Bl sales of goods

SALE OF GOODS ACT

Contract of Sale of Goods : A contract of sale of goods is a contract whereby the

seller transfer (or) agree to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part-owner and other (sec 4 (1)). A contract of sale may be absolute (or) conditional (Sec. 4 (2)).

Essentials of a Contract of sale :

Two Parties : buyer and seller

. Goods

. Price : The consideration for the contact of sale, called price, must be money. When goods are exchanged for goods. however, nothing to prevent the consideration from being partly in money and partly in goods.

Transfer of general property :

Essential elements of a Valid contract :

Creation of Contract of sale: The contract of sale means provide for the immediate

delivery of the goods, or immediate payment of price (or) both, or for the delivery or payment instalments(or) that the delivery (or) payment (or) both shall be postponed (Sec. 5 (1))

1. Transfer of property : In a sale of the property in the goods passes from the seller to the buyer immediately. So that the seller is no more the owner of the goods sold. A sale is an executed contract.

Creation of Contract of sale: 2. Type of goods : A sale can only be in case of

existing and specific goods only.

Risk of Loss : In a sale, if the good are destroyed, the loss falls on the buyer even though the goods are in the possession of the seller.

Agreement to sell :

1. In a agreement to sell, the transfer of property in the goods is to take place at a future time (or) subject to certain conditions fulfilled.

2. An agreement to sell is mostly in case of future and contingent goods although in some cases it may refer to uncertained existing goods.

3. In an agreement to sell, if the goods are destroyed, the loss falls on the seller,

4.Right to sell : In a sale, the seller cannot re-sell the goods (except in certain cases)

Agreement to sell : 5. Consequences of breach : In a sale, if the buyer fails

to pay the price of the goods (or) if there is a breach of contract by the buyer, the seller can sue for the price even though the goods are still in his possession.

In an agreement to sell if there is a breach of contract by the buyer, the seller can only sue for damages and not for the price even though the goods are in the possession of the buyer.

Agreement to sell : In an agreement to sell, in case of re-sale , the buyer,

who takes the goods for consideration and without notice of the prior agreement, gets a good title. In such a case, the original buyer can only sue the seller for damages.

DIFFERENCE BETWEEN SALE AND AGREEMENT TO SELL

SALE AGREEMENT TO SELL

1.executed contract

2.jus-in-rem(against the world)

3.Goods passes to the buyer with risk

4.Seller is entitled to sue for the price, right of lien

5.Loss will be borne by the buyer

1. Executory contract

2. 2.jus –in-personem(against the person)

3. 3.risk and property does not passes to buyer immediately

4. 4.seller has the right to sue for the damages only

5. 5.seller have to pay for the loss.

DIFFERENCE BETWEEN SALE AND AGREEMENT TO SELL

SALE AGREEMENT TO SELL

6.in case of insolvency of buyer ---seller must deliver the goods to official assignee or receiver

7. in case of insolvency of seller--- buyer entitled to receive the goods from official assignee or receiver

6. in case of insolvency of buyer- -- seller may refuse to deliver.

7. in case of insolvency of seller---buyer has to prove the amount that he has paid to the seller.

Conditions and Warranties Sec 12(2)

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

Sec 12(3)

a warranty is a stipulation collateral to the main purpose Of the contract, the breach which gives rise to a claim for damages but not to reject the goods and treat the contract as repudiated or broken.

Conditions and Warranties conditions and warranties may be expressly stated or

may be implied from the circumstances.

Stipulation as to time whether a condition:

If time is regarded as essential for the delivery of the goods,payment,quality or any other form etc…then time shall be considered as a condition in creation of a contract for sale of goods, breach which gives right to the aggrieved party to repudiate the contract.

Circumstances under which a breach of condition is would be held as a breach of warranty only :

1.where buyer elects to treat the breach of condition as breach warranty

2.where the buyer waives the conditions.

3.Unless there is an express or implied contract to the contrary

a. where buyer accepted the goods or part there of.

b. where contract is for specific goods,the property in which passed to the buyer.

Remedies available to the buyer on breach of condition:

Repudiate the contract and reject the goods

Elect to treat the breach of condition as iof warranty and claim damages.

Waive the condition(loosing legal rights,denying)

To file a suit in diminution or extinction of prices

To claim the damages

PERFORMANCE OF

CONTRACT

PERFORMANCE OF CONTRACT Delivery: sec 2(2) defines delivery as voluntary

transfer of possession of goods from one person to another.

Delivery of goods may be actual or symbolic.

Handing over of the goods b the seller to the buyer is called actual delivery.

handing over of documents related to the goods like bill of leading,railway receipt etc…constitutes symbolic or constructive delivery.

Rules: Delivery and payment (sec 31)

Delivery to be made to buyer/authorized person(sec33)

Part delivery (sec 34)

Buyer to apply for delivery (sec 35)

Mode delivery (sec 36(1))

Place of delivery (sec 36(1)

Time of delivery (sec 35(2))

Demand at reasonable hour (sec 36(4))

Goods in possession of third person (sec 36(3))

Expenses: generally borne by the seller (sec 36(5))

Rules: Installment delivery:

Expressly , nature of the contract ,conduct of the parties (sec 38(1))

Goods delivered at distant place (sec 40)

Delivery of wrong quality:

Short quantity

Excess delivery

Mixed delivery (mixed with other goods)

Acceptance of delivery: 1.examining goods (sec 41)

2.when accepted

A. he intimates the seller that he accepted them

B. where he does any act in relation to the goods

C. the buyer after direct/indirect acceptance cannot reject the goods

3.buyer not bound to return the rejected goods (sec 43)

Buyers liability for the rejecting,neglecting,refusing the goods: