9 Questions
Why is it important to know the precise moment when property in goods passes from the seller to the buyer?
All of the above
What is the primary purpose of a sale?
To transfer ownership of goods from the seller to the buyer
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?
The third party does not obtain a good title to the goods
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?
The seller is in breach of contract with the buyer
According to the general rule, what follows the ownership of goods?
The risk of loss or damage
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?
Whether the property in the goods was with the party adjudged insolvent
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?
To establish the seller's right to cancel the contract
When does the risk of loss or damage to the goods generally fall on the buyer?
After the property in the goods has passed to the buyer
What is the exception to the general rule that risk follows ownership, as mentioned in the text?
The text does not mention any exception to this rule
Study Notes
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.
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