Sale of goods act: Definitions

1.0 Buyer: The word "Buyer" means a person who buyers or agrees to buy goods.-Sec. !1"

1.1 Seller# The word "Seller" means a person who sells or agrees to sell goods.-Sec. !$"

1. %oods: The word "goods" means e&ery 'ind o mo&able property other than actionable claims and money- Sec. !("

%oods also includes )electricity* water*gas+ stoc' and shares* growing crops* grass* and things attached to or forming part of the land which are agreed to be se&ered before sale or under the contract of sale.

,-isting goods are goods which are already in e-istence and which are physically present in some person.s possession and ownership. -Sec./!1"

"0uture goods" means goods to be manufactured or produced or ac1uired by the seller after the ma'ing of the contract of sale.- Sec. !/"

2ontingent goods: There may be a contract for sale of goods the ac1uisitions of which by seller depends upon a contingency which may or may not happen. Sec. /! "

1.$ 3npaid Seller:

The Seller of goods is deemed to be an unpaid seller a" when the whole of the price has not been paid or tendered !b" when a bill of e-change or other negotiable instrument has been recei&ed as conditional payment

and the condition on which it was recei&ed has not been fulfilled by reason o the dishonor of the instrument or otherwise. Sec. 45!1"

1.4 0ault means wrongful act or default.

1.5 0uture goods means goods to be manufactured or produced or ac1uired by the seller after the ma'ing o the contract of sale.

1./ %oods means e&ery 'ind of mo&eable property other than actionable claims and money* and includes electricity* water* gas* stoc' and shares* growing crops* grass* and things attached to or forming part of the land which are agreed to be se&ered before sale or under the contract of sale

1.( 6dperson is said to be insol&ent who has ceased to play his debts in the ordinary course of business* or cannot play his debts as they become due* whether he has committed an act of insol&ency or not.

1.7 8erchant agent means a mercantile agent ha&ing in the customary course of business as such agent authority either to sell goods* or to consign goods or purposes of sale* or to buy goods* or to raise money on the security of goods.

1.9 :rice means the money consideration for a sale of goods.

1.10 :roperty means the general property in goods* and not merely a special property.

1.11 e-pressions used but not defined in this 6ct and defined in this 6ct and defined in the contract 6ct-17( * ha&e the meanings assigned to them in That 6ct.

Sale of goods act: 19(9 The sale of %oods 6ct is related to the sale of mo&able goods. The act came in to force on 1st ;uly* 19$0. <t closely follows the ,nglish act on the sub=ect. The

sale of goods 6ct 19(9 is a British 6ct of parliament !19(9* ch 54" which regulates contracts in which goods are sold and bought. The 6ct consolidates the Sale of %oods 6ct 179$ and subse1uent legislation* which in turn consolidated the pre&ious common law.

The 6ct lays down a small number of compulsory legal rules* but these restrictions are minimal: the bul' of 6ct is concerned with an array of presumptions and implied terms* which aim to reflect the commercial e-pectations in the most commonly agreed sales contracts. <n the absence of contrary agreement these terms will go&ern a contract within the 6ct.s remit. The benefits in efficiency !through lower bargaining costs" and legal certainty ha&e led to many =urisdictions adopting the legislation wholesale* and &ersions of the sale of goods 6ct ha&e been adopted in almost all the formal territories of the British ,mpire and 2ommonwealth !with the notable e-ception of 2anada* which has adopted hybrid legislation incorporating elements o the 3S 3niform 2ommercial 2ode".

>&er the years a large amount o commercial ?aw grew up* much of it de&eloped by traders themsel&es. 6 significant amount o this man made law is now embedded in statute law through 6cts of parliament such as the Sale of %oods 6ct that applies to all contracts where the seller transfers or agrees to transfer property in goods to the buyer for a money consideration called price.

The Sale of %oods 6ct :ermits the consumer options that are not open to him in the ordinary case law relating to contract. The 6ct !as amended in 1994" ma'es for the fast rectifying of problems in a commonsense manner. <t is intended to ma'e clear the rights and obligations of both parties and to a&oid the need for formal legal action such as going to court.

