SALES OF

GOODS ACT,
1930
DEFINITIONS U/S. 2
 Buyer s.2(1)

 Seller s. 2(13)
Goods s. 2(7)

Means every kind of movable property other than

actionable claims and money, but includes stock
and shares, growing crops, grass and things
attached to or forming part of the land, which are
agreed to be served before sale or under the
contract of a sale.

Actionable claim – debt or a claim for money

which a person may have against another and
which he can recover through suits.
KINDS OF
GOODS
Existing goods: These are the
goods which are owned or possessed
by the seller at the time of sale.
Only existing goods can be the
subject of a sale. The existing goods
may be-

Specific goods or Ascertained

Goods : Goods identified and agreed
upon at the time of making of the
contract of sale of goods.

Unascertained or generic goods:

Goods not identified or agreed upon
at the time of making of the contract
of sale. They are the goods defined
for description only.
2. Future goods: Goods to be
manufactured, produced or
acquired after making of the
contract are called future goods.

Example: ‘A’ contract, on 1st

January, to sell B 50 shares in
Reliance Ltd., to be delivered and
paid for on the 1st March of the
same year. At the time of making of
the contract, A is not in possession
of any shares. The contract is a
contract for the sale of future
goods.
3. Contingent goods : Goods,
the acquisition of which by the
seller ,depends upon an uncertain
contingency are called ‘contingent
goods’. They are also a type of
future goods.

Example: ‘A’ agrees to sell 100

units of an article provided the ship
which is bringing them, reaches the
port safely. This is an agreement for
the sale of contingent goods.
CONTRACT OF SALE

 According to Section 4 of the Act, a

contract of Sale means “a contract
where the seller transfers or agrees to
transfer the property in goods to the
buyer for price”
 Contract of Sale may be of two types:

Contract
of sale

Agreeme
Sale
nt to sell
SALE

EXAMPLE: It is a
A sells his contract
house to B where the
for Rs. ownership in
10,00,000. It the goods is
is a sale transferred
since the by seller to
ownership the buyer
of the house immediately
has been at the
transferred conclusion
from A to B. contract
AGREEMENT TO SELL

It is a contract of sale where the transfer of

property in goods is to take place at a future
date or subject to some condition thereafter
to be fulfilled.

EXAMPLE: A agreed to buy from B a certain

quantity of nitrate of soda. The ship carrying
the nitrate of soda was yet to arrive. This is
`an agreement to sale`. In this case, the
ownership of nitrate of soda is to be to
transferred to A on the arrival of the ship
containing the specified goods (i.e. nitrate of
soda) [Johnson V McDonald (1842) 9 M & W
600, 60 RR 838]
Basis Sale Agreement to sell

1. Transfer of The property of goods The transfer of

property passes from the seller property of the goods
to the buyer is to take place at a
immediately. So the future time or subject
seller is no more to certain conditions
owner of the goods to be fulfilled. It is an
sold. It is an executed executory contract.
contract.

2. Type of goods A sale can only be in An agreement to sell

case of existing goods is mostly in case of
only. future and contingent
goods. Although it
may refer to
uncertain existing
goods.
In a sale if the goods In an Agreement to
are destroyed , the Sell if the goods are
loss falls on the buyer destroyed the loss
even though the falls on the seller
3. Risk of loss
goods are in the even though the
posssession of the goods are in the
 In a sale the buyer If there is a breach of
fails to pay the price contract by the buyer
of goods (or) if there the seller can only
is a breach of sue for the damages
4.Consequences
contract by the buyer and not for the price.
of the breach
the seller can sue for
the price even though
the goods are still in
his possession
In a sale the seller The buyer who takes
cannot re-sell the the goods for
goods. consideration and
without notice of the
5. Right to re-
prior agreement gets
sell
him a good title. The
original buyer can
only sue the seller for
damages.
The sale of contract An agreement to sell
plus conveyance and is merely a contract
creates ‘Jus in rem’ pure and simple and
6. General and
i.e., gives right to the creates ‘Jus in
particular
buyer to enjoy the personam’ i.e., gives
property
goods as against the a right to the buyer
ESSENTIALS OF
CONTRACT OF SALE
Two parties

Goods

Transfer of
property

Price

Essential Includes sale and agreement to sell

elements
of a valid
contract No formalities are required
 Differences between Sale and Hire
 1.Purchase
In a sale, property in the goods is transferred to
the buyer immediately at the time of contract,
whereas in hire-purchase, the property in the goods
passes to the hirer upon payment of the last
installment.

