my final ppt

8/13/2019 My Final Ppt

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THIS IS (7thjan 1930) INDIAN PARLIAMENT


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The law as to sales of goods is basicallyoriginated from the INDIANCONTRACT ACT 1872.From sec 76 to123.However as the provisions ofsection 76 to 123 were insufficient ofgrowing merchandise transactions sothis act was formed.

INTRODUCTION.


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SALEDefination of sale [sec4(1)].

It is a contract where by the seller transfers or

agrees to transfer the property in goods to the buyerfor a price, there may be a contract of sale between onepart owner and another


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ESSENTIAL ELEMENTS OF A

CONTRACT OF SALES OF GOODS ACT

The following are the essential characteristics of acontract of sales of goods-

Two parties

Goods

Price

Transfer of property

Includes both a sales and agreement to sales Absolute and Conditional


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TYPES OF GOODS.


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SALE AND AGREEMENT TO

SELLSale1. Ownership is with the

buyer2. Executed contract

3. Sue for price, in case ofbreach

4. Goods lost by accidentthen loss falls on the

buyer.

Agreement to sell

1. Ownership is with theseller

2. Executory contract

3. Sue for damages only, incase of breach

4. Goods lost by accidentthen loss falls on theSeller.


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ESSENTIALS OF VALID

SALE CONTRACT Two parties:

There must be 2 distinct parties i.e., a buyer and a seller

Goods:Goods which form the subject matter of the contract of sale

must be movable. Price:

The consideration for the contract of sale, called price, mustbe money

Essential elements of a valid contract:A contract is made by an offer to buy or sell goodsfor a price and the acceptance of such offer.


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CONDITION

What is a Condition?[Section 12 (2)]A condition is a stipulation essential to the main

purpose of the contract, the breach of whichgives rise to a right to treat it as repudiated orbroken.


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WARRANTY

What is Warranty? [Section 12 (3)]A warranty is a stipulation collateral

to the main purpose of the contract, the

breach of which gives rise to a claim fordamages, but not to a right to reject thegoods and treat the contract asrepudiated or broken.


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CONDITION AND WARRANTY

Condition1. Its is a term in contract

which is essential.

2. When conditionbreaches?

3. Breach of condition canbe breach of warranty

Warranty1. Its a term in contract

which is collateral.

2. When warrantybreaches?

3. Breach of warrantycannot be breach ofcondition.


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When breach of condition

treated as breach of warranty[sec.13]

Voluntary waiver by buyer.Acceptance of goods by buyer.


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IMPLIED ONDITIONS1) Condition as to title2)Condition in a sale by description

3)Condition in a sale by sample

4)Condition in a sale by sample as well as bydescription

5)Condition as to fitness or quality

6)Condition as to merchantability

7)Condition as to wholesomeness


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IMPLIED WARRANTY

1)Warranty of quiet possession

2)Warranty of freedom from encumbrances

3)Warranty of disclosing the dangerous nature of goodsto the ignorant buyer


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DOCTRINE OF CAVEAT EMPTORCaveat emptor means let the buyer be aware

According to the doctrine of caveat emptorit is the dutyof buyer to be careful while purchasing goods of hisrequirement and the seller is not bound to disclose everydefect in goods of which he may be cognisant.

While making purchase the buyer depends on his ownskills and makes a bad choice and hence he cant hold theseller liable for the same, as there is no impliedundertaking by the seller.


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Rights of unpaidseller

Against the goods

Where the propertyin the goods has not

passed

With holding delivery

Stoppage in transit

Where the propertyin the goods has

passed

Lien

Stoppage in transit

Re sale

Against the sellerpersonally

Suit for priceRepudiation of

contractSuit for damages Suit for interest

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COST, INSURANCE, FREIGHT Sellers duty:

Make out an invoice ofthe goods sold.

Procure a contract ofaffreightment.

To arrange for aninsurance.

Buyers duty

To pay unloadingcharges, wharf agecharges, etc.

To pay custom andimport duties.


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AUCTION SALE :(sec 64) A sale by auction is a public sale where different

intending buyers try to outbid each other.

The goods are ultimately sold to the highestbidder.

The auctioneer who sells the goods by theauction is an agent of the seller, i.e. the owner.


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RULES OF AUCTION SALECompletion of sale:-

The sale is complete when theauctioneer announces its completion

by the fall of the hammer or in someother customary manner like one twothree or going going, gone


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Modyv/s

GregsonCase law :

Facts of the case : Instead of sale of Brandy by sample,brandy coloured with dye was supplied.It was held thatthe buyer was entitled to reject the goods.

