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Lloyd's Maritime and Commercial Law Quarterly

THE SALE OF GOODS (AMENDMENT) ACT 1995: CO-OWNERSHIP AND THE ROGUE SELLER

Janet Ulph*

The Sale of Goods (Amendment) Act 1995 appears at first glance to be a simple piece of legislation, which gives prepaying purchasers proprietary rights where there is an agreement to sell a particular quantity of goods from an identified bulk. Although the Act satisfies the needs of international traders, its application may cause problems in a domestic context. This article first discusses the acquisition of proprietary rights in goods and then considers whether proprietary rights can be retained in a situation where a “rogue” seller adds or removes goods from an identified bulk. Identification of the goods by a process of tracing in equity and at common law is set out and the lack of harmony between these two streams of law is brought into focus.
Agreements to sell specific quantities of goods from a bulk have become increasingly common, especially in international trade. The Law Commission has noted that “there have been great increases in the tonnage now carried in a single compartment in ships. Furthermore, cash-flow problems in recent years have led buyers to tend to prefer to make frequent purchases of small quantities rather than carry large reserves”.1 The layman and even the average commercial trader might have assumed that no particular problems were presented by such agreements. They would have been wrong. Before the Sale of Goods (Amendment) Act 1995 came into force,2 it was impossible to transfer property in a portion of a bulk (whether in a warehouse, on board a ship or wherever) unless and until that portion was separated from the rest: this was the effect of s. 16 of the Sale of Goods Act 1979. Section 16 has been amended but not abolished by the 1995 Act, which gives legislative effect to the Law Commission’s recommendations on the matter. It is now possible in certain circumstances to sell an undivided share in an identified bulk. Yet problems may arise in the future where many buyers have competing claims to such a bulk. Some of these problems have already been explored in this Quarterly.3 This article considers the Law Commission’s recommendations, the scope of the Sale of Goods (Amendment) Act 1995, and unanswered questions which exist in relation to additions to and withdrawals from the identified bulk by a “rogue” seller. It will seek to demonstrate

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