lecture-17 - TRANSFER GOODS THE SALELESSON 17: ACT, 1930 OF...

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Learning Outcomes After reading the lesson, you should be able to know: · The meaning of transfer of property · The rules relating to transfer of property · The transfer of property by non owners Introduction You must know what we mean by transfer of property. Transfer of property in a contract of sale is primarily the transfer of property in goods by the seller to the buyer. The exact time at which property in goods passes from seller to the buyer is of great importance. ‘The transfer ‘of property in goods’ means transfer of ownership of goods. ‘Property in goods’ is different from possession of goods. Possession simply refers to the custody of goods. Although the property in goods may pass from the seller to the buyer, but the goods may be in posses- sion of the seller as unpaid seller or as a bailee for buyer. In some cases the property in goods to still be with the seller although the goods may be in possession of the buyer or his agent or a carrier for transmission to the buyer. The Following Require special Notice 1. Risk ‘prima-facia’ passes with property. As a general rule the risk of the loss of goods is prima-facie in the person in whom property is. Section 26 provides to the same effect, thus, “Unless otherwise agreed, the goods remain at the seller’s risk until the property therein is transferred to the buyer, but when the property therein is transferred to buyer, the goods are at the buyer’s risk whether delivery has been made or not.” Thus, if after the contract the goods are destroyed or damaged the question who is to bear the loss is to be decided not on the basis of possession of the goods but on the basis of ownership of goods. Whosoever is the owner of the goods at the time of loss must bear the loss. Example A buys goods from B and property has passed to him, but the goods remained in B’s warehouse. Before delivery of goods to A, there is a fire in B’s warehouse and all the goods are de- stroyed. A must bear the loss and pay the price of goods to B, if he has not paid it so far. The opening words of Section 26, namely, ‘unless otherwise agreed’ are of great significance. These words imply that ‘risk passes with property’ is not an absolute or inflexible rule, but a prima facie one. Risk is no test of property passing. There is nothing to prevent the parties from contracting that risk shall pass even before passing of property or vice versa. 1. Action against third parties: If after the contract of sale, the goods having damaged by a third party, it is only the person in whom the property vests who can take action against the wrong doer. 2.Suit for price: Generally speaking the seller can sue for the price if the property in goods has passed to the buyer.
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lecture-17 - TRANSFER GOODS THE SALELESSON 17: ACT, 1930 OF...

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