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Summary notes

The Indian contract act 1872

Chapter 1 – introduction and nature of contracts

Contract

According to section 2(h) “an agreement enforceable by law is a contract”

Agreement

According to section2 (e)” every promise and every set of promises forming the consideration for each other is an agreement

Essential elements of a valid contract

1. Offer and acceptance 2. Consideration 3. Capacity 4. Agreement 5. Free consent

6. Lawful agreement

Types of contract

1. Void contract: according to section 2(j) a contract which ceases to be enforceable by law becomes the void when it ceases to
be enforceable

2. voidable contract according to section 2(i) an agreement which is enforceable by law at the option of one or more of the
parties there to but not at the option of the other or others is a voidable contract

3. Illegal contracts: it is a contract which the law forbids to be made.

4. Unenforceable contract: where a contract is good in substance but because of some technical

5. Express contracts: a contract which is made by words either spoken or written

6. Implied contract: by implied contract means implied by law

7. Tacit contract: A contract inferred from the conduct of the parties

Classified on the basis of performance: such contracts may be executed, executor, unilateral and bilateral

8. Executed contract: if the consideration for the promise had been given

9. Executor contract: consideration is to be performed in future.

10. Unilateral contract: a contract in which only one party has to perform his promise

11. Bilateral contract: where the litigation is outstanding on the part of both the parties

Formal contract:

(a) Contract of record: a contract of record is either a judgment of a court or a recognizance

(b) Contract under seal: it is writing signed, sealed and delivered by the parties. It is also called a deed or a specialty contract

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Proposal offer

Section 2(a) of the Indian contract act 1872 defines an offer as-

“When one person signifies to another his willingness to do or abstain from doing anything with a view to obtaining the assent
of the other to such act or abstinence he is said to make a proposal”

For example, A says to B will you purchase may car for RS 50,000? It will be a valid offer.

Essentials of a valid offer

The essential of a valid offer are as follows:

1. An offer must be one to give to legal; consequences

CASE LAW: Belfour

2. The terms of the offer must be definite

3. An offer must be distinguished from an invitation to offer

Case law: In pharmaceutical society of great Britain Vs. Bots cash chemists (southern) ltd.,

4. Every offer must be communicated to the offeree

EXPRESS OFFER AND IMPLED OFFER

EXPRESS OFFER: an offer made either by words spoken or written is an expenses offer.

GENERAL OFFER: Offer inferred from the conduct (action or behavior) of the parties is known as implied offer

SPECIFIC OFFERS

Lalman Shukla v. gauri Datt

GENERAL OFFER Where an offer is made to the whole world

Case law Carlill v. Smoke Ball co.

COUNTER OFFER: an offer made in return of an original offer is known as counter offer.

Result: counter offer results in rejection of original offer

Cross offer: when two parties exchange identical offers in ignorance of each other’s offers

Standing open or continuing offer: offer allowed to remain open for acceptance for over a period of time is known as standing
offer.

Lapse and revocation of offer [section 6] A proposal is revoked

1. by the communication of notice

2. Be the lapse of the time

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3. By the failure of the acceptor to fulfill a condition precedent to acceptance; or

4. by the death of insanity

5. by subsequent illegality or destruction of subject matter

Acceptance

According to section 2(b) when the person whom the proposal is made signifies his assent thereto the proposal is said to be
accepted. The proposal when accepted becomes a promise

Therefore in order to convert an offer into a promise the acceptance must be

1. absolute and unqualified (section 7(1))

2. Reasonable and usual manner (section 7(2)

3. Communicated to the offeror

4. within reasonable time

5. Competent person

6. Acceptance cannot be implied from silence

Communication hen complete [section 4]

The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made.

The communication of an acceptance is complete-

As against the proposer when if is put in a course of transmission to him so as to be out of the power of the acceptor

As against the acceptor when it comes to the knowledge of the proposer

Revocation of proposals’ and acceptance [section 5]

A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer but not
afterwards

An acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor
but not afterwards.

