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Business Law

Assignment

Group # 15

1.Satyak Rajhansa Roll No.
90
2.Abhjit Joshi Roll No.
36
3.Amit Phutane Roll No.
88
4.Priya Pawar Roll No.
86
5.Ameya Patankar Roll No.
81
6.Neil Gandhi Roll No.
28

Sale of Goods Act 1930
1. Contract of Sale
 Sale and agreement to sell.
 Essentials of Contract of sale.

2. Conditions and Warranties
 Distinctions between conditions and warranties.
 Express and implied conditions and warranties.

3. Doctrine of Caveat Emptor: “ Buyer Beware”

4. Transfer of Property
 Rules of ascertaining when the property in goods
passes to the buyer.
 Passing of Property

5. Sale by Non-Owners.

6. Performance of Contract
 Types of Delivery of Goods.
 Rules as to delivery of Goods.

7. Rights of an unpaid seller

 Goods: Goods are said to be in deliverable state. 1930: Definitions some terms used in the Sale of Goods act:  Buyer: Means a person who buys or agrees to buy goods  Delivery: Means voluntary transfer from one person to another. the buyer would under the contract be bound to take delivery of them. • Dock warrant. The following are recognized as documents of title to goods: • Bill of Loading • Railway Receipt • Warehouse keepers certificate • War finger’s certificate. when they are in such state.  Price: Means the consideration for a sale of goods.  Property: Means the general property in goods and not merely a special property. .  Insolvent Person: A person is said to be insolvent who cannot pay his debts as they become due.  “Document of Title Goods”: A document of title to goods may be described as any document used as proof of the possession or control of goods.The Sale of Goods Act.

A few amendments in the act were made by Sale of Goods (Amendment) act 1963. The act leaves the parties free to modify the provisions of the law by express stipulations. The act first came into force on the 1st of July 1930. The parties to the contract enjoy unfettered discretion to agree to any terms like relating to delivery and payment of price. before its delivered or the insolvency of the buyer. Thus it is a consensual transaction.  Sale and Agreement to sell: . The act contains Sixty-Six sections. It simply lays down certain positive rules of general application for those cases where the parties have failed to contemplate expressly for contingencies which may interrupt the smooth performance of a contract of sale. like any other contract. The term contract of sale is a generic term and includes both a sale & an agreement to sell. etc. A contract of sale of goods results. 1. etc. It applies to the whole of India except the State of Jammu & Kashmir. by an offer by one party & its acceptance by the other. The sale of goods act does not seek to fetter this discretion. It is the most common of all commercial contracts and its knowledge of its main principals is essential for all classes of the community. CONTRACT OF SALE: A contract of Sale of goods is a contract whereby the seller transfers or agrees to transfer the property in the goods to the buyer for a price. SALE OF GOODS ACT 1930: “An act to define and amend the law relating to the sale of goods” The sale of goods act. such as the destruction of a thing sold. 1930 governs the contracts relating to sale of goods.

gas. is fulfilled.Where under a contract of sale. electricity. An agreement to sell becomes a sale when the time elapses or the condition.e. water. decree of a court of law are all regarded as goods. If a supplier sends a quotation and the Purchase order stipulates conditions at variance with the term in the quotation. • There must be an acceptance to buy (usually a purchase order) But. Goods are classified into 3 types: • Existing goods Goods which are physically in existence and which are in seller’s ownership and/or possession at the time of entering . In a contract of sale: • There must be an offer to sell the goods at a price and subject.) Goods: Goods means every kind of movable property other than actionable claims and money and includes stock & shares. • Delivery or payment by installments. grass. • Delivery or payment or both at a future date. the contract is called as “an agreement to sell”. Goodwill. at once) the contract is called “a sale” but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled. a buyer & a seller. copy-rights. sometimes. The contract may provide for: • Immediate delivery of the goods or • Immediate payment • Or Both. growing crops.) Two Parties: There must be two distinct parties i. as a person cannot buy his own goods to affect a sale and they must be competent to contract. it is a counter offer and the supplier must accept the revised terms to give them the legal status of the contract. 2. and things attached to or forming a part of the land which are agreed to be severed before sale or under the contract of sale. This is usually a quotation. the property in the goods is transferred from the seller to the buyer (i. to certain terms and conditions.e. trademarks.  Essentials of a contract of sale: 1. patents rights. subject to which the property in the goods is to be transferred.

