THE SALE OF GOODS ACT, 1930
ACT No. 3 OF 1930
[15th March, 1930.]
An Act to define and amend the law relating to the sale of goods.
WHEREAS it is expedient to define and amend the law relating to
the sale of goods; It is hereby enacted as follows:-
CHAPTER I.
PRELIMINARY
CHAPTER I
PRELIMINARY
1.
Short title, extent and commencement.
1.Short title extent and commencement.-(1) This Act may be called
the 1* * * Sale of Goods Act, 1930.
2*[(2) It extends to the whole of India 3*[except the State of
Jammu and Kashmir].]
(3) It shall come into force on the first day of July, 1930.
2.
Definitions.
2. Definitions.-In this Act, unless there is anything repugnant in
the subject or context,-
(1) "buyer" means a person who buys or agrees to buy goods;
(2) " delivery" means voluntary transfer of possession from
one person to another;
(3) goods are said to be in a "deliverable state" when they
are in such state that the buyer would under the contract be
bound to take delivery of them;
(4) "document of title to goods" includes a bill of lading,
dockwarrant, warehouse keeper's certificate, wharfingers'
certificate, railway receipt, 4*[multimodal transport
document,]4. warrant or order for the delivery of goods and
any other document used in the ordinary course of business
as proof of the possession or control of goods, or
authorising or purporting to authorise, either by endorsement
or by delivery, the possessor of the document to transfer or
receive goods thereby represented ;
(5) "fault" means wrongful act or default;
(6) "future goods" means goods to be manufactured or
produced or acquired by the seller after the making of the
contract of sale;
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1 The Word "Indian" omitted by Act 33 of 1963, s, 2.
2 Subs. by the A. O. 1950, for sub-section (2).
3 Subs by Act 3 of 1951, for except Part B States".
4 Ins. by Act 28 of 1993, s.31 & Sch.(w.e.f. 16-10-1992).
The Act shall come into force in the state of Sikkim on 1-9-1984
vide Notifn. No. S.O. 645 (E), dated 24-8-84 Gaz. of India, Exty.
pt.II Sec. 3 (ii).
Extended to the Union territory of Pondicherry by Act 26 of 1968,
s.3 and Schedule.
Extended to Laccadive, Minicoy and Amindivi Islands (w.e.f. 1-10-
1967): vide Reg. 8 of 1965, s.3 & Sch.
Extended to Goa, Daman and Diu by Reg. 11 of 1963, s.3 & Sch.
Extended to and brought into force in Dadra and Nagar Havali
(w.e.f. 1-7-1965) by Reg. 6 of 1963, s.2 & Sch. I.
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(7)"goods" 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 contract of sale;
(8) a person is said to be "insolvent" who has ceased to
pay his debts in the ordinary course of business, or cannot
pay his debts as they become due, whether he has committed an
act of insolvency or not;
(9) "Mercantile agent" means a mercantile agent having in
the customary course of business as such agent authority
either to sell goods, or to consign goods for the purposes of
sale, or to buy goods, or to raise money on the security of
goods ;
(10) "price" means the money consideration for a sale of
goods;
(11) "property" means the general property in goods, and not
merely a special property;
(12) "quality of goods" includes their state or condition;
(13) "seller" means a person who sells or agrees to sell
goods;
(14) "specific goods" means goods identified and agreed upon
at the time a contract of sale is made ; and
(15) expressions used but not defined in this Act and
defined in the Indian Contract Act, 1872 (9 of 1872), have
the meanings assigned to them in that Act.
3.
Application of provisions of Act 9 of 1872.
3. Application of provisions of Act 9 of 1872.-The unrepealed
provisions of the Indian Contract Act, 1872 (9 of 1872), save in so
far as they are inconsistent with the express provisions of this Act,
shall continue to apply to contracts for the sale of goods.
CHAPTER II.
FORMATION OF THE CONTRACT.
CHAPTER II
FORMATION OF THE CONTRACT
Contract of sale
4.
Sale and agreement to sell.
4. Sale and agreement to sell.-(1) 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. 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,
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but 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.
(4) 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.
Formalities of the contract
5.
Contract of sale how made.
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
offer. The contract may provide for the immediate delivery of the
goods or immediate payment of the price or both, or for the delivery
or payment by instalments, or that the delivery or payment or both
shall be postponed.
(2) Subject to the provisions of any law for the time being in
force, a contract of sale may be made in writing or by word of mouth,
or partly in writing and partly by word of mouth or may be implied
from the conduct of the parties.
Subject-matter of contract
6.
Existing or future goods.
6.Existing or future goods.-(1) The goods which form the subject
of a contract of sale may be either existing goods, owned or possessed
by the seller, or future goods.
(2)There may be a contract for the sale of goods the acquisition
of which by the seller depends upon a contingency which may or may not
happen.
(3) Where by a contract of sale the seller purports to effect a
present sale of future goods, the contract operates as an agreement to
sell the goods.
7.
Goods perishing before making of contract.
7.Goods perishing before making of contract.-Where there is a
contract for the sale of specific goods, the contract is void if the
goods without the knowledge of the seller have, at the time when the
contract was made, perished or become so damaged as no longer to
answer to their description in the contract.
8.
Goods perishing before sale but after agreement to sell.
8. Goods perishing before sale but after agreement to sell.-Where
there is an agreement to sell specific goods, and subsequently the
goods without any fault on the part of the seller or buyer perish or
become so damaged as no longer to answer to their description in the
agreement before the risk passes to the buyer, the agreement is
thereby avoided.
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The price
9.
Ascertainment of price.
9.Ascertainment of price.-(1) The price in a contract of sale may
be fixed by the contract or may be left to be fixed in manner thereby
agreed or may be determined by the course of dealing between the
parties.
(2) Where the price is not determined in accordance with the
foregoing provisions, the buyer shall pay the seller a reasonable
price. What is a reasonable price is a question of fact dependent on
the circumstances of each particular case.
10.
Agreement to sell at valuation.
10. Agreement to sell at valuation.-(1) Where there is an
agreement to sell goods on the terms that the price is to be fixed by
the valuation of a third party and such third party cannot or does not
make such valuation, the agreement is thereby avoided:
Provided that, if the goods or any part thereof have been
delivered to, and appropriated by, the buyer, he shall pay a
reasonable price therefor.
(2) Where such third party is prevented from making the valua-
tion by the fault of the seller or buyer, the party not in fault may
maintain a suit for damages against the party in fault.
Conditions and warranties
11.
Stipulations as to time.
11. Stipulations as to time.-Unless a different intention appears
from the terms of the contract, stipulations as to time of payment are
not 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 contract.
12.
Condition and warranty.
12. Condition and warranty.-(1) A stipulation in a contract of
sale with reference to goods which are the 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.
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13.
When condition to be treated as warranty.
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 and not as a ground for treating
the contract as repudiated.
(2) Where a contract of sale is not severable and the buyer has
accepted the goods or part thereof, 1*** the breach of any condition to
be fulfilled by the seller can only be treated as a breach of warranty
and not as a ground for rejecting the goods and treating the contract
as repudiated, unless there is a term of the contract, express 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 otherwise.
14.
Implied undertaking as to title, etc.
14. Implied undertaking as to title, etc.-In a contract of sale,
unless the circumstances of the contract are such as to show a
different intention, there is-
(a) 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
that, 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 ;
(b) an implied warranty that the buyer shall have and
enjoy quiet possession of the goods;
(c) 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 when the
contract is made.
15.
Sale by description.
15.Sale by description.-Where there is a contract for the sale of
goods by description, there is an implied condition that the goods
shall correspond with the description ; and, if the sale is by sample
as well as by description, it is not sufficient that the bulk of the
goods corresponds with the sample if the goods do not also correspond
with the description.
16.
Implied conditions as to quality or fitness.
16. Implied conditions as to quality or fitness.-Subject to the
provisions of this Act and of any other law for the time being in
force, there is no implied warranty or condition as to the quality or
fitness for any particular purpose of goods supplied under a contract
of sale, except as follows:-
(1) Where the buyer, expressly or by implication, makes
known to the seller the particular purpose for which the
goods are required, so as to show that the buyer relies on
the seller's skill or judgment, and the goods are of a
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1 Certain words omitted by Act 33 of 1963, s. 3.
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88
description which it is in the course of the seller's
business to supply (whether he is the manufacturer or
producer or not), there is an implied condition that the
goods shall be reasonably fit for such purpose:
Provided that, in the case of a contract for the sale of a
specified article under its patent or other trade name, there
is no implied condition as to its fitness for any particular
purpose.
(2) Where goods are bought by description from a seller who
deals in goods of that description (whether he is the
manufacturer or producer or not), there is an implied
condition that the goods shall be of merchantable quality:
Provided that, if the buyer has examined the goods, there
shall be no implied condition as regards defects which such
examination ought to have revealed.
(3) An implied warranty or condition as to quality or
fitness for a particular purpose may be annexed by the usage
of trade.
(4) An express warranty or condition does not negative a
warranty or condition implied by this Act unless inconsistent
therewith.
17.
Sale by sample.
17. Sale by sample.-(1) A contract of sale is a contract for sale
by Sample where there is a term in the contract, express or implied,
to that effect.
