TRANSFER OF TITLE

Transfer of title by non owner:

–estoppels

–sale by mercantile agent

–Sale by one or several joint owner

–Sale of goods obtained under voidable agreement

–Sale by the seller  in possession of goods after sale

–Buyer in possession of goods over which the seller has some rights

–An unpaid seller

–One who found the goods – after reasonable search the owner

When the Seller Has Imperfect Title:

  • A void title is no title at all. If seller sells stolen property, title does not pass to buyer – Buyer beware!
  • A person with voidable title has power to transfer valid title for value to a good faith purchaser, generally called a bona fide purchaser

Risk of loss:

  • Risk passes with property . If the goods are lost , damaged the loss fall on the owner
  • If it is damaged by the third party it is the owner who can take action
  • If the owner become insolvent only the goods will be taken out by the official assignee . No matter who was buyer or seller then So it is important to find out who is the owner between buyer and seller
  • When a party has breached, the risk of loss generally lies with that party.

Delivery:

  • Delivery means a voluntary transfer of possession from one person to another Delivery may be

–actual delivery – when the goods themselves are delivered

–Symbolic- buyer get the means of possession

–Constructive – without any change in visible custody – bill of lading

Rules regarding delivery:

  • Possession of buyer

–By doing anything by which the party agrees

–Putting the goods in Possession of buyer or

–Any person authorized to hold them on his behalf

  • Part of delivery is not at all delivery – A delivery of part  of  goods,  in progress  of the delivery of the whole, has the same effect, for the purpose  of passing the property in such goods, as a delivery  of  the whole; but a delivery of part of the goods, with  an  intention  of severing  it  from the whole, does not operate as a  delivery  of  the remainder.
  • Application of delivery should made buy the buyer
  • Place of delivery goods sold are to be delivered at the place at which they are at the time of the sale, and goods agreed to be sold are to be delivered at the place at which they are at the time of the agreement to sell, or, if not then in existence, at the place at which they are manufactured or produced.
  • Time of delivery-Where under the contract of sale the seller is bound to send the goods to the buyer, but no time for sending them is fixed, the seller is bound to send them within a reasonable time
  • Possession of third person – he must acknowledge the buyer that he hold the good on his behalf (Where the goods at the time of sale are in the possession of a third person, there is no delivery by seller to buyer unless and until such third person acknowledges to the buyer that he holds the goods on his behalf )
  • Expenses of delivery shall be borne by the seller
  • Delivery of wrong quantity – if larger , if fewer, if mixed
  • Installment delivery – buyer is not bound to accept that
  • Delivery to the carrier
  • Buyer is not bound to return the goods
  • Liability of buyer for neglecting or refusing delivery of goods-When the seller is ready and willing to deliver the goods and requests the buyer to take delivery, and the buyer does not within a reasonable time after such request take delivery of the goods, he is liable to the seller for any loss occasioned by his neglect or refusal to take delivery, and also for a reasonable charge for the care and custody of the goods:
  • Examining the goods- Where goods are delivered to the buyer which he has not previously examined, he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract.
  • Acceptance – The buyer is deemed to have accepted the goods when he intimates  to the seller that he has accepted them,  or  when  the goods  have been delivered to him and he does any act in  relation  to them which is inconsistent with the ownership of the seller, or  when, after  the  lapse of a reasonable time, he retains the  goods  without intimating to the seller that he has rejected them.

Duties of seller:

  • Delivery   It is the duty of the seller to deliver the goods
  • Risk where goods are delivered at distance place –Where the seller  of  goods agrees to deliver them at his own risk at a place other   than  that  where  they  are  when  sold,  the  buyer   shall, nevertheless, unless otherwise agreed, take any risk of  deterioration in the goods necessarily incident to the course of transit.
  • Damages for non-delivery – Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may sue the seller for damages for non-delivery.
  • Specific performance –  in any suit for breach of contract to deliver specific or ascertained goods, the Court may, if it thinks fit, on the application of the plaintiff, by its decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages
  • It is the duty of the buyer to accept and pay for them,
  • Buyer to apply for delivery – Apart from any express contract, the seller of goods is not bound to deliver them until the buyer applies for delivery.
  • Acceptance – The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them,  or  when  the goods  have been delivered to him and he does any act in  relation  to them which is inconsistent with the ownership of the seller, or  when, after  the  lapse of a reasonable time, he retains the  goods  without intimating to the seller that he has rejected them.
  • Liability of buyer for neglecting or refusing delivery of goods –
  • When the seller is ready and willing to deliver the goods and requests the buyer to take delivery, and the buyer does not within a reasonable time after such request take delivery of the goods, he is liable to the seller for any loss occasioned by his neglect or refusal to take delivery, and also for a reasonable charge for the care and custody of the goods

