Sale of Goods Act, 1930 25

3.
PASSING OF PROPERTY

 Introduction
 Legal Consequence
 Intention determines passing of Property
 Intention to be ascertained in accordance with Sec. 18 & Sec.20-24
 Sale of Specific Goods (Sec. 20-22)
 Specific goods
 Deliverable state
 Unconditional Contract
 Goods to be put in deliverable state [Sec. 21]
 Goods to be weighed or measured [Sec. 22]
 Sale on Approval [Sec. 24]
 By acceptance [Sec. 24 (1)]
 By failure to return [Sec. 24 (2)]
 Sale of Unascertained Goods [Ss. 18 and 23]
 Goods must be ascertained
 Ascertainment
 Appropriation
 Property does not pass till appropriation

 INTRODUCTION
The essence of sale is the transfer of property from the seller to the buyer. In a contract of sale the
most crucial time is when the transfer of property takes place because as soon as the property in
goods is transferred from the seller to the buyer, certain important legal consequences follow.
In the first place, risk Prima facie passes with the property because with the transfer of property the
buyer becomes responsible for all risk of the property.
Secondly, the buyer acquires proprietary rights over the goods.
Thirdly, if the price has not been paid to the seller, he may sue for price against the property.
Property in the goods is said to pass to the buyer when he acquires proprietary rights over them.
The Act leaves the whole question of passing of property upon the intention of the parties. The heading
of Section 19, is “Property passes when intended to pass”. Thus, passing of property, through one of
the natural results of a sale is not the inevitable result.
The intention of the parties reigns supreme in the area. Sacks Vs. Tilley (1915 ) 32 TLR 148 is an
illustration in point:
In this case, certain diamonds were sent to the buyers by post by a foreign firm. A bill for the price
was sent along with them and a condition of the contract that property would pass on the bill being
accepted. The invoice was marked “settled by acceptance”. The bill was never accepted. The Court
held acceptance of bill was necessary for passing of property.
26 Sale of Goods Act, 1930

It is obviously necessary that such intention must be embodied in the contract itself, for when once the
rules apply, a subsequent attempt to modify them will be of no avail in Dennant Vs. Skinner (1948)
2 KB 168.
A car was sold by auction. The buyer was in fact a swindler. He gave a fake cheque and obtained
delivery. The seller, in order to protect himself, inserted a clause in the agreement that the property in
the car would not pass to the buyer until the cheque was cleared. Before the fraud could be discovered,
the car was sold to the defendant.
It was held that the property passed with the fall of the hammer and after that had happened, it was
too late to prevent it from passing and therefore, the defendants acquired a good title.
Sub-section (2) indicates the circumstances from which guidance is to be taken. It says that for the
purpose of ascertaining the intention of the parties regard shall be had to the (i) terms of the contract,
(ii) the conduct of the parties and (iii) circumstances of the case. The rules stated under the heading
“Passing of property” are in the nature of presumptions only. The law permits the parties to settle the
point for themselves by any intelligent expression of their intention.”
Where the intention of the parties is not apparent from their contract their intention will be ascertained
in accordance with the rules laid down in Sec.18 and Sec. 20 to 24. These sections deals with three
kinds of situation (1) Sale of specific goods (2) Sale of goods on approval and (3) Sale of unascertained
goods.

 SALE OF SPECIFIC GOODS (SEC. 20-22)

