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Unit III: The Sale of Goods Act, 1930
2 Marks Questions (Definitions / Direct Answers)
1. Define contract of sale. [GU BCom 2019, 2020]
Answer: A contract of sale is a contract whereby the seller transfers or agrees to transfer the ownership of goods to the buyer for a price. Section 4(1) of the Sale of Goods Act, 1930 defines it. It may be an absolute sale or an agreement to sell, depending on transfer of ownership.
2. Distinguish between sale and agreement to sell. [GU BCom 2021, 2024]
Answer: In a sale, ownership of goods is transferred immediately from seller to buyer, while in an agreement to sell, transfer takes place at a future time or upon fulfillment of conditions. In case of breach, a sale gives right in rem (against goods), while an agreement to sell gives right in personam (against seller).
3. What is a hire-purchase agreement?
Answer: A hire-purchase agreement is a contract in which goods are delivered to a person with an option to purchase after paying installments. Ownership passes only when the final installment is paid. If the hirer defaults, the owner can repossess the goods. It combines elements of bailment and conditional sale.
4. Define goods under the Sale of Goods Act, 1930. [GU BCom 2019]
Answer: Section 2(7) of the Sale of Goods Act, 1930 defines goods as every kind of movable property other than actionable claims and money, and includes stock, shares, growing crops, grass, and things attached to land agreed to be severed. Goods form the subject matter of the contract of sale.
5. What are existing goods?
Answer: Existing goods are goods which are owned or possessed by the seller at the time of the contract of sale. They may be specific, ascertained, or unascertained goods. For example, if a shopkeeper sells a shirt already available in his shop, it is an existing good.
6. What are future goods?
Answer: Future goods are goods which are not in existence at the time of making the contract of sale but will be manufactured, produced, or acquired by the seller after the contract. Section 2(6) of the Sale of Goods Act defines them. For example, a farmer agreeing to sell next year’s crop.
7. What is the difference between specific and unascertained goods?
Answer: Specific goods are identified and agreed upon at the time of the contract, such as a particular car with a registration number. Unascertained goods are not specifically identified at the time of the contract, such as 100 bags of rice from a larger stock. Ownership passes only when goods are ascertained.
8. Define the term “delivery.”
Answer: Delivery means the voluntary transfer of possession of goods from one person to another. Section 2(2) of the Sale of Goods Act defines delivery. It may be actual delivery (physical transfer), symbolic delivery (transfer of a document), or constructive delivery (acknowledgment by a third party holding the goods).
9. Define “document of title to goods.”
Answer: A document of title to goods is a document used in the ordinary course of business as proof of ownership, possession, or control of goods. Examples include a bill of lading, dock warrant, warehouse receipt, or railway receipt. Such documents enable transfer of goods by endorsement or delivery.
10. Define condition. [GU BCom 2019, 2020]
Answer: A condition is a stipulation essential to the main purpose of the contract, the breach of which gives the aggrieved party the right to treat the contract as repudiated. Section 12(2) of the Sale of Goods Act defines condition. For example, selling a new car but delivering an old one breaches condition.
11. Define warranty. [GU BCom 2021]
Answer: A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not a right to repudiate the contract. Section 12(3) of the Sale of Goods Act defines warranty. For example, a warranty that a car will be free from minor defects.
12. State two differences between condition and warranty.
Answer: i) Condition is essential to the main purpose of the contract, while warranty is collateral to the main purpose. ii) Breach of condition allows repudiation of the contract, whereas breach of warranty only allows a claim for damages. Thus, condition is more fundamental than warranty.
13. Define caveat emptor. [GU BCom 2019, 2023]
Answer: The doctrine of caveat emptor means “let the buyer beware.” It implies that the buyer must take care to examine the goods and cannot hold the seller responsible for defects if he fails to do so. Section 16 of the Sale of Goods Act recognizes this principle, subject to certain exceptions.
14. Write two exceptions to the doctrine of caveat emptor. [GU BCom 2020]
Answer: Two exceptions are: i) When the seller makes a false representation or conceals defects, the buyer can claim remedy. ii) When the buyer informs the seller about the particular purpose, and relies on the seller’s skill or judgment, the seller is bound to supply goods fit for that purpose.
15. Define unpaid seller. [GU BCom 2024]
Answer: According to Section 45 of the Sale of Goods Act, 1930, a seller is called an unpaid seller when the whole price has not been paid or a negotiable instrument like a bill of exchange or cheque given in payment has been dishonoured. An unpaid seller has certain statutory rights against goods and the buyer.
16. State two rights of unpaid seller. [GU BCom 2019, 2021]
Answer: The unpaid seller has two important rights: i) Rights against goods, such as lien, stoppage in transit, and right of resale. ii) Rights against the buyer personally, such as filing a suit for price, damages for non-acceptance, or interest. These rights protect the seller in case of buyer’s default.
17. What is lien? [GU BCom 2019, 2020]
Answer: Lien means the right of the unpaid seller to retain possession of goods until payment of the price. Section 47 of the Sale of Goods Act provides this right when the goods are sold without stipulation of credit or when credit period has expired or the buyer becomes insolvent.
18. Define stoppage in transit. [GU BCom 2019]
Answer: Stoppage in transit is the right of the unpaid seller to stop goods in transit and regain possession when the buyer becomes insolvent. Section 50 of the Sale of Goods Act allows this right, provided goods are still in transit and not yet delivered to the buyer or his agent.
19. Define auction sale.
Answer: An auction sale is a method of selling goods through public bidding, where goods are sold to the highest bidder. The contract is complete when the auctioneer announces its completion by the fall of the hammer or other customary manner. Auction sales are governed by Section 64 of the Sale of Goods Act.
20. Mention one difference between sale and hire purchase.
Answer: In a sale, ownership of goods transfers to the buyer immediately on purchase, while in hire-purchase, ownership is transferred only when the hirer pays the last installment. In hire-purchase, the hirer has the option to return the goods, while in a sale, the buyer cannot return after purchase.
21. What is appropriation of goods?
Answer: Appropriation of goods means the process by which goods are identified and earmarked for delivery under a contract of sale. It occurs when unascertained goods are selected from a larger bulk with the consent of both parties. Once appropriation is done, property in goods passes from seller to buyer.
22. What is passing of property?
Answer: Passing of property means the transfer of ownership in goods from seller to buyer. Under the Sale of Goods Act, the property passes when the parties intend it to pass, depending on the type of goods—specific, unascertained, or future goods. Passing of property determines risk and rights over goods.
