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Section 4 – Sale and Agreement to Sale

1. The 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. There may
be a contract of sale between one part owner and another.
2. A contract of sale may be absolute or conditional.
3. Where under a contract of sale the property in the goods is transferred from
the seller to the buyer, the contract is called a sale, but where the transfer of
property in the goods is to take place at a future time or subject to some
conditions thereafter to be fulfilled, the contract is called an agreement to
4. An agreement to sell becomes a sale when the time elapses; all the
conditions are fulfilled subject to which the property in the goods is to be

The Section may be illustrated by the following examples:
1. A agrees to buy a haystack from B on B’s land with liberty to come on B’s
land to take it away. This is a sale and B cannot revoke the licence given to
A to woo on his land. (Wood Vs Manley 1839)
2. Agreement by A to buy 20 tonnes of oil from the seller’s cisterns. The seller
has many cisterns, with more than 20 tonnes in them. This is merely an
agreement to sale. (White Vs Wilks, 1813)
3. Agreement for sale of a quantity of nitrate of soda to arrive at a certain ship.
This is an agreement to sell at a future date subject to the double condition
of the arrival of the ship with the specified cargo on board. (Johnson Vs
Macdonald 1842)
4. A customer who picks up goods in a self-service shop is merely offering to
buy them and the sale is not complete until they are paid for.
(Pharmaceutical Society Vs Boots, 1952)

Essential Requisites of Sale

In the case of (state of Madras Vs Gannon Dunkerley and Company Limited,

1958) the Supreme Court has held that according to the law, both of England
and India, in order to constitute a sale, it is necessary that there should be an
agreement between the parties for the purpose of transferring title to goods,
which of course presupposed capacity to contract, that it must be supported by
money consideration, that as a result of transaction, the property must actually
pass in the goods. Unless all these elements are present there would be no
The essential object of the contract of sale is the exchange of property for a
money price. There must be a transfer of property or an agreement to transfer
it, from one party, the seller, to the other, the buyer, in consideration of a
money payment or of a promise thereof by the buyer thereof. Both under the
common law and the statute law relating to sale of goods England and in
India, to constitute a transaction of sale, there should be an agreement,
expressed or implied relating to goods to be completed by passing of
title in those goods. It is the essence of the concept that both the agreement
and the sale should relate to the same subject matter. Transfer of property in
goods for a price is the linch pine of the definition. It is, however, not an
inevitable rule that the price must be fixed. An allotment of goods among
partners on dissolution of partnerships is not a sale. Exchange of property for
something other than money is not a sale. The difference between a sale and
an exchange is that in the former the price is paid in money while in the latter it
is paid in good by way of barter. But if the exchange is made partly for goods
and partly for a price, the contract is probably one of a sale.

Sale and Agreement to Sale

An agreement to sell, which is also called an executive contract of sale, is a

contract simply, and creates only a jus in personance; the property in the goods
which forms subject matter of the contract remains in the seller, so that they
may be taken in execution of his debts, and belongs on his bankruptcy to his
trusty in bankruptcy; if they are destroyed the loss will, in the absence of
excess agreement, have to be borne by him: and a breach by either party of
the agreement will normally only give the other party a right to sue for
The term ‘contract of sale’ includes both actual sales and agreement for sale.

The Supreme Court distinguished these two classes of contract –thus

An agreement to sell is a contact pure and simple whereas a sale is a contract
plus conveyance. By an agreement to sale a jus in personance is caused by
a sale a jus in rem also is transferred. Where goods have been sold and the
buyer makes the fault, the seller may sue for the contract price on the count of
‘goods bargained and sold’ but when an agreement to buy is broken, the
seller’s normal remedy is an action for unliquidity damages. If an agreement
to sell be broken, by the seller, the buyer has only a personal remedy against
the seller. The goods are still the property of the seller, and he can dispose of
them as he likes, but if there has been a sale and a seller breaks his
engagement to deliver the goods, the buyer has not only a personal remedy
against the seller but also the usual proprietary remedies in respect of the
goods themselves. In many cases, too, he can follow the goods into the
hands of third parties. Again, if there be an agreement of sale, and the goods
are destroyed the loss as a rule falls on the seller, while if there has been a
sale, the loss as a rule falls up on the buyer though the goods may have
never come to his position. (The Instalment Supply Limited Vs STO
Ahmedabad and others, 1974.)

