LCC200 SaleofGoods,Agency,NegotiableInstrumentsFinal

LCC200 SaleofGoods,Agency,NegotiableInstrumentsFinal - SALE...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
SALE OF GOODS The law relating to the sale of goods is contained in the Sale of Goods Act (Cap. 31). This Act is mainly based on English Sales of Goods Act 1893. At the same time, the general rules of contract law apply to contracts for the sale of goods. Definition Section 3(1) of the Act defines a contract for the sale of goods as: A contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration called the price”. The essential characteristics of a contract of sale of goods are as follows: 1. There must be two distinct parties to a contract of sale, a buyer and a seller. 2. There must be a transfer of property. Property here means ‘ownership’. A seller must either transfer or agree to transfer the property in goods to the buyer. 3. The subject-matter of the contract of the sale must be goods. “Goods’ includes all chattels personal other than things in action and money, and all emblements, industrial, growing crops and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale. 4. The consideration for a contract of sale of goods must be money consideration called the price. If goods are sold or exchanged for other goods the transaction is barter and not sale of goods. 5. The term contract of sale includes both a sale and an ‘agreement to sell’. Distinction Between Sale and Agreement to Sell: Section 3(4) of Act provides that: Where under a contract of sale the property in the goods is transferred from the seller to the buyer the contract is called a sale: but, where the transfer of the
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell”. The following are the main points of distinction between a ‘sale’ and ‘an agreement to sell”. 1. Transfer of property (ownership): In a ‘sale’ the property in goods passes to the buyer immediately at the time of making the contract. In ‘an agreement to sell’ there is no transfer of property to the buyer at the time of the contract. The conveyance of property takes place later so that the seller continues to be the owner until the agreement to sell becomes a sale either by the expiry of certain time or the fulfillment of some condition. 2. Risk of loss: The general rule is that unless otherwise agreed, the risk of loss prima facie passes with property. Thus in case of sale, if the goods are destroyed the loss falls on the buyer even though the goods may never have come into his possession because the property in the goods has already passed to the buyer. On the other hand, in case of an agreement to sell where the ownership in the goods is yet to pass from the seller to the buyer, such loss has to borne by the seller even though the goods are in the possession of the buyer.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern