Plain language law

New Zealand law explained for everyone

Contract and Commercial Law Act 2017

Sale of goods - Effects of contract - Transfer of property between seller and buyer

146: Rules for ascertaining parties’ intention

You could also call this:

“How to know when you own something you've agreed to buy”

When you agree to buy something specific that’s ready to be handed over, you become the owner as soon as you make the deal. It doesn’t matter if you’re going to pay or get the item later.

If the seller needs to do something to get the item ready for you, you don’t own it until they’ve done that and told you it’s ready.

Sometimes, the seller needs to weigh, measure, or test the item to figure out the price. In this case, you don’t own it until they’ve done that and let you know.

If you get something to try out or possibly return, you become the owner when you tell the seller you want to keep it, or if you just keep it without saying anything. If there’s a time limit to return it, you own it after that time is up. If there’s no time limit, you own it after a reasonable amount of time.

For things that don’t exist yet or haven’t been chosen, you become the owner when specific items that match what you agreed to buy are set aside for you. This can be done by the seller if you agree, or by you if the seller agrees. This agreement can be given before or after the items are set aside.

If the seller sends the items to you or to someone who will deliver them to you, and doesn’t keep the right to take them back, then those items are considered to be set aside for you.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6844341.

Topics:
Business > Fair trading Money and consumer rights > Consumer protection
Previous

145: Ascertaining parties’ intention, or

"Finding out when you own something you bought"

Next

147: Reservation of right of disposal, or

"Seller can keep control of goods until buyer meets certain conditions"

Part 3 Sale of goods
Effects of contract: Transfer of property between seller and buyer

146Rules for ascertaining parties’ intention

  1. Under an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made.

  2. For the purposes of subsection (1), it is immaterial whether the time of payment or the time of delivery, or both, is postponed.

  3. If there is a contract for the sale of specific goods, and the seller is bound to do something to the goods for the purpose of putting the goods into a deliverable state, the property in the goods does not pass to the buyer until—

  4. the thing is done; and
    1. the buyer has notice that the thing is done.

      1. If there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, measure, test, or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property in the goods does not pass to the buyer until—

      2. the act or thing is done; and
        1. the buyer has notice that the act or thing is done.

          1. If goods are delivered to the buyer on approval, or on sale or return or other similar terms, the property in the goods passes to the buyer—

          2. when the buyer indicates the buyer’s approval or acceptance to the seller, or does any other act adopting the transaction; or
            1. if the buyer does not indicate the buyer’s approval or acceptance to the seller, but retains the goods without giving notice of rejection,—
              1. when the time (if any) that is fixed for the return of the goods expires; or
                1. when a reasonable time expires (if no time has been fixed for the return of the goods).

                2. Subsection (7) applies if there is a contract of sale for unascertained or future goods by description.

                3. The property in the goods passes to the buyer when goods of that description that are in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller.

                4. For the purposes of subsection (7),—

                5. the assent may be expressed or implied and may be given either before or after the appropriation is made:
                  1. the seller must be treated as having unconditionally appropriated the goods to the contract if,—
                    1. in performing the contract, the seller delivers the goods to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to the buyer; and
                      1. the seller does not reserve the right of disposal.

                      Compare