Institute of Judicial Services

(IJS JUDICIAL COACHING ACADEMY)

SECTOR 38 A, CHANDIGARH, (Baljinder Singh Sra 9855851231, 9779611369)
SALES OF GOODS ACT- SUBJECTIVE SHORT NOTES
1. Definition of Contract of Sale -: S 4 of the Act postulates the following essentials to constitute contract of sale-:
a) It is a contract between two parties i.e Seller and Buyer
b) The subject matter of a contract is “goods”.
c) The seller should transfer or agree to transfer the property in the goods to the buyer. Property means general
property i.e ownership and not the special right/property like in case of hire or pledge.
d) The transfer is for consideration known as price.
2. Contract under Statutory Compulsion-: In Andhra Sugar Ltd V state of AP( 1968 SC) , it has been held that in
case of sale under statutory compulsion, the consent is not deemed to be caused by coercion, undue influence, fraud,
misrepresentation, or mistake . The consent is deemed to be a free consent resulting into valid contract of sale.
3. Formalities of Contract of Sale-: S 5 of the Act does not prescribe any formalities for creating a contract of sale.
Rather, it stipulates that it may be made orally or in writing, or partly orally and partly in writing or may even be
implied.
4. Meaning of ‘Goods’-: S 2(7) defined it. Distinction between “ Standing Timber “ and “ Standing Trees”: The former
is regarded as goods and the latter as Immovable property. The SC explained the distinction between the two in
Shantabai V state of Bombay ( 1958 SC) by emphasizing that a tree can be regarded as standing timber if it is in
such a state that if it is cut , it would be used as timber. The word ‘timber’ means a wood meant for building, or
carpentary etc.
When Immovable property may be regarded as Goods -: Even things attached to or forming part of the land would
fall within the definition of goods if they are agreed to be severed before sale or under the contract of sale.
Water, Electricity and Gas , Electronic TV signal -: The courts by extention of the definition of ‘goods’ have also
included these items within the definition of Goods.
Sale of Lottery ticket-: In H. Anraj V Govt of Tamil Naidu (1986 SC), the question before the SC was as to
whether sale of Lottery ticket amounts to sale of Goods for levying sales tax . It observed that sale of lottery ticket
confers two rights on purchaser – (i) A right to participate in the draw and (ii) A right to claim prize, if successful. The
transfer of first right amounts to sale of goods. The second one is an actionable claim.
5. Difference between Existing Goods and Future Goods –: S 6 (1) states that goods may be existing goods or future
goods. S 2(14) defines existing goods and S 2 (6) defines future goods. The difference between the two is important
as sale of future goods operates as an agreement to sell. Existing Goods may be further classified into specific goods
( means which are indentified and agreed upon at the time of making of the contract) and unascertained goods( means
which are not identified and agreed upon at the time of making of the contract.
6. Modes of determining the Price of goods-: S 9 postulates the following modes of determining price
a) It may be fixed by contract itself
b) It may be fixed in accordance with an agreed manner.
c) It may be determined by a course of dealings between the parties.
d) If none of the above mode is applicable, then buyer shall pay a reasonable price to the seller.
7. Effect of goods perishing before sale but after agreement to sell-: S 8 deals with contract which is valid when
made but becomes void later on. . In order attract the application of S 8, the following conditions must be satisfied-:
a) The agreement is to sell specific goods
b) The goods subsequently perishes or become so damaged as no longer answer to the description without any fault
of seller or buyer.
c) The risk has not passed to the buyer.i.e there is mere an agreement to sell goods.
d) If the aforesaid conditions are satisfied, the agreement is thereby avoided.
8. Distinguish between (A) Sale and Agreement to sell ;(B) Sale and Hire Purchase Agreement (C) Sale and
Contract of Work and Labour
(A) i) Passing of property (ii) Bearing of loss on damage to goods ;iii) Remedies iv) Sale is executed contract whereas
agreement to sell is executory contract.
