Sale of Goods Act, 1930
Sale of Goods Act, 1930
Sale of Goods Act, 1930
Definition [Sec.4]
A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to buyer for price
Essentials
1. At least two parties 2. Transfer or agreement to transfer ownership of goods 3. Subject matter of contract must necessarily be goods 4. The consideration is price 5. Contract may be absolute or unconditional 6. All other essential of contract must be present
(like free consent, capacity of parties, legal object, offer and acceptance etc.)
Agreement to Sell
Transfer of ownership is to take place in future Its Executory Contract
Sale
Executed Contract
Agreement to Sell
Executory Contract
Seller can sue the buyer for price of Seller cant goods Loss of goods will fall on buyer even if they are in possession of seller because Risk is associated with Ownership When buyer pays for price and seller becomes insolvent, he can recover it from Official Receiver or Assignee If buyer becomes insolvent, he needs to deliver goods to Official Assignee or Reliever Loss is borne by Seller even though they are in possession of buyer.
3.
Buyer cant
4.
5.
Goods
Goods means every kind of moveable property other than actionable claims and money and includes stocks and shares, growing crops, grass and things attached to or forming part of land which are agreed to be severed before sale or under the contract .
Classification of Goods
Existing Goods
Owned and possessed by seller at the time of contract 1. Specific and Ascertained
Goods identified and agreed upon at the time of contract of sale Goods indicated by description and not specifically identified
E.g. A places order to buy a machine parts with B strictly according to the sample within 3 months. Here, providing parts strictly according to the sample is Condition. Providing it within 3 months is Warranty.
Whether a stipulation is condition or warranty is to be inferred from the contract itself. Its to be mentioned in contract.
Warranty
A stipulation collateral to the main purpose of contract.
Breach of which gives rise to a right to treat the contract as repudiated or broken
A breach of condition may be treated as breach of warranty in certain circumstances
Gives right to claim for damages but not right to reject goods
CAVEAT EMPTOR
CAVEAT EMPTOR means Buyer Beware Exceptions:
Fraud For specific purpose
Goods are ordered for specific purpose Seller is made aware of it Buyer relies on skill or judgment of seller
Merchantable quality
Sale is made by description Purchase from seller who deals in goods of that description
Property in case of specific or ascertained goods passes when intended to pass [sec.19] Must be:
Terms of contract Conduct of parties Circumstances of case
Following are rules for ascertaining intentions of parties as to the time when property will pass:
1. Specific goods in deliverable state [sec.20]
When goods are in deliverable state, property passes when contract made
2. When goods are to be put into deliverable state [sec.21] 3. Specific goods in deliverable state, when the seller has to do anything thereto in order to ascertain price [sec.22]
Weight,measure,test or some other act to asc. price
3. Sale by one of the joint owners [sec.28] 4. Sale of goods by a person in possession of goods under a voidable contract [sec.29] 5. Sale by seller in possession after sale [sec.30(1)]
Lien
Stoppage in transit
Re-sale
Withholding delivery
Other rights
Right of Lien
A. Right of Lien [sec.47]
Right to retain possession of the goods until claim is paid or satisfied Possession of goods which are owned by another person (buyer) Possession is essential to create right of lien
Right of Lien
When can seller exercise his Right of lien: Goods have not been sold on credit Goods have been sold on credit & terms of credit has expired. During currency of credit, right can not be exercised Buyer becomes insolvent and seller is in possession of goods
Right of Lien
Where a seller has partly delivered goods and partly retaining, he can exercise right of lien on reminder Seller loses Right of lien if he parts with actual possession of goods
Right of Lien
Termination of Lien
When he delivers goods to carrier or bailee for transfer to buyer Buyer or lawyer lawfully obtains possession of goods Seller waives right of lien
Essentials:
Seller must be unpaid wholly or partly Buyer must have become insolvent Goods must be in transit
Can be exercised if seller has actual possession of goods. Right ends with parting of possession of goods. Right of lien is to retain possession.
Right ends with actual possession by buyer. Right of lien is to regain possession.
Right of Re-sale
C. Right of Re-sale [sec.54]
Unpaid seller can exercise this right if
He has possession of goods or Has regained possession of goods by using right of stoppage in transit
Right of Re-sale
Right can be exercised under foll. Conditions: Goods are of perishable nature Seller gives notice to the buyer of his intentions to re-sell goods and buyer doesnt tender price within reasonable time Seller has expressly reserved right to resell in case of default by buyer
Right of Re-sale
If profit is made after re-selling, its retained by seller If loss is occurred by re-selling, its recovered from buyer If seller expressly reserves right to re-sell, previous contract is rescinded and new contract comes into existence
7. Time of delivery
8. Demand at reasonable hour 9. Goods in possession of third person 10.Expenses 11.Installment delivery 12.Goods delivered at distant place
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