Contents

Chapter 1

The Sale of Goods Act, 1930

Introduction

 1

Statement of Objects and Reasons

 1

Charts

 6

Chapter 2

Definitions and Essentials of Sale

1. Short title, extent and commencement

 8

2. Definitions

 8

2(i) Buyer and Seller

 9

2(ii) Delivery

 10

2(iii) Documents of Title to Goods

 10

2(iv) Bill of Lading

 10

2(v) Dock Warrant

 10

2(vi) Warehouse-Keeper's Certificate

 10

2(vii) Delivery Order

 11

2(viii) Railway Receipts

 11

2(ix) Multimodal Transport Document

 11

2(x) Goods

 11

Chapter 3

Formation of the Contract

1. Essentials of Sale

 13

2. Bilateral Contract

 13

Q. Define sale with the help of relevant cases

 14

3. Money consideration

 15

Q. What do you mean by money consideration?

 15

4. Sale and Contract for Work and Material

 15

5. Goods

 15

Q. Write note on `goods'

 15

6. Sale and Agreement to Sell

 16

Q. Distinguish between sale and agreement to sale

 16

7. Sale and Hire Purchase

 16

Q. What is the difference between sale and hire purchase?

 16

8. Formalities of the Contract

 17

9. Subject-matter of Contract

 18

10. Effect of Damage

 18

Q. What do you mean by effect of damage? Discuss it in light of the provision given in section 7 of the Act.

 18

Q. What are the effects on contract if goods perish before making the contract?

 18

11. Goods perishing before Sale but after Agreement to Sell

 19

12. Price

 19

Q. Discuss the determination of price with the help of relevant case.

 20

13. Agreement to Sell at Valuation

 20

Chapter 4

Conditions and Warranties

1. Stipulations as to Time

 23

Q. "Time stipulation for the payment is not essence of the contract" substantiate with relevant example.

 23

1.1 Stipulations as to Time of Payment

 23

1.2 Stipulation as to Time of Performance of other Terms

 23

Q. In which cases time is considered as essence of the contract? Explain.

 24

2. Condition and Warranty

 24

Q. Discuss conditions or warranties of a contract of sale as given in section 12 of the Sale of Goods Act, 1930.

 24

2.1 Baldry v. Marshall, (1925) 1 KB 260: (1924) All ER Rep 515

 25

2.2 We can find the illustration of Warranty in the case; Harrison v.Knowles and Foster, (1917) 2 KB 606: (1918-19) All ER Rep 306

