sales of goods act.ppt

8/20/2019 sales of goods act.ppt

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Introduction General Principles

Meaning of Contract of Sale Distinction between Sale and Agreement to Sell Essentials of Contract of Sale Goods Perishing of goods Price

Transfer of Ownership Importance of Transfer of Ownership Rles regarding Transfer of Ownership

!npaid seller and his rights Conditions and warranties

Meaning of Conditions and "arranties Di#erence between Condition and "arrant$ E%press and Implied Conditions and "arranties Doctrine of &Ca'eat Emptor(

Action of Sale

2



The law relating to sale and prchase of goods)

prior to *+,- were dealt b$ the Indian Contract

Act) *./01

In *+,-) Sections /2 to *0, of the Contract Actwas repealed and a separate Act 3nown as the

Sale of Goods Act) *+,- was passed This act la$s down special pro'isions go'erning

the contract of sales of goods 1The general law ofcontract is also applicable to the contracts for the

sale of goods nless the$ are inconsistent with

the e%press pro'isions of the Sale of Goods Act

3



MEANING OF CONTRACT OF SALE According to Section 4 of the Act) a contract of Sale

means &a contract where the seller transfers oragrees to transfer the propert$ in goods to theb$er for price(

Contract of Sale ma$ be of two t$pes

4SA5E AGREEME6T TO SE55

CO6TRACTO7

SA5E



5

SA5E It is a contract where the ownership in the goods is transferred

b$ seller to the b$er immediatel$ at the conclsion contractE!AMPLE8 A sells his hose to 9 for Rs1 *-)--)---1 It is a sale

since the ownership of the hose has been transferred from A to91

AGREEME6T TO SE55 It is a contract of sale where the transfer of propert$ in goods is

to ta3e place at a ftre date or sb:ect to some conditionthereafter to be fl;lled1

E!AMPLE8 A agreed to b$ from 9 a certain <antit$ of nitrate of

soda1 The ship carr$ing the nitrate of soda was $et to arri'e1 This is =an agreement to sale=1 In this case) the ownership ofnitrate of soda is to be to transferred to A on the arri'al of theship containing the speci;ed goods >i1e1 nitrate of soda?@ "ohnson # Mc$onald >*.40? + M " 2--) 2- RR .,.B



6

%ASIS SALE AGREEMENT TO SELL

&' Transfer of

propert(

The propert$ of goodspasses from the seller tothe b$er immediatel$1 Sothe seller is no moreowner of the goods sold1It is an e%ected

contract1

The transfer of propert$ ofthe goods is to ta3e placeat a ftre time or sb:ectto certain conditions to befl;lled1 It is an e%ector$contract1

)' T(pe of*oods

A sale can onl$ be in caseof e%isting and speci;cgoods onl$1

An agreement to sell ismostl$ in case of ftreand contingent goods> associated ordependent ?1 Althogh it

ma$ refer to ncertaine%isting goods1

+' Ris, of loss

In a sale if the goods aredestro$ed ) the loss fallson the b$er e'en thogh

the goods are in theposssession of the seller1

In an Agreement to Sell ifthe goods are destro$edthe loss falls on the seller

e'en thogh the goods arein the posssession of the



%ASIS SALE AGREEMENT TO SELL

-'Conse.uences

of the/reach

In a sale the b$er fails topa$ the price of goods >or?if there is a breach of

contract b$ the b$er theseller can se for the pricee'en thogh the goods arestill in his possession

If there is a breach ofcontract b$ the b$er theseller can onl$ se for

the damages and not forthe price1

0' Ri*ht toresale

In a sale the seller cannotresell the goods1

The b$er who ta3es thegoods for considerationand withot notice of theprior agreement gets hima good title1 The originalb$er can onl$ se theseller for damages1

1' Generaland

particularpropert(

The sale of contract plscon'e$ance and createsFs in rem i1e1) gi'es rightto the b$er to en:o$ thegoods as against the wordand large inclding the

seller1

An agreement to sell ismerel$ a contract preand simple and createsFs in personam i1e1)gi'es a right to the b$eragainst the seller to se

for the damages17



%ASIS SALEAGREEMENT TO

SELL

2' Insol3enc( of/u(er

In a sale if the b$er

becomes insol'entbefore he pa$s forgoods) the seller in theabsence of the lieno'er the goods) mstretrn them to the

oHcial recei'er orassignee1 e can onl$claim the reteabledi'idend for the priceof the goods1

