Test: Sale of Goods Act - 1 - CLAT PG MCQ

If a seller fails to deliver the goods, the buyer can sue for damages due to non-delivery. The damages are typically calculated based on the difference between the contract price and the market price at the time of breach. This provision allows buyers to recover losses effectively, emphasizing the importance of fulfilling contractual obligations in sales agreements. An interesting aspect of this is that it encourages sellers to adhere to their commitments, thus fostering trust in commercial relationships.

Section 61 allows sellers to recover interest on the price of goods from the due date of payment if there is a specific agreement regarding interest. If no agreement exists, the seller may charge interest from the day they notify the buyer. This provision ensures that sellers are compensated for the time value of money, reinforcing the importance of timely payment in commercial transactions.

The primary responsibility of the seller under the Sales of Goods Act 1930 is to deliver the goods as per the terms specified in the contract. This includes ensuring that the goods are of the correct quantity and quality, as well as being delivered at the agreed time and place. An interesting fact is that the seller retains ownership of the goods until payment is made, which protects the seller in case of buyer default.

If the delivered goods do not conform to the contract specifications, the buyer has the right to reject the goods. This right ensures that buyers are protected against receiving substandard or incorrect goods, allowing them to seek redress. Interestingly, if the buyer accepts the goods, they waive the right to later reject them based on quality or quantity issues unless they have specified conditions in the contract.

"Jus in rem" refers to rights against the goods themselves, allowing the unpaid seller to assert claims over the goods until payment is received. This legal principle emphasizes the seller's control over their merchandise in cases of non-payment, ensuring they can safeguard their assets.

The right of stoppage in transit can be exercised when the buyer becomes insolvent, allowing the seller to halt the delivery of goods in transport and reclaim possession. This right is vital for sellers to mitigate losses when they suspect that the buyer may default on payment.

If a buyer rightfully refuses to accept the delivery of goods, they are not obligated to return the rejected goods. However, they must inform the seller of their refusal unless the contract specifies otherwise. This provision protects the buyer's interests and allows them to manage inventory without incurring unnecessary costs. An interesting fact is that this rule helps clarify the responsibilities of both parties in the event of disputes about delivery acceptance.

"Delivery" is defined as the voluntary transfer of possession of goods from one person to another. This means that simply transferring goods without the buyer's consent or through coercion does not constitute a valid delivery. An engaging fact is that the act highlights that possession gained through unfair means is not recognized as delivery, emphasizing the importance of mutual consent in transactions.

A buyer is considered to have accepted the delivery of goods when they do something inconsistent with the seller's ownership, such as using or altering the goods. Acceptance can also occur if the buyer informs the seller of their acceptance. This concept ensures that once goods are accepted, the buyer cannot later reject them based on the initial quality or condition. An interesting point is that acceptance solidifies the transfer of risk and ownership from the seller to the buyer.

The buyer has the duty to pay for the goods as per the contract when the seller is ready to deliver. This duty is fundamental to the buyer's obligation in a sales contract, as payment is typically required before the buyer gains possession of the goods. An important aspect to note is that if the buyer fails to take delivery within a reasonable time, they may incur additional costs or liabilities.

When an unpaid seller resells goods after exercising the right of lien, the subsequent buyer acquires a good title to those goods. This principle ensures that the seller can recover losses while also providing a clear legal standing to the new buyer, enhancing the fluidity of commercial transactions.

An unpaid seller loses the right of lien if they deliver the goods to a carrier for transmission to the buyer without explicitly reserving the right of disposal. This highlights the importance of clear contractual terms in preserving the seller's rights in the event of non-payment.

If a seller anticipatorily breaches a contract, the buyer can treat the contract as rescinded and sue for damages. This means that the buyer does not need to wait until the delivery date to take action, providing them with an opportunity to mitigate losses at an earlier stage. This legal framework is crucial as it protects buyers from potential losses resulting from a seller's failure to perform their contractual obligations.

Section 57 of the Sale of Goods Act allows the buyer to claim damages for non-delivery of goods, compensating for losses incurred due to the seller's failure to deliver the agreed-upon goods. This section is vital as it protects buyers from financial losses when sellers fail to fulfill their contractual obligations, thereby ensuring fairness in commercial dealings.

Reciprocal promises in a sales contract refer to a set of promises that are interdependent, meaning each party's obligations are contingent upon the other's performance. For example, the seller's obligation to deliver goods is dependent on the buyer's promise to pay. This mutual dependency is essential for enforcing contracts and ensuring both parties fulfill their roles. Interestingly, this concept is foundational in contract law, as it underpins the enforceability of agreements.

An unpaid seller is defined as someone who has sold goods but has not received the complete payment for them. This situation can occur when transactions involve negotiable instruments and the conditions of payment are not met, such as dishonored cheques or promissory notes. Understanding this definition is crucial for recognizing the seller's rights in commercial transactions.

The right to lien allows an unpaid seller to keep the goods in their possession until the buyer pays the outstanding price. This right is an essential legal tool that protects sellers against non-payment, ensuring they can secure their financial interests.

A key difference is that the right of stoppage in transit can be invoked even if the seller has parted with possession of the goods, as long as the goods are still in transit. In contrast, the seller's lien can only be exercised when the seller retains possession. This distinction is crucial for sellers to understand their legal options in different scenarios of non-payment.

A seller can exercise the right of lien when the buyer is insolvent and has not paid for the goods. This right allows the seller to retain possession of the goods until payment is received, thereby protecting the seller's interests in cases where the buyer may not fulfill their payment obligations. This mechanism is particularly important in commercial transactions, as it provides sellers with a level of security against buyer default.

One of the key rights of the seller under the Sales of Goods Act, 1930, is the right to deliver goods only upon the buyer's request. This emphasizes the seller's control over the delivery process until the buyer explicitly asks for the goods. It's important for sellers to understand that they are not obligated to deliver unless the buyer initiates the request, which can help in managing inventory and logistics effectively. Additionally, this right ensures that the seller can maintain ownership until payment is received, aligning with the seller's interests in the transaction.