If A agrees to sell to B a specific rare painting provided he is able to purchase it from its present owner this is a contract of sale of CONTINGENT GOODS. e. the contract is one of sale. it is a sale of unascertained goods because it is not known which bag is to be delivered. this is a contract for the sale of future goods. If A agrees to sell to B one bag of sugar out of the lot of one hundred bags lying in his go down. e. produced or acquired by the seller after the making of the contract of sale are called future goods.. If A Agrees to sell B all the milk that his cow may yield during the coming year. Where seller is the owner & has a general property in them and if he is an agent. • The price may be fixed. e. b) Unascertained goods: Goods that are not separately identified or ascertained at the time of making of the contract are known as unascertained goods. • Future goods Goods that are to be manufactured. the acquisition of which by the seller depends upon an uncertain contingency are called contingency goods. or • The price may be determined in the course of dealing between the two parties or . the contract of sale are called existing goods. e. Existing goods are further classified into 2 types: a) Specific goods: Goods identified and agreed upon at the time of the making of the contract of sale are called Specific Goods. If goods are sold or exchanged for other goods. governed by the transfer of property act. the transaction is barter.g. 3.g.g Where A agrees to sell B a particular radio bearing a distinctive number there is a contract of sale of specific or ascertained goods. But if goods are sold partly for goods and partly for money. or • The price may be left to be fixed in a manner agreed upon.) Price: The consideration for contract of sale must be money consideration called the “Price”.g. • Contingent goods Goods. he has the right to sell them.

A stipulation in a contract of sale with reference to goods may be a condition or a warranty. If A owns certain goods. It is not of such vital importance as a . a seller frequently makes representations or statements. Warranty: A warranty is a stipulation. B has general property in the goods. which is collateral to the main purpose of the contract.B has special property in the goods. If there are no such representations then the concept of “ buyer beware” applies. Such representations or statements differ in character and importance.) Essential Elements of a Valid Contract: All essential elements of a valid contract must be present in the contract of sale. Held the contract was a contract of sale. If he pledges them with B. If he pledges them with B. If the price is not fixed as per these provisions.g A agrees to exchange with B 100 kgs of barley at Rs 60/kg for 52 bullocks valued at Rs 300 per bullock & pay the difference in cash. Condition: A condition is a stipulation. It goes to the root of the contract. 4. it is defined as “an obligation which goes so directly to the substance of the contract. depends on the construction of the contract. e. This means the buyer gets the goods as they come and it is no part of the seller’s duty to point out the defects in the goods to the buyer. which influence the buyer to clinch the bargain.g if A owns certain goods . e. which is essential to the main purpose of the contract. or in other words so essential to its very nature. he has general property in the goods. Its non fulfillment upsets the very basis of the contract. Whether any statement or representation made by the seller with reference to the goods is a stipulation forming part of the contract or is a mere representation forming no part of the contract.) Transfer of General Property: There must be a transfer of general property as distinguished from special property in goods from the seller to the buyer. B has special property in the goods. the buyer “ shall pay the seller a reasonable price”. 2. CONDITIONS & WARRANTIES: Before a contract of sale is entered into. 5. that its non-performance may fairly be considered by the other party as a substantial failure to perform the contract at all. • May be fixed as per the valuation of a third party.

the stipulation is a condition.  Express and Implied Conditions & Warranties: Conditions & Warranties may be either express or implied. which is essential to the main purpose of the contract. cannot be treated as a breach of a condition. is not so vital that a failure to perform it goes to the substance of the contract”. as it has no right to treat the contract as repudiated. It is defined as “ an obligation. If there is a breach of a warranty.condition. which. But if instead of buying a particular horse. Condition & warranty can be explained as follows: A Man buys a particular Horse. They are said to be express when at the will of the parties they are inserted in the contract and they are said to be implied when the . A breach of a warranty however.) Difference as to Breach: If there is a breach of a condition the aggrieved party can repudiate the contract of sale.) Difference as to Value: A condition is a stipulation. The distinction between the two i. or keep the horse & claim the damages. 3. which is warranted quiet to ride & drive.e. & the buyer can reject the horse. If the horse turns out to be vicious the buyer’s only remedy is to claim damages. Whether a stipulation is a contract of sale is a condition or a warranty depends on each case on the construction of the contract as a whole. though it must be performed. 2. A warranty is a stipulation. which is collateral to the main purpose of the contract.  Distinctions between a condition & a warranty: 1. This would happen where the agreed party is contended with damages only. but in case of a breach of a warranty. the aggrieved party can only claim the damages. a man asks a dealer to supply him with a quiet horse & the horse turns out to be vicious. the aggrieved party can claim damages only.) Difference as to Treatment: A breach of a condition may be treated as a breach of a warranty.

