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SALE OF GOODS ACT 1930

BySurajit Goswami Sundeep Tiwari Maruthu Pandian Kishan Gupta Jaydeep Modi Group no- 5

SALE OF GOODS ACT


The

law as to the sale of goods was originally embodied in sections 76 to 123 of the Indian Contract Act, 1872. There were many complexities in growing mercantile transaction so it was repealed and Sale of Goods Act, 1930 took birth. It is well-known that our Sale of Goods Act, 1930 is based upon and is largely a re-production of English Sale of Goods Act, 1893.

SCOPE OF THE ACT


The

sale of Goods Act applies only to movables other than actionable claims and money and not to immovable which are governed by Transfer of Property Act, 1882.

Goods [Sec. 2(7)]


Goods

means every kinds of moveable property other than actionable claims and money and includes stock and shares, growing crop, grass and things attached, to or forming part of the land agreed to be severed before sale or under the contract of sale.

SALE AND AGREEMENT TO SELL (SEC-2)


A contract

of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. A contract of sale may be absolute or conditional. Absolute contract is without any conditions. Conditional contract may be a contract with condition precedent or condition subsequent. A contract of sale of goods may be either be either a sale or an agreement to sale.

SALE
When

under a contract of sale the property of sale is transferred from seller to the buyer, the contract is called a sell. Resale of goods is also sale of goods. A second sale is a resell. Resell may be to third person or the original seller.

AGREEMENT TO SELL
Where

transfer of the property, for example, ownership in the goods is to taken place at a future date or subject to some condition to be fulfilled, the contract is called an agreement to sell. When agreement to sell becomes agreement of sale? An agreement to sell becomes a sell when times lapses or the condition are fulfilled subject to which the property in the goods is to be transferred.

ESSENTIAL OF VALID SELL


There

must be two parties:- Atleast 2 or more people are involved in a sell, a person cannot sell goods to himself. Transfer of property:- In a sell there should be transfer of a some type of property, a sell means give and take. By writing or by word of mouth:- A sell should take place either by writing or by word of mouth, expressed means by action, by sign language a sell cannot take place. Consideration for a sale of goods must be money:- Today barter system has no existence, so whenever a sale takes place there should be money as a medium of transaction. Includes both an actual sale and agreement to sell:- In a valid sell either an actual sale is there or an agreement to sell is there, no vague transaction is called a sale.

FORMALITY OF THE CONTRACT


Offer

and acceptance. Delivery. Ascertainment of price. Goods. Contract. Amount of increased and decreased tax to be added or deducted (sec 64 A)

CONDITION AND WARRANTIES

Condition: A condition is a stipulation essential to the main purpose of the contract, breach of which gives right to treat the contract as repudiated or broken.

Warranty: A Warranty is a stipulation collateral to the main purpose of the contract the breach of which gives rise to a claim for damages but not to a right to reject the foods and treat the contract as repudiated or broken.

IMPLIED WARRANTIES AND CONDITIONS

Warranty as to title (sec 14) Sale by description (sec 15) Sale by sample (sec 17) Sale by sample as well as by description (sec 15) Warranty as to quality or fitness (sec 16) Warranty as to quiet possession free from encumbrances [sec (A) (B) (C)]

DIFFERENCE BETWEEN CONDITION & WARRANTY

Condition Essential Affects the legality of contract May be treated as breach of warranty Contract can be cancelled

Warranty Subsidiary It does not affect

Warranty cannot become a condition


At best damages are to be paid

CAVEAT EMPTOR

Caveat emptor means" let the buyer beware ex. the buyer must take care. Exception
or usage of trade. Fraud : seller is guilty of fraud, he is liable. For specific purpose. Merchantable quality : Where (1) sale is by description & (2) purchased form the seller deals in goods of that description, implied condition is that the goods are of merchantable quality.
Custom

UNPAID SELLER

Who is an unpaid seller? A seller of the goods is deemed to be an unpaid seller when:

The whole of the price has not been paid or tendered. A bill of exchange or other negotiable instrument has been received as conditional payment.

