SOGA

SOGA

PAHUJA LAW ACADEMY

Topic – Introduction

 

Sales of Goods Act

 

  • Þ Law of Sale       of        Goods

 

Means transfer           Subject matters

of ownership              (movable property)

[known as general

Property]

  • Transfer of absolute interest
  • Þ Earlier it was known as Indian Sales of Goods Act, later word “Indian” have been omitted in the year 1963.
  • Þ Sales of Goods Act does not deal with sale by operation of law rather under this Act, transfer is by act of parties.
  • Þ This act is not exhaustive.
  • Þ Earlier the provisions were contained in ICA [Section 76 – 123]
  • Þ Act is based on the English Sales of Goods Act 1893.

 

Contract of Sale

 

Sale                                                                                                        Agreement to Sell

  • Immediate transfer of ownership ownership to be transferred in future
  • Whether price is paid or not, or ownership still with the Seller

Goods are delivered or not.

 

  • Þ Essentials of Contract of Sale [Section 4]
  • Two parties
  • Transfers or agrees to transfer
  • Transfer of property
  • Subject matter is always goods.
  • For a price

 

  • Þ Kinds of Goods [Section 6]

 

Existing Goods                                                  Future Goods [Section 2(6)]

 

Owner      or       Possessed                           Manufactured                   Procured             Produced

 

At the time of Contract of Sale                                                                   Future

 

  • Þ Existing Goods

Specific Goods [Section 2(14)                      Unascertained Goods

 

Goods identified              Agreed upon

 

  • Þ Consequence of Perishing of Goods [Section 7 & 8]

Section 7, Contract for Sale of Specific Goods

At the time of Contract

 

Perished              or            So damaged without the knowledge of Seller

Becomes void

Section 8, Goods perish [Subsequently]

After agreement to Sell but before Sale

Contract becomes void.

 

 

Sales of Goods Act

 

Mains Questions

 

  1. “One cannot Contract to buy his own Goods.” Discuss.
  2. “Property in Goods” is a Linchpin of the definition of Sale. Discuss.

 

Pre- Questions

 

  1. The Sale of Goods Act, 1930 applies to the whole of India except
    • Jammu & Kashmir
    • Dadra and Nagar Haveli
    • Goa, Daman & Diu
    • All the above.

 

  1. The Sale of Goods Act, 1930 came into force on.
    • 1st April, 1930
    • 1st July, 1930
    • 1st December, 1930
    • 31st January, 1931.

 

  1. Expressions used but not defined in the Sale of Goods Act, 1930 and defined in the …………. shall have the meanings assigned to them in that Act.
    • Indian Contract Act
    • Limited Liability Partnership Act
    • Sale of goods Act
    • Companies Act

 

  1. Under section 2(2) of the Sale of Goods Act, 1930, ‘delivery’ means
    • gratuitous transfer of possession from one person to another
    • involuntary transfer of possession from one person to another
    • voluntary transfer of possession from one person to another
    • transfer of possession irrespective of whether it is gratuitous, involuntary or voluntary, from one person to another

 

  1. Goods are said to be ………….. when they are in such state that the buyer would under the contract be bound to take delivery of them.
    • Sold
    • Purchased
    • In a deliverable state
    • Buyable

 

  1. ‘Which of the following sections of the Sale of Goods Act, 1930, defines the contract of sale and agreement to sell?
    • Section 4
    • Section 5
    • Section 6
    • Section 7

 

  1. An agreement to sell becomes a sale when
    • The time elapses
    • The conditions are fulfilled subject to which the property in the goods is to be transferred.
    • Either (a) or (b)
    • None of the above

PAHUJA LAW ACADEMY

Topic – Rules as to transfer of property [19-24]

And

Risk passes with the property [Section 26]


Sales of Goods Act

 

  • Þ In every contract of Sale

Either

Sale                  Agreement to Sell

Whether sale or agreement to sell depends

 

Kinds of Goods                  Intention of parties [Section 19-24]

 

Specific                                 Future Goods

Unascertained Goods

Agreement to Sell                            [always Agreement to Sell]

Sale        or            Agreement to Sell

 

  • Þ Rules as to Intention of parties [Section 19 – 24]

 

  • Specific Goods (II)    Unascertained             (III)     Sale on approval

[Section 19-22]                 [Section 18 & 23]                          [Section 24]

 

  • Goods are Specific
  • Section – 19 property pass when intended to pass
  • If intention is not clear then Rules mentioned in Section 20, 21 and 22 apply.
  • Section – 20 Specific Goods deliverable state.
  • Section – 21 Specific Goods to be put in deliverable state
  • Section – 22 Specific Goods in a deliverable state, when the seller has to do anything there in order to ascertain price.

