Transfer of Property in Unascertained & Future Goods

Topics: Bill of lading, Sale of Goods Act 1979, PASS Pages: 10 (3906 words) Published: December 18, 2009

Where there is contract for the sale of unascertained or future goods, the property therein does not pass at the time of making of the contract. The property in unascertained goods cannot pass until the goods are ascertained . Similarly, if the subject- matter is future goods , the contract operates as an agreement to sell , i.e., the buyer does not become the owner at the time of making of the contract. After the goods have been ascertained, the property in them will pass when the parties intend it to pass . If the parties have expressed the intention, the property in them passes in accordance with the provisions of Sec. 23, which is as under:

Section 23(1):
When there1 is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be expressed or implied, and may be given either before or after the appropriation is made. Section 23(2):

Wherein pursuance of the contract, the seller delivers the goods to the buyer or to a carrier as other bailees (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract.

As required by Sec. 23(1), the property in respect of unascertained or future goods sold by description passes to the buyer when the following conditions are satisfied: 1.There is appropriation of the goods to the contract either by the seller or by the buyer. 2.The appropriation of the goods is made by one party with the assent of the other, i.e., if the seller makes the appropriation it must be with the buyer’s assent and if the appropriation is made by the buyer, seller’s assent thereto is necessary. 3.The goods appropriated to the contract are of same description as given in the contract and are in a deliverable state, and 4.The appropriation is unconditional.

Examples – The section may be illustrated by the following examples:- •Sale of twenty hogsheds of sugar out of a larger quantity. The seller fills four hogsheds which the buyer takes away. Subsequently the seller fills sixteen more hogsheads, and informs the buyer of this, asking him to come and take them away. The buyer promises to do so. The property has passed to the buyer. •A contract to sell to B a certain quantity of liquor out of a big cask containing a much larger quantity. The required quantity is not separated or bottled. The property in the liquor does not pass to the purchaser. •Sale on May 6th of eight hundred and fourteen tins of oil, for which the buyer pays the price. The goods were not in the possession of the sellers at the date of the contract, but had been dispatched to them on April 25th. Subsequently they received the railway receipt and endorsed it and sent it to the buyers. Afterwards, on May 12th, the goods were destroyed by fire while in transit. The property had passed to the buyers and they had to bear the loss. •Sale of shares. A broker hands certificates to a buyer, together with transfers signed in blank by the registered holders. The shares are ascertained, the sale is complete and the property has passed to the buyer.

1.Appropriation :
Appropriation of the goods to the contract means doing of any act by the parties which indicates that certain goods are to be assigned to a particular contract, i.e., certain goods are considered to be meant for the performance of a particular contract. For example, a seller agrees to supply me a wrist watch which he has yet to manufacture, and after manufacturing some watches, he dispatches one of them to me, that particular watch has been appropriated to the contract, by the...
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