Amity Global Business School Business Law Module 3: Sale of Goods Act: CASES
Case No 1) Ms Prachi Dutt has hired 100 laptops for her office @Rs30000 per laptop (Rs3000000) for a monthly rent of Rs1 lakh. The stipulation is that if Ms Prachi pays the rent regularly for 20 months, she is entitled to either exercise the option of purchasing all the laptops or return the laptops immediately after 20 months. However, if purchase option is exercised, the instalment facility would continue. She decides to exercise the purchase option. Is this a valid contract?
(Ans: Yes. It is a hire purchase contract)
Case No 2) Mr Sukumar as an Agent of Ringfish Airlines entered into an agreement with Mr Parashuram chartering a Ringfish aircraft, which Mr Parashuram badly needed for holding an international conference in Singapore along with 100 delegates from India. From the day of the agreement, all the Ringfish Aircrafts were grounded on account of pilot strike. Both Mr Sukumar and Mr Parashuram were not aware of this state of affairs of the airlines. Is the contract valid?
Ans: No. It is a void contract—mutual mistake or impossibility of the contract
Case No 3: Mr Pruthvi Raj Chavan of Bangalore entered into contract for selling 10000 kgs of grapes in his garden in Kolar with Mr Menezes of Goa, a fruit merchant. The grapes were destroyed before the date of the agreement though Mr Pruthvi Raj Chavan was not aware of the same. The grapes could, however, be used for preparing wine. Mr Pruthvi Raj Chavan compels Mr Menezes to purchase the same. Is the contract valid?
Ans: No. Goods no longer answered the description of fruits.
Case No 4: Mr Shivakumar, a wholesaler of Textiles holds the Railway Receipt for two wagons of Textile goods transported from Surat to Bangalore. He endorses the same in favour of his retail buyer for a consideration of Rs 75 lakh. Is this a valid contract.
Ans: Yes. Transfer through document of title is a valid transfer of sale.
Case No 5: Jagadeesh a Dealer in two wheelers sells a brand new ACCESS 125 for a downpayment of Rs25000/- and the balance in instalments of Rs2000/- per month for 50 months. Is this is a contract of sale of goods?
Ans: YES. Price is stipulated to be in instalments (not a hire purchase contract)
Case No 6: Mr Jigar Dhuvad agrees to sell his second hand Maruthi Omni Van to Mr Katta for a price to be determined by Mr Dutta. Mr Katta took delivery of the Vehicle. Mr Dutta refuses to fix the price. Mr Jigar Dhuvad wants the vehicle back. What is the position?
Ans: No. Mr Jigar has to accept a reasonable amount and Mr Katta has to pay a reasonable amount. Mr Jigar cannot call back the goods.
Case No 7: Mr A from Vizianagaram in Andhra sold 100 quintals of Andhra rice (with necessary permit) to Mr B in Bangalore but yet to be delivered. Before the delivery, the Karnataka Government has banned interstate movement of rice.
Ans: Contract becomes void because of supervening impossibility of performance.
Case No 8: Mr X who has taken a Machinery from Mr Y on hire purchase basis for 20 months. The option was to be exercised at the end of 10 months. Before exercising the option, he sold the machinery to Mr A who takes without knowledge of the previous hire. Will A gets a good title?
Ans: No. The Hire purchaser has no title to the goods. He cannot pass on the title to others
Case No 9: Mr A sold his old Air conditioner to Mr B stating that it is just one year old. Mr B took it depending on A’s statement. Later Mr B learns that the Air conditioner is three years old. Can Mr B return the Air conditioner and get back his amount? Will your answer differ if the AC was working when A delivered and now it has stopped working.
Ans: Yes. B can return the goods. No change in the status of Mr B
Case No 10: Mr A sold his Home Theatre to Mr B on a condition that Mr B shall check the status through a qualified electronic engineer. Mr B has taken the Home Theatre after his engineer verified and estimated the price. However, Mr A demanded Rs 2000/- more than what the engineer fixed. Mr B agreed and took delivery. The Home Theatre has broken down within one month. Can B return the goods.
