Sales of Goods Act Presentation - Unitedworld School of Business

7/28/2019 Sales of Goods Act Presentation - Unitedworld School of Business

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ESSENTIALS OF A VALID SALES CONTRACT

Two parties:

There must be two distinct parties i.e. a buyer and aseller.

Goods:

Goods which form the subject matter of the contract of sale must be movable.

Price:

The consideration of the contract of sale, called price,

must be money. Hence in nutshell a contract is made by an offer to buy or

sell goods for a price and the acceptance of such offer.



basis sale Agreement tosell

1. payment Immediatepayment is notnecessary and can be done at afuture date.

Ownership is to be given at afuture date.

2 contract Its an executedcontract

Its an executory contract

3.Right on goods Jus-in-rem Jus-in-personam

4.risk There is a risk because the goodspasses to the

buyer withoutpayment

There is no risk.



CONDITION

It is a stipulation essential to the main purpose of thecontract, the breach of which gives the aggrieved party aright to repudiate the contract itself. In addition, he may maintain an action for damages for loss suffered, if any,on the footing that the whole contract is broken and the

seller is guilty of non-delivery.

EXAMPLE-P , goes to R , a horse dealer, and says, I wanta horse which can run at a speed of 30km.perhour . Thehorse dealer points out a particular horse and says , this

will suit you. P buys the horse . Later on P finds that thehorse can run only at a speed of 20km./hr . There is a

breach of condition,P can repudiate the contract , returnthe horse to R and get back the price.



WARRANTY

A warranty is a stipulation collateral to the purpose of thecontract, the breach of which gives the aggrieved party a rightto sue for damages only ,and not to avoid the contract

EXAMPLE- Assume that a farmer ,intending to plant no-till soybeans

,approaches a seller to buy her biocide . Assume further thatthe buyer requests a particular herbicide mix but the sellersuggests a less expensive mix . If the chemicals fail to killcrabgrass and the farmer has a low yield of soybeans , the

farmer could sue the seller for breach of the warranty of fitness for a particular purpose because the seller knew whatthe farmer required



The rights and

duties of Buyer

and Seller







Rights and duties of seller





Unpaid Seller

Unpaid Seller

Seller to whom the full price of the goodssold has not been paid.

As per section 45 of Sale of Goods Act When the whole of the price has not been paid

When a bill of exchange or other negotiableinstrument has been received as conditionalpayment and the condition on which it was receivedhas not been fulfilled by reason of dishonour of theinstruments or otherwise



Rights of Unpaid Seller

Rights Against Goods

Where the ownership of goods is transferred to buyer

(2) Rights Against Buyer Where the ownership of goods is not transferred to

buyer.



Rights Against Goods

Right of Lien

Right to retain possession of goods until payment of price

It can be exercised when Goods have been sold without any stipulation as to credit

Goods sold on credit but the term of credit has expired

Buyer becomes insolvent



Continued

2. Right of stoppage in transit

Right of stopping the goods in transit after the unpaid seller

has parted with the goods.

Exercised when: when buyer becomes insolvent

Goods are in transit

Only for the payment of price of the goods



Continued

3.Right of Re-sale

The unpaid seller can re-sale the goods when

The goods are of perishable nature Seller gives notice to the buyer of

his intention to re-sale the goods

Seller has reserved his rights of resale



Rights Against Buyer

1. Suit for price

The buyer fails to pay the price of goods

The seller can file a suit against the buyer for recovery

of the price.

2.Suit for Damages for Non-Acceptance

The seller is ready to deliver the goods to the buyer

But the buyer wrongfully neglects or refuses to acceptthe goods and pay for them.







Caveat emptor means ‘LET THE BUYER BEWARE’

EXCEPTIONS TO THE DOCTRINE OF CAVEAT EMPTOR

In case of misrepresentation by seller.

In case of concealment of latent defect.

In case of sale by description.

In case of sale by sample.

In case of sale by descriptionand sample.

Fitness for a particular purpose



EXAMPLES

Ex. Pigs were sold subject to all faults and these pigs being infected caused typhoid to other healthy pigs of the buyer, it was held that the seller was not bound to

disclose that the pigs were unhealthy. The rule of thelaw being caveat emptor.





Documents

Sales of Goods Act Presentation - Unitedworld School of Business