Sale of Goods Act, 1930

Unit II

General

Act applies to whole of India except the State of Jammu & Kashmir Contract of Sale of Goods subject to the general principles of law relating to contracts (Indian Contract Act)

Sale & Agreement to Sell

Sale

The property in the goods is transferred from the seller to the buyer

Agreement to Sell
Transfer of property in the goods is to take place at a future time Becomes sale when time elapses or conditions are fulfilled i.e. property in goods is transferred

Essentials of Contract of Sale

Fulfill all essentials of contract It is of Goods Transfer of Property is required Contract is between buyer and seller Sale should be for Price Contract may be absolute or conditional

Document of Title to Goods

Entitles and enables its rightful holder to deal with the goods represented by it as if he were the owner It is proof of ownership, possession or control of goods Cash memo, Bill of Lading, Warehouse keepers certificate, Lorry receipt (L/R), Railway Receipt (R/R)

Conditions and Warranties

Stipulations that are essential for main purpose of contract. Non-fulfillment of such will mean loss of foundation of contract. These are termed as Conditions. Stipulations not essential are termed as warranty. Aggrieved Party may claim damages.

Implied Conditions

Condition as to title
Condition of seller : He has right to sell the goods (title to goods) If sellers title is defective buyer may reject

Condition as to Description

Goods & Packing should correspond with the description given by seller

Implied Conditions

Condition as to Quality or Fitness

Conditions : Buyer makes known to the seller the purpose, Relies on skill of seller, Goods are of description which the seller ordinarily supplies in the course of business The goods shall be reasonably fit for such purpose

Implied Conditions

Condition as to Merchantability

Goods should be commercially saleable under the description in the market at their full value
Incase of eatables and foodstuff, Goods must be for human consumption.

Condition as to Wholesomeness

Implied Conditions

Condition implied by Custom or Trade Usage Conditions in a Sale by Sample

Is implied when sample is shown Goods to be of the same kind and quality

Conditions in a Sale by Sample as well as by Description

Goods must correspond with sample and with description

Implied Warranties

Implied Warranty of Quiet Possession

If disturbed, the buyer may sue the seller for damages.

Implied Warranty of Freedom from Encumbrances

Shall be free from encumbrance in favor of any third party not declared or known to buyer If discharge of amount of encumbrance is required the buyer is entitled to damages.

Transfer of Property in Goods

Property : Ownership of Goods Possession of Goods : Physical custody or Control of goods Moment when property in goods passes:
Ownership Risk follows ownership Action against third parties Suit for price

Essentials of Transfer of Property

Goods must be ascertained : Buyer should have reasonable opportunity to examine the goods for the purpose of ascertaining whether they are in conformity with the contract. Intention to pass Property in Goods must be there

Performance of Contract of Sale

Delivery of Goods : Voluntary transfer of possession from one person to another. Requires two parties to act

Mode of Delivery

Actual delivery (Physical Delivery) Symbolic Delivery (where bulk of goods are involved) Constructive Delivery (delivery when a 3rd person, in possession of the goods, acknowledges to hold the goods on behalf of the buyers; 3 people are involved)

Rules regarding Delivery of Goods

Possession of Goods Delivery and Payment are concurrent conditions Demand for Delivery of Goods Time of Delivery Place of Delivery Goods in possession of third person

Rules regarding Delivery of Goods

Effect of Part Delivery Expenses of Delivery (Seller) Installment Delivery (not to be accepted) Delivery of Wrong Quantity
Short Delivery Excess Delivery Mixed Delivery

Acceptance of Delivery

Buyers right of examining the goods When Accepted?

He intimates seller that he accepted them or He receives delivery of goods or After lapse of time he retains the goods without intimating to the seller that he rejected them

Buyer not bound to return the rejected goods; it is sufficient if he intimates to the seller.

Rights of a Buyer

Right to have Delivery of Goods Right to reject the goods Right not to accept instalments Right to examine the goods Right not to return the rejected goods Right to get the notice of insurance during transit

Rights of Buyer

Suit the seller for non-delivery Suit for breach of warranty Suit for specific performance Repudiation of contract before due date Suit for interest

Duties of Buyer

Duty to pay price and accept the goods Duty to apply for delivery Duty to demand delivery at a reasonable hour Duty to accept instalment delivery and pay for it (if acc to contract)

Duties of Buyer

Duty against deterioration Duty to intimate the seller when rejecting the goods Duty to take delivery Duty to pay price Duty to pay damages for nonacceptance Duty to pay increased tax

Rights of a Seller

Right to claim compensation Right to sue for price Right to sue for damages Right to treat the contract as subsisting Right to interest by way of damages Rights of Unpaid seller

Duties of Seller

Duty to deliver the goods Duty to deliver the goods at the agreed place Duty to supply the goods within specified time Duty to send the goods at reasonable hour Duty to bear the expense of putting the goods in deliverable state

Duties of Seller

Duty to give notice to the buyer to get the goods insured; otherwise at sellers risk during transit Duty to give reasonable opportunity to examine the goods

Rights of Unpaid Seller

Where the property in the goods has passed to the buyer

Right of Lien Right of Stoppage in transit Right of Resale.

Where the property in the goods has not passed to the buyer

Right of with holding delivery Suit for price Suit for damages for non-acceptance Suit for damages for repudiation of contract Suit for interest

Buyers remedies against Seller for breach of contract

Suit for damages for NonDelivery Suit for Price Suit for specific performance Suit for Breach of Warranty Suit for damages for repudiation of contract before due date Suit for Interest

Good Job!!! Class over for Today