Ans: No. Where the seller has provided reasonable opportunities to the buyer to verify the condition/status of the goods, buyer is taking his risk.
Case No 11: Mr X had sold a Car to Mr Y. In fact, the Car belongs to Mr A and later on it is learnt that the RC book was forged and made in the name of Mr X. Mr Y having paid the price, wants to have the car and refuses to return the same to Mr A.
Ans: Mr Y should return the car to Mr A but he can recover the amount from Mr X
Case No 12: M from Kashmir Sold to Mr N of Singapore 500 tons of Apple packed in wooden cases each containing 30 tonnes. M delivered a substantial portion of goods (say 350 tonnes) packed in carton boxes with proper cushions. Can Mr N reject the whole goods and rescind the contract.
Ans: Yes. Packing does not conform to the contract.
Case No 13. A purchased 5 old lorries (trucks) from Mr B mentioning that he required lorries to transport the cows from the shandy market to the villages. As the lorries had completed the life of 15 years, the fitness was not given. Without indicating this, B had sold the vehicles. Within 15 days of purchase, two lorries broke down and 6 animals were dead for want of food. What are the remedies for Mr A.
Ans: Breach of condition of Fitness. A has full claim for damages.
Case No 14:
Mr A has purchased 500 grams(ml) of Ghee of a particular brand from a nearby retail store. On consuming the ghee, A’s wife was to be hospitalised and she died. What is the remedy?
Ans: Mr A can sue the Company for the damages for the death of his wife as the goods were not merchantable
Case No 15: Mr A sold a tin of cleaning acid to Mrs B. Mr A knew that it was likely to be dangerous to Mrs B if she does not exercise caution and special care while opening the lid. Mrs B opened the tin in the normal course and her face was defaced by sprinkles of acid. Can she file a case against Mr A
Ans: For all dangerous goods, the seller is bound to inform the buyers all the dangers inherent and the precautions to be taken. Mr A is liable for the damages.
Case No 16. Mr A has sold to Mr B his assembled computer (desktop) on a condition “as is where is”. Mr B starts the desktop at his house and to his dismay the monitor has gone.
Ans: B loses as there is already an implied warranty—as is where is basis.
Case No 17. Ms Pooja goes to a beauty saloon. She asks for a facial and a hairdo. She does not disclose any allergies to the beautician. The beautician applied some hair dye without asking anything about the possible allergies. Ms Pooja developed dermatitis. Is the beautician liable?
Ans: No. Fitness of the dye to extends to that of a normal person. If a client has specific allergies, the client is bound to disclose the same.
Case No 18: Mr A, a farmer, who wants to go abroad for a year has requested Mr B to look after his 4 cows for a period of one year for a consideration (payment of service charges). When A returned he found that 2 cows had given birth to calves. Mr B returned only the four cows and refused to hand over the calves.
Ans: All accretions ( the calves in this case) should be returned to the bailor. His fees automatically covered the maintenance of calves as well. (contract of bailement)
Case No 19. An unpaid seller Mr X has given notice to the transport company exercising his right of stoppage in transit. Mr Y who is the buyer is also due to the transport company on some other obligation. The Transport Company wants to exercise their lien on the goods superceding the unpaid seller’s right of stoppage in transit.
Ans: Carrier is first the agent of the unpaid seller. Transport company has to follow the instructions of the unpaid seller
Case No 20. Mr A sells certain goods to Mr B, the delivery date being 1 st July 2011 but the payment was to be made on or before 1st April 2011. B refuses to pay on 1st April 2011 stating that the delivery of goods should be made before the payment is made and that the property in the goods has not passed. Can A sue B for the price before the delivery of the goods.
