UNIT V: THE SALE OF GOODS ACT,

1930

Dr. Nikhila Shankar Tigadi

part of the Indian Contract Act, 1872 (Sec 76 to 123).

▪ Later, it was deleted and a separate legislation, The Sale of Goods Act was passed in 1930. It

came into force on 1st July, 1930.

▪ The Indian law of Sale of Goods is based on the English Sale of Goods Act, 1893.
 Contract of Sale of Goods
• As per Section 4(1) of the Sale of Goods Act, 1930, 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.
Essential Elements
1. There must be at least two parties viz., Seller and Buyer.
2. The subject matter of the contract must be goods.
3. A transfer of property in goods from seller to the buyer must take place.
4. A price in money should be paid or promised.
5. It must be absolute or conditional.
6. All other essentials of a valid contract must be present.
GOODS
As per Sec 2(7), it means every kind of movable property other than actionable claims and money;
and includes stock and shares, growing crops, grass and things attached to or forming part of the
land which are agreed to be severed before sale or under the contact of sale.
 TYPES OF GOODS
1)Existing Goods: The Goods which are in existence at the time of the Contract of Sale i.e.
owned or possessed by the seller. Existing goods may be Ascertained or Unascertained.
a) Specific or Ascertained Goods: It means goods identified and agreed upon at the time of
the contract of sale has been made
Example:
X has three mobile phones Nokia, Samsung, and Redmi. X offers to sell Samsung, Y accepts
to purchase it . Here Samsung mobile phone is considered Specific Good.
b) Generic / Unascertained Goods: It means the goods which are not specifically identified
at the time of making of the contract of sale but are indicated by description.
Example:
X has 5 horses, he offers to sell 2 horses to 'Y' but without specifying which of them to be
delivered. Y accepts to purchase. It is sale of unascertained goods.
2) Future Goods: It means goods to be manufactured or produced or acquired by the seller
after making the contract of sale.
▪ Example :
X agrees to sell Z the mangoes which will be grown on his land within 6 months.
3) Contingent Goods: It means the goods the acquisition of which by the seller depends
upon a contingency which may or may not happen.
▪ Example
A agrees to sell a property to B if he wins the case. A's title is subject to the contingency of
winning and hence the Property is called 'Contingent goods'.
 Agreement to Sell
• Section 4(3) of the Sale of Goods Act, 1930 defines Agreement to sell as,
“where the transfer of the property in the goods is to take place at a future time or
subject to some condition thereafter to be fulfilled, the contract is called an agreement to
sell.”
• In other words, where the property in the goods is to be transferred to the buyer at some
future date or on the fulfillment of a certain condition, the contract of sale is called an
agreement to sell.
• Thus, in Agreement to Sell, Ownership of goods is not immediately transferred from a
seller to a buyer.
• Sec.4(4) says “An agreement to sell becomes a sale when the time elapses or the
conditions are fulfilled subject to which the property in the goods is to be transferred.”
 SALE AGREEMENT TO SELL
1.Transfer of property: The property in goods 1. Transfer of property: In agreement to sell, the ownership of
passes from the seller to the buyer Immediately the property will pass from the seller to the buyer at some
future time or on fulfillment of some conditions.

2.Nature of contract: A sale is an executed 2. Nature of contract: An agreement to sell is an executory

