SALE OF GOODS ACT
Q.(i) A sells to B on 5th March, 'all the hay standing on my land in a particular enclosure: the hay to be cut and carried by B after two weeks and the price of Rs.500/- to be paid on 15th April. The hay was destroyed by fire before it was cut. A sues B for the price after the due date. Decide.
(ii) A, a dealer at Chandigarh, places an order with B, a trader at Delhi, for the supply of certain goods on the terms; "F.O.R. Delhi. Payment against documents". B delivers the specified goods to the Railways at Delhi for transmission to A, the consignee, and sends the railways receipt to his Bank at Chandigarh for handing over the same to A against payment. Intimation is also rent separately to A. The goods are destroyed by fire before these are loaded in the wagons at Delhi. A dishonours the documents. B sues A for the price of the goods. Will B succeed? Give reasons. (D.J.S. 1989)
Q.(a) What is meant by sale by Sample? What are the conditions implied in such a sale?
(b) Vulcanized rubber material was agreed to be sold in rolls 40 ft. long under the description of linatex and with a small soft piece as sample. Following a request from the buyers, the sellers sent ten rolls directly to a customer of the buyers to whom it had been resold by description and the same sample. The customer rejected the goods on the ground that the rolls were crinkly, hard and folded. The sellers sued the buyers for price. The Court found that a sample process of heating and pressing would correct the defects. Was the customer justified in rejecting the goods? Can the buyers avoid payment altogether or must they be content with a reduction in price?
(c) What are the exceptions to the rule of Caveat Emptor?
(d) A sold 50 bales of cotton on credit and kept them in his warehouse on rent charged to the buyer. Before the period of credit expired, buyer sold away 15 bales and became insolvent. A seeks to exercise his lien on the remaining bales in the warehouse for the price of 50 bales and the rent in arrears. Advise A. (D.J.S. 1990)
Q.(a) "Risk prima facie passes with property". Explain. What are the exceptions to this principle?
(b) X contracted to sell to Y the stock of Firewood for Rs.8,000/-. Y allowed X to keep all Firewood in X's premises so long as it is not lifted by him (Y) after making payment. In the meantime, fire took place and all firewood was destroyed. X claims amount of Rs.8,000/- from Y. Y refuses to pay. X files a suit. Will X succeed. Give reasons.
(c) X brought a horse for Y for Rs.5,000/- from Z stipulating for five days trial. The horse was delivered to X but before the expiration of those five days, the horse died without any fault on the part of X. Then Z sued X for recovery of Rs.5,000/-. Decide.
(d) 'X' in Madras writes to 'Y' at Bombay to send to 'X' a packet of patent medicine. 'Y' accordingly sends the packet, 'X' finds some defect in the medicines. Can 'X' receive the price of medicines from 'Y'. (D.J.S. 1991)
Q. What are the rules regarding transfer of property in goods as per Sale of Goods Act. (D.J.S. 1996)
Q. Haryana Oil Mills is engaged in the business of manufacture of vanaspati. For their raw material, they are allocated vegetable oil by Govt. of India up to certain percentage. Oil is supplied by STC, which imports the same from foreign countries. The Mill was allocated 300 MT of oil at the issue price of Rs.8,000/- P.M.T. The Mill paid the entire price for 300 MT and were issued 3 separate delivery orders dated 15.01.1993, 15.02.1993 and 15.03.1993. All these orders had an endorsement regarding price to be charged as on date of delivery after the measurements are taken since the oil was to be taken out of large containers and then supplied to buyer. The Mill had taken delivery of 200 MT. But when they went to take delivery of 3rd installment by then prices had been revised to Rs.10,000/- P.M.T. STC claimed difference in price. Haryana Mills refused to pay as they pleaded that they had already made the full payment for 300 MT and are not liable to pay enhance price. Discuss their rights and obligations. Whether STC could refuse to deliver remaining 100 MT vegetable oil at pre-revised price.
Q. A manufacturer of woolen cloths sold woolen cloth to a tailor on the basis of particular sample. The tailor had purchased the cloth for particular purpose but he had not told the seller about the same. Owing to latent defect in cloth as well as in sample, the cloth turned out to be unfit for purpose for which tailor had purchased though the same was fit for other purposes. Tailor filed suit for damages. Decide.
Q. "Nemo dat quodnon habet' Explain. A buys a cow for Rs.1500/- and makes payment to B but does not take delivery. Subsequently B sold the cow to C for Rs.1800/- and delivers it to C, B leaves his house and is untraceable. Can A sue C for recovery of Cow. (D.J.S. 1996)
Q. What are the rights of an unpaid seller under the Sale of Goods Act? (D.J.S. 1999)
Q.(a) 'A' purchased a car from 'B', which turned out to be stolen property. 'A' filed a suit for recovery of price against 'B'. 'B' took the plea that he himself was a bona fide purchaser from 'C' a third party and never knew that the car was stolen property belonging to 'D' and therefore, he is not liable to return the price.
Decide the case in the light of Section 27 of the Indian Sale of Goods Act, which provides, "subject to the provisions of this Act and of any other law for the time being in force, where goods are sold by a person, who is not the owner thereof and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title than the seller had unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell".
(b) 'A' purchased rice from 'B', being the whole contents of a godown. 'a' had paid earnest money and had taken delivery of a part of rice. Before the rest could be taken away, it was destroyed by fire.
Discuss who shall bear the loss.
(c) Section 47 of the Sale of Goods Act, provides,
"(1) Subject to the provisions of this Act, the unpaid seller of goods, who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases, namely :
(a) where the goods have been sold without any stipulation as to credit;
(b) where the goods have been sold on credit, but the term of credit has expired; (c) where the buyer becomes insolvent."
"(2) The seller may exercise his right of lien, notwithstanding that he is in possession of the goods as agent or bailee for the buyer."
'A' sold 50 bales of cotton on credit and kept them in his godown on rent charged to buyer B. Before the price of credit expired, B sole away 15 bales and become insolvent. A seeks to exercise his lien on the remaining bales lying in his godown, for the price of 50 bales and the rent in arrears. Advise A regarding his right being unpaid unpaid seller, under the provisions of Sale of Goods Act. (D.J.S. 2000)
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