 

  • Goods are Un-ascertain
  • Section – 18 no property in Goods is transferred unless and until goods are transferred.
  • Section – 23 unascertained goods, 2 conditions are required

 

Ascertained                                        unconditional appropriation

 

Seller with the assent of buyer

OR

Buyer with the assent of seller

By delivery to buyer or his agent or carrier

Property therein passes

 

 

  • Sale on approval [Section 24]

When Goods are delivered to buyer on approval

 

Property passes

Signified his approval                                     retain the goods without notice

or acceptance                                                    of rejection

 

 

[Section – 26] RISK PASSES WITH THE PROPERTY

  • Possession is not material to decide the risk, it is the ownership which decides the risk.
  • Ownership depens upon whether contract of Sale

 

Sale                                        Agreement to Sell

Buyer is the owner                              Seller owner

He has to bear the risk                   he has to bear the risk

 

There are 3 exceptions to the above Rules

  • Subject to Contract :- Rule under section 26 is subject to Contract
  • Proviso (1) to Section 26

If loss is caused by delay- then defaulter is liable

  • Proviso (2) to Section 26

Nothing is section 26 shall affect the duties of either buyer or seller as bailee.

 


Sales of Goods Act

 

Mains Question

 

  1. “There are definite rules for ascertaining the intention of the parties as to time when the property in the Specific Goods is to pass to the buyer.” Discuss.

 

  1. Risk passes with the property? Explain.


Pre- Questions

 

  1. Under section 19 of the Sale of Goods Act, 1930, the property in goods in a contract for

sale of specific or ascertained goods, passes to the buyer

  • when the contract is made
  • when the parties intend the property in goods to pass
  • when the goods are delivered
  • when the price is paid

 

  1. For the purpose of ascertaining the intention, of the parties under section 19 regard shall be had to
    • The terms of the contract
    • The conduct of the parties
    • The circumstances of the case
    • All of the above

 

  1. The passing of title in a sale of specific goods in a deliverable state dependent on
    • Payment of price
    • Time of delivery
    • Both (a) and (b)
    • None of the above

 

  1. Which of the following sections of the Sale of Goods Act 1930 deals with Sale of unascertained goods and appropriation’?
    • Section 22
    • Section 23
    • Section 24
    • Section 25

 

  1. Section 23 of the Sale of Goods Act, 1930 applies to
    • ascertained goods
    • specific goods
    • unascertained goods
    • all the above

 

  1. ……. passes with property.
    • Always
    • Prima facie
    • Usually
    • None of the above

 

  1. In case of loss of goods, the loss shall be borne by the party who has the ……………… of the goods at the time of loss.
    • Possession
    • Ownership
    • Either (a) or (b)
    • None of the above

PAHUJA LAW ACADEMY

Topic – Section – 27

LECTURE – 3

[Sale by non- owner]

 

Sales of Goods Act

 

  • Section – 27 deals with transfer of title. It provides general rule, that in case of Sale by non- owner, buyer acquires defective title.

 

  • This general rule is subject to some exceptions.

 

  • General rule protects the interest of the owner but exceptions protect the interest of innocent buyer.

 

Exception

 

  • Under other Laws (II)    Under Sales of Goods Act (SOGA)
  • Under Insolvency Act          (1)  Section 27 para (1) last time

Sale under estoppel Section 27 proviso

  • Section 169 of Indian          (2) Sale by Mercantile agent.

Contract Act, (ICA)

  • Section 28, Sale by one of the joint

owners.

  • Section 29, sale by person in possession under voidable Contract.
  • Section 30 seller or buyer in possession after Sale.

