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Introduction
The law relating to sale and purchase of goods, prior to 1930 were dealt by the Indian Contract Act, 1872. In 1930, Sections 76 to 123 of the Contract Act was repealed and a separate Act known as the Sale of Goods Act, 1930 was passed. The provisions of the Contract Act still apply to contracts of sale of goods except where the Sale of Goods Act, 1930 specifically provides for the contrary.
Definition
A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer
the property in goods to the buyer for a price. (Sec. 4) The term contract of sale is a generic term, which includes sale and agreement to sale both.
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Goods
Goods means every kind of movable property other than actionable claims and money and includes stocks 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. [Sec 2(7)]
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Classification of Goods
a) Existing goods - Goods which either owned or possessed by the seller at the time of contract of sale. i) Specific goods - Means goods identified and agreed upon at the time a contract of sale is made.
The Price
Price means the money consideration for a sale of goods. [Sec 2(10)] Price can be fixed in the following ways : by the contract or terms of agreement, or may be determined by course of dealing between the parties. It may be the price prevailing on a particular day, or price to be fixed by a third party. When price is not capable of being fixed by any of the above modes, the buyer shall pay the seller a reasonable price. 9
Implied Conditions A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated. [Sec 12(12)] Implied Warranties A warranty is a stipulation collateral to the main purpose of the contract, breach of which gives rise to a claim for damages, but not a right to reject the goods and treat the contract as repudiated. [Sec 12(3)]
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where goods are supplied by description and they do not corresponds with the description;
where the goods are supplied by description and they are not of merchantability quality; when goods are sold by sample, and the goods do not correspond with the sample;
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when the goods are sold by sample as well as description, and the bulk of the goods do not match either the sample or description, or both; where the buyer relies upon the skill and judgement of the seller;
where trade usages or customs implies some condition or warranty and the seller deviates from that.
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Implied Warranties
Warranties as to Quite Possession. Warranties as to free from encumbrance. Warranty as to disclosure of dangerous nature of the goods.
Passing of Property
Transfer of property in the goods to the buyer
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Delivery to carrier
Where the goods are delivered to the buyer
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Transfer of Title
The principle of Nemo dat quod non habet Exceptions Transfer of title by Estoppel. Sale by Mercantile Agent. Sale by joint owner. Sale by person in possession under voidable contract. Seller in possession after sale. Buyer in possession before sale. Resale by an Unpaid Seller.
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Other Exceptions
Finder of lost goods can convey a better title under certain circumstances. Pawnee or pledgee of goods can transfer a better title under certain circumstances.
Sale by Official Receiver or Assignee in case of insolvency can transfer a better title in spite of not being owner of the goods.
A holder in due course gets better title of a negotiable instrument than the transferor.
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Performance of Contract
It is the duty of the seller to deliver the goods and of the buyer to accept and pay for them. [Sec 31] Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions. [Sec 32] Delivery may be made by doing anything that shall be treated as delivery, or which has the effect of putting the goods in the possession of the buyer, or of any person authorised to hold them on his behalf. [Sec 33]
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Modes of Delivery
a) Actual Delivery b) Constructive Delivery
Constructive delivery may take place in either of the three ways i) seller in possession of goods after sale agrees to hold them on behalf of the buyer; or ii) buyer is in possession of the goods and the seller agrees to his holding the goods as owner; or iii) a third person in possession of goods acknowledges to the buyer that he is holding them on his behalf.
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Part Delivery
A delivery of part of goods, in progress of the
delivery of the whole, has the same effect, as a delivery of the whole; but a delivery of part of the goods, with an intention of severing it from the whole does
Place of Delivery
The place of delivery of goods may be specified in the contract itself. Where no place is specified in the contract, the foll. shall apply a) in case of sale, goods sold are to be delivered at the place at which they are at the time of sale, b) in case of an agreement to sale, goods are to be delivered at the place at which they are at the time of the agreement to sell, c) if at the time of agreement to sell the goods are not in existence, they are to be delivered at the place where they are manufactured or produced.
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Delivery to Carrier/Wharfinger
Delivery of the goods to a carrier or to a wharfinger is deemed to be a delivery to buyer.
The seller shall make such contract with the carrier or wharfinger on buyer's behalf as may be reasonable having regard to the nature of goods and other circumstances.
If the seller omit to do so, and the goods are lost or damaged, the buyer may decline the delivery to himself. Where goods are sent by sea, the seller shall give notice to the buyer to enable him to insure them, if
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Unpaid Seller
The seller of goods is deemed to be an "unpaid" seller when the whole of the price has not been paid or tendered; or
when a bill of exchange or other negotiable instruments has been received as conditional payment, the conditions has not been fulfilled by reason of the dishonour of the instrument or otherwise. [Sec 45(1)]
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by waiver thereof.
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Rejection by buyer If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of them, the transit is not at an end. Wrongful refusal to deliver Where the carrier wrongfully refuses to deliver the goods to the buyer or his agent, the transit is at an end. Part delivery Where the goods have been delivered in part, the seller may stop the remainder of the goods, unless the part delivery shows an agreement to give up the possession of the whole. 37
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Damping
An unlawful act discouraging the intending purchaser from bidding by pointing out defects in the goods in the auction sale; or by taking away the intending purchaser from the place of auction by some other method. Damping is illegal and the auctioneer is entitled to withdraw the goods from the auction.
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