4. Transfer of risk: In a sale, if the goods are 4. Transfer of risk: In an agreement to sell, if the goods are
destroyed, the loss falls on the buyer even though destroyed, the loss falls on the seller, even though they are in
they are in the possession of the seller. the possession of the buyer
 SALE HIRE-PURCHASE
1. Property in the goods is transferred to the 1. The ownership property in goods passes to the
buyer immediately at the time of Contract. hirer upon payment of the last installment.
2. The position of the buyer is that of an Owner 2. The position of the hirer is that of a Bailee till he
of the goods. pays the last installment
3. The buyer cannot terminate the contract and 3. The hirer may, if he so likes, terminate the
is bound to pay the price of the goods. contract by returning the goods to its owner
without any liability to pay the remaining
installments
4. The seller did not take back the goods on 4. if the hirer fails to pay an installment the owner
account of the insolvency of the buyer. has right to take back the goods.
5. The buyer can resell the goods. 5. The hirer cannot resell the goods till the last
installment.
6. Tax is levied at the time of the 6. Tax is not leviable until it eventually ripens into a
contract. sale.
 SALE BAILMENT
1.The property in goods is transferred from the seller 1. There is only transfer of possession of goods from
to the buyer. Both ownership and possession are the bailor to the bailee for any specific purpose
transferred.
2. The return of goods in contract of sale is not 2. The bailee must return the goods to the bailor on
possible. the accomplishment of the purpose for which the
bailment was made.
3. The consideration is the price in 3. The bailment may be gratuitous or
terms of money non-gratuitous
 Conditions and Warranties
▪ It is usual for both seller and buyer to make representations to each other at the time of entering
into a contract of sale.
▪ Some of these representations are mere opinions which do not form a part of contract of sale.
Whereas some of them may become a part of contract of sale.
▪ Representations which become a part of contract of sale are termed as stipulations which may
rank as condition and warranty
▪ e.g. a mere comment on his goods by the seller doesn’t become a stipulation and gives no right of
action to the buyer against the seller, as such representations are mere opinion on the part of the
seller.
▪ But where the seller asserts a fact of which the buyer is ignorant, it will amount to a stipulation
forming an essential part of the contract of sale
Meaning of Condition [Section 12(2)]
• A condition is a stipulation which is essential to the main purpose of the contract. The breach of which gives
the aggrieved party a right to terminate the contract.
Meaning of Warranty[Section 12(3)]
• A warranty is a stipulation which is collateral to the main purpose of the contract. The breach of which gives
the aggrieved party a right to claim damages but not a right to reject goods and to terminate the contract.
Express and Implied Conditions and Warranties
• In a contract of sale of goods, conditions and warranties may be express or implied.
Express Conditions and Warranties
• These are expressly provided in the contract.
• For example, a buyer desires to buy a Sony TV Model No. 2020.
• Here, model no. is an express condition.
• In an advertisement for Khaitan fans, guarantee for 5 years is an express warranty.
Implied Conditions and Warranties
• These are implied by law in every contract of sale of goods unless a contrary intention
appears from the terms of the contract.
• The various implied conditions and warranties have been shown below
Implied Conditions
1. Conditions as to title [ Section 14 (a)]
2. Condition in case of sale by description [Sec. 15]
3. Condition in case of sale by sample [Section 17]
4. Condition in case of sale by description and sample [Section 15]
5. Condition as to quality or fitness [Section 16(1)]
6. Condition as to merchantable quality[Section 16(2)]
7. Condition as to wholesomeness
1. Conditions as to title [ Section 14 (a)]
• There is an implied condition on the part of the seller that:
- In the case of a sale, he has a right to sell the goods, and
- In the case of an agreement to sell, he will have a right to sell the goods at the time when the property is
to pass
- Rowland v. Divall (1923)
2. Condition in case of sale by description [Section 15]
- Where there is a contract of sale of goods by description, there is an implied condition that the goods
shall correspond with description.
- The main idea is that the goods supplied must be same as were described by the seller.
Sale of goods by description include many situations as under:
i) Where the buyer has never seen the goods and buys them only on the basis of description given by the
seller.
ii) Where the buyer has seen the goods but he buys them only on the basis of description given by the
seller.
3. Condition in case of sale by sample [Section 17]
• A contract of sale is a contract for sale by sample when there is a term in the contract, express or implied, to that effect.
• Such sale by sample is subject to the following three conditions:
a) The goods must correspond with the sample in quality.
b) The buyer must have a reasonable opportunity of comparing the bulk with the sample.
c) The goods must be free from any defect which renders them merchantable
4. Condition in case of sale by description and sample [Section 15]
• If the sale is by sample as well as by description, the goods must correspond with the sample as well as the description.
5. Condition as to quality or fitness [Sec.16(1)]
• There is no implied condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale. In
other words, the buyer must satisfy himself about the quality as well as the suitability of the goods.
Exception to this rule:
• There is an implied condition that the goods shall be reasonably fit for a particular purpose described if the following three
conditions are satisfied:
1) The particular for which goods are required must have been disclosed(expressly or impliedly) by the buyer to the seller and
the buyer must have relied upon the seller’s skill or judgement.
2) The seller’s business must be to sell such goods.
6. Condition as to merchantable quality[Section 16(2)]
• Where the goods are bought by description from a seller who deals in goods
of that description, there is an implied condition that the goods shall be of
merchantable quality.
• The expression ‘merchantable quality’ means that the quality and condition
of the goods must be such that a man of ordinary prudence would accept
them as the goods of that description.
• Goods must be free from any latent or hidden defects.
7. Condition as to wholesomeness
• In case of eatables or provisions of food stuffs, there is an implied condition
as to wholesomeness. Condition as to wholesomeness means that the goods
shall be fit for human consumption.
Implied warranties
a) Warranty as to quiet possession [Section14(b)]
• There is an implied warranty that the buyer shall have and enjoy quiet possession of the goods. The
breach of this warranty gives buyer a right to claim damages from the seller. – Niblett v.
Confectioners’ Materials Co. (1949).
b) Warranty of freedom from encumbrances [Section 14(c)]
• There is an implied warranty that the goods are free from any charge or encumbrance in favour of
any third person.
• If the buyer is not aware of such charge or encumbrance, it amounts to breach of this warranty and
thereby gives the buyer a right to claim damages from the seller.
c) Disclosure of dangerous nature of goods:
• There is another implied warranty on the part of the seller that in case the goods are inherently
dangerous or they are likely to be dangerous to the buyer and the buyer is ignorant of the danger,
the seller must warn the buyer of the probable danger.
• If there is breach of this warranty, the seller will be liable in damages.
When Conditions to be treated as Warranty [Section 13]
In the following three cases a breach of a condition is treated as a breach of a warranty:
1) Where the buyer waives a condition- once the buyer waives a condition, he cannot insist on its
fulfillment e.g. accepting defective goods.
2) Where the buyer elects to treat breach of the condition as a breach of warranty- e.g. where he
claims damages instead of repudiating the contract.
3) Where the contract is not severable and the buyer has accepted the goods or part thereof, the
breach of any condition by the seller can only be treated as breach of warranty- It can not be
treated as a ground for rejecting the goods unless otherwise specified in the contract. Thus,
where the buyer after purchasing the goods finds that some condition is not fulfilled, he cannot
reject the goods. He has to retain the goods entitling him to claim damages.
 DIFFERENCE BETWEEN CONDITION AND WARRANTY