Ans: Yes. Terms and conditions were clearly drafted. A can definitely sue Mr B
doc_706293110.docx
Case No 1) Ms Prachi Dutt has hired 100 laptops for her office @Rs30000 per laptop (Rs3000000) for a monthly rent of Rs1 lakh. The stipulation is that if Ms Prachi pays the rent regularly for 20 months, she is entitled to either exercise the option of purchasing all the laptops or return the laptops immediately after 20 months. However, if purchase option is exercised, the instalment facility would continue. She decides to exercise the purchase option. Is this a valid contract?
(Ans: Yes. It is a hire purchase contract)
Case No 2) Mr Sukumar as an Agent of Ringfish Airlines entered into an agreement with Mr Parashuram chartering a Ringfish aircraft, which Mr Parashuram badly needed for holding an international conference in Singapore along with 100 delegates from India. From the day of the agreement, all the Ringfish Aircrafts were grounded on account of pilot strike. Both Mr Sukumar and Mr Parashuram were not aware of this state of affairs of the airlines. Is the contract valid?
Ans: No. It is a void contract—mutual mistake or impossibility of the contract
Case No 3: Mr Pruthvi Raj Chavan of Bangalore entered into contract for selling 10000 kgs of grapes in his garden in Kolar with Mr Menezes of Goa, a fruit merchant. The grapes were destroyed before the date of the agreement though Mr Pruthvi Raj Chavan was not aware of the same. The grapes could, however, be used for preparing wine. Mr Pruthvi Raj Chavan compels Mr Menezes to purchase the same. Is the contract valid?
Ans: No. Goods no longer answered the description of fruits.
Case No 4: Mr Shivakumar, a wholesaler of Textiles holds the Railway Receipt for two wagons of Textile goods transported from Surat to Bangalore. He endorses the same in favour of his retail buyer for a consideration of Rs 75 lakh. Is this a valid contract.
Ans: Yes. Transfer through document of title is a valid transfer of sale.
Case No 5: Jagadeesh a Dealer in two wheelers sells a brand new ACCESS 125 for a downpayment of Rs25000/- and the balance in instalments of Rs2000/- per month for 50 months. Is this is a contract of sale of goods?
Ans: YES. Price is stipulated to be in instalments (not a hire purchase contract)
Case No 6: Mr Jigar Dhuvad agrees to sell his second hand Maruthi Omni Van to Mr Katta for a price to be determined by Mr Dutta. Mr Katta took delivery of the Vehicle. Mr Dutta refuses to fix the price. Mr Jigar Dhuvad wants the vehicle back. What is the position?
Ans: No. Mr Jigar has to accept a reasonable amount and Mr Katta has to pay a reasonable amount. Mr Jigar cannot call back the goods.
Case No 7: Mr A from Vizianagaram in Andhra sold 100 quintals of Andhra rice (with necessary permit) to Mr B in Bangalore but yet to be delivered. Before the delivery, the Karnataka Government has banned interstate movement of rice.
Ans: Contract becomes void because of supervening impossibility of performance.
Case No 8: Mr X who has taken a Machinery from Mr Y on hire purchase basis for 20 months. The option was to be exercised at the end of 10 months. Before exercising the option, he sold the machinery to Mr A who takes without knowledge of the previous hire. Will A gets a good title?
Ans: No. The Hire purchaser has no title to the goods. He cannot pass on the title to others
Case No 9: Mr A sold his old Air conditioner to Mr B stating that it is just one year old. Mr B took it depending on A’s statement. Later Mr B learns that the Air conditioner is three years old. Can Mr B return the Air conditioner and get back his amount? Will your answer differ if the AC was working when A delivered and now it has stopped working.
Ans: Yes. B can return the goods. No change in the status of Mr B
Case No 10: Mr A sold his Home Theatre to Mr B on a condition that Mr B shall check the status through a qualified electronic engineer. Mr B has taken the Home Theatre after his engineer verified and estimated the price. However, Mr A demanded Rs 2000/- more than what the engineer fixed. Mr B agreed and took delivery. The Home Theatre has broken down within one month. Can B return the goods.
