Business & Labor LawLecture no 14

Date 4th January 2017

Zafar ul haq

PROPERTY Any thing or things belonging to

someone; possessions collectively. The owner has the right to move, sell or alter in that.

There are two main types of property Real property Personal property

The basic objective of contract of sales of good is to transfer the property from seller to buyer. The buyer acquires ownership rights.

Ownership and Possession

RULES FOR TRANSFERRING OF PROPERTY

Unascertained or Future goods. Section 18 of the contract act 1872.

No property in the good is transferred to the buyer unless and until the goods are ascertained or specified.

• Ali agrees to sell Shahid 20kg of rice out of large stock. Unless 20kg is separated from the stock, the contract can’t take place.

The unascertained goods should be

brought to ascertained position that should be ready for delivery.

SPECIFIC GOODS Where there is contract of specific

goods in deliverable state, the property in goods passes from seller to buyer and the ownership is also transferred.

If the deal/contract is postponed by any one party or both, then the transaction should be cancel.

Ali agrees to sell his cell phone to Amjad for Rs15000. once Ali delivers the cell phone to Amjad then Amjad is legally the owner of the cell phone.

SPECIFIC GOODS NOT IN DELIVERABLE STATE

Sec 21 says that, When there is contract between two

parties for any specific good that is not in deliverable position, then there should be no transaction unless and until the goods to be in deliverable position.

EXAMPLES

Buying a car that is not yet assembled.

Buying a novel that is not yet written.

Buying a software that is not yet completed

SPECIFIC GOODS IN A DELIVER STATE BUT PRICE TO BE ASCERTAINED

Sec 22 When there is contract between two

parties for any transactions and the goods are specific and even in position of deliverable, yet again the seller is bound to ascertain the price by weight, measure or test etc.

EXAMPLE

A Stock of wheat is sold @ 100/kg. now here the stock should be measured/weight and then deliver to the buyer. Incase any loss is there to the stock, the seller is bound to compensate the buyer, unless the stock is delivered.

TRANSFER OF TITLE Under the contract of sales of goods,

the actual owner has the right to sell his property to a buyer.

No 3rd party can transfer the property. If a buyer buys some property from

such a person who is not the actual owner, then is illegally possessing the good/property.

EXAMPLE

A hires a car from B and sells to C. here C has no title of car because the title of car is with A.

SALES UNDER IMPLIED AUTHORITY Sec 27 (1) When the actual owner of the good shows

his conduct or words that the seller has the authority to sell the good, then the buyer can get the title from the 3rd person.

A person sells his brother’s cell phone in the presence of his brother to X. here X has now the title of the cell phone.

SALES BY MERCANTILE AGENT Sec 27 (2) Mercantile agent is a person who has the

authority to sell or purchase goods on the behalf of the principal. So the buyer if buys goods from such agent has the title of the goods.

Property dealers Sales man etc

SALES BY JOINT OWNER Sec 28 Where a joint owner of goods having

sole possession of them sell goods with the authority of joint owners, the buyer has then the title.

X and Y are joint owner of a car. Y with the permission of X can sell the car to Z.

SALES UNDER VOIDABLE CONTRACT Sec 29 When seller of a good acquires

possession of goods of other person by coercion and sells it to a buyer, then the buyer can have a good title.

X buys furniture of Y at a low price by threaten him and sells the furniture to Z, Z can have the furniture title.

SELLER IN POSSESSION AFTER SALE Sec 30 Buyer obtain goods title once it buys from

a seller who has already sold the goods to other person but still have the possession of the goods.

X sells a car to Y but the car has already sold to Z, but X still has the possession, here Y can have the car title.

BUYER AFTER SALE Sec 30 (2)

X enters in to a contract with Y to buy Y’s car. X has now the title and possession of the car. X sells the car to Z , hence Z requires to have the car title.

SALE BY UNPAID SELLER Sec 54 (3)

X buys a car from Y @ Rs 5lac. He pays 3Lac as down payment and remaining 2Lac to be paid in specified time before the delivery of the car. Now X fails to deliver the amount and Y sell the car to Z, here Z can have the car title.

SALES OF FINDER OF LOST GOODS A person who find goods belonging to

another and takes them in to custody can sell the goods under the following conditions.

Goods are perishable in nature Due search of owner and fails Lawful charges exceeds 2/3rd of the

value of good.

EXAMPLE

X finds a mobile that is very expensive. X gives aid in newspaper in search of the owner but either gets no response or the owner refuses to pay the expenses, so X sells the mobile to Z and Z can have the mobile title.

SALES OF PLEDGE Sec 176 When a person pledge his goods as

securty of debt, the pledgee can also sell the pledged good under genuine condition.

Ali borrow 20 lac rupee from Zahid and pledge his car. If Ali fails to repay Zahid, Zahid can sell the pledged car.

CASE OF INSOLVENCY Due to in solvency of one party the

official receiver can sell the goods and property of solvent person.

X borrows 5 lac rupees from Y to start business and become solvent for some reason. Y can sell the property of X to Z and Z can have the goods title.

Question & Queries ?