SOGA UNIT 3 Flashcards
What does passing of property in goods depend on?
Passing of property in goods mainly depends on
1. Intention of the parties which is determined by terms of contract, conduct of the parties and circumstances of the case
2. Identification of the goods. Property in unascertained goods cannot pass until they are ascertained or specific.
Property passes in case of Specific/Ascertained goods
In case of specific/ascertained goods, property in the goods when it is intended to be passed which is determined by conduct of parties, terms of contract and circumstances of the case
Sale of specific goods- property passes
3 situations
1. In a deliverable state (when contract is made)
2. To be put into a deliverable state (when put into a deliverable state + buyer has notice of it)
3. Seller has to ascertain the price (buyer has tested, measured or weighed the goods to ascertain the price and buyer has notice of it)
What is appropriation of goods?
Appropriation of goods refers to selection of goods for the purpose of using them in the contract of sale with the mutual consent of both buyer and seller.
Essentials of appropriation
- There is a contract of sale of unascertained or future goods
- The goods are put in a deliverable state
- Goods conform to the description stated in the contract
- Goods are unconditionally appropriated by agent, buyer, delivery etc
- Goods are appropriated with mutual consent.
- Assent can be express or implied
- Assent can be before or after appropriation
Appropriation through delivery to carrier
Goods when delivered to the carrier for the purpose of transmission to seller without the seller reserving the right to disposal, are said to be unconditionally appropriated
Passing of property in case of sale or return basis
When goods are delivered to buyer through sale or return basis then property in them passes when
1. The buyer accepts the goods or does any act adopting the transaction
2. The buyer does not accept the goods but retains them without giving any notice of rejection beyond the time fixed or beyond the reasonable time
3. Buyer does something which amounts to acceptance of goods like sale or pledge
Reservation of right to disposal
The seller can reserve his right to disposal of goods as in the property in the goods is not passed until certain conditions are fulfilled
Situation where right to disposal is reserved
- Goods are delivered to railway administration and by the bill of lading or railway receipt it is deliverable by the order of the seller
- The bill of lading or railway receipt of goods is sent with a bill of exchange to secure payment. The document of title is to be returned if the buyer does not accept the bill of exchange
Risk passes prima facie with ownership of goods
The seller remains liable until the property in the goods has been passed to buyer. Once the property in them has been passed to the buyer, the goods are now at the risk of the buyer irrespective of who is in possession of the goods.
Exception to Section 23- Risk passes with property in goods
If there is a delay in delivery, then the person at fault which may be either the seller or buyer shall be liable for faults that would not have arisen if not for the delay in delivery.
Mnemonic for exceptions of nemo dat quod non habet
JUMP EVS
J- joint owner
U-unpaid seller
M-mercantile agent
P-buyer in possession of goods without property
E-estoppel
V-voidable contract
S-seller in possession after sale
Sale by owner
Nemo dat quod non habet is a latin expression which says that you cannot give something you do not have. The seller must have absolute property in the goods to sell them. A seller cannot pass a better title than what he himself has. He can pass the same title as him.
Sale by joint owner
Goods that are in possession of a joint owner with the consent of the other co-owners may sell the goods to third party. If the third party buys the goods in good faith then he will acquire the right over the goods
Sale by unpaid seller
After the unpaid seller has used his right of lien and stoppage in transit, he can sell the goods to a third party
Sale by mercantile agent
Sale by a mercantile agent is valid in the following circumstance
1. Goods are in possession of the agent with consent of owner
2. Agent acts in the ordinary course of business
3. Buyer acts in good faith
Sale by buyer who has possession of goods but property in them has not been transferred
If in good faith then good title transferred
Sale by estoppel
If owner by his conduct makes third party believe that the seller has authority to sell the goods then good title transferred
Sale under voidable contract
A seller who has obtained possession of goods under a voidable contract due to CUFM may sell them to a third party in good faith before the contract is rescinded
Sale by seller of goods already sold but in his possession
In good faith
What is performance of contract of sale?
Performance of contract of sale refers to delivery of goods by seller, acceptance of delivery of goods and payment of price by buyer according to terms of contract.
What is delivery?
Voluntary transfer of possession of goods from seller to buyer. (Actual, Symbolic, Constructive)
Delivery and Payment are _______ conditions
Concurrent. The seller should be ready and willing to deliver the goods in exchange for price of the goods. The buyer should be ready and willing to pay the price of the goods in exchange for possession of goods.
Delivery proper definition
Delivery refers to any act which the parties agree constitutes as delivery or which has the effect of putting the goods in possession of the buyer or anyone authorized to hold them.