 2. In a sale, the position of the buyer is that of the

owner of the goods but in hire purchase, the position
of the hirer is that of a bailee till he pays the last
installment.

 3. In the case of a sale, the buyer cannot terminate

the contract and is bound to pay the price of the
goods. On the other hand, in the case of hire-
purchase, the hirer may, if he so likes, terminate the
contract by returning the goods to its owner without
4. In the case of a sale, the seller takes the risk of any loss
resulting from the insolvency of the buyer. In the case of hire
purchase, the owner takes no such risk, for if the hirer fails to
pay an installment, the owner has the right to take back the
goods.

5. In the case of a sale, the buyer can pass a good title to a

bonafide purchaser from him but in a hire-purchase, the hirer
cannot pass any title even to a bonafide purchaser.
CONDITION AND
WARRANTIES
Condition:
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.
[Sec 12(2)]
Example: Buyer wanted a horse
which could run at a speed of 45
m.p.h.

Warranty:
A warranty is a stipulation
collateral to the main purpose of
the contract, breach of which
gives rise to a claim for
damages, but not a right to
reject the goods and treat the
contract as repudiated. [Sec
Condition Warranties

Condition is of a fundamental Warranty is of a subsidiary of

nature. inferior character.

Condition is essential to the main Warranty is only collateral to the

purpose of the contract. The main main purpose of the contract.
purpose of the contract cannot be Fulfillment of the main purpose of
fulfilled without the prior the contract does not depend up
fulfillment of this stipulation. on the fulfillment of the warranty.

If there is breach of condition, the In case of breach of warranty, the

aggrieved party can repudiate the aggrieved party can claim
contract. damages only.

A breach of condition may be A breach of warranty , however,

treated as a breach of warranty. cannot be treated as a breach of
This would happen where the condition.
aggrieved party is contented with
damages only.
X sells food-stuff to Y. The On the other hand, if the contract
contract between X and Y stipulates that the food-stuff should
states that the food to be be packed in 1 kilo box but the
sold should be fit for seller packs it in half-kilo box, only
consumption and this is an auxiliary or minor term of the
the essential term in the contract is broken, Y may be able to
contract. So, if it contains claim compensation in respect of its
any poisonous substance, breach, but not avoid the contract.
Y is entitled to reject the Such an auxiliary term is called
food-stuff and to warranty.
repudiate the contract
This essential term is
called a condition.
IMPLIED CONDITIONS
AND WARRANTIES
Conditions and warranties may
be express or implied.

Express Express condition and

warranties are those which
have been expressly
condition and agreed upon by the parties
at the time of contract of
warranties: sale

Implied Implied condition and

warranties are those which
the law incorporates into
condition and the contract unless the
parties stipulate to the
warranties: contrary.
IMPLIED CONDITIONS
Condition • Condition as to Title [Sec 14(a)]

Condition • Condition as to Description [Sec 15]

Condition • Condition as to Sample [Sec 17(2)]

Condition • Condition as to Sample as well as Description

[Sec 15]

Condition • Condition as to Quality or Fitness for Buyer’s

purpose [Section 16(1)]

Condition
• Condition as to Merchantability
• [Section 16(2)]

Condition • Condition as to Wholesome

Condition as to Title [Sec 14(a)]

It is the most important implied condition in a contract

of sale that seller has the right to sell the goods.
Example: R bought a car from D and used it for 4
months. D had no title to the car and consequently R
had to hand it over to the true owner. Held, R could
recover the price paid [Rowland v. Divall(1923)2 K.B.
500]
 Condition as to Sample
In a sale by sample there is a implied
condition that the goods shall
correspond with the sample in quality,
and the goods shall be free from the
defects.
Sale by sample has following
three conditions:
(i) Correspondence of Goods
with sample in quality [sec 17(2)(a)]
(ii) Reasonable opportunity of
comparing goods with the sample
[Sec 17(2)(b)]
(iii) Merchantability of Goods
[Sec 17(2)(c)]

Example: Certain shoes were sold by

sample for the French Army. The shoes
were found to contain paper not
discoverable by ordinary inspection.
Held, the buyer was entitled to the
refund of price plus damages.
Condition as to Description [Sec 15]

In sale by description there is

an implied condition that the
goods shall correspond with
description.

Example: A want to sell his

typewriter. He says to B ,
intending buyer who has not
have seen the machine, that it
is a brand-new machine. B
agrees to purchase it . On
delivery B finds that the
machine is old and repaired. B
can repudiate the contract.
Condition as to quality or fitness[Sec. 16 (1)]

Normally, in a contract of sale there

is no implied condition as to quality
or fitness of the goods for a
particular purpose. The buyer must
examine the goods thoroughly before
he buys them in order to satisfy
himself.

Example: An order was placed for

some lorries to be
used “for heavy traffic in a hilly
area”. The lorries supplied were unfit
and breakdown. There is a breach of
condition as to fitness.
Condition as to merchantability[Sec. 16(2)]

Where goods are bought by description

from a seller who deals in goods of that
description there is an implied condition
that the goods are of merchantable
quality.

Condition as to wholesomeness

In the case of eatables and provisions,

in addition to the implied condition as
to merchantability, there is another
implied condition that the good shall be
wholesome.
Example: X purchased milk from Y ,
a milk dealer. The milk contained
typhoid germs. X’s wife, on taking the
milk, got infection and died. Held, X can
entitled for damages.
 IMPLIED WARRANTIES

Quiet
Usage of Trade
Enjoyment
Freedom
Dangerous
from
Nature
Encumbrance
 In a contract of sale,
unless there is a contrary
intention, there is an
implied warranty that the
buyer shall have and enjoy
Warranty of quiet quiet possession of the
possession[Sec. 14(b)]. goods. If the buyer is in
any way disturbed in the
enjoyment of the goods in
consequence of seller’s
defective title to sell, he
can claim damages from
the seller.

Warranty of freedom
The goods are not subject
from
to any change or right in
encumbrances[Sec. 14
favor of a third party.
(c)].
 Warranty as to quality or fitness
by usage of trade
[Sec. 16 (4)].
An implied warranty as to quality
or fitness for a particular purpose
may be annexed by the usage of
trade.
 Warranty to disclose dangerous
nature of goods
Where a person sell goods, knowing
that the goods are inherently
dangerous or they are likely to be
dangerous to the buyer and that the
buyer is ignorant of the danger, he
must warn the buyer of the probable
danger, otherwise he will be liable in
damages.
CONSEQUENCES OF
BREACH OF WARRANTY

Rights to claim damages No remedy is available if Buyer may set up against

but not a right to reject the fulfillment of the warranty the seller the breach of
goods. becomes impossible. warranty in diminution of
the price.
CAVEAT EMPTOR
Caveat Emptor is a Latin phrase
meaning

“let the buyer beware”.

Under this doctrine the buyer

takes the risk on an item he
purchases and cannot complain
of a defect.
Unless there is either fraud or
warranty (guarantee) by the
seller.
EXCEPTIONS
(i) Condition as to Quality or Fitness for
Buyer’s purpose

(ii) Where the seller makes a false

representation or obtains consent of the
buyer by fraud

(iii) Condition as to Merchantability

(iv) Condition as to Wholesomeness

TRANSFER OF TITLE BY
NON-OWNERS

GENERAL RULE – EXCEPTIONS:

“NEMO DAT QUO
NON HABET”
No one can give Transfer of title by Sale by a seller in
that which he has Estoppel.(Sec.27) possession after
not Sale by Mercantile sale.(Sec.30(1))
To protect Agent.(Sec. 27) Sale by a buyer in
property rights. Sale by joint possession of
owner/co- goods.(Sec.30(2))
owner(Sec.28) Sale by an Unpaid
Sale by person in Seller.(Sec. 54)
possession under
voidable contract
((Sec.29).
PERFORMANCE OF SALE

Performance of a contract of sale implies a ‘Delivery' has been defined as voluntary

duty of the seller to deliver the goods, and of transfer of possession of goods from one
the buyer to accept the delivery of the goods person to another. S.2(2)
and make payment in accordance with the
terms of the contract (sec. 31).
MODES OF DELIVERY
1. Actual delivery:

Actual delivery means physical transfer of goods by the seller to the

buyer. The delivery may be made by the agent of the seller to the agent of
the buyer.

2. Symbolic delivery:

Where the goods are bulky, it is usual for the seller to give symbolic
delivery. For example, where the timber is lying in a warehouse, the
delivery of key is regarded as symbolic delivery which has the effect of
putting the buyer in possession or actual control of the goods.

It should be noted that the key must give complete access to the goods. If
for example, the key of a room in which the goods are kept is given but
the key of the main gate or door is not given, it is not regarded as a valid
delivery
 3. Constructive delivery:
 In place of actual or symbolic delivery, the goods may be
delivered without any change in their actual or visible
custody. For example, where the goods at the time of sale
are in possession of a third person and such third person
acknowledges to the buyer that he holds the goods on his
(buyer's) behalf, the delivery is called constructive
delivery.

 Example:
 A sells to B 100 bags of rice lying in C's warehouse. C
acknowledges to B that he is holding these 100 bags on
behalf of B. It is constructive delivery by A to B.
RULES REGARDING
DELIVERY
1. Delivery by whom and to whom (Sec. 31):

It is the duty of the seller to deliver the goods and of the buyer to
accept and pay for the goods delivered.

2. Delivery and payment are concurrent conditions (Sec. 32):

Unless otherwise agreed, delivery of goods and payment of price are

concurrent conditions, i.e., at the same time or reciprocally.
The seller shall be ready and willing to deliver the goods and the
buyer shall be ready and willing to pay the price in exchange for
delivery of the goods.

3. Mode of delivery (Sec. 33):

The delivery may be actual, symbolic or constructive. The parties

may agree to any mode of delivery expressly or impliedly.
4. Effect of part delivery (Sec. 34):

A delivery of part of the goods, in the process 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. However, delivery of part of the goods, with an intention of severing it
from the whole, does not operate as a delivery of the remainder.

5. Delivery to be made on request of the buyer (Sec. 35):

Apart from any express contract, a seller is not bound to deliver the goods unless
and until requested by the buyer.

If the seller fails to deliver the goods on the application of the buyer, the seller is
guilty of breach of contract.

6. Place of delivery [Sec. 36(1)]:

In the absence of an agreement, express or implied, the goods sold are to be

delivered at the place at which they are at the time of sale. The 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.
9.Tender of Delivery:

Demand or tender of delivery may be treated as

ineffectual unless made at a reasonable hour. Sec. 36(4)

10. Expenses of delivery:

Unless otherwise agreed, the expenses of and incidental

to putting the goods into a deliverable state shall be
borne by the seller. In case the buyer is compelled to pay
these expenses, he can recover the same from the seller.
Sec. 36(5)
 10. Effect of delivery of wrong quantity (Sec. 37)
 (i) Short Delivery [Sec. 37(1)]:
 Where the seller delivers lesser quantity than contracted
for, the buyer has the option to accept or reject the whole.
Naturally, when he accepts, he must pay for them at the
contract price.
 Example:
 A ordered B to supply 10 bags of rice. B supplied only 6
bags. A is at liberty to accept 6 bags or to reject them.
When he accepts them, he must pay for the 6 bags at the
contracted price.
 Example:
 A ordered B to supply 10 bags of rice. B supplied 15 bags.
A has the option to accept 10 bags and pay for them. He
may accept even 15 bags and pay for him. He is entitled
to reject the whole [Cunliffe v. Harrison],
 (ii) Delivery of mixed goods [Sec. 37(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.
 Example:
 Certain specific articles of China were ordered. The seller
in addition sent some of his articles of China. Held, the
buyer could reject the whole [Levy v. Green.]
 11. Delivery by instalment (Sec. 38):
 Unless otherwise agreed, the buyer of goods is
not bound to accept delivery in instalments. He
may, if he so desires, refuse the goods.
 Example:
 25 tons of pepper October/November shipment
was sold. The seller shipped 20 tons in November
and 5 tons in December. Held, the buyer was
entitled to reject the whole [Reuter v. Sala]
 In case there is a contract for the sale of goods to
be delivered by stated instalments which are to
be paid for separately and the buyer or seller
commits a breach in respect of one or more
instalments. There will be breach in contract in
following ways;
 i. Seller makes default in delivery in respect one
or more instalments
 ii. Buyer neglects or refuses to take delivery of
one or more instalments
 12. Delivery to carrier or wharfinger (Sec.
39).

