Sale of goods

Law of Sale of Law of Sale of GoodsGoods

Introduction Introduction

• The Act came into force on 1The Act came into force on 1stst July, 1930. July, 1930.• It extends to the whole of India, except Jammu and It extends to the whole of India, except Jammu and

Kashmir.Kashmir.• Definition: ‘section 4’ defines contract of sales as “ a Definition: ‘section 4’ defines contract of sales as “ a

contract whereby the seller transfers or agrees to contract whereby the seller transfers or agrees to transfer the property in goods to the buyers for a transfer the property in goods to the buyers for a price”.price”.

Essentials of a contract of saleEssentials of a contract of sale

• There must be at least two parties.There must be at least two parties.• Transfer or agreement to transfer the ownership of Transfer or agreement to transfer the ownership of

goods.goods.• Subject matter of the contract must necessarily be Subject matter of the contract must necessarily be

goods.goods.• Price is the consideration of the contract of sale.Price is the consideration of the contract of sale.• A contract of sale may be absolute or conditional.A contract of sale may be absolute or conditional.• All other essentials of a valid contract as per the All other essentials of a valid contract as per the

Indian Contract Act,1872, must be present.Indian Contract Act,1872, must be present.

Difference betweenDifference between SaleSale

• A sale is an executed contract.A sale is an executed contract.

• Since the ownership has passed Since the ownership has passed to the buyer, the seller can sue to the buyer, the seller can sue the buyer for the price of the the buyer for the price of the goods, if the latter makes a goods, if the latter makes a default in payment.default in payment.

• In case of loss of goods, the loss In case of loss of goods, the loss will fall on the buyer, even will fall on the buyer, even though the goods are in the though the goods are in the possession of the seller. It is possession of the seller. It is because the risk is associated because the risk is associated with ownership.with ownership.

Agreement to SellAgreement to Sell

• It is an executory contract.It is an executory contract.

• In case of breach, the seller can In case of breach, the seller can only sue for damages, unless the only sue for damages, unless the price was payable at a stated price was payable at a stated date.date.

• The loss in this case shall be The loss in this case shall be borne by the seller, even borne by the seller, even though the goods are in the though the goods are in the possession of the buyers.possession of the buyers.

Goods and their classificationGoods and their classification

• Goods mean every kind of movable property, other Goods mean every kind of movable property, other than actionable claims and money. It includes stocks than actionable claims and money. It includes stocks and shares, growing crops, grass and things attached and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be to or forming part of the land which are agreed to be served before sale or under the contract of sale.served before sale or under the contract of sale.

• The term goods excludes money.The term goods excludes money.

Classification of Goods:Classification of Goods:

1.1. Existing goods:Existing goods:

Goods are those which are owned or possessed by the seller at the Goods are those which are owned or possessed by the seller at the time of contract (sec. 6)time of contract (sec. 6)

These are further divided into two:These are further divided into two:

Specific Goods / Ascertained Goods:Specific Goods / Ascertained Goods:

Goods identified and agreed upon atGoods identified and agreed upon at the time a contract of the time a contract of sale is made.sale is made.

Generic Goods / Unascertained Goods:Generic Goods / Unascertained Goods:

Goods indicated by description and not specifically identified. Goods indicated by description and not specifically identified. (ex: pet shop)(ex: pet shop)

2. 2. Future Goods:Future Goods:

These are the goods which are to be manufactured These are the goods which are to be manufactured or produced or acquired by the seller after making or produced or acquired by the seller after making the contract of sale. (crops)the contract of sale. (crops)

3. 3. Contingent Goods:Contingent Goods:

Goods the acquisition of which by the seller Goods the acquisition of which by the seller depends upon a contingency which may or may not depends upon a contingency which may or may not happen. (painting) happen. (painting)

Meaning of priceMeaning of price

Price means the money consideration for the sale of goods. Price means the money consideration for the sale of goods. According to sec. 9 the price mayAccording to sec. 9 the price may

i.i. Either be fixed by the contract orEither be fixed by the contract or

ii.ii. Agreed to be fixed in a manner provided by the contract e.g., Agreed to be fixed in a manner provided by the contract e.g., by a valuer orby a valuer or

iii.iii.Determined by the course of dealings between the parties.Determined by the course of dealings between the parties.