In an Agreement to

Sell ) If the b$erbecomes insol'entand has not $et paidthe price the seller isnot bond to part withthe goods ntil he is

paid for1

4' Insol3enc( of theseller

In a sale the sellerbecomes insol'ent)the b$er being theowner is entitled toreco'er the goodsfrom the oHcialrecei'er of theassignee1

If the b$er who haspaid the price) ;ndsthat the seller hasbecome insol'ent hecan onl$ claim areteable di'idend andnot the goods becasepropert$ in them has

8



ESSENTIALS OF CONTRACT OF SALE

Two parties There mst be two parties a b$er and a seller toconstitte a contract of sale1

Goods Contract of sale relates to goods i1e1) mo'able propert$ 1 Transaction in'ol'ing prchase and sale of immo'able propert$are ot of the pr'iew of the Sale of Goods Act1

Transfer of *eneral propert( The ob:ect of the contract mstbe the transfer of general propert$ as distingished from thespecial propert$ in the goods b$ one person to another1 The termgeneral propert$ refers to ownership of goods1

Price The consideration for the contract of sale called price mstbe mone$1

Essential ele5ents of a 3alid contract All the essentialelements of a 'alid contract mst be present in the contract of

sale19



GOODSDe;nition8

The sb:ect matter of a contract of a sale mst be goods 1

According to Section 0>/? the term goods means &e'er$ 3ind of mo'able propert$ other than actionable claims and mone$ andincldes stoc3 and shares ) growing crops ) and things attached toor forming part of the land which are agreed to be se'ered beforesale or nder the contract of sale( T$pes of goods8

10

GOODS

E%itinggoods

7tregoods

Contingentgoods

Speci;c

Ascertain

ed

!nascertained



&' E6istin* *oods These are the goods which are ownedor possessed b$ the seller at the time of sale1 Onl$e%isting goods can be the sb:ect of a sale1 The e%isting

goods ma$ be a? Speci;c goods8 Goods identi;ed and agreed pon at

thetime of ma3ing of the contract of sale of goods1

b? Ascertained goods8 Goods identi;ed sbse<ent to theformation of the contract of sale1 The terms ascertainedand speci;c) are commonl$ sed for same 3ind of goods1

c? !nascertained or generic goods8 Goods not identi;ed oragreed pon at the time of ma3ing of the contract ofsale1 The$ are the goods de;ned for description onl$1

E6a5ple A who wants to b$ a tele'ision set goes to a showroomwhere for sets of Fanta model of Oscar tele'ision are displa$ed1 esees the performance of a particlar set) which he agrees to b$1

The set so agreed to be boght is a specifc set. If after ha'ingboght one set he mar3s a

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particlar set) the set so mar3ed becomes ascertained1 Till this

all is done all sets are unascertained1

)' Future *oods Goods to be manfactred)prodced or ac<ired after ma3ing of the contractare called ftre goods1

E6a5ple A contract) on *st

Fanar$) to sell 9 J- shares inReliance 5td1) to be deli'ered and paid for on the *st March ofthe same $ear1 At the time of ma3ing of the contract) A is not inpossession of an$ shares1 The contract is a contract for the saleof ftre goods1

+' Contin*ent *oods Goods) the ac<isition of which

b$ the seller )depends pon an ncertaincontingenc$ are called contingent goods1 The$ arealso a t$pe of ftre goods1

E6a5ple A agrees to sell *-- nits of an article pro'ided theship which is bringing them) reaches the port safel$1 This is an

agreement for the sale ofcontingent goods1 12



Perishing of goods before ma3ing of thecontract>Sec1 /?

"here there is a contract for the sale of speci;c goods)the contract is 'oid if the goods withot the 3nowledge ofthe seller ha'e) at the time when the contract was made)perished or become so damaged as no longer to answerto their description in the contract1

Illustration Facts8 A agrees to sell to 9 a certain horse1 Ittrns ot that the horse was dead at the time ofbargain) thogh neither part$ was aware of the fact1Discss the 'alidit$ of the contract1

Solution8 The agreement is 'oid1 In case part ofgoods is perished) the following rle applies 8

>a?if contract is indi'isible) it shall be 'oidK and >b?if contract is di'isible) it will not be 'oid and the part

a'ailable in good condition mst be accepted b$ theb$er

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Goods perishing before sale bt after agreement tosell >Sec1.?