 25

3. Condition to be Treated as Warranty

 26

3.1 Waiver by Buyer

 26

3.2 Acceptance of Goods by Buyer

 26

4. Implied undertaking as to title etc.

 26

Q. Can a buyer claim the price of goods if it was found on possession that it was stolen and seller sold it knowingly?

 27

5. Sale by Description

 28

Q. Under the provision of section 15 of the Sale of Goods Act discuss the sale by description. Cite relevant cases also.

 28

6. Sale by Sample

 30

Q. Discuss the provision of section 15 of the Sale of Goods Act,which deals with `Sale by Sample'.

 30

7. Conditions implied by way of Exceptions to Rule of Caveat Emptor

 30

Q. What is the significance of the exceptions of the rule `caveat emptor' in contract?

 31

8. Division of section 16

 32

8.1 Fitness for Buyer's Purpose

 32

Q. What do you mean by fitness for buyer's purpose under section 16(1).

 32

8.1(i) Sale under Trade Name

 33

8.1(ii) Sale to consumer statutory changes

 34

8.1(iii) Sale by Agent

 35

8.2 Merchantable Quality [Section 16(2)]

 35

Q. What is merchantable quality of goods.

 35

8.2(i) Purchase by Description

 35

Q. Write note on "Purchase by Description".

 35

8.2(ii) Marketability

 35

8.2(iii) Sale of Pictures: A General Observation

 36

8.2(iv) Packing

 36

8.2(v) Goods should not violate Applicable Statutes

 36

8.2(vi) Test of Merchantable Quality

 37

Q. Define and discuss the test of Merchantable Quality".

 37

8.2(vii) Statutory Definition of Merchantability

 37

8.3 Conditions Implied by Trade Usage [Section 16(3)]

 38

8.4 Express Warranty [Section 16(4)]

 38

9. Sale by Sample

 38

Q. Discuss `Sale by Sample' with the help of relevant cases.

 39

9.1 Bulk to Correspond with Sample

 39

9.2 Opportunity to compare Bulk with Sample

 39

9.3 Goods free from any defect, rendering them unmerchantable

 39

Q. Discuss under section 17 the requirement of goods to be merchantable.

 39

9.4 Buyer's State of Knowledge about Goods

 40

Q. Upto what extent a buyer is responsible regarding his knowledge about the goods? Explain it with the help of relevant cases.

 41

Chapter 5

Effects of the Contract

1. Introduction

 44

Q. Define `ascertained goods' and differentiate it with `unascertained goods'.

 44

2. Importance of transfer of property

 45

3. Property passes when intended to pass

 45

Q. What are the circumstances in which it can be said that the goods have been passed?

 45

4. Sale of Specific Goods

 47

5. Meanings of terms

 48

5.1 Specific Goods

 48

5.1(i) Shankar Das v. Bhanna Ram, AIR 1926 Lah 606

 48

5.1(ii) Kursell v. Timber Operators and Contractors Ltd.,(1926) 135 LT 223

 49

5.1(iii) Aluminium Industries Ltd. v. Minerals and Metals Trading Corporation of India Ltd., MANU/TN/0836/1997 : AIR 1998 Mad 239

 49

5.2 Deliverable State

 49

Q. What do you mean by `deliverable state' of goods?  Discuss it in the light of provision of section 2(3).

 50

5.3 Unconditional Contract

 50

6. Goods to be put in Deliverable State

 51

Q. What do you mean by "to put the goods in deliverable state".Discuss it with the help of relevant cases.

51

7. Goods to be Weighed or Measured

 51

(a) Zagury v. Furnell, (1809) 2 Camp 240: 11 RR 704

 52

(b) Sanwick v. Sothern, (1839) 48 RR 740

 52

(c) Shoshi Mohun Pal Chowdhry v. Nobo Kristo Poddar, (1878) 4 ILR Cal 801

 52

8. Sale of Unascertained Goods and Appropriation (Section 23)

 52

8.1 Some more points on Appropriation

 53

Q. Why it is mandatory on part of seller to sort out the goods for appropriation of goods.

 53

8.2 Appropriation without Buyer's Assent

 54

8.3 Buyer's Assent may be Express or Implied

 54

8.4 Appropriation _ Unconditional and Goods of Contract Quality

 54

9. Delivery to a Carrier

 55

• Acknowledgement by Bailee

 55

10. Goods Sent on Approval or `On Sale or Return _ Section 24 of the Act says as

 56

10.1 Delivery of Goods on Sale or Return

 56

Q. Is it essential on the part of buyer to approve or `on sale or return' before the goods passes to the buyer?

 56

10.2 Risk of Loss or Damage

 56

10.3 Delivery on Sale or Return and Conditional Sale

 57

11. Reservation of right of disposal

 57

Q. Explain the provision of section 25 of the Sale of Goods Act as—"Where there is a contract for the sale of specific goods or where goods are subsequently appropriated to the contract, the seller may,by the term of the contract or appropriation reserve the right of disposal of the goods until certain conditions are fulfilled."

