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Sales of Good Act

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  1. 1.  Representation: Statement made by the seller before entering into a contract.  Stipulation: If such representation forms an integral part of the contract and other party relies upon it.
  2. 2.  “ A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated.”  It goes to the root of the contract.  Its non fulfillment upsets the very basis of the contract.
  3. 3.  EXAMPLE- P, goes to R, a horse dealer, and says, I want a horse which can run at a speed of 30 km. per hour.The horse dealer points out a particular horse and says, this will suit you. P buys the horse. Later on P finds that the horse can run only at a speed of 20km./hr. there is a breach of condition, P can repudiate the contract, return the horse to Rand get back the price
  4. 4.  A warranty is a stipulation collateral to the main purpose of the contract the breach of which gives rise to a claim for damages but not right to reject the goods and treat the contract as repudiated.
  5. 5.  EXAMPLE-Assume that a farmer, intending to plant no-till soybeans, approaches a seller to buy herbicide.Assume further that the buyer requests a particular herbicide mix but the seller suggests a less expensive mix. If the chemicals fail to kill crabgrass and the farmer has a low yield of soybeans, the farmer could sue the seller for breach of the warranty of fitness for a particular purpose because the seller knew what the farmer required.
  6. 6. CONDITION  It is a stipulation which is essential for the main purpose of the contract.  In case of breach of a condition, the aggrieved party can repudiate the contract of sale. WARRANTY  It is a stipulation which is collateral to the main purpose of the contract.  In case of breach of warranty, the aggrieved party can claim damages only.
  7. 7. CONDITION  A breach of condition may be treated as breach of warranty.  Contract can’t be fulfilled until the condition is fulfilled. WARRANTY  The breach of warranty cannot be treated as a breach of a condition.  A contract is complete even if the warranty has not been fulfilled.
  8. 8. 1) Condition as to title 2)Condition in a sale by description 3)Condition in a sale by sample 4)Condition in a sale by sample as well as by description 5)Condition as to fitness or quality 6)Condition as to merchantability 7)Condition as to wholesomeness
  9. 9.  Warranty of Quiet possession.  Warranty against encumbrances.  Warranty to disclose dangerous natures of goods.  Warranty implied by Customs
  10. 10. Caveat emptor means “let the buyer be aware”. According to the doctrine of caveat emptor it is the duty of buyer to be careful while purchasing goods of his requirement and the seller is not bound to disclose every defect in goods of which he may be cognizant. While making purchase the buyer depends on his own skills and makes a bad choice and hence he can’t hold the seller liable for the same, as there is no implied undertaking by the seller.
  11. 11. Let the ‘Buyer Beware'.The maxim Caveat Emptor does not apply & the contract will be subject to the implied conditions under the following circumstances : 1. Seller makes a false representation amounting to fraud or conceals defect in goods. 2. Goods are purchased by description and are not of merchantable quality. 3. Goods are purchased by sample but does not correspond to them.
  12. 12. 4. Buyer makes his purpose for purchase clear and goods are not fit for that particular purpose. 5. Goods are purchased by description and by sample and don’t correspond to them. 6. Goods are not fit according to the usage of trade.
  13. 13.  The general rule is that risk follows ownership.  It says that Unless otherwise agreed, the good remains at the seller’s risk until the property therein is transferred to the buyer but when the property therein is transferred to the buyer, the goods are at the buyer’s risk whether delivery has been made or not.
  14. 14.  EXCEPTIONTOTHE GENERAL RULE  1. Agreement to the Contrary.  2. Delay in delivery by a party.  3. Usage of trade  4. Loss caused by a party because of carelessness.