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The document discusses the Sale of Goods Act, 1930, outlining the distinctions between a sale and an agreement to sell, including the transfer of property and risk. It explains the implications of conditions and warranties in contracts, detailing the rights of buyers in cases of breach. Additionally, it addresses the principle of 'Nemo Dat Quod Non Habet,' emphasizing that a seller cannot transfer better title than they possess.
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0% found this document useful (0 votes)
35 views28 pagesDocScanner 12 Feb 2025 8-45 Am
The document discusses the Sale of Goods Act, 1930, outlining the distinctions between a sale and an agreement to sell, including the transfer of property and risk. It explains the implications of conditions and warranties in contracts, detailing the rights of buyers in cases of breach. Additionally, it addresses the principle of 'Nemo Dat Quod Non Habet,' emphasizing that a seller cannot transfer better title than they possess.
Uploaded by
mrajit515Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF or read online on Scribd
/ 28
Tegal Helpline: Contract Law - 1
Section I]
Sale of Goods Act, 1930
jiestion 15 E
ei”. Can the
nswert, As
nis fers OF,
3. In case of sale, the property in goods Passes to the buyer and so,
the risk also Passes to the buyer. In agreement to sell, since Property does
Not pass to the buyer, the ris!
k also does not pass to the buyer,
4. In case of sale, the buyer can be sued for the Price of the goods
SS the property has passed to the buyer and the seller can be sued for
Non-delivery of goods but in an agreement to sell, the aggrieved party
© sue for damages only and not for the price, unless the price was
Payable at q Specified date,
1) Case of sale, the buyer is liable for any subsequent loss or
destruct
©n of the goods but in an agreement to Sell, the liability remains
With the settey
T.
67 Legal Helpline: Contract Lave - 1 ‘Legal Helpline: Contact Law - 1)
rcomespond with the description; and if the sale i
azseript ortespond both with tens
th the sample ag
e buyer refises to accept the goods or d
can: ;
buyer for price, even if goods are in his own p
cond with the description given in the contact the gabe
in accordance with the description given in the’ fontract,
5: ject the goods and treat the t as repudiated
ice even though goods are in possession of the buyer. one ees bs
Sale made with regard to future zoods;
A-contract/of sale can be made.
ican only operate as an agreeme; ; :
[present sale of goods because future goods which are fi fe ee eee eer ae
possessed by th the time of contract of sale but Wl ; ed is according 10. 0 2a debe Sele
manufactured or produced or acquired. by. the’ seller nil gr because. it: OnLy! COMSEDSTGS ay Uae ema atSRDn ES
cure th the description (lava sugat) sven inthe Contract. is}
therefore, there can be’no immediate transfer of properly I fe scordance with Mele PoC) of Sale or GoentAre weet ae
Property in such goods can be tansferted only on some Aceorling to Section 37(3) of Sale of Goods Acs whe
ilfactired Or prodlced on, acquit siler delivers to the buyer the goods he contracted to sell mixed with
he cantamie'a Contcscr ceca STATE foods of a different description not included in the contract, the buyer
Jonly es an agreernent to sel tn future: : tay accept the goods which are in accordance with the contract and
Eee ee ; ‘et the rest or may reject the whole.
Question 2 A contracts with B to buy 50 chairs of speci ‘The words “mixed wit
and model. B rs 30 chairs of required sp y". The sub-
model and ¢! 20
; accept the goods which are in accordance with the contrat
\r may reject the whol :
ion’ in sub-section (3) is to be strictly constructed
tles the buyer to accept the goods which are in
th the contract Ye
However if goods of the description ordered are delivered, but
them are of inferior quality, there is no mixture as contemplated |
‘on 37(3), In such a case the remedy of the buyer is to accept of 10
ee aN
" Sales, #
"of Goods Act, 1930
bys
where there is a contract =
ied condition that the ‘Legal Helpline: Contract Law -I1
‘Legal Helpline: Contract Law - 11
according to Section 12(2) and 16 and the buyer
¢ only which are of inferior quality,
In Moore & Co. V. Landauer&Co.”, A contracted
tons of pearl starch, the starch to be packed in bags of 2
When the goods arrived, it was found that 3,000 tons were
,000 were
diated.
(3) A breach of
tbe treated. as
oa jin a contract of tion 0
se on the consti
oa da warrant
fans
model. As he has i
oes cled quali and ede A, te buyer ha
Y's ae
‘though adel the scooter fs
(b) Sale by deseripion (Ss a
yt 30 chairs and sue the sel
Oi the description.
‘corresponds with the sai
imple
description. This rule is by ied condition that th
Section 16(1)). Boods shall be reasonably
however, does not apply
(c) Sale by sample & S B x
s ere is an in
ee rk shall correspond with the sample ing
have a reasonable opportu
comparing the bi
he goods
umomerchantable, rave revealed (Section 16(2).
iiip trade usage attached ar
is quality of goods.
seat There there is a contract for the sale of goods by description,
seres an implied condition thatthe goods shall correspond
‘ha pion and, ifthe sale is by sample as well as by description, i
snt that the bulk of the goods corresponds with the sample
so correspond with the description (Section 15).
jer has made a false representation relating to the goods
and the buyer ce
6, When the seller has deliberately concealed a defect which is not
sppatent on the reasonable examination of the goods.
fion as to wholesomeness: In case of eatabl
condition as to merchan!
there is another implied condition that the goods shall be wholesome,
Q
‘warranties implied by law in a contract for tl
4: With the help of illustrations explain the conditions and
ale of goods.
Answer: Terms or stipulations which are very important and
‘ery root of the transaction are called conditions while those which are
important but not essential for the enforcement of the contract, are called
aranties. These stipulations (conditions and warranties), may be
xpress or implied, Sections 14 to 16 of the Sale of Goods Act deal with
le of caveat emptor is laid down in Section
states that, “Subject to the provisions of this Act and of any other
implied warranty or-condit
the quality or fitness for any particular purpose of goods suppl
contract of sale’ *
However, this doctrine is subject to the following excep:
1, Where the buyer, expressly or by
seller the particular purpose for which th
* js an implied
(1) Implied conditions as to ttle Section 14: There is an 1.
‘ontion on the part of the seller that In the case ofa sale he has aight
vs 3B
72 ‘goods are his own goods, and that he has a
; tis
he was not the ovmer atthe time of sale, and was
(Sold niotoFTear Io BAN
ered that Ahad no title to
goods by description, there is an impli
} correspond with the description; and if the sa
Hence, in the given case, there is no breach of implied condition as t0 othe requisite thing and give ntie tthe BYE iver the
the seller is not isle as the lady did not disclose his 4 particular table to B and itis also agreed
and as su
to the seller.
39
*(1939] | AILER 685 Legal Helpline: Contract Law - Il
and A puts 100 maunds of wheat into the ba
se DAE (wheat) passes to B and In future they will be at his rake,
88°" Gne most common form of appropriating goods to the é
in sub-section (2) of Section 23 is where, In pursuance of the
seller delivers the goods to the buyer or to cartier ot other
ther named by the buyer or not) for the purpose of
jssion to the buyer, and does not reserve the right to disposal, he i
scaiatning 7 have unconditionally appropriated the goods to the cost
gs. The property in
done and the bute deiye goods delivered must conform tothe description given inthe
ut
contract for the sale is of specific goods, as for example, i
in bulk or in heap and the seller is bound to weigh, meas} ‘Where goods that are appropriated to a contract do not conform
or do some other act or thing with reference to the goods for the’
of ascertaining the price, In such a case, the property does not purchaser when they are handed over to the cartier or are
such act or thing is done and the buyer has notice thereor ery of by the purchasers from the barrier [Bhagwant Saran v,
Example: A agrees to purchase all the oranges contained in a' Prasad]”
the rate of Re. 5/- per dozen. This is a contract for sale of speci In case of future goods, property, does not pass unless the goods
ll the oranges contai the basket) in a deliverable st are ascertained. But if there is a contract for sale of future goods by
offnges must be count in the price: Geerition and gpods of that description and in a deliverable state are
Property in the oranges will not pass to the buyer unless the unconditionally appropriated to the contract, either by the seller with the
‘counted and the buyer has notice thereof and if the oranges are assent of the buyer or by the buyer with the assent of the seller, the
before this is done, the loss of the seller, property in the goods thereupon passes to the buyer. Such assent may be
, (d) Where In a contract for the sale ined. express or implied, and may be given either before or after the
goods by description fi appropriation is made but the appropriation of the goods must take place
before there has been repudiation or breach of the contract by either:
he buyer or by the buyer (© When goods are delivered to the buyer on approval or “on sale or
the property In the goods thereupon passes Z return” of other similar terms, the property therein passes to the buyer:
be express or implied, and may be given ei (i) When he signifies his approval or to the seller or does any
appropriation [Section 23 (1)]. olher act, adopting transact
‘The word appro i (i) If he does not signify his approval or acceptance tot
poe sascraseen Gr of goods from the bulk by but retains the goods without giving notice of rejection, then,
counting, easuing ete. for the purpose of satisfying a ‘as been fixed for the return of the goods on the expiration ofmich oa
contract. This appropri can be changed also so lon, ‘and i i ration of a reasonable i
Party has not assented tit. . rf eae ine has been fined, onthe expiration
ee cana
LR 1980 An. nay
1 rey
‘Legal Helpline: Contract Law - IT
Ques 11 Explain statutory provisions regarding transfer of property
as between seller and buyer under the sale of Goods Act. Or
Ques. Write a note on transfer of property in uncertain goods,
Answer: ‘Transfer of property’ is one of the most important Condition
for a contract of sale. The phrase “transfer of property” in goods means
transfer of ownership of the goods. The statutory provisions Tegarding
transfer of property under Sale of Goods Act can be studies as under:
1. Transfer of property in specific or ascertained goods
2. Transfer of property in unascertained and future goods
Transfer of property in specific or ascertained goods
When there is a contract for the sale of specific or ascertained goods, the
property in them is transferred to the buyer at such time as the parties to
the contract intend it to be transferred. For the purpose of ascertaining
the Intention of the parties, regard shall be had to the terms of the
contract, the conduct of the parties. and the circumstances of the case
[Section 19 (1) and (2)].
Unless a different Intention appears, the following rules will
apply for ascertaining the intention of the parties:
(a) Where there is an unconditional contract for the sale of
specific goods in deliverable state, the property in the goods passes to the
buyer when the contract is made, and It Is immaterial whether the time of
payment of the price or the time of delivery of the goods or both is
postponed [Section 20].
Problem: A offers B his horse Re. 1,000/- on a month’s credit. B
accepts the offer. Next day, the horse, being still with B, is killed
accidentally. Who is to suffer the loss?
This is a case of an unconditional contract for the sale of specific goods
in a deliverable state and hence the property in the goods passes from the
seller to the buyer immediately. Therefore, A has to suffer the loss. B’s
liability was only that of a bailee. As no negligence on B’s part is shown,
therefore, A cannot recover damages from B.
(b) 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 deliverable state, the property does not pass until such
thing is done and the buyer has notice thereof (Section 21).
92 Legal Helpline: Contract Law - Tl
Held, A was to bear the loss as the horse was still his property wh
perished. (Elphickys Barnes).*
‘Transfer of property in unascertained and future goods
The rule rel of property in unascertained and
‘and 23. These sections provi
where goods contracted to be sold are not ascertained or where they
future goods, the property in goods does not pass to the buyer unl
the goods are i
‘The word appropriati
hhas not been define
unascertained or future goods by
description and goods of that
description and in a deliverable state
are unconditionally appropriated to the isfy
contract, either by the seller with the |} Purpost, 9f satisying
assent of the buyer or by the buyer
with the assent of the seller, the
property in the goods thereupon passes
to the buyer. Such assent may be
express or implied, and may be given
either before or after the appropriation
is made (Section 23 (1).
by weighing, coun
measuring ete, for
Example: A agrees to sell to B 50 maunds of wheat out of a much]
stock of wheat lying in his godown. It is agreed that B will sen
empty bags for the wheat and A will put the wheat into them, B sen
bags and A puts 50 maunds of wheat Into the bags. The property,
‘g00ds (wheat) passes to B and In future they will be at his risks,
One most common form of appropriating goods to the contract
in sub-section (2) of Section 23 is where, in pursuance of the cont
seller delivers the goods to the buyer or to carrier or othe
(whether named by the buyer or not) for the purpose of transmis
(1880) $ CPD 321 54
94
ona Law = 1
and does mot reserve the right to dis ‘
A oe nditionally appropriated the goods ie tee ee
delivered must conform to the ‘escription given inthe contrac,
goods that are appropriated to a contact do not see
\n to the goods contracted for the property in them do not nn
chaser when they are handed overt the eam coh
very of by the purchasers from the barrier, [Bhagwant Saran vs.
jnath Prasad”)
Bayne yp case of future goods, property, does not pass unless the goods
ascertained, But if there i a contract fo sale of future gock ty
ie xiption and goods of that description and in a deliverable state ate
cevoncitionally appropriated to the contrac, ether by th seller with ke
Le the buyer or by the buyer with the assent of the seller, the
the goods thereupon passes tothe buyer. Such assent may be
Zipress or implied, and may be given either before or after the
sppropriation is made but the appropriation of the goods must take place
before there has been repudiation or breach of the contract by either.
gods
syhere
Po ibe eiad
"LR 195040, 113),
95 Legal Helpline: Contract Law - IT
Ques. “Unpaid Seller has some rights under law.” Explain his ri
4
Ques. Who is unpaid seller of goods and discuss his
stoppage of goods in transit.
Answer: According to Section 45 of
the Sale of Goods Act, 1930, the seller
fe The lien of an
of goods is deemed to be an "unpaid
(@) when the whole of the price
has not been paid or tendered;
() when a
other negotiable
received as conditional payment, and
the condition on which it was received
has not been fulfilled by reason of the
dishonor of the instrument or
otherwise.
The term "sel
includes any person who the
n.of a seller, as, for instance, an
agent of the seller to whom the bill of
lading has been endorsed, or a
consignor or agent who: has’ himself
paid, or is directly responsible for, the
Price,
96
‘Legal Helpline: Contract Law -11
ye seller now refused to deliver back
ming a lion on them until the amount ori ae ads
was held that ons the delivery of the retigeatorfad bento
yer, the right of lien had come to an end andthe same cele,
ived by the seller again getting the possession of those goods.
48 provides that where an unpaid seller has made prt delivery of
the goods, he may exercise his right of lieu on the remainder wales on
art delivery has been made under such circumstances as to shov va
pet ement to waive the lien,
Senn Hammond v/s Anderson’ oat of 100 bags of wheat which
vere to be supplied by the seller to the buyer, 20 have already becn
felivered to the buyer, the seller may exercise his right of lien over the
siher 80 bags. If, however, the buyer gets the whole of the goods
weighed but takes away only a part of them. The delivery ofthe part of
the goods in such case would operate as delivery of the whole and the
sellers right of lien over remaining goods would come to an end.
Termination of lien (Section49)
The unpaid seller of goods loses his lien thereon: 1
@ ‘when he ers 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; é i
(@® when the buyer or his agent lawfully obtains possession of the
goods;
()_ bywaiver thereof :
(@ by estoppel e.g. where the seller so conducts himself that he leads
third parties to believe that the lien. docs not exist. eco bis Ben
The unpaid seller of goods, having a lien thereon, does ae
by reason only that he has obtained a. Cae i the price of the goods.
2. Right of Stoppage in Transit: (Section 7
When the buyer ler eai becomes insolvent, the unpaid seller, ioe
Parted with the possession of the goods, has the right of stopping the
The tions are fulfilled:
The seller can exercise this right only if the conditions are
|. The seller must be unpaid .
