Classification of Property
Contract of Sale – Movable Property
Borrowing against Property as security
Hire Purchase of Property
Lease of Property
Exchange/Gilt/Assignment of Property
Intellectual Property Rights (IPR)
Transfer of Property Act 1882
Sales of Goods Act 1930
Indian Trusts Act 1882
The term property is used to signify the thing
over which the right of ownership is exercised.
Ownership is said to exist when
The right is available against the whole world
(jus in rem)
Over a determinate thing
Indefinite in point of user
Unrestricted in point of disposition
Unlimited in point of duration
Movable and Immovable Property
Tangible and Intangible Property
Movable property is usually referred to as
goods. They are liable to be consumed or
destroyed in usage and are not the subject of
perpetual or uniform enjoyment
Immovable property is indestructible and is
capable perpetuity or uniform continuity of
use or enjoyment
Movable Property is usually referred to as goods.
According to sec 2 (7) of the Sales of goods Act, 1930,
Goods means every kind of movable property other than
actionable claims and money and includes stocks and
shares, growing crops, grass and things attached to or
forming part of land.
Immovable Property is dealt under Transfer of
Property Act, 1882. It is indestructible and is capable of
perpetuity or uniform continuity of use or enjoyment.
Property, the physical existence of which can
be gauged and maintained by a person is
called tangible property.
Property which is not tangible or cannot be
touched is called Intangible property.
As per section 4(1) of the Sale of Goods Act, a contract of
sale of goods is a contract whereby the seller transfers or
agrees to transfer the property in goods to the buyer for
a price. Such contract of sale may either be absolute or
As per section 4(3), it deals with the concept of an
agreement to sell and stipulates that where the transfer
of property in the goods is to take place at the future
time or subject to some condition thereafter to be
fulfilled, such a contract is an agreement to sell.
Basis Sale Agreement to Sell
Transfer of Sale is an executed contract. In a An agreement to sell is an
Property sale, the property in the goods executory contract. In
passes from the seller to the buyer agreement to sell, the
immediately so that the seller is no transfer of property in the
more the owner of the goods sold. goods is to take place at a
future time or subject to
certain conditions to be
Type of A sale can only be in case of An agreement to sell is
Goods existing and specific goods. mostly in case of future
and contingent goods
Risk of Loss In sale, the loss falls on buyer even In this, loss falls on seller
if goods are in possession of seller even if goods are in
possession of buyer
Consequences of In sale, the buyer falls to In an agreement to
Breach pay the price of the sell, if there is a breach
goods or if there is a of contract by the
breach of contract by the buyer, the seller can
buyer, the seller can sue only sue for the
for the price even damages and not for
though they are still in the price even though
his possession the goods are in
possession of buyer
Right to resell In sale, the seller cannot In case of resell, the
resell the goods if he buyer who takes the
does so the consequent goods for consideration
buyer does not acquire and without notice of
title to the goods the prior agreement,
gets a good title. In
such a case original
buyer can only sue the
seller for damages
General and particular A sale is a contract plus An agreement to sell is
Property conveyance, and creates merely a contract, pure
‘jus in rem’, i.e, gives and simple and creates
right to the buyer to ‘jus in personam’ i.e.
enjoy the goods as gives a right to the buyer
against the world at against the seller to sue
large including the seller. for damages.
Insolvency of Buyer In a sale, if the buyer In an assignment to sell,
becomes insolvent if the buyer becomes
before he pays for the insolvent and has not
goods, the seller, in the paid the price, the seller
absence of a lien over is not bound to part with
the goods, must return goods, until he has paid
them to the official for.
receiver or assignee. He
can only claim a rateable
dividend for the price of
Insolvency of In a sale if the seller In an agreement to
Seller becomes insolvent, sell, if the buyer,
the buyer, being the who has paid the
owner, is entitled to price, finds that the
recover the goods seller has become
from the official insolvent, he can
receiver, or only claim rateable
assignee. dividend and not
the goods because
property in them
has not yet passed
Passing of Risk
Transfer of possession of the goods.
Transfer of ownership of goods from the seller
to the buyer.
Goods must be ascertained
Property in the goods passes when intended
Property is transferred on transfer of title from
the seller to the buyer.
For the transfer of defectless title, the seller
should have a good title to the Goods.
‘Nemo dat quod non habet’- No person can
give a better title than he has.
A acquired certain goods from C by falsely
representing that he was acting on behalf of
B and was authorized to collect the Goods. A
later sold the Goods to D. It was held that D
did not acquire any title against C.
The seller of the Goods, though not being the owner of the Goods, can confer a
better title to the buyer in following cases:
•Where he sells the goods with the authority
and consent of the true owner.
• Where the true owner does not deny the seller’s
authority to sell.
• Where there is a sale by one of the joint owners.
• Where there is a sale by person in possession under a
• Where there is a sale by seller in possession after the sale, provided the
second purchaser does not have notice of the defective title of the seller.
• Where there is a sale by buyer in possession after having bought or agreed to
buy goods, provided the second purchaser receives the same in good faith and
without notice of any lien or other right of the original seller in respect of the
• Where there is a sale by an unpaid seller.
The Pawnee of goods is empowered to sell the goods pawned,
under certain conditions. (Section 178 of the Indian Contract Act)
A thief or a finder of a negotiable instrument endorsed a blank or
payable to bearer can give a good title to a person who purchases
it for value and without notice of the defect in title.
