Sec 4(3) • A contract of sale of goods is a contract, whereby the seller transfers or agrees to transfer the property in the goods to the buyer for a price
1.There must be at least 2 parties • 2. Transfer or agreement to transfer the ownership of goods should take place • 3. Subject matter: Goods • 4. Consideration: Price • 5. May be absolute or conditional • 6. All other essentials of a valid contract must be present
Conditions and Warranties in sales contract • Condition: A condition is a stipulation which is essential to the main purpose of the contract. It goes to the root of the contract. • Warranty: A warranty is a stipulation which is collateral to the main purpose of the contract. It is not of such vital importance as a condition.
Contract of guarantee • The person who gives the guarantee is called the ‘Surety’ • The person for whom the guarantee is given is called as ‘principal debtor’ • The person to whom the guarantee is given is called the as “creditor”
Unpaid seller Sec 45(1) • 1. He must be unpaid and the price is due. • 2. He must have an immediate right of action for the price • 3. A bill of exchange or other negotiable instrument was received but the same has been dishonored.
Rights of an unpaid seller: Against the goods • 1. Right to lien (to retain the possession • 2. Right of stoppage in transit • 3. Right of resale : With or without notice • Against the buyer personally: • 1. Right to sue for the price • 2. Right to sue for damages
Buyer’s Rights against Seller • 1. Damages for Non Delivery (Sec.57) • 2. Specific Performance (Sec.58) • 3. Remedy for breach of Warranty (59)
Doctrine of ‘caveat emptor’ • Exceptions: • Where the seller makes a false representation and the buyer relies on that representation • Seller actively conceals a defect in the goods, so that on a reasonable examination the same could not be discovered • Buyer makes known to the seller, the purpose for which he is buying the goods and the seller should know to sell the goods of that description