NAME : ICHIE JOHN A.

ID NO : BU/15C/LAW/1666
COURSE : COMMERCIAL LAW II
DATE : 31/10/2016
ASSIGNMENT :
ANALYSE SECTION 4 OF THE SALE OF GOODS ACT 1893 IN
MODERN TRANSACTION WITH EMPHASIS ON SUBSECTION 1

INTRODUCTION
Its a legislative disgrace for any aspect of commercial transactions, which are the
live wire of the economy of a State, to be governed by moribund laws. This,
however, is the case for transactions involving the sale of goods in Nigeria which is
still regulated the Sale of Goods Act 1893 1. The SGA, which is a statute of general
application in Nigeria, is very much in need of review to reflect the changing world
of commerce. Section 4(1) SGA states that a contract for the sale of goods of ten
pounds or upwards shall not be enforceable by action unless the buyer shall accept
part of the goods so sold and actually receive the same, or give something in
earnest to bind the contract, or in part payment, or unless some note or
memorandum in writing of the contract be made and signed by the party to be
charged or his agent on his behalf. This provision has been repealed in states such
as Lagos and other states in the former Western region such as Ogun, Oyo ,Ondo &
Edo2 and also in the FCT, Abuja3. It is, however, still operational in the Northern
and Eastern Regions of the Country. The focus of this essay is on the
aforementioned Section and the inherent hardships to modern transactions possibly
posed by its retention in some states of the Federation.

States such as Bayelsa, Benue, Abia, Lagos, Ogun and Ondo have enacted their own Sale of Goods Laws, however,
the provisions are substantially similar with that of the 1893 Act.
2
The Sale of Goods Law No 43 of 1958 repealed and replaced SGA 1893 in the then Western Region.
3
It has been repealed in the FCT by virtue of the Law Reform (Contracts) Act 1961.

ANALYSIS OF SECTION 4 OF SGA 1893

Section 4 of SGA 1893 states as follows :
4(1) A contract for the sale of goods of ten pounds or upwards shall not be enforceable by action
unless the buyer shall accept part of the goods so sold and actually receive the same, or give
something in earnest to bind the contract, or in part payment, or unless some note or
memorandum in writing of the contract be made and signed by the party to be charged or his
agent on his behalf.
4(2) The provisions of this contract apply to every such contract, notwithstanding that the goods
may be intended to be delivered at some future time, or may not at the time of such contract be
actually made, procured, or provided, or fit or ready for delivery or some act may be requisite
for the making or completing thereof, or rendering the same fit for delivery.
4(3) There is acceptance within the meaning of this section when the buyer does any act in
relation to the goods which recognises a pre-existing contract of sale whether there be an
acceptance in performance of the contract or not.

Section 4 SGA 1893 was drafted into the act in order to ensure that only parties who have
provided consideration can enforce a contracts of sale of goods by action. The section, which is a
reproduction of Section 17 of the Statute of Fraud 1677, was also made for the purpose of
preventing the danger of contracts being proven by false or unreliable testimony which was
contrary to the intentions of the parties not to make a contract.4
Contract for sale of goods : A contract of sale of goods is defined in section 1(1) SGA 1893 as a
contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a

Draschler, L. M., The British Statute of Frauds- British Reform and American Experience(1958) Vol. 3, No. 1
Section of International and Comparative Law Bulletin.

money consideration called the price. The elements required to be present for a contract to be
valid are : offer, acceptance, consideration, legality, capacity to contract and intention to enter
legal relations.
Goods : Goods as defined in Section 62(1) SGA includes all chattels personal other than
things in action and money. The term includes emblements, industrial growing crops, and things
attached to or forming part of the land which are agreed to be severed before sale or under the
contract of sale. The contract of sale of goods in section 4(1) SGA could be for one item valued
at 10 or upwards or for several articles with a collective value of 10 or more. Existing goods
are goods owned or possessed by the seller at the time of entering into the contract of sale 5 whilst
future goods as defined by section 62(1) SGA are goods to be manufactured or acquired by the
seller after the making of the contract of sale. Goods can be classified into existing and future
goods. Section 4(2) SGA states that the stipulations of Section 4(1) extends to a buyer or a
seller in a contract of sale for future goods who wishes to seek remedy for a breach of
contractual terms. The monetary value equivalent of 10 or upwards was given in Section 7(1)
Law Reform (Contracts) Act 1961 as 20 or upwards. Section 4 SGA will not apply for
contracts for the sale of services6 or any contract other than a contract for the sale of goods.
Enforceable by Action : This simply means that any contract for the sale of goods of value
worth 10 or upwards in which the aggrieved party fails to adduce evidence of his fulfilment of
some form of consideration or evidence of a memorandum in writing signed by the defendant or
his agent is unenforceable by the courts. The aggrieved party would not be successful in getting
remedy from the court for the violation of contractual terms by the other party even though the
contract is not illegal.

