Stipulations as to time: These are divided by this section into— (1.) Stipulations as to time of payment: (2.) Other stipulations. And both may or may not be "of the essence" of the contract, i. e., conditions precedent. S. 10 (1). tions as to time of Firstly, with regard to stipulations as to the time of payment. (1) Stipula"By the law of England, differing in this respect from the civil law, the buyer's default in paying the price will not justify payment. an action for the rescission of the contract, unless the right be expressly reserved (u). The principle at common law is that the goods have become the property of the buyer, and that the vendor has agreed to take for them the buyer's promise to pay the price. If, then, the buyer fail to pay, the vendor's remedy is limited to an action [under s. 49] for the breach of that promise, the damages for the breach being the amount of the price promised, to which may be added interest " (x) under s. 54. And Lord Denman says, in Martindale v. Smith (y) :-" The sale of a specified chattel on credit, though that credit may be limited to a definite period, transfers the property in the goods to the vendee, giving the creditor a right of action for the price, and a lien on the goods if they remain in his possession till the price is paid. But that default in payment does not rescind the contract." On this question the following clear exposition of the rationale of the law is given by Lord Blackburn (z) : : "In an agreement amounting to a bargain and sale, a failure in the punctual payment of the price never can literally go to the whole consideration for the sale. The property is transferred from the moment of the bargain, and with the property the risk. The purchaser, therefore, during the interval between the completion of the bargain, and the time when he becomes in default, is liable to the risk of the loss of the goods. . . . If the parties, by the terms of their agreement, show an intention to make the punctual payment of the price of the essence of the contract, they may do so; but it seems that in such cases the agreement does not amount to a bargain and sale, and that, consequently, the property and risk remain with the vendor. It is perfectly obvious that, in addition to this liability to the risk of loss, . . . the buyer may . . . have undertaken many things besides the payment of the price, and, consequently, that the buyer, though in (u) See s. 48 (4). (x) Benj. p. 763. See per Holroyd, J., in Tarling v. Baxter (1827), G. 6 B. & C. p. 362. (y) (1841), 1 Q. B. at p. 395. F S. 10 (1). (2) Other stipulations as to time. default as to payment, may have conferred benefit to the vendor under the contract." It will be seen from the above extracts that the reasons for the rule are:-(1) that the stipulation as to time does not go to the whole consideration of the sale; and (2) delivery may take place before the time of payment, and the seller is consequently relying, not on performance by the buyer, but on his promise to pay (a). This rule is, with regard to the property in specific goods, adopted in this Act (b), following the common law (c). But failure in punctual payment may, coupled with other facts, e. g., the buyer's insolvency and his notice thereof to the seller, amount to an invitation to the seller to rescind the contract which the latter may accept (d). And such failure without insolvency may also show an intention of the buyer's no longer to be bound by the contract, and in the same way amount to an offer to rescind (e). The application of the rule to the case of goods deliverable by instalments is dealt with in s. 31. Secondly, with regard to other stipulations as to time. The rule is thus stated by Mr. Benjamin (f) :-"In determining whether stipulations as to the time of performing a contract of sale are conditions precedent, the Court seeks simply to discover what the parties really intended, and if time appear, on a fair consideration of the language and the circumstances, to be of the essence of the contract, stipulations with regard to it will be held conditions precedent." And, as in all cases of conditions, the rules in Pordage v. Cole (a), as to the order of performance of the various promises, and the extent of the operation of the consideration, will apply. It may here be mentioned that the Judicature Acts have not extended to mercantile contracts the equitable rule as to time of performance applicable to contracts for the sale of land (9). In some cases, stipulations as to time may amount to words of description of the goods sold, and consequently be of the essence of the contract under s. 13, e. g., where goods are to be shipped 10 Ch. D. 586; Ex parte Chalmers (1873), 8 Ch. Ap. 289. (e) Withers v. Reynolds (1831), 2 B. & Ad. 882; Mersey, &c. Co. v. Naylor, supra. (ƒ) p. 583, approved per Folger, J., in Higgins v. Delaware Ry. Co., 60 N. Y. 557. (g) Per Cotton, L.J., in Reuter v. Sala (1879), 4 C. P. D. at p. 249. within a particular time. See the notes to that section, post, p. 88. Other cases are of contracts providing that a declaration shall be made by the seller to the buyer within a particular time of some fact on which the latter relies to enable him to act, as, e. g., to go into the market to resell the goods. An instance is where the seller has to declare the particulars of the shipment, or the date of the bill of lading, or the name of the vessel (h). "In mercantile contracts," says Thesiger, L.J. (), "like the present, the making within a given time of a declaration or declarations upon which the buyer may act, is an essential feature of such contracts." So, also, the date of the bill of lading of goods to be shipped may be a condition (k). For contracts of sale of goods "to arrive" within a particular time, see notes to s. 5 (2), ante, p. 55. S. 10 (1). Month. The same meaning is given to "month" in the S. 10 (2). Interpretation Act, 1889 (52 & 53 Vict. c. 63), s. 3. "The word month,' although at common law it generally means a lunar month, is in mercantile contracts understood to mean a calendar month (1). And the Court will look at the context in all cases to see whether a calendar month was not intended, and if so, will adopt that construction" (m). ILLUSTRATIONS. 