TRANSFER OF PROPERTY

IntroductionAccording to the Transfer of Property Act 1882,

“Transfer of Property“ means an act by which a person conveys property to one or more persons. The act of transfer may be done in the present or for the future. The person may include an individual, company or association or body of individuals, and any kind of property may be transferred, including the transfer of immovable property.

Transfer of propertySale is the first step in the “

TRANSFER OF PROPERTY IN GOODS “ by the seller to the buyer.

The Phrase “ TRANSFER OF PROPERTY IN GOODS “ means Transfer of ownership of the Goods from one person to another.

Transfer of property(contd..)

Property in Goods is different from Possession of Goods.

Possession of Goods refers to the custody over the Goods whereas Property in Goods means ownership over the Goods.

Importance of transfer of propertyRisk follows ownership if property has passed to the

buyer, he becomes the owner of the goods and then the risk of destruction, damage or loss.

Action against third parties if goods are damaged by action

of third parties, only owner of goods can take the action.

Importance of transfer of property(contd..)Suit for priceSeller become entitled to recover

price of goods only when property in goods has passed to buyer.

InsolvencyIf the ownership has passed to

buyer and buyer became insolvent, buyer’s official receiver can take possession of goods or vice versa...

Time when property passes

1)Specific or ascertained goods.

2)Unascertained goods.

Specific or ascertained goodsGoods that are existing at the

time of contract of sale and it is identified and agreed upon time of sale.

Section 19 of Sale of Goods Act provides “Where there s a contract for sale of specific or ascertained goods,the property in them is transferred to buyer at such time as the parties to contract intend to be transferred”.

Rules as regards ascertaining goods (sec.20-24)

1)Passing of property at time of contract

When there is a unconditional contract for the sale of goods in a deliverable state, The property in goods passes to buyer when contract is made. The payment of price of delivery does not prevent property in goods passing at once.

Passing of property delayed beyond date of contract

Goods not in deliverable state

Something has to be done by the seller to put them in a deliverable state, property passes only when such thing is done, and the buyer has notice thereof.

Passing of property delayed beyond date of contract(contd..)

When price of goods to be ascertained by weighing or measurement

Where there is a contractor for the sale of specific goods in a deliverable state but seller is bound to weigh, test or do some other thing with reference to them, for ascertaining the price, the property does not pass till such act or thing is done and the buyer has notice of it.(sec.22).

Unascertained or future goods (sec.23)

There is a contract for the sale of unascertained goods, property in the goods in not transferred to the buyer unless and until the goods are ascertained.(sec18).

Process of ascertainment involves separating, weighing, measuring, counting.

Unascertained or future goods(contd..)

Sale “On Approval” or Sale or Return” basis

Where goods are delivered to the buyer ‘on approval’ or on ‘Sale or return’ or similar terms, the property passes to the buyer:

Unascertained or future goods(contd..)

Essentials of valid appropriation1.The appropriation must be of goods answering contract description.2.The appropriation must be intentional.3.The appropriation must be made either by seller with the assent of buyer or by the buyer with the assent of seller.4.The appropriation must be unconditional.

Unascertained or future goods(contd..)Delivery to carrier[sec.23(2)].Delivery to a carrier without reserving the right of disposal is a delivery to the buyerand the property passes at once at a time of delivery to the carrier.Reservation of right of

disposal(sec.25)Reserving a right to dispose of the goods until certain conditions(like payment of price) are fulfilled.

Transfer of title by Non-owners (sec.27-30)

Transfer of title by Non-owners (sec.27-30)

The general rule is that only the owner of goods can transfer a good title. No one can give better title than he himself has. This rule is expressed by the maxim “Nemo dat quod non habet,” which mean “that no one can give what he himself has not.”

Exception of the rule

Sale by mercantile agent.(sec.27)

It as an agent having in the customary course of business as such agent authority either to sell goods for the purpose of sale, or to buy goods, or to raise money on the security of goods.

Exception of the rule(contd..)Sale by a joint-owner.(sec.28)Several joint owners of goods has

the sole possession thereof, with the consent of the others, any purchaser from such person, for value without notice at the time, of the seller’s want of authority to sell, acquire a good title thereof against the other joint owners.

Exception of the rule(contd..)

Sale by a person in possession under a voidable contract(sec.29)

A person who has obtained possession of goods under a contract which is voidable on the ground of fraud, misrepresentation, coercion, or undue influence, can convey a good title, provided the sale takes place before the voidable contract is avoided.

Exception of the rule(contd..)

Sale by a seller in possession of goods after sale.(sec.30)

A seller having sold goods, continues in possession thereof or title to the goods, the transfer by such person or by a mercantile agent acting for such person, of the same, by way of sale will pass a good title to the transferee, if such latter person has acted in good faith and without notice of the previous sale.

Exception of the rule(contd..)Sale by buyer in possession of

goods.(sec.30(2))A person having bought or agreed to buy

obtains, with the consent of the seller, possession of the goods or of the documents of title to the goods. The delivery of such person, of the goods or documents, pledge or other disposition thereof will be valid and effective, if the person receiving the same, acted bonafide and without notice of the seller’s lien, if any.

Exception of the rule(contd..)Sale by an unpaid seller.

(sec.54(3))An unpaid of goods who has

exercised his right of the lien or stoppage in transit can, even though the ownership in them has passed to the buyer, resell the goods and convey a valid to another buyer, though no notice of re-seller has been given to the original buyer.