5
6

Igweike, K. I, Nigeria Commercial Law : Sale of Goods, Malthouse Press, Lagos., 3rd ed. at p.7.
Robinson v Graves (1935) All ER Rep. 935; 24

Accept , actually receive : An action will lie if a breach of contract occurs after the buyer
has accepted and actually received the goods. Acceptance is defined in section 4(3) SGA as when
the buyer does an act in relation to the goods which recognises a pre-existing contract of sale
whether there be an acceptance in performance of the contract or not. 7 In Page v Morgan8, a
buyer of wheat by sample rejected the wheat sent by the seller to him after he opened the sacks
of wheat and discovered that the wheat in the sacks was not equal to the sample. The court held
that the buyer of wheat had accepted the goods because his examination of the wheat was an act
which in relation to the goods was a recognition of a pre-existing contract of sale. The
acceptance could be of part of the goods .In Marshall v Green,9 the court held that where
growing timber is sold and the buyer fells some of the trees, that is sufficient acceptance and
receipt to satisfy the statute. Actually receive means the goods have been delivered to the
buyer. A carrier is prima facie the agent of the buyer for the receipt of the goods. Once the
transfer in property in the goods to the buyer has been effected, the buyer is deemed to have
received the goods.
Earnest, Part-payment : The contract described in Section 4(1) can be enforceable in court
by the buyer if he has given part-payment to the seller or given something in earnest to bind the
contract. Part-payment refers to a partial payment of the price made by the buyer to ensure the
transfer in property in goods fro the seller to him. Part-payment could be purely monetary or it
could be in the form of goods to which some monetary value has been attached. In Aldridge v
Johnson10, it was held that twenty-three bullocks valued at 192 was part-payment for the sale of
barley Thus, the contract between the two parties was one for the sale of barley and not for an
exchange of barley for bullocks. Goods to which no monetary value has been attached to cannot
7

This definition adopts the language of Bowen LJ in Page v Morgan (1885) Q. B. D 228.
(1885) 15 Q. B. D 228.
9
(1875) 1 C. P. D. 35.
10
(1857)7 E. & B. 885.
8

be used as part-payment in a contract of sale of goods. In Flynn v Mackin & Mahon11 , it was
held that an old car to which no value was placed could not be used as part-payment for the sale
of a new car valued at 250. Thus, the contract was one of barter and not a contract for the sale
of the new car. In Norton v Davison,12 the court held that it is not part-payment for the sale of
goods(e.g: cabinets) if the contract between involves that a sum of money which had been
overpaid on a previous transaction be used to discharge part of the price for this new transaction
between the parties. Earnest can be described as money,

gift or some other form of

consideration given by the buyer to the seller and which was accepted by the seller to mark the
final conclusive assent of both sides to the bargain.13 It is, not as a rule, part of the price.14
Note , memorandum in writing : A contract under Section 4(1) SGA can be enforced if
there is a note or memorandum in writing that was made and signed by the party to be charged or
his agent in that behalf. The note or memorandum in writing is an informal written note
outlining the terms of a transaction or contract. 15 A memorandum should contain the following :
(i) A contracts subject matter (goods to be sold) 16 (ii) The names or description of the parties 17
(iii) The contracts essential terms (iv) The signature of the party or his agent against whom
enforcement is sought. Section 4(1) SGA does not nullify Section 4 Statute of Frauds Act 1677
which states in relation to sale of goods that the verbal contract that extends over more than a
year must be put in writing. For verbal contracts that extend over more than a year, the other
conditions for enforceability of a contract of sale of goods of value 10 or upwards in section 4
SGA will not suffice in rendering the contract enforceable by action if there is no note or
11

