and
(c) when the buyer becomes insolvent.
54(2)The seller may exercise the seller’s right of lien even though the seller is in possession of the goods as agent or bailee or custodian for the buyer.
R.S.1973, c.S-1, s.38; 1982, c.3, s.71
Part delivery
55When an unpaid seller has made part delivery of the goods, the seller may exercise the right of lien or retention on the remainder, unless the part delivery has been made under circumstances that show an agreement to waive the lien or right of retention.
R.S.1973, c.S-1, s.39
Termination of lien
56(1)The unpaid seller of goods loses the lien or right of retention on them
(a) when the seller delivers the goods to a carrier or other bailee or custodian for the purpose of transmission to the buyer without reserving the right of disposal of the goods,
(b) when the buyer or the buyer’s agent lawfully obtains possession of the goods, and
(c) by waiver of it.
56(2)The unpaid seller of goods, having a lien or right of retention on them, does not lose the lien or right of retention by reason only that the seller has obtained judgment for the price of the goods.
R.S.1973, c.S-1, s.40; 1986, c.4, s.48
Stoppage in Transit
Availability of stoppage in transit
57Subject to the provisions of this Act, when the buyer of goods becomes insolvent, the unpaid seller who has parted with the possession of the goods has the right of stopping them in transit, that is to say, the unpaid seller may resume possession of the goods as long as they are in course of transit, and may retain them until payment or tender of the price.
R.S.1973, c.S-1, s.41
When goods deemed in transit
58(1)Goods are deemed to be in course of transit from the time when they are delivered to a carrier by land or water, or other bailee or custodian, for the purpose of transmission to the buyer, until the buyer, or the buyer’s agent, takes delivery of them from that carrier or other bailee or custodian.
58(2)If the buyer or the buyer’s agent obtains delivery of the goods before their arrival at the appointed destination, the transit is at an end.
58(3)If, after the arrival of the goods at the appointed destination, the carrier or other bailee or custodian acknowledges to the buyer, or the buyer’s agent, that the carrier or other bailee or custodian holds the goods on the buyer’s behalf and continues in possession of them as bailee or custodian for the buyer, or the buyer’s agent, the transit is at an end, and it is immaterial that a further destination for the goods may have been indicated by the buyer.
58(4)If the goods are rejected by the buyer, and the carrier or other bailee or custodian continues in possession of them, the transit is not deemed to be at an end, even if the seller has refused to receive them back.
58(5)When goods are delivered to a ship chartered by the buyer it is a question depending on the circumstances of the particular case whether they are in the possession of the master as a carrier, or as agent to the buyer.
58(6)If the carrier or other bailee or custodian wrongfully refuses to deliver the goods to the buyer, or the buyer’s agent, the transit is deemed to be at an end.
58(7)If part delivery of the goods has been made to the buyer, or the buyer’s agent, the remainder of the goods may be stopped in transit, unless the part delivery has been made under circumstances that show an agreement to give up possession of the whole of the goods.
R.S.1973, c.S-1, s.42
Exercising right of stoppage in transit
59The unpaid seller may exercise the right of stoppage in transit either by taking actual possession of the goods, or by giving notice of the seller’s claim to the carrier or other bailee or custodian in whose possession the goods are, which notice may be given either to the person in actual possession of the goods or to that person’s principal, but in the latter case the notice to be effectual shall be given at such time and under such circumstances that the principal, by the exercise of reasonable diligence, may communicate it to a servant or agent in time to prevent a delivery to the buyer.
R.S.1973, c.S-1, ss.43(1)
Notice of stoppage in transit
60When notice of stoppage in transit is given by the seller to the carrier or other bailee or custodian in possession of the goods, the latter shall redeliver the goods to, or according to the directions of, the seller, but the expenses of the redelivery shall be borne by the seller.
R.S.1973, c.S-1, ss.43(2)
Resale by Buyer or Seller
Subsale or pledge by buyer
61(1)Subject to the provisions of this Act, the unpaid seller’s right of lien or retention or stoppage in transit is not affected by any sale, or other disposition of the goods that the buyer may have made, unless the seller assented to it.
61(2)If a document of title to goods has been lawfully transferred to any person as buyer or owner of the goods, and that person transfers the document to a person who takes the document in good faith and for valuable consideration, then, if the latter transfer was by way of sale, the unpaid seller’s right of lien or retention or stoppage in transit is defeated, and if the latter transfer was by way of pledge or other disposition for value, the unpaid seller’s right of lien or retention or stoppage in transit can only be exercised subject to the rights of the transferee.
R.S.1973, c.S-1, s.44
Resale by unpaid seller
62(1)Subject to the provisions of this section, a contract of sale is not rescinded by the mere exercise by an unpaid seller of the right of lien or retention or stoppage in transit.
62(2)When an unpaid seller who has exercised the right of lien or retention or stoppage in transit resells the goods, the buyer acquires a good title to them as against the original buyer.