 

LECTURE – 3

 

Mains Question

 

  1. Discuss “Nemo dat quad non habet” with exceptions.

 

LECTURE – 3

 

[Sale by non- owner]

 

Pre- Questions

 

  1. Which of the following is an exception to the rule Nemo dat quod non habet?
    • Sale by estoppel
    • Sale by mercantile agent
    • Sale by one of several joint owners
    • All of the above

 

  1. Which of, the following sections of the Sale of Goods Act, 1930 deals, with ‘sale by person in possession under voidable contract’?
    • Section 29
    • Section 30
    • Section 31
    • Section 32

 

  1. Which of the following is an essential requirement of section 29 of the Sale of Goods Act?
    • Seller obtained the possession under a voidable contract
    • Contract must not have been rescinded
    • Buyer must act in good faith
    • All of the above

PAHUJA LAW ACADEMY

Topic – Conditions & Warranties,

Caveat Emptor

 

Sales of Goods Act

 

Conditions and Warranties

  • In a contract of sale of goods, there may be various terms and stipulation.
  • That stipulation, in a contract, with reference to goods, may be a condition or a warranty.
Condition Warranty
(1)    Essential to main contract (1)    Collateral to main contract
(2)    Repudiation and damages (2)    Only damages
(3)    A breach of condition may be treated as a breach of warranty [Section 13] (3)    Not vice versa.

 

  • Conditions and Warranties may be

 

Express                                                Implied

 

Terms of the Contract                       Not expressly provided

expressly states them                       in the Contract

 

Presumes by law to be present

 

It may be waived or negated by

an express agreement [Section 62]

 

 

Implied Conditions

  • Implied Condition as to title [Section 14(a)]
  • In case of sale by description [Section 15]

 

Implied condition that goods shall corresponds with description

 

  • In case of sale by description as well as sample [Section 15]

 

Implied condition that goods shall corresponds with both

  • In case of sale by sample [Section 17]

Implied condition that goods shall

  • Correspond with sample.
  • Reasonable opportunity of comparing.
  • Free from any latent defect

 

(5)   No implied condition as to quality and fitness of goods, unless provided under the

circumstances mentioned in Section 16 [Rule of Caveat Emptor]

 

(6)   Implied condition can be annexed by usage of trade [Section 16(3)]

 

Implied Warranties

  • Implied Warranty as to quiet possession [Section 14(b)]
  • Goods shall be free from encumbrances [Section 14(c)]
  • May be annexed by usage of trade [Section 16(3)]

 

Rule of Caveat Emptor

  • Caveat Emptor means buyer beware
  • This rule of Caveat Emptor is applicable in India under section 16 of SOGA
  • Exceptions to the Rule of Caveat Emptor i.e. cases in which seller is responsible, if the goods are not of good quality or not fit for particular purpose.

 

  • Exception I

Section 16(1) When buyer relies upon seller skill or judgment by disclosing his purpose and seller is

dealer in those goods.

 

Except – where buyer mentions the trade name.

 

  • [Section 16(2)] when goods are brought by description.

 

Except – where defects are patent then no liability of seller.

 

  • [Section 16(3)] an implied condition or warranty as to quality or fitness may be annexed by the

usage of trade.

 

  • This rule has been modified by virtue of Consumer Protection Act, by making the seller responsible i.e. Caveat Venditor.

 

 

Mains Question

 

  1. The Rule of Caveat Emptor does not mean that the buyer must take a chance, it means that the buyer must take care. Explain with exceptions, if any.

 

 

Pre- Questions

 

  1. Section 11 of the Sale of Goods Act, 1930 provides for
    • Stipulation as to time in a contract of sale
    • Conditions
    • Warranties
    • All the above

 

  1. In mercantile contracts stipulations as to time, other than as regards time of payment are
    • usually not of the essence of the contract
    • usually of the essence of the contract
    • depends upon the terms of the contract
    • both (a) and (c)

 

  1. A ‘condition’ in a contract of sale, in the Sale of Goods Act, 1930, has been defined under
    • section 12(1)
    • section 12(3)
    • section 12(2)
    • section 12(4)

 

  1. ‘A breach of condition may be treated as a breach of warranty and not vice versa’. The statement is
    • True
    • False
    • Depends
    • None of the above

 

  1. Which of the following is/are exceptions to the rule of caveat emptor?
    • Fitness for buyer’s purpose
    • Merchantable quality
    • Conditions implied by usage of trade
    • All of the above

 

  1. Caveat emptor means
    • Let the seller beware
    • Let the buyer beware
    • Let the parties beware
    • None of the above

PAHUJA LAW ACADEMY

 

Sales of Goods Act

 
Topic – Unpaid Seller

Mains Question

 

  1. Discuss the rights of an unpaid seller.

                                                [OR]

Explain the provisions relating to unpaid seller’s lien and stoppage in transit?

