Remedies for Breach of Sale of Goods Contract

This post will be a short one as I'm rushing for an event today, thus, as below;

In the every contract, there are breaches and things that tells the beyond the limits of a contract. The stepping of across the border of contract will lead to a simple fact, that is the contract being cancelled. So pay attention in the remedies below

Remedies for Sellers
1. Rights of unpaid sellers

• in case the goods are not yet delivered
• in case the goods are in the process of delivery
• in case the good have been delivered

2. Rights to sue for breach of contract

Remedies of Buyers
1. Rights to sue for damages for non-delivery
2. Rights to sue for specific performance
3. Remedies for breach of warranty (compensation)
4. Rights to sue under law of tort

• Detinue - an old commonlaw form of action to recover possession of personal property wrongfully detained
• Conversion -
  
  a. unauthorized assumption and exercise of rights of ownership over personal property belonging to another.

  b. change from realty into personalty, or vice versa, as in the sale or purchase of land or mining coal.
  
  

For more information and more in-depth details of breach of contract, kindly refer to this link.

Exceptions to Nemo Dat Quod non Habet!!

Woo hoo, yes, for those guys met in these situation before like how Mamat in the previous post, that my lecturer storied, we are here to enlighten the six exception to Nemo Dat Quod non Habet.

Hehe, it sounds like protests on the rules, but definitely for the right of justice, and laws are man-made it definitely can be changed, altered or put into exceptions.

The first exceptions are widely known as The Operatoin of Estoppel (section 27). Taking Mamat story again, and re-cap the story by having this exception into the story. In this rules, Mamat can have the title of the car if...Paul (the owner) by his conduct makes it appear to Mamat that Jack has his authority to sell such car and the buyer (Mamat) relies on that conduct. Here Paul is 'estopped' or precludd from denying Jack's authority to sell. And this appears to show as if authority is given. The best recap moments will be let's put like Mamat and Jack is talking about it and Paul is there, and knowing all the details. Instead of objecting, he is there, chilling and nodding in agreement, that is one of the point of Operation of Estoppel.

The next exception will be Sale by Mercantile Agent (section 27) and the stories goes;
Mamat can have the title of the car if ...Jack in this case is Paul's mercantile agent, having possession of the car with the consent of Paul, and had sold it to Mamat in the ordinary cause of business as mercantile agent. The definition of Mercantile Agent can be found in Section 2 of SOGA 1957. Ahuh, in this case, it is quite clear that they is an agent and definitely, the agent can represent the owner.

Besides that will be Sale by One of Joint Owners (section 28) and the following are the continuation of another scenario of the story;
Mamat can have the title of the car if Jack and Paul are joint owners of the car and he has the sole possession of the car by permission of the co-owner...provided that Mamat bought from Jack on good faith, and had no notice that the seller has no authority to sell. And the quote of on good faith, and no notice that the seller has no authority sell, means that Mamat is innocent to know the case as to avoid bad intention that Mamat want to create between Jack and Paul. Just some explanation on it.

In the next context, under Section 29 will be Sale under a Voidable Title. Chapter 4 continued..
Mamat can have the title of the car if ... Jack had acquired the car from Paul under a voidable contract (voidable as according to s.19-20 Contract Act 1950 eg. fraud, coercion, undue influence etc.) and at that time, Paul had not rescinded the contract. Provided that Mamat bought it in good faith and had no notice about the defect of Jack's title on the car. This will mean that the problem occurs between Jack and Paul, and it is apparent but not realised. Thus, the point of having Mamat not blamed and to earn the ownership.

The 5th exceptions will be sale by a seller in possession. Mamat can have the title of the car if ..Jack (seller) had previously sold the car to Paul, but then he continues or is in possessions of the car or of the documents of title to the car after the first sale..So here Jack sold it to second buyer after selling it to the first. Provided that Mamat bought in good faith and here Jack is liable to compensate Paul. Clear cut enough but on how ridiculous the stories can sound, it is true and had happen before, and thus Sectoin 30 (1) will be the reference of the story. And in this case, all I can say is 'Kesian Paul, he is the victim'.

Last but not least will be Sale by a Buyer in Possession under Section 30(2). The story to be told...
Mamat can have the title of the car if...Jack, after buying the same car from Paul, had possessions of the car, even though such contract is not yet completed and Jack had not obtained a good title yet. Just as clear cut as the previous few exceptions, this simply entail that Jack already have the ownership with the intention of Paul is to sell the car as well.