Mode of payments of the priceMode of payments of the price

• Earnest moneyEarnest money

• Incidence of taxationIncidence of taxation

CONDITIONS & CONDITIONS & WARRANTIESWARRANTIES

Conditions & WarrantiesConditions & Warranties

• Sec.12(2) defines a condition as a Sec.12(2) defines a condition as a stipulation essential to the main stipulation essential to the main purpose of the contract.purpose of the contract.

• Sec.12(3) defines a warranty as a Sec.12(3) defines a warranty as a stipulation collateral to the main stipulation collateral to the main purpose of the contract.purpose of the contract.

• Sec.12(4) A stipulation may be a Sec.12(4) A stipulation may be a condition though called a warranty in condition though called a warranty in a contract.a contract.

Example- Kaushal asks a dealer to supply Example- Kaushal asks a dealer to supply him a shirt which would not shrink after him a shirt which would not shrink after use and wash. The dealer supplies a shirt use and wash. The dealer supplies a shirt which shrinks after use and wash. Kaushal which shrinks after use and wash. Kaushal can reject the shirt or keep the shirt and can reject the shirt or keep the shirt and claim damages. Here the stipulation to claim damages. Here the stipulation to supply a shirt which would not shrink supply a shirt which would not shrink after use and wash is a condition.after use and wash is a condition.

Now if kaushal buys a particular shirt which Now if kaushal buys a particular shirt which is warranted by a dealer to be one which is warranted by a dealer to be one which would not shrink after use and wash and would not shrink after use and wash and the shirt does shrink after use and wash, the shirt does shrink after use and wash, Kaushal’s only remedy is to claim Kaushal’s only remedy is to claim damages.damages.

IMPLIED CONDITIONSIMPLIED CONDITIONS

1.1. CONDITION AS TO TITLE. SEC(14)CONDITION AS TO TITLE. SEC(14)2.2. SALE BY DESCRIPTION. SEC(15)SALE BY DESCRIPTION. SEC(15)3.3. CONDITION AS TO QUALITY OR FITNESS. CONDITION AS TO QUALITY OR FITNESS.

SEC[16(1)]SEC[16(1)]4.4. CONDITION AS TO MERCHANTABLE CONDITION AS TO MERCHANTABLE

QUALITY. SEC[16(2)]QUALITY. SEC[16(2)]5.5. CONDITION AS TO WHOLESOMENESS.CONDITION AS TO WHOLESOMENESS.6.6. IMPLIED CONDITION IN THE CASE OF SALE IMPLIED CONDITION IN THE CASE OF SALE

BY SAMPLE. SEC(17)BY SAMPLE. SEC(17)7.7. IMPLIED CONDITION IN THE CASE OF SALE IMPLIED CONDITION IN THE CASE OF SALE

BY SAMPLE AS WELL AS DESCRIPTION. BY SAMPLE AS WELL AS DESCRIPTION. SEC(15).SEC(15).

CONDITION AS TO TITLE. CONDITION AS TO TITLE. SEC(14)SEC(14)

• No one can transfer what one does No one can transfer what one does not have/own. not have/own.

• If a person sells trademark or patent If a person sells trademark or patent goods, there must be no infringement goods, there must be no infringement on the trademark/patent.on the trademark/patent.

• Ex- 25 people in Delhi have been Ex- 25 people in Delhi have been arrested for selling chinese goods arrested for selling chinese goods with patent of Nokia.with patent of Nokia.

SALE BY DESCRIPTION. SALE BY DESCRIPTION. SEC(15)SEC(15)

• The product is described.The product is described.• Ex- A shirt described as a 100% Ex- A shirt described as a 100%

cotton should not contain man made cotton should not contain man made fibre.fibre.

• Ex- A car is sold as a new car. The Ex- A car is sold as a new car. The buyer finds it to be a used one. The buyer finds it to be a used one. The buyer may reject the car or retain buyer may reject the car or retain the car and claim damages.the car and claim damages.

CONDITION AS TO CONDITION AS TO MERCHANTABLE MERCHANTABLE

QUALITY. SEC[16(2)]QUALITY. SEC[16(2)]

• Goods must be merchantable.Goods must be merchantable.• They must be saleable in the market under They must be saleable in the market under

the denomination mentioned.the denomination mentioned.• If you buy a washing machine, it should If you buy a washing machine, it should

actually work when you get it home.actually work when you get it home.• Ex- Ameer buys a black yarn from Daleep Ex- Ameer buys a black yarn from Daleep

and finds it to be damaged by the white and finds it to be damaged by the white ants. The condition as to merchantability is ants. The condition as to merchantability is broken.broken.

