sale of goods
TRANSCRIPT
A Presentation On
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DEFINITION
Goods means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass and things attached and forming part of lands which are agreed to be served before sale or under the contract of sale. Section 2(7).
• Existing goods- Section 6(1) These are the goods which are in existence and are physically present in the seller’s possession.
• Specific goods- Section 2(14) – These are the goods identified and agreed upon at the time the contract is made.
• Ascertained goods- These are identified after the formation of the contract.
• Unascertained goods- These are the goods which are not specifically identified or agreed upon at the time of the contract of sale.
• Future goods – Section 2(6) Goods which are to be manufactured or produced or acquired by the seller after making contract of sale.
• Contingent goods- Section 6(2).
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KINDS OF GOODS:
• A Contract only if the ownership of goods is transferred from one person to another immediately at the time of formation of contract or subsequent to formation of contract;
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The Sale of Goods Act shall apply to
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Bailment of goods;
Pledge of goods ;
Any contract relating to immovable property
Contract of work and skill
Sale of Goods Act shall not apply to
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1) Express – which are expressly provided in thecontract.
2) Implied- which the law implies into the contract unless the parties stipulate to the contrary.
Types of conditions and warranties
1. Condition as to title [sec.14(a)] - seller has the right to sell.
2. Sale by description (sec.15)- goods shall correspond with the description.
3. Condition as to quality or fitness [sec16(1)] 4. Condition as to merchantability [sec.16(2)]5. Condition implied by custom- fitness for a
particular purpose may be annexed by the usage of trade [sec.16(3)]
6. Sale by sample (sec.17)7. Condition as to wholesomeness
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Implied Conditions
Implied Warranties
1. Warranty of quiet possession [sec.14(b)].2. Warranty of freedom from encumbrances [sec.14(c)].3. Warranty as to quality or fitness by usage of trade
[sec16(4)].4. Warranty to disclose dangerous nature of goods.
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Suit for damages for breach of warranty
Where there is a breach of warranty, the buyer is entitled to sue for damages if he had paid the price to the seller. But if he has not paid the price yet, he may ask the seller for a reasonable reduction in the price. (Sec. 59)
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TRANSFER OF PROPERTY
• Goods must be ascertained• Specific goods in a deliverable state• Specific goods to be put in a deliverable state• Specific goods in a deliverable state when the
seller has to do anything thereto in order to ascertain price
• Sale of unascertained goods and appropriation• Goods sent on approval or “ on sale or return”• Reservation of right of disposal • Risk prima facie passes with the property
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TRANSFER OF TITLE• The general rule “ no one can give that which one
has not got”• Sale by person not the owner – “effect of estoppel”• Sale by mercantile agent• Sale by one of joint owners• Sale by person in possession under voidable contract• Seller in possession after sale• Buyer in possession after sale• Sale by an unpaid seller
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Doctrine of Caveat Emptor [Sec 16]
The doctrine of caveat emptor is a fundamental principle of law of sale of goods. It means ‘Caution Buyer’ i.e. ‘let the buyer beware’. In other words, it is no part of the seller’s duty to point out defects in his own goods. The buyer must inspect the goods to find out if they will suit his purpose e.g. certain pigs are sold ‘subject to all faults’. These pigs being infected cause typhoid to the other healthy pigs of the buyer. The rule of caveat emptor would apply.
EXCEPTIONS TO THE DOCTRINE OF CAVEAT EMPTOR
(i) Condition as to Quality or Fitness for Buyer’s
purpose
(ii) Where the seller makes a false representation or
obtains consent of the buyer by fraud
(iii) Condition as to Merchantability
(iv) Condition as to Wholesomeness
(v) Condition implied by the Custom or Trade Usage
The seller of goods is deemed to be unpaid (Sec. 45-1)I. When whole of the price has not been paid of tendered.II. When the bill of exchange or negotiable instrument has
been received as a condition of payment and the condition on which it was received has not been fulfilled by the reason on dishonor of the instrument or otherwise.
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UNPAID SELLER
Features of the Unpaid Seller
I. He must sell goods on the cash basis and must be unpaid.II. If he sells on credit basis, he is not an unpaid seller during the period of
credit.III. The term of credit has expired and the price has not been paid to him.IV. He must be unpaid wholly or partially. If a part of price remains unpaid, he
is unpaid.V. When the price is paid in the form of negotiable instruments and it has
been dishonored.VI. If buyer offers payment and seller refuses to accept, the seller is not an
unpaid seller.Example:I. Party A sells a car on cash basis to party B and the price has not been
received yet.II. A sells good to B on 5 months credit period and B turns insolvent after 2
months.III. A sells TV set to B on the same day cheque basis, the cheque is dishonored
due to insufficient funds. A is an unpaid seller. 15
Rights of an Unpaid Seller
The unpaid seller has following rights:1) Rights against the goods.i. Rights of lienii. Right of stoppage of goods in transitiii. Right of rescale2) Rights against buyer personallyi. Suit for priceii. Suit for damages for non-acceptanceiii. Suit for special damages and interest
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I. When the goods reaches the destination.II. While the buyer or his agent takes possession of delivery even if it is
not reached destination.III. In case the carrier is agent of the buyer, the transit comes to an end
the instance carrier receives the goods and seller can not stop the transition
IV. Carrier’s wrongful refusal to deliver goods to the buyer.Example:“A” sells TV set to “B”. “A” delivers the TV to the carrier to carry it to
“B”. Later on gets news that “B” has become insolvent; “A” can stop delivery.
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The unpaid seller can not stop goods in transit in following cases:
