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If you don’t build your dream, someone else will hire you to help them build theirs.”
-Dhirubhai Ambani
Outline of the chapter Definitions Sales & Agreement to sale Sales & Hire purchase agreement Sales & Barter exchange Sales & Bailment Sales & Contract for work materials Subject matter contract of sell Document of title of goods Stipulation as to time
Definitions Buyer and Seller:
‘Buyer’ means a person who buys or agrees to buy goods [Sub Section(1)]
‘Seller’ means a person who sells or agrees to sell goods [Sub Section (13 )].
The two terms, ‘buyer’ and ‘seller’ are complementary and represent the two parties to a contract of sale of goods. Both the terms are, however, used in a sense wider than their common meaning.
Contract for sales
Contract of Sale of Goods is a contract between buyer and seller intending to exchange property in goods for a price. Section 4 (1) of the Sale of Goods Act,
1930
Essentials of contract of sale There must be at least two parties. The subject matter of the contract must
necessarily be goods. A price in money (not in kind) should be paid
or promised. A transfer of property in goods from seller to
the buyer must take place. A contract of sale must be absolute or
conditional All other essential elements of a valid contract
must be present in the contract of sale.
Sale and an agreement to sell
“where under a contract of sale the property in the
goods is transferred from the seller to the buyer, the contract is called a sale.”
the Section 4(3) of the Sale of Goods Act, 1930
Sale Vs an agreement to sell The property in the goods
passes to the buyer and along therewith the risk.
It is an executed contract. i.e. Contract for which consideration has been paid.
The seller can sue the buyer for the price of the goods because of the passage of the property therein to the buyer.
Since property in the goods does not pass to the buyer, the risk also does not pass to him.
It is an executor contract, i.e. Contract for which consideration is to be paid at a future date.
The aggrieved party can sue for damages only and not for the price, unless the price was payable at a stated date.
Sale Vs an agreement to sell A subsequent loss or
destruction of the goods is the liability of the buyer.
Breach on the part of the seller gives the buyer double remedy; a suit for damages against the seller and a proprietary remedy of recovering the goods from third parties who bought them
Such loss or destruction is the liability of the seller.
The seller, being still the owner of the goods, may dispose of them as he likes, and the buyer’s remedy would be to file a suit for damages only.
Sales & Hire purchase agreement Property in the goods
is transferred to the buyer immediately at the time of contract.
The position of the buyer is that of the owner of the goods.
The buyer cannot terminate the contract and is bound to pay the price of the goods.
The goods passes to the hirer upon payment of the last installment.
The position of the hirer is that of a bailee till he pays the last installment.
The hirer may, if he so likes, terminate the contract by returning the goods to its owner without any liability to pay the remaining installments.
Cont… The seller takes the
risk of any loss resulting from the insolvency of the buyer.
The buyer can pass a good title to a bonafide purchaser from him.
Tax is levied at the time of the contract.
The owner takes no such risk, for if the hirer fails to pay an installment the owner has right to take back the goods.
The hirer cannot pass any title even to a bonafide purchaser.
Tax is not livable until it eventually matures into a sale.
Sales & Bailment The property in goods
is transferred from the seller to the buyer.
The return of goods in contract of sale is not possible.
The consideration is the price in terms of money.
There is only transfer of possession of goods from the bail or to the bailee for any of the reasons like safe custody, carriage, etc.
The bailee must return the goods to the bailor on the accomplishment of the purpose for which the bailment was made.
The consideration may be unwarranted
Sales & Contract for work materialsA
contract of sale contemplates the delivery of goods whereas
a contract for work and material involves exercise of
skill and labour by one party in respect of materials supplied
by another
Subject-matter of Contract of Sale Goods:
“Goods” means every kind of movable property other than actionable claims and money & 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 contract of sale[Sub Section 2 (7)].
Existing goods Such goods as are in existence at the time of
the contract of sale, like those owned or possessed by the seller
Cont... Specific goods means goods identified and agreed
upon at the time the contract of a sale has been made.
Ascertained goods means commonly use as similar in meaning to specific goods
Generic goods defined only by description and not identified and agreed upon.
Future goods
means goods to be manufactured or produced or acquired by the seller after making the contract of sale [Section 2 (6)]
Cont… Contingent goods
These are the goods the acquisition of which by the seller depends upon a contingency which may or may not happen
Contingent & future goods
The procurement of contingent goods depends upon a contingency whereas it is not so in case of future goods
Document of title of goods Bill of lading
Acknowledges receipt of goods on board a ship and is signed by the captain of the ship or duly authorized representative
Dock warrant Issued by a dock owner, giving details of the goods and
certifying that goods are held to the order of the person
Warehouse-keeper’s certificate Document issued by the warehouse-keeper stating
goods specified in the document are in his warehouse
Cont… Railway receipt
Acknowledge receipt of the goods. Presented by the holder at he destination to take deliver of the goods
Delivery order Document containing an order by the owner of the
goods to the holder of the goods on his behalf, asking him to delver the goods to the person named in the document
Stipulations as to time
Stipulations relating to time of payment
There are not of the essence of a contract of sale, unless a different intention appears from the contract
Stipulations not relating to time of payment but on delivery of goods
The delivery must be made at the fixed time, otherwise the other party is entitled to put an end to the contract
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