CONDITION AS TO CONDITION AS TO WHOLESOMENESSWHOLESOMENESS

• The goods are fit for human The goods are fit for human consumption. Ex- Horlicksconsumption. Ex- Horlicks

• Ex- F bought a tin of condensed milk Ex- F bought a tin of condensed milk from A, the chemist. The milk from A, the chemist. The milk contained typhoid germs. F’s wife contained typhoid germs. F’s wife became infected and died. A was became infected and died. A was liable for damages, because the milk liable for damages, because the milk was not fit for human consumption.was not fit for human consumption.

IMPLIED CONDITION IN IMPLIED CONDITION IN THE CASE OF SALE BY THE CASE OF SALE BY

SAMPLE. SEC(17)SAMPLE. SEC(17)• It should not be assumed to be a sale by sample It should not be assumed to be a sale by sample

in all cases where sample is shown.in all cases where sample is shown.• IN sale by sample, the implied conditions are-IN sale by sample, the implied conditions are-1.1. The bulk shall correspond with the sample in The bulk shall correspond with the sample in

quality.quality.2.2. The buyer shall have a reasonable opportunity The buyer shall have a reasonable opportunity

of comparing the bulk with the sample.of comparing the bulk with the sample.3.3. The goods shall be free from any defects.The goods shall be free from any defects.Ex- Certain shoes are sold by sample. The shoes are Ex- Certain shoes are sold by sample. The shoes are

found to contain paper not discoverable by found to contain paper not discoverable by ordinary inspection. The buyer is entitled to ordinary inspection. The buyer is entitled to refund to the price plus damages.refund to the price plus damages.

IMPLIED CONDITION IN IMPLIED CONDITION IN THE CASE OF SALE BY THE CASE OF SALE BY SAMPLE AS WELL AS SAMPLE AS WELL AS

DESCRIPTION. SEC(15)DESCRIPTION. SEC(15)• The goods must correspond both The goods must correspond both

with the description as well as with with the description as well as with the sample.the sample.

IMPLIED WARRANTIESIMPLIED WARRANTIES

1.1. Quite possession of the goods. Quite possession of the goods. Sec[14(b)]Sec[14(b)]

2.2. Goods free from any charge or Goods free from any charge or encumbrance. Sec[14(c)]encumbrance. Sec[14(c)]

Quite possession of the Quite possession of the goods. Sec[14(b)]goods. Sec[14(b)]

• The buyer will be able to owe the The buyer will be able to owe the product and use it peacefully product and use it peacefully without any hindrance from without any hindrance from anywhere.anywhere.

Goods free from any charge Goods free from any charge or encumbrance. Sec[14(c)]or encumbrance. Sec[14(c)]• If seller does not tell that the car has If seller does not tell that the car has

been bought on installment and has been bought on installment and has not been paid totally, then this not been paid totally, then this would be a violation of this case.would be a violation of this case.

Passing of Passing of property in property in

GoodsGoods

Meaning of property in Meaning of property in goodsgoods

The phrase ‘property in goods’ means The phrase ‘property in goods’ means ownership of goods. The ‘ownership’ ownership of goods. The ‘ownership’ of goods is different from ‘possession’ of goods is different from ‘possession’ of goods. The ‘possession’ of goods of goods. The ‘possession’ of goods refers to the custody of goods, though refers to the custody of goods, though normally a person who is in normally a person who is in possession of the goods shall also be possession of the goods shall also be its owner but it need not necessarily its owner but it need not necessarily be so. There may be situations where be so. There may be situations where a person is the owner of certain goods a person is the owner of certain goods but is not possession of the same or but is not possession of the same or vice versa.vice versa.

Rules regarding passing of Rules regarding passing of property I goods from the seller property I goods from the seller to the buyer to the buyer

1)Specific goods in deliverable state : - 1)Specific goods in deliverable state : - In a scale of specific or ascertained In a scale of specific or ascertained goods, the property is them is goods, the property is them is transferred to the buyer at such times transferred to the buyer at such times as the parties to the contract intend it as the parties to the contract intend it to transferred. to transferred.

