What is Transfer of Property? Definition, Types | Business Law
- Post last modified: 24 January 2021
- Reading time: 21 mins read
- Post category: Business Law
What is Transfer of Property?
The transfer of property (or ownership) is important as it determines who owns the goods at a particular point during the contract.
The term transfer of property implies transfer of ownership and not physical possession of goods.
Table of Content
- 1 What is Transfer of Property?
- 2 Transfer of Property Definition
- 3.1 Ownership is transferred at the time of making contract
- 3.2 Ownership is transferred when goods are put in a deliverable state
- 3.3 Ownership is transferred when goods in the deliverable state put to weighted or measured to ascertained price
- 4.1 Appropriation
- 5 Transfer of Property in Sale on approval
- 6.1 By taking a document of title in his own name or his agent’s name [Sec. 25(2)]
- 6.2 When the bills of exchange along with the RR/bill of lading is sent to the buyer. [Sec. 25(3)].
- 7 Business Law Notes
- 8 Business Law Book References
Transfer of Property Definition
In the following sections “ transfer of property ” means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself and one or more other living persons; and “to transfer property” is to perform such act.
In this section “living person includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals.
Sections 18 to 25 of Sales of Goods Act 1930 lay down the rules which determine when ownership of the property passes from the seller to the buyer.
These rules may be summarised as follow:
1. Transfer of Property in Specific Goods i.e. Ascertained Goods
- Ownership is transferred at the time of making contract [Sec 20]
- Ownership is transferred when goods are put in deliverable state [Sec 21]
- Ownership is transferred when goods in the deliverable state put to weighted or measured to ascertained price [Sec 22]
2. Transfer of Property in Uascertained Goods
- Goods are ascertained ( valid appropriation )
3. Transfer of Property in Sale on approval [Sec. 24]
4. Transfer of Property When Right of Disposal is Reserved [Sec. 25]
By taking a document of title in his own name or his agent’s name [Sec. 25(2)]
- When the bills of exchange along with the RR/bill of lading is sent to the buyer [Sec. 25(3)]
Transfer of Property in Specific Goods
In case of the sale of specific goods, the rules relating to the transfer of ownership are contained in Sections 20-22 of the Sales of Goods Act which may be discussed as under:
Ownership is transferred at the time of making contract
The ownership is transferred immediately at the time of making the contract if all the following conditions are satisfied:
a. The contract is for specific goods. b. The goods are in a deliverable state. c. The goods are not required to be weight or measured for determining the price.
Example: A sold to B, 100 bales of cotton lying in his warehouse. Before the bales could be identified and separated, all the bales were destroyed on the fire. Here, the seller is liable for damage because the ownership is not transferred.
Ownership is transferred when goods are put in a deliverable state
If the goods are not ready in the deliverable state at the time of making the contract of sale, the ownership of goods is transferred after the formation of the contract of sale when the following conditions are satisfied:
a) The contract is for specific goods. b) The goods are put in a deliverable state by the seller. c) The fact that the goods are put into a deliverable state has come to the knowledge of the buyer.
Example : A certain quantity of oil was purchased by A. The oil was to be filled in tins. B filled up some of the tins and informed A to take the delivery. In the meantime, a fire destroyed the entire quantity of oil. Held, A will bear the loss of the oil which was filled in the tins and the seller must bear the loss of the balance.
Ownership is transferred when goods in the deliverable state put to weighted or measured to ascertained price
If the goods are not weighed or measured at the time of making a contract of sale, the ownership of the goods is transferred after the formation of the contract of sale when the following conditions are satisfied:
a) The contract is for specific goods. b) At the time of formation, the price is not determined. It is determined later by the weight or measurement. c) The goods are put in a deliverable state by the seller. d) The fact that goods have been weighted or measured in order to determine the price has come to the knowledge of the buyer.
Example: A sold 10 Kg of sugar. The sugar was to be weighted. Before the sugar was weighted, it was carried away by the flood. Held, the ownership of the sugar was left with the seller and it did not pass to the buyer.
