Sale and

Transfer of Ownership
 Ownership
only of specific things.
This vase
This table
This clock
This boat
This bottle
The three bottles
All the bottles
A person can own only a specific
car.

And this one.

This one.
But not any one car!
However,
A person cannot
he can be
be the
the owner
owner of
of any
these
three of
three
thebottles.
bottles on the shelves.
The owner can give his goods
to another person.
The person will get possession,
Not the ownership.
 The drycleaner has the possession
but the ownership is with the customer.
The transporter has the possession
but not the ownership.
The airline has only the possession
not the ownership.
Continues
The finder
to beonly
the gets
property
the possession
of the owner.
not the ownership.
Sale is a contract, where:

The seller transfers

the ownership in goods
for a price in money.
Consideration for the buyer
is the transfer of ownership
(and not mere possession).
Only the owner can transfer the
ownership in goods.
The owner can also authorise
a person to sell
Like, an agent or auctioneer.
Delivery is integral to sale.

Delivery is voluntary
transfer of possession from
the seller to the buyer.
 Sale of ascertained goods

There is a specific identified thing.

The parties enter in a contract for

the sale of that particular thing.
 Accepted
I offer to sell this used
car for Two lakhs.
The contract is for sale of
specific or ascertained goods,
this particular car.
 Accepted
I offer to sell this
bag of rice Rs. 800.
The contract is for sale of
specific or ascertained goods,
this specific bag of rice.
Sale of unascertained goods

A sale which is not for

specific goods
is for unascertained goods.
 Accepted
I offer to sell one 1
litre Acquafina for
Rs. 10.
The contract is not for sale
of any specific bottle. It is a
sale of unascertained goods.
The seller will procure or manufacture a
bottle of the description and give it to the
buyer.

Eventually, the buyer will become

the owner of a specific bottle.
Customer: Give me a Store: Yes Sir.
bottle of Acquafina.

The sale is for unascertained

goods.

The store pick-up one

and gives to the
customer.
 Accepted
I offer to sell 2 Kgs.
Of rice from this
bag for Rs. 70.
The 2 Kgs of rice is not
specific and distinct.

The seller will take 2 Kgs out

from the bag.

The contract is for sale of

unascertained goods.
 Sale of Unascertained goods
In a sale contract for unascertained goods:

• the goods are described, or

• are to be separated from a bulk, or
• Goods to be made in the future (future
goods)
 Exercise:
Sale of Goods- Ascertained and
Unascertained Goods
1. Ascertained, all the 50 computers.

2. unascertained, the goods are described.

3. Ascertained

4. Ascertained, the entire heap of cauliflowers.

5. unascertained, the newspaper is described.

6. Unascertained, goods are described.

7. Unascertained, goods are described.

8. Unascertained, goods to be separated from bulk.

9. Unascertained, future goods.

10. Unascertained, goods are described.

11. Unascertained. Future goods- the painting to be made.

12. Unascertained. The books to be drawn from bulk.

13. Unascertained. The goods are described.

14. Ascertained. The entire content of the tanker.

15. Unascertained, future goods.

 Exercise
Sale and Ownership- Principles
1. No (A contract is formed on acceptance of offer)

2. Yes (A contract is formed on acceptance of offer

3. Yes (A gift is not a contract as it lacks consideration)

4. No (Only the owner can transfer ownership)

5. Yes

6. No

7. No (Only the owner can transfer ownership)

8. Yes

9. Yes

10. Yes. (The employee is an agent of the company)

 Exercise:
Transfer of Ownership- Principles
 Transfer of Ownership
A thief stole a laptop belonging to A and sold to B.
1.Yes
2.Yes
3.No
4.Yes
5.No
6.Yes (The thief has given B only the possession
and not the ownership.)
7.No
8.No
2. TV Advertisement

Has C got the ownership of the TV? No

Did B get the ownership in the TV? No

Is A in breach? Yes

Is the breach condition or warranty?

Condition

Can the finance company Yes

terminate the contract?
When does the ownership transfer?
Principle 1- Ownership transfers as provided
in express or implied terms in the contract.

Principle 2- If the contract is completely

silent, the time when the contract got made.

Qualification for sale of unascertained goods:

Transfer of ownership will wait till the goods
get ascertained.
 Sale Contract
Ascertained goods unascertained goods

Are there express terms on Are there express terms on

transfer of ownership? transfer of ownership?
If yes, follow. If yes, follow it.
If not If not

Are there implied terms on Are there implied terms on

transfer of ownership? transfer of ownership?
If yes, follow it. If yes, follow it.
If not If not

Ownership transferred the very Ownership will transfers when

time the contract got made. goods get ascertained and
committed to the contract.
Risk, delivery and Ownership
 Case: Sale and Transportation
Niraj settled on a TV and paid the price. As the TV
was bulky, he expected the shopkeeper to deliver it
to his place. The shop said they could organise it in
the afternoon. The shop called him in the afternoon
and said that they have loaded it on a three wheeler
and Niraj should settle on the carriage charges with
the driver. Niraj was unhappy with the petty
behaviour of the shop. He had bought a TV for Rs.
90, 000 without bargaining and negotiating. The
least the shop could have done is provided free
carriage.
 … cond
A car hit the three wheeler at a cross section and
the TV screen broke.

Niraj is insisting that the shopkeeper give him a new

television while the shopkeeper says that the carrier
was carrying the television for Niraj.
 Risk, Carriage and Insurance
In all transactions thereafter Niraj was cautious and
asked the question:

Who pays for transportation?

