Better Late than Never: The Reform of the Law on the Sale of Goods Forming Part of a Bulk
| Date | 01 March 1996 |
| DOI | http://doi.org/10.1111/j.1468-2230.1996.tb02078.x |
| Published date | 01 March 1996 |
| Author | Tom Burns |
The Modern Law Review
[Vol.
59
cannot coerce the private sector into offering secure and adequate private
provision. There
are
other perceptions and other policies.103 Whilst this article has
not directly addressed the affordability of pensions, I hope it has increased the
reader’s awareness of what is at stake.
Better Late than Never: The Reform
of
the Law on the
Sale
of
Goods
Forming
Part
of a Bulk
Tom
Burns*
Until September 1995, contracts worth millions of pounds were being concluded
regularly in the commodity markets’ of the United Kingdom in which the
purchasers of goods forming part of bulk cargoes or bulk storage were at grave risk
if
the seller became insolvent. This was the result of the inadequate statutory
protection provided by the Sale of Goods Act 1979. If a purchaser paid for goods
while they were still part of an identified bulk? for example
100
tons of wheat
from a named ship carrying a cargo of
500
tons of wheat, and received in return
what he perceived to
be
a document of title such as a bill of lading,3 the buyer
would assume he had become
the
legal owner of the goods. He would probably not
be too womed by the seller becoming insolvent before the ship reached the port
and would expect that the goods he had paid for would be separated out from the
bulk at the docks and transferred to him rather than going to the seller’s receiver
or liquidator. Section 16 of the Sale of Goods Act 1979: however, stated that
103 See, for example, Townsend and Walker,
New Directions
for
Pensions: How to Revitalise National
Insurance
(1995) European Labour Forum; Field and Owen,
Private Pensions For
All:
Squaring the
Circle
(1993) Fabian Society; Atkinson,
State Pensions for Today and Tomorrow
(London: LSE,
1994) Discussion Paper WSP/104, Suntory-Toyota International Centre for Economics and Related
Disciplines; Hill,
The Future
of
Welfare
(York: Joseph Rowntree Foundation, 1993).
*Lecturer in Law, Napier University, Edinburgh.
1
The main commodity exchanges in the
UK
where actuals and futures are traded are: (i) the Baltic
Exchange specialising in the trade of grain, potatoes and meat under the auspices of the Grain and
Feed Trade Association; (ii) the London Metal Exchange dealing in non-ferrous metals such
as
copper, lead, zinc; (iii) the International Petroleum Exchange (London); and (iv) the London Futures
and Options Exchange dealing in futures contracts and options in commodities such
as
cocoa, coffee
and sugar.
2 This would be unascertained goods forming part of
a
larger mass, stored
in
a
specific place such
as
a
ship’s hold,
a
warehouse
or
a
silo, which was identified in the contract. Such unascertained goods
have been classed by Roy Goode
as
‘quasi-specific’ goods because they share more features in
common with ascertained
or
specific goods than they do with wholly unascertained
goods:
Goode,
Commercial Law
(London: Penguin, 1995) ch
6.
See further below, ns
5
and
6.
Section 2 of the 1995 Act amends
s61(
I)
of the 1979 Act by providing
a
definition of bulk
as
‘a
mass
or
collection of goods of the same kind, which
(a)
is contained in
a
defined space
or
area; and (b) is
such that any goods in the bulk are interchangeable with any other goods therein of the same number
or
quantity.’
3 Bills of lading are accepted by traders and by banks
as
‘documents of title’ and many sale and
security transactions are undertaken in commercial practice in the belief that the bill of lading gives
a
real right to the underlying goods. In
Sewell
v
Burdick
(1884) LR
10
App Cas 74, however, the
House of Lords held that these bills represent possession
of
the goods and not ownership, although
possession may raise the presumption of ownership. For further discussion of these issues, see
Cretton, ‘Pledge, Bills of Lading, Trusts and Property Law’ (1990)
Juridical Review
Part
I,
23-34,
and Rodgers, ‘Pledge and Bills
of
Lading
in
Scots Law’ (1971)
Juridical Review
Part
111,
193-213.
4 The Sale of
Goods
Act 1979 replaced the Sale of
Goods
Act 1893 which codified the law of sale in
England and Ireland. Late in its passage through Parliament the application
of
the 1893 Bill was
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