Professional Documents
Culture Documents
Unit II
General
Act applies to whole of India except the State of Jammu & Kashmir Contract of Sale of Goods subject to the general principles of law relating to contracts (Indian Contract Act)
Sale
The property in the goods is transferred from the seller to the buyer
Agreement to Sell
Transfer of property in the goods is to take place at a future time Becomes sale when time elapses or conditions are fulfilled i.e. property in goods is transferred
Fulfill all essentials of contract It is of Goods Transfer of Property is required Contract is between buyer and seller Sale should be for Price Contract may be absolute or conditional
Entitles and enables its rightful holder to deal with the goods represented by it as if he were the owner It is proof of ownership, possession or control of goods Cash memo, Bill of Lading, Warehouse keepers certificate, Lorry receipt (L/R), Railway Receipt (R/R)
Stipulations that are essential for main purpose of contract. Non-fulfillment of such will mean loss of foundation of contract. These are termed as Conditions. Stipulations not essential are termed as warranty. Aggrieved Party may claim damages.
Implied Conditions
Condition as to title
Condition of seller : He has right to sell the goods (title to goods) If sellers title is defective buyer may reject
Condition as to Description
Goods & Packing should correspond with the description given by seller
Implied Conditions
Implied Conditions
Condition as to Merchantability
Goods should be commercially saleable under the description in the market at their full value
Incase of eatables and foodstuff, Goods must be for human consumption.
Condition as to Wholesomeness
Implied Conditions
Implied Warranties
Property : Ownership of Goods Possession of Goods : Physical custody or Control of goods Moment when property in goods passes:
Ownership Risk follows ownership Action against third parties Suit for price
Goods must be ascertained : Buyer should have reasonable opportunity to examine the goods for the purpose of ascertaining whether they are in conformity with the contract. Intention to pass Property in Goods must be there
Delivery of Goods : Voluntary transfer of possession from one person to another. Requires two parties to act
Mode of Delivery
Actual delivery (Physical Delivery) Symbolic Delivery (where bulk of goods are involved) Constructive Delivery (delivery when a 3rd person, in possession of the goods, acknowledges to hold the goods on behalf of the buyers; 3 people are involved)
Possession of Goods Delivery and Payment are concurrent conditions Demand for Delivery of Goods Time of Delivery Place of Delivery Goods in possession of third person
Effect of Part Delivery Expenses of Delivery (Seller) Installment Delivery (not to be accepted) Delivery of Wrong Quantity
Short Delivery Excess Delivery Mixed Delivery
Acceptance of Delivery
He intimates seller that he accepted them or He receives delivery of goods or After lapse of time he retains the goods without intimating to the seller that he rejected them
Buyer not bound to return the rejected goods; it is sufficient if he intimates to the seller.
Rights of a Buyer
Right to have Delivery of Goods Right to reject the goods Right not to accept instalments Right to examine the goods Right not to return the rejected goods Right to get the notice of insurance during transit
Rights of Buyer
Suit the seller for non-delivery Suit for breach of warranty Suit for specific performance Repudiation of contract before due date Suit for interest
Duties of Buyer
Duty to pay price and accept the goods Duty to apply for delivery Duty to demand delivery at a reasonable hour Duty to accept instalment delivery and pay for it (if acc to contract)
Duties of Buyer
Duty against deterioration Duty to intimate the seller when rejecting the goods Duty to take delivery Duty to pay price Duty to pay damages for nonacceptance Duty to pay increased tax
Rights of a Seller
Right to claim compensation Right to sue for price Right to sue for damages Right to treat the contract as subsisting Right to interest by way of damages Rights of Unpaid seller
Duties of Seller
Duty to deliver the goods Duty to deliver the goods at the agreed place Duty to supply the goods within specified time Duty to send the goods at reasonable hour Duty to bear the expense of putting the goods in deliverable state
Duties of Seller
Duty to give notice to the buyer to get the goods insured; otherwise at sellers risk during transit Duty to give reasonable opportunity to examine the goods
Where the property in the goods has not passed to the buyer
Right of with holding delivery Suit for price Suit for damages for non-acceptance Suit for damages for repudiation of contract Suit for interest
Suit for damages for NonDelivery Suit for Price Suit for specific performance Suit for Breach of Warranty Suit for damages for repudiation of contract before due date Suit for Interest