So this is one of the important few points to note, especially in these cyberworld, as we do purchase alot of things through online. Do be aware on the rights that you are having, especially not just things that you buy from Lelong.com.my or Mudah.com.my, but very importantly, in the forums as the purchased may not be genuine or fitting the rules of the guideline. We have to beware as at the end of the day, the problem will lead to us, as we are the buyer, and we are not compensated even though we are not at fault. And realistically, if happen for a RM 100 item, that leads you to go to court to settle the issue, will you do it?

nemo.dat.quod.non.habet

Yes, Nemo dat Quod Non Habet is one of the most hard to pronounce at some point, but one of the most important rule in the Sale of Goods Act. In fact, it is very applicable in a lot of way. But before that, let us define in the Law scope of what Nemo Dat Quod Non Habet means:

Nemo dat quod non habet, literally meaning "no one [can] give what he does not have" is a legal rule, sometimes called the nemo dat rule, that states that the purchase of a possession from someone who has no ownership right to it also denies the purchaser any ownership title. This rule usually stays valid even if the purchaser does not know that the seller has no right to claim ownership of the object of the transaction (a bona fide purchaser); however it is often difficult for courts to make judgements as in many cases there is more than one innocent party. As a result of this there are numerous exceptions to the general rule which aim to give a degree of protection to bona fide purchasers as well as original owners (from Wikipedia.org)

To simplify it to Business Law context, "no one can give a better title than (from) what he has himself". As quoted in Section 27 of SOGA 1957, and this actually entails that the individual who purchased the item, whether is stolen or not, as with no recognition by the party who is considered uninformed or innocent for this case, the buyer are not entitled for the ownership of this.

With that some people may think, hey, I'm just a buyer who don't even know the origin of the products, and I'm the victim. How bout the stupid guy who sold me this thing, why doesn't he got any problem with that. Thus, we bring the story that our lecturer share during the class.

This is Mamat and he is happy to have recently bought a racing car from Jack. But later on found out that the car did not belong to Jack, but instead belonged to Paul. Jack had sold it to him without Paul's knowledge, authority or approval?
and in this scenario, the rule of Nemo Dat Quod Non Habet applied and Mamat had to returned the car to Paul.

But seriously, this case had brought numerous issues, especially for the judge, as some of the parties are innocent, lack of information given and etc. And we shall proceed with the next post of with the exceptions of the rules.

Sale of Goods

At some point, we can't stop cursing the slickest thing about lawyers' for defending some laws that in emotional or common sense, shouldn't be that way. For the record, we also should truly pity their hardship on learning every single thing and actually protecting the human rights'. The amount of studies and researches that they have to put on or reviewed through is far way more, and in fact, historians' reading may not be as much as them. While historians things are from the past, lawyers' element are from the past, now and future. And with every business when we usually talk, we use the terms, friends are friends, and business means business. Just the same for lawyers, friends are friends, the rightful laws should remain as the rightful laws.

Although whatever I type maybe blabbing, but do not find it pointless for our next topic. Lawyers are the one that got us be more aware especially in purchasing our items and our rights as a consumer.

Let's start with the introduction.
The nature of Sales of Goods contract is just a little variation from some of the definition of contract law and company law whereby, "A contract of sale of goods is a contract whereby a seller transfers or agrees to transfer the property in good to the buyer for a PRICE(s.4(1)). Note the bold and capital words as it is something very essential to be aware of. The transfer of property in good is very important in the contract to state the VALUE OF OWNERSHIP that this contract shall shift the value of one to the other who purchased it. At the same time, we go for PRICE. The reason it is important to note that price in this context means sale, as if the statement is written without price, it simply means a GIFT. As a gift is a transfer of ownership as well, but without the price tags there.

In Malaysia, under Section 2 of Sales of Goods Act, Goods are defined to two categories namely i) goods may be either existing or future goods and ii) every kind of movable property.
By this definition the second one do seem ambiguous at some point, thus, the act have some exclusions so that it wouldn't confused the public. The acts excludes any actionable claims, money and land, as they are immovable. In addition to that, it includes growing crops and grass, stock and shares and things attached but severable to land.