Ans: No. Where the seller has provided reasonable opportunities to the buyer to verify the condition/status of the goods, buyer is taking his risk.
Case No 11: Mr X had sold a Car to Mr Y. In fact, the Car belongs to Mr A and later on it is learnt that the RC book was forged and made in the name of Mr X. Mr Y having paid the price, wants to have the car and refuses to return the same to Mr A.
Ans: Mr Y should return the car to Mr A but he can recover the amount from Mr X
Case No 12: M from Kashmir Sold to Mr N of Singapore 500 tons of Apple packed in wooden cases each containing 30 tonnes. M delivered a substantial portion of goods (say 350 tonnes) packed in carton boxes with proper cushions. Can Mr N reject the whole goods and rescind the contract.
Ans: Yes. Packing does not conform to the contract.
Case No 13. A purchased 5 old lorries (trucks) from Mr B mentioning that he required lorries to transport the cows from the shandy market to the villages. As the lorries had completed the life of 15 years, the fitness was not given. Without indicating this, B had sold the vehicles. Within 15 days of purchase, two lorries broke down and 6 animals were dead for want of food. What are the remedies for Mr A.
Ans: Breach of condition of Fitness. A has full claim for damages.
Case No 14:
Mr A has purchased 500 grams(ml) of Ghee of a particular brand from a nearby retail store. On consuming the ghee, A’s wife was to be hospitalised and she died. What is the remedy?
Ans: Mr A can sue the Company for the damages for the death of his wife as the goods were not merchantable
Case No 15: Mr A sold a tin of cleaning acid to Mrs B. Mr A knew that it was likely to be dangerous to Mrs B if she does not exercise caution and special care while opening the lid. Mrs B opened the tin in the normal course and her face was defaced by sprinkles of acid. Can she file a case against Mr A
Ans: For all dangerous goods, the seller is bound to inform the buyers all the dangers inherent and the precautions to be taken. Mr A is liable for the damages.
Case No 16. Mr A has sold to Mr B his assembled computer (desktop) on a condition “as is where is”. Mr B starts the desktop at his house and to his dismay the monitor has gone.
Ans: B loses as there is already an implied warranty—as is where is basis.
Case No 17. Ms Pooja goes to a beauty saloon. She asks for a facial and a hairdo. She does not disclose any allergies to the beautician. The beautician applied some hair dye without asking anything about the possible allergies. Ms Pooja developed dermatitis. Is the beautician liable?
Ans: No. Fitness of the dye to extends to that of a normal person. If a client has specific allergies, the client is bound to disclose the same.
Case No 18: Mr A, a farmer, who wants to go abroad for a year has requested Mr B to look after his 4 cows for a period of one year for a consideration (payment of service charges). When A returned he found that 2 cows had given birth to calves. Mr B returned only the four cows and refused to hand over the calves.
Ans: All accretions ( the calves in this case) should be returned to the bailor. His fees automatically covered the maintenance of calves as well. (contract of bailement)
Case No 19. An unpaid seller Mr X has given notice to the transport company exercising his right of stoppage in transit. Mr Y who is the buyer is also due to the transport company on some other obligation. The Transport Company wants to exercise their lien on the goods superceding the unpaid seller’s right of stoppage in transit.
Ans: Carrier is first the agent of the unpaid seller. Transport company has to follow the instructions of the unpaid seller
Case No 20. Mr A sells certain goods to Mr B, the delivery date being 1 st July 2011 but the payment was to be made on or before 1st April 2011. B refuses to pay on 1st April 2011 stating that the delivery of goods should be made before the payment is made and that the property in the goods has not passed. Can A sue B for the price before the delivery of the goods.
Ans: Yes. Terms and conditions were clearly drafted. A can definitely sue Mr B
doc_706293110.docx