UNIT-II- Business LawQues.1) Explain the term nemo dat quod non habet.Ans.1) A seller cannot convey a better title than he himself has: The general rule relating to the transfer of title on sale is that the seller cannot transfer to the buyer of goods a better title than he himself has. If the title of the seller is defective the buyers title will also be subject to the same defect. Nemo dat quod non habet no one can give that which he has not. In other words a buyer cannot acquire a better title that the seller possesses.Therefore a buyer cannot get good title to the goods unless he has purchased the goods from a person who was the owner of the goods or a person who is properly authorized by the seller to sell the goods. The title of the buyer will remain defective if the title of the seller was defective in spite of the fact that the buyer may have purchased the goods bona fide and for value.Following are the exceptions to the above rule. It is in these cases that the non owner can convey a better title to the bona fide purchaser of goods for value.1) Title by estoppel: where the true owner by his words or conduct causes the buyer to believe that the seller was the owner of the goods or has the owners authority to sell them and induced him to by goods in that belief, he will be stopped afterwards from setting up sellers want of title or authority to sell.Example: A says to B in the presence of C, the real owner of the goods that the A is the owner of goods. C remains mum. Subsequently A sells the same goods to B. C cannot recover the goods from B since by his conduct he has accepted that A is the owner of the goods.2) Sale by a mercantile agent: where goods are sold by a mercantile agent, who is in the possession of the goods or any document of title to the goods, with the consent of the real owner, in the ordinary course of the business, the buyer will get good title if he acts in good faith. Example: A entrusts his car to his agent B for sale. He instructs B not to sell the car below a sum of Rs10000. A sells it to C for Rs8000 and absconds with the money. A cannot recover the car from C since the sale was made by a mercantile agent who transferred valid title to C.3) Sale by a co-owner: a buyer who purchases goods from a co-owner will get valid title.Example: A and B are co owners of a lantern projector with several slides. They use the projector by turns. While the projector is with A, with the consent of B, he wrongfully sells it away to C, a bona fide purchaser for value. C gets a good title.4) Sale by a person in possession of goods under voidable contract: where a person who is in the possession of the goods under a contract voidable sells such goods to another before the contract is avoidable by the party having the option to do so and the buyer purchases them for value, in good faith and without notice of the sellers defect of title, he will under such conditions acquire a good title.Example: A obtains goods from B by falsely representing that he is Xs agent. He subsequently sells them to C, a bona fide purchaser for value. C does not get any title to the goods since the person who self the goods to him, himself did not have any title.5) Sale by seller in possession after sale: where a person having sold goods is in possession of the goods or documents of title to the goods, resells the goods, the new buyer will get a good title over the goods provided he acts in good faith, does not have notice of the prior sale and obtains possession of goods or documents of title to the goods.Example: A bought motor lorry from B, a dealer in motor lorries and took its delivery. Subsequently A let out the vehicle to B on a hire purchase agreement. B then sold it away to C who bought it in good faith. It was held that sale to C was not valid because he took it not from a seller in possession but a bailee of goods.6) Sale by a buyer in possession of goods: where a person having bought or agreed to buy goods, obtains, with consent of the seller, possession of goods or of the documents of title of the goods, the delivery or transfer by such person or by a mercantile agent acting for such person of the goods or documents, by way of sale, pledge or other disposition thereof will be valid and effective if the person receiving the same acted bona fide and without notice of the sellers lien.7) Unpaid sellers right of re sale: A purchaser of goods of value from an unpaid seller, who has the goods in his possession in the exercise of his right of lien or stoppage in transit, shall get an absolute title to the goods even though re sale may not be justified under the circumstances.8) Sale under the provisions of other acts: other acts also contain some provisions under which a non-owner may pass to the buyer a better title than he himself has. For example,a) Sale by finder of lost goods under circumstances b) Sale by pawnee or pledge under certain circumstancesc) Sale of official receiver in case of insolvency of an individual

