Beruflich Dokumente
Kultur Dokumente
Contract of Sale
A contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a certain price. Characteristics : 1. Buyer & seller 2. Goods 3. Price 4. Transfer of ownership 5. Element of a valid contract
SALE : When the ownership of goods is transferred from the seller to the buyer under a contract of sale , a sale is said to have been made.
AGREEMENT TO SELL : when the transfer of ownership of goods under a contract of sale is to take place at a future date or on the fulfillment of a condition, its called an agreement to sell.
3. Right of usage : Sale- buyer has the right to usage AOS buyer does not have the right to usage. 4. Consequences of Breach: Sale if the buyer defaults in making the payment, the seller can sue the buyer AOS if buyer fails to take delivery of goods & payment for the same , the seller is entitled to sue the buyer for damages only and not the cost of goods.
5. Risk of loss : Sale the buyer will bear any kind loss or damage to the goods. AOS seller will bear the loss. 6. Insolvency of seller: Sale if the seller is declared insolvent before the delivery of the goods, the buyer can claim the goods from the official representative of the seller.
AOS the buyer has no right claim the goods in event of insolvency of the seller
7. Insolvency of buyer Sale the seller is required to deliver the goods to the official representative of the buyer. AOS the seller has the right to refuse to deliver the goods.
8. Default by seller : Sale the buyer can not only claim for the damages but also file a suit against a third party . AOS the buyer can sue for damages only when the seller refuses to deliver the goods.
TYPES OF GOODS
1. Existing goods in the possession of the seller. a. ascertained (specific) goods b. unascertained (generic) goods. 2. Future goods. 3. Contingent goods (if the seller gets the goods from the 3rd party then he will deliver the goods to the buyer)
Warranty its a stipulation collateral to the main purpose of the contract , the breach of which gives rise to a claim for damages but not a right to reject the goods & treat the contract as repudiated.
If warranty is violated , the contract does not terminate , only the aggrieved party can file a suit for damages.
When does a condition become a warranty ? 1. Waiver of conditionIf the seller fails to fulfill a condition and the buyer of his own will , decides to waive such condition i.e. does not insist on its fulfillment on the part of seller , then the seller is not bound to fulfill such condition . Later on the buyer cannot hold the seller responsible for non performance of such condition.
eg : Ram makes a contract to deliver 500 bales of cotton to Hari on 15th jan, and the latter considers the delivery by that date to be the condition & says that he will not accept the goods after that date . But the goods are delivered to Hari on 18th jan, and he accepts the delivery.
If Ram had committed a breach of condition by not delivering the goods on the appointed date , Hari had the right to break/repudiate the contract. By accepting the goods on 18th Jan , he has accepted it as a breach of warranty & can only sue for damages.
When a contract of sale is not divisible ,& the buyer has accepted the delivery of a part of the goods or when the contract relates to the goods that have been already delivered to the buyer , the breach of condition is deemed (viewed as) to be breach of warranty
Implied Warranties :
1. Quite & peaceful possession. 2. Warranty as to specific care.
Rules 1. Goods must be ascertained 2. Goods must be appropriated 3. Goods must be delivered to the carrier. c. Goods sent on approval or on sale or returnRules 1. When the buyer communicates his acceptance of the goods , the transfer of ownership is completed.
2. When the buyer does not indicate his acceptance of goods but retains the goods without communicating his disapproval to the seller , if a time limit is specified for approval , at the expiry of the time or within a reasonable time if no limit has been fixed , the ownership is deemed to be transferred to the buyer. 2. Reservation of the right of disposal (right to use something) when the goods are sold to buyer who is far away & the goods are dispatched by public transport , in order to ensure he gets the payment , the seller reserves the right to disposal.
Exceptions:
1. 2. 3. 4. Title by estoppels. Sale by merchantile agent. Sale by co owner. Sale by a seller in possession of goods after sale. 5. Sale by a buyer in possession of goods. 6. Sale by unpaid seller.
Unpaid Seller
A person who has sold the goods to another person but has not been paid for the goods , or has been partially paid, is called an unpais seller. Rights of an unpaid seller: 1. Right against the goods. 2. Right against the buyer of goods.
2. Right of stoppage of goods in transit When the seller has delivered the goods to a carrier for transmission to the buyer & the goods are in transit , if he receives the information that the buyer has become insolvent , the seller has the right to stop the goods in transit & retain their possession till such time as he is not paid the price of the goods. Conditions : 1. The price of goods is partially or totally not paid 2. When the buyer has become insolvent 3. When the goods are in transit.
