LEGAL MEANING OF A SELLER

by Mercy Maina,

Section 2 of the Sale of Goods Act, Cap 31 Laws of Kenya defines a seller as a person who sells or agrees to sell goods. The Black’s law dictionary defines a seller as one who sells anything; the party who transfers property in the contract of sale. Section 3 of the Sale of Goods Act, cap 31 Laws of Kenya defines a contract of sale of goods as a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer………… it therefore follows that for a contract of sale of goods to exist there must be a seller who is transferring or agreeing to transfer the property in the goods to a buyer. A seller can therefore be simply defined as the person who transfers or agrees to transfer property in goods to another under a contract of sale.

Who a seller is in a contract will depend on the terms of the contract, in some contracts a seller maybe defined to include his agents, representatives, employees etc. this however does not negate the fact that at the end of the day the seller is the entity or person who has the responsibility to transfer the property in the goods.

To determine who a seller is in a contract, it is therefore prudent to look into who bears the legal obligation to transfer property in the goods. Though it may be done on his behalf by an agent or representatives and though payment for the goods may be received by another on his/its behalf, the seller of goods is the person who is directly obligated to transfer property in the goods as the terms of the contract.

In the case of Geoffrey Munyua v Mombasa Centre Complex & John Felix Kariuki [2014] eKLR, the 1^st Respondent claimed that the agreement of sale subject of this case existed between the Appellant and the 2^nd Respondent as the 1^st Respondent’s company seal had not been used in execution of the contract. The court however found from evidence tendered that the 2^nd Respondent worked for the 1^st Respondent and he executed the contract on behalf of the 1^st Respondent. The court found that the contract existed as between the Appellant and the 1^st Respondent as the 2^nd Respondent was merely an agent of the 1^st Respondent. In reaching this conclusion the court relied on section 38 of the Companies Act which states that

“a document or proceeding requiring authentication by a company may be signed by a director, secretary or other authorized officer of the company, and need not be under its common seal.”

The general rule is that where a person contracts as agent for a principal, the contract is the contract of the principal and not that of the agent so that, the only person who may sue or be sued and to whom all rights and obligations in the contract vest is the principal and not the agent as was held in Montgomerie versus United Kingdom Mutual Steamship Association (1891) 1QB 370.

A seller is therefore in whom the obligation to ensure a transfer of the property to the buyer vests. All others whether agents, representatives or employees simply act on behalf of the seller and cannot therefore are deemed to be the seller. Similarly, even in contracts where parties get into a contract upon the introduction of another party, the third party falls out of the contract and the only parties existing as seller and buyer is the supplier of the goods (seller) and the consumer (buyer).