In case of sale of specific goods the general rule is that property passes as soon as the contract is
made. The basic conditions relating to such sales are laid down in Section 20. Section 21 and 22 apply
where one of the other of the conditions are fulfilled. The rule laid down in Section 20 is:
Specific goods in a deliverable state – Where there is an unconditional contract for the sale of
specific goods in a deliverable state, the property in the goods passed to the buyer when the contact is
made, and it is immaterial whether the time of payment of the price or the time of delivery of goods, or
both is postponed.
The basic conditions for this rule to apply are (1) the sale must be that of specific goods (2) the goods
must be in a deliverable state and (3) the contract must be unconditional.
(a) Specific goods: In the words of section 2(14) “specific goods” means goods identified and agreed
upon at the time a contract of sale is made”. In other words the identity of the goods has already been
established at the time of the sale. Their individuality has been found.
In Kursell Vs. Timber Operators & Contractors Ltd., (1927) 1 KB 298. There was a sale of all
the “merchantable timber” as “all trunks and branches of trees but not seedling and young trees of less
than six inches in diameter at a height of four feet from the ground”. The buyers had 15 years in which
they had to cut the timber sold, but they had worked for a few days only when the forest was nationalized
and all private right annulled. The sellers sued for the price.
But the buyers were not held liable. It was not a sale of specific goods and the property had not passed
to the buyer at the time of contract. Not every tree in the forest passed, but only those complying with
the certain measurement passed. How much of each tree passed depended on where it was cut how
far from the ground. Nor does the timber seem to be in a deliverable state until the buyer has
severed it.”
Sale of Goods Act, 1930 27

(b) Deliverable state: Section 2(3) provides that “Goods are said to be in a deliverable state when they
are in such state that buyer under the contract be bound to take delivery of them. In Underwood Ltd
Vs. Burgh Castle Brick & Cement Syndicate (1922) 1 KB 343. The facts appear from the judgment
of BANKES LJ.
The subject matter of the sale was a horizontal condensing machine. The seller agreed to sell it for
London. The engine weighed 30 tons. It was bolted to a concrete emplacement in which it had become
embedded by its own weight, so that it had first to be unfastened, and then to be dismantled… the
engine was damaged on its way to the rail. The seller contended where nothing more has to be done to
make it an engine or a cart – it is then in a deliverable state…. I do not accept that test. A ‘deliverable
state’ does not depend upon the mere completeness of the subject matter in all its parts, but on the
actual state of the goods at the date of the contract and the state in which they are to be delivered by
the terms of the contract. Where the vendors have to expend as much trouble and as much money as
the sellers had to expend before this engine could be placed on the rail, I cannot think that the subject
matter can be said to be in a deliverable state. “Goods must be in a physical condition in which the
buyer can take delivery and in which it has been agreed that he shall take delivery under the contract.”
Where the goods do not correspond with their description in the contract, they are not in a deliverable
state, and even if they have been delivered to the buyer, he may reject them.
(c) Unconditional Contract – Lastly the contract should be unconditional. A contract of sale is said to
be conditional when it is the common intention of the parties that property should not pass by unless
certain conditions are fulfilled. In a case before the Calcutta High Court, the goods in question were in
a deliverable state but even then the property did not pass because (1) there was a custom of trade
that (2) the sale would not be completed until the goods were selected, tested and weighed by the
buyer. Similarly, in a sale of a car on instalments, the intention of the parties that the property should
not pass until the last instalment was paid was allowed to prevail to the exclusion of the rule stated in
Section 20. When the goods have to fulfill certain express or implied conditions on the their Character
or quality, the contract is conditional and if the goods delivered do not satisfy the conditions, the
property shall not pass.
 PROPERTY PASSES AT THE TIME OF CONTRACT:
Where the requirements of Section 20 are satisfied, the property passes as soon as the contract is
made and it is immaterial that the payment of the price or delivery of the good or both is postponed.
The right of property and the right of possession are distinct from each other; the right of possession
may be in one person, the right of property in another. A vendor may have a qualified right to retain the
goods unless the payment is duly made and yet property in the goods may be in the vendee.” Tarling
Vs. Baxter 5 LJKB 164 BAYLEY J Contrarily, the goods may have been delivered, and yet they
may be the property of the seller. Thus, where a crane was delivered to, and it was in the use of the
buyer company, yet in the winding up of the company, it was held to be the property of the seller
because the terms of the contract showed an intention to the effect that the crane was to remain the
seller’s property till it was paid for.
 Goods to be put in deliverable state [Sec. 21]
Specific goods to be put into a deliverable state – Where there is a contract for the sale of specific
goods and the seller is bound to do something to the goods for the purpose of putting them into a
deliverable state, the property does not pass until such thing is done and the buyer has notice
thereof.
Section 21 applies to cases where the seller has to do something to put the goods in a deliverable
state. “If anything remains to be done on the part of the seller, until that is done the property is not
changed.” Goods which have still to be packed are not in a deliverable state.
28 Sale of Goods Act, 1930

