3 sale of goods
TRANSCRIPT
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The sale of goods is the most commonof all commercial contracts.
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` A contract of sale of goodsis a contract whereby the
seller transfers or agreesto transfer the property ingoods to the buyer for a
price.T
he term contract ofsale includes both a saleand an agreement to sell.
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` SALE: Where under a contract of sale the
property in the goods is transferred from
the seller to the buyer, the contract iscalled a sale.
` AGREEMEN T TO SELL: Where the
transfer of the property in the goods is totake place at a future time or subject to
some condition thereafter to be fulfilled
the contract is called an agreement to sell.
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Essentials of a Contract of sale:1. It is a contract.
2. Between two parties.
3.
To transfer or agree totransfer.
4. The property in goods.
5. For a price, that is, money
consideration.
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Transferofproperty
meanstransferofownership ofthegoodsto
thebuyer.
`Propertymeansthe
generalproperty ¬merelyaspecificproperty.
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GOODSformthesubjectofacontractofsale. Theymeaneverykindofmovable
property otherthanactionableclaims&money,andincludestockandshares,growingcrops,grassandthingsattachedtoorformingpartofthelandwhichareagreedtobeseveredbeforesaleorunderthecontractofsale.
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` Actionableclaimscanonlybeclaimedor
enforcedbyaction¬bytakingphysical
possession.
` Moneyislegaltender.` Thecontractofsaleofthingsformingpart
ofthelandlikeacoalmine,orabuilding
stone quarryisnotacontractofsale.
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` Goodsmaybe:
` Existing:owned&possessedbythe
selleratthetimeofsale. Theymaybe
classifiedasspecific orascertained &unascertained.
` Future:whichthesellerdoesnot
possessatthetimeofthecontractand
whichwillbeacquired,manufactured orproduced byhimatsomefuturedate.
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` Contingent:theacquisitionofwhichby
thesellerdependsuponacontingency
whichmayormaynot
happen.
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` Theprice isthelinchpinofthe
definitionofcontractofsale. Itmust be
expressedinmoney. Itmaybe:
1. Mentionedbythecontractitselfor2. Themanneroffixingthepriceis
mentionedinthecontract
3. Maybedeterminedfromthecourseof
dealingbetweentheparties..
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` Whenpriceisnotfixedby
anyoftheabovemodes,areasonablepriceis
consideredasthepriceofthe
contract.` Whatisreasonablewill
dependuponthefactsand
circumstancesofeachcase.
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` (Specific) Goods perishing before makingthe contract:Thecontractisvoid. Ofcourse!thesellershouldnothaveany
knowledgeofdestruction.` (Specific) Goods perishing after the
agreement to sell but before the sale iseffected:Thecontractisvoid. Ofcourse!thesellershouldnothaveanyknowledgeof
destruction.y NOTE: Theabovedoesnotapplyto
unascertainedgoods.
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` SALE.
1. Ownershipis
transferredassoonascontractisenteredinto.
2. Buyercannot
terminatethecontract.
3. Sellercannottakepossessionifbuyercannotpaytheprice. Hecanonlysueforprice.
` HIRE PURCHASEAGREEMENT.
1. Ownershipisnottransferredimmediately.
2. Hire Purchaserhas
anoptiontoterminatethecontract.
3. HireSellercandoso.
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Asellerofthegoodsisdeemedtobeanunpaidsellerwhen:
` Thewholeofthepricehasnotbeenpaidortendered.
` Abillofexchangeorothernegotiableinstrumenthasbeenreceivedasconditionalpayment.
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Rights of unpaid seller
Against the goodsAgainst the buyer
personally
Where the property
In the goods has
passed
Where the property
In the goods has not
passed
Lien Re-SaleStoppage
In transit
Withholding
delivery
Stoppage in
transit
Suit for
damages
Suit for
interestRepudiation of
contract
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`Itisastipulationessentialtothemain
purposeofthecontract,thebreachofwhichgives
risetoarighttotreatthecontractasrepudiated.
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`Conditionastotitle
`Conditioninasaleby
description..
`Conditioninasaleby
sample
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`Conditionsastofitness&quality(inthefollowingcasesonly).x Buyermakesknowntotheseller
theparticularpurposeforwhichherequiresthegoods.x Buyerreliesontheskill&judgmentoftheseller
(Thesellersbusinessistosupply
suchgoodswhetherheisthemanufacturerorproducerornot)
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`Conditionastomerchantability. Wheregoodsareboughtby
descriptionfromasellerwhodealsingoodsofthatdescription (whetherheismanufacturerorproducerornot),thereisanimpliedconditionthatthegoodsshallbeofmerchantablequality.
x Merchantabilitymeansessentiallythatthegoodsmustbefitfortheordinarypurposeforwhichsuchgoodsareused.
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`Conditionastomerchantabilityx
Whenappliedtofoodproducts,theconditionoffitnessofmerchantabilityrequiresthatthegoodsshouldbewholesome, I.e. fit
forthepurposeofconsumption.
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` Warrantyasto quietpossession.
` Warrantyastonon-existenceofencumbrances.
` Warrantyastodisclosureof
dangerousnatureofthegoodstotheinnocentbuyer.
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`Optionofthebuyer..x Thetoastercase
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`Circumstancesaresuchthatgoodscannotbereturned.x
Whenthebuyerhasacceptedthegoods&intimatestotheseller.
x Whengoodshavebeendeliveredtothebuyer&hedoesanyactin
relationtothemwhichisinconsistentwiththeownershipoftheseller.
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`Byexpressagreement.`Bycourseofdealings.`Bycustoms&trade
usage.
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LETTHE BUYER
BEWARE
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` Whenthesellermakesa
representationoffact,whether
innocentorfraudulent,regardingtheproduct.
` Whentheseller activelyconceals
adefectinthegoodswhichcouldnotberevealedbyordinary
examination
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` Wheregoodsaresuppliedbydescriptionandtheydonot
correspondwiththedescription.` Wheregoodsaresuppliedby
descriptionandtheyarenotofmerchantable quality.
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` Whengoodsaresoldbysample&thegoodsdonot
correspondwiththesample.` Whenthebuyerreliesonthe
skill&judgmentoftheseller
&makeshispurposeofbuyingtheproductknowntohim.