51238471 Consumer Protection Sale of Goods Act 1930

8/2/2019 51238471 Consumer Protection Sale of Goods Act 1930

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Consumer

Aconsumer is a user of goods and services

Any person paying for goods and serviceshas the right to demand quality services andproducts.

Before the industrial era the producer/settlerand the buyer/customer/consumer has closecontact and understanding.

Industrialization and mass productivesystems involving machines hasundermined close contact between sellerand consumer was almost lost.


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Definitions

Goods means goods as defined in the Sale of goods Act,1930. Under the Act, goods means every kind of

movable property other than actionable claims andmoney and includes stocks and shares, growingcrops, grass and things attached to or forming part ofthe land which are agreed to be severed before sale orunder the contract of sale.

Service is defined to mean service of any description whichis made available to potential users and includes theprovision of facilities in connection with banking,financing,insurance, transport, processing, supply ofelectrical or other energy, board or lodging or

both,housing construction, entertainment, amusementor the purverying of news or other information butdoes not include the rendering of any service free ofcharge or under a contract of personal service.


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In India, we have the Indian Contract Act, thesale of Goods Act, the Dangerous Drug Act, theAgricultural Produce (Grading & Marketing)Act, The Indian Standards of weight andMeasure Act, The Trade and Merchandise

Mark Act, etc. These Acts to some extentprotect consumer interest.

The drawback of the abovesaid Acts is that itrequires the consumers to initiate action byway of Civil suit which mostly lengthy legalprocess which are expensive and timeconsuming. There need a much more simplerand quicker access to redressed to consumer

grievances.

Consumer Acts


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Consumer and WTORegime

With the coming of WTO, goods from

different countries in the world beganto pour the markets of the Third World

and the consumers interest are not

adequately protected.


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Consumer Protection Act

The preamble to the Act states that the Act

is legislated to provide for better protection

of the interests of consumers and for that

purpose to make provision for the

establishment of consumer councils and

other authorities for the settlement ofconsumers disputes and for matters

connected therewith.


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Basic Rights under ConsumerProtection Act, 19861. The Right to be protected against marketing of goods and

services which are hazardous to life and property

2. The right to be informed about the quality, quantity,potency, purity, standard and price of goods, or servicesso as to protect the consumer against unfair trade

practices.3. The right to be assured, wherever possible,access to

variety of goods and services at competitive prices

4. The right to be heard and be assured that consumersinterests will receive due consideration at appropriate

forums5. The right to seek redressal against unfair trade practices

or restrictive trade practices or unscrupulous exploitationof consumers

6. The right to consumer education


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WHO IS CONSUMER?

The word "Consumer" has been definedseparately for "goods" and "services".(A) For the purpose of "goods", a consumermeans a person belonging to the followingcategories:One who buys or agrees to buy any goods for aconsideration which has been paid or promised orpartly paid and partly promised or under anysystem of deferred payment;It includes any user of such goods other than theperson who actualy buys goods and such use ismade with the approval of the purchaser.


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Note : A person is not a consumer if he

purchases goods for commercial or resale

purposes. However, the word "commercial"

does not include use by consumer of goodsbought and used by him exclusively for the

purpose of earning his livelihood, by means

of self employment.


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Who are not consumers?

1.

A person who purchased goods for resale2. A person who purchased goods for commercial purpose

3. A person who obtains services without consideration

4. A person who obtains services under a contract ofpersonal service

5. Tax-payers to municipality6. Contractors

7. Applicants for jobs

8. Persons who filed suits in courts


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B) For the purpose of "services", a "consumer"means a person belonging to the followingcategories:One who hires or avails of any service or servicesfor a consideration which has been paid or

promised or partly paid and partly promised orunder any system of deferred payment.It includes any beneficiary of such service otherthan the one who actually hires or avails of theservice for consideration and such services areavailed with the approval of such person.


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Different redressal Forums

for Consumers

National Consumer Disputes Redressal Commission - knownas "National Commission" deals with complaints involvingcosts and compensation higher than Rs. One Crore.

State Consumer Disputes Redressal Commissions - known as

"State Commission, deals with complaints involving costs andcompensation higher than Rs. Twenty Lakhs and less than Rs.One Crore.

District Consumer Disputes Redressal Forums - known as"District Forum, deals with complaints involving costs andcompensation less than Rs. Twenty Lakhs.


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RELIEF AVAILABLE TO

CONSUMER1-Removal of defects from the goods,2-Replacement of the goods;3-Refund of the price paid;4-Award of compensation for the loss or injury suffered;5-Removal of defects or deficiencies in the services;6-Discontinuance of unfair trade practices or restrictive trade

practices or direction notto repeat them;7-Withdrawal of the hazardous goods from being offered tosale; or8-Award for adequate costs to parties


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LIMITATION

The District Forum, the State Commissionor the National Commission shall not admit

a complaint unless it is filed within two

years from the date on which cause ofaction has arisen


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Sale Of Goods Act1930


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Section 4 Sale andAgreement to Sale1. The contract of sale of goods is a contract whereby the

seller transfers or agrees to transfer the property ingoods to the buyer for a price.

2. A contract of sale may be absolute or conditional.

3. Where under a contract of sale the property in the goods

is transferred from the seller to the buyer, the contract iscalled a sale, but where the transfer of property in thegoods is to take place at a future time or subject to someconditions thereafter to be fulfilled, the contract is calledan agreement to sell.

4. An agreement to sell becomes a sale when the timeelapses; all the conditions are fulfilled subject to whichthe property in the goods is to be transferred.


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Section 4 Sale andAgreement to Sale Examples: A agrees to buy a car from B from Bs garage with

liberty to come to Bs garage to take it away. This is asale and B cannot stop A to enter his garage.

