SALE OF GOODS ACT, 1930

TRANSFER OF PROPERTY

Ms SAHER SAYED
Assistant Professor
DEPARTMENT OF COMMERCE
SHAHEED BHAGAT SINGH COLLEGE
INTRODUCTION
  TRANSFER OF PROPERTY IN GOODS means
Transfer of ownership of the Goods from seller to buyer.
 Property in Goods is different from Possession of Goods.
Possession of Goods refers to the physical custody or
control over the Goods whereas Property in Goods
means ownership over the Goods.
IMPORTANCE OF TRANSFER OF
PROPERTY
 Risk follows ownership: If property has passed to the
buyer, he becomes the owner of the goods and then the
risk of destruction, damage or loss.
 Action against third party: If goods are damaged by
action of third parties, only owner of goods can take the
action.
 Suit for price: Seller become entitled to recover price of
goods only when property in goods has passed to buyer.
 Insolvency of seller or buyer: If the ownership has
passed to buyer and buyer became insolvent, buyer’s
official receiver can take possession of goods or vice
versa.
 RULES REGARDING TRANSFER OF
PROPERTY [SECTION(18-24)]
 Transfer of property in specific or ascertained goods
Transfer of Property in case of Ascertained goods, must be at the
intentions of the parties and as per the terms and conditions of both
the parties.
 Rules for Ascertaining Intention of the Parties: transfer are as
follows……
1. Where Goods are in immediately deliverable state to the
buyer.When the contract is unconditional, the transfer of property
can be at the time when the contract is made. In this case, there is no
need of transfer of price from buyer to the seller.
 RULES REGARDING TRANSFER OF
PROPERTY [SECTION(18-24)]
2. Where the Goods have to be put into a Deliverable State.Where
there is a contract for some specific goods, the seller is bound to do
something with the goods (packaging, cleaning etc.) before, they are
delivered to the buyers. Until then, the property can’t be transferred.
3. When the goods are in deliverable state, the seller is bound to
weigh, measure or test the goods in order to decide the price of the
product. The property doesn’t transfer, until the buyer does such
things with the goods at the time of receipt of goods.
4. Where goods are delivered to the buyer on Approval of Sale or
return or other similar terms, the property therein passes to the
buyer.
 Transfer of property in Unascertained goods
1. Ascertainment of goods: The transfer of property from the seller to
buyer is possible, only when, the unascertained goods become
Ascertained. Until the goods become ascertained, there can not be any
agreement.
In case of unascertained goods, the contract is possible only based on its
description and the unconditional acceptance by the buyer for transfer of
ownership.
2. Appropriation of goods: It means selection of goods matching to the
intentions (requirement) of its performance, with the mutual consent of
both, buyer and the seller (based on use or available money).
Appropriation must be unconditional, with express or implied assent by
both, the buyer and the seller.
Appropriation means adoption or acceptance. Appropriation must be done
by both the parties or at least by the buyer, who is falling in the contract.
3. Delivery to the Carrier: Where in pursuance of the contract, the
seller delivers the goods to the buyer or a to a carrier or other
bailee(whether named by the buyer or not) for the purpose of
transmission to the buyer and does not reserve the right of disposal,
he is deemed to have unconditionally appropriated the goods to the
contract.  
 RESERVATION OF RIGHT OF DISPOSAL
(SEC.25)
The rights of disposal if lies with the seller, in any type of goods, the
ownership remains with the seller until certain conditions are
fulfilled. (Ex: Advance payment before delivery of goods)
If the goods are shipped by the train & the bill of lading is on the
name of seller or its agent. Hence until the condition of payment is
fulfilled by the buyer, the ownership will not transfer to buyer.
 TRANSFER OF TITLE BY NON-OWNERS
(SEC.27-30)
This rule is expressed by the maxim “Nemo dat quod non habet,”
which means no one can pass better title than what he had. The
general rule is that only the owner of goods can transfer a good title.
EXCEPTIONS :
1.Title by estoppel [Sec: 27]: When the owner of the goods, by his
statement or conduct, lead the buyer to believe that the seller has the
authority to sell, then subsequently he may be estopped from
denying the sellers authority to sell.
2. Sale by a mercantile agent [Sec: 27]: An agent having in the
customary course of business as such agent authority either to sell
goods for the purpose of sale, or to buy goods, or to raise money on
the security of goods.
3. Sale by joint owner [Sec: 28]: If one of the several joint owners of
certain goods has the sole possession of the goods by permission of
the other co-owners, the property (ownership) is transferred to any
person who buys such goods from such joint owner.
4. Sale by a person in possession under a voidable contract [Sec:
29]: A person who has obtained possession of goods under a contract
which is voidable on the ground of fraud, misrepresentation,
coercion, or undue influence, can convey a good title, provided the
sale takes place before the voidable contract is avoided.
5. Sale by a seller in possession of goods after sale [Sec: 30(1)]:A
seller having sold goods, continues in possession thereof or title to
the goods, the transfer by such person or by a mercantile agent acting
for such person, of the same, by way of sale will pass a good title to
the transferee, if such latter person has acted in good faith and
without notice of the previous sale.
6. Sale by buyer in possession of goods after an agreement to sell
[Sec: 30(2)]: A person having bought or agreed to buy obtains, with
the consent of the seller, possession of the goods or of the
documents of title to the goods. The delivery of such person, of the
goods or documents, pledge or other disposition thereof will be valid
and effective, if the person receiving the same, acted bonafide and
without notice of the seller’s lien, if any.
7. Sale by an unpaid seller [Sec: 54(3)]: Where an unpaid seller
who has exercised his right of lien or stoppage of goods in transit
resells the goods, the buyers acquires a good title to the goods as
against the original buyer.