NTA UGC NET - Commerce: UNIT 09 Legal Aspects of Business PART 04

 

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NTA UGC NET - Commerce

UNIT 09

Legal Aspects of Business

PART 04

 

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Sale of Goods Act, 1930

 

The term "goods" in Sale of Goods Act, 1930 does not include
 

a. Goodwill
b. Actionable claims
c. Stocks and shares
d. Harvested crops
 

 ANSWER: b. Actionable claims

 

It came into force on 1st July, 1930
Law relating to contract of sale
 

Essential Elements of a contract of sale: -
 

A) There must be at least two parties. (Bilateral Contracts)
 

B) The subject matter of the contract must be goods.
 

Any kind of movable property other than actionable claims and money
 

1. Existing goods
2. Future goods
3. Contingent goods 

C) A price in money should be paid or promised.
 

D)A transfer of property in goods from seller to the buyer must take place.
 

E)All other essentials of a valid contract must be present

DIFFERENCES BETWEEN SALE AND AGREEMENT OF SELL
 

Sale - Agreement of Sell
 

1. It is an executed contract - It is an executory contract.
 

2. Property in goods is transferred from seller to buyer when the contract is made. - Transfer of property in goods takes place at some future date.
 

3. Seller cannot resell the goods as the property is with the buyer.
- Seller can further resell the goods as the property in good remains with him.
 

4. Risks passes to the buyer, as he becomes the owner. - Risks is with the seller as he remains the owner.
 

5. Breach on part of buyer, seller can sue for the price and damages both. - Breach on part of buyer, seller can sue for damages only and not for the price.
 

6. In this, if goods are destroyed then loss will be of Buyer.
- In this, if goods are destroyed by accident, loss will fall on seller.

 

DIFFERENCES BETWEEN SALE / BAILMENT
 

1. Property in goods is transferred from seller to buyer /
There is only transfer of possession of goods from bailor to bailee.
 

2. Consideration is the price in terms of money /
Consideration may be gratuitous or nongratuitous.
 

3. Buyer may use the goods in any way he likes /
Bailee can use the goods only according to the bailor‟s direction

 

 

Doctrine of Caveat Emptor
 

“Caveat Emptor” is a Latin phrase that translates to “let the buyer beware”.
 

This means it lays the responsibility of their choice on the buyer themselves.
 

01- if the buyer shares with the seller his purpose for the purchase
 

02- the buyer relies on the knowledge and/or technical expertise of the seller
 

03- Goods Purchased under Brand Name
 

04- Goods sold by Description
 

05- Sale by Sample
 

 

Doctrine of Caveat venditor

 

The rule of Caveat emptor is being taken over by the rule of “Caveat venditor”
 

Caveat Venditor simply means “let the seller beware”, which imposes a greater responsibility on the sellers themselves for the goods and services that they sell. 

 

  

Earnest

 

The payment given as a token of good faith is termed as Earnest

 

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