Transfer of property

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TRANSFER OF PROPERTY (BUSINESS LAW)
Prepared by
Dr.R.Sangeetha
Assistant Professor
PG & Research Department of Commerce with International Business
Hindusthan College of Arts and Science, Coimbatore.

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W
Transfer of
Property
 There are three stages in the performance of a
contract of sale of goods by a seller, viz.,
(i) the transfer of property in the goods
(ii)the transfer of possession of the goods
(i.e., delivery); and
(iii)the, passing of the risk.

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Transfer of
Property
Property,Possession
andRisk  Transfer of property in goods from the seller to the buyer is the
main object of a contract of sale.
 The term ‘property in goods’ must be distinguished from
‘possession of goods’.
 ‘Property in goods’ means the ownership of goods whereas
‘possession of goods’ refers to the custody or control of goods.
 An article may belong to A although iy may not be in his
possession. B may be in possession of that article although he
is not its owner.

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Property, Possession and Risk
It is important to know the precise moment of time at which the property in
goods passes from the seller to the buyer for the following reasons :
(1)Risk follows ownership
 Unless otherwise agreed, risk follows ownership whether delivery has been
made or not and whether price has been paid or not.
 Thus the risk of loss as a rule lies on the owner.

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Property, Possession and Risk
(2) Action against third parties
- damaged or destroyed by third party, owner has right to take action.
(3) Insolvency of the seller or the buyer
- the question arise whether the Official Receiver or Assignee can take
over the goods or not depends on whether the property in the goods
has passed from the seller to the buyer.
(4) Suit for price
- the seller can sue for the price, unless otherwise agreed, only if the
goods have become the property of the buyer.

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Passing of Property
Primary Rules
(1) [Sec. 18] Goods must be ascertained
(2) [Sec.19(1), 19(2)] Intention of the parties – sale of specific or ascertained goods
(3) [Sec. 19(3)] Where the intention of the parties cannot be ascertained.
(4) [Sec. 20 to 24] apply under [Sec.19(3)]

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Passing of Property
I. Specific goods [Secs. 20 to 22]
Rules relating to transfer of property in specific goods are,
(1) Passing of property at the time of contract [Sec. 20]- unconditional contract
for the sale of specific goods in a deliverable state.
(2) Passing of property delayed beyond the date of contract
(i) Goods not in a deliverable state [Sec. 21]
(ii) When the price of goods is to be ascertained by weighing, etc. [Sec.22]

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Passing of Property
II. Unascertained goods [Sec.23]
 In case of unascertained or future goods sold by description, property passes
only when goods according to the description are unconditionally appropriated
to the contract and the buyer is given a notice thereof.
 Delivery to a carrier (the seller not reserving right of disposal, Sec. 25) amount
to an unconditional appropriation.

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Passing of Property
II. Goods sent on approval or ‘on sale or return’ [Sec. 24]
 In case of goods delivered to a buyer on approval or on sale or return property
passes when he signifies his approval or acceptance or when he does some act
adopting the transaction.
 If he retains the goods without giving notice of rejection, property passes when
the time agreed for returning the goods expires or after a reasonable time has
expired.

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Sale by Non-Owners
 The general rule of law is that only the owner of the goods or any person
specifically authorised by him can sell the goods.
 If any other person sells them, the title of the buyer will bot be better than that
of the seller.

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Sale by Non-Owners -
Exceptions
The following are the exceptions,
(1) Sale by a mercantile agent
(2) Sale under the implied authority of owner or title by estoppel.
(3) Sale by one of several joint owners
(4) Sale by a person in possession of goods under a voidable contract
(5) Sale by a seller in possession after sale.
(6) Sale by a buyer in possession after having bought or agreed to buy.
(7) Sale by an unpaid seller.
In all these cases, the person selling the goods must be in possession of the goods
with the consent of the seller and the buyer must act bona fide.