The Passing of Property

[20.01] There are a number of circumstances in which it may be important to determine whether the property in goods has passed from the seller to the buyer (see para 19.10 ). In such cases, the first question to ask is whether, under the contract, the goods are specific or unascertained (see para 20.02 ); because this important question will determine in relation to the diagram set out below on which side of the bold line the contract falls. Once that issue is determined, except by novation a contract will never cross the bold line in the diagram below. ¹ That issue being settled, the rules for the passing of property provide for carefully defined stages. Stage 1 is that the legislature has laid down in s 16 of the SGA the earliest moment at which a contract for the sale of unascertained goods may pass the property in goods (see para 20.05 ). However, the s 16 rule is cast in such a manner that it is automatically satisfied with regard to specific goods. Stage 2 is that, once the previous requirement is met, the property in the goods will pass when the parties so intend (SGA, s 17: see para 20.06 ). Stage 3 is that, where the parties do not provide for the passing of property in their contract, s 18 of the SGA lays down a number of different rules, basically ² according to whether the goods are specific (see para 20.08 , et seq.) or unascertained (see para 20.15 , et seq.). This pattern may be represented diagrammatically as follows: ³

	Specific Goods	Unascertained Goods
Stage 1	-	s 16 (unascertained)
Stage 2	s 17	s 17 (ascertained)
Stage 3	s 18, rr 1–4	s 18, r 5