Subject Matter Of Sales Of Goods

The subject-matter of the contract must be GOODS. ‘Goods’ means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass and things attached to or forming part of that land which are agreed to be severed before sale or under the contract of sale.

Specific Goods Perishing Before Contract SPECIFIE NATURE OF GOODS DESTROY OR DETERIORATED(NOT MATCH TO DESCRIPTION)

without seller knowledge, THE CONTRACT BECOME VOID. THIS RULE APPLY TO ASCERTAINED GOODS NOT TO

UNASCERTAINED GOODS

DESTUCTION OF PARTS OF GOODS SOLD

WHEN GOODS DESTROY IN PARTS ,THE PERFORMANCE OF CONTRACT DEPENDS ON :-

1.WHETHER CONTRACT IS

DIVISIBLE •CONTRACT IS NOT VOID

2.WHETHER CONTRACT IS INDIVISIBLE •CONTRACT

BECOME VOID

BARROW LANE &

BAILARD LTD.V/S

PHILLIP & CO.

What happens if the goods are damaged or lost before or after their property is passed on to the buyer?

EFFECTS OF DESTRUCTION OF GOODS

EFFECTS OF PERISHING OF SPECIFIC GOODS

GOODS PERISHING BEFORE MAKING OF CONTRACT .GOODS PERISHING BEFORE SALE BUT AFTER AGREEMENT TO SALE.

In case of destruction of unascertained goods , the contract will not be void.

EEFECTS OF PERISHING OF UNASCERTAINED GOODS

If the future goods are specific, the destruction of such goods will amount to supervening impossibility and the contract shall be void.

DESTRUCTION OF FUTURE GOODS

CAVEAT EMPTOR

Cavaet Emptor is the latin for ‘let the buyer beware’. It is the basic premise that the buyer buy at his/her own risk and

therefore should examine and test a product himself/herself for obvious defects and imperfections.

Cavaet Emptor still applies even if purchase is “as is” or when a defect is obvious upon reasonable inspection before purchase.

Recently, consumer protection laws have stated that the seller is to held a higher standard of disclosure when the defects of a product cannot be identified through casual inspection.

DEFINITION

Purchase By Description: The rule of caveat emptor does not apply in a case where goods are brought by description from a seller

Purchase by samples and Description: Where goods are bought by samples as well as by description and the bulk

of goods do not correspond with the description, the buyer is entitled to reject the goods.

Fitness for purpose: Where the buyer informs the seller the particular purpose for which the

goods are required and relies upon seller’s skill or judgement.

EXCEPTIONS

Trade Name: In case of a contract for a specified article under it’s patent or other trade

name, there is no implied condition as to it’s fitness for any particular purpose.

Merchantable Quality Where the goods are brought by description from a seller who deals in goods

of that description. Whether he is a manufacturer or producer or not, there is an implied condition that the goods should be of merchantable quality.

Usage of Trade Where the usage or trade annexes an implied condition or warranty as to

quality or fitness for a particular purpose and seller deviates from that, then this rule of Caveat Emptor does not apply.

Sale By Sample In a sale of goods by sample. The rule of caveat emptor does not apply if

the bulk does not correspond with the sample, or if the buyer is not given an opportunity to compare bulk with the sample.

Consent By Fraud Where the seller makes a false statement intentionally to the buyer and

the buyer relies on it or where the seller knowingly conceals the defects in the good, the doctrine of Caveat Emptor does not apply.

In 1980, a doctor killed a 13- year old girl and buried her in the garden at the backyard of the house. But later he dismembered the body and hid the small pieces in different parts of the house.

The house was then sold to a couple, who only found the body parts after 10 years in 1990. They were completely unaware of it until then.

The initial reaction was to sell the house and they didn’t tell it to the purchasers.

All would have gone well if it wasn’t for a documentary on the television based on the murder.

CASE ON CAVEAT EMPTOR

The purchasers demanded their money back, and appealed to the court for money.

But as Caveat emptor took the role as a villain, the purchasers never got their money back. They had to leave the house.

GOODS AND ITS CLASSIFICATION

DEFINITION OF GOODS:

Goods' is defined as per Section 2 (7) of the 'Act' as. “Every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.”

CLASSIFICATION OF GOODS:

TYPES OF EXISTING GOODS:

 The subject matter of a contract of a sale must be goods .According to Section 2(7) the term ‘goods’ means “every kind of movable property other than actionable claims and money and includes stock and shares , growing crops , and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale”

GOODS

GOODS

EXISTING GOODS

SPECIFIC

ASCERTAINED

UNASCERTAINED

FUTURE GOODS

CONTINGENT GOODS

CLASSIFICATION OF GOODS:

 Goods to be manufactured, produced or acquired after making of the contract are called future goods.

 Goods, the acquisition of which by the seller ,depends upon an uncertain contingency are called ‘contingent goods’. 

FUTURE GOODS

CONTINGENT GOODS

ELEMENT OF PRICE

PRICE:

PRICEMONEY

CONSIDE-RATION

FOR SALE OF

GOODS

Essential part of the contract.Expressed in terms of money.Can be fixed on a later date

ASCERTAINMENT OF PRICE AGREEMENT TO SELL AT VALUATION

Price fixed at the time of contract itself Price is to be fixed by the valuation of the third party•If the third party does not make valuation ,the agreement becomes void.•If the third party is prevented from making the valuation, the party not in fault may maintain a suit for the damages against the party in fault

Left to be fixed in an agreed manner

Left to be determined by the course of dealing between the two parties

nothing is said by the parties regarding price, the buyer must pay a reasonable price

CASE STUDY

THE CASE & PARTIES INVOLVED

ABOUT THE PETITIONER AND RESPONDENT Petitioner- M/S JCL international ltd. JCL provides solution for supply and distribution of

LPG as domestic, industrial and automotive fuel. They carry out LPG bottling for Shell, Bharat Petroleum Corporation Ltd.

Respondent - Bharat Petroleum Corporation Ltd. Bharat Petroleum Corporation Ltd. (BPCL) is one of

the largest public sector oil marketing company in India.

SEQUENCE OF EVENTS

SEQUENCE OF EVENTS

SEQUENCE OF EVENTS

THE JUDGEMENT

Section 9 of the 1930 act allows the parties not to fix the price at the time of the transfer and to leave the determination of the amount of consideration to a later date.

Also re-fixing or revising of the price was done with the due notice and /or in breach of terms and condition of the contract and/or statutory provision

Thus, considering the provisions of sales of goods act and the contract act, the fixation of provisional price cannot be stated to be impermissible and creates no rights in favour of JCL’s claims.

VERDICT

Dispute

Dispute

Dispute

Dispute

Dispute

….as a result

Court Verdict