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Atleast two parties. Transfer or agreement to transfer ownership of goods. Subject matter of the contract must be goods. Price is the consideration of contract of sale. All other essentials of a valid contract as per the Indian Contract Act, 1872.
Sale: The property in goods is immediately transferred from the seller to the buyer, at the time of making the contract. Agreement to sell: The transfer of property in goods is to take place at a future time or subject to some conditions thereafter to be fulfilled
Subject matter of Contract of Sale of Goods: Goods: Goods means every kind of movable property other than actionable claims and money and includes 1. stock and shares, 2. 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.
Classification of Goods: i. Existing goods ii. Future goods iii. Contingent goods The Existing goods may be: a. Ascertained goods b. Unascertained goods
Implied Condition as to title Implied Condition under a sale by description: Goods must correspond with description Goods must be of merchantable quality Condition as to wholesomeness Condition as to fitness for particular purpose Implied conditions under a sale by sample Implied conditions in sale by sample as well as by description
Warranty as to quiet possession Warranty as to freedom from encumbrances Warranty to disclose dangerous nature of goods Warranties implied by the custom or usage of trade
Exceptions to the doctrine: i. Seller makes a false representation. ii. Seller actively conceals defects in goods. iii. Buyer makes known to the seller the purpose for which he is buying the goods. iv. If goods are sold by description, there is an implied condition that goods will be of merchantable quality. v. Goods have some latent defects that no examination could have revealed or detected.
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Risk generally passes with ownership Action against third parties Suit for price Insolvency of the seller or the buyer
The general rule is the seller cannot transfer to the buyer of goods a better title than he himself has. The rule is expressed by the maxim, nemo det quod non habet. The rule aims at protecting the interests of the true owner.
Unpaid seller: The seller of goods is deemed to be unpaid seller: i. When the whole of the price has not been paid ii. When the payment was made by a bill of exchange or other negotiable instrument and instrument has been dishonoured.
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Rights against the goods: Right of lien Right of stoppage in transit Right of resale
Rights against the buyer: Suit for the price Suit for damages for non-acceptance Suit for special damages and interest
Damages for non-delivery Right of recovery of the price Specific performance Suit for breach of condition Suit for breach of warranty Recovery of interest