Skip to content

CA Foundation · Business Laws · The Sale of Goods Act, 1930

Sharma sells a bicycle to Neeraj for Rs 8,000 on 'sale or return' terms for 7 days. Neeraj keeps the bicycle for 7 days and neither accepts nor returns it, and says nothing. What is the legal position at the end of the period?

Property passes to Neeraj. In a sale or return transaction, a buyer who keeps the goods beyond the time fixed without giving notice of rejection is treated as having adopted the transaction, so ownership moves to him even though he has not paid.

  1. AProperty remains with Sharma until Neeraj pays
  2. BProperty passes to Neeraj because he retained the goods beyond the fixed timeCorrect
  3. CSharma must collect the bicycle, as property never passed
  4. DThe contract becomes void for lack of acceptance

Explanation

Under sale or return, property passes to the buyer if he retains the goods beyond the fixed time without giving notice of rejection. Neeraj did exactly that. Option one wrongly assumes payment is needed for transfer.

Did you get it right without looking?

One question tells you little. A timed set on The Sale of Goods Act, 1930 shows your real accuracy, how long you take and where you lose marks.

Practise The Sale of Goods Act, 1930Free diagnostic mock

More The Sale of Goods Act, 1930 questions