Transfer of Property in Uascertained Goods
The goods are not transferred to the buyer until and unless they are ascertained.
Example: You buy 100 bags of cement and pay for it and take it away; you promise to take another 100, but you have not ascertained unconditionally, that is, you may take them if you need—there is no contract for the next 100 bags.
How goods are ascertained? – By valid appropriation
Appropriation
Appropriation means selection of goods with the mutual consent of the parties.
The following are the essentials of appropriation:
a) The goods should confirm to the description and quality stated in the contract. b) The goods must be in a deliverable state. c) The goods must be unconditionally (as distinguished from an intention to appropriate) appropriated to the contract either by delivery to buyer or his agent or the carrier.
Example: The cement dealer selected 100 bags that you approved, paid, and took away. Upon your consent, he set apart another 100 bags, but you failed to take them away and they got damaged. You are liable for the damage because you had consented to take them although the payment was pending.
Transfer of Property in Sale on approval
When the goods are delivered to the buyer on approval basis, from the moment of approval or ‘on sale or return,’ or on other similar terms, the goods transferred to the ownership of the buyer.
Example: A bookseller sends a consignment of books to the library; the librarian approves some and keeps them and sends back the rest.
Transfer of Property When Right of Disposal is Reserved
The object of reserving the right of disposal of goods is to secure that the price is paid before the property passes to the buyer. For example, under the VPP (Value Pre Paid) system the ownership passes to the buyer when the price is paid against the delivery of goods, till then the seller retains control over the goods.
Section 25(1) lays down that –
— in a contract for the sale of specific goods or where goods are subsequently appropriated to the contract,
- the seller may reserve the right of disposal of the goods until certain conditions are fulfilled.
- In such a case, even if the goods are delivered to the buyer himself, or to a carrier or other bailee for transmission to the buyer, the buyer does not acquire ownership until the conditions imposed by the seller are satisfied.
For example , X sends certain goods by lorry to Y and instructs the lorry driver not to deliver the goods until the price is paid by Y to the lorry driver. The property passes only when the price is paid.
— In the following circumstances, the seller is presumed to have reserved the right of the disposal:
When goods are shipped or delivered to railways for carriage but the document of title i.e. the bill of lading are taken by the seller in his own name or in his agent’s name, the seller is presumed to have reserved the right of disposal. The property passes over to the buyer only when the buyer pays the price in exchange of bill of lading or the railway receipt.
When the bills of exchange along with the RR/bill of lading is sent to the buyer . [Sec. 25(3)].
If the goods are delivered to a carrier (i.e. the shipping company or railways) and the bill of lading or RR are taken in the name of the buyer. But the seller draws a bill of exchange on the buyer for the price of the goods and sends the same to the buyer along with the bill of lading or railway receipts to secure the payment of the price.
The property in goods does not pass to the buyer until he accepts the bill of exchange or pays the price of the goods. If he retains the goods without accepting the bill of exchange or payment of the price the property does not pass.
Business Law Notes
( Click on Topic to Read )
- What is Business Law?
- Indian Contract Act 1872
- Types of Contract
- Offer: Types, Elements
- Elements of a Valid Contract
- Performance of a Contract
- Discharge of Contract
- Sales of Goods Act 1930
- Goods & Price: Contract of Sale
- Conditions and Warranties
- Doctrine of Caveat Emptor
- Transfer of Property
- Rights of Unpaid Seller
- Negotiable Instruments Act 1881
- Types of Negotiable Instruments
- Types of Endorsement
- Promissory Note
- Bill of Exchange
- Crossing of Cheque
Business Law Book References
- Goel, P. K. (2006). “ Business Law for Managers ” Wiley
- Sheth, T. (2017). “ Business Law ” (2ed.) Pearson.
- Kuchhal. M.C. & Prakash. “ Business Legislation for Management ” (2ed.) Vikas Publishing.
Go On, Share article with Friends
Did we miss something in Business Law Note ? Come on! Tell us what you think about our article on Transfer of Property | Business Law in the comments section.
