Question 3 OR (b)

Importance of the time at which ownership passes in a contract of sale

6 marks

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

Question

Question 3 OR (b) · 6 marks

In a contract of sale, what is the importance of the time at which ownership 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

What the paper leaves open

Only a combined mark of 18 is printed for parts (a) to (c); each part is reckoned here at 6 marks (inferred).

Write it in this order

  1. Read; underline the asks; jot your points 1 min
  2. 1 Risk, actions against third parties, suit for price 3 marks 5 min
  3. 2 Ascertainment; when property passes in specific goods 2 marks 4 min
  4. 3 Conclusion 1 mark 1 min
  5. Check: every ask answered, key terms underlined 1 min

Short on time? Trim steps 1 and 2 evenly rather than skip one: each is capped at its own marks. End with step 3 in a line or two.

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.

Importance of the time of transfer:

  1. Risk. Risk prima facie passes with the property: if the goods are lost or damaged, the loss falls on whoever is the owner at that time, even if the goods are still in the seller's possession.
  2. Action against third parties. Where the goods are damaged by a third party, it is the owner who can take action.
  3. Suit for price. The seller can sue for the price only when the property has passed to the buyer.
  4. Unascertained goods. Property in unascertained goods cannot pass until the goods are ascertained (s. 18).

When property passes in specific goods (s. 20). In an unconditional contract to sell specific goods that are in a deliverable state, the property passes when the contract is made, even if payment or delivery or both are postponed. For example (our illustration), a customer who buys a particular television on those terms and asks for home delivery owns it from the moment the contract is made.

Conclusion. The moment ownership passes decides who bears the risk, who may sue third parties for damage, and when the seller may sue for the price.

Where the 6 marks sit

#ComponentMarks
1Risk, actions against third parties, suit for price3
2Ascertainment; when property passes in specific goods2
3Conclusion1
Total6
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