 (i) Unconditional delivery to carrier or

wharfinger means delivery by seller (sec. 39):
 Where in pursuance of a contract of sale, the
seller is authorized or required to send the goods
to the buyer, delivery of goods to a carrier for the
purpose of transmission to the buyer or to a
wharfinger for safe custody is prima facie deemed
to be a delivery of the goods to the buyer.
 (ii) Seller's duty to reasonably secure goods
before delivery [Sec. 39(2)]:
 Where the goods are delivered to a carrier or
wharfinger, it is the duty of the seller to
reasonably secure the responsibility of the carrier
for the safe delivery of the goods. In case the
seller fails to do so, he will be liable to make good
the loss suffered by the buyer.
 Example:
 B, at Agra orders A, who lives at Calcutta, three casks
of oil to be sent to him by railway. A takes three casks
of oil directed to B to the railway station and leaves
them there without conforming to the rules which
must be complied with in order to render the railway
company liable for their safe carriage. The goods are
lost on the way. There has not been a sufficient
delivery to charge B in a suit for the price. [Clarke v.
Hutchin].

 (iii) Seller's duty to inform the buyer to get the

goods insured in case the goods involve a sea
transit [Sec. 39(3)]:
 Where the goods are sent by the seller to the buyer
by a route involving sea transit, the seller is bound to
give such notice to the buyer as may enable him to
insure the goods during sea transit. Failure to do so
will mean that the goods are at the seller's risk
during the transit and the seller will have to make
good the loss suffered by the buyer.
13. Goods delivered at a distinct place: (Sec. 40)
Where the seller of goods agrees to deliver the goods at
his own risk other than they are sold, the buyer shall
take risk of any deterioration in good incidental to the
transit.

14. Examining the goods by the buyer:

(Sec. 41.)
“Where the seller delivers the goods to the buyer, he is
bound to give a reasonable opportunity to the buyer to
examine the goods for the purpose of ascertaining
whether they are accordance with the contract.
15. Acceptance of delivery by buyer:( Sec. 42)
The buyer is deemed to have accepted the goods in either of the
following ways.
(i) When he intimates to the seller that he has accepted the goods.
(ii) When he does any act in relation to the good which is
inconsistent with the ownership of the seller.
(iii) When, after lapse of reasonable time, he retains the goods
without intimating, the seller that he has rejected them.

16. Buyer not bound to return rejected goods:(Sec 43.)

“Where goods are delivered to the buyer and he refuses to accept
them, having the right to do so, he is not bound to return them to
the seller. He should inform the seller about his rejection.

17. Liability in case of refusing to take delivery of goods:

(Sec. 44.)
When the seller is ready to deliver the goods and requests the
buyer to take delivery, and the buyer does not take delivery of the
goods within reasonable time, the buyer is liable to the seller for
any loss arising on account of refusing to take delivery.
DUTIES OF SELLER OF
GOODS

It is the duty of the seller to deliver the goods and the buyer to accept and
pay for them, in accordance with terms of contract of sale (Sec. 31).

Unless otherwise agreed delivery of the goods and payment of price are
concurrent conditions; that is to say that seller shall be ready and willing to
give possession of the goods to the buyer in exchange of the price and the
buyer shall be ready and willing to pay the price in exchange of possession of
the goods-(Sec. 32).

