law unit sale of goods

8/2/2019 LAW UNIT Sale of Goods

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Sale of Goods Act, 1930

UNIT III


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Contract of Sale

Sec 4(2)

A Contract of Sale is a contract

whereby the seller transfers or agreesto transfer the property in the goods to

the buyer for a price.

Contract of sale includes agreement to

sell.


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Sale Vs. Agreement to sell.

1. Transfer of property is

immediate

2. Goods are existing or

specific.

3. Risk of loss is of the

buyer even though the

possession of the goods

is with the seller.

4. The buyer has a rightagainst the whole world

1. Transfer of property is

at a future date.

2. Goods are future and

contingent goods

3. Risk of loss is of the

seller even though the

possession of the goods

is with the buyer.

4. The buyer has a rightonly against the seller.


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Sale Agreement to sell

1. If the buyer fails to

pay the price of the

goods the seller can

sue for the priceeven though the

goods are in his

possession

2. The seller has noright to resell the

goods.

1. The seller can only sue for

damages and not for the

price even though the

goods are in the

possession of the buyer.

2. The seller has a right to

resell because ownershiphas not passed on.


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Sale Agreement to sell

1. In case of insolvency of

the buyer, the seller in

the absence of lien over

the goods, must give

the goods to the officialreceiver


the seller, the buyer is

entitled to recover thegoods from the official

receiver


the buyer, the seller is not

bound to part with the

goods


the seller, the buyer who

has paid the price cannotclaim for the goods


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Sale Vs hire purchase agreement

1. Ownership istransferredimmediately

2. The position of the

buyer is that of theowner.

3. The buyer cannotterminate a contract

4. If the payment is madein installments, theamount to be paid getsreduced.

1. Ownership is transferredfrom a seller to hirepurchaser only afterpaying certaininstallments.

2. The position of the hirepurchaser is that of abailee.

3. The hire purchaser hasan option to terminatethe contract at any

stage.4. The installments are

rentals till the option topurchase the property isavailed.


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Essentials of sale

1. Two parties- buyer and seller

2. Transfer of ownership (general

property)3. Goods

4. Price

5. Essentials of a valid contract.


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Goods.

Sec 2(7)

every kind of moveable property other

than actionable claims and money isgoods; and includes stocks and shares,

growing crops and grass and anything

attached to land which can be detached

from land at the time of sale.


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Classification of goods:-

Existing goods Future goodsContingent

goods

Specific

goods

Ascertained

goods

Unascertained

goods


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Difference between condition and

warranty

Difference as to value.

Difference as to breach.

Difference as to treatment.


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Express and implied conditions

and warranties

Express conditions

Implied conditions:-

1. Condition as to title. sec 14

2. Sale by description. Sec153. Condition as to quality and fitness. sec 16.

4. Condition as to merchantability.

5. Condition implied by custom

6. Sale by sample

7. Condition as to wholesomeness.


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Sale by description. Sec15

It may include the following situations:-

1. Where the buyer has not seen the goodsbut relies on the description of the seller.

2. When the buyer has seen the goods but

relies on the description given by the

seller.3. Packing of goods may sometimes be a

part of the description.


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3. Condition as to quality and fitness:-

Points to be noted.:-1. Where the buyer makes known to the seller the purpose for which he needs the goods and depends on the skilland judgment of the seller.

2. If the buyer purchasing an article for a particular use issuffering from an abnormality and it is not made known tothe seller implied condition as to fitness does not apply.

3. In case the goods can be used for a number of purposes,the buyer must tell the seller the particular purpose for

which he requires the goods.

4. If the buyer purchases an article under its trade name, theimplied condition that articles are fit shall not apply,unless the buyer relies onsellersskill or judgement


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Implied warranties

Warranty of quiet possession

Warranty of freedom from encumbrances.

Warranty to disclose the dangerous nature

of goods.


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Caveat emptor

Means buyer beware

Exceptions :-

Fitness for buyers purpose. Sale under a patent or a trade name.

Merchantable quality

Consent by fraud.


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Performance of a contract.

Meaning of performance.

Delivery of goods

it means voluntary transfer ofpossession of goods from one person to

the other.

Delivery of goods may beActual delivery

Symbolicdelivery

Constructive

delivery.


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Rules of delivery

1. Mode of delivery

2. Delivery and payment are concurrent .

3. Effect of part delivery is same as that of whole delivery if itis so intended and agreed

4. Buyer to apply for delivery.5. Place of delivery

6. Time of delivery

7. Goods in the possession of the third party.

8. Cost of delivery.

9. Delivery of a wrong quantity.10. Installment deliveries.

11. Delivery to a carrier.


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Rights and duties of the buyer.

Rights:-

Right to have delivery as per the contract.

Right to reject the goods

Right to repudiate

Right to notice of insurance. Right to examine.

Right against the seller for breach of contract:-

1. Suit for damages

2. Suit for price

3. Suit for specific performance.4. Suit for breach of warranty.

5. Suit for interest.

6. Repudiation of the contract before the due date.


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Duties of the buyer

Duty to accept the goods and pay for

them.

Duty to apply for delivery. Duty to demand delivery at reasonable

hour.

Duty to intimate to the seller when he

rejects the goods.

Duty to pay damages for breach.


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Rights of an unpaid seller

A seller of goods will be deemed to be

an unpaid seller if :

The whole of the price has not been made.

The payment has been made by a bill of

exchange or other negotiable instrument that

has got dishonored.


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Against the goods Against the buyer personally

When theproperty

in goodshaspassed

When theproperty in

goods has notpassed

LienStoppage in transit

Re-sale

Rights of an Unpaid Seller

Suit for price Suit for Damages

for non acceptance

Repudiation ofcontract before

due date

Suit forinterest

Withholdingdelivery

Stoppagein transit


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Auction Sales

Rules of auction sales:

1. Goods put up for sale in lots each lot is treatedas a separate contract.

2. Completion of sale.

3. Right of the seller to bid.4. Reserve price.

5. Use of pretended bidding is voidable at theoption of the buyer.

6. Knock out agreement not to bid against eachother.

7. Damping.

8. Implied warranties in an auction sale.


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Auction Sales

Implied warranties in an auction sale

He warrants that he has authority to sell

He also warrants that he does not know ofany defect in the title of his principal

He undertakes to give possession of the goods

against the price paid to him

He guarantees the quiet possession of thegoods by the purchaser

law unit sale of goods

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