the sale of goods act

Q.No. 01:

What is condition & warranty ?

Ans. to the Q.No.01:

Section 12 of the sale of goods act states that a stipulation (or term) in a contract of sale with reference to goods may be a condition or a warranty.

Condition :

A Condition is a stipulation essential to the main purpose of contract , The breach of which fives rise to a right to treat the contract as repudiated-Sec 12 (2)

Warranty :

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 reject the goods and trat the contract as repudiated-Sec 12 (3).

Whether a stipulation in a contract of sale is a condition or a warrenty depends in each case on the construction of the contract.

A stipulation may be a condition , through called a warranty in the contract-Sec. 12 (4).

Q.No. 02:

Distinction between condition and warranty .

Ans. to the Q.No.02:

Title	Condition	Warranty
Purpose	Main purpose of the contract	Subsidiary to the main purpose of the contract
Essentials vs. Collateral	It is a stipulation which is essential to the main purpose to the main purpose of the contract.	It is a stipulation which is only collateral to the main purpose of the contract.
Right in case of breach	The aggrieved party can terminate the contract	The aggrieved part can claim damages but cannot terminate contract
Treatment	A breach of condition can be treated as a breach of warranty. For example, a buyer may like to retain the goods and claim only damages.	A breach of warranty cannot be treated as a breach of condition.

Q.No. 03:

Distinguish between sales and agreement for sale

Ans. to the Q.No.03:

Basic of Distinction	Sale	Agreement to sell
Transfer of Ownership	Transfer of ownership of goods takes place immediately	Transfer of ownership of goods is to take lace at a future time or subject to fulfillment of some condition.
Executed contract or Executory contract	It is an executed contract because nothing remains to be done.	It is an executor contract because something remains to be done.
Conveyance of proper	Buyer gets a right to enjoy the goods against the whole world including seller. Therefore a sale creates jus in rem. (Right against property)	Buyer does not get such right to enjoy the goods it only creates jus in personam (Right against the person)
Transfer of risk	Trasnfer of risk of loss of goods takes place immediately because ownership transferred. As a result, In case of distruction of goods,The loss shall become by the buyer even though the goods are in the possession of the seller.	Transfrred of risk of loss of goods does not take place because ownership is not transferred a results in case of destruction of goods.The loss shall be brone by the seller even though the goods are in the prossession of the buyer.
Right of seller against the buyers breach	Seller can sue the buyer for the price even through the goods are in his prossion.	Seller can sue the buyer for damages even through the goods are in the proession of the buyer .
Right of buyer against the sellers breach	Buyer can sue the  seller for damages and can sue the third party who bought these goods for goods.	Buyer can sue the seller for damage only
Effect of insolvency of seller having possession of goods	Buyer can claim the goods from the official receiver or assignee because the ownership of goods has transferred to the buyer	Buyer cannot claim the good even when he has paid the price because the ownership has not transferred to the buyer. The buyer who has paid the price can only claim reteable dividend.
Effect of insolvency of the buyer before paying the price	Seller must deliver the goods to the official receiver or assignee because the owenership of goods has transferred to the buyer.He can only claim reteable dividend for the unpaid price	Seller can refuse to deliver the goods unless he is paid full price of the goods because the ownership has not transferred to the buyer.

Q.No. 04:

“No seller of goods can give the buyer of goods a better title to those goods then he himself has “Discuss

Ans. to the Q.No.04:

General Rule :

The general rule is that only the owner of goods can sell the goods .No onecan convey to a transfree a better title than he himself has. If a person transfers articles not belonging to him,The transferee gets no title.

Latin phrase –“Nemo qui non habet “ Which means “ None can give does not himself possess” This rule applies to both movable and immovable property”

Exception:

1. Transfer of title by estoppels
2. Sale by mercantile agent
3. Sale by one of several joint owners
4. Sale by person on possession under voidable agreement
5. Sale by seller in possession of goods after sale
6. Buyer in possession of goods over which the seller has same rights
7. Re-Sale by an unpaid seller
8. Sale on provision of other acts or contract Act.

1. Sale by finder of goods
2. Sale by pownee
   Cases not coming within the exceptions.
   If is to be noted that apart from the cases maintained above ,the general rule applies, and no seller can give a better title that he himself has .
   Example:
   X found a ring, He made a reasonable search for the owner but did not find him. Search for the owner but did not find him.
   He them sold the ring to y. It was held that the true owner can recover the ring from y.
   