(2) In the case of a contract for sale by sample there is an implied
condition-
(a) that the bulk shall correspond with the sample in
quality;
(b) that the buyer shall have a reasonable opportunity of
comparing the bulk with the sample;
(c) that the goods shall be free from any defect, rendering
them unmerchantable, which would not be apparent on
reasonable examination of the sample.
CHAPTER III.
EFFECTS OF THE CONTRACT.
CHAPTER III
EFFECTS OF THE CONTRACT
Transfer of property as between seller and buyer
18.
Goods must be ascertained.
18. Goods must be ascertained.-Where there is a contract for the
sale of unascertained goods, no property in the goods is transferred
to the buyer unless and until the goods are ascertained.
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19.
Property passes when intended to pass.
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 the circumstances of the case.
(3) Unless a different intention appears, the rules contained in
sections 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.
20.
Specific goods in a deliverable state.
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 the price or the time of delivery of the goods, or both, is
postponed.
21.
Specific goods to be put into a deliverable state.
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.
22.
Specific goods in a deliverable state, when the seller has to do
anything thereto in order to ascertain price.
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.
23.
Sale of unascertained goods and appropriation.
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, either by the seller
with the assent of the buyer or by the buyer with the assent of the
seller, the property in the goods thereupon passes to the buyer. Such
assent may be express or implied, and may be given either before or
after the appropriation is made.
(2)Delivery to carrier. Where, in pursuance of the contract, the
seller delivers the goods to the buyer or to a 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.
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24.
Goods sent on approval or "on sale or return".
24.Goods sent on approval or "on sale or return".-When goods are
delivered to the buyer on approval or " on sale or return " or other
similar terms, the property therein passes to the buyer-
(a) when he signifies his approval or acceptance to the
seller or does any other act adopting the transaction;
(b) if he does not signify his approval or acceptance to
the seller but retains the goods without giving notice of re-
jection, then, if a time has been fixed for the return of the
goods, on the expiration of such time, and, if no time has
been fixed, on the expiration of a reasonable time.
25.
Reservation of right of disposal.
25. Reservation of right of disposal.-(1) Where there is a
contract for the sale of specific goods or where goods are
subsequently appropriated to the contract, the seller may, by the
terms of the contract or appropriation, reserve the right of disposal
of the goods until certain conditions are fulfilled. In such case,
notwithstanding the delivery of the goods to a buyer or to a carrier
or other bailee for the purpose of transmission to the buyer, the
property in the goods does not pass to the buyer until the conditions
imposed by the seller are fulfilled.
1*[(2) Where goods are shipped or delivered to a railway adminis-
tration for carriage by railway and by the bill of lading or railway
receipt, as the case may be, the goods are deliverable to the order of
the seller or his agent, the seller is prima facie deemed to reserve
the right of disposal.
(3) Where the seller of goods draws on the buyer for the price
and transmits to the buyer the bill of exchange together with the
bill of lading or, as the case may be, the railway receipt,to secure
acceptance or payment of the bill of exchange, the buyer is bound to
return the bill of lading or the railway receipt if he does not honour
the bill of exchange ; and, if he wrongfully retains the bill of
lading or the railway receipt, the property in the goods does not pass
to him.
Explanation.-In this section, the expressions " railway " and
"railway administration" shall have the meanings respectively assigned
to them under the Indian Railways Act, 1890.] (9 of 1890.)
26.
Risk prima facie passes with property.
26. Risk prima facie passes with property.-Unless otherwise
agreed, the goods remain at the seller's risk until the property
therein is transferred to the buyer, but when the
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1 Subs. by Act 33 of 1963, s. 4, for sub-sections (2) and (3).
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90A
property therein is transferred to the buyer, the goods are at the
buyer's risk whether delivery has been made or not:
provided that, where delivery has been delayed through the fault
of either buyer or seller, the goods are at the risk of the party in
fault as regards any loss which might not have occurred but for such
fault:
Provided also that nothing in this section shall affect the
duties or liabilities of either seller or buyer as a bailee of the
goods of the other party.
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Transfer of title
27.
Sale by person not the owner.
27. Sale by person not the owner.-Subject to the provisions of
this Act and of any other law for the time being in force, where goods
are sold by a person who is not the owner thereof and who does not
sell them under the authority or with the consent of the owner, the
buyer acquires no better title to the goods than the seller had,
unless the owner of the goods is by his conduct precluded from denying
the seller's authority to sell:
Provided that, where a mercantile agent is, with the consent of
the owner, in possession of the goods or of a document of title to the
goods, any sale made by him, when acting in the ordinary course of
business of a mercantile agent, shall be as valid as if he were
expressly authorised by the owner of the goods to make the same ;
Provided that the buyer acts in good faith and has not at the
time of the contract of sale notice that the seller has not authority
to sell.