"here there is a contract for the sale of speci;c goods) thecontract is 'oid if the goods withot the 3nowledge of the sellerha'e) at the time when the contract was made) perished orbecome so damaged as no longer to answer to their description inthe contract1

Illustration Facts8 A b$er too3 a horse on a trial for *- da$s on conditionthat

if fond sitable for his prpose the bargain wold become

absolte1 The horse died on Jth da$ withot an$ falt of either

part$1 Discss the position of both parties1 Solution 8The contract ) which was in the form of an

agreement

to sell) becomes 'oid and the seller shall bear the loss1

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Sec10>*-? de;nes price &as mone$ considerationfor

a sale of goods(1 It forms an essential part of the contract1 It mst be e%pressed in terms of mone$1 It is not essential that the price shold be ;%ed

at the time of sale1 It mst) howe'er) bepa$able) thogh it ma$ not ha'e been ;%ed1

Ascertainment of price Price in a contract of sale ma$ be

;%ed b$ the contract itself) or

left to be ;%ed in an agreed manner) or

determined b$ the corse of dealing between theparties@Sec1 +>*?B

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In the absence of this) the b$er mst pa$ toseller a reasonable price1 "hat is the reasonableprice is a <estion of fact dependent on thecircmstances of each particlar case@Sec1 +>0?B

Agreement to sell at valuation "here there is an agreement to sell goods on the terms

that the price is to be ;%ed b$ the 'alation of a thirdpart$ and sch third part$ cannot or does not ma3e sch

'alation) the agreement is thereb$ a'oided1 Pro'ided that) if the goods or an$ part thereofha'e been deli'ered to) and appropriated b$) the b$er)he shall pa$ a reasonable price there for1

"here sch third part$ is pre'ented from ma3ing the

'alation b$ the falt of the seller or b$er) the part$not in falt ma$ maintain a sit for damages against thepart$ in falt1

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A contract of sale of goods in'ol'es

transfer of ownership from the seller tothe b$er1 Transfer of ownership orpropert$ in goods is in fact the mainob:ect of ma3ing a contract of sale1



It is important to 3now the precise moment

of time at which the propert$ in goods passes

from

the seller to the b$er for the followingreasons8*1 Ris3 prima acie passes with ownership8

In case of destrction of or damage to the

goods) it is the owner who has to bear the lossbecase the general rle is res perit domino’risk ollows ownership or whosoe'er is the ownermst bear the loss1 The pa$ment of the price or

possession of goods is immaterial1

ELAMP5E A t t t h ,- t f l



ELAMP5E8A contracts to prchase ,- tons of apple :ice from 919 crshes the apple) pts :ice incas3s and 3eeps them read$ for deli'er$1 A )howe'er ) dela$s to ta3e the deli'er$ and the :ice

goes ptrid and has to be thrown awa$1 A is liable to pa$ theprice@Demby Hamilton & Co. Ltd. v. Barden!"#$#% ll ' (.

$)*+

01 Action against third parties8 In case the goods

ha'e damaged b$ a third part$) it is the onl$ theowner who can ta3e action against him1,1 Insol'enc$ of the seller or the b$er8 In the

e'ent of insol'enc$ of either the seller or the

b$er) the <estion whether the OHcial Recei'eror Assignee can ta3e o'er the goods or notdepends on whether the propert$ in the goodshas passed from the seller to the b$er1

12



Goods mst be ascertained Propert$ passes when intended to pass1

For Speci7c *oods>Sec1 0- to 00?Passing of propert$ at the time of

contract>Sec10-?

"here there is an nconditional contract for the sale

of speci;c goods in a deli'erable state) the propert$in the goods passes to the b$er when the contract ismade1 ELAMP5E8 9 o#ers A for his horse a sm of

Rs1*---1The horse is to be deli'ered to 9 on a ;%edda$ and the price is to be paid on another ;%ed da$1 Aaccepts the o#er1 The horse becomes 9s propert$ assoon as the o#er is accepted1

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P i f t d l d b d th d t f th



Passing of propert$ dela$ed be$ond the date of thecontract

Goods not in a deli'erable state>Sec10*?

"here there is a contract for sale of speci;c goods not

in a deli'erable state) i1e1) the seller has to do somethingto the goods to pt them into the deli'erable state) the

propert$ does not pass ntil sch thing is done and the

b$er has notice of it1

"hen the price of goods is to be ascertained b$ weighing >Sec1 00?