(1974) IR 101.
(1899) 1 Q. B. 401, C. A.
13
Benjamin,P.J., Benjamins Sale of Goods, 5th edition, 1906 p. 224.
14
Howe v Smith (1884) 27 Ch. D., at p. 101,102 per Fry,J.
15
Memorandum , Blacks Law Dictionary, 8th edition, West Group, 2004.
16
Thornton v Kempster (1814) 5 Taunt. 786.
17
Vandenbergh v Spooner (1866), L. R. 1 Ex. 316.
12

memorandum in writing of the transaction.18

Signature : Any name, mark or writing used with the intention of authenticating a document.19
Delivery : This is defined in Section 62(1) SGA as voluntary transfer or possession from one
person to another.
Fit for delivery : This refers to the goods being in a deliverable state. Section 62(4) defines
goods in deliverable state as goods in such a state that the buyer would under the contract be
bound to take delivery of them.

RELEVANCE OF SECTION 4 IN MODERN TRANSACTIONS

The term Goods as used in the section refers to all chattels personal other than things in action
and money. The term includes emblements, industrial growing crops, and things attached to or
forming part of the land which are agreed to be severed before sale or under the contract of
sale.20 Goods in SGA refers to tangible items. In contemporary Nigeria, would we classify the
payment of electricity-bill as a payment for goods or as one for services? In the Indian case of
Associated Power Co. v. R.T. Roy,21 it was held that electricity was under the definition of
goods since it is capable of delivery, and it does not matter whether it is a tangible or intangible
form of energy.22 There is , however, no judicial decision in England which includes electricity
within the definition of goods for the purpose of Sale of Goods Act. 23 The issue has yet to be
brought before Nigerian courts so it is still unknown as to whether a contract for the purchase of
electricity for 20 or upwards would fall under Section 4(1) SGA or not. Another possible issue
with the definition of goods is whether software programs can be classified as goods under
18

Prested Miners Co . v Gardner, Ltd ., (1910) 2 K.B. , 776 , affirmed 1 K.B. , (1911) 425, C.A.
Signature, Blacks Law Dictionary, 8th edition, West Group, 2004.
20
Section 62(1) SGA 1893.
21
AIR 1970 Cal 75.
22
Kumbakonam Electric Supply Corp Ltd. v. Joint Commercial Tax Officer, AIR 1964 Mad 477.
23
Benjamins Sale of Goods, 71 (M. Bridge et al. eds., 8th ed. 2010).
19

SGA? The issue was examined in the English case of St Albans City and District Council v.
International Computers Ltd.24 where it was held that a software program contained in a floppy
disk can be classified as a good under the Sale of Goods Act.
Section 4(1) SGA does not nullify the effect of Section 4 of the Statute of Frauds Act, 1677
which still applies to Nigeria as a statute of general application made on or before 1900. Section
4 of the Statute of Frauds Act, 1677 states that a verbal contract which extends over more than a
year is not enforceable by action. Thus, an action brought before the court for the enforcement
of the sale of a good such as cocoa which was conducted via a verbal contract in Northern or
Eastern Nigeria will not be enforced by the courts if it extends over more than a year.
The provisions of Section 4(1) SGA applies to internet transactions which satisfy the conditions
of being worth the value of 10 or upwards. 25 Contracts for the sale of goods made via emails
thus fall under Section 4(1) SGA. Thus, it is advisable for the parties to the transaction to keep a
printed log of the internet transaction. For an email exchange to satisfy the provisions of Section
4(1) , there must be evidence of an intention to authenticate the communication. 26 An intention
to authenticate the transaction will be evinced by the courts upon consideration of whether the
email account used was a business or personal email account (an inquiry as to the purpose of the
various email accounts set up by the sender is usually necessary); use of real names or aliases
and where the alias is used, knowledge of the recipient of the alias; analysis of the content of the
communication to discover the intention of the sender to authenticate it; prior dealings between
the parties and usual practices in the business which is the subject of the email contract. 27 The
courts look out for whether the crucial elements of a contract such as offer, acceptance, legality,
24

[1995] FSR 686.