23. Define agreement to sell.
Answer: An agreement to sell is a contract where the transfer of ownership in goods is to take place at a future time or subject to certain conditions to be fulfilled. Section 4(3) of the Sale of Goods Act defines it. An agreement to sell becomes a sale when ownership is transferred.
24. What do you mean by “ownership” in goods?
Answer: Ownership in goods refers to the legal right of a person to possess, use, enjoy, and dispose of the goods. It represents absolute title and control over the goods. In a contract of sale, ownership passes from seller to buyer, and along with it, the risk in goods usually transfers.
25. Who is an unpaid seller?
Answer: An unpaid seller is one to whom the whole of the price has not been paid or tendered, or when a bill of exchange or other negotiable instrument received as conditional payment has been dishonoured. He enjoys special rights against the goods as well as rights against the buyer personally.
5 Marks Questions (Short Notes / Brief Explanations)
a) Sale and Agreement to Sell [GU BCom 2021, 2024]
b) Condition and Warranty [GU BCom 2019, 2020, 2021]
c) Sale and Hire Purchase
d) Specific Goods and Unascertained Goods
Write short notes on:
a) Doctrine of Caveat Emptor [GU BCom 2019, 2023]
Answer: The doctrine of Caveat Emptor is a fundamental principle under the Sale of Goods Act, 1930, which means "Let the buyer beware." According to this doctrine, it is the duty of the buyer to be careful while purchasing goods and to ensure that the goods suit his purpose. The seller is not responsible for any defect in the goods once the buyer has accepted them after proper examination. The principle is based on the assumption that the buyer has a full opportunity to examine the goods and judge their quality and suitability before buying.
Section 16 of the Sale of Goods Act states that there is no implied condition or warranty as to the quality or fitness for any particular purpose of goods supplied under a contract of sale. Therefore, if the buyer makes a bad choice, he cannot blame the seller later.
However, this doctrine applies only when the seller has not misrepresented or concealed any material fact and when the buyer has a chance to inspect the goods before purchase.
In simple words, the doctrine of Caveat Emptor protects the seller by putting the responsibility on the buyer to ensure the quality and suitability of the goods before making the purchase.
b) Exceptions to Caveat Emptor [GU BCom 2020]
Answer: Although the doctrine of Caveat Emptor holds the buyer responsible for his own choices, there are several exceptions where the seller is held liable. These exceptions are given under Section 16 of the Sale of Goods Act, 1930.
i) Fitness for Buyer’s Purpose: When the buyer makes known to the seller the specific purpose for which the goods are required, and relies on the seller’s skill or judgment, the seller must provide goods fit for that purpose.
ii) Sale by Description: If the sale is made by description, the goods supplied must correspond with the description. If they do not, the buyer can reject them.
iii) Sale by Sample: When the sale is made by showing a sample, the bulk of the goods must correspond with the sample in quality.
iv) Sale by Sample as well as Description: When the sale is made by both sample and description, the goods must correspond with both the sample and description.
v) Merchantable Quality: When the goods are bought by description from a seller who deals in such goods, they must be of merchantable quality, meaning they should be fit for sale and usable in ordinary circumstances.
vi) Fraud or Misrepresentation: If the seller intentionally conceals defects or makes false statements about the goods, the buyer can claim compensation.
vii) Trade Usage: If there is a particular trade custom where the seller is expected to take responsibility for certain defects, the seller is bound by such custom.
c) Rights of Unpaid Seller [GU BCom 2019, 2021, 2024]
Answer: An unpaid seller is one who has not received the full price of the goods sold or has received a bill of exchange or other negotiable instrument that has been dishonoured. The Sale of Goods Act, 1930, provides certain rights to such a seller to protect his interest. These rights are divided into two categories:
i) Rights against the goods:
Right of Lien: The unpaid seller has the right to retain possession of the goods until payment is made.
Right of Stoppage in Transit: If the buyer becomes insolvent, the unpaid seller can stop the goods while they are in transit and regain possession.
Right of Resale: The unpaid seller can resell the goods after giving due notice to the buyer if payment is not made within a reasonable time.
ii) Rights against the buyer personally:
Suit for Price: The seller can sue the buyer for the price of the goods if the ownership has passed.
Suit for Damages: The seller can claim damages for non-acceptance of goods.
Suit for Interest: The seller can claim interest on the unpaid price from the due date till the date of payment.
These rights safeguard the interests of the seller when the buyer fails to pay or becomes insolvent.
d) Lien of Unpaid Seller [GU BCom 2019, 2020]
Answer: The term lien means the right to retain possession of goods until certain dues are paid. Under Section 47 of the Sale of Goods Act, 1930, the unpaid seller who is in possession of the goods has the right to retain them until full payment is made. This right is called the Seller’s Lien.
The lien can be exercised in the following situations:
i) When goods have been sold without any condition of credit.
ii) When goods have been sold on credit but the credit period has expired.
iii) When the buyer becomes insolvent.
The lien is lost in the following circumstances:
i) When the seller delivers the goods to a carrier without reserving ownership rights.
ii) When the buyer or his agent lawfully obtains possession of the goods.
iii) When the seller waives his lien voluntarily.
The right of lien can only be exercised while the seller is in possession of the goods. Once possession is lost, the lien is also lost.
e) Stoppage in Transit [GU BCom 2019]
Answer: The right of stoppage in transit is available to an unpaid seller when the buyer becomes insolvent after the goods have been handed over to a carrier for transmission but before the buyer obtains possession.
According to Section 50 of the Sale of Goods Act, 1930, this right allows the seller to stop the goods in transit and regain possession to prevent loss.
Conditions for exercising stoppage in transit are:
i) The seller must be unpaid.
ii) The buyer must be insolvent.
iii) The goods must be in transit.
iv) The seller must take possession before the buyer receives the goods.
The right of stoppage in transit ends when:
i) The buyer or his agent obtains possession of the goods.
ii) The carrier acknowledges to the buyer that he holds the goods on his behalf.