Agreement by A to buy 20 tonnes of oil from the sellerscisterns. The seller has many cisterns, with more than

20 tonnes in them. This is merely an agreement to sale. Agreement for sale of a quantity of nitrate of soda to

arrive at a certain ship. This is an agreement to sell at afuture date subject to the double condition of the arrivalof the ship with the specified cargo on board.

A customer who picks up goods in a self-service shopis merely offering to buy them and the sale is notcomplete until they are paid for.


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Essential Requisites ofSale

In the case of (state of Madras Vs Gannon Dunkerley and

Company Limited, 1958) the Supreme Court has held, in

order to constitute a sale, it is necessary that

- there should be an agreement between the parties for the

purpose of transferring title to goods,

- presupposed capacity to contract,

- that it must be supported by money consideration,

-

that as a result of transaction, the property must actuallypass in the goods. Unless all these elements are present

there would be no sale.


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Sale and Agreement toSale

An agreement to sell, which is also called an executivecontract of sale, is a contract simply, and creates only a jus in personance; the property in the goods which formssubject matter of the contract remains in the seller, so that

they may be taken in execution of his debts, and belongson his bankruptcy to his trusty in bankruptcy; if they aredestroyed the loss will, in the absence of excessagreement, have to be borne by him: and a breach byeither party of the agreement will normally only give the

other party a right to sue for damages. The term contract of sale includes both actual sales and

agreement for sale.


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The Supreme Court distinguished these two classes of contract thus

An agreement to sell is a contact pure and simple whereas a sale is a contract plus conveyance. By an agreement to sale ajus in personance is causedby a sale

ajus in rem also is transferred. Where goods have been sold andthe buyer makes the fault, the seller may sue for the contract priceon the count of goods bargained and sold but when anagreement to buy is broken, the sellers normal remedy is anaction for unliquidity damages. If an agreement to sell be broken,by the seller, the buyer has only a personal remedy against theseller. The goods are still the property of the seller, and he candispose of them as he likes, but if there has been a sale and aseller breaks his engagement to deliver the goods, the buyer hasnot only a personal remedy against the seller but also the usualproprietary remedies in respect of the goods themselves. In many

cases, too, he can follow the goods into the hands of third parties. Again, if there be an agreement of sale, and the goods aredestroyed the loss as a rule falls on the seller, while if there hasbeen a sale, the loss as a rule falls up on the buyer though thegoods may have never come to his position.


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Formalities of a contract ofsale:

Section 5: Contract of Sale - how made A contract of sale is made by an offer to buy or sell

goods for a price and the acceptance of such price. Acontract may provide for the immediate delivery of

goods or immediate payment of the price or both, orfor the delivery or payment by instalments. Or thatthe delivery of payments or both shall be postponed.

Subject to the provisions of any law for the time being

enforced, a contract of sale may be in writing or bythe word of mouth or may be impliedly or may beimplied from the conduct of the parties.


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A statement or conduct inviting the making of an offersuch as by display of goods in a shop does not buy itselfbind the shopkeeper to accept the customers offer evenat the price displayed or advertised. Such invitation totreat therefore differs from an offer, which is intended to

be binding on the person making it and is capable ofbeing accepted without any further negotiation. Where,however, the accessibility to goods in intended to an offercapable of acceptance by customers act such as fillingthe petrol tank of a car from a self service pump or

choosing items in a self service shop or taking goodsintended for sale for an automatic vending machine thequestion of obtaining sellers assent does not arise.


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Sub-section 1 emphasis the consensual nature of a

contract of sale; the parties may agree to such terms as

they think fit. A sale can be complete even without

effecting immediate delivery and immediate payment. In a

contract of sale, the title in goods passes immediately onthe payment of price while in an agreement to sale the title

in goods passes at a future time subject to conditions to

be fulfilled thereafter however, when the goods are

accepted by the buyer and the price is received by theseller the sale is deemed to be complete.


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Earnest : The conclusion of a contract of sale is sometimes marked by the

giving of earnest this was expressly referred to in Sec. 78 of the

Contract Act with regard to the giving of earnest Earnest whether given in money or not must be something ofvalue really given by the buyer and kept by the seller A meresymbolic ceremony such as one party drawing a coin across theothers hand will not do.

When a deposit in the nature of earnest is paid for the same of

immovable property in India, a vendor by whose default the salegoes off must return the sum so paid, but if the default is thepurchasers the purchaser must loose it.


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Conditions and Warranties Sec. 11 - Stipulation as to time Unless a different intention appears

from the terms of the contract, stipulation as to time of payment are not

deemed to be of the essence of a contract of sale. Whether any otherstipulation as to time is of the essence of the contract or not depends onthe terms of the contract.

Examples:

1) Sale of some stacks of oak on the sellers ground, upon the terms that

they might remain there for four months and the buyer should pay within12 weeks of the contract. The seller on the expiration of 12 weeksdemanded the price which the buyer failed to pay. Later the buyer askedfor further time which the seller refused to give, and said that as the

buyer had not paid he should not have the stacks. The buyer latertendered the price, but the seller refused to accept it and subsequentlyresold the stacks. The Buyer was held entitled to recover.

2) Sale of goods to be shipped and bill of lading to be dated December January. Goods were shipped on 30th January but the bill of lading wasdated 2nd February the buyer was held entitled to reject.


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2. Stipulations as to timeof payment

The failure by the buyer to pay on the appointed

day does not as a rule, entitle the seller to treat

the contract as repudiated, though he may be

entitled to withhold delivery until the price is paidand to resell the goods if the buyer does not pay

or tender the price within a reasonable time.

The time cannot be taken to be the essence of

the contract in case where the contract itself

does not stipulate the time for payment of the

price.