(B) (i) Definition/ Nature of contract ii) Bearing of loss iii) Passing of property iv ) Termination of Contract
(C) The distinction between the two is important for the purpose of levying sales tax . The distinction is fine one and
depends upon the object of the contract. If the object of the contract is to transfer the property in some chattel ( goods)
and delivery of the same to the buyer irrespective of the fact that the cost of the materials used bear a very small
proportion to the price charged, it is a contract of sale . But if the object of the contract is not to transfer property in
the chattel but to render skill and labour, the contract is one for work and labour. Thus the dominant object of the
contract is to be seen.
(D) Auction Sale : In sale by auction, the contract is completed with the acceptance of bid and the property( ownership) in
goods passes to the buyer at that time. Since the contract arises only when the auctioneer accepts the offer by
announcing its completion, the bidder may retract his bid before the completion of acceptance. When the auctioneer
puts up the goods in lots for sale, each lot is primafacie deemed to be subject of a separate contract of sale. In M
Lachia Setty V Coffee Board 1981 SC, there was a condition in the auction sale that “ bidders are not entitled to
withdraw the bid telegraphically or telegraphical instructions regarding bidding will not be considered”. The appellant
made the bid but had withdrawn it both orally and telegraphically. Despite that , their bid was accepted and result of
auction was announced. The appellant sought to avoid the contract on two grounds : i) They had withdrawn the bid
and therefore in the absence of offer, the same cannot be accepted ;ii) That their bid was not the highest.
The SC rejected both the contentions holding that the oral revocation of the bid was not made to the
proper/appropriate authority and thus useless/invalid and telegraphic withdrawal of bid was forbidden by the
conditions of auction. Thus withdrawal of bid was ineffective and invalid. As regards second contention, it was held
that it was stipulated in the notice of auction sale that the seller has discretion to accept the lower bids and bound to
accept highest bid, and therefore acceptance of lower bid created a valid contract.
Pooling or Agreement not outbid each other -: These agreement are valid and not against public policy. Sujan
Singh V Mokham Chand 1983 Pb and Hr high court is an illustrative case on the point.
9. Conditions and Warranties-: These are the subject matter of S 11 to 17 of the Act. These are discussed under
following heads-:
(i) Meaning : S 12 . The various stipulations in a contract of sale may be either condition or warranty. A
condition is that stipulation which is essential to the main purpose of the contract whose breach gives the
 right to the party to treat the contract as repudiated . On the other hand, a warranty is that stipulation which is
collateral to the main purpose of the contract and its breach gives rise to claim for damages but the party
cannot reject the goods and repudiates the contract. It is matter of construction of contract to find out whether
a stipulation is a condition or a warranty notwithstanding the nomenclature given by the party to a given
stipulation.
(ii) Stipulation as to Time: The general rule stated in S 11 is that time of payment of price is not deemed to be
of the essence of the contract unless different intention is evidenced from the terms of contract. As regards
other stipulation as to time, it states that it depend on the terms of the contract.
(iii) Options available to the buyer on breach of ‘Condition’ by the seller: S 13 (1) of the Act stipulates the
following options with buyer on breach of condition by seller -:
a) He may treat the contract as repudiated by virtue of S 12(2)
b) He may waive the condition
c) He may treat the breach of condition as a breach of warranty.
S 13 (2) provides for a situation where right of repudiation cannot be exercised. If a buyer accepts goods
or part thereof, the breach of condition has to be treated as breach of warranty. S 42 provides for
different modes for acceptance of goods. Those are : i) When he intimates to seller that he has accepted
them ii)When on delivery, he does some act in relation to them which is inconsistent with ownership of
the seller.iii) When after the lapse of reasonable time, he retains the goods without intimating his
rejection. S 13 (3) deals with situation where fulfilment of condition or warranty is excused by law due
to impossibility or otherwise , then there is no liability for their non performance.
iv) Liability of Seller under Law of Torts-: If breach of a condition or warranty in contract of sale also give rise to a tort, the
buyer has also a right to claim compensation under the law of torts. Clarke V Army & Navy Cooperative Society Ltd is an
illustrative case on the point.
