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Business Law Important Topics  UNIT - 3:  THE SALE OF GOODS ACT 1930   CONTRACT OF SALE GOODS  Essentials Of Valid Sale Difference Between Sale And Agreement To Sell  Types Of Goods CONDITIONS AND WARRANTIES Condition And Warranty Implied Conditions And Implied Warranty In Contract Of Sale Doctrine Of Caveat Emptor TRANSFER OF OWNERSHIP Relevance Of Transfer Of Ownership Rules Regarding Transfer Of Property Sale By Non – Owner And Its Exception UNPAID SELLER Rights Of Unpaid Sellers Remedies/ Suit For Breach Of Contract If you found this useful then share with others as sharing knowledge means gaining knowledge. If you have any doubt then use the comment section below. If you want to download this as study material, drop me a message in the below contact form and lastly if you want latest Accounting lessons, study materials, IQ lists and many more like this then subscribe my blog with your email and start your jou...

Breach of contact: When the buyer or seller denies to fulfill his part of performance in a contract of sales, they are said to be committing breach. In short, breach means “non-performance by the parties.” 1. Breach by buyer:   A buyer may commit breach in a contract of sale when he does not accept the goods when the seller offers to deliver them to him or when the buyer refuses to pay the price for the goods. In such a case, the seller may take a personal action against the buyer or he may retain the goods with him until his payment is received. Remedies of seller against the buyer:  The seller may take an action either against the goods or against the buyer personally. These have already discussed in topic 10 rights of unpaid seller. 2. Breach by seller: Where the seller does not deliver the goods to the buyer in accordance with the terms of the contract, he is said to have committed breach. Therefore, the buyer has the following remedies against seller. Reme...

Introduction : A contract of sale is just like any other contract, where both the parties need to perform their part of obligations. So it is the duty of the seller to deliver goods as pert he terms of the contract and it is the duty of the buyer to accept the delivery of goods and pay for them accordingly. In case any of the parties does not perform his part of the promise, it amounts to breach of contract and therefore the aggrieved party can sue the defaulting party. Unpaid Seller: Under Section 45, a seller is said to be unpaid: i) When the seller does not receive whole or part of the price. ii) Where the seller had a negotiable instrument such as a bill of exchange and that instrument has been dishonoured. The seller remains an unpaid seller as long as any portion of the price remains unpaid. For example: A seller draws a bill of exchange for a price of goods on the buyer. The buyer duly accepted it, but on the date of maturity, the buyer refused to pay. Held, the selle...

“NEMO DET QUOD NON HABET” – This Latin maxim means that “No one can give who possesses not”. The general rule is: “No man can sell goods and give a good title unless he is the owner of the goods”. In a contract of sale, the seller can sell the goods only if he is the owner of those goods. Before the contract of sale, it is must that the seller is the true owner of the goods and when the seller transfers the property to the buyer, then the buyer becomes the true owner of the goods. If the seller was not the owner of the goods, then he cannot transfer the ownership rights the buyer. i.e. “No man can pass a better title than he himself has.” For example: ‘X’ stole a car and sold it to ‘Y’ bought it in good faith and without knowledge of defective title of car. Held, ‘Y’ could not obtain title of goods. Exception to this rule: There are few cases where a non – owner can transfer the property in goods i.e. although the seller was not the owner of the goods but he did pass a bet...

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 ...

INTRODUCTION A contract of sale is a contract where the seller performs his part of obligation by transferring the ownership rights and possession of goods to the buyer perform by making the payment for the goods.  Transfer of property is different from Transfer of Possession. TRANSFER OF POSSESSION: When the custody of the goods is given by the seller to the buyer, then we say that the possession of goods has been transferred. For example: ‘A’ gives his car for repair to a mechanic. Here only the possession of goods is given and not ownership rights. TRANSFER OF PROPERTY:  Transfer of property means transfer of ownership rights by the seller to the buyer. The legal rights to own the goods are also handed over to the transferee. For example: ‘A’ sold his car to ‘B’ for Rs 1,50,000 and transferred the ownership document in the name of ‘B’ although the car is still in custody of ‘A’. Held, the property rights or ownership rights of the car now belongs to ‘B’, no matte...