CHAPPTER 2. CONSIDERATION

Consideration [section 2(d) “ when at the desire of the promisor the promisee or any other person has done or
obtained from doing or does or abstains from doing or promises to do or so obstain to do or abstain fro doing. Something such
act abstinence or promise is called from doing. Something such act or abstinence or promise is called a consideration for the
promise”

Legal rules of consideration

1. Consideration must move at the desire of the promisor

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2. Consideration may move from the promisee or any other person

Case law: Chinnaya Ram v. Ramayya

3. Consideration need not be adequate :

4. Consideration must not be illusory but real and competent

Pre – existing legal obligation

Consideration must be legal or lawful [section 23]

7. It may be past present or future

Stranger to the contact cannot sue on it”. Explain state any exceptions to the principal

CASE LAW: DUNLOP[ PNEUMATIC TYRE CO. LTD. VS. SELFRIDGE & CO. LTD.

Exceptions to the rule of privity of contract

(1) A beneficiary.
(2) Marriage settlement partition or other family arrangements:
(3) Acknowledgement or estoppel
(4) Agency
(5) Assignment
(6) Conditions running with the land

Contract without consideration – when valid

Agreement made on account of love and affection

Promise for compensation of voluntary services

To create am agency

completed gift

A promise to pay a time barred debt

Chapter 3- other essential elements of a valid contract

Capacity of parties

According to section 10 party entering into a contract must be competent to contract who is of the age of majority according to
the law to which he is subject is of sound mind and is not disqualified from contracting by any law to which he is subject:

Position of minor’s agreement

(1) An agreement with or by a minor is void ab initio

Case law: Mohori Bibi Vs. Dharamdas Ghose
(2) Minor can be a promisee or beneficiary
(3) No ratification on attaining majority
(4) Doctrine of restitution is not possible

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(5) No estoppel and can plead minority
(6) No specific performance
(7) He cannot enter into a contract of partnership
(8) His property is liable for necessaries supplied
(9) His parents or guardian are not liable for the contract entered into by him.

Sound mind

A person is of unsound if he is:

(i) An idiot
(ii) A lunatic
(iii) A drunken person

Person disqualified from entering into a contract

(1) Alien enemy

(2) Convicts
(3) Foreign diplomats and ambassadors
(4) Insolvent person
(5) Body corporate

FREE CONSENT

Meaning of consent [section 13] two or more persons are said to consent when they agree upon the same thing in the same
sense.

Contract without free consent – not valid

According to section 15 of Indian contract act “consent is said to be free when it is not caused by___

(1) Coercion as defined in section 15 or

(2) Undue influence as defined in section 16 or
(3) Fraud as defined in section 17 or
(4) Misrepresentation as defined in section 18 or
(5) Mistake subject to the provisions20,21,22

Coercion

According to section 15 “ coercion is the committing or threatening to commit any act forbidden by the Indian penal code (45
to 1860) or the unlawful detaining or threatening to detain any property to the prejudice of any person whatever with the
intension of causing prejudice any person to enter into an agreement. It is immaterial whether the Indian Penal code (45 to
1860) is or is not in force in the place where coercion is employed.

Thereat to commit suicide amounts to coercion- Yes

Effect of coercion: the contract is voidable at the option of the party whose consent was obtained by coercion.

Undue influence

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Meaning of undue influence [section 16(1)]

A contract is said to be induced by undue influence’ where the relations subsisting between the parties are such that one of the
parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other.

Deemed position to dominate the will of another [section 16 (2)]

(a) real or apparent authority or fiduciary where the relations subsisting between the parties are such that one of the parties is
in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other.

Deemed position to dominate the will of another [section 16(2)]

(a) Real or apparent authority or fiduciary relation

(b) Whose mental capacity is affected by reasons of age illness or mental or bodily distress.

