The UK Supreme Court Decision in The Res Cogitans and the Cardinal Role of Property in Sales Law
Michael Bridge
Citation: [2017] Sing JLS 345
The decision of the United Kingdom Supreme Court in The Res Cogitans has had a profoundly upsetting impact on the law of sale of goods, upsetting many decades of a common understanding about the nature of a sale of goods contract. In a contract for the supply of bunker fuels, the supplier reserved the property in the goods but permitted the shipowner to consume the bunkers before payment and therefore before the property was intended to pass. This supply contract, moreover, was the fourth in a series of contracts on broadly similar terms. The contract was held not to be one of sale of goods because it did not require the property in the bunkers to pass to the shipowner. In reaching this outcome, the court remitted this type of supply contract to the common law, giving rise to a series of potential problems highlighted in this article. The litigation was sparked by the question whether the supplier could maintain a debt action for the price of the goods. In holding that_x000D_
the contract was not one of sale, the court was able to give the supplier its price action without being confined by the apparent limitations on such an action as laid down in the Sale of Goods Act and as expressed at earlier stages in the litigation. Dicta in the Supreme Court, however, have broadened significantly the circumstances in which a sale of goods action for the price may be maintained. Had the broader availability of the price action been decided earlier in the litigation, we should probably not have arrived at the conclusion that this contract was not one of sale of goods.