‘Caveat Emptor’ means “Let the Buyer Beware”. The Doctrine of Caveat Emptor states that when the buyer was given a chance of examining the goods but he did not examine them, in fact relied on his own skill and judgement and makes a bad selection then he cannot blame anybody except himself. For example: Raju picks up a shampoo from a departmental store along with the other articles that he bought from there. Later after using that shampoo he developed infection on his scalp as he had bought the shampoo for curing blisters on his scalp which he never mentioned to the seller. Held, Raju was himself liable therefore, he could not sue the seller for the losses that he suffered. EXCEPTIONS TO THE RULE The law of Caveat Emptor has certain exceptions, where in the seller shall stand liable for losses suffered by the buyer. 1. Where the buyer makes the purpose known to seller: Where the buyer make the seller know the particular purpose for which the buyer requires the goods and relie...

WHAT IS IMPLIED CONDITIONS AND IMPLIED WARRANTY IN CONTRACT OF SALE These are those conditions and warranties which the law incorporates into every contract of sale. Apart from the express condition and warranties, implied conditions and warranties that have been provided under section 14 – 17 of sale of Goods Act, 1930 are binding on the parties in every contract of sale. Breach of implied conditions can repudiate the contract and breach of implied warranties can only enable the aggrieved party to claim damages. IMPLIED CONDITIONS: 1. Condition as to Title: U/S 14(a): In a contract to sale, it is an implied condition that the seller should be the owner of the goods sold and he should be having the right to sell these goods. Where the seller was not true owner of the goods or did not have the right to sell these goods. Then the buyer has the right to reject the goods and refuse to pay for them if the buyer has already paid the price then he can it claim back. For example: ‘R’...

Introduction: When forming a contract, a party may make a statements with a view to inducing the other party to enter in to the contract. Such statements when made before entering into the contract are known as Representation. Such representations may or may not be part of the contract and this depends upon the intention of the parties. So the representations which become a part of the contract are called as Stipulations. And the representations which do not form part of contract are merely expression of opinion and their non-fulfilment does not give rise to any legal consequences. Definitions: According to Section 12 (1) of Sale of Goods Act, 1930 “A stipulation in a contract of sale with reference to goods which are subject matter thereof, may be a condition or a warranty.” Condition u/s 12 (2) “A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated.” For example: A sel...

Meaning:  The subject matter of contract of sale is GOODS. In other words, the contract of sale is made for the sale of goods by the seller to the buyer. Goods means any kind of a movable property but it does not include money, actionable claims and any other immovable property. The goods which form the subject matter of contract of sale are divided into three: 1. Existing Goods: Goods which exists and which are owned and possessed by the seller at the time of making the contract of sale is called existing goods. Existing goods are further classified into three namely: i) Specific goods: The goods identified by the buyer before entering into the contract are called specific goods. The property in specific goods passes to the buyer at the time of making the contract itself because these goods are selected before forming the contract. For example: Selection of one horse out of 25 horses is a specific good. ii) Ascertain Goods: Ascertain goods are those which are iden...

DIFFERENCE BETWEEN SALE AND AGREEMENT TO SELL Basis Contract of sale Agreement to sell 1.        Meaning A contract where the seller transfers the property in goods to the buyer for a price is a contract of sale. An agreement where the seller agrees to transfer the property in goods to the buyer in future or upon the fulfilment of certain conditions is called an agreement to sell. 2.        Nature of contract It is an executed contract where both parties have performed. It is an executory contract where property in goods is to be transferred in future. 3.        Transfer of property Property is immediately transferred at the time of making the contract. Property is transferred in future upon the fulfilment of conditions. 4.        Risk of loss Risk of lo...

ESSENTIALS OF VALID SALE INTRODUCTION: The Sale of Goods Act 1930 deals with the law relating to sale of goods in India. The term ‘Goods means every kind of movable property, other than money and actionable claims. The Sale of Goods Act, 1930 is mainly based on the English sale of goods Act, 1893. Earlier the Sale of Goods Act, 1930 was covered under the Chapter VII of Indian Contract Act, 1872, the provision of which were found to be inadequate. Therefore, a strong need was felt to have an independent Sale of Goods Act and consequently a new act called Sale of Goods Act 1930 was passed. CONTRACT OF SALE: According to Section 4 of the Sale of Goods Act, “a contract of sale of goods is a contract whereby the seller transfers t agrees to transfer the property in goods to buyer for a price.” A contract of sale consists of the following: 1. Sale or Absolute Sale 2. Agreement to sell or Conditional Sale. 1. Sale or  Absolute sale: When  the ownersh...