The Sale of Goods Act Lecture

The Sale of Goods Act Lecture - Transcript

The Sale of Goods Act 1939
Essentials of a contract of sale
A Two parties
B Goods The subject matter of a contract
C Transfer of property
D Monetary consideration price
E Essential elements of a valid contract
F A Contract of sale includes sale as well as an agreement to Sell
Goods
a Existing goods
b Future goods
c Contingent goods
a Existing goods
Existing goods are those goods that are owned and possessed by the seller at the time of sale These may be of three types which are as follows
Specific goods Specific goods are those goods that are identified and agreed upon at the time of a contract of sale is made
Ascertained goods Goods identified or which become ascertained subsequent to the formation of the contract of sale
Unascertained or generic goods The goods that are not identified and agreed upon at the time of the contract of sale are the unascertained or generic goods Such goods are defined by description only and may form a part of a lot
Future goods
Future goods are those that are to be manufactured produced or acquired A seller does not actually possess the future goods at the time of the sale A contract of present sale of future goods purports to operate as an agreement to sell and not a sale
Contingent goods
Contingent goods are a type of future goods Goods the acquisition of which by the seller depends upon a certain contingency are called contingent goods
Effects of destruction of goods or perishing of goods Sections 7 and 8
The contract must be an agreement to sell and not of actual sale
The loss must be specific
The loss is not caused by the wrongful act or default of either buyer or seller
The goods have been perished before the risk is passed to the buyer
Ascertainment of price Sections 9 10
Stipulation as to time Section 11
Stipulation relating to time of payment and
Stipulation not relating to time of payment but to other things like delivery of goods etc
Transfer of title Sections 27 30
Sale by mercantile agent
Sale by one of the joint owners
Sale by a person in possession under a voidable contract
Sale by one who has already sold the goods but continues in position thereof
Sale by buyer opting possession before the property in the goods vested in him
Sale by an unpaid seller
Sale under the provisions of other Acts
Transfer ownership and delivery of goods
Passing of property Sections 18 26
Essentials of appropriation
Reservation of right to disposal Section 25
Passing of risk Section 26
Exceptions to the doctrine of Caveat Emptor
Sale and agreement to sell points of distinction
Nature of Contract
Transfer of ownership of property
Types of goods or nature of property transferred
General and particular property
Consequences of breach
Risk of loss
Seller s right of reselling the goods
Seller s insolvency
Buyer s insolvency
Sale and Hire purchase Agreement
Nature of contract and ownership
Termination of a contract
Implied conditions and warranties
Payment in installments
Insolvency of the buyer and risk of loss
A sale is subject to the imposition of sales tax at the time of a contract of sale while sales tax is not leviable on a hire purchase until it is finally converted into a sale
Sale and bailment
Sale and barter exchange
Difference between a condition and a warranty
Purpose
Difference as to breach
Difference as to treatment
Essence of the contract of sale
Damages
Express Implied conditions in a contract of sale
Sections 14 17
Condition as to title Section 14 a
Condition as to sale by description Sec 15
Condition as to sale by description as well as by sample
Condition as to sale by sample Section 17
Condition as to quality or fitness Sec 16 1
Condition as to merchantability Section 16 2
Condition as to wholesomeness
Condition implied by custom Section 16 3
Implied Warranties in a Contract of Sale
Implied warranty of quiet possession Section 14 b
Implied warranty of freedom from encumbrance Section 14 c
Implied warranty as to quality or fitness by usage of trade Section 16 3
Implied warranty to disclose dangerous nature of goods
Delivery of goods
a Actual delivery
b Symbolic delivery
c Constructive delivery or delivery by allotment
Rules regarding delivery of goods
a Mode of delivery Section 33
b Delivery of goods and payment of price are concurrent conditions Section 32
c Effect of part delivery of goods Section 34
d Buyer to apply for delivery Section 35
e Place of delivery of goods
f Risk of delivery Section 40
g Time of delivery Section 36 2 and 4
h Goods in possession of a third person or party Section 36 3
i Cost of delivery of goods Section 36 5
j Delivery of wrong quantity Section 37
k Installment deliveries of goods Section 38
l Delivery to carrier or wharfinger Section 39
m When an acceptance is complete on delivery of goods Section 42
n Buyer not bound to return rejected goods Sec 43
o Liability of buyer for neglecting or refusing delivery of goods Section 44
Rights of unpaid Seller and remedial measures
The conditions mentioned below must be fulfilled before a seller can be deemed to be an unpaid seller
He must have sold goods against cash and the price must be due
He must be unpaid either wholly or partly
He must have an immediate right or action for the price
He must have not refused payment when tendered
A bill of exchange or any other negotiable instrument was received but dishonored
Rights of an unpaid seller and remedial measures
Under the Sale of Goods Act the unpaid seller gets certain rights which can be broadly classified under the following two heads
Rights against goods and
Rights against the buyer personally
a Rights of unpaid seller against the goods sold
Where the property in the goods sold has been passed he has the following rights Section 46 1
Right of Lien Section 47 to 49
Right of stoppage of goods in transit Section 50 to 52
Right of resale Section 54
Where the property in the goods has not been transferred he gets the following two rights Section 42 2
Withholding the delivery of goods and
Stoppage in transit
b Rights against the buyer personally
Following four rights the unpaid seller gets against the buyer
Suit for price Section 55
Suit for damages Section 56
Repudiation of contract Section 60
Suit for interest Section 61
The rights of the unpaid seller also can be shown diagrammatically as follows
Rights of an unpaid seller against the goods
Right of lien Section 47 to 49
Termination of Lien Section 49
The unpaid seller loses his lien on the goods sold
when he delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without reserving the right of disposal of the goods
when the buyer or his agent lawfully obtains possession of the goods
by waiver of his lien This means the unpaid seller loses his lien on the goods when the seller voluntarily abandons his right of lien on the goods He may do this either expressely or impliedly
Right of stoppage of goods in transit
Duration of transit Section 51
How stoppage in transit is affected Section 52
Distinction between right of lien and right of stoppage in transit
Right of lien Right of stoppage in transit
The right of lien is exercised by the unpaid seller when the goods are in his possession actual or constructive If he loses the possession he loses the right of lien
The right of stoppage in transit can be exercised when goods are in transit or may be in the possession of the middleman