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3. Stipulations as to time ofperformance of other terms

If a man orders a suit of clothes, a promise by the tailor that heshall have it by a certain date would not, generally speaking, beof the essence of the contract, though it might be if he wasordering court dress for the purpose of attending a court on aparticular day. But in the case of commercial contracts,although occasionally stipulations as to time may not be of the

essence, the usual rule is that they are. In contracts of sales of goods, the computation of the time of

performance from a particular date, act or event is prima facieexclusive of the day, act or event and inclusive of the day ofperformance, although this presumption may be displaced by acontrary intention appearing from the contract and its

surrounding circumstances.


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4. Waiver of thestipulations

Stipulations as to time may be waived by theparty in whose favour they are inserted either

expressly or by implication, and if he does so

he cannot afterwards treat the failure to

comply with them by other party as giving a

right to rescind the contract.


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Section 12. Condition andWarranty1. A stipulation in a contract of sale with reference to goods which

are subject thereof may be a condition or a warranty.

2. A condition is a stipulation essential to the main purpose of thecontract, the breach of which gives rise to a right to treat thecontract as repudiated.

3. A warranty is a stipulation collateral to the main purpose of thecontract, the breach of which gives rise to a claim for damages

but not to a right to reject the goods and treat the contract asrepudiated.

4. Whether a stipulation in a contract of sale is a condition or awarranty depends in each case on the construction of thecontract. A stipulation may be a condition, though called awarranty in the contract.

Synopsis

1. Conditions and warranties 2. Express Conditions

3. Express Warranties 4. Representations

5. Implied conditions and warranties 6. Puffs


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Express Conditions The parties if they wish, may put the contents of any

particular statement or promise which passes betweenthem on the same footing as the description of the thingcontracted for, so that if it is not made good by the partyundertaking it, the failure is deemed to be a total failure ofthe performance, and the other is at least wholly

discharged, and may in addition recover damages forsuch failure of performance. This is a condition in theproper sense, as defined in sub-s (2). In the usual sense,the condition means an essential undertaking in thecontract which one party promises will be made good. If itis not made good, not only will the other party be entitledto repudiate the contract, but also to sue for damages forbreach.


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3. Express Warranties There may also be, and there occur in common practice, auxiliary

promises or undertakings of which the breach is not intended toavoid the contract, but only to give a remedy in damages. Theseare warranties in the proper sense, as defined in sub-s (3). Acondition of sale, protecting a seller in respect of misdescription,may be overridden by a warranty given before the sale takes placeand damages may be recovered for breach of the warranty.Whether a statement is to be regarded as warranty must be

objectively ascertained by asking whether adopting the standard ofa reasonable man, the other party assumed that the representorwas to be regarded as undertaking legal liability for his assertions.The importance of the statement, the relative knowledge andmeans of knowledge of the parties, and the possibility ofverification are the relevant factors which would indicate whether

the statement is a warranty. Thus, statements may be warrantieswhen made by dealers, though they would not be warranties ifmade by private sellers; for the dealers may be in possession ofspecial knowledge, expertise and means of information notavailable to ordinary persons.


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4. Representations An affirmation as regards the goods, if it is to have contractual

effect, must be part of the contract; if it is not, it is only arepresentation, the untruth of which will not, in the absence offraud, give rise to an action an for damages, though it mayenable the other party to rescind the contract and sometimes arepresentation may amount to a condition precedent to theformation of the contract, so that if be untrue, the other party is

discharged from all liability. It depends upon the intention of theparties whether an affirmation made at the time of, or duringthe negotiations for sale, is to be treated as a condition, awarranty or a mere representation: and although an assertionmade by the seller of a fact unknown to the purchaser may bestrong evidence that it was intended as a warranty, it is not

necessary so in law. If the representation does not form part ofthe contract, that is, if it is neither a condition nor a warranty, itamounts to an expression of opinion not intended to enter thebargain and its no fulfilment does not give rise to any right to alegal action.


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5. Implied Conditions andWarranty Although the parties may have used no expressed words thatwould create such a stipulation, the law annexes too many

contracts, conditions, the breach of which may be treated bythe buyer as avoiding the contract or given a right to damages.These are called as implied conditions and are enforced on thegrounds that the law infers from all the circumstances of thecase, that the parties intended to add such a stipulation to theircontract, but did not put it into expressed words.

Most of the statutory implied terms as to sellers duties as totitle, confirmative with description and quality, terms designateda conditions by the contract itself, terms similar to those oralready treated as conditions in another case, time clauses inmercantile contracts and residual category where breached ofterm is to be treated as giving right to treat the contract as

discharged are considered as terms likely to be treated asconditions.

The existence of an employed condition or warranty may berebutted by proof of facts, which show a contrary intention


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6. Puffs

A mere puff is a vague and extravagant statement so

preposterous in its nature that nobody could believe that

anyone was misled by it. The extent to which a statement

may be so categorised depends on the degree or

obviousness of its untruth. The circumstances of its

making and in particular on the expertise and knowledge

attributable to the person whom it is made.


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Section 13 : When conditionto be treated as warranty,

1. Where a contract of sale is subject to any condition to befulfilled by the seller, the buyer may waive the condition orelect to treat the breach of the condition as a breach ofwarranty and not as a ground for treating the contract asrepudiate.

2. Where a contract of sale is not severable and the buyer hasaccepted a goods or part thereof, or where the contract is forspecific goods, the property in which has passed to the buyer,the breach of any condition to be fulfilled by the seller can onlybe treated as a breach of warranty and not as ground forrejecting the goods and treating the contract as repudiated

unless, there is a term of a contract, expressed or implied tothat effect

3. Nothing in this section shall affect the case of any condition orwarranty fulfilment of which is excused by law, by reason ofimpossibility or otherwise.