>ne of the goods things about the Sales of %oods 6ct is its clearity and the shortness of the 6ct itself. <t is easy to read and understand.

<n contrast law the usual remedy for breach of condition or warranty is damages. This may not be appropriate for someone who has bought a computer

that does not wor'. The consumer will want to go bac' the shop and either ha&e his money refunded or a replacement item. 6ll of this is the entitlement of the consumer and does not depend on shop'eeper goodwill.

The 6ct applies to all contracts where property .goods. is transferred or agreed to be transferred for a monetary consideration.

@ature of contract

Sale is an .e-ecuted contract. because in sale* consideration mo&es simultaneous with promises of both parties. 6lso* in a sale the property of specific goods is transferred to the buyer immediately. But an "agreement to sell" is an .e-ecutor contract. because the consideration is to mo&e at a future date. 6lso the :roperty of specific goods passes to buyer later.

The ,ssential ,lements

The essential element of a contract for the sale of goods is enumerated below:

1. Movable Goods:

The sale of goods 6ct deals only with mo&able goods li'e building* land* mines* etc* e-cepting actionable claims and money. This 6ct does not apply to immo&able properties.

2. Movable Goods, for Money: There must be a contract or the e-change of mo&able goods for money. Therefore in a sale there must be money-consideration. 6n e-change of goods for goods is not a sale. But it has been held that if an e-change is made partly for goods and partly for money* the contract is one of sale. 6ldridge &.;ohnson.

3. Two parties: Since a contract of sale in&ol&es a. change of >wnership* it follows that the buyer and the seller must be different persons. 6 sale is a bilateral contract. 6 man 6 man cannot buy from or sell goods to himself. To this rule there is one e-ception* pro&ided for in Sec.4!1"of the sale o goods act. 6 part-ownercan. =ell goods to another part-owner. There fore a partner may sell goods to his firm and the firm may sell goods to partner.

Examples:

!i" : A B are each of them 1C owners !if a certain stoc' of mo&able goods. : can sell his rights to B. 6fter the sale B becomes owner of 1C share.

!ii" 6 club supplies food to the members. 6ny member ta'ing it has to pay its cost to the club. Thus a member o the club pays to the members =ointly i.e. to the club. This transaction is a release of =oint interest of the other members of the club.D 8ember of a club or &oluntary society are undi&ided =oint owners* Dot part-ownersD Therefore it is not asale. %raff & ,&an.

4. 0ormation of the contract of sale: 6 contract of sale is made by and offer to buy or sell goods for a price and the acceptance of such offer. The contract may pro&ide for the immediate deli&ery of the goods or immediate payment of the price or both* or for the deli&ery and payment by instalments* or that the deli&ery or payment or both shall be postponed.

5. 8ethod of forming the contract : Sub=ect to the pro&ision of any law for the time being in force* a contract of sale may be in writing* or by word of mouth* or may be implied from the conduct of the parties.

/. The terms of contract: The parties may agree upon any term concerning the time* place* and mode of deli&ery. The terms may be of two types: essential and non-essential. ,ssential terms are called 2onditions* non-essential terms are called warranties. The Sale of %oods 6ct pro&ides that in the absence of contract to the 2ontrary* certain conditions are warranties are to be implied in an 2ontracts of Sale.

(. >ther essential elements: 6 contract for the sale of goods must satisfy all tile essential elements necessary for the formation of a &alid contract* e.g.* the parties must be competent to contract* there must be free consent* there must be consideration* the ob=ect must be lawful etc.

Dissolution of a partnership firm: Dissolution of a firm means the end o a firm by the brea' up o the relation of partnership between all the partners. Dissolution is to be distinguished from reconstitution of a firm. <n the latter case* the partnership continues but there is a change in the number of partners. <n the former case there is complete se&erance of =ural relations between all the partners. The grounds of Dissolution 6 firm may be dissol&e on any o the following grounds: 1. By agreement !Sec.40" 6 firm may be dissol&e any time with the consent of all the partners of the firm. :artnership is created by contract# it can also be terminated by contract. . 2ompulsory Dissolution !Sec 41" 6 firm is dissol&ed a" By the ad=udication of all the partners or of all the partners but one as insol&ent* or b" By the happening of any e&ent which ma'es the business of the firm unlawful.

