RSNL1990 CHAPTER S-6 - SALE OF GOODS ACT

RSNL1990 CHAPTER S-6 SALE OF GOODS ACT Amended: 1995 c13 s15; 1996 cJ-1.1 s200; 1998 cP-7.1 s83; 2018 cC-4.1 s108 CHAPTER S-6 AN ACT RESPECTING THE SALE OF GOODS Analysis 1. Short title 2. Interpretation PART I FORMATION OF THE CONTRACT 3. Contract of sale 4. Capacity to contract 5. Form of contract 6. Sale of goods greater than $50 7. Goods as subject of contract 8. Loss of specific goods before contract 9. Loss of specific goods after agreement to sell 10. Price of goods 11. Third party valuation 12. Time not of essence 13. Breach of condition 14. Implied conditions and warranties 15. Sales by description and sample 16. Warranty or condition as to quality or fitness 17. Sale by sample PART II EFFECTS OF THE CONTRACT 18. Sale of unascertained goods 19. Sale of specific goods 20. Rules for ascertaining intention of parties 21. Right of disposal of goods 22. Goods at seller's risk 23. Buyer acquires no better title than seller 24. Saving provision 25. Seller's title voidable 26. Property in stolen goods 27. Delivery of goods by person in possession to purchaser in good faith 28. Rep. by 1996 cJ-1.1 s200 PART III PERFORMANCE OF THE CONTRACT 29. Duties of buyer and seller 30. Delivery and payment concurrent conditions 31. Provisions re possession or delivery of goods 32. Delivery of lesser or greater quantity than that ordered or of mixed goods 33. Delivery by instalments 34. Delivery to carrier 35. Risk of deterioration 36. Right of examination of goods 37. Goods considered accepted 38. Buyer who rejects not bound to return goods 39. Wrongful refusal of delivery PART IV RIGHTS OF UNPAID SELLER AGAINST THE GOODS 40. Unpaid seller 41. Rights of unpaid seller 42. Lien of unpaid seller 43. Lien on remainder of goods 44. Loss of unpaid seller's lien 45. Right of stoppage in transit 46. When goods considered to be in transit 47. Exercising right of stoppage 48. Unpaid seller rights vs. good faith purchaser for value 49. Rules re rescission of contract PART V ACTIONS FOR BREACH OF THE CONTRACT 50. Action by seller for price 51. Action by seller for damages 52. Action by buyer for non-delivery 53. Court may order specific performance 54. Rights re breach of warranty 55. Right to interest or special damages PART VI SUPPLEMENTARY 56. Implication of law negatived 57. Reasonable time 58. Enforcement of rights 59. Sales by auction 60. Law of insolvency and common law Short title 1. This Act may be cited as the Sale of Goods Act. RSN1970 c341 s1 Back to Top Interpretation 2. (1) In this Act (a) "action" includes counterclaim and set off; (b) "buyer" means a person who buys or agrees to buy goods; (c) "contract of sale" includes an agreement to sell as well as a sale; (d) "court" means the Trial Division; (e) "delivery" means voluntary transfer of possession from 1 person to another; (f) "document of title to goods" includes a bill of lading, dock warrant, warehouse-keeper's certificate, and warrant or order for the delivery of goods, and another document used in the ordinary course of business as proof of the possession or control of goods, or authorizing or purporting to authorize, either by endorsement or by delivery, the possessor of the document to transfer or receive goods represented by that document; (g) "fault" means wrongful act or default; (h) "future goods" means goods to be manufactured or acquired by the seller after the making of the contract of sale; (i) "goods" includes personal property other than things in action and money and includes natural products of the land, industrial growing crops, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale; (j) "property" means the general property in goods, and not merely a special property; (k) "quality of goods" includes their state or condition; (l) "sale" includes a bargain and sale as well as a sale and delivery; (m) "seller" means a person who sells or agrees to sell goods; (n) "specific goods" means goods identified and agreed upon at the time a contract of sale is made; and (o) "warranty" means an agreement with reference to goods which are the subject of a contract of sale, but collateral to the main purpose of that 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. (2) A thing is considered 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. (3) A person is considered to be insolvent within the meaning of this Act who either has stopped paying his or her debts in the ordinary course of business or cannot pay his or her debts as they become due, whether he or she has been declared insolvent or not. (4) 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. RSN1970 c341 s2; 1995 c13 s15 PART I FORMATION OF THE CONTRACT Back to Top Contract of sale 3. (1) A 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 money called the price. (2) There may be a contract of sale between 1 part owner and another. (3) A contract of sale may be absolute or conditional. (4) Where 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 where the transfer of the property in the goods is to take place at a future time, or subject to a condition to be fulfilled at a later time, the contract is called an agreement to sell. (5) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred. RSN1970 c341 s3 Back to Top Capacity to contract 4. (1) Capacity to buy and sell is regulated by the general law concerning capacity to contract, and to transfer and