Lloyd's Maritime and Commercial Law Quarterly
SALES FROM BULK
A. H. Hudson*
Sales of unseparated shares in a larger quantity of goods, such as a share in a cargo or of the contents of a warehouse, have long raised difficult legal problems. Now the Law Commission1 and the Scottish Law Commission2 have published papers outlining these difficulties and canvassing possible solutions.
The two major problems are posed by s. 16 of the Sale of Goods Act 1979, which may bar the passing of property until the goods sold are separated from the bulk, and by s. 1 of the Bills of Lading Act 1855, which requires that, if the transfer of a bill of lading is to confer rights and obligations on a consignee of goods, the transfer must be operative to pass property. It is interesting to see that, while the Scottish Law Commission acknowledge a debt to the work of the English Commission, with whom they worked in full consultation, the two Commissions appear to be by no means entirely at one on what are the most satisfactory solutions to these and other problems. In particular, the Scottish Commission put forward one course, the adoption of the provisions of the Uniform Commercial Code on passing of property, on which the English Commission express some reservations of detail which are criticized in the Scottish Discussion Paper, and the latter advances a proposal to decouple the right of a consignee under a bill of lading to sue the carrier from the passing of property, a solution contemplated by the English Commission but apparently set aside as being more controversial than other possible courses.
The English Working Paper addresses problems which, as it points out, have become more insistent with the increase in commodities carried in single compartments in ships and the fact that cash flow problems result in buyers making frequent purchases of small quantities rather than carrying large reserves.3 Although the problems usually arise in relation to carriage by sea, there is no reason of principle why they should not arise in relation to other transport, though far shorter periods of transit mean that they are less likely to occur, and they may also arise with purchases from bulk stored on land. Indeed, a questionnaire distributed to commodity traders reveals that purchases on land seem to be as common as those afloat.4
* Professor of Common Law, University of Liverpool.
1. Working Paper No. 112: Rights to Goods in Bulk (hereafter “W.P.”).
2. Discussion Paper No. 83: Section 16 of the Sale of Goods Act 1979 and Section 1 of the Bills of Lading Act 1855 (hereafter “D.P.”).
3. p. 2, para. 1.2. They cite at p. 2, n. l a number of recent cases raising these problems.
4. This brought over 100 replies from the United Kingdom and abroad. It is appended to the Working Paper together with a summary of responses. See pp. 61–69 and esp. p. 63, note to Q. 4. See also p. 18, para. 2.25, saying the Commission is not aware of major practical problems in non-sea carriage.
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