SOGA

SOGA

PAHUJA LAW ACADEMY

MAINS QUESTIONS

  1. One cannot Contract to buy his own Goods.” Discuss.
  1. “Property in Goods” is a Linchpin of the definition of Sale. Discuss.
  1. Ram bought a camel for Vijay for Rs.10,000 from Vikas stipulating for five days trial. The camel was delivered to Ram but before the expiration of these five days, the camel died without any fault on the part of Ram. Then, Vijay sued Ram for recovery of Rs.10,000.Decide.
  1. X agrees to sell Y ten bales of Egyptian cotton out of 100 bales lying in his godown. The godown had been destroyed by fire at the time of the contract. X is unaware of this fact. Who is to bear the loss? Support your answer.
  1. Distinguish between Sale and Agreement to Sale

Topic – Introduction

 LECTURE NOTES

Sales of Goods Act

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

Act is based on the English Sales of Goods Act 1893.

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  • 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.

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

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Pre- Questions

 

  1. The Sale of Goods Act, 1930 applies to the whole of India except

a. Jammu & Kashmir

b.  Dadra and Nagar Haveli

c.  Goa, Daman & Diu

d.  All the above.

 

  1. The Sale of Goods Act, 1930 came into force on.

a. 1st April, 1930

b.  1st July, 1930

c.  1st December, 1930

d.  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.

a. Indian Contract Act

b. Limited Liability Partnership Act

c. Sale of goods Act

d. Companies Act

 

  1. Under section 2(2) of the Sale of Goods Act, 1930, ‘delivery’ means

a. gratuitous transfer of possession from one person to another

b. involuntary transfer of possession from one person to another

c. voluntary transfer of possession from one person to another

d. 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.

a. Sold

b. Purchased

c. In a deliverable state

d. Buyable

 

  1. ‘Which of the following sections of the Sale of Goods Act, 1930, defines the contract of sale and agreement to sell?

a. Section 4

b. Section 5

c. Section 6

d. Section 7

 

  1. An agreement to sell becomes a sale when

a. The time elapses

b. The conditions are fulfilled subject to which the property in the goods is to be transferred.

c. Either (a) or (b)

d. None of the above

 

8. In sale of Goods act several provisions of the Indian contract Act have been retained

a. to meet the needs of the buyers

b. to meet the need of the sellers

c. to meet special conditions existing in India regarding sale of goods

d. to meet the need of both the buyers and sellers

 

9. The “documents of title to goods” in the Sale of Goods Act,1930 have been described , under

a. section 2

b. section 2(1)

c. section 2(4)

d. section 2 (5)

 

10. Under Section 2(6) , of the Sale of Goods Act, 1930 “future goods” means

a. specific goods

b. ascertained goods

c. uncertain goods

d. goods which are not yet in existence

 

 

PAHUJA LAW ACADEMY

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

And

Risk passes with the property [Section 26]

MAINS QUESTIONS

  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.
  2. Risk passes with the property? Explain.
  3. Mr XYZ (seller) agreed to supply 300 tons of apple juice by samples. He crushed 300 tons of apples at once to ensure that they are according to the samples and filled them in the casks. After some installments had been delivered, the buyer refused to take further deliveries.
  4. “X, a seller of the goods, enters into a contract of sale of goods with Y, the buyer, who visits X’s office to check the goods. Both the parties to the contract agree that transfer of ownership will take place with the execution of the contract, restricting X’s right to sell those goods to someone else. They both agree X will bring the goods in the deliverable state in 2 days and after two days, Y’s agent will collect the goods from X. Both the parties agree that X will take care of Y’s goods for 5 days after the contract has been executed (if not collected) and not beyond the period of 5 days. Decide.
  5. P entrusted his bike to M , an auctioneer ,for sale by public auction on the term that M would not sell it below Rs.70,000. M sold it to Q for Rs.30,000 in private sale and misappropriated the amount and absorbed and absconded. Can P recover the bike from B ? Decide .


Sales of Goods Act

Image 1Goods 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.

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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.