The finder of goods is empowered to sell the goods if the true
owner cannot be traced or where the goods are of a perishable
nature. He can also sell the goods, where the lawful charges
incurred in respect of the goods amount to the thirds of its value
and the owner refuses to pay such lawful charges.
Buyer’s Right of examining the goods.
Acceptance of Delivery.
Buyer not bound to return rejected goods.
Re-sale of rejected goods.
Burden of expense.
A) Buyer's Liabilities will arise on fulfillment of
Seller should have willing to deliver the goods
He should have asked the buyer to take the delivery
The buyer should have neglected to take delivery
within a reasonable time after the request by the
B) When buyer fails to take the delivery of the
goods, he will be liable to the seller:
For any loss or damage incurred on failure to take
For any reasonable charge incurred by the seller
for taking care of the goods.
Right to have delivery of the goods as per the terms and
conditions of the contract.
Where the goods delivered to the buyer are in excess or less than
the quantity contracted for, the buyer can:
a) Accept the whole
b) Reject the whole
c) Accept the quantity ordered and reject the rest
Unless there is a contract to the contrary, the buyer is not
required to accept delivery by installments.
Where goods are sent to the buyer by a route involving sea
transit, the buyer has a right to be informed of the same so as to
enable him to insure the goods.
The buyer has the right to examine the goods before he accepts
The buyer is required to take the delivery of the goods and make
payment according to the terms of contract.
Apart from any express contract, it is the duty of the buyer to apply
for the delivery.
The buyer’s duty includes a demand to make delivery at a reasonable
Where the seller agrees to deliver the goods at his own risk at a place
other than where they are sold, the buyer shall take any risk of
deterioration in the goods necessarily incident to the course of
It is the duty of the buyer to give notice of rejection of goods to the
The buyer should take delivery of goods within a reasonable time.
Where the property in the goods passes to buyer, it is his duty to pay
price according to the terms of contract.
Where the buyer wrongfully neglects or refuses to accept and pay for
the goods, he will have to compensate the seller, in a suit by him, for
damages for non-acceptance (Section-56)
As per Sec 45 of the sale of Goods Act 1930, the
seller of goods is deemed to be an unpaid seller:
When the whole of the price has not been paid.
When a bill of exchange or other negotiable
instrument has been received as conditional
payment and the condition on which it was
received has not been fulfilled by reason of the
dishonor of the instrument.
If the property in the goods may have passed
to the buyer , the unpaid seller of the goods
have following rights:
Lienon the goods.
Right of stopping the goods in transit.
Right of re-sale.
The goods should be in transit
The buyer should have become insolvent
The Unpaid seller of goods who is in possession of
them is entitled to retain such possession until
payment or tender of the price in the following
Where the goods have been sold without any
stipulation as to credit.
Where the goods have been sold on credit, but
the term of credit has expired.
Where the buyer becomes insolvent.
Hypothecation is not a statutory creation but is a
product of trade usage. It is a kind of pledge where
pledged goods remain in the possession of the
pledger for his use. Hypothecator holds such goods
as an agent and not as the owner.
The goods are liable to be returned to the
hypothecatee under the circumstances stated in the
contract. If the hypothecator refuses to return the
goods to the hypothecatee, then the hypothecatee
has a right to seek court help in recovering them.
Pledge goods are stored in Hypothecated goods are not
godown under the lock and under the lock and key of
key of bank under the the bank.
bank’s supervision. They are allowed to be kept
They remain in the physical at the premises of the
possession of the bank and borrower without any lock
no withdrawals or additions and key of the bank as such
in stock are permissible but are supposed to be
without bank permission. under constructive
possession of the bank.
Mortgage means transfer of an interest by pledging
(delivering) a property as security against an advance as loan
or existing or future debt or for performance of an act or
engagement which gives rise to the liability.
According to section 58 (a), “A mortgage is the transfer of an
interest in specific immovable property for the purpose of
securing the payment of money advanced or to be advanced
by way of loan or existing or future debt or for performance of
an act or engagement which gives rise to a liability.”
Transfer of Interest
Specific Immovable Property
Competence of Parties
Simple Mortgage [Section 58 (b)]
Mortgage by Conditional Sale [Section 58 (c)]
Usufructuary Mortgage [Section 58 (d)]
English Mortgage [Section 58 (e)]
Mortgage by deposit of title deeds [Section 58 (f)]
Anomalous Mortgage [Section 58 (g)]
Acc to sec 58(b), where
Without delivering possession of mortgaged
The mortgager binds himself personally to pay the
Agree that in the event of his failing to pay, the
mortgagee have right to cause the mortgaged
property to be sold, and the proceeds of sale to be
applied, so far as may be necessary in payment of the
mortgage money; and
The transaction is called a simple mortgage.
Acc to sec 58(d) of Transfer of property Act, where the
Delivers possession, or expressly or by implication
binds himself to deliver possession of the mortgaged
property to the mortgagee; and
To retain such possession until payment of mortgage money
To receive the rents and profits accruing from the property
or any part of such rents and profits
The transaction is called as usufructuary mortgagee
to sec 58(e) of transfer of Property Act,
where the mortgager binds himself-
To repay the mortgage money on a certain date;
Transfers the mortgaged property absolutely to the
mortgagee, but subject to a provision, that the
mortgagee will retransfer it to the mortgagor upon
payment of the mortgage money as agreed; and
The transaction is called an English mortgage