Thus, this right protects the seller when the buyer’s financial position becomes weak before delivery.
f) Auction Sale – Rules [GU BCom 2021]
Answer: An auction sale is a public sale where goods are sold to the highest bidder. Section 64 of the Sale of Goods Act, 1930, lays down the rules governing auction sales.
i) Each lot of goods is a separate contract: When goods are sold in lots, each lot is treated as a separate contract of sale.
ii) Completion of Sale: The sale is complete when the auctioneer announces its completion by the fall of the hammer or any customary manner.
iii) Withdrawal of Bid: A bidder can withdraw his bid any time before the hammer falls.
iv) Right to Bid by Seller: The seller can reserve the right to bid at the auction if notice of such right is given before the sale.
v) Prohibition of Pretended Bidding: The auctioneer cannot employ false bidders to raise prices; if done, the sale is voidable at the buyer’s option.
vi) Reserve Price: The seller may fix a reserve or minimum price below which the goods cannot be sold.
These rules ensure transparency, fairness, and protection to both buyers and sellers during an auction sale.
g) Types of Goods under the Sale of Goods Act, 1930
Answer: The Sale of Goods Act, 1930, classifies goods into three types under Section 6 based on their existence and ownership at the time of the contract.
i) Existing Goods: Goods which are owned or possessed by the seller at the time of the contract of sale. They are further classified into:
a) Specific Goods: Identified and agreed upon at the time of the contract.
b) Ascertained Goods: Identified after the contract is made.
c) Unascertained Goods: Not identified at the time of contract.
ii) Future Goods: Goods which are to be manufactured, produced, or acquired by the seller after the contract of sale is made. A contract for future goods is only an agreement to sell.
iii) Contingent Goods: Goods whose acquisition by the seller depends upon the happening or non-happening of a certain event.
This classification helps determine when ownership and risk in goods pass from the seller to the buyer.
h) Conditions Implied in a Contract of Sale
Answer: Certain conditions are implied in every contract of sale under the Sale of Goods Act, 1930, to protect the buyer’s interest. The main implied conditions are:
i) Condition as to Title: The seller has a right to sell the goods and transfer ownership to the buyer.
ii) Condition as to Description: When goods are sold by description, they must correspond with that description.
iii) Condition as to Sample: When goods are sold by sample, the bulk must correspond with the sample.
iv) Condition as to Merchantable Quality: Goods sold by description must be of merchantable quality and suitable for ordinary use.
v) Condition as to Wholesomeness: Goods meant for consumption must be safe and wholesome.
vi) Condition as to Fitness for Purpose: If the buyer makes known the purpose for which goods are required and relies on the seller’s skill, the goods must be fit for that purpose.
These implied conditions ensure that the buyer receives goods that meet his expectations and protect him from defective or unsuitable products.
i) Warranties Implied in a Contract of Sale
Answer:
Implied warranties are certain obligations automatically attached to a contract of sale, ensuring the buyer’s rights are protected even after the sale. Under the Sale of Goods Act, 1930, the following warranties are implied:
i) Warranty as to Quiet Possession: The buyer shall have peaceful possession of the goods after purchase without any disturbance from the seller or any third party.
ii) Warranty as to Freedom from Encumbrances: The goods must be free from any charge, lien, or encumbrance in favour of a third party. If any charge exists, the buyer is entitled to compensation.
iii) Warranty as to Disclosing Dangerous Nature: If goods are of a dangerous nature, the seller must warn the buyer of the potential risks.
iv) Warranty Arising from Usage of Trade: A warranty may also arise from customary trade practices or implied understanding between the parties.
These warranties safeguard the buyer’s interest even after ownership of the goods has passed, ensuring fairness and security in commercial transactions.
Long Question Answers for 5 Marks each:
1) State the essential elements of a contract of sale. [GU BCom 2020]
Answer: A contract of sale is an agreement whereby the seller transfers or agrees to transfer the ownership of goods to the buyer for a price. It is governed by Section 4 of the Sale of Goods Act, 1930. To make a valid contract of sale, certain essential elements must be present.
i) Two Parties – Seller and Buyer: There must be at least two distinct parties – one who sells (seller) and the other who buys (buyer). The same person cannot be both seller and buyer in one transaction.
ii) Transfer of Ownership: The main purpose of the contract must be the transfer of ownership or property in goods from the seller to the buyer. It is not merely the transfer of possession.
iii) Goods: The subject matter of the contract must be movable goods as defined under Section 2(7) of the Act. Goods include every kind of movable property other than actionable claims and money.
iv) Price or Consideration: The transfer of goods must be for a price, which means money consideration. If goods are exchanged for goods, it is a barter, not a sale.
v) Offer and Acceptance: There must be a lawful offer by the seller and acceptance by the buyer, fulfilling the basic requirements of a valid contract under the Indian Contract Act, 1872.
vi) Capacity of Parties: Both the seller and buyer must be competent to contract, i.e., they must be of sound mind, not disqualified by law, and of the age of majority.
vii) Free Consent: The consent of the parties must be free and not obtained by coercion, undue influence, fraud, misrepresentation, or mistake.
viii) Legality of Object: The purpose of the sale must be lawful. The sale of prohibited or illegal goods (e.g., smuggled items or narcotics) is void.
ix) Transfer of Property Either Immediately or in Future: In a sale, ownership transfers immediately, while in an agreement to sell, it transfers at a future date or upon fulfillment of certain conditions.
Therefore, a valid contract of sale must satisfy all the essentials of a contract as well as the specific requirements under the Sale of Goods Act.
2) State the rights of an unpaid seller against goods and against buyer personally.
Answer: An unpaid seller is one who has not received the full price of the goods or has received a negotiable instrument (like a bill of exchange) that has been dishonoured. Under the Sale of Goods Act, 1930, the unpaid seller enjoys certain rights to protect his interests. These rights are classified into two categories:
i) Rights against the goods:
a) Right of Lien: The unpaid seller who is in possession of the goods has the right to retain them until full payment is made. This right can be exercised even if the goods have been sold, but not delivered.
b) Right of Stoppage in Transit: If the goods are in transit and the buyer becomes insolvent, the seller can stop the goods in transit and regain possession.
c) Right of Resale: The unpaid seller can resell the goods after giving notice to the buyer if payment is not made within a reasonable time.
ii) Rights against the buyer personally:
a) Suit for Price: The seller can file a suit to recover the price if the property in goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay.
b) Suit for Damages for Non-Acceptance: If the buyer refuses to accept and pay for the goods, the seller can claim compensation for loss or damages suffered.
c) Suit for Interest: The seller can also claim interest on the unpaid amount from the date of due payment till the date of actual payment.
These rights provide strong legal protection to the seller in case of default or insolvency of the buyer.
3) State the rules regarding delivery of goods.