v) Implied conditions and Warranties-: S 14 is subject to different intention expressed by the parties. It stipulates the
following condition and warranties-:
a) Implied Condition as to title- There is an implied condition on the part of seller ; in case of sale, that he has a right to sell
the goods and in case of agreement to sell, he will have a right to sell goods at the time when property ( i.e ownership) in them
is to pass. Rowland V Divall is an illustrative case on the point. The want of title may be on account inherent lack of title or on
account of any external factor by which the seller is prevented under the law from selling. E.g Trade mark violations. Niblett V
Confectioners Materials Co is an illustrative case on the point.
b) Implied Warranty of Quiet Possession S 14 (b) The buyer shall have and enjoy quiet possession of the goods. Niblett V
Confectioners Materials Co is an illustrative case on the point.
c) Implied Warranty against encumbrances- S 14(c). There is implied warranty that the goods sold shall be free from any
charge or encumbrance in favour of third party.
d) Implied Condition in sale by description – S 15. If goods are sold by description , S 15 provides for an implied condition
that goods supplied shall correspond with the description. The term ‘Description’ means any essential feature or details of the
goods sold and it may includes the mode of packing etc also. If they donot, buyer can reject the goods or treat the breach of
condition as breach of warranty by virtue of S 13. Varley V Whipp is an illustrative case on the point.
e) Implied condition in Sale by Sample as well as Description -: S 15 . If goods are sold by sample as well as description,
there are following conditions : i) The bulk of goods, which may corresponds with sample, should also corresponds with the
description. If they donot, the buyer can reject it. Wallis V Pratt is an illustrative case on the point.
f) Implied condition as Quality or fitness of Goods-: S 16 stipulates that , as a general rule, there is no implied warranty or
condition as to quality or fitness for any particular purpose of goods supplied. It incorporates the rule contained in the
Maxim’Caveat Emptor’ which means buyer beware. This rule imposes a duty of care on the buyer while purchasing the goods
so as to satisfy himself as to the purpose or fitness of the goods. Re Andrew Yule & Co is an illustrative case on the point.
However S 16 incorporates the following two exceptions to the said rule -:
i) Implied condition as to quality or fitness : First exception : S 16 (1) . In order to attract the application of S 16(1), the
following conditions must be satisfied -: i) The buyer at the time of purchasing goods makes known, either expressly or
impliedly, to the seller the particular purpose for which the goods are required so as to show that he relies on the seller’s skill
or judgment. ii) The goods supplied are of description which it is in the course of seller’s business to supply. If these twin
conditions are satisfied , then there is an implied condition that goods supplied by the seller shall be reasonably fit for the
purpose for which the buyer’s want them. Priest V Last and Grant V Australian Knitting Mills Ltd are illustrative cases on the
point.
Exception to an exception : Proviso to S 16(1) enacts that the aforesaid implied condition would not be applicable where the
goods are bought under patent or Trade name. The proviso is applicable when the buyer buys by mentioning a trade name and
doesnot rely at all on the skill and judgment of the seller as to the fitness of the goods for any particular purpose. But if he still
relies on seller skill and judgment, then the implied condition as to fitness is applicable. Baldry V Marshall is an illustrative
case on the point.
ii) Implied condition of Merchantable Quality : Second exception : S 16 (2) contains another exception to rule of caveat
emptor.In order attract the application of this exception, the following conditions must be satisfied: i) The goods are sold by
description by seller ii) The seller deals in such goods whether as manufacturer or producer or otherwise . If these conditions
are satisfied, there is an implied condition that goods shall be of merchantable quality. It is noteworthy that s 15 provided that
in case sale by description, there is an implied condition that goods shall answer the description. S 16 (2) goes a step further by
providing that goods shall be of merchantable quality because it may be possible that goods, though answer the description, yet
are not of merchantable quality. The term ‘merchantable quality’ is not defined in the Act. It means that article is of such a
quality and in such condition ( Quality + Condition) that a reasonable man after full examination would accept it in
performance of his offer to buy that article, whether he buys it for his own use or to sell it further. Grant V Australian Knitting
Mills Ltd is an illustrative case on the point.
