Transfer of property

 Risk passes with the property, unless

otherwise agreed by the contacting parties.
 After passing of the property the buyer can
exercise the proprietary rights.
 The seller is entitled to recover the price of
goods only after the property in goods is
passed to the buyer.
 In case of insolvency of any of the parties,
the ownership of goods is the key issue and
not the possession of goods.
 Rules for passing of property.
 Goods must be ascertained. Sec.18
 Intention of parties :- Sec.19(1). ‘Where there is a
contract for the sale of specific or ascertained
goods, the property in them passes to the buyer at
the time when the parties intend it to pass.’
 For the purpose of ascertain intentions of parties
the terms of contract and the circumstances of the
case are considered.
 Where intentions can not be ascertained Secs 20 to
24 apply.
 Specific goods secs.20 to 22
 Passing of property at the time of contract:-Where
there is an unconditional contract for the sale of
specific goods in a deliverable state, the property in
goods passes to the buyer when the contract is made,
and it is immaterial whether the time of payment of the
price or time of delivery of goods, or both, is
postponed.
 Where the goods are not in a deliverable state, the
property does not pass until the seller puts them in to
deliverable state.
 Where the price of goods is to be ascertained by
weighing, etc. the property does not pass until such
thing is done.
Unascertained goods.
 There can be no transfer of property of
unascertained goods. Until goods are
ascertained there is only an agreement to
sell.
 Sec 23(1) further provides that in case of a
contract of unascertained or future goods
by description and goods of that
description in a deliverable state are
unconditionally appropriated to the
contract, the property in goods thereupon
passes to the buyer.
Essentials of valid appropriation
1. The goods should confirm the description and
the quality as per the contract.
2. The goods must be in a deliverable state.
3. The appropriation must be unconditional.
4. The appropriation must be with the ascent of
buyer and the seller.
5. The ascent may be express or implied and
may be given before or after the appropriation.
 Goods sent on approval or ‘sale or
return’ Sec.24
 When Goods are delivered to the buyer on
approval or ‘sale or return’ or other similar terms,
the property therein passes to the buyer –
b) When he signifies his approval or acceptance to
the seller or does any other act adopting the
transaction;
c) If he does not signify his approval or acceptance to
the seller but retains the goods without giving
notice of rejection, then, when a time has been
fixed for the return of the goods, on the expiration
of such time, and, if no time has been fixed, after a
reasonable time.
Sale by non owners.
 Sec.27 provides that where gods are sold
by a person who is not the owner thereof
and who does not sell them under the
authority or with the consent of the owner,
the buyer acquires no better title to the
goods than the seller had.
 This rule has certain exceptions-
 Exceptions..
 Transfer of title by estoppel.
 Sale by mercantile agent where a) he has the
possession of the goods or the documents of the
title, b) he is acting in ordinary course of business,
and the buyer has acted in good faith, believing
agents authority to sell.
 Sale by a joint owner.
 Sale by a person in possession under a voidable
contract.
 Sale by seller in possession after the sale.
 Sale by a buyer in possession before the sale.
 Resale by an unpaid seller.