The Law of Sales of Goods - Presentation

The Law of Sales of Goods

Overview

  • Governs the sale of goods, previously included in the Contract Act of 1872.

  • Now under the Sale of Goods Act, 1930, adopted by Pakistan in 1947.

Key Terms in Foreign Trade

  • Loco Price: Price of goods in the seller's warehouse.

  • Free Alongside Ship (FAS) Price: Price including costs to transport goods alongside ship.

  • Free on Board (FOB) Price: Price including all costs up to loading on the ship.

  • Cost and Freight (C&F): Price including costs up to freight payment.

  • Cost, Insurance and Freight (CIF) Price: Includes all costs plus insurance premiums.

  • Franco Price: All expenses until delivery at the buyer's warehouse.

  • Ex-Ship Contract: All costs until arrival at destination port.

Formation of the Contract

Types of Sale Contracts

  • Sale: Immediate transfer of property in goods from seller to buyer.

    • Seller can sue for price if buyer fails to pay.

    • Loss from destruction falls on buyer.

  • Agreement to Sell: Transfer of property at a future date or conditional.

    • Seller can only sue for damages if buyer fails to accept.

    • Loss from destruction falls on seller unless otherwise agreed.

Formalities of the Contract

  • Must involve a seller (who sells) and a buyer (who buys).

  • Contracts can be written, oral, or implied from conduct.

  • Goods refer to movable property, excluding money and actionable claims.

  • Types of goods: specific (identified at contract) and future (to be produced).

Price Determination

  • Price = Money consideration for sale of goods.

  • Usually fixed by contract; if not, a reasonable price must be paid.

  • Agreement void if a third party fails to determine the price.

Conditions and Warranties

Conditions

  • Essential stipulations; breach allows aggrieved party to terminate contract or claim damages.

  • Example: Incorrect product delivery allows rejection and damages.

Warranties

  • Minor stipulations; breach allows only claim for damages, not contract termination.

  • Example: Late product delivery allows for damages but not contract cancellation.

Differences Between Condition and Warranty

  • Value: Condition is essential; Warranty is not.

  • Basis: Condition forms the contract's basis; Warranty does not.

  • Breach Consequences: Breach of condition allows rejection; Warranty does not.

Sale by Auction

  • Separate contracts for lots.

  • Sale completes upon auctioneer's hammer announcement.

  • Seller may reserve bidding rights; any fraudulent bidding makes sale voidable.

  • Sales can have a reserved or upset price.

Law Governing Partnership

Definition

  • Act of a Firm: Actions by partners that create enforceable rights.

  • Business: Includes trade, occupation, and profession.

  • Third Party: Non-partner individuals.

Partnership Types

  • Partnership at Will: Duration unspecified; can be terminated anytime.

  • Particular Partnership: Formed for a specific undertaking.

Essential Elements of a Partnership

  • Must have a business and more than one person (max 20 for ordinary).

  • Must be a contract with profit as the objective, acting on behalf of all.

Registration of Partnership Firms

  • Mandatory registration established by the Partnership Act of 1932.

  • Non-registered firms cannot file suits against or by third parties.

Method of Registration

  • Submit a form with details about the firm, partners, and business duration.

  • Must comply with naming regulations and sign by all partners.

Changes Notification

  • Inform Registrar of any structural changes (partner entry/exit, name changes).

Illegal Partnerships

  • Circumstances that render partnership illegal include insolvency of partners or legality of business.

  • Invalid if it exceeds partner limits or continues post-dissolution.