3. Sale of Goods Act Cases

Case 1: Sale vs. Agreement to Sell

Scenario:

• A agrees to sell B 100 bags of rice after receiving stock from his supplier.
• Later, A refuses to supply the rice, claiming that he never received the stock.
• B sues for breach of contract.

Legal Principle Applied:

• Since the goods were not in A’s possession at the time of contract, it was an agreement to sell, not a sale.
• In an agreement to sell, ownership transfers only when the goods are delivered.

Outcome:

• B could only sue for damages and not for specific performance.

Case 2: Breach of Warranty

Scenario:

• A buyer purchases a laptop with a one-year free servicing warranty.
• The seller refuses to provide free servicing.

Legal Principle Applied:

• A warranty does not affect ownership but allows the buyer to claim damages.

Outcome:

• The buyer can sue for damages but cannot cancel the contract.

Case 3: Rights of an Unpaid Seller

Scenario:

• A seller delivers 100 units of furniture to a buyer.
• The buyer becomes insolvent before making payment.
• The seller stops the goods in transit and resells them.

Legal Principle Applied:

• Section 50 of the Sale of Goods Act, 1930: If the buyer becomes insolvent, the seller can stop the goods in transit and retain them.

Outcome:

• The court ruled that the seller had the right to resell the goods to recover losses.