the sale of goods act (3)

8/7/2019 THE Sale of Goods Act (3)

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THE SALE OF GOODS ACT

Presented by :-

Aarushi Tyagi (121)Anusha Jain(125)

Drushti Gala(128)

Nirali Mehta (146)

PalakAgrawal(150)

Samir Parikh(161)


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SALE OF GOODS ACT, 1930

A contract of sale of goods is a :

contract whereby the seller transfers

or agrees to transfer the property in goods to thebuyer for a price. Sec.4(1)

There may be a contract of sale between one partowner and another.

A contract of sale may be absolute or conditional.


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MEANING

The Sale of Goods Act is complimentary toContract Act. Basic provisions of Contract Act

apply to contract of Sale of Goods also. Basic

requirements of contract i.e. offer and acceptance,legally enforceable agreement, mutual consent,

parties competent to contract, free consent, lawful

object, consideration etc. apply to contract of Saleof Goods also.


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ESSENTIALS OF CONTRACT OF SALE

A contract (all essentials of valid contract

applicable)

Between two parties

To transfer or agree to transfer the property

In goods

For a price, i.e. the consideration is money.


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HOW CONTRACT OF SALE IS MADE A contract of sale is made by an offer to buy or sell goods for a

price and the acceptance of such offer.

The contract may provide for the immediate delivery of thegoods or immediate payment of the price or both, or for the

delivery or payment by instalments, or that the delivery orpayment or both shall be postponed. [section 5(1)].

Subject to the provisions of any law for the time being in force,a contract of sale may be made in writing or by word of mouth,

or partly in writing and partly by word of mouth or may beimplied from the conduct of the parties. [section 5(2)].

Thus, credit sale is also a sale. - - A verbal contract or contractby conduct of parties is valid. e.g. putting goods in basket in

super market or taking food in a hotel.


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SALE AND AGREEMENT TO SALE

When property is transferred from seller to buyer at

the time of formation of contract, an absolute sale

occurs.When property in the goods is to be transferred at

some future date and not at the time of contract,

the contract of sale is termed as an agreement tosell.


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EFFECT OF PERISHING OF GOODS

Goods perishing before formation of thecontract.- in case of specific goods suchcontract is void ab initio as the performance of

the contract is impossible due to destruction ofsubject matter.

Goods perishing before the sale but after theagreement to sell.:- in case of specific goods thecontract of sale becomes void and both partiesare excused from the performance.(Sec.8)


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EFFECT OF PERISHING OF GOODS

Effect of perishing of future goods.:- Sec.8applies in this case also which says where thereis an agreement to sell specific goods, andsubsequently the goods without any fault onthe part of the seller or buyer perish or becomeso damaged as no longer to answer to their

description in the agreement before the riskpasses to the buyer, the agreement is therebyavoided.


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ASCERTAINMENT OF PRICE

The price in a contract of sale may be fixed by thecontract.

May be left to be fixed in manner thereby agreed.May be determined by the course of dealing

between the parties.

Where the price is not determined in accordance

with the foregoing provisions the buyer must pay areasonable price.Reasonable price is dependent onthe circumstances of each particular case.


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AGREEMENT TO SELL AT VALUATION

Where there is an agreement to sell goods on

the terms that the price is to be fixed by the

valuation of a third party, and such third party

cannot or does not make such valuation, theagreement is avoided.

Where such third party is prevented from

making the valuation by the fault of the selleror buyer the party not in fault may maintain

an action for damages against the party infault.


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STIPULATION AS TO TIME

Time of payment is not essence of contract buttime of delivery of goods is, unless specifiedotherwise . Stipulations as to time of payment arenot deemed to be of the essence of a contract ofsale. [section 11].

In other words, time of payment specified is

warranty. If payment is not made in time, theseller can claim damages but cannot repudiate thecontract.


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WHEN CONDITION TO BE TREATED AS WARRANTY

SALE OF GOODS ACT 1930-SECTION 13

Where a contract of sale is subject to any

condition to be fulfilled by the seller, thebuyer may waive the condition or elect to

treat the breach of the condition as a breach

of warranty and not as a ground for treatingthe contract as repudiated.


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SALE BY DESCRIPTION

Where there is a contract for the sale of goods bydescription, there is an implied condition that the

goods shall correspond with the description.