Ex :-Ram offer to sell his car to shyam Ex :-Ram offer to sell his car to shyam at rs.90,000. shyam accepts the offer. at rs.90,000. shyam accepts the offer. As soon as the contract is made, the As soon as the contract is made, the property in the car passes to shyam. It property in the car passes to shyam. It shall make no difference even if the shall make no difference even if the goods are sold on credit, because the goods are sold on credit, because the contract is an unconditional one for contract is an unconditional one for the sale of specific goods in a delivery the sale of specific goods in a delivery state.state.

2) Specific goods not in a deliverable 2) Specific goods not in a deliverable state :- in the case of specific goods state :- in the case of specific goods to which something has to be done to which something has to be done by the seller to put them in a by the seller to put them in a deliverable state, property passes deliverable state, property passes only when such thing is done and the only when such thing is done and the buyer has notice.buyer has notice.

Ex :-The whole of the contents of a Ex :-The whole of the contents of a cistern of oil are sold and the cistern of oil are sold and the seller has to put the oil in casks to seller has to put the oil in casks to be then delivered to the buyer. The be then delivered to the buyer. The ownership will not pass till the oil ownership will not pass till the oil is actually put into casks ready for is actually put into casks ready for delivery and the buyer is notified delivery and the buyer is notified accordingly.accordingly.

3) Where there is a contract for the sales 3) Where there is a contract for the sales of specific goods in a deliverable state but of specific goods in a deliverable state but the seller is bound to weight, measure, the seller is bound to weight, measure, test or do some other thing with reference test or do some other thing with reference to them, for ascertaining the price, the to them, for ascertaining the price, the property does not pass till such act or property does not pass till such act or thing is done and the buyer has notice.thing is done and the buyer has notice.

Ex :- A stock of rice is sold at an agreed Ex :- A stock of rice is sold at an agreed price per ton. The rice is to be weighed by price per ton. The rice is to be weighed by the agents of the seller as also of the the agents of the seller as also of the buyer for the ascertainment of the price. A buyer for the ascertainment of the price. A part of the rice is weighed and carried part of the rice is weighed and carried away by the buyer’s agent, but the away by the buyer’s agent, but the remaining is swept away by the floods. remaining is swept away by the floods. The loss of the remainder would be borne The loss of the remainder would be borne by the seller, since the ownership thereof by the seller, since the ownership thereof had not passed as the required weighing had not passed as the required weighing had not been done. had not been done.

Unascertained or future goods :- When there is a Unascertained or future goods :- When there is a contract for the sale of unascertained goods, contract for the sale of unascertained goods, property in the goods is not transferred to the property in the goods is not transferred to the buyer unless and until the goods are ascertained.buyer unless and until the goods are ascertained.

Ex :- Ghanshyam agrees to sell ram rattan Ex :- Ghanshyam agrees to sell ram rattan 200quintals of wheat out of larger quantity lying 200quintals of wheat out of larger quantity lying in ghanshyam’s godown. The agreed price is to be in ghanshyam’s godown. The agreed price is to be paid on the day appointed under the contract. paid on the day appointed under the contract. Unless and until the required quantity of 200 Unless and until the required quantity of 200 quintals is separated from the large quantity and quintals is separated from the large quantity and the goods have been ascertained the property the goods have been ascertained the property therein cannot pass from the seller to the buyer.therein cannot pass from the seller to the buyer.

Unconditional appropriation :- The Unconditional appropriation :- The Unconditional appropriation of Unconditional appropriation of goods may be made either by the goods may be made either by the seller with the buyer’s assent or by seller with the buyer’s assent or by the buyer with the seller’s assent. the buyer with the seller’s assent.

Ex :- There are 500 bags of Ex :- There are 500 bags of wheat lying with the seller and wheat lying with the seller and he selects 100 bags out of the lot he selects 100 bags out of the lot with the buyer’s assent, the with the buyer’s assent, the ownership of those 100 bags ownership of those 100 bags would pass to the buyer as soon would pass to the buyer as soon as this is done as this is done

TRANSFER OF TRANSFER OF TITLE BY NON TITLE BY NON

OWNERSOWNERS

TRANSFER OF TITLE BY NON TRANSFER OF TITLE BY NON OWNERSOWNERS

• Section 27 lays down a general rule as to Section 27 lays down a general rule as to transfer of title, that is, it is only the transfer of title, that is, it is only the owner of goods who can transfer a good owner of goods who can transfer a good title.title.

