Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
INTRODUCTION
Transactions in the nature of sale of goods form the subject matter of the Sale of
Goods Act, 1930.
The Act covers topics such as the concept of sale of goods, warranties and
conditions arising out of sale, delivery of goods and passing of property and
other obligations of the buyer and the seller.
It also covers the field of documents of title to goods and the transfer of
ownership on the basis of such documents. The Act came into force on 1 July,
1930.
Indian business persons, conducting their business against the backdrop of the
Sale of Goods Act, have not found it difficult to work out the several varieties of
contracts of sale of goods as resorted to in national and transnational business,
such as f.o.b. (free on board), c.i.f. (cost, insurance and freight) and ex-ship.
2.
3.
4.
5.
6.
All other essentials of a valid contract as per the Indian Contract Act, 1872
must be present
Sale and Agreement to Sell. Where under a contract of sale, the property
(ownership) in the goods is transferred from the seller to the buyer, it is called a
sale [s. 4(3)]. Thus, sale takes place when there is a transfer of ownership in
Cont.
goods from the seller to the buyer. A sale is an executed contract.
Example. Ramanathan sells his car to Bhim for Rs 1 lakh. If all essential
elements of a valid contract are present, it is a sale and therefore the ownership
of the car stands transferred from Ramanathan to Bhim. This is so even where
the payment of the price or the delivery of the car or both have been postponed.
Agreement to sell means a contract of sale under which the transfer of property
in goods is to take place at a future date or subject to some conditions thereafter
to be fulfilled.
Example. Amar agrees to sell certain goods to Akbar. The goods are on their
way from London to Mumbai in a ship. The ownership in the goods will pass to
the buyer when the goods come and the agreement is subject to the condition
that the ship arrives at port with the goods.
Cont.
1.
2.
3.
4.
5.
6.
Sale
A sale is an executed contract.
Since the ownership has passed to the buyer, the
seller can sue the buyer for the price of the goods, if
the latter makes a default in payment.
It creates a right in rem, i.e., against the whole
world.
In case of loss of goods, the loss will fall on the
buyer, even though the goods are in the possession
of the seller. It is because the risk is associated with
ownership.
In case, the buyer pays the price and the seller
thereafter becomes insolvent, the buyer can claim
the goods from the official receiver or assignee, as
the case may be.
If the buyer becomes insolvent without paying the
price, the ownership having passed to the buyer, the
seller shall have to deliver the goods to the official
receiver or assignee, as the case may be, except
where he has a lien over the goods.
Agreement to sell
It is an executory contract.
In case of breach, the seller can only sue for
damages, unless the price was payable at a
stated date.
It creates a right in personam, i.e., against
specified person only.
The loss in this case shall be borne by the
seller, even though the goods are in the
possession of the buyer.
In this case, the buyer cannot claim the
goods but only a rateable dividend for the
money paid.
Under this, the seller can refuse to deliver
the goods to the official receiver or
assignee, as the case may be.
Cont.
MEANING OF PRICE
Meaning. Price means the money consideration for the sale of goods. Price is
an integral part of a contract of sale. If price is not fixed, or is not capable of
being fixed, the contract is void ab initio.
Mode of Payment of the Price.
Earnest money. Also known as deposit, it is paid by the buyer in advance
as security for the due performance of his part of the contract. It is not paid as
part payment of price.
Incidence of taxation. Tax revision means any increase or decrease or
remission in customs, or excise duty, or any tax on the sale or purchase of goods
imposed. Thus, the buyer would have to pay the increased price if the tax
increases and would be entitled to the benefit of reduction if taxes are reduced.
However, this provision can be excluded by the parties by a term in the sale
agreement.
2.
Unconditional appropriation
Mode of appropriation
Cont.
Risk Prima Facie Passes with Property. Section 26 (First paragraph) reads:
unless otherwise agreed, the goods remain at the sellers risk until the property
therein is transferred to the buyer,
Example. A buys goods of B and property has passed to him; but the goods
remain in Bs warehouse and the price is unpaid. Before delivery a fire burns
down the warehouse destroying the goods. A must pay the price of the goods as
A was the owner.
Rules regarding delivery. The following are the rules regarding delivery of
goods:
1.
2.
Unless agreed otherwise, the seller is not bound to deliver goods, till the
buyer applies for delivery (s.35).
3.
Place of delivery.
4.
Time of delivery.
5.
6.
7.
Instalment delivery.
8.
Cont.
Lien
Available only when the goods are in the
possession of the unpaid seller
Available, even when the buyer is not an
insolvent.
Stoppage-in-Transit
Available only after the seller has parted with the
possession of the goods.
Available only when the buyer becomes an
insolvent.
Implied Conditions
Regarding description
If sale is through a sample
Quality of fitness
On the part of the seller that, in the case of a sale, he has a
right to sell the goods and that, in the case of an agreement
to sell, he will have a right to sell the goods at the time when
the property is to pass;
Implied Warranty
(b) an implied warranty that the buyer shall have and enjoy
quiet possession of the goods;
(c) an implied warranty that the goods shall be free from any
charge or encumbrance in favour of any third party not
declared or known to the buyer before or at the time when
the contract is made.