Transfer of property under The Sale of Goods Act, 1930

This article is written by Vishwas Chitwar currently pursuing B.COM LLB (HONS) from Institute of Law Nirma University. This is an article which deals with various legal principles regarding the transfer of property under The Sale of Goods Act 1930.

Introduction

The term passing of goods or property means that there is a transfer of ownership which is governed by the principles of The Sale of Goods Act, 1930. In order to understand the rights, duties and liabilities of both the seller and the buyer it is very important to understand the concept of the passing of property. It is a settled principle of law that along with the ownership of the goods or property, the risk is also transferred from the seller to the buyer. This article will be dealing with the various principles and provisions pertaining to Passing of property in the light of the Sale of Goods Act, 1930.

Types of Goods under The Sale of Goods Act, 1930

There are three types of goods under the umbrella of the Sale of Goods Act, 1930 and they are as follows:

  1. Existing Goods

  2. Future Goods

  3. Contingent Goods

Existing Goods

As per Section 6 of the Sale of Goods Act, 1930, those goods which are present (in existence) at the time of formation of a contract are known as existing goods. The existing goods can be further classified as:

1. Specific Goods

As per Section 2(14) of the Sale of Goods Act, 1930, specific goods are those goods which are specifically identified and ascertained by the buyer which he intends to buy at the time when the contract of sale is formulated.

For example, Deepak wants to sell his old guitar. He put an advertisement in the local newspaper with its picture, make and other details. Rahul agrees to buy the guitar and thereby formed a contract with Deepak. The guitar is a ‘Specific Good’ in this case.

2. Ascertained Good:

Ascertained goods are not defined under the Sale of Goods Act, 1930 and many jurists have considered specific Goods and ascertained Goods as alike. However, ascertained goods can be called those goods which are specifically selected from a large set of goods.

For example, Deepak went to buy oranges in a wholesale market. He specifically selected 300 oranges from a larger set of unspecified oranges. These 300 oranges will be ascertained goods.

3. Unascertained Good:

Unascertained goods are those goods which are not specifically identified by the buyer at the time when the contract for sale is formulated.

For example, Deepak from his 300 oranges wants to sell 100 oranges; however, he doesn't specify which oranges he wants to sell. This is called a sale of unascertained goods.


Future Goods

As per Section 2(6) of the Sale of Goods Act, 1930, future goods have been characterised as those goods which at the time of formation of the contract will either be “manufactured, produced or acquired by the buyer”. There will not be an actual sale in the sale of future goods, it will always be an “agreement to sell”. For example, Deepak has an orange grove with oranges in it. He agrees to sell 500 oranges to a buyer once the oranges are ready for market. This is a sale which will happen in the future. However, the goods have already been identified along with the agreement to sell. Such goods are known as future goods.

Contingent Goods

Contingent goods are a subtype of future goods. In contingent goods, the sale happens in the future. The sale will always come with some contingency clause in it. For example, if Deepak sells his oranges from his orange grove when the trees are yet to produce oranges, then the oranges are contingent good. This sale of contingent goods will be dependent on a condition that the trees will produce oranges, which may or may not happen.

Legal Principles regarding Transfer of Goods

There are four principles regarding the transfer of goods under the umbrella of The Sale of Goods Act, 1930, which the article will be talking about and they're as follows:

1. Transfer of property in sale of Specific or Ascertained Goods

Section 19 to section 22 of The Sale of Goods Act, 1930 are a few sections which govern the transfer of goods in a case where the goods are specific and ascertained in nature:

(a) The property when intended to pass (Section 19)

Section 19 of The Sale of Goods Act, 1930, is divided into further subsections and they're as follows:

  1. Where a contract for sale of ascertained or specific goods exists, a specified time is fixed as per the convenience and consensus of both the parties at which the property is intended to be transferred from the seller to the buyer.

  2. One has to pay attention to the circumstances and conduct of both the parties to the c