Sale of goods act ppt

sale of goods act 1930 general principles and sale of goods act business to business transactions
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Dr.NishaGupta,India,Teacher
Published Date:25-07-2017
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The Sale Of Goods Acts,1930 (Conditions & Warranties) CPT Section B Mercantile Law Unit 2 Dr. Anju Gupta Learning Objectives Meaning and types of conditions and warranties Doctrine of Caveat Emptor and its Exception Distinguish between Conditions and Warranties 2 Meaning of Stipulation • A stipulation in a contract of sales of goods may be a condition or warranty Section 12(1) • (A) Meaning of Condition :- • A condition is a stipulation – (a) Which is essential to the main purpose of the contract (b) The breach of which gives the aggrieved party a right to terminate the contract. Sec 12 (2) (B) Meaning of Warranty:- • A warranty is a stipulation – (a) Which is collateral to the main purpose of the contract (b) 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 Sec 12(3) Conditions & Warranties Stipulation Conditions Warranties Express Implied Express Implied Conditions & Warranties Cont… ‘Conditions’ and ‘Warranties’ may be either expressed or implied. They are “expressed” when the terms of the contract expressly state them. They are implied when, not being expressly provided for. Express Condition Implied Condition Express Warranties Implied Warranties Express conditions are those, which are agreed upon between the parties at the time of contract and are expressly provided in the contract. The implied conditions, on the other hand, are those, which are presumed by law to be present in the contact. What are The Implied Condition and Warranties 1. Condition as to title Sec 14 (a) 2. Sale by description Sec 15 3. Sale by sample 4. Sale by sample as well as by description 5. Condition as to merchantable quality 6. Sale as quality and fitness 7. Condition as to wholesomeness Sale by description Condition as to Sec 15 title Sec 14 (a) Sale by sample as well as by description Sale by sample Sale as quality and fitness Condition as to merchantable Condition as to quality wholesomeness Condition as to title Section 14(a) (1) Condition as to title Section 14(a) implied condition on the part of the seller is that (a) in case of a sale, he has a right to sell the goods, and (b) in the case of an agreement to sell, he will have right to sell the goods at the time when the property is to pass. In simple words, the condition implied is that the seller has the right to sell the goods at the time when the property is to pass. Example:- X purchases a car from Y. After 6 months Z ,the true owner of the car ,demanded it from X. X had to return it to its true owner. X was entitled to recovery the full price even through several months had passed (2) Condition as to description Section 15 (2) Condition as to description Section 15 This rule is based on the principle that “if you contract to sell peas, you cannot compel the buyer to take beans.” The buyer is not bound to accept and pay for the goods which are not in accordance with the description of goods. Example:- A ship was contracted to be sold as “copper-fastened vessel” but actually it was only partly copper-fastened. Held that goods did not correspond to description and hence could be returned or if buyer took the goods, he could claim damages for breach. (3) Condition as to Sample Sec 17 Condition as to Sample Sec 17 in a contract of sale by sample, there is a implied contract:- a) the bulk shall correspond with the sample in quality; b) the buyer shall have a reasonable opportunity of comparing the bulk with the sample, and (3) Condition as to Sample Sec 17 Cont… c) the goods shall be free from any defect rendering them un-merchantable, which would not be apparent on reasonable examination of the sample. This condition is applicable only with regard to defects, which could not be discovered by an ordinary examination of the goods. But if the defects are latent, then the buyer can avoid the contract. Example: A company sold certain shoes made of special sole by sample for the French Army. The shoes were found to contain paper not discoverable by ordinary inspection. Held, the buyer was entitled to the refund of the price plus damages. (4) Condition as to sample as well as by description Section 15 (4) Condition as to sample as well as by description Section 15 Where the goods are sold by sample as well as by description the implied condition is that the bulk of the goods supplied must correspond both with the sample and the description. In case the goods correspond with the sample but do not tally with description or vice versa or both, the buyer can repudiate the contract. Example: A agreed with B to sell certain oil described as refined sunflower oil, warranted only equal to sample. The goods tendered were equal to sample, but contained a mixture of hemp oil. B can reject the goods. Condition as to merchantable quality • It is the implied condition that the goods delivered by seller must satisfy the ordinary purpose of buying and if not the buyer can repudiate the contract. • Example: A sold a pencil without led. Thus buyer can reject the goods as it is not able to satisfy the purpose of buying. (5)Condition as to quality or fitness Section 16 (5)Condition as to quality or fitness Section 16 : Ordinarily, there is no implied condition as to the quality or fitness of the goods sold for any particular purpose. However, the condition as to the reasonable fitness of goods for a particular purpose may be implied if the buyer had made known to the seller the purpose of his purchase and relied upon the skill and judgment of the seller to select the best goods and the seller has ordinarily been dealing in those goods. Even this implied condition will not apply if the goods have been sold under a trademark or a patent name. Example: A purchased a hot water bottle from a chemist. The bottle burst and injured his wife. Held, breach of condition as to fitness was committed and thus chemist was liable for refund of price and the damages. As a general rule, it is the duty of the buyer to examine the goods thoroughly before he buys them in order to satisfy himself that the goods will be suitable for his purpose for which he is buying them. This is known as rule of caveat emptor which means “Let the buyer beware”. 6)Condition as to wholesomeness: (6)Condition as to wholesomeness: In the case of eatables and provisions, in addition to the implied condition as to merchantability, there is another implied condition that the goods shall be wholesome. Example: A supplied F with milk. The milk contained typhoid germs. F’s wife consumed the milk and was infected and died. Held, there was a breach of condition as to fitness and A was liable to pay damages. Implied Warranties: (1) Warranty as to undisturbed 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) Warranty (1) Warranty as to undisturbed possession: An implied warranty that the buyer shall have and enjoy quiet possession of the goods. That is to say, if the buyer having got possession of the goods, is later on disturbed in his possession, he is entitled to sue the seller for the breach of the warranty. (2) Warranty as to non-existence of encumbrances: An implied warranty that the goods shall be free from any charge or encumbrance in favour of any third party not declared or known to the buyer before or at the time the contract is entered into.

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