Sale of goods act 1930

The Act deals with only one kind of transfer namely SALE-this act is not concerned with HP,or Exchange or Contract of labourAct deals with movable goods only-like stocks and shares,growing crops- ,things attached to or forming part of land which are agreed to be severed before saleThus coconut grove sold as such is immovable property but if trees are cut and sold they are movable goods-Goods shall be in existence on date of sale-An ACTIONABLE CLAIM ie-claim for a debt and money are not goods-Sale means transfer of property in the goods for a consideration-payment by itself does not create sale-credit sale for exampleThe performance of a contract of sale constitutes of 2 stages-iepassing of risk,transfer of possession of goods and transfer of ownership of title from seller to buyer-

Sale of goods act 1930

Property and possession have different meanings-till ownership or title pass seller has responsibility-the time the property passes from seller to buyer is also imp-acc to sec 26 unless otherwise agreed goods remain at the sellers risk until property therein is transferred to the buyer but once property in goods is transferred to buyer buyers risk commences-in case of transfer of property between seller and buyer following conditions need be fulfilled-1-goods must be ascertained-it is a condition precedent for transfer of property from seller to buyer-where the goods sold have already been ascertained and where the property in the goods has already passed to the buyer the fact that the seller mixes the goods with other goods will not affect the rights of the buyerProperty in the goods passes when it is intended to pass-where there is a contract for the sale of specific or ascertained goods the property is transferred at such time as the parties think fit-

Sale of goods act 1930

For the purpose of ascertaining the intention of parties regard shall be had to the terms of the contract,,to the conduct of parties and the circumstances of the caseEven when goods are ascertained it is not necessary that property in goods are also transferred-passing of property does not depend on paymt of price or on delivery of goods but on intention of partiesTRANSFER OF TITLE-property is transferred from seller to buyer-for a defectless transfer seller should have a clear titlewhere sold with out owners consent no title-case-Higgons vs BurtonSale by non owners-certain exceptions to the rule DEMO DAT QUOD NON HABET-

Sale of goods act 1930

Normally no one can give a title better than what he hasexceptions to this rule-1-where he sells the goods with the authority and consent of true owner-2-where the true owner is prevented by his conduct from denying the sellers authority to sellThe buyer of goods from a mercantile agent who has no authority to sell gets a good title where the agent is in possession of goods or documents with consent of owner,where the agent sells the goods while acting in the ordy course of business,where the buyer acts in good faith and where the buyer has no at the time of sale that the agent has no authority to sellSimilarly where there is a sale by one joint owner,or by seller in possession after sale or where there is a sale by a person in possession of a voidable contract,or where there is sale by buyer bonafide without notice of defect of seller who is in possession-

Sale of goods act 1930

Also where there is sale by a buyer in possession after having bought or agreed to buy provided second purchaser receives same in good faith without notice of lien or any other right-,also in case where there is sale by an unpaid sellerBuyerrights-Buyers right of examining the goods-if not already examined-till then deemed not acceptedAcceptance of delivery-the buyer is deemed to have accepted the goods 1when he tells seller so 2-when goods have been delivered to him he does not act in any way inconsistent with ownership or seller or when he retains goods for long witout intimating rejection-for defective delivery a person entitled to rescind contract and still accepts defective goods seller is not discharged-buyer can claim insufficient performanceBuyer not bound to return rejected goods-where goods do not answer description buyer has right to reject-need not return-position of baileewhen goods are in buyers possession risks lie with seller-

Sale of goods act-1930

Resale of rejected goods=-if seller does not remove inspite of notice of rejection-in such case buyer must sell immediately Burden of expense-as bailee-recover from seller Buyers liabilities-such liability will arise if seller is wi;lling to deliver goods has ,asked buyer to take delivery and buyer neglected to do so-when buyer fails to take delivery in reasonable time-buyer responsible to seller For any loss or damage incurred on failure to take delivery and for any reasonable charges incurred by seller for taking care of goods

 RIGHTS OF BUYER-1-right to have delivery as per contract-2-where delivery is excess or deficit buyer can accept whole or reject whole-or accept ordered qty and reject the rest-3-unless there is a contract to the contrary buyer is not required to accept delivery in installmts-4when sent by sea inform route so buyer can insure5-right to examine goods before acceptance

Sale of goods act 1930

Sale of goods act 1930

BUYERs duties-1-take delivery and pay as per contract-2-apply for delivery3-where seller agrees to deliver at his own risk buyer shall take risk of deterioratio4-give notice of rejection5take delivery in reasonable time6-where property in goods passes duty to pay price contracted6where buyer wrongfully neglects or refuses to accept and pay compensation to seller-in a suit for damages for non acceptance RIGHTS OF UNPAID SELLER

Sale of goods act 1930

In sale there is transfer of property in the goods-sale creates a jus in rem-if the buyer fails to pay the price the remedies available to the seller ar 1-personal remedy namely suit for the price2-remedy against the goods-unpaid vendors lien-2-stoppage of goods in transit3-limited right of resale If the seller commits a default the buyer has the following remedies1-personal remedy-suit for damages2-remedy against the goods-since the buyer has become the owner in MOST cases he can follow the goods in the hands of third parties-If the goods are lost or destroyed the buyer as owner should bear the loss If the seller has become insolvent since the buyer has become owner of the goods the official assinee has no claim

