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RULES REGARDING TRANSFER OF PROPERTY
Section 19 of the Act states when there is a contract of sale for specific or ascertained goods, the property in such goods are transferred to the buyer according to the intention of parties. In case the intention of the parties not be ascertained (neither expressly nor implied) regarding when the property in goods was said to be transferred to buyer, then in these circumstances the rules given under section 20 – 24 of Sale of Goods Act, 1930 are to be followed.Rules regarding transfer of property (section 20 – 24):
1. Specific gods in deliverable state (Sec 20): In a contract of sale of specific goods in deliverable state, the property in goods passes to the buyer when the contract was made irrespective of fact whether the payment was made or not, whether the goods were delivered or not or postponed.
For example: In Tarling VS. Baxter, a contract for the sale of a certain stack of hay was entered into on January 6. The price was to be paid on February 4, the stack was not to be removed until May 1. The stack was accidentally destroyed by fire on January 20. It was held that in this case the property in the goods has passed to the buyer even though the payment of the price and the delivery of the goods were postponed and therefore the buyer should bear the loss.
2. Specific goods not in deliverable state (Sec 21): Sec 21 lays down that where there is a contract for the sale of specific goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property does not pass until such thing or action is done and the buyer has notice thereof.
For example: The contents of a tank of oil were sold the oil was to be filled into drums by the seller and then the drums were to be taken away by the buyer. Some of the drums were filled in the presence of the buyer, but before the remainder could be filled a fire broke out and the entire quantity of oil was destroyed. The buyer must bear the loss of the oil which was put into drums and the seller must bear the loss of the remainder. (Maung Paw v.s. Maung Saw, 12, 1C. 805)
3. Specific gods where price is yet to be determined (Sec 22): Sec 22 lays down that where there is a contract for the sale of specific goods in a deliverable state but the seller is bound to weigh, measure, test or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pas until such act or thing is done and the buyer has notice thereof.
For example: The buyer contract to buy 10 quintals of oil from the seller Rs 2000 per quintal. The seller weighed 3 quintals of oil and delivered them to the buyer, the buyer paid for 3 quintals of oil. The ownership of remaining 7 quintals shall be transferred only when it shall be weighed.
4. Unascertained goods and its appropriation (Sec 23): Sec 23 deals with the question of passing of property in the case of a contract for the sale of unascertained or future goods by description. It provides that in such case, when the goods are unconditionally 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 property in goods passes to the buyer.
For example: ‘A’ had contracts to sell ‘B’ 20 bags of sugar from the bulk. After contract, ‘A’ fills 20 bags with sugar and gives notice to ‘B’ that the bags are ready and requires him to take them away. ‘B’ says he will take them as soon as he can. By this appropriation by ‘A’ and assent by ‘B’, sugar becomes the property of ‘B’.
5. Goods sent on Sale or return basis (Sec 24): When goods are sold under a contract of ‘Sale or return basis’, the sale is a conditional sale. The property is such a case passes to the buyer:
i) When the buyer signifies his approval or acceptance to the seller.
ii) When the buyer does any other act which implies his acceptance.
iii) Retention of goods without approval. (time is fixed or not)
For example: the buyer of a horse on sale or return terms had 8 days to return the horse. The horse died within 8 days, but without his fault. It was held that the seller could not recover the price of the horse as the property in horse had not yet passed to the buyer.
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