You Might Also Like
Essential Elements of a Valid Contract
What is Offer? Types, Elements Lapse & Revocation
Indian contract act 1872 | business law, what is business law definition, meaning, books, trade unions act, 1926 | registration, object, dispute, goods & price | contract of sale, leave a reply cancel reply.
Save my name, email, and website in this browser for the next time I comment.
World's Best Online Courses at One Place
We’ve spent the time in finding, so you can spend your time in learning
Digital Marketing
Personal growth.
Development
Writing & creativity.
TRANSFER OF PROPERTY IN SALES OF GOODS
What is transfer of property.
This is the moment at which it would be believed by the court that the property in the goods has passed from buyer to seller. The application of the rule is different in the instance of ascertained goods and unascertained goods.
Transfer of Specific or Ascertained Goods
In the case of ascertained goods, it is provided by S.17 (1) that the property in the goods will be transferred to the buyer at the time which was agreed upon by the parties. In order to pin point the intention of the parties as to when the property in the goods should be passed, S.17 (2) provides that regard shall be had to the contract, the conduct of the parties and the circumstances of the particular case.
There are also additional rules provided for ascertaining the intention of the parties. The first rule as provided in S.18 rule 1 is that when there is an unconditional contract for selling specific goods that are in a deliverable state, the property in the goods will be passed when the contract is agreed upon. This is regardless of whether or not the date for payment or delivery has been postponed.
The second rule under S.18 is that in the case of goods that are not in a deliverable state and the seller has to do something to the goods to make them deliverable, property in the goods passes when such things are done and the buyer is notified of such.
In the case of Underwood ltd vs Burgh Castle, the plaintiffs intended to sell a condensing machine to the defendants. The machine weighed 30 tons and was bolted to the ground. Thus the machine had to be dismantled and transferred to the defendant. After dismantling the machine, as it was about being loaded on the railway, it got spoilt. The court held that property in the goods had not yet passed to the defendant since the goods were not yet in a complete deliverable state when the machine got spoilt.
The third rule under S.18 is that when the goods are in a deliverable state but the seller has to weigh, measure, test or do some other thing to the goods in order to ascertain the price, property in the goods passes when such thing is done and the buyer is notified.
The fourth rule provides that where the goods are delivered on a “sale or return” term or any other such term, the property passes to the buyer when he signifies the acceptance of the goods or he does an act that adopts the transaction.
In a situation in which the buyer doesn’t signify any acceptance, the property passes when the date specified for rejection is elapsed. If no date is given, the goods will pass after a reasonable time. The determination of a reasonable time is a question of fact.
See: Bull vs Smith Car Sale 1962 2 All ER
Transfer of Unascertained Goods
By the provision of S.18 rule 5(1) in the case of unascertained or future goods by description and they are in a deliverable state, the property passes to the buyer when they have been unconditionally appropriated for such contract whether by the seller with the consent of the buyer or by the buyer with the assent of the seller. The assent could be given before or after the appropriation of the goods.
Unconditional appropriation of goods to a contract means that the goods have been set apart from the bulk of unascertained goods and they would be used for that particular contract without modification.
Also, if the goods are transferred by the seller to a third party or carrier, whether selected by the buyer or not, for delivery to the buyer, and the seller doesnt reserve a right of disposal, the goods will be considered unconditionally appropriated to the contract S.18 rule5 (2) SOGA .
- Lecture on Commercial Law delivered by Dr. Mrs H.I Saadu, Faculty of Law, University of Ilorin.
- MC Okany: Nigerian Commercial Law
- Sales of Goods Act
Leave a Reply Cancel reply
Notify me by email when the comment gets approved.
Join an online course that makes it easy for you to get A’s in your law exams, you can check it out here: Get Access to Ace LL.B Exams.
Passing of Property
- Post author: [email protected] om
- Post published: 25/05/2021
- Post category: Law of Contract-2
- Post comments: 0 Comments
What is Passing of Property?