Where the seller agrees to deliver the goods at his own risk at a place other
than where they were sold, the buyer nevertheless take any risk of
deterioration in the goods necessarily incidental in course of transit. (Sec.40)

Where the seller wrongfully neglects or refuses to deliver the goods, may be
sued for damages . (Sec.57)
DUTIES OF BUYER
Must pay the price

If refuses wrongfully liable to pay the compensation

Apart from any express contract seller is not bound to deliver the goods,
unless applied by the buyer

If the contract specifically provides for the delivery of the goods by the
seller by instalments, the buyer shall accept such a delivery.

If the buyer refuses to accept the goods, it is his duty to inform the seller
about it.

If the seller delivers the goods as per the contract, it becomes the duty of
the buyer to take delivery of the same within a reasonable time. He
remains liable to the seller for any loss arising on account of his refusal to
take delivery.
If the ownership rights have already been passed on to the buyer by the
seller, the former has the duty to pay the price as per the terms of the
contract.

If the buyer wrongfully refuses to accept and pay for the goods, he will
have to compensate the seller for damages for non-acceptance.
RIGHTS OF BUYER
 1. He has the right to have delivery of the goods as per the
contract.
 2. If the seller does not send, as per the contract, the right
quantity of goods to the buyer, the buyer can reject the
goods.
 3. The buyer has a right not to accept delivery of the goods
by instalments by the seller.
 4. If the goods are sent by sea route by the seller, the buyer
has a right to be informed by the seller so that
he may get the goods insured.
 5. The buyer has a right to examine the goods which he has
not seen earlier before giving his acceptance for the same.
 6. If the seller wrongfully refuses to deliver the goods to the
buyer as per the contract, the buyer may sue the seller for
damages for non delivery. The amount of damages will be the
difference between the contract price and the market price
of the goods.
 7. If the buyer has already paid the price and the seller
has not delivered the goods as per the contract, the buyer
can recover the amount paid.
 8. If the contract is for the sale of specific or ascertained
goods, the buyer may sue the seller for the specific
performance of the contract in case of breach of contract
by the latter.
 9. The buyer may sue the seller for damages for the
breach of any implied warranty as per the provisions of
this Act.
 10. If the seller rejects the contract before the date of
delivery, the buyer may either treat the contract as still
existing and wait till the date of delivery or he may treat
the contract as cancelled and sue the seller for damages
for the breach. The second case is known as
the anticipatory breach of contract.
 11. If, in view of the breach of contract by the seller, the
price has to be refunded to the buyer, the buyer has a
right to claim interest on the amount.
UNPAID SELLER AND HIS
RIGHTS
 UNPAID SELLER IS A PERSON

 To whom the price has not been paid

 A bill of exchange and other N.I. has

been received as a conditional payment
and the condition for which it has been
received has not been fulfilled by reason
of the dishonour of the instrument
RIGHTS OF UNPAID SELLER