Formalities of a contract of sale:

Section 5: Contract of Sale - how made

1. A contract of sale is made by an offer to buy or sell goods for a price and
the acceptance of such price. A contract may provide for the immediate
delivery of goods or immediate payment of the price or both, or for the
delivery or payment by instalments. Or that the delivery of payments or both
shall be postponed.
2. Subject to the provisions of any law for the time being enforced, a contract
of sale may be in writing or by the word of mouth or may be impliedly or
may be implied from the conduct of the parties.
A statement or conduct inviting the making of an offer such as by display of
goods in a shop does not buy itself bind the shopkeeper to accept the
customer’s offer even at the price displayed or advertised. Such invitation to
treat therefore differs from an offer, which is intended to be binding on the
person making it and is capable of being accepted without any further
negotiation. Where, however, the accessibility to goods in intended to an
offer capable of acceptance by customer’s act such as filling the petrol tank
of a car from a self service pump or choosing items in a self service shop or
taking goods intended for sale for an automatic vending machine the
question of obtaining seller’s assent does not arise.

Sub-section 1 emphasis the consensual nature of a contract of sale; the

parties may agree to such terms as they think fit. A sale can be complete
even without effecting immediate delivery and immediate payment. In a
contract of sale, the title in goods passes immediately on the payment of
price while in an agreement to sale the title in goods passes at a future time
subject to conditions to be fulfilled thereafter however, when the goods are
accepted by the buyer and the price is received by the seller the sale is
deemed to be complete.

Earnest :
The conclusion of a contract of sale is sometimes marked by the giving of
earnest this was expressly referred to in Sec. 78 of the Contract Act with
regard to the giving of earnest Fry L.J. said in Howe V.s Smith (1884).
The practice of giving something to signify the conclusion of the contract,
sometimes a sum of money, sometimes a ring or other object, to be repaid
or redelivered on the completion of the contract, appears to be one of great
antiquity and very general prevalence….. It was familiar to the law of Roam
( where the rule was that a defaulting buyer forfeited the earnest money
and a defaulting seller was bound to restore it two fold”.
Earnest whether given in money or not must be something of value really
given by the buyer and kept by the seller … A mere symbolic ceremony
such as one party drawing a coin across the other’s hand will not do.
When a deposit in the nature of earnest is paid for the same of immovable
property in India, a vendor by whose default the sale goes off must return
the sum so paid, but if the default is the purchasers the purchaser must
loose it.

Conditions and Warranties :

Sec. 11 - Stipulation as to time – Unless a different intention appears from
the terms of the contract, stipulation as to time of payment are deemed to
be of the essence of a contract of sale. Whether any other stipulation as to
time is of the essence of the contract or not depends on the terms of the
Examples: The section may be illustrated by the following examples
1) Sale of some stacks of oak on the sellers ground, upon the terms that
they might remain there for four months and the buyer should pay within 12
weeks of the contract. The seller on the expiration of 12 weeks demanded
the price which the buyer failed to pay. Later the buyer asked for further
time which the seller refused to give, and said that as the buyer had not
paid he should not have the stacks. The buyer later tendered the price, but
the seller refused to accept it and subsequently resold the stacks. The
Buyer was held entitled to recover in an action of trover. ( Martin Dale V/s.
Smith 1841)
2) Sale of goods to be shipped and bill of lading to be dated December –
January. Goods were shipped on 30 th January but the bill of lading was
dated 2nd February the buyer was held entitled to reject.

2. Stipulations as to time of payment

As punctual payment does not go to the whole consideration of the sale, the
failure by the buyer to pay on the appointed day does not as a rule, entitle
the seller to treat the contract as repudiated, though he may be entitled to
withhold delivery until the price is paid and to resell the goods if the buyer
does not pay or tender the price within a reasonable time. Consequently, if
before such resale the buyer tenders the price, even though it be on a date
after the date name in the contract the seller cannot, in the absence of a
stipulation to the contrary, treat the contract as at an end and refuse to
allow the buyer to have the goods; and a subsequent resale by him will be
tortious. The time cannot be taken to be the essence of the contract in case
where the contract itself does not stipulate the time for payment of the price.
3. Stipulations as to time of performance of other terms

As the Act deals with all kinds of contracts of sale, and not only with
commercial contracts, the enactment as to stipulations as to time, other
than as to payment of the price, is necessarily put in somewhat general
language. If a man orders a suit of clothes, a promise by the tailor that he
shall have it by a certain date would not, generally speaking, be of the
essence of the contract, though it might be if he was ordering court dress
for the purpose of attending a court on a particular day. But in the case of
commercial contracts, although occasionally stipulations as to time may not
be of the essence, the usual rule is that they are.