"here there is a contract for sale of speci;c goods in a

deli'erable state) bt the seller is bond to weigh)

measre) test or do some other act or thing withreference to the goods for the prpose of ascertaining

the price) the propert$ does not pass ntil sch act or

thing is done and the b$er has notice thereof1

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F t i d8 9f t : d S 0,



For unascertained8 9future: *oods Sec10, In the case of a contract for a sale of nascertained or

ftre goods b$ description ) propert$ will pass from theseller to the b$er when the goods of the same description)

in a deli'erable state) are nconditionall$ appropriated to thecontract b$ one part$ with the consent of the other1 Goods sent on appro3al or 9sale or return:

Sec104 "hen the goods are deli'ered to the b$er on appro'al or

on sale or retrn basis) the propert$ in the goods will passfrom seller to the b$er) when an$ of the following conditionsare satis;ed1

The b$er accepts the goods) or The b$er does something which is similar to his act of accepting the

goods) e1g1) pledges the goods or sells awa$ the goods) or The b$er retains the goods withot gi'ing notice of re:ection

be$ond the period ;%ed or reasonable period if no time is ;%ed1

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GE6ERA5 R!5E 6EMO DAT 6O6 A9ET

6o one can gi'e that which he has not To protect propert$ rights1 ELCEPTIO6S8

Transfer of title b$ Estoppel1>Sec10/?

Sale b$ Mercantile Agent1>Sec1 0/? Sale b$ :oint ownercoowner>Sec10.? Sale b$ person in possession nder 'oidable

contract1 >Sec10+?

Sale b$ a seller in possession after sale1>Sec1,->*?? Sale b$ a b$er in possession of goods1>Sec1,->0?? Sale b$ an !npaid Seller1>Sec1 J4?

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24

;NPAI$ SELLER<Seller < A person who sells the goods or agrees to

sell the goods is called seller1;npaid < It means pa$ment is not made or withotpa$ment1 In simple words) N!npaid sellerN means a person who

has soldthe goods for a price bt price has not been paid to him1,ales act defnes the -unpaid seller- in the ollowin words 8;npaid Seller Is A Person <i' To whom the whole price has not been paid or tendered1ii' And where a bill of e%change or other negotiable

instrments has been accepted b$ him as a condition onwhich it was recei'ed has not been fl;lled b$ reason ofdishonor of the instrment or otherwise1

ELAMP5E8 Part$ A sells a car on cash basis to part$ 9 and the price has not been recei'ed $et1



25

Rights of npaidseller

Right againstgoods

Right against the b$erpersonall$

"hen the propert$ inthe goods has beentransferred

Right of5ienRight of stoppagein goods in transit

Right toresale

"hen the propert$ in thegoods has not beentransferred

Right of withholdingdeli'er$

Sit forprice

Sit for damages fornon acceptance

Sit for specialdamage and interest



26

. /hen the property in the oods has beentranserred

&'RIG>T OF LIEN?Sec -1@&@a and -2 to-B

The right of lien means lawfll$ right toretain the goods possession ntil the fll price

is recei'ed1 An npaid seller can e%ercise his rightof lien

in following cases1Sec4/4+I1 "here the goods ha'e been sold on the cash

basis'II1 "here the goods ha'e been sold on credit basis

and the term of credit has e%pired1III1 "here the b$er has become insol'ent e'en

if the period of credit has not been e%pired1



Other rles to satisf$ the conditions for thisright are

I1 The npaid seller mst be in actal possession

of the goods sold1II1 It can be e%ercised e'en If the docments of

title ha'e been deli'ered to the b$er1III1

It can be e%ercised for the price and not forother e%penses1I1If the seller deli'ers some goods) it can be

e%ercised on the remaining

Ter5ination of ri*ht of lienSellers right of lien is terminated in following

cases1*1 "hen he deli'ers the goods to the carrier or

other baile$ for transmission to the b$er 27



28

2. When the buyer or his agent lawfully obtains the

possession of the goods.

3. When seller waies his right of lien on the goods.

4. !he right of lien on"e lost will not be restored.

5. When the buyer further sells the goods and the

seller agrees.

Example: # seller $%& sells a !' set to $(& and deliers it

to $(& and sin"e the !' set was not fun"tioning

properly ) $(& deliered it ba"* to $%& for the

repairs. +t was held that $%& "an not e,er"ise hisright of lien oer !' set.