(1) In Rugg Vs. Minett (1809) 11 East 210, there was a sale of the whole of turpentine oil lying
in a cistern. The oil has to be filled by the seller in casks, which was partly done in the buyer’s
presence, but before he could remove the casks the whole oil was consumed by fire. The buyer
had to bear the loss for the casks which had been filled up because “everything had been done
by the seller which lay upon them to perform in order to put the goods in deliverable state”.
(2) Where the seller undertakes to put the goods on rail the property remains in him till they are
loaded and if they are injured on the way or remain unloaded owing to unavailability of wagons,
the seller has to bear the loss.
 Goods to be weighed or measured (Sec. 22)
Specific goods in a deliverable state, when the seller to do anything thereto in order to
ascertain price – Where there is a contract for the sale of specific goods in a deliverable state,
but the seller is bound to weigh, measure, test, or do some other act or thing with reference to the
goods for the purpose of ascertaining the price, the property does not pass until such act of things
is done and the buyer has notice thereof.
Where the seller has to take weight or measurement of the goods or he has to test them or to do
something in reference to the goods for the purpose of ascertaining their price the property does
not pass till such thing is done and the buyer has notice of it. Thus where it was the duty of the
seller to count the goatskins in each bale, and the price was for a certain sum per dozen skins, the
seller had to bear the loss caused by fire before he had counted the goods. “If a part of a bulk is
sold, so that weighing or separation is necessary to determine the identity or individuality of the
article, or if the whole of the commodity be sold, but weighing is necessary to ascertain the price,
because the quantity is unknown, the weighing and measuring must precede delivery, and symbolic
delivery without such weighing will not be sufficient. Accordingly it was held in that case “or a
contract for the sale of goods lying in a warehouse, the handing over the delivery order to the
buyer, and the transfer of the goods to him in the warehousemen book, will not vest the property in
him, if something remains to be done for the purpose of ascertaining the identity or quantity of the
goods”.
“But if the identity and the quantity are ascertained, as where the oats in a particular bin, which
contains nothing else, the property vests, although the delivery order describes the goods by the
weight as well as the bin (1,028 bushels of oats in bin 40) and directs the warehouseman to weigh
them over. Sale of a bulk for a lump sum price would make the sale final because nothing remains
to be done for working out the price.
Where the seller has done his part the property passes even if the buyer has to do something for
his satisfaction. “Where the identity of the goods and the quantity are known, the weighing can
only be for the satisfaction of the buyer, in such cases the transfer in the books of the wharfinger
is sufficient to pass property. Where the plaintiff sold to the defendant a quantity of fire clay at a
certain price per tonne the clay to be carted away by the defendant, at his own expense and
weighed by him at the weighing-machine of a third person, it was held that the property in the clay
had never been weighted. If something is to be done by the buyer for his satisfaction, it would not
have the effect of suspending the transfer of ownership. Where the buyer said that he would test
the weight of cocoa bought by him at the delivery point of his sub-buyers, that did not postpone the
vesting of property in him at the time of sale to him.
Sale of Goods Act, 1930 29

Similarly in a Calcutta case S.M. Pal Vs. N. Kristo Poddar (1878) 4 ILR Cal 801.
A contracted with B, to sell him 975 maunds of rice,the whole content of certain golah. B paid to A
certain earnest money, and agreed to remove the whole of the rice after weighing. B transferred
his contract to C who took delivery of some bags, but refused to accept the residue on account of
their inferiority. The golah was accidentally burnt.
It was held that this was sale of specific goods and the property passed as soon as the contract was
made. The buyer could have discovered the inferiority by ordinary diligence before accepting the
rice.
Here also the whole arrangement is subject to the parties’ intention. Where the price was already
taken but was to be worked out more accurately subsequently to delivery by taking weight, etc., it
was held that the inference as that the parties did not link the passing of property with accuracy of
price.