Answer: Delivery means the voluntary transfer of possession of goods from one person to another. Section 33 to Section 39 of the Sale of Goods Act, 1930, describe the rules regarding the delivery of goods.
i) Modes of Delivery: Delivery may be actual (physical transfer), symbolic (delivery of a key or document), or constructive (transfer of ownership without physical movement).
ii) Effect of Delivery: Delivery of goods must result in the transfer of possession from the seller to the buyer or to his authorized agent.
iii) Seller’s Duty to Deliver: It is the seller’s duty to deliver the goods according to the terms of the contract, and the buyer must accept and pay for them.
iv) Place of Delivery: If not specified, the goods must be delivered at the seller’s place of business. If specific goods are located elsewhere, delivery shall be made at that location.
v) Time of Delivery: Delivery should be made within a reasonable time if no specific time is mentioned in the contract.
vi) Expenses of Delivery: Unless otherwise agreed, the seller bears the cost of making delivery, while the buyer bears the cost of taking delivery.
vii) Delivery of Wrong Quantity:
a) If the seller delivers less than the contracted quantity, the buyer may reject or accept and pay for the goods received.
b) If the seller delivers more than the contracted quantity, the buyer may accept the agreed quantity and reject the rest.
c) If goods are delivered mixed with goods of a different description, the buyer may accept those that are as per contract and reject the rest.
viii) Delivery by Installments: Unless otherwise agreed, the buyer is not bound to accept delivery by installments.
These rules ensure fairness and clarity between buyer and seller in the process of transferring goods.
4) Explain the rules regarding passing of property in goods.
Answer: The term passing of property refers to the transfer of ownership (not possession) of goods from the seller to the buyer. The rules governing the passing of property are contained in Sections 18 to 25 of the Sale of Goods Act, 1930.
i) Specific or Ascertained Goods: In case of specific goods, the property passes to the buyer when the parties intend it to pass. The intention is determined from the terms of the contract, conduct of parties, and circumstances of the case.
ii) Unascertained Goods: Ownership does not pass to the buyer unless the goods are ascertained or identified.
iii) Goods to be Put into Deliverable State: If the seller has to do something to make the goods ready for delivery (e.g., packing or measuring), property does not pass until that act is done and the buyer is informed.
iv) Goods to be Weighed or Measured: When goods are to be weighed or measured to fix the price, property does not pass until such act is done with the buyer’s consent.
v) Approval or “Sale on Return” Basis: When goods are sent on approval or return, the property passes when the buyer signifies his approval, does any act adopting the transaction, or retains the goods beyond the fixed or reasonable time.
vi) Unconditional Contract for Specific Goods in a Deliverable State: If there is an unconditional contract for the sale of specific goods in a deliverable state, the ownership passes immediately at the time of contract, irrespective of payment or delivery.
Understanding when ownership passes is important because it determines who bears the risk of loss or damage to the goods.
5) State the different types of goods recognized under the Sale of Goods Act.
Answer: The Sale of Goods Act, 1930, classifies goods into three main types under Section 6, depending on their existence and ownership at the time of the contract.
i) Existing Goods: These are goods that are owned or possessed by the seller at the time of the contract of sale. Existing goods are further classified into:
a) Specific Goods: Identified and agreed upon at the time of the contract (e.g., a particular car with registration number).
b) Ascertained Goods: Identified later from a larger stock after the contract is made.
c) Unascertained Goods: Not specifically identified at the time of contract, such as goods from a bulk quantity.
ii) Future Goods: These are goods which are yet to be manufactured, produced, or acquired by the seller after making the contract of sale. A contract for such goods is an agreement to sell and not an actual sale.
iii) Contingent Goods: These are goods whose acquisition by the seller depends upon the happening or non-happening of a certain uncertain event. For example, sale of goods dependent on arrival of a particular ship.
This classification helps to determine when ownership and risk in goods pass from the seller to the buyer.
6) Briefly explain “Agreement to Sell” with examples.
Answer: According to Section 4(3) of the Sale of Goods Act, 1930, an agreement to sell is a contract where the transfer of ownership in goods is to take place at a future time or subject to certain conditions to be fulfilled later.
In an agreement to sell, the ownership remains with the seller until the agreed time or condition is fulfilled. Once the time lapses or the condition is satisfied, the agreement becomes a sale.
Example 1: A agrees to sell his car to B for ₹2,00,000, delivery to be made after one month. Here, the ownership will pass after one month, so it is an agreement to sell.
Example 2: A agrees to sell 100 bags of rice to B, provided the rice arrives by ship next week. This is also an agreement to sell because ownership depends on a future uncertain event.
Difference between Sale and Agreement to Sell:
In a sale, ownership is immediately transferred, while in an agreement to sell, the transfer is to take place in the future.
An agreement to sell protects both parties, as ownership and risk remain with the seller until the conditions of the agreement are satisfied, making it an important form of commercial contract.
10 Marks Questions (Long / Essay Type)
1) Define contract of sale. Distinguish between sale and agreement to sell. [GU BCom 2019, 2020, 2021, 2024]
Answer: According to Section 4(1) of the Sale of Goods Act, 1930, a contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the ownership (property) in goods to the buyer for a price. The term “contract of sale” includes both a sale and an agreement to sell. The transaction may be absolute (immediate transfer of ownership) or conditional (transfer at a future time or on fulfillment of a condition).
A contract of sale is a special type of contract and must include all essentials of a valid contract as per the Indian Contract Act, 1872, such as offer and acceptance, lawful consideration, capacity to contract, and free consent.
Example: If A sells his motorbike to B for ₹50,000 and ownership is transferred immediately, it is a sale. But if A agrees to sell the motorbike to B for ₹50,000 after one month, it is an agreement to sell.
Distinction between Sale and Agreement to Sell:
Hence, a sale and an agreement to sell differ mainly in terms of ownership and risk. An agreement to sell becomes a sale when time elapses or conditions are fulfilled.
2) Explain the difference between condition and warranty. [GU BCom 2019, 2020, 2021]
Answer: Under the Sale of Goods Act, 1930, the terms condition and warranty are important elements of a contract of sale. They determine the rights of the buyer in case of breach by the seller.
According to Section 12(2), a condition is a stipulation essential to the main purpose of the contract. Breach of a condition gives the buyer the right to repudiate the contract and claim damages.
According to Section 12(3), a warranty is a stipulation collateral to the main purpose of the contract. Breach of a warranty gives the buyer the right only to claim damages, not to reject the goods.
Example: If A buys a car from B, and it is agreed that the car is new but it turns out to be second-hand, the stipulation is a condition. But if the car is new but a horn is missing, that is a warranty.