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Transfer of Property asBetween Seller and Buyer

Section 18 Goods must beascertained Goods must be ascertained: where there is contract

for the sale of unascertained goods, no property in

the goods is transferred to the buyer unless anduntil the goods are ascertained Synopsis

1. Transfer of property

2. Property cannot pass until the goods are identified

3. Part of a specific whole

4. Property and risk

5. Identification of goods


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Property cannot pass untilthe goods are identified

It is a condition precedent to the passing of the property inevery case that, the individuality of the thing to be deliveredshould be established. It is essential that the article should bespecific and ascertained in a manner binding on both theparties, for unless that be so, the contract cannot beconstrued as contract to pass the property in that category.

Where according to the terms of the contract, the seller wasto supply waste coal ash as and when it was discharged fromthe bunkers of the powerhouse, it was held that the contractwas for the sale of unascertained goods and, therefore noproperty passed to the buyer till the goods were ascertained.(Tej Singh Vs State of Uttar Pradesh and others 1981)


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3. Part of a specific whole It is obvious that if the contract is merely for the sale of goods by

description, such as a contract for sale of a certain quantity ofmalting barley, or future goods, the necessary condition is notfulfilled. Nor is it fulfilled even if the goods are so far ascertainedthat the parties have agreed that they shall be taken from somespecified larger stock. The parties did not intend to transfer theproperty in one portion of the stock more than in another, andthe law which only gives effect to their intention does not transferthe property in any individual portion(White Vs. Wilks 1813).

And the mere fact that an order for the delivery is given by theseller to the buyer, and is lodged by the buyer with awarehouseman, who holds the specified larger stock out ofwhich the goods sold are to be taken, is not sufficient to transferthe property to the buyer.(Laurie & Morewood Vs. Dudin &

sons 1926) Thus, where the ascertainment of the goodsdepends upon their being separated from the bulk by the selleror a third party or the buyer, by their being severed, weighed ormeasured or some other process, no property can pass until thisis done (National Coal Board Vs. Gamble 1959)


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4. Property and Risk In this class of case, it is necessary to distinguish the passing of

the property from the transfer of the risk; the risk usually passeswith the property, but may pass independently of it; Thus,acceptance of the delivery warrant for a certain quantity of spiritout of a larger bulk which was liable to deteriorate in storage washeld to put the risk of deterioration on the buyer, although he hadacquired, not property but only undivided interest in the whole

bulk. Equally, it would seem that there can be none in anindividual part of a chattel, such as a tree which has been felled,of which a marked portion was sold, and of which the otherportion is to be retained by the seller. In such a case, it isconceived, the whole tree remains the property of the seller until

the marked portion is severed, even if the severance is to bedone by the buyer.


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5. Identification of thegoods The contract itself may provide that the property shall pass on the

happening of some specified event, sufficient to identify the goods, andoccasionally they may become identified by other means. Thus, in acase where the seller sold 250 quarters of wheat out of a larger bulkbelonging to him in a warehouse, and the buyer took delivery of 400quarters and pledged the remaining 850 quarters to a bank, and in themeantime the seller sold the remainder of the bulk in the warehouse, ofwhich delivery was taken, so that 850 quarters only were left in the

warehouse, it was held that by this process of exhaustion the 850quarters became ascertained goods and property therein passed to thebuyer, so that the pledgee acquired a title thereto against the seller.(Wait & Midland Bank 1926) In State of karnataka Vs. The WestCoast Paper Mills Ltd. AIR 1986 it was held that where under acontract a company was permitted to remove bamboos from the forestarea at Rs.10 /- per ton, and the government by a subsequent order

enhanced the price to Rs.20/- per ton, it was held that the enhancedrate was no applicable to the bamboos cut although not removed priorto the date of the government order, because on the bamboos being cutand extricated, the goods being ascertained and in a deliverable state,the property had passed to the company.


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Section 19. Property passeswhen intended to pass

1. Where there is a contract for the sale of specific or ascertainedgoods the property in them is transferred to the buyer at suchtime as the parties to the contract intend it to be transferred.

2. For the purpose of ascertaining the intention of the parties regardshall be had to the terms of the contract, the conduct of the

parties and circumstances of the case.3. Unless a different intention appears, the roles contained insection 20 to 24 are rules for ascertaining the intention of theparties as to the time at which the property in the goods is topass to the buyer.

Synopsis1. Principles for determining whether the property is transferred

2. Intention of the parties

3. Ascertained goods


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1. Principles fordetermining whether the

property is transferred When it appears that the goods -- the subject of the

contractare specific or ascertained, so that it is possible

for the property to pass to the buyer, it becomes

necessary to determine whether it has actually passed;

This section reproduces this statement in statutory form,

and the rules of construction adopted by courts are those

set out in Ss 20 to 24.


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2. Intention of the parties

The governing principle which should determine as to thepassing of the property in the goods must be to find outwhat is the intention of the parties. It is open to the partiesto agree that the property shall pass ipso factoimmediately the goods become ascertained or even that it

shall pass at some time after the delivery is effected. Thedesirability of making express provisions to this effect isdemonstrated by the consequences of its omission fromthe Contract Act. It might have been thought that, even inthe absence of such a provision, the courts would be freeto give effect to the intention of the parties to a lawfulcontract of sale on such an important element of thecontract as the transfer of the property, and that view hason some occasions been acted upon.


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2. Intention of the parties Where a company had transferred its plant and machinery to

the finance corporation and the only right the company hadwas to redeem and it was clear that the company could not sellthe same without the concurrence of the finance corporation itwas held that the intention of the parties notwithstanding thelanguage of the document between the company and M/s

Ranga Engineering Company was to transfer the property onlyafter obtaining the consent of the finance corporation and therewas no sale until then.(PPLooke Vs. NJ Mathew & others1967) Sale of shares becomes complete as soon as property inthe shares is intended to be transferred to the buyer. Suchintention does not depend on any particular form or mode oftransfer and has to be gathered from the facts of eachparticular case. Unity Company Pvt. Ltd. Vs. DiamondSugar Mills & others AIR 1971


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3. Ascertained goods Then term ascertained goods, which also occurs in

Section 58, is not defined by the Act. It is, however, clearthat the words specific goods bear the meaning assignedto them in the definition clause, goods identified andagreed upon at the time a contract of sale is made.Ascertained probably means identified in accordance with

the agreement after the time a contract of sale is made.Sections 23 and 25, therefore, must also be read subject tothe provisions of this section, and regard must be had tothe intention of the parties when considering whether theproperty has or has not passed in the circumstances dealt

with by those sections. Where teak trees to be cut were ofmore than 12 inches girth, it was held that till it wasascertained as to which trees fell within the description theywere not ascertained goods. Badri Prasad Vs. The Stateof Madhya Pradesh AIR 1970 SC.