But if a firm has more than one underta'ing* some of which become unlawful and some remain lawful* the firm may continue to carry on the lawful underta'ings. $. >n the happening of 2ertain 2ontingencies !Sec. 4 " Sub=ect to contract between the partners* a firm is dissol&ed a" <f constituted for fi-ed term* by the e-piry of that term# b" <f constituted to carry out one or more ad&entures or underta'ings* by the completion thereof# c" By the death of a partner# and d" By the ad=udication of a partner as an insol&ent. The partnership agreement may pro&ide that the firm will not be dissol&ed in any of the aforementioned cases. Such a pro&ision is &alid. 4 .By notice !Sec. 4$" Ehere the partnership is at will* the firm may be dissol&ed by any partner gi&ing notice in writing to all other partners of his intention to dissol&e the firm. The firm is dissol&ed as from the date mentioned in the notice as the date of dissolution* if no date is mentioned* as from the date of communication of the notice. 4. Dissolution by the court !44" 6t the suit of a partner* the court may dissol&e a firm on any one of the following grounds: a" <nsanity: <f a partner has become of unsound mind. The suit for dissolution in this case filed by the ne-t friend of the insane partner or by any other partner. b" :ermanent incapacity: if a partner becomes permanently incapable of performing his duties as a partner. :ermanent incapacity may arise from an incurable illness li'e paralysis. The suit of dissolution in this case must be brought by a partner other then the person who has become incapable c" %uilty 2onduct: if a partner is guilty of conduct is li'ely to affect pre=udicially the carrying on o the business* regard being had to the nature o the business. To =ustify dissolution under this clause the misconduct must be o such a nature as to affect ad&ersely the particular business concerned. The suit of dissolution on the ground mentioned in this clause must be brought by a partner other then the partner who is guilty of misconduct. d" :ersistent Breach of 6greement: if a partner wilfully and persistently commits breach of the partnership agreement regarding management or otherwise conducts himself in such a way that it is not reasonably practicable or the other partners to carry on business in partnership with him. The suit for dissolution in cases coming under this clause is to be brought by a partner other then the partner guilty of the acts complained of.

e" Transfer of whole interest: < a partner has transferred the whole of his interest in the firm to an outsider or has allowed his interest to be sold in e-ecution of a decree. Transfer of a partnerFs interest dowse not by itself dissol&e the firm. But the other partners may as' the court to dissol&e the firm if such a transfer occurs. f" ?oss: <f the business of the firm cannot be carried on e-cept at a loss. Since the moti&e* with which partnership are formed* is ac1uisition of gain* the courts ha&e been gi&en discretion to dissol&e a firm in cases where it is impossible to ma'e profits.

g" ;ust and ,1uitable clause: <f the court considers it =ust and e1uitable to dissol&e the firm. The firm dissol&es.

6gents duties to the principals 1. 6gents duty in conduction principleFs business: 6n agent must bound to conduct a business according to the gi&en directions from the principal or in absence of the principal or such direction he must do what any one do in order to carry on these business. Sec. 11 . S'ill and diligence re1uired from agent : 6n agent is bound to conduct not run 6 business in such a manner and with as much 'nowledge and s'ills that Should a person need to ha&e in order to run a business. Sec. 1 $. 6gent duty to render account: >n demand or periodically if so pro&ided in the agreement an agent is bound to render proper accounts to his principal.Sec. 1$ 4. 6gent duty to communicate to principal: <n any 'ind of difficulties where the agent has to e-ercise his gi&en authority must communicate with the principle. Sec. 14 5. 6gent not to deal on his own account: < an agent deals on his own account without the concern of the principal for his own benefits* then this circumstance the principal can repudiate the transaction. Sec. 15 /. :rincipal to get benefit of agentFs dealings: agent can not conduct any business on his own account instead of principalFs account. <f does then the principal can claim for that. Sec. 1/. (. 6gentFs duty to pay sums recei&ed for principal: an agent has to pay the entire amount recei&ed for principal after deducting his remuneration. Sec 17. 7. :rincipals death or insanity: when an agency terminated due to the death* insanity or unsound mind of the principal. The agent has to ta'e charge on behalf of the principal and ta'e reasonable steps in order to protect and preser&e the interest entrusted him. Sec. 09

9. 8iscellaneous: Some other duties of agent are he must be loyal to the principal and pro&ide all the information. Ge must not dele gate his authority and must not set up ad&erse title against the principal* etc.