Ques.2) Describe rules regarding delivery of goods.Ans.2) The rules regarding delivery of goods are as follow:-1. Delivery may be either actual or symbolic or constructive: delivery of goods sold may be made by doing anything which the parties agree shall be treated as delivery or which has the effect of putting the goods in the possession of the buyer or of any person authorized to hold them on his behalf. Thus, the delivery of the goods may be either actual or symbolic or constructive.2. Delivery and payment are concurrent conditions: unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is, the seller should be ready and willing to deliver the goods to the buyer in exchange for the price and the buyer should be ready and willing to pay the price in exchange for possession of the goods simultaneously, just like in a cash sale over a shop counter.3. Effect of part delivery, when property in goods is to pass on delivery: a delivery of part of the goods, in progress of the delivery of the whole, has the same effect, for the purpose of passing the property in such goods, as a delivery of the whole. In other words, when a delivery of part of the goods has been made with the intention of delivering the rest also, the property in the whole of the goods is deemed to pass to the buyer as soon as some portion is delivered.4. Buyer to apply for delivery: although it is the duty of the seller to deliver the goods according to the contract, yet he is not bound to deliver them until the buyer applies for delivery. It is the duty of the buyer to demand delivery and if he fails to do so the buyer cannot blame the seller for the non delivery. The parties may however agent otherwise.5. Time of delivery: Where under the contract of sale the seller is bound to send the goods to the buyer, but no time for sending them is fixed, the seller is bound to send them within a reasonable time. Further, demand of delivery by the buyer or the tender of delivery by the seller should be made at a reasonable hour.6. Place of delivery: The place of delivery may be stated in the contract of sale, and where it is so stated, the goods must be delivered at the named place during business hours on a working day.7. Delivery of goods where they are in possession of a third party: where the goods at the time of sale is in possession of third person, there is no delivery by the seller to the buyer unless and until such third person acknowledges to the buyer that he holds the goods on his behalf. Such a delivery is known as constructive delivery and requires the consent of all the three parties, the seller, the buyer and the person having the possession of the goods. Where the seller hands over the delivery order to the buyer, there is no delivery unless the sellers agent holding the goods ahs assented thereto.8. Expenses of delivery: unless otherwise agreed, the expenses of incidental to putting the goods into a deliverable state must be borne by the seller.9. Delivery of wrong quantity or different quality: As already observed, a seller is duty bound to deliver the goods to the buyer strictly in accordance with the terms of the contract. A defective delivery entitles the buyer to reject the whole, accept the whole to accept the quantity and quality he ordered and reject the rest of the goods so delivered.10. Installment deliveries: unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by installments. If the parties so agree then only the delivery of the goods may be made by installments.11. Delivery to carrier or wharfinger: where the seller is authorized or required to send the goods to the buyer, delivery of the goods to a carrier, whether names by the buyer or not, for the purpose of transmission to the buyer or not, for the purpose of transmission to the buyer, or delivery of the goods to a wharfinger for safe custody is prima facie deemed to be a delivery of the goods to the buyer.12. Liability of buyer for neglecting or refusing to take delivery of goods: when the seller is ready and willing to deliver the goods and requests the buyer to take delivery, and the buyer does not within a reasonable time after such request take delivery of the goods, he becomes liable to the seller for any loss occasioned by his neglect or refusal to take delivery, and also for a reasonable charge for the care and custody of the goods.Q3. Distinguish between a Sale and Agreement to sell. In a contract for the sale of goods, state when the property in goods sold passes from the seller to the buyer.Ans. Difference between Sale and Agreement to Sell

1. Transfer of propertySale : The property of goods passes from the seller to the buyer immediately. So the seller is no more owner of the goods sold.In an Agreement to Sell : The transfer of property of the goods is to take place at a future time or subject to certain conditions to be fulfilled.2. Type of goodsSale : A sale can only be in case of existing and specific goods only.In an Agreement to Sell : An agreement to sell is mostly in case of future and contingent goods ( associated or dependent ). Although it may refer to uncertain existing goods.3. Risk of loss Sale : In a sale if the goods are destroyed , the loss falls on the buyer even though the goods are in the posssession of the seller.In an Agreement to Sell : In an Agreement to Sell if the goods are destroyed the loss falls on the seller even though the goods are in the posssession of the buyer.4. Consequences of the breachSale : In a sale the buyer fails to pay the price of 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 the damages and not for the price.5. Right to re-sellSale : In a sale the seller cannot re-sell the goods.In an Agreement to Sell : The buyer who takes the goods for consideration and without notice of the prior agreement gets him a good title. The original buyer can only sue the seller for damages.6. General and particular propertySale : The sale of contract plus conveyance and creates Jus in rem i.e., gives right to the buyer to enjoy the goods as against the word and large including the seller.In an Agreement to Sell : An agreement to sell is merely a contract pure and simple and creates Jus in personam i.e., gives a right to the buyer against the seller to sue for the damages.7. Insolvency of buyerSale : In a sale if the buyer becomes insolvent before he pays for goods, the seller in the absence of the lien over the goods, must return them to the official receiver or assignee. He can only claim the reteable dividend for the price of the goods.In an Agreement to Sell : In an Agreement to Sell , If the buyer becomes insolvent and has not yet paid the price the seller is not bound to part with the goods until he is paid for.8. Insolvency of the sellerSale : In a sale the seller becomes insolvent, the buyer being the owner is entitled to recover the goods from the official receiver of the assignee.

