Hardy and Co v Hillerns and Fowler
Rule established
A buyer who resells and despatches goods to sub-buyers does an act inconsistent with the ownership of the seller. That constitutes acceptance, and the right to reject for breach of condition is lost even if a reasonable opportunity of examination has not been exhausted. The buyer is confined to damages.
Facts
- The sellers contracted to supply a quantity of wheat of a specified description.
- Delivery was taken by the buyers.
- Within a few days of delivery, and before completing their examination, the buyers resold part of the parcel and despatched it to sub-buyers.
- Subsequent analysis showed that the wheat did not correspond with the contract description.
- The buyers thereupon gave notice rejecting the whole parcel.
- The sellers contended that by dealing with the goods the buyers had accepted them.
Issue
- Whether a buyer who resells and despatches part of the goods before completing examination has accepted them, so as to lose the right to reject for breach of condition.
Held
- The buyers had accepted. Reselling and sending the goods on to sub-buyers was an act inconsistent with the seller's ownership, which by statute amounts to acceptance. The right to reject was gone. The provision preserving the buyer's reasonable opportunity of examination could not be used to keep the right to reject alive once the buyer had dealt with the goods as owner. The buyers were confined to a claim for damages for breach of the condition.
Ratio Decidendi
The right to reject rests on the buyer's ability to restore the goods to the seller. Once he treats them as his own and puts them beyond his control by passing them down the chain, restitution in specie is no longer possible and the seller cannot be put back in his former position. The statute therefore treats the inconsistent dealing as an election to accept. The examination provision protects the buyer who has not yet dealt with the goods; it does not survive his own act of ownership.
How to use it in an exam
- The leading authority on S.42 of the Sale of Goods Act 1930, and specifically on the second mode of acceptance: doing any act in relation to the goods which is inconsistent with the ownership of the seller.
- State all three modes of acceptance under S.42: intimation of acceptance, an act inconsistent with the seller's ownership, and retention beyond a reasonable time without intimating rejection.
- Explain the tension with S.41, the buyer's right to a reasonable opportunity of examining the goods, and note that on these facts S.42 prevailed once the buyer dealt with the goods.
- Consequence to state precisely: the right to reject is lost, but the right to damages for breach of condition survives.
- Contrast with Behrend and Co v Produce Brokers Co 1920, where acceptance of part did not compel acceptance of the whole. In a problem where the buyer has dealt with only some of the goods, argue that acceptance attaches to that part alone.
Source
Source: [1923] 2 KB 490 (CA); leading authority on acceptance by an act inconsistent with the seller's ownership; proposition and year confirmed; the report page number was not independently confirmed
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.