)'RIG>T OF STOPPAGE IN TRANSIT?Sec' 0D t0)

It means stoppage of goods while

the$ are in transit to ta3e possessionntil the price is paid >sec1J-J0?

!npaid seller can stop the goods in transit in

the following cases1*1 "hile the b$er becomes insol'ent1

01 "hile the goods are ot of actal possession ofseller) bt ha'e not reached b$ers possession

i1e1 goods are in transit with career1,1 The npaid seller can stop the goods in transit

onl$ for pa$ment of the price of the goods andnot for an$ other charges1

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The npaid seller can not stop goods in transitin following cases1

*1 "hen the goods reaches the destination1

01 "hile the b$er or his agent ta3es possessionof deli'er$ e'en if it is not reached destination1

,1 In case the carrier is agent of the b$er) the

transit comes to an end the instance carrierrecei'es the goods and seller can not stop thetransition1

41 Carriers wrongfl refsal to deli'er goods to

the b$erE6a5ple8(A( sells T set to &9(1 &A( deli'ers the T to the carrier to carr$ it to &9(1 5ater on getsnews that &9( has become insol'entK&A( can

stop deli'er$1 30

+ RIG>T TO RE SALE



+'RIG>T TO RE<SALE

If a b$er fails to pa$ or o#er the price within a

reasonable time) the npaid seller has the righttoresell the goods in the following circmstances1

*1 "here the goods are of perishable natre1

01 "here the npaid seller has e%ercised his rightof lien or stoppage in transit and gi'es anotice to b$er of his intension of resell thegoods1

,1 "here the npaid seller has e%pressl$reser'ed his right of resale1

41 "here seller gi'es notice to the b$er of hisintension to resell and the b$er does not pa$within a reasonable time) he can 31



a? Reco'er loss on resale of the goods) ifan$

b? Retain an$ srpls on resale of goods) ifan$

owe'er if the seller sells with ot the notice tothe b$er) he can not

a? Reco'er an$ loss of the goods) if an$b? Retain an$ srpls on the resale of the

goods) if an$

E6a5pleM( sells *-- blan3ets to &6( andgi'es him one wee3 for pa$ment1 &6( doesnot pa$1 &M( can resell those to an$ otherperson1

32

B /hen the property in oods has not been



B. /hen the property in oods has not beentranserred

RIG>T OF IT>>OL$ING $ELI#ER If the propert$ in the goods has not passed to theb$er) the npaid seller cannot e%ercise right of lien )bt gets a right of withholding the deli'er$ of goods)similar to and coe%tensi'e with lien1Ri*hts a*ainst the /u(er personall(

There are some rights which an npaid seller ma$enforce against the b$er personall$1 These rights arecalled RIGTS I6 PERSO6AM

S;IT FOR PRICE?Sec' 00

"here ownership of the goods has passed to the b$er andthe

b$er refses to pa$ the price according to the terms of the

33



contract) the seller can se the b$er for price) irrespecti'e of deli'er$ of the goods1>Sec1 JJ?

S;IT FOR $AMAGES FOR NON<$ELI#ER?Sec'01"here the b$er refses to accept and pa$ for the goods) theseller ma$ se him for damages for non acceptance1 The sellercan reco'er damages onl$ and not the fll price >Sec1 J2?

S;IT FOR SPECIAL $AMAGES AN$ INTEREST?Sec'1&

The seller can se the b$er for special damages where theparties are aware of sch damages at the time of contract1 Thenpaid seller can reco'er interest at a reasonable rate on the

totalnpaid price of goods) from the time it was de ntil it is paid1

>Sec1 2*?

34



The Sale of Goods Act gi'es the followingremedies to a

seller and b$er for a breach of a contract of sale8 Seller:s suits

Sit for price>Sec1 JJ?

Sit for damages for nonacceptance of thegoods>Sec1J2?

Sit for interest@Sec1 2*>0?>a?B %u(er:s suits

Sit for damages for nondeli'er$ of thegoods>Sec1J/?

Sit for speci;c performance>Sec1J.?

Sit for breach of warrant$>Sec1J+?

