Introduction
In Uganda, the commercial law governing the sale of goods is principally contained within the Sale of Goods Act, Cap 82 (hereinafter ‘the Act’). This legislation, derived from the old English Sale of Goods Act 1893, provides a comprehensive framework for contracts involving the transfer of property in goods for a money consideration. A central pillar of this framework is the concept and classification of ‘goods’. This essay will argue that the classification of goods is indeed fundamental to the operation of the law of sale of goods in Uganda. The initial definition of what constitutes ‘goods’ determines the very applicability of the Act. Furthermore, the subsequent categorisation of those goods—as either existing or future, and more critically, as specific or unascertained—directly governs the most crucial aspects of the transaction, including the passing of property, the transfer of risk, and the remedies available to the buyer and seller. Without this system of classification, the principles that underpin sale of goods law would be rendered uncertain and largely inoperable.
The Definitional Gateway: What Constitutes ‘Goods’?
The starting point for any discussion on the sale of goods is the legal definition of the term itself. This definition is fundamental because it acts as a gateway, determining whether a transaction falls under the purview of the Act. Section 2(1) of the Act defines goods as including "all chattels personal other than things in action and money" and specifies that the term also encompasses "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."
This definition is crucial in setting the scope of the law. It confines the Act to tangible, movable property. It explicitly excludes real property (land and buildings, unless things attached are to be severed), choses in action (intangible rights like debts or shares), and money when used as currency (Bakibinga, 2011). Therefore, a contract to sell a car is governed by the Act, but a contract to sell company shares or a piece of land is not. The classification of an item as ‘goods’ is the first and most fundamental step, as it dictates whether the protections and rules of the Act, such as implied terms as to quality and fitness for purpose, will apply.
The development of technology has tested the boundaries of this definition, particularly concerning items like computer software. While Ugandan courts have not extensively pronounced on this, English case law, which is of persuasive authority, has grappled with the issue. For instance, in St Albans City and District Council v International Computers Ltd [1996] 4 All ER 481, the court distinguished between software on a physical disk (which could be considered goods) and software delivered by electronic means (which could not). This illustrates that the initial classification of an asset as ‘goods’ is a primary and sometimes complex question upon which the entire application of sale of goods law depends.
The Distinction Between Existing and Future Goods
Once an item is identified as goods, the Act further classifies it. A key distinction is made in Section 6(1) between ‘existing goods’ and ‘future goods’. Existing goods are those which are owned or possessed by the seller at the time the contract is made. In contrast, future goods are defined as "goods to be manufactured or acquired by the seller after the making of the contract of sale."
This classification is fundamental because it determines the nature of the contract itself. According to Section 6(3) of the Act, a contract purporting to be a present sale of future goods operates only as an ‘agreement to sell’. This is a critical distinction. In a ‘sale’, property can pass to the buyer immediately. However, in an ‘agreement to sell’, the transfer of property is deferred to a future time, typically when the goods are manufactured or acquired by the seller and appropriated to the contract (Bell, 2005). For example, a contract to buy a car currently on the showroom floor is a sale of existing goods. A contract to buy a car of a certain specification that the dealer must order from the factory is an agreement to sell future goods. This distinction is foundational because it affects the timing of the transfer of ownership, which in turn has significant consequences for other areas of the law, most notably the passing of risk.
The Crucial Divide: Specific and Unascertained Goods
Arguably the most fundamental classification in the operation of the Act is the distinction between ‘specific’ and ‘unascertained’ goods. This division lies at the heart of the rules governing the passing of property. Section 2(1) of the Act defines specific goods as "goods identified and agreed upon at the time a contract of sale is made." Unascertained goods, though not explicitly defined, are simply all goods that are not specific. This can include generic goods (e.g., "100 bags of Ugandan Robusta coffee") or an unidentified portion of a larger, identified bulk (e.g., "100 bags of coffee from the 1,000 bags currently in your Jinja warehouse").