Meaning of Passing of Property : – The literal meaning of the passing of property is the transfer of ownership at an agreed price. The passing of property is an important aspect to help determine the liabilities and rights of both the buyer and the seller. Once a property is passed to the buyer, then the risk in the goods sold is that of the buyer and not the seller. This is true even if the goods are in the possession of the seller. Ownership is transferred only when the ownership of property rights is transferred from the seller to the buyer.
Thus, the following will be determined : –
- The exact time when the property in the goods is transferred from the buyer to the seller.
- The time when the risk is transferred from the seller to the buyer.
- The time when the seller give the right of ownership and possession to the buyer.
There are four primary rules that govern the passing of property : –
- Specific or Ascertained Goods
- Passing of Unascertained Goods
- Goods sent on approval or “on sale or return”
- Transfer of property in case of reservation of the right to disposal
There are three stages involved in the performance of a contract of sale of goods : –
- Transfer of property in goods ( Sections 18 to 25 )
- Transfer of possession of goods ( Section 26 )
- Transfer of title ( Section 27-30 )
What are the rules related to the passing of property?
The rules related to the passing of property are as follows : –
- Risk passing (Section 24) : – The section provides that the goods will remain with the seller until the property is transferred to the buyer. As soon as the property is transferred to the buyer, the goods are at the buyer’s risk of whether the goods have been delivered or not. But, if delivery is delayed due to either party’s fault, the risk lies with the party’s fault because of whom the delivery gets delayed. Therefore, ‘assets’ and ‘risks’ go together.
- Ascertainment of goods (Section 18) : – The property in goods cannot be transferred by the seller to the buyer if the contract for sale is of ascertained goods. Therefore, the goods must be ascertained for the transfer of property in goods.
- Parties Intent [Section 19 (1)] : – Property in goods is given to the buyer when both parties intend to do so. The terms of the contract, the conduct of the parties and the circumstances of the case will be considered to determine the intent of the parties.
- Goods in Deliverable State ( Section 20 ) : – A state in which a buyer is obliged to take delivery of goods is known as a deliverable state. When the contract for the transfer of property in goods is unconditional, the transfer of property in goods is done when such a contract is made. For example : – Peter goes to an electronics store and buys a television set. He asks the shopkeeper to take it to his home. The shopkeeper agreed. Television immediately becomes Peter’s property.
- To keep the goods in a deliverable condition (Section 21) : – In some contracts, the seller is presumed to have something to do with the goods so that they can be placed in the deliverable condition, and the property in the goods is not yet transferred until such a thing is said to be done for the goods and the buyer is informed of the same. For example : – Peter buys a laptop from an electronics store and asks for home delivery. The shopkeeper agreed to it. However, the laptop does not have the Windows operating system installed. The shopkeeper promises to set it up and calls Peter before making the delivery. In this case, the property is transferred to Peter only after the shopkeeper has installed the OS to prepare the laptop for delivery.
- Price of goods determined by means of weights (Section 22) : – Where the price of the specific goods in the contract of sale is to be determined by weight, measurement or in any other way, the property in the goods is not said to be passed unless the weighing, measurement or method is used to determine the price and is informed to the buyer. For example : – Peter sells John a carpet and as part of the contract agrees to place it in John’s house. He lays the carpet and informs John that he will be laying it the next day. That night the carpet is stolen from John’s premises. In this case, John is not liable for the loss because the property was not given to him. As per the terms of the contract, it will be in a deliverable condition only after the carpet is laid.
- Uncertain Goods (Section 23) : – In a contract for the sale of uncertain goods by description, the property in the goods is delivered to the buyer if the goods of the said description are in deliverable condition and are unconditionally appropriated to the contract by the seller with the consent of seller or vice versa. Consent can be either expressed or implied and given after or before appropriation.
- The buyer indicated his acceptance or approval to the seller;
- The buyer acts in a way that indicates the adoption of the transaction;
- The buyer retains the goods even after the expiry of the fixed period.
