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Tamilnadu Samacheer Kalvi 12th Commerce Solutions Chapter 21 The Sale Of Goods Act 1930

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Samacheer Kalvi 12th Commerce The Sale Of Goods Act 1930 Textbook Exercise Questions and Answers

I. Choose the correct answer

Question 1.
Sale of Goods Act was passed in the year _______
(a) 1940
(b) 1997
(c) 1930
(d) 1960
Answer:
(c) 1930

Question 2.
Which of the below constitutes the essential element of contract of sale?
(a) Two parties
(b) Transfer of property
(c) Price
(d) All of the above
Answer:
(d) All of the above

Question 3.
Which of the below is not a good?
(a) Stocks
(b) Dividend due
(c) Crops
(d) Water
Answer:
(b) Dividend due

Question 4.
In case of the sale, the _______ has the right to sell.
(a) Buyer
(b) Seller
(c) Hirer
(d) Consignee
Answer:
(b) Seller

Question 5.
The property in the goods means the _______
(a) Possession of goods
(b) Custody of goods
(c) Ownership of goods
(d) Both (a) and (b)
Answer:
(c) Ownership of goods

Question 6.
Specific goods denote goods identified upon the time of of sale.
(a) Agreement
(b) Contract
(c) Order
(d) Obligation
Answer:
(b) Contract

Question 7.
In which of the following types, the ownership is immediately transferred to buyer?
(a) When goods are ascertained
(b) When goods are appropriate
(c) Delivery to the carrier
(d) Sale or return basis
Answer:
(c) Delivery to the carrier

Question 8.
_______ is a stipulation which is collateral to main purpose of contract.
(a) Warranty
(b) Condition
(c) Right
(d) Agreement
Answer:
(a) Warranty

Question 9.
Unpaid seller can exercise his right of lien over the goods, where he is in possession of the goods as _______
(a) Owner of goods
(b) Agent of buyer
(c) Bailee for buyer
(d) All of these
Answer:
(d) All of these

Question 10.
The unpaid seller can exercise his right of stoppage of goods in transit where the buyer _______
(a) Becomes insolvent
(b) Refuses to pay price
(c) Payment of price
(d) Both (b) and (c)
Answer:
(a) Becomes insolvent

II. Very Short Answer Questions

Question 1.
What is a contract of sale of goods?
Answer:
Contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property (ownership) of the goods to the buyer for a price.

Question 2.
List down the essential elements of a contract of sale.
Answer:
Following essential elements are necessary for a contract of sale:

  1. Two Parties
  2. Transfer of Property
  3. Goods
  4. Price
  5. Includes both ‘Sale’ and ‘Agreement to Sell’

Question 3.
What is meant by goods?
Answer:
The term goods mean every kind of movable property other than actionable claim and money.

Question 4.
What is a Contingent Goods?
Answer:
Contingent goods are the goods, the acquisition of which by the seller depends upon a contingency (an event which may or may not happen). Contingent goods are a part of future goods.

Question 5.
What do you understand by warranty?
Answer:
Warranty represents a stipulation which is collateral to the main purpose of the contract. It is of secondary importance to the contract.

III. Short Answer Questions

Question 1.
Explain the meaning of Agreement to sell.
Answer:
The property (ownership or title) in the goods has to pass at a future time or after the fulfilment of certain conditions specified in the contract.

Question 2.
Discuss in detail about existing goods.
Answer:
Existing goods are those owned or possessed by the seller at the time of contract of sale. Goods , possessed even refer to sale by agents or by pledgers. Existing goods may be either:

  1. Specific Goods
  2. Ascertained Goods
  3. Generic or Unascertained Goods

Question 3.
Discuss the implied conditions and warranties in sale of goods contract.
Answer:
In every contract of sale, there are certain expressed and implied conditions and warranties. The term implied conditions means conditions which can be inferred from or guessed from the context of the contract.
Following are the implied conditions:

  1. Conditions as to Title
  2. Conditions as to Description
  3. Sale by Sample
  4. Conditions as to Quality or Fitness
  5. Conditions as to Merchantability
  6. Condition as to Wholesomeness
  7. Condition Implied by Trade Usage

Following are the implied warranties:

  1. Quiet Possession
  2. Free from Any Encumbrances
  3. Warranty in the case of Dangerous Goods

Question 4.
Discuss in detail the rights of an unpaid seller against the buyer personally.
Answer:
Where the Property in the Goods does not pass to the Buyer. Right of an Unpaid Seller against the Buyer Personally:

  1. Suit for price
  2. Suit for Damages for Non-acceptance
  3. Suit for Cancellation of the Contract before the Due Date- Where the buyer cancels the contract before the date of delivery, the seller may either treat the contract as continuing or wait till the due date.
  4. Suit for Interest

IV. Long Answer Questions

Question 1.
Explain in detail the elements of Contract of sale.
Answer:
Sale means selling the ownership of the goods to the buyer for a price. Similarly purchase means buying the ownership of the goods from the seller for a price. Following essential elements are necessary for a contract of sale:

  1. Two Parties: A contract of sale involves two parties – the seller and the buyer. The buyer and the seller should be two different persons.
  2. Transfer of Property: To constitute sale, the seller must transfer or agree to transfer the ownership in the goods to the buyer.
  3. Goods: The subject matter of contract of sale must be goods. It excludes money, actionable claims and immovable property.
  4. Price: The monetary consideration for the goods sold is called price

Question 2.
Distinguish between sale and agreement to sell.
Answer:

Basis for Comparison Sale Agreement to Sell
1. Ownership The property (ownership or title) in the goods passes from the seller to the buyer immediately. The property (ownership or title) in the goods has to pass at a future time or after the fulfilment of certain conditions.
2. Risk of Loss

 

Where the goods sold under the contract of sale are destroyed, the loss falls fully on the buyer as the ownership has already passed. Where the goods under the agreement to sell are destroyed, the loss falls fully on the seller as the ownership is still vested with seller.
3. Consequences of violating the contract Where the buyer fails to pay the price, the seller cannot seize the goods. Where the buyer violates the contract, the seller can repossess the goods from the former. .
4. Nature of contract It is an executed contract. It is an executory contract, i.e., contract yet to be performed.
5. Insolvency of the Buyer In a sale, if a buyer becomes insolvent before he pays for the goods even though the goods sold are under the possession of the seller, the latter has to return them to the Official Receiver. If the buyer becomes insolvent before the payment of the price, the seller can retain the goods if they are under his possession.