In contracts of sales of goods, the computation of the time of performance

from a particular date, act or event is prima facie exclusive of the day, act or
event and inclusive of the day of performance, although this presumption
may be displaced by a contrary intention appearing from the contract and
its surrounding circumstances.

4. Waiver of the stipulations

Stipulations as to time may be waived by the party in whose favour they are
inserted either expressly or by implication, and if he does so he cannot
afterwards treat the failure to comply with them by other party as giving a
right to rescind the contract. Where, however, an initial stipulation making
time of the essence of the contract is waived, reasonable notice to make
time again of the essence would give rise to the right to rescind. There can,
strictly speaking, be no waiver after breach, but to accept goods, though
delivered late, is often spoken of as a waiver of the right of action which the
breach has given.

Section 12. Condition and warranty

1. A stipulation in a contract of sale with reference to goods which are
subject thereof may be a condition or a warranty.
2. 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.
3. 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 to a right to
reject the goods and treat the contract as repudiated.
4. Whether a stipulation in a contract of sale is a condition or a warranty
depends in each case on the construction of the contract. A stipulation may
be a condition, though called a warranty in the contract.
1. Conditions and warranties 2. Express conditions 3. Express Warranties
4. Representations 5. Implied conditions and warranties 6. Puffs

1. Conditions and Warranties

This section is in effect an additional definition or interpretation section and

supplies a want long felt in India. At the time when the Contract Act was
passed the phrase ‘warranty’ had been and used with several different
meanings and shades of meaning, and the difficulty had been increased by
some of those meanings overlapping some of the meanings of the word
‘condition’. The Contract Act used the word ‘warranty’ in this ambiguous
sense and did not define it. The result was that the courts had to decide on
the construction of each section whether the word ‘warranty’ was used in the
strict sense of the English Law, as it was . The present Act avoids this
confusion and uses the words ‘condition’, and ‘warranty’ and draws a
distinction between the two.

2. Express Conditions

The parties if they wish, may put the contents of any particular statement or
promise which passes between them on the same footing as the description
of the thing contracted for, so that if it is not made good by the party
undertaking it, the failure is deemed to be a total failure of the performance,
and the other is at least wholly discharged, and may in addition recover
damages for such failure of performance. This is a condition in the proper
sense, as defined in sub-s (2). In the usual sense, the condition means an
essential undertaking in the contract which one party promises will be made
good. If it is not made good, not only will the other party be entitled to
repudiate the contract, but also to sue for damages for breach.

3. Express warranties

There may also be, and there occur in common practice, auxiliary promises or
undertakings of which the breach is not intended to avoid the contract, but
only to give a remedy in damages. These are warranties in the proper sense,
as defined in sub-s (3). A condition of sale, protecting a seller in respect of
misdescription, may be overriden by a warranty given before the sale takes
place and damages may be recovered for breach of the warranty. Whether a
statement is to be regarded as warranty must be objectively ascertained by
asking whether adopting the standard of a reasonable man, the other party
assumed that the representor was to be regarded as undertaking legal liability
for his assertions. The importance of the statement, the relative knowledge
and means of knowledge of the parties, and the possibility of verification are
the relevant factors which would indicate whether the statement is a warranty.
Thus, statements may be warranties when made by dealers, though they
would not be warranties if made by private sellers; for the dealers may be in
possession of special knowledge, expertise and means of information not
available to ordinary persons.

4. Representations

An affirmation as regards the goods, if it is to have contractual effect, must be

part of the contract; if it is not, it is only a representation, the untruth of which
will not, in the absence of fraud, give rise to an action an for damages, though
it may enable the other party to rescind the contract and sometimes a
representation may amount to a condition precedent to the formation of the
contract, so that if be untrue, the other party is discharged from all liability. It
depends upon the intention of the parties whether an affirmation made at the
time of, or during the negotiations for sale, is to be treated as a condition, a
warranty or a mere representation: and although an assertion made by the
seller of a fact unknown to the purchaser may be strong evidence that it was
intended as a warranty, it is not necessary so in law. If the representation
does not form part of the contract, that is, if it is neither a condition nor a
warranty, it amounts to an expression of opinion not intended to enter the
bargain and its no fulfilment does not give rise to any right to a legal action.

