Business Law (Legal Aspects of Business)

Assignment No.1
Sales of Goods Act 1930

Q. No.1. Define the term ‘sale’ and ‘agreement to sell’.

 When in a contract of sale, the exchange of goods for money consideration takes
place immediately, it is known as Sale.
 When in a contract of sale, the parties to contract agree to exchange the goods for a
price at a future specified date is known as an Agreement to Sell.
 An agreement to sell becomes a sale when the time elapses or the conditions are
fulfilled subject to which the property in the goods is to be transferred.

Q. No.2. Define the term ‘price’. Discuss the modes of fixing the price.
 The money consideration for a sale of goods is known as ‘price ‘
Modes of fixing the price
1. It may be expressly fixed by the contract itself:
2. It may be fixed in accordance with an agreed manner provided by the contract:
3. It may be determined by the course of dealings between the parties
4. If the price is not capable of being determined in accordance with any of the
above modes, the buyer is bound to pay to the seller a reasonable price

Q. No.3. P agrees to sell to Q his two motor cars on the terms that the price was to be fixed
by R. Q takes the delivery of one car immediately, R refuses to oblige P & Q and
fixes no price. P ask for the return of the car already delivered whereas Q insists
on the delivery of the second car to him for a reasonable price of both the cars.
Decide the case.
 Price in the contract is fixed in following ways: -
1. Fixed by the contract itself
2. Left to be fixed by an agreed manner
3. Determined in the course of dealing between the parties.
4. As in the contact of terms it is mentioned that p agrees to sell q only if the
price is fixed by r. since r refuses to fix the price the contact becomes void
no future transaction can be done and if they want to do the transaction they
need to create another contract.

Q.No.4. What is the doctrine of caveat emptor?

 The doctrine of caveat emptor means "buyer beware." It basically conveys the
message that the buyer must protect his or her own interests when making a
purchase or transaction. The phrase is often used in real estate transactions, but it
can apply to other goods and some services as well.
Q.No.5. What do you mean by Delivery of goods?
 Delivery of Goods in the Sale of Goods Act is defined as a voluntary transfer of
possession from one person to another. Thus, to effect a valid delivery, goods from
one person to another must be transferred willingly and not by means of fraud, theft,
or force, etc. Mere possession of goods does not amount to delivery of goods.

Q.No.6. A sells to B 100 bags of wheat which are locked up in a godown. A hands over to
B the keys of the godown. Does it constitute delivery of the goods to B?
 Yes, it constitutes to delivery of goods to b as one of the moods of delivery is
symbolic delivery which means Where the goods are bulky and heavy and it is not
possible to physically hand them over to the buyer, delivery thereof may be made by
indicating or giving a symbol. Here the goods itself are not delivered, but the means
of obtaining possession of goods is delivered.
Q.No.7. Discuss 2 rights of an unpaid seller.
 Suit for price: - When any goods are passed on to the buyer and the buyer has
wrongfully neglected or refused to pay as per the terms and conditions of the
contract, the seller may sue him because once the property has been passed the
buyer is bound to pay the price.
 Suit for interest: - where there is a specific agreement between buyer and seller
with regards to interest on the price of goods from the date on which payment
becomes due, the seller may recover interest from a buyer. But if there were no such
agreement the seller may charge interest from the day he notifies the buyer.

Q.No.8. What is an Auction Sale?

 An auction sale is a public sale. The goods are sold to all members of the public at large
who are assembled in one place for the auction. The price they are offering for the
goods is the bid
Examine the following transaction & decide:
A attended an auction sale and made a bid of Rs.600/- for a typewriter but withdrew
the offer before the fall of the hammer. One of the conditions of the sale which A
had read was that biddings once made shall not be withdrawn. A was sued for
Rs.600, his being the highest bid (decide).
 According to the rules of auction When the auctioneer announces its completion by
the fall of the hammer or in some other customary manner, the sale is considered
complete. Until such an announcement, any bidder may revoke his bid. Since one of
the conditions of sale was biddings once made shall not be withdrawn A can be sued
for this.