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Where under a contract of sale the property in the goods is transferred from
the seller to the buyer, the contract is called a sale, but where the transfer of
the property in the goods is to take place at a future time or subject to some
condition thereafter to be fulfilled, the contract is called an agreement to
sell.
An agreement to sell becomes a sale when the time elapses or the
conditions are fulfilled subject to which the property in the goods is to be
transferred.
SALE AND AGREEMENT TO SELL
DISTINGUISHED
Classification of Goods
Existing goods: owned or possessed by the seller at the time of sale
Specific goods: identified and agreed upon at the time a contract of sale is
made.
Ascertained goods: means identified in accordance with the agreement
after a contract of sale is made.
Generic and Unascertained: goods not specifically identified but indicated
by description and may form part of a lot.
Future goods: goods to be manufactured or produced or acquired by the
seller after making the contract of sale.
Contingent goods: Future goods the acquisition of which by the seller
depends upon a contingency which may or may not happen.
Price
Price: Money Consideration for sale of the goods.
9. Ascertainment of price
(1) The price in a contract of sale may be fixed by the contract or may be
left to be fixed in manner thereby agreed or may be determined by the
course of dealing between the parties.
(2) Where the price is not determined in accordance with the foregoing
provisions, the buyer shall pay the seller a reasonable price. What is a
reasonable price is a question of fact dependent on the circumstances of
each particular case.
10. Agreement to sell at valuation
(1) Where there is an agreement to sell goods on the terms that the price is
to be fixed by the valuation of a third party and such third party cannot or
does not make such valuation, the agreement is thereby avoided;
PROVIDED that, if the goods or any part thereof have been delivered to,
and appropriated by, the buyer, he shall pay a reasonable price therefor.
(2) Where such third party is prevented from making the valuation by the
fault of the seller or buyer, the party not in fault may maintain a suit for
damages against the party in fault.
Contract of sale
Contract of sale how made [Sec 5]
Sale by sample
Bulk to correspond with sample in quality
Buyer to have reasonable opportunity to compare the bulk with sample
Goods to be of merchantable quality (defects not apparent on reasonable
examination of sample)
Condition as to wholesomeness
In the case of eatables in addition to be of merchantable quality the goods
need to be wholesome.
Implied Warranties
Warranty of quit possession- right of enjoyment or possession is not
disturbed
Warranty of freedom from encumbrances- free from any charge in
favor of a third person.
Warranty as to particular quality and fitness by usage of a trade.
Warranty to disclose dangerous nature of goods.
Doctrine of caveat emptor
Caveat Emptor means Let the buyer beware. In other words,
it is no part of the sellers duty to point out defects of his own
goods. The buyer must inspect the goods to find out if they
will suit his purpose.
Exceptions
Seller makes a falls representation and buyer relies on that
representation.
Seller actively conceals the defect in the goods, so that on
reasonable examination the same could not be discovered.
Buyer informs seller about the purpose for which he is buying, and
seller happens to be a person whose business is to sell goods of
that description.
In case of sale by description, there is an implied condition as to
their being of merchantable quality. (examination- hidden or latent
defects)
The unpaid seller of goods loses his lien thereon in following cases-
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 thereof.
Where he assents to a sub-sale by the buyer
Where he takes a security from the buyer for the payment of the price, in place of
his lien.
The unpaid seller of goods, having a lien thereon, does not lose his lien by
reason only that he has obtained a decree for the price of the goods.
Rights of a Unpaid Seller
Right against goods
Right of Stoppage-in-transit: This right consists in preventing the
goods from being delivered to the buyer, and resuming or regaining
their possession while in transit, retaining them till the price is paid.
This right is earned only when the right of lien is lost and is available
only where the buyer has become insolvent.