7.sale of goods act

7/29/2019 7.Sale of Goods Act

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The Contract of SaleDefinition:

Section 4(1) of Sale of Goods Act defines acontract of sale as a contract whereby aseller transfers or agrees to transfer the

property in goods to the buyer for a price. Includes Sale and agreement of Sell


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Essentials of a contract of Sale

Two parties- buyer Sec.2(1),seller Sec.2(13)

GoodsPrice or Money consideration

Transfer of Property general

Essential elements of a valid contract


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TYPES OF GOODS 1) EXISTING GOODS:

Specific goods

Ascertained goodsUnascertained goods

2) FUTURE GOODS

3) CONTIGENT GOODS


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Sale and agreement to sell-

distinction Transfer of property

Type of goods a)Existing specific, ascertained

unascertained c) Future goods d) contingent goods Risk of loss

Consequences of breach

Right to re-sell

General and particular property

Insolvency of buyer

Insolvency of seller


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Sale and hire-purchase agreementOwnership

Position

Termination of contract

Payment


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CONDITION[SEC-12(2)]-: Condition defines as astipulation essential to the main purpose of thecontract , the breach of which gives rise to a treat thecontract as repudiated

WARRANTY[SEC-12(3)]-: Warranty is defined as a

stipulation collateral to the main purpose of thecontract, the breach of which gives rise to claim for butnot to a right to reject the goods & treat the contract asrepudiated


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EXPRESS & IMPLIED CONDITIONS

& WARRANTIES EXPRESS CONDITIONS & WARRANTIES-:They are

said to the express when the terms of the contractexpressly provide to them

IMPLIED CONDITIONS & WARRANTIES-:They aresaid to be implied when the laws deems theirexistence in the contract even without their actuallyhave been put in contract


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IMPLIED CONDITIONS

CONDITION AS TO TITLE(S-14) ex- stolen car

SALE BY DECCRIPTION (S-15) ex- 100% cotton shirt

QUALITY OR FITNESS FOR BUYER PURPOSE(S-16 (1) )

CONDITION TO MERCHANTABLE QUALITY (S-16 (2) )

CONDITION AS TO WHOLESOMENESS(eatables&provisions)CONDITION IN THE CASE OF SAMPLE (S-17)


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IMPLIED WARRANTIESWARRANTY OF QUIET POSSESION [SEC-14(b)]

WARRANTY OF FREEDOM FROM ENCUMBRANCE

[SEC-14(c) ]

WARRANTY TO DISCLOSE DANGEROUS NATURE OFGOODS

CAVEAT EMPTORLet the buyer beware


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Rights of an Unpaid Seller Who is an unpaid seller?

1) The whole of the price has not been paid

2) A bill of exchange or other negotiableinstrument has been received as a conditionalpayment and the condition on which it wasreceived has not been fulfilled by reason of the

dishonor of the instrument or otherwise (Sec.45(1))


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Against the goods

Against the buyer personally


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Rights of an unpaid seller against the goods Right of lien [Secs46(1)(a) and 47 to 49]

A lien is a right to possession of goodsuntil payment of the price.

It is available to the unpaid seller of the goodswho is in possession of them.


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Right of stoppage in transit [sec. 46(1) (b)

and 50 to 52] It is the right of stopping the goods in transit after the

unpaid seller has parted with the possession of thegoods.

It is available to the unpaid seller as-

1) when the buyer becomes insolvent

2) when the goods are in transit[sec.50]


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How stoppage of transit is effected [sec.52] By taking actual possession of the goods or

By giving notice of his claim to the carrier or other

bailee in whose possessions the goods are


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Right of re-sale[sec.46(1) (c)] &54 The unpaid seller can re-sell the goods-

1) Where the goods of perishable nature; or

2) Where he gives notice to the buyer of his intentionto re-sell the goods & the buyer does not within areasonable time pay the price.


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Rights of an unpaid seller against the buyer

personally These rights of the seller against the buyer are

called rights in personam. The rights in personam are as follows:

Suit for price(sec.55)a) where property has passedb) where property has not passed

Suit for damages for non-acceptance ofgoods(sec.56)Repudiation of contract before due date(sec.60)Suit for interest [sec 612(a)]


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TRANSFER OF PROPERTYTransfer of property in goods from seller to buyer is the

main object of a contract of sale

Property in goods means the ownership of goods

Possession of goods refers to the custody or control ofgoods


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Rules for ascertaining when the property in

goods passes to the buyer

1.Specific goods (sec 20-22)- Passing of property at the time of contract

2. Unascertained goods The ownership does notget transferred unless the goods are

ascertained.


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3.Goods sent on approval or on sale or return(sec.24)

- Signifies his approval to the seller- Does any other act adopting the transaction

Eg: pledging jewellery

- Does not signify his acceptance


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Performance of Contract Performance of a contract of sale means as regards the

seller, delivery of the goods to the buyer, and as regard thebuyer, acceptance of the delivery of the goods and payment

for them, in accordance with the terms of the contract ofsale[Sec. 31]

If the contract contains any special terms as to delivery andacceptance, these must be compiled with. If there are no

terms in the contract to this effect , delivery of goods andpayment of the price are concurrent condition, that is, boththese must take place at the same time as in, for instance, acash sale over a shop counter[Sec. 32]


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Delivery of Goods Delivery means voluntary transfer of possession of

goods from one person to another

Delivery goods may be

Actual delivery

Symbolic delivery

Constructive delivery or delivery by attornment


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Rules as to delivery of goods1. Mode of delivery

2. Delivery and payment-concurrent condition

3. Buyer to apply for delivery4. Place of delivery

5. Time of delivery

6. Goods in possession of a third party

7. Cost of delivery

8. Delivery of wrong quantity

9. Instalment deliveries


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Auction SalesAuction sale is a mode of sale where different buyers

come to purchase the goods, and the goods are sold tothe person who is ready to pay the highest price

The auctioneer who sells the goods by auction is anagent of the seller

Normally the auctioneer gives wide publicity to the

auction and fixes a time and place for it


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The various rules regarding auction

sale are as follow: Goods put up for sell in lots

Completion of sale

Right of seller to bid Fraudulent sale

Auction sale with upset or reserve price (minimumprice that is fixed by the seller)

Knock out or agreement not to bid against each other. Damping illegal act dissuading the intending

purchaser from bidding

7.sale of goods act

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