Exception to an exception : Proviso to S 16(2) enacts that the aforesaid implied condition would not be applicable where the
buyer has examined the goods as regards patent defects. As regards latent defect, the implied condition would still be
applicable. S 41 of the Act entitles buyer to have an opportunity to examine the goods before he is called upon to accept them.
Thornett & Fehr V Beers and Sons is an illustrative case on the point.
g) Implied condition in a sale by Sample-: S 17 (1) provides that a contract of sale is to taken to be a contract of sale by
sample where there is a term; express or implied, in the contract to this effect. In such a contract, S 17(2) provides for
following conditions –i) The bulk shall corresponds with the sample in quality,ii) The buyer shall have reasonable opportunity
of comparing the bulk with the sample,iii) The goods shall be free from any latent defect rendering them unmerchantable.
Godley V Perry is an illustrative case on the point.
h) Exclusion of Implied Terms and Conditions : S 62 provides the following means/modes for varying or negativing the
rights, duties or liabilities arising by implication of law -: i) By Express agreement between the parties;ii) By Course of dealing
between the parties ;iii) By usage , if it is such as to bind both parties to the contract. Ward v Hobbs is an illustrative case on
the point. However , the courts over a period of time had devised following methods to discourage the exclusions clauses
excluding the liability of seller : a) Fundamental Breach of Contract : Giving effect to exemption clause should not result into
fundamental breach of contract. If it does, the court will not enforce it. b) Strict interpretation of Exemption Clause: The court
will give strict interpretation to exemption clause to counter an attempt by seller to exclude his liability.
10. TRANSFER OF PROPERTY AND TITLE: The Act provides for different rules for transfer of property ( Ownership)in
specific goods and unascertained/future goods. S 19,20,21,22 and 24 deals with the former and S 18, 23 and 25 with the later.
A) Specific or Ascertained Goods : On analysis of the aforesaid provisions, the following rules may be stated in this respect -;
i) Primarily ;it depends on the intention of the parties as to when the property in the goods is to be transferred. If they donot
expressly mention anything, their intention can be gathered/inferred from their contract , for which regard shall be had to terms
of contract, conduct of parties and circumstances of the case.
ii) If there is an unconditional contract for the sale of specific goods in deliverable state , the property in goods passes when the
contract is made. In such a case, payment of price or delivery goods may both be postponed and the same doesnot effect the
passing of property in goods.
iii) In a contract of sale of specific goods, when the goods are not in deliverable state, and seller is bound to do some act for
putting those goods in deliverable state, the property doesnot passes until such thing is done and buyer has notice of it.
iv) In a contract of sale of specific goods in deliverable state, but seller is bound to weigh , measure , test or do some other act
or thing with reference to the goods for purpose of ascertaining price, the property doesnot passes until such thing is done and
buyer has notice of it.
v) When goods are delivered to buyer on approval or on sale or return or other similar terms , The property passes to buyer
according to following rules: a) When buyer signifies his approval or acceptance or does some other act indicating his adoption
of the transaction; b) If he doesnot signifies his approval or acceptance, but retains the goods without giving notice of rejection
by the time fixed for return of goods and if no time is fixed on the expiry of reasonable time, the property will pass on the
expiration of fixed time or reasonable time as the case may be.
B) Unascertained Goods or Future goods-: In case of sale of unascertained and future goods, the property( Ownership)
dosenot passes at the time of making of contract. The property in unascertained goods cannot pass until the goods are
ascertained. Similarly contract to sell future goods operates as an agreement to sell. On analysis of the aforesaid provisions,
the following rules may be stated in this respect-:
i) In case of sale of unascertained goods, no property is transferred to buyer unless and until the goods are ascertained.
ii) After the goods have been ascertained, primarily ;it depends on the intention of the parties as when the property in the
goods is to be transferred. If they donot expressly mention anything, their intention can be gathered/inferred from their contract
, for which regard shall be had to terms of contract, conduct of parties and circumstances of the case.
iii) In respect of unascertained and future goods sold by description , the property passes on the satisfaction of following
conditions: a) There is appropriation of goods to contract either by seller or buyer; b) The appropriation is made by one party
with the assent of the other. Assent may be express or implied and may be given before or after the appropriation ; c) The
goods appropriated should be of the same description and should be in deliverable state; d) The appropriation must be
unconditional. The term ‘appropriation’ means assigning of goods to a particular contract .