The term " sale of goods by description" mustapply to all cases where the purchaser has not seenthe goods, but is relying on the description alone.


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SALE BY SAMPLE

Where the seller exhibits a specimen only of thegoods to be sold for the purpose of showing thequality of the goods.

This will be taken as a representation by theseller, that the sample is a fair representation ofthe quality of the bulk, and the seller will bebound as on an express warranty.

It is, however, to be commonly treated as animplied warranty that the bulk is of the samequality, nature and kind as the sample.


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IMPLIED TERM AS TO TITLE

In a contract of sale, other, there is an implied on the part of the sellerthat in the case of a sale he has a right to sell the goods, and in thecase of an agreement to sell he will have such a right at the timewhen the property is to pass.

In a contract of sale, there is also an implied that

o the goods are free, and will remain free until the time when the

property is to pass, from any charge not disclosed or known to thebuyer before the contract is made, and

o the buyer will enjoy quiet possession of the goods except so far asit may be disturbed by the owner or other person entitled to thebenefit of any charge so disclosed or known.


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IMPLIED CONDITION AS TO QUALITY OR FITNESS

Where the seller sells goods in the course of a business, thereis an implied term that the goods supplied under the contractare of satisfactory quality.

For the purposes of this Act, the quality of goods includestheir state and condition and the following are in appropriatecases aspects of the quality of goods

a)fitness for all the purposes for which goods of the kind inquestion are commonly supplied,

b)appearance and finish,c)freedom from minor defects,

d)safety, and

e)durability.


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Implied condition as to quality or fitness :As of now, there is noimplied warranty or condition as to the quality or fitness for anyparticular purpose of goods supplied under a contract of sale

.however there are some exceptions to it:-1. Where the goods are ordered for a specific purpose and the

purpose is made known to the seller.

2. Where the buyer relies on sellers sill and judgement.

3. Where goods are purchased under a trade name.

4. Where the goods are bought on the basis of description given bythe seller who deals in goods of that description.

Sale by sample -sometimes contracts are entered on the basis ofthe sample given. Following conditions must be applicable-

1. that the bulk shall corresponded with the sample in quality.2. that the shall have a reasonable opportunity of comparing the

bulk with the sample.

3. that the goods shall be free from any defect, rendering them un-merchantable, which would not be apparent on reasonableexamination.


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EFFECTS OF THECONTRACT

1. Goods must be ascertained: Where there is a contract for the sale of unascertained

goods, no property in the goods is transferred to thebuyer unless and until the goods are sanctioned.

2. Property passes when intended to pass: Where there is a contract for the sale of specific or

ascertained goods the property in them is transferred tothe buyer at such time as the parties to the contractintend it to be transferred.

For the purpose of ascertaining the intention of theparties regard shall be had to the terms of the contract,the conduct of the parties and the circumstances of the

case. Unless a different intention appears, the rules contained

in Section 20 to 24 are rules for ascertaining the intentionof the parties as to the time at which the property in thegoods is to pass to the buyer.


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3.Specific goods in a deliverable state: Where there is an unconditional contract for the sale of specific goods in

a deliverable state, the property in the goods passes to the buyer whenthe contract is made, and it is immaterial whether the time of payment of

the price or the time of delivery of the goods, or both, is postponed.4. Specific goods to be put into a deliverable state:

Where there is a contract for the sale of specific goods and the seller isbound to do something to the goods for the purpose of putting them intoa deliverable state, the property does not pass until such thing is doneand the buyer has notice thereof.

5 .Specific goods in a deliverable state, when the seller has to do anythingthereto in order to ascertain price:

Where there is a contract for the sale of specific goods in a deliverablestate, but the seller is bound to weigh, measure, test or do some otheract or thing with reference to the goods for the purpose of ascertaining

the price, the property does not pass until such act or thing is done andthe buyer has notice thereof.


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6.Sale of unascertained goods and appropriation:(1)Where there is a contract for the sale of unascertained or future goods bydescription and goods of that description and in a deliverable state areunconditionally appropriated to the contract, either by the seller with the

assent of the buyer or by the buyer with the assent of the seller, the propertyin the goods thereupon passes to the buyer. Such assent may be expressed orimplied, and may be given either before or after the appropriation is made.

(2) Delivery to carrier.-Where, in pursuance of the contract, the seller deliversthe goods.

