Sec. 37. Parties To Sales

The capacity of parties to sales is governed entirely by the general law of contract.

Reference is made to the general law of contract as to capacity of parties to sales.17

17. Such reference is also made by the Uniform Sales Act.

Sec. 38. Sale Of "Future Goods."

Goods to be acquired to arise in the future, or being now in existence, but to be acquired in the future, may be the subject of a contract to sell but not of a sale.

A sale, in its narrower sense is a transfer of ownership in property from one to another. Logically, one can not confer ownership to another of a thing he doesn't own himself. Therefore there may be no sale of goods to be acquired in the future, although there may be a contract to sell such goods and if there has been an attempted sale it will operate as a contract to sell,18 but, as was explained, in that event the buyer gets thereby no title. Something further must be done in order to transfer title; that is, the contract to sell must be executed after the goods come into existence. Until that time the purchaser has only his action for damages. Thus A "sells" to B fish yet to be caught by him. This does not put the title in B as the fish are caught. A must confer the title by some unequivocable act after the fish are caught. If he sells the fish to C, C gets a good title and B has only his action for damages.19

18. Low v. Pew, 108 Mass. 347.

19. Id.

Sec. 39. Destruction Or Deterioration Of The Goods Before The Making Of The Contract

If one attempts to sell specific goods which without his or the buyer's knowledge have been destroyed in whole or in part, or have materially deteriorated in whole or in part, there is a mistake which prevents a contract from arising and neither party can aver breach; yet the law permits the buyer in case of part destruction or deterioration to take the part remaining or the deteriorated goods.

It is well settled in the law of contracts that if there is a mutual mistake in the minds of the parties to an agreement as to the existence of the subject matter thereof there is really no meeting of minds and therefore there is no formation of contract. This principle is applicable to the law of sales. If a contract is made to sell goods, whether title is to pass now or later, and before the time of making the contract, but unknown to the parties, the goods had been destroyed, then neither party may be charged with breach. There was really no contract to be broken. We shall note hereafter that where one orders goods by description or by sample he thereby undertakes that he will supply goods of a certain quality, and it is immaterial that his stock or the material from which he expected to supply them has been destroyed, where it is not the stipulation of both parties that they shall be supplied out of certain ascertained stock or material. But if the seller and buyer are negotiating concerning certain known and ascertained goods, then their agreement cannot attach to any other goods whatsoever; and in such case the prior destruction of such subject matter, unknown to either, creates in their minds a mutual mistake preventing the formation of contract.

Example 4. Thus A owns a certain wagon which B desires to buy. Pending the negotiations the wagon is destroyed by fire. Neither party knowing of this, a bargain is struck. The destruction of the wagon while still belonging to A puts the loss upon him, and it prevents B from alleging breach of contract. But had A contracted to deliver to B "ten Imperial wagons, No. 3," no particular wagons or lot of wagons being specified, the destruction of certain wagons A had in mind would be no excuse.

What has been said of total destruction is true also of partial destruction or material depreciation.

The law provides, however, that if the buyer elects, notwithstanding, to take the deteriorated goods or the part that remains, he may do so by paying the price that he would have paid had there been no such mistake as to quality or existence; or in case the contract is divisable, that is, made up of parts, so that the price of the whole is plainly referable to the number of unit parts in the whole, then he may have the contract price proportioned to the part taken.20

20. Uniform Sales Act, SEC. 7 (2).

Sec. 40. Destruction Or Deterioration After Contract To Sell Of The Subject-Matter Thereof

If there is a contract to sell specific goods and thereafter before tide or risk passes to the buyer the goods in whole or in part perish or substantially deteriorate without seller's fault, the seller's obligation is discharged; but the buyer may elect to take the part remaining or the deteriorated goods.

The destruction of the subject matter before title passes excuses performance. This must be distinguished from the cases in which material is destroyed out of which a seller expected to deliver, where he has no obligation in respect to that very material, but has the right to supply from such other source. In that case the destruction would be the seller's misfortune, but would not excuse him, for the seller may still perform by selecting out of other stock or material, or by going upon the market to buy.

Example 5. A and B contract for the sale by A to B of A's horse "Ely." After the contract to sell, but before the actual sale has taken place, the horse dies without A's fault. This occurrence terminates the contract between the parties. If the horse had died after title passed, the loss would be B's, even though A still had possession.

Example 6. A contracts with B to sell 1000 bushels of May wheat. No particular lot of wheat is specified as the subject matter of the sale. A has 1000 bushels on hand. Before the sale takes place this 1000 bushels is destroyed. A is still bound to deliver 1000 bushels of wheat.

What has been said of total destruction is true also in case of part destruction or material deterioration.

Yet the law allows the buyer in such case to take the goods remaining or the deteriorated goods, paying the price therefor he would have paid had the contract been performed, or if the contract is divisible, that is, made up of parts so that the price of the whole is plainly referable to the number of unit parts, then he may have the contract price proportioned to the part taken.21

21. Uniform Sales Act, SEC. 8 (2).