acquire property. (2) Where necessaries are sold and delivered to an infant or minor, or to a person who because of mental incapacity or impairment by alcohol or drugs, is incompetent to contract, he or she shall pay a reasonable price for those necessaries. (3) Necessaries in this section mean goods suitable to the condition in life of the infant or minor or other person, and to his or her actual requirements at the time of the sale and delivery. RSN1970 c341 s4; 2018 cC-4.1 s108 Back to Top Form of contract 5. (1) A contract of sale may be made in writing, either with or without seal, or by word of mouth, or partly in writing and partly by word of mouth, or may be implied from the conduct of the parties. (2) Nothing in this section shall affect the law relating to corporations. RSN1970 c341 s5 Back to Top Sale of goods greater than $50 6. (1) A contract for the sale of goods of the value of $50 or more shall not be enforceable by action unless (a) the buyer accepts and actually receives part of the goods sold; (b) the buyer gives something in earnest to bind the contract, or in part payment; or (c) some written note or memorandum of the contract is made and signed by the party to be charged or his or her agent. (2) This section applies to a contract referred to in subsection (1), notwithstanding that (a) the goods may be intended to be delivered at a future time; (b) the goods may not at the time of the contract be actually made, procured, or provided; (c) the goods may not at the time of the contract be fit or ready for delivery; or (d) some act may be necessary for the making or completing of the contract, or making the goods fit for delivery. (3) There is an acceptance of goods within the meaning of this section when the buyer does an act in relation to the goods which recognizes a pre-existing contract of sale, whether there is an acceptance in performance of the contract or not. RSN1970 c341 s6 Back to Top Goods as subject of contract 7. (1) The goods which form the subject of a contract of sale may be existing goods, owned or possessed by the seller, or goods to be manufactured or acquired by the seller after the making of the contract of sale, in this Act called "future goods". (2) There may be a contract for the sale of goods, the acquisition of which by the seller depends upon a contingency which may or may not happen. (3) Where 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. RSN1970 c341 s7 Back to Top Loss of specific goods before contract 8. Where 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. RSN1970 c341 s8 Back to Top Loss of specific goods after agreement to sell 9. Where there is an agreement to sell specific goods, and later the goods, without fault on the part of the seller or buyer, perish before the risk passes to the buyer, the agreement is as a result void. RSN1970 c341 s9 Back to Top Price of goods 10. (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 upon in the contract or may be determined by the course of dealing between the parties. (2) Where the price is not determined under subsection (1), the buyer shall pay a reasonable price. (3) In this section a reasonable price is a question of fact dependent on the circumstances of a particular case. RSN1970 c341 s10 Back to Top Third party valuation 11. (1) Where there is an agreement to sell goods on the term that the price is to be fixed by the valuation of a 3rd party, and that 3rd party cannot or does not make that valuation, the agreement is void. (2) Where the goods or a part of the goods have been delivered to and appropriated by the buyer under subsection (1), he or she shall pay a reasonable price for the goods. (3) Where the 3rd party is prevented from making the valuation by the fault of the seller or buyer, the party not in fault may maintain an action for damages against the party at fault. RSN1970 c341 s11 Back to Top Time not of essence 12. (1) Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not considered to be of the essence of a contract of sale. (2) Whether another stipulation as to time is of the essence of the contract depends on the terms of the contract. (3) In a contract of sale "month" means calendar month. RSN1970 c341 s12 Back to Top Breach of condition 13. (1) Where 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 that condition as a breach of warranty, and not as a ground for treating the contract as repudiated. (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. (3) A stipulation may be a condition, though called a warranty in the contract. (4) Where a contract of sale is not severable, and the buyer has accepted the goods, or a part of the goods, or where 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. (5) Nothing in this section shall affect the case of a condition or warranty, fulfilment of which is excused by law because of impossibility or otherwise. RSN1970 c341 s13 Back to Top Implied conditions and warranties 14. In 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 he or she has a right to sell the goods, and that in the case of an agreement to sell he or she will have a right to sell the goods at the time when the property is to pass; (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 a charge or encumbrance in favour of a 3rd party, not declared or known to the buyer before or at the time when the contract was made. RSN1970 c341 s14 Back to Top Sales by description