PRESENTATION

ON
BUSINESS LAW
INTRODUCTION

Sale of goods act

Definition:

“Contract where by the seller

Transfers or agrees to transfer the
property in goods to the buyer for
a price”
 Characteristics of a
contract of a sale of goods:
Two parties (Bilateral contract)
* Buyer
* Seller

Case:State of Gujarat VS Raman Lal

and company.
Transfer of property:

Example: If “A” who owns certain

goods pledges them to “B” , “A”
has a general property in the
goods where as “B” has special
property or interest in the goods
to the extent of the amount of the
advance made by him.
 GOODS:

* Transfer of Property act 1882

* Actionable claims

For Example: A debt is not treated as

goods because it can only be
assigned as per the transfer of
property act but cannot be sold.
 MONEY:

 PRICE:
Case:
“Aldridge Vs Johnson(1857)”
SALE AND AGREEMENT TO SELL:

 Under the contract of sale” The

property in the goods is immediately
transferred at the time of making the
contract from the seller to the buyer,
the contract is called a Sale.”

 Under the contract of sale” The

property in the goods is to take place at
a future time or subject to some
condition there after to be fulfilled, the
contract is called an Agreement to sale.”
DISTINCTION BETWEEN SALE
AND AGREEMENT TO SALE :

 Transfer of Property:
 Risk of loss:

 Consequences of breach:

 Right to re sale:

 General and Particular property:

 Insolvency of Buyer:

 Insolvency of Seller:
 Rights of buyer
 First right of buyer is to have delivery of goods as
per the terms of contract(sec.37)
 Right to reject goods for defective delivery
/excess/ short.
 Right to notice of insurance.
 Right to examine the delivered. (suit for
damages )
 Right to sue for breach of contract
suit for price.
suit for specific performance.
suit for interest.
suit for breach of contract.
Duties of buyer:-
1. To take delivery of , and pay for the goods.
2. To apply for delivery.
3.to demand for delivery at a reasonable
hour(sec.36(4))
4. To take risk of deteoration.
5. Liabality of buyer for neglecting or reducing
delivery of goods.(sec 44)
6.duty to accept installment delivery and pay
for it.
7.duty to pay damages for non-acceptance.
8. Examine the goods delivered.
9. Accept the goods delivered.
 Liabality of buyer for refusing deliver :-

If the buyer neglects or

refuse to take delivery of goods within a
reasonable time , he is liable to the seller
for loss and charges for the care and
custody of the goods.
Right of unpaid seller

 1.when the property in the goods has passed

 A. RIGHT OF LIEN.
 B. Right of stoppage in transit.
 C. Right of resale.

2. When the property in the goods has not passed

A. Right of withholding delivery.
B. Right of lien.
C. Right of stoppage in transit.
D. Right of resale.
Against the buyer personally

 Right to sue for price.

 Right to sue for damages.
 Right to sue for interest.
 Un-paid sellers right against the goods:
 Un-paid sellers had a particular lien.
 Stoppage in transit.
 Right of resale.
 Right of with holding delivery.
CONDITIONS
CONDITIONS AND
AND
WARRENTIES
WARRENTIES
Conditions:-
 Meaning:
According to Section 12(2)
of the sale of goods act,1930 “ A
condition is a stipulations essential to
the main purpose of the contract, the
breach of of which gives rise to treat
the contract as repudiated.”
WARRANTIES:-
Meaning:
As per section 12(3) of the
sale of goods act 1930,
“A warranty is a stipulation
collateral to the main purpose
of the contract, the breach of
which gives rise to only claim
for damages but not to a right
to reject the goods and treat
the contract as repudiated ”.
Characteristics of Conditions
A condition is a stipulation or term regarding
goods forming part of the contract of sale.
A condition is a stipulation in a contract of a sale,
Essential to the main purpose of the contract.
The breach of condition gives the aggrieved party
the right to treat the contract as repudiated, and
also entitles him to claim damages.
If a condition in a contract of sale is broken, no
doubt aggrieved party can treat the contract as
repudiated and reject the goods, Alternatively
option is that he can treat the breach of condition
as a breach of warranty.
Characteristics of Warranty