PAHUJA LAW ACADEMY

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

a.  when the contract is made

b.  when the parties intend the property in goods to pass

c.  when the goods are delivered

d.  when the price is paid

 

  1. For the purpose of ascertaining the intention, of the parties under section 19 regard shall be had to

a. The terms of the contract

b.  The conduct of the parties

c.  The circumstances of the case

d.  All of the above

 

  1. The passing of title in a sale of specific goods in a deliverable state dependent on

a. Payment of price

b. Time of delivery

c. Both (a) and (b)

d. 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’?

a. Section 22

b. Section 23

c. Section 24

d. Section 25

 

  1. Section 23 of the Sale of Goods Act, 1930 applies to

a. ascertained goods

b. specific goods

c. unascertained goods

d. all the above

 

  1. ……. passes with property.

a. Always

b. Prima facie

c. Usually

d. 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.

a. Possession

b. Ownership

c. Either (a) or (b)

d. None of the above

 

8. Section 20 of the Sale of Goods Act,1930 provides for, passing of property in goods where

a. there is an unconditional contract for the sale of specific goods but not in a deliverable state

b. there is a conditional contract for the sale of specific goods in a deliverable state

c. there is an unconditional contract for the sale of generic goods

d. there is an unconditional contract for the sale of specific goods in deliverable state.

 

9. Assent to the appropriation of goods to the contract of sale of goods, under section 23 of the Sale of Goods Act,1930, can be given

a.  only before and not after the appropriation .

b. either before or after the appropriation

c. after the appropriation

d. before the appropriation

 

10. Section 26 of the Sale of goods Act ,1930 lays down the rule

a. risk follow the defaulter

b. risk follows the delivery

c. risk follows the property

d. all of the above

 

Topic – Section – 27

LECTURE – 3

[Sale by non- owner]

MAINS QUESTIONS 

  1. Discuss “Nemo dat quad non habet” with exceptions.
  1. A purchased a car from B, which turned out to be stolen property. A filled a suit for recovery of price against B. B took the plea that he himself was a bona fide purchaser form C a third party and never knew that the car was stolen property belonging to D and therefore,he is not liable to return the price.

Decide the case in the light of section 27 of the Indian Sale of goods Act.

  1. Can in any circumstances a buyer to whom the property in the goods has not passed and who never intended to pay the price therefore, make an effective sale of these goods?
  2. “No one can give a better title than he himself has”.  Discuss and illustrate the exceptions under this rule.

 

Sales of Goods Act

LECTURE NOTES

  • 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.

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Pre- Questions

 

  1. Which of the following is an exception to the rule Nemo dat quod non habet?

a. Sale by estoppel

b. Sale by mercantile agent

c. Sale by one of several joint owners

d. 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’?

a. Section 29

b.  Section 30

c. Section 31

d. Section 32

 

  1. Which of the following is an essential requirement of section 29 of the Sale of Goods Act?

a. Seller obtained the possession under a voidable contract

b. Contract must not have been rescinded

c. Buyer must act in good faith

d. All of the above

 

4. The Latin maxim “nemo dat quid habet” as contained in section 27 of the sale of Goods Act, 1930 means

a. a finder of goods can pass a proper title.

b. an innocent occupier of goods can pass a proper title

c. no man can pass a better title than he has

d. an innocent and bona fide purchaser gets a proper title as of a true owner

 

5. The consent in section 27 contemplates

a. consent of price

b. consent of goods

c. consent in fact

d. none of above

 

6. The rule in the Latin maxim “nemo dat quod non habet” under the Sale of Goods Act,1930 is contained in

a. section 27

b. section 28

c. section 29

d. section 30

 

7. Section 27 of the Sale of Goods Act, 1930 provides for

a. transfer of property in goods

b. transfer of title in goods

c. transfer of risk in goods

d. all of above

 

8. Which of the following sections contains the exceptions to the principle that “no man can pass a better title than he has”

a. Section 28 to 30

b. Section 27-30

c. Section 29 -31

d. Section 26 -30

 

Topic – Conditions & Warranties,

Caveat Emptor

MAINS QUESTIONS

  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.
  1. Sam in Madras writes to Sanju at Bombay to send to Sam a packet of patent medicine. Sanju Accordingly sends the packet . Sam finds some defects in the medicines . Decide whether Sam receives the price of medicines from Sanju .
  1. Explain with the help of case law – “stipulation as to time of paymemt and its importance in commercial contracts .
  1. Ajay purchased a packet of shampoo from Dev , a dealer in shampoo. His hair  was abnormally sensitive and he had disclosed that  fact to Dev. However, he  suffered from hair trouble as a result of using the shampoo , on the other hand his friend Vikas who was using the same shampoo for a long time had no such problem.