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Section 20 Specific goods ina deliverable state

Where there is an unconditional contract for the sale of specificgoods in a deliverable state, the property in the goods passesto the buyer when the contract is made, and it is immaterialwhether the time of payment of or the time of delivery of goods,or both, is postponed.

Examples

This section may be illustrated by the following examples:

1. Sale on the 4th January of a haystack on the sellers land at theprice of 145 to the paid on the 4th February, the hay to beallowed to remain on the sellers land until the 1st May: no hayto be cut until the price was paid. The property in the haystackpassed on the making of the contract and on the stack beingdestroyed by fire, the buyer must bear the loss Tarling Vs.Baxter (1827)


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Section 20 Specific goods ina deliverable state

Examples

2. Sale of a specified number of bushels of oats, thecontents of a bin in a warehouse. The seller gives adelivery order to the buyer, addressed to the

warehouseman, authorising delivery of the oats tiothe buyer, and asking the warehouseman to weighthem,. The warehouseman accepts the order andenters it in his books. The property has passed to the

buyer, as the weighing was not necessary to identifythe oats or to ascertain the price, but was merely forthe satisfaction of the buyer. Swanwik Vs. Sothern(1839)


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Section 21 Specific goodsto be put into a deliverable

state Where there is a contract for the sale of specific goods and theseller is bound to do something to the goods for the purpose ofputting them into a deliverable state, the property does notpass until such thing is done and the buyer has notice thereof.

Example

This section may be illustrated by the following example: Saleof the whole contents of a cistern of oil, the oil to be put intocasks by the seller and then taken away by the buyer. Some ofthe casks are filled in the presence of the buyer, buy before anyare removed, or the remainder are filled, filled, fire destroys the

whole of the oil. The buyer must bear the loss of the oil whichhad been put into the casks, the seller that of the remainder.Rugg Vs. Minett (1089)


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Section 22 : Specific goods ina deliverable state , when

the seller has to do anythingthereto in order to ascertain

price : Where there is a contract for the sale of specificgoods in a deliverable state, but the seller is bound to

weigh, measure, test or do some other act or thing

with reference to the goods for the purpose of

ascertaining the price, the property does not pass

until such act or thing is done and the buyer has

notice thereof.


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Section 22 Examples

This section may be illustrated by the following examples:1. Sale of a stack of bark at a certain price per ton, the bark

to be weighed by the sellers and buyers agents. Part wasweighed and taken away, but before anything more was

done a flood carried away the remainder. The loss of thisfell on the seller. Simmons Vs Swift (1826)

2. Sale of 289 specified bales of goatskin, containing 5dozen in each bale, at a certain price per dozen. By theusage of the trade, it was the sellers duty to see whether

the bales contain the number specified in the contract.Before the seller had done this the bales were destroyedby fire. The loss fell on the seller. Zagury vsFurnell(1809)


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Section 23 : Sale ofunascertained goods and

appropriation.1. Where there is a contract for the sale of unascertained orfuture goods by description and goods of that descriptionand in a deliverable state are unconditionally appropriatedto the contract assent of the buyer or by the buyer withthe assent of the seller, the property in the goods there

upon passed to the buyer. Such assent may beexpressed or implied, and may be given either before orafter the appropriation made.

2. Delivery to the carrier - Where in pursuance of the

contract the seller delivers the goods to the buyer or tothe carrier or other bailee (whether named by the buyer ornot) for the purpose of transmission to the buyer, anddoes not reserve the right of disposal, he is deemed tohave unconditionally appropriated the goods to the

contract.


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Section 23 : Sale ofunascertained goods and

appropriation Example This section may be illustrated by the following example:

1. Sale of 20 hogsheads of sugar out sugar out of a largerquantity. The seller fills four hogsheads which the buyer

takes away. Subsequently the seller fills sixteen morehogsheads, and informs the buyer of this asking him tocome and take them away. The buyer promises to do so.The property has passed to the buyer.

2. Mr A contracts to sell to Mr B a certain quantity of liquor

out of a big cask containing a much larger quantity. Therequired quantity is not separated or bottled. The propertyin the liquor does not pass to the purchaser.


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Section 24 Goods sent onapproval or on sale or

return When goods are delivered to the buyer on approvalor on sale or return or other similar terms, theproperty therein passes to the buyer

(a) when he signifies his approval or acceptance to

the seller or does any other act adopting thetransaction:

(b) if he does not signify his approval or acceptanceto the seller but retains the goods without givingnotice of rejection, then, if a time has been fixed forthe return of the goods, on the expiration of suchtime, and, if no time has been fixed, on the expirationof a reasonable time.


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Section 24 Goods sent onapproval or on sale or

return Examples The section may be illustrated by the following

examples:

1.Goods delivered on sale or return are pledged by the

deliveree. He thereby becomes the buyer of thegoods, and the original owner cannot recover thegoods from the pledgee.

2. Goods delivered on sale or return to the defendantare delivered by him on similar terms to another. The

latter in turn hands them to a fourth person, wholoses them. The defendant, being unable to returnthe goods, must pay for them as if he had actuallyagreed to become the buyer.