This was even though the ship was sold subject to all faults & defects 3.g. the implied conditions are: a. that the goods did not correspond to description & hence could be returned or else if the buyer took the goods. for the recovery of the purchase price even though several months had passed. Implied Conditions & Warranties may however be negatived or varied by express agreement. 2. if the deviation of the goods from the description is such which could not have been discovered by casual examination i. which would not be apparent on reasonable examination of the sample. The goods shall be free from any defect.law presumes their existence in the contract automatically though they have not beed out into it in express words. if the goods show any latent defects. As a result of this condition if the sellers title turns out to be defective the buyer is entitled to reject the goods and the recover the price. Held. a ship was sold by description viz . A used the car for several months. The buyer shall have a reasonable opportunity of comparing the bulk with the sample. The bulk sample shall correspond to the sample in quality b. rendering them unmerchantable. “copper fastened vessel” but actually it was partly copper fastened. will not affect his rights to reject the goods. A purchased a car from B who had no Title to it. c. it is not the article bargained for. there is an mplied condition where the goods shall correspond to the with the description. e. If the article tendered is different in any respect. the other party is not bound to take it”. in the case of a sale. foods are supplied according the a sample agreed upon. Implied Conditions: Unless otherwise agreed the law incorporates the following implied conditions: 1. he could claim damages for breach.) Condition in a sale by sample: When under a contract of sale. .) Condition as to Title: The first implied condition on part of the seller is that. that A was bound to hand over that car to its true owner & that A could successfully sue B the seller without Title. e. the two owners spotted the car & demanded it from A. Further the fact that the buyer has examined the goods. or by course of dealing between the parties or by usage of trade. he has the right to sell the goods at the time when the property is to pass.) Condition in a sale by description: “ Where there is a contract of sale of goods by description.e.g. After that. Held.

The buyer.g A approached B. a motor car dealer & asked for a comfortable car for touring purpose recommended his Bugatti car.g. . 6. Held. b. A certain shoes were sold by sample by the French Army. the rule of law being let the “buyer beware”. 5. e. should make known to the seller the particular purpose for which the goods are required.g A agreed to sell to B some oil describes as “Foreign refined rape oil warranted only equal to sample”.B could reject the goods. e.versa. the buyer is entitled to reject the goods. or there must be some latent defect in the goods. But an implied condition is deemed to exist. expressly or impliedly. Held. while ordering that car by its trade name he was still relying on the sellers skill & judgment as regards the suitability of the car for the specific purpose. the goods tendered were equal to sample but contained an admixture of Hemp oil.e.) Condition as to merchantability: This condition is implied only when the sale is by description. which was supplied. A there upon ordered for a bugatti car. the following conditions are to be met: a. if the following conditions are satisfied: a. a Trade name & also showed a specimen of the same. The buyer should rely on the seller’s skill or judgment. The buyer must not have any opportunity of examining the goods. It was held that he was entitled to do so because. whether he is the manufacturer or not.) Condition as to fitness or quality: Normally there is no implied condition or warranty as to quality or fitness for any particular purpose of goods supplied.) Condition in a sale by sample as well as by description: There is an implied condition that the bulk of the goods shall correspond both with the sample and with the description. the buyer was entitled to the refund of price plus damages. Goods sold must be of a description which the seller deals in the ordinary coarse of his business. A claimed to reject the car & recover back the purchase money paid by him. If the goods supplied correspond only with the sample and not with the description Or vice. 4. b. The seller should be a dealer in the goods of that description. The bulk of the goods must correspond with both. The Shoes were found to contain paper not discoverable by ordinary inspection. The car proved to be unsuitable for touring purposes. be it a manufacturer or not. And c.