and sample 15. (1) Where there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description. (2) Where the sale is by sample as well as by description, it is not sufficient that the bulk of the goods corresponds with the sample where the goods do not also correspond with the description. RSN1970 c341 s15 Back to Top Warranty or condition as to quality or fitness 16. There is no implied warranty or condition as to the quality or fitness for a particular purpose of goods supplied under a contract of sale, except as follows (a) where 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 which it is in the course of the seller's business to supply, whether he or she is the manufacturer or not, there is an implied condition that the goods shall be reasonably fit for that purpose; (b) 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 a particular purpose; (c) where goods are bought by description from a seller who deals in goods of that description, whether he or she is the manufacturer or not, there is an implied condition that the goods shall be of merchantable quality; (d) where the buyer has examined the goods, there shall be no implied condition as regards defects which that examination ought to have revealed; (e) an implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade; and (f) an express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent with this Act. RSN1970 c341 s16 Back to Top Sale by sample 17. (1) A contract of sale is a contract for sale by sample where there is a term in the contract, express or implied, to that effect. (2) In the case of a contract for sale by sample there is an implied condition that (a) the bulk shall correspond with the sample in quality; (b) the buyer shall have a reasonable opportunity of comparing the bulk with the sample; and (c) the goods shall be free from defect, making them unmerchantable which would not be apparent on reasonable examination of the sample. RSN1970 c341 s17 PART II EFFECTS OF THE CONTRACT Back to Top Sale of unascertained goods 18. Where there is a contract for the sale of unascertained goods, property in the goods is not transferred to the buyer until the goods are ascertained. RSN1970 c341 s18 Back to Top Sale of specific goods 19. (1) Where there is a contract for the sale of specific or ascertained goods, the property in them is transferred to the buyer, at a time when the parties to the contract intend it to be transferred. (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. RSN1970 c341 s19 Back to Top Rules for ascertaining intention of parties 20. Unless a different intention appears, the following are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer: Rule 1. - Where 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, is postponed. Rule 2. - Where 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. - Where 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 some other 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. - When goods are delivered to the buyer on approval or "on sale or return", or other similar terms, the property in those goods passes to the buyer (a) when the buyer signifies his or her approval or acceptance to the seller or does another act adopting the transaction; (b) where the buyer does not signify his or her approval or acceptance to the seller but retains the goods without giving notice of rejection, then, where a time has been fixed for the return of the goods, on the expiration of that time, and, where no time has been fixed, on the expiration of a reasonable time and what is a reasonable time is a question of fact. Rule 5. (1) Where 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 at that time passes to the buyer. (2) Assent under Rule 5(1) may be express or implied, and may be given either before or after the appropriation is made. (3) Where, under the contract, the seller delivers the goods to the buyer or to a carrier or other bailee whether named by the buyer or not, for the purpose of transmission to the buyer, and does not reserve the right of disposal, he or she is considered to have unconditionally appropriated the goods to the contract. RSN1970 c341 s20 Back to Top Right of disposal of goods 21. (1) Where there is a contract for the sale of specific goods, or where goods are later 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. (2) In cases under subsection (1), notwithstanding the delivery of the goods to the buyer, or to a carrier or other bailee 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. (3) Where goods are shipped, and by the bill of lading the goods are deliverable to the order of the seller or his or her agent, the seller is, in the absence of evidence to the contrary, considered to reserve the right of disposal. (4) Where the seller of the 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 where he or she does not honour the bill of exchange, and where the buyer wrongfully retains the bill of lading the property in the goods does not pass to him or her. RSN1970 c341 s21 Back to Top Goods at seller's risk 22. (1) Unless otherwise agreed, the goods remain at the seller's risk until the property in the goods is transferred to the buyer. (2) When the property in the goods is transferred to the buyer, the goods are at the buyer's risk whether delivery has been made or not. (3) Where delivery has been delayed through the fault of either buyer or seller, the