What is Transfer Of Property? According to The Sale of Goods Act, the following are the rules regard to transfer of property in goods from the seller to the buyer.
TRANSFER OF PROPERTY
1. GOODS MUST BE ASCERTAINED
The goods for which contract has been made must be ascertained, Where there is a contract for unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained. Sec, 18.
Illustration: A orders B to send 100 pairs of shoes to A. But nothing is mentioned whether these shoes be ladies shoes or gents shoes. Now B cannot transfer the property (goods) to A unless it is ascertained that what sort of shoes should be sent.
2. PROPERTY PASSES WHEN INTENDED TO PASS
Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment of the price or the time of delivery of the goods or both, is postponed. Sec. 20.
3. SPECIFIC GOODS TO BE PUT INTO A DELIVERABLE STATE
Where there is a contract for a 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 Sec. 21.
4. SPECIFIC GOODS IN A DELIVERABLE STATE SUBJECT TO MEASUREMENT
Where there is a contract for 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 Prices the property does not pass until such act or thing is done and the buyer has notice thereof, Sec.
5. SALE OF UNASCERTAINED GOODS
Where there is a contract for the sale of unascertained or future goods by description and goods in 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 properties in goods thereupon passes to the buyer. Such assent may be expressed or implied. Sec. 23.
6. GOODS SENT ON APPROVAL OR “ON SALE OR RETURN
When goods are delivered to the buyer on approval or “on sale or return”, the property therein passes to the buyer, when he signifies his approval or acceptance to the seller or does any other such act. If the buyer does not signify his approval or acceptance to the seller and retains the goods without giving any notice of rejection, the property in goods passes to the buyer when the time fixed for return expires or on the expiration of reasonable time if time is not fixed for return.
TRANSFER OF TITLE OF GOODS
It is a general rule that only the owner of the goods can sell goods. No one else can transfer a better title of goods than he himself has. If a seller sells such goods which are not the property of the seller, the buyer gets no title of the goods he buys on good faith. In this way, the true owner of the goods is protected against the claim of the buyer who buys goods from non-owner of the goods.
1. A hires car from B and sells to C. In this case C will have no title of the car because A the seller of the car himself has no title to transfer it to C.
2. If a finder or a thief sells goods, the buys of such goods will have no title against the true owner.
EXCEPTIONS OF THE RULE
There are some cases where the seller’s title is defective but the buyer has a good title of the goods sold to him. These exceptions of the general rule have been discussed as under;
1. SALE UNDER THE IMPLIED AUTHORITY
If the true owner of the goods shows by his conduct or by an act to the buyer that the seller has authority to sell the goods, then the buyer will have a good title of the goods.
Illustration; Aslam sells his father’s horse in the presence of his father who has no objection to this sale, the buyer will have good title.
Illustration: A is the agent of B and sells B’s goods at B’s shop. Now a person who purchases the goods from A will have a good title even though A himself has no title of goods.
2. SALE BY CO-OWNER
When a co-owner of the goods having sole possession of them sells goods with the permission of the other co-owners, the buyer will have a good title of the goods purchased by him in good faith.
Illustration: A and B jointly own a car which is in A’s possession. A sells the car to Z with B permission. Z will have a good title for the car.
3. SALE BY MERCANTILE AGENT
A mercantile agent is a person who in the ordinary course of business has authority 10 sell or purchase goods on behalf of the principal (his master). If the buyer buys goods from such agent, he gets a good title.
Illustration: X is the agent of Y and sells Y’s goods at Y’s shop. The person who purchases goods from X will have a good title even though X himself does not have a title of goods.
4. SALE BY A PERSON IN POSSESSION UNDER VOIDABLE CONTRACT
When a person having goods in possession under voidable contract sells them, the buyer who buys goods on good faith acquires a good title if at the time of sale the contract has not been rescinded and a buyer has no notice of seller’s default in a title.
Illustration: A who has purchased goods from B by using undue influence, sells the goods to C. The C will have a good title if he does not know that A has purchased the goods by using undue influence and contract in between A and B was voidable.
5. SALE BY SELLER IN POSSESSION AFTER SALE
The buyer acquires good title if he purchases goods from the seller who has already sold them but goods are still in seller’s possession provided that the buyer has not any notice of the previous sale.
Illustration: A has sold goods to B and has received money from B but the goods are still in the possession of A. The same goods are sold by A to C. the C will have goods title if C does not know about the fact those same goods were already sold to B.
6. SALE BY UNPAID SELLER
Unpaid seller means a person who has sold the goods but price still has not been paid to him. An unpaid seller who has exercised his right of lien or stoppage in transit and has given reasonable time and notice to sell the goods, the buyer of such goods gets goods title.
7. SALE BY BUYER IN POSSESSION AFTER SALE
If the person who has bought or agreed to buy goods which are in possession of him but the seller still has a lien or right over the goods and the buyer sells the same with the consent of the seller, the buyer of the goods will have good title.