Question 4 (c)

Property in goods and the importance of the time of its transfer

6 marks

Time to write: About 12 minutes
Topic: Contract of sale, goods and property

Question

Question 4 (c) · 6 marks

Under the Sale of Goods Act, of 1930, define the term 'Property'. Why does it matter to know the precise time when the property is transferred?

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

12 minfor 6 marks

Read from the question

WhyReasons, not a description: each reason explained in a line or two.

Write it in this order

Read; underline the asks; jot your points 1 min
1 Meaning of property 2 marks 2 min
2 Importance of the time of transfer 4 marks 8 min
Check: every ask answered, key terms underlined 1 min

Easy marks

Meaning of property (step 1, 2 marks): a clear definition and a line on what it covers. It opens the answer, so it takes a minute or two.

Short on time? Cut step 2 short rather than leave anything out.

Try it first. About 12 minutes for 6 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.

Property. Under section 2(11) of the Sale of Goods Act, 1930, "property" means the general property in goods and not merely a special property: that is, ownership. In every contract of sale the ownership of the goods must be transferred by the seller to the buyer, or the seller must agree to transfer it.

Importance of the time of transfer. Picture a consignment of tiles sold today and still in the seller's yard. Whether ownership has already passed answers four practical questions:

What can the unpaid seller sue for? The seller can file a suit for the price only after the property has passed to the buyer.
Who can sue a wrongdoer? If a lorry driver crashes into the yard and breaks the tiles, the right of action belongs to whoever owns them at that moment: where a third party damages goods, the action lies with the owner.
Who bears an accidental loss? Unless otherwise agreed, the risk goes with ownership (s. 26): if the tiles are destroyed by a flood, the loss falls on the owner at that time. Once property has passed, the risk is the buyer's even though the goods may still be in the seller's possession.
What happens on insolvency? If the seller goes insolvent after ownership has passed, the buyer keeps the tiles and the seller's official assignee can only collect the price; if ownership had not passed, the tiles are part of the seller's estate. If it is the buyer who goes insolvent, his official assignee can claim the tiles only if ownership had passed to him.

Where the 6 marks sit

#	Component	Marks
1	Meaning of property	2
2	Importance of the time of transfer	4
	Total	6

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