   
   Q. No. 05 :
   Meaning and essential element of contract of sale ( Section 4)
   Ans. to the Q.No.05:
   Meaning :
   According the section 4 (1) of the sale of goods act,1930
   “Contrcat of sale of goods is a contract whereby the seller transfers or agrees to another the property in goods to the buyer for a price ,” Contract of sale “ is a generic term which includes both a sale as well as an agreement to sell “
   
   
   Essential elements of contract of sale :

The aforesaid definition clearly indicates the essential elements shown below in :

1. Seller and buyer
2. Goods
3. Transfer of general property
4. Price
5. Essential element of a valid contract.

Q. No. 06 :

Meaning of goods [Section 2 (7)]

Ans. to the Q.No.06:

Goods means every kind of movable property other than actionable claims and money ,and includes the following :

1. Stock and shares
2. Growing crops .grass and thing attached to or forming past of the land which are agreed to be served before sale or under the contract of sale.
   Example of Goods:
   Old rare coins ,stock ,shares ,debentures , goodwill, patents ,trademark, copyright, water, gas ,electricity, grass, growing crops ,trees to be cut and their log wood delivered etc.
   Things excluded from the term “Goods “ :
   The term ‘goods “does not include the following:

1. Actionable claim, which means a claim to any debt or any beneficial interest in movable property not in possession such claims cannot be sold or purchased like goods ,they can only be assigned ,e.g. ,a debt from one person to another.
2. Money ,which means the legal tender and not the old rare coins.
3. Immovable property.
   
   
   Q. No. 07 :
   Type of goods [Section 6]
   
   
   Ans. to the Q.No.07:
   
   
   The goods which from the subject of a contract of sale may be classified in to following categories as shown below – 

Q. No. 08 :

Meaning of an unpaid seller [Section 45 (1)(2)]

Ans. to the Q.No.08:

The seller of Goods is deemed to be an “ Unpaid Seller “-----------

1. When the whole of the price has not been paid or tendered.
2. When a bill of exchange or other negotiable instrument (Such as cheque ) Has been received as conditional payment and it has been dishonored [Section 45 (1)]

The term “Seller “includes any person who is in the position of a seller.

Notes:

1. The seller shall be called an unpaid seller even when only a small portion of the price remains to be paid.
2. It is for the non-payment of the price and not for other expenses, that a seller is termed as an unpaid seller.
3. Where the goods have been sold an credit, the seller cannot be called as an unpaid seller during the credit period unless the buyer becomes insolvent ,on the expiry of credit period if the price remains unpaid ,then only the seller will become an unpaid seller.
4. Where the full price has been tendered by the buyer and the seller has refused to accept it , the seller cannot be called as unpaid seller.

Case (a) x Sold same goods to y for tk.10,000 y paid tk. 9,900 but failed to pay the balance.

X is an unpaid seller because the full price has not been paid.

Q. No. 09 :

Rights of an unpaid seller

Ans. to the Q.No.09:

The rights of an unpaid seller can broadly be classified under the following two categories.

1. Right against the goods
2. Right against the buyer personally

Right against the Goods :

1. Where the property in goods has passed to the buyer

• Right of lien
• Right of stoppage in transit
• Right of resale

1. Where the property in goods has not passed to buyer

• Withholding delivery
• Lien ‘Stoppage in transit
• Resale

Right against the buyer personally :

• Suit for price
• Suit for damage for non-acceptance
• Suit for interest
• Suit for damage for repudiation of the contract.

Q. No. 10 :

Rights of the Buyer ?

Ans. to the Q.No.10:

Following rights of the buyer :

1. Suit for damages for non-delivery
2. Suit for specific performance
3. Suit for breach of warranty
4. In case of repudiation of the contract
5. Suit for interest.

Q. No. 11 :

What do you understand by caveat Emptor? A set there any exceptions to its application to sale of goods ?

Ans. to the Q.No.11:

Caveat emptor is a Latin expression which means “ buyer beware “.The doctrine of convent emptor means that ordinarily , a buyer must by goods after satisfying himself of their quality and fitness .If makes a bad choice he cannot blame the seller on recover damages from him.

“ The rule probably originated at a time when goods were mostly sold in market overt, and the buyer therefore had every opportunity to satisfy himself as to the quality of the goods or their fitness for a particular purpose ,and at common law it was presumed that where the buyer could examine the goods even though he did not ,he relied upon his own skill and judgments.”

Exceptions:

1. Where the buyer relies upon the skill and judgment of the seller.
2. Where by custom an implied condition of fitness is annexed to a contract of sale .
3. Where there is a sale of goods by description, there is an implied condition that the goods are fit for sale.
4. Where the seller is guilty of Fraud .A contract of sale of goods must satisfy all the essential elements of a contract and therefore if the consent of the buyer was obtained by fraud, The seller is not protected by the doctrine of caveat Emptor.
   In case not falling under any of the tour exception noted above,The seller is not liable to any penalty if the goods purchased are found to be unfit by the buyer for the purposes he had in mind.

Q. No. 12 :

What is seller’s lien? Distinguish between a sellers lien and stoppage in transit?