Sit for interest@Sec12*>0?>a?B35



MEANING OF CONDITION AND ARRANT! A stiplation in a contract of sale with reference

to goods which are the sb:ect thereof ma$ bea condition or a warrant$@Sec1 *0>*?B1

Condition8 A condition is a stiplation>re<irement? essential to

the main prpose of the contract) the breach of whichgi'es rise to a right to treat the contract asrepdiated1>re:ected? @Sec *0>0?B

"arrant$8 A warrant$ is a stiplation collateral to the main

prpose of the contract) breach of which gi'es rise toa claim for damages) bt not a right to re:ect thegoods and treat the contract as repdiated1 @Sec

*0>,?B 36

"hen condition to be treated as warrant$@Sec *,B



"hen condition to be treated as warrant$@Sec1*,Bo"here a contract of sale is sb:ect to an$ condition

to be fl;lled b$ the seller) the b$er ma$ wai'ethe condition or elect to treat the breach of thecondition as a breach of warrant$1 @section *,>*?B1

o"here a contract of sale is not se'erable and theb$er has accepted the goods or part thereof) thebreach of an$ condition to be fl;lled b$ the sellercan onl$ be treated as a breach of warrant$ )nlessthere is a term of the contract) e%press or implied)to that e#ect1 @section *,>0?B1

o6othing in this section shall a#ect the case of an$condition or warrant$ fl;llment of which ise%csed b$ law b$ reason of impossibilit$ orotherwise1 @section *,>,?B1

37



38

%ASIS CON$ITION ARRANT &' Nature Condition is of a

fndamental natre1"arrant$ is of a sbsidiar$of inferior character1

)' #alue

Condition is essential tothe main prpose of thecontract1 The mainprpose of the contractcannot be fl;lled withotthe prior fl;llment of thisstiplation1

"arrant$ is onl$ collateralto the main prpose of thecontract1 7l;llment of themain prpose of thecontract does not dependp on the fl;llment of thewarrant$1

+' %reach

If there is breach of

condition) the aggrie'edpart$ can repdiate thecontract1

In case of breach of

warrant$) the aggrie'edpart$ can claim damagesonl$1

-' Treat5ent A breach of condition ma$be treated as a breach ofwarrant$1 This wold

happen where the

A breach of warrant$ )howe'er) cannot betreated as a breach of

condition1



39

%ASIS CON$ITION ARRANT

-' E6a5ple L sells foodst# to 1 Thecontract between L and states that the food to besold shold be ;t forconsmption and this isthe essential term in thecontract1 So) if it containsan$ poisonos sbstance)

is entitled to re:ect thefoodst# and to repdiatethe contract This essentialterm is called a condition1

On the other hand) if thecontract stiplates thatthe foodst# shold bepac3ed in * 3ilo bo% btthe seller pac3s it in half3ilo bo%) onl$ an a%iliar$or minor term of thecontract is bro3en) ma$be able to claimcompensation in respectof its breach) bt nota'oid the contract1 Schan a%iliar$ term is calledwarrant$1



Conditions and warranties ma$ be e%press orimplied1E6press condition and warranties

E%press condition and warranties are those which

ha'ebeen e%pressl$ agreed pon b$ the parties at thetime of

contract of sale

I5plied condition and warrantiesImplied condition and warranties are those which the

law incorporates into the contract nless the parties

stiplate to the contrar$1

40



41

IMP5IED

CO6DITIO6

As to Title As toDescription

As to

Sample

As to Qalit$ or

7itness

As toMerchantabilit$ As to

"holesomeness

Condition as to title?Sec' &-@a



? @ In a contract of sale) nless the circmstances of the contract

are sch as to show a di#erent intention) there is an impliedcondition on the part of the seller that

a?In the case of a sale) he has a right to sale the goods) and b?In the case of an agreement to sell) he will ha'e a right to

sell the goods at the time when the propert$ is to pass1E6a5ple R boght a car from $ and sed it for 4 months1 $ had no title to the

car and conse<entl$ R had to hand it o'er to the tre owner1 Held R coldreco'er the price paid @(owland v. Divall!"#0)%0 1.B. *22+

Condition a to description@Sec' &0 In sale by description there is an implied condition that the goods shallcorrespond with description.

This means “if you contract to sell peas, you cannot oblige the party to take beans.” Hence if the description of the article tendered is different then the buyer may not buy the goods.