- Right to Dispose (Section 25) : – If a seller reserves the right to dispose of the goods until certain conditions are met, the property in the goods cannot be transferred to the buyer until such conditions are fulfilled.
What is contracts by sea?
Meaning of contracts by sea : – A contract by sea may be defined as an agreement that is concluded between a carrier and a shipper for the carriage of goods by sea, in which a carrier, against the payment of freight, undertakes to deliver goods from one port to another.
Where contracts involving sea routes are for sale, special clauses and conditions have been prepared keeping in mind the international customs and practices of the merchants : –
- Delivery of goods with ship.
- Notify buyer of ship as well as delivery.
- Arrangement of Affreightment contract.
- Notify the seller of the ship’s name and delivery with the ship.
- Take a risk and pay a fee for the ship as well as the goods delivered.
- Delivery of goods on a ship designated by the buyer. Once the goods are put on the ship, they are at the buyer’s risk. The seller’s duty ceases when he delivers the goods to the ship at his own expense.
- Inform buyer about shipping of goods. The notification is intended to enable the buyer to protect the goods against loss during the transmission of the goods. If the seller fails to notify the buyer, the goods will be at his / her own risk.
- Arrange for fire extinguishing contracts;
- To tell the seller the name of the ship through which the goods are transported.
- Carry risk and fees related to delivery of goods onboard.
- The property of the goods is said to be given to the buyer when the goods are delivered. If the buyer fails to name the ship for the transfer of the goods, the seller can sue the buyer for non-acceptance of the goods but cannot sue for the price.
- Cost, insurance and freight contracts : – When a seller agrees to sell goods, the price of the goods will include the price of the goods, the cost of insurance, and the freight. Such contracts are done when documents, bills of lading, insurance policies, invoices etc. are given to the buyer through the bank. The bank transfers the documents at a fee. The seller is called the owner of the goods until the buyer receives the documents and pay for the goods.
- Ex-Ship Contracts : – Under these contracts, the seller delivers the goods from the ship arriving at the port of destination at his own expense. Property in goods is not said to be transferred until goods are delivered to the buyer.
Case laws under passing of property
- Badri Prasad vs. State of Madhya Pradesh : – In this case, the court stated that in cases of sale of trees, property in goods is transferred when the trees fall after being cut down because they cannot be ascertained unless they fall.
- Multanual Chempalal vs. C.P. Shah & Co : – In this case, it has been held that Section 26 of the Sale of Goods Act, risk passes only when the property is passed, but if there is a contract to the contrary, for the passing of the l risk before the title of the property. Thus, the parties can enter into a contract that provides for the risk to pass before the property is passed.
Leave a Reply Cancel reply
Save my name, email, and website in this browser for the next time I comment.
- Call for Papers
- Competitions
- World Legal
- Legal Drafting
- Know Your Rights
- Law Academic
- Law of Contract- II
Passing of Property under the Sale of Goods Act, Seller- Buyer Duties, Important Case Laws
The phrase “passing of property in the goods” implies “transfer of ownership in the goods” which has been provided under the Sale of Goods Act, 1930. The passing of property is one of the important concept related to the contract for sale of goods and property. This article deals with several aspects of the concept by covering the rules for the passing of ownership and the various contracts in which the delivery of goods is done through ships.
Introduction
In a contract for sale of goods or property, the ownership of such goods or property is also passed to the buyer. It is important to determine the exact point at which the property is passed from seller to the buyer as the risk involving the property depends on it. Thus, the following shall be determined:
- a) The exact point of time when the property in the goods is passed from the buyer to the seller.
- b) The point of time at which risk passes on to the buyer from seller.
- c) The time when right of ownership and possession is passed on to the buyer by seller.