Difference between Condition and Warranty:
Thus, both conditions and warranties safeguard the buyer’s interests, but their legal consequences differ depending on their importance in the contract.
3) Discuss the doctrine of caveat emptor and its exceptions. [GU BCom 2019, 2020, 2023]
Answer: The Latin phrase Caveat Emptor means “Let the Buyer Beware.” It is a fundamental principle of the Sale of Goods Act, 1930. According to this doctrine, it is the buyer’s responsibility to examine the goods carefully and ensure that they suit his purpose before making a purchase.
Section 16 of the Act states that there is no implied condition or warranty as to the quality or fitness of the goods supplied under a contract of sale. Thus, the seller is not bound to disclose defects unless asked or unless they are hidden.
Essence of the Doctrine:
The buyer must take care of his own interests and cannot hold the seller liable for defects in goods after the sale, provided there was no fraud or misrepresentation.
Example:If A buys a horse from B without specifying its purpose, and the horse turns out to be unfit for riding, A cannot hold B responsible.
Exceptions to the Doctrine of Caveat Emptor:
i) Fitness for Buyer’s Purpose: If the buyer makes known to the seller the specific purpose for which the goods are required and relies on the seller’s skill or judgment, there is an implied condition that the goods shall be fit for that purpose.
ii) Sale by Description: When goods are sold by description, they must correspond exactly with that description.
iii) Sale by Sample: When goods are sold by sample, the bulk must correspond in quality with the sample shown.
iv) Sale by Sample and Description: The goods must correspond with both the sample and the description.
v) Merchantable Quality: When goods are bought by description from a seller who deals in such goods, there is an implied condition that the goods are of merchantable quality.
vi) Fraud or Misrepresentation: If the seller conceals defects or makes false statements, the doctrine does not protect him.
vii) Trade Usage: Where custom or trade usage implies a condition as to quality or fitness, the buyer can rely on it.
Conclusion: The doctrine of caveat emptor protects sellers from careless buyers, but the exceptions balance the principle by protecting buyers from fraudulent or negligent sellers.
4) Who is an unpaid seller? State the rights of an unpaid seller. [GU BCom 2019, 2021, 2024]
Answer: An unpaid seller is defined under Section 45(1) of the Sale of Goods Act, 1930, as a seller who has not received the full price of goods sold or has received a bill of exchange or other negotiable instrument that has been dishonoured.
An unpaid seller includes not only the direct seller but also any person who is in the position of a seller, such as an agent or consignee who has paid for the goods on behalf of the buyer.
Rights of an Unpaid Seller:
The rights of an unpaid seller can be divided into two categories:
i) Rights against the goods:
a) Right of Lien (Section 47): The unpaid seller who is in possession of the goods can retain them until full payment is made. This right is available when the goods are sold without credit or when the credit period has expired.
b) Right of Stoppage in Transit (Section 50): When the goods are in transit and the buyer becomes insolvent, the unpaid seller can stop the goods and regain possession.
c) Right of Resale (Section 54): The unpaid seller has the right to resell the goods after giving due notice to the buyer if payment is not made within a reasonable time.
ii) Rights against the buyer personally:
a) Suit for Price (Section 55): If ownership has passed and the buyer fails to pay, the seller can sue for the price of the goods.
b) Suit for Damages for Non-Acceptance (Section 56): If the buyer refuses to accept or pay for the goods, the seller can claim damages.
c) Suit for Interest (Section 61): The seller can recover interest on the unpaid price from the date of due payment until realization.
These rights ensure that the seller’s financial interests are protected in case of buyer’s default or insolvency.
5) Define unpaid seller. Explain his rights against goods and against the buyer personally.
Answer: Under Section 45 of the Sale of Goods Act, 1930, an unpaid seller is a person who has not been paid the full price of goods sold, or has received a bill of exchange or other negotiable instrument as conditional payment, which has been dishonoured.
The unpaid seller enjoys certain statutory rights to protect his interests, which are classified into:
i) Rights against the goods:
a) Right of Lien: The seller can retain possession of the goods until payment is received, provided he still holds the goods. This right is lost once the goods are delivered to a carrier or buyer without reserving ownership.
b) Right of Stoppage in Transit: If the goods are in transit and the buyer becomes insolvent, the seller can stop the goods and resume possession before they reach the buyer.
c) Right of Resale: The unpaid seller can resell the goods after giving proper notice to the buyer if payment is not made within a reasonable time. The seller can recover any loss arising from the resale.
ii) Rights against the buyer personally:
a) Suit for Price: The seller can file a suit against the buyer for the price if the property has passed and the buyer wrongfully neglects or refuses to pay.
b) Suit for Damages for Non-Acceptance: If the buyer refuses to take delivery, the seller can recover damages for the loss suffered.
c) Suit for Interest: The seller can claim interest on the unpaid amount from the date the payment became due until the actual date of payment.
Conclusion: The rights of the unpaid seller provide legal remedies to ensure that sellers are not financially harmed due to non-payment, delay, or insolvency of the buyer. These rights maintain fairness and protect the integrity of trade transactions.
Q6. Explain the rules regarding passing of property in goods.
Answer:
The term “passing of property” means the transfer of ownership or title in the goods from the seller to the buyer. The moment when the property passes is important because it determines who bears the risk of loss and who has the right to sue for the price. The rules regarding passing of property are laid down under Sections 18 to 25 of the Sale of Goods Act, 1930. The main rules are as follows:
i) Specific or Ascertained Goods: When there is a contract for the sale of specific or ascertained goods, the property in them is transferred to the buyer at the time when the parties intend it to be transferred. The intention of the parties can be gathered from the terms of the contract, conduct, and circumstances of the case.
ii) Unascertained Goods: When goods are not identified at the time of the contract, no property in the goods is transferred to the buyer unless and until the goods are ascertained.
iii) Goods to be put into a Deliverable State: When the seller has to do something to the goods to put them into a deliverable state (for example, packing or weighing), ownership does not pass until such action is completed and the buyer is informed.
iv) Goods to be Weighed or Measured for Price: When goods are in a deliverable state, but something has to be done to determine the price (such as weighing or measuring), the property does not pass until that is done and the buyer has notice.
v) Approval or Sale or Return Basis: When goods are delivered to the buyer on approval or sale or return basis, the property passes when the buyer signifies approval, does any act adopting the transaction, or retains the goods beyond the fixed or reasonable time.
vi) Unascertained or Future Goods Appropriated to Contract: When unascertained or future goods are appropriated to the contract with mutual consent of the buyer and seller, ownership passes to the buyer when such appropriation is made.
vii) Risk Follows Ownership: Unless otherwise agreed, the goods remain at the seller’s risk until the property is transferred to the buyer, and thereafter, they are at the buyer’s risk.