Rights of unpaid
seller

Right against Right against the buyer

goods personally
When the property in Suit for
the goods has been price
transferred
Right of Suit for damages for
Lien non acceptance
Right of stoppage
in goods in transit
Suit for special
Right to damage and interest
resale
When the property in the
goods has not been
transferred
Right of withholding
52
delivery
RIGHT AGAINST GOODS
 Right of lien or retention
 Rights of stoppage of goods in transit
 Right of resale
 Right to withhold delivery
1.RIGHT OF LIEN[Sec 46(1)(a) and 47 to
49]
The right of lien means lawfully right to
retain the goods possession until the full
price is received. An unpaid seller can
exercise his right of lien in following
cases.Sec47-49
I. Where the goods have been sold on the
cash basis.
II. Where the goods have been sold on credit
basis and the term of credit has expired.
III. Where the buyer has become insolvent.
Other rules to satisfy the conditions for this right
are
I. The unpaid seller must be in actual
possession of the goods sold.
II. It can be exercised even If the documents of
title have been delivered to the buyer.
III. It can be exercised for the price and not for
other expenses.
IV. If the seller delivers some goods, it can be
exercised on the remaining
Termination of right of lien
Seller’s right of lien is terminated in following
cases.
1. When he delivers the goods to the carrier or
other bailee for transmission to the buyer
 2. When the buyer or his agent lawfully
obtains the possession of the goods.
 3. When seller waives his right of lien on
the goods.
 4. The right of lien once lost will not be
restored.
 5. When the buyer further sells the goods
and the seller agrees.
 Example:
 A seller “S” sells a TV set to “B” and
delivers it to “B” and since the TV set
was not functioning properly , “B”
delivered it back to “S” for the repairs.
It was held that “S” can not exercise
his right of lien over TV set
2.RIGHT OF STOPPAGE IN TRANSIT[Sec.
50 to 52]
It means stoppage of goods while
they are in transit to take possession until
the price is paid (sec.50-52)
 Unpaid seller can stop the goods in transit
in the following cases.
1. While the buyer becomes insolvent.
2. While the goods are out of actual possession of
seller, but have not reached buyer’s possession
i.e. goods are in transit with carrier.
3. The unpaid seller can stop the goods in transit
only for payment of the price of the goods and
not for any other charges.
 The unpaid seller can not stop goods
in transit in following cases.
1. When the goods reaches the destination.
2. While the buyer or his agent takes
possession of delivery even if it is not
reached destination.
3. In case the carrier is agent of the buyer,
the transit comes to an end the instance
carrier receives the goods and seller can
not stop the transition.
Example:”A” sells TV set to “B”. “A”
delivers the TV to the carrier to
carry it to “B”. Later on gets news
that “B” has become insolvent;“A”
can stop delivery.
 3.RIGHT TO RE-SALE

If a buyer fails to pay or offer the price

within a reasonable time, the unpaid
seller has the right to resell the goods
in the following circumstances.
1. Where the goods are of perishable nature.
2. Where the unpaid seller has exercised his
right of lien or stoppage in transit and gives
a notice to buyer of his intention of resell
the goods.
3. Where the unpaid seller has expressly
reserved his right of resale.
4. Where seller gives notice to the buyer of his
intention to resell and the buyer does not
pay within a reasonable time, he can
 a) Recover loss on resale of the
goods, if any
b) Retain any surplus on resale of

goods, if any
However if the seller sells with out the
notice to the buyer, he can not
c) Recover any loss of the goods, if

any
d) Retain any surplus on the resale

of the goods, if any

Example:“M” sells 100 blankets to “N”

and gives him one week for payment.
“N” does not pay. “M” can resell those
to any other person.
 RIGHT OF WITHHOLDING DELIVERY
If the property in the goods has not passed to
the buyer, the unpaid seller cannot exercise
right of lien , but gets a right of withholding
the delivery of goods, similar to and co-
extensive with lien.
 SUIT FOR PRICE[Sec. 55]
Where ownership of the goods has passed
to the buyer and the buyer refuses to pay
the price according to the terms of the
contract, the seller can sue the buyer for
price, irrespective of delivery of the goods.
(Sec. 55)

SUIT FOR DAMAGES FOR NON-

ACCEPTANCE[Sec.56]
Where the buyer refuses to accept and pay
for the goods, the seller may sue him for
damages for non acceptance. The seller can
recover damages only and not the full price
(Sec. 56)
 SUIT FOR SPECIAL DAMAGES AND
INTEREST
[Sec.61]
The seller can sue the buyer for special
damages where the parties are aware of
such damages at the time of contract. The
unpaid seller can recover interest at a
reasonable rate on the total unpaid price
of goods, from the time it was due until
it is paid. (Sec. 61)
RIGHTS AGAINST BUYER
 Suits for price

 Suits for damages of non-acceptance

 Repudiation of contract before due date

 Suit for interest

REMEDIES FOR BREACH
OF CONTRACT OF SALE
 SELLER’S SUIT
 Suit for price
 Suits for damages of non-acceptance
 Suits for interest

 BUYERS SUIT
 Suits for damages for non-delivery of the
goods
 Suit for specific performance
 Suit for breach of warranty
 Suit for interest
RIGHT AGAINST BUYER
 Suit for price
 Suit for damages of non-acceptance
 Suit for damaging for repudiating
contract before due date
 Suit for interest and special damages