Lloyd's Maritime and Commercial Law Quarterly
RISK, PROPERTY AND BULK GOODS IN INTERNATIONAL SALES
Michael Bridge *
This article deals with the sale of goods out of an identified bulk, where the buyer has paid for the contractual quantity to which it is entitled without the goods yet having been separated from that bulk. Critical attention will be paid to the Sale of Goods Act 1979, s.20A, with particular reference to the question whether any shrinkage in the bulk should be rateably apportioned between seller and buyer in those instances where the seller retains a property interest in that bulk. The argument developed below is that any shrinkage in the bulk should be rateably apportioned and not charged first against the seller. The view that the Law Commission intended the seller first to bear the loss is not clearly borne out either in the Law Commission’s report or in the ensuing legislation and is also lacking in commercial common sense. Attention will also be paid to the time when rights in a bulk accrue and to the impact of s.20B on these rights.
1. Introduction
(a) General
This article is concerned with the interplay of risk and property principles where goods are sold in bulk. In addition to the normal issues that present themselves where two parties conclude a contract, it takes account of the complexities that arise when three or more parties are involved. A particular focus of the article is on contractual and proprietary issues that arise in the case of marine transportation. The entitlement of a buyer who has paid for goods not yet separated from bulk has proved in the past to be a thorny problem. Legislation was passed in the mid-1990s to deal with this problem1 but the legislation, though not the subject of litigation in England,2 gives rise to a number of contentious issues. The most important of these for the purposes of this article concern the allocation of loss between a seller and a buyer when the seller retains a property interest in a shrinking bulk and the time when the shares of those with an interest in the bulk are determined.
Attention will be paid to the sale of “dry” (grain, soya, vegetable oils) and “wet” (crude and refined oil) commodities in circumstances where the goods are shipped on a vessel that is loaded up with goods that in gross exceed the amounts specified in each of the
* QC (Hon), FBA. Professor of Law, National University of Singapore; Emeritus Professor of Law, London School of Economics.
1. Sale of Goods (Amendment) Act 1995, introducing Sale of Goods Act 1979, ss 20A–20B.
2. A Singapore case applying the same legislative provisions in Singapore’s own statute deals with the question whether a bulk has been identified to the contract (RBG Resources Plc v Banque Cantonale Vaudoise [2004] SLR(R) 4), an issue not dealt with in this article.
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