• This rule is expressed by the maxim This rule is expressed by the maxim `nemo dat quod non habet``nemo dat quod non habet`

EXCEPTIONS TO GENERAL EXCEPTIONS TO GENERAL RULERULE

(Sec 27-30)(Sec 27-30)

• SALE BY A MERCANTILE SALE BY A MERCANTILE AGENTAGENT

• SALE BY THE JOINT VENTURESALE BY THE JOINT VENTURE

• SALE BY PERSON IN POSSESSION SALE BY PERSON IN POSSESSION UNDER VOIDABLE CONTRACTUNDER VOIDABLE CONTRACT

Contd…Contd…

• SALE BY AN UNPAID SELLERSALE BY AN UNPAID SELLER

• SALES BY A SELLER IN SALES BY A SELLER IN POSSESSION OF GOODS AFTER POSSESSION OF GOODS AFTER SALE.SALE.

Performance of a Performance of a contract of Sale of contract of Sale of

GoodsGoods

Performance of a contract Performance of a contract of Sale of Goodsof Sale of Goods

• The contract of sale of goods is to be The contract of sale of goods is to be performed. In this context, Ss 31-44 performed. In this context, Ss 31-44 provide for the duties of the seller provide for the duties of the seller and the buyer and the rules and the buyer and the rules regarding delivery of goods.regarding delivery of goods.

• Duties of the Seller and the BuyerDuties of the Seller and the Buyer : : It is It is the duty of the seller to deliver the goods the duty of the seller to deliver the goods and of the buyer to accept and pay for and of the buyer to accept and pay for them, in accordance with the terms of the them, in accordance with the terms of the contract of sale (s.31).contract of sale (s.31).

• If the buyer is not willing to pay the price If the buyer is not willing to pay the price and if the seller is not ready to sell, there is and if the seller is not ready to sell, there is no need for delivery.no need for delivery.

• The seller has the duty of giving delivery of The seller has the duty of giving delivery of goods acc to the (1) terms of the contract, goods acc to the (1) terms of the contract, and (2) rules contained in the Act.and (2) rules contained in the Act.

• The buyer has the duty to pay for the The buyer has the duty to pay for the goods, accept delivery and pay goods, accept delivery and pay compensation to the seller in case he compensation to the seller in case he wrongfully refuses to accept delivery.wrongfully refuses to accept delivery.

• DeliveryDelivery : : According to [s.2(2)], Delivery According to [s.2(2)], Delivery is defined as a voluntary transfer of is defined as a voluntary transfer of possession from one person to another.possession from one person to another.

• Delivery of goods may be actual, Delivery of goods may be actual, symbolic or constructive. In the case of symbolic or constructive. In the case of actual delivery, the possession of goods actual delivery, the possession of goods is handed over by the seller to the buyer. is handed over by the seller to the buyer. In the case of symbolic delivery, it is In the case of symbolic delivery, it is made by delivering some symbol that made by delivering some symbol that carries with it the real possession or carries with it the real possession or control over the goods, e.g., the delivery control over the goods, e.g., the delivery of a railway receipt properly endorsed, of a railway receipt properly endorsed, or delivery of the key of a warehouse.or delivery of the key of a warehouse.

• Rules regarding DeliveryRules regarding Delivery : : The The following are the rules regarding delivery following are the rules regarding delivery of goods :of goods :

1.1. Delivery of part of goods sold may Delivery of part of goods sold may amount to delivery of the whole if it is so amount to delivery of the whole if it is so intended and agreed (s.34).intended and agreed (s.34).

2.2. Unless agreed otherwise, the seller is not Unless agreed otherwise, the seller is not bound to deliver goods, till the buyer bound to deliver goods, till the buyer applies for delivery (s.35).applies for delivery (s.35).

3.3. Place of delivery [s.36(1)]Place of delivery [s.36(1)]4.4. Time of delivery [s.36(2)]Time of delivery [s.36(2)]5.5. Unless agreed otherwise, the expense of Unless agreed otherwise, the expense of

and incidental to putting the goods into a and incidental to putting the goods into a deliverable state shall be borne by the deliverable state shall be borne by the seller.seller.

