LAW OF SALES

PART I

CHAPTER I

THE CONTRACT

§ 1. Place in the Law. The Law of Sales is a subdivision of the law of contracts and is one of the group of subjects included in what is frequently termed "commercial" or "business law." The word "sale" is popularly applied to the transfer of ownership in any form of property whatever; but, technically speaking, the term should be applied only to the transfer of ownership of personal property.

§ 2. History. Nothing is more common in our modern business world than the buying and selling of property. Everyone is almost daily a buyer or seller in some form. As far back as history discloses, transfers of property, both real and personal, are found taking place. Such transfers, before the use of money was known, were generally of one thing for another, and are properly denominated barters and exchanges. In ancient times, transfers of property were cumbersome and formal. One of the greatest writers on Ancient Law, Sir Henry Maine, said:

"An ancient conveyance was not written, but acted. Gestures and words took the place of written, technical phraseology, and any formula mispronounced, or symbolic act omitted, would have vitiated the proceeding."

Ceremonial Character of Ancient Law. A sale under the Roman Law involved a public ceremonial. If A wished to purchase B's horse, it was necessary that there should be present, in addition to the buyer and the seller and the Copyright, 1912, by American School of Correspondence.

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horse, six Roman citizens of full age, five of whom were to serve as witnesses, while the sixth held a pair of scales in his hands. The buyer took hold of the horse and said: "I declare this horse to be mine by law, and that I buy him with this piece of money and this pair of scales." He then struck the scales with the copper coin in his hand and handed the coin to the seller. The coin was not the real purchase money, but was used as a symbol of it. The price was subsequently paid in manner and form as might have been agreed upon between the parties. Originally, however, the actual money was probably weighed into the scale pan and paid over on the spot.

The ancient ceremonial transfer of property would be ill adapted to the rapid and multitudinous transfers of personal property at the present day. Only in the conveyance of real property has there survived any of the cumbersome methods of the early times. It must be remembered, in explanation, that the object of the ancient ceremonial was publicity of the transaction in a time when writing and recording of instruments were unknown. In no other way could the community be made surely to remember the event.

§3. Property. The student has learned already that the word "property" is used in two senses, a popular sense and a legal sense;1 that in law the word property does not stand for a visible, tangible thing, but means ownership, or right of dominion over a thing, and that the thing may be a material one, as a house or a horse, or may exist only in contemplation of law, as the good will of a business, or a right over another man's land. Therefore, in speaking of personal property, the student should try to think not of concrete objects so much as of rights of control and dominion over those objects. It is such rights of control and dominion that are transferred in a sale. Yet as the term is used not only in ordinary language but even in law books as denoting things, we shall use it interchangeably in this article.

Classes of Property. The student has also learned that 1 See Article on Personal Property.

all property is divided into two great classes, called real property and personal property; that real property includes lands, tenements, and hereditaments, meaning under this last term inheritable forms of property, or, roughly speaking, that real property includes things immovable; and that personal property includes all other kinds and may be said to comprise movable property exclusively. There are many different forms of personal property, and various terms are used as synonymous with "personal property," for instance, "chattels," "goods," and "goods, wares and merchandise." In this article, we shall use as the synonym of personal property the term "goods," not including thereunder, however, choses in action, except so far as may be necessary in discussing transfer under the Statute of Frauds and by documents of title.

Forms of Transfer. Property may be transferred from one person to another, either by operation of law, or by act of parties. Sale is one form of transfer of personal property by act of the parties.

§ 4. Law Governing Sales.. The contract of sale is governed in most jurisdictions by the principles of the common law and the English Statute of Frauds, passed in 1677. In some States the law of sales has been codified and enacted into a statute which furnishes the rule of construction and interpretation, prescribing as well the form of the contract. In the case of a conflict of laws the same rules apply as govern in case of the formation and the performance of any contract, the chief rule being that a sale valid where made is valid everywhere, and can be enforced everywhere in the absence of local law or statute to the contrary.

Uniform Sales Act. As part of the movement begun by the American Bar Association, looking to the uniformity of the laws of the different States on various subjects in which uniformity is desirable, an act making uniform the law relating to the sale of goods has been adopted in the following States: Arizona, Connecticut, New Jersey, Massachussetts, Rhode Island, and Ohio, and is likely to be introduced into many more States eventually. It behooves

students in the States named to consult, on questions involving the law of Sales, the statutes of their respective States.

Sales at Common Law. In a case2 that reached the Supreme Court of the United States, that Court said of sales at common law:

"Nothing was required at common law to give validity to a sale of personal property except the mutual assent of the parties to the contract. As soon as it was shown by competent evidence that it was agreed by mutual assent that the one should transfer the absolute property in the thing to the other for a money price, the contract was considered as completely proven and binding on both parties. If the property by the terms of the agreement passed immediately to the buyer, the contract was deemed a bargain and sale; but if the property in the thing sold was to remain for a time in the seller, and only to pass to the buyer at a future time or on certain conditions inconsistent with its immediate transfer, the contract was deemed an executory agreement. Contracts of the kind are made in both forms, and both are equally legal and valid; but the rights which the parties acquire under the one are very different from those secured under the other. Ambiguity or incompleteness of language in the one or the other frequently leads to litigation; but it is ordinarily correct to say that whenever a controversy arises in such a case as to the true character of the agreement, the question is rather one of intention than of strict law, the general rule being that the agreement is just what the parties intended to make it, if the intent can be collected from the language employed, the subject-matter, and the attendant circumstances."

DEFINITIONS

Blackstone, the English Commentator, defines a sale as "a transmutation of property from one man to another in consideration of some price.

Kent, the American Commentator, defines a sale as “a contract for the transfer of property from one person to another for a valuable consideration." 4

Benjamin thus defines a sale: "By the common law a

2 Hatch v. Oil Co., 100 U. S. 124. 32 Bl. Comm. 446.

42 Kent Comm. 468.

sale of personal property is usually termed 'a bargain and sale' of goods. It may be defined to be a transfer of the absolute or general property in a thing for a price in money."'

Mechem defines a sale as "the transfer, in pursuance of a valid agreement, from one party, called the seller, to another, called the buyer, of the general or absolute title to a specific chattel, for a price, or a consideration estimated in money. 776

The term "bargain and sale" as employed above, is used as synonymous with the single word "sale"; the word "bargain" having reference to the preliminaries and dickering leading up to the actual sale or delivery, which seems to be the root meaning of the word. The bargain includes the terms of the agreement upon which the sale is based, if any distinction is to be made between the two terms of the expression.

In the Uniform Sales Act a sale is defined as follows: "A sale of goods is an agreement whereby the seller transfers the property in goods to the buyer for a consideration called the price.'”

Finally, it may be said, where a contract is intended to result immediately in the transfer for a price of the property in goods from one party called the vendor or seller to another called the vendee or buyer, it is a contract of sale of the goods.

Under the term "goods" in this article are included both existing goods of the seller, or goods to be manufactured or acquired by him after the making of the contract. In this respect, American law and the Sales Act extend the common law meaning of the term, as will hereafter appear.

SALES AND OTHER DISPOSITIONS OF PERSONAL PROPERTY

As personal property may be transferred in other ways than by sale, it is well to point out how a sale differs from other modes of transfer.

5 J. P. Benjamin on Sales, § 1. • Mechem on Sales, § 1.

Uniform Sales Act, §§ 1, 2.