 

  1. In what cases has an unpaid seller a lien over the goods? Would his lien he destroyed if he makes part delivery of the goods? When does the lien come to an end.

 

 

Topic – Unpaid Seller

S/45      Defines Unpaid Seller

 

To whom whole of the                   to whom any negotiable

Price has not been paid                 instrument has been paid

 

Same has been honoured

 

S/46 Unpaid Seller has following rights against goods

  1. Lien
  2. Right of Stoppage in transit
  • Right of re-sale

 

S/47   I.                 Lien can be exercised only 

 

                When he is in Possession of the goods

 

goods are sold                   term of the credit            buyer becomes

without any term             has been expired             insolvent

of credit

 

S/49  Termination of Lien

 

delivery of goods              buyer or agent                                                        payment or                   disposition by

to the buyer or                  lawfully obtains                                                       tenders of                     buyer as per

other carrier or                 the possession                  waiver                           price                             S/ 53

bailee

express                implied

 

 

  1. Right of Stoppage in transit [S/46 (b) r/w S/50] 

 

when he parted with                                      buyer becomes

the possession                                                   insolvent

 

III.           Right of resale [S/46(c) r/w S/54]

If after lien or stoppage in transit

 

 

Buyer does not pay the price

 

Seller – resell them in accordance with S/54

 

The Unpaid Seller has followings Rights against the buyer

  • Suit for price [S/55]
  • Suit for damages for non-acceptance [S/56]
  • Repudiation of contract before due date [S/60]
  • Suit for Interest [S/61]

 

 

Pre- Questions

 

  1. Rights of an unpaid seller against the goods, under the Sale of Goods Act, 1930, have been prescribed in A
  • Chapter V
  • Chapter VI
  • Chapter VII
  • Chapter IV

 

  1. Chapter V of the Sale of Goods Act, 1930 provides for
  • rights of unpaid seller against the buyer
  • rights of unpaid seller against the goods
  • rights of unpaid seller against the carrier
  • all the above

 

  1. ‘Unpaid seller’ of goods has been defined under
  • section 45 of the Sale of Goods Act, 1930
  • section 44 of the Sale of Goods Act, 1930
  • section 47 of the Sale of Goods Act, 1930
  • section 46 of the Sale of Goods Act, 1930

 

  1. Under section 45 of the Sale of Goods Act, 1930, a seller of goods is an ‘unpaid seller’ when
  • part of the price has not been paid
  • substantial portion of the price has not been paid
  • the whole of the price has not been paid
  • either (a) or (b) or (c)

 

  1. After the passing of property in goods to the buyer, under section 46 of the Sale of Goods Act, 1930, the unpaid seller has a right of
  • lien over the goods
  • stoppage of goods in transit
  • re-selling the goods
  • all the above

 

  1. The right of lien is lost by the unpaid seller, under the circumstances stated in
  • section 47 of the Sale of Goods Act, 1930
  • section 48 of the Sale of Goods Act, 1930
  • section 49 of the Sale of Goods Act, 1930
  • section 50 of the Sale of Goods Act, 1930.

 

  1. The unpaid seller of goods can waive his right to lien
  • expressly
  • impliedly
  • either expressly or impliedly
  • only expressly and not impliedly

 

  1. Right of the unpaid seller, as to stoppage in transit against the goods has been provided under
  • section 52 of the Sale of Goods Act, 1930
  • section 51 of the Sale of Goods Act, 1930
  • section 50 of the Sale of Goods Act, 1930
  • section 49 of the Sale of Goods Act, 1930

 

  1. Duration of transit of goods has been provided under
  • section 51 of the Sale of Goods Act, 1930
  • section 52 of the Sale of Goods Act, 1930
  • section 49 of the Sale of Goods Act, 1930
  • section 50 of the Sale of Goods Act, 1930.

 

 

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