goods are at the risk of the party in default as regards a loss which might not have occurred but for that fault. (4) Nothing in this section shall affect the duties or liabilities of either seller or buyer as a bailee of the goods of the other party. RSN1970 c341 s22 Back to Top Buyer acquires no better title than seller 23. Where goods are sold by a person who is not the owner of the goods, 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 the owner of the goods is by his or her conduct precluded from denying the seller's authority to sell. RSN1970 c341 s23 Back to Top Saving provision 24. Nothing in this Act shall affect (a) an enactment enabling the apparent owner of goods to dispose of them as if he or she were the true owner of the goods; (b) the validity of a contract of sale under a special common law or statutory power of sale, or under the order of a court of competent jurisdiction. RSN1970 c341 s24 Back to Top Seller's title voidable 25. Where the seller of goods has a voidable title in the goods, but his or her title has not been avoided at the time of the sale, the buyer acquires a good title to the goods, provided he or she buys them in good faith and without notice of the seller's defect of title. RSN1970 c341 s25 Back to Top Property in stolen goods 26. (1) Where goods have been stolen and the offender is prosecuted to conviction, the property in the stolen goods revests in the person who was the owner of the goods or his or her personal representative, notwithstanding an intermediate dealing with them, by sale in open market or otherwise. (2) Notwithstanding an enactment to the contrary, where goods have been obtained by fraud or other wrongful means not amounting to larceny, the property in those goods shall not revest in the person who was the owner of the goods or his or her personal representative, by reason only of the conviction of the offender. RSN1970 c341 s26 Back to Top Delivery of goods by person in possession to purchaser in good faith 27. (1) Where a person having sold goods is in possession of the goods, or documents of title to the goods, the delivery or transfer by that person, or by a mercantile agent acting for him or her, of the goods or documents of title under a sale, pledge, or other disposition, to a person receiving the goods in good faith without notice of the previous sale, shall have the same effect as if the person making the delivery or transfer were expressly authorized by the owner of the goods to make the transfer. (2) Where 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 him or her, of the goods or documents of title, under a sale, pledge, or other disposition, to a person receiving the goods in good faith and without notice of a lien or other right of the original seller in respect of the goods, shall have 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. (3) In this section the term "mercantile agent" means a mercantile agent, having in the customary course of his or her business as that agent authority either to sell goods, or to consign goods for the purpose of sale, or to buy goods, or to raise money on the security of goods. RSN1970 c341 s27 Back to Top Rep. by 1996 cJ-1.1 s200 28. [Rep. by 1996 cJ-1.1 s200] 1996 cJ-1.1 s200 PART III PERFORMANCE OF THE CONTRACT Back to Top Duties of buyer and seller 29. It is the duty of the seller to deliver the goods, and of the buyer to accept and pay for them, under the terms of the contract of sale. RSN1970 c341 s29 Back to Top Delivery and payment concurrent conditions 30. Unless 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. RSN1970 c341 s30 Back to Top Provisions re possession or delivery of goods 31. (1) Whether 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 on the contract, express or implied, between the parties. (2) Apart from the contract referred to in subsection (1), express or implied, the place of delivery is the seller's place of business, where the seller has one, and, if not, his or her residence. (3) Where the contract is for the sale of specific goods, which to the knowledge of the parties when the contract is made are in some other place, then that place is the place of delivery. (4) Where 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. (5) Where the goods at the time of sale are in the possession of a 3rd person, there is no delivery by seller to buyer unless and until that 3rd person acknowledges to the buyer that he or she holds the goods on his or her behalf. (6) Nothing in this section shall affect the operation of the issue or transfer of a document of title to goods. (7) Demand 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. (8) Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable state shall be borne by the seller. RSN1970 c341 s31 Back to Top Delivery of lesser or greater quantity than that ordered or of mixed goods 32. (1) Where the seller delivers to the buyer a quantity of goods less than the seller contracted to sell, the buyer may reject them; however, where the buyer accepts the goods delivered he or she shall pay for them at the contract rate. (2) Where the seller delivers to the buyer a quantity of goods larger than he or she contracted to sell, the buyer may accept the goods included in the contract and reject the rest, or the buyer may reject the whole. (3) Where the buyer accepts the whole of the goods delivered under subsection (2) he or she