Terms of Contract of Sales of Good

Often time, many people go into contract to buy a particular good without even reading through the essential statements contained in the terms of the contract. The stipulation in a contract of sale with reference to goods which are the subject thereof may be a condition or a warranty.

Conditions

A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated. In some circumstances to a breach of the conditions of a contract, the innocent party cannot repudiate the contract but can merely claim damages. Generally, the statement of conditions of a contact is very vital and binding for the sales of good to be completed.

Warranty

A warranty unlike the conditions, is a stipulation collateral to the main purpose of the contract, the breach of a warranty gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated. Warranty often deals with the functionality and purpose for which the good is meant to fulfil or offer.

The stipulation of a contract whether it's a condition or a warranty depends in each case on the construction of the contract. Stipulation as to time would be considered only if the contract indicates the exact time to which the payment must be made. If the time is not mentioned or silent, that means that the buyer may pay at the date agreed upon and the seller can not repudiate the contract.

Sales of Goods

Everyone at one point or the other, has or will enter a contract of sales of good. It is regarded as a commercial transaction because it involves exchange of the goods with a valued price of money.

What is 'goods'? Goods means 'every kind of movable property other than actionable claims(e.g suing another person for a debt or for any other reason) and money; it includes stocks and shares, growing crops, grass and thing attached to or forming part of land which are agreed to be severed before sale or under the contract of sale'. Note that LAND is not part of sale of good.

Goods could either be existing or future goods. Existing goods are goods already owned or possessed by the by the seller, and may be either specified or agreed upon at the time a contract of sale is made. Future goods means goods to be manufactured or produced or acquired by the seller after the making of the contract of sale.

The contract of sale of goods is 'a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price'. This means that a sale occurs when the ownership in goods passes to the buyer. A sale is different from agreement to sell, an agreement to sell is a contract in which the transfer of the goods is to take place at a future time or subject to some conditions which are yet to be fulfilled.

Formation of the Contract: this is made by an offer to buy or sell goods at a particular price and the acceptance of such an offer. that is the buyer must agree to the price that the seller is offering his/her goods. Both the sell and the buyer might also agree upon the delivery method and payment method if it would be an immediate, full payment, or instalments. The formalities of the contract of sale may be made in writing and partly by word of mouth, or partly in writing and partly by word of mouth.

Legal Principles on Company

As stated in the previous post, Company is a separate legal entity and it's dinstinct from its members and shareholders.

Some legal principles hold for companies and among them are what I shall discuss below:

Doctrine of Corporate Legal Entity

A company is seen as just like a human individual entity and in no way will the position of a company interferes with the personality of the owners, members or shareholders of the company. The legal entity signifies that a company answers a name of its own, can sue and be sued, can buy, sell, lease and mortgage its property in its own name. So when there is any crises or legal issue, the owner of a company is treated differently and also the company as an individual legal entity.

• Legal decided case: Salomon vs Salomon Co. Ltd [1897] - A landmark UK company case of a shoemaker owned and operated by a single person. The case was upheld from a debt history that Mr Salomon found himself and the company in. The principle held was that the company will have to bear the liabilities alone and not with the owner of the company. (Please Kindly read the details of the case as provided in law references.

Lifting the Veil of Incorporation

This means that in certain circumstances, the directors and members of the company might be personally liable for theirbsiness transactions. Those circumstances include:

1. Business carried on when there are fewer than two members.
2. Defrauding the creditors.
3. Signing documents without the name of the company.

• Case: Lee William Leitch Bros Ltd. The company carried on business even after insolvency and the creditors discovered that they would not be able to pay. It was held that they carried out business with an intent to defaraud creditors. Hence, the directors of the company would be personally liable for the debts.