In an Agreement to Sell : If the buyer who has paid the price, finds that the seller has become insolvent he can only claim a reteable dividend and not the goods because property in them has not yet passed to him.Passing of PropertyThe primary rules for ascertaining when the property in goods passes to the buyer are as follows:1. Goods must be ascertained.-Where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are sanctioned.

2. Property passes when intended to pass.-(i) Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.(ii) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case.(iii) Unless a different intention appears, the rules contained in Section 20 to 24 are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer. These rules are as follows:

Specific goods in a deliverable state.-Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment of the price or the time of delivery of the goods, or both, is postponed Specific goods to be put into a deliverable stateWhere there is a contract for the sale of specific goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property does not pass until such thing is done and the buyer has notice thereof.

Specific goods in a deliverable state, when the seller has to do anything thereto in order to ascertain price.- Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, measure, test or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing is done and the buyer has notice thereof.

Sale of unascertained goods and appropriation.-(1) Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be expressed or implied, and may be given either before or after the appropriation is made.(2) Delivery to carrier- Where, in pursuance of the contract, the seller delivers the goods

Goods sect on approval or on sale or return- when goods are delivered to the buyer on approval or on sale or return or other similar terms, the property therein passes to the buyer- (a) when he signifies his approval or acceptance to the seller to does not other actadopting the transaction.(b) if he does not signify his approval or acceptance to the seller but retains he godswithout giving notice of rejection, then, if a time has been fixed for the return of thegoods, on the expiration of such time, and, if not time has been fixed, on the expiration of a reasonable time.

Q-4 Differentiate between condition and warranty in Sales of Goods Act. Explain all the implied conditions in the contract of sales of goods.Ans. Difference between condition and warrantyDifference as to value- A condition is a stipulation essential to the main purpose of the contract. A warranty is a stipulation collateral to the main purpose of the contract.Difference as to breach- If there is a breach of condition, the aggrieved party can repudiate the contract of sale; in case of a breach of warranty, the aggrieved party can claim damages only.Difference as to treatment- A breach of condition may be treated as a breach of a warranty. This would happen where the aggrieved party is contended with damages only. A breach of warranty, however, cannot be treated as a breach of a condition.Whether any express condition is made or not law presumes certain standards which are to be ensured by the seller before selling the any product .These presumptions as to nature, quality, and rightful ownership of the product are termed as implied conditions.