The three stages involved in the performance of contract of sale of goods are:
1) Transfer of property in goods (Section 18 to 25)
2) Transfer of possession of goods (Section 26)
3) Transfer of title (Section 27-30)
Rules relating to Passing of Property
1) Passing of risk (Section 26): The section provides the goods, unless the property is transferred to the buyer, shall remain with the seller. As soon as the property is transferred to the buyer, the goods are at the buyer’s risk whether the goods have been delivered or not. But, if delivery is delayed due to the fault of either party, the risk lies with the party at fault. Therefore, ‘property’ and ‘risk’ goes simultaneously.
2) Rules as to the passing of property in the goods (Section 18-25): The general rules relating to the transfer of property in the goods are:
- a) Ascertainment of goods (Section 18): The property in the goods cannot be transferred by the seller to the buyer if the contract for sale is of ascertained goods. Therefore, the goods must be ascertained for transfer of property in the goods.
- b) The intention of parties [Section 19(1)]: The property in the goods is passed to the buyer when both the parties intend to do so. The terms of the contract, conduct of parties and circumstances of case shall be considered for determining the intention of the parties.
3) Specific Goods (Section 20-22): Rules relating to the transfer of property in specific goods are provided under Section 20 to 22 which are as follows:
- a) Goods in Deliverable State (Section 20) : A state in which a buyer is bound to take delivery of the goods is known as a deliverable state. When a contract for transfer of property in the goods is unconditional, the transfer of property in the goods is said to be done when such contract is made.
- b) Goods to be put in deliverable state (Section 21): In some contracts, the seller is supposed to do something with the goods for putting them in deliverable state, and the property in the goods is not said to be transferred unless such thing is done to the goods and the buyer is given notice of the same.
- c) Price of goods ascertained through weighing (Section 22): Where the price of the specific goods in a contract of sale is to be determined by weighing, measuring or some other method, the property in the goods is not said to be passed unless such weighing, measuring or the method is used for ascertainment of price and buyer is given notice of the same.
4) Unascertained goods (Section 23): In a contract for sale of unascertained goods by description, the property in the goods passed on to the buyer if the goods of the said description are in deliverable state and are unconditionally appropriated to the contract by the buyer with the consent of seller or vice-versa. The consent can be either express or implied and can be given after or before the appropriation is done.
As per a contract, if the goods are delivered to the buyer, carrier or bailee who doesn’t have a right of disposal (named by a buyer or not) by the seller, it is assumed that he has unconditionally appropriated the goods to the contract.
5) Goods sent on approval basis (Section 24): When the goods are delivered to the buyer on specific terms i.e. ‘approval’, ‘sale on return’ or any other such term, the property is said to be transferred when:
- a) The buyer indicated his approval or acceptance to the seller;
- b) The buyer acts in a way which indicates adoption of the transaction;
- c) The buyer retains the goods even after expiry of fixed period.
6) Reserving right of disposal (Section 25): If a seller reserves a right to dispose the goods until fulfillment of certain conditions, then the property in the goods cannot is not transferred to the buyer until such conditions are fulfilled even if the goods are specific or subsequently appropriated.
Contracts Involving Sea Routes
Where the contracts are for sale involving sea routes, there are special clauses and conditions prepared keeping in mind the international customs and practices of merchants:
- A) Free Alongside Ship Contracts: In FAS contracts, the property in the goods sold passed to the buyer when the seller delivers the goods alongside the ship whose name has been mentioned in the contract of carriage between the parties. The seller’s and buyer’s duties under such contracts are as following:
Seller’s Duties :
- Delivery of goods alongside the ship.
- Notify the buyer of delivery alongside the ship.
Buyer’s Duties :
- Arrangement for affreightment contract.
- Notify the seller of the ship name and delivery alongside the ship.
- Bear risks and pay charges for the goods delivered alongside the ship.
- B) Free on board Contracts: Under FOB contracts, if a seller agrees to sell goods, then the seller have to put the goods on a ship on behalf of buyer, at his own expenses under the contract of carriage by sea for transmitting the goods to buyer.
Seller’s duties:
- Delivery of goods on the ship named by buyer. Once the goods are put on a ship, they are at buyer’s risk. The seller’s duty ends once he delivers goods to the ship at his own expenses.