28.
Sale by one of joint owners.
28.Sale by one of joint 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
of such joint owner in good faith and has not at the time of the
contract of sale notice that the seller has not authority to sell.
29.
Sale by person in possession under voidable contract.
29.Sale by person in possession under voidable contract.-When the
seller of goods has obtained possession thereof under a contract
voidable under section 19 or section 19A of the Indian Contract Act,
1872 (9 of 1972), but the contract has not been rescinded at the time
of the sale, the buyer acquires a good title to the goods, provided he
buys them in good faith and without notice of the seller's defect of
title.
30.
Seller or buyer in possession after sale.
30. Seller or buyer in possession after sale.-(1) Where a person,
having sold goods, continues or is in possession of the goods or of
the documents of title to the goods, the delivery or transfer by that
person or by a mercantile agent acting for him, of the goods or
documents of title under any sale, pledge or other disposition thereof
to any person receiving the same in good faith and without notice of
the previous sale shall have the same effect as if the person making
the delivery or transfer were expressly authorised by the owner of the
goods to make the same.
(2) Where a person, having bought or agreed to buy goods,
obtains, with the consent of the seller, possession of the goods or
the documents of title to the goods, the delivery or transfer by that
person or by a mercantile agent acting for him, of the goods or
documents of title under any sale, pledge or other disposition thereof
to any person receiving the same in good faith and without notice of
any lien or other right of the original seller in respect of the goods
shall have effect as if such lien or right did not exist.
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CHAPTER IV
PERFORMANCE OF THE CONTRACT
CHAPTER IV
PERFORMANCE OF THE CONTRACT
31.
Duties of seller and buyer.
31. Duties of seller and buyer.-It is the duty of the seller to
deliver the goods and of the buyer to accept and pay for them, in
accordance with the terms of the contract of sale.
32.
Payment and delivery are concurrent conditions.
32. Payment and delivery are concurrent conditions.-Unless
otherwise agreed, delivery of the goods and payment of the price are
concurrent conditions, that is to say, the seller shall be ready and
willing to give possession of the goods to the buyer in exchange for
the price, and the buyer shall be ready and willing to pay the price
in exchange for possession of the goods.
33.
Delivery.
33. Delivery.-Delivery of goods sold may be made by doing anything
which the parties agree shall be treated as delivery or which has the
effect of putting the goods in the possession of the buyer or of any
person authorised to hold them on his behalf.
34.
Effect of part delivery.
34. Effect of part delivery.-A delivery of part of goods, in
progress of the delivery of the whole, has the same effect, for the
purpose of passing the property in such goods, as a delivery of the
whole ; but a delivery of part of the goods, with an intention of
severing it from the whole, does not operate as a delivery of the
remainder.
35.
Buyer to apply for delivery.
35. Buyer to apply for delivery.-Apart from any express contract,
the seller of goods is not bound to deliver them until the buyer
applies for delivery.
36.
Rules as to delivery.
36. Rules as to delivery.-(1) Whether it is for the buyer to take
possession of the goods or for the seller to send them to the buyer is
a question depending in each case on the contract, express or implied,
between the parties. Apart from any such contract, goods sold are to
be delivered at the place at which they are at the time of the sale,
and goods agreed to be sold are to be delivered at the place at which
they are at the time of the agreement to sell, or, if not then in
existence, at the place at which they are manufactured or produced.
(2) Where under the contract of sale the seller is bound to send
the goods to the buyer, but no time for sending them is fixed, the
seller is bound to send them within a reasonable time.
(3) Where the goods at the time of sale are in the possession of a
third person, there is no delivery by seller to buyer unless and until
such third person acknowledges to the buyer that he holds the goods
on his behalf:
Provided that nothing in this section shall affect the operation
of the issue or transfer of any document of title to goods.
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(4) Demand or tender of delivery may be treated as ineffectual
unless made at a reasonable hour. What is a reasonable hour is a
question of fact.
(5) Unless otherwise agreed, the expenses of and incidental to
putting the goods into a deliverable state shall be borne by the
seller.
37.
Delivery of wrong quantity.
37. Delivery of wrong quantity.-(1) Where the seller delivers to
the buyer a quantity of goods less than he contracted to sell, the
buyer may reject them, but if the buyer accepts the goods so delivered
he shall pay for them at the contract rate.
(2) Where the seller delivers to the buyer a quantity of goods
larger than he contracted to sell, the buyer may accept the goods
included in the contract and reject the rest, or he may reject the
whole. If the buyer accepts the whole of the goods so delivered, he
shall pay for them at the contract rate.