1. A. sells to B. six stacks of oats to be paid for on a particular day. B. does not pay on that day, but tenders the price two days afterwards. A. refuses the money, and afterwards sells the oats. He is liable to B. in trover, as the contract still exists, and A.'s lien is gone by B.'s tender. Martindale v. Smith (1841), 1 Q. B. 389. 2. A. agrees to sell B. 5,000 tons of steel, deliverable 1,000 tons monthly, and each instalment to be paid for within three days after receipt of shipping documents. A. in the first month delivers only 332 tons, and 260 tons in the early part of the next month. A. then becomes insolvent, and B. refuses to pay for the instalments delivered, whereupon A. refuses further deliveries. A. is liable to B. for nondelivery, as, payment by B. for each instalment not being a condition precedent to the delivery of that instalment, there is no intention that it should be a condition precedent to the delivery of the residue. Mersey Steel and Iron Co. v. Naylor (1884), 9 App. Čas. 434. and 3. A. agrees to sell B. 300 tons of rice to be shipped in March (h) Reuter v. Sala (1879), 4 C. P. D. 239; Graves v. Legg (1854), 9 Ex. 709. (i) Reuter v. Sala, supra, at p. 246. (k) Gathorne v. Adams (1862), 12 C. B. N. S. 560. or M. & W. 473; Reg. v. Chawton (m) Simpson v. Margitson (1847), (1) Webb v. Fairmaner (1838), 3 S. 111; Benj. p. 686. S. 10 (2). When condition to be treated as warranty. S. 11 (1) (a). April at a particular place. B. resells. All but a very small portion 4. A. sells B. goods by auction, one of the conditions of sale being that the goods shall be taken away within three days, otherwise the deposit to be forfeited and the goods resold. B. does not clear the goods within the time, but comes shortly afterwards to do so. A. had in the meantime delivered the goods to C. A. is liable for non-delivery, as there was no condition precedent binding on B., as B.'s default was only a partial breach of the consideration. Woolfe v. Horne (1877), 2 Q. B. D. 355. 5. A. agrees to sell to B. 2,000 tons of rails to be shipped to Philadelphia, payment to be made in exchange for the bill of lading, and it is stipulated that the bill shall be forwarded to B. in time to reach him before the arrival of the ship, or before charges are incurred by him in respect thereof on landing. This stipulation as to time is not of the essence of the contract, as it does not go to the whole consideration for B.'s promise to accept and pay for the goods. Per Brett, M.R., in Sanders v. McLean (1883). 11 Q. B. D. at p. 336. 6. A. agrees to sell to B. 300 bales of wool, to be shipped with all dispatch in a particular month, and the name of the vessel to be declared by A. on shipment. The wool is unsaleable by B. unless he receives notice of shipment. B. is not liable to accept the wool unless (1) it is shipped with all dispatch in the month named; and (2) the name of the vessel be declared. Graves v. Legg (1854), 9 Ex. 709 (n). 11.-(1.) In England or Ireland (a) Where a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may waive the condition, or may elect to treat the breach of such condition as a breach of warranty, and not as a ground for treating the contract as repudiated. In England or Ireland.-For the law in Scotland, see sub-s. (2), post, p. 76. "Condition" is Warranty is defined in s. 62 (1) of this Act. not so defined in the Act, but appears by implication, from ss. 11 and 62 (1), to be an essential term, a breach of which entitles the buyer to reject the goods, and treat the contract as repudiated. The definition is in accordance with the previous law (o). The definition of warranty is based upon the celebrated judgment of Lord Abinger in Chanter v. Hopkins (p), in which he protested against confounding warranty with condition. Both are parts of (n) See Reuter v. Sala (1879), 4 C. P. D. 239. (0) See per cur. in Behn v. Burness (1863), 3 B. & S. 751. (p) (1838), 4 M. & W. 399. the contract; but the latter is fundamental and essential, the S. 11 (1) (a). former only collateral; but both are more than mere representations, not forming part of the contract at all. See on this distinction, the notes to clause (b), infra, p. 70. The buyer may waive the condition, or may elect.-Sub-s. (1), clause (a), deals with voluntary acts of the buyer with reference to conditions to be performed by the seller. Clause (c), on the other hand, deals with the compulsory election of the buyer. The buyer under this clause, then, has two courses open to him if he does not rely upon the non-performance of the condition, viz. :— (1.) To waive the condition: or (2.) To elect to consider it only as a warranty. If he relies upon the condition, he may, of course, in addition to any other defence, recover the price paid, as on a consideration which has wholly failed, under s. 54 (q). Having regard to the wording of this clause as compared with Waiver clause (c), the buyer being allowed an alternative, i.e., of waiver (express). or election, it seems probable that by "waiver" an express or voluntary waiver is meant. The waiver necessarily implied from a prevention of the performance of the condition, &c., as being a legal excuse of non-performance, would seem more logically to fall under sub-s. (3), and these cases are accordingly there discussed, post, p. 77. With regard to the waiver under this clause, "no authority is needed for the proposition that the party, in whose favour the condition has been imposed, may expressly waive it" (r), as the maxim, Quilibet renunciare potest juri pro se introducto, applies. The buyer's election "to treat the breach of the condition as a Election to breach of warranty," means that he has elected not to repudiate rely on the contract, but to accept the goods. On this Mr. Benjamin says (8) : "The buyer will also lose his right of returning [i. e., rejecting] goods delivered to him under a [condition] of quality, if he has shown by his conduct an acceptance of them. . . . This does not constitute an abandonment of his remedy by cross action, or his right to insist in defence upon a reduction of price." Having, then, shown his election by an acceptance of the goods, defined in ss. 34 (1) and 35, the buyer has the remedies defined in s. 53, q. v. (t). "The second proposition, that the buyer may, after receiving and accepting the goods, bring his action for damages, in case (9) Heilbutt v. Hickson (1872), L. R. 7 C. P. 438. (r) Benj. p. 547. (s) p. 946. (t) See also Benj. p. 940. warranty. |