Sale of Goods

SALE OF GOODS ACT, 1930  According to Section 4(1) of the Sale of Goods Act 1930 “ 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.”  Essential Elements of Contract of Sale a) Sell Seller er and and buye buyerr b) Goods c) Transf Transfer er of of gener general al Prop Propert erty y d) Price e) Essentia Essentiall element elements s of a valid valid contra contract. ct.

(a)

Absolute Or Conditional Offer & acceptance (b) Delivery and payment (c ) Express or implied. Meaning and Types of Goods (sec. 2(7)) A goods means every kind of movable property other than actionable claims and money, and include the following: a) Stoc Stock k and and shar shares es b) Growi Growing ng crops, crops, grass grass and and thing things s attac attached hed to or forming forming part part of the land land which which are are agreed to be served before sale or under the contract of sale. Things Excluded from the Terms ‘Goods’ a) Acti Action onab able le clai claims ms b) Money, Money, which which means means the the legal legal tender tender c) Immo Immova vabl ble e pro prope pert rty y TYPES OF GOODS (SEC.-6) Goods

a) Existing goods  Specific goods, Ascertained goods ,Un ascertained goods. b) Futu Future re good goods s c) Cont Contin inge gent nt good goods. s.

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CONDITIONS AND WARRANTIES STIPULATED (SEC.-12(1)) A stipulation in a contract of goods may be condition or warranty. Condition (S-12 (2)) A condition is a stipulation: a) Which Which is essenti essential al to the main main purpos purpose e of the contrac contract, t, and b) The breach of which gives gives the aggrieved party a right to terminate terminate the contract

Warranty (S-12 (3)) A warranty is a stipulation: a) Which Which is collate collateral ral to the the main purpos purpose e of the contrac contractt and b) The breach breach of which gives gives the aggriev aggrieved ed party party a right to claim damag damages es but not a right to reject goods and to terminate the contract. Express And Implied Conditions And Warranties a) Express conditions conditions & warranties warranties : these are expressly expressly provided provided in the the contract. b) Implied Implied conditions conditions and and warrantie warranties s : these are implied implied by law in every every contract contract of sale of goods unless a contrary intention appears appears form the terms of the contract. Impliled Conditions And Warranties

a) b) c) d) e) f) g) h)

IMPLIED CONDITIONS Cond Condit itio ions ns as as to titl title e (sec (sec 14( 14(a) a))) Cond Condit itio ions ns in case case of sale sale by description (Sec – 15) Cond Condit itio ion n in cas case e of sal sale e by sam sampl ple e (Sec – 17) Cond Condit itio ions ns in case case of sale sale by description and sample (Sec – 15) Condit Condition ion as to to qualit quality y or fitnes fitness s (Sec (Sec – 16(1)) Cond Condit itio ion n as to Mer Merch chan anti tile le qua quali lity ty (Sec- 16(2)) Cond Condit itio ion n as to to whol wholes esom omen enes ess s Condit Condition ion implie implied d by custom customers ers (Sec(Sec16(3))

a) b) c)

IMPLIED WARRANTIES Warra Warranty nty as to to quiet quiet posses possessio sion n (Sec (Sec – 14(b)) Warr Warran anty ty of free freedo dom m from from encumbrances (Sec – 14 (c)) Warra Warranty nty as to to quali quality ty or or fitn fitness ess for a particular purpose annexed by usage of  trade (Sec – 16(3))

Meaning and Exception to the Doctrine of Caveat Emptor:  The expression ‘Caveat Emptor’ means ‘let the buyer beware.’ In other words, it is not part of the sellers duty to point out defects of the goods which he offers for sale, rather it is the duty of the buyer to satisfy himself about the quality as well as the suitability of the goods. Exceptions To The Doctrine Of Caveat Emptor a) b) c) d) e) f) g)

In case case of misrepre misrepresent sentatio ation n by the the seller. seller. In case case of conceal concealment ment of of latent latent defects defects by seller seller In case case of sal sale e by descr descript iption ion (S (S –15) –15) In case case of of sale sale by by sampl sample e (S-15) (S-15) In case case of sale sale by descr descripti iption on and sampl sample e (S – 15) 15) Fitnes Fitness s for a par partic ticula ularr purpos purpose e (S – 16(1)) 16(1)) Mercha Merchanta ntable ble qua qualit lity y (S – 16(2)) 16(2))

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RIGHTS OF UNPAID SELLER  The seller of goods is deemed to be an ‘unpaid seller’ a) When the the whole whole of the price price has has not been been paid or tendered tendered b) When a bill of exchange exchange or the other negotiable instrument instrument (such (such as cheque) cheque) has been received as conditional payment and it has been dishonored (Sec – 45(1)). c) The term ‘seller includes any any person who is in in the position position of a seller (for instance instance an agent of the seller to whom the bill of lading has been indorsed, or a consignor or agent who has himself paid, or is directly responsible for the price) S – 45(2). Note: a) The seller shall be called called an unpaid unpaid seller even when only only a small portion portion of the price price remains to be paid. b) It is for the non-payment non-payment of the price and and not for other other expenses, expenses, that a seller is termed as an unpaid seller c) Where Where the goods goods have been been sold on credit, credit, the the seller seller cannot cannot be called called as an unpaid unpaid seller during the credit period unless the buyer becomes insolvent. d) Where the the full price price has been tendered tendered by the the buyer and and the seller seller has has refused to accept it the seller cannot be called as unpaid seller.

RIGHTS OF AN UNPAID SELLER 

AGAINST THE BUYER  PERSONALLY

AGAINST GOODS

I WHERE THE PROPERTY IN GOODS IS PASSED TO THE BUYER 

RIGHT TO LIEN

RIGHT OF STOPAGE IN TRANSIT

SUIT FOR  PRICE

II WHERE THE PROPERTY IN THE GOODS HAS NOT PASSED TO THE BUYER 

RIGHT OF RESALE

WITH HOLDING DELILVERY

SUIT FOR  DAMAGES

LIEN

SUIT FOR  INTEREST

RIGHTS OF BUYER RIGHTS OF BUYER 

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STOPPED IN TRANSIT

RESALE

SUIT FOR  DAMAGES FOR   NON-DELIVERY SEC. 57

SUIT FOR  SPECIFIC PERFORMANCE SEC. 58

SUIT FOR   BREACH OF WARRANTY SEC. 59

IN CASE OF REPUDIATIO  N OF THE CONTRACT SEC. 60

SUIT FOR  INTEREST SEC. 41(3)

AUTION SALE (S – 64) Auction sale means a public sale where intending buyers assemble at one place and offer the price at which they are ready to buy the goods. The offer of the price is known as ‘bid’ and the person making the bid is known as the ‘bidder.’ The owner of the goods may himself  sell them by auction or appoint a person to sell the goods in auction on his behalf. The person so appointed is known as “auctioneer.”

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