Contract of Sale of Goods
Contract of Sale of Goods
Contract of Sale of Goods
CA Module B
FORMATION OF CONTRACT
CONTRACT OF SALE [4]
It is a contract where: (a) (b) (c) (d) (e) the seller; transfers or agrees to transfer; the property in goods; to the buyer; for a price.
The term contract of sale includes both sale and agreement to sell. The contract of sale may be absolute or conditional and there may be a contract of sale between one part-owner and another.
3.
Consequences of breach
4.
Right of resale
Mercantile Law (Sale of Goods Act) If the buyer is adjudged insolvent before he pays for the goods, the seller (unless he has right of lien) must deliver the goods to official assignee. The seller is entitled only to a ratable dividend for the price of goods. The buyer is entitled to receive goods from official assignee if he has paid for the goods. If the buyer is adjudged insolvent before he pays for the goods, the seller may refuse to deliver the goods to the official assignee unless paid for. If buyer has paid the price, he shall be entitled to ratable dividend as a creditor only.
5.
Insolvency of buyer
6.
Insolvency of seller
An agreement to sell becomes a sale when time elapses or conditions mentioned above are fulfilled. Illustration Facts: Jazib agrees to purchase Anthonys car for Rs.500,000/- provided Anthony stands surety for him with Salman. Is it sale or agreement to sell? Solution: It is an agreement to sell. It becomes the sale when the condition is fulfilled by Anthony.
CA Module B
THE PRICE
ASCERTAINMENT OF PRICE [9]
The price may be: (a) fixed by the contract; (b) left to be fixed in an agreed manner; (c) determined by course of dealing between the parties. Where the price is not determined as above the buyer shall pay a reasonable price determined on circumstances of particular case. What is a reasonable price is a question of fact dependent on the circumstances of each particular case.
CA Module B insists on the delivery of the second car to him for the reasonable price of both the cars. Decide the case. Solution: As regards the car already delivered, Kamran cannot ask for its return and must accept a reasonable price for that. As regards the second car, Jazib cannot insist on its delivery to him since the contract has become void. Where third party is prevented from valuation by the fault of buyer or seller, the party not in default may maintain a suit for damages against the party in default.