Skip to content

CSEET · Business Laws and Management · Elements of Law relating to Sale of Goods

Ravi sold a machine to Meena but continued to hold it. He then pledged it to Kiran, who acted in good faith and without notice of the earlier sale. Under the Sale of Goods Act, 1930, the effect is that:

The pledge to Kiran has the same effect as if Ravi were expressly authorised by the owner, because a seller who remains in possession after sale can pass a good disposition to a person taking in good faith without notice of the earlier sale.

  1. AThe pledge is void because property already passed to Meena
  2. BThe pledge has the same effect as if Ravi were expressly authorised by the ownerCorrect
  3. CThe pledge is valid only if Meena later ratifies it
  4. DThe pledge is valid only if Ravi is an unpaid seller

Explanation

Section 30(1) provides that where a person having sold goods remains in possession, a disposition by him to someone receiving in good faith and without notice of the earlier sale has the same effect as if he were expressly authorised by the owner. Ratification or unpaid status is not required.

Did you get it right without looking?

One question tells you little. A timed set on Elements of Law relating to Sale of Goods shows your real accuracy, how long you take and where you lose marks.

Practise Elements of Law relating to Sale of GoodsFree diagnostic mock

More Elements of Law relating to Sale of Goods questions