CONDITION WARRANTY
1. A condition is essential to the main purpose of 1. It is only collateral to the main purpose of the
the contract contract.
2. In case of breach of condition, aggrieved party 2. In case of breach of warranty, aggrieved party can only
can: claim damages.
i. Rescind the contract, return the goods and claim
refund.
ii. Claim damages
3. A breach of condition may be treated as a breach 3. A breach of warranty cannot be treated as a breach of
of warranty condition.
 THE DOCTRINE OF CAVEAT EMPTOR (LET THE BUYER BEWARE)
➢ ‘Caveat Emptor’ is a Latin expression which means “let the buyer beware”.
➢ The Doctrine states generally seller is not responsible for the defect in the goods. The buyer himself
should be careful while purchasing the goods and he should himself ascertain that the goods suit his
purpose.
➢ As per the rule, seller is not responsible in following cases:-
(i) Where the goods do not suit the particular purpose of buyer.
(ii) If buyer chooses the goods negligently
(iii) If the goods are defective and the defect is patent (i.e. defect which can be discovered by mere
inspection)
▪ Exceptions to the Doctrine of Caveat Emptor
Exceptions to Caveat Emptor are following and the Seller is responsible in the following situations :-
1) Where the buyer specifies the particular purpose for which the goods are required to the seller and
thereby relies on the seller’s skill or judgment.
2) Where there is contract of sale by sample, the rule of caveat emptor will not apply if the goods do not
correspond with sample.

3) Where goods are bought by description, if the goods do not correspond with the description.

4) If the goods are bought both by sample as well as by description this rule will not apply if goods do not
correspond with both sample and description.