Where the actions are done in normal course of business it will not amount to undue influence example- lending money at
high rate of interest in case of shortage of money in the market.

Fraud

Definition of fraud: according to section 17

‘fraud means and includes any of the following acts committed by a party with an intension of deceiving the other party.

(1) The suggestion as a fact of that which is not true by one who does not believe it to be true:
(2) The active concealment of a fact by one having knowledge or belief of the fact;
(3) A promise made without any intension of performing it;
(4) Any other act fitting to deceive;
(5) Any such at or omission as the law specially declared to be fraudulent.

Silence as to facts

Mere silence as to facts likely to affect the willingness of a party to enter into a contract is not fraud

Exceptions:

(1) Where the party stands in fiduciary relationship with the other
(2) Where silence is in itself equivalent to speech
(3) Partial disclosure of truth which deceives the party is a fraud

Effect of fraud

1. voidable 2. Damages 3. RestitutioN

Definition of misrepresentation

According to section 18 “misrepresentation” means and includes-

(a) The positive ascertain not warranted by the information

(b) Any breach of duty which without an intent to deceive
(c) Innocent mistake
SUGGESTION OF A FACT WHICH IS NOT TRUE BY ONE WHO BELIEVES IT TO BR TRUE IS A MISREPRESENTATION.

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Effects of misrepresentation

The contract affected by misrepresentation is voidable at the option of aggrieved party

Mistake (section 20 to22)

Meaning of mistake: mistake is the erroneous belief about some thing

The mistake may be of the following kinds:

1. mistake of law 2. Mistake of fact

1. ,mistake of law

Mistake of law may be of the following two kinds:

(a) mistake of Indian law i.e. mistake of law force in India mistake of Indian law does not render a contract void or voidable i.e.
valid

(b) mistake of FOREIGN law . treated as if it were a mistake of fact .

2. mistake of fact

Mistake of fact may be of the following two kinds

(a) Bilateral mistake . the agreement is void

Bilateral mistake may be-

I. Mistake as to existence of subject matter or

II. Mistake as to identity of subject matter; or
III. Mistake as to quality and substance of subject matter
IV. Mistake as to quantity of subject mater
V. Mistake as to title of the subject matter
VI. Mistake as to possibility of performance either legal or physical

(b) Unilateral mistake a contract I neither void nor voidable due to uniteral mistake

Legality of object and consideration

According to section 10. All agreements are contracts if made for unlawful consideration and with a lawful object.

According to 23 The consideration or object of an agreement is lawful unless_

(i) forbidden by law : (a) which are punishable under the Indian penal code and (b) any acts prohibited by special legislation

(ii) if it is of such nature that if permitted it would defeat of the provisions of any law:

(iii) defeat of any rule for the time being in force in India

(iv) if the object is Fraudulent:

(v) if it involves injury to the person or property of another

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(vi) if the court regards it as immoral: an agreement whose object or consideration is immoral is illegal and void

(vii) Agreement opposed to public policy: an agreement opposed to public policy is void.

Agreements opposed to public policy

(a) Trading with enemy

(b) Stiffing prosecution
(c) Champerty and maintenance
(d) Interference with the course of justice
(e) Marriage brokerage contracts
(f) Interest against duty or obligation
(g) Sale of public offices
(h) Agreement for the creation of monopolies
(i) Agreement in restraint of marriage (section 26)
(j) Agreement in restraint of trade (section 27)

Chapter 4- performance of contracts

Mode of performance

As per section 37 there are two modes of performance:

1. actual performance 2. Offer to performance i.e. attempted performance

1. actual performance: it is the fulfillment of obligations arising from a contract by both of the parties.

