17fd7sale of goods- shinu

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Amity Business School MBA, _______________Semester 2 Economic and Business Legislation

Amity Business School:

Amity Business School Sale of Goods Act, 1930 Section 4 defines a contract of sale as “a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price.”

Amity Business School:

Amity Business School Essentials of a Contract of Sale: At least two parties. Transfer or agreement to transfer ownership of goods. Subject matter of the contract must be goods . Price is the consideration of contract of sale. All other essentials of a valid contract as per the Indian Contract Act, 1872.

Amity Business School:

Amity Business School Agreement to sell: It is an agreement where the transfer of ownership in goods is to take place at a future time or subject to fulfillment of some condition. Hire-purchase Agreement: It is an agreement of hiring. Possession of goods is transferred immediately. Ownership is transferred on the payment of the last instalment when option to purchase is exercised. Hirer has the right to terminate the contract before transfer of ownership. Vendor has right to re-possess goods in case of default.

Amity Business School:

Amity Business School Subject matter of Contract of Sale of Goods: Goods: Goods means every kind of movable property other than actionable claims and money and includes stock and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contact of sale. Actionable claim’ means claim to any debt or to any beneficial interest in movable property not in possession of the claimant. Eg: Receivable from a person is ‘actionable claim’, which can be trasferred to another(e.g. one bank may transfer some of its receivables to another).

Amity Business School:

Amity Business School Classification of Goods: Existing goods Future goods Contingent goods Existing goods may be: Specific or Generic goods Ascertained or Unascertained goods

Amity Business School:

Amity Business School Conditions and Warranties: Condition: It 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 .Eg: Ownership of goods is a condition necessary for sale Warranty: It is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to claim for damages but not to a right to reject the goods and treat the contract as repudiated.Eg: Stipulation relating to quality is a warranty of sale Collateral: Related to, but not strictly a part of, the main thing or matter under consideration.

Amity Business School:

Amity Business School Implied Conditions: Implied Condition as to title Implied Condition under a sale by description: Goods must correspond with description Goods must be of merchantable quality Condition as to wholesomeness Condition as to fitness for particular purpose Implied conditions under a sale by sample Implied conditions in sale by sample as well as by description wholesomeness :Conducive to sound health or well-being, eg: wholesome food; wholesome climate . Merchantable: Free from any defect

Amity Business School:

Amity Business School Implied Warranties: Warranty as to quiet possession Warranty as to freedom from encumbrances Warranty to disclose dangerous nature of goods Warranties implied by the custom or usage of trade

Amity Business School:

Amity Business School Doctrine of Caveat Emptor: It means “let the buyer beware’. Exceptions to the doctrine: Seller makes a false representation. Seller actively conceals defects in goods. Buyer makes known to the seller the purpose for which he is buying the goods.

Amity Business School:

Amity Business School Passing of Property in Goods: ‘Property in goods’ means ownership of the goods. Passing of property in specific/ ascertained goods: Goods in deliverable state - When contract is made. Goods not in deliverable state - When goods are put in deliverable state and buyer has notice of it. Goods in deliverable state but have to be weighed/ measured/ or some other thing is to be done to ascertain the price - When such thing is done and buyer has notice of it.

Amity Business School:

Amity Business School Passing of Property in Unascertained Goods: ‘Property in goods’ does not pass until the goods are ascertained. Passing of property in case of sale on ‘approval’ or ‘sale or return’ basis: Property in goods passes- When buyer signifies approval to the seller; or When he retains the goods without giving notice of rejection.

Amity Business School:

Amity Business School Performance of a Contract of Sale: It is the duty of seller to perform the contract by delivering the goods and of the buyer to accept the goods and pay for them in accordance with the contract. Delivery of goods: Delivery means voluntary transfer of possession from one person to another. Delivery may be: Actual or physical Symbolic Constructive

Amity Business School:

Amity Business School Unpaid seller: The seller of goods is deemed to be unpaid seller: When the whole of the price has not been paid or tendered When a conditional payment was made by a bill of exchange or other negotiable instrument and instrument has been dishonoured.

Amity Business School:

Amity Business School Rights of an Unpaid seller: Rights against the goods: Right of lien Right of stoppage in transit Right of resale Right to withhold delivery Rights against the buyer: Suit for the price Suit for damages

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