6.6. Demand for and tender of delivery Demand for and tender of delivery must be at a reasonable hour.must be at a reasonable hour.

7.7. Delivery of wrong quantity.Delivery of wrong quantity.

8.8. Installment delivery [s.38]Installment delivery [s.38]

9.9. Delivery to the carrier or wharfinger Delivery to the carrier or wharfinger [s.39][s.39]

10.10.Where goods are delivered to a buyer, Where goods are delivered to a buyer, which he has not personally which he has not personally examined, [s.41]examined, [s.41]

11.11.Buyer not bound to return the Buyer not bound to return the rejected goods [s.43].rejected goods [s.43].

12.12.Liability of the buyer [s.44]Liability of the buyer [s.44]

• Performance of Property in Goods Performance of Property in Goods in the Case of Foreign Tradein the Case of Foreign Trade : : there there are certain terms which are used in the are certain terms which are used in the contract of sale of goods in foreign contract of sale of goods in foreign trade. The most usual of such contracts trade. The most usual of such contracts are (1) Free on board (F.O.B.) or Free are (1) Free on board (F.O.B.) or Free on Airport (F.O.A) and (2) Cost, on Airport (F.O.A) and (2) Cost, Insurance and Freight (C.I.F.) and Ex-Insurance and Freight (C.I.F.) and Ex-Ship.Ship.

Unpaid Seller and Unpaid Seller and His RightsHis Rights

Unpaid Seller and His Unpaid Seller and His RightsRights

• A contract is comprised of reciprocal A contract is comprised of reciprocal promises. In a contract of sale, if promises. In a contract of sale, if seller is under an obligation to seller is under an obligation to deliver goods, buyer has to pay for deliver goods, buyer has to pay for it. In case buyer fails or refuses to it. In case buyer fails or refuses to pay, the seller, as unpaid seller, shall pay, the seller, as unpaid seller, shall have certain rights.have certain rights.

• Who is an Unpaid SellerWho is an Unpaid Seller : : A seller of A seller of goods is an unpaid seller when (a) the goods is an unpaid seller when (a) the whole of the price has not been paid or whole of the price has not been paid or tendered (b) a bill of exchange or other tendered (b) a bill of exchange or other negotiable instrument has been negotiable instrument has been received as conditional payment and received as conditional payment and the condition on which it was received the condition on which it was received has not been fulfilled by reason of the has not been fulfilled by reason of the dishonor of the instrument or dishonor of the instrument or otherwise. The term seller includes otherwise. The term seller includes any person who is in the position of a any person who is in the position of a seller.seller.

• Rights of an Unpaid SellerRights of an Unpaid Seller : : It is It is broadly be classified under two heads, broadly be classified under two heads, namely (1) Rights under the Ss. 73-74 namely (1) Rights under the Ss. 73-74 of the Indian Contract Act, 1872, i.e., of the Indian Contract Act, 1872, i.e., to recover damages for breach of to recover damages for breach of contract. (2) Rights under the Sale of contract. (2) Rights under the Sale of Goods Act, 1930: (a) rights against the Goods Act, 1930: (a) rights against the goods (b) rights against the buyer goods (b) rights against the buyer personally.personally.

• Lien on Goods (Ss. 47-49)Lien on Goods (Ss. 47-49) : : Lien Lien means to retain possession of. An means to retain possession of. An unpaid seller who is in possession of unpaid seller who is in possession of goods is entitled to retain them in his goods is entitled to retain them in his possession until payment or tender of possession until payment or tender of the price in three situations that are: the price in three situations that are: (1) where the goods have been sold (1) where the goods have been sold without any stipulation as to credit; without any stipulation as to credit; (2) where the goods have been sold on (2) where the goods have been sold on credit, but the term of credit has credit, but the term of credit has expired (3) where the buyer becomes expired (3) where the buyer becomes insolvent.insolvent.

• Right of Stoppage in TransitRight of Stoppage in Transit : : This This right of the unpaid seller consists in right of the unpaid seller consists in preventing the goods from being preventing the goods from being delivered to the buyer and resuming delivered to the buyer and resuming and regaining their possession while in and regaining their possession while in transit, retaining them till the price is transit, retaining them till the price is paid.paid.