Decide can Ajay claim damages from Dev. “Once a condition always a condition”.  Comment.

LECTURE NOTES 

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.

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

circumstances mentioned in Section 16 [Rule of Caveat Emptor]

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.


Pre- Questions

  1. Section 11 of the Sale of Goods Act, 1930 provides for

a. Stipulation as to time in a contract of sale

b. Conditions

c. Warranties

d. All the above

 

  1. In mercantile contracts stipulations as to time, other than as regards time of payment are

a. usually not of the essence of the contract

b. usually of the essence of the contract

c. depends upon the terms of the contract

d. both (a) and (c)

 

  1. A ‘condition’ in a contract of sale, in the Sale of Goods Act, 1930, has been defined under

a. section 12(1)

b. section 12(3)

c. section 12(2)

d. section 12(4)

 

  1. ‘A breach of condition may be treated as a breach of warranty and not vice versa’. The statement is

a. True

b. False

c. Depends

d. None of the above

 

  1. Which of the following is/are exceptions to the rule of caveat emptor?

a. Fitness for buyer’s purpose

b. Merchantable quality

c. Conditions implied by usage of trade

d. All of the above

 

  1. Caveat emptor means

a. Let the seller beware

b. Let the buyer beware

c. Let the parties beware

d. None of the above

 

6. Under section 16 of the Sale of Goods Act,1930 in a contract of sale of goods, ordinarily

a.there is an implied warranty or condition as to the quality or fitness for any purpose of goods

b.there is no implied warranty or condition as to the quality or fitness for any purpose of goods

c.there is an implied condition as to the quality or fitness for any particular purpose of goods

d.there is an implied warranty as to the quality or fitness for any particular purpose of goods

 

7. Section 17 of the Sale of Goods Act,1930 provides for implied conditions in a contract of sale of good

a. at least half of the goods shall correspond with the sample

b. some of the goods shall correspond with the sample

c.the whole of the goods shall correspond with the sampled

d. the bulk of the goods shall correspond with the sample.

 

8.Section 16 of the Sale of Goods Act ,1930 saves any condition or warranty that may arise

a.under any other law

b. under any other provisions of the act

c. Both (a) and (b)

d.neither (a) nor (b)

 

9. Implied condition or warranty by usage as contained in section 16(3) of the sale of Goods Act 1930, is based on the decision in

a. Bombay United Merchants Co.V Doolubram

b. Wood V. Wood

c. Syers V Jonas

d. Jones V. Bowden

 

10. The implied condition as contained in section 16(2) of the Sale of goods Act ,1930 applies to

a.Sale of goods under a patent or other trade name

b. Sale of goods by description only

c.  Both (a) and (b)

d.only (a) and not (b)

 

11. Under section 16 of the Sale of goods Act, 1930 any condition or warranty that may arise under any other provision of the Sale of Goods Act 1930, or any other law is

a. may or may not be saved depending on the express agreement between the parties.

b. may or may not be saved depending on the facts and circumstance of the case.

c. not saved

d. saved

 

12. The exception provided under section 16 (1) of the Sale of Goods Act,1930, to the rule of “caveat emptor” is not applicable where

a. the goods are not in case and the buyer has no opportunity to inspect the same

b. the goods are in case and the buyer has actually inspected them.

c. inspected the same

d. neither (a) nor (b) or (c)

 

13. The implied condition that the goods shall be fit for buyer’s specific purpose is applicable only where the buyer tells his purpose to the seller and relies upon seller’s skill and judgement.

a.False, as it is buyer’s duty to select goods which serve his purpose.

b. True, as it is a requirement of law

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.
  1. X sold to Y a scooter for a sum of Rs 50,000 , Y pays the whole price except Rs 10,000 which he promised to pay within ten days . X holds the possession over the scooter until the rest of money is paid , but before the expiry of the stipulated time Y becomes  bankrupt . X resold the scooter to R for Rs 60,000 without giving notice to Y. Y claims from X Rs 10,000 i.e profit on re-sale.Decide Is X liable.
  1. “The notion of transit is both a matter of fact as well as of law” as regards stoppage in transit by an unpaid seller. Explain this statement and refer to case law.
  1. Ram sells 1000 packet of biscuits to Dev and send 800 by car and 200 by ship. Dev receives delivery of the packets of biscuits by ship. But before he receives the delivery of the packets by Car , he becomes insolvent . Ram,still being unpaid ,stops the goods in transit. The official Receiver in Dev’s insolvency claims the goods.

