Passing of property - sale of goods

[bob_theman]

I am rather confused over the following question:

Who bears the loss/risk for some Chinese rugs, 100 of which had been paid for by Mr W, an exporter. The remainder were purchased by Mr S who sub-sold the goods to Mr L. The goods were damaged in the sellers warehouse

[Gmcd01]

I can see why that question might confuse you, but rather than give you an answer (from which you'll learn nothing), I'll point you in the right direction. This question reads like an academic one, which is why a two word answer won't suffice for you.
What I will say is that you should start reading the Sale of Goods Act 1979, s.18, with particular reference to the type of goods- such as future goods, ascertained goods and so forth. If there's a term in that you don't understand, using a legal dictionary will help you.
If you read all that, you could ask another question on this thread and I'll be happy to discuss with you whether you have the correct answers or not. If that helps...

[bob_theman]

Thanks for the helpful comment, I looked into 1979 Sale of goods act as you recommended, it seems the goods are unascertained and s18(5) applies here. however do the goods not need to become ascertained before s18(5) can be used because they dont seem to become ascertained. Also I'm sure there is significance to the subsale.

Thanks again for the help as I feel progress is being made!!

[Gmcd01]

Yes, I would say that you're correct with that notion- we don't know in the question how many rugs that the original seller has to sell, so we cannot know if the goods are ascertained (if he only had 100 in stock) or are unascertained (Mr. W may have bought 100 of 500 rugs, but we don't know which of the 500 he specifically bought.)
So, if we presume that the goods are identified as originally being unascertained, it is now a good idea to read section of 16 of SoGA 1979, which will give you the basic idea to start from.
Of course, that seems slightly easy for an essay, doesn't it? There wouldn't be any need for the other people in the question if that were the answer. Rather, this first answer you've got is just one of many possible strands of the question. Imagine it as the first paragraph, where you say "one cannot know with certainty on the facts whether the goods are part of a larger bulk, which would render them unascertained, or are 100 rugs on their own. However, if they were part of a larger bulk, they are unascertained goods, and under section 17"...etc. Then explain the answer you just worked out with some cases added; try 'Re Wait (1927).
When you're done with that section, we'll try working on the next possible answer, based on some presumptions. Eventually, we'll cover all the possible answers; questions like this should be thought of as a spider diagram. How many words is this essay?

[bob_theman]

Its actually only on of four parts of an essay, the only real difficult part! However, my lecturer has sent an email out correcting the question to state that there are 300 rugs altogether and the question concerns an unascertained part of a specific whole. I'm thinking that this alters the answer significantly and I'm not sure at all now

[Gmcd01]

No, you're still correct, but it just means that we need to explore the chain of title instead of making presumptions on whether the goods are ascertained or not.
Begin with s.16 SoGA 79, which tells you that prima facie, because of the unascertained goods, title remains with the seller. This is unless the provisos of s20A are met, which seem simple and you can read. You'll find out that there is no suggestion on the facts that these conditions have been met. Explain this in your essay, and provide some cases to show how s20A isn't applicable. Use 'Healy v Howlett & Sons(1917)' to show your point.
This is all for Mr. W. Mr S., who bought the remainder, is in the same position, as we don't know which of the 300 were to be his 200 rugs. You should look to explore and state ways in which identification of the goods could have taken place, which would have made the good ascertained. So, I would suggest reading 'Re Wait' and 'The Elafi (1982)' as well as the Howlett case mentioned above. By showing that the goods could've been, but weren't ascertained, you're showing your knowledge and proving your point that the goods remained the liability of the seller.

[Gmcd01]

Finally, we need to look at Mr. L. Logic follows that as the goods are unascertained, and as there is no subsequent identification or agreement between the parties (see the cases, section 17 SoGa and the SoGa (Amendment) 1995), the liability for the loss remains with the original seller. If "the loss lies where it falls", as it does, Mr. S has not gained title to the rugs and thus cannot sell them onto Mr. L. The opposite effect of this is that Mr. S is not liable to Mr. L for damages, as neither of them ever had title to the rugs to lose/sell. In this instance, the accidental destruction of the goods is an act that can void the contract between Mr. S and L (see your contract lectures for a case.) The best solution here is that Mr S. return the purchase price to L, or find an alternative supply of rugs that L is happy to purchase.

[Gmcd01]

I guess that there is an argument that S is the agent of L for the purchase of the rugs, but I didn't discuss this because your question is not about the law of agency. Any other questions, just ask...

[Kidragon0121]

can you carry on from the third comment please

[fiction-factory]

That 'third comment' was made over 10 years ago. It's very unlikely the poster of the third comment is still looking in.