2. attempted performance or tender of performance: when a party offers to perform but is not able to perform as the other
party to the contract does not accept the performance

BY WHO CONTRACT MAY BE PERFORMED

I. Promisor himself
II. By the promisor or by his agent
III. By the legal representatives
IV. Third persons
V. Joint promisors

Liability of joint promisors [section 42 to 44]

(1) All promisors must jointly fulfill the promise [section 42]
(2) Anyone of the joint promisors may be compelled to perform [section 43]

(iii) if any of the joint promisors makes a default in making his contribution the remaining joint promisors must bear the loss
equally.

(3) Effect of release of joint promisors [section 44]: does not discharge the other joint promisor

Time and place of performance [section 46 to 50]

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I. If no time is specified within a reasonable time.
II.
III. If a promise is to be performed on a specified date during the usual hours of business on such day .
IV. When no place is fixed a reasonable place for the performance of the promise.
V. Where the promisor has not undertaken to perform the promise without an application it is the duties of the
promisee apply for performance at a proper place and within the usual hours of business.

Performance of reciprocal promise

I. Promisor not bound to perform unless reciprocal promisee ready and willing to perform [section 51]
II. Order of performance of reciprocal; promises [section 52]: where the order is expressly fixed they shall be
performed in that order and where the order is not expressly fixed they shall be performed in that order and
where the order is not expressly fixed than according to the nature of the transaction requires.

Exceptions

I. Sale of goodwill
II. Partner’s agreement
a) Restriction on existing partner
b) Restriction on outgoing partner
c) Restriction on partners upon or in anticipation of the dissolution of the firm
d) Restriction in case of sale of goodwill of a firm (section 55 of the partnership act 1932)
e) Restraint by a contract of service.

(k) Agreement in restraint of legal proceedings (section 28)

Exception

(l) Reference to arbitration

Agreement which expressly declared to be void

(a) Consideration unlawful; in part

(b) Agreement the meaning of which is uncertain (section 29)
(c) wagering agreement

Meaning: a promise to give money’s worth upon the determination or ascertainment of an uncertain event.

An agreement by way of a wager is void

Essentials of wagering contract

1. promise io pay money’s worth :

2. uncertain event
3. one to lose other to win
4. no control over the event
5. past present or future events
6. no other interest in the event
7. unlawful event

special cases

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1. lottery: agreement is void
2. crossword puzzles: not a wagering agreement
3. insurance contracts: is not a wagering agreement
4. chit fund : chit fund is not wager
5. exception in favour of certain prizes for horse racing
chapter 5 breach of contract

The following remedies are available to the aggrieved party in case of breach of contract:

1. suit for damages 2. Suit upon quantum meruit 3. Rescission of contract 4. Suit for specific
performance 5. Suit for injunction

1. suit for damages

Liability for damages

(a) liability for special damages

(b) liability to pay vindictive or exemplary damages
(c) liability to pay nominal damages
(d) damages for deterioration caused by delay:

2. Suit upon quantum meruit: the phrase ‘quantum meruit’ means as much as is earned or” according to the quantity of work
done “ or in proportion to the work done

(a) Where the work has been done and accepted under a contract which is subsequently discovered to be void in such a case
party is entitled to recover the amount for the work done

(b) Where a person does some act or delivers something to another person with the intension of make payment if he
accepts such services or goods or enjoys their benefit.

3. Rescission of contract

4. Suit for specific performance

5. Suit for injunction

Chapter 6= contingent and quasi contracts

Contingent contracts

According to section 31, contingent contract is a contract to do or not do something if some event collateral to such contract
does or does not happen.

Rules relating to enforcement

1. Enforcement of contracts contingent on an event ‘happening’: cannot be enforced by law unless and until that event has
happened. If the event becomes impossible such contracts become void.

3. Liability of party preventing event on which the contract is to take effect [section 53] the contract becomes voidable at the
option of the party so prevented and he is entitled to compensation from the other party

Effects of failure to perform at a time fixed in a contract in which time is essential

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1. where time is the essence of contract: becomes voidable at the option of the promisee
2. where time is not the essence of contract: where time is not essential the contract cannot be avoided
3. effect of acceptance of performance at time other than agreed upon: in such an event he cannot claim compensation
unless at the time of acceptance of the performance he has given a notice to the promisor of his intension to claim
compensation.