Thus, the passing of property depends upon the nature of goods, the intention of the parties, and the fulfillment of certain conditions as required by law.
Q7. State the rules regarding delivery of goods under the Sale of Goods Act.
Answer: Delivery means the voluntary transfer of possession from one person to another. According to Section 33 of the Sale of Goods Act, 1930, delivery of goods may be made by doing anything which the parties agree shall be treated as delivery. The rules relating to delivery are given below:
i) Mode of Delivery: Delivery may be actual, symbolic, or constructive. Actual delivery means the physical transfer of goods. Symbolic delivery means delivery by giving something that represents the goods, and constructive delivery occurs when the person in possession acknowledges holding goods on behalf of the buyer.
ii) Delivery and Payment Are Concurrent Conditions: Unless otherwise agreed, the seller must be ready to deliver the goods and the buyer must be ready to pay for them at the same time.
iii) Effect of Part Delivery: A delivery of part of goods may operate as delivery of the whole if it is made in progress of the whole delivery. However, if it is made with the intention of separating it from the rest, it does not amount to delivery of the whole.
iv) Buyer to Apply for Delivery: The seller is not bound to deliver the goods unless the buyer applies for delivery.
v) Place of Delivery: In the absence of an agreement, the goods are to be delivered at the place where they are at the time of sale, or in the case of future goods, at the place of manufacture or production.
vi) Time of Delivery: In the absence of any specific agreement, delivery must be made within a reasonable time.
vii) Expenses of Delivery: Unless otherwise agreed, the seller bears the expenses of making the goods ready for delivery, and the buyer bears the cost of receiving them.
viii) Goods in Possession of Third Party: When goods are in possession of a third party, there is no delivery unless that party acknowledges to the buyer that he holds the goods on his behalf.
These rules ensure that the rights and obligations of both the seller and the buyer are balanced and clear with respect to delivery.
Q8. Define auction sale. State the legal rules applicable to auction sales. [GU BCom 2021]
Answer:
An auction sale is a public sale where goods are sold to the highest bidder by an auctioneer. According to Section 64 of the Sale of Goods Act, 1930, several rules govern auction sales to ensure fairness and transparency.
The legal rules applicable to auction sales are as follows:
i) Each Lot as Separate Contract: When goods are put up for sale in lots, each lot is considered the subject of a separate contract of sale.
ii) Completion of Sale: The sale is complete when the auctioneer announces its completion by the fall of the hammer or in any customary manner. Until then, any bidder may retract his bid.
iii) Right to Bid Reserved: The seller may reserve the right to bid at the auction, but if such right is not expressly reserved, neither he nor his agent can bid.
iv) Pretended Bidding: If the seller or his agent makes a bid to raise the price, and such bidding is not permitted, the buyer may treat the sale as fraudulent and void.
v) Reserve or Upset Price: The seller may fix a reserve or minimum price below which the goods cannot be sold. The auctioneer has no authority to sell below this price.
vi) Knockout Agreements: When two or more bidders agree not to compete and later share the goods among themselves, such agreements are void as they defeat fair competition.
vii) Transfer of Ownership: Ownership passes to the buyer when the auctioneer announces completion by the fall of the hammer, provided the goods are specific and in a deliverable state.
Thus, auction sales are governed by specific legal rules to protect both buyers and sellers from unfair practices.
Q9. Explain different types of goods under the Sale of Goods Act with examples.
Answer: According to Section 6 of the Sale of Goods Act, 1930, goods form the subject matter of a contract of sale. Goods are defined under Section 2(7) as every kind of movable property other than actionable claims and money. The Act classifies goods into several types as follows:
i) Existing Goods: These are goods which are owned or possessed by the seller at the time of the contract of sale. Example: A jeweler sells a gold necklace from his shop.
Specific Goods: Identified and agreed upon at the time of contract (e.g., a particular car).
Ascertained Goods: Identified after the contract is made from a larger quantity (e.g., 10 bags out of 100 bags of rice).
Unascertained Goods: Not specifically identified at the time of contract (e.g., 50 kg of sugar out of a stock).
ii) Future Goods: Goods to be manufactured, produced, or acquired by the seller after the making of the contract. Example: Sale of next month’s harvest.
iii) Contingent Goods: Goods the acquisition of which by the seller depends upon the happening of some uncertain event. Example: Sale of goods that will be imported if a ship arrives safely.
Thus, the classification of goods helps determine the time when ownership passes and the nature of obligations between the parties.
Q10. Define condition and warranty. Distinguish between the two and explain the implied conditions in a contract of sale.
Answer: According to Section 12 of the Sale of Goods Act, 1930, the terms of a contract of sale are classified as conditions and warranties.
A condition is a stipulation essential to the main purpose of the contract, the breach of which gives the aggrieved party the right to treat the contract as repudiated.
A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives the aggrieved party the right to claim damages but not to repudiate the contract.
Difference between Condition and Warranty:
Implied Conditions:
Certain conditions are implied by law in every contract of sale, unless otherwise agreed. These are:
i) Condition as to Title: The seller must have the right to sell the goods.
ii) Condition as to Description: Goods must correspond with the description under which they are sold.
iii) Condition as to Quality or Fitness: When the buyer makes known the purpose, the goods must be fit for that purpose.
iv) Condition as to Merchantable Quality: Goods must be of saleable quality.
v) Condition by Sample: When sold by sample, the bulk must correspond with the sample.
vi) Condition by Sample as well as Description: Goods must correspond both with the sample and the description.
Thus, the distinction between condition and warranty ensures the protection of buyers’ interests and the smooth functioning of trade contracts.
Q11. Explain the essentials of a contract of sale with examples. [GU BCom 2020]
Answer: A contract of sale is a legal agreement between a seller and a buyer where the seller transfers or agrees to transfer the ownership of goods to the buyer for a price. According to Section 4(1) of the Sale of Goods Act, 1930, “A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price.”
For a valid contract of sale to exist, certain essential elements must be present. These essentials ensure that the contract is legally enforceable and that both the seller and the buyer have clear rights and obligations.