• The right of stoppage in transit is The right of stoppage in transit is earned only where the right of lien is earned only where the right of lien is lost and is available only where the lost and is available only where the buyer has become insolvent [s.50].buyer has become insolvent [s.50].

• Right of ResaleRight of Resale : : The unpaid seller, who has The unpaid seller, who has retained the possession of the goods in retained the possession of the goods in exercise of his right of lien or who has exercise of his right of lien or who has resumed possession from the carrier upon resumed possession from the carrier upon insolvency of the buyer, can resell the goods, insolvency of the buyer, can resell the goods, (a) if the goods are of a perishable nature, (a) if the goods are of a perishable nature, without any notice to the buyer and (b) without any notice to the buyer and (b) in other cases after notice to buyer calling in other cases after notice to buyer calling upon him to pay the price within a reasonable upon him to pay the price within a reasonable time and upon failure of the buyer to do so.time and upon failure of the buyer to do so.

• The seller is entitled to recover from the The seller is entitled to recover from the original buyer damages caused to him by the original buyer damages caused to him by the resale.resale.

• But if any profit accrues from the resale, such But if any profit accrues from the resale, such profit shall go to unpaid seller and not to the profit shall go to unpaid seller and not to the buyer.buyer.

Remedies for Breach of a Remedies for Breach of a ContractContract

• In addition to the rights against In addition to the rights against goods provided in Ss. 47-54, the goods provided in Ss. 47-54, the seller has the following remedies seller has the following remedies against the buyer personally. (1) suit against the buyer personally. (1) suit for price (s.55); (2) damages for non-for price (s.55); (2) damages for non-acceptance of goods (s.56); (3) suit acceptance of goods (s.56); (3) suit for interest (s.56).for interest (s.56).

• Suit for PriceSuit for Price : : Where under a Where under a contract of sale the property in the contract of sale the property in the goods has passed to the buyer and the goods has passed to the buyer and the buyer wrongfully neglects or refuses to buyer wrongfully neglects or refuses to pay the price, the seller can sue the pay the price, the seller can sue the buyer for the price of goods.buyer for the price of goods.

• Where the property in goods has not Where the property in goods has not passed to the buyer, as a rule, the passed to the buyer, as a rule, the seller cannot file a suit for the price; seller cannot file a suit for the price; his only remedy is to claim damages.his only remedy is to claim damages.

• Suit for Damages for Non-AcceptanceSuit for Damages for Non-Acceptance : : Where the buyer wrongfully neglects or Where the buyer wrongfully neglects or refuses to accept and pay for the goods, refuses to accept and pay for the goods, the seller may sue him for damages for the seller may sue him for damages for non-acceptance.non-acceptance.

• Where the property in the goods has not Where the property in the goods has not passed to the buyer and the price was not passed to the buyer and the price was not payable without passing of property, the payable without passing of property, the seller can only sue for damages and not for seller can only sue for damages and not for the price.the price.

• The amount of damages is to be The amount of damages is to be determined in accordance with the determined in accordance with the provisions laid down in s. 73 of the Indian provisions laid down in s. 73 of the Indian Contract Act, 1872.Contract Act, 1872.

• Suit for InterestSuit for Interest : : when under a when under a contract of sale, the seller tenders the contract of sale, the seller tenders the goods to the buyer and the buyer goods to the buyer and the buyer wrongfully refuses or neglects to wrongfully refuses or neglects to accept and pay the price, the seller has accept and pay the price, the seller has a further right to claim interest on the a further right to claim interest on the amount of the price.amount of the price.

• In the absence of a contract to the In the absence of a contract to the contrary, the court may award interest contrary, the court may award interest at such rate as it thinks fir on the at such rate as it thinks fir on the amount of the price.amount of the price.

• Buyer’s remedies against SellerBuyer’s remedies against Seller : : The buyer has the following rights The buyer has the following rights against seller for breach of contract :against seller for breach of contract :

1.1. Damages for non-deliveryDamages for non-delivery

2.2. Right of recovery of the priceRight of recovery of the price

3.3. Specific performanceSpecific performance

4.4. Suit for breach of conditionSuit for breach of condition

5.5. Suit for breach of warrantySuit for breach of warranty

6.6. Anticipatory breachAnticipatory breach

7.7. Recovery of interestRecovery of interest

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