5. Implied Conditions and Warranty

Although the parties may have used no expressed words that would create
such a stipulation, the law annexes too many contracts, conditions, the breach
of which may be treated by the buyer as avoiding the contract or given a right
to damages. These are called as implied conditions and are enforced on the
grounds that the law infers from all the circumstances of the case, that the
parties intended to add such a stipulation to their contract, but did not put it
into expressed words.
Most of the statutory implied terms as to sellers duties as to title, confirmative
with description and quality, terms designated a conditions by the contract
itself, terms similar to those or already treated as conditions in another case,
time clauses in mercantile contracts and residual category where breached of
term is to be treated as giving right to treat the contract as discharged are
considered as terms likely to be treated as conditions.
The existence of an employed condition or warranty may be rebutted by proof
of facts, which show a contrary intention

6. Puffs

A mere puff is a vague and extravagant statement so preposterous in its

nature that nobody could believe that anyone was misled by it. The extent to
which a statement may be so categorised depends on the degree or
obviousness of its untruth. The circumstances of its making and in particular
on the expertise and knowledge attributable to the person whom it is made.

Section 13 : When condition to be treated as warranty,

1. Where a contract of sale is subject to any condition to be fulfilled by the
seller, the buyer may waive the condition or elect to treat the breach of
the condition as a breach of warranty an not as a ground for treating
the contract as repudiate.
2. Where a contract of sale is not severable and the buyer has accepted a
goods or part thereof, or where the contract is for specific goods, the
property in which has passed to the buyer, the breach of any condition
to be fulfilled by the seller can only be treated as s breach of warranty
and not as ground for rejecting the goods and treating the contract as
repudiated unless, there is a term of a contract, expressed or implied to
that effect
3. Nothing in this section shall affect the case of any condition or warranty
fulfilment of which is excused by law, by reason of impossibility or

Transfer of Property as Between Seller and Buyer

Section 18 – Goods must be ascertained

Goods must be ascertained: where there is contract for the sale of
unascertained goods, no property in the goods is transferred to the buyer
unless and until the goods are ascertained


1. Transfer of property
2. Property cannot pass until the goods are identified
3. Part of a specific whole
4. Property and risk
5. Identification of goods

1. Transfer of property – This and the five following sections of the Act deal
with the question foreshadowed by section 4 of the Act and lay down rules
which assist in deciding the question when the object of the contract of sale,
namely, the transfer of the property in the goods to the buyer has been
2. Property cannot pass until the goods are identified – It is a condition
precedent to the passing of the property in every case that, the ‘individuality of
the thing to be delivered’ should be established. In any given case, there may
be question whether this condition is fulfilled or not, and it may be that the
property will not pass even if it is fulfilled, but until it is, there is no possibility of
the property passing. It is essential that the article should be specific and
ascertained in a manner binding on both the parties, for unless that be so, the
contract cannot be construed as contract to pas the property in that category.
Where according to the terms of the contract, the seller was to supply
waste coal ash as and when it was discharged from the bunkers of the
powerhouse, it was held that the contract was for the sale of unascertained
goods and, therefore no property passed to the buyer till the goods were
ascertained. (Tej Singh Vs State of Uttar Pradesh and others 1981)

3. Part of a specific whole

It is obvious that if the contract is merely for the sale of goods by description,
such as a contract for sale of a certain quantity of malting barley, or future
goods, the necessary condition is not fulfilled. Nor is it fulfilled even if the
goods are so far ascertained that the parties have agreed that they shall be
taken from some specified larger stock. ‘The parties did not intend to transfer
the property in one portion of the stock more than in another, and the law
which only gives effect to their intention does not transfer the property in any
individual portion’(White Vs. Wilks 1813). And the mere fact that an order for
the delivery is given by the seller to the buyer, and is lodged by the buyer with
a warehouseman, who holds the specified larger stock out of which the goods
sold are to be taken, is not sufficient to transfer the property to the buyer.
(Laurie & Morewood Vs. Dudin & sons 1926) Thus, where the
ascertainment of the goods depends upon their being separated from the bulk
by the seller or a third party or the buyer, by their being severed, weighed or
measured or some other process, no property can pass until this is done
(National Coal Board Vs. Gamble 1959)