Sale of goods act 1930

If the buyer becomes an insolvent- since the buyer has become the owner the official assignee is entitled for the goods-in agreement to sell transfer is to take place at a future date or subject to the fulfillment of a condition- here agreement to sell creates a Jus in Personam-if the buyer refuses to accept the goods and pay the price in agreemt to sell the only remedy is a personal remedy that is suit for damages-similarly for sellers defaulting only personal remedy is avai;able that is suit for damages-if goods are destroyed seller should bear the losses-if seller becomes insolvent under greemt to sell official assignee is entitled to goods-if buyer becomes insolvent official assignee not entitled to goods--if buyer becomes insolvent official assignee not entitled to goods-

Sale of goods act 1930

As contract of sale may provide for immediate delivery of goods or immediate paymt or both-or for both by instalmtsEffect of goods perishing-after agreement but before sale-if contract is for specific goods and if with out knowledge of seller goods have perished contract becomes void ab initio-if after risk passes to buyer goods become bad then the contract is voidPrice of goods are fixed by contract or fixed in a may be determined during course of dealing-buyer and seller may agree to leave price fixing to a third party-if third party does not or cannot make such valuation contract becomes voidCONDITIONS AND WARRANTIES-In every contract there will be some stipulations-some stipulations go to the root of the transaction-they are fundamental in character-condition is a stipulation essential for the main purpose of the contract-the breach of a condition gives a right to the buyer to reject goods

Sale of goods act 1930

Warranty is also a stipulation-it is not fundamental in character-it is only collateral to the main purpose of the contract-the breach of a warranty gives rise to a right to the buyer to claim damagesthe buyer cannot repudiate the contract and reject the goodsWhether a stipulation is a condition or warranty depends upon the construction of the contract-a stipulation may be a condition though called a warranty in the contractCONDITION AS A WARRANTY-sec 13-if a contract of sale is subject to any condition to be fulfilled by the seller and the seller does not fulfill it the buyer can waive the the condition or he can treat it as non fulfillment of a warranty-this is left to the buyerhowever if the buyer has accepted the goods then such a choice is not available to the buyer and the buyer has to treat the non fulfillment of condition by the seller as a breach of warranty only unless contract says otherwise

Sale of goods act

Implied conditions and warranties-that the buyer shall have quiet possession-that the goods are free from encumbrance or charge in favour of third party- Implied copndition as to title-unless otherwise specified seller has right to sell-NIBLETT VS CONFECTIONERSMATERIALS CO-A sold tins of condensed milk to B labelled NISSLY BRANDA had no right to sell in that brands name-breach of condition hereB could either reject the goods or treat the breach of condition as a breach of warranty and claim damages-ROWLAND VS DIVALLA sold a car to B who used it for many months-subsequently discovered to be stolen-car belonged to C-Since A had no title he could confer no title to B-title still with C-C could recover the car from B-A had no right to sell the car-breach of an implied condition-since B had to surrender the car to C he could treat the breach of condition as a breach of warranty and claim damages-

Sale of goods act

SALE BY SAMPLE-implied condition that bulk should correspond with sample in quality-buyer should have reasonable opportunity of comparing bulk with sample-goods should be merchantable and free from defectLORYMER VS Smith-A contracted to sell by sample two parcels of wheat one containing 700 bushels and the other 1400 bushels-he allowed inspection of smaller parcel but refused inspection of larger parcel-held-buyer was entitled to refuse to take any wheatSALE BY DESCRIPTION-Consists of two parts-sale by description and sale by sample and description-sample is addressed to the eyes-description addressed to ears-when goods are sold by description implied condition that goods shall correspond with description-Thus if A sells rice to B he cannot deliver wheat-

Sale of goods act

BOWES VS SHAND-A agrees to sell to B rice at Chennai during the month of April/May about 300 tonnes by the ship named Raja of Cochin-part of the cargo is shipped in March and part by Apr-B may refuse to accept any of the rice ,reason being goods not corresponding with descriptionPackaging is a description-Thus in Jormalkasturchand vs Hassan Ali Khanbhai A agreed to sell B tea in chests containing 8 pounds of tea-A tendered containing 7 pounds of tea-held,,,B was entitled to reject the goodsIf the sale is by sample as well as description goods should confirm to bothCAVEAT EMPTOR-All material factors known to him need not be disclosed by a contracting party-LET BUYER BEWARE-exceptions to this-

Sale of goods act

Buyer makes known purpose-seller depends on it-hotel waiter and foodbuyer relies on skill and judgement of seller-goods confirm to sellers normal supply standards-Caveat Emptor will not apply nowPriest vs Last-A goes to a chemist shop asks for hot water bottle-shown a bottle which the chemist says will not stand boiling water but is meant for hot water-A buys-bottle bursts-breach of condition-Grant vs Australian knitting Mills-a retail dealer in woolen goods sells underpants-he ought to know they are to be worn next to skin-so if the wearer gets skin irritation retailer is responsible-Baldary vs Marshall-A asks for a car which is meant for long distance-dealer shows a particular brand-A places order-car not found fit for long distannce-A is entitled to reject and recover purchase money-he wants car for a purpose not a brandRisk folows ownership-however both may agree to separate the twoFOB,CIF CONTRACT-in FOB risk passes to buyer if on board-in CIF seller continues to be owner till price is paid-