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sale of good act

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Contract of sale

SALE OF GOODS ACT, 1930CONTRACT OF SALE (Sec.4)

A contract of sale of goods is a contract where by the seller transfers or agree to transfer the property in goods to the buyer for a price. AGREEMENT TO SALEWhere the transfer the of the property, ownership in the goods is to take place at a future date or subject to some condition to fulfilled ,the contract is called an agreement to sell.

DISTINCTION BETWEEN SALE AND AGREEMENT TO SELLBASICSALE AGREEMENT TO SELLNature of contract

Sale is an executed contractAgreement to sell is an executory contractPassing of propertyProperty in the goods passes to the buyer with the riskProperty and risk does not pass to the buyerRemedies in case of breach of contract of

Seller is entitle to sue the price of the goods and also has a right of lien stoppage in transit and resaleSeller has the right only to sue for damages for non performance of the contractLoss The loss will be born by the buyer even if the possession of goods is with the sellerThe seller will have to pay for the loss since the ownership in the goods has not passed to the buyerESSENTIALS OF A VALID SALEProperty :there must be a transfer of general property in the goods.

Movable goods : transfer of goods must be that of movable goods only.

Price: price means the money consideration for sale of good.

Parties: there must be two parties, buyer and seller.

Form: no particular form is necessary to constitute a contract of sale.

EFFECT OF THE CONTRACT

Transfer or passing of property-risk follow ownership

Time when property passes in specific or ascertained goods[sec.2(14)]

Specific goods in a deliverable state(sec.20)

When specific goods are to be put a deliverable state(sec.21)

Specific goods in a deliverable state when the seller has to do anything,therto in order to ascertain prices(sec.22)

Goods sent on approval or on sale or return basis(sec.24)PERFORMANCE OF CONTRACTDuties of seller and buyer -It is the duty of the seller to deliver the goods and of the buyer to accept and pay for them, in accordance with the terms of the contract of sale. (SEC 31)Payment and delivery are concurrent conditions.-Unless otherwise agreed, delivery of the gods and payment of the price are concurrent conditions, that is to say, the seller shall be ready and willing to give possession of the goods to the buyer in exchange for the price, and the buyer shall be ready and willing to pay the price in exchange for possession of the goods. (SEC 32)PERFORMANCE OF CONTRACT Delivery.-Delivery of goods sold may be made by doing anything which the parties agree 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) Effect of part delivery.-A delivery of part of goods, in progress of the delivery of the whole has the same effect, for the purpose of passing the property in such goods, as a delivery of the whole, but a delivery of part of the gods, with an intention of severing it from the whole, does not operate as a delivery of the remainder. (SEC 34) Buyer to apply for delivery.-Apart from any express contract, the seller of goods in not bound to deliver them until the buyer applies for delivery. (SEC 35)

PERFORMANCE OF CONTRACTRisk where goods are delivered at distant place.-Where the seller of goods agrees to deliver them at his own risk at place other than that where they are when sold, the buyer shall, nevertheless, unless otherwise agreed, take any risk of deterioration in the goods necessarily incident to the course of transit.PERFORMANCE OF CONTRACT Delivery of wrong quantity.-(1) Where the seller delivers to the buyer a quantity of good less than he contracted to sell, the buyer may reject them, but if the buyer accepts the goods so delivered he shall pay for them at the contract rate. (2) Where the seller delivers to the buyer a quantity of goods larger than he contracted to sell the buyer may accept the goods included in the contact and reject the rest, or he may reject the whole. If the buyer accepts the whole of the goods so delivered, he shall pay for them at the contract rate. UNPAID SELLER AND HIS RIGHTSIn simple words, "Unpaid seller" means a person who has soldthe goods for a price but price has not been paid to him.Sales act defines the "unpaid seller" in the following words :Unpaid Seller Is A Person :-i.To whom the whole price has not been paid or tendered.ii.And where a bill of exchange or other negotiable instruments has been accepted by him as a condition on which it was received has not been fulfilled by reason of dishonor of the instrument or otherwise.Rights of unpaid sellerWhen the property in the goods has been transferredRight of LienRight of stoppage in goods in transitRight to resaleWhen the property in the goods has not been transferredRight of withholding deliverySuit for priceSuit for damages for non acceptanceSuit for special damage and interest 15Right against goodsRight against the buyer personallyA. When the property in the goods has been transferred 1.RIGHT OF LIEN[Sec 46(1)(a) and 47 to 49]The right of lien means lawfully right to retain the goods possession until the full priceis received. An unpaid seller can exercise his right oflien in following cases.Sec47-49Where the goods have been sold onthe cash basis.Where the goods have been sold oncredit basis and the termof credit has expired.Where the buyer has become insolvent even ifthe period of credit hasnot been expired.