6) There is an implied condition that the goods shall be of merchantable quality

7) When the seller actively conceals some defect in the goods so that the same could not be discovered by the
buyer on a reasonable examination, then the rule of Caveat Emptor will not apply.
 Passing of Property or Transfer of Ownership
• A sale of goods or movable property implies a transfer or passing of ownership to the buyer.
• The passing of property is an important aspect to help determine the liabilities and rights of both
the buyer and the seller.
• Once a property is passed to the buyer, then the risk in the goods sold is that of the buyer and
not the seller.
• This is true even if the goods are in the possession of the seller.
Passing of Property
➢ There are following primary rules that govern the passing of property:
1) Passing of Specific or Ascertained Goods
2) Passing of Unascertained Goods
3) Goods sent on approval or “on sale or return”
Passing of Ascertained Goods (Section 19)
• This is the first rule of the passing of property. It deals with the passing of specified goods and states that
–Specific or ascertained goods is transferred to the buyer at such time as the parties to the contract
intend it to be transferred.
• If the parties do not expressly mention anything, their intention could be inferred from their contracts.
• Specific goods in a deliverable state (Section 20)
• Section 20 states that if the contract is unconditional for the sale of specific goods in a deliverable state,
then the property in the goods must pass to the buyer the moment the contract is made.
• This rule holds true even if the time of payment of price or delivery of the goods or both is postponed.
• Example: Peter goes to an electronics store and buys a television set. He asks the shopkeeper to deliver it
to his house. The shopkeeper agrees. The television immediately becomes the property of Peter
Specific goods to be put into a deliverable state (Sec. 21)
• In a contract for the sale of goods, where the goods are not in a deliverable state, the seller is required to
make them ready for delivery.
• In such cases, the passing of property happens only after the seller puts them in a deliverable state and
informs the buyer.
• Example: Peter buys a laptop from an electronics store and asks for a home delivery. The shopkeeper
agrees to it. However, the laptop does not have a Windows operating system installed. The shopkeeper
promises to install it and calls Peter before making the delivery. In this case, the property transfers to
Peter only after the shopkeeper has installed the OS and therby making the laptop ready for delivery.
Specific goods are in a deliverable state but the seller may be bound to weigh etc., to ascertain the price
(Section 22)
▪ In a contract of sale of goods, where goods are in a deliverable state but the seller has to verify weight,
measure, test, or perform any other act on the goods to ascertain the price.
• In such cases, the property does not pass until the seller does the act and informs the buyer.
Passing of Unascertained Goods
• If there is a contract for the sale of unascertained goods, then the passing of the property of the goods to
the buyer cannot happen unless the goods are ascertained. (Sec. 18)
• Goods sent on approval or “on sale or return”- Approved/adopts the transaction
PASSING OF RISK
• The general rule is that unless otherwise agreed the goods remain at the seller’s risk until the property is
transferred to the buyer, but when the property is transferred to the buyer, the goods are at the buyer’s
risk. - (Sec.26)
• Rule is known as Resperit Demino i.e. the loss falls on the owner.
• But the parties may agree that risk will pass at the time different from the time when ownership is
passed, e.g. the seller may agree to be responsible for the goods even after the ownership is passed to
the buyer or vice versa.
• Exceptions to the above general rule:
(i) If there is agreement between the parties.
(ii) If the delivery of goods are delayed either due to buyer’s or seller’s default, goods are at risk of party
in default.
(iii) Trade customs.
 Transfer of title by non-owner or
No one can give a better title than he himself has
A sale is a contract plus a conveyance.
• As a conveyance it involves transfer of title of goods from the seller to the buyer.
• If the seller’s title is defective, the buyer will not get better title.
• A person can only transfer what he has.
• No one can transfer a better title to the goods than he himself possesses.
• This principle is expressed by the Latin phrase, “Nemo dat quad non habet”, which means “no
one can give who does not himself possess”.
Exceptions
In each of the following cases, a person who is not an owner, can give to the transferee a valid title to the goods:-
1. Transfer of title by estoppel [(Sec. 27)]
When the true owner of the goods by his conduct or words or by any act or omission leads the buyer to believe
that the seller is the owner of the goods or has the authority to sell them, he cannot afterwards deny the seller’s
authority to sell. The buyer in such a case gets a better title than that of the seller.
Example:-‘A’ who is the true owner of the goods, causes the buyer ‘B’ to believe that ‘S’ has the authority to sell
the goods. ‘A’ cannot afterwards question the seller’s want of title on the goods.