(3) Where the seller delivers to the buyer the goods he contracted
to sell mixed with goods of a different description not included in
the contract, the buyer may accept the goods which are in accordance
with the contract and reject the rest, or may reject the whole.
(4) The provisions of this section are subject to any usage of
trade, special agreement or course of dealing between the parties.
38.
Instalments deliveries.
38.Instalments deliveries.-(1) Unless otherwise agreed, the buyer
of goods is not bound to accept delivery thereof by instalments.
(2) Where there is a contract for the sale of goods to be
delivered by stated instalments which are to be separately paid for,
and the seller makes no delivery or defective delivery in respect of
one or more instalments, or the buyer neglects or refuses to take
delivery of or pay for one or more instalments, it is a question in
each case depending on the terms of the contract and the circumstances
of the case, whether the breach of contract is a repudiation of the
whole contract, or whether it is a severable breach giving rise to a
claim for compensation, but not to a right to treat the whole contract
as repudiated.
39.
Delivery to carrier or wharfinger.
39.Delivery to carrier or wharfinger.-(1) Where, in pursuance of
a contract of sale, the seller is authorised or required to send the
goods to the buyer, delivery of the goods to a carrier, whether named
by the buyer or not, for the purpose of transmission to the buyer, or
delivery of the goods to a wharfinger for safe custody, is prima facie
deemed to be a delivery of the goods to the buyer.
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(2) Unless otherwise authorised by the buyer, the seller shall
make such contract with the carrier or wharfinger on behalf of the
buyer as may be reasonable having regard to the nature of the goods
and the other circumstances of the case. If the seller omits so to
do, and the goods are lost or damaged in course of transit or whilst
in the custody of the wharfinger, the buyer may decline to treat the
delivery to the carrier or wharfinger as a delivery to himself, or may
hold the seller responsible in damages.
(3)Unless otherwise agreed, where goods are sent by the seller to
the buyer by a route involving sea transit, in circumstances in which
it is usual to insure, the seller shall give such notice to the buyer
as may enable him to insure them during their sea transit, and if the
seller fails so to do, the goods shall be deemed to be at his risk
during such sea transit.
40.
Risk where goods are delivered at distance place.
40. Risk where goods are delivered at distance place.-Where the
seller of goods agrees to deliver them at his own risk at a place
other than that where they are when sold, the buyer shall,
nevertheless, unless otherwise agreed, take any risk of deterioration
in the goods necessarily incident to the course of transit.
41.
Buyer's right of examining the goods.
41. Buyer's right of examining the goods.-(1) Where goods are
delivered to the buyer which he has not previously examined, he is not
deemed to have accepted them unless and until he has had a reasonable
opportunity of examining them for the purpose of ascertaining whether
they are in conformity with the contract.
(2)Unless otherwise agreed, when the seller tenders delivery of
goods to the buyer, he is bound, on request, to afford the buyer a
reasonable opportunity of examining the goods for the purpose of
ascertaining whether they are in conformity with the contract.
42.
Acceptance.
42.Acceptance.-The buyer is deemed to have accepted the goods when
he intimates to the seller that he has accepted them, or when the
goods have been delivered to him and he does any act in relation to
them which is inconsistent with the ownership of the seller, or when,
after the lapse of a reasonable time, he retains the goods without
intimating to the seller that he has rejected them.
43.
Buyer not bound to return rejected goods.
43. Buyer not bound to return rejected goods.-Unless otherwise
agreed, where goods are delivered to the buyer and he refuses to
accept them, having the right so to do, he is not bound to return them
to the seller, but it is sufficient if he intimates to the seller that
he refuses to accept them.
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44.
Liability of buyer for neglecting or refusing delivery of goods.
44.Liability of buyer for neglecting or refusing delivery of
goods.-When the seller is ready and willing to deliver the goods and
requests the buyer to take delivery, and the buyer does not within a
reasonable time after such request take delivery of the goods, he is
liable to the seller for any loss occasioned by his neglect or refusal
to take delivery, and also for a reasonable charge for the care and
custody of the goods:
Provided that nothing in this section shall affect the rights of
the seller where the neglect or refusal of the buyer to take delivery
amounts to a repudiation of the contract.
CHAPTER V.
RIGHTS OF UNPAID SELLER AGAINST THE GOODS.
CHAPTER V
RIGHTS OF UNPAID SELLER AGAINST THE GOODS
45.
"Unpaid seller" defined.
