Sale of Goods Act, 1930

Unit V

General

Act applies to whole of India except the State of Jammu & Kashmir Contract of Sale of Goods subject to the general principles of law relating to contracts (Indian Contract Act)

Sale & Agreement to Sell

Sale
 The

property in the goods is transferred from the seller to the buyer

Agreement to Sell
 Transfer

of property in the goods is to take place at a future time  Becomes sale when time elapses or conditions are fulfilled i.e. property in goods is transferred

Essentials of Contract of Sale
   

 

Fulfill all essentials of contract It is of ‘Goods’ Transfer of Property is required Contract is between buyer and seller Sale should be for ‘Price’ Contract may be absolute or conditional

Document of Title to Goods

Entitles and enables its rightful holder to deal with the goods represented by it as if he were the owner It is proof of ownership, possession or control of goods Cash memo, Bill of Lading, Warehouse keeper’s certificate, Lorry receipt (L/R), Railway Receipt (R/R)

Conditions and Warranties

Stipulations that are essential for main purpose of contract. Non-fulfillment of such will mean loss of foundation of contract. These are termed as ‘Conditions’. Stipulations not essential are termed as ‘warranty’. Aggrieved Party may claim damages.

Implied Conditions

Condition as to title
 Condition

of seller : He has right to sell the goods (title to goods)  If seller’s title is defective – buyer may reject

Condition as to Description
 Goods

& Packing should correspond with the description given by seller

Implied Conditions

Condition as to Quality or Fitness
 Conditions

: Buyer makes known to the seller the purpose, Relies on skill of seller, Goods are of description which the seller ordinarily supplies in the course of business  The goods shall be reasonably fit for such purpose

Implied Conditions

Condition as to Merchantability
 Goods

should be commercially saleable under the description in the market at their full value of eatables and foodstuff, Goods must be for human consumption.

Condition as to Wholesomeness
 Incase

Implied Conditions

Condition implied by Custom or Trade Usage Conditions in a Sale by Sample
 Is

implied when sample is shown  Goods to be of the same kind and quality

Conditions in a Sale by Sample as well as by Description
 Goods

must correspond with sample and with description

Implied Warranties

Implied Warranty of Quiet Possession
 If

disturbed, the buyer may sue the seller for damages.

Implied Warranty of Freedom from Encumbrances
 Shall

be free from encumbrance in favor of any third party not declared or known to buyer  If discharge of amount of encumbrance is required the buyer is entitled to damages.

Transfer of Property in Goods
 

Property : Ownership of Goods Possession of Goods : Physical custody or Control of goods Moment when property in goods passes:
 Ownership  Risk

follows ownership  Action against third parties  Suit for price

Essentials of Transfer of Property

Goods must be ascertained : Buyer should have reasonable opportunity to examine the goods for the purpose of ascertaining whether they are in conformity with the contract. Intention to pass Property in Goods must be there

Rights of Unpaid Seller

Where the property in the goods has passed to the buyer
Right of Lien  Right of Stoppage in transit  Right of Resale.

Where the property in the goods has not passed to the buyer
Right of with holding delivery  Suit for price  Suit for damages for non-acceptance  Suit for damages for repudiation of contract  Suit for interest

Buyer’s remedies against Seller for breach of contract

   

Suit for damages for NonDelivery Suit for Price Suit for specific performance Suit for Breach of Warranty Suit for damages for repudiation of contract before due date Suit for Interest

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