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).

PURCHASER’S REMEDY IF SELLER DIES BEFORE REGISTRATION OF TRANSFER OF LAND TO PURCHASER

Where there is an agreement for the sale of land and the seller dies before registration of the transfer, the purchaser may be at a loss on the way forward. Under section 43 (3) of the Land Act, 2012, a transfer is completed by the registration of the transferee as proprietor of land. In other words, before registration, the transfer is not complete and the property still belongs to the registered owner.

Upon death, the property of the deceased vests in his personal representatives. Under section 51 of the Law of Succession Act, the administrator of the estate of a deceased holds the land subject to any liabilities, rights and interests that are unregistered but nevertheless enforceable and subject to which the deceased held the land.

Once one gets into an agreement for the sale of land and the purchaser pays the purchase price, he becomes a creditor of the seller. The seller has an obligation to transfer his interest over the land to the buyer. Therefore, if the seller unfortunately dies before the transfer is registered, he dies indebted to the purchaser.

The purchaser’s remedy in that case is to claim against the estate of the deceased seller as a creditor to his estate. the purchaser’s claim should be directed to the personal representatives of the deceased as at that point the property vests in them and they have the legal power to deal with the property as the grant.

If the personal representatives had obtained a grant and had it confirmed in such a manner that the land subject of the agreement of sale would devolve to a beneficiary of the deceased and thus cut out the purchaser, the purchaser may make an application seeking to revoke that grant. In this case, the purchaser will approach the court under section 76 of the Law of Succession Act as an interested party.

Section 76 states that A grant of representation, whether or not confirmed, may at any time be revoked or annulled if the court decides, either on application by any interested party or of its own motion that the grant was obtained fraudulently by the making of a false statement or by the concealment from the court of something material to the case. The court in the case of Musa Nyaribari Gekone & 2 others v Peter Miyienda & Another (2015) eKLR defined the term ‘interested party’ as used under section 76 to include a purchaser.

This therefore means that the purchaser may apply to court to have the grant revoked if he can prove that the administrators obtained the grant fraudulently. In this case, he would have to show the court that the administrators were fully aware of his interest over the property but they nevertheless went ahead to apply for confirmation of grant which would take away the purchaser’s interest over the property. The purchaser is a creditor to the property and has the right to seek refund of the purchase price from the estate of the deceased seller.