Post Graduate Programme in International

Management (PGPIM)
1

LEGAL ASPECTS OF BUSINESS

(LAB)

Prof. Parul Gupta

PhD (Faculty of Law-JMI, New Delhi), LL.M., PGDBM

Dr. Parul Gupta

 Session 9
2

 Transfer of Property
 Rights of an Unpaid Seller

Announcement Group Assignment

Dr. Parul Gupta

 Transfer of Property
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 The property in the goods is said, to be

transferred from the seller to the buyer when
the buyer acquires the proprietary rights
over the goods and the obligations linked
thereto.
Transfer of property in goods is
distinct from delivery of goods.
 Here property implies the ownership of the
goods not the possession

Dr. Parul Gupta

 Transfer of Property
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Significance of Transfer of Property

 Ownership

 Risk follows ownership

 Action against third parties

 Suit for Price

 Insolvency

Dr. Parul Gupta

 Transfer of Property
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The Seller offered to sell to the Buyer a certain

machine for Rs. 5,000. The buyer refused to buy
the machine in its then existing condition and said
that he would not buy the machine unless certain
work was done on it. The Seller asked the Buyer to
get the work done himself and deduct the expense
from the cost of the machine. To this the Buyer
agreed and took the machine to a repair shop.
While being repaired the machine was destroyed
accidently without any fault of the repairmen.

Dr. Parul Gupta

Rules For A Valid Transfer of Property
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(i) Transfer of property in existing and specific or,

ascertained good

 (1) Specific goods in a deliverable state (Section 20)

 (2) Specific goods are not in a deliverable state but
to be put into a deliverable state (Section 21)
 (3) Specific goods in a deliverable state, when the
seller has to do anything there to in order to
ascertain price (Section 23)
 (4) Goods sent on approval or “on sale or return
basis” (Section 24)

Dr. Parul Gupta

Rules For A Valid Transfer of Property
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(ii) Generic or unascertained or future goods

(Section 18 & 23)

Unconditional Appropriation

Case: Aldridge v Johnson

 Discussion Point
 Was the property in goods transferred? Who
was the owner?
Dr. Parul Gupta
 Rights of An Unpaid Seller
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 Unpaid Seller (Sections 45-54)

 When the whole of the price has not been

paid or tendered.
 When a negotiable instrument or a bill of
exchange has been received as conditional
payment and the condition in which it was
received has not been fulfilled by reason
of the dishonor of the instrument or
otherwise.
Dr. Parul Gupta
 Rights of An Unpaid Seller
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(A) Rights against the goods

 (i) Right of Lien (Sections 47-49 and 54)

 (i) The goods have been sold without stipulation as to

credit; or
 (ii) The goods have been sold on credit, but the term of
credit has expired; or
 (iii) Where the buyer becomes insolvent, even though the
period of credit may not have expired.

Dr. Parul Gupta

 Rights of An Unpaid Seller
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(A) Rights against the goods

 (ii) Stoppage in transit (Sections 50-52)

Duration of transit [Section 51(1)]

 (i) When the buyer obtains delivery before the arrival of

the goods at their destination;
 (ii) When, after the arrival of the goods at their
destination, the carrier acknowledges to the buyer that he
holds the goods on his behalf.
 (iii) When the carrier wrongfully refuses to deliver the
goods to the buyer.

Dr. Parul Gupta

 Rights of An Unpaid Seller
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(A) Rights against the goods

 (iii) Right of re-sale (Section 54)

 Where the goods are perishable;
 Where the right is expressly reserved in the contract;
 Where in exercise of right of lien or stoppage in
transit, the seller gives notice to the buyer to apprise
the buyer with his intention to re-sell, and the buyer,
does not pay or tender the price within a reasonable
time.

Dr. Parul Gupta

 Rights of An Unpaid Seller
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(B) Rights of an unpaid seller against the buyer
 (i) Suit for price (Section 55)
 (ii) Suit for damages for non-acceptance (Section
56)
Case:Thompson v Robinson (Gunmakers) Ltd.
Discussion Point
Was the Defendant liable to pay damages to the plaintiff for the
non acceptance of the goods?
 (iii) Suit for special damages and interest (Sec.61)
 (iv) Right to repudiate the contract before due
(Anticipatory breach of contract – Agreement to
sell)
Dr. Parul Gupta
 13

Announcement
Group Assignment
Submission Due in
Session 13
Dr. Parul Gupta
 14

Dr. Parul Gupta