S i 26 Ri k i f i i h


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Section 26 Risk prima facie passes with

property unless otherwise agreed, the goods remain at the

sellers risk until the property therein is transferred tothe buyer, but when the property therein istransferred to the buyer, but when the propertytherein is transferred to the buyer, the goods are at

the buyers risk whether delivery has been made ornot.

Provided also that nothing in this section shall affectthe duties or liabilities of either seller or buyer as abailee of the goods of the other party.

S ti 26 Ri k i f i ith


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property Examples This section may be illustrated by the following examples;

1. Goods in a house held on lease and belonging to the tenantwere sold by auction under conditions expressly providing that

all lots should be taken to be delivered at the fall of thehammer, after which time they should remain at the exclusiverisk of the purchaser. The rent of the house was in arrear, andafter the sale the landlord threatened to distress on thesegoods; to prevent distress, the auctioneer paid the rent andhanded the net proceeds of the sale to the original owner of the

goods, the tenant. It was held that the auctioneer had no rightto make this deduction, as the property in the goods hadpasse0d to the respective buyers and the seller, therefore, hadno further interest in them; the auctioneer, in consequence, hadno implied authority from him to pay the rent in order to savethe goods from distress. Sweeting Vs. Turner (1871)

S ti 26 Ri k i f i ith


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property 2. The defendant purchased 975 bales of rice, being the whole

contents of a gola, paid earnest money, and took part delivery of therice. The rest was afterwards destroyed by fire. The property in thewhole had passed to him and he was held liable to pay the balance ofthe price. The Union of India Vs. The West Punjab Factories Ltd.AIR 1966 SC

3. The defendant contracted to purchase 30 tons of apple juice. Theplaintiff crushed the apples, put the juice in casks and kept it pendingd3elivery. The defendant delayed taking delivery and the juice wentputrid and had to be thrown away. The defendant was liable to pay the

price; the seller had been in a position to sell the goods elsewhere andacquire other goods for the postponed time of delivery and he had notdone so and there was some loss in the meanwhile, the responsibilityfor the loss would have fallen on him, but in the present case the sellerhad to keep the goods ready for delivery as and when the buyerproposed to take them. Demby Hammilton & Co. Ltd. Vs. Barden

(Endeavour Wines Ltd) 1949


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PERFORMANCE OF THE CONTRACT Section 31. Duties of the seller and buyer It shall be the duty of the

seller to deliver the goods and of the buyer to accept and pay for them,in accordance with the terms of the contract of sale.

The general rule enunciated in this section follows from the nature ofthe contract of sale, by which the property in the goods is transferred,or agreed to be transferred, from the seller to the buyer in return for the

price.

There would be breach of the duty to accept when the buyerunjustifiably rejects the goods. Taking of delivery of the goods is animportant aspect of the duty to accept and refusal to do so willconstitute rejection of the goods and therefore , would amount to anon-acceptance of the goods. There is however a distinction betweenacceptance of goods and taking delivery of them. The buyer signifyinghis approval of the goods accepts them though he may not have takendelivery of the goods. It will be noticed that the Act does not expresslyimpose any duty to take delivery although it prescribes sanctions whenthere is delay in taking delivery.

S ti 32 P t d d li


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Section 32 Payment and delivery are

concurrent conditions : Unless otherwise agreed, delivery of the goods and payment of the

price are concurrent conditions, that is to say, the seller shall be readyand willing to give possession of the goods to the buyer in exchangefor the price, and the buyer shall be ready and willing to pay the pricein exchange for the possession of the goods.

A contract of sale is an example of a contract consisting of reciprocalpromises to be simultaneously performed. In accordance, thereof, withthe general principle laid down in s.51 of the contract Act, the seller isnot bound to deliver, and commits no breach of contract in failing todeliver, if the buyer is not ready and willing to pay the price, and is not

liable to an action for failure to accept the goods, if the seller was notready and willing to let the buyer have goods on demand. The owes tothe buyer as onerous a duty to deliver the goods, as the buyer owes tothe seller the duty to accept and pay for them.


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Section 34. Effect of part delivery A delivery of part goods, in progress of the delivery of the whole, has

the same effect, for the purpose of passing the property in such goods,as a delivery of the whole; but a delivery of the part of the goods withan intention of severing it from the whole, does not operate as adelivery of the remainder.

Examples The section may be illustrated by the following examples: 1`. Sale of a quantity of goods lying at a wharf. The seller left an

order with the wharfinger to deliver the goods to the buyer, who hadpaid for them by a bill. The buyer subsequently weighed the goods andtook away part of them. This was held to amount to a delivery of thewhole of the goods.

S ti 34 Eff t f t d li


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Section 34. Effect of part delivery

2. A ship arrived in port with a cargo of wheat. The master

reported her at the Customs House and made an oath thatthe cargo was for A., the indorsee of the bill of lading. Nextday, A made entry of the wheat in his name at theCustoms House. Part of the cargo was thendelivered to A. This constituted a deliver of the whole.

3. Sale of a stack of hay. The buyer asked the permissionof the seller to cut and remove part of the stack,which was granted. The clear intention of the partiesbeing to separate the part delivered of the whole.

Section 35 Buyer to apply for delivery


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Section 35 Buyer to apply for delivery Apart from any express contract, the seller of the goods is not bound to deliver them

until the buyer applies for the delivery

This section reproduces s93 of the contract Act except that for the words in theabsence of any specific promise, the words apart from any express contract havebeen substituted. The words in the absence of any special promise have beenconstrued to mean an express stipulation as to delivery6 which relieves the buyerfrom the obligation to apply for delivery or the necessary implication of such astipulation from the nature of the contract as expressed. It might also arise out ofusage or custom.

Even if there is an obligation on the part of the seller to inform the buyer when thegoods are in a deliverable state, it is not a special promise, though it may postponethe obligation of the buyer to apply for delivery, and after the lapse of a reasonabletime, to enable the goods to be procured by the seller, the buyer would be entitledand bound to apply for delivery.