- Notify the buyer about the shipping of goods. The notification is in order to enable the buyer to protect the goods against loss during transmission of goods. If the seller fails to notify the buyer, the goods will be at his risk.
Buyer’s Duties
- Arrange for the contract of aafireightment;
- To tell the seller the name of the ship through which the goods are delivered.
- Bear risks and charges relating to delivery of goods on ship.
The property in the goods is said to be passed on to the buyer when the goods are delivered. If the buyer fails to name a ship for transfer of goods, the seller can sue the buyer for the non-acceptance of goods but he cannot sue for the price.
- C) Cost, Insurance and Freight Contracts: When a seller agrees to sell goods, the price of goods shall include the price of goods, cost of insurance and freight. Such contracts are said to be performed when the documents, bill of lading, insurance policy, invoice, etc are delivered to the buyer through a bank. The bank transfers the documents at a charge. The seller is said to be the owner of goods till the time buyer receives the documents and pays for the goods.
- D) Ex-Ship Contracts: Under these contracts, the seller delivers the goods from a ship arrived at the port of destination at his own expenses. The property in the goods is not said to be transferred until the goods are delivered to the buyer.
Case Laws relating to Passing of Propert-
Badri Prasad v. State of M.P: In this case, the court held that in the cases of sale of trees, the property in the goods is said to be transferred when the trees fell after they are being cut as they cannot be ascertained unless they fall.
Multanual Chempalal v. C.P. Shah & Co.: In this case, it has been held that section 26 of the Sale of Goods Act, the risk passes only when the property is passed but if there is a contract to the contrary, the risk passes before the title to the property is passed. Thus, the parties can enter into a contract which provides for passing of risk before the passing of property.
The Sale of Goods Act, 1930 provides for several aspects relating to the passing of property in a contract for sale of goods or property. There are several rules provided under Sections 18 to 25 of the Act through which rights and liabilities of the buyer and seller can be determined. Passing of property in the goods signifies the transfer of ownership in the goods which is a different concept from the possession of goods as possession only involves delivery or custody of goods.
RELATED ARTICLES MORE FROM AUTHOR
Contract of guarantee, kinds, functions under the indian contract act, 1872, adr- arbitration vs conciliation vs mediation and their differences, advantages, know the formation, independence and functions of the election commission of india, leave a reply cancel reply.
Save my name, email, and website in this browser for the next time I comment.
Contract of Sale of goods | Meaning | Essential elements
8 important causes for failure of advertisement.
Advantages and disadvantages of sales promotions
IMAGES
VIDEO
COMMENTS
A contract of sale of goods is a contract whereby the seller transfers property in the goods to the buyer for a price. ‘Passing of property in goods means ‘ transfer of ownership of the goods. When the goods are sold, it is the property in the goods that are transferred to the buyer. Table of Content [ Show]
The transfer of property (or ownership) is important as it determines who owns the goods at a particular point during the contract. The term transfer of property implies transfer of ownership and not physical possession of goods. Table of Content [ Show] Transfer of Property Definition
What is Transfer of Property This is the moment at which it would be believed by the court that the property in the goods has passed from buyer to seller. The application of the rule is different in the instance of ascertained goods and unascertained goods. Transfer of Specific or Ascertained Goods
Rules for the passage of property in goods (Section 18-25): – The general rules relating to the transfer of property in goods are: – Ascertainment of goods (Section 18): – The property in goods cannot be transferred by the seller to the buyer if the contract for sale is of ascertained goods.
2) Rules as to the passing of property in the goods (Section 18-25): The general rules relating to the transfer of property in the goods are: a) Ascertainment of goods (Section 18): The property in the goods cannot be transferred by the seller to the buyer if the contract for sale is of ascertained goods. Therefore, the goods must be ...
Transfer of Property (Ownership rights) in a contract of sale The time of passing of property in goods from the seller to the buyer is important in view of the following reasons: Transfer of Ownership in Contract of Sale – Reason, Rules 1. It is only the owner who has to bear the risk of loss.