45."Unpaid seller" defined.-(1) The seller of goods is deemed to
be an "unpaid seller" within the meaning of this Act-
(a) when the whole of the price has not been paid or
tendered;
(b) when a bill of exchange or other negotiable instrument
has been received as conditional payment, and the condition
on which it was received has not been fulfilled by reason of
the dishonour of the instrument or otherwise.
(2) In this Chapter, the term " seller " includes any person who
is in the position of a seller, as, for instance, an agent of the
seller to whom the bill of lading has been indorsed, or a consignor or
agent who has himself paid, or is directly responsible for, the price.
46.
Unpaid seller's rights.
46. Unpaid seller's rights.-(1) Subject to the provisions of this
Act and of any law for the time being in force, notwithstanding that
the property in the goods may have passed to the buyer, the unpaid
seller of goods, as such, has by implication of law-
(a) a lien on the goods for the price while he is in
possession of them;
(b) in case of the insolvency of the buyer a right of
stopping the goods in transit after he has parted with the
possession of them;
(c) a right of re-sale as limited by this Act.
(2) Where the property in goods has not passed to the buyer, the
unpaid seller has, in addition to his other remedies, a right of with-
holding delivery similar to and co-extensive with his rights of lien
and stoppage in transit where the property has passed to the buyer.
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Seller's lien.
47. Seller's lien.-(1) Subject. to the provisions of this Act,
the unpaid seller of goods who is in possession of them is entitled to
retain possession of them until payment or tender of the price in the
following cases, namely:-
(a) where the goods have been sold without any stipulation
as to credit ;
(b) where the goods have been sold on credit, but the term
of credit has expired ;
(c) where the buyer becomes insolvent.
(2) The seller may exercise his right of lien notwithstanding
that he is in possession of the goods as agent or bailee for the
buyer.
48.
Part delivery.
48. Part delivery.-Where an unpaid seller has made part delivery
of the goods, he may exercise his right of lien on the remainder,
unless such part delivery has been made under such circumstances as to
show an agreement to waive the lien.
49.
Termination of lien.
49. Termination of lien.-(1) The unpaid seller of goods loses his
lien thereon-
(a) when he delivers the goods to a carrier or other bailee
for the purpose of transmission to the buyer without
reserving the right of disposal of the goods ;
(b) when the buyer or his agent lawfully obtains possession
of the goods;
(c) by waiver thereof.
(2) The unpaid seller of goods, having a lien thereon, does not
lose his lien by reason only that he has obtained a decree for the
price of the goods.
Stoppage in transit
50.
Right of stoppage in transit.
50. Right of stoppage in transit.-Subject to the provisions of
this Act, when the buyer of goods becomes insolvent, the unpaid
seller who has parted with the possession of the goods has the right
of stopping them in transit, that is to say, he may resume possession
of the goods as long as they are in the course of transit, and may
retain them until payment or tender of the price.
51.
Duration of transit.
51. Duration of transit.-(1) Goods are deemed to be in course of
transit from the time when they are delivered to a carrier or other
bailee for the purpose of
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transmission to the buyer, until the buyer or his agent in that behalf
takes delivery of them from such carrier or other bailee.
(2)If the buyer or his agent in that behalf obtains delivery of
the goods before their arrival at the appointed destination, the
transit is at an end.
(3)If, after the arrival of the goods at the appointed
destination, the carrier or other bailee acknowledges to the buyer or
his agent that he holds the goods on his behalf and continues in
possession of them as bailee for the buyer or his agent, the transit
is at an end and it is immaterial that a further destination for the
goods may have been indicated by the buyer.
(4)If the goods are rejected by the buyer and the carrier or
other bailee continues in possession of them, the transit is not
deemed to be at an end, even if the seller has refused to receive them
back.
(5)When goods are delivered to a ship chartered by the buyer, it
is a question depending on the circumstances of the particular case,
Whether they are in the possession of the master as a carrier or as
agent of the buyer.
(6)Where the carrier or other bailee wrongfully refuses to
deliver the goods to the buyer or his agent in that behalf, the
transit is deemed to be at an end.
(7)Where part delivery of the goods has been made to the buyer or
his agent in that behalf, the remainder of the goods may be stopped in
transit, unless such part delivery has been given in such circum-
stances as to show an agreement to give up possession of the whole of
the goods.
52.
How stoppage in transit is effected.
52.How stoppage in transit is effected.-(1) The unpaid seller may
exercise his right of stoppage in transit either by taking actual
possession of the goods, or by giving notice of his claim to the
carrier or other bailee in whose possession the goods are. Such
notice may be given either to the person in actual possession of the
goods or to his principal. In the latter case the notice, to be
effectual, shall be given at such time and in such circumstances that
the principal, by the exercise of reasonable diligence, may
communicate it to his servant or agent in time to prevent a delivery
to the buyer.