When the applies for delivery and the seller then fails to deliver, the seller is guilty ofa breach of contract. So where the contract provided for delivery in all November on

seven days notice from the buyer, and the buyer gave the notice early in November,it was held that by the terms of the contract the buyer had the right to fix the date inNovember on which the delivery should be made, and the seller having failed todeliver as required by the notice, was guilty of a breach of contract. JuggernathKhan Vs. Machlachar (1881)

Section 36. Rules as to delivery


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Section 36. Rules as to delivery 1. Whether it is for the buyer to take possession of the goods or f

the seller to send the goods to the buyer is a question depending ieach case on the contract, express or implied, between the parties.

Apart from any such contract, goods sold are to be delivered at thplace at which they are at the time of the sale, and goods agreed to bsold are to be delivered at the place at which they are at the time of thagreement to sell., if not then in existence, at the place at which theare manufactured or produced.

2. Where under the contract of sale the seller is bound to send th

goods to he buyer, but no time for sending is fixed, the seller is bounto send them within a reasonable time. 3. Where the goods at the time of sale are in the possession of a thir

person, there is no delivery by seller to buyer unless and until sucthird person acknowledges to the buyer that he holds the goods on hibehalf :

Provided that nothing in this section shall affect the operation of thissue or transfer of any document of title to goods.

4. Demand or tender of delivery may be treated as ineffectual unlesmade at a reasonable hour. What is reasonable hour is a questionfact.

5. Unless otherwise agreed, the expenses of and incidental to puttinthe oods into a deliverable state shall be borne b the seller

Section 36. Rules as to delivery


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y Examples The section may be illustrated by the following examples :

1. Sale of 12 puncheons of rum, made from molasses, of whichwere delivered. The buyer pressed for delivery of the remainder, bthe seller delayed and in the meanwhile an Act of Parliament wapassed prohibiting the distillation of spirits from molasses, anannulling all contracts for the sale of such spirits. The sellers werheld liable in damages as having failed to deliver within a reasonabltime. Phillips Vs. Blair and Martin (1801)

2. Sale of goods to be sold to be delivered in the last fortnightMarch. Delivery is tendered at 9 p.m. on 31 March. It is a questionfact whether this is a reasonable hour. If it is not, there is no deliver

and the buyer may repudiate. Startup Vs. macdonald (1843)

3. Sale of goods for ready money. The seller packs them up in thbuyers boxes in the buyers presence, but they remain in the sellerpremises. This is not a delivery. Boulter Vs. Arnott (1833)


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Section 38. Instalment Deliveries

1. Unless otherwise agreed, the buyer of goods is not bound toaccept delivery thereof by instalments.

2. Where there a contract for the sale of goods to be delivered bystated instalments which are to be separately paid for, and the sellermakes no delivery or defective delivery in respect of one or moreinstalments, or the buyer neglects or refuses to take delivery of or pay

for one or more instalments, it is a question in each case depending onthe terms of the contract and the circumstances of the case, whetherthe breach of the contract is a repudiation of the whole contract, orwhether it is severable breach giving rise to a claim for compensation,but not to a right to treat the whole contract as repudiated.


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Section 38. Instalment Deliveries

Examples The section may be illustrated by the following examples :

1. Sale of 25 tons of pepper October /November shipment. Thesellers shipped 20 tons in November and 5 tons in December. Thebuyers were entitled to reject the whole 25 tons. Reuter Vs. Sala

(1879)

2. Sale of 200-300 tons of coal to be shipped as early as possible bya named ship or other vessel. The named ship was not available andthe seller shipped 152 tons on another ship, informing the buyer that

he had done so and that he had drawn on him for the price andproposing to ship the remainder later. The buyer made no reply to thiscommunication. The ship was lost. In an action by the seller for theprice it was held that the buyer had impliedly assented to the shipmentof the smaller quantity as an instalment and was liable to pay for it.Riichardson Vs. Dunn (1841)

Rights of Unpaid Seller against goods


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Rights of Unpaid Seller against goods

Section 45. Unpaid seller defined 1. The seller of goods is deemed to be an unpaid seller within the

meaning of this Act (a) when the whole of the price has not been paid or tendered ; (b) when a bill of exchange or other negotiable instrument has been

received as conditional payment, and the condition on which it wasreceived has not been fulfilled by reason of the dishonour of theinstrument or otherwise.

2. In this chapter, the term seller includes any person who is in theposition of a seller, as, for instance, an agent of the seller to whom thebill of lading has been indorsed, or a consignor or agent who hashimself paid, or is directly responsible for, the price

Examples The section may be illustrated by the following example;

The seller draws bills for the price of the goods on the buyer, whoaccepts them, and the seller negotiates them. Before the bills arrive atmaturity the buyer fails. The seller is in position of an unpaid seller.


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Section 46. Unpaid Sellers rights

1. Subject to the provisions of this Act and of and of any law for thetime being in force, notwithstanding that the property in the goods mayhave passed to the buyer, the unpaid seller of goods, as such, has byimplication of law

(a) a lien on the goods for the price while he is in possession of them; (b) in case of the insolvency of the buyer a right of stopping the goods

in transit after he has parted with the possession of them ; (c) a right of resale as limited by this Act.

2. Where the property in goods has not passed to the buyer, theunpaid seller has, in addition to his other remedies, a right of

withholding delivery similar to and co-extensive with his rights of lienand stoppage in transit where the property has passed to the buyer.


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Section 46. Unpaid Sellers rights

Example The section may be illustrated by the following example : Sale of goods to be delivered by instalments, each

instalment to be paid for in cash fourteen days afterdelivery. During the currency of the contract, the buyer

becomes insolvent and the price of one instalment isunpaid. The seller need not make further deliveries unlessthe price of that instalment is paid and cash is paid againstdelivery of subsequent instalments.