The implied conditions in sale of goods are laid down in sections 14 to 17.1. CONDITION AS TO TITLE.It is presumed in law that in the case of sale, the seller has the right to sell the Goods, and in the case of an agreement to sell the, the seller will have the right to sell the goods at the time of sale. In case a seller sells without the right to sell them, the buyer has the right to repudiate the contract. The term right to sell infers that the seller should have a valid title to the Goods. According to section 14 of the Act, In a contract of sale, unless the circumstances of the contract are such as to show a different attention, there is an implied condition on the part of the seller that-(a).in the case of a sale, the seller has the right to sell. (b).in the case of an agreement to sell the seller will have a right to sell at the time of sale.In Rowland v. Divall, {1923}2K.B.500, B bought a second hand car from S a car dealer. After few months the car was taken away by the police as it was a stolen one. The court observed that it was a breach of condition as to title as S had no right to sell the car. It was held that B could recover full price from S. B buys a stolen car from S without knowing this fact .By the time B came to know about it S had compensated the true owner and acquired a legal ownership of the car. Now B cannot terminate the contract on the ground of breach of implied condition.2. SALE BY DESCRIPTION.If you contract to sell peas, you cannot oblige a party to take beans. This is the rule laid down in section 15, where there is a contract for the sale of goods by description, there is an implied condition that the goods shall correspond with the description. In Shepherd v. Kane (1821)5b&Ald.240, A ship was contracted to be sold as copper fastened vessel to be taken with all faults, without any allowance for any defects whatsoever. The ship turned to be partially Copper fastened .The court held that that the buyer was entitled to reject the goods.When a descriptive word or phrase is used in a contract of sale to describe the product it creates an implied condition that the goods will correspond to the description. For example a sale of Seedless Grapes, signifies that the fruit will have no seeds. If it turns that the fruit is with seeds the buyer can reject the goods.Sale of Goods by description may include the following situations,,(1) Where the buyer has not seen the goods and relies on their description given by the seller.In Varley v. Whipp,1900Q.B.513,W bought a reaping machine which he had never seen V the seller described to have been new the previous year and used to cut only 50 to 60 acres .W found the machine to be extremely old .It was held that W could return the machine as it did not answer to the description.(2).Where the buyer had seen the goods but relies not on what he had seen but on what was stated to him by the seller. InNicholson&Vennv.Smith Marriot,(1947)177 L.T.189, In an auction sale of a set of Napkins and table clothes, these were described as dating from the seventh century; the buyer bought the set after seeing it. Subsequently it was found that the set was not of the seventh century but of the eighteenth century, it was held that he could reject the goods.3. Sale by description as well as by sample.Section 15 further provides that if the sale is by sample as well as by description then it is not sufficient that it corresponds to the description but it should also correspond to the sample.In Wallis v. Pratt, (1911) A.C .394, in a contract for the sale of a quantity of the sale of seed described as common English Sainfoin, the seed supplied was of a different kind, though the defect was not discoverable except by sowing the defect also existed in the sample. Held the buyer was entitled to recover damages for the breach of contract.4 . CONDITION AS TO QUALITY OR FITNESS.Ordinarily there is no implied condition that the goods supplied by the seller should be fit for the particular purpose of the buyer. The rule Caveat emptor applies instead It means that while buying it is the responsibility of the buyer to ensure that the goods corresponds to the particular purpose he want to meet. However in the following situation the responsibility of the fitness as to Goods falls on the seller.A the buyer make known to the seller the particular purpose for which he requires goods.,B The buyer and seller relies on the skill and judgment of the buyer.C The sellers business is to supply such goods whether he is the manufacturer or producer or not.5 CONDITION AS TO MERCHANTABILITY.Section 16 (2)-Where goods are bought by description from a seller who deals in goods of that description whether he is not the producer or manufacturer or not, there is an implied condition that the goods shall be of merchantable qualityThe above provision reveals that the condition of merchantability is applicable when,a) The goods are sold by descriptionb) The seller deals with such goodsThus when Mohan a blacksmith sells to Das his old car, no implied condition as to merchantability applies.Merchantable means that the goods must be fit for the ordinary purpose for which such goods are used. For example, when shoes are sold, merchantability requires that the shoes have their heals attached well enough, that they will not break of under the normal use.In Jones v. Just, 1868LR 3 QB 197, B&Co a firm of merchants contracted to buy from S some bales of Manila Hemp. This was to arrive from Singapore. The hemp arrived wetted with sea water. It was so damaged that it was not possible to sell it as Manila hemp in the market. The court held that the hemp was not of merchantable quality and it was entitled to be rejected.But where the buyer examines the goods and the defects are such which can be revealed by ordinary examination, the condition of merchantability does not apply to the extent of such defects.Where the product has some latent defects which cannot be revealed by ordinary examination, the condition of merchantability would apply when even if the buyer has examined the goods.6. CONDITION AS TO WHOLESOMENESS.In the case of food products the condition of fitness or merchantability requires that the goods should be wholesome, that is it should be fit for consumption. In Chapronier v. Mason,(1905)21 TLR633, C brought a Bun from a bakers shop .The bun contained a stone which broke of Cs teeth. The court held that the seller was liable to pay damages as he breached the condition of wholesomeness.In Dr.Baretto v. T.R.Price, AIR 1939 Nag 19, A bought a set of false teeth from a dentist. The set did not fit into As mouth. Held A could reject the set as the purpose for which anybody would buy it was implicitly known to the seller, here the dentist.In Priest v Last (1903)2K.B.148,P asked for a hot water bottle to S ,retail chemist ,he was supplied one which burst after few days use and injured Ps wife. The court held that S was liable for the breach of implied condition because P had made known to the Chemist the purpose for which he buys the goods.7. SALE BY SAMPLE.A contract of sale by sample is a contract for sale by sample where there is a term express or implied in the contract, to that effect. (Section 17).In the case of contract of sale by sample, there is an implied condition 1.That the bulk shall correspond to the sample in quality.2. That the buyer shall have a reasonable opportunity of comparing the bulk with the sample.3. That the goods shall be free from any defect, rendering them unmerchantable.The defect should not however be apparent on a reasonable examination of the sample.Q-5 Who is an unpaid seller. Describe the rights of an unpaid seller under the sales of goods Act.Ans 5. Unpaid Seller (Sections 45-54)The seller of goods is deemed to be unpaid seller- When the whole of the price has not been paid or tendered; or When a conditional payment was made by a bill of exchange or other negotiable instrument, and the instrument has been dishonoured..Rights of an Unpaid Seller may be against the goods as well as for the buyer personallyRights of an Unpaid Seller against the GoodsAn unpaid seller's right against the goods are- (1) A lien or right of retention(2) The right of stoppage in transit.(3) The right of resale.(4) The right to withhold delivery.(1) Lien (Sections 47-49 and 54)-An unpaid seller in possession of goods sold, may exercise his lien on the goods, i.e., keep the goods in his possession and refuse to deliver them to the buyer until the fulfilment or tender of the price in cases where-1. the goods have been sold without stipulation as to credit; or 2. the goods have been sold on credit, but the term of credit has expired; or 3. the buyer becomes insolvent.

