Passing of Property and Transfer of Ownership in Sale Transactions

Why is it important to know the precise moment when property in goods passes from the seller to the buyer?

What is the primary purpose of a sale?

If the buyer resells the goods to a third party before the property in the goods has passed to the buyer, what is the consequence?

If the seller attempts to sell the goods to a third party before the property in the goods has passed to the buyer, what is the consequence?

According to the general rule, what follows the ownership of goods?

In case of insolvency of either the seller or the buyer, what determines whether the goods can be taken over by the official assignee or the official receiver?

Which of the following statements is NOT a reason given in the text for the importance of knowing the precise moment of transfer of ownership?

When does the risk of loss or damage to the goods generally fall on the buyer?

What is the exception to the general rule that risk follows ownership, as mentioned in the text?

Passing of Property or Transfer of Ownership

The primary purpose of a sale is to transfer ownership of goods from the seller to the buyer.
It is crucial to determine the exact moment when property in goods passes from the seller to the buyer for several reasons.

Reasons for Determining Ownership

The general rule is that risk follows ownership, regardless of whether delivery has been made or not.
If goods are lost or damaged, the loss falls on the owner of the goods at the time of the loss or damage, subject to certain exceptions.
In cases of potential damage by third parties, the owner of the goods can take action.
The rights of third parties depend on the passing of property, especially in cases where the buyer resells the goods to a third party.

Importance in Different Scenarios

If a buyer resells goods to a third party, the third party will only obtain a good title if the property in the goods has passed to the buyer before or at the time of resale.
If the seller breaches their contract with the buyer and attempts to sell the goods to a third party, the third party will not obtain a good title if the property in the goods has not passed to the buyer.
In cases of insolvency of either the seller or the buyer, it is essential to determine whether the goods can be taken over by the official assignee or official receiver, which depends on whether the property in the goods was with the party adjudged insolvent.

Learn about the passing of property or transfer of ownership in sale transactions as per Sections 18-20. Understand the importance of knowing the exact moment when the property in goods passes from seller to buyer, and how it affects risk and ownership. Explore exceptions and rules related to property transfer.