SALE OF GOODS ACT 1930 TRANSFER OF PROPERTY

SALE OF GOODS ACT, 1930 TRANSFER OF PROPERTY Ms SAHER SAYED Assistant Professor DEPARTMENT OF COMMERCE SHAHEED BHAGAT SINGH COLLEGE

INTRODUCTION TRANSFER OF PROPERTY IN GOODS means Transfer of ownership of the Goods from seller to buyer. Property in Goods is different from Possession of Goods refers to the physical custody or control over the Goods whereas Property in Goods means ownership over the Goods.

IMPORTANCE OF TRANSFER OF PROPERTY Risk follows ownership: If property has passed to the buyer, he becomes the owner of the goods and then the risk of destruction, damage or loss. Action against third party: If goods are damaged by action of third parties, only owner of goods can take the action. Suit for price: Seller become entitled to recover price of goods only when property in goods has passed to buyer. Insolvency of seller or buyer: If the ownership has passed to buyer and buyer became insolvent, buyer’s official receiver can take possession of goods or vice versa.

RULES REGARDING TRANSFER OF PROPERTY [SECTION(18 -24)] Transfer of property in specific or ascertained goods Transfer of Property in case of Ascertained goods, must be at the intentions of the parties and as per the terms and conditions of both the parties. Rules for Ascertaining Intention of the Parties: transfer are as follows…… 1. Where Goods are in immediately deliverable state to the buyer. When the contract is unconditional, the transfer of property can be at the time when the contract is made. In this case, there is no need of transfer of price from buyer to the seller.

RULES REGARDING TRANSFER OF PROPERTY [SECTION(18 -24 )] 2. Where the Goods have to be put into a Deliverable State. Where there is a contract for some specific goods, the seller is bound to do something with the goods (packaging, cleaning etc. ) before, they are delivered to the buyers. Until then, the property can’t be transferred. 3. When the goods are in deliverable state, the seller is bound to weigh, measure or test the goods in order to decide the price of the product. The property doesn’t transfer, until the buyer does such things with the goods at the time of receipt of goods. 4. Where goods are delivered to the buyer on Approval of Sale or return or other similar terms, the property therein passes to the buyer.

Transfer of property in Unascertained goods 1. Ascertainment of goods: The transfer of property from the seller to buyer is possible, only when, the unascertained goods become Ascertained. Until the goods become ascertained, there can not be any agreement. In case of unascertained goods, the contract is possible only based on its description and the unconditional acceptance by the buyer for transfer of ownership. 2. Appropriation of goods: It means selection of goods matching to the intentions (requirement) of its performance, with the mutual consent of both, buyer and the seller (based on use or available money). Appropriation must be unconditional, with express or implied assent by both, the buyer and the seller. Appropriation means adoption or acceptance. Appropriation must be done by both the parties or at least by the buyer, who is falling in the contract.

3. Delivery to the Carrier: Where in pursuance of the contract, the seller delivers the goods to the buyer or a to a carrier or other bailee(whether named by the buyer or not) for the purpose of transmission to the buyer and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract.

RESERVATION OF RIGHT OF DISPOSAL (SEC. 25) The rights of disposal if lies with the seller, in any type of goods, the ownership remains with the seller until certain conditions are fulfilled. (Ex: Advance payment before delivery of goods) If the goods are shipped by the train & the bill of lading is on the name of seller or its agent. Hence until the condition of payment is fulfilled by the buyer, the ownership will not transfer to buyer.

TRANSFER OF TITLE BY NON-OWNERS (SEC. 27 -30) This rule is expressed by the maxim “Nemo dat quod non habet, ” which means no one can pass better title than what he had. The general rule is that only the owner of goods can transfer a good title. EXCEPTIONS : 1. Title by estoppel [Sec: 27]: When the owner of the goods, by his statement or conduct, lead the buyer to believe that the seller has the authority to sell, then subsequently he may be estopped from denying the sellers authority to sell. 2. Sale by a mercantile agent [Sec: 27]: An agent having in the customary course of business as such agent authority either to sell goods for the purpose of sale, or to buy goods, or to raise money on the security of goods.

3. Sale by joint owner [Sec: 28]: If one of the several joint owners of certain goods has the sole possession of the goods by permission of the other co-owners, the property (ownership) is transferred to any person who buys such goods from such joint owner. 4. Sale by a person in possession under a voidable contract [Sec: 29]: A person who has obtained possession of goods under a contract which is voidable on the ground of fraud, misrepresentation, coercion, or undue influence, can convey a good title, provided the sale takes place before the voidable contract is avoided. 5. Sale by a seller in possession of goods after sale [Sec: 30(1)]: A seller having sold goods, continues in possession thereof or title to the goods, the transfer by such person or by a mercantile agent acting for such person, of the same, by way of sale will pass a good title to the transferee, if such latter person has acted in good faith and without notice of the previous sale.

6. Sale by buyer in possession of goods after an agreement to sell [Sec: 30(2)]: A person having bought or agreed to buy obtains, with the consent of the seller, possession of the goods or of the documents of title to the goods. The delivery of such person, of the goods or documents, pledge or other disposition thereof will be valid and effective, if the person receiving the same, acted bonafide and without notice of the seller’s lien, if any. 7. Sale by an unpaid seller [Sec: 54(3)]: Where an unpaid seller who has exercised his right of lien or stoppage of goods in transit resells the goods, the buyers acquires a good title to the goods as against the original buyer.