Sale of Goods Act/Hire Purchase Act


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In today’s class, we will be talking about the sale of goods act/hire purchase act. Enjoy the class!

Sale of Goods Act/Hire Purchase Act

Sale of Goods Act/Hire Purchase Act


  • Sale of goods – application, definition and relevant Act
  • Conditions constituting acceptance under the contract of sale of goods
  • Duties and rights of parties to the contract
  • Hire purchase Act 1975 – application and provisions

Sale of goods

A contract of sale of goods is a contract whereby the seller transfer the property in goods to the buyer for a money consideration called the price.

The parties to this contract are known as the seller (vendor or transferor) and the buyer (vendee or transferee). The seller must be either the owner of the goods or his duly authorized agent.

The relevant law is the Sale of Goods Act 1893. This law does not cover the buying and selling of immovable or real property like land and houses. The Sale of Goods Act deals with only the rules and regulation which governs the buying and selling of personal movable property like motor vehicle, future, machinery, food, clothing and other similar commodities.

Provision of the sale of goods act (1893)
  1. A seller has the legal rights to offer goods for sale
  2. The sample goods offered to the customer must have the same quality as the actual goods the seller display for sale
  3. If the seller sells by description, the description must correspond with the description of the actual goods displayed for sale
  4. The goods must be suitable for the purpose they are meant to serve
  5. The goods offered for sale must be free from any claim in favour of any third parties (i.e. equities).
  6. A buyer must examine carefully the goods he is to buy and make sure of the quality before buying and failure to do so; he bears the consequences of any default. This is the principle of “CAVEAT EMPTOR” or “let the buyer beware”
Conditions that constitutes acceptance in the contract of sale of goods

In a contract of Sale of Goods, the buyer is deemed to have accepted goods (i.e.) taken over their ownership under the following circumstances

  • If he informs the seller that he has accepted them
  • If, after receiving the goods he does any act in relation to the goods which can only be done by the owner e.g. reselling the goods.
  • If he retains the good beyond a reasonable period without informing the seller that he rejected them.


  1. State three provisions of the Sales of Goods Act 1893
  2. State three conditions that constitute acceptance in a contract of Sale of Goods
Duties and rights of parties of the contract
  • Sellers owe the duty, subject to the express terms of the contract to:
  1. Deliver the goods and at the right time
  2. Ensure that the goods supplied are of the right quantity and quality
  3. Pass good title to the buyer
  • Buyers too owe the duty, subject to the express terms of the contract
  1. To accept and pay for the goods
  2. To observed all stipulations as to time

Hire purchase act 1975

This Act spells out the rights and duties of the hire purchaser (buyer) and the hire vendor (seller) and also protects the buyer from cheating and exploitation.

Provision of the hire purchase act (1975)
  1. In hire purchase transactions the cash sale price must be shown along with hire purchase price to enable the buyer to know the difference.
  2. If the buyer defaults after paying 1/3 of the hire purchase price the seller cannot repossess the article except through court order
  3. The buyer has the right to stop paying the instalments and return the article if he has paid ½ of the hire purchase price.
  4. Where the buyer is compelled or made to sign the Hire Purchase agreement at his home, he has the right to cancel it within three days of the contract.


  1. State two duties of buyers in a sale of goods.
  2. State two provision of the Hire Purchase Act (1975)
  3. State six differences between Hire Purchase and Deferred Payment
General evaluation
  1. Explain five factors affecting the choice of transportation of frozen products
  2. State five disadvantages of air transport
  3. State seven features of a public corporation
  4. List and explain six new trends in retailing
  5. State five features of a mail-order business

Reading assignment

Essential Commerce for SS by A. O. Longe Page 288 – 290


  1. State two provisions of the sale of Goods Act 1893
  2. State four features of Hire Purchase


In our next class, we will be talking about Employer/Employee Relationship & Government Regulation of Business.  We hope you enjoyed the class.

Should you have any further question, feel free to ask in the comment section below and trust us to respond as soon as possible.

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