Essentials of a Contract of Sale
i) Two Parties – Seller and Buyer There must be at least two distinct parties — one who sells or agrees to sell (the seller) and another who buys or agrees to buy (the buyer). The same person cannot be both seller and buyer.
Example: If A sells his car to B, A is the seller and B is the buyer. But if A transfers the car to himself, there can be no contract of sale as there are not two parties.
ii) Transfer of Property in Goods: The essence of a contract of sale is the transfer of ownership or property in goods from the seller to the buyer. It is not merely the transfer of possession. The ownership may be transferred immediately (in the case of a sale) or at a future date or subject to a condition (in the case of an agreement to sell).
Example: If A sells his bike to B for ₹40,000 and delivers it immediately, the ownership passes at once. However, if A agrees to sell his bike to B after one month, it is an agreement to sell until the transfer takes place.
iii) The Subject Matter Must Be Goods: The subject matter of the contract must be goods, as defined in Section 2(7) of the Sale of Goods Act. Goods mean every kind of movable property other than actionable claims and money, and include growing crops, grass, and things attached to or forming part of the land agreed to be severed before sale.
Example: Sale of a car, furniture, machinery, or stock of goods are examples of goods. However, sale of land or house is not a sale of goods.
iv) Price – Consideration in Money: Price is the monetary consideration for the transfer of goods. It may be paid fully in money, partly in money and partly in goods, or may be promised to be paid later. Without price, the transfer cannot be called a sale; it would merely be an exchange or barter.
Example: If A sells his mobile to B for ₹10,000, it is a contract of sale. But if A exchanges his mobile with B’s watch, it is barter, not a sale.
v) Mutual Consent: The contract of sale must be made with the free and mutual consent of both the seller and the buyer. If consent is obtained by coercion, fraud, misrepresentation, mistake, or undue influence, the contract becomes void or voidable under the Indian Contract Act, 1872.
Example: If A forces B to buy his goods at a high price, the contract is voidable at B’s option due to lack of free consent.
vi) Existence of Goods: The goods which form the subject matter of the contract must either be in existence or must be capable of being manufactured or acquired in the future. The sale of non-existent goods is void.
Example: If A agrees to sell B 50 bags of rice that are yet to be produced from his field, it is an agreement to sell future goods
vii) Legal Formalities: A contract of sale may be made in writing, orally, or implied from the conduct of the parties. However, certain contracts, by custom or agreement, may require a written form. In modern business, written contracts are preferred as they serve as evidence in case of disputes.
Example: A written sales agreement between a dealer and a customer for delivery of machinery within 10 days.
viii) Capacity of Parties: Both the buyer and the seller must be legally competent to enter into a contract. They must be of sound mind, of the age of majority, and not disqualified by any law. A minor or a person of unsound mind cannot make a valid contract of sale.
Example: If a minor sells his watch, the contract is void because he is not competent to contract.
ix) Valid Contractual Elements: The contract of sale must fulfill all essential requirements of a valid contract as laid down in the Indian Contract Act, 1872, such as lawful object, lawful consideration, certainty, possibility of performance, and not being expressly declared void.
Example: A contract to sell smuggled goods is void as its object is unlawful.
Conclusion Thus, a contract of sale is a specific type of contract that involves the transfer of ownership of goods for a price. For it to be valid, it must include all the essential elements such as two parties, transfer of enforceable by law, ensuring protection to both the seller and the buyer.
Q12. Explain the concept of hire-purchase agreement. Distinguish it from contract of sale.
Answer: A hire-purchase agreement is a contract under which goods are let on hire and the hirer agrees to pay rent in installments. The ownership of the goods passes to the hirer only after the payment of the last installment. Until then, the hirer is only a bailee of the goods.
Distinction between Hire-Purchase and Sale:
Example: If A takes a car from B on hire-purchase for ₹10,000 per month for 12 months with ownership transferring after full payment, it is a hire-purchase agreement, not a sale.
Thus, while both involve the transfer of goods, hire-purchase is a conditional contract, whereas a sale transfers ownership immediately.
Q13. Explain the rules relating to transfer of ownership in goods.
Answer: The transfer of ownership or property in goods means the transfer of legal title from the seller to the buyer. It determines who bears the risk of loss and who can sue for the price. The rules relating to the transfer of ownership are laid down in Sections 18 to 25 of the Sale of Goods Act, 1930.
i) For Specific or Ascertained Goods: Property in specific or ascertained goods passes to the buyer when the parties intend it to pass. The intention can be gathered from the terms of the contract, conduct of the parties, and circumstances of the case.
ii) For Unascertained Goods: When goods are unascertained or not identified at the time of contract, ownership does not pass until the goods are ascertained.
iii) Goods to Be Put into a Deliverable State: When the seller has to do something to the goods to put them into a deliverable state (e.g., packing or finishing), ownership does not pass until that act is done and the buyer is informed.
iv) Goods to Be Weighed or Measured: When the price has to be determined by weighing, measuring, or testing, property does not pass until that is done and the buyer is notified.
v) Goods Sent on Approval or Sale or Return Basis: Ownership passes when the buyer approves or adopts the sale, or keeps the goods beyond the fixed or reasonable time.
vi) Unascertained or Future Goods Appropriated to Contract: When goods are unascertained or future goods, the ownership passes only when goods are identified and appropriated to the contract with the consent of both parties.
vii) Risk Follows Ownership: Unless otherwise agreed, risk passes with ownership; that is, the person who owns the goods bears the risk of loss.
Thus, ownership in goods passes according to the intention of the parties and the nature of goods involved.
Q14. Explain the effect of perishing of goods before and after formation of contract.
Answer: The Sale of Goods Act, 1930, deals with the effect of perishing of goods in Sections 7 and 8. The rules differ depending on whether the goods perish before or after the formation of the contract.
i) Perishing of Goods Before Making the Contract (Section 7):
If there is a contract for the sale of specific goods, and the goods, without the knowledge of the seller, have perished or become so damaged as no longer to answer their description before the contract is made, the contract is void.
Example: A agrees to sell B a specific horse, but the horse had already died before the contract was made. The contract is void.
ii) Perishing of Goods After the Contract but Before Sale (Section 8):
If there is an agreement to sell specific goods, and the goods perish without any fault of the seller or buyer before the risk passes to the buyer, the agreement becomes void.
Example: A agrees to sell B certain goods lying in a warehouse. Before delivery, the warehouse is destroyed by fire. The contract becomes void as the goods have perished.
Thus, in both cases, the contract becomes void and neither party is liable, provided the loss occurred without their fault.