2 He must have parted with the possession of goods
mts
"1803 8 RR 763
98 Let ei: Cont tay
Legal Hebe: Contact Law =I
4, The goods must be in transit
4 The buyer has become insolvent
§ The right is subject ta provisions ofthe act
Rights of an unpaid seller agai
has the following rights against the goods whether the. proy
goods has passed to the buyer or not:
1. Right of Lien: (Section 47) The wn - Seley exerdise this right either
The unpaid seller of goods whi nin pession g y giving notice of his cir
retain possession until payment or tender of the goods.
ccan exercise the right of lien Goods are deemed to
(a) where the goods have been sold without any stipul carrier for transmis:
credit; The goods are st
() "where the goods have been sold on credit, but the t
hhas expir
(c) where the buyer becomes.
by taking actual
im to the carrier of
arrival of goods at their destinatio i
ce acknowledges tothe buyer or his agen! athe bolas he gone
] bis beta, even if a further destination ofthe goods is indicated by the
For eg: A was the owner of speeific goods, lying in Zs w: Leela
by Z of A's account. A sold those goods to B, and J] 3.1F the carrier wrongfully refuses to deliver the goods to the buyer
exchange from B for the price and handed B a deli ere cotmans ws Lancashire & Yorkshire Ry. Co”
addressed to N. B re-sold the goods to C and C’ a delivery dslivery of the goods by the seller on board a ship belonging to the
buyer. The bill of lading was also taken in buyer's order. It was held that
in this case it amounted to the delivery of the goods to the buyer s6 that
theseller was precluded from exercising his right of stoppage i transit.
LRG ot Resale (Section 54):
The unpaid seller can exercise the right to re-sell the goods under the
lowing conditions: 4
thout notice to buyer: Where the goods are of a perishable nature,
the goods without any notice Toe Byer
: Where the unpaid seller who has exercised
To stoppage in transit gives notice to the buyer of his
possession of the goods as agent or bailee for the buyer.
payment of a prop.
that the unpaid seller may
expenses, the seller has only a personal remed
In Eduljee v. Cafe John Bi
refrigerator to a buyer for Rs. 120 ani
ime pay or tender the pric,
time and recover from the original
k joned by his breach of contract, but the
loss occasioned by tact ue
led to any profit which may occur on
ALR, 1943 Nag. 249,
7 6. j Legal Helpline: Contract Law <1)
sub-sale or pledge o}
does not affect
Question 1 Discuss the rules provided under the sale of goods Act,
1930 as to the delivery of goods.
Answer: The term ‘dclivery" has been defined in Section 2, as meaning
the voluntary transfer of possession from one person to another,
The parties to any contact are bound to perform their obligations
under the contract. The parties are free to provide in their contract as to
how the performance of contract by each party is to be made.
According to Section 31 “It is the duty of seller to deliver the
goods and of the buyer to accept and pay for them, in accordance with
the terms of the contract of sale.”
Section 32 reads, “Unless otherwise agreed, delivery of the goods and
Payment of the price are concurrent conditions, that is to say, the seller
shall be ready and willing to give possession of the goods to the buyer in
exchange for the price, and the buyer shall be ready and
exchange for possession of the goods.
“Concurrent conditions” means that they have to be performed
to perform their colle
le, need not keep ready cas!
for example, need nt keep rey ot
moment’s call. The buyer,
'm to be paid as soon as the seller asked for
de proper arrangements for making payment without unde dy
, the seller is not expected to keep a ready stock of the goo
ed from the moment the contract has been entered into
103 Legal Helpline: Contract Law + I
a
tn Godts Ws Rose it was held that if the seller dizect 4.
sonst man t0 hold the goods on buyers behalf butte ye a
sore to te same there is not delivery of goods ote bges
sot consutes regarding the delivery of goods by the seller to the
are laid down in Section 36, A specific agreement beteesa the
‘can vary these rules. .
