UNIT 3

THE CONCEPT OF PROPERTY

In legal terms, "property" refers to the ownership rights over goods, including the right to possess, use, and dispose of them. Under commercial transactions, the transfer of property is a key event that dictates when these ownership rights move from the seller to the buyer. Ownership implies the ultimate control over the goods, while possession refers to physical control. The passing of property deals primarily with the transfer of ownership, not just possession.

PASSING OF PROPERTY IN SPECIFIC GOODS

Specific Goods are those identified and agreed upon at the time the contract of sale is made. The rules for the passing of property in specific goods are outlined in section 17 of the Sale of Goods Act 1893 which states that property in specific goods passes when the parties intend it to pass. The intention can be explicitly stated in the contract or inferred from the circumstances. See the case of Tarling v. Baxter (1827) where the court held that for specific goods, property passes when the contract is made, unless there is a contrary intention and rule 1 under section 18 which provides that in the case of an unconditional contract for the sale of specific goods in a deliverable state, property passes to the buyer when the contract is made. See also the case of Akoshile v. Ogidan (2001) 12 NWLR (Pt. 736) 600 where the court held that property in specific goods passed to the buyer at the time the contract was made since the goods were identified and in a deliverable state.

PASSING OF PROPERTY IN UNASCERTAINED OR FUTURE GOODS

Unascertained Goods are not identified and agreed upon at the time of the contract. Future Goods refer to goods that are to be manufactured or acquired by the seller after the contract is made. See section 16 which provides that property in unascertained goods does not pass until the goods are ascertained and rules 2 and 3 under section 18 which provides guidance on when property passes for unascertained goods states thus;

• Rule 2: When the seller has to do something to the goods to put them into a deliverable state, property does not pass until this is done.
• Rule 3: When the seller has to weigh, measure, test, or do some other act to determine the price, property does not pass until this act is done.

See the case of Acron Rubber Manufacturing Ltd. v. Ministry of Commerce & Industries (1989) 3 NWLR (Pt. 107) 76 where the court established that property in unascertained goods passes only when the goods are appropriated to the contract, meaning they are specifically identified and set aside for the buyer.

ASCERTAINMENT AND APPROPRIATION

For property to pass in unascertained goods, they must be ascertained and appropriated to the contract. Ascertainment involves identifying the specific goods that are the subject of the contract, while appropriation refers to the act of setting aside or earmarking the goods for the buyer. See the case of Re Wait (1927) where the court held that property does not pass in unascertained goods until the goods are appropriated to the contract.

FUTURE GOODS

Future goods become specific and can pass to the buyer only after they are manufactured or acquired and then ascertained. See section 5(1) of the Sale of Goods Act 1893 which provides that a contract for the sale of future goods operates as an agreement to sell, meaning the transfer of property is conditional upon the goods being manufactured or acquired and then appropriated to the contract.

CONCLUSION

The passing of property under commercial transactions in Nigeria is governed by clear statutory provisions and supported by case law. Understanding when and how property passes from the seller to the buyer is crucial for determining ownership rights and responsibilities. For specific goods, property typically passes when the contract is made, unless otherwise intended. For unascertained and future goods, property passes only upon ascertainment and appropriation to the contract. These principles ensure clarity and predictability in commercial transactions, protecting the interests of both buyers and sellers.