Asked by Derise Major on Jul 16, 2024
Verified
Donald is the owner of a recently closed gas station. John, a neighbouring filling station owner, agreed to buy the gasoline remaining in Donald's tanks. Donald tested the gasoline for the presence of water, which would destroy the gasoline, and found it to be "clean." He then called John informing him of the test results and quoted him a price. John reaffirmed his agreement to buy and arranges pickup of the gas two days later. During the intervening 18-hour period a large amount of rain fell and with the excess amount left on the ground, water drained into the tank and ruined the gas. Upon hearing this, John refused to buy, but Donald pointed out that the gas was already John's and insisted on payment.
a. Discuss how the rules of title transfer would help effect a resolution to this situation.
b. How would the outcome differ if Donald sold the gas by the litre and if the amount of gas in the tank was unknown and had to be measured, when John came to remove it?
Title Transfer
The legal process of changing the ownership of a property from one person or entity to another, typically involving the execution of a deed or similar document.
Ruined Gas
Gasoline that has become contaminated or degraded, making it unusable for its intended purpose.
Payment
The transfer of money, goods, or services in exchange for a product, service, or fulfillment of a legal obligation.
- Elucidate the notion of ownership and the transfer process from the vendor to the purchaser across different situations.
- Utilize the tenets of the Sale of Goods Act to provide guidance to entities in complicated contractual confrontations.
Verified Answer
FA
Frances AdamsJul 20, 2024
Final Answer :
a. Under the Sale of Goods Act, the rule for transfer of title in this case provides that in the sale of specific goods that need to be tested, checked, etc. before delivery, the title will pass when the testing, checking etc. is completed and the buyer notified. This was done. Since risk follows title, the gas belonged to John when it was contaminated by the rain.
b. If the measuring had to be done to determine the quantity, the title would not pass until John came to remove it (and measure it at that time). In this case the title and risk would be with Donald when the gas was contaminated, and John not obliged to buy it.
b. If the measuring had to be done to determine the quantity, the title would not pass until John came to remove it (and measure it at that time). In this case the title and risk would be with Donald when the gas was contaminated, and John not obliged to buy it.
Learning Objectives
- Elucidate the notion of ownership and the transfer process from the vendor to the purchaser across different situations.
- Utilize the tenets of the Sale of Goods Act to provide guidance to entities in complicated contractual confrontations.