shall pay for them at the contract rate. (4) Where 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 which are in accordance with the contract and reject the rest, or the buyer may reject the whole. (5) This section is subject to usage of trade, special agreements or courses of dealing between the parties. RSN1970 c341 s32 Back to Top Delivery by instalments 33. (1) Unless otherwise agreed, the buyer of goods is not bound to accept delivery of those goods by instalments. (2) Where there is a contract for the sale of goods to be delivered by stated instalments, which are to be separately paid for, and the seller makes defective deliveries in respect of 1 or more instalments, or the buyer neglects or refuses to take delivery of or pay for 1 or more instalments, it is a question 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. RSN1970 c341 s33 Back to Top Delivery to carrier 34. (1) Where, under 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 considered to be a delivery of the goods to the buyer. (2) Unless otherwise authorized by the buyer, the seller shall make with the carrier, on behalf of the buyer, a reasonable contract having regard to the nature of the goods and the other circumstances of the case. (3) Where the seller does not act as required under subsection (2), 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. (4) Unless otherwise agreed, where 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 notice to the buyer which enables him or her to insure them during their sea transit, and, where the seller fails to do this, the goods shall be considered to be at his or her risk during that sea transit. RSN1970 c341 s34 Back to Top Risk of deterioration 35. Where the seller of goods agrees to deliver them at his or her own risk at a place other than that where they are when sold, the buyer shall, unless otherwise agreed, take a risk of deterioration in the goods necessarily incident to the course of transit. RSN1970 c341 s35 Back to Top Right of examination of goods 36. (1) Where goods are delivered to the buyer, which he or she has not previously examined, the buyer is not considered to have accepted them until he or she has had a reasonable opportunity for examining them in order to ascertain whether they conform with the contract. (2) Unless otherwise agreed, when the seller offers delivery of goods to the buyer, he or she is bound, on request, to give the buyer a reasonable opportunity of examining the goods in order to ascertain whether they conform with the contract. RSN1970 c341 s36 Back to Top Goods considered accepted 37. The buyer is considered to have accepted the goods when (a) the buyer intimates to the seller that he or she has accepted them; (b) the goods have been delivered to the buyer, and he or she does an act in relation to them which 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 he or she has rejected them. RSN1970 c341 s37 Back to Top Buyer who rejects not bound to return goods 38. Unless otherwise agreed, where goods are delivered to the buyer, and the buyer refuses to accept them, having the right to refuse, he or she is not bound to return them to the seller, but it is sufficient if the buyer intimates to the seller that he or she refuses to accept them. 1970 c341 s38 Back to Top Wrongful refusal of delivery 39. (1) Where 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 that request take delivery of the goods, he or she is liable to the seller for loss occasioned by his or her neglect or refusal to take delivery, and also for a reasonable charge for the care and custody of the goods. (2) Nothing in this section shall affect the rights of the seller where the neglect or refusal of the buyer to take delivery amounts to a repudiation of the contract. RSN1970 c341 s39 PART IV RIGHTS OF UNPAID SELLER AGAINST THE GOODS Back to Top Unpaid seller 40. (1) The seller of goods is considered to be an "unpaid seller" within the meaning of this Act (a) where the whole of the price has not been paid or tendered; and (b) where 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 because of the dishonour of the instrument or otherwise. (2) In this Part the term "seller" includes a 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. RSN1970 c341 s40 Back to Top Rights of unpaid seller 41. (1) Notwithstanding that property in the goods may have passed to the buyer, the unpaid seller of goods has by implication of law (a) a lien on the goods for the price while he or she is in possession of them; (b) in case of the insolvency of the buyer, a right of stoppage of the goods in transit after he or she has parted with the possession of them; and (c) a right of resale as limited by this Act. (2) Where the property in goods has not passed to the buyer the unpaid seller has, in addition to his or her other remedies, a right of withholding delivery similar to and co-extensive with his or her rights of lien and stoppage in transit where the property has passed to the buyer. RSN1970 c341 s41 Back to Top Lien of unpaid seller 42. (1) The unpaid seller of goods who is in possession of the goods is entitled to retain possession of them until payment or tender of the price (a) where the goods have been sold without a stipulation as to credit; (b) where the goods have been sold on credit but the term of credit has expired; or (c) where the buyer becomes insolvent. (2) The seller may exercise