Substitution of contract

(a) novation: on novation the old contract is discharged and consequently it need not be performed
(b) effect of rescission: when the p[arties to a contract agree to rescind it, the contract need not be performed
(c) Effect of alteration of contract: the terms of contract may be so altered by mutual agreement that the alteration may
have the effect of substituting a new contract for the old one.

Discharged of a contract

A contract may be discharged in any of the following ways:

(i) Discharge by performance: performance may be

(1) actual per performance or (2) attempted may be

Actual performance when each of the parties has done what he had agreed to do under the agreed to do under the agreement

Attempted performance or tender: when the promisor offers to perform his obligation but the promisee refuses to accept the
performance.

(ii) Discharge by mutual agreement

(iii) Discharge by impossibility of performance
(iv) Discharge by lapse of time
(v) Discharge by operation of law
(vi) Discharge by breach of contract

Effect of anticipatory breach:

(i) Treat the anticipatory breach as actual breach and sue for damages immediately
(ii) Treat the contract as subsisting and wait till the date of performance

2. enforcement of contracts contingent on a event not happening : where a contingent is made to do or not do anything if
an uncertain future event does not happen it can be enforced only when the happening of that event becomes impossible
and not before.

3. when shall an event on which contract is contingent be deemed impossible, if it is the future conduct of a living person:
the event shall be considered to have become impossible when such person does anything which renders it impossible
that he should so act within any definite time or otherwise

4. Agreement contingent on impossible event (section 36): A contingent agreement to do or not to do anything. If an
impossible event happens is void.

Quasi – contract

An obligations imposed by law upon a person for the benefit of another even in the absence of a contract is known as
quasi contracts.

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Types of Quasi – contracts

(a) Claim for necessaries supplied to persons incapable of contracting (section 68)
(b) Right to recover money paid for another person:
(c) Obligation of a person enjoying benefits of non gratuitous act (section 70)
(d) Responsibility of a finder of goods [section 71]
(e) Liability for money paid or thing by mistake or under coercion [section 72

The sale of goods act 1930

This act came into force on 1st day of July 1930 and it extends to the whole of INDIA except the state of Jammu and Kashmir.

Definitions

Section 2 of the sale of goods 1930 defines the terms which have been frequently used in the act which are as follows:

(a) Buyer and “seller:

Buyer [section 2(1)]: seller means a person who sells or agrees to sell goods. A seller includes not only a person who sells but
also the one who agrees to buy is a buyer.

Seller [section 2(13) : seller means a person who sells or agrees to sell goods. A seller includes not only a person who sells but
also a person who agrees to sell.

(b) goods and other related terms:

(I) “ goods” [ section 2(7)]: goods means every kind of movable property other than actionable claims and money’ and includes
stock and shares growing crops , gross and things attached to or forming part of the land which are agreed to be served before
sale or under the contract of sale.

(ii) existing goofs section 6]: future goods means those goods which are to be manufactured or produced or acquired by the
seller after making the contract of sale. Thus under the act a contract of sale of future goods

(iv) Specified goods: it means goods indentified and agreed upon at the time the contract of a sale has been made.

(a) ‘generic or unascertained goods: these are those goods which are defined only by description and not indentified and
agreed upon.

(b) ascertained goods: it means those goods which are indentified in accordance with the agreement after the contract of sale
has been made

(v) deliverable state: goods are said to be in a deliverable state when they are in such a condition that the buyer would under
contract be bound to take delivery of them.

