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The sale of goods is the most commonof all commercial contracts.

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` A contract of sale of goodsis a contract whereby the

seller transfers or agreesto transfer the property ingoods to the buyer for a

price.T

he term contract ofsale includes both a saleand an agreement to sell.

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` SALE: Where under a contract of sale the

property in the goods is transferred from

the seller to the buyer, the contract iscalled a sale.

` AGREEMEN T TO SELL: Where the

transfer of the property in the goods is totake place at a future time or subject to

some condition thereafter to be fulfilled

the contract is called an agreement to sell.

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Essentials of a Contract of sale:1. It is a contract.

2. Between two parties.

3.

To transfer or agree totransfer.

4. The property in goods.

5. For a price, that is, money

consideration.

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Transferofproperty

meanstransferofownership ofthegoodsto

thebuyer.

`Propertymeansthe

generalproperty &notmerelyaspecificproperty.

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GOODSformthesubjectofacontractofsale. Theymeaneverykindofmovable

property otherthanactionableclaims&money,andincludestockandshares,growingcrops,grassandthingsattachedtoorformingpartofthelandwhichareagreedtobeseveredbeforesaleorunderthecontractofsale.

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` Actionableclaimscanonlybeclaimedor

enforcedbyaction&notbytakingphysical

possession.

` Moneyislegaltender.` Thecontractofsaleofthingsformingpart

ofthelandlikeacoalmine,orabuilding

stone quarryisnotacontractofsale.

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` Goodsmaybe:

` Existing:owned&possessedbythe

selleratthetimeofsale. Theymaybe

classifiedasspecific orascertained &unascertained.

` Future:whichthesellerdoesnot

possessatthetimeofthecontractand

whichwillbeacquired,manufactured orproduced byhimatsomefuturedate.

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` Contingent:theacquisitionofwhichby

thesellerdependsuponacontingency

whichmayormaynot

happen.

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` Theprice isthelinchpinofthe

definitionofcontractofsale. Itmust be

expressedinmoney. Itmaybe:

1. Mentionedbythecontractitselfor2. Themanneroffixingthepriceis

mentionedinthecontract

3. Maybedeterminedfromthecourseof

dealingbetweentheparties..

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` Whenpriceisnotfixedby

anyoftheabovemodes,areasonablepriceis

consideredasthepriceofthe

contract.` Whatisreasonablewill

dependuponthefactsand

circumstancesofeachcase.

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` (Specific) Goods perishing before makingthe contract:Thecontractisvoid. Ofcourse!thesellershouldnothaveany

knowledgeofdestruction.` (Specific) Goods perishing after the

agreement to sell but before the sale iseffected:Thecontractisvoid. Ofcourse!thesellershouldnothaveanyknowledgeof

destruction.y NOTE: Theabovedoesnotapplyto

unascertainedgoods.

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` SALE.

1. Ownershipis

transferredassoonascontractisenteredinto.

2. Buyercannot

terminatethecontract.

3. Sellercannottakepossessionifbuyercannotpaytheprice. Hecanonlysueforprice.

` HIRE PURCHASEAGREEMENT.

1. Ownershipisnottransferredimmediately.

2. Hire Purchaserhas

anoptiontoterminatethecontract.

3. HireSellercandoso.

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Asellerofthegoodsisdeemedtobeanunpaidsellerwhen:

` Thewholeofthepricehasnotbeenpaidortendered.

` Abillofexchangeorothernegotiableinstrumenthasbeenreceivedasconditionalpayment.

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Rights of unpaid seller

Against the goodsAgainst the buyer

personally

Where the property

In the goods has

passed

Where the property

In the goods has not

passed

Lien Re-SaleStoppage

In transit

Withholding

delivery

Stoppage in

transit

Suit for

damages

Suit for

interestRepudiation of

contract

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`Itisastipulationessentialtothemain

purposeofthecontract,thebreachofwhichgives

risetoarighttotreatthecontractasrepudiated.

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`Conditionastotitle

`Conditioninasaleby

description..

`Conditioninasaleby

sample

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`Conditionsastofitness&quality(inthefollowingcasesonly).x Buyermakesknowntotheseller

theparticularpurposeforwhichherequiresthegoods.x Buyerreliesontheskill&judgmentoftheseller

(Thesellersbusinessistosupply

suchgoodswhetherheisthemanufacturerorproducerornot)

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`Conditionastomerchantability. Wheregoodsareboughtby

descriptionfromasellerwhodealsingoodsofthatdescription (whetherheismanufacturerorproducerornot),thereisanimpliedconditionthatthegoodsshallbeofmerchantablequality.

x Merchantabilitymeansessentiallythatthegoodsmustbefitfortheordinarypurposeforwhichsuchgoodsareused.

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`Conditionastomerchantabilityx

Whenappliedtofoodproducts,theconditionoffitnessofmerchantabilityrequiresthatthegoodsshouldbewholesome, I.e. fit

forthepurposeofconsumption.

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` Warrantyasto quietpossession.

` Warrantyastonon-existenceofencumbrances.

` Warrantyastodisclosureof

dangerousnatureofthegoodstotheinnocentbuyer.

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`Optionofthebuyer..x Thetoastercase

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`Circumstancesaresuchthatgoodscannotbereturned.x

Whenthebuyerhasacceptedthegoods&intimatestotheseller.

x Whengoodshavebeendeliveredtothebuyer&hedoesanyactin

relationtothemwhichisinconsistentwiththeownershipoftheseller.

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`Byexpressagreement.`Bycourseofdealings.`Bycustoms&trade

usage.

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LETTHE BUYER

BEWARE

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` Whenthesellermakesa

representationoffact,whether

innocentorfraudulent,regardingtheproduct.

` Whentheseller activelyconceals

adefectinthegoodswhichcouldnotberevealedbyordinary

examination

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` Wheregoodsaresuppliedbydescriptionandtheydonot

correspondwiththedescription.` Wheregoodsaresuppliedby

descriptionandtheyarenotofmerchantable quality.

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` Whengoodsaresoldbysample&thegoodsdonot

correspondwiththesample.` Whenthebuyerreliesonthe

skill&judgmentoftheseller

&makeshispurposeofbuyingtheproductknowntohim.