10. RISK FOLLOWS THE PROPERTY : S 26 postulates the general rule that goods are at the risk of the person in
whom the property ( ownership) in the goods vests. It provides that if the property in the goods has not yet passed to
the buyer, the loss has to be borne by the seller, but if the property has been transferred to the buyer , such loss has to
be borne by the buyer. However, the general rule admits of three exceptions which are : i) The provision is subject to
the contract to the contrary . ii) If the delivery of the goods has been delayed due to the fault of either the buyer or the
seller resulting into loss , the party at fault has to bear the loss. The causal connection between the fault and the loss to
the goods must be shown before it is attracted iii) The seller or buyer may be responsible in the capacity of bailee of
the goods where those are in their possession but not in the capacity of the owner.
11. Nemo dat Quod non habet – S 27 of the incorporates the principle that one cannot pass a better title than one has.It
tries to protect the interest of true owner. However the rule admits of certain exceptions where the buyer gets a good
title despite the defect in the title of the seller. The exceptions are : i) Transfer of title by estoppel S 27 ii) Sale by
Merchantile agent ; proviso to S 27 iii) Sale by joint owners S 28 iv) Sale by person in possession under a voidable
contract S 29 v) Sale by the seller in possession of goods , the property in which has passed to the buyer S 30 (1)vi)
Sale by buyer in possession of goods before the property in goods has passed to him S 30 (2) vii) Resale of goods by
an unpaid seller after he has exercised the right of lien or stoppage in transit S 54(3)viii) Sale by finder of goods S 169
of Contract Act ix) Sale by a pawnee when the pawner makes a default in payment S 176 of Contract Act x) Sale in
market overt.
12. Performance of Contract :
i) Seller’s duty to Deliver the goods: S 31 stipulates the duty of seller to deliver goods to buyer and buyer’s
duty to accept it and the pay the price of it in accordance with the contract of sale of goods . S 2(2) defines
‘delivery ’. S 2 ( 4) gives the inclusive definition of ‘ document of title to goods’ Thus delivery may actual,
symbolic or constructive. In the first there is actual delivery of goods but not in second or third case. The
rules with respect to performance of contract are laid down from S 32 to 44 of the Act. On analysis of the
same, the following rules may be stated :
a) The delivery of goods and payment of price are concurrent condition unless otherwise agreed to between
the parties.
b) Delivery of goods sold may be made by doing anything which the parties agree shall be treated as
delivery or which has the effect of putting the goods in the possession of buyer or his agent.
c) A delivery of part of goods in progress of the whole shall for the purpose of transferring of property in
goods be treated as delivery of the whole. However where there is an intention to sever it from the
whole, then it is not so treated.
d) The seller of the goods is not bound to deliver the goods until the buyer applies for it unless there is any
express contract to the contrary. Thus , the duty to demand delivery of goods firstly is on the buyer.
e) The question as to whether the buyer is take possession or seller is to send the goods depend upon the
contract, express or implied, between the parties . In the absence of any contract; the goods are to be
delivered at the place where they are at the time of sale or agreement to sell ; and in case of future goods,
where they are manufactured or produced.
f) Where seller is bound to send the goods to buyer without any time being fixed, the seller is bound to
send them in reasonable time.
 g) If goods are in possession of third person, there is no delivery unless third person acknowledges to buyer
that he holds the goods on his behalf.
h) Demand or Tender of delivery of goods shall made at a reasonable hour, which itself is a question of
fact.
i) The expenses of putting the goods in deliverable state shall be borne by seller unless otherwise agreed.
j) Delivery of wrong quantity i.e less or larger or mixed with goods of other description, than contracted;
entitles the buyer to reject the goods or accept it. It is subject to usage of trade, special agreement or
course of dealings between the parties.
k) The buyer is not bound to accept delivery by instalments unless agreed otherwise.
l) In case of default or defective deliveries of instalments or buyer neglects or refusal to take delivery or
pay for one or more instalments , whether breach amounts to repudiation of whole of contract or it is a
severable breach, is a question fact depending on the terms of the contract.
m) If in pursuance to the contract, the seller deliver goods to a carrier or wharfinger , for the purpose of
transmission to the buyer or delivery to wharfinger for safe custody, it is deemed to be delivery of goods
to buyer. In such case, seller shall make such contract with carrier or wharfinger for the protection of
goods as may be reasonable having regard to nature of goods and circumstances of the case. In case of
default resulting into damage or loss to goods, the buyer may decline to treat it as delivery to himself or
may hold seller responsible for damages. If goods are sent through sea route, the seller shall give notice
to buyer to enable him to insure the goods.
n) The risk of deterioration of goods which is incidental to the course of transit is to be borne by the buyer
where seller agrees to deliver the goods at his own risk at a place other than that where they are when
sold.
o) The buyer has a right to examine the goods and reasonable opportunity should be afforded to him in
order to ascertain that goods are in conformity with the contract.
p) There are three modes of acceptance of goods by buyer. Those are : i) When he intimates to seller that he
has accepted them ii)When on delivery, he does some act in relation to them which is inconsistent with
ownership of the seller.iii) When after the lapse of reasonable time, he retains the goods without
intimating his rejection.
q) The buyer is not bound to return rejected goods. He needs to intimate the seller.
r) In case of wrongful refusal to take delivery of goods by buyer, he is liable to seller for any loss
occasioned by his neglect or refusal and also for reasonable charge for care and custody of goods.

13. RIGHTS OF UNPAID SELLER-:

I) Meaning: S 45 of the Act states that seller of goods is deemed to be unpaid seller in following two situations: i)
A seller to whom whole of the price has not been paid or tendered. The word ‘whole’ signifies that if part of the
price is still due, he is deemed to be unpaid seller. Further, in case wrongful refusal to accept the price by seller
on being tendered by buyer, he cannot be called as unpaid seller and would not be entitled to exercise rights
available to unpaid seller ;ii) When price has been paid through bill of exchange or other negotiable instrument
such as cheque, and accepted as a conditional payment, and the same is dishonoured.
II) Rights of Unpaid Seller: S 46 confers three rights on an unpaid seller which he may exercise in the manner and
under circumstances stipulated in S 47 to 54 of the Act. The rights are available notwithstanding the property
( ownership) in goods may have passed to the buyer. The unpaid seller has the following three rights:
a) Right of lien
b) Stoppage of Goods in transit
c) Right of Resale.
d) In addition to above three rights, the unpaid seller has a right of withholding delivery of goods where
property in goods has not passed to the buyer.
Right of Lien : The right of lien means a right to retain or retention. The unpaid seller can exercise right of lien
over goods in his possession until payment or tender of price is made in the following three situations :
i) Where goods have been sold without any stipulation as to credit.
ii) Where goods were sold on credit but term of credit has expired.
iii) Where buyer has become insolvent.
The right can be exercised even if seller is in possession of the goods as agent or bailee for the buyer.
But he must be actual possession of the goods. In case of part delivery of goods, he can exercise the right
over the remaining goods unless such part delivery was made under such circumstances so as to amount
to waiver.
Termination of Lien: S 49 stipulates three situations where right of lien is lost. However, the right is not lost merely because
the unpaid seller has obtained a decree for the price of goods. The situations are-:
i) Delivery to Carrier: Where seller delivers goods to a carrier or other bailee for transmitting it to buyer
without reserving the right of disposal of goods
ii) Possession to Buyer : Where buyer or his agent has lawfully obtained possession of goods . However, if
possession obtained is unlawful, it will not defeat the right of lien of unpaid seller. Eduljee V Café John
Bros is an illustrative case on the point.
iii) Waiver.