e. A.g. The milk was contaminated with germs of typhoid fever. damages reflecting not merely the price paid. B was held liable in damages. She was held entitled to recover from the seller’s for the breach of the warranty.) Warranty of Quiet Possession: In every contract of sale. the condition as to merchantability has been broken and A is entitled to reject as unmerchantable. and finds if damaged by white ants.g. the first implied warranty on the part of the seller is that “the buyer shall have & enjoy quiet possession of the goods. unfit for human consumption. e. pledges it with B. B approaches C and tells him about the pledge . which render them. which would not be apparent on reasonable examination of the same. Unknown to the parties. A’s wife on taking the milk became infected and died of it. then there is a breach of warranty & buyer is entitled to damages. free from any defect. Where A purchases a certain quantity of black yarn from B. In such cases the goods supplied must not only answer to description and be merchantable but must also be wholesome i.” If the quiet possession of the buyer is in anyway disturbed by a person having superior right than that of the seller.e. 2. but also the cost of repair.) Condition as to Wholesomeness: This condition is implied only in a contract of sale of eatables and provisions.g. the typewriters was a stolen one and the plaintiff was compelled to return the same to its true owner. Implied Warranties: Unless otherwise agreed the law also incorporates into a contract of sale of goods the following implied warranties: 1. The plaintiff a lady purchased a second hand typewriter from the defendant. a dealer in yarn. the buyer can claim damages from the seller. After a week obtains possession of the watch from B for some limited purpose and sells it to C. the owner of the watch. e.) Warranty of freedom from encumbrances: Where the goods shall be free from any charge or encumbrance in favour of any third party not declared or known to the buyer before or at the time when the contract is made” If the goods are afterwards found to be subject to a charge and the buyer has to discharge the same. A bought milk from B a dairy owner.g. She thereafter spent some money on its repairs and used it for some months. 7. e.

A opens the tin in the normal way. If.g.) Warranty of disclosing the dangerous nature of goods to the ignorant buyer: The third implied warranty on the part of the seller is that. whereupon the disinfectant power flies into her eyes and causes injury. therefore. a farmer. the buyer cannot hold the seller liable for the same.g. It turned out unsound and unfit for human . e. B is liable in damages to A as he should have warned A of the probably danger. There is breach of this warranty and C is entitled to claim compensation from A. bought from B. The maxim of caveat emptor means. as there is no implied undertaking by the seller that he shall supply the goods. “let the buyer beware”.affair. but tells nothing to A. intending to return after completing other business and take it away. he must curse himself for his own mistake. the seller is not bound to disclose every defect in the goods of which he may be cognizant. A purchases a Tin of disinfectant powder from B. If there is a breach of warranty the buyer is entitield to claim compensation for the injury caused to him. a butcher. he will warn the buyer of the probable danger. while making purchases of the goods the buyer depends upon his own skills and makes a bad choice. in the absence of any misrepresentation or guarantee by the seller. B knows that the lid of the tin is defective and if it is opended without special care it may be dangerous. a farmer. If the goods turn out to be defective or do not serve his purpose. BUYER BEWARE: DOCTRINE OF CAVEAT EMPTOR. This doctrine too has certain exceptions. 3. According to the doctrine of caveat emptor it is the duty of the buyer to be careful while purchasing goods of his requirement and. e. which suits the buyers purpose. if the goods sold are of dangerous nature. on seeing and wishing to buy it. 3. in the absence of any enquiry from the buyer. the carcass of a dead pig for consumption and left it hanging up. In his absence C. C has to make payment of the pledge amount to B. A. was referred to A and bought it of A. The buyer must examine the goods thoroughly and must see that the goods that he buys must be suitable for the purpose of which he wants them.