Question 3.
Classify goods under the Sale of Goods Act.
Answer:
The term goods mean every kind of movable property other than actionable claim and money. The goods are classified as follows:

  1. Existing Goods- These goods are owned or possessed by the seller at the time of contract of sale. Existing goods may again be divided as:
    • Specific Goods- It denotes goods identified and agreed upon at the time of contract of sale.
    • Ascertained Goods- The term ‘ascertained goods’ is also used as similar in meaning to specific goods.
    • Unascertained Goods- These are goods which are not identified and agreed upon at the time of contract of sale.
  2. Future Goods- These are goods which a seller does not possess at the time of contract of sale, but which will be manufactured or produced or acquired by him after entering into the contract.
  3. Contingent Goods- These are the goods, the acquisition of which by the seller depends upon a contingency (an event which may or may not happen).

Question 4.
Distinguish between Condition and Warranty.
Answer:

Basis for Difference Condition Warranty
1. Meaning It is a stipulation which is essential to the main purpose of the contract of sale. It is a stipulation which is collateral to the main purpose of contract.
2. Significance Condition is necessary to the contract that the breaking of which cancels out the contract. The violation of warranty will not revoke the contract.
3. Transfer of Ownership Ownership on goods cannot be transferred without fulfilling the conditions. Ownership on goods can be transferred on the buyer without fulfilling the warranty.
4. Remedy In case of breach of contract, the affected party can cancel the contract and claim damages. In the ease of breach of warranty, the affected party cannot cancel the contract but can claim damages only.
5. Treatment Breach of condition may be treated as breach of warranty. Breach of warranty cannot be treated as breach of condition.

Question 5.
Discuss in detail the rights of an unpaid seller against the goods.
Answer:
A seller is deemed to be an unpaid seller when:
(a) the whole of the price has not been paid
(b) a bill of exchange or other negotiable instrument given to him has been dishonoured.

Rights of an Unpaid Seller against the Goods:
(I) Where the Property in the Goods has Passed to the Buyer:

A. Right of Lien: An unpaid seller has a right to retain the goods till he receives the price. But to exercise this lien-

  1. He must be in possession of goods
  2. The goods must have been sold without any condition.

B. Right of Stoppage in Transit: Where the seller has delivered the goods to a carrier or other bailee for the purpose of transmission to the buyer, but the buyer has not acquired them, then the seller can stop the goods.

C. Right of Resale: The unpaid seller can resell the goods-

  1. Where they are of a perishable nature or
  2. Where the seller has expressly reserved the right of resale in the contract itself.

Case Study

Question 1.
X purchased a hot water bottle from Y, retail chemist. X asked Y if it would stand boiling water. The chemist told him that the bottle was meant to hold hot water. The bottle burst when water was poured into it and injured his wife. State whether seller is liable for the injury suffered by the buyer and the consequent compensation, give your reasons.
Answer:
The seller is not liable for the injury because he already told that the bottle is hot water bottle. X’s wife poured boiling water in the bottle, so she was injured. But there is no need for compensation.

Question 2.
X asked a car dealer to suggest him car suitable for touring purposes. The dealer suggested a ‘Buggati Car’. Accordingly, X purchased it but found it unsuitable for touring purpose. State whether the car dealer is liable for breach of condition?
Answer:
Yes, the car dealer is liable for breach of condition, because he told ‘Buggati Car’ was suitable for touring purpose. But in usage, it became unsuitable for touring purpose.

Question 3.
X, a dealer sold a plastic catapult to B. While using the catapult in the usual manner, it broke due to the fact that the materials used in its manufacture were unsuitable. As a result, the boy who was using it, blinded in one of his eyes. State whether the seller is liable or not.
Answer:
The seller is liable, because the materials used to manufacture catapult were not of a good quality. That is why the boy was blinded in one of his eyes.

Question 4.
X bought from Y a heap of wheat the weight of which is 1000 kg at the rate of Rs. 8 per kg. and agrees to pay the price on the first day of the next month and the wheat is to be delivered at X’s godown on the following day. A fire broke out and the entire quantity of wheat was destroyed. State whether X is liable to pay the price or not. Why?
Answer:
X is not liable, because before delivery, the goods were destroyed in Y’s godown. So X need not pay the price.

Question 5.
X bought from Y a heap of wheat (weight 100 kg) at the rate of Rs. 8 per kg. and Y had to put the wheat in bags to deliver it to X. Y filled some bags in X’s presence, but before the remainder could be filled, a fire broke out and the entire quantity of wheat was destroyed. State whether X is liable to pay the price or not. Why?
Answer:
X is not liable, due to non-delivery of the goods by Y. Before the wheat was filled in the bags, the godown caught fire. So X need not pay the price of wheat.

Question 6.
X bought from Y a heap of wheat at a rate of Rs. 8 per kg and Y had to weigh the wheat. Before weighing was completed, the wheat was destroyed by fire. State whether X is liable to pay the price or not. Why?
Answer:
X is not liable, because the wheat was destroyed before weighing. So X need not pay the price.

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