Who pays for insurance?
Who bears the risk of damage?
Traders had developed trade terms to
allocate carriage cost, insurance and
risk between the buyer and seller.
International Chamber of Commerce had
systematised and revised these terms as
Incoterms

The last revision of incoterm is- Incoterm 2020

 Incoterms
All Modes of CIP – CARRIAGE AND INSURANCE PAID
Transportation TO
CPT – CARRIAGE PAID TO
DAP – DELIVERED AT PLACE
DPU – DELIVERY AT PLACE UNLOADED
DDP - DELIVERED DUTY PAID
EXW – EX WORKS
FCA - FREE CARRIER
Sea and CFR - COST AND FREIGHT
inland CIF – COST, INSURANCE AND FREIGHT
waterways FAS – FREE ALONGSIDE SHIP
FOB – FREE ON BOARD
 E Term

Buyer bears all costs and risk

Seller Buyer

0 100%

Responsibility of the seller

 D Term

Seller bears all costs and risk

Seller Buyer

0 100%

Responsibility of the seller

 F Terms

Buyer bears most costs

Seller Buyer
Point of shipment
0 100%

Responsibility of the seller

 C Terms

Seller bears most costs

Seller Buyer
Point of shipment
0 100%

Responsibility of the seller

Seller Buyer
E F C D
0 100%

Responsibility of the seller

 Incoterms
All Modes of CIP – CARRIAGE AND INSURANCE PAID
Transportation TO
CPT – CARRIAGE PAID TO
DAP – DELIVERED AT PLACE
DUP – DELIVERY AT PLACE UNLOADED
DDP - DELIVERED DUTY PAID
EXW – EX WORKS
FCA - FREE CARRIER
Sea and CFR - COST AND FREIGHT
inland CIF – COST, INSURANCE AND FREIGHT
waterways FAS – FREE ALONGSIDE SHIP
FOB – FREE ON BOARD
Video on incoterms

..\4 Sale Video\1 Final clip.wmv

 Incoterm

Incoterm does not

settles in express terms
transfer of ownership.

Is it implied?
 Sale Contract
Buyer: in Surat
Seller: in Manchester
Shipment terms: FOB Bristol.

What can we infer on transfer of ownership?

 FOB Bristol

Shipment point Arrival point

Seller Buyer

Manchester Bristol Mumbai Surat

 FOB Bristol

a. Transportation costs Seller up to Bristol.

and insurance Buyer Bristol onwards

Seller Buyer

Seller Buyer

Manchester Bristol Mumbai Surat

 FOB Bristol

Delivery and passing of At Bristol, on loading

risk. on to the ship.

Seller Buyer

Manchester Bristol Mumbai Surat

 Sale Contract
Buyer: in Surat
Seller: in Manchester
Shipment terms: FOB Bristol.

Transfer of ownership:
No express provision in the contract

Is the transfer of ownership implied? Yes

Ownership transfer in Bristol.

Contract must provide
in express terms on
transfer of ownership.
A contract where the seller has some
bargaining power, has a clause to this effect:

The ownership in the goods will remain with

the seller till the purchase price for the goods is
paid in full and received by the seller.
Clause 16 in the GCC

Ownership to transfer only on payment, protection

of the goods and the rights of the buyer to access,
re-possess and resell.
 Exercise
Sale and Transfer of Ownership- Cases
 Auction of Antique Vase
Is the sale of a specific vase? Yes.

Are there express terms Yes. On delivery

on the passing of property?

Are there implied terms

on passing of property?

When did the ownership

transfer to the buyer? June 5, when the buyer
took delivery
 Purchase of machine
Is the sale for a Yes. The secondhand
specific machine? machine.

Are there express terms No

on the passing of property?

Are there implied terms Yes. When goods given

on passing of property? to the carrier.

Where did the ownership

Mumbai, when given
transfer to the buyer?
to the carrier.
 Recall

Auction of Painting
We did this in session 2-3 to conclude
that an auction can be without express
terms. The bidders offer and the
auctioneer accepts.
Is the sale of a specific painting?
Yes. The very sketch done by the painter.

There are no express terms for the sale. Are there

implied terms on passing of property?

No communication has taken place between the

parties. There are no implied terms.

When does the ownership transfer?

The very time the contract was made. The contract
was made when the painter said: “It is yours.”
 Sale of Painting ‘August’
Is the sale for a specific painting? Yes

Are there express terms No

on the passing of property?

Are there implied terms

No
on passing of property?
Ownership transferred when the contract was made on
the webpage.
Who was the owner when
the painting got destroyed? Buyer
 Bus Sale
Is the sale for a specific identified bus? No

Are there express terms Yes, only on payment

on the passing of property?

Are there implied terms

on passing of property?

Who was the owner on June 14? Seller

 Shalimar Chemical Work
Is the sale for No. Unascertained
Specific coconuts?

Are there express terms No

on the passing of property?

Are there implied terms Yes. When goods given

on passing of property? to the carrier.

Where did the ownership

Kerala, when given
transfer to the buyer?
to the carrier.
 Sale of Print ‘Monsoon’
Is the sale for a specific No
Copy of the print?

Are there express terms

on the passing of property? No

Are there implied terms

No
on passing of property?

Ownership will transfer when a print is committed to

the contract by delivering to the buyer.
Who was the owner when
the painting got destroyed? Seller
 Gold Coins
A person can be the owner of only ascertained
goods.

Are the gold coins of a

No
certificate holder ascertained?

Then, the company is the owner of the

inventory of the gold coins.
End