The act is divided into six parts, the first dealing with the formation of the contract. The ist section, which may be re garded as the keystone of the act, is in the following terms : "A contract of sale of goods is a contract whereby the seller trans fers or agrees to transfer the property in goods to the buyer for a money consideration called the price. A contract of sale may be absolute or conditional. When 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 when 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.' 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." This section clearly enunciates the consensual nature of the contract, and this is confirmed by sec. 55, which provides that "where any right, duty or liability would arise under a contract of sale by impli cation of law," it may be negatived or varied by express agree ment, or by the course of dealing between the parties, or by usage, if the usage be such as to bind both parties to the contract.
i The next question is who can sell and buy. The act is framed on the plan that if the law of contract were codified, this act would form a chapter in the code. The question of capacity is therefore referred to the general law, but a special provision is inserted (sec. 2) relating to the supply of necessaries to infants and other persons who are incompetent to contract. Though an infant cannot contract he must live, and he can only get goods by paying for them. The law, therefore, provides that he is liable to pay a reasonable price for necessaries supplied to him, and it defines necessaries as "goods suitable to the condition in life of such minor or other person, and to his actual requirements at the time of the sale and delivery." The 4th section of the act reproduces the famous 17th section of the Statute of Frauds, which was an act "for the prevention of frauds and perjuries." The object of that statute was to prevent people from setting up bogus contracts of sale by re quiring material evidence of the contract. The section provides that "a contract for the sale of any goods of the value of or upwards shall not be enforceable by action unless the buyer shall accept part of the goods so sold, and actually receive the same, or give something in earnest to bind the contract, or in part payment, or unless some note or memorandum in writing of the contract be made and signed by the party to be charged, or his agent in that behalf." It is a much-disputed question whether this enactment has brought about good or harm. It has defeated many an honest claim, though it may have prevented many a dishonest one from being put forward. When judges and juries have been satisfied of the bona fides of a contract which does not appear to satisfy the statute, they have done their best to get round it. Every expression in the section has been the sub ject of numerous judicial decisions, which run into almost impos sible refinements, and illustrate the maxim that hard cases make bad law. It is to be noted that Scotland is excluded from the operation of sec. 4. The Statute of Frauds has never been applied
to Scotland, and Scotsmen appear never to have felt the want of it.
As regards the subject-matter of the contract, the act provides that it may consist either of existing goods or "future goods"— that is to say, goods to be manufactured or acquired by the seller after the making of the contract (sec. 5). Suppose that a man goes into a gunsmith's shop and says, "This gun suits me, and if you will make or get me another like it I will buy the pair." This is a good contract, and no question as to its validity would be likely to occur to the lay mind. But lawyers have seriously raised the question, whether there could be a valid contract of sale when the subject-matter of the contract was not in existence at the time when the contract was made. The price is an essential element in contract of sale. It may be either fixed by the con tract itself, or left to be determined in some manner thereby agreed upon, e.g., by the award of a third party. But there are many cases in which the parties intend to effect a sale, and yet say nothing about the price. Suppose that a man goes into an hotel and orders dinner without asking the price. How is it to be fixed? The law steps in and says that, in the absence of any agreement, a reasonable price must be paid (sec. 8). This pre vents extortion on the part of the seller, and unreasonableness or fraud on the part of the buyer.