:rincipalFs duties to agent 1. 6gent to be identified agencies conse1uence of lawful act: The principal is bound to identify and assure the agent against the conse1uence of all lawful acts. the agent has full authority to e-cise though same instructions are gi&en by the principal. Sec. ,-ample: H* who is the agent of I principal contracts with J to deli&er certain medicines to him. I does not send the medicines to H and conse1uently J sa&es H for breach of contract. H informs I of the suit and I authoriKed him to defend the suit. H defends the suit and I authoriKed him to defend the suit. H defends the suite and is compelled to pay damages and costs and is compelled tp pay the damager and costs and incurs e-periences. Gere* I is liable to H for such damages* costs and e-periences. . 6gent to be indemnified against conse1uences of acts done is good faith L when the principal or the employer is responsible to indemnify and assure the agent against the conse1uences of that act* though it causes an in=ury to the rights of third party. Sec. $$. ,-ample : 6t the re1uest of :* B sells goods which is in the possession of :* but that : had not right to dispose of since B does not 'now this* so hands o&er the proceeds of the sate of :. 6fterwards* M the true >wner of the goods* sues B and reco&ers the &alue of goods and costs. Gere : is liable to indemnify B for what he has been compelled to pay to M and or BFs own e-penses. $. @on-liability for criminal acts: Ehere one person employs another to do an act which is criminal or unlawful* the employ is not liable and responsible to the agent* either upon an e-press or an implied promise* to indemnify him against the conse1uences of that act. Sec. 4. ,-ample : M employs S to beat T* and agrees to indemnify him against all conse1uences of the act. S thereupon beats T* and has to pay damages to T for doing this. M is not liable to indemnity S for those damages. 4. 2ompensation for principalFs neglect: The principal must male any type of compensation to his agent in case of any in=ury and harmfulness which can be caused to an agent of negligence or want of s'ill by the principal. Sec. 5. ,-ample : 8 employs @ as a news paper &endor and while selling newspaper* @ was in=ured. So 8 must ma'e compensation to @.

2ondition as to title !Sec. 14": Sec. 14 incorporates into the contract a term that the seller either has legal title to the property to be sold or that he will ha&e title at the time when property is to pass. Two warranties are additionally implied that the buyer will en=oy 1uiet possession of the goods and that the buyer will en=oy 1uite possession of the goods and that the goods will be free from any encumbrances !such as sellersF lien or a third party ha&ing lien o&er the goods" . These terms can be harash in their application: contro&ersially* the case of Mowland & Di&all held that re=ection of goods found to be in breach of s. 1 will allow the buyer to reco&er the full price paid * with no allowance for the buyerFs !potentially e-tensi&e" use of the goods. Mowland & Di&all !19 $"- The facts of the case is as follows. Di&all bought a car from a man who had stolen it and then sold it on to Mowland. Mowland repainted the car and sold it again to a third party. The police seiKed the car from the third party* and Mowland reimbursed him the the purchase price* see'ing then to reco&er his purchase price from Di&all. The 2ourt held that the defendant was in breach of section 14 of The Sale of %oods 6ct* which implies conditions and warranties into the sale o goods. The court also held that there had been a total failure of consideration in spite of the fact that M had had the use of the car. Mestitution of the purchase price was allowed* with no deduction for the period of use* on the basis that M had contracted for the ownership of the car and not merely the ability to use it. 6lso see @iblett ?td & confectioners 8aterials 2o !19 1" 5. Sale by description !Section" Ehere there is a contract for the sale of goods by description