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Sale Of Goods Act

Presented By:-

Aksha Anand (06)

Ananya Sri (11)Deeksha Kaul (18)

Garima Sekhri (20)

Heena Wadhwa (24)

Karan Thakur (26)

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Agenda

Formation of the Contract of Sale

Goods & Prices

Warranties

Doctrine of Caveat Emptor

Transfer of Title

Unpaid Seller & Sale By Auction

Real Cases

Learnings

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Formation of the Contract

A contract of sale of goods is a contract whereby theseller transfers or agrees to transfer the property in

goods to the buyer for a price.

A contract of sale may be absolute or conditional.

Transfer of property in goods for a price

is the main point of the act.

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SALE AGREEMENT TO SELL*

Goods transferred from seller to buyer *Conditions applied :Once the time elapses or the

conditions are fulfilled

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Contract of Sale

A contract of sale is made by an offerto buy or

sell goods for a price and the acceptanceof such

offer. immediate delivery of the goods

immediate payment of the price or both

delivery or payment by instalments

delivery or payment or both shall be postponed

may be made in writing or by word of mouth

partly in writing and partly by word of mouth

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Goods & PricesGOODS Existing or Future Goods Goods perishing beforemaking of contract

no longer match the description in the contract

Goods perishing before sale but afteragreement to sell

PRICES Ascertainment of price Fixed or left to be fixed

Agreement to sell at valuation - Fixed by thevaluation of a third party but if, third party

cannot or does not make such valuation, then

the agreement becomes voidBusiness Ethics - Group 928-03-2012 6

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Conditions And Warranties

Stipulation which is essential to the main purpose of thecontract.

Breach gives party right to sue for damages and repudiate

contract A breach in condition may be treated as a breach in warranty

CONDITION

Astipulation which is only collateral or subsidiary to the mainpurpose of the contract

Breach gives party only right to sue for damages

A breach in warranty cannot be treated as a breach ofcondition

WARRANTY

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ImpliedCondition

Condition asto Title

Sale byDescription

Condition as

to Quality ofFitness

MerchantableQuality

ImpliedWarranty

Warranty ofQuiet

Possession

Warranty ofFreedom fromEncumbrances

Case: Priest v Last (1903)

Case: Mason v. Burmingham (1949)

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Caveat Emptor(let the buyer be aware)

It is not the duty of the seller to point out the defects in his own goods.

The buyer must inspect the goods to find out if they suit his purpose.

Case: Goddard v Hobbs [(1978), 4 App. Case. 13]

Some pigs were sold subject to all faults. These pigs were infected with

the germ of typhoid.

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Exceptions:

Where the seller makes false representations and the buyer relies

on them

Where the seller actively conceals the defects of his own goods

Where the buyer makes known to the seller, the purpose or

intended use of the goods being purchased.

The implied condition of merchantable quality applies to

only hidden or latent defects in inspected goods.

Case: Donaghue v Stevensen

(the snail in a ginger-beer case)

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Transfer Of Title By Non-owners

This rule is expressed by the maxim "Nemo dat quod non habet"

which means "that no one can give what he himself has not.

Exceptions to the Rule1. Sale by Mercantile Agent

2. Sale by a Joint-owner

3. Sale by a Person in Possession under a Voidable Contract

4. Sale by the Seller in Possession of Goods after5. Sale by an unpaid seller

li

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DeliveryVoluntary transfer of possession from one person to another

Delivery of the goods may be:

I. Physical or Actual Delivery

2. Symbolic Delivery3. Constructive Delivery or Attornment

Rules regarding delivery

1. The seller is not bound to deliver goods till the buyerapplies fordelivery in terms

of the contract.2. Place of Delivery

3. Time of Delivery

4. The expenses of and incidental to putting the goods into a deliverable state shallbe borne by the seller, as per the terms of the contact.

5. Demand and tender must be at a reasonable hour

6. Delivery of Wrong Quantity7. InstalmentDeliveries

8. Delivery to the Carrier or Wharfinger

9. Buyer not boundto return rejected

10. Liabilityof the Buyer

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Who is an unpaid seller

An unpaid seller of goods is a person who has

not been paid the whole of the price or to

whom the whole of the price has not been

tendered. The term "seller" includes an agentof the seller.

Sale by Auction

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Cases in Court

for

Sale of Goods Act, 1930

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Case 1: Baldry V/s Marshall

Baldry consulted Marshall for a car which is

suitable for touring purpose. Marshall

suggested Bugatti and Baldry purchased it. It

turned out unfit for touring purpose.

Judgement: Baldry was entitled to reject car

and get his money back from the dealer

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Case 2: Wallis V/s Pratt

Seeds were sold by sample a English Sanfoinseeds and described as common English

Sainofin. The seeds supplied were found to

be Giant SainofinJudgement: Held there was a breach of

condition as to description

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Case 3: Borrowlane Etc. v/s Phillips

700 bags of groundnut were to be sold. It waslater found that 109 bags bad been stolen

before contract was made but both the

parties were not aware of it. What happens in

this scenario?

Judgement: Contract is void due to effect of

destruction of goods

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What have we learnt?

DealerCustomer

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Mr. A Mr. B

Give me

mywheat!!

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Mr. P Mr. Q

Mr. R

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References:

BOOKS Business Law: M C Kuchhal

Business Law: Satish B. Mathur

URLs

http://lawcommissionofindia.nic.in/1-50/Report8.pdf

http://www.corecentre.co.in/Database/Docs/DocFiles/goods_act.pdf

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Thank You

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