The purchase of the conveyor belt raises the issue of whether or not Contigrain is an innocent third party and can claim damages for fraudulent misrepresentation on the part of Hampshire. The sale of the truck to farmer Giles may also expose Contigrain to liability on the grounds that the truck was not of merchantable quality.
In order to determine whether or not Contigrain is entitled to demand possession of the Brazilian peanut extract from the liquidators of Agrigus or demand payment in full from Munchy Feeds for the turnip fibre it is necessary to examine each contract by reference to the Sale of Goods Act 1979. To start with Section 2(1) defines a contract for the sale of goods as an agreement where the vendor “transfers or agrees to transfer the property in goods to the buyer” for a price.1 On the facts of the case for discussion there is a sale of goods contract in both instances. Clearly, Contigrain and Agrigus agreed that in consideration of the sum of 1000 pounds per ton, Agrigus would transfer 100 tonnes of peanut extract to Contigrain for which the latter made a payment of 50,000 pounds. Similarly, Contigrain agreed to and did deliver 500 tonnes of turnip fibre to Munchy in consideration of the sum of 1000 pounds per ton to be paid in full within 30 days of delivery.
Having established that contracts for the sale of goods have been completed between Contigrain and Agrigus and Contigrain and Munchy, it is necessary to determine whether or not and at which point title to the property passes from the seller to the purchaser. This is important for ascertaining who bears liability for any risk associated with the goods. Section 20(1) of the Sale of Goods Act 1979 provides:
Unless otherwise agreed, the goods remain at the sellers risk until the property in them is transferred to the buyer, but when the property in them is transferred to the buyer the goods are at the buyers risk whether delivery has been