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Premium member Presentation Transcript GROUP-2: GROUP-2 GROUP-2A Presentation On: A Presentation On 2 Sale Of Goods Act 1930 GROUP-2Slide 3: GROUP-2 Goods Kinds Of Goods Contract Of Sale Sale Of Goods Shall Apply To Sale Of Goods Shall Not Apply To Importance of the Contract of sale of good Condition Or Warranties Difference Between Condition and Warranties Types Of Condition And Warranties Implied Conditions Implied Warranties Transfer of Property Transfer of Title Rules as to delivery of goods Unpaid Seller Features of the Unpaid Seller Rights of an Unpaid Seller Buyer’s right against seller 3 CONTENTSlide 4: DEFINATION Goods means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass and things attached and forming part of lands which are agreed to be served before sale or under the contract of sale. Section 2(7). GROUP-2Slide 5: GROUP-2 Existing goods- Section 6(1) These are the goods which are in existence and are physically present in the seller’s possession. Specific goods- Section 2(14) – These are the goods identified and agreed upon at the time the contract is made. Ascertained goods- These are identified after the formation of the contract. Unascertained goods- These are the goods which are not specifically identified or agreed upon at the time of the contract of sale. Future goods – Section 2(6) Goods which are to be manufactured or produced or acquired by the seller after making contract of sale. Contingent goods- Section 6(2). 5 Kinds Of Goods:The Sale of Goods Act shall apply to: The Sale of Goods Act shall apply to A Contract only if the ownership of goods is transferred from one person to another immediately at the time of formation of contract or subsequent to formation of contract ; 6Sale of Goods Act shall not apply to: Sale of Goods Act shall not apply to 7 Bailment of goods; Pledge of goods ; Any contract relating to immovable property Contract of work and skill GROUP-2Importance of the Contract of sale of good:: GROUP-2 Importance of the Contract of sale of good: A contract of sale of goods is essential for the smooth operations and exchange of goods in the economy. It is always preferred to have written contract as it serves as proof in legal proceedings. A written and attested contract ensures quality of the subject matter. The Seller, thus is duty-bound to warrant that the goods are merchantable, conforms to Industry Standards and specifications. It prevents fraud and deception on behalf of the subject-matter of price by either of the parties. It assigns specific responsibilities upon the buyer and seller which they are bound to perform. The Buyer has a responsibility to reasonably examine goods prior to acceptance and to notify the seller of any defect of the goods – hence it make a buyer more aware of what s/he is buying, thus preventing flaw. 8 Condition AND Warranties: GROUP-2 Condition AND Warranties 9 Warranty: It is a stipulation collateral to main purpose of the contract, the breach of which gives rise to claim for damages but not the right to reject the goods and treat contract as repudiated. Condition: It is a stipulation essential to main purpose of the contract, the breach of which gives right to the repudiate the contract and to claim damages.Slide 10: 10 Types of conditions and warranties Express – which are expressly provided in the contract. 2) Implied- which the law implies into the contract unless the parties stipulate to the contrary. GROUP-2Difference Between Condition and Warranties : Difference Between Condition and Warranties Condition A condition is essential to the main purpose of the contract. The aggrieved party can repudiate the contract or claim damages or both in case of breach of condition. A breach of condition may be treated as breach of warranty. Warranty It is only collateral to main purpose of contract. The aggrieved party can claim only the damages in case of breach of warranty. A breach of warranty cannot be treated as breach of condition. 11 GROUP-2Slide 12: Condition as to title [sec.14(a)] - seller has the right to sell. Sale by description (sec.15) - goods shall correspond with the description. Condition as to quality or fitness [sec16(1)] Condition as to merchantability [sec.16(2)] Condition implied by custom- fitness for a particular purpose may be annexed by the usage of trade [sec.16(3)] Sale by sample (sec.17) Condition as to wholesomeness 12 Implied Conditions GROUP-2Implied Warranties: Implied Warranties 1. Warranty of quiet possession [sec.14(b)]. 2. Warranty of freedom from encumbrances [sec.14(c)]. 