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;

---------------------------------------------------------------------

     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.
---------------------------------------------------------------------


84

          (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,



85


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.



87


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
---------------------------------------------------------------------
     1 Certain words omitted by Act 33 of 1963, s. 3.
---------------------------------------------------------------------


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.




89


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.


90


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.


91

                          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.




92


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.




93



     (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.


94

     (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.



95


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.


96


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


97

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.



98

                     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.


99




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.



100



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;




101



          (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.



---------------------------------------------------------------------
     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).
---------------------------------------------------------------------



102

     (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.