Business Law - Transfer of Ownership and Delivery of Goods

Preparing for foundation / intermediate examinations of CA / CMA / CS / Business Exams (English and Hindi Languages)

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Business Law - Transfer of Ownership and Delivery of Goods

What You Will Learn!

Introduction
Passing of Property (Section 18-26)
Risk Prima Facie Passes with Property (Section 26)
Transfer of Title by Non Owner (Section 27-30)
Performance of a Contract of Sale (Section 31-44)

Description

Chapter 2: The Sale of Goods Act, 1930

UNIT – 3: TRANSFER OF OWNERSHIP AND DELIVERY OF GOODS

After studying this unit, you would be able to understand-

1. Understand how and at what point of time the ownership in goods which are the subject matter of a contract of sale passes to the buyer from the seller.

2. Be clear about what appropriation of goods is and how it affects the passing of property in goods.

3. Distinguish between passing of property and passing of title.

4. Understand the rule of ‘nemo dat quod non habet’ (no one can give what he has not got) and exceptions thereof.

5. Be familiar with the rules relating to delivery of goods and acceptance of goods.

INTRODUCTION

Sale of goods involves transfer of ownership of property from seller to buyer. It is essential to determine the time at which the ownership passes from the seller to the buyer.

Importance of the time of transfer : The general rule is that risk prima facie passes with the property. In case where goods are lost or damaged, the burden of loss will be borne by the person who is the owner at the time when the goods are lost or damaged. Where the goods are damaged by the act of the third party, it is the owner who can take action. Suit for price by the seller can be filed only when the property has passed to the buyer.

SUMMARY

The property in the goods or beneficial right in the goods passes to the buyer at a point of time depending upon ascertainment, appropriation and delivery of goods. Risk of loss of goods prima facie follows the passing of property in goods. Goods remain at the seller’s risk unless the property therein is transferred to the buyer, but after transfer of property therein to the buyer the goods are at the buyer’s risk whether delivery has been made or not. An important rule regarding passing of title in goods is that the purchaser does acquire no better title to the goods than what the seller had.

This rule again is not applicable under certain circumstances.

Delivery of goods denotes the voluntary transfer of possession, which may be actual or even in some constructive form and which is again subject to various rules which help in deciding when the delivery becomes effective.