 SALE ON APPROVAL (SEC. 24)

(a) When he signifies his approval or acceptance to the seller or does any other act according to the
transaction.
(b) If he does not signify his approval or acceptance to the seller but retains the goods without giving
notice of rejection, then, if time has been fixed for the return of the goods, on the expiration of
such time, and if time has not been fixed, on the expiration of a reasonable time.
The essence of the rule is that the property passes either by (1) acceptance (2) by failure to return
within reasonable time.
 By acceptance -
In the first place, the property passes when the buyer signifies his acceptance or approval or
otherwise adopts the transaction. The acceptance may be express or implied from conduct. An
implied adoption takes place when the buyer deprives himself of the power to return the goods.
In Krikham Vs. Attenborough (1897) 1 QB 201 CA. A manufacturing jeweller delivered some
Jewellery to one Winter “on sale or return”. Winter pledge the Jewellery with the defendant,
Atttenborough, a pawn-broker. Winter failed to pay the price. The plaintiff then commenced an
action against the pawn-broker to recover the goods.
But it was held that the plaintiff should have sued Winter for the price and not the defendant, who
had acquired a good title because Winter, by pledging the goods, had adopted the transaction and
the property then passed to him.
Explaining the meaning and consequence of sale on approval LORD ESHER RM said: The contract
by which goods are delivered ‘on sale or return’ means this the purchaser may return the goods
within a reasonable time, and the option to return belongs solely to the purchaser; the other party
cannot even ask for the return of the goods, and his only right is to sue for the price if the goods
are not returned.
Acceptance means acceptance of the part of the contract which makes him the purchaser
absolutely….That will be some act which signifies that he intends to be the absolute purchaser. If
he does some act which would be right only if he were the absolute purchaser that signifies an
acceptance or adoption within the statues.
30 Sale of Goods Act, 1930

 SALE OF UNASCERTAINED GOODS (SECTIONS 18 AND 23)

The provisions relating to passing of property on sale of unascertained goods are split into two sections.
Section 18 is the first relevant provision.
Sec. 18: Goods must be ascertained – Where there is a contract for the sale of unascertained
goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained.
Sec. 23: Sale of unascertained goods and appropriation – (1) Where there is a contract for the
sale of unascertained future goods by description and goods of that description and in a deliverable
state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer
or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer.
Such assent maybe express or implied, and may be given either before or after the appropriation is
made.
Thus (1) ascertainment of the goods is the first condition and their (2) appropriation to the contract the
second, and thereupon the property passes to the buyer.
 Ascertainment
“Ascertainment” is the process by which the identity of the goods to be delivered under the contract
is established but “a mere setting apart or selection by the seller of the goods which he expected to
use in performance of the contract is not enough. “That must also be appropriated to the contract.
The distinction between “ascertainment” and “appropriation” is that ascertainment can be a unilateral
act, that is, the seller alone may set apart the goods. But “appropriation” involves “the element of
common intention”.
 Appropriation
Selection of the goods with the exclusive intention of using them in performance of the contract
and with the mutual consent of the parties is what constitutes “appropriation”. For example, in
Rhode Vs. Thwaites (1827) 6 B & C 388.
There was a sale of twenty hogsheads of sugar out of a larger quantity. Four hogsheads were filled
and taken away by the buyer. Subsequently the seller filled sixteen more hogsheads and informed
the buyer who promised to take them. But before he could do so the goods were lost. Buyer will
bear the loss.
 Property does not pass till appropriation:
The act of appropriation has usually to be done by the seller. Where the seller has done nothing to
sort out the goods, the question of the property in them passing to the buyer does not arise. Thus
where there was a contract for the sale of a quantity of liquor out of a cask containing a much
larger quantity, no part having been separated or bottled, the property did not pass. Similarly, in
Healey Vs. Howlett & Sons (1917) 116 LT 591
The defendants ordered the plaintiff a fish exporter, twenty boxes of hard bright mackerel. The
plaintiff consigned 190 boxes with a railway company following the usual practice by which the
railway company had to earmark and deliver twenty boxes to the defendant and the rest to the two
other consignees. The consignment was delayed en route and when ultimately the twenty boxes
were marked off for the defendants the fish had deteriorated and were no more merchantable.
The defendants accordingly refused to accept them and the sellers sued for the price.
It was held that at the time of deterioration the property had not passed to the buyers. Explaining
the reason RIDLEY J said:
Sale of Goods Act, 1930 31