7 . Goods sect on approval or on sale or return- when goods are delivered to thebuyer on approval or on sale or return or other similar terms, the propertytherein passes to the buyer-

(a) when he signifies his approval or acceptance to the seller to does not otheract adopting the transaction.

(b) if he does not signify his approval or acceptance to the seller but retains

the gods without giving notice of rejection, then, if a time has been fixed forthe return of the goods, on the expiration of such time, and, if not time hasbeen fixed, on the expiration of a reasonable time.


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8.Reservation of right of disposal:(1)Where there is a contract for the sale of specific goods or where goods are subsequentlyappropriated to the contract, the seller may, by the terms of the contract or appropriation,reserve the right of disposal of the goods until certain conditions are fulfilled.

(2)Where goods are shipped or delivered to a railway administration for carriage by railwayand by the bill of landing or railway receipt, as the case may be, the goods are deliverable tothe order of the seller or his agent, the seller is prima facie deemed to reserve the right ofdisposal.

(3)Where the seller of goods draws on the buyer for the price and transmits to the buyer thebill of exchange together with the bill of lading or, as the may be, the railway receipt, tosecure acceptance to payment of the bill of exchange, the buyer is bound to return the bill oflading or the railway receipt if he does not honour the bill of exchange, and, if he wrongfully

retains the bill of lading or the railway receipt, the property in the goods does not pass tohim.

9. Risk Prima facie passes with property:

Unless otherwise agreed, the goods remain at the sellers risk until the property therein istransferred to the buyer,

When the delivery has been delayed through the fault of either buyer or seller, the goods are

at the risk of the party in fault as regards any loss which might not have occurred but forsuch fault.

Provides also that nothing in this section shall affect the duties or liabilities of either seller orbuyer as a bailee of the goods of the other party


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Performance of the contract

Duties of buyer and seller

Payment and delivery are concurrent conditions

Delivery

Effect of part delivery

Buyer to apply for delivery

Delivery of wrong quantity


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Installment deliveries

Delivery to carrier or wharfinger.

Risk where goods are delivered at distant place

Buyers right of examining the goods

Buyer not bound to return rejected goods

. Buyer not bound to return rejected goods

Liability of buyer for neglecting or refusing delivery of goods


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Whether it is for the buyer to take possession of the goods or for the

seller to send them to the buyer is a question depending in each caseon the contract, express or implied, between the parties

Reasonable timing

Involvement of third person

Demand or tender of treaty

Unless otherwise agreed, the expense of and incidental to putting the

goods into a deliverable state shall be borne by the seller.

Rights as to delivery


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UUNPAIDNPAID SELLERSELLER

Definition:Definition:one who has not been paid or tendered the whole of the price

or one who receives a bill of exchange or other negotiable

instrument as conditional payment and the condition onwhich it was received has not been fulfilled by reason of thedishonour of the instrument or otherwise.

In simple terms:In simple terms:An unpaid seller is one who is to get the price or considerationfor the goods.


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RRIGHTSIGHTS OFOF UUNPAIDNPAID SSELLERELLER AGAINSTAGAINST GOODSGOODS

SectionSection 4545.. UnpaidUnpaid sellerseller::

1.The seller of goods is deemed to be an unpaid sellerwithin the meaning of this Act:

when the whole of the price has not been paid or tendered.

The term seller includes any person who is in the positionof a seller, as, for instance, an agent of the seller to whomthe bill of lading has been endorsed, or a consignor or

agent who has himself paid, or is directly responsible for,the price.


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Rights of anunpaid seller

Against goods

Where property inthe goods has

passed to the buyer

Right oflien

Right ofstoppagein transit

Right ofresale

Where the propertyin goods has notpassed the buyer

With holdingdelivery of goods

Other remedies

Against the buyer

Suit for priceSuit for

damagesSuit for interest

RIGHTS OFAN UNPAIDRIGHTS OFAN UNPAID

SELLERSELLER


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SSECTIONECTION 46. U46. UNPAIDNPAID SSELLERELLERSS RIGHTSRIGHTS

1. Subject to the provisions of this Act and of any law forthe time being in force, not withstanding that the propertyin the goods may have passed to the buyer, the unpaidseller of goods, as such, has by implication of law

(a) a lien on the goods for the price while he is inpossession of them (b) in case of the insolvency of the buyer a right of stopping

the goods in transit after he has parted with the possessionof them

(c) a right of resale as limited by this Act.