Last but not least in this introductory of post of SOG, the most important elements with regard to the formation of contract are succumbed to three main points namely Parties to Contract, Offer and Acceptance (just like in contract law) and Price. Parties to Contract is rather simple as we know that whenever you want to buy something, there must be someone selling. Offer and Acceptance talks with regard that a price is offered by either party, upon agreed will become promise and for the contract to be established. Thus, according to s. 5(2) of SOGA, the offer and acceptance may be made in writing or/and by word of mouth or implied from conduct.

The final elements that shows the differences among other laws will be again, PRICE. In price, the contract can be formed in 4 various vital points.
The price can be fixed in various manners as;

1. Fixed by contract - that means it is bound by a contract for the price of the products
2. Left in a manner to the agree, eg. 3rd party
3. Determined by course of dealing of the parties
4. By subject to a reasonable price
   

Salomon v A Salomon & Co Ltd

For the past few weeks, we have been exposed to the understanding of company law. Company law which most popularly known as corporate law had lots of distinct ways that protects and disclosed the rights of the owners, and the consequences of ownership. It differs a lot as to compare with sole proprietorship and also partnership in a way that, both are different entity, that infers separate legal entity in every way of a company can be.

With one of the most interesting case that is brought on will be Salomon v A Salomon & Co. Ltd. And below are the excerpts that I got from Wikipedia for the actual story of the case;

Mr Aron Salomon was not a leather boot and shoe manufacturer. His firm was in Whitechapel High Street, with warehouses and a large establishment. He had had it for 30 years and "he might fairly have counted upon retiring with at least £10,000 in his pocket." He had a wife, a daughter and five sons. Four of the sons worked with him. The sons wanted to be partners, so he turned the business into a limited company. The wife and five eldest children became subscribers and two eldest sons also directors. Mr Salomon took 20,001 of the company's 20,007 shares.

The price fixed by the contract was £39,000, which was "extravagent" and not "anything that can be called a business like or reasonable estimate of value." Transfer of the business happened on June 1, 1892. Purchase money for the business was paid, totalling £20,000, to Mr Salomon. £10,000 was paid in debentures to Mr Salomon as well (ie, Salomon gave the company a loan, secured by a charge over the assets of the company). The balance paid went to extinguish the business’ debts (£1000 of which was cash to Salomon).

But soon after Mr Salomon incorporated his business, there was economic trouble. A series of strikes in the shoe industry led the government, Salomon's main customer, to split its contracts between more firms (the Government wanted to diversify its supply base to avoid the risk of its few suppliers being crippled by strikes). His warehouse was full of unsold stock. He and his wife lent the company money. He cancelled his debentures. But the company needed more money, and they sought £5000 from a Mr Edmund Broderip. They gave him a debenture, the loan with 10% interest and secured by a floating charge. But the business still failed, and they could not keep up with the interest payments. In October 1893 Mr Broderip sued to enforce his security. That was the end. The company was put into liquidation. Mr Broderip was paid but other unsecured creditors were not.

The liquidator met Broderip’s claim with a counter claim, joining Salomon as a defendant, that the debentures were invalid for being issued as fraud. The liquidator claimed all the money back that was transferred when the company was started: rescission of the agreement for the business transfer itself, cancellation of the debentures and repayment of the balance of the purchase money.

So in this case, from the passage above, it is very clear of something that the doctrine of corporate separate legal entity rules. As Mr. Broderip may have filed a lawsuit toward Salomon, whom apparently was the holder of that debentures, but with the company's name. Thus, Mr. Broderip first step is supposed to be suing the company namely A.Salomon & Co. Ltd., as Aron Salomon had nothing to be liquidated. His loss is limited to the liability or the amount that he invested on or having shares of the company. The blunder of the Mr. Broderip ended up, being able to take the money but was forced to claimed back as the liquidator claimed his debentures were invalid. Thus, in making corporate agreements or contracts with others, a very clear point is that, one should always be aware of the rightful person that should be issued your resources eg. money.

Let's say A is your good friend, a very very good friend. Thus, he is the owner of company Aiyo Bhd., and his total capital invested in the company is RM 5000, let's say. You, the good friend of A is a rich guy as well. And one day, when A's company were facing insolvency problem and soon lead to the company's in crisis that they have to tear up the company. The company is insolvent for about RM 1 million, and you are requested by your friend to help. So in this case, if you are issuing your nice big amount of money of cheque, do issue to the company and not to A (where he will beg you like s**t to send to him). Continually worse case scenario that the company is put into liquidation, if you give to the company, you are able to succumbed to earn back your money if strict procedures is followed. However, if you issued to your friend, suing him will only earned you back abruptly RM 5000, as that is his limited liability. So be aware of such scenarios, cronies are there a lot!