I think it is clear on authorities that goods become the property of consignee as soon as they are
marked off by some distinct act and are delivered to the carrier as agent to complete delivery to
the purchaser. Here, however, out of a larger number of boxes only a portion were to belong to the
defendants, and none had been marked off… Suppose half the boxes had been lost, who could say
whether they were those of the defendants or of the other purchasers? The name of the consignee
should have been placed on the boxes.
Another cases of the same kind in Laurie and Morewood Vs. Sons (1926) 1 KB 223.
A sold W 200 out of 618 quarter of maize lying in a warehouse and gave him a delivery order
addressed to the owner of the warehouse. W sold the 200 quarters to the plaintiff and gave them
a delivery order addressed to the owner of the warehouse. W did not pay A and, therefore, A
directed the warehouseman to stop delivery. The plaintiffs claimed the goods from the
warehouseman.
It was held that the property in the goods had not passed to the plaintiffs as the 200 quarters of
maize had not been separated from the rest of the stock.
To the same effect In Re: Wait. Wait bought 1,000 tons of wheat which was on board a ship. He
sold 500 tons of the same to a buyer and received price. Before the arrival of the ship Wait went
bankrupt. It was held that the goods were still generic goods, the part sold having not been separated
from the rest. There was no ascertainment or appropriation and, therefore, the buyer could not claim
the goods.
Appropriation mutual with assent – Once “appropriation” with mutual assent has taken place,
the goods become the property of the buyer and if they have not been delivered, they are in the
custody of the seller as a bailee. Aldridge Vs. Johnson (1857) 26 LJ QB 296 is the leading
authority.
The plaintiff had bought 100 quarters of barley from the seller’s stock which he had seen in bulk
and approved of. It was agreed that the plaintiff should send sacks, the seller should fill and deliver
them to a carrier for carriage to the plaintiff. The plaintiff sent 200 sacks of which the seller had
filled 155. But before he could find a carrier he got into financial difficulties and re-emptied the
sacks. His assignee in bankruptcy seized the whole stock.
It was held that so much of the barely as had been filled into the sacks became the property of the
buyer and he was entitled to it.
 Appropriation without buyer’s assent is ineffective:
The plaintiff at fair orally contracted to sell to the defendant two packets of hops which were on
the spot and also two other pocket which were lying in a warehouse in London. The defendant paid
for and took away the first two but the last two were to be forwarded to him at a future time. On
his return to London, the plaintiff went to the warehouse and selected two out of the their pockets
which he had there, and directed the ware housekeeper to mark them “to wait the buyer’s order”.
It was held that this did not pass property to the buyer as there was no evidence that the appropriation
of the two pockets in the London warehouse was either originally authorized or subsequently assented
to by the buyer.
32 Sale of Goods Act, 1930

 Buyer’s assent may by express or implied:

The buyer’s assent to the appropriation may be either express or implied from his conduct. Thus,
where the buyer was informed that goods were available for collection at the seller’s warehouse
and he was asked to take them, he made no reply for two months and before he ultimately sent his
man the goods were stolen without the seller’s fault, it was held that the seller had appropriated
the goods; that the buyer’s assent was implied from his failure to reply and that the goods were the
buyer’s property at the time of theft and the seller was not liable for non-delivery. [Pignatoro Vs.
Gilvery & Son, (1919) 1 KB 459]
 Appropriation should be unconditional and of goods of contract quality:
It is one of the conditions of an effective appropriation that the goods must be of contract quality.
Again, appropriation must be unconditional. It should be the last act to be performed by the seller.
Thus, in Carlos Federspiel & Co. S A vs. Chalres Twigg & Co. Ltd (1957) Lloyd’s Rep
230, the seller had to dispatch cycles and tricycles. “f.o.b. UK port”. They had the goods parked
and marked with the port of destination. But before they were shipped, the seller went into liquidation.
The buyers claimed the goods from the liquidator on the ground that the goods, having been
unconditionally appropriated, became their property. But the court held that the parties intention
was that property should pass on shipment and the mere preparation for shipment did not amount
to an “appropriation”.
Thus, the intention of the parties reigns supreme. All the rules are subject to an agreement, express
or implied. Depending upon the parties’ intention, the property may pass even when the seller has
still to do something.
 Delivery to Carrier [Sec. 23 (2)]
‘When, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or
other bailee (whether named by buyer or not) for the purpose of transmission to the buyer, and
does not reserve that right of disposal, he is deemed to have unconditionally appropriated the goods
to the contract.’
The moment the goods which have been selected in pursuance to the contract are delivered to the
carrier, the carrier becomes the agent of the vendee and such a delivery amounts to a delivery to
the vendee; and if there is binding contract between the vendor and the vendee then there is no
doubt that the property passes by such delivery to the carrier.
In Marwar Tent Factory Vs. Union of India AIR 1990 SC 1753, It was held that this kind of
delivery to the carrier did not amount to appropriation. The Supreme Court has laid down that in a
contract for supply of goods (tents in this case) to a Government Department FOR (free on Rail at
the place of the supplier), the property passed as soon as the goods (consignment of 1500 tents,
already approved by the buyer’s officials) were delivered to the railway and railway delivered 224
items less than those dispatched. Under the terms of the contract 95% of the price was payable on
the fact of dispatch and the 5% was payable on receipt of the goods by the buyer in good condition.
The Supreme Court did not allow any deduction for the short delivery on account of default by the
carrier. Here it was carrier’s fault so he can be held liable for short delivery. And as far as buyer
is concerned, he has supplied 1560 tents so he is entitled to under price.
 Reservation of right of disposal [Sec. 25]
Where, however, the seller reserves the right of disposal of the goods until certain conditions are
fulfilled, the property does not pass. 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 impose by the seller are satisfied section 25(1) deals with the matter:
Sale of Goods Act, 1930 33

Sec. 25: Where there is a contract or the sale of specific goods or where goods are subsequently
appropriated to the contract, the seller may, by the terms of the contract or appropriation, reserve
the right of disposal of the goods until certain conditions are fulfilled. In such a case, notwithstanding
the delivery of the goods to a buyer, or to a carrier or other bailee for the purpose of transmission,
to the buyer, the property in the goods does not pass to the buyer until the condition imposed by the
seller are fulfilled.
Where goods are shipped or delivered to a railway administration for carriage by railway and by
the bill of lading or railway receipts, as the case may be, the goods are deliverable to the order of
the seller of his agent, the seller is prima facie deemed to reserve the right of disposal.

SUBJECTIVE QUESTIONS
1. Discuss the rules of passing of property in specific goods. [JJS 2017][DJS 2014, 1996] [BJS 1991]
2. Discuss the rules relating to transfer of property in respect of (i) specific goods in a deliverable state; (ii) specific
goods to be put in a deliverable state and (iii) goods ‘sent on approval’, or “on sale or return”. D, delivered the
horse to E and E to F on the same terms. F, lost the horse; who would bear the loss. [OJS 2009]
3. What are the specific goods? Discuss the rules relating to passing of property in case of sale of specific and
unascertained goods. [RJS 1999]
4. A delivers a jewellery to B on approval specifying that in case of non-acceptance it should he returned within
15 days. B begins to use the jewellery without communicating his acceptance. After 10 days the jewellery is
stolen from B’s house. Can A recover the price of the jewellery from B? [HJS 1996]
5. 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. Z sued X for
recovery of Rs. 5,000. Decide. [DJS 1991]
6. The contract between the seller “A” and the purchaser “B” stipulated that delivery of the goods would be
made by “A” at a godown of “B” and the goods would be dispatched by railway at the seller’s risk upto the
godown of “B”. The consignment was booked in the name of “B” by “A”. In a fire at the railway station, the
goods were destroyed. “B” sued the Railways. The railways pleaded that the property in the goods has not
passed to “B”, so “B” can’t sue. Decide the case giving reasons. [DJS 1989]
7. When does property in the goods sold pass to the buyer: [BJS 1987]
(i) In a contract for the sale of unascertained goods
(ii) In a contract for the sale of ascertained goods
(iii) In a contract for the sale of future goods
8. When the property passes to the buyer in case of goods sent on approval? [RJS 1986]
9. B delivers a hundred barrels to C on approval. D delivers the barrels to E. Before E could exercise his option
the barrels were destroyed by fire. Who will bear the loss of goods & why? [BJS 1984]
10. A delivers some goods to B on approval. B then delivers goods to C on approval. Before B could exercise his
option the goods are suddenly destroyed by fire. Who among A, B and C bears the loss? Give reasons for your
answer. [BJS 1980]
11. When there is a contract for the sale of specific goods, explain when the property in the goods would pass to
the buyer? Does it pass when the contract is made or at the time of the payment of the price or when the goods
are put in a deliverable state? [RJS 1977]
34 Sale of Goods Act, 1930