.A lien is lost(i) When the seller delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer, without reserving the right of disposal of the goods;(ii) When the buyer or his agent lawfully obtains possession of the goods; (iii) By waiver of his lien by the unpaid seller. (2) Stoppage in transit (Sections 50-52)-The right of stoppage in transit is a right of stopping the goods while they are in transit, and retaining possession until payment of the price.The right to stop goods is available to an unpaid seller(i) when the buyer becomes insolvent; and(ii) the goods are in transit.The buyer is insolvent if he has ceased to pay his debts in the ordinary course of business, or cannot pay his debts as they become due. It is not necessary that he has actually been declared insolvent by the Court.The transit comes to an end in the following cases-(i) If the buyer obtains delivery before the arrival of the goods at their destination; (ii) If, after the arrival of the goods at their destination, the carrier acknowledges to the buyer that he holds the goods on his behalf, even if further destination of the goods is indicated by the buyer.(iii) If the carrier wrongfully refuses to deliver the goods to the buyer.If the goods are rejected by the buyer and the carrier or other bailee holds them, the transit will be deemed to continue even if the seller has refused to receive them back.The right to stop in transit may be exercised by the unpaid seller either by taking actual possession of the goods or by giving notice of the seller's claim to the carrier or other person having control of the goods. On notice being given to the carrier he must redeliver the goods to the seller, who must pay the expenses of the redelivery. (3) Right of re-sale (Section 54)- The unpaid seller may re-sell-(i) where the goods are perishable;"(ii) where the right is expressly reserved in the contract;(iii) where in exercise of right of lien or stoppage in transit, the seller gives notice to the buyer of his intention to re-sell, and the buyer, does not pay or tender the price within a reasonable time.'If on a re-sale, there is a deficiency between the price due and amount realised, the re-seller is entitled to recover it from the buyer. If there is a surplus, he can keep it. He will not have these rights if he has not given any notice and he will have to pay the buyer any profits.(4) Rights to withhold delivery- If the property in the goods has passed, the unpaid seller has right as described above. If, however, the property has not passed, the unpaid seller has a right of withholding delivery.Rights of an Unpaid Seller against the buyer personallyAn unpaid seller may sue the buyer for the price of the goods in case of breach of contract where the property in the goods has passed to the buyer or he has wrongfully refused to pay the price according to the terms of the contract.The seller may sue the buyer even if the property in the goods has not passedwhere the price is payable on a certain day.Under Section 56, the seller may sue the buyer for damages or breach of contract where the buyer wrongfully neglects or refuses to accept and pay for the goods.The unpaid seller has also a right to claim the buyer for the prices of goods.