(2)When notice of stoppage in transit is given by the seller to
the carrier or other bailee in possession of the goods, he shall
redeliver the goods to, or according to the directions of, the seller.
The expenses of such re-delivery shall be borne by the seller.
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Transfer by buyer and seller
53.
Effect of subsale or pledge by buyer.
53. Effect of subsale or pledge by buyer.-(1) Subject to the
provisions of this Act, the unpaid seller's right of lien or stoppage
in transit is not affected by any sale or other disposition of the
goods which the buyer may have made, unless the seller has assented
thereto:
Provided that where a document of title to goods has been issued
or lawfully transferred to any person as buyer or owner of the goods,
and that person transfers the document to a person who takes the
document in good faith and for consideration, then, if such last men-
tioned transfer was by way of sale, the unpaid seller's right of lien
or stoppage in transit is defeated, and, if such last mentioned
transfer was by way of pledge or other disposition for value, the
unpaid seller's right of lien or stoppage in transit can only be
exercised subject to the rights of the transferee.
(2)Where the transfer is by way of pledge, the unpaid seller may
require the pledgee to have the amount secured by the pledge satisfied
in the first instance, as far as possible, out of any other goods or
securities of the buyer in the hands of the pledgee and available
against the buyer.
54.
Sale not generally rescinded by lien or stoppage in transit.
54. Sale not generally rescinded by lien or stoppage in
transit.-(1) Subject to the provisions of this section, a contract of
sale is not rescinded by the mere exercise by an unpaid seller of his
right of lien or stoppage in transit.
(2)Where the goods are of a perishable nature, or where the un-
paid seller who has exercised his right of lien or stoppage in transit
gives notice to the buyer of his intention to re-sell, the unpaid
seller may, if the buyer does not within a reasonable time pay or
tender the price, re-sell the goods within a reasonable time and
recover from the original buyer damages for any loss occasioned by his
breach of contract, but the buyer shall not be entitled to any profit
which may occur on the re-sale, If such notice is not given, the
unpaid seller shall not be entitled to recover such damages and the
buyer shall be entitled to the profit, if any, on the re-sale.
(3)Where an unpaid seller who has exercised his right of lien or
stoppage in transit re-sells the goods, the buyer acquires a good
title thereto as against the original buyer, notwithstanding that no
notice of the re-sale has been given to the original buyer.
(4)Where the seller expressly reserves a right of re-sale in case
the buyer should make default, and, on the buyer making default, re-
sell,s the goods, the original contract of sale is thereby rescinded,
but without prejudice to any claim which the seller may have for
damages.
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CHAPTER VI
SUITS FOR BREACH OF THE CONTRACT
CHAPTER VI
SUITS FOR BREACH OF THE CONTRACT
55.
Suit for price.
55.Suit for price.-(1) 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.
(2)Where under a contract of sale the price is payable on a day
certain irrespective of delivery and the buyer wrongfully neglects or
refuses to pay such price, the seller may sue him for the price
although the property in the goods has not passed and the goods have
not been appropriated to the contract.
56.
Damages for non-acceptance.
56. Damages for non-acceptance.-Where the buyer wrongfully
neglects or refuses to accept and pay for the goods, the seller may
sue him for damages for non-acceptance.
57.
Damages for non-delivery.
57.Damages for non-delivery.-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.
58.
Specific performance.
58. Specific performance.-Subject to the provisions of Chapter 11
of the Specific Relief Act, 1877 (1 of 1877), 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 the option of retaining the goods on payment of
damages. The decree may be unconditional, or upon such terms and
conditions as to damages, payment of the price or otherwise, as the
Court may deem just, and the application of the plaintiff may be made
at any time before the decree.
59.
Remedy for breach of warranty.
59. Remedy for breach of warranty.-(1) Where there is a breach of
warranty by the seller, or where the buyer elects or is compelled to
treat any breach of a condition on the part of the seller as a breach
of warranty, the buyer is not by reason only of such breach of
warranty entitled to reject the goods ; but he may-
(a) set up against the seller the breach of warranty in
diminution or extinction of the price ; or
(b) sue the seller for damages for breach of warranty.
(2) The fact that a buyer has set up a breach of warranty in
diminution or extinction of the price does not prevent him from suing
for the same breach of warranty if he has suffered further damage.
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60.
Repudiation of contract before due date.
60. Repudiation of contract before due date.-Where either party
to a contract of sale repudiates the contract before the date of
delivery, the other may either treat the contract as subsisting and
wait till the date of delivery, or he may treat the contract as
rescinded and sue for damages for the breach.
61.
Interest by way of damages and special damages.