 57

12. Transfer of Risk

 58

Q. When it is decided that risk of goods has been transferred to buyer?Discuss it with the help of relevant cases.

 58

12.1 Separation of Risk from Property

 58

12.2 Delay in Delivery of Goods

 58

12.3 Express Agreement

 59

Chapter 6

Transfer of Title

1. Introduction

 61

2. Buyer is without Title when Sale is by a Person who is not the Owner of the Title

 62

Q. Explain the meaning of—Buyer is without title when sale is by a person who is not the owner of the title."

 62

3. Nemo Dat Quod Non Habet

 63

Q. Explain the maxim nemo dat quod non habet

 63

4. Estoppel

 63

Q. What do you mean by estoppel in the sale of goods?Explain with the help of relevant cases.

 64

• Estoppel by Negligence

 64

5. Sale by Mercantile Agent

 65

5.1 Mercantile Agent

 65

Q. Define `mercantile agent'.

 65

5.2 In Possession as Mercantile Agent

 66

5.3 With Owner's Consent

 66

5.4 Must sell while acting as Mercantile Agent

 66

5.5 Good faith and without Notice

 67

6. Sale by one of Joint Owners

 67

7. Sale by Person in Possession under Voidable Contract

 67

7.1 Seller under Voidable Title

 68

Q. What do you mean by sale by person who is in possession of goods under voidable contract?

 68

7.2 Goods must be Obtained in Pursuance of a Contract

 70

8. Seller or Buyer in Possession after Sale

 71

8.1 Seller in Possession after Sale [Section 30(1)]

 72

Q. Explain the conditions as mendtioned under section 30(1).

 72

8.2 Buyer in Possession before Sale [Section 30(2)]

 73

Chapter 7

Performance of the Contract

1. Introduction

 76

2. Duties of Seller and Buyer

 77

3. Payment and Delivery, two Concurrent Conditions (Section 32)

 77

Q. Do you agree with the facts that payment and delivery in sale of goods are two concurrent conditions, to be fulfilled in sale?

 78

• Readiness and Willingness

 78

4. Delivery

 78

4.1 Delivery of Goods

 78

Q. What is symbolic delivery? Explain it with the help of relevant cases.

 79

4.2 Acceptance and Receipt

 79

4.3 Symbolic Delivery

 79

4.4 Constructive Delivery

 79

Q. What is constructive delivery? Discuss it with the help of some cases.

 80

5. Effect of Part Delivery (Section 34)

 81

Q. Explain the effect of part delivery with relevant case laws.

 81

6. Buyer to apply for Delivery

 81

• Buyer's Duty to Apply for Delivery

 81

7. Rules to Delivery [Section 36]

 82

Q. Define the rules of delivery.

 82

7.1 Place of Delivery

 83

Q. What are the rules of delivery of goods? Under provisions of section 36 of the Sale of Goods Act?

 83

7.2 Time for Delivery

 83

7.3 Duty of Seller to Dispatch

 83

7.4 Delivery `as required'

 84

7.5 Attornment of Bailee

 84

7.6 Expenses of Delivery

 84

8. Delivery of Wrong Quantity

 84

8.1 Delivery of less Quantity of Goods

 85

8.2 Delivery in Excess of Contract Quantity

 85

8.3 Delivery of contractual goods together with others

 86

9. Instalment Deliveries

 86

9.1 Instalment Deliveries

 86

9.2 Entire Contracts

 87

9.3 Severable Contracts

 87

9.4 Failure in paying an Instalment

 87

Q. What would be the effect of non-payment of an instalment on contract? Discuss with case laws.

 87

10. Delivery to Carrier or Wharfinger

 87

10.1 Delivery to Wharfinger or Carrier

 88

10.2 Duty of Seller on Delivering Goods in a Carrier

 88

10.3 Transit by Sea

 89

11. Risk where Goods are delivered at a Distant Place

 89

12. Buyer's Right of Examining the Goods

 90

Q. Can a buyer reject the goods after delivery if he finds that the supplied goods do not commensurate with the quality agreed at the time of contract? Explain it.

