2.Sale of Goods Act and Restrictive Trade Practices

7/28/2019 2.Sale of Goods Act and Restrictive Trade Practices

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Sale of goods act and restrictivetrade practices

BY

PROF. MAYUR MALVIYA

Tuesday, February 19, 2013PROF. MAYUR MALVIYA


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Contract of Sale

Definition

(Section 4)

A contract of sale of goods is a contract whereby the seller transfers or agreesto transfer the property in goods to the buyer for price".

ESSENTIALS OF CONTRACT OF SALE

From the above definition, the following essentials of a contract of sale may bynoted:

1. There must be at least two parties

2. Transfer or Agreement to transfer the ownership of goods.

3. The subject matter of the contract must necessarily be 'goods'.

4. The consideration is Price.

5. A Contract of sale may be absolute or conditional

6. All other essentials of a valid contract must be present.



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Sale and Agreement to Sell

1. A sale is an executed contract 1.An Agreement to sell is anexecutory contract.

2. In a sale, since the property haspassed to the buyer, the seller can suethe buyer for the price of the goods.

2.In an agreement to sell, in case ofbreach, the seller can only sue fordamages, unless the price was payableat a stated date.

3. A sale creates a right in rem 3.An agreement to sell creates a right inpersonam

4. In case of loss of goods, the loss will

fall on the buyer, even though the goodsare in the pos-session of the seller. It isbecause 'Risk' is as-sociated withownership

4.The loss in this case shall be borne by

the seller, even though the goods are inthe pos-session of the buyer.



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Hire Purchase Agreement

It is an agreement for hire, with an option to purchase.

The hirer, under this agreement, is required to pay every month a

particular sum of money, and if he pays in that way for a fixed numberof months, the hirer will become the owner of the goods on thepayment of the last instalment.

, ,

terminate the contract and take away the goods, because theownership continues to remain in the owner. A "Hire-purchaseagreement" is distinct from "Sale" in which price is payable byinstalments

A 'Hire-purchase agreement,' does not result in passing of the propertyunless the option to purchase is exercised, usually by payment of all theinstalments. Till such time, it constitutes bailment.



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CONDITIONS

In a contract of sale, parties make certain

stipulations, i.e., agree to certain terms. Some of them may be intended by the parties to be of

a fundamental nature, e.g., quality of the goods to be

supp e . The stipulation essential to the main purpose of the

contract, the breach of which gives rise to a right to

treat the contract as repudiated. Such stipulationsare known as `Conditions`.



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Stipulation

Remedy Exercise of option as to treatment as breach of

warranty


1. Option of buyer2. Waived by buyer

3. Sale is not severable or contract is for specific

goods


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Warranties

The stipulation collateral to the main purpose of the

contract, the breach of which gives rise to a claim fordamages but not to a right to reject the goods. Herethe stipulations are known as `warranties



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Warranty as to title

By description By sample

ualit or fitness


Free from any charges over goods


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Conditions and warranties'

The stipulation essential to the mainpurpose of the contract, the breach ofwhich gives rise to a right to treat the

contract as repudiated. Suchstipulations are known as

`Conditions`.

. The stipulation collateral to the mainpurpose of the contract, the breach of

which gives rise to a claim for damagesbut not to a right to reject the goods.

Here the stipulations are known as`warranties



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CAVEAT EMPTOR

Caveat Emptor is a fundamental principle of the law of sale of goods. Itmeans "Caution Buyer", i.e. "Let the buyer beware".

In other words, it is not the duty of the seller's duty to point out defects ofhis own goods. The buyer must inspect the goods to find out if they will suithis purpose.

Exceptions:

.

2. Fraud

3. For specific purposes - Dr.Grant vs.Australian knitting mills

4. Merchantable quality

Caveat venditorLet the seller beware



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DUTIES OF SELLER AND BUYER

Duty of the seller

To deliver the goods, in accordance with the terms of the contract of

sale.

Delivery and payment of price are concurrent conditions.

The seller of goods has the duty of giving delivery according to the.

