1 Transfer of property in sale of goods - Transfer of property means transfer of ownership .

Reasons for importance of Transfer of Property in sale of goods : (i) (ii) (iii) To know who is owner at a particular time , as owner has to bear the loss for any reason . Only owner can file suit in case of loss , Seller can file suit for price only if ownership has passed to buyer . Rules regarding transfer of Property I .Specific Goods Specific goods mean goods identified and agreed upon for a particular buyer at the time of contract . The general rule is that in case of sale of specific goods , property / ownership passes to the buyer at such time at which parties so intend . The intention of parties is to be determined from following : (a) terms of contract (b) conduct of parties (c) circumstances of case . If the intention can not be so judged , following rules apply : (a) Sale of specific goods in deliverable state ; In these goods , property passes at the time when contract of sale is made . It is immaterial whether time of delivery or time of payment is postponed . However ,sale should be unconditional . Deliverable state means , goods are ready for delivery and buyer will have to take delivery . For example , P buys ready to delivery chair . Property immediately passes to X . He wishes to take the chair on return .If there is fire in sellers shop , X, being owner , will have to bear loss of chair by fire.

2 (b) Sale of specific goods not in deliverable state - It means that seller has to do something (polishing ,packing , filling etc. ) to make them in deliverable state . - In these goods , property passes when : (i) (ii) When goods have put in a deliverable state , and Seller has notice of it .

(c) Sale of specific goods in deliverable state but seller has to do something to ascertain price - This means seller has to do something like weighing , measuring , testing etc. to ascertain the price . - In such cases , property passes when : (i) (ii) Seller has done that act to ascertain price , and Buyer has notice of it .

(d) Goods delivered on sale or approval / sale or return basis In such cases , property passes to buyer as under ; (i) (ii) (iii) Examples : P sells his Horse to Q , on sale or approval basis , for 5 days ; (i) (ii) (iii) (iv) horse dies on second day , without any fault of Q P has to bear loss as ownership has not passed to buyer (Q) on second day , Q conveys his approval to the sale , in next hour horse dies Q has to bear loss as ownership has passed to Q Q retains horse after 5 days without any notice to P, horse dies on 7th day Q has to bear loss as ownership has passed Q retains horse after 5 days but gives notice of rejection to P on 5th day , horse dies on 6th day P has to bear loss as ownership has not passed . when buyer signifies his approval to the sale or does something to adopt the sale (i.e., pledges , uses or sells ) On expiry of time fixed for return of goods , when he retains goods beyond the time fixed . On expiry of reasonable period if no time fixed .

II .

Sale of unascertained and future goods (a) Unascertained goods For unascertained goods , property passes only when goods have been ascertained . (b) Sale of unascertained or future goods by description In such cases ,property passes , when : (i) (ii) (iii) Goods of contract description have been obtained , and Goods are put into deliverable state ,and Such goods are unconditionally appropriated to the contract - by seller with consent of buyer ,or - by buyer with consent of seller

Unconditional appropriation means no right of disposal is retained by the seller . For example : Seller puts the oil in bottles supplied by buyer .