4. Property and Risk

In this class of case, it is necessary to distinguish the passing of the property

from the transfer of the risk; the risk usually passes with the property, but may
pass independently of it; Thus, acceptance of the delivery warrant for a
certain quantity of spirit out of a larger bulk which was liable to deteriorate in
storage was held to put the risk of deterioration on the buyer, although he had
acquired, not property but only undivided interest in the whole bulk. Equally, it
would seem that there can be none in an individual part of a chattel, such as a
tree which has been felled, of which a marked portion was sold, and of which
the other portion is to be retained by the seller. In such a case, it is
conceived, the whole tree remains the property of the seller until the marked
portion is severed, even if the severance is to be done by the buyer.

5. Identification of the goods

The contract itself may provide that the property shall pass on the happening
of some specified event, sufficient to identify the goods, and occasionally they
may become identified by other means. Thus, in a case where the seller sold
250 quarters of wheat out of a larger bulk belonging to him in a warehouse,
and the buyer took delivery of 400 quarters and pledged the remaining 850
quarters to a bank, and in the meantime the seller sold the remainder of the
bulk in the warehouse, of which delivery was taken, so that 850 quarters only
were left in the warehouse, it was held that by this process of exhaustion the
850 quarters became ascertained goods and property therein passed to the
buyer, so that the pledgee acquired a title thereto against the seller.(Wait &
Midland Bank 1926) In State of karnataka Vs. The West Coast Paper
Mills Ltd. AIR 1986 it was held that where under a contract a company was
permitted to remove bamboos from the forest area at Rs.10 /- per ton, and the
government by a subsequent order enhanced the price to Rs.20/- per ton, it
was held that the enhanced rate was no applicable to the bamboos cut
although not removed prior to the date of the government order, because on
the bamboos being cut and extricated, the goods being ascertained and in a
deliverable state, the property had passed to the company.

Section 19. Property passes when intended to pass

1. Where there is a contract for the sale of specific or ascertained goods the
property in them is transferred to the buyer at such time as the parties to the
contract intend it to be transferred.
2. For the purpose of ascertaining the intention of the parties regard shall be
had to the terms of the contract, the conduct of the parties and circumstances
of the case.
3. Unless a different intention appears, the roles contained in section 20 to 24
are rules for ascertaining the intention of the parties as to the time at which
the property in the goods is to pass to the buyer.


1. Principles for determining whether the property is transferred

2. Intention of the parties
3. Ascertained goods
1. Principles for determining whether the property is transferred
When it appears that the goods -- the subject of the contract—are specific
or ascertained, so that it is possible for the property to pass to the buyer, it
becomes necessary to determine whether it has actually passed;
This section reproduces this statement in statutory form, and the rules of
construction adopted by courts are those set out in Ss 20 to 24.
2. Intention of the parties
The governing principle which should determine as to the passing of the
property in the goods must be to find out what is the intention of the
parties. It is open to the parties to agree that the property shall pass ipso
facto immediately the goods become ascertained or even that it shall pass
at some time after the delivery is effected. The desirability of making
express provisions to this effect is demonstrated by the consequences of
its omission from the Contract Act. It might have been thought that, even in
the absence of such a provision, the courts would be free to give effect to
the intention of the parties to a lawful contract of sale on such an important
element of the contract as the transfer of the property, and that view has
on some occasions been acted upon. Where a company had transferred
its plant and machinery to the finance corporation and the only right the
company had was to redeem and it was clear that the company could not
sell the same without the concurrence of the finance corporation it was
held that the intention of the parties notwithstanding the language of the
document between the company and M/s Ranga Engineering Company
was to transfer the property only after obtaining the consent of the finance
corporation and there was no sale until then.(PPLooke Vs. NJ Mathew
& others 1967) Sale of shares becomes complete as soon as property in
the shares is intended to be transferred to the buyer. Such intention does
not depend on any particular form or mode of transfer and has to be
gathered from the facts of each particular case. Unity Company Pvt. Ltd.
Vs. Diamond Sugar Mills & others AIR 1971
3. Ascertained goods
Then term ‘ascertained goods’, which also occurs in Section 58, is not
defined by the Act. It is, however, clear that the words ‘specific goods’
bear the meaning assigned to them in the definition clause, ‘goods
identified and agreed upon at the time a contract of sale is made.’
Ascertained’ probably means ‘identified in accordance with the agreement
after the time a contract of sale is made’. Sections 23 and 25, therefore,
must also be read subject to the provisions of this section, and regard
must be had to the intention of the parties when considering whether the
property has or has not passed in the circumstances dealt with by those
sections. Where teak trees to be cut were of more than 12 inches girth, it
was held that till it was ascertained as to which trees fell within the
description they were not ascertained goods. Badri Prasad Vs. The
State of Madhya Pradesh AIR 1970 SC.
Section 20 Specific goods in a deliverable state