The right of lien is exercised when the buyer is able to pay but does not pay
Unpaid seller s right to stop the goods in transit arises only when the buyer is insolvent

Right of lien comes to an end when the seller loses the possession of goods
Right of stoppage in transit commences when the seller loses the possession of the goods sold and it continues until the buyer acquires their possession

In the right of lien the possession is retained by the seller
In the right of stoppage the goods in transit possession is regained


Effect of pledge or sub sale by the buyer Section 53
Right of resale Section 54
If no notice of re sale is given to the buyer the unpaid seller is not entitled
to recover any loss on re sale of the goods and
to retain surplus if any on the resale
Right to withhold the deliver of goods Section 46 2
Rights of an unpaid seller against the buyer personally
The unpaid seller has the following four rights available against the buyer personally
Right to sure for prices
Right to sure for damages for non acceptance
Right to repudiate the contract
Right to sure for interest
Rights of parties in case of breach of contract
Suit for non delivery
Suit for specific performance Section 58
Suit for damages for breach of warranty Section 59
Suit for recovery of price Section 61
Auction Sale Section 64
In the case of a sale by auction
Where goods are put up for sale in lots each lot is prima facie deemed to be the subject of a separate contract of state
The sale is complete when the auctioneer announces its completion by the fall of the hammer or in any other customary manner and until such announcement is made any bidder may retract his bid
A right to bid may be reserved expressly by or on behalf of the seller and where such right is expressly so reserved but not otherwise the seller or anyone person on his behalf may subject to the provisions hereinafter contained bid at the auction
Where the sale is not notified to be subject to a right to bid on behalf of the seller it shall not be lawful for the seller to bid himself or to employ any person to bid at such sale or for the auctioneer knowingly to take any bid from the seller or any such person and any sale contravening this rule may be treated as fraudulent by the buyer
The sale may be notified to be subject to a reserved or upset price
If the seller makes use of pretended bidding to raise the price the sale is voidable at the option of the buyer
Sales of Goods Act
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Dr Subhash Gupta