his or her right of lien notwithstanding that he or she is in possession of the goods as agent or bailee for the buyer. RSN1970 c341 s42 Back to Top Lien on remainder of goods 43. Where an unpaid seller has made part delivery of the goods, he or she may exercise his or her right of lien on the remainder, unless that part delivery has been made under circumstances which show an agreement to waive the lien. RSN1970 c341 s43 Back to Top Loss of unpaid seller's lien 44. (1) The unpaid seller of goods loses his or her lien on those goods (a) when he or she delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without reserving the right of disposal of the goods; (b) when the buyer or his or her agent lawfully obtains possession of the goods; and (c) by waiver of the lien. (2) The unpaid seller of goods, having a lien on those goods, does not lose his or her lien by reason only that he or she has obtained judgment for the price of the goods. RSN1970 c341 s44 Back to Top Right of stoppage in transit 45. Where the buyer of goods becomes insolvent, the unpaid seller who has parted with the possession of the goods 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. RSN1970 c341 s45 Back to Top When goods considered to be in transit 46. (1) Goods are considered to be in transit from the time when they are delivered to a carrier by land or water, or other bailee for the purpose of transmission to the buyer, until the buyer or his or her agent in that behalf, takes delivery of them from that carrier or other bailee. (2) Where the buyer or his or her agent obtains delivery of the goods before their arrival at the appointed destination, the transit is at an end. (3) Where, after the arrival of the goods at the appointed destination, the carrier or other bailee acknowledges to the buyer or his or her agent, that he or she holds the goods on his or her behalf and continues in possession of them as bailee for the buyer, or his or her 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. (4) Where the goods are rejected by the buyer, and the carrier or other bailee continues in possession of them, the transit is not considered to be at an end, even where the seller has refused to receive them back. (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 ship's captain as a carrier or as agent to the buyer. (6) Where the carrier or other bailee wrongfully refuses to deliver the goods to the buyer, or his or her agent, the transit is considered to be at an end. (7) Where part delivery of the goods has been made to the buyer, or his or her agent, the remainder of the goods may be stopped in transit, unless that part delivery has been made under circumstances which show an agreement to give up possession of the whole of the goods. RSN1970 c341 s46 Back to Top Exercising right of stoppage 47. (1) The unpaid seller may exercise his or her right of stoppage in transit either by taking actual possession of the goods or by giving notice of his or her claim to the carrier or other bailee in whose possession the goods are. (2) Notice under subsection (1) may be given either to the person in actual possession of the goods or to his or her principal. (3) In the case of notice being given to a principal, to be effectual, the notice shall be given at a time and under circumstances that the principal, by the exercise of reasonable diligence may communicate it to his or her servant or agent in time to prevent a delivery to the buyer. (4) When notice of stoppage in transit is given by the seller to the carrier, or other bailee in possession of the goods, he or she shall redeliver the goods to, or under the directions of, the seller. (5) The expense of redelivery under subsection (4) shall be borne by the seller. RSN1970 c341 s47 Back to Top Unpaid seller rights vs. good faith purchaser for value 48. (1) The unpaid seller's right of lien or stoppage in transit is not affected by a sale, or other disposition of the goods which the buyer may have made, unless the seller has assented to the sale. (2) Where a document of title to the goods, has been lawfully transferred to a 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, where that last-mentioned transfer was by way of sale the unpaid seller's right of lien or stoppage in transit is defeated, and where that last-mentioned transfer was by way of pledge or other disposition for value, the unpaid seller's right of lien or stoppage in transit can only be exercised subject to the rights of the transferee. RSN1970 c341 s48 Back to Top Rules re rescission of contract 49. (1) A contract of sale is not rescinded by the exercise by an unpaid seller of his or her right of lien or stoppage in transit. (2) Where an unpaid seller who has exercised his or her right of lien or stoppage in transit resells the goods, the buyer acquires a good title to them as against the original buyer. (3) Where the goods are of a perishable nature, or where the unpaid seller gives notice to the buyer of his or her 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 loss occasioned by his or her breach of contract. (4) Where the seller expressly reserves a right of resale in case the buyer defaults, and on the buyer defaulting, resells the goods, the original contract of sale is rescinded, but without prejudice to a claim the seller may have for damages. RSN1970 c341 s49; 1989 c12 s26 PART V ACTIONS FOR BREACH OF THE CONTRACT Back