Duty of the buyer

Pay for the goods;

Accept delivery; and Pay compensation to the seller in case he wrongfully refuses to accept

delivery.



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Unpaid seller

An unpaid seller of goods is a person who has not beenpaid the whole of the price or to whom the whole of the

price has not been tendered. The term "seller" includes anagent of the seller.

The seller of goods is deemed to be an "unpaid sellerif:

a e w o e o e pr ce, as no een pa or en ere ;

(b) when a bill of exchange or other negotiable instrumenthas been received as conditional payment, and the

condition on which it was received has not been fulfilled byreason of the dishonour of the instrument or otherwise.



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RIGHTS OF AN UNPAID SELLER

Rights againstgoods

(a)Lien onthe oods

Rights Againstthe Buyer

Personally

Right to sue forthe rice and

(b) A rightof stoppage

in transit

(c) A rightof re-sale

The right to sue thebuyer for damages for

non-acceptance



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Unfair Trade Practices (36A)Unfair Trade Practices (36A)Unfair Trade Practices (36A)Unfair Trade Practices (36A)

WhereWhereWhereWhere bybybyby anyanyanyany methodmethodmethodmethod whatsoeverwhatsoeverwhatsoeverwhatsoever ,,,, aaaa beliefbeliefbeliefbelief isisisis createdcreatedcreatedcreated inininin thethethethe mindsmindsmindsminds ofofofofconsumersconsumersconsumersconsumers asasasas totototo somesomesomesome qualityqualityqualityquality orororor utilityutilityutilityutility ofofofof goodsgoodsgoodsgoods orororor services,services,services,services, andandandand thethethethegoodsgoodsgoodsgoods orororor servicesservicesservicesservices actuallyactuallyactuallyactually fallfallfallfall shortshortshortshort ofofofof thosethosethosethose beliefs,beliefs,beliefs,beliefs, thethethethe methodmethodmethodmethod

adoptedadoptedadoptedadopted isisisis anananan unfairunfairunfairunfair tradetradetradetrade practicepracticepracticepractice....

36363636 AAAA ((((1111)))) :::: FalseFalseFalseFalse representationrepresentationrepresentationrepresentation ofofofof productsproductsproductsproducts orororor services,services,services,services, includingincludingincludingincluding

falsefalsefalsefalse description,description,description,description, guarantee,guarantee,guarantee,guarantee, warrantywarrantywarrantywarranty orororor performanceperformanceperformanceperformance ofofofof aaaa

productproductproductproduct orororor serv ceserv ceserv ceserv ce....

36363636 AAAA ((((2222)))) :::: AdvertisementAdvertisementAdvertisementAdvertisement ofofofof falsefalsefalsefalse bargainbargainbargainbargain pricepricepriceprice....

36363636 AAAA ((((3333)))) :::: Contest,Contest,Contest,Contest, lotteries,lotteries,lotteries,lotteries, gamegamegamegame ofofofof chancechancechancechance orororor skillskillskillskill forforforfor promotionpromotionpromotionpromotion ofofofof

salesalesalesale....

36363636A(A(A(A(4444)))) :::: SaleSaleSaleSale ofofofof goodsgoodsgoodsgoods notnotnotnot inininin conformityconformityconformityconformity withwithwithwith safetysafetysafetysafety standardsstandardsstandardsstandardsprovidedprovidedprovidedprovided bybybyby thethethethe lawlawlawlaw....

36363636A(A(A(A(5555)))) :::: HoardingHoardingHoardingHoarding orororor destructiondestructiondestructiondestruction ofofofof goodsgoodsgoodsgoods orororor refusalrefusalrefusalrefusal totototo sellsellsellsell goodsgoodsgoodsgoods....



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Sec.33 Agreement restricting sale or purchase

For tie up or full line sale Exclusive dealing agreement Collective agreement of price fixation nd tendering Discriminatory dealings


Restrict output or supply Restrict employment of any method Exclude any person from trade association Eliminate competition Restrict procurement Collective bidding Declared by govt. as restrictive Any enforciation of the above


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2.Sale of Goods Act and Restrictive Trade Practices

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