Sale as per sample as well as description:( section 15) Ifsale is by sample as well as by description, it is notsufficient that the bulk of the goods correspond with thesample .If the goods does not correspond withdescription, where sale is by sample as well as bydescription, here the goods shall correspond both withsample as well as by description. Even if the bulkcorrespond with sample, but the bulk doesnot corespondwith description , the contract is terminated


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Case law Facts of the case: When nicholas agreed

to sell to Gogts some oil describe as foreign refined grape oil warranted onlyegual to sample but contained an addedmixture of hemp oil

Held: it was held that Gogts could rejectthe goods

Condition as to Merchandise QualitySec16(2) The merchandice has not beendefined in this Act but it means

If one buys it for self use, there shouldbe reasonable effect for which they are

generally using If ther are not for resale, it should be

commercially saleable underthedescription by which they are known inthe market at their full value

NicholasV/s

Gogts

Godle


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Case law

Facts of the case : sold catipult to a boy of6 yrs , while the boy was using it thecatipult broke made the boy blind by oneeye .Held :the catipult was not of Mercandisequality, so he had to refund for damages ascompensation.Condition as to Wholesomeness:It it applicable to eatables ,foodstuffs that means goods shallbe fit for human consumption

Godlev/s

Perry


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Case Law

A brought a hot water bagfrom B a retail chemist. A examine

bottle A asked B if it would stand

boiling water. B told him that it was

intended to hold hot water. The bottleburst after a few day of use & injured

As wife .

Held :B was liable for breach of implied

condition that the bottle was unfit for

the purpose for which it was made.

Priest

v/s

Last


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octrine ofcaveat mptor Caveat emptor means let the buyer beware that is thebuyer must take care as general rule, the buyer

purchases goods after satisfying himself as to quality

& fitness & therefore, the buyer purchases the goods at

its own risk relying upon his own skill &judgement.

This doctrine of caveat emptor implies that the

person who bought the goods must keep his eyes open,

his mind active & cautious while buying thIn other

words, the buyer while buying the goods must examine

them thoroughly. If the goods,


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Turns out to be defective

Does not serve this purpose ,

If he depends upon his skill &

judgement & makes a bad choicehe cannot blame anybody butmust thank himself for his ownfaults.

In absence of any warranty/misrepresentation


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Case law :

Facts of the case: H sends pigs tomarket, to be sold by auction. Pigs weresold to W with all fauits & errors ofdescription. H knew the pigs weresuffering from swine fever (typhoidfever)but he never disclosed this to W.

Held:sale was valid, as there was noimplied warranty/ condition for the sale.The house of lords (supreme court) heldthat sending infected . Pigs to the market

was offence(crime). But the seller wasnot bound to disclose that the pigs wereunhealthy. The buyer should not claimdamages from seller on the principles ofcaveat Emptor

Wards

v/s

Hobbs (1878)

v


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exceptions to cAveAt

emptor

Doctrine of caveat Emptor does not imply under thefollowing circumstances

The seller does not give an implied warranty as toquality & fitness of the goods & if the goods are not fitof sale the seller cannot take refence under thedoctrine of caveat Emptor & he shall be liable forbreach of warranty of quality & fitness.


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i) Customs/Usage of trade:An implied warranty/ condition as to quality & fitness

for particular purpose may be annexed by the custom/usage of trade. However custom should not be

unreasonable & should not be inconsistent withexpress terms of contract

ii)Fraud: when the seller is guilty of fraud

Eg: When the seller got consent of the buyer by fraud &conceals a defeat the seller is liable. In case law WardsV/s Hobbs


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iii) For specific Purpose: Where the goods are ordered & the

seller is made aware of it & when thebuyer relies on skill & judgement of

the seller, there is an impliedcondition that the goods shall bereasonably fit for such purpose

iv) Merchantable Quality : Where

the sale is by description & purchasesis done from the seller . Who deals ingoods of that description, there is animplied condition that the goods

shall be of merchantable quality


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Case law: Facts of the case: F brought milk from K. The

milk supplied by Davis (A) was contaminated withgerms of typhoid fever, the plaintiff s wife (Fs wife)

was infected & died.Held: The milk dealer was held liable (A was held liable )

. Frost

V/s

Ayalsbury dairy

co Ltd


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Condition implied by trade

usage: Condition as to quality / fitness for particular purpose

may be annexed by usage of trade i.e an impliedwarranty or condition as to quality or fitness for

particular purpose .

Eg. Printing & manufacturing the expiry date formedicines

Condition as to quality / fitness for


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Condition as to quality / fitness for

buyers purpose (sec 16(1)

It lays down when a buyer , expressly or by implicationmakes known. To the seller that particular purpose forthe goods are enquired so that the buyer relies on thesellers skill and judgement & the goods are ofdescription which is in course of the sellers business tosupply where he is the manufacturer or producer ornot. There is implied condition that the goods shall bereasonably fit for such purpose

This condition arises only when the followingcircumstances are proved:


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Where the buyer has made known to the seller for whichthe goods were ordered.

Where the buyer has relied upon the sellers skill &judgement

Where the goods are brought by description.

Which is in course of sellers business to sell

Finally by custom & usage implied condition of fitness's& merchantible quality is annexed (attached) tocontract of sale


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Case law:

Facts of the case: A buys a machine describedby the seller as it is good as new. But it was aold machine. The buyer buys it withoutseeing. It was found that it tuned out to beold & rusted.

Held: Buyer could reject the machine

Sale by Sample : (sec 17) The sale by sample means where there is a

term of contract express or implied there are3 implied transactions where the goods aresupplied accordingly to the sample

That the bulk shall correspond with thesample in quality That the bulk shall have reasonable

opportunity for comparing the bulk with thesample

That the goods shall be free from any defects

Varley

V/s

Whipps


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TH NKYOU

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