Sales of goods act


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Sales of goods act - Unitedworld School of Business

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Sales of goods act

  1. 1. ESSENTIALS OF A VALID SALES CONTRACT  Two parties:  There must be two distinct parties i.e. a buyer and a seller.  Goods:  Goods which form the subject matter of the contract of sale must be movable.  Price:  The consideration of the contract of sale, called price, must be money.  Hence in nutshell a contract is made by an offer to buy or sell goods for a price and the acceptance of such offer.
  2. 2. basis sale Agreement to sell 1. payment Immediate payment is not necessary and can be done at a future date. Ownership is to be given at a future date. 2 contract Its an executed contract Its an executory contract 3.Right on goods Jus-in-rem Jus-in-personam 4.risk There is a risk because the goods passes to the buyer without payment There is no risk.
  3. 3. CONDITION  It is a stipulation essential to the main purpose of the contract, the breach of which gives the aggrieved party a right to repudiate the contract itself. In addition, he may maintain an action for damages for loss suffered, if any, on the footing that the whole contract is broken and the seller is guilty of non-delivery.  EXAMPLE-P , goes to R , a horse dealer, and says, I want a horse which can run at a speed of 30km.perhour . 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 R and get back the price.
  4. 4. WARRANTY  A warranty is a stipulation collateral to the purpose of the contract, the breach of which gives the aggrieved party a right to sue for damages only ,and not to avoid the contract  EXAMPLE-  Assume that a farmer ,intending to plant no-till soybeans ,approaches a seller to buy her biocide . 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
  5. 5. The rights and duties of Buyer and Seller
  6. 6. Rights and duties of seller
  7. 7. Unpaid Seller  Unpaid Seller  Seller to whom the full price of the goods sold has not been paid.  As per section 45 of Sale of Goods Act  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 dishonour of the instruments or otherwise
  8. 8. Rights of Unpaid Seller  Rights Against Goods  Where the ownership of goods is transferred to buyer  (2) Rights Against Buyer  Where the ownership of goods is not transferred to buyer.
  9. 9. Rights Against Goods  Right of Lien  Right to retain possession of goods until payment of price  It can be exercised when  Goods have been sold without any stipulation as to credit  Goods sold on credit but the term of credit has expired  Buyer becomes insolvent
  10. 10. Continued 2. Right of stoppage in transit Right of stopping the goods in transit after the unpaid seller has parted with the goods. Exercised when:  when buyer becomes insolvent  Goods are in transit Only for the payment of price of the goods
  11. 11. Continued 3.Right of Re-sale The unpaid seller can re-sale the goods when  The goods are of perishable nature  Seller gives notice to the buyer of his intention to re-sale the goods  Seller has reserved his rights of resale
  12. 12. Rights Against Buyer 1. Suit for price  The buyer fails to pay the price of goods  The seller can file a suit against the buyer for recovery of the price. 2.Suit for Damages for Non-Acceptance  The seller is ready to deliver the goods to the buyer  But the buyer wrongfully neglects or refuses to accept the goods and pay for them.
  13. 13. Continued 3. Repudiation of contract before due date  When the buyer puts an end to the contract before due date of delivery of goods, the seller may either  Treat the contract as subsisting and wait till the date of delivery of goods  Treat the contract as repudiated and bring the legal action against the buyer for the recovery of the damages.
  14. 14. Continued 4. Suit for Interest  Specific agreement between buyer and seller  Regarding interest on the price of goods from the date on which payment becomes due  The seller can recover interest from the buyer
  15. 15. Caveat emptor means ‘LET THE BUYER BEWARE’ EXCEPTIONS TO THE DOCTRINE OF CAVEAT EMPTOR  In case of misrepresentation by seller.  In case of concealment of latent defect.  In case of sale by description.  In case of sale by sample.  In case of sale by description and sample.  Fitness for a particular purpose
  16. 16. EXAMPLES  Ex. Pigs were sold subject to all faults and these pigs being infected caused typhoid to other healthy pigs of the buyer, it was held that the seller was not bound to disclose that the pigs were unhealthy. The rule of the law being caveat emptor.
  17. 17. Campus Overview 907/A Uvarshad, Gandhinagar Highway, Ahmedabad – 382422. Ahmedabad Kolkata Infinity Benchmark, 10th Floor, Plot G1, Block EP & GP, Sector V, Salt-Lake, Kolkata – 700091. Mumbai Goldline Business Centre Linkway Estate, Next to Chincholi Fire Brigade, Malad (West), Mumbai – 400 064.