Other rules to satisfy the conditions for this right areThe unpaid seller must be inactual possession of the goods sold.It can be exercised even Ifthe documents of title have been delivered to the buyer.It can be exercised for the price and not for other expenses.If the seller delivers some goods,it can be exercised on theremainingTermination of right of lienSellers right of lien isterminated in following cases.1. When he delivers the goods to the carrier or other bailey for transmission to the buyer

Suites of breach of ContractTermination of right of lienSellers right of lien isterminated in following cases.1. When he delivers the goods to the carrier or other bailey for transmission to the buyer2. When the buyer or his agent lawfully obtains the possession of the goods.3. When seller waives his right of lien on the goods.4. The right of lien once lost will not be restored.5. When the buyer further sells thegoods and the seller agrees.2.RIGHT OF STOPPAGE IN TRANSIT[Sec. 50 to 52] It means stoppage of goods while they are in transit to take possession until the price is paid (sec.50-52)Unpaid seller can stop the goodsin transit in thefollowing cases.While the buyerbecomes insolvent.While the goods are out of actual possession of seller, but have not reached buyers possession i.e. goods are in transit with career.The unpaid seller can stop the goods in transit only for payment of the price of the goods and not for any other charges.

3.RIGHT TO RE-SALE

If a buyer fails to pay or offer the price within areasonable time, the unpaid seller has the right to resell the goods in thefollowing circumstances.Where the goods are of perishable nature.Where the unpaid seller has exercised his right of lien or stoppage in transit and gives a notice to buyer of his intension of resell the goods.Where the unpaid seller has expressly reserved his rightof resale.Where seller gives notice to the buyer of his intension to resell and the buyer does not pay within a reasonable time, he can

RIGHT OF WITHHOLDING DELIVERYIf the property in the goods has not passed to the buyer, the unpaid seller cannot exercise right of lien ,but gets a right of withholding the delivery of goods,similar to and co-extensive with lien.Rights against the buyer personallyThere are some rights which an unpaid seller mayenforce against the buyer personally. These rights arecalled RIGHTS IN PERSONAM SUIT FOR PRICE[Sec. 55]Where ownership of the goods has passed tothe buyer and thebuyerrefuses to pay the price according to the terms of the

CONDITION AND WARRANTYA condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to repudiate the contractWARRANTYA warranty is a stipulation collateral to the main purpose of the contract, the breach of which do not gives rise to repudiate the contract but to claim the damages.IMPLIED CONDITIONAs to titleAs to descriptionAs to sampleAs to quality or fitnessIMPLIED WARRANTYQuiet enjoymentFreedom from encumbranceUsage of tradeDangerous nature

NEMO DAT QUOD NON HABETLiteral meaning "no one gives what he doesn't havestates that the purchase of a possession from someone who has no ownership right to it also denies the purchaser any ownership titleDOCTRINE OF CAVEAT EMPTOR Caveat Emptor is a Latin phrase meaning let the buyer beware.Let the buyer beware: the principle that the seller of a product cannot be held responsible for its quality unless it is guaranteed in awarranty.

Under this doctrine the buyer takes the risk on an item he purchases and cannot complain of a defect.Unless there is either fraud or warranty (guarantee) by the seller, the rule applies to the sale of personal property. The buyer and seller have equal access to information about the item and the buyer is able to make personal inspection

AVEAT EMPTORImplied condition as to quality or fitness. Where the buyer has made know to the seller the purpose for which he requires the goods and depends on the sellers skill and judgment, there is an implied condition that the seller will supply the goods which are fit for that purpose. Section 16(1)

Sale of goods by description. Where the goods arepurchased bydescription from a seller, who deals