ABSTRACT
Since Lickbarrow v Mason8 in 1791, the courts have recognised the custom of merchants that the indorsement of a bill of lading could transfer not only possessory rights but also rights of ownership in the goods described therein, if that was the intention of the parties when indorsing the bill of lading. The seller is not obliged to transfer property in the goods when they are delivered either to the buyer or to a carrier for delivery to the buyer. By s 19(1) of the Sale of Goods Act 1979, the seller is entitled to contract on the basis that it reserves a right of disposal over the goods in these situations until some condition, usually payment of the price, is satisfied. Where the bill of lading makes the goods deliverable to the order of the seller or its agent, s 19(2) provides a presumption that such a right of disposal has been reserved. If the bill of lading makes the goods deliverable to the order of the buyer, the statutory presumption does not apply. Nonetheless, the fact that the parties contract on the basis of a payment against documents will show their intent that the seller should still have this right of disposal.