Where there is an unconditional contract for the sale of specific goods in a

deliverable state, the property in the goods passes to the buyer when the
contract is made, and it is immaterial whether the time of payment of or the
time of delivery of goods, or both, is postponed.
This section may be illustrated by the following examples:
1. Sale on the 4th January of a haystack on the seller’s land at the price of
£145 to the paid on the 4 th February, the hay to be allowed to remain on
the seller’s land until the 1st May: no hay to be cut until the price was paid.
The property in the haystack passed on the making of the contract and on
the stack being destroyed by fire, the buyer must bear the loss Tarling
Vs. Baxter (1827)
2. Sale of a specified number of bushels of oats, the contents of a bin in a
warehouse. The seller gives a delivery order to the buyer, addressed to
the warehouseman, authorising delivery of the oats tio the buyer, and
asking the warehouseman to weigh them,. The warehouseman accepts
the order and enters it in his books. The property has passed to the buyer,
as the weighing was not necessary to identify the oats or to ascertain the
price, but was merely for the satisfaction of the buyer. Swanwik Vs.
Sothern (1839)
Section 21 Specific goods to be put into a deliverable state
Where there is a contract for the sale of specific goods and the seller is
bound to do something to the goods for the purpose of putting them into a
deliverable state, the property does not pass until such thing is done and
the buyer has notice thereof.
This section may be illustrated by the following example: Sale of
the whole contents of a cistern of oil, the oil to be put into casks by the
seller and then taken away by the buyer. Some of the casks are filled in
the presence of the buyer, buy before any are removed, or the remainder
are filled, filled, fire destroys the whole of the oil. The buyer must bear the
loss of the oil which had been put into the casks, the seller that of the
remainder .Rugg Vs. Minett (1089)
Section 22 Specific goods in a deliverable state , when the seller has
to do anything thereto in order to ascertain price : Where there is a
contract for the sale of specific goods in a deliverable state, but the seller
is bound to weigh, measure, test or do some other act or thing with
reference to the goods for the purpose of ascertaining the price, the
property does not pass until such act or thing is done and the buyer has
notice thereof.
This section may be illustrated by the following examples:
1. Sale of a stack of bark at a certain price per ton, the bark to be weighed
by the seller’s and buyer’s agents. Part was weighed and taken away, but
before anything more was done a flood carried away the remainder. The
loss of this fell on the seller. Simmons Vs Swift (1826)
2. Sale of 289 specified bales of goatskin, containing 5 dozen in each
bale, at a certain price per dozen. By the usage of the trade, it was the
sellers duty to see whether the bales contain the number specified in the
contract. Before the seller had done this the bales were destroyed by fire.
The loss fell on the seller. Zagury vs Furnell(1809)
Section 23 : Sale of unascertained goods and appropriation.
1. Where there is a contract for the sale of unascertained or future goods
by description and goods of that description and in a deliverable state are
unconditionally appropriated to the contract assent of the buyer or by the
buyer with the assent of the seller, the property in the goods there upon
passed to the buyer. Such assent may be expressed or implied, and may
be given either before or after the appropriation made.
2. Delivery to the carrier - Where in pursuance of the contract the seller
delivers the goods to the buyer or to the 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.

This section may be illustrated by the following example:
1. Sale of 20 hogsheads of sugar out sugar out of a larger quantity. The
seller fills four hogsheads which the buyer takes away. Subsequently the
seller fills sixteen more hogsheads, and informs the buyer of this asking
him to come and take them away. The buyer promises to do so. The
property has passed to the buyer.
2. Mr A contracts to sell to Mr B a certain quantity of liquor out of a big
cask containing a much larger quantity. The required quantity is not
separated or bottled. The property in the liquor does not pass to the