Sunday, 28 May 2017

Sale of Goods Act- 1930 "Bullet Points"

Sale of Goods Act

·       A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in the goods to the buyer for a price( sec-4 of the Act )
·       Where under a contract of sale, the property in the goods is transferred from the seller to the buyer, the contract is called as a SALE. But when the transfer of property in the goods is to take place at a future time or subject to some conditions 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
·       Goods form the subject matter of Sale and include all kinds of movable property other than actionable claims and money. It also includes stocks and shares, growing crops, grass & things attached to or forming part of the land
·       Goods may be existing, future or contingent. The price in a contract of sale must be expressed in terms of money only
·       When the price is not determined specifically, the buyer must pay the seller a reasonable price (sec-9 )
·       A stipulation in a contract of sale with reference to goods sold/to be sold may be a condition or a warranty (sec-12.1)
·       A CONDITION is a stipulation essential to the main purpose of the contract. Its violation gives a right to the buyer to cancel/refuse the contract
·       A WAARANTY is a stipulation collateral to the main purpose of the contract. Its violation gives rise to a claim for damages, but not a right to reject the goods and treat the contract as refused/cancelled

·       In a contract of sale, there is an implied warranty that 1. The buyer shall have and enjoy quiet possession of the goods 2. The goods are  free from any charge or encumbrance in favor of any third party
·       CAVEAT EMPTOR means LET THE BUYER BE AWARE and thus a privilege available to seller. However, this privilege shall not be available when 1. Implied warranty is there 2. The buyer gives a choice and depends solely on the seller’s skill/judgment 3. There is practice in trade to deny this privilege 4. there is a fraud committed by seller
·       The general rule of law is that only the owner of the goods or any person specifically authorized by him can sell the goods. If any other person sells it, the title of the buyer will not be better than that of the unauthorized seller
·       Some exceptions to the above rule are: 1. Sale by a mercantile agent 2. Sale under the implied authority of the owner 3. Sale by one of the several joint owners 4. Sale by a seller in possession of goods under a voidable contract 5. Sale by a seller in possession after sale 6. Sale by a buyer in possession after having bought or agreed to buy the goods 7. Sale by an UNPAID SELLER

·       The rights of an unpaid seller are:

  • ·       Lien of unpaid goods
  • ·       Stoppage of goods in transit
  • ·       Withholding delivery of unpaid goods
  • ·       Re-sale of unpaid goods
  • ·       Suit against the buyer for unrealized price
  • ·       Suit against the buyer for damages
  • ·       Refusal/cancellation/repudiation of the contract made earlier with the buyer
  • ·       Suit for realization of interest as time value for money

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