2. Sale by a mercantile agent [Proviso to Sec. 27] Sale of goods by a mercantile agent gives a good title to the
purchaser even in cases where the agent acts beyond his authority, provided the following conditions are
satisfied—
(i) The agent is in possession of the goods or of a document of title to the goods.
(ii) Such possession is with the consent of the owner.
(iii) The agent sells the goods in the ordinary course business.
(iv) The purchaser acts in good faith and has no notice that the agent had no authority to sell.
3. Sale by one of several joint owners [Sec. 28]
• This section enables a co-owner to sell not only his own share but also of his other co-owners.
• If one of several joint owners of goods has the sole possession of them by permission of the co-
owners, the property in the goods is transferred to any person who buys them from such joint owner
provided the buyer acts in good faith and without notice that the seller had no authority to sell.
• Section 28 lays down three conditions for validating a sale by one of co-owners :—
(a) He must be in sole possession by permission of his co-owners.
(b) The purchaser acts in good faith i.e. with honesty.
(c) The purchaser had no notice at the time of the contract of sale that the seller had no authority to
sell.
Example :- X, Y & Z own truck in common. X is in possession of the truck by permission of his co-owners.
X sells the truck to A. A purchases bona fide. The property in the truck is transferred to A.
4. Sale of goods obtained under a voidable agreement [Sec. 29]
When the seller of goods has obtained possession thereof under a voidable agreement but the
agreement has not been rescinded at the time of sale, the buyer obtains a good title to the goods,
provided he buys them in good faith and without notice of the seller’s defect of title
5. Sale by the seller in possession of goods after sale [Sec. 30(1)]
• Under this exception, a second sale by the seller who has the possession of the goods will give a good title to the buyer
acting in good faith and without notice.
Following conditions should be fulfilled under this exception :
(a) The seller must continue in possession of the goods or of the documents of title to the goods as seller.
(b) Good faith and absence of notice of the previous sale on the part of the second buyer
6. Sale by buyer in possession of goods over which the seller has some rights [Sec. 30(2)]
• This exception deals with the case of a sale by the buyer of goods in which the property has passed to him.
• When goods are sold subject to some lien or right of the seller (for example for unpaid price) the buyer may pledge, or
otherwise dispose of the goods to a third party and give him a good title, provided the following conditions for sale, are
satisfied:
(i) The first buyer is in possession of the goods or of the documents of title to the goods with the consent of the seller.
(ii) Transfer is by the buyer or by a mercantile agent acting for him.
(iii) The person receiving the same acts in goods faith and without notice of any lien or other right of the original seller
7. Sale by an unpaid seller [Sec. 54]
• An unpaid seller of goods can, under certain circumstances, re-sell the goods.
• The purchaser of such goods gets a valid title of the goods.
8. Sale under the Contract Act
(a) A Pawnee may sell the goods of Pawnor if the Pawnor makes a default of his dues. The purchaser
under such a sale gets a good title. [Sec. 176 of Contract Act]
(b) A finder of goods can sell the goods under certain circumstances. The purchaser gets a good title.
[Sec. 169 of Contract Act]
(c) Sale by an Official Receiver or Liquidator of the company will give the purchaser a valid title.
 PERFORMANCE OF CONTRACT OF SALE
▪ Performance of a Contract of Sale means :-
• As regards the Seller, Delivery of Goods to the Buyer , as per the terms of Contract
• As regards the Buyer, Acceptance of the Goods for the Price, as per the terms of Contract-
(Sec. 31)
▪ Section 2(2) defines Delivery of Goods as:-
• Voluntary transfer of possession of goods from one person to another [Sec.2(2)].
• Delivery may be Actual or Symbolic or Constructive (Sec. 33)
• Actual or physical delivery arises when the goods are handed over by the seller to the buyer or
his duly authorized agent.
• For ex: ‘X’ gives the possession of the book to ‘Y’.
• Symbolic Delivery is made by giving some indication or symbol representing that the
goods are transferred from one person to another.
Ex: Handing over the key of a godown to the buyer
• Constructive delivery arises when any person is authorized to hold them on behalf of the
buyer.
• i.e., when a third person who is in possession of the goods acknowledges that he holds
the goods on behalf of the buyer and the buyer has assented to it.
Ex: X sells to Y 20 bags of rice lying in Z’s warehouse. X gives an order to Z, asking him to
transfer the goods to Y. Z assents to such an order and enters the transfer to Y, in his
books. This is a constructive delivery
 RULES AS TO DELIVERY
(RULES AS TO PERFORMANCE OF CONTRACT OF SALE)
1) Delivery of goods according to contract (Sec.31)
2) Time of Delivery and Payment (Sec. 5(1) r/w Sec 32)
3) Effect of Part Delivery (Sec.34) -Delivery of the part of the goods has the same effect as the delivery of whole,
provided such part delivery is made in progress of the delivery of whole.
4) Buyer’s duty to apply for Delivery(Sec.35)- The seller to deliver the goods when the buyer applies for the