Q15. State the rules regarding appropriation of goods.
Answer: Appropriation of goods means the process of identifying and setting apart the goods for the purpose of fulfilling a particular contract. The rules regarding appropriation are provided under Sections 23(1) and 23(2) of the Sale of Goods Act, 1930.
i) For Unascertained Goods: Property in unascertained goods does not pass until the goods are ascertained and appropriated to the contract.
ii) Appropriation with Mutual Consent: The appropriation must be made either by the seller with the buyer’s assent or by the buyer with the seller’s assent, which may be express or implied.
iii) Deliverable State: The goods appropriated must be in a deliverable state, i.e., ready for delivery without further act.
iv) Delivery to Carrier: When the seller delivers goods to a carrier for transmission to the buyer without reserving the right of disposal, it is deemed to be unconditional appropriation, and ownership passes to the buyer.
v) Assent to Appropriation: Assent may be given either before or after appropriation, and once given, ownership is transferred to the buyer.
Example: A agrees to sell B 50 bags of rice out of 200 bags in his godown. A sets aside 50 bags and informs B. B agrees to take delivery. The ownership passes to B.
Thus, appropriation ensures that the goods under the contract are identified, and ownership can lawfully pass to the buyer.
Q16. Discuss the implied conditions and implied warranties in a contract of sale.
Answer: In a contract of sale, certain conditions and warranties are implied by law under Sections 14 to 17 of the Sale of Goods Act, 1930, even if not expressly mentioned.
Implied Conditions:
i) Condition as to Title (Section 14(a)): The seller has the right to sell the goods, and if he has no such right, the buyer can reject the goods and recover the price.
ii) Condition as to Description (Section 15): When goods are sold by description, they must correspond with the description given.
iii) Condition as to Quality or Fitness (Section 16(1)): If the buyer makes known the purpose for which goods are required, it is implied that they shall be fit for that purpose.
iv) Condition as to Merchantable Quality (Section 16(2)): Goods must be of merchantable quality, i.e., fit for sale under their description.
v) Condition by Sample (Section 17): When sold by sample, the bulk must correspond with the sample.
vi) Condition by Sample and Description: When sold by both sample and description, goods must correspond to both.
Implied Warranties:
i) Warranty of Quiet Possession (Section 14(b)): The buyer shall have quiet possession of the goods.
ii) Warranty of Freedom from Encumbrance (Section 14(c)): Goods must be free from any charge or encumbrance in favor of a third party.
iii) Warranty as to Quality or Fitness (Section 16): There is an implied warranty that goods shall be reasonably fit for the general purpose for which such goods are used.
Thus, these implied conditions and warranties protect buyers from defects and ensure fairness in trade transactions.
Q17. Explain the remedies available to an unpaid seller under the Sale of Goods Act.
Answer: An unpaid seller is one to whom the whole price has not been paid or who has received a negotiable instrument that has been dishonoured. The rights and remedies of an unpaid seller are provided under Sections 45 to 54 of the Sale of Goods Act, 1930.
I. Rights Against the Goods:
i) Right of Lien (Section 47): The seller who is in possession of goods has the right to retain them until full payment is made.
ii) Right of Stoppage in Transit (Section 50): If the buyer becomes insolvent after the goods have been dispatched but before delivery, the seller may stop them in transit and resume possession.
iii) Right of Resale (Section 54): The unpaid seller can resell the goods under certain conditions—if they are perishable or after giving notice to the buyer.
II. Rights Against the Buyer Personally:
i) Suit for Price (Section 55): The seller may sue the buyer for the price when ownership has passed and payment is not made.
ii) Suit for Damages (Section 56): If the buyer wrongfully refuses to accept or pay for goods, the seller can claim damages for non-acceptance.
iii) Suit for Interest: The seller may recover interest on the price from the date of payment becoming due.
Thus, the unpaid seller is well protected under the Act, with both possessory and personal remedies available.
Q18. Distinguish between agreement to sell and hire-purchase agreement.
Answer:
Q19. Discuss the provisions relating to delivery of goods under the Sale of Goods Act.
Answer: Delivery of goods refers to the voluntary transfer of possession from one person to another. The rules relating to delivery are provided under Sections 33 to 39 of the Sale of Goods Act, 1930.
i) Mode of Delivery: Delivery may be actual (physical transfer), symbolic (by token), or constructive (by acknowledgment).
ii) Delivery and Payment Are Concurrent Conditions: The seller must be ready to deliver, and the buyer must be ready to pay at the same time.
iii) Place of Delivery: In absence of an agreement, the place of delivery is where the goods are at the time of sale.
iv) Time of Delivery: In the absence of a fixed time, delivery must be made within a reasonable time.
v) Effect of Part Delivery: Part delivery in the progress of the whole delivery is treated as delivery of the whole, unless intended otherwise.
vi) Delivery to Carrier: Delivery to a carrier or wharfinger for transmission to the buyer amounts to delivery to the buyer.
vii) Goods in Possession of Third Party: There is no delivery unless the third party acknowledges holding the goods on behalf of the buyer.
Thus, delivery ensures the transfer of possession and enables the buyer to exercise control over the goods purchased.
Q20. Discuss the legal rules relating to transfer of title in goods.
Answer: The general rule under the Sale of Goods Act, 1930, is embodied in the maxim “Nemo dat quod non habet”, meaning “no one can give what he does not have.” Hence, a buyer cannot get a better title than the seller possesses.
Exceptions to the General Rule:
i) Sale by a Mercantile Agent (Section 27): A buyer gets a good title if the agent acts in the ordinary course of business with the consent of the owner.
ii) Sale by One of Joint Owners (Section 28): If one joint owner is in sole possession and sells the goods with the consent of others, the buyer gets good title.
iii) Sale by Person in Possession Under Voidable Contract (Section 29): If the seller obtained goods under a voidable contract and sells them before rescission, the buyer gets a good title.
iv) Sale by Seller in Possession After Sale (Section 30(1)): If the seller continues in possession after selling and resells the goods, the second buyer in good faith gets a good title.
v) Sale by Buyer in Possession (Section 30(2)): If the buyer, with consent of the seller, obtains possession before ownership passes and resells, the sub-buyer in good faith gets a good title.
vi) Estoppel: If the true owner, by his conduct, leads the buyer to believe that the seller has authority to sell, he cannot later deny the seller’s authority.
Thus, while the law generally protects ownership rights, these exceptions balance the interests of bona fide purchasers in commercial transactions.
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