42

E6a5ple A want to sell his t$pewriter e sa$s to 9 intending



E6a5ple A want to sell his t$pewriter1 e sa$s to 9 ) intending

b$er who has not ha'e seen the machine) that it is a brand newmachine1 9 agrees to prchase it 1 On deli'er$ 9 ;nds that themachine is old and repaired1 9 can repdiate the contract1

Condition as to sa5ple@Sec' &2A contract of sale is a contract for sale b$ sample where

there is a term in the contract) e%press or implied) to

that e#ect1

In a sale b$ sample) the following are the impliedconditions8

*1The bl3 shall correspond with the sample in <alit$K

01That the b$er shall ha'e a reasonable opportnit$

of comparing the bl3 with the sampleK and

,1That the goods shall be free from an$ defectsrendering

them nmerchantable) which wold not be apparenton

reasonable e%amination of the sample1 43

E6a5ple8 Certain shoes were sold b$ sample for the 7rench Arm$1



p $ p $ The shoes were fond to contain paper not disco'erable b$ ordinar$inspection1 Held the b$er was entitled to the refnd of price plsdamages1

Condition as to .ualit( or 7tness?Sec' &1 @&

6ormall$) in a contract of sale there is no implied conditionas to <alit$ or ;tness of the goods for a particlar prpose1 The b$er mst e%amine the goods thoroghl$ before he

b$s them in order to satisf$ himself1 E6a5ple An order was placed for some lorries to be

sed &for hea'$ traHc in a hill$ area(1 The lorries spplied

were n;t and brea3down1 There is a breach of condition as to ;tness1

Condition as to 5erchanta/ilit(?Sec' &1@) "here goods are boght b$ description from a seller who

deals in goods of that description there is an implied

condition that the goods are of merchantable <alit$1

44

This means goods shold be sch that the$ are



g $commerciall$ saleable) as per the description b$which the$ are 3nown in the mar3et at their fll 'ale.

Condition as to wholeso5eness In the case of eatables and pro'isions) in addition to

the implied condition as to merchantabilit$) there isanother implied condition that the good shall be

wholesome1 E6a5ple L prchased mil3 from ) a mil3 dealer1 The mil3

contained t$phoid germs1 Ls wife) on ta3ing the mil3) gotinfection and died1 eld) L can entitled for damages1

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46

IMP5IED "ARRA6TIES

IMPLIE$ ARRANTIES

Qiet

En:o$ment7reedom

fromEncmbrance

!sage of Trade

Dangeros6atre

arrant( of .uiet possession?Sec' &-@/'



( . p ? @ In a contract of sale) nless there is a contrar$ intention) there is

an implied warrant$ that the b$er shall ha'e and en:o$ <ietpossession of the goods1 If the b$er is in an$ wa$ distrbed in theen:o$ment of the goods in conse<ence of sellers defecti'e title tosell) he can claim damages from the seller1

arrant( of freedo5 fro5 encu5/rances?Sec' &-@c'

The goods are not sb:ect to an$ change or right in fa'or of a

third part$1 arrant( as to .ualit( or 7tness /( usa*e of trade ?Sec' &1 @-1

An implied warrant$ as to <alit$ or ;tness for a particlar prposema$ be anne%ed b$ the sage of trade1

arrant( to disclose dan*erous nature of *oods "here a person sell goods) 3nowing that the goods are inherentl$

dangeros or the$ are li3el$ to be dangeros to the b$er and thatthe b$er is ignorant of the danger) he mst warn the b$er of theprobable danger) otherwise he will be liable in damages1

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Ca'eat Emptor is a 5atin phrase meaning &let t"e #u$er #e%are(1

Let the /u(er /eware8 the principle that theseller of a prodct cannot be held responsible forits <alit$ nless it is garanteed in a warrant$1

7or e%ample) $o b$ a sed car which $o are

told is in perfect condition) bt it immediatel$brea3s down OR $o b$ a hose) bt it has termites1 ;nder this doctrine the b$er ta3es the ris3 on

an item he prchases and cannot complain of adefect1 !nless there is either frad or warrant$

>garantee? b$ the seller) the rle applies to thesale of personal propert$1

48

The b$er and seller ha'e e<al access to



$ <information abot the item and the b$er is able toma3e personal inspection

E6a5ple8 Sppose Ram boght *- cows from a cattle bro3er1 Ot of

those *-) 0 cows had defects1 owe'er) Ram did not 3now thisbecase he didnt chec3 all *- cows thogh he paid for them1 Gesswhat happenedU The 0 infected cows died within three da$s of theprchase1 6ow) as there was no tacit condition that the cows woldbe in great health at the time of the sale) Ram cannot hold thecattle bro3er as responsible or ha'ing sold him those infected cows1It was Rams basic dt$ to chec3 the health of those cows and note%pect the cattle bro3er to state all the defects1