it is only the owner of the goods who can take action at that time. e. Hence it is important to know the precise moment of time at which the property in the goods passes from the seller to the buyer for the following reasons: 1. 2. 4. B.consumption. whereas “possession of goods” refers to the custody or control of goods. B contracts to purchase 30 Tons of apple juice from S. S crushes the apples. the goods are at the risk of the party at fault. whether delivery has been made or not and whether the price has been paid or not. . whether the official receiver or Assignee can take over the goods or not depends on whether the property in the goods has passed from the seller to the buyer. delay to take the delivery and the juice goes putrid and has to be thrown away. But if the delivery has been delayed by fault of either the buyer or seller.) The transfer of property in the goods. 4. B is liable to pay the price. TRANSFER OF PROPERTY: There are primarily 3 stages in the performance of a contract of sale of goods by a seller. It was held that no warranty of soundness was implied by law between farmers A and C. When the property of the goods gets transferred to the buyer.) The passing of the risk. 2. Thus risk and Property go together.g. puts juice in casts and keeps it ready for delivery. Property in Goods means the ownership of goods.) Action against Third Parties: When the goods are in anyways damaged or destroyed by the action of third parties. viz: 1. risk follows ownership.) Insolvency of the Seller or the Buyer: In the event of insolvency of the seller of the buyer. however. the goods are at the buyers risk.) The transfer of possession in the goods. whether the delivery has been made or not. 3. Transfer of property in the goods from the seller to the buyer is the main object of a contract of sale. Hence the risk of loss lies with the owner.) Risk follows ownership: Unless otherwise agreed.

property in them passes to the buyer at the time when the parties intend to pass. Till the trees were felled. While being repaired the machine was destroyed without any fault of the repairman. To this B agreed and took the machine to his repair shop. they were not ascertained. But where the intention of the parties as to the time when the property in the goods is to pass to the buyer cannot be ascertained from the contract. The stumps of the tree’s after cutting had to be 3 inches high.5. Held in these circumstances the property in the timber that was cut would pass to B when the trees are cut. 2. For purpose of ascertaining the intention of the parties. B refuses to buy it unless certain work was done on it to put it under proper running conditions.g. conduct of the parties & the circumstances of the case. E. S replied that B could get it done himself and when the cost of repairs was known B might pay S Rs 5000 less the cost of repairs. regard shall be had to the terms of the contract. The property in the machine did not pass from S to B. Possession of goods refers to the custody of goods.) Suit for Price: The seller can sue for the price. unless otherwise agreed.) Goods must be ascertained: Where there is a contract for the sale of unascertained goods.  PASSING OF PROPERTY: What does “Property in Goods” mean? Ans: It means ownership of the goods. only if the goods have become the property of the buyer. the rules contained in Sec 20 to 24 apply. B was entitled to cut teak tree’s of more that 12 in Girth. The rules regarding the passing or property in goods are contained in Section 18-25 of the act.: S offers to sell B a certain machine for Rs. But it should be understood that “Property in Goods” is not the same as “Possession of Goods”. no property in the goods is transferred to the buyer unless and until the goods are ascertained. Ex: Under a contract of sale. 5000/-.) Intention of the parties: Where there is a contract for the sale for specific or ascertained goods. . Primary Rules of ascertaining the when the property of the rights gets transferred to the buyer as follows: 1.

i.) Specific Goods: The rules relating to the transfer of property of specific goods are as follows: a. The horse dies before it is delivered and paid for. or both. the property does not pass until such a thing is done and buyer has notice of it. Deliverable state means such a state that the buyer under the contract be bound to take delivery of them. is postponed does not prevent the property in the goods. the property . Passing of property delayed beyond the date of the contract: i. The fact that the time of payment of the price or the time of delivery of the goods. passing at once. but the seller is bound to weigh.. ii. A part of the machine was destroyed while being removed. B asks his servant to keep the horse separate from the other horses.These rules are as follows: 1. the seller has to do something to the goods to put them into a deliverable state. measure or do some other act or thing with reference to the goods for the purpose of ascertaining the price. When the price of goods is to be ascertained by weighing: Where there is a contract for the sale of specific goods in deliverable state.e. Ex: X sells to B a horse. the property in the goods passes to the buyer when the contract is made. the buyer was entitled to refuse to take the machine. The property of the goods has passed to B and he has to bear the loss. Ex: There is a contract of sale for a machine weighing 30 Tons and embedded into the concrete floor. Passing of property at the time of contract: When there is an unconditional contract for sale of specific goods in a deliverable state. B is to pay the price on delivery. which is to be delivered to B the next week. as it was not in a deliverable state. b. Goods not in a deliverable state: Where there is a contract for the sale of specific goods not in a deliverable state. Held. test.