Decide .

 

LECTURE NOTES

Topic – Unpaid Seller

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Section 46, Unpaid Seller has following rights against goods

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

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The Unpaid Seller has followings Rights against the buyer

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

Pre- Questions

 

  1. Rights of an unpaid seller against the goods, under the Sale of Goods Act, 1930, have been prescribed in A

(a) Chapter V

(b) Chapter VI

(c) Chapter VII

(d) Chapter IV

 

  1. Chapter V of the Sale of Goods Act, 1930 provides for

(a) rights of unpaid seller against the buyer

(b) rights of unpaid seller against the goods

(c) rights of unpaid seller against the carrier

(d) all the above

 

  1. ‘Unpaid seller’ of goods has been defined under

(a) section 45 of the Sale of Goods Act, 1930

(b) section 44 of the Sale of Goods Act, 1930

(c) section 47 of the Sale of Goods Act, 1930

(d) 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

(a) part of the price has not been paid

(b) substantial portion of the price has not been paid

(c) the whole of the price has not been paid

(d) 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

(a) lien over the goods

(b) stoppage of goods in transit

(c) re-selling the goods

(d) all the above

 

  1. The right of lien is lost by the unpaid seller, under the circumstances stated in

(a) section 47 of the Sale of Goods Act, 1930

(b) section 48 of the Sale of Goods Act, 1930

(c) section 49 of the Sale of Goods Act, 1930

(d) section 50 of the Sale of Goods Act, 1930.

 

  1. The unpaid seller of goods can waive his right to lien

(a) expressly

(b) impliedly

(c) either expressly or impliedly

(d) only expressly and not impliedly

 

  1. Right of the unpaid seller, as to stoppage in transit against the goods has been provided under

(a) section 52 of the Sale of Goods Act, 1930

(b) section 51 of the Sale of Goods Act, 1930

(c) section 50 of the Sale of Goods Act, 1930

(d) section 49 of the Sale of Goods Act, 1930

 

      7. Duration of transit of goods has been provided under

(a) section 51 of the Sale of Goods Act, 1930

(b) section 52 of the Sale of Goods Act, 1930

(c) section 49 of the Sale of Goods Act, 1930

(d) section 50 of the Sale of Goods Act, 1930.

 

8. Right of the unpaid seller, as to stoppage in transit against the goods has been provided under

a. section 52 of the Sale of Goods Act, 1930

b.section 51 of the Sale of Goods Act, 1930

c.section 50 of the Sale of Goods Act, 1930

d. section 49 of the Sale of Goods Act, 1930

 

9. Duration of transit of goods has been provided under

a.  section 51 of the Sale of Goods Act, 1930

b.  section 52 of the Sale of Goods Act, 1930

c.   section 49 of the Sale of Goods Act, 1930

d.section 50 of the Sale of Goods Act, 1930.

 

10.  In case of conditional payment through a negotiable instrument ,under section 45 of the Sale of Goods Act,1930 the seller is unpaid

a. if the buyer becomes insolvent during the currency of the bill .

b.  if the buyer fails to meet the bills at maturity

c.   Only (a) and not (b)

d. Either (a) or (b)

 

11. Under section 49 of the Sale of Goods Act 1930, the right of lien of the unpaid seller is lost

a. where the buyer obtains the possession of the goods by a tortuous act

b. where the buyer obtains the possession of the goods by a criminal act

c. where the buyer lawfully obtains the possession of the goods

d. either a or b or c.

 

12. The unpaid seller, under section 52 of the sale of goods act 1930, can exercise his right of stoppage in transit , against the goods by

a.  taking actual possession of goods

b. giving notice of his claim to the carrier in whose possession the goods are

c. only (a) not (b)

d. d either (A) or (b)

 

 

 

 

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