to Top Action by seller for price 50. (1) Where, 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 under the terms of the contract, the seller may maintain an action against him or her for the price of the goods. (2) Where, under a contract of sale, the price is payable on a certain day irrespective of delivery, and the buyer wrongfully neglects or refuses to pay that 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. RSN1970 c341 s50 Back to Top Action by seller for damages 51. (1) Where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against him or her for damages for non-acceptance. (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. (3) Where there is an available market for the goods in question the measure of damages is, in the first instance, to be ascertained by the difference between the contract price and the market or current price at the time when the goods ought to have been accepted, or, where no time was fixed for acceptance, then at the time of the refusal to accept. RSN1970 c341 s51 Back to Top Action by buyer for non-delivery 52. (1) Where 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. (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. (3) Where there is an available market for the goods in question, the measure of damages is to be ascertained by the difference between the contract price and the market or current price of the goods at the time when they ought to have been delivered, or where no time was fixed, then at the time of the refusal to deliver. RSN1970 c341 s52 Back to Top Court may order specific performance 53. (1) In an action for breach of contract to deliver specific or ascertained goods, the court may where it thinks appropriate, 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 on payment of damages. (2) The judgment under this section may be unconditional, or upon those terms and conditions as to damages, payment of the price, and otherwise, that the court considers just, and the application by the plaintiff may be made at any time before judgment. RSN1970 c341 s53 Back to Top Rights re breach of warranty 54. (1) Where there is a breach of warranty by the seller, or where the buyer elects or is compelled to treat a breach of a condition on the part of the seller as a breach of warranty, the buyer is not by reason only of that breach of warranty entitled to reject the goods; but he or she 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. (2) 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. (3) In the case of breach of warranty of quality that loss is 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. (4) The fact that the buyer has set up the breach of warranty in diminution or extinction of the price does not prevent him or her from maintaining an action for the same breach of warranty where he or she has suffered further damage. RSN1970 c341 s54 Back to Top Right to interest or special damages 55. Nothing in this Act shall affect the right of the buyer or the seller to recover interest or special damages in a case where, by law, interest or special damages may be recoverable, or to recover money paid where the consideration for the payment of it has failed. RSN1970 c341 s55 PART VI SUPPLEMENTARY Back to Top Implication of law negatived 56. Where a right, duty or liability would arise under a contract of sale by implication of law, it may be negatived or varied by express agreement or by the course of dealing between the parties, or by usage, where the usage is such as to bind both parties to the contract. RSN1970 c341 s56 Back to Top Reasonable time 57. Where by this Act a reference is made to a reasonable time, the question of what is a reasonable time is a question of fact. RSN1970 c341 s57 Back to Top Enforcement of rights 58. Where a right, duty or liability is declared by this Act, it may unless otherwise indicated in this Act, be enforced by action. RSN1970 c341 s58 Back to Top Sales by auction 59. (1) In the case of a sale by auction (a) where goods are put up for sale by auction in lots, a lot is considered to be the subject of a separate contract of sale; (b) a sale by auction 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 a bidder may retract his or her bid; (c) where a sale by auction is not notified to be subject to a right to bid on behalf of the seller, it shall not be lawful for the seller to bid himself or herself or to employ a person to bid at that sale, or for the auctioneer knowingly to take a bid from the seller or other person referred to in this paragraph; (d) a sale by auction 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; (e) where a right to bid is expressly reserved, the seller, or a person on his or her behalf, may bid at the auction. (2) A sale that contravenes paragraph (c) may be treated as fraudulent by the buyer. RSN1970 c341 s59 Back to Top Law of insolvency and common law 60. (1) The law of insolvency relating to contracts of sale shall continue to apply to contracts of sale notwithstanding anything contained in this Act. (2) The rules of the common law, including the law merchant, unless they are inconsistent with 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, shall continue to apply to contracts for the sale of goods. (3) The provisions of this Act relating to contracts of sale do not apply to a 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. RSN1970 c341 s60; 1998 cP-7.1 s83