12. On February 1, 1974, A sold 100 bags of wheat out of a bulk in godown to B. Delivery was postponed till March
1, 1974. Remaining bags in that godown were sold to C on February 3, 1974 and C took delivery on the same
day. The goods in the godown were destroyed in a fire on February 20, 1974. A filed a suit against B for the
recovery of the price of wheat sold. B resisted on the plea that goods were unascertained and property had not
passed to him. [DJS 1976]
13. What are the various rules regarding passing of property from the seller to the buyer in a contract of sale of
goods? Explain. [OJS 1975]
14. When does the property in the goods passes to the buyer? [RJS 1974]
15. ‘A’ and ‘B’ entered into an oral contract as per which seller ‘A’ was to supply 5,000 tennis balls of yellow
colour whithin 10 days for Rs. 10,000/- to buyer ‘B’. ‘A’ supplied white colour tennis balls within the said period
instead of yellow colour tennis balls, which delivery was made to the gatekeeper at the shop of ‘B’ as ‘B’ was
out of station on the said date. ‘B’, on return inspects the balls after two weeks, and notices that balls were of
white colour, though the contract was for supply of yellow colour balls. ‘B’ does not inform or talk to ‘A’ but
intimates his Bank not to honour the post dated cheque given by him. The post dated cheque issued by ‘B’ to
‘A’ gets dishonoured. In the meanwhile, another person ‘C’ approaches ‘B’ and the white balls supplied by ‘a’
are sold by ‘B’ to ‘C’ at a mutually agreed price of Rs. 15,000/-. ‘A’ files a suit for recovery against ‘B’ for the
price as agreed i.e. Rs. 10,000/-. ‘B’ contests the said suit on the ground that the balls supplied were not as per
the agreed contractual terms, and therefore, he is not liable. He also pleads and leads evidence to show that the
market price of white colour balls was lower than the market price of yellow colour balls. ‘A’ submits that ‘B’
has sold the white balls and made profit of Rs. 5,000/-.
Examine with reference to the provisions of law applicable and decide. [DJS 2018]
OBJECTIVE QUESTIONS
1. Goods are said to be in a ‘deliverable state’ where
(a) they are in good condition
(b) they are in reasonable condition
(c) they have been delivered on time
(d) the buyer is bound to take their delivery under contract
2. “Mercantile agent” means the person:
(a) who sells goods, or consigns for the purpose of sale, or buy goods or raises money on security of goods
(b) who only sells or purchases
(c) who only consigns goods
(d) who only transfers goods
3. Under Section 2(6) of the Sale of goods Act, 1930 ‘Future Goods’ mean
(a) goods which are not yet in existence (b) unascertained goods
(c) ascertained goods (d) specific goods
4. If a contract for sale of goods is for sale of two or more things under an entire contract, the perishing of some
of them would:
(a) avoid the whole contract (b) not avoid the contract at all
(c) avoid the contract relating to the goods perished and not the whole contract
(d) either (b) or (c)
5. Under Section 23 of the Sale of goods Act, 1930 for passing of property in goods:
(a) The buyer is to do something for ascertaining the price
(b) The goods must be in a deliverable state
(c) The seller is to do something to put the goods in a deliverable state
(d) All the above
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