© delivery – its forms and derivatives

Meaning : delivery means voluntary transfers of possession by one person to another [(section 2(2)]

Types of delivery:

1. Actual delivery: it is actual when the goods are physically delivered to the buyer

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2. Constructive delivery: when it is effected without any change in the custody or actual possession of the thing as in
the case of delivery by attornment (acknowledgement )
3. Symbolic delivery: when there is a delivery of a thing in token of a transfer of something else, i.e. delivery of goods in
case of transit may be made by handling over documents of title to goods, like bill of loading or railway receipt or
delivery orders or the key of a warehouse containing the goods is handed over to buyer.

Difference between a document showing title and document of title

A share certificate Is a document showing title but not a document of title

(e) mercantile agent [section 2(9)]: it means an agent having in the customary course of business as such agent and
authority either to sell goods or to consigns goods

(f) property [section 2(11)]:

General property : it means right of owner ship in goods

Special property: it means a right of a person which is inferior to the right of ownership. Special property

Special property: it means a right of a person which is inferior to the right of ownership. Special property signifies limited
rights attached with the goods.

(g) insolvent section 2(8): where a person ceased to pay his debts in the ordinary course of business______

Contract of sale

According to section 4(1) of the sale of goods act 1930 contract of sale is

“ a contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the
buyer for a price”

Distinction between sale and an agreement to sell

The difference between the two are as follows:

basic of distinction sale agreement to sell

1. time of transfer of ownership immediately subsequent to formation of contract
of sale
2. risk of loss of goods immediately passes to buyer at the risk of the seller until it becomes
sale
3. remedies for breach by seller the buyer has the legal right to obtain the buyer may claims damages
the possession of the goods
4. remedies for breach by buyer seller can sue the buyer for recovery seller cannot sue the buyer for
of price recovery of price of goods
5. right of seller to resell of goods the seller cannot resell. But if where seller resells the goods to a new
possession remains with the seller buyer the new buyer will become the
then: owner
(a) buyer knows that the seller has no
legal right to resell then new buyer will
not become the owner of such goods
(b) the seller may be resell in goods
faith
8. insolvency of buyer official assignee shall have a right over official assignee shall; have no right

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the goods over the goods
7. nature of rights the buyer gets the right against the the buyer gets the rights only against
whole world i.e., jus in rem. the seller i.e. jus in personam

Sale distinguished from other similar contracts

basic of distinction sale hire purchase agreement

1. meaning sale means a contract of sale in which hire purchase agreement means an
properly in goods is transferred from agreement whereby the hirer uses the
seller to the buyer as soon as the goods by paying regular installments
contract of sale is made and having an option to purchase the
goods on payment of all the
installments
2. government act ‘sale’ is governed by the sale of goods a hire purchase is governed by the hire
act 1930 purchase act 1972

(ii) sale and bailment

The difference between bailment and sale may be clearly under stood by studying the following:

basic distinction sale bailment

1. meaning a contract of sale of goods is a A bailment is the delivery of goods by
contract where by the seller transfers one person to another for some
or agrees to transfer the property in purpose upon a contract that they
goods to the buyer for a price. shall when the purpose is
accomplished be returned or
otherwise disposed of according to the
directions of the person delivering
them.
Subject matter of contract of sale

Contingent goods: acquisition of the goods by the seller depends upon the uncertain contingencies

Effect of destruction of goods

1. Goods perishing before making of the contract [section 7] contract of sale is void

A goods perishing after an agreement to sell but before the sale is completed [section 8]

Ascertainment of price [section 9 & 10)

1. The fixation of price by the contract of sale [section 9 (1)]:

2. The fixation of price in a manner provided in the contract of sale [section 9 (1):
3. The fixation of price by course of dealings [section 9 (1)]:
4. The fixation of a reasonable price [section 9 (2):
5. The fixation of [price by third party [section 10]

Unit 2

Conditions & warranties

Conditions and warranties

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According to section 12 (2) of the sale of goods act “ a condition is a stipulation essential to the main purpose of the contract
the breach of which gives rise to a right to treat the contract as repudiated”

According to section 12(3) of the sale of goods act “ 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 threat the contract as repudiated”