Section 47. Sellers lien


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1. Subject to the provisions of this Act, the unpaid seller of goods whois in possession of them is entitled to retain possession of them untilpayment or tender of the price in the following cases, namely :

(a) Where the goods have been sold without any stipulation as tocredit ;

(b) where the goods have been sold on credit, but the term of credithas expired ;

(c) where the buyer becomes insolvent.

2. The seller may exercise his right of lien notwithstanding that he isin possession of the goods as agent or bailee for the buyer.

A sellers lien is described as an additional security given to a personwho has a right to be paid, but he has a right to be paid besides and

independently of his lien. One of the objects of S.47 which confers thesellers lien is to protect a vendor from incurring an expense inmanufacturing or acquiring goods for which payment remains justly indoubt . The sellers lien is a particular lien arising in the precisecircumstances specified by the Act and not a general lien for all hisdebts due from the buyer and he cannot rely on the equitable principle

of the vendors lien.


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Section 48. Part delivery

Where an unpaid seller has made part delivery of thegoods, he may exercise his right of lien on the remainder,unless such part delivery has been made under suchcircumstances as to show an agreement to waive the lien.

Section 49. Termination of lien


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1. The unpaid seller of goods loses his lien thereon (a) when he delivers the goods to a carrier or other bailee

for the purpose of transmission to the buyer withoutreserving the right of disposal of goods;

(b) when the buyer or his agent lawfully obtains possession

of the goods; (c) by waiver thereof. 2. The unpaid seller of goods, having a lien thereon, does

not lose his lien by reason only that he has obtained adecree for the price of the goods.


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Section 49. Termination of lien Examples This section may be illustrated by the following examples:

1. Goods were sold and sent by the sellers at the request of the buyerto shipping agents of the buyer, and were put on board a ship by thoseagents. Subsequently, they were re-landed and sent back to the sellersfor the purpose of re-packing. While they were still in the possessionof the sellers for that purpose, the buyer became insolvent. Thereuponthe sellers refused to deliver them to the buyers trustee in bankruptcyexcept upon payment of the price. Held, that the sellers had lost theirlien by delivering the goods to the shipping agents, and their refusal todeliver the goods to the trustee was wrongful. Valpy Vs. Gibson1847

2. Sale of a stack of hay for 86, to be paid for as it is taken away,the whole to be removed by a certain date. Part, but only part, waspaid for and removed by a certain date, and two months after that datethe seller cut up and used the remainder. By doing so, the sellerwaived his lien, and the buyer successfully maintained an action

against him. Gurr Vs. Cuthbert 1843


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Section 50 Right of stoppage in transit Subject to the provisions of this Act, when the buyer of goods

become insolvent, the unpaid seller, who has parted with the

possession of the goods has the right of stopping them in transit, thatis to say, he may resume possession of the goods as long as they arein the course of transit, and may retain them until payment or tender ofthe price.

In order that the right may be exercised, the following conditions mustall be satisfiedthe seller must be unpaid, the seller must have partedwith the possession of the goods and the buyer must not haveacquired it. This last condition, as appears from the next section is thatwhich is shortly expressed by saying that the goods are in transit.Further, the right can only be exercised by a seller or a person in a

position analogous to that of a seller, the right to stop in transit isunknown outside the law of sale of goods. Lastly, it is a right againstthe goods themselves only.


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Section 52. How stoppage to transit is

effected

1. The unpaid seller may exercise his right of stoppage in transiteither by taking actual possession of the goods, or by giving notice ofhis claim to the carrier or other bailee in whose possession the goodsare. Such notice may be given either to the person in actualpossession of the goods or to his principal. In the latter case thenotice, to be effectual, shall be given at such time and in suchcircumstances that the principal, by the exercise of reasonablediligence, may communicate it to his servant or agent in time toprevent a deliver to the buyer.

2. When notice of stoppage in transit is given by the seller to thecarrier or other bailee in possession of the goods, he shall redeliver thegoods to, or according to the directions of, the seller. The expenses ofsuch re-delivery shall be borne by the seller.


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Section 52. How stoppage to transit is

effected

Examples The section may be illustrated by the following examples :

1. A railway company is in possession of goods as carriers when thesellers give notice of stoppage in transit. A sum of money is owing bythe buyers to the railway company. The railway company is notentitled to set up in priority to the sellers right of stoppage in transit ageneral lien exercisable by the company against the buyers as ownersof the goods.

2. An unpaid seller stops goods sent by sea at a port short of theirdestination. He is liable for the fright, not only to the part where thegoods were actually landed, but also to the port of their ultimatedestination. Booth & Co. vs. Cargo Fleet Iron Co. Ltd. 1916


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Section 64. Auction sale In a case of a sale by auction 1. Where goods are put up for sale in lots, each lot is prima facie

deemed to be the subject of a separate contract of sale ;

2. the sale is complete when the auctioneer announces its completionby the fall of the hammer or in other customary manner; and, until suchannouncement is made, any bidder may retract his bid;

3. a right to bid may be reserved expressly by or on behalf of the sellerand, where such right is expressly so reserved, but not otherwise, theseller or any one person on his behalf may, subject to the provisionshereinafter contained, bid at the auction;

4. where the sale is not notified to be subject to a right to bid on behalfof the seller, it shall not be lawful for the seller to bid himself or toemploy any person to bid at such sale, or for the auctioneer knowinglyto take any bid from the seller or any such person ; and any salecontravening this rule may be treated as fraudulent by the buyer ;

5. the sale may by notified to be subject to a reserved or upset price ; 6 if th ll k f t d d biddi t i th i th

51238471 Consumer Protection Sale of Goods Act 1930

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Transcript of 51238471 Consumer Protection Sale of Goods Act 1930