Rules: Delivery of goods to the carrier The buyer taking delivery before destination Holding the goods by the carrier on behalf of the buyer When the goods are rejected by the buyer. When the goods are delivered to the ship chartered by t he buyer. When the carrier refuses to deliver the goods. When partial delivery has been made to the buyer.
Introduction
The law relating to negotiable instruments is contained in the Negotiable Instruments Act, 1881 which applies and extends to the whole of India.
Negotiable Instruments
Definition: The word negotiable means transferable by delivery, and the word instrument means a written document by which a right is created in favour of some person. Thus, the term negotiable instrument literally means a written document which creates a right in favour of somebody and is freely transferable by delivery. A negotiable instrument is a piece of paper which entitles a person to a certain sum of money and which is transferable from one to another person by a delivery or by endorsement and delivery.
Promissory Note
Definition: According to Section 4, A promissory note is
an instrument in writing (not being a banknote or a currency-note) containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument.
In course of transfer of a promissory note by payee and others, the parties involved may be (a) The Endorser the person who endorses the note in favour of another person. In the above specimen if Ramesh endorses it in favour of Ranjan and Ranjan also endorses it in favour of Puneet, then Ramesh and Ranjan both are endorsers. (b) The Endorsee the person in whose favour the note is negotiated by endorsement. In the above, it is Ranjan and then Puneet.
Essentials of Promissory Note 1. It must be in writing: A promissory note has to be in writing An oral promise to pay does not become a promissory note The writing may be on any paper or book Illustrations: A signs the instruments in the following terms:
I promise to pay B or order Rs. 500 I acknowledge myself to be indebted to B in Rs. 1, 000 to be paid on demand, for value received
The above instruments are not promissory notes as there is no undertaking or promise to pay. There is only an acknowledgement of indebtedness. Where A signs the instrument in the following terms:
I acknowledge myself to be indebted to B in Rs. 1, 000, to be paid on demand, for value received, there is a valid promissory note
4. It must be signed by the maker: It is imperative that the promissory note should be duly authenticated by the signature of the maker Signature means the writing or otherwise affixing a persons name or a mark to represent his name, by himself or by his authority with the intention of authenticating a document
The above instruments are invalid as promissory notes because the exact amount to be paid by A is not certain
Bill of Exchange
Definition: Section 5 of the Negotiable Instruments Act defines a Bill of Exchange as follows: A bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument. Illustration: Mr. X purchases goods from Mr. Y for Rs. 1000/Mr. Y buys goods from Mr. S for Rs. 1000/Then Mr. Y may order Mr. X to pay Rs. 1000/- Mr. S which will be nothing but a bill of exchange.
6. 7. 8.
Cheque
A cheque is the means by which a person who has fund in the hand of a bank withdraws the same or some part of it. A cheque is a kind of bill of exchange but it has additional qualification namely1- it is always drawn on a specified banker and 2-it is always payble on demand without any days of grace.
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Slide 46
Holder in due course means any person who for consideration became the possessor of a promissory note, billl of exchange or cheque, if payble to the bearer or the payee or indrosee there of ,if payble to the order before the amount mentioned in it became payble , and without having sufficient cause to believe that any defect existed in the title of the person from who he derived his title
The bill of exchange is dishonour by nonpayment and acceptance , whenever the other instrument the promissory not and by the non-payment.
Dishonour by non-acceptance
A bill of exchange is dishonoured by nonacceptance. When a drawee commits in accepting the bill of exchange . When the drawee is incapable to contract. When the presentment for acceptance person and cannot be found even after due search.
Dishonour by non-payment
A promissory note , bill of exchange or change is said to be dishonoured due to non-payment when the makes of the promissory note , acceptance of bill of exchange and drawee of the cheque commits a defaults in payment on the non-acceptence and non- payment.
In case of dishonour by non in case of dishonour by non-payment, acceptance ,a suit cannot be filed the holder can file a suit if he has served against debtor, since he is not a party notice of dishonour on all other parties. to the instrument before he accepts the same. in case of dishonour by non-payment, the drawer can file a suit for recovering the noting and protesting charges, interst, etc, along the amount of the loan,
In case of dishonour by non-acceptance the creditor can file a suit only the recovery of the amount of the loan.
Notice of dishonour
Notice by whom Notice to whom mode of giving notice what is reasonable time?
Discharge of instrument
An instrument is said to be discharged when all the rights contained therein are the instrument ceases to be negotiable .even the holder in due course does not get any the instrument in such a situation.