delivery. The buyer is bound to claim delivery
5) Place of Delivery (Sec.36)- Where the place of delivery is stated in the Contract, the goods must be delivered
at the specified place during working hours on a working day. Where no place is mentioned, the goods sold
are to be delivered at the place at which they are at the time of sale.
6) Expenses of Delivery [Sec.36(5)]- The seller has to bear the cost of delivery unless otherwise agreed.
7) Delivery of goods in wrong quantity or wrong description (Sec 37)
8) Installment Delivery (Sec.38)- Unless otherwise agreed, the buyer is not bound to accept the delivery in
installments
9) Delivery to a Carrier or wharfinger (Sec.39)- In pursuance of the contract, the seller is authorized to send the
goods to the buyer through carrier or wharfinger, the Delivery of goods to a carrier for transmission to the
buyer or delivery of goods to a wharfinger for safe custody, is a prima facie deemed to be a delivery of goods
to the buyer
 Breach of Contract of Sale
▪ What amounts to breach of contract of sale?
- If the party does not fulfill his contractual promise, or;
- Has given information to the other party that he will not perform his duty as mentioned in the contract,
or;
- If by his action and conduct he seems to be unable to perform the contract;
he is said to has committed the breach the contract.
▪ There are certain remedies available for the aggrieved party.
Remedies for Breach of Contract of Sale
1) Suit for Price
2) Damages for Non-Acceptance
3) Damages for Non-Delivery
4) Specific Performance
5) Suit for breach of condition or warranty
1) Suit for price ( Right of Seller)
• Where under a contract of sale, the property in the goods has passed to the buyer and the buyer
wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller
may sue him for the price of the goods. – (Sec. 55)
2) Damages for Non-Acceptance ( Right of Seller)
Where the buyer wrongfully neglects or refuses to accept the goods and pay for the goods, the seller
may sue him for damages for non- acceptance. – (Sec. 56)
3) Damages for non- delivery (Right of Buyer)
Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may sue
the seller for damages for non- delivery.
4) Specific Performance (Right of Buyer)
• In any suit for breach of contract to deliver specific or ascertained goods, the Court may, if it thinks fit,
on the application of the plaintiff, by its decree direct that the contract shall be performed
specifically, without giving the defendant any other options like payment of damages.
5) Suit for breach of condition or warranty (Right of Buyer)
• Where there is a breach of condition or warranty by the seller, the buyer may sue the seller for
damages for breach of condition or warranty
 UNPAID SELLER (Sec. 45 – 54)
When the Seller is deemed to be an unpaid seller?
▪ Whole or part of the price has not been paid, or
▪ bill of exchange or other negotiable instrument was given as payment, but the same has been dishonored.
Rights of Unpaid Seller
1)Rights of Unpaid Seller against Goods
2)Rights of Unpaid Seller against Buyer
1)Rights of Unpaid Seller against Goods
a) Right of lien or retention.
b) Right of stoppage in transit.
c) Right of resale.
d) Right to withhold delivery
2)Rights of Unpaid Seller against Buyer
a) Suit for Price (Sec. 55)
b) Suit for Damages for Non-Acceptance (Sec. 56)
 Rights of Unpaid Seller against Goods
a) Right of Lien or Retention (Sec. 47 - 49 & 54)
• It can be exercised on the goods for the price while he is in possession until the payment of price of such goods. It
can be exercised in following cases:
(i) Where goods have been sold without any stipulation as to credit.
(ii) Where goods have been sold on credit (on the expiry of the period of credit, the seller can exercise the lien)
(iii) Where buyer becomes insolvent.
• This right depends upon physical possession. It can only be exercised for the non-payment of price.
b) Right of Stoppage in Transit (Sec. 50 - 52)
• It means right to stop the further transit of goods, to resume possession and to hold the same till the price is paid
• It can be exercised in following cases:
(i) Seller must be unpaid.
(ii) He must have parted with the possession of goods.
(iii) Goods are in transit.
(iv) Buyer has become insolvent.
• Right is subject to provisions of the Act
• Goods are deemed to be in transit from the time when they are delivered to carrier or other bailee for transmission,
until buyer or his agent takes delivery of them.
c) Right of Resale (Sec. 54)
• It can be exercised in following cases:
a) Where the goods are of perishable nature and the buyer does not pay within a reasonable
time.
b) Where he gives notice to the buyer of his intention to resell the goods, the buyer does not pay
within a reasonable time.
c) Where the right is expressly reserved in the contract.
 Rights of Unpaid Seller against Buyer
a) Suit for Price (Sec. 55)
• Seller may sue —
(a) Where the property has passed to the buyer and he wrongfully neglects or refuses to pay for
goods, or;
(b) Where the property has not passed and price is payable on a certain day irrespective of delivery,
buyer wrongfully neglects or refuses to pay such price.
b) Suit for Damages for Non-Acceptance (Sec. 56)
• The seller may sue the buyer for non-acceptance, where the buyer wrongfully neglects or refuses to
accept and pay for the goods
Thank You!