62(3)If the goods are of a perishable nature, or if the unpaid seller gives notice to the buyer of the seller’s intention to resell, and the buyer does not within a reasonable time pay or tender the price, the unpaid seller may resell the goods and recover from the original buyer damages for any loss occasioned by the buyer’s breach of contract.
62(4)If the seller expressly reserves a right of resale in case the buyer should make default and, on the buyer making default, resells the goods, the original contract of sale is as a result of that rescinded, but without prejudice to any claim the seller may have for damages.
R.S.1973, c.S-1, s.45
5
ACTIONS FOR BREACH
OF THE CONTRACT
Remedies of the Seller
Action re price of goods
63(1)If, under a contract of sale, the property in the goods has passed to the buyer, and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may maintain an action against the buyer for the price of the goods.
63(2)If, 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 the price, the seller may maintain an action for the price, although the property in the goods has not passed, and the goods have not been appropriated to the contract.
R.S.1973, c.S-1, s.46
Action re non-acceptance of goods
64(1)If the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against the buyer for damages for non-acceptance.
64(2)The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the buyer’s breach of contract.
64(3)If there is an available market for the goods in question the measure of damages is, in the absence of evidence to the contrary, to be ascertained by the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted, or, if no time was fixed for acceptance, then at the time of the refusal to accept.
R.S.1973, c.S-1, s.47
Remedies of the Buyer
Action re non-delivery
65(1)If the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may maintain an action against the seller for damages for non-delivery.
65(2)The measure of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the seller’s breach of contract.
65(3)If there is an available market for the goods in question the measure of damages is, in the absence of evidence to the contrary, to be ascertained by the difference between the contract price and the market or current price of the goods at the time or times when they ought to have been delivered, or, if no time was fixed, then at the time of the refusal to deliver.
R.S.1973, c.S-1, s.48
Specific performance
66(1)In any action for breach of contract to deliver specific or ascertained goods, the court may, if it thinks fit, on the application of the plaintiff, by its judgment direct that the contract shall be performed specifically without giving the defendant the option of retaining the goods in payment of damages.
66(2)The judgment may be unconditional, or on such terms and conditions as to damages, payment of the price, and otherwise, as the court considers just, and the application by the plaintiff may be made at any time before judgment.
R.S.1973, c.S-1, s.49; 1986, c.4, s.48
Remedy re breach of warranty
67If there is a breach of warranty by the seller, or if the buyer elects, or is compelled, to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer is not by reason only of the breach of warranty entitled to reject the goods, but the buyer may
(a) set up against the seller the breach of warranty in diminution or extinction of the price, or
(b) maintain an action against the seller for damages for the breach of warranty.
R.S.1973, c.S-1, ss.50(1)
Damages re breach of warranty
68(1)The measure of damages for breach of warranty is the estimated loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty.
68(2)In the case of breach of warranty of quality the loss is, in the absence of evidence to the contrary, the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had answered to the warranty.
R.S.1973, c.S-1, ss.50(2), (3)
Action re further damages
69The fact that the buyer has set up the breach of warranty in diminution or extinction of the price does not prevent the buyer from maintaining an action for the same breach of warranty if the buyer has suffered further damages.
R.S.1973, c.S-1, ss.50(4)
Interest, special damages or recovery of money paid
70Nothing in this Act affects the right of the buyer or the seller to recover interest or special damages in any case where by law interest or special damages may be recoverable, or to recover money paid if the consideration for the payment of it has failed.
R.S.1973, c.S-1, s.51
6
SUPPLEMENTARY
Negating or varying implication of law
71If any right, duty or liability would arise under a contract of sale by implication of law, it may be negated or varied by express agreement or by the course of dealing between the parties, or by usage if the usage is such as to bind both parties to the contract.
R.S.1973, c.S-1, s.52
Reasonable time
72When, by this Act, any reference is made to a reasonable time the question what is a reasonable time is a question of fact.
R.S.1973, c.S-1, s.53
Enforcement by action
73When any right, duty or liability is declared by this Act, it may, unless otherwise provided by this Act, be enforced by action.
R.S.1973, c.S-1, s.54
Sale by auction
74In the case of a sale by auction,
(a) when goods are put up for sale in lots, each lot is, in the absence of evidence to the contrary, deemed to be the subject of a separate contract of sale,
(b) a sale is complete when the auctioneer announces its completion by the fall of the hammer, or in other customary manner, and, until that announcement is made, any bidder may retract his or her bid,
(c) if a sale is not notified to be subject to a right to bid on behalf of the seller, it is not lawful for the seller to bid himself or herself or to employ any person to bid at the sale, or for the auctioneer knowingly to take any bid from the seller or any such person, and any sale contravening this rule may be treated as fraudulent by the buyer, and
(d) a sale may be notified to be subject to a reserved or upset price, and a right to bid may also be reserved expressly by or on behalf of the seller, and if a right to bid is expressly reserved, but not otherwise, the seller, or any one person on the seller’s behalf, may bid at the auction.
R.S.1973, c.S-1, s.55
N.B. This Act was proclaimed and came into force February 9, 2017.
N.B. This Act is consolidated to February 9, 2017.