Case stud( "ones 3s' Pad*ett

The b$er boght cloth for ma3ing niforms1 owe'er) the seller

was not aware of the prpose of b$ing the cloth1 5ater) the b$erfond that the cloth is not ;t ma3ing niforms1 It was) howe'er) ;tfor other normal prposes1 The seller was not fond gilt$ as theprinciple of ca'eat emptor applied in this case1

49

E!CEPTION OF CA#EAT EMPTOR



Implied condition as to <alit$ or ;tness1 "here the b$er has made 3now to the seller the

prpose for which he re<ires the goods and dependson the sellers s3ill and :dgment) there is an impliedcondition that the seller will sppl$ the goods whichare ;t for that prpose1 Section *2>*?

E%ample8 A b$s a blac3 $arn from 9 and ;nds that

it has been damaged b$ white ants1 The conditionas to merchantable <alit$ is bro3en and therefore)the doctrine of bro3en and therefore) the doctrineof ca'eat emptor does not hold good1

Sale of goods b$ description1 "here the goods are prchased b$ description from a

seller) who deals in sch class of goods) there will bean implied condition that the goods shall be of

merchantable <alit$1 50

E%ample 8English sainfoin seeds) dl$ e%hibited b$ a



sample) are sold1 The bl3 corresponds to the sample

bt the seeds spplied are giant sainfoins and not

English sainfoin1 There is a breach of condition as to

description of goods1 So the doctrine of ca'eat emptoris not applicable1

!sage of trade An implied condition or warrant$ as to <alit$ or ;tness

for a particlar prpose ma$ be anne%ed b$ the sageof trade and if the seller de'iates from that) the rle ofca'eat emptor does not hold good1

E%ample8 A dealer sells a refrigerator to Mohit1

The refrigerator performs all other fnctionse%cept ma3ing ice1 This wold amont to breach

of an implied condition and ths the doctrine ofca'eat

emptor will not wor31 51

Consent b$ frad1



$ "hen the b$er relies on false representation of the seller

and s#ers damages) i1e1) in a contract where the b$ersconsent was obtained b$ the seller b$ frad) the doctrine

of ca'eat emptor will not hold good1 E%ample8 A boght ,--- tins of preser'ed mil3

from !1S1A1 The tins were labeled in sch a wa$ as to

infringe the 6estlVs trademar31 As a reslt) the$ were

detained b$ the cstom athorities1 To get theclearance certi;cate from the cstoms) A had to remo'e

the labels and sell them at a loss1 6ow A can hold the

seller responsible for frad and claim damages1

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MEA6I6G8Sale of action is the pblic sale where the goodsare generall$ sold to the highest bidderR!5ES O7 A!CTIO6 SA5E8

The law on action sales is contained in Sec124 ofthe

Sale of Goods Act1 According to it) in the case of asale of action the following rles appl$ 8 "here goods are pt p for sale in lots) each lot

is prima acie deemed to be the sb:ect of aseparate contract of saleK

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The sale is complete when the actioneer



The sale is complete when the actioneerannonces its completion b$ the fall of the hammeror in other cstomar$ mannerK and) ntil sch

annoncement is made) an$ bidder ma$ retract hisbidK A right to bid ma$ be reser'ed e%pressl$ b$ or on

behalf of the seller and) where sch right is

e%pressl$ so reser'ed) bt not otherwise) the selleror an$ one person on his behalf ma$) sb:ect to thepro'isions hereinafter contained) bid at the actionK

"here the sale is not noti;ed to be sb:ect to a rightto bid on behalf of the seller) it shall not be lawflfor the seller to bid himself or to emplo$ an$ personto bid at sch sale) or for the actioneer 3nowingl$to ta3e an$ bid from the seller or an$ sch personK

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and an$ sale contra'ening this rle ma$ be



and an$ sale contra'ening this rle ma$ betreatedas fradlent b$ the b$erK

The sale ma$ be noti;ed to be sb:ect to areser'ed or pset priceK

If the seller ma3es se of pretended bidding toraise the price) the sale is 'oidable at theoption of the b$er1

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T>ANH ;

sales of goods act.ppt

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