The importance of this classification is made clear by Section 17(1) of the Act, which contains a cardinal rule of commercial law: "Where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer until the goods are ascertained." This is an absolute and non-negotiable rule. No matter what the parties intend, ownership cannot pass until the specific goods that will satisfy the contract have been identified and separated from the bulk. This was famously affirmed in the English case of Re Wait [1927] 1 Ch 606, where a buyer who had paid for 500 tons of wheat from a larger cargo on a ship could not claim ownership of any of it when the seller went bankrupt because the 500 tons had not been separated from the bulk.
In stark contrast, for specific goods, the rules are far more flexible and depend on the intention of the parties. Section 18 of the Act provides rules for ascertaining the parties' intention. Rule 1 states that for an unconditional contract for the sale of specific goods in a "deliverable state," property passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, are postponed. The case of Underwood Ltd v Burgh Castle Brick and Cement Syndicate [1922] 1 KB 343 illustrates this, where a heavy engine bolted to a concrete floor was held not to be in a deliverable state, so property had not passed even though the goods were specific. This shows that the classification as ‘specific’ is the trigger for applying the rules in Section 18, which determine the exact moment of ownership transfer.
The Consequences of Classification: Risk and Remedies
The timing of the passing of property, which is dictated by the classification of goods, is fundamental because of the principle res perit domino—risk passes with property. Section 21 of the Act states that, unless otherwise agreed, the goods remain at the seller’s risk until the property in them is transferred to the buyer. After property has passed, the goods are at the buyer's risk, whether delivery has been made or not.
The practical implication is immense. If a buyer agrees to purchase 50 bags of maize (unascertained goods) from a seller’s general stock, and the seller’s entire warehouse burns down before the 50 bags are set aside for the buyer, the property has not passed due to Section 17(1). Consequently, the risk remains with the seller, and they bear the loss. Conversely, if a buyer purchases a specific, identified painting (specific goods) from a gallery, property passes at the moment the contract is made (under Section 18, Rule 1). If the painting is destroyed in a fire that night before the buyer collects it, the risk has already passed to the buyer, who must bear the loss and still pay the price. The classification of the goods is therefore the determining factor in allocating the risk of accidental loss or damage.
Furthermore, the classification of goods directly impacts the remedies available. The powerful equitable remedy of specific performance, which compels a party to perform their contractual obligation, is, under Section 52 of the Act, only available for contracts involving "specific or ascertained goods." A court will not order a seller to deliver 100 generic bags of coffee, as the buyer can simply buy them elsewhere and claim damages for any price difference. However, if the contract was for a unique painting or a vintage car (specific goods), damages may be an inadequate remedy, and the court may order the seller to deliver those specific goods. The availability of this key remedy is thus contingent on the goods being classified as specific or ascertained.
Conclusion
In conclusion, the proposition that the classification of goods is fundamental to the operation of the law of sale of goods is not only correct but is a central truth of this area of Ugandan commercial law. The initial definition of ‘goods’ sets the jurisdictional boundaries of the Sale of Goods Act, Cap 82. Beyond this, the subsequent classifications into existing or future, and specific or unascertained, provide the essential legal mechanics that drive the entire transaction. These classifications are not mere academic labels; they are determinative of the most significant legal and financial consequences of a sale. They dictate when a sale becomes a sale, when ownership passes from seller to buyer, who bears the catastrophic risk of loss if the goods are destroyed, and what remedies a party can seek if the contract is breached. The entire edifice of the Act, from the passing of property to the allocation of risk, is built upon this foundational system of classification.
References
Bakibinga, D.J. (2011) Law of Contract in Uganda. 2nd edn. The Professional Books Publishers and Consultants Ltd.
Bell, A. (2005) 'The Passing of Property in Part of a Bulk', The Journal of Business Law, (Mar), pp. 219-238.
Sale of Goods Act, Chapter 82, Laws of Uganda 2000.
Kursell v Timber Operators & Contractors Ltd [1927] 1 KB 298.
Re Wait [1927] 1 Ch 606.
St Albans City and District Council v International Computers Ltd [1996] 4 All ER 481.
Underwood Ltd v Burgh Castle Brick and Cement Syndicate [1922] 1 KB 343.
