2. There are three stages in the performance in the sales of goods
by a seller, viz,
•The transfer of property in the goods
•the transfer of possesion of the goods(delivery)
•The passing of the risk
3. PROPERTY, POSSESSION AND
RISK
•Transfer of property in the goods from the seller to the buyer is the main object of contact of
sale
•the term property in the goods is different from possesion of goods.
•property in the goods means OWNERSHIP OF GOODS
•possession of the goods refers to CUSTODY OR CONTROL OF THE GOODS
•An article may belong to A is may not be in his possession. B maybe in possession of that
article although he is not its owner.
4. PROPERTY, POSSESSION AND
RISK
•1. RISK FOLLOWS OWNERSHIP
• unless otherwise agrees, risk follows ownership whether delivery has been made or not and whether price has been
paid or not.
•thus the risk of loss as a rule lies on the owner
2. ACTION AGAINST THIRD PARTIES
•damaged or destroyed by third parties owner has the right to take action
3. INSOLVENCY OF THE SELLER OR THE BUYER
•the question arises whether the official receiver or assignee can take over the goods or not depends on whether the
property in the goods has passed from the seler to the buyer.
4. SUIT FOR PRICE
•the owner can sue for the price, unless otherwise agrees, only if the goods have become the property of the buyer
5. PASSING OF PROPERTY
Primary Rules
1. [Sec. 18] Goods must be ascertained
2.[Sec. 19(1), 19(2)] Intention of the parties- sale of specific or ascertained goods
3.[Sec. 19(3)] Where the intention of the parties cannot be ascertained
4.[Sec. 20 to 24] applyunder [SEC.19(3)]
6. PASSING OF PROPERTY
1. SPECIFIC GOODS [SEC. 20 TO 22]
Rules relating to transfer of property in specific goods are,
•Passing of property at the time of contract [SEC. 20]- unconditional contract for the
sale of specific goods in a deliverable state.
•Passing of property delayed beyond the date of contact
1. Goods not in a deliverable state [SEC. 21]
2.When the price of of goods is to be ascertained by weighing, etc. [SEC. 22]
7. 2. SPECIFIC GOODS [SEC. 20 TO 22]
• In case of unascertained or future goods sold by description, property
passes only when goods according to the description are unconditionally
appropriated to the contract and the buyer is given a notice thereof.
•Delivery to a carrier (the seller not reserving right of disposal, [SEC. 25]
amount to an unconditional appropriation.
8. 3.GOODS SENT ON APPROVAL OR ‘ON SALE OR RETURN’ [SEC. 24]
• In case of delivered to the buyer on approval or on sale or return property passes when he
signifies his approval or acceptance or when he does some act adopting the transaction.
•
•If he retains the goods without giving notice of rejection, property passes when the time
agreed for returning the goods expires or aftera a reasonable time has expired.
9. •The general rule of law is that only the owner of the goods or
any person specifically authorized by him can sel the goods.
•If any other person sells them, the title of the buyer will not be
better than that of the seller.
10. THE FOLLOWING ARE THE EXCERPTIONS,
1.Sale by a mercantile agent
2.Sale under the implied authority of owner or title by estoppel.
3.Sale by one of several joint owners.
4.Sale by a person in possession of goods under a voidable contact
5.Sale by a seller in Possession after sale.
6.Sale by a buyer in possesion after having bought or agreed to buy.
7.Sale by an unpaid seller.
IN ALL THESE CASES, THE PERSON SELLING THE GOODS
MUST BE IN POSSESSION OF THE GOODS WITH THE CONSENT
OF THE SELLER AND THE BUYER MUST ACT BONA FIDE.