 90

13. Acceptance

 91

Q. When it can be said that the goods have been accepted by the buyer? Explain it with the help of relevant cases.

 91

• Time for Rejection

 92

14. Buyer not bound to return Rejected Goods

 93

Q. Is buyer bound to return the rejected goods?

 93

15. Liability of Buyer for Neglecting or Refusing Delivery of Goods

 93

Chapter 8

RIGHTS OF UNPAID SELLER AGAINST THE GOODS

1. Introduction

 97

2. `Unpaid seller' defined

 97

2.1 Unpaid Seller

 97

2.2 Payment by Bill _ Conditional Payment

 98

2.3 Payment by Credit Card

 98

3. Unpaid Seller's Rights

 99

Q. What are the rights of unpaid seller?

 99

• Rights where Property Remains in the Seller

 99

4. Seller's Lien

 100

4.1 Seller's lien

 100

4.2 When lien exists

 100

5. Part Delivery

 100

5.1 Lien Available though Seller has Parted with Possession of Part of the Goods 100

 100

 5.2 Instalment Deliveries 

100

6. Termination of Lien

 101

6.1 Loss of Lien

 101

6.2 Buyer Tortiously obtaining Possession

 101

6.3 Waiver of lien

 101

6.4 Waiver of lien by Wrongful Acts

 102

7. Right of Stoppage in Transit

 102

Q. What are the grounds to invoke the provisions of section 50 if the seller wants to stop the goods in transit?

 102

8. Duration of Transit

 102

Q. When a transit deemed to be at an end. Explain in the light of provisions of section 51.

 103

8.1 Delivery to the Buyer [Section 51(1)]

 103

8.2 End of Transit before its Destination [Section 51(2)]

 104

8.3 Acknowledgement to the Buyer [Section 51(3)]

 104

8.4 Rejection of Goods by Buyer [Section 51(4)]

 104

8.5 Delivery to a Ship Chartered by a Buyer [Section 51(5)]

 105

8.6 Wrongful refusal to deliver the Goods [Section 51(6)]

 105

8.7 Part Delivery [Section 51(7)]

 105

9. How Stoppage in Transit is Effected (Section 52)

 106

9.1 Notice to Principal

 106

Q. What are the ways by which the unpaid seller stops the goods in transit?

 106

9.2 Duties of the Carrier and the Seller

 107

10. Effect of Sub-sale or Pledge by Buyer [Section 53]

 107

10.1 Seller's rights do not get affected by the Buyer's dealing with the goods

 107

10.2 Transfer of the Bill of Lading

 108

Q. Discuss `transfer' of the bill of lading with the help of relevant cases.

 108

10.3 Good Faith

 109

11. Sale not Generally Rescinded by Lien or Stoppage in Transit (Section 54)

 109

11.1 Further rights of the Unpaid Seller against the Goods

 109

11.2 Contract not Rescinded by the Buyer's Default in Payment

 110

11.3 The Seller's Right to Resale

 110

11.4 Lawful Resale by the Seller

 110

Chapter 9

Suits for Breach of Contract

1. Introduction

 112

2. Suit for Price (Section 55)

 112

3. Damages for non-acceptance [Section 56]

 113

• Damages for Breach of Contract

 114

Q. Discuss `damages for breach of contract' and cite some cases relevant to it.

 114

4. Damages for non-delivery (Section 57)

 114

Q. What are the remedies available for a buyer if he doesn't get delivery of goods from the seller.

 115

• Duty of Mitigation

 115

5. Specific Performance (Section 58)

 116

Q. What is specific performance? Describe it under the provision of section 58 of the Sale of Goods Act.

 116

6. Remedy for Breach of Warranty (Section 59)

 116

6.1 Notice to Seller of Defective Condition

 117

6.2 Resale by Buyer

 118

6.3 Acceptance of Goods without Inspection

 118

7. Repudiation of Contract before Due date (Section 60)

 118

7.1 Measure of Damages

 118

7.2 Measure of Damages when Goods are to be Delivered by Instalments

 119

8. Interest by way of Damages and Special Damages (Section 61)

 119

Chapter 10

Miscellaneous

1. Exclusion of Implied Terms and Conditions (Section 62)

122

1.1 By Express Contract

 122

1.2 Course of Dealing

 123

1.3 Trade Usage

 124

2. Section 63 of the Act speaks about the Reasonable time

 124

3. Auction Sale

 124

3.1 Aim

 125

3.2 `Ring' or `knock-out'

 126

3.3 Bidder's Right to Withdraw Bid

 126

3.4 Auctioneer's Right not to Accept any Bid

 126

4. In Contracts of Sale, Amount of Increased or Decreased Taxes to be Added or Deducted (Section 64A)

 126

5. Repeal

 127

6. Savings

 128

Chapter 11

Questions and Answers

• Table of Cases

 138

• Section Index

 145

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