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CMA Foundation · Fundamentals of Business Laws and Business Communication · Sale of Goods Act, 1930

Anand Steel contracts to sell 100 tonnes of steel rods of a stated description, unascertained at the time of contract, to Bharat Builders. Anand packs 100 tonnes of conforming rods in a deliverable state and hands them to a transporter for carriage to Bharat, without reserving any right of disposal. Which is the correct conclusion under Section 23?

Anand is deemed to have unconditionally appropriated the goods to the contract, so property passes to Bharat. Under Section 23(2), delivering the goods to a carrier for transmission, without reserving the right of disposal, amounts to unconditional appropriation, and Section 23(1) then passes property.

  1. AProperty has not passed because Bharat has not yet received the goods
  2. BProperty passes only when Bharat pays the price
  3. CAnand is deemed to have unconditionally appropriated the goods to the contract, so property passes to BharatCorrect
  4. DProperty passes only if Bharat expressly assents in writing after delivery

Explanation

Under Section 23(2), when the seller delivers goods to a carrier for transmission to the buyer in pursuance of the contract and does not reserve the right of disposal, he is deemed to have unconditionally appropriated them to the contract. Under 23(1), property then passes to the buyer. Receipt or payment is not required for this.

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