1. It depends on each case whether the buyer is to take
gosession ofthe goods oF the seller isto send hem othe buyer. Apart
pasmany such contract, goods sold are tobe delivered atte place a
frm dey are atthe time of the sale, and goods agreed tobe sld are to
whivered at the place at which they aeatthetime of the agreement 9s
ve ifthe goods are not in existence at the time of agreement to sell i,
‘Coss are future goods, they are to be delivered atthe place at which
ify are manufactured or produced,
Faveg: A agrees to sell goods to B “to be delivered at any place in Delhi
tebe mentioned thereafter.” Here there is an express contract as to
delivery giving the buyer the right to fix the place anywhere in Delhi IF
ds (like, key of the warehouse in whi Literary ey Del rally siaion the selee
eaeae Sine receipt etc), so thaf the 2. The seller is bound to send goods within a reasonable time if
: there is no demand from the buyer and no time has been fixed for
sending them. As to what is a reasonable time depends upon the
circumstances of each case.
IEA express to sell and deliver goods to B “as required”. B isnot
to wait indefinitely. He must require delivery within a reasonable
{'B fails to do so, A may rescind the contract that is, put an end to
be cannot do so without previous notice to B giving B a reasonable
eto pay for and take delivery of the goods.
. Where the goods at the time of sale ae in possession ofa third person,
there is no delivery by the seller to the buyer unless and until such third
Person acknowledges to the buyer that he holds the goods on his bebalf.
All the three partes to the contract must agree viz., the seller, the buyer
must agree vi ‘and the third person in whose possession the goods actually are. No
Possession the g attachment is necessary in case of delivery of goods by transfer of
delivery of goods by trans documents ofl te aecds os
ayer
partes
Section 33 may be read,
may be made by doing anyt
as delivery (2)
possession of the buyer or of any person authc
behal
1s 10 have custody of goods
usly he was an owner, now
Pie
1855 17(CB) 299 ie
105 ‘Legal Helpline: Contract Law -I1
4. Demand for delivery of
hour. Similarly, the offer
expenses of putting the goods in a deliverable state, in such a state,
the buyer under the agreement be bound to take delivery of them,
expenses must be borne by A.
Question 15 What rights and liabilities flow in cases of part
and wrong delivery of goods? Explain,
Answer: Effect of Part Ds
Section 34 provides that a delivery of part of goods, in progress.
delivery of the whole has the s:
». Anderson where the buyer, with a view
taking delivery, gets the whole of the goods weighed but takes away or
a - of them (according to his convenience e.g, transport arrangement)
delivery of the part would operate as a delivery of the whole. In
case, if the undelivered lot is damaged or destroyed, the buyer will b
the loss. ‘i
as the permission r part of the goods.
The general rule is that where there is a contract for a
quantity of goods, the delivery of more or less than the Sp
# (1803) 1 B&PNR 69
$(1833) 4 B & Ad 5683
106
matract Law ~ I
does not constitute a sufficient detiv
ie or more of the stipulated qian
Socept the goods because by
falfill his contract Similar a buyer can n
anything short of the quantity unless he
Scotion 37 of Sale of Goods Act, lays
ges to the buyer a quantity of goods less
elivers may reject them but If the buyer ace
i My for them atthe Contract rate which
J
ry and the seller who.”
can not, call upon the”
18 a wrong quantity he
1t call Upon the seller to
is prepared to accept the
down that where the seller
than he contracted to sell,
epts the goods delivered he
is deemed to be an index of
‘Where the seller delivers to the buyer a quantity of goods larger
tan he contracted to sell, the buyer may accept the goods included In the
tract and reject the rest or he may reject the whole. The buyer cannot
{him to accept a part ofthe contracted quantity or ofthe excess,
Where the seller makes a mixed delivery ic, delivers the goods
te contracted to sell mixed with goods of a different description not
included in the contract, the buyer may accept the goods which are in ~
ecordance with the contract and reject the rest or may reject the whole,
The above ions are subject to any Usage of trade, special
agement or course of dealing between the partes. For example partes
may qualify the specific quantity of goods to be supplied under the
contract by use of such words as “about” or “more or less” etc,
Sub-section (3) of Section 37 lays down that where the seller delivers to
the buyer goods he contracted to sell mixed with goods of a different
