QUESTION 8
Rules for Determining When Ownership Passes(Section 20 of sales Act)
1. Unconditional Contracts for Specific Goods:
o Explanation: If the contract is for specific goods that are ready for delivery (in a
deliverable state) and there are no conditions attached, ownership passes to the buyer
as soon as the contract is made. It does not matter if payment or delivery is postponed.
2. Goods Needing Preparation:
o Explanation: If the seller needs to do something to the goods to make them ready for
delivery (e.g., assembling or packaging them), ownership does not pass to the buyer
until that work is done and the buyer is informed.
3. Goods Requiring Assessment:
o Explanation: If the goods are ready for delivery but need to be weighed, measured,
tested, or assessed to determine their price, ownership does not pass until these actions
are completed and the buyer is informed.
4. Approval or Sale-or-Return Terms:
o Explanation: For goods delivered on approval or sale-or-return basis: (i) Ownership
passes when the buyer approves or accepts the goods, or performs any act that shows
they have adopted the transaction (e.g., using the goods). (ii) If the buyer retains the
goods without giving notice of rejection, ownership passes when the specified return
period expires. If no return period is specified, ownership passes after a reasonable time,
which is determined based on the facts.
5. Unascertained or Future Goods:
o Explanation: If the contract involves unascertained (not yet identified) or future goods,
and goods matching the description are set aside for the contract, ownership passes
when the goods are set aside with the consent of both parties. This consent can be given
before or after the goods are set aside and can be explicit or implied.
6. Delivery by Seller:
o Explanation: When the seller delivers the goods to the buyer or a carrier without
reserving the right to control the goods, the seller is considered to have set the goods
aside for the contract, and ownership passes to the buyer at that point.
UESTION 10
(a) Rules for Delivery to the Buyer(Secion 31 of Sales Act)
1. Responsibility for Delivery: Whether the buyer must pick up the goods or the seller should send
them depends on the terms of the contract, either explicit or implied. If there is no specific
agreement, the default place of delivery is the seller's business location, or if there is no business
location, then their residence. If the goods are known to be at a different location at the time of
the contract, that location becomes the place of delivery.
2. Timing for Sending Goods: If the seller is required to send the goods to the buyer but no specific
time is set for sending, the seller must send the goods within a reasonable period.
3. Goods Held by a Third Party: If the goods are with a third party at the time of sale, delivery is
not considered complete until the third party acknowledges to the buyer that they are holding
the goods on the buyer's behalf. This does not affect the issuance or transfer of any document of
title for the goods.
4. Reasonable Hour for Delivery: Any demand or offer to deliver must be made at a reasonable
hour, and what constitutes a reasonable hour depends on the specific circumstances.
5. Delivery Expenses: Unless otherwise agreed, the seller is responsible for any costs associated
with making the goods deliverable.