Holding and Subsidiary

AS we all know that in the whole world, there are a lot of types of businesses that had been going around. From sole proprietorship, to partnership and even until a company, we can see so many variations and so many entrepreneurs that come from each and every form of businesses. Some started small, while some strive for the biggest.

With every elements that form the true personality of a great businessman, we are going to a scope of big major companies. Our focus today will be on the company side whereby companies grew so big, they needed subsidiaries to exploit every field or industry they ought to excel.

My company selection will be one of the GLC and conglomerate company (which is one element of subsidiaries company) will be the company that provide me funding for my tertiary education, that is Sime Darby Berhad.

Sime Darby Berhad is the largest conglomerate in Malaysia and one of the largest in southeast Asia. In this company, its orbit are more than 270 operating companies in 23 countries, with its most extensive foreign operations in Hong Kong (which accounts for 25 percent of revenues), Singapore (14 percent), and Australia (11 percent)(The company generates 38 percent of its revenues domestically.). Sources written so nicely, of course adapted from their webpage.

The initial start up of Sime Darby started from plantation which is still the current most active division in SD, from rubber plantation and now, palm oil and many more. Agriculture based business is their forte before they started venture into more broadly diversified activities include a wide range of industries, with the core businesses being plantations (including oil palm and the company's original business, rubber), tire manufacturing, heavy equipment and motor vehicle distribution, property development, power generation, and engineering services. Other business operations include paint manufacturing, refrigeration product manufacturing, travel and tourism services, hospitals, and golf courses, which is KLGCC, that recently hold the Maybank Malaysian Open that prizes up to USD2million worth of competition! In addition to that, there are 3 more divisions that are still on their progress on working and getting stronger, that is Health Industry, which they are boosting more on this. Also, on ICT, as currently in Wisma Sime Darby they have a specific floor on utilization of ICT system in Sime Darby and to expand further. And last but not least, a division by itself, Yayasan Sime Darby had become independent from HR dept. just early this year, and are working strongly on Corporate Social Responsibility activity of Sime Darby. (can see the progress at http://www.yayasansimedarby.com)

From every divisions that they work, they have multiple subsidiaries which will be enlisted later to entail their coverage of nearly every field you can think of in Malaysia. The below show their principal subsidiaries.
Principal Subsidiaries: Consolidated Plantations Berhad; SD Holdings Berhad; Sime UEP Properties Berhad (51.2%); Tractors Malaysia Holdings Berhad (71.7%); DMIB Berhad (51%); Sime Tyres International (M) Sdn. Bhd.; Kuala Lumpur Golf & Country Club Berhad; Subang Jaya Medical Centre Sdn. Bhd.; Sime Engineering Sdn. Bhd.; Sime Coatings Sdn. Bhd.; Mecomb Malaysia Sdn. Berhad; Puchong Quarry Sdn. Bhd. (85.4%); Sime Inax Sdn. Bhd. (80%); Chubb Malaysia Sendirian Berhad (70%); Sime Rengo Packaging (M) Sdn. Bhd. (70%); Sime SembCorp Engineering Sdn. Bhd. (70%); Port Dickson Power Berhad (60%); Sime Darby Hong Kong Limited (74.9%); Sime Singapore Limited (69.1%); Sime Darby Pilipinas, Inc. (Philippines; 97.2%); Lec Refrigeration plc (U.K.; 98.5%); Sime Darby Australia Limited; Hastings Deering (Australia) Ltd.

Sime Tyres I believe a lot will know as one of the popular tyre brand ever since 1980's. Subang Jaya Medical Centre is one of their iconic stuff in the health industry.

Also, there are principal divisions mentioned earlier that leads up to Sime Darby as one of the conglomerate type of company, so big that they have more than 100,00 employees in total!

To read more on Sime Darby, click here!

KFC Snack Plate

Focus on my post and not on this ads!

Alright, let's do some topic regarding the Contract Law, although it's been near to a week after our paper.

The reason why I put up this picture serve a purpose, as we do know that for each agreement to be a contract and to make the contract enforceable, there are few steps and procedures to go through. And for advertisement, usually it is just an invitation to treat and while we think, they are offering to us what they have, we are wrong! We are offering to them what they have! As funny or ridiculous as it sounds, it actually makes sense in the law, especially in contract law!