Q-6 Write note on the following:a) Warrantyb) Rule of Caveat Emptorc) Types of Goodsd) Implied WarrantiesWarrantyThe parties are at liberty to enter into a contract with any terms they please. As a rule, before a contract of sale is concluded, certain statements are made by the parties to each other. The statement may amount to a stipulation, forming part of the contract. It may also be a mere expression of opinion which is not part of the contract. If it is a statement by the seller on the reliance of which the buyer makes the contract, it will amount to a stipulation. If it is a mere commendation by the seller of his goods, it does not amount to a stipulation and does not give the right of action.The stipulation may either be a condition or a warranty. If the stipulation is collateral to the main purpose of the contract, i.e.. is a subsidiary promise, it is a warranty. The effect of a breach of a warranty is that the aggrieved party cannot repudiate the contract but can only claim damages. Thus, if the seller does not fulfill a warranty. the buyer must accept the goods and claim damages for breach of warranty.Example: X asked a car dealer to suggest him a good car. The dealer suggested a car and said that it can run for 20 kms per litre of petrol. But the car could run only 15 kms per litre of petrol. In this case the statement made by the seller is a warranty. X cannot reject the car but he can claim the damages.

Rule of Caveat EmptorThe term caveat emptor is a Latin word which means "let the buyer beware". This principle states that it is for the buyer to satisfy himself that the goods which he is purchasing are of the quality which he requires. If he buys goods for a particular purpose, he must satisfy himself that they are fit for that purpose. The principle was applied in the case of Ward v. Hobbs. (1878) 4 A.C. 13, where certain pigs were sold by auction and no warranty was given by seller in respect of any fault or error of description. The buyer paid the price for healthy pigs. But they were ill and all were died of typhoid fever. They also infected some of the buyer's own pigs. It was held that there was no implied condition or warranty that the pigs were of good health. It was the buyer's duty to satisfy himself regarding the health of the pigs.Exceptions to the doctrine of Caveat Emptor-(1) Where the seller makes a false representation and the buyer relies on it.(2) When the seller actively conceals a defect in the goods which is not visible on a reasonable examination of the same.(3) When the buyer, relying upon the skill and judgement of the seller, has expressly or impliedly communicated to him the purpose for which the goods are required.(4) Where goods are bought by description from a seller who deals in goods of that description.

TYPES OF GOODSDefinition: The subject matter of a contract of a sale must be goods . According to Section 2(7) the term goods means every kind of movable property other than actionable claims and money and includes stock and shares , growing crops , and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of saleTypes of goods:1. Existing goods: These are the goods which are owned or possessed by the seller at the time of sale. Only existing goods can be the subject of a sale. The existing goods may be- a) Specific goods: Goods identified and agreed upon at the time of making of the contract of sale of goods.b) Ascertained goods: Goods identified subsequent to the formation of the contract of sale. The terms ascertained and specific, are commonly used for same kind of goods.c) Unascertained or generic goods: Goods not identified or agreed upon at the time of making of the contract of sale. They are the goods defined for description only.Example: A who wants to buy a television set goes to a showroom where four sets of Janta model of Oscar television are displayed. He sees the performance of a particular set, which he agrees to buy. The set so agreed to be bought is a specific set. If after having bought one set he marks a particular set, the set so marked becomes ascertained. Till this all is done all sets are unascertained.2. Future goods: Goods to be manufactured, produced or acquired after making of the contract are called future goods. Example: A contract, on 1st January, to sell B 50 shares in Reliance Ltd., to be delivered and paid for on the 1st March of the same year. At the time of making of the contract, A is not in possession of any shares. The contract is a contract for the sale of future goods. 3. Contingent goods : Goods, the acquisition of which by the seller ,depends upon an uncertain contingency are called contingent goods. They are also a type of future goods.Example: A agrees to sell 100 units of an article provided the ship which is bringing them, reaches the port safely. This is an agreement for the sale of contingent goods.

IMPLIED WARRANTIES Warranty of quiet possession[Sec. 14(b)]. In a contract of sale, unless there is a contrary intention, there is an implied warranty that the buyer shall have and enjoy quiet possession of the goods. If the buyer is in any way disturbed in the enjoyment of the goods in consequence of sellers defective title to sell, he can claim damages from the seller. Warranty of freedom from encumbrances[Sec. 14 (c)]. The goods are not subject to any change or right in favour of a third party. Warranty as to quality or fitness by usage of trade [Sec. 16 (4)]. An implied warranty as to quality or fitness for a particular purpose may be annexed by the usage of trade. Warranty to disclose dangerous nature of goods Where a person sell goods, knowing that the goods are inherently dangerous or they are likely to be dangerous to the buyer and that the buyer is ignorant of the danger, he must warn the buyer of the probable danger, otherwise he will be liable in damages.