In . Ex: Goods are delivered by A to B on “sale or return”. but is bound to pay the price to B and B is bound to pay the price to A. If for Ex: it is the term of the contract that the buyer is to pay for the goods before delivery. C cannot recover the loss from D. As such. When he signifies his approval or acceptance to the seller. As between A and B and B and C. has not passed to D. They are further delivered by B to C and then by C to D on similar terms. the seller reserves the right for disposal. does not pass until such act or thing is done. The “ascertainment of the goods” and their unconditional “appropriation to the contract” are two pre-conditions for the transfer of property from the sellar to the buyer in case of unascertained goods. the property of the goods thereupon passes to the buyer. the property is the goods do not pass to the buyer until the goods are ascertained. Until goods are ascertained there is merely an agreement to sell. b. and buyer has notice thereof. Reservation of rights of disposal: The property in goods. the property there in passes to the buyer: a. Where goods are delivered to the buyer on approval or “on sale” or “on return” or other similar terms. does not pass to the buyer if the seller reserves the right of disposal of goods. 2. Ascertainment is a process by which the goods answering the description are identified and set apart. Further under section 23 states that where there is a contract for sale of unascertained or future goods by description & goods that that description and in a deliverable state are unconditionally appropriated in the contract. whether specific or unascertained. but before he could do so the goods were lost. The remaining 16 were subsequently filled and the buyer was informed of the same. When he does some act adopting the transaction. The goods are stolen while in custody of D.) Unascertained Goods: Where there is a contract for the sale of unascertained goods. The buyer promised to take them away.) Goods sent on approval or “ on sale or return”: under sec 24. 4 were filled and taken away by the buyer. Ex: in a sale of 20 hog-heads of sugar out of a large quantity. Held the property had passed to the buyer at the time of the loss. 3.

The agent should be in possession of the goods or documents of the title to the goods with the consent of the owner. does not acquire the property in the goods. 2. The general rule of law is that “no one can give that which he has not got”. After sometime B buys those goods from A. there are certain exceptions: 1. for A having no title could pass none the better. leads the buyer to believe that the seller has the authority to sell and induces the buyer to buy the goods.e.) A.) A finds a ring of B and sells it to a third person who purchases it for a value & in good faith. gets a good title to the goods if the following conditions are satisfied: a. B can recover from that person. The above rules.such a case the property of the goods does not pass to the buyer until the conditions imposed by the seller is fulfilled. 2. The buyer of the goods from a mercantile agent. Ex: A tells B within the hearing of C that he is the owner of certain goods which infact belong to C. SALE BY NON-OWNERS: Sections 27 – 30. B. The agent should sell the goods while acting in the ordinary course of business of a mercantile agent. Only an owner of the goods can transfer a good title. At the most he acquires such an interest as the hirer had. who has no authority from the principal to sell. through a bonafide purchaser.) Sale by a person not the owner or title by estoppels: Where the true owner by his conduct or by an act of omission. The true owner i. he shall be estopped from denying the fact of want of authority of the seller. as such agent authority either to sell goods or to consign goods for the purpose of sale or to buy goods. c. The title of B will be better than that of A and C will be precluded from disputing B title to the goods.) Sale by a mercantile agent: A mercantile agent is the one who in the customary course of his business. The buyer in such a case gets a better title than that of the seller. has. 5. The buyer should act in good faith . This rule is expressed by the Latin maxim “ Nemo dat quod non habet”. b. the hirer of goods under a hire purchase agreement sells them to B. or to raise money on the security of the goods. Examples: 1.

provided he buys them in good faith and without notice of the seller defect of title. continues to be in possession of the goods or documents of the title to the goods and sells them either himself or through a merchantile agent to a person who buys in good faith and without notice of previous sale. F sued to recover the car from K. C gets a good title. 4. the buyer acquired a good titile to the goods. Ex: F.) Sale by a buyer in possession after a sale: Where a person having bought or agreed to buy goods obtains. Held. H sold the car for Rs 145 to K who bought it in good faith and without notice of any fraud. 3. as H was in possession of the car with F’s consent for the purpose of sale. Ex: A purchases a piano from B by fraud. sells the goods. Ex: A sells certain goods to B and promises to deliver the goods the next day. the buyer who acts in good faith and without notice of any lien or other right of the original seller in respect of the goods gets a good title .) Sale by a person in possession under a void able contract: When the seller of goods has obtained their possession under a voidable contract. B’s only remedy in this case is against A. The buyer should not have at the time of the contract of sale notice that the agent has no authority to sell. a buyer in good faith of those goods gets a good title to the goods. with the concent of the seller . before he purchased. K obtained a good title to the car. 5. 6. Before B reincides the contract. passed to B.) Sale by seller in possession after sale. possession of the goods or documents of the titile to the goods and sells them either himself or through an agent. who is in sole possession of the goods by permission of the other co-owners. d. who buys in good faithand in ignorance of the fraud. the buyer gets a good title. A sells the piano to C. the owner of a car delivered it to H a mercantile agent for sale at not less that Rs 575. but the contract has not be rescinded at the time of the sale. C gets a good title to the goods not withstanding that the property had.: Where the seller having sold goods. Before delivery A sells & delivers the goods to C who buys the goods in good faith and without prior knowledge of sale to B.) Sale by one of several joint owners: If one of the several joint owners. A has a voidable title to the goods. H misappropriated the money.

) Symbolic Delivery: The deliver is made by delivering some symbol. unless the seller us ready and willing to give the delivery. 7. nor need the buyer pay the price. Unless otherwise agreed. 2. delivery & payment of price are concurrent conditions. But.) Exceptions in other acts like Indian Contract Act 1872. 3. under a sale by finder of lost goods.m A sale by a pawnee or pledgee or sale by sale by official receiver or official assignee. had obtained a good title to the furniture. 1. . A sold the furniture to B before paying the last instalment. however.) Physical or actual delivery: The physical possession of the goods is handed over by the seller to the buyer. in accordance with the terms of the contract of sale.” Delivery of goods may. Held.) Constructive Delivery: There is only an acknowledgement by the person in possession of goods that he holds them on behalf of another. no delivery need be given. In other words. 6.) Sale by an unpaid seller: Where an unpaid seller who has exercised his right of lien or stoppage in transit re-sells the goods. B having bought in good faith. therefore be. Ex: Delivery of a railway receipt properly endorsed. B purchased the furniture bona-fide. part delivery does not amount to delivery of the whole.) Delivery of Part of Goods: Part of goods sold may amount to delivery of the whole if it is so intended and agreed. if the buyer is not willing to pay the price. 8. Delivery: It is defined in the act as “a voluntary transfer of a possession from one person to another. A sold the furniture to B before paying the last instalment. the ownership to pass to him on the payment of the last installment. Rules Regarding Delivery: 1. the buyer acquires a good title to the goods as against the original buyer.Ex: A bought some furniture on hire – purchase. where the part is intended to be severed from the whole. PERFORMANCE OF THE CONTRACT OF SALE: Duties of the seller and the buyer: It is the duty of the seller to deliver the goods & of the buyer to accept and pay for them.

he shall pay for them at the contract rate. less that he contracted to sell. If he fails to do so.) Unless agreed otherwise. the seller is not bound to deliver the goods. 7.) Time of Delivery: When under the contract of sale. the buyer may reject them.) Place of Delivery: Where at the place at which delivery of the goods is to take place is specified in the contract. unless otherwise agreed. unless he has reasonable opportunity of examining them and ascertaining whether they conform to the contract.) Liability of the buyer: When the seller is ready and willing to deliver the goods and requests the buyer to take delivery and buyer does not within a reasonable time after such request take delivery of the goods. all expenses of and incidental to the making of delivery are borne by the seller. 2. the goods sold are to be delivered at the place at which they are at the time of sale. he is not deemed to have accepted them.) Delivery to the carrier or wharfinger: Delivery of the goods by the seller to a carrier for transmission to buyer or to wharfinger for safe custody is prima facie deemed to be a delivery of the goods to the buyer.) Cost of Delivery: Unless otherwise agreed. but all expenses of and incidental to obtaining of delivery are borne by the buyer. If the buyer accepts the whole of the goods so delivered. the goods must be delivered at that place during business hours on a working day. What is a reasonable time is a question of fact. the buyer may accept the goods included in the contract and reject the rest or he may reject the whole. But. 8. unless the right of disposal has been recovered by the seller. UNPAID SELLER AND HIS RIGHTS: . Where there is no specific agreement as to place. but no time for sending them is fixed. the seller is bound to sell the goods to the buyer. he is liable to the seller for any loss occasioned by his neglect or refusal to take delivery.) Installment Deliveries: The buyer is not bound to accept delivery by installment. the seller is bound to send them within a reasonable time.) Delivery of Wrong Quantity: Where the seller delivers to the buyer a quantity of goods. 10. he is liable in damages to the buyer. Where a larger quantity is delivered. the buyer applies for delivery. 7. 3. The seller is bound to make with the carrier such a contract of carriage as properly protects the interest of the buyer.) Where goods are delivered to a buyer. 9. 5. if the buyer accepts the goods delivered he should be required to pay for them at the contracted rate. which he has not previously examined. 4. 6.