A warranty is a stipulation or term

regarding goods forming part of the
contract of sale.
A warranty is a stipulation or term which is
not essential to the main purpose of the
contract of the sale, is only collateral to the
main purpose of the contract.
The breach of warranty gives the aggrieved
party only the right to sue for damages.
Case regarding Warranty:

HARTLEY Vs HYMANS
A man buys a particular horse
which is warranted quite to ride and
drive. If the horse turns out to be
vicious, the buyers only remedy is to
claim damages.
Case regarding condition:
BALDRY Vs MARSHALL(1925)

Baldry consulted Marshall a car

dealer for a car suitable for a touring
purpose. Marshall suggested that a “Bugatti”
car would be appropriate. Relaying upon the
recommendation Baldry purchased a Bugatti
car. Later on, the car turned out to be
unsuitable for touring purposes. Baldry
wanted to reject the car and refund of the
price paid.
 When breach of condition
is to be treated as breach of warranty
(Section 13).

 Voluntary waiver by buyer:

 Acceptance of goods by buyer.

DIFFERENCES BETWEEN CONDITION
AND WARRANTY:

 Relation to main purpose.

 Importance.
 Difference as to breach.
 Difference as to treatment.
Express and Implied Condition &
Warranties

In a contract of sale, condition and

warranties may be express or implied.

Express condition and warranties

are those which are expressly provide in the
contract.

Implied condition and warranties are

those which the law incorporates in to the
contract ,unless the parties stipulate to the
contrary.
 Various Implied Condition in a
contract of sales of good
In the absence of any contract to the
contrary .The condition implied in every
contract of sales of goods.

1. Condition as to sellers title to the goods

sold :- (sec-14)

-In the case of a sales ,the seller has a

right to sell the goods.

-In the case of an agreement to sell, he

will have right to sell the goods at the
time when the property is to pass.
2. Condition in the case of sale description:
(sec-15)
-There is an implied condition that the goods
shall correspond with the description.
-The description of good may be in the term of
the, qualities, characteristics of good .the
trade mark, trade name, brand, or label under
which they are sold or any other aspect of
the good.
Sales of good by description includes
such situation.
(A) Where the buyers has not seen the goods but
relies on their description give by the seller.
(B) Where the buyer has seen the goods, but
relies not on what he has seen, but what is
stated to him by the seller, and the deviation
of the goods from the description is not
3.Condition in the case of sale by sample:
(sec-17)

(a) That the bulk of the goods delivered should

correspond with the sample in quality .

(b) That the buyer should have a reasonable

opportunity to compare the bulk with the
sample.

(c) That the goods should be free from any latent

defect, rendering the good, unmerchantable or
 4. Condition in the case of sale by
description as well as by sample: (sec-
15)

when the good are sold by

description as well as sample .There is an
implied condition that the bulk of good shall
correspond both with the description and
with the sample, if the goods correspond
only with the description and not with sample
or vice-versa the buyer is entitled to reject
the good.
5. Condition as to fitness or quality: (sec-
16-1-)
The buyer must examine the
goods before he buys them in order to
satisfy him self as to the suitability of the
good for the while he is buying them.
(a) -Where the goods are required for a
particular purpose which the buyer
,expressly or make know to the seller.
-Where the buyer relies on the sellers skills
or judgment.
-Where it is the sellers business to deal in
such good implied condition that the goods
supplied shall be reasonable fit for the
(b) Where the article can be used for
only one particular purpose ,the
buyer need not tell the seller the
purpose.

(c) Where the article can be used for a

number of purpose the buyer must
tell the seller the particular purpose
for which he required the goods.

(d) In the case the good are purchased

under a patent or trade name ,there is
no implied condition as to their fitness
for any particular purpose.
6. Condition as to the merchantable quality of
the good supplied: (sec-16-2-)
Where the good are bought by
description from a seller who deal in goods of
that description there is an implied condition
that the goods are of merchantable quality.

