Sale of Goods Act, R.S.O. 1990, c. S.1

• Jurisdiction: Ontario

Sale of Goods Act

R.S.O. 1990, CHAPTER S.1

Consolidation Period: From December 9, 1994 to the e-Laws currency date.

Last amendment: 1994, c. 27, s. 54.

CONTENTS

Definitions and interpretation

1 (1) In this Act,

“buyer” means the person who buys or agrees to buy goods; (“acheteur”)

“contract of sale” includes an agreement to sell as well as a sale; (“contrat de vente”)

“delivery” means the voluntary transfer of possession from one person to another; (“livraison”)

“document of title” includes a bill of lading and warehouse receipt as defined by the Mercantile Law Amendment Act, any warrant or order for the delivery of goods and any other 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 delivery, the possessor of the document to transfer or receive goods thereby represented; (“titre”)

“fault” means a wrongful act or default; (“faute”)

“goods” means all chattels personal, other than things in action and money, and includes emblements, industrial growing crops, and things attached to or forming part of the land that are agreed to be severed before sale or under the contract of sale; (“objets”)

“plaintiff” includes a defendant counterclaiming; (“demandeur”)

“property” means the general property in goods and not merely a special property; (“propriété”)

“quality of goods” includes their state or condition; (“qualité”)

“sale” includes a bargain and sale as well as a sale and delivery; (“vente”)

“seller” means a person who sells or agrees to sell goods; (“vendeur”)

“specific goods” means the goods identified and agreed upon at the time the contract of sale is made; (“objets déterminés”)

“warranty” means an agreement with reference to goods that are the subject of a contract of sale but collateral to the main purpose of the 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. (“garantie”)

Things done in good faith

(2) A thing shall be deemed 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.

What deemed insolvency

(3) A person shall be deemed to be insolvent within the meaning of this Act who either has ceased to pay his, her or its debts in the ordinary course of business or cannot pay his, her or its debts as they become due.

Deliverable state

(4) Goods shall be deemed to be 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. R.S.O. 1990, c. S.1, s. 1.

PART I
FORMATION OF THE CONTRACT

Sale and agreement to sell

2 (1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in the goods to the buyer for a money consideration, called the price, and there may be a contract of sale between one part owner and another.

Absolute or conditional

(2) A contract of sale may be absolute or conditional.

What constitutes a sale or agreement to sell

(3) Where under a contract of sale the property in 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 some condition thereafter to be fulfilled, the contract is called an agreement to sell.

When agreement becomes sale

(4) 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. R.S.O. 1990, c. S.1, s. 2.

Capacity

3 (1) Capacity to buy and sell is regulated by the general law concerning capacity to contract and to transfer and acquire property, but where necessaries are sold and delivered to a minor or to a person who by reason of mental incapacity or drunkenness is incompetent to contract, he or she shall pay a reasonable price therefor. R.S.O. 1990, c. S.1, s. 3 (1).

Definition

(2) In this section, “necessaries” means goods suitable to the conditions in life of the minor or other person and to his or her actual requirements at the time of the sale and delivery. R.S.O. 1990, c. S.1, s. 3 (2); 1993, c. 27, Sched.

Section Amendments with date in force (d/m/y)

1993, c. 27, Sched. -31/12/1991

Contract, how made

4 Subject to this Act and any statute in that behalf, 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, but nothing in this section affects the law relating to corporations. R.S.O. 1990, c. S.1, s. 4.

5 Repealed: 1994, c. 27, s. 54.

Section Amendments with date in force (d/m/y)

1994, c. 27, s. 54 - 09/12/1994

What goods may be subject of contract

6 (1) The goods that form the subject of a contract of sale may be either 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”.

Contingency

(2) There may be a contract for the sale of goods the acquisition of which by the seller depends upon a contingency that may or may not happen.

Sale of future goods

(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. R.S.O. 1990, c. S.1, s. 6.

Goods that have perished

7 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 the contract is made, the contract is void. R.S.O. 1990, c. S.1, s. 7.

Goods perishing before sale but after agreement to sell

8 Where there is an agreement to sell specific goods and subsequently the goods without any fault of the seller or buyer perish before the risk passes to the buyer, the agreement is thereby avoided. R.S.O. 1990, c. S.1, s. 8.

Price

9 (1) The price in a contract of sale may be fixed by the contract or may be left to be fixed in manner thereby agreed or may be determined by the course of dealing between the parties.

Where price not determined

(2) Where the price is not determined in accordance with the foregoing provisions, the buyer shall pay a reasonable price, and what constitutes a reasonable price is a question of fact dependent on the circumstances of each particular case. R.S.O. 1990, c. S.1, s. 9.

Agreement to sell at valuation

10 (1) Where there is an agreement to sell goods on the terms that the price is to be fixed by the valuation of a third party and the third party cannot or does not make the valuation, the agreement is avoided, but if the goods or any part thereof have been delivered to and appropriated by the buyer, the buyer shall pay a reasonable price therefor.

Valuation prevented by act of party

(2) Where the third 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 in fault. R.S.O. 1990, c. S.1, s. 10.

Stipulations as to time

11 Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not of the essence of a contract of sale, and whether any other stipulation as to time is of the essence of the contract or not depends on the terms of the contract. R.S.O. 1990, c. S.1, s. 11.

Breach of stipulation

12 (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 the condition as a breach of warranty and not as a ground for treating the contract as repudiated.

Stipulation which may be condition or warranty

(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, and a stipulation may be a condition, though called a warranty in the contract.

Where breach of condition to be treated as breach of warranty

(3) Where a contract of sale is not severable and the buyer has accepted the goods or part thereof, or where the contract is for specific goods the property in which has passed to the buyer, the breach of any 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.

Fulfillment excused by impossibility

(4) Nothing in this section affects the case of a condition or warranty, fulfillment of which is excused by law by reason of impossibility or otherwise. R.S.O. 1990, c. S.1, s. 12.

Implied conditions and warranties

13 In a contract of sale, unless the circumstances of the contract are such as to show a different intention, there is,

(a) an implied condition on the part of the seller that in the case of a sale the seller has a right to sell the goods, and that in the case of an agreement to sell the seller will have a right to sell the goods at the time when the property is to pass;

(b) an implied warranty that the buyer will have and enjoy quiet possession of the goods; and

(c) an implied warranty that the goods will be free from any charge or encumbrance in favour of any third party, not declared or known to the buyer before or at the time when the contract is made. R.S.O. 1990, c. S.1, s. 13.

Sale by description

14 Where there is a contract for the sale of goods by description, there is an implied condition that the goods will correspond with the description, and, if the sale is by sample as well as by description, it is not sufficient that the...