Right of Resale. but the term of credit has expired. c. Lien can be exercised only for the non-payment of the price.) Where the buyer becomes insolvent.Who is an unpaid seller? A seller is deemed to be an unpaid seller when – 1.) The whole of the price has not been paid or tendered.) Where the goods have been sold on credit. Ex: The seller cannot claim lien for go down charges for storing the goods in exercise for his lien of the rights.) He must be unpaid and the price must be due. Rights of an unpaid seller: These may be broadly classified under 2 heads 1. If the instrument is not honored the seller is deemed to be an unpaid seller. looses his lien in the following cases: . without any stipulation as to credit. b. Termination of Lien: An unpaid seller.) Rights against goods: An unpaid seller has the following rights against the goods a. the condition being that the instrument shall be duly honored. 3.) Rights against the buyer personally. is entitled to retain them in his possession until payment or tender of the price in the following cases.) A bill of exchange or other negotiable instruments was received but the same has been dishonored.) He must have an immediate right of action for the price.) Rights against goods 2. namely: a.) Where the goods have been sold. Lien of Goods: The word “lien” means to retain possession of. Right of Stoppage in transit. When payment is made by a negotiable instrument it is usually a conditional payment. c. Right of Lien b. and not for any other charges due against the buyer. The following conditions must be fulfilled before a seller can be deemed to be an unpaid seller: 1. 2. An unpaid seller who is in possession of goods. 1. 2.) A bill of exchange or other negotiable instrument has been received as a conditional payment & the condition on which it was received has not been fulfilled by reason of dishonor of the instrument.

) By waving the right of lien.) Right of Re-sale: The unpaid seller can re-sell the goods : 1) where the goods are of perishable nature. 4. 3) Where he gives notice to buyer of his intention to resale the goods & the buyer does not within a reasonable time pay or tender the price. 3) Repudiation of contract before due date. 2. Rights of an unpaid seller against the buyer personally: These are the rights.e rights against the goods & are in addition ti his rights against the goods.) Where he ascends to a sub sale by the buyer.) Rights of stoppage in transit The right of stoppage in transit is a right of stopping the goods while they are in transit.) Where he takes a security from the buyer for the payment of the price. in place of his lien 2. The rights in personam are explained as follows: 1) Suit for Price 2) Suit for damages for non-acceptance. . These rights of the seller against the buyer personally are called Rights in personam as against the rights in rem( i. 5. & retaining possession until payment or tender of the price. which an unpaid seller may enforce against the buyer personally. without reserving a right of disposal of the goods to himself Ex: Seller take Railway Receipt in the name of the buyer or his carrier. 4) Suit for interest. 2) Where the seller expressly reserves theright of resale in case the buyer shoul make default. resuming possession of the goods as long as they are in the course of transit. 1.) Where a buyer or his agent lawfully obtains the possession of the goods 3. 3.) When the seller delivers the goods to a carrier for the purpose of transmission to the buyer.

Ed.) Business Law: M.D.2000 . 2005 3.) Elements of Business Law: N. Ed. Kuchhal.S.References: 1. 1986 2.C.Avatar Singh.Kapoor.) Business Law: S. Ed.Kapoor. Gulshan.) Law of Sale of Goods and Hire Purchase. G. Dr. Ed 1995 4.K.