Question 3

When ownership passes: ascertainment, deliverable state, the parties' choice; horse sent on approval

18.75 marks

Time to write
About 38 minutes

From an older CBCS paper

Question

Question 3 · 18.75 marks

Q.3. The time of transfer of ownership will depend on: (i) the ascertainment of goods; or on (ii) the Deliverable state of the goods or on (iii) what Buyer and Seller choose. Explain, giving examples.

Suppose A sells a horse to B on approval, giving him seven days to approve. If the horse dies on (i) the 3rd day without approval from B and on (ii) the 8th day without express approval from B, who will bear the loss.

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

38 minfor 18.8 marks

Read from the question

  • examplesExamples are asked for: one short example with each point.

What the paper leaves open

The paper prints no mark per question (any four of six, equal marks, 75 in all); each question is reckoned here at 18.75 marks.

Write it in this order

The parts stand alone: start with the one you are surest of.

  1. Read; underline the asks; jot your points 2 min
  2. 1 (i) Ascertainment (section 18) 4 marks 7 min
  3. 2 (ii) Deliverable state (sections 20 to 22) 5 marks 9 min
  4. 3 (iii) Approval or sale or return (section 24) 4 marks 7 min
  5. 4 The horse: third and eighth day 5.8 marks 11 min
  6. Check: every ask answered, key terms underlined 2 min

Short on time? A few lines on every part beat a full answer to one: each part is capped at its own marks.

Try it first. About 38 minutes for 18.75 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

The time at which ownership passes depends on these factors.

Picture itWhen ownership passes: ascertainment, deliverable state, the parties' choice; horse sent on approval

1The TV is boxed and ready at the counter—his from the handshake, delivery or not.

Specific goods in a deliverable stateA customer who buys a television in a shop and asks for home delivery owns it at once.

2The laptop still needs its software loaded—the ribbon waits till the shop finishes.

Specific goods to be put into a deliverable stateWhere a shop must install the operating system on a laptop before delivery, property passes only when it has done so and told the buyer.

3The grain must be weighed first—ownership moves only after the scale settles and he is told.

Price to be ascertainedThe property does not pass until that act is done and the buyer has notice of it

(i) Ascertainment of goods. In a contract for the sale of unascertained goods, no property passes to the buyer until the goods have been ascertained (s. 18). Example: if a dealer agrees to sell 100 bags of rice out of the 1,000 in his godown, no bag belongs to the buyer until the hundred are set apart for him.

(ii) Deliverable state:

  1. Specific goods ready for delivery (s. 20): under an unconditional contract, the property passes when the contract is made, even if payment or delivery is put off. Example: a customer who buys a particular sofa on display, paying next week and collecting on Sunday, owns it from the moment of the bargain.
  2. Specific goods the seller must first make ready (s. 21): the property passes only when the seller has done it and the buyer knows. Example: a bicycle that the dealer has agreed to fit with new tyres before delivery becomes the buyer's only once the tyres are fitted and the buyer is told.
  3. Specific goods to be weighed, measured or tested to fix the price (s. 22): the property passes only when that has been done and the buyer knows. Example: a particular stack of timber sold at so much per cubic foot passes only after the seller has measured it to work out the price and told the buyer.

(iii) The choice of buyer and seller. The basic rule is that property in specific or ascertained goods passes when the parties intend it to, and their intention is gathered from the terms of the contract, their conduct and the circumstances (s. 19). Example: a car dealer and a buyer may agree that the car becomes the buyer's only when the bank releases the loan, even though the car is handed over earlier. Goods sent on approval or on sale or return pass to the buyer only when he chooses: when he signifies approval or does an act adopting the transaction; or, if he retains the goods without giving notice of rejection, when the time fixed for their return expires, or a reasonable time if none is fixed (s. 24).

The horse (s. 24):

  1. Dies on the 3rd day without approval: the seven days had not run, and B had neither approved nor adopted the sale; the property had not passed, and the loss falls on A, the seller.
  2. Dies on the 8th day without express approval: B kept the horse beyond the seven days fixed without giving notice of rejection; the property passed to him when the seven days expired, so the loss falls on B, the buyer.

Where the 18.75 marks sit

#ComponentMarks
1(i) Ascertainment (section 18)4
2(ii) Deliverable state (sections 20 to 22)5
3(iii) Approval or sale or return (section 24)4
4The horse: third and eighth day5.75
Total18.75
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