Seller’s Rights and duties:

  • Seller’s right to cure: seller may cure if time for seller’s performance had not yet passed, seller notifies buyer of intent to cure defect and seller properly repairs or replaces the defective goods within time allowed
  • Enforcement of the liability of buyer for not taking delivery
  • Other rights

–Damages for non delivery

–Remedy for breach of warranty

–Repudiation of contract

–Interest or special damages

Buyer’s Rights and Obligations:

Perfect tender rule: If the goods or the tender of delivery fail in any respect to conform to the contract, the buyer may: reject the whole, accept the whole, or accept any commercial unit or units or reject the rest

  • Right to have delivery of goods ,
  • Buyer is not bound to accept the delivery in wrong quantity , or by installment
  • Buyer has right of inspection before acceptance
  • Buyer is Not bound to return the reject goods
  • Right to have the damages because of non delivery
  • Right to have the remedy for the breach of warranty
  • Buyer may reject nonconforming goods and withhold payment

Unpaid seller:

  • The seller of goods is deemed to be an “unpaid seller” (a) when the whole of the price has not been paid or tendered;  (b) when a bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has not been fulfilled by reason of the dishonor of the instrument or otherwise.  And the term “seller” includes any person who is in the position of a seller, as, for instance, an agent of the seller to whom the bill of landing has been indorsed, or a consignor or agent who has himself paid, or is directly responsible for, the price.

Unpaid seller’s rights: 

  • (a) a lien on the goods for the price while he is in possession of them;
  • (b) in case of the insolvency of the buyer a right of stopping the goods in transit after he has parted with the possession of them;
  • (c) a right of re-sale as limited by this Act.
  • (2) Where the property in goods has not passed to the buyer, the unpaid seller has, in addition to his other remedies, a right of withholding delivery similar to and co-extensive with his rights of lien and stoppage in transit where the property has passed to the buyer.

Buyer’s Remedies for seller breach:

Seller Breaches and Buyer Rejects – The risk remains with the seller until he cures the defect or the buyer accepts the goods.

–Seller repudiates before delivery of goods – cancel contract , obtain goods from another supplier ,sue seller

–Seller fails to deliver- cancel contract ,obtain goods from another supplier ,sue seller

–Seller delivers nonconforming goods, buyer rejects – cancel contract , obtain goods from another supplier , sue seller , sell rejected goods to recover advance payments , if no advance payments, store or reship goods

–Seller delivers nonconforming goods, buyer accepts – deduct damages from price , sue seller for damages ,sue for breach of warranty

Seller’s Remedies for buyer breach ( rights of unpaid seller): 

  • Before receiving goods
  • cancel contract
  • minimize losses by completing or stopping manufacture
  • Retain possession

– when not sold for credit

– if sold on credit but time is expired

– when buyer become insolvent ,

– if price is not paid ( half goods)

  • Stoppage in transit
  • resell goods in commercially reasonably manner( perishable and after giving notice to buyer
  • After receiving goods
  • If buyer won’t pay, sue for payment & damages,
  • If buyer wrongfully rejects, sue for payment & damages special damages and interest

Unpaid Seller’s Lien:

the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment

(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.

Part delivery.  Where an unpaid seller has made part delivery of the goods, he may exercise his right of lien on the remainder, unless such part delivery has been made under such circumstance as to show an agreement to waive the lien.

Termination of lien.  (1) The unpaid seller of goods loses his lien thereon –

  • (a) when he delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without reserving the right of disposal of the goods;
  • (b) when the buyer or his agent lawfully obtains possession of the goods;
  • (c) by waiver thereof.
  • (2) The unpaid seller of goods, having a lien thereon, does not lose his lien by reason only that he has obtained a decree for the price of the goods.

Document of Title To Goods:

  • includes a bill of lading, dock- warrant, warehouse keeper’s certificate, wharfingers’ certificate,  railway receipt, warrant or order for the delivery of goods and any  other document used in ordinary course of business as proof of the  possession or control of goods, or authorising or purporting to   authorise, either by endorsement or by delivery, the possessor of the  document to transfer or receive goods thereby represented.

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