Apart from above three situations, the right is lost by
iv) Payment of Price : When buyer pays or tender the price of goods.
v) Disposition of Goods by buyer : S 53 states that right of lien is not affected by any sale or other
disposition of goods by buyer which is subject to two exceptions :
a) When seller himself gives assents to a subsale or other disposition
b) When buyer having lawfully obtained possession of document of title of goods transfers the same to
transferee in good faith and for consideration by way of sale.
Stoppage in Transit: The right of stoppage in transit is available to unpaid seller in case of insolvency of buyer by virtue of S
46. S 50 explains what this right is. It states that unpaid seller, who has parted with possession , may resume possession of
goods as long as they are in the course of transit and may retain them until payment or tender of price. S 51 indicates duration
of transit or time period within which the right can be exercised. S 52 indicates the manner of exercising the right.
Right of Resale: The right of resale is available to unpaid seller after he has exercised right of lien or stoppage in transit ,
however if the buyer still doesnot pay the price, S 54 provides that the unpaid seller may exercise this right in the following
situations : i) where goods are of perishable nature . In this situation , there is no requirement of giving notice to buyer because
of emergent situation. or ii) Where unpaid seller gives notice to the buyer of his intention to resell or iii) where seller has
expressly reserved a right of resale . If resale is properly made, and results into loss , the seller can claim the loss from the
buyer, however, if profit is made that is also to be retained by seller and wont be paid to the buyer. The measure of damages is
the difference between the contract price and the resale price. It is different from S 73 of the contract Act where the difference
is taken on the date of breach of contract. Since for resale , certain formalities such as giving of notice to buyer etc is required,
it may not be possible to resell the goods on the date of breach of contract. Resale will be considered to be properly made if the
property in the goods sold had passed to the original buyer. If it is not so, then resale is not properly made. The reason is that if
seller himself is the owner of the goods and property had not yet passed to buyer, there is no need for complying with any
formality and seller himself being the owner can dispose of goods on the date of breach. In such a case, the measure of
damages will be calculated as per s 73 of the Contract Act i.e difference in contract price and sale price on the date of breach of
contract.
Suits for breach of contract: S 55 to 61 of the Act deals with various kinds of suits which the seller and buyer are entitled to
file/prefer against each other :
Seller : i) The seller can file a suit against buyer for price of goods where buyer wrongfully refuses or neglects to pay for goods
according to the terms of contract. The suit can be filed even if property in the goods has not yet passed to the buyer if the price
was payable on a certain day irrespective of appropriation or delivery of goods. S 55, ii)Seller can sue the buyer for damages
for wrongful neglects or refusal to accept and pay for the goods ,iii) Suit to recover interest or special damages if admissible
under law.
Buyer : i) Buyer can file suit against seller for damages for non delivery of goods,ii) Buyer can prefer suit for specific
performance of contract in case of contract to deliver specific or ascertained goods subject to the provision of Specific relief
Act. ,iii) Suit to recover the price paid where consideration for payment has failed. S 61, iv) Buyer can setoff damages, which
he is entitled to, on account of breach of warranty by seller or where he elects or compelled to treat breach of condition as
breach of warranty, against the suit by seller in diminution or extinction of price. V) Buyer can sue the seller for damages for
breach of warranty.
Anticipatory Breach of contract i.e Repudiation of Contract before due date : S 60 . In case of anticipatory breach of
contract of sale by either of the party, the other party has the option either to treat the contract as subsisting and wait for the due
date for its performance or treat the contract as rescinded and sue for damages for the breach.
Auction Sale :The rules of auction sale are stated in S 64.
Increase or Reduction in price on account of variation of Taxes: S 64A of the Act states that there can be an increase or
reduction in price of goods on account of imposition, variation, modification or remission in Excise , Custom Duty and
sales/purchase Tax unless a different intention appears from the terms of contract.