61. Interest by way of damages and special damages.-(1) Nothing
in this Act shall affect the right of the seller or the buyer to
recover interest or special damages in any case where by law interest
or special damages may be recoverable, or to recover the money paid
where the consideration for the payment of it has failed.
(2) In the absence of a contract to the contrary, the Court may
award interest at such rate as it thinks fit on the amount of the
price-
(a) to the seller in a suit by him for the amount of the
price from the date of the tender of the goods or from the
date on which the price was payable;
(b) to the buyer in a suit by him for the refund of the
price in a case of a breach of the contract on the part of
the seller from the date on which the payment was made.
CHAPTER VII
MISCELLANEOUS
CHAPTER VII
MISCELLANEOUS
62.
Exchange of implied terms and conditions.
62. Exchange of implied terms and conditions.-Where any right,
duty or liability would arise under a contract of sale by implication
of law, it may be negatived or varied by express agreement or by the
course of dealing between the parties, or by usage, if the usage is
such as to bind both parties to the contract.
63.
Reasonable time a question of fact.
63. Reasonable time a question of fact.-Where in this Act any
reference is made to a reasonable time, the question what is a
reasonable time is a question of fact.
64.
Auction sale.
64. Auction sale.-In the case of a sale by auction-
(1) where goods are put up for sale in lots. each lot is
prima facie deemed to be the subject of a separate contract
of sale ;
(2) the sale is complete when the auctioneer announces its
completion by the fall of the hammer or in other customary
manner; and, until such announcement is made, any bidder may
retract his bid;
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(3) a right to bid may be reserved expressly by or on
behalf of the seller and, where such right is expressly so
reserved, but not otherwise, the seller or any one person on
his behalf may, subject to the provisions hereinafter con-
tained. bid at the auction;
(4) where the sale is not notified to be subject to a right
to bid on behalf of the seller, it shall not be lawful for
the seller to bid himself or to employ any person to bid at
such sale, or for the auctioneer knowingly to take any bid
from the seller or any such person; and any sale contravening
this rule may be treated as fraudulent by the buyer;
(5) the sale may be notified to be subject to a reserved or
upset price ;
(6) if the seller makes use of pretended bidding to raise
the price, the sale is voidable at the option of the buyer.
64A.
In contracts of sale, amount of increased or decreased taxes to be
added or deducted.
1*[64A. In contracts of sale, amount of increased or decreased
taxes to be added or deducted.-(1) Unless a different intention
appears from the terms of the contract, in the event of any tax of the
nature described in sub-section (2) being imposed, increased,
decreased or remitted in respect of any goods after the making of any
contract for the sale or purchase of such goods without stipulation as
to the payment of tax where tax was not chargeable at the time of the
making of the contract, or for the sale or purchase of such goods tax-
paid where tax was chargeable at that time-
(a) if such imposition or increase so takes effect
that the tax or increased tax, as the case may be, or
any part of such tax is paid or is payable, the seller
may add so much to the contract price as will be
equivalent to the amount paid or payable in respect of
such tax or increase of tax, and he shall be entitled to
be paid and to sue for and recover such addition; and
(b) if such decrease or remission so takes effect that
the decreased tax only, or no tax, as the case may be,
is paid or is payable, the buyer may deduct so much from
the contract price as will be equivalent to the decrease
of tax or remitted tax, and he shall not be liable to
pay, or be sued for, or in respect of, such deduction.
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1 Subs. by Act 33 of 1963, s, 5, for s. 64A, ins. by Act 41 of
1940, s. 2. (w.e.f. 22-9- 1963).
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(2) The provisions of sub-section (1) apply to the following
taxes, namely:-
(a) any duty of customs or excise on goods;
(b) any tax on the sale or purchase of goods.]
65.
Repeal.
65. [Repeal] Rep. by the Repealing Act, 1938 (1 of 1938), s. 2
and Sch.
66.
Savings.
66. Savings.-(1) Nothing in this Act or in any repeal effected
thereby shall affect or be deemed to affect-
(a) any right, title, interest, obligation or liability
already acquired, accrued or incurred before the commencement
of this Act, or
(b) any legal proceedings or remedy in respect of any such
right, title, interest, obligation or liability, or
(c) anything done or suffered before the commencement of
this Act, or
(d) any enactment relating to the sale of goods which is
not expressly repealed by this Act, or
(e) any rule of law not inconsistent with this Act.
(2) The rules of insolvency relating to contracts for the sale
of goods shall continue to apply thereto, notwithstanding anything
contained in this Act.
(3) The provisions of this Act relating to contracts of sale do
not apply to any transaction in the form of a contract of sale which
is intended to operate by way of mortgage, pledge, charge or other
security.