Rights of an unpaid seller:

When the property in the good s has passed to the buyer. When the property in the goods has not passed to the buyer.

When the property in the goods has passed to the buyer:

Right of lien. Right of stoppage in transit. Right of re-sale.

When the property in the goods has not passed to the buyer:

Right of withholding delivery. Reservation of right of disposal. Other rights.

AUCTION SALES

Implied warranties in an auction sale (1) Auctioneer warrants his authority to sell. (2) He warrants that he knows of no defect in principals title. (3) He warrants to give quiet and peaceful possession of goods against payment of the price. Knock-out agreement A knock-out agreement means an agreement between a group of persons not to bid against each other.

RIGHTS AND DUTIES OF BUYER


Rights: 1. To receive delivery of goods. 2. To repudiate the contract, if the seller commits breach of contact. 3. To have reasonable opportunity to examine the goods. 4. To sue the seller for damages for non delivery of goods. 5. To recover the amount paid if the seller fails to deliver the goods.

6. To sue the seller for damages for breach of warranties. 7. To sue the seller for specific performance of the contract. 8. In case of breach of contract by the seller, when the buyer sue for the refund of the price, the buyer has a right to claim the amount of price paid from the date on which the payment was made.

Duties: 1. 2.

3.

To pay for the goods and take delivery thereof. To apply for the delivery of goods as the seller is not bound to deliver the goods until the buyer applies for delivery. To compensate the seller for any loss occasioned by his neglect or refusal to take delivery of the goods and also reasonable charge for care and custody of goods.

RIGHTS AND DUTIES OF SELLER


Rights: 1. To receive the price of the goods. 2. To receive compensation or sue for damages for any loss occasioned by him by neglect or refusal of the buyer to take delivery of the goods. 3. To receive reasonable charge and custody of the goods. 4. To sue the buyer for damages for wrongfully neglecting or refusing to accept the goods.

5. To recover interest from the buyer if there is specific agreement to that effect or change interest on the price when it become due. 6. To sue for the price of the goods. 7. To sue for the damages on buyer repudiating the contract.

Duties:

1. To deliver the goods when buyer demands the delivery thereof. 2. To compensate the buyer incase he repudiates the contract or commits breach of the contract. 3. To give reasonable opportunity to the buyer to examine the goods. 4. To refund the amount paid by the buyer incase he fails to deliver the goods. 5. To compensate the buyer incase of delivery of wrong quantity.

PERFORMANCE OF THE CONTRACT


Delivery of goods Actual delivery Symbolic or constructive delivery Rules for Delivery of goods Delivery and payment Delivery to be made to buyer Part delivery Buyer to apply for delivery Mode of delivery Place of delivery Time of delivery Demand at reasonable hour Expenses Installment delivery Goods in possession of third party

Delivery of wrong Quantity


Short

delivery Excess delivery Mixed delivery


Acceptance of delivery Rules


Examining

goods When accepted?


Buyer intimates When after the lapse of reasonable time, he retains the rejected items Mere Intimation of rejection by buyer is sufficient

Buyer

not bound to return the rejected goods:

DELIVERY TO CARRIER

Carriage by sea : 1) C.I.F(Cost insurance freight) Contracts 2) F.O.B(Free on Board) - Contracts 3) Ex - ship contracts: Seller has to deliver the goods after the arrival of the ship. Seller has to pay freight. The goods are at the seller's risk during the voyage.

REMEDIES FOR BREACH OF THE CONTRACT


OF SALE

Remedies available to the seller:

Suit for price. Suit for damages.

Remedies available to the buyer:

Suit for damages for non-delivery of the goods. Suit for specific performance. Suit for breach of warranty. Suit for repudiation of the contract-anticipatory breach.