Express and implied conditions and warranties

Implied conditions

1. Conditions as to title [section 14 (a)]:

2. Condition as to description (section 15]:
3. Condition as to sample [section 17 (2)]:
4. Condition as to sample as well as description [section 15]:
5. Condition as to quantity or fitness for buyer’s purpose [section 16 (1)]:
6. Condition as to merchantability [section 16 (2)
7. Condition as to wholesomeness:

Implied warranties

1. Warranty as to undistributed possession

2. Warranty as to non existence of encumbrances
3. Disclosure of dangerous nature of goods
4. Warranty as to quality or fitness by usage of trade [section 16(4)]:

Caveat emptor

The term caveat emptor is a Latin word which means let the buyer beware i.e. a buyer purchases the goods at his own risk

Exceptions

1. Condition as to quality or fitness for buyer’s purpose

2. Condition as to merchantability
3. Condition as to wholesomeness
4. Condition implied by customer

Unit 3

Transfer of ownership & delivery of goods

1. Risk passes with the ownership

2. Proprietary rights over the goods:
3. Seller’s right for price
4. Insolvency of the seller or the buyer

Passing of property (sections 18 – 24)

The primary rules relating to the passing of properly in the sale of goods are:

1. the ownership is transferred at the time of making the contract [section 20]

(a) The sale must be specific goods:

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(b) The goods must be in a deliverable stat
(c) The contract of sale must be unconditional

2. the ownership is to transfer at some other time

TR ANSFER OF OWNERSHIP IN CASE OF SALE OF UNASCERTAINED GOODS

1. ascertainment of goods

2. appropriation of goods

Transfer of title (section 27)

1. Title by estoppel
2. Sale by a mercantile agent
3. Sale by a joint owner
4. Sale by a person in possession under a voidable contract
5. Sale by a seller in possession of goods after their sale
6. Sale by a buyer in possession of goods after their sale
7. Sale by a finder of goods

RULES REGARDING DELOVERY OF GOODS (SECTION 33 – 39)

The sale of goods act 1930 prescribes the following rules of delivery of goods

1. Effect of part delivery

2. Buyer to apply for delivery
3. Place of delivery
4. Time of delivery
5. Goods in possession of a third party
6. Time for tender of delivery
7. Expenses for delivery
8. Delivery of long quantity
9. Installment deliveries
10. Delivery of carrier
11. Deterioration during transit:
12. Buyer’s right to examine the goods

Unit 4

Unpaid seller

Unpaid seller

A seller is an unpaid seller in the following two types

1. Where the payment has been made by a negotiate instrument

2. Where the payment has not been made by a negotiate instrument

Rights of an unpaid seller

The rights of an unpaid seller may be discussed as follows

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1. rights of an unpaid seller against the goods (sections 47 to 54)

These rights may further be studies under the following heads:

Case (a) where there ownership has been transferred. If the ownership of goods has already been transferred to the buyer the
unpaid seller can exercise the following remedies:

 Right of lien (sections 47, 38, 49 and 53)

 Right of stopped transit (section 50,51, 52 and 53)
 Right of resale of goods (section 54)

Case (b) where ownership has not been transferred. If the ownership of goods has not been transferred to the buyer the
unpaid seller can exercise his right to without the delivery of goods (section 46)

2. Rights of an unpaid seller against the buyer (section 44, 55, 56, 60 and 61)

These rights may further be studies under the following heads:

1. Sue for price (section 55)

2. Damages for non acceptance of goods (section 56)
3. Damages for repudiation of contract before the due date of delivery of (section 60)
4. Right to interest (section 61)
5. Damages for wrongful; refusal to take delivery (section 44)

Right of parties in case of breach of contract

a. Buyer’s right against the seller in case of breach of contract (sections 57- 59)

1. Suit for non delivery

2. Suit for specific performance [section 58]
3. Suit for damages for breach of warranty [section 59]
4. Suit for recovery of price

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