7. Condition as to wholesomeness:-
This condition is implied only in the case
of a contract of sale of eatables and provisions .i
such cases, the goods supplied must not only
answer description and be merchantable but also
be wholesome .
Implied Warranties

1.Warranty of quiet possession: (sec-

14.a,b)

There is an implied warty that the buyer

shall have and enjoy quiet possession of
the goods. If the buyer is in any way
disturbed in the enjoyment of the goods by
a person having a superior right than that
of seller ,to the buyer can claim damages
from the seller.
2. Warranty
of freedom from
encumbrances or charges: (sec-
14.c)

‘ The goods shall be free

from any charger or encumbrance in
favors of any third party not declared or
know to the buyer before or at the time
when the contract is made ’ if the
possession of the buyer is in any way
disturbed by reason of the existence of
such charge the buyer shall have a right
to claim damages for breach of this
warranty.
3. Warranty of disclosing the dangerous nature
of goods to the ignorant party:

When the goods are dangerous and the seller

know that the buyer is ignorant about the
dangerous natures of the goods, the seller
should warn the buyer about the probable
dangers.

Where the seller know that the goods are

inherent dangerous or they are likely to be
dangerous to be buyer, and that the buyer is
ignorant of such danger ,the seller must warn the
buyer of the of the probable danger ,other wise
 CAVEAT EMPTOR
 Meaning of Caveat Emptor:
The maxim “caveat emptor’’ means ‘let
the buyer beware’. This doctrine implied that the buyer
must be careful while purchasing goods of his
requirement .while purchasing goods he must examine
the goods thoroughly and satisfy himself that the goods
he buys are not defective ,and they are of the quality
which he requires and they will suit the purpose for
which he purchases them. This principle also implied
that if the buyer depends on his own skill and judgment
and if the goods purchased by him turn out to be
defective or of poor quality or do not suit the purpose for
which he has purchased them ,he cannot hold the seller
liable or recover damages from him.
Exceptions:-

1.Sales by misrepresentation.
2.Consent by fraud.
3.Sale by description.
4.Merchantable quality.
5.Sales by sample.
6.Sales by sample & description.
7.Fitness for the buyer’s propose.
8.Usage of trade.
 PERFORMANCE OF
CONTRACT OF SALE
The term ‘performance of
the contract of sale’ may be defined
as the performance of the respective
duties of seller & buyer as per the
terms of the contract.

Performance of the contract of

sale comprises the two parts,
1. Sellers duty to deliver the goods
DELIVERY OF GOODS

 “ Delivery of goods sold may by doing

anything which the parties agrees shall be
treated as delivery or which has no effect of
putting the goods in the possession of the
buyer or any person authorize to hold them
on his behalf “
RULES AS TO DELIVERY OF GOODS

 Mode of delivery
 Delivery & Payment are
concurrent conditions
 Effect of part delivery
 Buyer to apply for delivery
 Place of delivery
 Time of delivery
Manner of delivery
Expenses of delivery
Delivery of wrong quality
Installment deliveries
Delivery of wrong qualities
Goods delivered at distant place
Examining the goods on delivery
TRANSFER OF PROPERTY, POSSESSION
AND RISK:

There are 3 stages in the performance

of a contract of sale of goods by seller
 The Transfer of property in the goods :
It is important to know the precise
moment of time at which the property in
goods passes from seller to the buyer for
the following reasons.
1. Risk follows ownership
2. Owner to take action against third
parties
3. Insolvency of the seller or the buyer
4. Sellers right to suit price

 Passing of property
1. Goods must be ascertained
2. Intention of the parties
 Transfer of property:

1. Passing of property at the time

of contract
2. Passing of property delayed
beyond the date of contract
 Goods not in deliverable state
 When the price of goods is to be
ascertained by weighing, etc

 Unascertained goods:
 Delivery to carrier:

 Absolutely for the buyer

 Absolutely for the seller

 Goods sent on approval or

‘on Sale or Return’
TRANSFER OF TITLE BY NON-
OWNERS

The general rule as to

transfer of title is that only the owner of
goods can transfer a good title. The rule
is expressed by the maxim “Nemo dat
quod non habet”, which means “no one
can give what he himself has not”.
Exceptions Under the state of goods
Act, 1930

 Estoppels
 Sale by mercantile agent
 Sale by one of several joint owners
 Sale by unpaid seller
 Sale by seller in possession after
sale