3. Warranty as to quality or fitness by usage of trade [sec16(4)]. 4. Warranty to disclose dangerous nature of goods. 13 GROUP-2When is a condition considered to be a warranty: GROUP-2 When is a condition considered to be a warranty According to the Sale of Goods Act, a condition is taken as warranty for repudiation purpose under the following: i. Where a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may waive the condition or elect to treat the breach of the condition as a breach of warranty and not as a ground for treating the contract as repudiated. Section 13(1) ii. Where a contract of sale is not severable and the buyer has accepted the goods or part thereof, the breach of any condition to be fulfilled by the seller can only be treated as a breach of warranty and not as a ground for rejecting the goods and treating the contract as repudiated, unless there is a term of the contract, express or implied, to that effect. Section 13(2) iii. Nothing in this section shall affect the case of any condition or warranty fulfillment of which is excused by law by reason of impossibility or otherwise. Section 13(3) 14Suit for damages for breach of warranty: Suit for damages for breach of warranty Where there is a breach of warranty, the buyer is entitled to sue for damages if he had paid the price to the seller. But if he has not paid the price yet, he may ask the seller for a reasonable reduction in the price. (Sec. 59) 15 GROUP-2 Transfer of Property: Transfer of Property Goods must be ascertained Specific goods in a deliverable state Specific goods to be put in a deliverable state Specific goods in a deliverable state when the seller has to do anything thereto in order to ascertain price Sale of unascertained goods and appropriation Goods sent on approval or “ on sale or return” Reservation of right of disposal Risk prima facie passes with the property 16 GROUP-2TRANSEFER OF TITLE: TRANSEFER OF TITLE The general rule “ no one can give that which one has not got” Sale by person not the owner – “effect of estoppel” Sale by mercantile agent Sale by one of joint owners Sale by person in possession under voidable contract Seller in possession after sale Buyer in possession after sale Sale by an unpaid seller 17Unpaid Seller: Unpaid Seller The seller of goods is deemed to be unpaid (Sec. 45-1) I. When whole of the price has not been paid of tendered. II. When the bill of exchange or negotiable instrument has been received as a condition of payment and the condition on which it was received has not been fulfilled by the reason on dishonor of the instrument or otherwise. 18 GROUP-2Features of the Unpaid Seller: GROUP-2 Features of the Unpaid Seller I. He must sell goods on the cash basis and must be unpaid. II. If he sells on credit basis, he is not an unpaid seller during the period of credit. III. The term of credit has expired and the price has not been paid to him. IV. He must be unpaid wholly or partially. If a part of price remains unpaid, he is unpaid. V. When the price is paid in the form of negotiable instruments and it has been dishonored. VI. If buyer offers payment and seller refuses to accept, the seller is not an unpaid seller. Example: I. Party A sells a car on cash basis to party B and the price has not been received yet. II. A sells good to B on 5 months credit period and B turns insolvent after 2 months. III. A sells TV set to B on the same day cheque basis, the cheque is dishonored due to insufficient funds. A is an unpaid seller. 19Rights of an Unpaid Seller: Rights of an Unpaid Seller The unpaid seller has following rights: 1) Rights against the goods . i. Rights of lien ii. Right of stoppage of goods in transit iii. Right of rescale 2) Rights against buyer personally i. Suit for price ii. Suit for damages for non-acceptance iii. Suit for special damages and interest 20 GROUP-2Slide 21: I. When the goods reaches the destination. II. While the buyer or his agent takes possession of delivery even if it is not reached destination. III. In case the carrier is agent of the buyer, the transit comes to an end the instance carrier receives the goods and seller can not stop the transition IV. Carrier’s wrongful refusal to deliver goods to the buyer. Example: “A” sells TV set to “B”. “A” delivers the TV to the carrier to carry it to “B”. Later on gets news that “B” has become insolvent; “A” can stop delivery. 21 GROUP-2 The unpaid seller can not stop goods in transit in following cases:Slide 22: 22 THANK YOU! GROUP-2 GROUP-2 You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.