Section 7(1) of the Law Reform(Contracts) Act places the value of 10 to be 20.
26
Ballon, I.C. , E-Commerce and Internet Law, Thomson Reuters/West ,2nd edition, 2009 at para. 14-05 [2] [B] [iv];
p. 14-23.
27
Ibid.
25

intention to enter legal relations and capacity to contract can be inferred from the online contract
of sale of goods. There is a strong indication that the sender intends to authenticate the
communication where he indicates his name at the bottom of the email, the usual space for
signature.28
The requirement for signature to be made by the party to be charged or his agent is satisfied in
electronic transactions by digital signature, by typing a name into an electronic document or even
by clicking on a website button.29 In this regard, acceptance can be made by computers on behalf
of the seller. Section 93(2) of the Evidence Act, 2011 recognises electronic signature as valid
authentication for contracts and section 93(3) of Evidence Act, 2011 provides that all electronic
signatures may be proved in any manner, including by showing that a procedure existed by
which it is necessary for a person, in order to proceed further with a transaction to have executed
a symbol or security procedure for the purpose of verifying that an electronic record is that of the
person.
Finally, the issue of acceptance under section 4(3) is likely to pose a problem in modern
transaction as the section stipulates that acceptance on the part of the buyer involves the
performance of an act which recognises the existence of a pre-existing contract between the
parties. An act which recognises the existence of a pre-existing contract of sale includes acts
could at times be different from an act which is inconsistent with the ownership of the seller. 30
Example : An examination of goods bought by sample is an act which recognises the existence of
a pre-existing contract of sale but its subsequent rejection for not being of the same grade as the
sample is an act which is not inconsistent with the ownership of the seller. This could pose a
serious problem in transactions which involve sale by sample in Nigeria.
28

Rosenfeld v. Zernec, 776 N.Y. Sup. 2004).

Ezike, E. O. , Online Contracts in Nigeria : An Overview (2013) 11 Nig. J. R.
30
Section 35 defines acceptance as including acts done by the buyer which are inconsistent with the ownership off
the seller.
29

CONCLUSION
Section 4 SGA 1893 was drafted into the act in order to ensure that only parties who have
provided consideration can enforce a contracts of sale of goods by action. The section, which is a
reproduction of Section 17 of the Statute of Fraud 1677, was also made for the purpose of
preventing the danger of contracts being proven by false or unreliable testimony which was
contrary to the intentions of the parties not to make a contract. 31 Section 4 SGA should be
scrapped by the legislature as it is more likely to be used as a defence by fraudulent people in a
transaction for the sale of goods. Its provision in subsection(1) that contracts of the value of 10
or upwards are not enforceable by action unless the provisions of section 4(1) are satisfied
makes it extremely difficult for verbal contracts to be enforced by action. According to Section
7(1) of the Law Reform (Contracts) Act 1961, the value of 10 is 20. Illustration: Mr A
purchases some grocery items from Mr. Bs shop worth the value of 1000 without a receipt as
is common in very small stalls. He discovers that the groundnut oil he purchased from B had
expired and he goes back to B . B denies having sold any item to him. Section 4(1) stipulates that
if A cannot prove that he paid any sum of money to B in consideration for the goods then A must
provide a memorandum or note of the transaction. A does not have a memorandum of this
transaction. Thus, it is very likely that A would not be successful if he sues B to court as he
cannot adduce oral evidence to show that a contract existed between the two parties. Clearly, this
defeats the purpose of the statute and as such section 4 SGA should be repealed.
Section 4 SGA does not nullify the provision of Section 4 Statute of Fraud Act 1677 which
states interalia that no verbal contract extending over more than a year is enforceable unless it
is in writing. Thus, section 4 Statute of Frauds 1677 applies to sale of goods under section 4(1)

31

Draschler, L. M., The British Statute of Frauds- British Reform and American Experience(1958) Vol. 3, No. 1
Section of International and Comparative Law Bulletin.

SGA. It must be scrapped because there is a danger of it being used to defraud illiterates in the
country who might prefer to engage in such verbal contracts as described in section 4 of the
Statute of Fraud 1677 rather than in written contracts.
Law should reflect changes in the society and as such the Sale of Goods Act in order for it to
effectively govern such transactions in contemporary Nigeria must be reviewed and
anachronistic sections such as section 4 SGA must be repealed.