Alright let's put a scenario in this post,

Uncle J: (walk into KFC, and look through the board) I want the Snack Plate!
Cashier L: Hi, one Snack Plate! What do you want for drinks Sir?
Uncle J: Pepsi will do!
Cashier L: Anything else Sir, you want to add? Cheesy Wedges? Coffee, Tea or ME? (just for joking purposes)
Uncle J: Nop, that will do!
Cashier L: Alright, that will be (the most current price) RM 10.65 Sir!
Uncle J: Okay!

A while later, while the attendants of the KFC is trying to bring the food for this uncle, the awaiting Uncle J quoted,
Uncle J: Boy, I want my meal EXACTLY like the picture in the board!

Thus, this leads to not confusion, some discussion!
First of all, the offer only start when Uncle J decided to purchase the food. Cashier L accepted and continued the process. A contract is made! With that, in acceptance wise, absolute as in the payment will be made in CASH, so no prob! And unqualified, that means one-time payment and no other things in between, true also! It is just merely that simple actually!

As we proceed further, BUT WHAT IF, Cashier L did not do as how Uncle J asked! That means he didn't serve him exactly like the pic, no drumstick, but two pieces of chicken breasts meat?
OR even, Uncle J is constantly not satisfied with the arrangement that the chicken is smaller than the picture and etc.? (trust me, this things, does OCCUR)

In regard to offer, Uncle J is the one offered to pay the price, and Cashier L main unqualified term is not just one time payment, but to fulfil the required as how the order should come in. In considering, the pieces or arrangement of the plate, it should not be an ISSUE because unless the statement was made earlier during the OFFER stage, whereby while offering, the terms are stated clearly, if not Cashier L arrangement are not deemed to be a problem! In a lawsuit, let's say they pursue this case (don't be surprise, same case happen in the TGV Cinema in KLCC last Saturday when I was there), point it out for me if I'm wrong, Cashier L will have the advantage as performing as accordingly, while Uncle J slip the offering stage further.

comments is very encouraged! thanks

Feng Shui

As this few days is the festive celebration for the Chinese in Malaysia, Taiwan, China and Hong Kong and Vietnamese in Vietnam. This is the celebration called the Lunar New Year whereby the year is determined by the moon as what the ancient people believe last time.

Thus, during this celebration, there are always superstition, do's and don'ts in the Chinese community. In every aspect from dressing, foods, home decorations and etc., Chinese the color of RED brings luck and fortune, that's why we will put firecrackers as to bright up the hope for those benefits. Fish, poultry, and lots other foods are essential to bring you good harvest and more to come in the future. Each and everything brings a certain measure of good things to us.

That is just something old-school, and as time goes by, Chinese become more peculiar and more sensitive towards certain issues that even the birth year, whereby we have ox, pig, dragon, snake, rabbit, horse, monkey, goat, dog, and this year, the year of the Tiger. Even this zodiac become something superstitious which bring in another element of wider and comprehensive knowledge of Feng Shui.

Personally, Feng Shui on wind, sun, water and landscape is quite true as my brother who took Architecture and Civil Engineering as a degree did mentioned. So much so that even those Dummies book have the knowledge for Feng Shui. However, looking on Feng Shui on zodiac and predicting our years is rather vague.

This is not that I want to counter whatever those Feng Shui master said and definitely I'm someone who will listen and take the good of it. However, this year, it bumped into me to listen to up to 3 sources of Feng Shui. I was born in the year of the Dragon and in fact, three different sources tells me different things. One say good, but must be careful, one say bad, and real bad and lastly, rather neutral.

Thus, the reason for this post is this, one Feng Shui master can tell you that you should be careful on your health, eat more vegetables, do not always think opportunity is always good as it may be an loopholes and etc. The problem is this, everything they said is ambiguous. Every good thing they mentioned there is bad thing coming in, and every bad thing they mentioned, it will always comes off good. And since they are talking without paying any money, suing them means no point, as if you say you got a bad accident, they will say, YES I Told you. But if you tell them, don't have also, although a lot would not challenge that, he will say, yes, things are turning better.

So the speculation of this post is like this, whatever statement that they make, we never know whether is an OFFER or INVITATION TO TREAT. We can say yes and say no, thus, it may lead to an acceptance in the knowledge. But however, with all the thing that this contract may be legal, one problem arises, which is, is the contract voidable or not and etc. which I will discuss in the next post.

This is Eric here writing, in care of listening to the right things for yourself.