Tuesday, December 25, 2012

What is the essential requisites of sale?

  • In the case of (State of Madras Vs Gannon Dunkerley and Company Limited, 1958) the Supreme Court has held that according to the law, both of England and India, in order to constitute a sale, it is necessary that there should be an agreement between the parties for the purpose of transferring title to goods, which of course presupposed capacity to contract, that it must be supported by money consideration, that as a result of transaction, the property must actually pass in the goods. Unless all these elements are present there would be no sale.
  • The essential object of the contract of sale is the exchange of property for a money price. There must be a transfer of property or an agreement to transfer it, from one party, the seller, to the other, the buyer, in consideration of a money payment or of a promise thereof by the buyer thereof. Both under the common law and the statute law relating to sale of goods England and in India, to constitute a transaction of sale, there should be an agreement, expressed or implied relating to goods to be completed by passing of title in those goods. It is the essence of the concept that both the agreement and the sale should relate to the same subject matter. Transfer of property in goods for a price is the linch pine of the definition. It is, however, not an inevitable rule that the price must be fixed. An allotment of goods among partners on dissolution of partnerships is not a sale. Exchange of property for something other than money is not a sale. The difference between a sale and an exchange is that in the former the price is paid in money while in the latter it is paid in good by way of barter. But if the exchange is made partly for goods and partly for a price, the contract is probably one of a sale.

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