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SSECTIONECTION 46. U46. UNPAIDNPAID SSELLERELLERSS RIGHTSRIGHTS

The section may be illustrated by the following example : Sale of goods to be delivered by instalments, each instalment

to be paid for in cash fourteen days after delivery. During the

currency of the contract, the buyer becomes insolvent and theprice of one instalment is unpaid. The seller need not makefurther deliveries unless the price of that instalment is paid andcash is paid against delivery of subsequent instalments. This isknown as the stoppage of transit.


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SSECTIONECTION 47. S47. SELLERELLERSS LIENLIEN

1. Subject to the provisions of this Act, the unpaid seller of1. Subject to the provisions of this Act, the unpaid seller ofgoods who is in possession of them is entitled to retaingoods who is in possession of them is entitled to retainpossession of them until payment or tender of the price inpossession of them until payment or tender of the price inthe following cases, namely :the following cases, namely :

(a) Where the goods have been sold without any(a) Where the goods have been sold without anystipulation as to credit.stipulation as to credit.

(b) where the goods have been sold on credit, but the(b) where the goods have been sold on credit, but theterm of credit has expired.term of credit has expired.

(c) where the buyer becomes insolvent.(c) where the buyer becomes insolvent.2. The seller may exercise his right of lien not withstanding2. The seller may exercise his right of lien not withstanding

that he is in possession of the goods as agent orthat he is in possession of the goods as agent or baileebailee forforthe buyer.the buyer.


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SUITS FORTHE BREACHOFTHE CONTRACT

Suit for price.

Damages for non-acceptance.

Damages for non-delivery.

Remedy for breach of warranty. Repudiation of contract before due date.

Interest by way of damages and special damages.


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SUIT FOR PRICE

Where under a contract of sale the property in the

goods has passed to the buyer and the buyer

wrongfully neglects or refuses to pay for the goods

according to the terms of the contract, the seller maysue him for the price of the goods.

Where under a contract of sale the price is payable

on a day certain irrespective of delivery and the buyer

wrongfully neglects or refuses to pay such price, the

seller may sue him for the price although the

property in the goods has not passed and the goods

have not been appropriated to the contract.


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DAMAGES FOR NON-ACCEPTANCE:

Where the buyer wrongfully neglects or refuses to accept andpay for the goods, the seller may sue him for damages fornon-acceptance.

Damages for non-delivery:

Where the seller wrongfully neglects or refuses to deliver the

goods to the buyer, the buyer may sue the seller for damagesfor non-delivery.


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REMEDY FOR BREACHOFWARRANTY

(1)Where there is a breach of warranty by the seller, or

where the buyer elects or is compelled to treat any breach ofa condition on the part of the seller as a breach of warranty,

the buyer is not by reason only of such breach of warranty

entitled to reject the goods; but he may-(a) Set up against the seller the Brach of warranty indiminution or extinction of the price; or

(b) Sue the seller for damages for breach of warranty.

(2)The fact that a buyer has set up a breach of warranty in

diminution or extinction of the price does not prevent him

from suing for the same breach of warranty if he has sufferedfurther damage.


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REPUDIATION OF CONTRACT BEFORE DUE DATE.

Where either party to a contract of sale

repudiates the contract before the date ofdelivery, the other may either treat the

contracts as subsisting and wait till the

date of delivery, or he may treat thecontract as rescinded and use for

damages for the breach.


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INTEREST BYWAY OF DAMAGES AND SPECIAL

DAMAGES

Nothing in this Act shall affect the right of the seller or thebuyer to recover interest or special damages in any casewhereby law interest or special damages may berecoverable, or to recover the money paid where theconsideration for the payment of it has failed.

In the absence of a contract to the contrary, the Court mayaward interest at such rate a it think fit one the amount ofthe price-

(a) to the seller in a suit by him for the amount of the price.-from the date of the tender of the goods or from the date onwhich the price was payable.

(b) to the buyer in a suit by him for the refund of the price ina case of a breach of the contract on the part of the seller-from the date on which the payment was made.


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MISCELLANEOUS

Exclusion of implied terms and conditions.

Reasonable time a question of fact.

Auction sale.

Savings.


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THANKYOU!!

the sale of goods act (3)

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